Thank you, operator. Good morning, everyone. Christopher Halpin here, and welcome to the IAC and Angi Inc., third quarter earnings call. Joining me today are Joey Levin, CEO of IAC, and Chairman of Angi Inc., and Jeff Kipp, CEO of Angi Inc. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter, which is currently available on the Investor Relations section of IAC's website. We will not be reading the shareholder letter on this call. I will shortly turn the call over to Joey to make a few brief introductory remarks, and we'll then open it up to Q&A. Before that, I'd like to remind you that during this presentation, we may make certain statements that are considered forward-looking under the Federal Securities Laws. These forward-looking statements may include statements related to our outlook and strategy and future performance and are based on our current expectations and on information currently available to us. Actual outcomes and results may differ materially from the future results expressed or implied in these statements due to a number of risks and uncertainties including those contained in our most recently quarterly report on Form 10-Q and our most recently annual report on Form 10-K and in the subsequent reports that we filed with the SEC. The information provided on this conference call should be considered in light of such risks. We'll also discuss certain non-GAAP measures, which, as a reminder, include adjusted EBITDA, which we'll refer to as EBITDA for simplicity during the call. I'll also refer you to our earnings releases, the IAC shareholder letter, our public filings with the SEC, and again to the Investor Relations section of our respective websites for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. And now, I will turn it over to Joey.

Thanks, Chris. Obviously, the big news today is that we are contemplating a spin of Angi, which if we completed would be the spin of IAC in four years and obviously join a very long line of spin-offs out of this company. Besides creating two separate focused companies, this move would allow Angi to stand on its own, have a more liquid currency, and a standalone ambitious strategy, whether that's M&A or capital allocation generally. The key to making this possible is the fact that profits in cash flow in the business have improved meaningfully. Consumer experience has improved significantly, and jobs done well has become a true driving obsession of everybody in the business. Jeff and I believe strongly that the business has revenue growth again in its future, and profitability will be stable from here. So we're in a strong position to do this, and we're grateful for the opportunity to have another spin out of IAC. I'm sure we'll have a lot of questions on all of this and IAC's performance generally, which I think was very good this quarter. People worked hard, we're very proud of the work everybody did this quarter. And so let's get to the questions to talk about it. Thank you. Operator, first question, please.

Our first question will come from Cory Carpenter with JP Morgan.

Thank you and good morning. Joey, could you expand on why now on exploring the Angi spin? And then second question related to that, which you just mentioned, what's giving you the confidence in Angi returning to revenue growth and is there any impact you're expecting next year from the SEC’s 101 consent rule? Thank you.

Yes, I'll take the first one and I'll let Jeff do the second but I can weigh in there too. The answer to why now is as we said through many spins we've done in the past, there's not a particular formula or a specific kind of automatic trigger on these things. It's a confluence of factors, and one is the business being spun and the other is the impact on what's left behind. In the case of Angi, the key is that it is standalone, strong, healthy, and capable of being on its own in the public markets. The business is now comfortably profitable, comfortably generating cash flow, and we believe it is on the right path strategically. It has all the pieces it needs to truly deliver for the consumer, and there’s a lot of execution ahead in terms of product, but there’s also a lot of execution behind it in terms of product and seeing that come through on things like retention and customer satisfaction. We like the path that Angi is on right now and like Jeff's ability to execute against that. There are also benefits to having a more liquid currency. There's more direct investor access and the ability to use that liquid currency, whether it's for M&A or compensation. I think being spun off and standing alone, those things can help. Of course, this is also a tax-efficient concept in the sense that the spin, if we do it, would be tax-free. The other piece is that it allows IAC to focus. We've really been on a campaign of slimming down, focusing, and we think that can allow us to do fewer things better. And that's what we plan to do with IAC.

