Good morning, everyone. Glenn Schiffman here, and welcome to the IAC and ANGI Homeservices Third Quarter Earnings Call. Joining me today is Joey Levin, CEO of IAC and Chairman of ANGI Homeservices; and Brandon Ridenour, CEO of ANGI Homeservices.

Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter. We will not be reading the shareholder letter on this call. It is currently available on the Investor Relations section of IAC’s website.

I will shortly turn the call over to Joey to make a few brief introductory remarks, and then we’ll open it up to Q&A. Before we get to that, I'd like to remind you that during this call, we may discuss our outlook and future performance.

These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate, or similar such statements. These forward-looking views are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today.

Some of these risks have been set forth in IAC and ANGI Homeservices' third quarter press releases and respective reports filed with the SEC. We'll also discuss certain non-GAAP measures, which as a reminder, include adjusted EBITDA, which we’ll refer to today as EBITDA during this call.

I'll also refer you to our press releases, the IAC shareholder letter, and again, to the Investor Relations section of our website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Let's jump right into.

Joey?.

Thanks, Glenn. Good morning, everybody. Feel very fortunate to be here right now. The fact that you're on this call means you've got your health. It means you're working, probably able to work remotely.

And if you're working, God knows you're not doing these earnings calls for fun, but if you're working, it also means you're probably doing pretty well, because as a shareholder, things have worked out for IAC during this period, which we're all very grateful for and very much appreciate everyone's support.

I know it's a very, very busy week between corporate stuff, and of course, what's going on in the country. As usual, we put some big news in the letter. So, I do want to also get to questions quickly. And I know you'll have a bunch. And then after that, we can all get back to watching John King on that map.

So I guess, Mark, why don’t you open up the first question?.

Sure. We'll take our first question from John Blackledge at Cowen..

Great. Thank you. Joey, could you discuss further the rationale and timing for Vimeo spin and how it might differ from the recent Match spin? And then also on Vimeo, could you just discuss the success on the enterprise side this year? And Vimeo went EBITDA positive this quarter.

Maybe discuss the near and longer term margin potential for the business?.

Yes, definitely. So, the rationale and timing on the Vimeo spend, there's - as we say when we're doing them, also when we're not doing them, there's not a magic bullet on timing on any of these things that's a sort of crystal clear catalyst that pushes things one way or the other.

But the sort of mounting case on Vimeo has been, Vimeo is - the category in where Vimeo operates, which is enterprise software, and the currency of enterprise software is very different than the IAC currency. And that's a gap that we can bridge relatively easily, but that continues to grow wider and wider.

And the question is, does it at some point start to limit Vimeo’s options? And we want to make sure Vimeo has the greatest options possible for Vimeo’s success.

And the other thing that that has held it back historically is whether Vimeo was ready, both in terms of revenue scale, in terms of profits scale, in terms of ability to control its own destiny, meaning a money losing business, you want to make sure that it has enough capital or can it choose to not be a money losing business? So I think, and this will get into your second question a little bit too, but we've proven now that Vimeo can generate cash.

We've proven that clearly to ourselves. And now I think we've proven that externally. So really, Vimeo is now in control of its own destiny. We, over the last few quarters, have seen very good accelerating growth. And over the last few years, we've been very successful in adding to Vimeo with M&A.

We - in the live category, we did this through livestream. In the OTT category, we did that through VHX. In the creation category, we did that through Magisto. And all those things so far are working out pretty well. And the reason they’re working out well is we're able to add them onto the Vimeo platform.

In fact, in all cases, we've sort of rebuilt the products completely onto the Vimeo platform, but we were able to do that much faster when we bought something and it comes with both a lot of learning and customers and things that we can test and things like that.

And so when you have that collection of things, you think you want to have access to currency to continue to be aggressive and to continue to execute in that category. I think it's also important to - as a potential branding event for Vimeo, the sort of noise and drum beat of information on Vimeo, continues to get louder. I think that's important.

We still have people who say, isn't Vimeo just the other YouTube or the cooler YouTube, or whatever it is. And that's not really Vimeo’s business model at all today. And it's helpful, as we start talking about these things, for people to understand that. And so to some extent, it can also be a branding event to get Vimeo out there and in the news.

And this is Vimeo’s moment to really get that definition for itself. It's not a rush and it's not definitive. And as I said, Vimeo has both the capital we just raised, and of course backed by all of IAC’s capital, and Vimeo could be profitable right now. We want it to continue to be profitable.

So it's not like we have to get out there to get access to cash. But I do think it could be good for Vimeo long-term to be in that position.

Second question was, I think, around what's driving the growth? Was that it, John?.

Enterprise..

Enterprise. Okay. So, enterprise is doing incredibly well right now, and that's led by a few things. I mean, mostly it's internal communications, but also external communication.

So employee town halls, webinars, seminars, training, great examples, are - some of the biggest companies you've heard of now on our platform doing town halls, Columbia University doing its graduation on Vimeo, the - and then small businesses, I guess I’m going away from enterprise, but small businesses, and we've talked about this example all the time, fitness, yoga, things like that, where you're accessing a broader audience.

We're actually seeing growth across every product in Vimeo right now, and accelerating growth across every product in Vimeo right now, but enterprise definitely the fastest growing and definitely the biggest. It’s just - it is now the default thing where it makes sense for enterprise to need a solution like Vimeo in their organization.

And of course, we're adding to that acceleration with incremental sales, both in the US and internationally where we're almost nowhere on sales internationally, and I think that's a huge opportunity for us..

