Earnings Call Transcript - ANGI Q2 2022

Operator, Operator

During this presentation, we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate or similar statements. These forward-looking views are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in IAC and Angi Inc’s second quarter press releases and our respective filings with the SEC. We'll also discuss certain non-GAAP measures, which as a reminder, include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during the call. Please also refer you to our press releases, the IAC shareholder letter and to the Investor Relations section of our websites for all comparable GAAP measures and full reconciliations for all material non-GAAP measures.

Operator, Operator

Good morning. Thank you for joining the IAC Q2 Earnings Call. I'm joined here today by Joey Levin, CEO of IAC; Oisin Hanrahan, CEO of Angi; and Neil Vogel, CEO of Dotdash Meredith. We are going to go into a statement by Joey and some early comments and then we will go directly into Q&A. With that I’ll turn it over to Joey Levin.

Joey Levin, CEO

Good morning, everyone. Thank you for being here. I appreciate being in the office with my colleagues as we build our businesses. I also want to thank those of you joining us via phone and video. I'm feeling very positive about our businesses right now. For our largest segment, Dotdash Meredith, we are on track with the plans we've set; we're making the necessary progress and generally seeing the expected results. Although we are not moving as quickly as we would like, I'm hopeful that we will receive the support from the advertising market as anticipated. We are accomplishing what we aimed to achieve, most notably the migration to the Dotdash platform that we've completed in 90 days. This positions all of our resources effectively, enabling us to start executing from this point. The key factor moving forward is driving traffic, something we've successfully done in the past, and I expect we will see progress in that area post-migration, leading to growth and increased market share. We are confident in having the best product in the category, and we know we are meeting consumer needs, so we should continue to see growth. At Angi, our focus on profitability has shown positive results. We've observed a decrease in losses and growth in services month over month. Even with our tempered growth, we are still significantly outperforming market growth and anticipate continuing this trend. I'm pleased with the direction at both Dotdash Meredith and Angi. While we still have much to demonstrate, we are progressing well. Looking at our other businesses, Care, MGM, and Turo are all expanding and have substantial opportunities ahead. Regarding the macro environment, we've shared the data we've gathered, but we do not have specific predictions. The signs we see indicate other businesses are preparing for challenges. However, many factors can influence consumer behavior and economic reactions in the coming months. We can manage our businesses and our execution. Our intention is to perform effectively and grow, regardless of the external environment. We are optimistic that our businesses can thrive under these conditions. I know there are many questions, so let’s move to those now.

Operator, Operator

Great. Our first question is from Cory Carpenter at JPMorgan.

Cory Carpenter, Analyst

Thanks for the questions. I had two on Angi. Oisin, maybe bigger picture, could you talk about the trends you saw through the quarter…

Oisin Hanrahan, CEO

Go ahead, Cory.

Cory Carpenter, Analyst

Can you hear me now?

Oisin Hanrahan, CEO

Yes.

Cory Carpenter, Analyst

Okay. Two questions on Angi. Oisin, maybe just bigger picture, if you could talk about the trends through the quarter and the ads leads and in all sorts of services business. And on services specifically hoping to hear more about the optimizations you're making around unit economics and how that impacts growth? And then second, I think probably for Chris, just pulling it all together, how should we think about the right level of overall growth and profit for Angi in the second half of the year? Thank you.

Oisin Hanrahan, CEO

Thanks, Cory, it's great to see you. I'm pleased to share that we are very satisfied with our performance in the second quarter. If we think back to a year ago when we began our rebranding and someone had predicted we would return our ads and leads business to growth, that would have seemed like a strong outcome. We're thrilled to report that our ads and leads business is performing well, and we aim to continue this upward trend. The key factors driving this growth include increased engagement from professionals, their willingness to invest, and their heightened activity in the market, which has been very beneficial. Regarding our services, we have experienced significant success as well. As Joey mentioned, with a new emphasis on profitability coming to the forefront in Q2, we made some strategic trade-offs within that business which have generally yielded positive results, enhancing our overall profitability at Angi. However, we have faced some challenges in our Roofing business. As we conclude the Roofing acquisition, it's important to highlight a few details. When we review our overall growth rate, excluding Roofing from the services number, we achieve a 34% organic growth rate for services. This suggests that Roofing contributed negatively to our growth in July. Specifically, we generated approximately $14 million in revenue from Roofing in Q2, which fell to around $9 million in July, compared to about $11 million the previous year in July. This highlights the considerable operational challenges we are experiencing in Roofing. These challenges mostly stem from pricing, as we’ve been able to successfully adjust pricing in other categories, whereas Roofing has presented some difficulties, slowing our growth. We expect it will take a couple of quarters to realign Roofing's growth trajectory. Overall, looking at all our elements together, our largest business, ads and leads, is growing at a mid to high single-digit rate. Additionally, our services business, excluding Roofing, grew around 34% in July. If this trend continues and we manage to restore growth in our Roofing business, we anticipate reaching a growth rate of 15% to 20% over time, all while also increasing profitability. When examining the underlying profitability across all business units, we are very pleased with the current trends and how everything aligns. This explains why we exceeded our profitability expectations in Q2, and we anticipate continuing to enhance profitability moving forward.

