IAC Q1 2025 Earnings Report

IAC EPS Results

• Actual EPS: -$2.80
• Consensus EPS: -$3.94
• Beat/Miss: Beat by +$1.14
• One Year Ago EPS: $0.51

IAC Revenue Results

• Actual Revenue: $570.49 million
• Expected Revenue: $809.18 million
• Beat/Miss: Missed by -$238.69 million
• YoY Revenue Growth: -8.60%

IAC Announcement Details

• Quarter: Q1 2025
• Date: 5/5/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 8:30AM ET

IAC (NASDAQ:IAC), together with its subsidiaries, operates as a media and internet company worldwide. The company publishes original and engaging digital content in the form of articles, illustrations, and videos and images across entertainment, food, home, beauty, travel, health, family, luxury, and fashion areas; and magazines related to women and lifestyle. It also operates a digital marketplace that connects home service professionals with consumers for repairing, remodeling, cleaning, landscaping, maintenance, and enhancement services under the Angi Ads, Angi Leads, and Angi Services brands. In addition, the company operates websites that offer general search services and information, including Ask.com, a search site with a variety of fresh and contemporary content; Reference.com that offers content across select vertical categories; Consumersearch.com, which offers content designed to simplify the product research process; and Shopping.net, a vertical shopping search site that contains a mix of search services and/or content targeted to various user or segment demographics, as well as offers direct-to-consumer downloadable desktop applications. Further, it offers Care.com, an online destination for families to connect with caregivers for their children, aging parents, pets, and homes; develops and provides subscription mobile applications across the communication, language, weather, business, health, and lifestyle verticals; a technology driven staffing platform for flexible W-2 work under the Bluecrew name; a platform to connect healthcare professionals with job opportunities under the Vivian Health name; The Daily Beast, a website dedicated to news, commentary, culture, and entertainment that publishes original reporting and opinion; and production and producer services for feature films for sale and distribution through theatrical releases and video-on-demand services. The company was formerly known as IAC/InterActiveCorp. The company is headquartered in New York, New York.

IAC Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Welcome to the IAC First Quarter twenty twenty five 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.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Thank you. Good morning everyone. Christopher Halpin here and welcome to the IAC first quarter earnings call. Joining me today is Neil Vogel, CEO of Dotdash Meredith or as we will refer to it today on the call DDM. IAC has published two presentations on the Investor Relations section of our website today, a new investor presentation and a Q1 earnings call presentation.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

On this call, will be reviewing the latter, which comprises a few key slides from the longer investor presentation. I'll begin with some introductory remarks that will reference that earnings call presentation and then open it up to Q and A. Before we get to that, I'd like to remind you that during presentation, we may make certain statements that are considered forward looking under the federal securities law. Forward looking statements may include statements related to our outlook, 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 recent annual report on Form 10 ks and in the subsequent reports that we file with the SEC.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

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 release, investor presentations, our public filings with the SEC and and again to the Investor Relations section of our website for all comparable GAAP measures and full reconciliations for all material non GAAP measures. Now that we've covered that, I want to say thank you for joining us on this call as we commence this next chapter in IAC's history. As an overarching comment, I want to say Q1 was a solid start to the year.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

To echo our Chairman Barry Diller's published comments, IAC is back to doing what we do best. ANGI is officially on its own. Our businesses are executing with focus and effort and we are deploying capital including into the company we know best ourselves through the repurchase of 4,500,000.0 shares. We've also increased our share repurchase authorization by 10,000,000 shares. The macroeconomic outlook is uncertain, but we are reaffirming full year 2025 adjusted EBITDA guidance across all of IBC.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Turning to the Q1 earnings call presentation. You'll see on page three the businesses and assets that comprise IAC today. These include four leaders in large and growing categories. And in Q1, we had a truly productive quarter executing on a number of fronts. On March 31, we completed the full spin of ANGI to shareholders representing the tenth independent company IAC's created.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

With the spin, Joey Levin transitioned from IAC CEO to ANGI Executive Chairman, where he's working with CEO Jeff Kipp to drive ANGI to be the industry leader in home services. Our company has executed strongly. DDM grew digital revenues 7% in the quarter and increased EBITDA 46% that's excluding a one time lease gain. That lease gain however represents a different type of win as we were able to terminate a long term lease for two floors at DDM's New York headquarters for $43,000,000 in cash payments representing about three times save cash flow and generating a $36,000,000 book gain. Care keeps making progress through its single-minded focus on improving its product to drive better customer experience, conversion and retention.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

MGM reported solid earnings last week and in the words of CEO Bill Hornbuckle is well prepared for the rest of 2025. Turo, the leading car sharing service has withdrawn its plans for an IPO and is fully focused on driving growth and seizing on the opportunities in front of Vivien is implementing AI into its products and processes in truly innovative ways, which combined with the 2,000,000 clinicians on its platform has the opportunity to potentially fundamentally change healthcare staffing. At Search, we renewed our contract with Google and the business is showing signs of stability after a challenging couple of years. And The Daily Beast grew revenue 72% while achieving profitability. At Corporate, we've taken steps to rationalize structure.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Additionally, during the quarter, we also reached agreement in principle to settle the match separation litigation with IAC only needing to contribute $200,000 beyond our insurance coverage. But despite all this progress, turning to page four, our shares are still trading for less than the value of our 23% stake in MGM and the $900,000,000 of cash at IAC Pork parent. Importantly and as a reminder, we have $800,000,000 in NOLs that essentially would offset the taxable gain presently on our MGM stake. So as you can see on the right, our collection of wholly owned businesses as well as our 32% preferred equity stake in Turo and our unencumbered headquarters building are trading at an implied value of negative $100,000,000 We obviously think this represents a massive value disconnect. And turning to the next page, we're working every day on a strategy to create equity value and shrink that discount.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

