Good morning, everyone. Mark Schneider here, and welcome to the IAC and ANGI Inc. third quarter earnings presentation. Joining me today is Joey Levin, CEO of IAC and Chairman of Angi; Oisin Hanrahan, CEO of Angi; and Neil Vogel, CEO of Dotdash.

Similar to last quarter, supplemental to our quarterly earnings releases, IAC has 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 presentation, 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 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's third quarter press releases and our respective filings 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 for simplicity during the call.

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

Joey?.

Thanks, Mark. Hello, everybody. Thanks again for joining us, as always. Busy, busy quarter for IAC as they usually are. We have -- we announced the Meredith deal and so it wasn't long we saw you last.

We've been deep at work trying to figure out how to get everything right for a time when we can close that deal, which we're still hoping to do by the end of the year. And all the other businesses are humming along right now.

It's Angi -- well, I'm sure we'll talk a lot about today, but the services business is in a really great place and we're making progress on the rebrand. And Care.com is doing really well. We didn't talk about Care yet, but Care is growing really nicely, hitting all-time records, which we're excited about. And our little businesses are doing well.

Bluecrew and Vivian are breaking growth records, which is incredibly exciting. And even Daily Beast is -- had a really nice revenue growth quarter. We're all in different locations today so hope we get -- hopefully, we get all the logistics right, but we are feeling good about the business and where we're headed.

And I know we've got a lot of questions so we brought Oisin, of course, from Angi and Neil, again from Dotdash so we could talk about all the big things going on. And I'm here, of course, to talk about anything IAC. So let's get started on the first question..

Great. Our first question will be from Cory Carpenter at JPMorgan..

I had two on Angi.

Maybe first, Oisin, could you just give us an update on the rebrand in Angi services? And then second, either for you or Mark, 3Q for Angi was better than you guided so hoping you could discuss the drivers of the upside there and any changes to your expectation going forward?.

Great. Thanks, Cory, so let me back up for a second. So we started this journey about 9 months ago to really put the homeowner and the pro at the center of everything we're doing at Angi. And overall, we're incredibly happy with how that's going. So you referenced the services business. We've obviously crammed a lot of change into this first year.

I think last quarter was no different. So the services business up 160% year-on-year, about half of that organic, half of it from our Roofing acquisition. Still continues to perform in line with expectations.

We actually pulled out -- we pulled out the plan that we made in Q4 last year for where we wanted to take the services business in our upside case, our mid case. And we're in line with the upside case of where we wanted the services to be. So we're really happy with the things we're proving out there. There are 3 things that we always talked about.

The first was, are we going to get anyone to buy this at scale and what does that look like? The second is, can we fulfill at scale? And the third is can we drive margin? And we've obviously proven that we can get people at scale to buy it. So the conversion rates on site are in a really strong spot.

We've proven that we can get contribution margin from it, so the contribution margin last quarter was better than expected, frankly. And the fulfillment, it's good. It needs some work. So in certain categories, it's great.

In certain categories, it needs work, and we're going to take some of that margin and reinvest it back in, reinvest it back into the business to make sure that we continue to drive an amazing experience for the homeowner, an amazing experience for the pro when they use Angi Services. So overall, we're super happy with how Angi Services is going.

I think we're still just getting started, frankly. I mean, obviously, it's a sizable part of the business. If you flash forward, you think about the major categories within Angi Services, I said this before. There's probably a dozen categories or so that we could build billion dollar-plus revenue businesses just within that category alone.

The TAM is enormous. We're no longer just going after the advertising spend for those small businesses. It is the full TAM of everything a homeowner spends on their home. So we're really, really excited about how that's going and expect to continue to see things progress well there as we continue to build out the team.

In terms of the rebrand, we published in the letter that we are generating more revenue from the Angi brand than any -- than ever before and then the HomeAdvisor brand.

And you think about that journey, you flashed back a year ago, with the majority of our revenue is coming from the HomeAdvisor brand, we've worked tirelessly and the team has done an amazing job to rapidly transition our homeowners to that Angi brand.

We now have 50-plus percent aided awareness for the new Angi brand, which for a new brand, I understand it's drafting off the old Angie's List brand, but for a new brand less than a year old is phenomenal, especially given the volume and media dollars we've spent on it.

And we've continued to work to drive up that brand to make sure that the experience is great, to make sure that we're driving it to a single mobile experience for that brand. And I think there's still some work left to be done.

We obviously still have the HomeAdvisor brand that is helping us consume SEO real estate and consume mind share for people who don't yet know Angi that we're working to transition. And we still have some other legacy bits and pieces.

So we've got the Handy brand in retail, and we've got some other stuff going on that we've got to gradually work over to this primary brand. So overall, we're turning the corner on the brand. I think it is a milestone that the majority of the revenue now does come from the Angi brand.

And I think we'll continue to see the impact of the rebrand into '22. But overall, we're starting to feel more and more positive about where we've taken that brand and where we can go with it.

In terms of the guidance on where we've been and where we're going, yes, we've put the stake in the ground that it's most important to us to do the right thing for the homeowner and the right thing for the pro and not to focus on short-term EBITDA.