Operator, Operator

Thank you, Cory. With respect to overall profitability, we were very happy with where Q2 came out $9.7 million of adjusted EBITDA for Angi, that is inclusive of a $2 million lease impairment. So run rate profitability of the business is higher. One of the things we were cheered by was 10% overall gross profit growth across the Angi portfolio, some of that is due to growth at the higher-margin ads and leads business, but it's also a function of the take rate and margin improvements that Oisin and team are driving across services. When we looked for the rest of the year, high single digits, ads and leads revenue growth will again drive revenue to the bottom line and continued margin improvement by - at services. We said last quarter that we are past peak investment in services. And we said in the Q, we expect to have continued sequential improvements and services investment throughout this year as we go. So our view on overall adjusted EBITDA within Angi is for higher aggregate EBITDA in the second, in the third and fourth quarter than what we produced in the second quarter. We feel very good about the profitability picture and momentum in the business.

Operator, Operator

Great. Our next question will be from Ross Sandler at Barclays.

Ross Sandler, Analyst

Hey, folks. I guess question for Neil. We can obviously see what's going on with the broader digital ad space and the deceleration. But if we look at MDD Digital, the 7% decline, how much of that is just the macro environment versus self-inflicted? Or said differently, what would that down 7% have been if you had not demonetized and re-platform some of the sites in 2Q? So that's the first question. And the second question is just looking at the monthly trajectory, it seems to trend that MDD Digital could be down low double digits to 15% or so in the back half. And that combined with the over $300 million in EBITDA common points to about a 30% EBITDA margin for that digital business. So how much do you see the margin expanding in 2023 once all the re-platforming is done? What kind of incremental margin might we see at MDD Digital given the new run rate? Thanks a lot.

Neil Vogel, CEO

I think I remember all that. Thanks, Ross. The ad market is definitely facing challenges. The term self-inflicted fits well because much of it is due to our own actions. If I had to estimate, I would say it's about a 50:50 situation, and it's difficult to analyze fully. There is a secondary issue we've noticed, as Joey mentioned, we have been slower on migrations than we intended. This delay is justified because we want to ensure everything is done correctly, considering the complexity of the internet and the challenges in hiring. However, we feel very positive about our current position. When analyzing the ad market as a whole, it's important to break it down. We have observed some good diversity, particularly during the pandemic. The health and finance sectors are doing reasonably well, travel is performing excellently though it's a smaller category, and beauty is also good. The main concentrated issues for advertisers are around retail, as you all have noted, as well as food and consumer packaged goods, which relate to the Meredith assets we've acquired that strongly relate to those categories. Our slower migration has caused us to enter a more challenging period without all our resources. During the pandemic, with Dotdash, even when the situation became difficult, we managed well because our offerings performed strongly. But since we haven't transitioned the Meredith assets as quickly as possible, we didn't have enough high-performing sites readily available which has added to our challenges. I might be over-explaining this, but it does seem fair to say the situation is roughly 50:50. Currently, 75% of our traffic has been migrated, and we are confident about where we are heading; the remainder should be completed by the end of next quarter. We are optimistic about our asset pool and the combined offering of scale and strong brands with intent-driven performance traffic, which we are still learning to leverage more effectively now that migration is underway. We are beginning to show measurable results to advertisers. We're having many intriguing discussions with large advertisers who are also engaging with Google and Meta, telling us they are considering us because we can deliver at scale, performance, and in a brand-safe environment, offering a distinctive product in relation to publishers and content. While we acknowledge the market conditions are challenging, we are optimistic about our prospects moving forward. The second question relates to margins and growth. I'll start and let Chris provide further insights. For the rest of the year, you should expect to see monthly improvements from us. These may not be sequential and could be uneven. As mentioned in previous conversations, this is a transition year, which has become evident due to unforeseen challenges in the market since January. However, I believe you will see improvements, and as we approach the fourth quarter, we should be in a position to turn the corner towards profitability. Regarding margins, I'll let Chris address that.

