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Operator: Good day, and welcome to the IAC First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Christopher Halpin, COO and CFO. Please go ahead, sir.

Christopher Halpin: Thank you. Good morning, everyone. Christopher Halpin here, and welcome to the IAC First Quarter Earnings Call. Joining me today are Barry Diller, Chairman and Senior Executive of IAC; Neil Vogel, CEO of People Inc.; and Tim Quinn, CFO of People Inc. IAC has published a presentation on the Investor Relations section of our website today entitled Q1 Earnings Presentation as well as a letter from our Chairman published last week. On this call, Barry, Neil, Tim and I will provide some introductory remarks referencing that presentation and letter 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.

And now I will turn it over to Barry.

Barry Diller: Thank you, Chris. Good morning, everyone. I wrote a letter that I hope everyone has read because it says it far better than I can say about this transition that we’re undergoing. A lot of people ask why now? Well, the truth is this is really been going on for the last couple of years as we simplified — want to simplify our operations. We’ve been through — since this organization started 30 years ago. We’ve been through 4 cycles. Each time we’ve gone through one of those cycles, we’ve been a smaller enterprise because we spun off so many public entities. I like that because I think that gives us kind of energy and focus to build up again. I also think that the 2 principal assets probably, hopefully, the only assets that the company will have in the future.

I’m talking about the — actually the present rather than the future, people and our interest in MGM Resorts. In a way, as I wrote, I think there’s a perfect hedge. One is in the virtual world primarily, that certainly prints a lot of magazines as well, but it’s very much in the digital world and the other is very hard assets of resorts in the United States and in China, and a building in Japan. But rather than me [indiscernible] around, I hope you’ll just take a second to read the letter. I’m not — actually, I should do the thing that they do with Amazon, which is, all right. Now we’ll take 5 minutes for everyone to read the letter and be silent, but I’m not going to do that. I would like though to be sure to thank Mr. Halpin, who has been with us for many years outstandingly.

And is this the last call which you will be on or you’d be on the next one, too?

Christopher Halpin: It’s sort of a coin flip. So we’ll figure it out at [indiscernible].

Barry Diller: We’ll have one more of you, but thanks for a great information.

Christopher Halpin: Thank you.

Barry Diller: And with that, let’s move on. It’s much better, actually, I think for all of us, if you just ask pointed questions and we’ll respond pointedly.

Christopher Halpin: Fair enough. We’re just going to do a few prepared remarks just to lay out some key pages. So Neil, do you want to kick it off?

Neil Vogel: Sure. Everyone goes on to Slide 5. And you can see we, again, at People Inc., we had a very solid quarter. We delivered 8% digital revenue growth, our tenth consecutive quarter of growth and digital adjusted EBITDA margins expanded to 20% from 18% in Q1 of last year. Our performance is underpinned by diversified audience and revenue mix, a real diverse audience and real diverse revenues and a laser focus on meeting our audiences where they are now. To that end, in the quarter, we continue to invest in a host of new products and services including what BD calls or inversion projects and what we’ve called our inversion projects. These are businesses built off of our iconic brands that extend and transcend traditional publishing models, accelerating our nonsession-based revenue.

We have a few updates on the early projects we’ve talked about and some highlights of what’s to come. There’s real traction around our [indiscernible], our recipe locker tool, the People App and InStyle breakout series, the intern and the boss on social media. We expect to roll out in Q2 a membership club for a super fans of Southern Living among our strongest audiences and plan to follow with a similar program for food and wine. And something very exciting for us. We’re launching a new social shopping tool based on the learnings of our scaled commerce business, where shoppers can easily save and store their pics for future purchases in a very innovative way, that’s to come as well. We plan on a drumbeat of product launches through the coming quarters.

So you can expect that from us. And look, our focus is meeting audiences on their terms and the next slide further illustrates this. So if everyone flip to Slide 6. You’ll see the trends over the last few years continue. As you can see, our opportunity is clearly on the right side of this page, core web sessions continue to be challenged. Google search traffic declined as expected, and we expect that will continue. Traffic from the Open Web also declined a bit as a substitution rate from core web sessions to off-platform audiences increases. The driver of our growth continues to be though these off-platform audiences, which grew 27% in Q1. We see strong performance across Apple News, TikTok, Instagram, YouTube and syndication partners. And our audience trends align with where users are today and how advertisers and marketers want to connect with them.

As you can see in our numbers, the strategy is working. That takes us to Page 7. Our big story continues to be our nonsessions-based revenue, which grew 24% year-over-year in Q1. Non sessions-based revenue continues to grow as a percentage of our digital revenue. We’re now at 41% versus 35% in the first quarter versus the first quarter last year. Similar to last quarter, this is led by Decipher, our AI-powered targeting tool, ad-targeting tool by our social and custom ad programs by Apple News and by strong licensing performance, including the addition of our Meta deal. We also maintained a healthy business in sessions based revenue by delivering a solid quarter and continued strong monetization of these audiences. The strength of our brands is really driving premium rates.