We've guided to revenue growth in and around where we've been in this 15% to 20% range, including the acquisition. And we've said we'd take it to EBITDA flat, EBITDA neutral. Some quarters might do a little better, some quarters might do a little worse. But overall, that's still the outlook.

Our long-term position is we obviously want to take as much market share as possible and get this to over 20% growth rate, knowing we've got $0.5 trillion TAM out there..

Yes. Just to add on a little bit to what Oisin said. Remember that we said last quarter that you should expect, for the foreseeable future, sort of our organic growth number to be in that May, June range, which was roughly 7%, give or take, and then layer on the Roofing acquisition.

So I think you've seen, since then, July to October, that range between 15% to 21%, so consistent with what Oisin just said. And that's what we expect for the foreseeable future as we navigate this brand, the rebranding, as we continue to navigate out of this pandemic.

And then on the bottom line, yes, so in and around breakeven, Q3 came in a little bit better but we're going to continue to push, and as Oisin said, push back that investment into the experience to make that product as the best as possible. So our next question will be from Ross Sandler at Barclays..

A question for Neil or Joey on Meredith.

So guys, how should we think about the cadence near term in 2022, given the digital advertising and you guys have some challenging comps in the first half? Second is, what are the, like, lowest-hanging fruit opportunities around traffic or monetization? You talked a lot about this on the last call, but maybe what are we going to go to first? And are these more iterations or are they potentially pretty quick needle-moving revenue opportunities? And then lastly, the Print business, what's the overall strategy for Meredith's Print business?.

Sure. Joey, I can take it first on the....

Yes, go ahead, Neil..

So the first -- the 2022 margin and the lowest-hanging fruit, that's all sort of a related question. And I know as Joey said and we said, we have a lot of work to do and we think we can do most of it in 2022. So that's going to make 2022 financials maybe a little bit tricky to read.

As you know, with all the other things we've bought, we've tended to -- we take a small step back before we take some big step forwards. And obviously, we're buying something very big here so there's going to be some steps back. We do that to address the low-hanging fruit and let me finish up on the margin.

I think in the long term, we would expect the margin of the whole business to look like our margins have looked historically. The low-hanging fruit question is, I think one of the things that has us most excited is the low-hanging fruit or the things we know how to do very much align with what we've historically been good at.

Like we're going to make their sites much faster. We understand a formula for content improvement in the way that we've done things, changing how they use ads and the mix of ads they use and some of the ad load stuff. That's all very easy for us.

So there's going to be like an initial phase of changes that we can do very quickly that you qualify as low-hanging fruit that I do think are going to make a really big impact. But then as we get more into it through 2022 and then ongoing, this model is the same as our model. It's just work, it's doing the right things.

It's making the very best content for all the things they cover and essentially taking their brands, which will be our brands, which we think are some of the best brands in publishing and putting them in their proper place on the Internet.

And again, I've said this before, I think I've actually said this to you, Ross, like there's no reason why the spruce is twice the size of Better Homes and Gardens online. That doesn't make any sense.

So the opportunity to get Better Homes and Gardens to its rightful place online in some combination of this low-hanging fruit and the really hard work we have to do. And that's going to start sort of immediately at closing. It's going to take us through 2022. But heading into 2023, we're very confident with the numbers we've put forth.

We're confident where we're going. Print, again, I think we've been fairly straightforward with what we said we're going to do with Print. And Print historically, they've been focused on a very traditional rate-based model, which is print a lot of magazines and sell ads against large audiences.

The days of that -- the best days of that have probably passed. We're not the guys that are going to change the secular advertising decline on print. However, their magazines are beloved and they're incredible. The editorial is amazing. So what we're going to do is we're going to work on the magazines and make them as good as they can be.

But we're going to focus the economic model on being much more of a consumer model, which means it's some combination of subscriptions and advertising leaning much more on subscriptions and other things like newsstand, a little less on advertising, which means circulation is going to go down in a lot of these titles.

And that's all part of sort of like the evolution of media and how to make these things healthy in the long term for Food and Wine and for Southern Living and for People and for all these properties, Print is going to be a long-term part of this mix. We just want to do it in a way that's right for 2021..

The only thing I'll add to that, I agree with everything Neil said. The only thing I'll add to that is from IAC's perspective, the -- what we've said to Neil and the team is that 2022 is a rebuilding year and should be a rebuilding year, which means get everything done in 2022.

So as it relates to financials that year, I'm not particularly -- I mean, obviously, we're going to want to see underlying metrics and progress on all the objectives that we've laid out. We've got a very, very clear path on what we're doing.

But as it relates to the financials for 2022, we're very -- we're much less focused on what that looks like and looking towards 2023 because we don't want to push big decisions out. We don't want to push big changes or efforts out. We want to get everything done relatively quickly and reflect all those transitional costs in 2022..

Great. Our next question will be from John Blackledge at Cowen..

Maybe a couple of questions for Joey.

Joey, what does IAC look like kind of post the Meredith deal? How should we think about capital allocation and maybe an update on the CFO search?.

Sure. So I think probably the best way to think about pro forma cash is somewhere in the neighborhood of $1.5 billion. We have about $3 billion of cash right now, and we'll -- we've said we're going to raise $1.6 billion of debt for the Meredith transaction.