Yes. Just want - you asked about the timing of Vimeo. Look, our spins in the past, typically have been - have taken us kind of six to nine months post decision. We have yet to make our decision. In all likelihood, if we move forward with Vimeo, it'll be much simpler.

So I would say it could be inside of the six months until we're able to effect it, but we'll see. Just some factoids around the enterprise side. You saw in the letter, it grew 100% year-over-year. Bookings actually grew faster than that. And as Joey said, we're really just scratching the surface on the enterprise side.

It's less than 25% of revenue, and obviously growing. The price point around enterprise, we've talked about this before, is on average $15,000 to $20,000 per customer per year. The self-serve piece, which obviously we have a vast majority - sorry, almost all of our 1.5 million subscribers, that's a great feeding ground to our enterprise.

And in fact, 35% of our bookings on the enterprise business come from that funnel. We talked in the letter, it was only 3,500 enterprise customers right now. So, we've got a tremendous opportunity on enterprise. Lastly, you asked about margin. Yes, we were profitable this quarter, you saw on the letter, by - somewhat by default, instead of by design.

I think we're going to continue to invest in this business for the ensuing quarters. It's about product development. It's clearly around sales. Joey highlighted international. It's a big focus of ours. We're scaling the sales force.

And unlike at ANGI where we've been at sales for probably greater part of a decade, we're probably, what, a year and a half, two years into it. So we're still - in addition to hiring people, we're still optimizing getting efficiency out of sales. So that's going to obviously be investment for us. Marketing’s going to be an investment.

So, I wouldn't expect profitability again for several quarters, if not longer, again, as we invest into growth. The one last thing in terms of long-term margin, to answer your question, we talked about this business being a 20% EBITDA margin business eventually. We also mentioned, we think that's conservative.

One of the reasons why we think that's conservative is because we're making great progress on gross margin. We talked about 70% being our target and this quarter, we're kind of in and around that number. So, we're raising our targets and raising the bar for Vimeo and appropriately so..

Great. Thank you..

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

Thanks, guys. I wanted to ask about ANGI, and when we think about the supply constraint problem there, it seems to be like a good problem to have. It’s more funnel focused and you're innovating. You’re rolling out toolsets and fixed price.

And all that seems to give you the ability to kind of open the funnel and slide stuff down the funnel, and ultimately solves that problem. So I want to know if you could kind of talk about what you’re seeing with the supply constraint problem on ANGI and how you're fixing that..

Yes. Great question. We talked about it last quarter, that we've been quite pleased with the resiliency of our business in the face of the pandemic. And we've seen more Homeowners turn to us for help with their home care needs than really ever before.

At the same time, we haven't gone without impact from the pandemic, and the industry itself has not gone without impact. A couple of key challenges that we face. One is just, service providers are fairly overwhelmed, particularly in the back half of this year.

You have the period of March, April, May, which is typically a time when a lot of these providers will be scaling up, or rather, as we all know this year, they were pulling back and locking down. And by June, we had seen a pretty massive resurgence or surge in consumer demand.

And I think a lot of these companies are operating with a little bit less capacity than they otherwise would be. And then have been met with this sort of unprecedented surge in demand. So what we're seeing, quite frankly, is just many companies can't take on new customers. And so that's something that is just a reality of the situation.

In terms of when it resolves, the way we think about it is largely that it will - that it is somewhat tied to the pandemic and that as the sort of situation at large normalizes, we would expect the operations and capacity of these companies to normalize, and their appetite to pay to meet new customers would rebound to former levels.

The other challenge that we have faced specifically is, we came into the year with pretty ambitious plans to grow our sales force. We were ahead of where we expected to be going into March.

But unfortunately, obviously, during the second quarter, we had to sort of freeze everything, very, very quickly find a way to get several thousand people working remotely for the first time in history. And then subsequent to that, we've had to learn how to hire and train new salespeople remotely, which is not easy for a variety of reasons.

And so we are, what I would say, effectively about six months behind where we expected to be in terms of the size of our sales force.

Our sales force that we do have, has performed well during this period, which I think is a bright note, but growing the sales force and having those incremental salespeople bring on more service providers and growing our overall network at a faster rate, is critical to at least being one contributor to solving the supply challenge.

On the other side of our business, fixed price, which is somewhat nascent but important, really works quite a bit differently. And we have seen that grow very quickly. That's an area - if on one side of our business, service providers are paying us to meet customers, and they've got a lower appetite for that, on the fixed price side of our business.

We’re able to take advantage of that - those higher levels of consumer demand, and we're actually paying service providers. So we saw growth there really meet our expectations, but it's a newer part of our business and small relative to the traditional component. As we look forward to next year, there are things we can control and things we can't.

we think we'll have our sales force back where it needs to be by the end of this year, but those folks will be hired much later than we expected, and it'll take time to get them fully ramped up and productive over the first part of next year.

Fixed price, we expect to continue to grow very quickly and bringing on additional capacity via that platform. And then we have new products that we will go to market with that we think can tap into different segments of the SP universe than we traditionally have.

So, is it a good problem to have? I think having lots of consumers relying on your service and having that demand, which is intrinsically valuable, is obviously incredibly important and the most important thing, frankly. But we've got a lot of work to do to get our provider capacity back to where it needs to be.

And we frankly would like to see some normalization of the environment at large.

And Brian, the way that you framed it is very consistent with the way that I think about it, the way that we think about it, which is - and by the way, everything Brandon says is of course true.