The first piece of the strategy is obvious, continue to execute and drive growth across the businesses. Neil will talk today about everything he and his team are doing to seize on DDM's opportunities as the largest digital publisher. Care, Vivien, Search and the Daily Beast management are similarly improving their product content and technology to accelerate their revenue and profitability. And in the case of Care and the Beast, we brought in new leaders who reenergized those companies. And then we're also the largest shareholder with active board members at MGM and Turo helping those industry leaders seize on their market opportunities.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

The second prong is capital allocation. Our Chairman Barry Dillard said last quarter that after working through the challenges of the past few years capital allocation is front of mind. As an initial step we completed the buyback of 4,500,000.0 shares of IAC and refreshed our authorization as mentioned earlier. We've demonstrated our conviction in our own stock underscoring the deep value we see in our businesses and we will continue to actively evaluate share buybacks going forward. To the right, M and A is a key element of IAC's DNA and success.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

And Rush Barsht, our Head of M and A and Strategy is driving an active effort to find investment opportunities both through our existing companies and in new platforms. More on that in a second. And then finally, as we said two quarters ago, we will continue to pursue strategic divestitures of our smaller holdings should they arise, freeing up capital and simplifying IAC where attractive. The final area is major catalysts. Significant events to crystallize value have always been part of the IAC playbook.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Spinning ANGI was a key step in our strategy last quarter. Looking forward, we can't say what such catalysts may be, but we will be fearless in pursuing them if we believe they will benefit our shareholders. Regarding M and A, we included the next slide to present an overview of how we are approaching capital deployment, our foundation, our interests and our advantages. A number of us have been active in capital investment throughout our careers and fundamentally believe we have real advantages through our permanent forever capital and ability to invest at any stage of a company. We've always been unique in the marketplace for capital given our structured deep industry experience, flexibility and operational know how and these strengths continue to serve us well.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

We're actively pursuing acquisitions and investments small and large and hope to be discussing new additions to IAC. The final slide summarizes our guidance bringing us back to a discussion of the macro environment. We've been following trends actively across DDM and Care as well as garnering insights from our other companies and holdings. Consumer spending through DDM's performance marketing has been solid, clearly bucking the weak consumer confidence numbers we've all seen. That may represent consumers pulling forward spend ahead of tariff impacts or it may represent real solidity.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

It's too early to tell. At Care, we've seen early signs of consumer pressure around the edges through ebbing conversion, but not yet any material moves. On the DDM advertising front, we've been closely watching the trends given the news flow, but premium demand has remained generally stable. Strength in pharma, tech and beauty has helped to offset weakness in areas like food and beverage. One element we are thankful for in our advertising base is that Tmall, Shein or the de minimis exemption players have never been direct advertisers on our platforms.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Programmatic pricing conversely has definitely softened essentially running flat year over year after being up for much of the year. We're analyzing the disconnect between direct revenues on one hand and programmatic on the other to see which provides better insights on the forward trends in advertiser demand, but right now it's too early to say. In sum, we'd say we are carefully monitoring the macroeconomic environment for signs of either stability or weakness among consumers and brands and we're thinking carefully about discretionary spend in that context. Against that backdrop, we're reaffirming our adjusted EBITDA guidance for the year for each of our companies with the core assumption of no significant recession. That assumption derives from what we are seeing in our businesses, but we know we are living in unpredictable times.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

All we can control is our focus and execution. With that, let's go to Q and A. Operator, can we please have the first question?

[Operator]

We will now begin the question and answer session. Our first question comes from Jason Helfstein from Oppenheimer. Please go ahead.

[Jason Helfstein, Managing Director - Head of Internet Research at Oppenheimer & Co. Inc.]

Thanks for taking the question. Can you talk about the key priorities and I guess it would probably the key product priorities that could drive 2026 TDM revenue growth? And then secondly, how should we think about capital allocation going forward? Obviously, a lot of stock repurchases in the quarter for some in a while. But going forward, how should we think about allocation between repurchases and M and A?

[Jason Helfstein, Managing Director - Head of Internet Research at Oppenheimer & Co. Inc.]

And is there a minimum gross cash level that you think about? Thank you.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Cool. Hey, Jason, it's Neil. First, for those of you in New York, allergies are I'm sorry I sound so awful. But to answer your question, do the Chris can take the second one.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I'll take the first one. Twenty twenty six is something we're actually pretty excited about. I think one thing we're talking about before this call is we came into this year and I think we are executing at an exceptionally high level and a big part of that is looking down the field and figuring out what we need to do for the future. And we had a number of really big projects. I'm sure you've seen the People app we launched which we're very excited about.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We're going to meet audiences where they are and meet younger audiences. If you haven't yet downloaded and use it, we're really proud of it. It's one of the best things ever built. We have a very big project around recipes called MyRecipes. If you believe Comscore, we're probably at least 40% of the traffic on the open web to recipes and food content.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