And look, the model for our future is clear and in focus. One, strong growth from our non-session-based revenue streams; two, executing against our sessions-based businesses; and three, connecting directly with our audiences and advertisers and meeting them where they are, including our big focus on our version projects. We’re very proud of the quarter, and I’d like to welcome Tim to the call who’s going to give a rundown of the financials.

Unknown Executive: Great. Thanks, Neil. It’s great to be here, and I’m excited to have a chance to work with everyone. I, along with almost the entirety of our management team have been in our positions for over a decade, both working with and for Neil and under the leadership of IAC. So this continuity is a big part of the success that we’ve had together and something that we think is — it gives us a lot of confidence as we undertake what’s going to be an exciting transition. So we look forward to that. Referencing Slide 8 for a second and refocusing on the financials. As Neil said, we had a really strong quarter in Q1. Digital revenue grew 8%, and we saw digital margin expansion of about 200 basis points, generating solid 45% digital — incremental digital margins.

This is a testament to the strength of our brands, the diverse revenue models that they support and the continued discipline we bring to all of our investment decisions. Print EBITDA declined in the quarter, which was expected. There is some quarter-to-quarter volatility there, but we reiterate our expectation that full year print EBITDA will cover people in corporate overhead with the caveat this year, excluding the estimated $15 million of Google litigation expense. Finally, I want to highlight that we continue to generate really solid and predictable free cash flow of almost $50 million in the quarter, putting us on track to exceed $150 million of free cash flow this year. That’s on net debt of about $1.1 billion. So we feel really good about the balance sheet and the opportunity to continue to delever rather quickly.

Moving on to Page 9. I want to highlight some changes we made to our segment repeating. We transitioned the management of a business we call M&I, which is a legacy media agency business, previously captured within our Print segment, which now operates under the decipher team in Jim Lawson. As a result, we reclassified the business from print to digital, both for Q1 and over historical periods. The reason for this is it unlocks 2 exciting new opportunities for us. Number one, it opens up a new distribution channel for Decipher, notably independent agencies and political advertisers previously untapped by our sales team. The second opportunity is by putting this business and operations under Decipher, we can offer these advertisers a more advanced product delivering superior performance and at better margins to People Inc., and you saw some of that benefit — some of that accrued to our benefit in Q1.

One point on political advertising. Historically, People Inc., has not run political ads on our branded properties, but we can now target this ad category on third-party sites using Decipher. These political ad cycles create a little bit of volatility in the numbers, especially related to the 2024 presidential election cycle. Excluding those political dollars, just to give you a baseline, M&I was — revenue was flat, excluding political. So that’s the business we’re bringing over. This change in segment reporting resulted in about a 200 basis points drag in digital revenue growth in Q1. So the 8% growth would have been 10%, but for the change. Ultimately, however, this move is expected to accelerate growth and adoption of December, particularly in the second half of this year.

This change — all these changes did not impact our guidance for the year, which remains in reiterating digital revenue growth of mid- to high single digits, delivering total company adjusted EBITDA in the $3.10 to $3.40 range. With that, I’ll hand it back over to Chris to take you through the IAC changes.

Christopher Halpin: Thanks, Tim. Moving to Slide 11, we’ll talk through financial performance beyond People Inc. this past quarter. It was a busy quarter on a number of fronts as we continue to execute on our core strategy of simplifying IAC and building our cash balances. First off, we completed the sale of Care.com in March, generating $296 million in net proceeds. Following closing, Care.com is now presented as a discontinued operation in our consolidated financials. We think this caused a little bit of confusion overnight, which we’ll talk about more later.

Barry Diller: I mean I hope it’s the thing that caused a lot of confusion given how banged up we got just from people not being able to add properly.

Christopher Halpin: We’ll work with them on it, BD. We continue to allocate capital to the 2 companies we know best and believe in, IAC and MGM. We repurchased 2.9 million shares of IAC for $111 million since our last earnings call, and we’ve now bought back 13% of IAC since the beginning of 2025. We also purchased 1 million incremental shares of MGM for $37 million, increasing our ownership to 26%. As Barry said in his letter, we continue to view both stocks as the priority areas of capital allocation. Our Emerging and Other segment showed strong performance this quarter as both Vivien and the Daily Beast continued their momentum with both seen accelerating revenue growth in the 2 companies combining to generate about $4 million of adjusted EBITDA in the quarter.

We also closed operations in our Search segment in April. As many of you know, this was a noncore business that had frankly lived on well past many expectations. As previously disclosed, Google notified us late last year that it would not renew our search contract under the existing terms. Following negotiations across the first quarter, we came to the conclusion that we could not confidently operate the business profitably on the new terms on offer from Google. As part of the shutdown, we incurred $7 million in costs from severance and the write-off of prepaid software and the search business will also now be shown as a discontinued operation starting in our second quarter financials. One other note, we sold an unutilized domain name for $7.5 million this past quarter.