And then there's probably another, realistically, a couple of hundred million of costs that all in, once you get through everything, all the costs related to clean up on Meredith that will come through over the course of the year. We also have a -- we've talked about this a little bit.

We have a warrant with respect to Turo that is another potential use of cash, which we would expect to exercise at some point. And so with that all in, we think about right in the neighborhood of $1.5 billion of sort of totally free cash to spend.

And remember, there's no debt at the parent level so that we also have greater spending capacity than just $1.5 billion. And there's a lot of currencies that we can invest in or that we can issue or go any direction with. We've got the IAC currency. Of course, there's the Angi currency. There's MGM, there's, maybe at some point, Turo.

And so all of these things are areas where we can think about cash going in 1 direction or the other, and that provides us a significant amount, I think, of flexibility.

And the priorities aren't going to be the same they've always been, meaning, number 1 is investing into our existing businesses that can look like what we're doing with Angi right now, where we're reinvesting most of the P&L. That could look like reinvesting in our existing businesses through share repurchases.

And that could also -- and I think that probably the -- a significant portion of our time right now is spent on looking at new things. And we see a lot of new areas that are fun, a small scale. We've got -- we're building businesses with NewCo.

We've built a few businesses already, and we've got a great list of businesses that we're trying to build with NewCo. And again, we're always looking for new things. And so that's going to be a factor for our cash, too. Second question was CFO search. The -- there's 2 kind of -- both actually is great news on CFO search.

One is we're seeing phenomenal candidates. I've met with another half dozen this week and a lot of interest in the role. And the other good news is we have the luxury of being able to take our time to make sure we get the right fit. You all have met Mr. Schneider who's a phenomenal -- doing a phenomenal job in FG&A and Investor Relations.

We have Mike Thormann, who is doing an exceptional job and has been with us for a very long time as a controller. Nick our Treasurer and the list goes on. We have a phenomenal finance staff. And so I'm not worried about where we are. It's not to say we don't need a CFO and want the CFO, want to get 1 quickly.

But we have an exceptional finance staff that keeps the trains running very well with high confidence for all of us internally. And we're going to make sure we find the right person for the role and take our time doing it..

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

Dotdash has been decelerating on a tough comp, and the October growth rate was also a deceleration on an easing comp. Just curious if your confidence still on the organic 20% sustainable growth.

And any commentary you can provide on the tailwinds they're experiencing from an IDFA front?.

Sure, I'll take that. The first thing is that IDFA, there's no tailwinds. I mean, one of the things we talk about a lot in our business is we don't need personally identifiable information to do what we do. Again, if someone is coming looking for diabetes information, we know pretty much what we need to know about them.

If they're trying to figure out, I think, as Joey wrote in the letter, what color to paint their children's room, we know everything we need to know about them without knowing any of that. So none of the changes have provided a headwind. I think if there is a headwind, it is, as you said, it's a hard comp.

I mean, at this time -- and it's primarily in the transactional commerce business. This time last year, people were not shopping in stores at all. It was all e-commerce. I think at this time last year, there was no -- there weren't any supply chain issues. Both of those things are fairly big headwinds. I feel good about the 20% long-term target.

I think we had an exceptionally good time period last year. I think things are just, I guess, evening out a little bit. But I think in the long term, I think 20% is something that we're pretty comfortable with..

Yes. Just to add on a little to what Neil said. Remember that the comp last year, we grew 33% in Q4, which is a high point of the year. So it is a tougher comp and it's something that we've been discussing throughout the year that the comps would get tougher.

On a 2-year stack, that growth in October would have been closer to 40% relative to where we came in, so still a really healthy number. And then I would just also highlight the sort of the macro environment. You saw some of our -- some other businesses report, Amazon, their U.S.

commerce business only up 3%, so that just illustrates what Neil was saying about some of the headwinds that's up against our performance marketing business, but still up over -- in and around 10% the last couple of months..

And just a quick follow-up for Joey on search. It's doing really well.

Can you walk through what you're seeing on that side?.

Yes. The search business now is primarily performance marketing in the sense that we go out and acquire users and we monetize them when they get to our site. There's 2 components to that. There's our efficiency in acquiring users where we had a technology upgrade that got us better at the acquisition.

And then on the monetization side, that's been good, pretty steady. But we found as a result of some of the work we've been doing on some new channels for marketing where we go out and find users with a new ad unit significantly. Historically, we've generally acquired users from search into a search experience.

Now we've opened up the ability to acquire users from display advertising, and so that yet opens up inventory on a lot of publishers, where we now can market there and drive back to the site for monetization.

And that effort really started at 0 at the beginning of this year is going very, very well, and it's something that we'll continue to lean into and grow.

It doesn't change my overall view on the segment, which is it's a segment that is -- has some ups and downs, but for us, has been a reliable cash flow generator and we think can continue to be a reliable cash flow generator..

And Brent, just to talk about the numbers a little bit just to help you understand sort of the trajectory there. So growth for total search was 57% in Q3, accelerating throughout the quarter with 78% in October. We do expect that to moderate going forward.

The comps last year, again, Q3 2020, Ask Media, which grew 88% in Q3 and over 100% the last few months was down 7%. So it was an easier comp versus the 40% growth that we saw in Q4 2020. So we do expect that to moderate somewhat but still healthy based on all the things we're doing and what Joey went into. The other piece of search is desktop.