So it's a really modern take on the Recipe Locker which if you're a chef, you're a home cook you find very, very valuable. We're excited about that. And probably thing we're most excited about is Decipher Plus, which allows us to take Decipher, which we've talked about, which is using our intent driven contextual data that produces ad targeting that beats cookies and pretty much beats anything else in space and extending it across the open web. So you cannot only use Decipher to target exceptionally our own inventory, but target the whole web. And between those three things, we're really excited about where we can go.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We're also not new but we're really investing in our event businesses and this is not some new strategy. It's just the continued growth of things like the Food and Wine Classic. We've had really good strength in off platform audiences across social. We've got a couple of many of you probably seen my reality show turn on the In style show The Intern, but we're building really fun audiences different places that advertisers really, really value. And we're just excited.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We're long term very excited about this business. Great brands, great audiences, real emotional connection to our the people that use our products and we feel pretty good.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Thanks. And then Jason on capital allocation, bought back $4,500,000 goal is by $200,000,000 of our shares. We have our remaining $900,000,000 of corporate cash. We're also generating cash down in DDM. Our goal now is to look at M and A opportunities as we talked about.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Nothing forecloses additional share purchases, but we're interested in M and A. Our Chairman Barry Diller is. We're looking at things large and small. We think the volatility of the current period can lead to new opportunities there. One of the things Russ and number of us have talked about a lot is these private equity and VC backed companies have hung on for a long time waiting for the market to return to exceptional levels.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

That really hasn't happened in that world and also their investors, their limited partners are in greater need of liquidity. So we're cautiously optimistic we'll see more opportunities shake out of the private market. We're also looking at earlier stage opportunities. But again people have challenged us that you can walk and chew gum when it comes to capital allocation for a while. You can buy your own stock and do M and A and we believe that.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

But we and we definitely see value embedded in our share price and we'll continue to calibrate as we go. Thanks, Jason. Operator, next question.

[Operator]

Next question comes from Jason excuse me, John Blackidge from TD Cowen. Please go ahead.

[John Blackledge, Senior Equity Research Analyst at Cowen]

Great. Thanks. Two questions. Sticking with DDM Digital, can you talk about the 1Q trends, revenue trends at DDM Digital? Looked like advertising was a bit lighter than expected, offset by higher performance and licensing revenue.

[John Blackledge, Senior Equity Research Analyst at Cowen]

Any further color there would be great. And then on the 2Q DDM Digital revenue guide of seven to 9%, can you talk about the puts and takes for the rev guide across the three segments? And is the current macro tariffs impacting advertiser brand spend? And then second question on the DDM cash flow to IAC. Could you just talk about the dynamic where DDM hits a certain leverage ratio and the cash is accessible to IAC?

[John Blackledge, Senior Equity Research Analyst at Cowen]

Like how does that benefit IAC and its shareholders? Thank you.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes, sure, I'll start and then Neil will definitely weigh in. Q1, we guided last quarter that there were a few elements that would lead to slower growth in on traffic and revenue in Q1. Specifically, we had tough comps in January and February in '24 that we are running over. There was one less day in the quarter which is about a 1% decline. And then Easter which is an important quarter for us sorry, important holiday fell into the second quarter this year.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

As it played out, the news cycle wasn't our friend between the fires in LA and then political news seemingly crowding out most other information and people's attention. These factors combined core traffic declining 3% in the quarter and digital advertising only being up 1%. In that 1% premium was actually pretty solid. We just with fewer impressions we had less programmatic to sell which was a headwind. But things within just traffic and advertising improved across the quarter.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

March was solid at 8% digital advertising growth for example and April similarly was in that vein. For the first quarter licensing led the way with 30% growth. Thanks in part to the OpenAI license, but also due to real strength at Apple News. Performance marketing was also excellent at 11% growth and we continue to see solid consumer spending on commerce. And that really got us to the 7% for the quarter.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So we were not really surprised by that number. For the second quarter, we've guided to 7% to nine percent digital revenue growth. That will come from a combination of stable traffic. We've already seen that. So easier comps definitely.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So far, we've seen stability in premium demand with some particularly strong categories offsetting those where tariff uncertainty is more pronounced and continued solid performance marketing offset again by soft programmatic. Licensing will have a tougher comp as we lap the OpenAI deal, but we'll still grow. And then we've spent a lot of time analyzing the advertiser demand and the impact of tariff uncertainty. We do it constantly. That 7% to 9% digital for Q2 is our best view of where we are right now and the trends.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Neil, anything? Yes.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Add a little to the market perspective on this. I think, as I said before, we came into this year really strong and executing really well. I think we have seen our premium revenue hold together really like really, really well so far. I think anyone who doesn't think the mood of the buyers is changing is not paying attention. But we haven't seen any significant huge cracks in that yet.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I guess it all remains to be seen. We are very focused on control what we can control. I think we're really well positioned because of our scale and because of our focus on performance. And again, goes down to things like Decipher and really intent driven traffic. You got a much better chance to hang in there when you're the ads that really perform.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

So we'll see. But again, it's control what you can control and we'll see. I think Chris touched on this a little bit. I think there is a little bit of a disconnect between what is essentially the advertising spot market, which is the real time programmatic markets, which are probably were running for a long time for us. We're particularly good at it up 20 ish percent.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We're back down to sort of flattish year over year and that's not really moving. I think that is definitely a little bit of uncertainty in the buyers and a little slower to pull the trigger. What I would also say about the future is we're not seeing much more than you guys are seeing, right? There's new things coming out every day and we're reacting and reading and reacting every day. What I would say in long term, great brands, great audiences, great execution we'll be fine.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We just got to get through whatever short term bumpiness hits and if it applies to us, it's going to apply to lots of other people as well.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

And then on the cash flow question, so everyone understands we have entity level debt at Dotdash Meredith, a institutional term loan in two tranches as well as unfunded revolver. Under the credit agreement on that debt, IAC can dividend cash up to itself the parent from DDM if the total leverage ratio is below four times total debt to EBITDA. And that's on a credit agreement definition of adjusted EBITDA which is I guess more favorable and slightly different than what we report publicly. In any case through debt pay down and increased EBITDA Neil and team have steadily reduced leverage at DDM and we went below that four times test ratio as of twelvethirty onetwenty four. That means IAC has access to DDM cash for any IAC corporate purposes should we so desire.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

It's a nice increase to our financial flexibility and it was a real objective of ours essentially since the acquisition closed to get below both from a just from a total leverage perspective but also for access to that cash. We'd also highlight that on a go forward basis DDMs leverage ratio should only improve through the combination of improving EBITDA but also it's a great cash flow producer and net free cash flow generation. Thank you, John. Operator, next question.

