Good day, and welcome to the ANGI Homeservices Q4 2019 Results Conference Call. At this time, I would like to turn the conference over to CFO, Glenn Schiffman of IAC. Please go ahead.

Thank you, operator. Good morning, everyone. Glenn Schiffman here and welcome to the ANGI Homeservices fourth quarter earnings call. Joining me today is Joey Levin, Chairman of ANGI Homeservices and CEO of IAC; and Brandon Ridenour, CEO of ANGI Homeservices. Joey and I will also address any questions you may have on IAC's fourth quarter results. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter. We will not be reading the shareholder letter on this call. It is currently available on the Investor Relations section of our website. I will shortly turn the call over to Joey to make a few brief introductory remarks and then we'll open it up to Q&A. Before we get to that, I'd like to remind you that during this call, we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate or similar such statements. These forward-looking views are subject to risks and uncertainties and our actual results could differ materially from those views expressed today. Some of these risks have been set forth in both IAC and ANGI Homeservices fourth quarter press releases and our reports filed with the SEC. We will 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 press releases, the IAC shareholder letter, and again to the Investor Relations section of our websites for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Now let's jump right into it. Joey.

Thanks, Glenn, and thanks everybody for joining us. What we know to be a very busy morning. This is the first call in IAC's 25th year under current management and a really great place to start 2020. This is yet another big reset for IAC. I think since I've been here, we've probably had about four of these. And right now we're on the verge of separating from Match Group, which is the bulk of our current enterprise value and cash flow, which is a little bit daunting but exciting because we're going to -- we're going to become a much smaller company again, which means we're going to focus on building, we're going to focus on building new businesses and new categories and we love this stage of the business, wouldn't be possible without the support of the 8,600 employees now across all of IAC, so I want to thank everybody for a great year in 2019 and then exciting outlook going forward in 2020. In particular there's one employee, I want to think it's Mandy Ginsberg for her leadership over the last few years at Match Group and an unbelievable run and a seamless transition to Shar Dubey who has been a incredible leader at Match throughout her tenure at the company. And I think going to do a fabulous job at the top. So that's the exciting news. And let's switch to the questions now. Operator we'll take the first question.

[Operator Instructions] We'll take our first question from Eric Sheridan with UBS.

Thanks for taking the question. Joey the section in the weather on that public versus private market valuations, wanted to sort of see if we can get a little bit more granularity about your thinking there of what you're seeing on the landscape for capital allocation for new IAC and for the new entity going forward. And maybe taking the time to frame it in terms of care, why that was a deal you guys wanted to do, what you see as an opportunity there. And maybe if, if or if not, that should be a blueprint. People should think about the way the company might allocate capital going forward. Thanks so much.

Yeah, thanks Eric. I think that you're exactly right. I think there is great blueprint for a bunch of reasons, it is a public company where probably a public company that may be went public a little bit too early in his life, but built an unbelievable brand, built great liquidity on both sides of the marketplace is a real marketplace business and it's been a category that has tremendous relevance for consumers at a pretty regular frequency. And those are the kinds of things we'll look for. It's also a good size. I mean that's about a $500 million deal. I think if we look through IAC's history, our best results have been in that multi $100 million range, in terms of value creation. So we like that size, checks, we like that size of business, we like that size of market. If you happened to be a public company and we think it's ironically your department had it easier to get transactions with public companies than with private companies. And I do think that the private market remains sort of mysteriously priced from our perspective. So care is a great example and just to get into care a little bit, we looked at that as a great analogy to Service Magic actually. And service magic I recall as the predecessor to Home Advisor and now Angi Home services and when Brandon and team came in to Service Magic, that was a, in many ways, similar to what care.com is right now. Service Magic was trying to as quickly as possible get a consumer in and getting consumer out and you know, make some margin in between there ideally, and they did a wonderful job of that, but couldn't really scale the products because there wasn't the necessary product innovation acting in there and the folks on both sides of the marketplace were using the platform didn't really appreciate the value that the platform could provide. And what happened is, Brandon and Chris and others really evolved it from what was sort of derisively lead gen to true matching. And I think that adds a lot of value to the -- in the case of care to the caregiver and a lot of value to the care seeker and make that process much more efficient. That's what we're going to try and do in the product here with care.com, and it's a $300 billion market just in the US, it's got great tailwinds we think both in terms of an aging population and eldercare being very important to more families over time. Lots of families with two working parents, which means that they're going to need help with child care. Enterprise is very focused on making sure that their employees have help in this area so that they can show up for work and it's still a very small penetration among enterprises providing solutions for care for their employees. And we look at all of that and say that we can get the product right and Care has done it a wonderful job today building a product and we think there's room to improve there, we can get that product right. We think it's a really, really big opportunity with a lot of relevance and a lot of frequencies. Interestingly, the financial profile of ServiceMagic when Brandon and team came on and rebranded, it is very similar to what you see at care, LTM revenue at Care about $200 million and LTM EBITDA, little in excess of $20 million. So we're starting to execute the playbook.