But when - if you just take a step back, we're aggregating demand, and that's a very good position to be in, to be aggregating demand and growing demand the way we've been growing demand and getting the homeowner.

And in that experience, even though we're not monetizing, we're doing all the things that Brandon said to monetize, or even though we're not monetizing at the level we'd like to be, I think a lot of that's pandemic related. We've never had a problem at IAC figuring out how to monetize things.

And I don't think long-term, we're going to have a problem figuring out how to monetize this one if we've got the homeowner and we've got the demand continuing to come. And the people who are coming to our platform are generally being satisfied.

Now, we show them fixed price and they don't transact, that actually could very frequently be a satisfactory experience. We show them what the price is of that job.

We tell them when they could get that job done and how they could get that job done, and very, very often, they're choosing not to get that job done, which I think you all have been back to your own personal experience, probably 65% of the time you're not doing the job you thought you might want to do when you went and inquired about it.

So that actually is - that's a zero monetization event for us, but that's also a satisfactory experience. And I do think that if we keep these customers coming back and we keep delivering them satisfactory experiences, that over time our ability to monetize that, I feel very, very confident in. .

And we'll take our next question from Cory Carpenter at J.P Morgan. .

Great. Thank you. Brandon, just sticking with ANGI, I think on product, you highlighted payments in the shareholder letter. I'm hoping you could expand some on the opportunity there, and then maybe some of the other key initiatives you have in the product pipeline.

And as a follow-up, Glenn, just how we should maybe think about that translating to the level of investment needed to support these initiatives, and what that could mean for margins over the coming quarters. .

Yes, thanks, Cory. We’ve been very, very fortunate this year that our business has stayed resilient enough, that our teams have remained 100% focused the initiatives and the strategic areas that we came into the year focused on. And we have made, across the board, the progress that we were hoping to make, particularly around product innovation.

Payments, obviously, is a completely new feature that we've offered our providers, and we recently crossed sort of the $1 million a week mark. Fixed price has scaled, I think, very, very fast. And obviously that's a great new line of growth for us, but perhaps as important is the innovation it brings to the consumer.

And what we're seeing with a lot of the early cohort data is really a significantly different set of consumer behaviors for those folks that engage in that product. So, that's true of the payments feature. That's true of fixed price. That's true of folks that we get into our mobile app.

All of these experiences are driving a much stronger relationship with the consumer that ultimately is resulting in a much higher LTV. And as we've said coming into the year, that is probably the single most important thing that we need to do to create a durable business over the long-term.

As we think about next year, if I think about this year, I believe we're largely putting together building blocks and understanding how they work and ensuring that they create the experience that we aspire to, and that we're seeing the impact from a behavioral standpoint. We've created a lot this year.

Most of the engagement or scale which these experiences have achieved, is relatively small.

When I think about 2021, now that we know we have these building blocks and we know the impact they have on our relationship with Homeowners and just the improvement and the experience that they bring, 2021 will be largely about scaling engagement and scaling penetration.

And so we love - we absolutely are focused on moving as much of our audience into our mobile app as we possibly can, and we have tools at our disposal that we think are going to move the dial significantly. We want to see payments scale to be as large as it can possibly be.

Right now, our thinking around payments is perhaps less about what specific transaction fees we can make on each payment, but rather the change in behavior it creates on the consumer side. Consumer, once they've used the payments feature, they've got - we have their credit card on file.

The process then to buy a fixed price service is incredibly low friction. And overall, we see those consumers provide a much higher LTV.

And then on the provider side, the more they use our platform to run their business and to collect money from Homeowners, that's - we think that's a significant improvement to the relationship we have with advertisers. And then they're also starting to use this payments feature with their own customers that are acquired outside of our marketplaces.

And the great thing about that is ultimately those Homeowners who do - who end up paying those professionals, come back or come to home advisor for the first time to make that payment. So it effectively uses our network as a way to introduce us to new Homeowners.

And then with fixed price, we'll continue to scale that, but the thing I am very excited about is the opportunity to offer customers the ability to bundle fixed price services together, to get fixed price - certain fixed price services on a recurring basis.

And again, all this is to say, how can we get more share of the home services that Homeowners are doing? How can we keep - how can we start thinking about our acquisition of Homeowners, not as a 12-month span, but a five-year span or a 10-year span, and really create very, very strong relationships.

So, we will focus on really just scaling a lot of the things we've already talked about. We do have finance offering, sort of point-of-sale financing options for consumers that'll come here in Q4. And so that's another thing we'll add to the mix for next year..

And Cory, as you requested, translating that into investments, we'll be investing significantly over the next year. This past year, we talked about a $30 million to $50 million incremental investment largely in fixed price, a little bit in international. And I think that pace of investment clearly continues.

What that then therefore means for margin, of course will depend on revenue growth. And as Brandon said earlier, we think we're going to be at - in and around this kind of 9%, 9 to 10% revenue growth for the - at least the next couple of quarters, maybe beyond. We have to lap the pandemic, which gets us to the second quarter.

And I don't think we should expect a V-shaped snapback, given some of the sales initiatives that Brandon talked about, and the time it takes those to school up and the time it takes us to work through their backlog. So I don't think we'll be back towards the 20% target towards - probably towards the end of the year.

That, of course, has implications for margin, because at this 9 or so percent revenue growth level, we don't create a lot of incremental margin, and we're going to be investing that back in.

