Thank you for joining us today. I’m the CEO of IAC, and alongside me is Brandon Ridenour, the CEO of ANGI Homeservices. We will be addressing your questions regarding IAC’s second quarter results and our investment in MGM. As we did last quarter, we have published our quarterly shareholder letter, which is available on IAC’s Investor Relations website, but we won’t be reading it during this call. Shortly, I will hand it over to Joey for some introductory remarks before we move into the Q&A session. I want to remind you that during this call, we may talk about our outlook and future performance, as well as the potential for IAC’s investments in MGM. These forward-looking statements may include phrases like we expect, we believe, or we anticipate. It’s important to know that these statements are subject to risks and uncertainties that could lead to actual results differing significantly from what we discuss today. Some of these risks are outlined in the second quarter press releases from IAC, ANGI Homeservices, and MGM, as well as our reports filed with the SEC. We will also reference certain non-GAAP measures today, such as adjusted EBITDA, which we will simplify as EBITDA for the purposes of this call. Please refer to our press releases and the Investor Relations section of our websites for all comparable GAAP measures and detailed reconciliations of all significant non-GAAP measures. Joey, let’s get started.

Thanks, Glenn. The big news this quarter, on top of being a very strong quarter for IAC generally, is the MGM investment. And we've gotten, as you’d imagine, a lot of questions and curiosity around that. The main point I want to hit on is, while the form of this investment is a little different than what we've done historically, in a sense, it’s a public security and a minority investment. The concept is totally consistent with what we do and what we've always done, which is to be opportunistic and seize opportunities when we see them. That means looking for very large markets. We definitely have that in gaming, which is a $450 billion market globally, with maybe a third of that in the U.S. and still less than 10% penetrated online. We could say we did an excellent offline to online transition and there are natural tailwinds. That 10% penetration is definitely increasing and becoming significantly larger over time. Maybe we’ll pick the wrong horse or maybe the execution won’t be there, but there is no question that the 10% will get larger, and we benefit from those natural tailwinds. The other thing is scale dynamics here. This is not a typical marketplace business; however, the customer experience improves as more customers engage with this business, both in our offline and online domains. Lastly, it is essential to us to create value. Currently, we believe there is a temporary dislocation in the market. We do expect the world to return to normal eventually, and we believe that when it does, this business is incredibly well-positioned to benefit from that. There is a value opportunity right now. The critical question is whether they have enough capital to bridge the gap from here to normalization, and we're highly confident that they do. When we look at all that, that combination of offline to online, their real competitive advantages and value, suggests this is an opportunity for IAC that is very consistent with our historical opportunities. In the shareholder letter, we drew some analogies that I won't repeat here. The second topic I want to cover is our monthly metrics experiment, which is publishing figures monthly. You saw our numbers out through July. I think this is important for understanding the business and the flows we see, giving you all the information we have, eliminating the need for proxies or certain data sources. The only caution I'd provide is, again, as we've stated before, we don’t manage the business for a month, nor a quarter, but certainly not for a month. Monthly numbers can be volatile. There are many factors that can impact both the prior year period and the current period. We understand people will trade or focus on whatever they want; we cannot control that. But essentially, I would say the monthly numbers will fluctuate, and we’ll explain them as best as we can when we know what's happening. So with that, I’ll turn it to questions. Mark Schneider has joined us, and you can't see him on the camera here, but Mark Schneider, our Head of Investor Relations, is more than six feet away from us over there, working the keyboard.

Thanks, Joey. We're going to start with our first question from Ross Sandler at Barclays.

Hey, guys, thanks for doing the call this way. I really appreciate it. So maybe we can start with MGM. Knowing you guys, you've probably looked at the digital gaming space for a number of years, and there have been a bunch of interesting transactions. The question is, what drew you specifically to MGM? Was it the licenses, the loyalty program that they have? Given their partnership with GVC, what does IAC bring to the table that they may not already have? Lastly, Glenn, what's the cost basis on the investment? Thank you.

