Good day, ladies and gentlemen, and welcome to Ziff Davis First Quarter 2022 Earnings Call. My name is Paul, and I will be the operator assisting you today. A question-and-answer session will follow the formal presentation. On this call will be Vivek Shah, CEO of Ziff Davis; and Bret Richter, Chief Financial Officer of Ziff Davis. I will now turn the call over to Bret Richter, Chief Financial Officer of Ziff Davis. Thank you. You may begin.

Thank you. Good morning, everyone, and welcome to the Ziff Davis Investor Conference Call for Q1 2022. As the operator mentioned, I am Bret Richter, Chief Financial Officer of Ziff Davis; and I'm joined by our Chief Executive Officer, Vivek Shah. A presentation is available for today's call. A copy of this presentation is available at our website. When you launch the website, there is a button on the viewer on the right-hand side, which will allow you to expand the slides. If you have not received a copy of the press release, you may access it through our corporate website at www.ziffdavis.com. In addition, you'll be able to access the webcast from this site. After completing the formal presentation, we'll be conducting a Q&A. The operator will instruct you at that time regarding the procedures for asking questions. In addition, you can email questions to [email protected]. Before we begin our prepared remarks, allow me to read the safe harbor language. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our SEC filings, including our 10-K filings, recent 10-Q filings, various proxy statements and 8-K filings as well as additional risk factors that we have included as part of the slide show for this webcast. We refer you to discussions in those documents regarding safe harbor language as well as forward-looking statements. Now let me turn the call over to Vivek for his remarks.

