Welcome to the IAC Fourth Quarter 2025 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Christopher Halpin, COO and CFO. Please go ahead.

Thank you. Good morning, everyone. Christopher Halpin here, and welcome to the IAC Fourth Quarter Earnings Call. Joining me today are Barry Diller, the Chairman and Senior Executive of IAC; and Neil Vogel, CEO of People Inc. IAC has published a presentation on the Investor Relations section of our website today entitled Q4 Earnings Presentation. On this call, Barry, Neil and I will provide some introductory remarks referencing that presentation and then open it up to Q&A. Before we get to 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, strategy and future performance and are based on 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 recent annual report on Form 10-K and in the subsequent reports 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 today as EBITDA for simplicity during the call. I'll also refer you to our earnings releases, investor presentations, our public filings with the SEC and again, to the Investor Relations section of our website for all comparable GAAP measures and full reconciliations for material non-GAAP measures. And now I will hand it over to Barry.

Good morning, everyone. We had a solid fourth quarter at the company, finishing the year on a confident note characterized by focus and execution. We saw a 14% increase in digital revenue, surpassing the expectations of skeptics in digital publishing. Our financial performance, despite the rising disruption from AI, is a strong indicator of our resilience. AI overviews are increasingly present in our queries, and we're achieving record outcomes. As I've mentioned previously, we have been preparing for this disruption for years, enabling our brands to reach audiences not only on our own sites and apps but also across social media, news platforms, videos, and events. We’re expanding our offerings with new products and experiences wherever our audiences are engaged. However, our core strategy is to move beyond conventional digital publishing as the sole driver of our future. As discussed in my last call, we are in the process of transforming our iconic traditional content businesses into new consumer-oriented businesses. These new products will stand independently and feature revenue streams that are less susceptible to disintermediation. This is not just a concept; we are actively working on several initiatives. For instance, with Southern Tea, a magazine cherished by its readers, we plan to introduce Southern Tea as a product that we will own and distribute. At Food & Wine, we are collaborating with top chefs globally to create a unique product line. In Travel & Leisure, we aim to develop our own version of White Lotus, utilizing our extensive knowledge of the world’s best destinations and the stunning visuals we have. Additionally, every one of our books presents opportunities to transform our approach and develop branded products and services that we can market widely, as we distribute around 350 million books each year.

Yes. In the neighborhood, yes.

In the neighborhood, why did I get this wrong?

No, that's right. That's exactly right. Yes.

We have these books, and adding a few pages costs very little. This allows us to sell in unique ways that no one else can match. We want to create stand-alone page ads, and we can also publish editorial content about our products. It seems hard to believe that we can't leverage the deep knowledge we have about these domains to develop new business lines that won't be disrupted by AI, especially since we know more than anyone else. Our expertise can help us creatively explore new products or services. This represents a significant opportunity for us in the coming years. Another key aspect is MGM. As mentioned, we increased our ownership in MGM and bought additional shares of IAC in the quarter, totaling about 1% of MGM, which will bring us to an important accounting milestone of 25%. We repurchased $337 million worth of stock in 2026 and will continue to consider buybacks strategically. We're aware of the considerable discount in IAC's value. I genuinely believe we have a strong growth engine in People and that we are outperforming competitors in digital publishing. While there are challenges in digital publishing, many of them could actually work to our advantage. I am optimistic about what 2026 will bring. Now, I'm eager to hear your questions and I hope Chris will keep his comments brief.

Thank you, BD. I'll start talking on Page 5 of the presentation about People's financial performance. It was a strong quarter across the board with the business delivering 14% Digital revenue growth, driven by solid execution across all 3 revenue categories: Advertising; Performance Marketing and Licensing. Advertising grew 9% in the quarter, returning to growth and doing so despite a 13% decline in core sessions. Neil will go in more depth on this front but this highlights the success of the off-platform strategy and the strength of People's brands amidst AI headwinds. Performance Marketing grew 17% in the quarter over the important holiday period, reflecting both excellent execution by Neil's team and the strength of the consumer. Finally, Licensing grew 36%, driven by robust engagement with our content across Apple News and content syndication partners and the new AI content partnership with Meta contributed a little bit to growth as well. The Print segment declined 23% as expected, due partly to $20 million of revenue in the prior period from political advertising, which we flagged previously, and partly to the continued sectoral decline in print. Adjusted EBITDA was solid in the quarter, growing 9% in Digital when you adjust for severance expense a year ago and with incremental Digital margins at 26%. Print produced $13 million of adjusted EBITDA in the quarter, down from a year ago for the reasons stated earlier but more than enough to offset $9 million of corporate expenses. So the fourth quarter capped a solid year, $1.8 billion of revenue, $1.1 billion of that Digital revenue growing 10%. Aggregate adjusted EBITDA was $331 million for the year, reflecting the exclusion of the $41 million in gains from lease buyouts and the $15 million in third quarter severance. And Digital full year EBITDA margins were essentially flat year-over-year at 28%. With that, I will hand it to Neil to go deeper into people, strategy and performance.