Yes, Ross, it's a little bit of all of that and more. The question about what we bring to the table that they don’t already have? Quite frankly, we don't know. When we entered travel, we didn't bring anything to the table in that realm. The same goes for home services and dating. What we looked at is, what we think the future looks like. I mentioned that in the opener a bit: this 10% penetration is expected to be higher in ten years. Our confidence is high it will be significantly greater than that. When we enter, we will learn more and figure out where we can help. We have some general dynamics that we believe we are very familiar with and hope to share with MGM, such as insights from conversion channels that have been valuable to us, learnings in direct and performance marketing, and successful or unsuccessful metrics. MGM’s digital initiatives, combined with their partnership with GVC, positions them advantageously. GVC is quite capable and market-leading in many countries. They know what they are doing. When you combine that expertise with MGM’s valuable assets, we believe it is a winning combination. We entered this category years ago when we saw the opportunity, and we learned the importance of timing and execution. MGM brings a unique offline to online synergy—where their in-person and online experiences complement each other—which is a real asset that no one else has in the market. MGM has millions of room nights and a solid customer interaction at check-in, turning that into a digital footprint for engagement, which is extremely valuable. So, we look forward to helping them capture this opportunity.

And just some housekeeping items. We own 59 million shares and we paid $1.018 billion for that. So our basis is about $17.25 each. And after the investment, we’re left with $2.9 billion in cash. From a housekeeping perspective, you saw in our balance sheet it was in marketable securities. This quarter going forward, it’ll be in long-term investments due to our posture, and it will be marked to market quarterly.

Which effectively means net income will be somewhat irrelevant from here on out. I'm not going to have everyone focus on that particular metric, but I do see it as a relatively non-informative data point.

Our next question will go to Cory Carpenter at JPMorgan.

Great, thanks for the question. On ANGI, Brandon, I was hoping you could provide us with more color on what drove the demand and supply chains we saw in July? How do those track versus expectations? And how does that inform your thinking into the back half of the year? Thanks.

Thanks, Cory. We've had a strong finish in Q2, especially in May and June. In July, we continued those trends. Overall, global revenue in July was about flat to June and was up in North America, aligning with our expectations. From an operating metrics standpoint, service request volume and consumer demand remain elevated in July relative to post-COVID trends. For service provider sales, we continue to see explosive pace in new sales originations. The last four months, including July, have been the peak months in our company’s history. Specifically in July, we observed a 53% year-over-year increase in service provider sales. This was indeed a strong month, continuing the late Q2 trends. In terms of year-over-year numbers, as Joey alluded earlier, there are many influencing factors. Last year was volatile, with weather affecting the first half, resulting in July being an outlier in strong growth, making for a challenging comp. Currently, the consumer demand trends we’ve seen are strong and likely to sustain at this level for the foreseeable future. What’s more complex is the pressure on the provider side of the equation in our industry. Over two-thirds of service providers report being negatively impacted by COVID, with 40% indicating that they are operating at a reduced capacity. We track this regularly and have seen gradual improvement through June and July. The recovery is slower than we had hoped, and while it’s progressing week by week, it isn't very rapid. Therefore, while we don’t need the end of COVID-19 to see these businesses recover, it will be an ongoing incremental process through the second half of the year.

Just a couple numbers to reinforce what Brandon said. Our service requests in July grew by 24%, which was the third highest monthly growth rate since 2018. In July last year, we had five Mondays in the calendar; in this July, we had four. And it’s important to note the comp fluctuations we experience as we move through the year. For the back half, we do expect it to accelerate from the July levels, and we're optimistic that the third quarter will slightly surpass the 9% growth we saw in Q2. The fourth quarter is also expected to continue this trend of acceleration. As Brandon stated, we expect the supply constraints caused by COVID to lift as the year progresses, allowing us to monetize transactions better.

Our next question will come from Eric Sheridan at UBS.

Morning, everyone. Brandon, maybe I'll follow-up on Cory's question and widen the discussion. In the current environment, how do you align your strategic priorities with what's within your control versus what is not on both demand and supply sides? How do you align these investments over your medium to long-term goals?