Thank you, Bret, and good morning, everyone. Without question, the macroeconomic environment has become challenging and uncertain, with negative GDP growth, high inflation, rising interest rates, continued supply chain problems, geopolitical conflict, and labor shortages. Notwithstanding these challenges, Ziff Davis delivered a very strong set of first quarter results, with revenues and pro forma adjusted EBITDA, both up by over 5% year-over-year. And as I pointed out in our last call, this quarter was going to represent a hard comp for us given the relative strength of Q1 2021, and the lapping of our RetailMeNot acquisition. Overall, we're very pleased with our first quarter and to be in a position to reaffirm our guidance for the year. Our advertising revenues declined 4% in the first quarter. As we described in our last two calls, we've been concerned about the impact of supply chain disruptions on our advertising clients. We saw campaigns continuing to be delayed and budgets being curtailed as some of our marketers continue to have production and fulfillment challenges. We also saw fewer clicks from our properties to e-commerce sites, which is an important part of our performance marketing revenues. We also had the added challenge of RetailMeNot lapping itself in the quarter, which a year ago was being managed for lowered revenues but higher EBITDA. As we said on our last call, we were expecting many of these headwinds, and therefore, not at all surprised. At the same time, we experienced significant growth in the gaming and entertainment and health verticals. In fact, IGN had its largest ad revenue quarter in its history. Ad category diversification proves to be important as we look to weather the present macroeconomic challenges. Our subscription revenues grew over 15% in the first quarter. We saw double-digit growth in several of our subscription businesses, including our connectivity businesses, Ookla and Ekahau, and the benefit of several acquisitions, including RootMetrics and Moz SEO. The integration of those businesses has gone very well and both are on or ahead of plan. Our cybersecurity business was a low single-digit decliner, with continued challenges in direct customer acquisition and some foreign exchange headwinds. We have a new Chief Revenue Officer at the VIPRE Group, who brings extensive experience in selling through the channel and managed service providers, which are key to the SMBs we serve. In martech, we did experience reduced email activity within our customer base in the first quarter. We're also seeing some recovery. And overall, we're pleased with the trajectory of the Moz Group. Our organic revenues for the quarter declined 3%. But when excluding RetailMeNot, which was early in its planned revenue reduction in Q1 2021 and foreign exchange headwinds, we were closer to being flat in organic revenues, which is a good outcome considering the macroeconomic challenges in the quarter. In fact, organic growth was a positive 4% when excluding our tech and shopping businesses, meaning health, gaming and entertainment, connectivity, martech, and cybersecurity posted 4% organic growth. I'm also very pleased with our margins in Q1, which held at 32%, which means our acquired revenues were margin accretive, which is often difficult to accomplish in the first year of an acquisition. We will continue to be very judicious about expenditures, given the uncertain operating environment, but we'll also continue to invest in organic growth opportunities. In fact, a number of our verticals saw some strong organic growth rates in Q1, and we want to be sure to continue to support those businesses. We are in one of the best, if not the best liquidity positions we've ever been in. With nearly $1 billion of cash and investments, we have the ability to deploy capital for growth, whether within our existing portfolio or to acquire new businesses. Speaking of M&A, in Q1, we acquired a U.K.-based portfolio of pregnancy and parenting brands, including Emma's Diary. The acquisition solidifies our category leadership position in the U.K., where our three primary brands: BabyCenter, What to Expect, and Emma's Diary have a combined unduplicated reach of 2.7 million monthly users, and ranked in the #1 position among the competitive set. This transaction, like the other two in the quarter, is a relatively small tuck-in, but we continue to have very active discussions with larger acquisition targets company-wide. We believe we are entering into a favorable environment as a buyer, and believe our discipline and patience will be handsomely rewarded. We continue to look for assets within our existing verticals: tech, connectivity, shopping, gaming and entertainment, health, cybersecurity, and martech, as well as other verticals that share the high-value intent-driven nature of the ones we're in. Today, Ziff Davis is essentially a portfolio of assets that were acquired in the last decade, which was arguably one of the most robust sellers' markets in recent memory. Nevertheless, our total acquisition spend over estimated adjusted EBITDA is just a tick over 5x. We believe we're terrific acquirers, and that a more benign market for buyers will only enhance our returns and shareholder value. Now let me turn to our outlook for the rest of the year. We anticipate that Q2 growth rates will be somewhat similar to Q1 as many of the same headwinds we experienced in Q1 are carrying over into Q2. However, we believe the second half of the year will show improvements. First, we should have more favorable year-over-year comps for RetailMeNot; second, we expect to have new product launches that we believe have a lot of promise; third, we are getting signals of increased ad spend from major clients, including in the pharma category, where we anticipate a favorable drug pipeline, including important new drug launches and a streamlined post-COVID FDA approval process. Of course, if macroeconomic conditions don't stabilize or even worsen, then we'd have to reassess our views of the second half. At the same time, we have line of sight into acquisitions that could close during the balance of the year, which would leave us well positioned to add incremental revenue and adjusted EBITDA. We are excited for a new strategic partnership we're entering into with Group Black, which is a company attempting to transform the face of media ownership and investment. Group Black is home to one of the largest collectives of black-owned media and diverse content creators. Group Black and Ziff Davis will collaborate to create, amplify and monetize content across Ziff Davis' portfolio of media brands. The partnership will also fund and provide new exposure for Group Black's Collective, a black-owned content creators by providing them a voice on Ziff Davis' editorial platforms, with Ziff Davis providing ad inventory to Group Black in an effort to support the deployment of advertising investments from Group Black's brand and advertising partners. We also made a $15 million investment in Group Black, which we think will generate great returns while also providing financial and strategic support to black-owned media. Let me provide you with an update on our ESG efforts. In early March, we released Ziff Davis' inaugural ESG report. The report was well received by our stakeholders, including employees, customers, and shareholders. We were pleased to hold our second annual ESG non-deal roadshow in late March, where we presented highlights from the report and fielded questions about our ESG efforts. Thank you to those of you who took part. The report highlighted the findings from our first greenhouse gas inventory, and we have now officially committed to setting an emissions reduction target with the science-based targets initiative, known as SBTi. SBTi is the gold standard of emission reduction targets, and is the first step in setting a long-term carbon neutral goal. In recent months, we've also continued to respond proactively to some of the most pressing social issues and humanitarian crises we're collectively facing. Ziff Davis joined HRC's business statement on anti-LGBTQ state legislation as well as the Texas Competes and Florida Competes business coalitions. In the early days of Russia's invasion of Ukraine, we helped evacuate our Ukraine-based consultants to Poland and our Humble Bundle community subsequently raised $20 million for several Ukraine-based charities. Needless to say, I'm incredibly proud of the work Ziff Davis has done and continues to do to respond to the enormous environmental, social, and societal challenges upon us. I want to conclude by thanking Richard Ressler, who recently announced his retirement from our Board for his incredible service to our company over the past two decades. Richard was an early investor when the company was private. He was our CEO for a period and most recently, our Chair. His wisdom, intuition, and leadership are extraordinary and have been a valuable mentor to me and a steadfast advocate for our shareholders. Fortunately, we have a wonderful successor in Sarah Fay, who has been our Lead Director, the Chair of our Compensation Committee and a Director since 2018. Sarah possesses fantastic judgment and her commitment to our company and its stakeholders is unmatched. She was a pioneering executive in the advertising industry, having served as the CEO of Aegis Media North America, and President of Carat U.S. and Isobar U.S. Currently, she is a Managing Director at Venture Capital firm, Glasswing Ventures. With that, let me hand the call back to Bret.