Guys. Thanks, Chris. Thanks, Barry. I too will go against my nature and be as brief as I can and hit the highlights here. We had a really strong quarter. As you guys all know, the publishing and web ecosystem has been changing dramatically, and we've been working hard to change along with it. The strategies we've outlined to you and have been talking about, they're working. As Chris and Barry said, we had 14% digital revenue growth in the quarter. It's a testament to the strength of the brands, truly the strength of the brands and our team's execution. Key is the diversity of our revenue models and the breadth of the industry sectors in which we compete is also a real strength. And I think importantly, in Q4, alongside our growth, we continued to invest heavily in a raft of new products and services, some of which you can see here on this slide, which I believe is Page 6 in your deck. The new Food & Wine Classic in Charleston exceeded our expectations. We had our most successful media cycle in the history of the Rejuvenated Seepixus Manali franchise, a very important franchise for People. And InStyle popular, the Intern social video franchise has become a real blueprint for what we're able to do on our platform. And we made solid progress, which I'm sure we'll get to in the Q&A on initiatives we discussed like D/Cipher and MyRecipes and the PEOPLE app, and there's a lot more to come, as BD said. We are energized. We feel really good about where we are. And we did all this in the face of a lot of disruption. Let's go to the next slide, and we can talk through that. We delivered this quarter in despite of a very challenging environment to core web sessions. Looking at the core sessions, we're down 13% year-over-year in the quarter. The biggest contributor to that is a 50% drop in Google search referrals over the last 2 years. This quarter, we also saw a little softness in non-search traffic sources, mainly driven by declines in Google Discover, which is their version of Apple News, which had been a contributor to non-search growth earlier in the year. However, offsetting the effects of core sessions decline is the continued rapid growth in our off-platform and distributed audiences. You can see off-platform views have nearly doubled in the last 2 years and grew 43% last quarter year-over-year. There's real momentum here. This is a continuation of a pronounced shift in our business. We are aligning our efforts and resources to connect with audiences where they are now. We are going where the people are. Our brands have great momentum across everything from Instagram to Apple News to TikTok to YouTube as well as real cultural cloud in our tentpole events and our operated properties. And the non-session-based growth is underpinning our financial story. And the next slide really gets some color on that. If you go to Slide 8 in the IAC deck, this slide clearly shows that our non-session-based revenue sources are now the fastest-growing part of our business. Again, non-session-based revenue, revenue not based on web sessions, now comprises about 38% of total digital revenue, and it grew 37% year-over-year in Q4. This growth is led by D/Cipher, our events businesses, creator and social models, including the Feedfeed acquisition, our deep partnership with Apple News and our AI licensing deals. At the same time, sessions-based revenue was 62% of total revenue and grew at 4% year-over-year. We absorbed the declines in Google referral traffic by delivering great premium sales quarters across our brands and showed continued strength in our Performance Marketing business. The brands are still super strong and advertisers and marketers are really interested in these brands, both in the new environments and the traditional environments. Look, this is the model for our future. Strong growth from non-session-based revenue streams led by our growth in off-platform audiences at D/Cipher and executing against our session-based businesses while absorbing continued declines in referral traffic from Google and other platforms. We're super proud of this quarter. We have a solid model, as BD talked about. We got a lot of seeds planted, and we're excited and we got a clear path in front of us. We've got a ton to do, but we got the teams, and we think we have a real strategy to succeed. So with that, I will kick it back to Chris.

