Good day and welcome to the IAC, Angi First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Christopher Halpin, CFO and COO of IAC. Please go ahead. .

Thank you. Good morning, everyone, Christopher Halpin here and welcome to the IAC and Angi Inc. First Quarter Earnings Call. Joining me today is Joey Levin, CEO of IAC and Chairman of Angi Inc., and Jeff Kip, CEO of Angi Inc.

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

I will shortly turn the call over to Joey to make a few brief introductory remarks and then we will open it up for 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's and Angi Inc.'s first quarter earnings releases in 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 as EBITDA for simplicity during the call.

I will also refer you to our earnings releases, the IAC shareholder letter, our public filings with the SEC and again, to the Investor Relations section of our respective websites for all comparable GAAP measures and the full reconciliations for all material non-GAAP measures. .

Now I will turn it over to Joey. .

Thank you. Good morning, everybody. Thank you for spending some time with us this morning. I won't repeat the numbers you've seen posted. I think we had a great quarter with real progress on growing profit and free cash flow. And that puts us in a solid position for deploying capital from here. .

Biggest news in the quarter was we've -- we're starting to participate now in the new AI ecosystem in a tangible, financial way. We announced the deal yesterday with OpenAI, where we'll be compensated for enhancing ChatGPT experience.

We'll start to hopefully get some incremental users to our properties from ChatGPT and we are going to collaborate on D/Cipher, which is a product inside of Dotdash Meredith that we think is the future of advertising on the OpenWeb and where we've been growing nicely and we think generally taking share on the OpenWeb.

And hopefully, that agreement is just the beginning of other opportunities for us in that AI ecosystem. .

And we're incredibly grateful to OpenAI who, from the very beginning here, has been a leader in the category, including with their first product which really opened the dam for everybody competing in this area.

And hopefully, they'll still similarly act as a leader as they have done in the agreement with us in starting the -- opening the floodgates towards new opportunities for us in that area. .

I also want to welcome back Mr. Kip. He actually used to be on this call 8 years ago and is back in new capacity as CEO of Angi. I'm not just thrilled about that because it lightens my load at Angi.

I'm thrilled about that because I think Jeff has been -- already know, Jeff has been involved in this business in a meaningful way for a very long time, going all the way back to his role as CFO of IAC many years ago where he spent an enormous amount of time getting deep with what was the predecessor to Angi Inc., HomeAdvisor and then spent 8 years very much in the details of the business, in running the international business for Angi.

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And you've seen, as we've reported tremendous progress in that business. And I'm really excited now that Jeff has the entire Angi business and he's very focused on the key to succeeding in that business, which is delivering jobs done well and I expect the job done well out of Mr. Kip. So welcome, Jeff. .

Let's get to questions. Operator, first question please. .

[Operator Instructions] Our first question comes from John Blackledge with Cowen. .

Two questions. First, for DDM, overall revenue growth beat our forecast. Could you just unpack the growth within DDM digital revenue across advertising performance and licensing? And maybe how should that trend going forward? And then I have a follow-up on the OpenAI deal. .

Sure. So we felt great about the performance of Dotdash Meredith digital in Q1. Overall, Digital revenue grew 13%, led by 19% growth in Digital advertising. And that's due to the combination we've talked about before, 8% core session growth and then improved monetization across both premium and programmatic. .

Advertiser spending is firming up. It's not a hot market or on fire but it's better and it's strengthening and that drives our premium sales. And then on programmatic, we believe we're outperforming and improving market and that we're doing better because of our superior tech stack and performance. .

Performance marketing only grew 3% in the quarter and that was really pulled down by a 30% decline in services such as -- which is overwhelmingly financial products such as brokerage accounts and insurance. Performance marketing for e-commerce or goods, as we highlighted, grew 18%.

So we recognize we've got to continue to invest and innovate in performance marketing, particularly on the services side but we're confident that we'll get back to strong growth there. .

