Hello, and welcome to the IAC Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Christopher Halpin, IAC's COO and CFO. Please go ahead. Christop

Thank you. Good morning, everyone. Christopher Halpin here, and welcome to the IAC Second Quarter Earnings Call. Joining me today is Neil Vogel, CEO of the newly rebranded People Inc. IAC has published a presentation on the Investor Relations section of our website today entitled Q2 Earnings Presentation. On this call, Neil and I will provide some introductory remarks referencing that presentation and then open it up to Q&A. Before we get to that, I'd like to remind you that during this presentation, we may make certain statements that are considered forward-looking under the federal securities laws. These forward-looking statements may include statements related to our outlook, strategy and future performance and are based on current expectations and on information currently available to us. Actual outcomes and results may differ materially from the future results expressed or implied in these statements due to a number of risks and uncertainties, including those contained in our most recent annual report on Form 10-K and in the subsequent reports we filed with the SEC. The information provided on this conference call should be considered in light of such risks. 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 earnings release, investor presentations, our public filings with the SEC and, again, to the Investor Relations section of our website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Now that we've covered that, let's turn to the presentation. On Page 3, IAC's businesses continue to seize momentum and make excellent progress against our goals in the second quarter of 2022. Dotdash Meredith rebranded as People Inc., a new name with a storied legacy, befitting a company where people, that is, human experts, create the premium content that people, our consumers and readers, seek for entertainment and information. We truly believe People Inc. achieves that by providing superior content across superior brands using superior technology. This quarter, despite the volatility and uncertainty in both the macro environment and open web, we're happy to report that People Inc. returned to core sessions growth and achieved 9% Digital revenue growth, accelerating from 7% in Q1 and at the high end of our guidance. We were also thrilled to complete a $1.4 billion refinancing of our debt at People Inc. in June, replacing the original acquisition capital structure with new bank debt and bonds at attractive pricing and 5- to 7-year maturities. Neil will go into more depth on People Inc. shortly. MGM reported second quarter earnings last week and demonstrated the power of its diversified gaming portfolio, with strength in digital, the regionals and Macau offsetting softness in Las Vegas. We're particularly excited about BetMGM's strong results, 36% net revenue growth in the second quarter and increased guidance for the full year to at least $2.7 billion of revenue and at least $150 million of EBITDA. The digital gaming opportunity at MGM has always been a core pillar of our thesis, and it is great to see those assets performing so well. Our second largest wholly owned business, Care.com, revitalized its product and brand in June, a key step in its comprehensive plan to reenergize growth in its consumer business. Care also unveiled a fresh new look and launched a new marketing campaign across its offerings. As we will discuss shortly, while it is early days, we are seeing promising signs across engagement metrics. Finally, across consolidated IAC, adjusted EBITDA increased 15% in the quarter, and we are guiding to $247 million to $285 million of EBITDA for the full year. On the capital allocation front, it was a quiet quarter following the completion of the previously announced $200 million in buybacks. As our Chairman, Barry Diller, noted in the remarks included in our earnings release, we are actively pursuing M&A opportunities and hoping some visibility in the economic and trade outlook will lead to more price discovery and deal activity in the back half of the year. As always, we continue to analyze further buybacks of our shares with our corporate cash balance while also exploring strategic divestitures of noncore businesses to bolster that cash balance. Now let's go deeper into our 2 largest wholly owned businesses. With that, I'll turn it over to Neil.