Operator, Operator

Certainly. The margin we are most focused on obviously is digital profitability and EBITDA margins. You've seen steady improvement over the year. Fourth quarter is always the biggest revenue year seasonally for the business and also highest margins, just given the scale on a fairly fixed cost base in the digital business. We feel good, very good as Joey articulated in the shareholder letter about the level of cost savings that we've identified and driven in Meredith through the integration. Parts of those, though, however, are obscured just by the lower digital revenues than we had hoped for, at this point, given some of the headwinds that Neil just spoke about within the advertising market. As we get back to growth and continue to scale digital revenues, we look forward to increasing EBITDA margins. Dotdash historically was in the low to mid-30s. There’s every reason to believe this business on a stabilized basis can get back to that level. And when we think about getting to $450 million of EBITDA, well, as we said, in the shareholder letter, that is not in the cards for next year on digital. The key there is getting to about $1.3 billion of revenue and then mid-30s EBITDA margins, and we will be at that $450 million. So, it's really now in our mind as we get back to growth and get through this period, when we get to that $1.3 billion of digital revenue and achieve the $450 million of EBITDA. Probably we're six to 12 months delayed on that, given the ad market and a few of the migration slowdowns. But as Neil said, we are confident we will be there by the end of Q3.

Operator, Operator

Our next question is from Eric Sheridan at Goldman Sachs.

Eric Sheridan, Analyst

Thanks for taking the questions. Maybe a few, if I can. In terms of looking at the shareholder letter, I think the thing that stuck out was first, on the macro side, your bifurcation of the market between enterprise and consumer trends, maybe flesh that out a little bit in terms of what you're seeing and how you're preparing some of your consumer businesses for what your assumption is about how the consumer spending habits might change in the back part of this year and into ‘23. Second off the letter bought back stock for the first time in four years. But there was also sort of an implication that the M&A market might move back more in your favor when you see compression and sort of public versus private valuations, we'd love to get an update on the broader capital allocation strategy versus what you're seeing in your own stock, versus the broader M&A. Maybe if I could just sneak in one last one on Care. I thought it was interesting to call out elements of how demand might pick up in September, when you get back to work back to school, and the elements of how you're planning for an improvement in demand and investing behind Care broadly as a platform. Thanks so much, guys.

Joey Levin, CEO

Sure. I think I'll take all those. As far as the macro environment, this has been a very clear disparity we've seen so far. The presumption is that corporations are ahead of the consumer on this, meaning they're expecting the consumer to get worse and therefore preparing for that. We don't know if that ends up being the case or not. But being prepared just means that we're being much tighter on expenses, and being much more focused on margin so that we have that flexibility if consumers start spending less. That's entirely possible. It also means thinking about our products in the context of what that means if consumer spending less. We've talked about Angi and that's not a terrible situation for Angi because as service requests come down the service professionals are more interested in our platform and more interested in what our platform can deliver. We have to make sure the ads and leads product is servicing that part of the market and is well prepared for it. As you go through business by business, the main theme is to be tight on expenses, tight on margin, leaving ourselves room for consumers to spend less so that we can operate in that environment. Regarding M&A or share repurchases, both are always on the table today. Both are on the table. The M&A is evaluated against the share repurchase. As is often the case these things happen to be highly correlated, meaning as the M&A market gets cheaper, so does our share price. We’ll look at both of those things at the same time and make decisions. The benefit in share repurchases is of course we know those businesses very well and how they're doing and what their prospects are and what their issues are. We can do that well. But we are interested in finding new business pricing and we're going to continue to look there. We have the capital to do it. Looking there is very much something that we're exploring, M&A is very much something that we will be active in. I still think that the public markets as far as opportunities are much more attractive than the private markets; it takes time for the private markets to catch up. They haven't really yet, so companies raised enough money where they don't have to worry about it for a little while. I think the opportunities are certainly much more in the public markets today. As far as Care, the back-to-school has always been a big moment for the Care business. It's also important for Dotdash historically, and Meredith but is a big moment because that's when seasonally a lot of people are looking for care. It's very hard to see trends right now, given the impact of the pandemic. It may be that some of that was pushed out a little bit where we saw the demand come down and/or not accelerate as much as we expected in July that seems to have started to come back in later in July and early August. We think things like that can drive frequency onto the platform, which is good for both sides of the marketplace. When you can find a book somebody instantly, more importantly, when you know that you can find and book somebody instantly you come to the platform more often. That product is now live. We'll see how that goes. The other product that's new right now and contributing in the second half is managing families with daycare centers and starting to see momentum to start contributing. The enterprise business has also picked up momentum recently. Seasonally the back half of the year is where we'll really see that. We now see employees in enterprises increasing utilization, in some cases, increasing utilization meaningfully. That will be a nice driver of revenue for the business.