[Operator]

Next question comes from James Heaney from Jefferies. Please go ahead.

[James Heaney, SVP - Equity Research at Jefferies]

Great. Thank you, guys. Could you just talk about the appointment of Jim Lawson as the President of Decipher? Just be interested to hear about his strategic objectives for that particular product. Thank you.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Sure. Jim for us was a coup of a hire. I've known Jim personally for a while. Our team has known him for a while. If you are in the ad tech space, you know Jim.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Jim had been the CEO of a public company called AdFerint, which had recently been acquired. AdFerint is particularly appealing to us as either a partner of ours now and be they do a lot of the same things to allow advertisers to reach consumers that we're doing with Decipher. Jim is a star. He had lots of opportunities. I think we convinced the Togobi CEO of other things.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I think we did a good job of convincing him how big and exciting Decipher could be. And he's coming to hit the ground running and building a team, very commercial. We knew we had a great business and people at our place, Lindsay Van Kirk, John Roberts, who's done an incredible job building this. We needed to bring a real commercial CEO into this. A, it shows our focus on the business to the market and B, it's just the nuts and bolts skills that we need to build a team that can fully sell and execute on the potential of using our data, which we have more first party data than any other publisher to target the open web.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

And we know that our data and our contextual targeting beats cookie and other targeting and Jim believes that too and we're off to the races. Again, think we've talked a lot about I think you're going to see minimal contribution this year, but we're really looking towards '26 as this is a big part of our future.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

For Decipher Plus.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

For Decipher Plus, I'm sorry, for Decipher Plus. And it's interesting, last thing I'll say about Decipher, Decipher Plus while we're talking about it is, so the actual core Decipher business now is in more than half of our premium deals. It's doing really well. Those deals are 60 plus ish percent bigger than deals that don't have Decipher and those clients are growing faster than clients that don't use Decipher. It's also our ticket in the door.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

It's one of the few really new innovative things in ad targeting. And Jim, one of the great skills he has is he's a communicator and he can communicate what we are doing into this ad tech universe that isn't our native language. We're a publisher at our core. We make amazing content and build amazing things. He really understands our data product that we've built and is really looking to leverage it.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

So we're as you can tell from my tone, we're very excited about this.

[James Heaney, SVP - Equity Research at Jefferies]

Great. Thank you, Neil.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Thanks, James. Operator, next question.

[Operator]

Next question comes from Cory Carpenter from JPMorgan. Please go ahead.

[Cory Carpenter, Internet Equity Research at JP Morgan]

Hey, good morning. Thanks for the questions. Maybe sticking with Decipher, Neil, could you just talk about the impact or lack of impact kind of from Google no longer phasing out cookies, which they announced a few weeks ago? And then maybe for you, Chris, just could you talk about the announcement you made a few weeks ago with ArcHouse in the addition of them as a Board member? Thank you.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Sure. I'll do the cookies part first and Chris can go. Cookies is a little bit more this is a little more my opinion. I'm sure you're going to get different takes on this. I don't think it's that big of a deal at all.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I don't think anybody really thought cookies were going away for the last twelve months. And as you guys like to say, it's baked in. It was baked in already. For us, we're neutral on this. I think if anything, it might help us.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

It really helps us line up what we can do with contextual targeting versus cookies and how much more performance our Decipher and Decipher plus driven offerings are. So it's pretty good. We also look, we have a lot of clients that want to buy parts of their programs, even all their programs based on cookies for whatever reason and we can execute those So the one thing it will do that's positive is it will probably eliminate what would have been the thrash in the market to get from a to a true post cookies world. But I don't think in the long term it makes any difference for us.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. I think and just to align that to some of the prior conversations we've had on this topic, we if there was going to be a hard cut, we used to say it was going to disrupt everyone, but Decipher would be a winner. And team have highlighted the fear of a hard cut helped highlight Decipher to a number of brands and agencies, was great for getting them to trial and then see the experience where we are now stability in the market where we can just out compete other offerings is ideal.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Yes. And I think just to add Will, advertisers now really understand cookies are profiling individuals and there is varying levels of discomfort for that. We're not. We just look at behaviors and when you look at what cookies are backward looking. They're trying to guess what you're to do based on what you did.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We're real time. We know exactly what you're doing and I think that's very simply why we're better and why we don't mind cookies still hanging around as a comparison.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. And the last thing I'd say PowerPoint is not the answer to anything. But we tried in the investor presentation, spent a lot of time with DDM and team to really lay out what Decipher is and then how Decipher and Decipher Plus work off of what it is in a slide in the presentation. And we'd encourage investors to look at what we're doing with context connecting it to data and predictive analytics and then going O and O inventory and off.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I mean we've got the real time first party data of the biggest publisher in America across the biggest consumer categories in America. So we feel really good about where we are.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Thank you. And then Corey with respect to Tore Braman joining our board and the announcement with Arkhouse, Arkhouse is an IAC investor who is a really strong believer in the economic value embedded in our shares. They've highlighted that publicly. We've had constructive dialogue with Arkhouse. Our nominating committee believes Mr.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Brahmin's background in technology and capital markets as well as his board service experience in a number of public companies will be valuable as IAC continues to execute its strategy. We're excited to have him join the IAC board and work with us. He's filling the seat that had been held by Joey Levin and we're excited to move forward with him on our strategy. Thank you, Cory. Operator, next question.

[Operator]

Next question comes from Ross Sandler from Barclays. Please go ahead.