And then a real bright spot was licensing, which returned to growth at 9%, led by a strong performance at Apple News and syndication partners. That area has been a -- had been a headwind really since we closed the Meredith acquisition but we now feel it will be a tailwind and OpenAI will be a further element there. .

Looking forward, we continue to see 10% plus revenue growth in Digital each quarter and for the year, with solid execution across all 3 line items. Advertising will clearly lead the way as we see session growth and improve monetization.

And what's your second question, John?.

Yes.

Second question, could you talk about the DDM, OpenAI deal at a high level, including key terms of the deal? And can we expect similar deals with other LLMs, like Google, Anthropic, Meta, et cetera? And if you don't strike a deal with those companies, are they precluded from training their models on DDM content?.

Yes. So the deal, we obviously can't get into the very specific terms but at a high level, there are 3 elements to the OpenAI deal. There's displaying content and links attributed to DDM in the relevant ChatGPT responses. There's using the historical and ongoing DDM content to enhance their model's performance.

And then there's partnering with DDM and OpenAI on building out the D/Cipher cookie-less, intent-based targeting ad solution. That's a first of its kind partnership and we think that really enhances the future -- has the potential to enhance the future of privacy-protected advertising and we're excited to collaborate with them on that..

It's a multiyear deal and it involves both -- all the elements we said and that includes financial compensation. And we're really excited about that deal. .

In terms of others, I think -- look, as I said in my opening remarks, OpenAI led the way in showing the world the possibilities of GenAI and -- a sort of chat interface. And I think that they -- I'm hoping that they will again demonstrate to have led the way in dealing with publishers and journalism and content.

And I do expect that others will follow. That may take time and some may sort of go through various stages of resisting that but I do expect that others will follow over time. .

And the deal is not exclusive, which means that we certainly have the opportunity to do a lot more there and we really are grateful to OpenAI for figuring out how to get this done.

And I think really from the beginning, them -- and under Sam Altman's leadership, have had the right tone in thinking about a healthy Internet ecosystem and making sure that OpenAI but AI generally is a force of good for the world and they've continued to demonstrate that so far. .

And congrats, Jeff. .

Thank you. .

Your next question comes from Cory Carpenter with JPMorgan. .

On the Angi CEO transition, Joey, why was now the right time? And Jeff, it'd be great to hear your vision and strategic priorities as CEO? And then I have a follow-up but I'll let you answer that one first. .

Sure. Thanks, Cory. First of all, just having a full-time CEO is obviously better. And so as soon as we could do that, we were -- I was especially excited to do that.

And one of the things that -- besides sort of improving the business' fitness and customer centricity over the time I was there, I wanted to understand in-depth the issues and the opportunities.

And one of the things that became very clear in my time there was what had been accomplished in the international business and what continues to be accomplished there.

And that was a product of Jeff and an incredible leadership team in the international business that goes deeper than Jeff and realizing that both we had the talent there and the depth there created the opportunity to elevate Jeff to run the whole business. And I think he's going to do a fantastic job but I'll let him comment on it. .

I don't think that there is really a change in strategic vision. I think Joey has rightly put the customer at the center of what we're doing at Angi and we're really focused on delivering a better experience online and then most importantly, delivering jobs done well on both sides of the marketplace. .

And so the work he's done with removing, let's call it, empty calories and moving the business forward in terms of being customer first is what I hope to continue. I hope we deliver more jobs done well each year from here on out. We plan to and there's no real change. .

Cory, you had another one?.

Yes, maybe perhaps for Chris, just could you give us an update on your Angi revenue expectations this year? And if you think you'll need to reinvest ultimately to return the business back to growth?.

Sure. Thanks, Cory. Well, second part first. We definitely don't think we need to invest more incrementally in the business at Angi to get revenue stabilized and back to growth. And in fact, Jeff can talk to it and continuing a lot of the work that Joey has done.

We continue to see opportunities on the cost side and is why we're confident in our adjusted EBITDA forecast and continued margin improvements even with the revenue declines. .