Operator, Operator

Next question will be from Jason Helfstein at Oppenheimer.

Jason Helfstein, Analyst

Hey, guys, thanks. Just want to dig a bit more. We're getting questions from clients just on Angi. And the monthly trend, if you can unpack it. Was the slowdown that you saw in July just maybe you've kind of reconciled that versus June? Do we think about the business being kind of high single digits in ads and leads in the back half kind of being low teens? Just maybe help us understand some of the marketing decisions you're thinking through Oisin as you're kind of thinking about growth versus margin for the back half. Thanks.

Oisin Hanrahan, CEO

Thanks, Jason. In the ads and leads business, we've seen various developments related to the rebranding. The Angi brand is performing well, exceeding our expectations, and consumer demand remains strong. However, the HomeAdvisor brand has continued to struggle with consumer demand. Overall, despite this, the revenue from the ads business remains stable, and we anticipate improvements moving forward. Comparatively, we are more optimistic now about ads and leads than we were a year ago or even a quarter ago. This positivity is contributing to profitability as our services remain highly profitable. The services segment experienced a significant challenge with Roofing, which caused a decline from a 34% to an 18% performance range. As we address the Roofing issues, we expect to gradually return to the 15% to 20% range over the next year. We believe the adjustments we are making between growth and profitability are appropriate, with a stronger focus on profitability in our core services, including our book now business, retail, managed projects, and roofing. Each of these units is now more aligned with profitability, which has impacted growth rates but we believe it's the correct approach. Currently, we haven't allocated significant marketing funds toward services; our marketing efforts focus on the ads and leads business, while the services business benefits from the demand generated by ads and leads. Together, ads, leads, and services still represent a unique offering in the market, serving professionals and driving business effectively. We are confident that this combination will ultimately enhance revenue, market share, and profitability. We're making informed trade-offs between growth and profitability while carefully considering where to allocate marketing investments. The timing for marketing expenditures on services remains uncertain and will depend on market conditions. If we identify an imbalance between consumer demand and our pro supply, we'll adjust our strategy accordingly. For now, we continue to assess these opportunities.

Operator, Operator

The only thing I'd add with respect to services, monthly trends is it was a stark hit into growth in July from Roofing. As Oisin said before, Roofing did about $9 million of revenue in July, it had been averaging $14 million a month across Q2. That is not in our mind macro. That's not due to any decline in demand. We just got ahead of ourselves in aggressiveness on price and some other operational challenges that Oisin and team are focused on. That focus on price started in early June. So a bit of an own goal there. But we feel very good about the overall growth rate of the rest of the services portfolio. We feel great about the long-term growth rate of services. We just got to get Roofing chugging as evidenced by the $14 million revenue earlier in Q2, which was up substantially on a pro forma basis. So that's the point of focus right now, along with continued growth and profitability in ads and leads.

Oisin Hanrahan, CEO

Score fewer own goals.

Operator, Operator

Correct. It’s always a good strategy.

Operator, Operator

Our next question will be from John Blackledge at Cowen.

John Blackledge, Analyst

Great. Thanks, maybe two on Dotdash Meredith, for Neil. Could you provide some further color on the digital optimizations of the Meredith brands? Which brands have been converted? And then kind of what results are you seeing? And then secondly, any color on the brand versus performance mix at Dotdash Meredith? How was brand versus performance relative to the performance digital down 7% in 2Q and down 12% in July? Thank you.