That's a great question. Our goals and the pipeline of initiatives haven’t really changed since the beginning of the year. COVID has definitely presented additional supply challenges but our two primary goals remain: creating a sticky relationship with homeowners and building a sturdy relationship, and, additionally, increasing the provider capacity in the marketplace. For key investments, we plan to significantly grow our sales force in the latter half of the year. We intended to do that in Q2 but faced delays adjusting to remote processes. We are working through that now and scaling our initiatives. Additionally, we've accelerated the fixed-price service model, which is crucial for bringing more capacity to the marketplace. Last March was less successful than anticipated, but we've corrected our approach in late Q2 and are striving to onboard as many providers as possible. We've been testing new monetization models, and the theme is to provide varied tools and methods to engage service providers as we tap into incredible consumer demand. On the consumer and provider sides, we introduced a new payment platform, HomeAdvisor Pay, which has shown rapid growth, and we plan to add a financing option for consumers—a first-of-its-kind offering. We're heavily focused on driving engagement with our mobile app, which has shown explosive growth. Overall, our aim is to deepen engagement and create lasting relationships with consumers while enhancing the value proposition for service providers.

Another great data point this quarter is that our service requests from new consumers to the platform grew by 25%, increasing through the quarter, signifying we are either taking share from other solutions or converting offline to online effectively, especially with the successful product strategies from Brandon and his team.

Yes, we conduct weekly sentiment surveys at scale with service providers, and surprisingly, around 50% of them report lower consumer demand, which does not align with our marketplace observations. We believe we are at the intersection of two trends: people focusing more on their homes and seeking online solutions to fulfill their digital needs.

Our next question will come from Brad Erickson at Needham.

Thanks. A couple of follow-ups for Brandon. We've discussed this before, but I wanted to dig deeper into the service provider constraints. Something like 50% of service requests went unmonetized this quarter. Is there a concern that if this level persists, we could be losing some of those customers for good? Secondly, regarding Google, are you targeting the same types of service providers that Google is, or do you perceive a separation where HomeAdvisor and Google draw different types of value?

Yes, both questions are great. First of all, the inability to monetize a request does not indicate if we’ve satisfied a customer. Even if we're unable to monetize, we still have the broadest reservoir of providers available for connecting consumers. Significant growth in consumer demand will fill our database and create growth opportunities for the upcoming months. Should we have failed to satisfy those customers, it would be a different story, but monetization is not a reliable indicator of consumer satisfaction. For example, with our fixed-price service model, we provide solutions for more projects than we can fully monetize. If someone searches for a particular service, they may not accept a higher-priced offering, yet still find value in the solutions we propose. Regarding Google, our offerings differ greatly. Google's product operates by responding to a search for something like 'plumbers in Denver'—it's a less targeted model that doesn't delve into the specifics of project types. The service providers attracted to Google generally seek inbound calls, relying on less price competition. We haven't yet seen competition pressure us notably, as our sales productivity and recent performance show remarkable strength.

Our next question will come from John Blackledge at Cowen.

Great. Thank you. On Vimeo, the mid-teen ARPU growth was a great outcome, especially as the enterprise ARPU has been a key driver with growth at over 20% year-over-year. Could you discuss the enterprise adoption during COVID-19 and any demand signals thus far for Q3? Should we expect enterprise ARPU growth to be sustained in Q3 as we approach year-end? Glenn, could you discuss Vimeo's gross margins for the quarter as well?

Enterprise is doing exceptionally well right now. The timing is definitely working in our favor. To illustrate, we at IAC have changed our internal spending mindset. Pre-COVID, if someone asked for $10,000 for town hall software, I would have raised an eyebrow. Now? We look for the best tools available without price being a significant concern. Enterprises are accustomed to using technology like video solutions, persistently followed by a physical component. We find ourselves going into enterprises where there might already be users and now advocating for an enterprise-wide adoption at a reasonable price. It has shown to be a sticky product. The sales cycle has shortened from initially around 30 days to now averaging 15 days. We're seeing positive spend and decent ARPU retention. We will continue to add features that satisfy this sticky demand.

In terms of numbers, enterprise is distinctly our fastest-growing business unit. This quarter alone, it grew by over 70%, with bookings reaching triple-digit growth. We've seen significant ARPU inflations, with an example of a retailer that transitioned from spending $660 annually on self-service to now bringing in $660,000 as an enterprise customer. We are moving toward a gross margin target of around 70%, and our progression shows that this figure could ultimately prove conservative.