Yes, in terms of our confidence in the stability and future growth of the business, I'm going to start by going back two years to when Joey took over the business with tremendous opportunity to improve at the time. Joey and the team committed to improving the quality of the business, the customer experience, and returning the business to profitable growth. We've moved a fair amount of lower quality traffic off the ship. We removed some of our lower quality third-party traffic, and we've moved a significant portion of the business to consumer choice. The result has been that our jobs done well rate has grown about 30% in the last year, and pro-retentions risen materially each quarter. Homeowner NPS year-over-year is up by almost 60% in this last quarter. Those are big markers and a tribute to what we've accomplished to drive the long-term experience and growth of the business. We’ve also taken our unit economics apart and put them back together. We've right-sized our sales effort to drive long-term ROI, and we've re-engineered our paid marketing to drive material profit growth despite revenue decline. You can see it in the near 30% paid channel profit growth in the last quarter. We deliver profit growth in 2023 despite revenue declines. We're doing so again this year, and we'll hold our profit again next year as we make the next major investment in our customer experience. By moving the vast majority of our traffic that comes through our core customer journey to consumer choice, we welcome the FCC order change related to the TCPA, that I think most of you are aware of. This change will yield incremental real leaps in jobs done well and put it squarely where we want to be with our customer experience, which may mean another bump down in revenue. I would say we expect our first quarter to be down about as much as the quarter just ended and in line with what we expect in the fourth quarter. However, from there, we expect to stair-step up and grow in 2026 based on what we know and is in front of us. We have confidence in that. In terms of profitability, we fully expect to hold our profit in 2025.

Operator, next question?

Next question will come from Jason Helfstein with Oppenheimer.

Hi, thank you. There's one question, then a housekeeping question. So just to elaborate on that, I guess, for Joey and Jeff, I mean, many of us have covered Angi HomeAdvisor for a long time. There's always been this big promise of a total addressable market, you talked about it in the letter. And it's historically been hard to unlock, whether it's just word-of-mouth, Google, social media. Fully appreciate the improvement in efficiency in the business that you've been able to do, but I guess why should investors get excited now that you finally figured out how to unlock the growth that has been elusive for kind of 15 years in this vertical? And then a follow-up, just remind us the basis of the MGM stock and what's the tax treatment if you were to potentially sell that stake. Thank you.

Thanks, Jason. Chris will take the second one, but the first one is the fundamental difference right now, which hopefully you've been hearing for a while, and we see and have shared a lot of the underlying metrics of this is an absolute obsession with customer experience. The folks who have succeeded at disintermediating Google, which is a very tall order, or going after things like word-of-mouth, are the ones who have an absolute customer obsession in getting jobs done well. I think that change in our mantra is what's going to drive both pro-retention, the changes in the economics of the business, and allows us to reinvest in compelling ways, leading to a homeowner repeat rate, and a homeowner satisfaction, that allows us to reinvest in compelling ways. That is the difference, and we're doing it on a brand that is entirely dedicated to home services. That doesn't really exist in the market, and that I think aligns with us. I think throughout the past, there has been probably an overemphasis on more shorter-term results and less on the longer-term investment of an obsessive customer experience. And that's what we've put in place and continue to build upon. If we do continue to do that, I think that we can build a compelling direct brand with homeowners that goes after those other portions of the market that you mentioned. You want to add to that, Jeff?

No, but I completely agree.

And then Jason, on the MGM stake, we currently hold 64.7 million shares of MGM. Our basis is just below $1.3 billion. IAC has net operating losses in excess of $1 billion. It was $1.4 billion as of the end of last year. We'll probably use some this year to offset profits, but at the current trading levels of about $1 billion, we have more than enough NOLs to offset. So we think about it, and you can see it in the sum of the parts, as the market value of the shares is the appropriate way to think about our holdings, because we can offset any taxable gain right now. Thank you.

Next question will come from John Blackledge with TD Cowen.

Great, thanks. On DDM digital revenue, can you talk about the drivers of the 3Q overall revenue outperformance, notably ad revenue accelerating at a faster pace than expected while performance marketing and licensing were a bit lower? And then for 4Q, can you unpack the mid to high single digit revenue guide relative to our expectations of low double-digit revenue growth in 4Q? And as we look into 2025, just any color there on DDM digital top line growth. Thank you.