Neil Vogel, CEO

Sure. So let's do the migration, first question first. Remember, the migrations are to unlock two things for us. One, it unlocks all the audience growth, our full tools to make these great sites. The second thing is it unlocks performance, meaning, we get the ability to have extremely fast sites and fewer ads that perform better, which means better ROI for advertisers, whether they come in programmatic or premium and it unlocks all our ability to do commerce. We've migrated now and I have the list here seven sites, Health first, People most recently, Parents InStyle, Travel and Leisure, Shape, Better Homes & Gardens, and they skewed towards most recently. We can look at the curves that we've seen in the past with what we've done. If you take a basket, Byrdie, Investopedia, Brides and liqueur.com, which is a good cross-section of different types of sites that we have migrated here. If you look at traffic growth or audience growth, it will just keep it a simple traffic growth to keep the math easy. In four months, we typically see on average and they're all bumpy so you blend it up 10% to 15% growth. A year you blend these out, growing about 30, 18 months, you're close to 50. That is from on the more performance site, you just build a much better experience and do all the things that we've done, and it's worked, the site that we launched first health is very comfortably on this curve. The others because we've been a little late are a little harder to read. They've just been too recent, I would say parents is probably on this curve as well. We did that one in late May. But most everything else was done in June, July. Early reads are positive. The one thing we can say with confidence is these brands have exceeded our expectations in terms of when you make changes how consumers will respond, how algorithms will respond, how advertisers will respond. These brands have a superpower, People, Better Homes and Gardens has its 100th anniversary, it is a significantly more substantial brand than Spruce which we made the largest home site on the internet. The big opportunity there is really compelling. On the monetization side to answer other questions, there are three ways that we make money: one, we sell premium ads; two, we do a lot of programmatic ads; and third, we do performance marketing, which is commerce and various transactions, helping people source goods and services. Programmatically, July 1, we essentially put the two stacks together. We are brand new, and we are learning. What I mean by we are learning is as we now have this incredible scale of this really valuable intent-driven content. Every time you migrate a site, it gets more powerful because the audience gets better and the ads get more performance. We have to learn what ad units to use, and the ad setup on all the old Meredith sites is totally different. So we are really learning and we are very optimistic of our ability to take up yields programmatically. Premium, I mentioned in the first answer, we have this incredible opportunity, we have something other people can't replicate. We can address branding and performance. Our sales team is learning how to sell this. We have to bring the hustle across the portfolio, but we're doing that and we feel very good about it. Third thing we're going to do for yield while we feel very good about this is the commerce piece of our business and the transactional piece for business. Remember, when we did the deal, the primary way that we've done transactions in commerce historically has been very detailed guides, ratings, reviews, and best stuff sort of things. Meredith, despite all of the brands they've had never really engaged in this sort of commerce. So how do we do our type of commerce there? As soon as we hit that migration is done, we unlock our capabilities to get going. So that is a long answer of saying we feel very good about the supply side, we feel very good about the demand side. The market is obviously bumpy and a drag on that, but frankly, in the longer term, it's not going to be in the next month or the next quarter. In the longer term, I believe we should outperform the market because we have an offering that is significantly better than the rest of the market. We can address branding and performance.

Joey Levin, CEO

I hope so.

Neil Vogel, CEO

Yes. It seems to be true for us where the transactional business in categories has held on fairly well year-over-year. The ad stuff has been more challenged. I would say we have some specific things baked into our results. Like we had a huge business helping people open crypto accounts last year, that's obviously not going to happen. We had a couple of outliers that may have nicked us to the downside. Overall, the commerce business is a transaction this is the primary business that has been fairly strong.

Joey Levin, CEO

And just a few points that we'd add to the overall arc of Neil's summary, the business. As we go month to month, we obviously produce monthly metrics. So you have great insight into our trends, I think across these, you're going to have noise month to month, so days of holidays, etc. But as we move throughout the year, our comps at Dotdash Meredith do get easier in the fourth quarter, especially at the Meredith properties, which were quite slow, at the end of last year, probably due to distraction due to the acquisition, which put us behind where we wanted to be entering this year. For all the reasons that Neil highlighted, we feel good about revenue improvements as we go along. The key will be the overall environment in the fourth quarter and where people are on holiday advertising, holiday spend. But we feel momentum against the comps in that period. The other is on a profitability basis, the cost savings that we've driven phase in as they are annualized each quarter. We do expect to see continued margin improvement in the fourth quarter.