So we're probably talking about margin increases deferred till the end of 2021, maybe the third or fourth quarter, probably the fourth quarter, because this investment is borne of what we're seeing every single day in the business, and the positive feedback that we're seeing in the business. It's repeat rate, that fixed price.

It's what the payments product does for the relationship with SP. it's the customer satisfaction level on fixed price. It’s the growth in fixed price. And this year, we think we'll pierce through $150 million of revenue in the fixed price product. And as you recall, that's virtually from a standing start 12 to 18 months ago.

So on the back of that strength, we're going to continue to invest..

Great.

Can we do our next question from Brad Erickson at Needham?.

Great. So, I guess a couple of questions on the service provider front. One, just understand, obviously there's ongoing constraints there. I think to date, you've kept sales efforts to work on that pretty separated between the core business and fixed prices.

Does it make sense at some point to maybe commingle those efforts, might alleviate the situation, get a little bit more efficient? And then second, just on the sales and marketing spend, obviously it's been sort of ticking up the last few quarters.

How much of that - can you just kind of talk about the allocation of sales and marketing between acquisition versus service provider acquisition? Thanks. .

Yes. On the - in terms of commingling fixed price in our traditional network, right now I feel pretty strongly that the best way to build capacity is to keep those efforts separate. The traditional network, these are businesses that are - they're flushed with customers, and many of them are booked up through the end of the year.

So, I don't think there's a tremendous amount of excess capacity there to tap into. At the same time, it's not that difficult for us to scale the fixed price side of the business in terms of the providers. we're going out and offering to pay providers to do these jobs.

And that team has had a lot of success, even during what is a relatively challenging period with that value proposition, and with bringing the necessary providers online. It is a human constrained effort.

And as much as - when we don't have a provider for a particular type of project, we have to go find someone in that geography and for that particular task. And we're working through month after month, trying to keep up with a really fast consumer growth rate to build up that provider network.

But it's - overall, it's not that challenging, and I don't think further cannibalizing or taxing our traditional advertiser network, is a meaningful breakthrough in terms of adding quick capacity.

Clearly, someday we will begin to commingle those things more for the benefit of our providers, and more for - because we think the value proposition for fixed price is so compelling and we'll want to make sure that that's something that our advertisers and other traditional service providers can tap into if they want to.

But it's more oriented toward value proposition for them and less about overall aggregate capacity. In terms of sales and marketing, a couple of things. We said at the end of Q2, coming into Q3, that we were going to get - we were going to lean in a bit and get more aggressive on consumer marketing.

We saw in June, a strong environment, a strong rebound from a consumer demand standpoint, and frankly, relatively attractive ad rates across a number of channels. And we did just that. We got aggressive.

We spent quite a bit to acquire Homeowners, and that manifests in really some of the fastest service cross growth that we've seen in a couple of years. We obviously didn't monetize that as well as we had hoped.

And progressively throughout the quarter, we saw that sustained consumer demand really take a toll on provider capacity, our providers becoming too busy.

But as Joey said, acquiring these Homeowners and having them come and use our service, even if we didn't monetize it, we think is the right move and important in terms of growing our share of the market.

And those folks, even if we didn't monetize them, millions of them saw and experienced the opportunity to buy a fixed price service for the first time. That's something that's really never meaningfully existed at this scale in the way that we're offering it.

And so even if folks didn't purchase it, now they've seen it for the first time, and today's person that had an impression of it, is tomorrow's purchaser. And also we know from our own data that the folks that we acquire, whether we monetize them or not, they're going to come back.

We look at it on a 12-month horizon, and they come back and repeat at the same rate as somebody we did monetize. So they - all these consumers we acquired in Q3 will ultimately benefit us over the next 12 months. And hopefully we see monetization improve over that period, and are able to better capitalize on those repeat visits.

In terms of the increase in SP marketing, we’ve also increased SP marketing over the course of the year. I think on balance, more of the spend is really about consumers and driving consumer acquisition. We're spending a bit more on the provider side as well, but it's been more of the consumer side.

And in particular, we spent - we came into the quarter and spent quite a bit on television, which had a favorable rate environment. We didn't spend in Q2 for obvious reasons. As we go into Q4, we pull back on that a bit because it's just not a strong - it's not the strongest season for Homeservices, but that's the gist of it..

The other interesting thing that's happening inside of the service requests, and we made - I think we touched on this in previous calls is, our service requests from new users, people who've never tried our platform before, that's been up this year since the pandemic, between 25% and 30%. That compares to like 0% to 5% historically.

So we're creating a freshmen cohort of users on our platform, and that really bodes well for the future. That's the millennials who are beginning to own and purchase homes. And that's people who, again, will become repeat users.

And that's, I think, a real demonstrable display of offline to online conversion, of which we will be a significant beneficiary. .

Our next question will be from Brent Thill at Jefferies..

Thanks. Good morning.

Glenn, any more color as it relates to the mix of fixed price and where you think that can end up?.

Brandon, you want to do that?.

Well, yes, if you’re talking in the long-term. We, I think our ambition, and it's really a bit difficult to project something that's as nascent as this, with it being about 18 months old. Glenn referenced earlier that we expect to end the year at north of $150 million in that particular product line.

Our ambition is to get this to be about half the size of the business. And we think that's very attainable. In terms of the horizon, five years, six years, seven years, is probably the right duration to think about that, just given the growth right there relative to our traditional business and how we expect those to play out over time.

But I think that's the right level of ambition and I think that's the size we think about when we think about it over the long-term.