With the search business now closed, we will look hard at monetizing the portfolio of domains that underpin that business including [ ask.com ] creating cash raising opportunities. Finally, there’s a lot of noise in comparing year-over-year profitability in the first quarter. So we laid out on the bottom right of the page, some key onetime items, including last year, a large noncash lease gain at People Inc. and the costs associated with our CEO separation and this year notable severance transaction and litigation expenses. Moving to Slide 12. Last week, in parallel with Barry’s letter, sharing his rationale for a planned rebrand of IAC as People Inc., we issued an 8-K summarizing the key elements of the consolidation of the corporate functions of IAC parent and the People Inc.

subsidiary. The underlying principle is with 1 core operating business in People Inc., 2 layers of corporate expense, 1 at IAC and 1 at People Inc. are no longer necessary and don’t make sense. When we managed a number of operating businesses, the IAC corporate layer provided strategic oversight, shared services and M&A support to the individual companies enabling them to operate independently and positioning them for growth and success. But with the sale of Care.com and the narrowing of our focus to People Inc. and MGM Resorts, the opportunity presented itself to eliminate duplicative functions and generate significant savings. We’ve mapped out a careful consolidation plan in which over the course of the coming quarters, more than half of the corporate employees of IAC, including much of senior leadership will transition their responsibilities to counterparts at People Inc.

and exit the company. Key areas in this consolidation are accounting, tax, internal audit, legal, M&A, among others. Each employee has a specific exit date and a retention plan in place to ensure they remain engaged until the consolidation is complete. The full transition process is planned to run through February 2027. We expect annual run rate operating expense savings of $40 million and a reduction in stock-based compensation of $20 million to $25 million. These savings will phase in over the coming quarters as employees depart, with the second quarter of 2027 being the first clean quarter where the P&L will show the full savings of the consolidation. Total onetime expense of the rationalization is $63 million, comprising $15 million in cash severance and related expenses, of which $10 million was recognized this past quarter and then $48 million of stock-based compensation expense, which will be recognized over the next 4 quarters.

Kendall Handler, our superb Chief Legal Officer, and I will leave in mid-August, following the filing of second quarter financials and then will remain on as advisers through March 2027. Further, we expect that Neil will become CEO of the parent company, newly renamed People Inc., and Tim will become CFO in that same mid-August timing. All of us are working together to have a smooth transition to set up People Incorporated for continued success. Finally, moving to Slide 13. This will be the last slide we present before going to Q&A. I know you’re happy about that. On guidance, we reaffirmed People Inc. adjusted EBITDA guidance at $310 million to $340 million while raising emerging and other guidance to $5 million to $15 million of adjusted EBITDA based on the strength at Vivien and the Daily Beast.

As a reminder, Care.com is now a discontinued operation, so it is removed from both our financials and our guidance. We saw a couple of reactions overnight that cited a Q1 IAC consolidated miss and reduced guidance. But our analysis is that those market commentators and a number of analysts failed to adjust for Care’s revenue and EBITDA being removed as discontinued ops. As a reminder, search will also be classified as such and will not be in our reported or historical revenue and prospective revenue and adjusted EBITDA and is not part of our guidance. We’ve raised corporate expense guidance to $95 million to $105 million due entirely to the severance that I just mentioned before and other onetime charges. Following completion of the consolidation, we expect annual run rate IAC corporate costs to be around $45 million and stock-based comp for the entire companies declined to $30 million.

These figures are prior to any future reallocation of People Inc. leadership cost to the corporate level, which may occur. However, any such shift in cost allocations would have no impact on expected consolidated expense savings. With that, let’s go to Q&A. Operator, first question, please.

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Operator: The first question will come from James Heaney with Jefferies.

James Heaney: Can you just talk about the next chapter of IV? Like what do you think the next 5 years are going to look like? And what are the key areas of capital allocation going forward? And then would you still look to do M&A and select new areas? And then I have a follow-up.

Barry Diller: Well, I can’t tell you what the next 5 years. I can’t tell you — I mean, I can tell you with the next year, maybe or months are going to be. 5 years, who the [indiscernible] knows. What we have is, I think, extraordinary opportunity with what we got. I mean, what Chris has just gone over really is kind of a great cleansing. And that cleansing, as I said, has been going on for a while now. The combination of it was actually this quarter, changing our name, doing all of the tasks continuing to shed noncore assets, core assets, as we said before are hopefully going to be just 2. We’ve got plenty of capital. We’ve got a very good balance sheet. We can go in whatever direction that there is opportunity. I think that biggest — probably the biggest opportunity we have in front of us is the work that is being done in our publishing business and people and what we call [indiscernible] inversion, which is — we’ve got 19 different initiatives, having nothing to do with standard advertising or subscription revenue.