Operator, Operator

Our next question will be from Youssef Squali at Truist.

Youssef Squali, Analyst

Thank you very much. I have a couple of questions, mainly for Neil. Can you discuss the expected growth for Dotdash Digital as we approach the end of the year? Previously, we mentioned a range of 15% to 20% growth as we finish the year and continue into 2023. What is your current perspective on that? Additionally, I noticed the print ad business grew by 3% this quarter, which is encouraging. Could you elaborate on the factors influencing that growth and how sustainable you believe this positive trend will be? Thank you.

Neil Vogel, CEO

I mean, I'm just happy we got a great question. You did very well. Thank you. So, print, I think we said when we bought this thing that we're going to approach print differently. What print can be for us, it is not going to be an economic driver of the business. It is a very important brand driver for everything we're doing. We've seen that in food and wine with its continued success. We've seen that Better Homes and Gardens, we had Harry Styles on the cover, it really helped rebrand Better Homes and Gardens, and it carries over to everywhere else. It is a brand leader. It can be a nice, profitable business. What we did was we made the hard decisions very quickly, we shot a series of properties. As you know, we got down to seven titles, we have outstanding publishers, we have outstanding editors, we've improved each of the products, like you'll see the new better, we've improved paper quality, it's a little bit more of a luxury good. People still buy vinyl records. People love these things and it's working. When you go from 15 to 7, you get to keep an all-star people, other people we have are essentially the all-star team. So that's been positive and frankly, it's been a really positive morale thing for our company. We have brands. We have the best brands in the world, whether it's TikTok, Print, Instagram, or the Web. That's what we have, and if we're going to do something, we're going to be the best at it. I think that's really internally been a big win for us. Talk about a base case for growth for the year. I think we mentioned it a little bit; we are going to see hopefully monthly improvement. Not hopefully, we will see monthly improvement for the rest of the year. As Chris said, it's going to be bumpy, it's probably not going to be linear, given decisions we're making, given IAC’s patience with us and encouraging us to do the right thing. By the end of the year, we should be back to growth and 15% to 20% is in play for next year.

Operator, Operator

Yes, we aim for the EBITDA from Print to cover our corporate expenses each quarter and year, considering the positive profitability trends and strong performance in Print based on adjusted EBITDA. There is some disruption in Print due to the restructuring from February and ongoing non-recurring costs related to that. However, we are optimistic about the coverage of corporate from a recurring adjusted EBITDA perspective and encouraged by the advertising momentum in Print for our core titles. Regarding our overall cost structure, we are focused on scaling digital. A crucial aspect is the marginal profitability of every dollar of digital revenue. Our goal is to maintain a drop to adjusted EBITDA of 50% to 60% for that revenue. We are confident in our progress. The primary focus remains on driving consumption, engagement, and premium sales. Our business plan is to continue generating digital revenue while ensuring that incremental profitability from each dollar of digital revenue contributes to our bottom line. We are on that path.

Operator, Operator

Our next question would be from Daniel Kurnos at Benchmark.

Daniel Kurnos, Analyst

Great, thanks. I guess we'll stick with that, boy, you might get two Print questions here. Just maybe for Chris too, we know that Meredith national portfolio tends to reprice going into year ends, it's a sort of a big setup here. You guys have clearly taken an aggressive stance on cost reduction there. So if things get a little bit worse, I guess, I'd like to hear your answer on, do you believe you're not going to be impaired by anything that happens in Print and your ability to invest in underlying DDM. Attached to that, I think when you guys made the acquisition, I may have referenced that you might find a few more dollars in the seat cushions in the sort of underlying synergies. You've already started to acknowledge that. You gave some good color, Chris, just around getting to the $450 million. But do we think of that incremental synergy as additive to that or is that just broader DDM? And not necessarily digital related on the synergy? I have a follow up sort of more operationally for Neil.

Neil Vogel, CEO

Sure. Let's talk about the print question first; the answer's no. What we are doing for Print is we are making products, properties, and assets that help our brands. We've significantly de-risked the print business from where we started. We think print can be a very nice business and we're being extremely judicious with expenses. We're making smart investments. But if you follow us or if you followed IAC for a while, we feel pretty good about it. The second seat cushions question, I think you're someone who's probably followed the company for a while, because before we bought it, we said there would be about 50 in synergies; we're plus or minus 100 now. Is there more, is there less? I don't know. But we are approaching this with a lot of rigor. You get fresh eyes on something that hasn't had fresh eyes on it for a long time, you find things. That's where we are. Chris takes it, probably the rest of it.