Great. Our next question is from Jason Helfstein at Oppenheimer..

Thanks. Two questions. Maybe just the first, Brandon, I mean, just help us understand what gives you the confidence to lean into the marketing, given that many of these leads, you will not be able to monetize them the first - at the first action. It's kind of over the kind of life of that lead, three months, six months, nine months.

And so kind of what do you know now that you didn't know at 12 months with bringing those leads in the funnel? And then second, Joey, congrats on your 10-year extension. Just kind of, to the extent if you do move ahead with Vimeo, obviously a huge amount of that value is going to be ANGI within IAC.

Wouldn't it make sense to kind of bring ANGI back into the folds formally, given the small stub out there, just to kind of simplify the process and et cetera? Thanks..

Yes, I'll start off. Look, it's a very uncertain environment. I think that's probably an understatement. And coming into a situation like this, coming into the third quarter, you have to make a decision as to where your bias is. And our bias is towards growth.

We don't know how quickly monetization will normalize, but we do know it's a favorable environment to acquire consumers and gain more share of the consumer market. And you can see, we were very successful in that, in spite of perhaps not monetizing as well as we had hoped.

I anticipate and expect that we'll be able to better monetize those customers when they do repeat over the course of the next 12 months. We’ve got more of those people into our app than - like significantly more than we ever have before.

And I - we lean into this thinking that more consumer share and driving future growth is the most important priority. You could have taken the opposite tack, which is to say, pull back, get very conservative and make sure that everything is absolutely profitable within a quarter.

We didn't choose that path, and I personally feel strongly that in this market and with what we're trying to accomplish, leaning in, focusing on growth and focusing on consumer share and more exposure to our products and the innovative features we're offering, is the right path.

We'll see how that plays out, obviously, over the next six, nine, 12 months, but I expect it to bear fruit and I expect it to propel growth next year..

And to me, that huge increase in the mobile app conversion is a very big one and a very sticky one, or hopefully a very sticky one for behavior. I mean, we do see that today in behavior, a mobile app user behaves, and our ability to convert those mobile app - those web users to mobile users, has been very nice this year.

On your question, Jason, look, it's definitely something to think about. I think the question for us is same thing we do in the reverse direction. Is it valuable to us, to ANGI, to have a currency out there? And some periods, that is valuable, and for some currencies, that is valuable, and for some it's not.

And so I think it would be long-term, medium-term, or short-term, really dependent on that. And if the currency isn't an asset to ANGI and being out there, then that's maybe something we consider. If it is then, then maybe we wouldn't. .

Our next question is from Ross Sandler at Barclays..

Hey guys. Joey, I guess related to that last question, if we go - if we just rewind the clock a little bit, there was a lot of corporate strategy in 2008, when you broke up into the five different pieces.

And then there was this period of time from ’08 to 2014, where you were incubating a lot of the businesses and buying back stock and shares appreciated nicely, but there wasn't a lot of corporate activity.

So now that we're announcing Vimeo, should shareholders expect that this is kind of the next stage of the IAC era? What other things are you looking at, given the cash balance and the overall capitalization? What should investors expect out of this next phase, now that Vimeo is moving out the door? Thank you..

Yes. Ross, look, that's a very important question, and I don't have a definitive answer to that, but I'll give you some flavor. We haven't definitively made up our mind on Vimeo, but presuming we did that, there's not a obvious to me candidate for another spin, for example, for a while. I mean, there is.

You can make arguments and that always changes, and our thinking on these things can change very quickly, but there's not an obvious candidate for another spend. You're right.

We will be very well capitalized with cash, and we'll think about the whole range of options with cash, which we always have, which is, maybe that’s share repurchases, maybe that's investment in businesses, maybe that's picking up new businesses.

But the focus definitely for the next X years, but a while, is building, and that building can come inside of IAC, because we have a lot of great - I mean, think about just ex-Vimeo for a second. We've got ANGI. We’ve got a leader in this category, and a huge category. We've got Care, a leader in a category, a huge category.

We've got Dotdash, the leader in publishing, a huge category. And within Dotdash, probably at a minimum, we'll take four really big categories. And I could argue, even bigger than that.

And then we've got very large positions or where we're the biggest shareholder of other things that are huge and big in very large categories, Turo, MGM, all those things present options to us for more capital to deploy different ways of working with those companies over time.

And we're pretty excited about that menu of things to be able to execute against. That - so I can't sort of say this era, there's no more acquisition - sorry, there's no more spins or we're just focused internally and we're just focused on that growth, period.

I wouldn't say it as definitively as that because we do change a lot and circumstances create opportunities, and we'll always take advantage of those opportunities. But I do think realistically, there's not much left to spin post Vimeo in the reasonably near term.

And that means we're really focused on the building part inside IAC and with a huge amount of capital to deploy against that. .

And all the assets Joey mentioned, natural tailwinds, benefit from offline to online conversion, play in very large addressable markets where we’re the leader or close to being the leader. And that includes some of the assets that we have in the emerging and other bucket, some of the future work initiatives.

So if we don't acquire another thing, there's a long runway of a substantial and significant organic growth. .

Can we get our next question from Eric Sheridan at UBS?.

Thanks so much for taking the question. Maybe two if I can. One, going back to Vimeo, just wanted to better understand what you're seeing from some of the newer customers. We get a lot of incoming from investors on who the new customer cohorts are at Vimeo, how you expect them to age going forward, why they're choosing Vimeo for their video solutions.