Thank you, Vivek. Let's discuss our financial results. Our earnings release reflects both our GAAP and non-GAAP financial results for Q1 2022. Our earnings release also reflects pro forma adjustments for the impact of various asset dispositions. Explanations for and reconciliations of these adjustments are provided in the release. As you may recall from our previous earnings calls, our U.K. Voice assets were sold in February 2021, and we completed the sale of our B2B backup business in September 2021. The results related to these divestitures are reflected in our Q1 2021 financials through their respective date of sale. But these divestitures do not impact the presentation of our Q1 2022 results. On October 7, 2021, we completed the spin-off of Consensus. Our Q1 2021 GAAP income statement reflects the financial activity related to Consensus through October 7, 2021, in discontinued operations. We will focus our discussion today, and my commentary will primarily relate to our pro forma non-GAAP financial results from continuing operations, which exclude the contributions from the Consensus business for the periods up through the date of the spin, and exclude the contributions from our divested businesses for the period that they were owned by Ziff Davis. Now let's review the summary of our quarterly financial results on Slide 4. We reported pro forma revenue from continuing operations of $315.1 million for the first quarter as compared with $299.1 million for the prior year period, reflecting growth of 5.3%. Pro forma adjusted EBITDA from continuing operations was $100.8 million for Q1 2022 as compared with $95.9 million for the prior year period, reflecting growth of 5.1%. Our adjusted EBITDA margin for the quarter was 32%. We reported first quarter pro forma adjusted non-GAAP earnings per diluted share of $1.23. This figure reflects a 3.4% increase as compared with our Q1 2021 pro forma non-GAAP results. On Slides 5 and 6, we have provided performance summaries for our two primary sources of revenue: advertising and subscription. As you can see on Slide 5, and as discussed earlier by Vivek, Q1 pro forma advertising revenue declined by 4% as compared with the prior period. However, advertising revenue has grown 21% during the last 12 months. Our net advertising revenue retention and annual trailing 12-month statistic that we update quarterly, was 106.6%, above our 100% metric goal. Net advertising revenue retention compares advertising revenue generated by a defined group of advertisers in one trailing 12-month period to advertising revenue generated by these advertisers in the prior comparable period. As defined in the slide, in the first quarter, Ziff Davis had 1,950 advertisers, with average quarterly revenue per advertiser in excess of $87,000. In Q1, we reported a year-over-year increase in our number of advertisers as well as a year-over-year decline in revenue per advertiser. This primarily reflects two factors: the number of advertisers in our health and wellness business grew by more than 30% year-over-year, primarily due to the impact of M&A, including the acquisition of Lifecycle Marketing in Q1 2022. These acquired businesses added advertisers to our base, but are generally characterized by lower quarterly revenue per advertiser than certain of our other businesses. As noted earlier, we also experienced pullbacks and delays from a number of large advertisers, both in our health and wellness business, but also in technology, shopping, and entertainment. These actions resulted in lower spend by certain of our larger advertising partners. Slide 6 depicts our subscription revenue performance. Q1 2022 pro forma subscription revenue grew over 15% versus last year. Subscription revenues have grown 17% during the last 12 months. The table on the bottom of Slide 6 includes subscription metrics for the last five quarters. Sequentially, our average monthly revenue per subscriber increased by nearly $1 to $21.28, driven by an increase in subscription revenues within our higher ARP offerings, including within connectivity, which had roughly 13% sequential subscription growth and a slight decline in subscribers, primarily within our VPN solutions. Our overall churn rate increased 25 basis points from Q4 2021 to 3.22%. Please note that we redefined certain elements of these metrics during the first quarter of 2022. Additionally, the company saw its Q1 2022 other revenues grow by more than 100% year-over-year to more than $9 million. Slide 7 provides quarterly pro forma revenue growth rates delineated by organic and total revenue growth. Revenues from businesses owned for at least a full 12 months are included in organic revenue, while acquired revenues relate to businesses that we've owned for less than 12 months. For the last 12 months, we achieved a 7% organic revenue growth rate. As discussed earlier, for the company as a whole, organic revenue growth was negative 3% for the first quarter of 2022. Vivek highlighted a number of factors that contributed to this organic revenue decline, including the acquisition of RetailMeNot, and to a lesser extent, foreign exchange rates. Turning to our balance sheet. Please refer to Slide 8. Our balance sheet continues to be extremely strong. We have significant cash liquidity with $629 million of cash and cash equivalents as of quarter end, more than $350 million of short- and long-term investments, and significant leverage capacity both on a gross and net leverage basis. We continue to be committed to keeping gross leverage at or below 3x adjusted EBITDA, and we are currently well within this metric with our Q1 2022 gross leverage of 2.3x trailing 12 months adjusted EBITDA. At quarter end, our net leverage was 1x and only 0.3x if you include the value of our financial investments. We are operating in a challenging macroeconomic environment, and we will continue to prioritize the health of our balance sheet. However, we believe that we have the flexibility to continue to pursue various capital allocation alternatives in an effort to enhance shareholder value, particularly M&A alternatives. As announced on our fourth quarter and full year 2021 call, during the early part of the first quarter of 2022, we repurchased $54.6 million of our 4.625% senior notes, and $58.7 million of our common shares. During the first quarter, we also deployed approximately $30.8 million in cash related to current and prior period acquisitions. We believe all of these activities are consistent with our thoughtful balanced approach to capital allocation. If you refer to Slide 10. As Vivek noted, we are reaffirming the 2022 guidance range that we presented in February. As you may recall, the midpoints of our revenue, adjusted EBITDA, and adjusted non-GAAP income per diluted share guidance imply growth rates of approximately 10%, 13%, and 9%, respectively, as compared with the 2021 pro forma results from continuing operations that we presented in February. Following our business outlook slides are our supplemental materials, including reconciliation statements for the various non-GAAP measures to the nearest GAAP equivalent. This section includes a GAAP reconciliation on Slide 13 that reflects free cash flow from continuing operations and discontinued operations for Q1 2021 of $152.5 million. Please note that this figure reflects contributions from both the recently disposed B2B backup and U.K. Voice assets through their disposal dates as well as Consensus. Our Q1 2022 free cash flow was $86 million. While our first quarter 2022 cash flow does not reflect impacts of the operations of Consensus or the recently divested assets, it does reflect the seasonally high impact of working capital activity. As I noted on our last call, the timing of working capital is subject to quarterly fluctuations, but most working capital elements do resolve within any 12-month period. This is why we believe the cash flow is largely an annual financial measure and not one that we manage to during the short term. Overall, we are pleased with our Q1 2022 performance, having achieved growth in a number of our key financial metrics in a challenging environment. We are looking forward to the balance of 2022. With that, I will now ask the operator to rejoin us, to instruct you on how to queue for questions.