Thanks, guys. One of the things we just did, which was change our name to People Inc. from Dotdash Meredith. I think this is a very good time for us to reset and reflect on where we sit in the market, reflect on the media markets and give you guys some context as to our strategies and what we're doing. And I think the thing we're most excited about the People Inc. name is Dotdash Meredith was a name of convenience for us. We put together the names of 2 companies. We didn't want to offend anybody. And we wanted to live with it, and I'll be a bit more generous than our Chairman, Mr. Diller, who did not like the name at all. I was happy to live with it until we could really find something better, and we did. And it turns out, the name we wanted with emotion and aspiration and ambition and simplicity baked in was People Inc. It's the name of our hero brand. It's sort of been with us the whole time. Much like great businesses like Coca-Cola, we feel like the flagship brand should be the name of the business. And rather than having to say we're Dotdash Meredith and then the first thing you say is we're People, we can now just say that we are People. But I think the thing that got us most excited and it sort of kicks us off into the rest of the story is what People also means. And it means that we are content made by people for people. We are very aware and embracing of AI and things -- other things in the marketplace. But it's really important that experiences of our experts, our writers, our product testers are paramount to our brands, and many of these brands have a 100-year history relating to people. And People Inc. felt like a fitting name. And there's a little bit of Easter egg in there for those of you who like watch the media inside baseball. It is a little bit of a play on the old Time Inc. name, which again suggests some of the best brands in media. So that was Slide 4. Let's go to Slide 5. And we're going to zoom out for a second. And there are 2 things that we have that we think are going to propel us into the future. One is an incredible series of iconic brands. And two, we have scaled audiences. And it's helpful to zoom out and look at media and the type of media that we do. So food, home, tech, travel, beauty, style, entertainment. 30 years ago, these brands were exclusively communicated in some form of print. Then that changed. And they -- the content and the relationships all moved online. And when they moved online, that's when we got in this business, and we took great advantage of that transition from off-line to online. And by making smart investments and by being very disciplined in how we did things and by recognizing the power and permission of these brands, we built a really strong O&O business, owned-and-operated websites that really grew and put us at sort of like the top end of the brands in each of the categories in which we compete. Now that business was a Google-driven business, right? And if we don't go back too far, Google was -- 70%, 80%, 90% of the track on the open web came through Google, and we got very, very good at Google. And we're very successful, and we ended up buying Meredith and doing these things. But we also noticed around 3 -- coming out of the pandemic, 3, 4, 5 years ago, Google started to send out less and less traffic to people like us, to publishers and to others who created content. And that is Google's prerogative, right? So we're like, okay, we need to figure out how we're going to live in a world where Google traffic might not be the driver of our growth. And then add to that, 2 years ago, ChatGPT launched commercially, and we saw that. And we had a very faithful meeting where we sat and met with Sam Altman and we saw ChatGPT right before it launched. And we said, you know what, this is going to be a catalyst for change for us. We need to connect directly to our audiences, and we need to connect directly to our advertisers, and we need to have leverage here. So knowing that Google is favoring Google results, doing things with Reddit, knowing that ChatGPT is coming around, there's going to be a search answer replacement, what can we do? And if you look at Slide 5, Slide 5 is the outcome of a process that we really started 2 and 3 years ago. And if we can go left to right, we have 3 large buckets of owned audiences, off-platform audiences and audiences we can address. The owned and operated audiences, the far left, is what is still a very robust open web business. And we talked a lot about sessions. We grew sessions again this quarter, and that is a business that is going to be the underpinning of our growth going forward. But what we have really done over the past 2 years is build other assets. We've built a tremendous e-mail business. Our Print business is strong. We built a big events business, a very big syndication business. And our owned and operated sites and our owned and operated assets are very vibrant. To that, we've really added incredible off-platform audiences across Apple News and YouTube, at Instagram and TikTok. And this is the process of lots and lots of investment and lots and lots of time from us. And the way we run the business now is we look at our business and say, okay, we need to aggregate audience from as many sources as possible, an incredible diversity of audience sources. We have a term used internally called Google Zero. What happens if Google goes to 0? What happens if Google no longer sends us traffic? Well, I think we're going to be very healthy. And then the third thing we've done is taken our most valuable asset, which is our data and the first-party data that we know about our audiences, and we can extend that data across the open web. And we've talked a lot before about our D/Cipher ad targeting that allows us to contextually target based on visits to our own sites. And by allowing us to take that data and spread it across the open web, so we now can target advertisements off of Dotdash Meredith. And what that does and a lot of you guys have asked is that really expands our addressable market. We are 4 to 5x in addressable market if we can use our data to target other People sites than our sites so you can get our quality of performance and do it around the Internet. So if you look at this slide, and you say, okay, we've got a healthy open web business, we've got all these incredible new assets underpinned by our world-class brands, we have these rapidly growing off-platform audiences, and we have these addressable audiences well beyond our owned and operated assets. I like our pool of assets. And I feel like we have what we need, the audiences, the brands, the technical skills and the products to hit the revenue goals that we've laid out for everybody. So if you go to the next slide, this is some factual background to what we just talked about. And if you look at the left, you can see core sessions. These are sessions to our core sites. And you can see over the last 3 years, from '23 to '25, core sessions have grown, while the percentage of traffic from Google has shrunk. Now there are 2 reasons for that. One, Google is changing their search page rapidly to favor things Google chooses to favor. And two, that is the impact of AI. When people talk about the impact of AI on our business, they're really talking about search for us because as AI competes with Google and Google puts AI on their page or someone chooses to go somewhere else for search, there's no guarantee we get a link like the old days like we used to get a link. So you're seeing our traffic from Google go down while you're seeing our overall sessions go up. And that is everything we talked about on the prior page. The second thing, the middle chart is off-platform views, and we've done an outstanding job across our brands, whether it's People or Travel + Leisure, Food & Wine or Real Simple, of building off-platform views. And this really started actively investing in this in 2023, 2024, and you can see the results so far in 2025. Now about 1/3 of our Digital revenue comes from sources that are not sessions related, that are not sessions based. And then you can go to the far right, and you can see we've grown Digital revenue all the while. And we are very proud that as we've made this transition from what was a print-based business to a digital owner-owned Google-based business to a we have to be everywhere with these assets business, we've grown revenue the entire way.

And just to add on a couple of themes there. The -- going to core sessions, that decline in the dark blue box from $1 billion to down to $600 million, that is partly AI and also, predating that, the numerous changes that have been made to the search page over that time, including Reddit being heavily prioritized as well as cluttering of the search page. So as Neil talked about, the -- while the portion of our traffic -- of our sessions that comes from Google Search has declined from 52% to 28%, through the proactive efforts he and the team have driven at People Inc., we've increased our non-Google Search sessions at a 29% CAGR and believe that we can still continue to fill that hole. The second point, as Neil said, those sessions generate 64% of our Digital revenue. That's a key theme. So when you think about the remaining Google Search exposure, it's that 28% of that 64% approximately that we're talking about. The off-platform views are a component of our non-sessions -- our 36% non-sessions-based revenue along with things like licensing, related performance marketing, et cetera. So we wanted to get across in this slide, relative to the broader AI question, how much Google Search has come down and also the diversification in our Digital revenues and the various growth vectors we have from here.