Sure, John, thank you. Third quarter digital performance was excellent across both traffic and monetization. Digital advertising revenues grew 26% led by 14% growth in core sessions. We're happy to see overall sessions were positive for the quarter for the first time in a while. Traffic growth was particularly strong in our entertainment and food properties, and we continue to see momentum there. Direct ad sales were strong as well, perhaps even aided a little bit by advertisers pulling some spending forward into September ahead of the election. Programmatic was superb with rates up 30% plus in the quarter. Performance marketing disappointed, down 7%, with continued weakness in financial services such as insurance and brokerage. That segment has improved this quarter and we expect growth in the fourth quarter across performance marketing broadly. Licensing continues to be solid driven by both our OpenAI partnership and Apple News, up 17% in the quarter. Overall, it added up to 16% digital revenue growth, our best quarter since we acquired Meredith. We were also pleased with how that flowed down to adjusted EBITDA. We would highlight that aggregate adjusted EBITDA only grew slightly in the third quarter. That growth rate is dragged down by an $8 million favorable tax release related to the Meredith acquisition that benefited our corporate expense a year ago. Digital EBITDA grew 28% this past quarter and incremental margins were 42%. When you look at the fourth quarter, October was softer on both advertising spend and traffic than we expected, resulting in digital revenues that were only up 7% in October for the month. We knew there'd be some challenges with the election, but consumer distraction and advertiser caution exceeded our expectations. I'd note for those who are newer to the story that Dotdash Meredith does not sell digital inventory on its titles to political advertisers, so there's no benefit from the election and just headwinds for the properties. The good news for DDM was the election was rapidly decided and we are seeing a steady return of advertisers in November and December. We know Thanksgiving is a week later, so things are tighter in the overall holiday shopping period. DDM is pushing hard across its properties to drive both advertising and performance marketing, but we thought it prudent to guide fourth quarter digital revenue to the mid to high single digits at this point. Looking to 2025 and beyond, we are still confident in 10% digital revenue growth as the baseline for the DDM business. That will be driven roughly half by traffic growth and half by improved monetization. Individual quarters may bounce around above and below that target, but we still have confidence in that as the long-term driver of the business.

Thanks, John. Operator, next question?

The next question will come from Eric Sheridan with Goldman Sachs.

Thanks so much for taking the questions. Two, if I could. First, with the decision to break out Care as a reported segment, I want you if you could hit the refresh on where that business sits today and how are you thinking about the market opportunity set ahead for Care in the years to come? And then secondarily, Joey, there were some crosscurrents in the letter, the depressed evaluation of IAC, excluding MGM, but you also talked about the M&A environment being challenging from a valuation standpoint. Any reset or refreshed view on capital allocation broadly against what you see as the opportunity set? Thanks so much.

Thanks, Eric. So, on Care, we've been thinking about this for a while and especially with an Angi spin, if that happens, breaking out Care as its own segment makes a lot of sense. It's a scale business with $365 million of revenue and $45 million of adjusted EBITDA over the last 12 months. I think by far category leader in terms of online digital marketplace, bigger in terms of brand, audience, providers, and families than any competitor we're aware of. Regarding the market opportunity, if you want to put some numbers around it near term or even longer term, the site receives 7,000 to 10,000 job posts a day and 70,000 to 100,000 applications. We are currently only converting a small fraction of that into paying customers. What that tells you is we have the liquidity both on the supply side and on the demand side. I think we have the potential, and our new CEO has been focused on this, to improve the product and customer experience, especially using tools like AI and machine learning to get those matches better. If we can do that, we think we can drive conversion and also do a better job optimizing pricing and packaging. The other thing that's been a nice tailwind for the business is the enterprise portion where enterprises are increasingly taking on responsibility for delivering care. That trend is only going in one direction for a long time, and Care should be a beneficiary of that. We can start to innovate on things like senior care, which we're excited about. So, we're excited about the potential in that business. In terms of capital allocation, nothing has materially changed. We've had a discount for a while, and we have not been active in the M&A market. We've been more accumulating cash than spending cash and I think that is okay until we find opportunities that meet a very high bar. Everything is still on the table for IAC as it relates to capital allocation, and we'll continue to be on the table for capital allocation while our cash balance grows.

Thanks, Eric. Operator, next question.

The next question will come from Ross Sandler with Barclays.