We will now be conducting a question-and-answer session. One moment while we begin. And the first question is coming from Cory Carpenter from JPMorgan.

Vivek, one for you and maybe one for Bret. Vivek, you mentioned new product launches in the second half of the year. Just hoping you could expand a bit on some of your plans there on the product side. And then maybe for Bret, last quarter, you guided to ad growth in the high single digits this year and subscription growth in the low teens. Any update or change to your thinking just on the mix based on what you saw in the first quarter?

With respect to second half product opportunities and rollouts, our Ekahau business, which is in our connectivity business unit, is going to roll out its second version of a product called Sidekick, which we're very excited for and see a great deal of potential in. We actually have an exciting partnership with the Cleveland Clinic within the Everyday Health Group, which will ramp up in the second half, and we believe will represent some incremental inventory. Our Baby Center business in our parenting and pregnancy unit has developed a set of courses, which we are going direct to consumer that we think have some great potential. So really, at every one of our businesses, there are a set of opportunities and products that we're rolling out that we had invested in developing really last year, and we think do have potential for us in the second half.

Cory, thanks. With regards to that guidance, at this point in time, and it's earlier in the year, we're not going to revise that. I think it's important to sort of widen the lens. We're a business that serves multiple communities with multiple products and services on a global basis. We're subject to broad consumer trends as well as sort of meaningful decisions by discrete enterprises that we work with, particularly in the advertising community. On a quarterly basis, and even throughout the year, those trends could impact our performance. But importantly, in reaffirming our expectations for the full year, we think we're off to a good start, and we look forward to the balance of 2022.

And the next question is coming from Rishi Jaluria from RBC.

I wanted to dive deeper into both the gross retention and net retention rates. It appears that net retention is above 100%, but the advertising net retention has noticeably decreased from Q4 to Q1. I understand this is a trailing 12-month rate, so there may be various factors at play. Could you provide insights on why there was a decline in that area as well as the rise in churn rate?