And as you know there, the biggest piece of that is our B2C desktop applications business, which we've effectively stopped marketing earlier this year. So you have the dynamic of the tail of that revenue continuing but that will continue to erode over time but no marketing really against that.

So that is why you're seeing sort of the profits at search jumped the last couple of quarters. We do expect continued healthy profits from search, given what's going on at Ask but certainly not at the levels we've seen in Q3 long term. So our next question, we will go to Brian Fitzgerald at Wells Fargo..

On Meredith, you've talked about the site speed, the brand search, some of the complementarity around monetization. Wanted to ask about audience composition. Do you think the audience is a little older, more female? And wanted to ask if it helps you tap into wallet share in categories like CPG..

complementary audiences, complementary advertising partners, even the way we do commerce is different. They're very focused on commerce that's deals, and we're very focused on commerce that's product review-based, which we're going to make the whole company focused on.

So one of the things -- the more we learned and the reasons we got more excited is exactly -- it's almost like -- is like a question for me, I like it so much. Like everything is complementary. And that's what we're really, really excited about.

And even taking a step further, we're very good at making money transaction and they're very good at making money selling ads. And that's something that Joey highlighted in the letter as being very complementary. It's a really, really nice fit. It almost fits together like a perfect public piece..

Our next question will be from Jason Helfstein at Oppenheimer..

Want to ask a bit more about Angi Total Roofing. First, can you -- what did that grow kind of maybe just pro forma so how much did your top funnel benefit that asset? And to the extent that, that was successful, is this a playbook should you own -- should you buy 3, 4 more of these in other verticals? And then just another question on Angi.

You said transaction service perpetual was up 7%, yet the business kind of growing pretty minimally. I mean, just is there certain service professionals you're moving in while others may be moving out? So those are 2 questions..

So just in terms of how we're feeling about Roofing overall, we're incredibly happy with how Roofing is going. The early read is that it's doing exactly what we wanted it to do. So obviously, you change ownership and you want to make sure that everything is doing what you thought it was going to do. So that's happening.

The two dimensions in which we're expanding that business, 1 is geographically. So we're in 3 new markets. Q3, we'll be going into 2 more new markets. Q4, we are driving the majority of the top of funnel in those new markets from Angi. So Angi is the primary source of leads in those 3 new markets, Q3, 2 new markets, Q4.

And overall, we're seeing comparable conversion rates to what they were seeing in the existing markets. The early read is that it is going in the right direction. So we're very, very happy with the team, very happy with the existing -- our performance in the existing markets. Happy with the early read.

So I think there's no reason at this point to believe we won't be able to expand that out into many more markets next year. I think there's a lot we can do with that.

So by getting deeper into that funnel, it exposes us to more players in the supply chain, the manufacturer, the distributor, financing partner, gives us a lot more exposure to the different parts of the value chain that go into Roofing. So we haven't even started to really play there yet.

But I think you can expect, as we scale that business out, we are going to wait for those -- the first 3 markets we've expanded into to mature a little bit, hit some critical mass. And then we will expand that number of markets again next year, assuming everything continues to go on track with Roofing.

The follow-up on that was, are we going to do the same thing in other categories? I mean, as Joey pointed out, this is a material change for the business but a relatively small financial transaction for us to buy that business. We are actively exploring the same thing in other categories.

I think I've referenced before some of those categories that we think could be billion-dollar stand-alone categories, things like fencing, things like driveways, things like exterior painting, interior painting to a degree.

And we are actively looking at how we might repeat that again while we're developing the confidence that developing the confidence that this playbook is the right 1 for us. I think our early read tells us that, yes, we're going in the right direction with it.

If you zoom all the way out on this, this is effectively the playbook that we've had with Handy, where Handy was small in a small number of categories, and we've expanded Handy out now to be Angi Services and the BookNow business in 100-plus categories across the nation.

So I think the early read is very positive and we are likely to continue down that path. In terms of transacting SPs, look, we made a commitment 9 months ago to say, let's put the customer and the pro at the center of everything.

In terms of what that means for the pro, that means when we bring on a pro, we want them to be incredibly successful on the platform. So we've done a lot of work to change how the sales team is structured, in terms of compensation plan, in terms of verticalizing that sales force and that started to play out.

It's starting to play out in the types of SPs that we're bringing on in terms of how we throttle their spend in the first 60, 90 days up through the first 6 months, how we expose them to features on the platform, how we gradually increase their exposure. And I think all of that is proving to be super positive.

So that's some of what's going on in terms of us bringing on fewer higher quality, and by quality, I mean, likely to be successful in the platform SPs. And we're -- are the early read again on that data is that by doing that, we're seeing higher levels of retention, higher levels of ongoing engagement with those -- from those SPs.

And I think the ROI for SPs is going to be much higher. Like we said the things we're trying to get done are for the homeowner. We want to help them get the job in their home done for the SP. What we want to do is want to help them grow their business. And we're not successful long term unless we truly help that SP by delivering them great ROI.

So that's some of what's going on in the lead business in terms of transacting SPs. In addition to that, yes, obviously, we're facing supply constraints and that's putting a damper in terms of engagement.

