IAC(US:IAC)2023-11-08 20:22Financial Data and Key Metrics Changes - The company reported a decline in premium advertising revenue by 12%, which was slightly worse than the industry average, but overall performance marketing revenue accelerated to 22% growth year-over-year in Q3 [118][126]. - The revenue per monetized transaction for Angi declined about 11% year-over-year to approximately $40, while marketing costs decreased more modestly by 8% to about 27.5% [58][136]. Business Line Data and Key Metrics Changes - Core properties represented just under 80% of total sessions in the latest quarter, up from 67% in Q3 2022, indicating continued growth in core sites [6]. - The services business is currently viewed as healthy, with no further paring down expected, and the company is satisfied with its current state [44][55]. Market Data and Key Metrics Changes - The advertising market is experiencing softness, particularly in October, but trends have improved in November, suggesting a cautious optimism for the holiday season [25][105]. - The company is monitoring consumer spending patterns closely, noting that consumers are becoming more deal-oriented and waiting for promotions [25][57]. Company Strategy and Development Direction - The shift from lead generation to a marketplace model is a key strategic focus for Angi, aiming to enhance customer interactions and build brand loyalty [30][31]. - The company is prioritizing customer experience optimization, which aligns with profitability goals, as better matches on the platform lead to increased transaction value [66][75]. Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the holiday season, noting that while there are macroeconomic concerns, they are not seeing specific signs of a slowdown [25][105]. - The company is confident in its proactive actions to improve lead quality, which may have short-term impacts but are expected to yield long-term benefits [99][102]. Other Important Information - The company is actively working on improving the service provider and homeowner experiences, with significant improvements noted in retention and lifetime value of service professionals [10][20]. - The roofing business has been sold, and this will be classified as a discontinued operation starting next quarter for Angi, but will not impact IAC's financials [55][56]. Q&A Session Summary Question: Can you elaborate on the guide for the full year and its relation to revenue and margin? - Management indicated that the guidance is primarily driven by revenue softness due to proactive actions taken to improve lead quality, with no significant margin degradation expected [77][80]. Question: How is the advertising market performing, particularly for Dotdash Meredith? - Management noted a reversal in advertising demand in October but expressed optimism for November and the holiday season, expecting a mildly better macro environment for advertising [81][105]. Question: What is the rationale behind the buyback strategy for Angi versus IAC? - The buyback for Angi is aimed at offsetting potential dilution and is viewed as attractive under current conditions [108]. Question: What are the expectations for the services business and its growth? - Management believes the services business is in a healthy state and is not planning further reductions, with a focus on improving customer experience and engagement [44][54]. Question: How does the company view the impact of macroeconomic factors on Angi? - Management stated that the current challenges are more related to internal actions rather than external market conditions, and they are optimistic about future improvements [99][100].