[Ross Sandler, Analyst at Barclays Capital]

Great. Neil, the bigger slide deck talks about the new direct to consumer experiences. Just curious, how could you just elaborate on what you guys are doing there? How many other Meredith sites might be open to something like this and kind of what kind of impact that's going to have on growing your owned and operated inventory? Thank you.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Yes, sure. Good question. So one thing we've said and I'm in one of these calls in a bit, we've saying that anybody who listen is our objective as a business is with our brands and our audiences and our strength and the emotional connections we have, we need to focus more on connecting directly with our audiences and directly with our advertisers. And one of the things we've been able to do is we've really been able to do that, we've been doing it quietly. Mean there's a fun statistic around here that we can share there in this call is when we and it goes to why we're going direct.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

When we put Dotdash and Meredith together, about 60% of our traffic was in Google search. Right now it's a little bit more than a third and we've grown all the way through that. And that's because we are able to really connect with users and that doesn't even account audiences we've built on social, that's just traffic to our O and O's. So if you look at what we've done, we've taken our biggest properties and biggest areas, which is entertainment with people, which is food and recipes of MyRecipes and which is our superior ad targeting with Decipher Plus and all of these are ways to connect directly with audiences and with advertisers. And what we've seen is a really strong take up for this.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Just like we've seen a really strong take up for participating in our events, just like we've seen a really strong take up for advertising on our social. And it's a long term strategy. Look if you do what we do like you have to pay attention to the market. We've been at this a long time. I mean, I've been here almost twelve years.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

The media landscape looks entirely different than it did when we got here. And we've done nothing but grow and adjust the whole time. And we feel very positive about where we're going. And the second part of your question was what else you're doing? You guys should expect to hear from us new projects of the size and scale of a MyRecipe or People app.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I'm not going say every quarter, but with great frequency and we've got a one of the things we've done is we've pivoted our organization which is not that easy to do to really focus much more on innovating these things than we have focusing on the old business model. Like right, if we're not careful, we've got real innovative dilemma. We've got this old model that works, but would decline. But we've had this forever. This has been going on ten years like this.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

So we're constantly doing new things. We're really trying to bring innovation new ideas forth. I think again launching the people out, launching our recipes, launching the Cipher Plus, it teaches us and it teaches the ad market that you should expect new things from us and excitement from us and energy from us. And we really like where we are and what I can say is stay tuned there's going to be some more.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Thank you, Ross. Operator, next question.

[Operator]

Next question comes from Justin Patterson from KeyBanc. Please go ahead.

[Justin Patterson, Managing Director at KeyBanc Capital Markets]

Great. Thank you very much. Good morning. You're approaching one year of Dopdash working with OpenAI. Could you talk about your learnings from this partnership?

[Justin Patterson, Managing Director at KeyBanc Capital Markets]

And perhaps more broadly for Chris, how you're thinking about AI opportunities for the rest of the IAC portfolio? I know you called out Vivien as a potential beneficiary in the prepared remarks. And then just a big picture one for Neil. Obviously, the other big ad industry news is just the Google DoJ trial. How might the world look differently for Dotdash if we see divestitures and what opportunities that might create for you?

[Justin Patterson, Managing Director at KeyBanc Capital Markets]

Thank you.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I'll do the OpenAI. I'll do a quick answer on OpenAI. They've been a really good partner for us. What I would say is we do not have productive relationships with other people in their space. But with OpenAI they've been great.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Our engineers are cooperating. We're really helping them roll out some of their products. They're helping us roll out our products. They were a very big help with some decipher targeting with some of the AI things we can do around modeling. It's been very, very positive.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

And I think the choice we made that said we want to sit at the table with these guys that are at the tip of the spear on these things. I think for the first year we were right. And it's been really, really helpful for us in terms of how we're moving AI into our processes and getting a say in the future of how this stuff's working. In terms of larger deals, I'll let Chris talk about that. Yes.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Is

[Christopher Halpin, Executive VP, CFO & COO at IAC]

like a lot of things where there's so much buzz and then when there's really substantive increasingly substantive applications people are almost tired of hearing about it. So we're in that stage. Across the portfolio, we have essentially a bit of a lab where Neil's team will apply it on certain things. Vivian, who I actually think is the most aggressive and creative in how they've applied AI is doing it, you've got care. There are opportunities at Turo and at our search business.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

They've done applied AI through real time bidding and other activities. What's clear is where you have massive data sets where you're doing optimization activities, So things like smart matching or fraud detection, you've got real advantages there. We've seen that at Care, Vivian. Clearly customer service and you've heard the comments from Sam Altman and others that sort of level one, level two CSR activities are probably going to go rapidly to voice driven AI and if done right it's a better experience. We debate this all the time but I think of it as the ATM experience at the bank where most of us never want to go into a bank teller again.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

I think once you have a sort of pseudo omniscient AI efficient voice activated call service representative, you're not going to go on to want to go back to a human using a drop down screen and searching for information. What it's done for Decipher is clear. And then also we're seeing interesting things on onboarding and definitely on marketing. Think over time there'll be a through AgenTeq AI real changes to how marketing creative is generated, tested, optimized, placed. You're still going have humans involved.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

It's not going to be a cycle of machines, but much faster cycles that will have benefits over time.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Yes. And I'll go to the DOJ, Google stuff. Think there's two answers to that. First the legal case itself I assume you're talking about sort of the Daily Mail related legal case that the settlement that reverted to just came out. What I would say is we're looking very closely at it.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

We're trying to figure out how we actually participate in this in some way or don't. I don't have any real news on that. We're obviously very close to it. But I think from a business perspective, I mean this is like my favorite line from my favorite TV show, The Wire, is the great line is, this is Baltimore gentlemen, the gods will not save us, right? Like nothing is we will function and always have functioned as if we are on our own.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

And we need to have great relationships with advertisers, great relationships with audience, really compelling offerings, really compelling brands and we will be fine. And that's how we'll continue to operate. Obviously, the ecosystem changes, I feel very confident we'll be at the front end of reacting, but we'll have to see.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

I think

[Christopher Halpin, Executive VP, CFO & COO at IAC]

full outcomes remain to be determined obviously. And also I'd just say that to continue the wire analogy we'll defend our turf. Totally. And our IP and that's Yes. By corners.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Only in legal manners but we will do that. Justin, does that answer that question?