And we'll talk about that. It's a good transition to the next slide. Our 3 primary avenues of monetization: advertising revenue; performance marketing, a proxy for e-commerce; and licensing. All of our revenue sources are growing. Our brands are super strong. Our execution is good. We feel very good about the advertising business. We're very excited about our D/Cipher+ business that we just talked about a little bit that allows us to use our proprietary data to help People buy across the open web. We think there's a big CTV opportunity in there as well. Performance marketing, e-commerce, we work very closely with the biggest retailers online. I think in most cases, we are their largest referral partner, and that's been a really robust business. And even in our licensing business, which this quarter has -- we're 2/3 lapped the OpenAI deal that we signed last year, there's a lot of strength in places like Apple News and in Walmart. And it speaks to the strength of our brands. And Chris, do you want to do the next slide?

Yes, turning to Page 8. Thanks, Neil. On the next page, one topic we wanted to proactively cover today is our Digital margins of this past quarter. People Inc.'s Digital margins have been steadily scaling over the past few years with higher revenue. We reached just under 29% in FY '24. As a reminder, on a quarterly basis, EBITDA margins increased across the year, with the lowest margins in the first quarter and the highest margins in the fourth quarter due to revenue scale. And as we've grown Digital revenue, we have expected to see incremental Digital margin scale. You can see that demonstrated in Q1, where margins were up about 100 basis points year-over-year on 7% revenue growth. In Q2, however, Digital EBITDA was essentially flat year-over-year at $63 million, while revenues grew 9%, representing a 24% adjusted EBITDA margin. The increased cost, and this is featured at the bottom of Page 8, that reduced those margins derived heavily from the strategic investments Neil talked about across new products, technology and channels, everything we're doing to set the business up to grow. We expect and are confident in getting ROI of those investments, including in the third quarter that we're in this year. And so we expect adjusted EBITDA to grow year-over-year, you can see the guidance on the right, in Q3 on 7% to 9% revenue growth -- Digital revenue growth. And we expect margins in the 25% to 28% range and then get back to real margin scale in the fourth quarter. So with that, let's turn to Care.com on the next page, which continues to be the largest online marketplace for families and individuals looking for household caregivers across children, seniors, adults, pets, housekeeping. The company offers its services through 2 channels: consumer and enterprise. The left side of the page summarizes the direct-to- consumer segment, where care seekers go online, sign up, post jobs and are matched with care providers. Despite some consumer revenue erosion over the past couple of years, Care remains the clear leader in the online space, holding it's #1 brand position, with 62% of traffic coming from organic sources, primarily direct navigation. On the right side of the page is our enterprise business, where employers contract with Care.com to provide backup care days and employee access to care services as a benefit to their employees. Today, Care has relationships with over 700 employers covering 31 million employees. Financially, revenue is basically evenly split between the 2 segments, with both offerings utilizing Care.com's database of approximately 700,000 caregivers. The 2 businesses, though, have seen a clear divergence in performance recently, with enterprise growing solidly as more employers provide backup care as a benefit to their employees and the employees increasingly utilizing the product. But as discussed previously, consumer revenue has declined from pandemic highs since 2022. That's due to a combination of core deficiencies in the product experience, suboptimal marketing and some macro headwinds. Turning the page. That brings us to the Care.com relaunch in June. The outcome of more than a year of work, the new Care experience boasts fine-tuned search capabilities and enhanced messaging and matching, offering care seekers a smoother experience as they hone in on the perfect caregiver for their essential job. In many ways, Care.com's biggest challenge has not been liquidity on either side of their marketplace but instead optimizing the process for families and providers to match, connect and communicate on the platform. We feel good about where the product is today and where it is going. On the right side of the page, Care has held off on marketing over the last few quarters until the product was ready for prime time. In parallel with the relaunch, Care.com has rebooted its visual identity with a new brand and integrated marketing campaign, highlighting the breadth, quality and ease of its offerings. Product and marketing have been a challenge over the last few years. Now they are working in concert to propel the business forward. In the light green, we highlight the further areas for optimization as Care.com continues to refine its product, improve pricing and packaging and push more aggressively into senior care and pet care, 2 attractive growth areas that we're ready to aggressively pursue now that the building blocks are in place. On the metrics front, it's still early, but across June and July, we have seen core consumer metrics, direct navigation visits, sign-ups and subscriptions achieve stability and growth really for the first time since 2022. A lot more to do, but we are moving on the right path. Closing out on Care, Page 11 summarizes the financial picture, a major pandemic boost followed by growth in enterprise and softness in consumer over the last few years. Profitability has remained solid, with $46 million in adjusted EBITDA and minimal CapEx. The key for Care is to reignite revenue and generate the incremental margins we believe are possible. Turning to Page 12, we would reiterate that our discount remains pronounced in our mind. While MGM share price has risen since last quarter, the implied value of our private holdings on the right remains negligible. As we've said before, we will continue to drive IAC forward to unlock value from those holdings, drive simplification and shrink that discount as laid out in the strategy overview on the following slide. Execution, capital allocation and catalysts, these are the pillars of our focus and how we believe we will reduce that discount. Turning to guidance. We have tightened the range of IAC consolidated adjusted EBITDA for the year to $247 million to $285 million, with the midpoint relatively unchanged versus prior guidance. At People Inc., we have reiterated full year Digital revenue guidance at 7% to 10% and brought down the high end of full year adjusted EBITDA guidance from $350 million to $340 million, while maintaining the bottom end at $330 million. This reflects our confidence in the revenue outlook across advertising, performance marketing and license, but with increased spend and investments in new products like the D/Cipher+, MyRecipes and the People app, as well as more than $3 million in higher health care costs hitting us in the back half of the year. For Care, we maintain guidance at $45 million to $55 million. And at Search, we brought up the low end of it. Finally, on Corporate, we continue to make progress on lowering run rate costs and have reduced the range to $110 million to $115 million, which includes approximately $20 million of onetime costs. With that, let's go to Q&A. Operator, can we have the first question, please?