Okay, great. Thank you. Joey, two questions regarding MGM. First, how do you enact change as a minority investor in a public company like MGM? You are known for taking over companies, extracting value using your strategies. How does that function in this case? Secondly, do you, as a minority shareholder, need to be licensed by gaming authorities, or is that threshold something you can bypass?

Sure. Regarding the second question, yes, we will be licensed, and this will vary by state, as there are rules at both 5% and 10% ownership thresholds. Thus, we’ll undergo a regulatory process which is known to be quite burdensome; we are preparing for that process but not overly concerned. As for how we impact change as a minority investor, our goal isn’t necessarily to drive change, but rather to be helpful. We can assist in various ways as a minority investor. MGM intends to leverage our board insights, and we can harness access to our people, businesses, and their learnings. One significant synergy within IAC is that its businesses share data, information, and learnings voluntarily. Yesterday, we had a call with the CEOs of IAC’s businesses, and I noted that MGM should also be treated in this way; anyone interested can access our knowledge. With over $1 billion invested, this capital can significantly benefit MGM, and we are excited about how we can add value and help maximize its potential over time.

Thank you.

Great. Our next question will come from Jason Helfstein of Oppenheimer.

Thanks. Two questions: One, can you discuss Vimeo's product pipeline for the second half? Any insight into what the team is focusing on? Secondly, on M&A, you've mentioned the minority investment in MGM. Should we expect you to return to your historical approach of acquiring full stakes in companies that require remediation?

Yes, regarding your second question, yes, we will likely focus on buying full businesses, shaping where necessary. This aligns with the historical approach we’ve taken. While that is our plan, we will also remain opportunistic. On the Vimeo product pipeline, we are concentrating on verticalizing the product across specific industries to adapt effectively for tailored solutions. We want to enhance vertical relevance while avoiding bespoke solutions for individual customers. Additionally, we are innovating in response to the increasing importance of remote tools, such as screen recording capabilities, which can penetrate enterprise entries. With Vimeo generating more cash flow, we now have greater flexibility to invest continuously in growing our product pipeline and development resources.

Great. Our next question will go to Benjamin Black at Evercore.

Thanks for the question. Could you share your insights on the marketing environment surrounding ANGI? Does it remain as favorable as discussed last month? If supply restrictions remain, how willing are you to increase marketing investments in the latter half of the year? On fixed pricing, you mentioned its availability on around 200 tasks. How high do you think that can grow, and what is your outlook for fixed price contributions over the next 12 to 18 months?

Great question. The marketing environment is presently favorable owing to generally reduced rates across several channels along with organically increased consumer intent. For example, TV rates are down about 20% or 30% from where we projected. We eased back on marketing in Q2 due to uncertainty but have ramped up efforts specifically in TV since June. Overall, marketing spend is driven by ROI. We will spend in channels yielding profitable returns. Regarding fixed pricing, it is available on 200 tasks, which constitutes approximately 30% of the requests received. We’ve been gradually launching into higher-value projects, and our findings thus far indicate consumer willingness to engage in these higher-priced transactions, which opens sizable market opportunities. As we continue to undertake these projects, it will be essential to see how they unfold on a case-by-case basis. Over the next 12 to 18 months, we anticipate rapid growth in the fixed price segment, and while I cannot predict specific numbers, we expect it to contribute significantly to our growth.

We are committed to investing in marketing as described by Brandon. That's why we maintain our EBITDA posture for the year; we do not expect margins to improve. Our focus remains on taking market share, as evidenced by our service requests this quarter equating to 9.4 million - a figure just over 29 million on a 12-month basis. If we improve our monetized transactions from current levels, we see an immense opportunity ahead. If we reduce our unmonetized requests from 50% to 40%, that translates into substantially more revenue. Thus, our path of investment in marketing is critical for future product offerings.

Our next question will come from Michael Ng at Goldman Sachs.

Good morning. Thank you for the question. I have a couple on MGM. First, can you discuss the incrementality of online betting, and if cannibalism occurs, does that result in a net positive for MGM? Also, Joey, regarding your earlier points, is MGM well-positioned to capture a greater share of online gaming relative to their traditional gaming base?

Yes, I think a significant portion of that is likely to be incremental. Cannibalization could occur, but we believe it could be moderately incremental overall. Their share potential is enriched by the combination of their offline and online operations, as a strong customer experience is vital for differentiation. The same lines, odds, and payouts generate little distinction; so, to capture share effectively, customer experience must lead.