On a revenue outlook basis, for the next quarter, second quarter, we guide towards similar percentage revenue declines for total revenue at Angi, in and around what we've seen in the last 2 quarters, sort of that mid-teens level. I'd note we took further actions to eliminate low-value revenues at Angi this quarter.

One specific action we'd highlighted was to shutter an acquisition that was done 11 years ago called CraftJack. That had its own small pro network that was -- that ran alongside the Angi network. .

We thought it would be a nice add-on but as Joey and Jeff and [ Rusty ] dug in there, we realized it was not profitable and essentially was a drag on the business.

So we'll see some incremental loss of revenue and most notably for our external metrics with respect to service professionals, you should expect a decline of about 5,000 pros there but we expect to recapture many of the leads generated through CraftJack previously directly and view it as a margin-accretive shutdown. .

As far as total revenue outlook, looking beyond next quarter, we want to allow Jeff to continue to develop his own view of the forward path of the business. He talked about how the strategy continues but the specific application of that and what revenue opportunities as well as cost opportunities he identifies.

All in though, we'd say this is in the confidence that we have in our -- or in the context of the confidence we have in our guidance of $120 million to $150 million of adjusted EBITDA for the year and similar improving margins to the first quarter throughout. .

The next question comes from Jason Helfstein with Oppenheimer. .

Two questions.

The first, given the stronger first quarter EBITDA at both Dotdash and Angi, why not raise the full year guide? Are you seeing anything in your outlook that has given you pause?.

And then second and this will be multiyear repetitive, you talked in the letter about being frustrated with the stock price.

What's the takeaway? Are you implying that you'll lean into buybacks if the stock does not start to improve? And just do you think about like the MGM stake as a source of capital or leverage if you need it? And welcome back, Jeff. .

Thank you. .

Chris, do you want to do the first one and I'll do the second?.

Perfect. On full year guidance, on Dotdash, we feel confident in the momentum and outlook for the business between the revenue growth we are seeing, the OpenAI partnership and visibility on margins. Given the seasonality of the business, however, the full year is always heavily weighted towards the second half.

So we thought it prudent at this point to get deeper into the year before revising guidance. That's why we're reaffirming our $280 million to $300 million of adjusted EBITDA for the year, while making targeted investments in areas like content, D/Cipher and performance marketing.

But we would say we are -- we feel confident about being in the higher end of that range and we'll continue to update the market as the year progresses based on what we're seeing. .

On Angi, we produced strong profitability in the first quarter despite declining revenues. To us, that demonstrates that many of the revenues that we've removed from the business truly produced limited profitability and value. There's still more work to do in improving both the consumer and professional experience. That's a key priority.

So we want to continue to remain flexibility, to build the best business for the future. We'd say we feel good about $30-plus million a quarter of adjusted EBITDA for the remainder of the year. So we're keeping the guidance at $120 million to $150 million. Do you want to take... .

Yes. So on buybacks, Jason, the -- maybe a few things. One, let's talk about kind of the evolution of thinking about buybacks and what goes into that. And certainly, buybacks are on the table, I guess, would be the shortest answer to your question.

But the first step was really getting our operations in order and making sure we have very healthy business fitness. I think we've accomplished that. There's still other things we want to accomplish along those lines. So I think we made real progress there. .

Second thing is having excess cash and generating incremental cash. We feel very good about where we are there. We -- obviously, a prerequisite, which you highlighted already, is having an attractive valuation and believing we'll get a good return on capital. And I think that, that box is certainly checked.

It's also, of course, making sure we have no restrictions on our ability to buy back shares, which happens periodically. .

And then the -- maybe harder one is the opportunity cost to our cash, which is, we're always evaluating a lot of things. We're evaluating new M&A for our businesses, new M&A outside of our businesses.

I think the good news right now is, we have the ability to afford both and that is, to weave in your next question, a combination of the cash on our balance sheet, the incremental cash we're generating. And we do have a very, very valuable, important stake in MGM. We have no intention of getting out of that stake.

But that is -- that -- if you want to think about our overall liquidity and sources of liquidity that is a liquid public currency. .