Thanks, Neil. Moving to Page 10. Let's talk through performance at our other consolidated businesses. Care saw 9% revenue declines in the quarter, driven by softness in Enterprise, which we highlighted last quarter. Consumer revenue declined 4%, steady with last quarter, and we continue to see the benefits of Care's product improvements, marketing investment and add-on offerings bearing fruit. On the Enterprise side, as employers have tightened their benefit spend, many have adjusted their existing programs, leading to a 13% Enterprise revenue decline for the quarter. This decline is exacerbated by some particularly robust client usage and out-of-period client true-ups in Q4 '24. We believe both Consumer and total Care revenue in aggregate will return to growth by midyear. Care adjusted EBITDA was excellent at $19 million for the quarter, generating 22% EBITDA margins. Normalized on a year-over-year basis, profitability was essentially flat as Care incurred $9 million in legal charges and $2.5 million in severance in the fourth quarter last year. Emerging & Other revenue grew 18% and flipped to profitability with $3 million in adjusted EBITDA. The revenue growth was the output of strong performance at the Daily Beast, where revenues grew 50% and at Vivian, which grew in the fourth quarter for the first time since Q3 '24 and has regained its momentum. Both businesses were profitable in the quarter and the year-over-year picture further improved due to the resolution of the legacy legal matter we mentioned on our last earnings call. Finally, Corporate adjusted EBITDA was $23 million, down from a year ago and last quarter as we continue to reduce our overhead and get back into the mid-$80 million range on an annualized basis. Turning to the next page, we'll talk about guidance. IAC has always managed our businesses for the long term, not on a quarterly basis. At a high level, we will stop providing quarterly guidance as we do not believe it's productive for our businesses to focus on short-term results, particularly people as it navigates fundamental shifts in its industry. We want our businesses to remain focused on execution and long-term value creation, and this change also reflects proactive feedback from some investors. As in the past, we make changes to our guidance based on what we believe is best for the businesses and our shareholders. We will, however, continue to provide annual guidance as summarized on Page 11. For People Inc., we expect both digital revenue and digital adjusted EBITDA to grow mid- to high single digits for the year. We are forecasting approximately $15 million in litigation expenses this year related to our Google Ad tech litigation, which will result in corporate expense exceeding print adjusted EBITDA by that amount. Absent the litigation expense, we would expect them to offset. When rolled up, that produces our guidance range of $310 million to $340 million of total adjusted EBITDA for People Inc. I would note, this range implies digital adjusted EBITDA of $325 million to $355 million for the year compared to $315 million in 2025. We are expecting Care adjusted EBITDA of $45 million to $55 million with consumer returning to top line growth by the middle of the year. Our Search segment, which comprises Ask Media or AMG, a search monetization business, has innovated while navigating a complex and challenging search ecosystem for more than a decade. A reminder that our Search segment is managed for margin, not growth and has not been an area of strategic focus at IAC for a long time as it has steadily shrunk in size and materiality. As disclosed in our recent 8-K, we are in negotiations with Google, which supplies paid listings to AMG to extend our relationship and the outcome of those negotiations will likely determine the future of the business. At present, we are guiding to a range of negative $5 million to positive $10 million of adjusted EBITDA, and we expect to know a lot more over the next 90 days. Emerging & Other should continue to grow top line, thanks to Vivian and The Daily Beast, and we are expecting $0 million to $10 million of EBITDA there. And finally, Corporate expense is expected to be $80 million to $90 million, and we will continue to work to come in at the bottom of that range. Finally, Page 12 summarizes our continued buyback activities, as Barry mentioned. With our purchases since last earnings, we have bought back $337 million of our shares over the past 12 months and reduced our share count by 10%. With that, let's go to questions.

Our first question comes from Ross Sandler with Barclays.

Neil, could we go back to Slide 8 and the non-session-based revenue growing 37%. Could you just elaborate on like what are the key drivers of that line? And how do we feel about that in 2026 in the context of the mid- to high single growth rate for People overall?

Wait, Neil, before you continue, I just want to mention one thing about the growth in people for next year. Yes, we're being conservative. I don't understand why we go through this guidance process, but here we are. I would be very disappointed if the number of people did not exceed what was projected. There is momentum in this area. The developments we're pursuing will take time, but the system is running smoothly, and I believe it will yield more than what's indicated in your guidance. I know this might frustrate some of you, but that's just how it is.