Operator, Operator

Yes, I'd say we wouldn't make any decision with respect to investment in digital, that we’d having medium and long-term value for that core business and not do it because of headwinds in print. That's not how I see things; it's not how Dotdash Meredith thinks. Our belief in the long-term value that's being generated there. With respect to cost savings and long-term profitability of the business, those were a key element of the $450 million EBITDA target and they are a key boost to profitability. We knew 2022 was going to be a noisy year with restructuring, pulling some of the Dotdash titles or the Meredith titles back when we migrate them. To allow them to run even faster, as Neil has articulated post-migration. Layered on is the ad slowdown that we've all experienced really in May, June into July. We have significant confidence that while all those cost savings are not appearing right now in the P&L because of the digital compression or the digital slowdown in revenues. They will as those dollars come back because we have real cost scale in the business. We have a tight machine at Dotdash Meredith Digital.

Operator, Operator

Our next question will be from Brent Thill at Jefferies.

Brent Thill, Analyst

Thanks, Joey on Care, with it only growing 10% in Q2, can you provide your view and aspirations for longer-term growth over time?

Joey Levin, CEO

Yes, I looked at it as a very large market that we're still under-penetrated. For the second half of the year we look for 10% to 20%. A lot of that'll depend on getting enterprise going with new sales and the impact of the instant book business. It’s not so much that we drive dollars in instant bookings, but it is we drive frequency and we drive subscription product from people having the ability to find simple games on there and how that impacts your behavior. We look for this because we think we're in a very big market with a lot of room for the leading product.

Oisin Hanrahan, CEO

And the only thing I'd add, as we disclosed in the letter, first four months of the year, you really had consumer growing at plus minus 30%, and enterprise flat. To Joey's point, we will lap the challenging COVID comps of early ’21 in Care, we'll get it back to growth, and it'll be less of a drag on the business. First half was tough, but we feel good about the long-term opportunity in the enterprise space.

Operator, Operator

Next question will be from Tom Champion at Piper Sandler.

Tom Champion, Analyst

Okay, thanks guys. I’ll be quick. Oisin, maybe you could just talk about demand specific to home services. How do you think the consumer is holding up? And maybe you could reconcile that with maybe de-prioritizing spend on the home? Just curious if inflation is having an impact? And just last one quickly, any update on Angi Key subs in the quarter where that ended up? Thank you.

Oisin Hanrahan, CEO

So I'll hit them in reverse order. Thanks for the question. Angi Key, over 300,000 Angi Key members right now continue to be very engaged, continue to have retention and engagement characteristics above where we would have expected them to be versus normal consumers. We're continuing to build out that product and expect to add more features to it. We're testing a couple of new things on it. It’s still a pay-to-save membership program that we're very happy with. In terms of overall demand, I think the point that Joey made, which is we have this suite of products is really important. We got this ads and leads product where we make money when pros need more work. We've got a services product where we make money on the back of consumers driving towards convenience of purchase. You put those two things together in a slower environment, our ads and leads product actually does better. As pros need more work, every incremental service request we have is worth more money to them. That's a really important topic that perhaps gets lost sometimes. A moderate slowdown in home services is actually really good for the demand for our pros using our product. We've seen that in the last couple of months, where our pros are more engaged, they're active for match more. That means they're turning their leads on more, and their willingness to pay per lead has gone up. Overall, we think that moderation in demand is a very positive thing for the largest part of our business.

Operator, Operator

The only thing I'd add also being newer to the business, we knew April and May would be substantial comps in terms of the demand across the US for home improvement and overall services. We said in the letter, sort of 5 to 10% top of funnel a little bit lower conversion. It feels that just reduced activity around home; macro pressures those would be probably less of a factor in that magnitude given how elevated last year was. The health of a two-sided marketplace as Oisin has commented and more of a match between supply and demand accrues to the benefit of the Angi marketplace. Now we just got to keep improving product and experience and capturing pro demand. With that, I think we will wrap up the call. We thank all of you for your time. Wish you a good day. Thank you all.

Oisin Hanrahan, CEO

Thanks.