There's also stuff going on in the Services business in terms of transacting SPs, where we are seeing a concentration, in some cases, in larger SPs, which is resulting in fewer SP counts for the volume of service work that we're doing. So the mix shift of all that is changing what it means to have a transacting SP.

So you can look at the transacting SPs and think, yes, we're driving towards higher-quality, larger transacting SPs who we know are going to be more successful in leads and more successful in services. And ultimately, what we want to get to is SPs that are buying across or transacting across leads, ads and services where it's right for them..

So for our next question, we'll go to Ygal Arounian at Wedbush..

I guess I have a couple of Angi questions, too. So first, there's been a lot of talk especially this quarter around supply chain constraints, especially in Angi's line of business.

Is that having an impact on you guys at all, especially on the Angi Services side? Labor costs, taking longer to finish jobs, waiting for construction materials? And then you talked also a bit about expanded contribution margins.

Any color you could add around that? Is it coming from certain categories? Where are you along that path? How much more improvement is there left?.

Great. So in terms of the supply constraints, we're seeing it in pockets in Angi Services. However, the product market fit that we have there is so strong that it's growing through it.

So effectively at an 80-plus percent or around half the 160%, so call it 80% organic growth rate in that business, the product market fit is so strong, it's basically growing through the supply constraint. Yes, there's stuff on the margin that's impacting it so some of that business is sold through our retail partners.

Some of our retail partners obviously have supply chain constraints. We've all read about the backup on the ports, particularly in California. That's affecting that. Some of our pros are having issues getting materials, that's affecting that. But the product market fit is just so strong on Angi Services that it's almost not being noticed quite so much.

Yes, it's happening in small parts.

Where we're experiencing more of the supply constraint issue or the supply chain constraints is actually on the lead business, where the lead pros are and the ad pros are scaling back, in certain cases, their willingness to continue to invest in leads and ads when they know they're struggling to get more pros on board, when they're struggling to get tools, machinery equipment, et cetera, and they're not growing their business as fast as we would like.

So the two stories are pros are joining the Angi Services at such a fast rate that you don't notice supply constraints, whereas on the ad and lead business, we do see the supply constraints affecting the rate at which people are able to add capacity.

In terms of the expanded contribution margin, look, we're not getting into the specifics of the exact numbers, but the contribution margin year-over-year change was significant. We are seeing it across the board, particularly concentrated in the earlier categories that we launched.

So the categories that have been around the longest, the densest markets, the places where we built up to a small -- a certain number of jobs per geo, we see the expanded margin, we see expanded take rate, lower ops costs, lower customer service costs, lower refunds, claim rates, et cetera, all contributing to expanded contribution margin.

Where we're also seeing interesting data is on the expansion of revenue that we're getting when we expose our customers to Angi Services in the service request path.

So for every time we expose Angi Services, we're generating about the same amount of lead revenue from a service request as we were a year ago, but we're seeing a significant increase in the amount of revenue we're generating from Angi Services as a result of expanded conversion on sites, so increased conversion on site, increased and more accurate average order value so better pricing.

And then the third 1 is increased fulfillment rates. So the 3 of those put together are expanding the monetization of an SR from services whenever we show services on site. So all of that is coming through and also contributing to greater density and ultimately, more contribution margin..

Our next question, we'll go to Dan Salmon at BMO..

Maybe for Joey first, I just want to go back. You mentioned the broad strokes of the Meredith deal a moment ago.

I just want to come back and ask specifically since the announcement, any updates on any details? How is the process going? Specifically, anything that more that you've learned? And then second for Neil, the letter walks through 3 kind of distinguishing characteristics of Dotdash, right? And I think we call that curation, trust and privacy.

It seems like those things are particularly relevant this quarter.

So could you just walk through those 3 and unpack them a little bit and why those are more important as differentiators?.

Sure, I'll let Joey do your first question first, then I'll do the second..

Yes. The second question is much more interesting, but I'll let you 2 [indiscernible] I'll let you do both of them actually. I mean, just on how we're doing so far, we're really happy about everything we've learned so far.

We are -- we've got -- obviously, we can only go so far until we have clearance to close, but people are starting to, at least, get to know each other. And we're doing as much research as we can to have a plan in place for when we close. And I do think that we are as tightly planned in this 1 as we've ever been in any of them.

And that's a testament to the amount of diligence and work we did in advance of getting to a deal and a testament to the ongoing work people are doing right now so that when we get to closing, we will hit the ground running and we know what needs to happen and who needs to be in what seats, et cetera. I think that's a great head start.

And Neil, do you want to hit the 3 things?.

Dan, I could actually do like a full hour on these 3 things so I'll try and keep it short. Truth, privacy, curation, those are sort of the words Joey used but that's pretty much how we look at things. And I'll do them in reverse order.

The curation part, which Joey talks a lot about sort of like being everything to being something, that's the key to what we do. And the old problem that like About.com has and even like some of the Meredith brand have is you can't be everything to everyone. And you need to be experts in things.

And the way we've built our brands and the way Meredith brands are set up is we can be the experts, the single source of truth, trust expert for something that seemingly unimportant as like how to do smoky eyes when you have a date to go on, but that's very important for the women who used to do smoky eyes, versus like how do I deal with this health diagnosis which I got, which is also -- which is fairly high stakes in a different way or what do I do to roll over my 401(k)? Curating and providing the very best answer on the Internet or in whatever medium we're playing, whether it's print, whether it's something else, is the fundamental tenet of our business and is the fundamental thing that has gotten us here.