And so that contributes to the overall liquidity picture of IAC. Again, that doesn't imply anything. We're very happy with MGM, how MGM is doing and the fact that we now own over 20% of MGM, thanks to MGM being very aggressive on stock buybacks, buying back more than 1/3 of the company. .

So there's a lot that goes in there but the short answer to your question, Jason, is yes, that's considering buybacks as the antidote to what I raised and what you highlighted is absolutely on the table. .

The next question comes from Justin Patterson with KeyBanc. .

Actually wanted to build off of Jason's last question. Joey, now that you're full-time IAC CEO and no longer wearing 2 CEO hats, would love to hear about just how you're thinking about the evolution of IAC here. I know in the past, you talked about looking at marketplaces as your preference for M&A.

We've obviously seen a lot of changes within the Internet landscape with GenAI. So would love to hear more about just how you're spending your time these days and how you're thinking about the future of IAC. .

Yes. Thanks, Justin. It's a really important question. So certainly, on the spending time part of your question, very much on capital allocation, both in our existing opportunities and new opportunities. And AI is an area where we continue to try to learn and find opportunities. I think that's probably less likely from an M&A perspective.

I think that while there are plenty of opportunities out there, I think that the sort of pure-play AI things are currently priced to perfection, which is a hard place to deploy capital. .

But many businesses, including our own, as you just saw with Dotdash Meredith, are in a position to benefit from AI. And that's certainly a factor as we think about new opportunities for IAC. I wouldn't pick a particular sector right now. We're learning and considering in a lot of different areas and we are opportunistic.

We have historically done well with and like marketplace businesses. We understand those businesses but I wouldn't put that as a limiter on the things that we consider. .

Another area that's done very well for us historically is the travel and leisure segment, which we've talked about a bunch previously and which has sort of done -- outperformed other parts of the consumer wallet share for a very long time and we expect to continue benefiting from a lot of the technology trends that you see in the world.

So that is an area -- that has been an area of some focus. .

But we're looking pretty broadly. And I think that the priority for us in terms of M&A is certainly internal opportunities first, meaning more of what we already own, add-ons to those businesses where we can find synergies or have a unique angle on something and then new M&A.

But I do expect, at some point, we will add another leg to the stool, so to speak, on new opportunities and we're actively looking for those right now. .

The next question comes from Eric Sheridan with Goldman Sachs. .

Thanks for the question and all the details. Also, I'll echo, welcome back to Jeff into the new operating role as CEO of Angi. Maybe I'll follow up on Dotdash Meredith.

When you think about coming out of the advertising environment of last year and sort of building some momentum in the advertising environment this year, how should we be thinking about the conversion of revenue into EBITDA and the cadence of that between now and the end of the year, measured against the potential volatility up or down on revenue against things that you believe you need to invest in to make sure Dotdash Meredith, especially on the Digital side is set up for success on the longer term?.

Thanks, Eric. So a few things on that front. First, last quarter, just to re-anchor folks, when we provided the full year guidance of $280 million to $300 million of adjusted EBITDA for 2024, we said we expect essentially all of the consolidated EBITDA to come from Digital.

Print EBITDA and corporate expense should roughly offset each other this year, with corporate expense pretty consistent in each quarter, around $10 million. As we expected, Print started off the year at a low profit level, $2.9 million, due to seasonality and secular revenue declines.

We expect Q2 Print EBITDA to be $9 million to $11 million and then about $13 million to $15 million a quarter in the third and fourth quarters. .

Turning to Digital. We like seeing the profit scale this past quarter with adjusted EBITDA for Digital growing nearly 50% and increasing adjusted EBITDA margins. Looking forward on the revenue side, we continue to feel good about 10% plus revenue growth each quarter this year.

And again, that's a combination, traffic growth, improved monetization for both advertising and performance marketing and licensing growth. .

On the cost side, we're making specific targeted investments in strategic areas. Those are clearly content that we know will perform, D/Cipher and growing the capabilities of that strategic product, and performance marketing.