[Operator Instructions] Today's first question comes from John Blackledge with TD Cowen.

So really helpful what you included in the earnings deck on sources of traffic and how they build into revenue. Can you just go into greater depth on how you see the trajectory of sessions, including Google Search and off-platform views and kind of how that translates into revenue and margin? And then second question, can you just walk through puts and takes in the 2Q People Inc. Digital revenue? And how do you think about Digital revenue growth and Digital margins in the third quarter?

I'll do sessions first, and I'll let -- maybe Chris will do the margin thing. I think you're going to see sessions -- O&O sessions. I think they're going to be -- the third quarter will be down a little bit. We have a very tough comp. But I think going forward, flat to slightly up is a fair expectation for us. Again, we're very actively investing and hustling hard to keep O&O sessions up, and I think our results prove that. I think off-platform, you're going to see continued growth, probably continued growth somewhere around the trajectory where we're growing now. Now the numbers get bigger, the percentages are going to get lower. But you're going to see real growth there. It's a real investment area for us. I'll let Chris will do the -- no, he'll take the margin piece of this.

Yes. And on margins, we view both on-platform and off-platform as generating attractive EBITDA margins. And we are capable to do that because of the technology and offerings that we have. When you -- I said before, last year, on a consolidated Digital basis, we generated 29% adjusted EBITDA margins. We view non-session revenues as slightly accretive to that margin. And then sessions, on a marginal -- on an incremental basis, session revenues are more accretive. One of the natural questions we'll get is, is all this off-platform session, non-session revenue being done at low margins? It is not. We feel good about the margins where we can do it and that we will continue to scale off that 29% adjusted EBITDA margin. And that includes D/Cipher+ as well as off-platform views on third party.

And we'll address the next question, which is the exposure to the off-platform views. We have really good diversity across all those sessions. It comes from a whole host of different places and different sources at different points in their life cycle. So we feel pretty good about when you look at the diversity of what's now driving core sessions and the diversity in off-platform sessions, I think the diversity is a real strength for us.

And then I think your second question, John, was about Q2 and Q3 revenue. In Q2 Digital, advertising grew 5%, led by 2% core session growth and some improvement in monetization. We knew it was going to be a choppy monetization quarter as we signaled on advertising last quarter between -- given all the disruptions around tariff and trade. For those interested, direct was solid. Direct premium sales were solid, led by health, travel and tech, offsetting, not surprisingly, CPG, food and bev and home. Programmatic pricing was flat for much of the quarter but began strengthening in June and has continued. Currently, we're running up about 10% on pricing year-over-year. Last quarter, performance marketing was very strong at 14% and licensing also solid at 20%. That's real strength in Apple News. Neil and team are doing a fantastic job there. Also some performance at Walmart and then some OpenAI. All in all, strength really from our diversification of -- the diversified Digital revenues that Neil talked about previously. For the third quarter, we do have some tougher comps on traffic with the Olympics last year and some entertainment. So we'd expect core sessions to be slightly down. Off-platform growth and improved monetization should drive advertising revenue growth despite that. Performance marketing continues to be excellent. Especially if you want a window into the consumer...

Consumer is very strong.

Prime Day was great for us in July. And licensing should continue to grow, led by Apple News, Walmart and other areas. All in all, we're guiding the 7% to 9% Digital revenue growth in Q3 and reaffirming 7% to 10% for the year. And then on margins, as we discussed previously, we're guiding to 25% to 28% Digital adjusted EBITDA margins in Q3. Operator, next question?

Yes, that comes from Eric Sheridan with Goldman Sachs.

Maybe following up on People first. I know in the prepared remarks, you made a couple of statements about the decisions, but I just want to go a little bit deeper in why this is the right brand and why the team and you landed on this to go forward and how you plan on sort of positioning the brand in the broader digital media ecosystem looking out over the next couple of years. And the second question would be, you led with the quote from Barry in terms of the press release that talked a little bit about deployment of capital and the current state. I wanted to better understand what you look at as the M&A landscape you're facing right now. So the alternative of returning capital to shareholders will be deploying it into external opportunities. And maybe a quick update about how you see that landscape right now.