And look, the truth is we want expectations. Expectations are good. And Ross, to go back to your question, what is fueling that is from a high level, we're going where the audiences are. And if you look back like 5 years ago, this is going to be probably longer than you wanted, we were like 70% of our traffic from Google Search. Now it's like 30%, right? People would look at the Internet that we compete in and they would say, 'Oh my God, you guys are too much Google. How can this say you're not diversified enough?' We would look at the market and say 90% of the web started at Google, we're bad at this. Like we're not good enough at 70%, we should be better. And what that did was gave us a really tight and close view into Google, and we instrumented our business to work with Google, which at the time was the dominant source. Now that gave us 2 skills. One, we realized very, very quickly when Google started to change, and that wasn't going to be the best source. And two, we were very early on it. So what we were able to do 2, 2.5 years ago is we were jumping up and down and saying Google Zero internally. And what it gave us to do is we developed all of these new skills. And the payoff of these new skills is now. We developed all these new distribution channels for our content, for our audiences, whether it's social, whether it's reaching people through events, whether it's reaching people through things like D/Cipher, we had a sense of where the market was going and we're going with it. The audiences are going in that direction and the advertisers are going in that direction, and we're going in that direction. And we feel like we've put together a really, really interesting pool of assets. It's different for every brand to address this. And again, the proof is in the numbers, and we feel really good about what we've done. So that would be my answer.

And the next question comes from Jason Helfstein with Oppenheimer.

I have two questions for Barry. First, regarding M&A, could you discuss the types of assets that IAC is generally interested in? There has been speculation about your possible interest in CNN. If that were the case, would it be pursued through IAC or outside it? I'd like to hear your thoughts on M&A aspirations. Secondly, could you elaborate on your investment thesis for MGM and explain why you believe it was a wise deployment of capital at this time instead of using that capital for buybacks or M&A?

I'll start with MGM. It's kind of self-evident. We bought the stock at what dollar level, Chris?

$40 million.

No, no, no.

$40 million.

No, our total purchase of MGM stock. Our total equity in MGM how much.

We bought $1.3 billion.

And it's valued at what?

$2.2 billion.

That's the response to your question, but it's not the complete picture. Yes, we've performed exceptionally well. We made our purchase at an opportune moment and recognized our interest in the opportunity. Since then, and after acquiring additional shares, I've become fully convinced that this remarkable collection of assets, with MGM owning 40% of Las Vegas, adds immense value. The infrastructure of Las Vegas is irreplaceable. Each aspect of their operations can be refined, enhanced, and innovated without requiring massive investments, enabling us to provide experiences that, in my opinion, have been somewhat diminished in recent years. Las Vegas has always promised value to visitors, often touted for reasonably priced hotel rooms, although some prices have become inflated. However, I believe that value will eventually return to the business. We are firmly positioned in the luxury sector, which continues to thrive. As we embark on this innovative phase, I anticipate that we're about to reignite the city's vibrancy in a way it hasn't been seen recently, aside from exceptional projects like the sphere. I am confident that nothing will overshadow Las Vegas's allure in entertainment, except perhaps a simulation where everything else is irrelevant. Regarding our projects, we are developing a major resort in Osaka, Japan—a gaming resort of substantial scale at $12 billion. This is a long-term venture, set to debut around 2029 or 2030, and it promises to be an invaluable asset. Currently, I can’t identify any mergers or acquisitions that pique my interest as much as this. I haven't encountered anything compelling on the horizon and believe now isn't the right time for us to make investments in areas without clear potential. At this moment, I don't see any rational opportunities available. We're fortunate to have strong entities like People and MGM, along with the cash to increase our stakes in both. While there may be opportunities in the future, I'm pleased with our current position. Regarding your earlier inquiry about CNN, I've been intrigued by it for years. The chances of acquiring it seem less than even. We will see how various market dynamics, including Paramount, Skydance, Warner Discovery, and Netflix, unfold in the coming months. If an acquisition were to occur, it would likely be personal rather than through IAC, but that remains uncertain right now. I hope that thoroughly addresses your question.

Thank you, BD. Yes, just one point I'd add for investors, great results released by BetMGM today, reflecting the performance there and solidity. So another leg to the MGM.