And part of curating is doing the other things well, right, like having a site that's fast and not too many ads and all these things. And that ties right into, call it, truth and trust. And we don't do content. We're not like a news feed. We're not fake news. We're not like conspiracy. We're none of that.

We are content written by experts with true knowledge of the topics they're talking about. And we're doing that, combined with Meredith at a scale no one's ever done it before, which is, A, very good for users because we're going to have the resources to make the best stuff, but B, great for advertisers.

So you will not be able to spend at scale against intent-driven segments where you know what somebody wants at a level that we think we can take some money away from the platforms and the Facebooks of the world who don't have that. And the combination of the curation and the trust and the truth gets straight to intent, and that is what we do best.

Even in people, people in entertainment is sort of the de facto go-to source when someone checks when they read something to see if that's true or not. So across everything we're doing, those are really the themes that will wind through it. And the last bit about privacy is something that we've been focused on for a very long time.

And we haven't been right about everything but we have been right about this. We never thought that something you couldn't build a business around a cookie that never really made any sense to us. It's like the -- my dad looks at a pair -- set of golf clubs online that falls around for a week, it freaks him out, like that's not going to be a thing.

What we always knew is that context and content would work. And that's what's worked in media for the last 100 years, right? Like Enthusiast Magazine has always done great, still does great. Like a food magazine still does great, you know what it is. So we don't need to track people to know what they want.

And one of the beauties of Meredith is they have lots of login data and lots of first-party data and lots of subscription data that we don't have, but that's data that people want you to have because they're really interested in this thing and they're, in most cases, paying for something.

So between our ability to target via content and Meredith's ability to target via content and first-party data and what we can learn from there, we really look at privacy as an advantage. And you'll see a bunch of other media companies with some fairly big headwinds.

And because of changes Apple or whoever has made, that's not really been a factor for us at all..

A couple of comments. One, just looking at the selection of faces on this call, you might need to explain what smoky eyes is, Neil, but that -- that's makeup just so everybody knows..

I'm deep in this, Joey..

Yes. The 1 important thing for us, the trends that we're talking about here, those 3 trends in particular are a thing that we've believed in for several years, and that's informed Dotdash strategy for several years right now and execution for several years. And it's only now a lot of those things are coming to the forefront.

In fact, for the last little while, those things were pretty unpopular. But now those things are coming to the forefront.

And that's why another reason why we felt confident in leaning in with Meredith and making this bet is as we see those trends, we've seen those trends, those trends have been improving, and we think those trends have a significant runway still ahead of them right now..

That's great. We'll make sure we all have our makeup done better for next quarter..

We'd love to see anyone with the smoky eyes on this call..

Our next question will be from Michael Ng at Goldman Sachs..

I was just wondering if you could talk a little bit about how we should think about gross margins for Angi over the next couple of years, particularly as Services becomes a larger part of the mix? And then could you also talk a little bit more about the progress on Angi ancillary initiatives like Angi Pay and Angi Key?.

Sure. So in terms of the margins, I think in terms of the core ads and leads business, we've said we ultimately expect that to get towards 35%. The makeup of Angi Services is going to be different.

So within Angi Services, you've got smaller jobs, the $200, $300 jobs where we have a significant opportunity to generate margin where the take rate is strong. The operations and customer service cost is mostly something that we can automate, and we expect to be able to get to good margins on that.

And then we've got the larger jobs, the $10,000 jobs where we will see lower percentage margins. Ultimately though, we put it all together and this isn't about driving towards a particular percentage of margin. This is about margin dollars.

And this is about us saying that we had a business before which was focused on a very small subset of that $0.5 trillion of TAM or $500 billion TAM. And now what we're saying is we're focused on the entire thing, and we should be able to generate far larger margin dollars by focusing on that.

And if we do the right thing for the homeowner, we do the right thing for the pro, we ultimately think that the margin dollars pay off. The moat that we build around the business, the degree to which we the degree to which we will be very differentiated from the competition will allow us to get to strong dollar margins over the long term.

What exactly that looks like in terms of margin percent, it's not something we're focused on. We're focused on what the ultimate dollar margins will look like. Your -- sorry, I'm blank.

Your second question was on -- other initiatives?.

Angi Pay and Angi Key?.

Yes. So we've got a number of other things going on as you pointed out. We've got Angi Key membership. We've got payments, we've got financing. All of them continue to grow pretty nicely. So the Angi Key membership, as a reminder for people, is you pay $30 or $29 a year and you get up to 20% off hundreds of everyday home services.

That increases consumer retention rates, increase likelihood to transition over to the mobile app. And that -- the data that we showed before in terms of where that's tracking for retention rates continues to hold.

And we're pretty happy with the fact that the member who generates or the member who downloads the mobile app spends an awful lot more than the average consumer. So that's in a pretty strong spot. The rate at which we're adding members continues to hold so we're very happy with the growth and the membership.

Payments, we had previously rolled it out to our lead pros. We've more recently rolled it out to our ad pros. So the rate at which we're adding consumers and pros to the payment experience continues to grow nicely. I think we had our first $600,000 day yesterday or the day before in terms of volume of payments that we're processing.