Great. Back to DDM. Guys, on D/Cipher, there's a bunch of new information in the letter about how that's driving some improvement. Could you just talk about how the approach has changed with OpenAI now powering some of the number crunching at D/Cipher, and how quickly you can roll that out to all your advertisers? And then more broadly, as we look out over the next five years, how can you take this technology to off DDM inventory, and how big of an opportunity might that be? Thanks a lot.

Yes, it's a really important question. I'll start now, I'll turn it to Chris, but I wouldn't say that the approach has changed with respect to D/Cipher. What we added to D/Cipher with the OpenAI integration is the ability, as you referenced, to start addressing the off-DDM inventory. For a little while now, we have had DDM's inventory mapped nicely to outperform, generally, the market on intent. What the OpenAI integration did was take that mapping and apply it to around 30 million more URLs or somewhere in that neighborhood. Now we have the ability, whether through partnerships, or we can just buy some of that inventory to sell it to advertisers. This will increase the size of their buy with us and deliver larger scale packages. We expect that to be a driver of growth unbound by the size of DDM's existing inventory. You want to add to that?

Yes, I think the only additional element there, when you think about third party properties, you’ve got the demand and the supply side. Right now of DDM's existing inventory, D/Cipher can address 100% of our supply. We significantly increase the supply through the capabilities that OpenAI has brought to the product to score. We can now transact across those incremental 30 million websites that are in categories similar to DDM. So the effective supply that we can D/Cipherize will only increase. On the demand side, right now, in terms of how our advertisers and agencies buy, only about half of our digital advertising revenue is going through demand channels that D/Cipher is addressable to. So as of right now, the demand that comes through forward contracted orders from advertisers and agencies is about half of our revenue. The part where D/Cipher is included is growing at 25%, while the non-D/Cipher included part is growing about 5%. You can see the growth driver that D/Cipher is. We’ll continue to grow the addressable demand side through product investment and development. Thank you, Ross. Operator, next question?

The next question will come from Dan Kurnos with The Benchmark Company.

Yes, thanks. Good morning. Chris, can I just follow up on that? Are you as fully distributed as you want to be within the ad tech ecosystem? Do you need to make any incremental investment? We obviously know it's a pretty heavy lift to get Meredith up to Dotdash standards, but is there any more lift you need to do in order to achieve just kind of full D/Cipher coverage on programmatic? And then, Joey, we've been here forever on this. You used the word, I guess, the word de-conglomeration. Is that a long-term philosophical change for you regarding M&A companies in the portfolio, time to spin, increased focus, and what does it mean for things like stakes in Turo and MGM? Thanks.

No, it's not, Dan, it's a good question, but it's not a long-term change. We've always been de-conglomerating and re-conglomerating. Right now we're focused on; we want to focus on fewer things simplifying and executing strongly against those things, and that's our near-term priority. It is possible in the future that we add new legs size, but for the moment we are stepping focused on slimming down and executing, but we have a large cash balance obviously. We have the wherewithal to do other things, and we're going to remain curious and interested in possibilities for IAC, whether they are already in the portfolio or could be new things.

Again, and then thanks on the DDM question. Break down into a couple elements. As you mentioned, post-combination of Meredith onto the Dotdash platform, we feel excellent about the state of our programmatic stack and programmatic integrations broadly, so the ability for us to transact with the inventory that we don't sell directly. We feel great about the state of our ad tech stack and optimizing price and serving frequency, et cetera, and that Neil and his team have done a tremendous job building that out. The two continuing efforts, which we've talked about in the past, one is continuing to have D/Cipher integrate into demand-side platforms. Some respect intellectual property and some don't, and that requires them to look at their algorithms differently. We're chipping away at that and hope to make D/Cipher addressable to more of the ad market. The second is further integrating ourselves directly into the workflows of agencies and the large advertisers that transact directly through themselves. For us, that's a focus on developing the managed service capability that DDM can offer where D/Cipher is increasingly productized and programmatic-like on a direct basis. Thank you. Operator, next question?

The next question will come from Tom Champion with Piper Sandler.

Hi guys. Good morning. Maybe for Jeff, I was wondering if you could elaborate a little bit on the comments in the letter on the Ads Pro product and the Leads Pro product unification. Is this a test? Did it already happen? Maybe something you did in Europe. And then, curious if you could talk to the relationship with the jobs done well metric. Any connection there or would this amplify that trend? Thanks.