What I don’t understand is how the investment community can overlook the fact that we invested hundreds of millions of dollars in BetMGM. Despite initial losses and criticism for several years, we managed to turn around from a loss of around $200 million to a profit of $170 million the following year. I wonder why there isn't more recognition of that turnaround, especially with this year's projections being even higher. It really puzzles me, but I believe that the truth will eventually become clear.

The next question comes from Justin Patterson with KeyBanc.

You're clearly excited about a lot of these transformations going on at People. How scalable are some of these new curated experiences? How do you think that changes your relationships with audiences and monetization opportunities? And how should we think about just the investment levels to support this transformation in the AI era? And then separately, just one on Vivian. Bill Kong was recently named CEO. Could you talk about some of his top priorities in that role?

Yes, I'll start and then Chris will follow. The essence of our business lies in fostering direct relationships with our audiences and advertisers. We are particularly excited about the new initiatives we have launched. Our company has a long history of 100 years, so excelling in new ventures wasn't guaranteed. However, we are pleased with the momentum we’ve built and the key developments we've discussed. For instance, we launched MyRecipes less than a year ago, which serves as a recipe locker. As you may know, we dominate the online food and recipes space. In under a year and with minimal external marketing, we've attracted 3 million registered users who have saved 24 million recipes. We are continuously enhancing the user experience, which is appealing to advertisers and users alike, and we have a direct connection with our audience. This venture holds significant promise for the future and is supported by a strong team. We previously mentioned the PEOPLE app, which might evolve into the central hub for the entire People brand. Our investment focus has been on refining the user experience. Since its launch under a year ago, we’ve achieved around 300,000 downloads, emphasizing engagement rather than just download numbers, which we consider a solid figure. A noteworthy statistic is that when users visit people.com, the average visit lasts 2 minutes, whereas in the app, the average duration is 6 minutes, indicating a substantial increase in engagement. Additionally, we recently introduced a suite of games, including the People puzzler, and have launched two more games since then. These games have gained significant popularity, with users spending around 20 minutes in the app when playing. This traction could potentially lead to subscription revenues, an expanded advertising business, or sponsorship opportunities. Building new products is a challenging endeavor for many companies, but we have dedicated significant resources to these two projects. Lastly, I want to highlight a success at InStyle, where we have produced a social-first video series called the Intern. It mirrors the style of The Office and features our own team members, aside from two actors portraying interns. This series resonates well with the Gen Z audience.

Neo, when we started doing the Intern, I don't know, six a season. How many of these do we do a year?

Yes. Last year, we completed 7 seasons, with each season consisting of 3-minute episodes.

Fine. What I'm trying to do is just educate people. The first few cost nothing, but you made 50,000 or 80,000 or whatever. Now, for a given season, you're reaching sponsorships at the 500,000 or 700,000 level?

That's correct, yes.

I mean when you think about that, again, out of nothing at no real cost. This is done in-house basically on an iPhone or it has been done on an iPhone. And they are genuinely funny, and they have reached a genuine audience. That is that we now have, as what Neil has done is redeploying his forces into these new and productive areas. With the brands that we have, when you are doing that and you're dealing with ideation, you create new things that have nothing to do with search, with the issues of digital advertising or the problems of digital advertising, they're their own products, and we are producing them at real scale now. That's really exciting.

Yes.

Excuse me, operator. Vivian is an exciting business within emerging and other. We announced last week that Vivian Founder and CEO, Parth Bhakta, has moved to Chairman and Bill Kong, our COO, is taking over as CEO. Parth has done a great job building this business. It is a clinician marketplace.

I am not seeing anything right now. Can you... And the next question comes from...

Great. Maybe 2 for Chris. One on the People 2026 EBITDA outlook. At the midpoint of the range, it looks like kind of flattish EBITDA. Can you unpack the guide a little bit, Chris, and how we should think about drivers of EBITDA at People this year? And then second question, just on IAC's free cash flow conversion. So you guys guided to '26 EBITDA range of $260 million to $335 million. How should we think about free cash flow conversion of EBITDA this year?