So, just better understanding that landscape would be one. And then second, maybe pivoting away from ANGI, but to Care. Obviously, that's an asset you acquired. You're trying to reposition that asset for the medium to long-term.

Maybe an update on how you're doing in terms of your marketing initiatives, sorting out the supply and the demand side of that marketplace. Thanks so much, guys..

Sure. So on Vimeo customers, again, enterprise being the biggest driver recently, and that's the names you've heard of Fortune 500 companies that kind of are big brands you've heard of, using it very significantly for internal communications.

And we just launched a new internal product called screen recording, which allows people in an enterprise to record their own screen and then share it with their colleagues.

So imagine, with remote work, you're talking about a product and trying to fix a product, or where you want something to go, you - the engineering team, for example, is doing that on their own screen and sending that to their colleagues and saying what they want something to look like or what they want fixed.

So it starts to really go to a much broader part of the organization. I think our wedge into the organization has been one to many communications. So, town halls being a significant example or big meetings being another example, or big demonstrations to customers or conferences, things like that.

That has been the wedge in, and that seems to be very sticky because people are now recording those events and storing them, archiving, sharing them and creating a corporate library, and then embedding those videos across their properties. That, so far, seems to be very sticky among the larger enterprises.

But again, Columbia University graduation, that's another great example of a one to many broadcast, when you don't think of a corporation, but still town hall, concerts, music. We’re seeing - I can't think of the name of it, but famous music venues, things like that, where they're using Vimeo as a tool to do shows for their audience.

And then on the small side, I think it's hugely encouraging where businesses that obviously have nothing to do with video, nothing to do with performance, are using our tools just to make videos to give their business a presence, whether it's on social media, whether it's on their own website, whether it's an embedded video player, but they're using those videos to communicate a sale, a special, whatever it might be that's relevant for their business.

It's just more natural now, and I think will be increasingly so, to tell that story through video than it will be through a billboard or through a static text or through static images.

And we really are - I think I mentioned this earlier, but we're seeing those demand curves across all of those products and all of those customers grow, and enterprise being by far the biggest. That’s the - does that answer your question, Eric, on Vimeo customers? Is that what you were looking for? Oh, we knocked him off of communication. .

That was great. Thank you, guys. Yes. And then just Care would be the second one. Thanks so much. Sorry about that..

Yes. So on Care supply and demand, that definitely took a hit on both sides with the pandemic. For obvious reasons, demand - people weren’t going out on Saturday nights and they weren't leaving their kids and they weren't letting people into their homes. So you can imagine that childcare took a hit. That is changing now. That’s reversed.

So people, I think we're net growing subscribers again right now, first quarter of sequential net adds since the pandemic and double digit growth overall. So, that's very encouraging. I think that's another area actually where the enterprise is doing very well, positively surprising us.

I think that what we're seeing is enterprises start to feel a responsibility to help their employees with childcare and senior care. It’s, now that people are home more often, or children are home more often, that's becoming something where it's in the enterprise’s interest.

And before, it was focused on making sure that everyone in the household was able to keep working and that one person wasn't - had to be responsible to stay home with children, and that was a driver of that historically. Now, it's - because kids are at home and because people are stuck at home, it's relevant to all the workforce.

And that's, I think, a really nice tailwind for Care generally. Senior care side also, I think has a really nice tailwind in the sense that just the way that, A, people are aging. People are preferring of course, to age in place.

And when you see what's happening, of course, with this pandemic, the idea of putting somebody in a very - what's turned out to be very dangerous situations, getting people care in their home, senior care in their home, I think is a very nice long-term tailwind there. So we like the supply and the demand dynamics, long-term, short-term.

I think we're - I wouldn't - I definitely can't say that we're out of the woods, but we've definitely turned a corner on the things that would be holding back supply and demand as a result of the pandemic..

Great. Thank you..

For our next question, can we go to Nicholas Jones from Citi?.

Great. Thanks for taking the question. Maybe just a follow up on Vimeo. Can you talk about the integrations with GoDaddy, Shopify, what other opportunities there are to make integrations? And what kind of early engagement are you seeing from subs on those platforms with Vimeo? Thanks. .

Sure. I think those integrations are going to be very important, certainly for us and I think for the platforms that we're working with too. The - you should think of all the sort of competitors’ analogies to GoDaddy in terms of site builders. I think those are all relevant.

I think any platform that's working with lots of small businesses to enable them to sell their products, that - travel for example, is a vertical we're now going after. If you've searched on any of these platforms to look for accommodations, frequently you'll find video there. Frequently the owner of that accommodation is not well-versed in video.

And so can use our tools to - for example, to make video on their platform. Website builders, of course, I referenced, shopping platforms, I referenced.

All those things are - when you think of there - when you think of the people who are paying those platforms for their services, do they want video on that platform to supplement the way that they're selling their services? And I think the answer the vast majority of the time is going to be yes, and hopefully we can be the platform that does it.

I think we’ve built a product that services that very well, both services the platform very well and services the end-user very well. And we view that as a big, big potential growth area. In terms of engagement so far, there were some great stats on Shopify, which I now can’t recall.

I don't know if we're supposed to disclose, but I think getting really nice engagement with those platforms so far. I think GoDaddy, I don't even know if it's launched yet, but I think it's very early there. So I don't know if we know what ….

Yes. We announced it last week. .

Okay. Great. Thank you. .

Our next question.

Can we go to Youssef Squali at Truist?.