Sure. So right now, the Ads and Leads business exists as two different products and also on two different platforms. Fundamentally, it's the same transaction that happens. Pros pay us several hundred dollars for a bundle of Leads or contacts with homeowners. So at the end of the day, this sort of business deal isn't that different. But operating it in two formats with some inconsistencies and setup on different technical platforms isn’t optimal. We have set out to get onto a single platform so that we can market consistently, run the business consistently, and sell one product to our customers rather than multiple products through multiple salesforces. We have been running a test to understand the efficacy of selling the single product, which is performing better than Leads and almost as well as Ads. We see a path to ending up on the same product. The same product will be a pro paying several hundred dollars for a bundle of Leads. We think that getting it on the same platform will improve our business a great deal by selling one product to our customers and marketing to one customer base. In terms of jobs done well, we think this will enhance the business. Currently, the difference between our Ads and Leads product is that Ads buys a bundle of zip codes across a single category, whereas Leads can specify tasks within a category and specify zip codes. We believe that merging these will materially enhance jobs done well for that piece of our customer base. This migration is about the size we've already performed five times in Europe and are about to complete a sixth by moving the Canadian business to the European platform. This is a core competency in Angi, and although these things are not simple or easy, this is about as close to business as usual as it comes when it comes to doing one of these things.

Thanks. Operator, next question?

The next question will come from James Henny with Jeffries.

Thank you. Can we just get a little bit more detail on the comment that you made around reducing corporate costs post-Angi spin? What specifically are some of those areas and how much could we expect in terms of savings over the near, medium, and long term? Thank you.

Sure. I'll start and Chris can add to this, but we're not putting a number out on it, James, but we'll look at all corporate costs. Everything's on the table in there to figure out what we need in a slimmer IAC. Some of those costs may go with Angi, and some of those costs may go away. Everything in that context is on the table, and we’re just beginning that exercise right now, making sure we preserve the ability to grow at IAC while doing it more efficiently.

Yes. It's an active analysis, part of it is also looking at the corporate functions that Angi utilizes and understanding if the spin happens, what the level of infrastructure needs will be for those areas post-spin. Historically, when we've spun, some of our people go with the spun company to help build out the functions that don't exist at the spun vehicle, as they've relied on corporate. So this is an active analysis that we'll be going through, and we'll likely be coming back to you next quarter when setting out guidance for next year.

Great. And maybe just one quick follow-up on the macroenvironment that you're seeing within digital advertising. Obviously, a pretty strong quarter in Q3. I'm just curious what you're seeing maybe by vertical or just generally in the macro landscape.

Yes, we talked about October already being a little bit light, but as far as what we can see from the consumer, it seems reasonably healthy right now. When we look at MGM, Turo, and basket sizes in the commerce part of Dotdash Meredith, we don't see the consumer, at least the consumer that we're interacting with, retreating in any meaningful way. It seems relatively stable, but for October, which we think had a lot of distractions. Specifically, with respect to advertising categories at DDM, the slowdown in advertising spend was broad-based, with a notable dip in the last couple of weeks of October ahead of the election. However, we're seeing categories like retail, technology, and health come back solidly. Food and CPG had a strong September, but is coming back more slowly since the election, while home and travel are both slow, but that’s been due to secular slowdowns for a while. Entertainment and media continues to be very weak, as streamers are still figuring things out. We expect that a number of these will come back soon as we ramp up into the holidays and especially Thanksgiving, which is key for our food properties.

Thanks, James. Operator, next question?

The next question will come from Youssef Squali with Truist.

Thank you very much. So a couple of questions. First, on the data licensing deal, can you talk about the contributions of OpenAI to the core and just generally, what does the pipeline look like? With these types of deals, once you do a deal with one big platform, typically you do deals with a whole slew of others, and we haven't heard of any yet, so maybe just provide some color on that. And then, Joey, on the Angi spin-off, why just float the idea as a potential event at this point? What are you hoping to gauge before you make a final decision and potentially comment for that? Thank you.