And as a follow-up. Could you outline your long-term plans involving the MGM stake? If successful in 3 to 5 years, do you foresee chances to increase that stake or opportunities to capitalize on the online betting joint venture?

That's an important question. We haven't formulated a robust answer as we usually keep our sights on the long term. Our main aim is to stay invested for the long run. MGM’s primary focus has been share repurchase in the past when they’re generating excess capital. If the chance arises for MGM to repurchase shares, then we would hope ownership would increase over time. Nevertheless, many factors could intervene and dictate this process, whether to slow down or enhance the potential actions.

Our next question will come from Brian Fitzgerald at Wells Fargo.

Thanks, guys. A quick one on ANGI and a question about Dotdash. What updates can you provide on consumer intent regarding indoor versus outdoor jobs? Additionally, how have advertisers responded in terms of returning since Q2 on Dotdash, particularly as some paused their advertising?

Thanks, Brian. We've seen considerable recovery across different types of jobs, with a strong degree of engagement for mandatory tasks. Major indoor projects like kitchen and bathroom remodels have returned to flat or positive year-over-year demand, which is promising given the context. However, they are not yet back to earlier pre-COVID growth expectations. Overall, we're optimistic about recovery but expect some cautiousness due to COVID fears.

Regarding Dotdash, I can't address the broader ad landscape outright, but Dotdash's performance is exceeding expectations and advertising demand remains robust. There has been a drop in travel advertising, but we have seen a notable interest from other categories. Dotdash continues to thrive as we operate beyond the news cycle and remain focused on intent-based media.

Our next question will come from Ygal Arounian at Wedbush.

I have two questions—one regarding MGM and M&A, and the other on ANGI. After entering a space, you have historically consolidated thereafter. With your minority stake in MGM, is that roadmap still in play as you look to execute more acquisitions? How do you intersect or bypass regulatory hurdles if they arise? On ANGI, could you provide insight about your partnership with Lowe’s and how it’s expected to stimulate SP and SR growth in both the near and long term? Thanks.

I believe there are opportunities within MGM for further engagement and M&A, and our aim is to support MGM's aggressiveness in winning. We'll consider all methods available to achieve success. I think I answered the MGM question. The partnership with Lowe’s is one we’re very excited about given its multifaceted nature. We can combine our extensive service request data with Lowe’s premier offerings for home improvement products and materials. We can introduce fixed-price services within their retail environment, driving consumers through our platform. Also, we will offer Lowe’s pros a membership option to home advisor services as a membership perk, thus strengthening loyalty and driving our service providers to engage with ANGI. We hope to see huge synergy as this partnership develops, and we'll see how this plays out over time.

We have time for one more question.

Great, thanks everyone. Joey and Glenn, we know you'll keep a close watch on cash use. But would it be fair to suggest that another major acquisition is now lower probability? Or is it still likely that we could see another billion or multibillion acquisition among the various options you have? Then I'd also like to follow-up with Brandon regarding your sales team structure. Have you integrated sales teams for traditional SPs versus those coming in for fixed pricing, and what's the anticipated impact of that?

Dan, you faded a little bit, but I believe I grasped the sentiment—do we have a significant acquisition underway or is that less likely now than before? We don't have anything huge planned right now. The standard remains high for anything we would consider substantial. Generally, we prefer smaller acquisitions. At this moment, we plan to concentrate on smaller tuck-ins but will keep an eye on the market for broader opportunities.

On the fixed-price aspect, we maintain distinct sales forces for traditional SPs versus those utilizing the fixed price model. While they certainly have differing structures and practices, we anticipate these will remain separate for the time being. This allows us to focus effectively on distinct engagements. However, our goal is to streamline the experience as much as possible between these offerings. Once providers join our ecosystem, our approach is to ensure they are made aware of both models. Therefore, our overarching intention is to keep our existing service providers satisfied as we grow our offerings and maximize their engagement.

Thank you for your engagement, and for adapting to this format, which I appreciate and we plan to continue using moving forward. I hope everyone stays safe and healthy, and we will talk to you again soon.

Terrific to see you.