[Justin Patterson, Managing Director at KeyBanc Capital Markets]

That's perfect. Thank you both.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Okay. Thank you. Operator, next question.

[Operator]

Next question comes from Tom Champion from Piper Sandler. Please go ahead.

[Tom Champion, Director & Senior Research Aanalyst at Piper Sandler Companies]

Good morning, guys. Chris, maybe you could talk about Care for a little bit, particularly the consumer side of the business. How is leadership working on the challenges there? Neil, maybe just a quick one for you. I'd love to have you talk a little bit more about what you're seeing in the spot market and the growth there relative to what you've seen in the past.

[Tom Champion, Director & Senior Research Aanalyst at Piper Sandler Companies]

What do you think is driving that performance? Why would that not be, say, a leading indicator for the market?

[Neil Vogel, CEO, Dotdash Meredith at IAC]

I'll go first.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

The spot market has been really erratic. And I think that is in line with what everyone sees feels right like a lot of advertising is confidence and some days people are feeling confident and some days they're not. Wish I had more definitive insights for you. I'm reluctant to do it because I got a 50% chance of being wrong depending what happens tomorrow. Again, it is true.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Obviously, look spot markets are a very good window into what is happening at that very moment. I'm not totally sure it's indicative of tomorrow if the spot market gets better tomorrow. If you're looking for something that says we're getting better or we're getting worse. I just I'm reluctant to say either way.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. And the only thing I'd add, me honest here Neil is, we have no TMU, Xi'an or de minimis exemption in our direct base. On the broader programmatic market, they were a player. I mean especially on mobile apps and all those.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

The math of those guys coming out of the market because they spend a lot of money although it was generally below they can't afford our sites basically because we're really expensive. Well, we're expensive because we perform relative to what they buy. But when a big chunk of demand comes out of the market, prices are going to go down. So that definitely could be a factor in this as well.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. That would be something sort of specific to the programmatic market, but would especially given our endemic base of advertisers across our brands, we'd have a different dynamic on premium.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

For sure.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

We're not saying absolute, Tom. It's just more those are the kind of questions we're working through. On Care, thanks for the question on that. We broke Care out as a segment earlier this year for the first time. To set the backdrop, it is the number one provider in its area of consumer care access information, child care, senior care, pet care, housekeeping, etcetera.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

We got the most liquidity on both sides of the platform including demand and caregivers. And it's a good brand, great brand. We bought the company in 2020 and at the time of the acquisition, IAC knew there were core issues with the platform, with the product and the experience. A lot of time was spent early on improving the base platform for resiliency, quality of consistency of experience and putting the pieces in place to eventually improve things up the tax stack like the product pricing, packaging and payments. But because of that in that period the product didn't improve.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

But also in vein of you might start to think you're better than you are, the pandemic was a real the post pandemic period was a real boost for the business as there was major demand for childcare and senior care as people came back to work. In a lot of ways that masked deficiencies in the product in the twenty twenty two, twenty twenty three period. And then as that tailwind subsided and frankly given some of the wage increases that have occurred, the realities there's been more pressure on the category of care. The realities of the product came to the fore. Brad Wilson went in as CEO less than two years ago and he and his team and he's significantly upgraded the team and brought in new talent have been working to steadily improve the product and experience as well as pricing packaging.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So where we are right now on the consumer side, we have three core priorities this year, the product and they've made some improvements last year, but this year really rolling out major improvements in matching. So getting the most accurate match of a caregiver based on the specs of the care seeker. Messaging, the product was very antiquated in terms of one to one cross messaging of seeker and caregiver to figure out if it's the right match, search on the platform, very basic things. We're catching up and moving the ball forward there and fulfillment. So that's the product.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

The second is optimizing pricing and packaging. It's basically been a one size fits all product of a subscription. With the improved platform and product they can roll out different entry points and offerings to meet care seekers where they are and what they need. And then finally once we're happy with the product and packaging is marketing. And that's both reenergizing the brand of care and then also improving spend efficiency.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

One of the learnings was we had an always on model that was pretty inefficient relative to there are significant periods during the year when the preponderance of care of acquisition of House Care Household Care occurs. So we've seen improvements already in responsiveness and fulfillment in the product versus the old as they continue to ship improvements. We're excited about that. It's going to be around Q3 early Q4 before the product will always continue to improve but we really have the product where we want it. We have pricing and packaging rolling out and then we'll have improved marketing and we'll step up the spend in Q3 which is a big search period.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So a lot of work to do. We feel confident we'll get the consumer business back to stability and definitely we think it will grow in 2026 and Brad and team are taking the right steps.

[Tom Champion, Director & Senior Research Aanalyst at Piper Sandler Companies]

Thanks for the comments guys.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Thanks Tom. Operator, next question.

[Operator]

The next question comes from Youssef Squali from Truist. Please go ahead.

[Robert Zeller, Equity Research Associate at Truist Securities]

Hi guys. This is Robert Zeller on for Youssef Squali. Thanks for taking our questions. On the Google partnership, I'm curious if there was any cloud hosting savings as well with that? And what impact you guys are seeing to traffic, if any, from search algo changes as well as Google's transition to AIO?