Sure. I'll start and Chris can add in some detail on the licensing. In terms of what's happening broadly on licensing, you've got a number of term sheets since the OpenAI deal, so there is activity in the market, but we haven't gotten to any others of noteworthy scale to a level of transacting or announcing. However, there's active dialogue and different platforms have varying perspectives on it. Some respect intellectual property and some aren't there yet and might need some assistance on getting there. We'll see how that evolves. But there is certainly a number of active dialogues along those lines. And on the question of timing, that's both tactical and legal when you start to consider you actually have to make a disclosure around that as an 85% shareholder. That also allows us to explore details of that with everybody necessary in the ecosystem to figure out the details. I do think it is highly likely that we get to the conclusion that we will spin Angi, but there are some processes and boxes to check with all constituents to get that done.

Thanks, Joey. And Youssef, with respect to the OpenAI deal, if you look at Q3 of ‘24, we were licensing revenue up about $4.1 million year-over-year. The lion's share of that was driven by the OpenAI license. So that's on a quarterly basis a good proxy for the revenue we're recognizing. The variable components will be calculated and recognized in the future.

The next question will come from Yugal Arouninan with Citigroup.

Hey, good morning, guys. Just to follow up on the last question around the licensing, and you mentioned the letter AI overviews showing up in about 20% of queries. Can you expand on that a little bit, what you're seeing there trend-wise, what you expect, how you expect that to play out over time? I know right now; you're not seeing much of an impact on traffic. Do you think that it stays that way? And then, Joey, you just mentioned the term sheets, but in the letter, you also talked about protecting your intellectual property. Maybe we can expand on that as well. Thanks.

Sure. In terms of what we're seeing so far, when AI is present, we see a low, mid-single-digit impact. Sometimes, it's actually positive; sometimes it's more than that, sometimes it's less. It depends by category and our content. But remember, only a subset of our traffic is impacted, and AI is only rolled out on 20%. The overall impact to Dotdash Meredith is minimal. We don't know how the UI evolves. I expect penetration will continue to grow, and as we feature in AI overviews, we believe our content can maintain its competitive edge. We think we are holding our ground and we do expect to continue to, but the market evolves quickly and it's something we're keeping a close eye on. If traffic increases and consumers are using our content but not compensating us in some way, we'll certainly protect our intellectual property if that becomes an issue.

Operator, one more question please.

Yes, sir. And the last question will come from Nick Jones with JMP Securities.

Thanks for taking the questions. Jeff, on Angi, monetized transactions per service request continue to improve, but we see service professionals going lower and monetized transactions going lower, albeit slower than service requests. How should we think about that metric going forward? As you kind of turn the corner for growth, let's say in 2026, is that a metric that can be stable or could see growth? Is there a gating factor we should be aware of as we think about the growth algorithm for this business? And then Joey, on M&A, are there any learnings kind of from the last evaluations that really got ahead of everything? Kind of post-election, I think there are folks speculating that valuations may run a lot higher. Does that mean you're staring down maybe a multi-year period of struggle to find any M&A, or are there any learnings from last time that may make it different?

I'll start on the first question. There's a few components to what you're talking about. Our monetized transactions per service request are going up as we better manage our service requests against capacity in our system. With the expected inflection in revenue growth in ‘26, we also expect monetized transactions to start growing again. The other piece you mentioned is the number of service professionals. The fact is our existing base of service pros is effectively outperforming and growing more than it used to, because our retention is improving. If you normalize the acquisition over the last couple of years, you would actually see growth in the service pro base, but we are taking down low profitability service pro acquisition. So as we reach a floor in terms of acquiring, we will level out in 2025 and grow again across all of these metrics in 2026.

I think on your other question, what's key in any environment, whether valuations are down or creeping up, is having an edge in what you're going after. That's certainly what we have looked for and will continue to look for. Our last big acquisition was Meredith, which the timing was not ideal, but the strategic value of that transaction has turned out to be essential to our survival and what is now winning. The only reason we are doing okay in that transaction right now is because we're able to deliver strategic operating execution with what was an un-modernized digital business. We’ll continue to look for that edge, and when we find an edge, that enters the realm of possibility, and that’s what we continue to look for.

Thank you, everyone. Thank you, operator. I wish everyone a good day, and thank you for your time.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.