We'll take our next question from Brad Erickson with Needham & Company.

Thanks. Just had a couple on ANGI. First is on top line. I guess, lately you've talked about kind of a 20% to 25% growth rate. Are you able to stick to that in 2020? And just help us, what if anything is contemplated there for fixed price? And then second, with the sequential decline you showed, under the old definition of what it counted as a service provider. Can you talk about what's kind of going on there? And then, sort of why that's happening? And then also why the new disclosure, I guess maybe more instructive for how to think about business going forward? Thanks.

Yes, sure. This is Brandon. We're still committed to the long-term goal of 20% to 25% growth. And I think as we sit here today, we're more confident in that, than we have been in awhile. The drivers are really a few different areas. One that the Angie's list is accelerating from a growth standpoint, we expect that to continue throughout 2020. Handy, the acquisition there is has proven out even better than sort of what we had modeled in advanced. And then with HomeAdvisor, look at it from a few different ways. I think our position is much stronger, on a relative basis to where we were same time last year. And our traditional business there on the consumer side, we have made pretty dramatic progress in paid search and that's gone from a huge headwind last year at this time to a real area of strength and should be a good tailwind. And we are as of the end of January past the affiliate cuts from last year, which has been a big 12 month headwind for us. And then SEO, while they haven't seen any significant improvement has remained relatively stable and we're optimistic that environment, which has been pretty volatile over the last few years, is more stable going forward. And as we get through the spring and sort of the event we saw last -- last May that will also be favorable from a comp perspective. So we feel really good about consumer acquisition side of our -- of our business at HomeAdvisor. On the provider side, we end the year with the largest sales force in the history of the company. A lot of the investment in expanding the sales force was back weighted the second half of the year. And so we'd expect to see that investment drive as the capacity growth as the year progresses. As always, we've got a lot of work to do to bring on more providers, but we're excited with where we end the year and what that portends for future growth. And then lastly taking all that into consideration, we're now able to marry on top of it a fixed price is this new fixed price line of business, which obviously we've been pleased with the progress there in the back half of the year in particularly Q4 being ahead of where we thought we would be. And as we exit the year we have a really good understanding of the run rate of fixed price transactions and have from that confidence and the contribution to the growth rate that we expect in 2020. I think beyond that, lots of opportunity for upsides that there's a little bit uncertain at this point, obviously we've launched on a 150 different project types, most of those are what we call low consideration project search or lower ticket value projects. There's a whole other category projects that were sort of medium priced projects that covers about $150 billion in TAM that we're in the early stages of experimenting with. So the projects, we've already unlocked cover about $50 billion in TAM and the projects were sort of in the early stages of experimenting with cover another $150 billion. And so the patient timing of half of the way to roll out those medium sized projects is uncertain, but I think we understand the baseline and expect the fix price to be a material contributor to growth for the next year. In terms of the SPs metric, the way we have classically defined paying SPs includes the distribution of the 12 month membership that certain providers sign up for when they join. And so as we look at paying us fees, it's whoever's paid us in the last 30 days. And if you have a membership, you may have only had the membership, which is what you're paying for in the entire month. One of the things we began doing in the last quarter is experimenting and actually rolling out relatively significantly new, package and promotion configurations during the sales process that include a free membership for providers. And while we've seen really strong results from that promotion in terms of our ability to have much more productive sales people and see actually improve retention, it has caused a huge distortion in this paying SP metric because effectively you don't have the revenue recognition that a membership fee over a 12 month period. In order to give ourselves maximum flexibility to offer the pricing and promotions and package configurations that are best suited to our customers and that drive the best sales performance, and to better reflect where our business is going with a fixed price transactions we've introduced this new metric, which is transacting SPs. And I firmly believe that this gives much more transparency to the exact performance and inputs to our business, effectively with the new metrics, you will know exactly how many SPs transacted within the last quarter. And ultimately you'll be able to calculate things like number of transactions for SPs and average order value for SPs, this is much more suitable to the hybrid model that we're going forward with. And well, better reflect on an absolute basis to growth, not only in providers, but in the activity of those providers, which has been, you know, a little more opaque in the past. So that's the reason for that, the traditional number, unfortunately, it's just heavily distorted by the introduction of this promotion, but the promotion was effective and appropriate for us to roll out.

