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

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Jason Helfstein : And just a quick follow up. If you’re not going to build, I mean, the whole reason we’re trying to get into the services where you are the general contractor, is because you basically I think, thought you could get a better take rate, right? Because when you provide ads and leads, at the end of the day, there’s a diminishment, because the service provider has to compete to close that with other service providers, and so you don’t get the full cost. So I mean, do you agree with that thesis and just, if the bulk of the business is going to be on their ads and leads, we just have to think about kind of a lower conversion rate of that 10% to 20% of advertising over time? Thanks.

Joseph Levin: No, it’s not that. What would put us into the services business was trying to drive the customer experience. So trying to be able to get greater coverage in more categories, or give the homeowner more options. So what that means is, for example, where you — where advertising doesn’t work, because there’s a supply demand imbalance. You can’t go to the service professional and say, well come on our platform, and we’ll give you all the leads for free or even better, we’ll pay you to take the leads to make sure the customers get a better experience. What you can do in services is you can price those things to make it attractive to service professionals to service the customer on your platform. So what we’re trying to get to is more homeowners who come onto our platform have a solution that works for them.

Now, we have to do that in an economically feasible way and doing that in the complex services wasn’t working out economically for us, but in these other areas it does and so we can service more customers with a solution. The other thing is that homeowners — many homeowners in particular younger homeowners want to do less work or I should say are comfortable with is the platform doing more work. So that means that they trust the platform to give a fair price. They trust the platform to find a reasonable service professional, and they allow us to do that work on their behalf. And yes, that does lead to more take rate in that example. But really what’s driving that is, is having a compelling customer experience, which I think we can deliver —

Christopher Halpin: Long term revenue growth and margins.

Joseph Levin: Okay. On the long term revenue growth and margins, we think this should be a double digit revenue grower. Again, 2023 is going to be choppy, because we’re removing some empty calories and changing a bunch of things in the business. But it’s kind of — after 2023 I think double digit revenue growth is absolutely achievable with expanding margins, And there’s a lot of leverage to expand margin, we talked about cost savings and efficiency, which much of which we’ve already realized. But we do think that we can grow margins just by incremental revenue on a fixed cost base from here, and that’s to be expected to business.

Joseph Levin: Thank you. Next question?

Operator: Thank you. Our next question comes from Cory Carpenter with JPMorgan. Please go ahead.

Cory Carpenter : Thank you. I wanted to stick with Angi, I had two questions there. First, just hoping you could expand a bit on your expectations around revenue trends, maybe beyond 1Q this year, but not long term. In the non-profit you mentioned earlier, that roofing has turned profitable. So hope you could talk about where else you’re expecting leverage to come from the 2023 across the different segments. Thank you.

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