I'll take the People thing first. So if you go to -- let's talk about our goal first. Our goal for the company for People Inc. is we believe we can have platform scale with all the benefits of premium branded publisher environments. And we needed a name to reflect that. And again, the Dotdash Meredith name was quite simply putting together Dotdash and putting together Meredith. I don't think either of those names had any particular residence in the marketplace. People does. Everybody knows what People is. Again, it was always the first thing you said when you're explaining what we did. But what we really liked about it is it's simple, it's clear. It has that second meaning about what we are. We're people making content for people. In it is energy and ambition and simplicity. And look, you can make 1 million jokes about it. Dotdash Meredith sounds like an oil company. People Inc. sounds like a media company. And if our ultimate aspiration and where we would like to end up, again, platform-level scale with premium branded performance and all the advantages of these like beautiful safe environments, both online and off-line, if you want to do that, you need a name that reflects that. And we wanted a name that when people are talking about the great media companies and the -- where we want to be like -- again, we're obviously not here yet, but you have to aspire to something. I'd like it to be Meta, Comcast, People, right, Google. And it just hangs way better. I think the reception since last week across our clients and our advertisers and, really importantly, our employees, everybody was just really happy and really energized. And it just -- as Mr. Diller said, it just -- it's easy, and it fits. The only regret I have is we probably should have done it a little bit sooner. I may have been the resistance there, but we're really happy with where it ended up.

Thanks, Eric. On M&A landscape, we are actively working, looking at things small and large and, as always, through 2 prongs: through our existing businesses, particularly People Inc. as well as new platforms. Look, we look for ways to be creative, think differently and find assets that we have a different view on or an advantage. We continue to actively pursue acquisition opportunities through People Inc., looking to build on its premier brands and technology. I'd say the more we continue to -- as everything Neil said and is doing, to make progress there, in many ways, the more opportunities we see that we have a particular advantage on. So that's a key area of effort. On a new platform basis, we've been evaluating both public and private opportunities, platform builds as well as carve-out opportunities. The investment focus, we talked about this last call, can be put in 2 buckets, quality-defensible businesses, particularly where the first one is particularly where AI disruption or disintermediation, platform risk, everything is reduced. We've talked previously about experiential businesses that cannot be disintermediated, digital interactive businesses like gaming, others where the consumer is in the moment and you can -- you don't have the overhang of AI and other products. And then we're also looking at areas where you can find AI applications to sectors that we know well. And with the growth of agentic AI, you can see AI strategies in a host of sectors that we have spent time in previously at IAC or others of us in our careers and, I won't get too specific, but are trying to get to reasonable values on those opportunities. We've not wrestled the right one into the boat yet, but continue to work hard and focus. And then as I said before, hopefully, the macro environment will allow for more price discovery and agreement between buyers and sellers. Operator, next question?

That comes from Cory Carpenter with JPMorgan.

This is Danny Pfeiffer on for Cory. For the first question, can you comment on the current penetration of Google AI Overviews? And then for the second, is there any further color you could provide on the pause in share repurchases in 2Q after the disclosed amount in April?

Yes, AI Overviews, I think we said last quarter, we were on about 35% of our searches as expected. That has rapidly expanded. It's probably on more than half of the searches where our content appears. Some properties less, some properties more, but probably around 50%, 55%. Again, we run through the math that definitely depresses CTR, but it's the reason why we're doing everything we're doing, and it's the reason why we're investing behind our brands. It's the reason why we are doing things like the People app and MyRecipes and some more things you're going to see from us to connect directly to our audiences and directly to our advertisers. And in spite of this, we're holding sessions steady. We're growing them a little bit. So -- but yes, there's -- look, we don't -- again, we said -- we run this business as if Google from search is going to go to 0. Now it's obviously not going to go to 0. But that is the discipline with which we are approaching our investment and how we see the future media landscape and where audiences are going to come from. And again, part of being in media for as long as we've been in it, it is a constant state of change, and this is just another state of change. And we have been dealing with Google and Google changes and Google disruptions for a long time. And this is nothing new. Perhaps the remedy is a bit different, but it feels -- it all feels very familiar to us.

One comment, and I'll go to buyback for a second, but one comment I'd add, we've seen research that estimates the step-down in click- through. There was a Pew report of others. Our observation relative to the decline in click down, those reports very much overstate the decline for a premium publisher like People Inc. because there's a whole swath of searches that have been 0 click for years that never led to referral traffic from Google and are not -- haven't been sources of traffic for People Inc. and our properties for years. So I think some of those -- you really need to do those studies right, normalize for what was searches, which is why when we talk about searches that are germane for People Inc., what are searches that produced Google SEO traffic historically, and then what's the change in that? There is a step-down, but not nearly as big as we're seeing.

It's almost like you have to look at it -- it's like the marginal step-down.