Yes. Maybe I'll start with the first one, Rishi. Look, I think that if you look at what took place in Q1, the advertising revenues did decline, and that decline came primarily from some of our larger clients pulling back. And so that would obviously then show up in the net revenue retention. As I said, we are seeing some interesting signs from some of those same clients in terms of their expectations for the second half. I think what really did happen in the first quarter is supply chain and the other challenges that I delineated did curtail their spend, not just with us. I mean, I think you're seeing this across the entire ecosystem. I think, look, the other thing I would also say is that the advertising business is lumpy. It always has been, and I think it always will be. And clients can move in and out week-to-week and quarter-to-quarter. So we like to look at these things on a little bit of a longer-term basis. But really, I think it's just more a function of some of the headwinds we experienced in the advertising market in Q1.

Yes. Regarding the churn rate, it's partially a mathematical issue as it compares revenue churn with customer churn. This provides a broader view of the business rather than being a key performance indicator we track across similar businesses, as we are combining large enterprise customers with smaller ones. We experienced some revenue losses in certain areas of our connectivity business due to large contracts. Interestingly, this segment actually performed well this quarter and generated new revenue. So, it's a bit of a mix, and it reflects in the calculations. I believe we will continue to analyze these metrics, refine them, and ensure they accurately represent the overall business, which is a complex blend of various operations.

And the next question is coming from Shyam Patil from SIG.

Congrats on the good results considering the environment. I had a couple of questions. Vivek, you kind of talked about in your prepared remarks, about the M&A environment being favorable, and then Bret, you kind of reiterated that in your remarks as well. Can you guys just elaborate on that? Does this mean that you're seeing more opportunities? You're seeing potential to close even with the volatility in asset prices? And then second question, Bret, I know you don't guide by quarter, but I was just wondering if there's any color you could provide just on how to think about the revenue and EBITDA distribution between the third and fourth quarters?

Thanks for the question, Shyam. Reflecting on our achievements from last year, I'm excited about our future acquisition strategy. We've taken several steps, including the spin-off of Consensus and the sale of various voice assets, resulting in seven distinct platforms within the company that are positioned for acquisitions. These platforms include tech, shopping, connectivity, gaming, health, cybersecurity, and martech, each with a strong pipeline of opportunities competing for our capital. Additionally, we are on the lookout for an eighth platform. This situation creates significant deal sourcing activities. Currently, we're observing a level of sobriety in the market on the seller side that we haven't seen in the last decade, which is evident in both public and private markets. The combination of our current structure, sellers' perspectives, and our unprecedented balance sheet and liquidity position makes this an exciting time for the company. You can expect us to be very active in acquisitions, believing this opportunity will remain viable for a while. We will maintain our usual discipline, but considering our success in constructing a company that can deploy $2.8 billion in capital while generating around $540 million to $550 million in EBITDA, I am enthusiastic about our potential in a different market environment and the superior returns we can deliver to our shareholders.

Thank you for acknowledging that we do not provide quarterly guidance. I can provide some insights, starting with our Q1 results. We have indicated that we anticipate similar trends in the second quarter. During our fourth quarter conference call, we mentioned our guidance for 2022, highlighting that we expected revenue to be lower in the first quarter by about 20% and higher in the fourth quarter by approximately 30%, as it is typically our busiest quarter for revenue, especially in advertising. By connecting these trends, you can derive a revenue distribution for the year. We are expecting strong performance in the second half, although this is dependent on various factors, including the current macroeconomic climate, which has presented challenges. Nonetheless, we feel optimistic about the numbers and will continue to work towards our targets.

The next question is coming from Charlie Erlikh from Baird.

I wanted to ask again about M&A. Vivek, it sounds like it's a very exciting period for you guys. Could you just comment maybe on the size of the deals that are in the pipeline, maybe what we can expect from a frequency standpoint? Any more color on that would be great just in terms of the size and frequency in the pipeline, or maybe are you guys shifting more to larger deals or more smaller deals? Any color on that would be great.

Thank you for the question, Charlie. Our approach remains the same. As we've mentioned before, the majority of our activity occurs across various platforms and business units, which typically results in small to midsize deals. Given the high internal demand and our desire to distribute our capital, we tend to prefer these sized transactions. However, we are open to larger deals, like the Everyday Health and RetailMeNot transactions, which were around $400 million—this is our definition of a large deal. We are not opposed to higher-value transactions and we have the capability to handle them, although anything larger than that would be unusual for us due to the associated concentrated risk. If the investment profile and potential returns are particularly attractive, we would consider those as well. Our primary focus is generally on deals valued between $75 million and $150 million, and we are certainly still open to even smaller deals. We prefer to allocate our capital thoughtfully and over extended periods rather than setting specific targets for capital deployment. I believe the current changes in the market won't be short-lived, allowing us the luxury of patience without worrying about a sudden surge in asset valuations. I do not expect that to occur.