All right. Thank you very much, guys. A few very quick ones. One, can you just remind us what the zero match rate was this quarter? I think last quarter was around 40%.

Second, on the fixed price, how do you - how good is the algo to try to price a job sight-unseen? What have you seen so far in terms of just the accuracy of pricing? And on that, I think you guys talked about $180 million in reps. Just want to make sure I understand.

Is that for 2020, or is that a contribution that you expect for 2021?.

Yes, I'll knock off the last one. It's $150 million of revenues for the entire of our fixed price - entirety of our fixed price business, and that's 2020. .

2020. .

Yes, and then Brandon, you do the middle question. The zero metric was about 50%. Just divide in our disclosure, monetize transactions, divided by service requests, and that's the - the quick math falls out of that. It's still laboring at around 50%, which as we talked about earlier, is a terrific opportunity.

If we just get back to our 40%, that's 10% increase on 9.8 million SRs. That's 980,000 SRs, which we monetize SRs, as you know, at $60 a pop. So that's north of $50 million of very high margin quarterly revenue. That’s our opportunity. That's the unlock Brandon and Joey spoke about earlier.

That will take a couple of quarters obviously to flow through, but that's why we're so bullish on it. Brandon, I’m sorry..

Yes. No, in terms of the accuracy of pricing on fixed price, the way I would think about that, first of all, in terms of the performance of fixed price this year, it's been - margins on those transactions have been a little better than we anticipated. So, we've been pleased with how that played out.

I think when you think about the pricing accuracy, it's a question of how can you price as optimally as possible, given the market for that particular job and given the cost that it ultimately will require for us to fulfill on it. And right now, I think there's lots of room for improvement to get more sophisticated.

There’s hundreds of these jobs, right? So there's well over 200 individual job types at this point. And it's really a process of going job by job and understanding what inputs are needed to price as optimally as possible. And then also understanding the local market dynamics, in terms of what the cost of fulfillment ultimately will be.

And then with those two sets of inputs, having the algorithms, if you will, to calculate the right price at the right time. What you really get from that is increased consumer demand and increased consumer engagement. Right now, just to be frank, we are growing fast and we are not constrained on the consumer demand side.

We are really getting as many transactions as we can keep up with. And so the benefit of pricing more optimally or pricing more accurately in a market and driving even more consumer demand, is really not at the top of our list.

We do want to refine the way we price these jobs, because ultimately maximizing total transactions and maximizing as many - getting as many customers and consumers engaged with us as possible, will come down to having really competitive pricing for every job in every market.

I spent some time looking at this, this weekend actually, and some of the jobs, I think we're doing a good job pricing, and some of them we haven't gotten to yet, and the pricing is pretty rough, and it's largely sort of an hourly based rate.

I expect that to be something that we iterate on and make improvements on, certainly over the course of the next year and perhaps the next two years, just given the breadth of offerings that we have and the number of markets that we provide them in..

All right. We’ve got only time for a few more, so..

Yes. Our next question, let's go to Dan Salmon at BMO. .

Is Dan frozen?.

All right. While Dan is figuring that out, let's go to Justin Patterson at KeyBanc..

Great. Thank you. On Vimeo, could you frame how we should think about the pace of sales and marketing investments, given the success you're seeing in the enterprise, the return in the self-serve channel and what sounds like a TAM that's expanded? And then quickly on Dotdash, you mentioned looking to add more brands to the portfolio.

Should we think of that as more within the existing verticals or looking to enter new categories? Thanks so much..

Vimeo investments, I think it's really across everything. And I think - we're going to try and accelerate. So, let me elaborate from everything. Product and R&D, we're hiring people as best as we can in product and R&D. and I think there's - we have a very exciting list of things, products developed.

I just mentioned screen record, which came out in the last few weeks, but we've got a really long list of things that we think are going to work for the enterprises that we've already entered, let alone new enterprise.

So, definitely R&D sales, yes, we think we've got the returns, and we know we've got the returns on incremental salespeople, and we know we're not in a bunch of markets where there are big bases of customers like APAC and Europe, and we're adding those salespeople now.

I think we just did added a couple in APAC and one in Europe over - we're going as fast as we can there too. And in marketing, when you have a five to one return, you want to keep pushing that. we've been growing our marketing spend. You can't really grow it immediately to infinity. It doesn't work that way.

We always ask that question and we always try and push to that end, but it doesn't work that way because you’ve got to find the new marketing channels and test the new marketing channels, and you end up burning a lot of money if you push that too fast. But we are going to look to spend more in marketing to drive the self-serve.

And I think we're seeing really nice conversion right now, which allows us to spend heavily. I don't know if that conversion holds post pandemic. I think we're not seeing it - that conversion weaken yet. In fact, we've seen conversion strengthen.

But that'll be a question in terms of how much we can push that spend, but right now, we're pushing it, and we're certainly seeing the retention, the stickiness hold, which is what's most encouraging.

In terms of, Dotdash acquisitions, I think the bias is definitely - just as it is with the IAC, the bias is definitely in verticals where we already are. We’ve been able to do those quickly, effectively, and where we're able to, I think, capture a lot more margin in those examples. But we'll definitely look at new verticals too.

There's not a particular vertical right now that I'd say it's in our mind that we covet to enter. But I think the priority will be on the existing verticals. And if we find one we'll - if we find one outside there, we'll act on it. It's just less likely..

And we'll try Dan Salmon again..