Out of this, I think we can build wholly owned or partnered extremely large businesses in all sorts of categories. The thing that I came to understand about people is across the — how many — actual — I mean, I always get this figure wrong. How many magazines do we have [indiscernible]?

Neil Vogel: We have about 40 brands and 9 or 10 significant brands, so invested.

Barry Diller: Throughout this, there is so much we know about so many things that no one actually else knows. And instead of being in the kind of tried and true publishing model of licensing, your brands and licensing all this knowledge and all that stuff for other people to exploit, we’re going to exploit it. And out of that, I would be — I’d be giantly disappointed if we are not able to build real substantial businesses having nothing to do with advertising, having nothing to do with subscriptions, but having to do with goods, services, products, et cetera, that out of the corpus of our understanding in all these areas, we have a better advantage than anyone else. And the other thing — one other little note is, we published, what, $300 million or so actual hard copy things that are in people’s homes or whatever, an additional page cost us 0.

How many actual other digital impressions do we have? [indiscernible] so if we come up with and if we don’t come up with it, we’re really [indiscernible]. But if we come up with good ideas, we can promote them at not a dollar really additional cost to us. What a megaphone that is for the future. So I — that’s the work that we’re going to do. Wherever else, what [indiscernible] we’re going to use our cash flow, we’re going to continue to opportunistically buy our stock. We’ll continue to invest in MGM Resorts, which I also couldn’t be more excited about its future. So this is — again, it’s been worked on for the last almost 2 years. But this moment forward is a clean, clear, simple sheet that we get to write on, and we got, I think, all the necessary tools.

So a bit long-winded, but there it was. Next question.

James Heaney: Great. And I actually just had one follow-up on just the macro environment [indiscernible] sorry, just from environment across people and other businesses, just kind of what you’re seeing from geopolitical any other macro factors would be great?

Neil Vogel: Yes, I’ll do a quick take on the ad market. I think last quarter, we told you guys on a 10-point scale, it was a 6 out of 10, I think it’s still a 6 out of 10. There’s opportunities, there’s risks. Tim is here with us now. He can give us some color across industry.

Unknown Executive: Yes, there’s certainly strength in places like health and pharma, tech, telco, areas that are exposed to the consumer are a little bit soft or particularly the average consumer, I would say, things like CPG, food, bev. And we did see a little bit of a slowdown in planning related to the Iran issue and conflict. We think that’s abating a little bit now, but it’s still a little bit touch and go. But overall, as Neil said, the market is strong, but it’s not — I wouldn’t call it ripping.

Barry Diller: Good enough to do our job unless something changes.

Christopher Halpin: Yes. And I would just say, across the portfolio, we’ve been talking about the divergence between high income and low income for a while. I didn’t know that was called K-shape but now that’s called K-shape. I think that’s just only continued and maybe probably unfortunately being exacerbated for the country, what’s going on right now.

Operator: Your next question will come from John Blackledge with TD Cowen.

John Blackledge: Could you talk about the key drivers of the 1Q People Digital revenue line items saw the outsized growth at performance marketing and licensing and other revenue? And just any color on revenue trends in the second quarter. And then on digital EBITDA, that was better than expected. Just any — any color on the drivers of the upside to margins? And how should we think about 2Q and the rest of the year? And if you — and just lastly, if you can give some color on like 1 or 2 of the separate initiatives as part of the inversion process, that would be great.

Neil Vogel: Let me do the inversion first, and then Tim can take the string of other questions. So the emergent stuff that [indiscernible], look, most importantly, it has energized our organization. We are really in a great spot where we own these brands that are iconic and pillars of sort of [indiscernible] culture at American a couple of stats, some updates on things we’ve talked about. One of the first things we did is we launched this recipe Locker. We’re probably more than half of the recipe traffic on the Open Web right now. We launched it a little more than a year ago. We have 3.5 million registered users. We have 40 million recipe saved. We have a lot of momentum and a whole bunch of new product initiatives launching in the next couple of months.

The People app, which we’ve talked about before, again, the real win here is how we’re engaging people. Visit to the app is about 3x as long as a visit to the web. If we get people playing games, which is the most popular thing on the app, it’s a 20-minute visit. We’re up to 430,000 users since the last call. And I think the important thing to note about both MyRecipes and the People app, which have taught us how to engage users directly and all of these new skills is, as BD said, we have not gone outside our own assets at all to grow these things. And as we roll out and as we tighten up financial models around these, that’s a really big opportunity. Another thing worth mentioning is we’ve really looked at social video and social video series is sort of like the new TV.