And we talked about our initiative to reposition performance marketing growth -- for growth and particularly in the context of services. .

And we think those investments will build on our strengths and position us to grow for years. The impact of those investments will be most felt in Q2. We're forecasting incremental adjusted EBITDA margins of 30% year-over-year in Q2.

And then that will be followed by 50% plus incremental margins for the third and fourth quarter as we would expect in the ordinary course. The result is, EBITDA growth each quarter and improving margins and the first half, second half weighting for the year, which is very comparable to the 1/3, 2/3 on adjusted EBITDA that we saw last year. .

The next question comes from Brian Fitzgerald with Wells Fargo. .

A couple from us.

Maybe more broadly on AI, as we've seen Google scaling up their own Search Generative Experience, are you getting any visibility in changes, if any, in terms of referral traffic to you either as AI is integrated more deeply into traditional search?.

I'll take that one. I think it's hard to see specifically. So the short answer is, not really but I'd say long term, Google is taking more of the page and holding more traffic for themselves. That's basically been a, I don't know, multiyear, if not decade trend. And so I do expect that to continue. .

And I think we've done a nice job in navigating that through our history and we actually and it's -- Dotdash Meredith site continues to grow inside of Google because we have, I think, the best content where we've invested more than others and do a very nice job in addressing users' needs with the content that we've created.

And so I think we're in a pretty good position there. But I expect over time that Google continues to try to keep more for themselves. But we have not seen any direct impact of that yet. .

Got it. And then at Angi, Jeff, we wanted to ask kind of what ideas or portions of the international playbook you expect to bring to bear at Angi as you take over there. .

So just stepping back, if you just go back a few years, 5 years ago, we had market leadership position in Europe. It was put together through the acquisition of 4 different companies, 4 different platforms, where we were losing $10 million, we had 4 different products, 4 different business models and again, the 4 different technologies. .

We went through a process where the first thing we did was we pivoted our product to really be focused on homeowner choice and pro online enroll. I think the second thing we did was, we restructured in particular, our performing marketing and our unit economics, both operationally in terms of technology and we executed there. .

Thirdly, we looked at the foundation of business. We refactored, rebuilt, migrated the core technology. Today, we just finished migrating the fourth business in the U.K. We've improved each time we've done one of these and we're on a single platform with a single organization that's much more efficient.

And we've been able to really put our focus on the core experience, which is really the offline experience, which is when a homeowner who places a job on the platform hires a skilled pro on the platform and gets the job done well. .

Effectively, I would say, 1.5 years ago, Joey, probably took a more difficult hand actually in the United States, in some ways. There was more empty calorie revenue that was both low-quality experience and low -- or negative profitability in there and he's had to pull some of that out.

But he and the team have done a big part of this lift for me, so I'm lucky to come in now. .

Obviously, the market's a little different but it's also a lot bigger and the brand and share is stronger here. So I've got a little more to work with. But in any case, we need to follow the same path, Joey and the team have been on.

I think, basically, the key elements, the key ideas or components of what we did in Europe are in play in the right way in the United States and we need to finish the job. .

And I would just add a note, which is by 2022, we turned the business north and finally growing profit after a few years of flop -- finally growing revenue after a few years of flatness.

We now have the business at close to 20% revenue growth in the first quarter and close to 20% EBITDA margins and God willing and the creek don't rise, we're going to do the same thing in the United States in good time. .

Your next question comes from Dan Kurnos with the Benchmark Company. .

Welcome back, Jeff. Joey, a little in the weeds for you, maybe but just on the D/Cipher benefits around the algo from the AI partnership.

Just thoughts on incremental data signals, a shift to incrementally more probabilistic and what that kind of means in terms of driving outperformance relative to sort of the publishing peer group with that asset? And then maybe just an update on Care would be helpful. .

Sure. I'm not sure I totally followed the question but let me try the first question. This is -- was your question about D/Cipher, the D/Cipher's average? Okay. .

I think it would be D/Cipher, yes. .

