IAC (IAC) Oppenheimer 27th Virtual Annual Technology, Internet & Communications Conference summary

Digital advertising and DDM performance

• Digital revenue returned to double-digit growth, with guidance for 15%+ growth in Q3, outperforming the broader ad market due to strong traffic, content quality, and effective monetization strategies.

• Health, pharma, beauty, and retail ad categories showed strength, while technology and home categories stabilized at lower levels.

• Direct/premium advertising, aided by the D/Cipher product, now comprises over half of premium deals, driving superior outcomes for advertisers.

• Programmatic advertising grew 36%, outpacing the market, attributed to a strong tech stack and high-quality inventory.

• AI licensing, including a partnership with OpenAI, is a growing revenue stream, with expectations for more deals and variable contract structures.

Brand strategy, M&A, and margin outlook

• Focus remains on leveraging established brands rather than launching new ones, with M&A considered for intent-driven brands that fit the tech platform.

• Digital Adjusted EBITDA margin target remains in the mid-30s, with ongoing investments in content, marketing, and technology.

• Spin-off timing for DDM is based on strategic fit and value creation, not tied to margin maximization; cash dividends possible once leverage falls below 4x EBITDA.

• Debt structure is flexible, with improved credit quality and ongoing evaluation of optimal financing.

Angi business transformation and market dynamics

• Consumer experience improvements include reduced outbound marketing and enhanced product features, with progress in NPS and retention.

• Pro-side changes focused on higher lead quality, better onboarding, and improved retention, with matching tools still being enhanced.

• Demand remains a headwind, with growth expected from better marketing and product improvements.

• 60% of jobs are non-discretionary, providing stability; lower interest rates and a more dynamic housing market could be positive.

• Long-term margin target for Angi is 20% Adjusted EBITDA, with recent quarters showing improvement.