And we have a real breakout hit on our hands in style with 2 properties called the intern and the boss. They were — the first property the interim was launched about a year ago across all these episodes, which are 3-minute long episodes, 4 minute long episodes. We’ve got 45 million views in a year, and a robust sponsor business has grown around…

Barry Diller: Just one side that a while ago that just on internal 1 package, 1 series alone, which is they do multiple series a year, multiple [indiscernible] one episode was like [indiscernible]…

Neil Vogel: We have been very fortunate that we’ve been able to sell a season is about 20 minutes long in total 6 or 7, 3-minute episodes and we have sold full seasons in that neighborhood, some more, some less. So there’s a lot of interest in what we’re doing and different…

Barry Diller: Completely homegrown.

Neil Vogel: Completely homegrown, completely made by us. We own all the rights. We own everything, and it’s a really successful venture that we’re now modeling across people and a whole bunch of other properties…

Barry Diller: So Southern Living, Southern Living one of our strongest [indiscernible] hello, if somebody cough, whatever. There are a couple of things in Southern Living that I think are really interesting. It’s such a loyal base. So a couple of [indiscernible]…

Neil Vogel: Yes, Southern Living is a really big important property for us. Culturally, it is incredibly important in a big part of the country…

Barry Diller: One of the things that I learned about and for those people who are the follower of South. Now from [indiscernible], which is a particular southern drink, it is. Southern Living is going to — has developed. You keep saying that you’re going to let me taste this…

Neil Vogel: We are going to let you taste it, but not right now…

Barry Diller: That we are making our own team, our own brand, which we are going to manufacture and distribute and under the Southern Living branded Southern Living Suite T. That — who knows where that actually goes. If it emerges out of the South, and so many of these beverages have been geographical in where they’ve started and then they go nation and worldwide. Who knows what that can become. Also, Southern Living does these houses. And I mean, they build every year…

Neil Vogel: We sell architectural plans to build Southern style houses, really high end houses. They’re very, very beautiful houses.

Barry Diller: Yes. And also, this community, I mean, we may develop a Southern Living actual housing community, branded Southern Living for that kind of lifestyle that, again, we’ll own and hopefully operate.

Neil Vogel: So when BD mentioned before, 19 different ideas, there are actually probably more than 19 ideas floating around. And we are really chasing these down. I think going back to the tea, it’s a really good example.

Barry Diller: We can do each one, it can be a separately organized, finance business, whether our capital or other people’s capital, that is a stand-alone P&L of its very own separate and apart from this historic publishing business that can spin off — span off individual profit P&L businesses that have their own revenue, their own structure, et cetera. And you say what can happen again, it won’t happen in a year. But in the next years, as I say, 5 years out, this could — this is the fertile ground for dozens of businesses as we’re looking at this because we got the intellectual property that can give us an edge in this that I think no one else has once we begin to concentrate on it, which is what we started to set [indiscernible] I guess we should go to the next question.

John Blackledge: Well, let me just — I’ll tackle the financial questions as well.

Barry Diller: What was that?

Unknown Executive: Which was how do we get through Q1, [indiscernible]

Barry Diller: I mean that’s [indiscernible] people want to hear about our future rather than enabling little figures that no one pays attention to. Look, if you all paid attention to what happened to Care.com, and how it affected this what last quarter or whatever the confusion in guidance and all of that, that would have been, I would say, paying attention to the business.

Unknown Executive: What I would just say is that Q1 was a continuation of Q4, which was really strength — incredible strength in licensing and commerce, in particular, with the ads business roughly flat as we navigate these volume challenges. What I think the future is, is what BD is saying and Neil is saying, which is these non session-based revenue models, which currently comprise about 40%, 41% of our revenue, grew 24% in Q1. And that is the future while we kind of hold the line on the traditional sort of session-based media model, as it relates…

Barry Diller: I mean, we’ve lost — how much of our traffic have we lost from Google?

Unknown Executive: From Google, 65%.

Barry Diller: Okay. What publisher has navigated this transition anywhere close to how you have all navigated this. We have transitioned from depending — everyone has been — and I said for a decade more that we all kind of our surf on the property and land of the monopoly of Google. And this transition out of depending upon someone else to give you traffic, which is what every animal has done in this digital world for the last almost 20 years. And we have now transitioned out of it into 2 positive territory of our own traffic with our own hands, not dependent on anyone else. I find it incredible that no one really recognizes that feat for what it has been. [indiscernible]

Unknown Executive: We think that’s the future. And we’re going to — we think we see that 40% that is the traditional model grow meaningfully over the coming quarters and years.

Barry Diller: And it’s our. We don’t have to — we don’t have to beg or borrow or getting these end of conversations with the monopolist. And we’re really on our own firm ground, which is completely different than I think almost — not almost — it would be every other publisher other than the New York Times and the Wall Street Journal that have strong subscription revenues.

Operator: Your next question will come from Cory Carpenter with JPMorgan.