Yes. Okay. So right now, one of the things that we've done with Dotdash Meredith, with D/Cipher is, we basically mapped intent across a subset of the Internet, not just on our properties but other publishing properties to understand where intent exists and measure that performance relative to what we've seen very closely on our own properties.

And I think what the collaboration with OpenAI will enable us to do is, scale that towards a much bigger portion of the Internet, have that mapping and have those intent signals so that we can use them, bring them back and sell that to advertisers. .

Again, very much all with the view of cookie-less, privacy protected and focusing on the intent of the content, not the individual user or the privacy of the user. And so what we look for there is significantly more scale. So accessing significantly more scaled inventory with the same -- with good data for intent-based targeting.

And if we can pull that off, we think that's potentially a real accelerant to the business. And it is -- as we said, it's already working well so far. So we view this as -- there's only upside in that area. .

Yes. And just incremental area that excites us, which OpenAI is able to bring to D/Cipher that we don't have the scale to do would be additional media. So beyond just text, image and video and those things that are part of a user's experience being able to draw intent-driven linkages and monetize against them and drive performance.

And we expect to have a number of those flowers bloom as the 2 teams work together. .

Dan, does that answer your question?.

It does.

And then just update on Care?.

Yes. Look, Care is very healthy right now from a profit perspective. I think the enterprise business is growing nicely. We're really focused now on driving growth in the consumer part of the business.

And the -- we have a number of good projects in the works there, both on just optimizing some fundamentals around marketing but also on the new product side in terms of improving access to instant booking and improving the customer experience in instant booking. And so we've got optimism for where we think Care can go from here..

And in addition to both consumer and enterprise, there's also the other segments of Care, which are right now doing nicely. So senior care and pet care, we think are opportunities for growth from here. And we're starting to see some green shoots in those businesses, too.

Do you want to add to that?.

Yes. I think we've seen -- on the consumer side, we've seen a slowdown for a while. We needed -- we know -- we said in prior quarters, we know we needed to improve our marketing and improve our products. Under new management, we feel like we have the road map there and have a new Chief Technology Officer, Chief Product Officer, Chief Marketing Officer.

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There's some macro. We never want to blame macro but there's definitely some macro on childcare versus daycare going on right now and some childcare down a little or babysitting, day care up and senior care and pet care, where we're growing up.

But we'll lap that and it's really specific to us on the blocking and tackling on marketing and product and we feel very good about the opportunity. .

The next question comes from Brent Thill with Jefferies. .

Joey, in the past, you've talked about the M&A environment being somewhat irrational on multiples.

I'm curious if you could just update us kind of what you're seeing now? Have some of these expectations come back to earth? Or are you still seeing the similar environment?.

Brent, I think there's opportunities now.

I think there's -- we've gone through periods where things are -- everything is priced to perfection and things are insane from our perspective or we've gone through periods where everything is priced for failure and there's big opportunities from our perspective, that was probably the era where we bought into MGM. .

But right now, I think it's a balance. I think there are areas that are probably overheated like AI. All of these AI companies are not going to be a multibillion dollar companies. Some will but certainly not all of them. And there are plenty of areas of rational opportunity, and that's where we're focused.

So I'd say it feels pretty balanced, in the middle right now. You could say that's maybe a harder time to deploy capital because it's not obvious that you should be in or out. But we think we'll find some opportunities here. .

Okay. Great. And then just a quick follow-up on the emerging business.

Anything else to call out that you're really energized by in terms of what you're seeing in the momentum, in the other parts of the portfolio?.

The one I'd highlight in that -- we talked about Care already, which is, I think, a category leader and a great business with solid fundamentals. The other one in there -- actually, I'll talk about two.

One is Vivian, which has a very good product for the market that it's in, which is matching the health care professionals, primarily travel nurses, which is where it started and has the greatest share, but matching health care professionals with employment.

I think that's a category that long term has really nothing but tailwinds given a supply/demand imbalance of nurses but health care professionals generally. And Vivian has done a very nice job in matching that with very healthy revenue growth and not really consuming much capital at this point. .