That's the key element there. And again, Google Search is 28% of our traffic. So it's 55% of 28% and then the step-down there. So the -- manageable. In terms of our share repurchases, we tried to signal some of this last quarter. We announced that we completed $200 million in buybacks. We said we were going to focus on M&A opportunities while continuing to look at our stock price. We definitely see value in our stock and know we have the opportunity to buy it and take advantage of that embedded discount. We are actively exploring opportunities to deploy capital and create compelling returns for shareholders that way. I know our time horizon may be longer than some shareholders will want, but we believe we've got opportunity to do both at the same time, and we will continue to analyze both. And we -- definitely, as we are together with our Chairman, Barry Diller, and our leadership team, we are contemplating both on an active basis. Operator, next question?

And that comes from Stephen Ju with UBS.

Okay. Great. I think your Slide 9, talking about Care was pretty striking because I think your trailing 12-month revenue is $360 million. And that's material. That's not even 1% of the addressable market that you're calling out of $375 billion. So the optimist in me wants to think that given the white space ahead of you, you should be growing much faster. So what factors are under your control? And what needs to happen at the industry level? What needs to happen from a consumer perspective? And what needs to happen from an enterprise perspective?

Thank you, Stephen. So you hit on it. It is obviously a massive market that Care.com participates in, has in front of us, addressable market. And when you think about the needs of families for Care, both in-home and out-of-home across children, seniors, adult care and pets, it's a national challenge. It is something that the households themselves struggle with. And there's a theme of what we call the sandwich generation that sits between an ever burgeoning number of seniors who require care as well as their own children. And that is a 2-pronged effort and then certainly, in certain cases, their pets as well. That is a demand that's an ever-increasing drain on the financial resources as well as the mental energies of families to find and maintain care. And it is a tailwind. For Care.com to fully take advantage of that TAM, they need to continue to grow demand of care seekers and supply of caregivers on each side of the marketplace and then get better and better at matching those 2 parties and making transactions easier to execute in the platforms. What does that mean in practice? First is drive consumers from using off-line methods to find Care and turn to our platform first. To do that, that is very much front and center in what we're doing of improving the product experience to make it easier. There's a big element of Care of repeat visits, particularly for those who fulfilled jobs the first time. The easier you make it, the smoother the experience, the higher the quality of the match, the more likely people are to come back and repeat, either for another child caregiver if there's turnover there or to solve their senior or pet needs after a good experience on child or vice versa. The second, and this is a key step, is bring to market new pricing and packaging that meets consumer needs where they are in the journey. When you have the diversity of offerings, child, senior, pet, daycare, in-home care, emergency backup care, et cetera, you need different offerings on a price point, on a subscription versus transactional, et cetera, to meet the specific needs of a consumer coming to the platform. We've said this before, but we have 1.6 million nonregistered monthly visits, and Care is only monetizing a small percentage of them or only serving truly a small percentage of them. That means a lot of people are showing up and not seeing the entry point or the offering that is optimal for them. That's the opportunity of the business. It's also been the biggest challenge. But Brad Wilson and team are focused on creating entrée to the platform, limited-time use, smaller entry as well as upsell value packages as people become more familiar with the product and can use it going forward, things like background checks, et cetera, to offer greater flexibility and easier entry and access. And then finally, I talked about this earlier, we've got to continue to expand our vertical footprint outside of child care, which is our predominant category today. Senior care is a burgeoning marketplace, and this next-generation will be much more comfortable using digital to line up caregivers for their parents. And then pet care is a massive area of spend. We have liquidity there. It's really around putting -- and we've improved the product. It's really around making the investment there to drive growth. So in sum, Care has never lacked for growth opportunities. The hurdle has been our product and marketing. We feel good about where we're going. It's going to be -- continue to make progress every day and build the business. Operator, next question?

That comes from Jason Helfstein with Oppenheimer.

Two quick ones. Neil, how are you thinking about long-term revenue growth for People? And I guess, how do you get there from the 9% we're doing today? Just if you could kind of maybe bridge it to the aspirational goal. And then second, any thoughts on expanding licensing revenue beyond OpenAI as it relates to other LLM companies, who, I'm sure, are using your content?

Yes. I'll do the long-term revenue. I think we've said and we believe a long-term goal for us is 10% revenue growth. And I think it's a combination of what we can do on our O&O properties. We've talked about where monetization continues to get better as well as all the growth we have off-platform and in events and all the other things we're doing. So 10% remains our North Star goal, which we feel pretty comfortable with in the long term. In terms of licensing revenue, it is something we are obviously very interested in. I think there's 2 things going on in the market to make more licensing deals happen. Sort of 1 of these 2 things is going to have to happen, and they're not necessarily mutually exclusive. One, you're going to have to see a change in tenor or change in approach from the LLM creators. And two, we're going to have to manufacture some more leverage for ourselves. And you've seen that in what we've done with Cloudflare where we're now blocking almost all AI crawlers other than OpenAI, where we have a deal, and Google where we can't block them because they use one crawler for search and AI, which is a different discussion. But what we've seen in the last few weeks, and again, nothing is imminent, but we have seen some of the larger players approach us and come back to sort of reignite some discussions around how these things would work. There's lots of different ideas and lots of different economic models. We are very, very active here. You've obviously heard Mr. Diller and me and Chris and pretty much all of us talk consistently about what we believe, and we believe that if people are going to train and use and display our content, we need to be properly compensated for that. And hopefully, we're heading in that direction, but we will see.