Cory Carpenter: I wanted to ask about MGM in Turo. Maybe Barry for you with MGM. Could you just talk to what you see as the benefit of keeping MGM within People Inc., why not split that out separately? And then on Turo, any update you guys can provide on how that’s performing? And is that a business that you plan to hold on or also are looking to divest?

Barry Diller: I don’t do the MGM thing. Yes. The answer is, of course, it is. Look, this corpus used to house 50, 60 different businesses. We can certainly handle 2. And MGM — the prospects for MGM, I think our outstanding. MGM — once we get closer to, we’re building a large resort in Japan and each year that we get closer to its opening. I mean the only gaming resort — and some great size, a $12 billion project that will open in Japan and, I don’t know, [indiscernible]. The closer we get to it, the closer people will understand how discounted MGM is. I’m quite happy for it to be discounted now because it allows us — MGM has bought back 45 — almost — we have a little 45% of its stock over the last 5 years. Its operations have been solid.

People talk about Las Vegas. [indiscernible] through also endless cycles. Nobody is killing Las Vegas. Their current conditions that bother going into that have particularly for instance, Canada, we’re, I think, down — I may get the stat wrong, 40%, something like that, from Canada, which was a very good draw for Las Vegas because of the policies of the administration and other onetime items and things. And it’s just, I’m kind of glad it’s been discounted because it has allowed us to buy back so much of the stock, which I think — that — the discount that it currently has will close at some point. I’m not anxious for it to close too soon.

Christopher Halpin: Turo has executed well on its strategic effort to return to growth. We’ve talked previously that Turo experienced a real slowdown in volumes coming out of the froth of the pandemic. And that, combined with industry pricing pressures due to both working off pandemic highs and also some mistakes in electronic vehicles made by competitors. So the confluence of those 2 drove Turo revenue growth to mid-single digits at one point. Company generated over $1 billion of revenue in 2025, but management really focused last year with the Board on driving substantially more growth reinvigorating marketing and improving cost efficiency. They hired a new CMO and David Cornes, who we believe is making the right steps to drive greater brand awareness.

We’ve always said with Turo awareness in testing the product in many ways is the biggest challenge, repeat rate, NPS reviews are excellent. So David and team are focused at getting more people into the funnel and trying it and we’re excited to see that play out. They also promoted Cedric Matthew to Chief Business Officer in order to improve pricing, matching and execution across the marketplace. These efforts have borne fruit with Turo returning to double-digit revenue growth year-over-year in the first quarter, really led by increases in volumes. Rental car market pricing is no longer a headwind, and the company really has a clear game plan to drive more new users in. And we think it’s an experience that blows away any [indiscernible].

Barry Diller: If you asked us 6 months ago, I don’t know whatever we’d say. I would have said okay, let’s sell our interest in this. We’re not going to increase it. We’re not going to take over control of it, et cetera, et cetera. But it’s now performing very well. I doubt in a year or 2 or 3, it will be part of this corpus because it will probably go public at some point or get sold by some strategic player or whatever, but it’s now operating solidly. And my attitude is, unless somebody comes along and so it’s a big little brick on our table, we’ll keep it as it grows and it will spin itself out in some form, and we’ll take the cash.

Christopher Halpin: Yes. The only thing I’d say is I totally agree. They continue to improve gross margins and adjusted EBITDA margins solidly profitable with free cash flow. So full agree.

Operator: Your next question will come from Ross Sandler with Barclays.

Ross Sandler: Neil or Tim, just wanted to go back to the off-platform revenue. Could you just talk a little bit more about how you’re diversifying the traffic to off-platform and what you’re doing to kind of drive monetization and better margins in that business and kind of what you see for the medium-term kind of growth rate there. And then second question is somewhat related, but any update on the Google ad tech litigation like a time line for remedies and what we might hope to have as an impact to our business?

Neil Vogel: Yes, I’ll do the lawsuit piece, and then I’ll let Tim go through the numbers. As we’ve said before, the lawsuit that you’re referring to is sort of what people call the Google Ad Tech lawsuit, it’s building on [indiscernible] that Google legally uses dominance to monopolize the ad server and ad exchange markets. We believe we can fully rely on the government’s findings here, and we believe damages will be significant given our scale and level of participation in these markets.

Barry Diller: I mean it’s not really a lawsuit in the sense of law suit because the ruling has already taken place. They’ve already said that Google is guilty of this [indiscernible] other thing. We and a bunch of other people have based on that huge claims, I mean, they are [indiscernible], they are legitimately huge. I mean — and to me, it’s like, okay, we will just wait for this process, which I guess is like a year or 2 or something like that…

Unknown Executive: We intend to invest between $10 million and $15 million in it this year. We expect that it will take the entirety of this year into next year optimistically to resolve in the first half of next year, unless we were able [indiscernible].

Barry Diller: Yes, I mean it’s just a money trough. How big, we don’t know.