So really happy with the consumer feedback on it, really happy with the pro feedback. When pros use payments and generate revenue from the platform that we process for them, their retention rate is materially ahead of our other pros. So very happy with how that's going. And the third 1 is financing.

So we're -- financing is still small relatively, it's growing rapidly in terms of the growth rate. We're in the, for the quarter, high single-digit millions of dollars of financing that we've provided to our homeowners. Again, satisfaction rates on that are really strong.

Pros love it because it allows them to engage customers they might not have been engage. Customers love it because of the convenience of financing, where they're at the point of sale. The 3 of those things combined are not yet having a material impact on the business.

But we hope that as we get into 2022 when they scale, that we will start to see some impact in late 2022 from at least one of those initiatives. Overall, I think you think about where we're going holistically, we've got to make sure that we have a deep knowledge and a very robust payments platform.

I don't know any large consumer marketplace that's been built recently that doesn't have payments as a core part of the product. So we're going to continue to push on that. Financing, obviously, very topical important and the early read we get from membership gives us the confidence that is the right thing for us to do.

And I think on membership, in particular, it's a pretty light program right now. It's pay to save. It's the Angi equivalent of 2-day shipping or the Angi equivalent of a Costco-like membership of pay to save. I think in the coming weeks and months, you'll see us make that a little richer.

One of the first things we'll be starting to roll out in terms of making that richer has to do with a text-based service where we'll give people access to a home expert who can -- will give our members access to a home expert in a trial to allow them to communicate with someone who will make bookings on their behalf, help them out with issues that they've got for their home.

As we start to build that program into something where you really will turn to Angi Key or Angi Key for everything inside your home. So early read is super positive on all 3 still..

Our next question will be from Nick Jones at Citi..

I guess one on Angi and one on Dotdash, Meredith on Angi. How much of the kind of requests are related to kind of people who have purchased new homes? And is there kind of a risk that as the housing market cools off, that request might slow down? I think buying a home generally triggers people kind of think about doing repairs.

And then I have a follow-up on Dotdash..

Yes. In terms of the volume of requests, look, the bigger driver of request value almost and the volume of dollars flowing through the platform is just the size of home and the age of home and people's ability to invest in it. So yes, you're right that people buying new homes does trigger a percent of the service requests.

However, the bigger drivers are just the size of home, age of home and capacity to invest. So that's the driver of service requests. On the other side of the platform, we know that our pros are so supply constrained right now that their willingness to pay for SRs is a function of how much demand they've got from other sources.

So we don't feel particularly exposed to a shift in housing demand. Instead, I would say that if we see a normalization of consumer demand, it will probably be very beneficial for our ad business and our lead business as those pros experience less of a supply constraint overall..

The other thing I'd add, and Mark Schneider probably has a number. I think 60% of our service requests are in -- are sort of necessary jobs, somewhere in that ballpark. And the....

Yes, we said -- I think we've said historically, roughly 2/3 are nondiscretionary..

Yes, nondiscretionary, that was the word I was looking for. Thank you. And then the other thing I'd say is just when home sales slow and there's less turns, that also has a natural hedge in it which is people do more work on their existing homes. We've seen that historically.

I mean, it's really hard to predict any of these things and COVID changed a lot of things. So maybe the historical trends won't be indicative but that's what we've seen in the past..

We'll have a report coming out in the coming quarter that shows a significant change in the percentage of time people are spending at home and a significant change in the percentage of dollars that they're spending on their home, which we think, again, reflects the change in consumer behavior to focus on the home, which we don't think is going away anytime soon..

Great. That's helpful. And then on Dotdash Meredith, there's some interesting charts on the shareholder letter on Page 4. And it sounds like kind of making Meredith properties faster is kind of a key thing you're going to work towards.

So does that sound like kind of taking the entire library and replatforming to the Dotdash tech stack? When you think about maybe improving SEO, which I think, in some cases, is due to kind of the code actually on the content and how you format the content, is that kind of rejiggering like the entire library? Or is it more on kind of all future content and it's going to take some time for those benefits to kind of trickle through?.

Couple of answers to that, and it's probably a little bit more in the weeds and some people want but I'll give you the answer anyway. Their tech stack is actually quite good. They just actually built a new one, so I'm not entirely sure we're going to migrate everything over.

We may use some of their things and that's going to sort of like be consistent with a lot. They're very smart over there, and they actually just completed a migration of all their brands onto 1 unified tech stack that's pretty good. So we're going to work on all of that.

But what I would say, and this answer is -- works for SEO and it also works for everything else we do, and we've said this many times. We're very focused on search because we're very focused on algorithms.

And if you're going to be a publisher today or if you're going to be on the consumer Internet in any way, you're going to be in travel, you're going to be in anything, algorithms are going to be between you and your users. And what the algorithms we care about are the algorithms that care about where they send users.

So that means Google, that means Pinterest, that means Apple News, that means Flipboard. That means that sort of like the different algorithms within Google we care a lot about. So when we look at a new site, consistent with what we've done with other things we bought, it's very, very comprehensive.