Okay. No, that's really helpful. And then, Vivek, you also mentioned in the advertising business, you guys saw fewer clicks on your sites. I'm wondering if you can just expand a little bit on that? And maybe the potential causes of that and your confidence in that turning around in the second half?

And that really relates to where we saw issues and pressure. So in the advertising business, just as a reminder, the health and gaming and entertainment advertising businesses and categories were growers for us and did very nicely in Q1. It is tech and shopping where we saw declines. Those declines were primarily in our performance marketing and specifically within affiliate commerce. And as a reminder, affiliate commerce is when we generate clicks from our properties to an e-commerce site. If the customer transacts, we get a commission on the value of that transaction. That is the affiliate commerce business, that is an important part of our performance marketing business and an important part of the tech and shopping vertical. So when we say commerce clicks are down, it's the same as saying that e-commerce sales that we get compensated on were down, which is a, I think, probably seen in many places, very tough comp. 2021 Q1 e-commerce was extraordinary. And so looking at that against this year is tough as people have returned to in-person shopping, a very tough comp. For us, in particular, remember, we're lapping RetailMeNot, which is the single largest source of affiliate commerce and commerce clicks, so that probably gives you some context. It's all sort of saying the same thing, all where we've had our issues. So hopefully, that's helpful.

And the next question is coming from James Breen from William Blair.

To elaborate a bit more, there are noticeable challenges due to supply chain issues affecting advertising. Companies are hesitant to promote products they cannot supply. Additionally, we must consider the current economic situation. Can you identify a point where the economic pressures on the business outweigh the supply chain problems, prompting a shift towards mergers and acquisitions to acquire undervalued assets? While supply chain issues may improve as the pandemic situation develops, economic challenges might persist for a longer period.

Yes, Jim, I acknowledge that forecasting the macroeconomic factors is challenging, and we can only manage what is within our control. You're correct that our business model is influenced by factors that create near-term pressure on our revenues. However, this situation also presents a favorable environment for us as a buyer. We see this as a temporary challenge rather than an existential threat. These disruptions are momentary and affect almost everyone in specific ways. We are optimistic that they are not permanent, and we can acquire assets at stable prices that may be appealing. While we're certainly not in a guaranteed win situation, there’s an intriguing dynamic at play. Moreover, we believe that some pressures in the first quarter are unique to us, and as we approach the second half of the year, comparisons will become more favorable. It's essential to recognize this factor. Additionally, the investments we've made in our products up to now should benefit us in the latter half of the year. Of course, if the economy worsens significantly, that would present a different scenario. However, at present, we are noticing signs of improvement that we expect will be evident primarily in the second half.

The next question is coming from Jon Tanwanteng from CJS Securities.

It's Stefanos Crist calling in for Jon, can you just give us your thoughts on your preference for M&A versus share repurchases today?

As Bret mentioned and we've discussed previously, we are continuously evaluating our capital options, which typically include acquisitions, share repurchases, some debt repurchases, and capital expenditures. Currently, the market value of our company is at a historically low multiple. We had a solid performance in Q1, achieving around 5% growth on both the top and bottom lines, which, in this environment, is impressive—especially when you consider that organic growth is nearly flat if we exclude RetailMeNot and some foreign exchange challenges. The margins were strong as well. When we identify investment opportunities in our own stock, we have historically taken advantage of them. Similarly, we are open to pursuing acquisition opportunities when they arise. The positive aspect right now is that we have a considerable amount of capital to assess our capital allocation strategy, which is consistent with our approach over the last few years since I took on the CEO role.

Thank you. And there are no other questions in queue at this time. I would now like to hand the call back to Bret Richter for any closing remarks.

Thank you very much, Paul. We appreciate you all joining us today for our Q1 2022 earnings call. We issued a press release earlier this month regarding the investor conferences we plan to participate in during the month of May. And later this month, we'll announce conferences that we plan to participate in during the month of June. We hope to see some of you at those events. And again, thank you for your interest and your participation. Have a great day.

Thank you, ladies and gentlemen. This does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.