Hey. Thanks, Mark. Good morning, everyone. So, Joey, I wanted to return back to Vimeo as well. The product has evolved a lot. You talked about the live streaming, one to many streaming. You also talked about how YouTube clearly isn’t (indiscernible). We're all here on zoom.

I guess some of us are still figuring out how to use it properly, but is that a competitor? Is Zoom a competitor? Just to maybe review broadly what your competitors (indiscernible) these days and how you look at it.

And then for you, the letter has an interesting tidbit there about how you're currently getting about $5 of profit for every $1 of marketing. We know the IAC way, you're going to lean into that metric until it doesn't make sense anymore. What do you think the runway is on that? Thanks. .

Yes. On competitors, I think Zoom is not a competitor today technically, but I do think it's probably highly likely that they become one or we become one, one way or the other. There's a lot of differences right now. We're - Zoom is a fantastic product and we're using Zoom right now and we're happy to be using Zoom right now.

I mean, there's - it's just amazing what they’ve built and how well they've done it and how much we in our organization, and most organizations I know, are relying on it. It's fantastic. And the reason we're using it is, they've got this interactive communication video thing nailed.

And to do that, you make compromises on other things, but they've just done it perfectly. And I think they're going to continue to get better at that, and I think that there - that we’ll hopefully be able to continue to use them for events like this. We’re also actually using Vimeo right now, because we're going to record this event.

We’re going to put this event up on our website, and we're going to use an embedded Vimeo player to do that. And by the way, we can also add a bunch of graphics if we want. For those who didn't follow Mark's instructions on the logos, we could maybe add those back in or other things like that, to make the video and finish it.

And that's just a different product and a different skillset. Not to say that they can't do it. It's just something they're not doing today. And so this event - and this company is a perfect example, is using both and using both in a very complimentary way, very successfully. The other thing is video quality.

So we're able to do different things on video quality because we're not doing the two-way and or multi-way communication there.

And so we're able to broadcast video at a much higher quality level, which is something that things like musicians and other presentations are going to really - do really appreciate, and has always been a differentiator for Vimeo.

So I think that the best way to think about it is, is Zoom, today, and obviously any of these things can change on our side or on their side, but Zoom is for that more ephemeral communication. And they've just - they're a 10 out of 10 on that.

And Vimeo is more for that permanent communication, and that's where we're really focused on all the things pertinent to that, like graphics and switching scenes and what you're able to do with the video after it's done, and those things are really important.

Was there another question?.

Plan on the marketing spend..

Oh, right. On the marketing spend. Yes, you're right. We're going to try and push that. I don't know what the limits are. As I was saying earlier to Justin, the question is kind of how the things that feed into that change. I feel very good about LTVs and retention long-term, and those things holding. Conversion is doing very well right now.

I don't know whether that holds or not, meaning, I think that the compelling Vimeo story is as compelling as it could be today. And given the broader environment, I think those dynamics should stay for a long time, but I wouldn't swear that conversion will hold where it is right now, as we push the marketing spend.

And then it's channels of where you can spend. And I think we're not spending nearly, either geographically on a map or nearly geographically on platforms, at levels that we'd imagined we could spend.

In aggregate, when we look at this spend, it's a pretty small number from our perspective relative to the market size and relative to scale we've seen, we've been able to spend in other areas with similar market sizes. So hopefully, there's still quite a bit left in there. .

So let's do one more because we're right at time. Michael Ng from Goldman..

Great. Thanks for squeezing me in. I just had a follow-up on the service professional constraints on ANGI. Given that one of the challenges you guys cited was there being actually too much demand for service providers outside of ANGI.

Could we perhaps unusually see improved revenue trends at ANGI, if industry home service demand begins to wane and normalize? And what - how would you characterize the optimal home services demand environment for ANGI?.

Yes, that's a great question. I mean, obviously, any environment without a pandemic and without the associated challenges that come with it, would be much better for us. There are really two issues. One is the just sort of huge surge in consumer demand.

Obviously, as that moderates, these companies will have more appetite for paying to meet new customers, to put it simply. And so it's a question of when that moderation happens. And from our perspective, I think when people can get out of their house and resume normal lives, I think we would expect that - we would expect to see that moderation occur.

But there's another side of it too, which is just the operations of these companies are impaired to a degree. And what that means is they are having challenges with staffing. They’re having challenges with hiring. they're having challenges with supply chain around materials and parts. It's taking them longer to do a job.

So I think if you talk to a lot of the companies in this industry, even though they're busy, they're not necessarily killing it. This is a tough environment to operate. And so that too was obviously driven by the pandemic and we would expect that aspect of it to moderate as well.

I also think, even in the midst of the pandemic, these companies, they kind of got caught on their back heels here, with just something that was completely unexpected in terms of the surge in demand. Hopefully, as we go into the next year and the busy season, we'll see these companies staff up and react to the market opportunity.

These are profit motive driven companies and they will scale where the opportunity allows them to, and they'll have more time to do that. So I think to answer your question is, absolutely, we clearly saw our - we've seen our customers pull back their spend. They haven't left our platform for the most part. They’re still here.

These are longer term customers, bigger spenders, more successful companies. they've pulled back. We expect them to bring that spend back to the marketplace. It's only a question of when, and I think our best guess right now is to think about that as being associated with normalization of these sort of pandemic effects..

Thank you all. This was great. Sorry we kept you over time. Hopefully next time we're together, we'll know who the President is and things will be a little brighter..

Thank you. Happy Friday, all..