Just can you clarify the 10% for People? Is that total or Digital? I was asking Digital, but if you want to give both.

10% for Digital, and we've said Print will continue to secularly decline. The good news is as a weighted average percent of our total revenue base, it continues to decline. We've driven low single-digit total revenue growth the last few quarters. I think that should continue as we drive 10% plus Digital.

Well, we've always said that Print will offset our Corporate expenses, and we very much manage that business for cash flow and for the branding marketing value of having Print in the world, which is fairly material.

Thank you, Jason. Operator, next question?

Yes, that comes from James Heaney with Jefferies.

Search revenue came in a little bit lighter than expected. Can you just talk about when we should see stability in that business? How much of that is an intentional pullback versus more market-related weakness?

Yes. On Search, we manage that business for margin. And there are a number of different revenue streams that we are operating in at any given time. And within the broader Google Search ecosystem as well as search on other platforms, there are different trends, different competitive dynamics. You can see in our Q2 Print, despite coming in below our revenue guidance, we came in above our adjusted EBITDA guidance, and we raised the midpoint of our full year adjusted EBITDA. That's a reflection of identifying some higher-margin channels that we were able to pursue in the quarter. And again, we're coming back to gross -- essentially gross profit on our -- on the search activities and advertiser we're driving and then running that against our OpEx. I'd say it's been a multiyear decline in Search that's been pronounced on the top line, and that has flown through to EBITDA over the last few years. We are seeing stability. It's been second derivative positive over the last few quarters. The market is hopefully finding some level. But again, the Google Search ecosystem is always volatile. We'll feel good about it at one point, and then it will switch again. That's the nature of what we're doing with. We do feel good about our ability to maintain margin and profitability there and on our guidance for adjusted EBITDA. Operator, next question?

That comes from Dan Kurnos with The Benchmark Company.

Yes. Great. Neil, nice to chat again. Maybe just going back to Jason's question. If we just think about D/Cipher+, maybe a good time to kind of refresh how you're thinking about the TAM since you alluded to new potential markets like CTV and kind of how it fits in this decreasing signal loss, but increasingly self-selecting environment, especially if agentic browsing picks up. And then Chris, kind of your point on AI industry reports. I mean a lot of the recent data actually suggest that traffic click-through quality has been improving for certain brands. So maybe just more of a question for you guys on where you sit on the data and analytics side, if you're kind of in a good position to track this evolution even as you guys prepare in case things get worse from a Google perspective.

So I'll do D+, and then Chris can pick up after that. So we're really pleased with D/Cipher+. Jim Lawson, who is an experienced executive we brought in to run it, he's doing an excellent job scaling. I think we have said this before, and we believe it's going to be -- it should be a material contributor into '26 numbers. And right now, quarter-over-quarter, the numbers, albeit small, they look really good. And what we're seeing is, again, for those less versed in the story, what D/Cipher+ does, it allows us to use our first-party, intent- based contextual data, understanding the relationship between our content, use that to target ads on other sites off-platform. So we can go and understand that inventory, buy it and essentially resell it to our pool of advertisers. This obviously greatly expands our total TAM. We did some work since our last call together because a bunch of you guys have been asking for this. We think it's 4 to 5x our -- the existing market size that we have on-platform, and that doesn't actually include CTV. CTV is very interesting because we found a way to combine our signal with the identifiers needed on a household level to target CTV. We've actually run a few of these deals. They seem to be working really well. It's too early to make a call, but we feel very good about the CTV opportunity. You said it, CTV targeting, for many reasons we don't need to get into today, is fraught. It doesn't really work that well. It's a little bit messy. This is a very clean way for us to use our data to target CTV. And if we can add it, that just -- that TAM number is going to get bigger. I think this is a really important strategy for us, D/Cipher+, because it's very much in line with what we do. We are extremely good at getting people to our owned assets, be them websites, be events, be apps, be MyRecipes things, be off-platform places. And we've always had this data product that we use to target our own ads. What this is, is a great unlock to take what we think is the best first- party data potentially in media to this real intent-driven contextual data and use it to target across the open web. And if this performs the way it performs, we're very excited about the future.

Thank you. And on the -- Dan, when I talk about click-through, there's -- we have been running our searches. This is the data we've been reporting about frequency. There's -- it's less clean on traffic that comes via attribution within an AI Overview versus a consumer just skipping the AI Overview and going down to the SEO links. What we'd say is it is, in many ways, just a continuation of the cluttering of the search page that's been going on for a number of years, with greater SEM sort of thrusting Reddit directly into the top of the search results in there, YouTube, e-commerce. We agree with you that the step-down in click-through is -- I said it before, not -- nowhere as dramatic as these reports are citing. It is something, but it feels like more of a page knock rather than -- or page fill-up rather than a significant change in the search behavior. I would say, and I'll turn it back to Neil in a sec, but I would say there is an element of the underlying content that the consumer is looking for. So the more commoditized that content is, à la historical SEO, the better AI Overview will answer and be the endpoint of that search versus what we tend to do in the core of our -- or the foundation of our core brands is much more in-depth premium content where you want to go to the actual reference page, source and learn more. And so again, as we've said before, the decline in our click-through may just be fundamentally less than other publishers that have been heavily [ advertised ].