Yes. Thanks, John. On EBITDA guidance, we definitely want to explain this in detail to investors at People. So when you compare 2025 adjusted EBITDA for People to our '26 guidance, there are 2 key countervailing trends you need to understand. As background, '25 adjusted EBITDA, when you remove the $41 million in lease gains and the $15 million in severance expense was $331 million. That comprises $315 million of digital adjusted EBITDA and then an incremental $16 million deriving from the excess of print EBITDA over corporate expense. So $315 million and then a $16 million incremental. In our 2026 guidance, we are guiding to mid- to high single-digit EBITDA growth off of the $315 million generated in 2025. On the other hand, our guidance assumes $15 million in Google litigation expense hitting corporate. Without that litigation cost, we expect print EBITDA to equal corporate expense. So with the litigation, what you're seeing is a $31 million net swing from '25 actuals to '26 guidance in the relationship between Print and Corporate. It's that swing that leads the guidance to be in the $310 million to $340 million range and to look flattish year-over-year. Our most important line item in our mind is Digital revenue and EBITDA, and that is growing solidly. And as we said before, if you adjust for the Google litigation expense, we are guiding to $325 million to $355 million on Digital EBITDA. Going to IAC adjusted free cash flow. Simply, there are 4 line items between EBITDA and free cash flow that you should think about in your models. CapEx, change in working capital, net interest expense, taxes. CapEx for IAC is minor. It was $20 million last year, probably $20 million to $30 million in the '26 range. Net cash interest expense is the difference between the interest expense on the People debt and the interest income we make on our cash balances. Last year, it was $64 million of net interest expense. We would expect net interest expense to be around that same number, assuming flat yields on cash. Cash taxes are minimal due to our NOLs. So that leaves working capital. That was a major use of cash last year due to 2 items. One were the lease buyouts that we talked about, north of $40 million, as well as some unfavorable timing this past year of vendor payments and receivables. Looking ahead, we don't expect any similar large outflows like the lease buyouts and then working capital should normalize. So when you roll that up, we'd guide to 50% plus EBITDA to free cash flow conversion across IAC in 2026. Thanks, John. Operator, next question.

Next question comes from Cory Carpenter with JPMorgan.

I had 2. I wanted to ask, you called out the $15 million spend on the Google litigation. Maybe just update us on where you're at with that and kind of how you're thinking about the range of outcomes. And then, Barry, I think last quarter, you talked a lot about also the simplification of IAC. So maybe if you could just give us an update on how you're thinking about that and any progress you've made.

I'll do the litigation thing quickly, and then I'll kick to BD. So again, just to refresh everybody, the lawsuit builds on the government's antitrust case against Google, where Google was found to monopolize the ad server and ad exchange markets, right? Two major publishers, Gannett and Daily Mail already sued. And in their cases, the court ruled that they don't need to again prove what the government approved. We expect to rely on that ruling. Again, the costs are about $50 million. Chris has gone in great detail about that. Damages will be proved in this litigation in this phase. We seek to recover hundreds of millions of dollars in damages. Again, it all depends on where this lands. But we look at this as an investment. They've already been found to be sort of, again, I don't know the legal term in violation of these laws. So we'll see where it lands.

It has the potential to land very big. So as far as simplification, we've been doing this for really the last couple of years as we've cleaned up many, many things inside IAC, closed, transferred, et cetera. We're going to continue to do it. We're bringing down our overhead, which we should. Our overhead was large because we had so many businesses that we were responsible for and so much infrastructure. We're now really down to a couple of key businesses. So you're going to see simplification throughout the year.

Thank you, Cory. Operator, next question.

The next question comes from Eric Sheridan with Goldman Sachs.

Maybe 2, if I could. First, with respect to the Ad business, any mark-to-market views in terms of the overall macro environment, either verticals or the way in which advertisers are spending their money, brand versus direct response in terms of how that's impacting the business right now? And then I wanted to revisit the comments you made about the forward guidance in your prepared remarks in terms of maybe going a little bit deeper on what you think it might do to impact the operations, freeing people up to think a little more medium to longer term and whether the investment community could also expect some sort of at least qualitative commentary mark-to-market on a quarter-to-quarter basis.