Ross Sandler: Yes. And then to transition to Tim’s answer, by the way, very high margins.

Unknown Executive: Yes, correct. That’s correct.

Barry Diller: You can walk across the street with your check, the cash [indiscernible].

Neil Vogel: I would like to catch that, [indiscernible]. I’ll do a quick background on the off-platform and I’ll let Tim take the numbers. The — just if you zoom out, the reason why our offering [indiscernible] the reason why our off-platform business is working is if you zoom out, we bolted is because we have these terrific iconic brands. And since we bought Meredith 5 years ago, we’ve worked incredibly hard to put our brands in a position where they can do all of these new things and where their permission to come into people’s lives different ways. And whether it’s some of the inversion projects or whether it’s things like our historical events and things we’ve done, we’ve got real momentum because our brands are so strong, particularly the 7, 8, 9 brands that we talk about the most. And I’ll let Tim get into talking about the specific drivers, but this is the underpinning of everything we’re doing going forward.

Unknown Executive: as we were saying before, 41% of our revenue grew 24% in Q1. That revenue is comprised of licensing, which is everything from Apple News to our AI deals to content syndication, as we’ve been saying and Neil has said a few times, we’re creating more content today than we ever have in the past and distributing it across more platforms with success than we’ve ever had in the past. What is unique to us, we think, as we’ve highlighted a little bit here, is we have the combination of brands, audience size and reach, data about those audiences. And in the current incarnation, a sales team to go out and access advertisers to sell into those audiences. And so that’s where we can control our own destiny, and grow, again, the nonsession-based revenue streams at, we think, really attractive rates, and that’s the future for us. And we — and it’s not all speculative. We actually did it in Q1.

Operator: The next question will come from Justin Patterson with KeyBanc.

Justin Patterson: Two for Neil, if I can. First, I would love to hear more about your top priorities for Decipher for the year? And then second, just as you step back and look at how AI has changed the traffic funnel, what are some of your latest learnings there and how you think you can continue standing up a durable business for the next few years?

Neil Vogel: Sure. I’ll do the AI question first, and then we can talk about the other question, Tim can help with that. If you look at where AI is for us from here, we feel very strongly about this. We have more opportunities going forward than we believe we have risks. If you go back in time 1 year or 2 years and you look at the risk of AI for us, they all had to do with search. And is AI going to disintermediate our audience sources. That already happened. And we came off the — other side of it with a more diversified business and I believe is a stronger business. Now we’re looking at AI as opportunity. And I’ll just dovetail back to what Tim just said. We are making 50% more content than we made 3 years ago at the same cost, and I would argue at an incredibly — at a way higher quality and everything is still made by humans.

We are able to do that because all of our processes, we are able to streamline with AI. We are able to use AI and Decipher to really tighten our ad targeting. We’re able to use AI in our commerce business to really understand what makes people respond to offers. And AI for us, and people — we are embracers of the future. We are deeply unsentimental about processes of how we’ve done things. And we’ve taught our 3,500-person organization, how do you use AI, — like we don’t have an AI [indiscernible] it is your job in your seat to understand who AI applies to you, and it’s really, really working. And the thing that people think is somehow AI is in congressive brands. What has happened with us is in a world where people’s output is now increasingly confused as to, is this real, this is not really mistake.

Brands are the — they’re there — it’s a value now. People trust us. They know what they’re going to get. And we can now harness AI to make our brands and our brand offerings stronger. We think the opportunities are massive. And look, we are AI optimists at our place. And I think that is really important. And again, dovetails into all the things we’re doing with inversion and all the things we do day-to-day to sell ads, like putting AI in your business when you have these incredible brands and they’re all powered by humans is an incredible opportunity.

Barry Diller: I think that’s really well said. I will just add one thing about what I said earlier about what a wonderful situation is. I also have a natural hedge inside your own house. AI at MGM is actually meaningless. It is obviously being used internally to make the systems better in all sorts of ways. But nothing is going to get no AI until we get into the final simulation, whenever that comes. But nobody is going to get between a customer and one of our resorts is not possible to happen. And so it’s this wonderful kind of hedge in the world. If everybody worrying about how AI is going to change the story their business, et cetera. At MGM, guess what, people are going to come to our places. There’s not going to be a way for AI to in any way to disintermediate them.

And I truly love that one. It’s really the fundamental reason I got interested in that area is because I was worried a few years ago about all sorts of areas of ours being dependent upon other people’s control and here is this place where if you offer customers a great experience they’re going to come to it. All right, end of that.

Neil Vogel: Quickly on the Decipher. Look, we’re very optimistic about the Decipher. It really expands our TAM across the Open Web and CTV. And most importantly, it works. We have incredible first-party data. We have all kinds of AI powering going on, and I’ll let Tim [indiscernible].