[Robert Zeller, Equity Research Associate at Truist Securities]

And then on programmatic, I just wanted to unpack the drivers behind the softness. I think you guys mentioned some impression commentary earlier and I just want to reconcile that with strong advertisers leaving the market and the pressure on CPMs as well. Thanks.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Sorry. Can you just explain that last question one more time? I've got the first one.

[Robert Zeller, Equity Research Associate at Truist Securities]

Yes. I'm just

[Robert Zeller, Equity Research Associate at Truist Securities]

yes, sure. On the programmatic, I'm just curious, I just wanted to unpack the drivers behind the softness a little bit. I thought I heard you guys say that impressions were lower earlier in the call. So I just wanted to reconcile that with what you said about Teen Machine exiting the market and driving CPMs down as well.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Okay, got you. Yes, no, definitely understand that question. On the first question, the Google contract is for search. So there was no cloud component to that. That's just the long term AMG search partnership with Google related to its business.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

We have we use all the cloud services in our companies, but there was no bundling of vendor relationship there. It's just standalone search. Do you want

[Christopher Halpin, Executive VP, CFO & COO at IAC]

to take?

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Yes. I'll do the AIO impact. That's for those of you who don't know, that's the Google AI answer at the top of the page. I think right now those show up on about a third of our searches.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

You see a little performance decline on those pages. It's very hard to get a handle on exactly how much because there's so much else going on that page also. There are so many other features and search features and Reddit and Google is doing so much with that page. I don't want to editorialize from a user point of view, but it's a very confused page right now. And as I said earlier, look, when we put the business together, 60% of our traffic was from Google search.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Now it's probably a little bit more than a third and we've managed to grow all the way through. And we've said many, many times in our history, we are extremely happy to get traffic and audience from other algorithms and interim sources, but it is entirely incumbent upon us to manage those sources and be sure that we're meeting users where they want our content. We've been able to do that. So it's hard to say what the actual impact is. I actually don't think for us it's giant yet.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

It might be a little bit like and it's more in the context of a whole search page. So I'm not overly concerned about it.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. I mean, I would think about it if Google search is about a third of our traffic and you're seeing an AI overview on 35% of that and then you've got a small decline in click through, it's not a significant part of our traffic.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Yes, exactly. That's a much clearer way of saying it than I said it.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. Other way the other thing we see is as cluttered as the search pages this is IAC wide. As cluttered as the search page has become with Reddit and LSAs and e commerce and everything, brands still do well. And being it's sort of this massive spreading where top one, two, three brands in categories are doing that much better. So we see it also in our non core titles at DDM where we're not investing behind them but also they just the weaker brands just get washed out to the ocean.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

At least in the context of search page. In context of a search page.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

There's still value with consumers, there's still with advertisers, but you've seen a huge spread in search. So we're still feeling very good about our top brands and again that theme of brand and consumer trust continues across all elements of the business. On programmatic, thank you for the question. It's really bifurcating between Neil's comments we're on pricing and then I was talking about revenue for DDM. So on pricing, programmatic prices have been up strongly for a while with the recent concerns about tariffs and such, it's essentially gone to flat pricing year over year.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

That has some impact on programmatic. The point I was making was how our programmatic inventory or quantity works is we have our sessions and we sell as much as we can through premium direct given the improved CPMs and also it's strategic for us to provide that inventory to our direct partners and help them execute on their campaigns. If we have some slight traffic declines as we did in core in Q1 that just means there's less traffic for programmatic. So I think of it in Q1 as some less traffic for programmatic partly because of the overall traffic declined slightly but also because premium sopped up more. And then in Q2 as we see traffic coming back to stability and maybe some slight growth in Q2, but programmatic prices are no longer a tailwind given some of the market disruption we've seen.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Operator, thank you. Operator, next question.

[Operator]

The next question comes from Nick Jones from Citizens JMP Securities. Please go ahead.

[Luke Meindl, Equity Research Associate at JMP Securities LLC]

Hi, this is Luke on for Nick. Thanks for taking the question. I guess just double clicking a bit more on Care.com. I know it's a tough macro environment, but at a high level what are the key strategic priorities there to kind of help accelerate growth in the coming quarters or in years? Thank you.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. Thanks for the question. I would say at the end of the day Care on the consumer side is the industry leader and on the enterprise side is definitely one of the top companies with clear advantages. We've got liquidity on both sides of our marketplace. Care seekers, the consumer on one and then caregivers, child, senior, pet, etcetera on the other.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So it is really around execution and making the product, the experience, the matching as good as possible and continuing to through that drive initial conversion, recapture because right now it's a subscription product. So people go on, get a caregiver, may lapse or cancel their subscription, come back on, get a senior caregiver or a new child caregiver. So there's a number of elements of initial subscription and then recapture and re engagement and you've got to keep making the product and experience as good as possible. That is where we have missed the most over the last few years and we feel good about the path we're on. Next is pricing and packaging as I said and the third is marketing.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

And we've known our marketing was inefficient and suboptimal, but we came to the decision to hold off on really pushing behind it, reinvigorating the brand until we had the product where we want. So it's really been a it's a serial game plan that we have. On the enterprise side, it's a true cultural shift post pandemic where backup care and that service is increasingly a base consumer sorry, base employee benefit. And we've benefited from that. We think cares care for businesses offering of backup care, customer support, access to the care database of caregivers and our life service through life care or life service offering is truly differentiated.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So for us on enterprise, it's really three prongs. One, make help employees who have access to care for work care for business know what they have and utilize it. Two, continue to improve the product to make it as easy to book backup care employee as possible. And then three, acquire new logos and that's new sales of Fortune 500 companies all the way to down to small business through our own sales force. So we're heads down continuing to execute, but the tailwind, the dynamics of pressure on households for both senior care and childcare is not going away.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

And it's really, as we said before, in the four corners of care to execute. Thank you, operator. Last question?