And then we'll see similar such numbers throughout the year as we continue to affect that -- that sales strategy and our membership is a year, and which means every quarter, obviously 25% of the membership is up for renewal and on a year-over-year basis given the new membership strategy, membership only SPs were down. And then just to marry the two questions together to give you some backup if you will, for the 20% to 25%. You can look at our transacting SPs, you can look at our monetized transactions, and we look at double-digit growth rate for both of those metrics. And then you look at revenue per transacting SPs and you look at revenue per monetized transaction and we look at double-digit revenue growth for those two metrics as well. We'll probably be more efficient at monetizing than necessarily the nominal metrics over the next couple quarters given all the product innovation, and the scaling of fixed price. But those -- those two metrics and their corresponding revenue coefficients get us squarely and firmly to that 20% to 25% going forward.

We'll take our next question from Brent Thill with Jefferies.

Just a quick follow-up on fixed price. I think historically you said it's less than 10%. Can you give us a sense of where you think that can go over time? And real quick, Joey, just on Viemo guidance calling for another $300 million EBITDA loss in 2020 realize you're investing in the platform, but can you help us walk through the pathway to profitability for that business, and where do you think ultimately the margins for that business could go over time? Thanks.

Sure. I will -- I'll go first just because correct one quick thing. You said $300 million EBITDA loss of Vimeo. You meant a $30 million EBITDA loss in Vimeo. Otherwise we've made some big mistakes. The right now Vimeo, so just how we're thinking about profitability and we're thinking about profitability our internal discussion is around 2021 or 2022. And I think there's some choices in there for us to make and the main choices revolve around scaling enterprise sales and the sales force for that and scaling marketing. Of course we continue to invest in product and we've added product and engineering and we'll continue to add product and engineering there. But those are the kinds of levers that we're thinking about as it relates to 2021 or 2022. And, really that investment is on the enterprise business, which is growing incredibly fast right now. And a new business which we've talked about launching that we're in the process of launching right now, which is around video creation. And I think, we'll learn a lot over the next few quarters on video creation in particular and our ability to investing their and accelerate their to drive a revenue growth in top line. The other thing for those that there's some -- some choices in there, but these are pull away from those two businesses which are new or newish, the rest of the business we could make profitable if we wanted to be really is profitable right now. The -- the other thing that come towards profitability per Vimeo are gross margins. We made growth progress on gross margin over the course of 2019 and I think we've picked up somewhere in the neighborhood of 500 basis points of gross margin over 2019. And we're -- we're on our back, we think for very clearly to that 70% gross margin target that we've talked about there. And we're also starting to see so far this year, poor leverage on our marketing, the marketing decreasing as a percent of sales. And that's something that you see based on a very sticky customer base, you build on that customer base every year and so that you can get a real efficiency there in the core business. So those are the levers that are in our hands and that I think will play with over the course of this year and decide then and there, whether it's a 2021 or 2022, but I don't think I, I don't see a scenario where we expand losses from here the question of sort of where and when we target profitability.

And then on the question where we can get fixed price too is sort of a percentage of our business. I think there's a couple of ways to think about it. You know, first we've already launched a 150 project types those as I mentioned earlier, those, those project types cover about a $50 billion addressable market, as we experiment our way into the next tranche of projects to medium priced projects, that is, from a GMV standpoint about -- GMV and TAM standpoint about triple at 150 billion, but they're both somewhat equivalent in terms of frequency of requests. So we're recovering, you know, in terms of the opportunity for customers to engage we're already covering about a third of the service requests we get, but if we can expand to the next third requests, we essentially quadruple the addressable market that we're covering. We believe we can get there the medium sized projects are more complex because the scoping and pricing is just simply a more complicated efforts, one that will take a little bit more time to work through, but we are as I said earlier, actively experimenting there and the early signs we see are, are very, very encouraging. And then lastly, once we have made this offering available, you know, let's call it two thirds of requests and perhaps $200 billion to the addressable market, it all comes down to consumer preference. In our philosophy here is that we're going to give people a choice. The choice to connect to local providers as our traditional business has always done versus the choice to transact digitally and buy now directly from us. And our expectation that demographic trends and consumer preferences will meaningfully drive adoption of those sort of buy it now option up over time, but I think we'll have to see how that trend ultimately plays out.