Unknown Executive: Yes, I just think I want to reiterate what you’ll say is our capabilities are getting more sophisticated. We’re getting our products are better. We have now our premium sales team selling it to existing advertisers. We have this M&I sales team selling it to the middle market independent agencies and political advertisers. We’re really excited about it. And again, I reiterate what we said last time, we think it adds 200 to 300 basis points of growth to our growth rate back half of this year and into next year.

Operator: The next question will come from Youssef Squali with Truist.

Youssef Squali: So Neil, maybe just a follow-up to the advertising question. Can you maybe talk about the level of visibility you guys have in performance marketing and licensing revenues within people in particular? And any chance of seeing maybe additional licensing deals announced? And then Barry, given the very high free cash flow nature of the business and the cash you have on hand, et cetera, any interest in maybe starting a dividend to attract some yield-seeking investors at this point?

Neil Vogel: I’ll go first. I’m assuming you mean AI licensing deals, very quickly, these seem to be bucketing into 2 categories. One, the All You Can Eat deal, which is sort of like the foundational LMs like our Meta deal and like our OpenAI deal. And then there are the more marketplace deals like our Microsoft deal, which will be pay-per-use deals. We — since we started locking traffic, we have found — we’ve entered into very productive discussions with all kinds of players, both expected and unexpected in this market with the exception — exception of Google. And what we are seeing is we’re entering a phase of AI where the Internet — the available source of information have been crawled and what’s really valuable is people who are making new information.

We make an awful lot of new information, and it’s really valuable to people. So I would expect we will have more to report on this in the future. I’ve got nothing now [indiscernible] it’s just — it’s also early. It’s really — also early on all of it. But the key thing we’ve done, and we believe this is the right thing to do is we want to be early and we want to seed at the table with everybody, and that is our take. And so far so good. We’ll obviously keep you guys updated as things develop.

Christopher Halpin: The only thing I’d add is the pivot, the strategic shift that Neil and Tim have already talked about of moving all of the content development overwhelmingly from evergreen to new content makes us even with so many other content sources getting washed out to see in the competitive pressures really positions people link even better with all of the AI models as a constant producer of new information, which is what they need…

Unknown Executive: High-quality volume of quality…

Barry Diller: Sorry. As far as the dividend is concerned, sure. I hope as we build up cash, I think we should be a dividend-paying operation. So I would expect that to happen in the future.

Operator: The next question will come from Jason Helfstein with Oppenheimer.

Jason Helfstein: I guess as a follow-on on capital allocation. Given the healthy forecast for free cash flow this year, should we just assume that, that is basically deployed between a combination of buybacks, MGM purchases and potentially a dividend? Or is there kind of a desire to see that kind of just build up on the balance sheet for optionality?

Barry Diller: Well, I mean, listen — no, sorry, let me start again, which is — the answer is yes, which is we’re kind of use our cash to continue to shrink the capitalization of this company opportunistically. I think we’ll continue to invest in MGM. And yes, I would think — I’m not so sure we’ll do it within — I don’t people do it within the next few quarters. But sure, we will pay an appropriate dividend. I don’t have any — I think the investments we’re going to make are going to be inside the operations of people. I don’t see anything. We’re not — we’re actually collapsing our — we had a very large M&A group. We will have a very small M&A group out of this. I’m not seeing that as a — like as we operated historically, we were out there for all of the opportunities that came along with being very early into e-commerce and Internet activity.

So so we were always on the lookout, always in any sector, in any place. We’re not that anymore. I don’t want us to be bad. We have so much opportunity in-house. That’s where we should direct our capital.

Operator: And the next question will come from Matt Condon with Citizens Bank.

Matthew Condon: I just want to ask on affiliate commerce growth. It seemed like you guys had a healthy quarter there. Can you just talk about the drivers and just the future potential there to sustain growth?

Unknown Executive: I would just say that the commerce business has been remarkably consistent and resilient for quarters and really years. It’s a testament to our team and their ability to drive growth, meaning [indiscernible] growth to recaptures, otherwise, that business wouldn’t be growing. We’re doing that by creating more [indiscernible] as Neil highlighted, and deepening the partnerships and relationships with the retailers. So there was an earlier question about visibility. We have solid visibility there. Obviously, the consumer is performing well, and we feel good about it and kind of sites. We have some new products coming out soon that we’re excited about.

Barry Diller: The only thing I would add is in by, and we’ll see you in a while. Thanks, Chris again. So please [indiscernible] your income probably will be with us the next thing is that I hope that out of this in the coming days, we straighten out these numbers so that what was a very good first quarter won’t be misinterpreted as something other than that, which it seems to have been at least overnight.

Christopher Halpin: Which is the Care discontinued app.

Barry Diller: Yes, yes, yes. Other than that, I wish you all well. Thank you all, and we’ll see you — well we don’t see, but you’ll hear from us.

Neil Vogel: Thanks all.

Unknown Executive: Thank you, operator.

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

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