Sure. I'll start with the ad market and then turn it over to Chris. I would rate the market at a 6 out of 10 right now. It's healthy and generally favorable as we move into Q4, which is solid for us. We have some real advantages; brands are crucial, especially in an AI-driven environment where uncertainty prevails, and everything is a platform or user-generated content. Our presence in various markets helps us significantly. Our advertising programs perform well, both on and off the platform, and our ad relationships are strong. With our new initiatives on the advertising side, we not only have the essential elements in place but also some innovative features. This has greatly benefited us. As for the strongest sectors, I can only truly speak for our experience, but this does reflect on the broader market to some extent. Health and pharmaceuticals, travel, and technology sectors have been performing well for us. Conversely, we've encountered challenges in some areas affected by macroeconomic trends, such as food and beverage and consumer packaged goods. I'm sure you all are aware of these issues. Overall, the current market conditions are sufficient for us to execute our strategy, which is our primary focus.

Regarding our guidance, there are a few key points to consider. Firstly, in our largest segment, People Inc., we are experiencing significant volatility in the market. Neil has shared the steps being taken to navigate these challenges effectively, and the data supports this. However, fixating on quarter-to-quarter metrics such as session counts and individual revenue figures can feel disproportionate. This doesn't necessarily indicate negative trends; we exceeded expectations last quarter with strong revenue. Our focus is on consistent execution to strengthen our digital businesses annually, and we will share our objectives with you. In response to your second question, we will provide qualitative insights into market conditions, dynamics, and our strategic direction rather than specific guidance.

And the next question comes from Dan Kurnos with StoneX.

Maybe first for Neil, can you provide any insight on how we should approach D/Cipher+ this year? Should we expect any announcements similar to how Roku utilized Nielsen ACR as a data and conversion layer with Amazon DSP? Are there potential major partnerships we should consider? And for Chris, could you elaborate on the growth of Care, how you see it developing over the year, and what your long-term growth aspirations for Care are?

I'll start with Decipher. We are very excited about Decipher, as it is our fastest-growing off-platform business in terms of both headcount and revenue. This will prove to be a significant driver for us. It expands our total addressable market since we can utilize CTV and effectively target using our data, which is excellent. The mid- to high single-digit growth, with 2 to 3 points of that coming from D/Cipher+ this year, shows that it has real momentum. Jim Lawson has really established a solid foundation for this, and we have a dedicated team supporting it. It’s time to focus on this business, and I expect to see substantial results this year. We are genuinely excited about it. Our strategy is to engage with where the audience is, bringing advertisers and our content along, and this is a crucial piece of that approach. Jim is doing exceptionally well, and there is a lot of enthusiasm surrounding this initiative. Now, I’ll hand it over to Chris for further details.

The consumer business in Care has experienced a slowdown in recent years, influenced by post-pandemic factors and some challenges in product performance and marketing. Steps have been taken to address these issues, and since the second quarter of last year, we have seen stability in sign-ups. We are approaching more normalized growth levels and expect consumer growth to resume by midyear, with revenue continuing to increase from there. In the Enterprise segment, we are facing some macroeconomic challenges as employers reduce their hiring, but there are also opportunities to attract new customers. Our objective is to achieve revenue growth this year, and we are confident we will succeed. We have a positive outlook on margins and ongoing profitability. Overall, we anticipate consistent growth in the Care segment of 15% to 20%, supported by its market position, opportunities in various segments, and the rising demand for care services among consumers and employers alike, who increasingly see it as an essential benefit.

Let's do the last question, please.

And the last question comes from James Heaney with Jefferies.

I believe many of those points have been covered. However, concerning the anticipated slowdown in digital revenue growth into the mid- to high single digits next year, is there any caution reflected in that guidance? Are there any competitive dynamics you would like to highlight that might be influencing this, or is it primarily a natural slowdown? Additionally, if you could discuss the timing of this, even though I know you’re not planning it on a quarterly basis, is there anything we should keep in mind for the year?

Certainly. If you look broadly across '25, Digital revenue grew 10%. Our guidance of mid- to high single digits reflects some conservatism as we continue to navigate broader search disruptions. As Barry and Neil have said, we feel good about our positioning. We feel great about the robustness of our monetization and the off-platform strategy and the scale and freshness of our content. But we always want to be thoughtful at the beginning of the year on our outlook. So that would be the background. Thank you, James. Thank you, everyone.

Thank you all. Nice to be with you.

Thank you, operator. We can conclude the call.

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