And our next question is from Kunal Madhukar with Deutsche Bank.

So two I may, one on the ANGI side want to understand leverage. That had been under pressure all of 2019. I want to understand how you kind of see margin improvement and leverage across different line items in 2020. And then on Match. A couple of quick questions there. One is, what is the next step that we are going to see in terms of maybe it's an export that gets filed or when do we see that. And how soon after that should we start seeing things coming out off both Match as well as IAC in terms of next steps? And then second is with regard to exchange ratio. I know you've talked a bit about the change ratio earlier in December when you were talking about the deal. How should we kind of look at the change ratio for the convertible notes that will travel over to Match? Thank you.

Sure. Why doesn't Brandon go first and then Glenn and I tackle the next one.

Yes. On the margin leverage, we've talked before that ANGI creates operating margin in every line item sale, ops, G&A with the exception of marketing. And importantly this year, we're going to create real operating leverage in every line item, including marketing and that's going to create some nice investment dollars. And those investment dollars are primarily going into fixed price and our international business, and we are framing those investment dollars at about $30 million to $50 million of expenses that we're investing in international and we're investing in our fixed price. And not withstanding that investment of $30 million to $50 million, given the incremental margin we're creating at HomeAdvisor at Angie's list that will still enable us to drive incremental EBITDA this year and incremental profits. In terms of Match next steps, we should file all the [indiscernible] at some point next week, and then that the navigate through the SEC. We have to get comments and reacting to comments post that when it gets clear, we mail it, we have to mail it to our shareholders and the Match shareholders, then there'll be a shareholder vote, and then there'll be an averaging -- an averaging period for all the calculations embedded in of course the -- the exchange and the merger. So we still continue to believe the end of the second quarter, probably the end of June is the best estimate for when all this will be done by. And then in the exchange ratio, I think there's a couple of things embedded in that. I think your question related two mechanics as it relates to the merger. One how many shares we -- IAC give up to Match in exchange for the net liabilities that Match assumes. And we announced in December in the deck and I'll refer you to that deck. I think, when you went through all the calculations and all of the puts and takes that we laid out in the appendix, I think IAC was distributing 2.35 shares, Match shares to the IAC shareholders. Given the movement in the stock prices, I think we're now at 2.36. The numerator in that calculation tends to move with the denominator. So we don't see that moving a lot as it relates to the exchangeable specifically. In the appendix we, laid out how the exchangeable move to Match, and these instruments will be converted from IAC to Match based on the relative market values of new IAC and new Match at closing. So for example, our exchangeable that's due in 2030, once you've include obviously all the adjustments that I talked about as well as the adjustments associated with the call spread. That instrument currently converts into IAC shares at $457 per share. And again, this is a representative calculation that will be done at the -- at the time of district of -- of spin. But right now we estimate that instrument will convert into Match shares at $140 per share.

We'll take our next question from Brian Fitzgerald with Wells Fargo.

Thanks guys. I wanted to ask a little bit about the thought process around Homeservices to what extent you can leverage backend processes or best practices or maybe even infrastructure across kind of all the dozens of brands you have in their fixed CraftJack, MyHammer. And then do Care.com and Nurse Fly and BlueCrew, do they fit in the discussion as well? Maybe one way to ask the question might be is Care.com more like a Nurse Fly, BlueCrew or more like ANGI? Thanks.

I'll take the last one first, and then Brandon can go to the brand inside of ANGI. We think of Care separately and Nurse Fly and BlueCrew separately. Is there an opportunity maybe in the long distance future where you start to see some synergies among them in terms of the tumor or the worker perhaps, but really today and for the foreseeable future, they'll all be organized separately, with separate leadership, building their businesses on their own. We, for a long time at IAC, we believe in sharing information, sharing best practices, sharing learnings, but we don't believe in synergies between the businesses unless they have natural synergies and there's, we don't believe in forced synergies and gives us a common ownership. So Care has a lot of work to do on the product, there's lots of work to do in building out that marketplace, building out the tools bespoke for caregivers and care takers and that's going to be the priority there, they will learn, I mean Tim Allen is going to call Brandon Ridenour and pick his brain on a number of things. And throughout your organization in terms of what you've learned in converging, what you've learned in a retention, what's possible in areas like this I think is really helpful to be able to talk to somebody who's been through it and be able to get access to all their performance data. Those are excellent tools for building a business, and we view that throughout IAC. I'm not talking about using consumer data and consumer information about what is possible in terms of running a business and things like conversion or other factor to use to drive the business. So that would be helpful I think and valuable to the people who run these businesses, but each individual business is going to run on its own, they do have common themes, common threads, which is what we're doing and each of the four businesses you targeting about ANGI, Care, Nurse Fly, BlueCrew is we're helping people get jobs, helping people find work and really making that process much easier and taking out a lot of bureaucracy in that process that just gets people working. And that's something that we feel good about. It's a mission. And then add a lot of this country. But operating them as businesses, they're going to operate separately as businesses.