[Operator]

The last question comes from Yigal Ahronian from Citigroup. Please go ahead.

[Ygal Arounian, Director - Internet Equity Research at Citi]

Hey, guys. Thanks for squeezing me in. We spent a lot of time talking about the programmatic side and maybe thought you can both talking a little bit more about the premium side and strength you're seeing there. Are those commitments kind of multi quarter? What are you seeing there?

[Ygal Arounian, Director - Internet Equity Research at Citi]

And as I think, Neil, you mentioned, okay, premium is strong, but advertisers are kind of looking around at the environment. What are the trends? What are your advertisers saying as we look forward a couple of quarters? And then I'm not sure if there's anything to add here, but if there is, we'd love to hear just around on the M and A environment, as you kind of move to this stage. Any change or focus on areas that you kind of want to look into from here?

[Ygal Arounian, Director - Internet Equity Research at Citi]

Thanks.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Yes. I'll let Chris do the M and A thing. I'll do the premium side. Our premium business coming in this year was super strong. First quarter was very good as Chris said.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Second quarter, we're where we would hope to be. But again, think a lot of it is relative to the market. We've got really good offerings. We've got really good brands, we've really good audience of stuff performs, Decipher is really helping. Again, I would love to be able to answer your question more thoroughly and more eloquently, we just don't know.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

If again, things hang on where they are, I think we feel pretty good about where we're going to be going. Before any of this macro disturbance at the end of last year, we felt fantastic. We're executing at high level, having great conversations. And I guess, look, advertisers are people too. They look at markets.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

They look at it like in May was the way you guys look at it. They're analysts, right? CEOs and CMOs are analysts. So it's just a way of saying that we don't really know. But as of right now, there's nothing to suggest that we won't do fine the rest

[Neil Vogel, CEO, Dotdash Meredith at IAC]

of the year

[Neil Vogel, CEO, Dotdash Meredith at IAC]

and potentially good the rest of the year, but we'll see.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Yes. And I'd say this goes a bit to our approach to guidance and how we thought about it. Neil said it well, which is we are looking closely at the data to identify trends and patterns. We're very thankful again that Timu and Sheehan are not in our base that we have to comp against. Partly that was because as Neil said, we price them out of our inventory, it's great.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Broader IAC, we're looking at care and others. We've seen some recent softness in conversion, but that can be volatile from quarter to quarter, not volatile but no material moves. On enterprise for care, we're looking to see if employers lay folks off or significantly reduce. Haven't seen that yet but we're cautious on the world. Where we sat to Neil's point when we did our original guidance for the year in February, we factored in some volatility for the unknown.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

It seemed like every year I've been here we've had some unknown unknown come out of the woodwork and hit us. We had some factoring in there. By the March, we were seeing our businesses trending to the high end of their guidance ranges. DDM for example, March and April saw digital revenue growth of 1318% respectively across all digital and we would have we were pacing to be up low double digits for the second quarter. Now we're at seven to nine percent.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

So we're factoring in some economic slowdown in the rest of Q2 and Q3 in our guidance, but no significant recession. And also our businesses are thinking about cost actions they can take, which if things were going great, you'd continue to invest in your business macro, but they can take to be thoughtful around their cost structure. So this is the approach we're taking and into our guidance based on what we're seeing right now as Neil said. With respect to the second question, M and A environment, we're excited. We're looking at different things.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

We highlighted some of the industries that we're thinking about. We've always asked ourselves how do we build a big business or concept into something much bigger that can be through early seed investment, it can be through roll ups, consolidations or it can be through buying underappreciated larger businesses that we have a different thesis on. Digital is definitely tougher than it was ten, twenty years ago, but we still see opportunities. We're looking across experiences, digital enablement of experiences, what we've seen in MGM through the in person experiences, through digital gaming like Live Dealer, through BetMGM, others. You can see where the puck is going and the opportunities as things become even more real time and personalized.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

And then there's always idiosyncratic things. We're interested in how AI is going to influence consumer interactions, gaming, etcetera. It's hard to reveal too much, but we are working away and I think we will have some interesting opportunities. Thank you, Eyal.

[Ygal Arounian, Director - Internet Equity Research at Citi]

Thank you.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

I believe that's it operator.

[Operator]

Yes, that was the last question.

[Christopher Halpin, Executive VP, CFO & COO at IAC]

Okay. Thank you all for your time and engagement and onward and upward. Have a great

[Christopher Halpin, Executive VP, CFO & COO at IAC]

day.

[Neil Vogel, CEO, Dotdash Meredith at IAC]

Thanks.

[Operator]

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

Participants

Executives

• Christopher Halpin, Executive VP, CFO & COO
• Neil Vogel, CEO, Dotdash Meredith

Analysts

• Jason Helfstein, Managing Director - Head of Internet Research at Oppenheimer & Co. Inc.
• John Blackledge, Senior Equity Research Analyst at Cowen
• James Heaney, SVP - Equity Research at Jefferies
• Cory Carpenter, Internet Equity Research at JP Morgan
• Ross Sandler, Analyst at Barclays Capital
• Justin Patterson, Managing Director at KeyBanc Capital Markets
• Tom Champion, Director & Senior Research Aanalyst at Piper Sandler Companies
• Robert Zeller, Equity Research Associate at Truist Securities
• Luke Meindl, Equity Research Associate at JMP Securities LLC
• Ygal Arounian, Director - Internet Equity Research at Citi