We've been out of the commodity content business essentially for some time. This is not a new phenomenon. Remember, Google was doing things like answer boxes that was knocking some of this stuff out years and years ago. And again, I just go back to the math that Chris shared earlier, right? It's Google Search and core is 28% of traffic. Overviews, to keep the math easy, call it on 50%. It's a little bit more than 50%, but 50%. And then we lose, depending on the search, somewhere from very little to 20%, 25%...

So the baseline.

Yes, [ if we check with ] the baseline, it's lower than that. We're -- it's very well boxed and the sort of content we're making is moving away from what is being disintermediated is the point.

Operator, next question?

That comes from Matt Condon with Citizens.

My first one is just on the core D/Cipher product. Do you still believe that there's an opportunity to improve yields in your O&O properties just through algorithmic improvements or whatnot? And then my second one, just on Care.com. Understood the enterprise segment is lapping a more difficult comp there, but still declined 7% quarter-over-quarter. Can you just talk about trends you're seeing on the enterprise side of that business?

Yes. The answer to that is yes. The yield opportunity is still there. The smarter we get about our audiences, the smarter we get about targeting, the better D/Cipher gets on platform, the more we're going to be able to do. Also, as the value -- as we increase the value of our brands and the value of our content, I think we're seeing the ability to increase value on O&O was the first question. And Chris, there was the -- I'll let Chris handle the second question here.

Okay. Yes. I mean the -- on enterprise, I think the 7% you're referencing is a sequential decline quarter-over-quarter. There are elements of seasonality when you think about flu season or sickness in the winter produces more usage of backup days, and then it similarly goes up in the -- it tends to go up in the summer a lot when kids are out of school, those types of things. And then again, in many ways, on a sequential basis, Q2 is our lightest revenue quarter. Any given quarter, there are different elements. You basically have a subscription and a utilization element in that business. The utilization, you'll have peaks and valleys depending on where different employers are and the pace at which their bank of backup days get used. So long term, the sectoral tailwind of backup care and access to platforms like Care, we view as increasingly a table stakes employee benefit, but there will be some ups and downs quarter-to-quarter. Operator, one last question.

And that comes from Ygal Arounian with Citi.

Just one follow-up on Care and one on digital gaming. Neil, in some of the press articles, when you rebranded People, you talked about we've got 40 brands, and I don't think all of them are going to last. Can you just expand on that a little bit? And I understood that the core sessions are driving most of the growth. But does that create any sort of headwind to top line if we think about that transition? And the investment here you're talking about in this quarter as you rebrand and next quarter kind of going back to normal, is there a chance that you would need more investment levels as we transition around GenAI search? And then with MGM and the digital gaming, you talked about that performing well and that being a core part of the thesis with MGM. Are you guys actively involved in that as 25% shareholders and kind of maybe you could expand on that strategy a little bit?

I'll do the People question first. No, for the purpose of these numbers, the brands I was talking to in that are sort of the brands that are part of the core. So that's -- if anything, it's fully baked and fairly -- it's going to be in a steady state where it is now. It's more of a way to explain to people that are -- which you guys have known for a long time. Our biggest and best brands are carrying the water around here, and they're getting all the investment. The second question is GenAI or whatever is going to require more investment. I think we are at a point now where I think we made some really smart investments. I think they're going to pay back in -- measured in quarters, not years. And as Chris said, I think we're going to follow the margin profile Chris outlined earlier, if that's the question. I think -- we've been doing this a long time, and we're very good at investing behind success, not ahead of success. We've never been and invest ahead of success. Personally, we're going to see that these things are working, and we're going to invest. So I feel very comfortable with the margins Chris outlined, and I don't think there's going to be any outsized investment going forward that would affect that.

Yes. And just a couple of things I'd add on that. Core sessions now generate 90% of total. So we're sort of in that path to noncore becoming less and less relevant. The -- in that vein. And the only thing I'd say is relative to the investments that we made in Q2, the spend associated with those are baked into the guidance we've done in Q3 as well as our full year guidance. So we have ramped up that investment. That's a little bit why the top end of the range came down. Also the other, as I said before, there's $3 million plus of incremental health care costs due to high-cost claims that have flowed through and we are booking in the second half. We will look to optimize that going forward. On MGM, we are -- we own 24%. We are big supporters of the management team, Bill Hornbuckle, Jonathan Halkyard and others and also of the BetMGM management team and the joint venture there of Adam and Gary and others. We have humbly sought to provide our perspectives through Barry Diller and our former CEO, Joey Levin, who's on the Board, on ways to drive revenue, optimize performance, and along with the Chairman, Paul Salem and other Board members make BetMGM as successful as possible. We had a former joint employee of IAC and MGM, Gary Fritz, who's gone into MGM full-time and leads their digital and strategy efforts. And we feel great about his contributions and are thrilled he's working so closely with Bill. So we are active Board members, but really support the management team in their strategy. Thank you. Any other questions, operator? I think that's it.

Yes, I would like to return the floor at this time to Chris Halpin for any closing comments.

Thank you. Thank you to all for being on and the questions, and have a great day.

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