And we are as concerned with the oldest piece of content as you are with the newest piece of content. So because a user doesn't care and an algorithm doesn't care, they just want to know what's on that domain and what is it covering. Is it the best thing? And that's our focus.

So when we make new things, they're obviously going to be made probably with an eye on some different things and Meredith has done historically. But one of the really, really big opportunities is these brands and these websites are -- some of the brands are 100 years old, the website's obviously not 100 years old but they're 10, 15, 20, 25 years old.

And the opportunity to go back and get a look at some of that content and apply some of the things we know now that they wouldn't have known then to some of their content, and that some -- they've been working to update and some they haven't is a really, really big opportunity.

But I think the key takeaway for this question is what we do and what we do to brands, what we do to websites and actually, what we're going to do print magazines is comprehensive. It's not cherry-picking. And again, there's -- one of the things we say, which we stole from another publisher is like not all of our content that we have makes us money.

And we don't care about that.

But all of it supports the content that makes us money, which means that if you're going to have a health domain, there's obviously going to be some topics that are very big and some topics that are very small, the small topics have to be treated with the respect and the care of the big topics because the person who uses that or the advertiser that sees it, it doesn't matter to them that it's a small topic, it matters to them that, that's their topic.

And we look at all domains that way..

Our next question will be from Justin Patterson at KeyBanc..

Two if I can. So first 1 for Oisin. You brought on your first Chief Data Officer. Would love to hear how you're thinking about just ways to leverage data on the Angi platform over the next few years and how we should think about those benefits manifesting. And then for Joey, would love to hear about top priorities for Care.com.

Looks like trends are going well, so what are the next areas to lean into for growth?.

I'm curious if my wife will have smoky eyes for our date tonight. That's the logical conclusion to this.

So in terms of data I looked, the feedback I've gotten here has been everything from, how did you not have a Chief Data Officer before, to this is obviously something we should be doing, to how can we put more money into investing in investing and using our data. We have so much opportunity in data that it is almost embarrassing.

So the use of our data to accurately price our leads and ads for our pros is a huge opportunity. Right now, we set pricing for our leads approximately once a year. We don't really change that. That's a very obvious and very easy way that we can very quickly start to realize some benefit.

The second big opportunity is bringing our products together in the most thoughtful way from a data perspective to when to show an ad pro, when to show a lead pro, when to show services.

Right now, there's some logic behind it which is intelligent but it is not dynamic, doesn't respond to the availability of supply, doesn't respond to availability of demand and the likelihood that we'll have future budget from pros. So that's a second significant opportunity. And then the third is on consumer experience.

So the more we can know about your home, and we know a lot about your home already. You put it in multiple service requests, we can obviously access public databases to know a lot about your home. The more we can deliver a customized experience to you, that makes it easier for you to care for your home.

So I think there's a huge opportunity for us to become the repository for all of your information about your home in a way that reinforces Angi as the place to go to take care of your home. So the more we know about your home from you, from other places online, the more we can thoughtfully help you take care of your home.

Taking care of your home is a huge task, as we all know, biggest financial purchase for most people, biggest spend item overall. And it is -- the average person needs a dozen-plus things done in their home every single year. Most people don't even know what those dozen things are.

Those dozen things are not the same in Florida, in Miami as they are in New England, in Portland, in Maine, pick anywhere. It's a different dozen things. So we got to be very thoughtful down to a zip code level, down to a home level, down to an address level on how to use the data. And I think those are the 3 big opportunities.

It's pricing, it's matching and it's actually delivering a truly unique experience to the homeowner. And I think we're best placed to do it. So if anyone out there, we've got more data and we've got this opportunity to bring it all together and build an amazing profile for you as a homeowner that helps you take care of your home..

Justin, on Care, the biggest factor right now is just back to the core business and blocking and tackling on the core business where we've been able to move conversion, onboarding flows, data gathering that makes the matching more efficient between both sides, that makes it more likely that when you make a posting, you're going to find people applying for that job and that you'll have good robust applications that make sense.

And that -- a lot of that's why subscribers are up, I think, close to 1/3 in this quarter. I still think we have more to drive their We're benefiting in there at the moment from just people back to work and people back to going out and things like that, that are naturally helping the business and on the flip side, easy comps in the prior period.

But beyond that, and again, there's still more work to do there. But beyond that, there's enterprise, there's Instant Book, which is similar to what we've done at Angi. And there is daycare facilities, which is a new opportunity for us, where we're just starting to do some experimentation.

And then there's also tying it all together with consumer and enterprise and home pay.

And I think one of the big macro trends that we've found in Care and we're excited about in Care is that this notion of the enterprise starting to take a meaningful role in Care in their employees' lives, and it makes a big difference on getting the right people into the workforce.

It is a -- the burdens on women as against men in child care are very significant in this country and meaningfully less significant in a country like Sweden where there's subsidized child care and the workforce participation is basically equal between genders. And so I think a little bit of macro tailwind.

I think potentially some regulatory help there, which would be a phenomenal thing for this country. And then just execution on these things where enterprises are starting to realize the benefit of this service and enroll in this service. I think all those are going to be drivers for the next little while..

Great. I think we've reached the top of the hour.

So Joey, do you have any final thoughts?.

That's it. Thank you all for joining us. Really appreciate it and see you next quarter..