IAC Inc.

Good morning and welcome to the IAC third quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After introductory remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw your question, please press star then two. Please know 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.

Thank you. Good morning, everyone. Christopher Halpin here, and welcome to the IAC Third Quarter Earnings Call. Joining me today are Barry Diller, Chairman and Senior Executive of IAC, and Neil Vogel, CEO of People, Inc. IAC has published a presentation on the investor relations section of our website, today entitled Q3 Earnings Presentation. On this call, Barry, 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 call, 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 and in the presentation should be considered in light of such risks. We'll also discuss certain non-GAAP measures, which, as a reminder, includes 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 hand it over to Barry Dillard. Thank you. I'm very glad to be with you all today.

I've been talking to investors lately, and I more than get everyone's desire for more clarity about IAC's future. With the departure of our CEO and the spinoff of Angie, it's understandable that there are questions about our direction and our future. And I'm going to address those this morning, both in my remarks and in answering any of your questions. There are two core parts to IAC today. They're underpinned by a strong cash position and our balance sheet. They are people and our investment in MGM. Broadly, we have been and we will continue to slim down IAC's assets and our overhead. We'll get lean and crystal clear that people and MGM are IAC until something else wildly compelling comes along. What we want to do is, first, reimagine People, Inc. from defense to offense. Second, help MGM's excellent management team simplify its businesses and change its pitiful multiple. Next, we'll divest our non-core holdings and reduce our overhead. And finally, continue to be opportunistic on share repurchases. It certainly seems to me that opportunistic is now, as is increasing our ownership of MGM. There's this huge discount in the value of our shares and a mind-blowing discount in the value of MGM. I mean, it's selling at an emergency multiple. There's no chance that it's going to continue to infinity. Time will correct this, but we won't let time stand still. So let's start talking about People Inc. As for transparency, changing the name from the awkward DDM was a good first step. We are the largest digital and print publisher in America. We way outperform our peers with our brands and our content and our technology. The market narrative says content is dead, given all the AI talk of disintermediation and Google's continuing drive to shrink the revenue it shares with publishers. It's all a giant overreaction, and it ain't our reality. Yes, there's a transition in search. Yes, we're getting declining traffic from Google. But for some years, we've known these disruptions were coming, and we've been preparing and mastering for this rocky environment. Our results speak to that, as Neil Vogel and Chris Halepin will soon detail. You know, if you just play the old game like most publishers, and yes, you're in trouble. We've been doing the opposite for several years now, and we're transferring these great brands built over a century in the old media mold into digital powerhouses. We built out a massive modern content engine behind these brands that allows us to reach consumers wherever they are. on our sites and apps via social media and news platforms, through video, at events, actually everywhere. And for monetization, no one comes close to us. But beyond all that excellent execution from the great people at People, there is the evolution we're conducting beyond the hidebound publishing industry. What we're going to do is invert the base publishing model. I've used the following examples to my colleagues. What if five years ago at Travel and Leisure, which has always had these great pictures everywhere, every place in the world, covers vacation spots, just some of the best photography and best experiences. What if they thought of White Lotus and produced it? What if our food and wine magazine knowing so much about all that, food and wine and stuff, they thought, why don't we invent Casamigos? Why didn't Investopedia, one of our sites, invent Shark Tank? The other thing is, at People, we test an astonishing 16,000 products a year. There's just gotta be a pony in that. It goes on and on from there to every property we've got and all these incredible opportunities to invert our content businesses into a whole stream of new businesses. If we get that going, there's really no ceiling to what we can create and it is to create and not be on the back foot like almost every other publisher seems to be these days. That's what we'll be doing while we continue to execute on the day-to-day grind of today's publishing business. Neil's got more to tell you, but for the first time since we've acquired these assets, I am giantly excited about their future. Frankly, if we spent all our time on this one asset of ours, we can create a giant octopus of owned and operated companies and businesses for the future. All right, MGM. Here we're dealing with the opposite of the fear of disintermediation. MGM is a giant hedge against disintermediation. I use that word a lot because it's in the genuine and proper, because it really is the genuine and proper scare word for the disruption from artificial intelligence. For sure, AI will affect everything other than live entertainment and travel experiences. as there is no simulation that's going to get between MGM and its worldwide customers. Please think on this. These assets can never be disintermediated. Las Vegas can never be disintermediated. And no one, nowhere, is ever going to build the depth and scale of Las Vegas. It's now and it's forever going to be the entertainment capital of the world. It's got more infrastructure per square inch. than anywhere else. It's sports, gaming, performances from every big time entertainer, the best food, on and on. It may ebb and flow given macroeconomic issues from time to time. But it's been a constant build over 30 years, 30 years really when Steve Wynn kind of reinvented the city. Las Vegas is actually almost 100 years old. And MGM's footprint in Las Vegas with nine resorts is so violently strong that it has zero comparison. Back in 2020, at the height of COVID, we invested in MGM. We bought it right, understanding its extraordinary position in Las Vegas, that it had a superb management team, exciting digital opportunities, and was building a truly most extraordinary resort in Japan. Our expectations have been realized. Revenue rebounded from the lows of the pandemic. Digital operations scaled to profitability and it bought back astounding 45% of its shares. Shockingly, despite all this, MGM share prices declined 29% since the beginning of 22. As management said on the last earnings call, if you back out the value MGM's publicly traded holdings in MGM China and the value of its 50% stake in MGM, everything else in MGM is trading at less than three times EBITDA. It's extraordinary to say the least, and it will not continue. Think about what we got at MGM. Just think about it without all the gnarling on this and that individual stat. nine casinos, 40,000 hotel rooms, convention centers at a scale that no one else has anywhere, restaurants, hundreds, 400 or so restaurants, 120 music halls, arenas, et cetera, upcoming F1 and more sports teams coming along in the next years. it just can't be duplicated anywhere. Our ownership at MGM is now at 24%, and I believe it will increase over time both by our direct purchases as well as MGM stock purchases. I'm continually awestruck that the stock market seems to yawn too focused always does, I guess, in the short term. But, you know, bears point to the economic overhang of Las Vegas after this massive post-pandemic bounce, the 50-50 JV structure at MGM, at MGM, and the fact that Japan is going to take some years before it comes online. When Japan comes online, the only casino in the entire country of Japan, I mean, can you imagine? Well, uh, All these people naysaying MGM, they're all wrong, and time will certainly tell. On IAC capital allocation, which I telegraphed earlier, we purchased an additional 100 million of shares since our earnings call in early August, which brings our total year-to-date purchases to 300 million, which is 7 million shares, or 8% or so of our shares outstanding. Our cash balances are over a billion and they will be enhanced when we sell these non-core assets. I don't intend for our capital to sit idle, nor to be spent on acquisitions at high prices and speculatively questionable concepts. We've been inventing and building businesses at IAC for over 30 years. We had a green field for decades in internet and e-commerce. That period's pretty much ended, but it doesn't take a bird brain to be sure there are going to be opportunities in the future and in our future. But I'm patient. Well, I'm not really very patient about most anything, but I'm cautious now of the pricing of assets, and I've got no intention of splurging. And if... Needs more saying. I will say it again. People at MGM have enough opportunity to fully engage us. So now, Neil Vogel will give you more detail on Peopling.