And Vivian's also done, by the way, a very nice job in deploying AI tools to get the -- to enhance the chat experience between the health care professional and the employer. We're seeing some fun things on engagement there. .

And then the other one, which is very, very small for IAC but as media things do, they make a lot more noise than the size of their business. We've got great real leadership with incredible experience at Daily Beast now, with Ben Sherwood and Joanna Coles. They're making the changes at the business.

They're bringing a ton of energy to the business and who knows where they go with that. But I'd say that there's a exciting reboot happening there and we'll be interested to see how that turns out. .

The last question comes from Tom Champion with Piper Sandler. .

Maybe just 2 quick ones on DDM, maybe for Chris. Just looking at Core Sessions growth of 8%. Certainly solid and consistent with the fourth quarter but there was an extra day in the quarter. All else, fairly easy comp year-over-year.

Just curious if there was any onetime or a headwind or anything else that we should think about that in the context of a trend that was previously improving sequentially? And then just any comments on the Amazon partnership? Would love to hear about that. .

Yes, definitely, Tom. Thanks for the question. We actually did want to talk about Core Sessions trends. So the decline from 10% core growth in Q4 of last year to 8% growth this quarter is entirely driven by declines in traffic to our properties coming from Facebook.

This has been a significant trend across the publisher ecosystem since middle of last year. It hit the whole industry hard. Thankfully, for us, it's a small part of our growth, which is why we can keep growing. But they really ramped it up again from what we can see mid-quarter. .

For the first quarter, our Facebook traffic was down 50% year-over-year in the first quarter as they aggressively keep to -- seek more audience on their own platform. Again, thankfully, Facebook only represents about 4% of our traffic today, down from 7% a year ago. So we felt that this quarter, it will continue to attrit.

And we feel great about how everything else is growing and the ability to keep growing sessions. .

We also note we are seeing excellent growth at Apple News, which does not show up in our sessions numbers because that consumption happens on their platform, instead, it shows up in our licensing line.

So it's a bit of movement from 1 plat -- not exactly but we've got declines in 1 platform that's pretty small at this point and then grows in another where we see a lot of opportunity. I'd say in some, we feel great about session growth across the portfolio.

And also when you talk about comps, we're optimistic for our entertainment properties as we move further into the year, given we'll be lapping the strikes. .

I just want to add one thing on that, which is, whether 8% versus 10% or 1 more day in the quarter or whatever, 8% growth in Core Sessions is excellent, where primarily U.S. businesses, generally, the Internet is not growing right now in terms of users.

And so what you're seeing happen is the folks who invested in content and we've invested an enormous amount in content and continue to invest an enormous amount in content, are being rewarded with increasing share of audience and we feel very good about that.

And again, whether it's 8% or 10% or whatever, growing in that environment and growing healthily in that environment is a real testament to a winning product. .

And then, Tom, question on Amazon's and the demand side integrations for D/Cipher. Look, I think it's credit to Neil and team that they've positioned us to be in the spot we are with D/Cipher, given the industry trends. The data science there, the technology that underlies it are very strong.

And we know whether it's Amazon as a brand or the brand that it represents through its retail media network or when you look across the whole brand ecosystem, companies are focused on privacy-friendly solutions and getting to -- away from -- getting to cookie-less platforms whenever that rolls out. .

We continue to have productive conversations with other large demand-side platforms and creating the capabilities in their infrastructure to utilize D/Cipher and offer cookie-less-based targeting. It's -- we also think the integration of generative AI will be a positive in the perception of investors.

And it's just, head down, blocking and tackling, executing the integrations and explaining the story but we are very bullish on the dynamics. .

Yes. This integration of generative AI just meant advertisers, not investors, although perhaps both. .

Of yes, sorry, advertisers. I have investors on my mind, but I meant advertisers. .

Advertisers. Thank you all very much for joining us. I know it's a busy morning and appreciate the questions and support and we'll talk to you next quarter. .

Thanks all. .

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