IAC Inc. (NASDAQ:IAC) Q4 2022 Earnings Call Transcript

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The other area is making it clear to customers that all these opportunities exist for them. I think we’ve confused that a little bit. I think we’ve shown sort of too many things at once, or not enough things at once. And I apologize for this sounding a little bit muddled, because I don’t want to get into too much detail on the product. But we are capable of delivering the product that we know the homeowner wants. We just have to show them that clearly. Show them that when they want it and not force the entire experience through one funnel and then and then on that more narrow set of customers deliver a somewhat confused experience. Okay, and yeah, Joey said it but on that Dotdash Meredith, nothing that we’ve experienced so far undermines our belief in both the long term profit scale in the business in cash flow generation.

It obviously, doing $931 million of digital revenue in ’22 disappointed us. Part of that was the integration if we got it done faster, we probably too optimistic. We could have actually driven our playbook and activities faster, the bigger share was just getting hit hard by the ad market. But as we grow revenue, and particularly as we scaled e-commerce, and a lot of the high margin, e-commerce integrations which we’re seeing being proven out by Leo and team. All of those combined with revenues will be highly accretive to profitability. And we feel as good about the long-term margins there as we have at any point.

Dan Kurnos : Awesome, thanks.

Joseph Levin: Thank you.

Operator: Our next question comes from Youssef Squali with Truist Securities. Please go ahead.

Youssef Squali : Great, thank you. I have a question on the Dotdash and maybe just a clarification on Angi. So on Dotdash, obviously a lot happened since the acquisition happens. And I guess as you look beyond 2023 as the long term growth potential of the business, is it just fair to assume that that business overall, and I’m just talking about the digital side of it, not the print should grow generally in tandem with digital advertising? Historically, you guys made the case that you should grow faster because of the content because of the lack of exposure to things like IDSA, et cetera. Has that changed? Just kind of how should we think about growth beyond just 2023 for that business, maybe drivers there? And then the clarification is around just the recognition of revenues going from gross to net?

Who’s emerging, who is the merchant of record here? Because my understanding now is that you’re still getting paid by the customer and turn in and pay and service professional for some of these less complex services. Wouldn’t that imply that you may need to do it on a gross basis? I’m just a little confused on that front. If you can maybe clarify it, thanks.

Joseph Levin: I’ll let Chris do the gross to net. And say we are collecting the money from the homeowner. And then we are paying the service professional but it is correct that it has to be recognizing that based on the way the terms and conditions work now. And I’ll let Chris do more on that. But on Dotdash Meredith and the long term growth rate, we do expect to grow faster than the digital advertising market. And we should grow faster than the market. Again, right now, there’s a lot of things going on with the integration and getting us to the right place. But we are still, all of our content is clean content, meaning it’s all created by us is safe content. It is not covering controversial topics, it is good, safe, clean places to put advertising dollars at scale, number one.

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