And ANGI Homeservices, we are creating commonality and leveraging technology and platform where it makes most sense. I think in our international businesses where we're in five countries, we're seeing them converge on a common model and including replatforming in some cases where it makes sense. And in the U.S we have the Handy platform, which is really the engine of our fixed price offering across all of our brands so Handy and Homeadvisor and Angie's list. And while Handy is a brand, it's more importantly a platform that is powering this innovation across these three very large brands at this point. And then lastly we've made some changes to fold in and help desk, which is our field service tech offering into Angie's List. That combination makes a ton of sense because Angie's list tends to deal with larger service providers and this is a software SaaS offering that delivers the most value to larger providers. So we are taking advantage of the opportunities to sort of get synergies from a capability standpoint. But at the same time, we're not forcing a combined replatforming across all 10 of these brands, it's -- it doesn't make a ton of sense to create that level of distraction in a space that's moving so quickly from an innovation standpoint.

We'll take our next question from Ross Sandler with Barclays.

Hey guys. A couple of questions about the core stub business. I guess starting with apps. So this business will generate aside from Angie's the most EBITDA in the core business post spin. So congrats on getting to the $200 milestone -- $200 million milestone with Mosaic. Can you just talk about how that $200 million is concentrated among the big ones like Robokiller or iTranslate versus some smaller ones. And then, on the desktop side of the apps business, there's obviously lots of changes happening in the browser world. So any comment on the sustainability of that $60 million to $70 million of EBITDA that apps are going to generate this year on a go-forward basis. And then lastly post spin. What's likely to happen with the corporate expense on the negative 125, what will that look like after you spin out Match and potentially bring that down a little bit. Thank you.

Sure. Thanks, Ross. It's been awhile because we got an applications question, which is good. So it is -- on Mosaic, the way you think about the concentration definitely two that you mentioned are big ones. A translation for sure. One of our best categories and really a phenomenal product -- our phenomenal series of products with iTranslate being the biggest and worth trying if you're traveling abroad or need to communicate with somebody in another language. Robokiller another big one for sure. The other areas, weather is a big area for us, productivity is a big area, sleep, airplane trackers, things like that are all assets that are important. And I think, we've got something like 40 apps right now and probably a dozen greater than $2 million. The -- So Mosaic we think big opportunity in a category with about when we added it up, 20 billion downloads I think or over 20 billion downloads last year in the areas where we have products, and we're continuing to build products, both in the areas we're in and adjacent areas and a new area it's a 20 billion downloads across iOS and Google in the areas where we currently have products and that's grown. And modernization is growing there too people are more accustomed to subscription there now. And so we booked our product is 70% subscription we're moving towards longer term subscriptions, annual subscription, which is going well too. So we're pretty excited about Mosaic and continuing to add there both through organic builds and through acquisition where we've done reasonably well in those acquisitions. On the desktop side, we had a -- we've been in this business a very long time. We've been through a lot of volatility in this business both up and down. We had a nice calm period for several years of great cash flow and over the course of 2019 took another step down. I think that was a series of things. It was definitely some changes in the browser. It was definitely some changes on the Google side. And, I think that we're now at another new baseline is a step down for the desktop business. I think the way we look at it now, I'm probably bottoming out Q1 and then setting a new baseline from there. And then we do think a sustainable cash flow at that new level. And remember we just signed a new Google deal in last year, extending that deal for another three years. On the corporate expense side, remember one big thing in there which is important to call out is we are endowing the IoT foundation out of our 25th year to support the IoT fellows program with $25 million so that entirely it's in the year 2020. That is not a recurring expense and so you can adjust that out and then I'll let or you can adjust that how you want, but I'll let Glenn.

And then also this year we have $20 million of expenses in respect of the Match spinoff. So we think steady state probably 2021, we get back to where we were in 2018 call it $75 million a corporate plus or minus depending on the transactional activity or what we look like then, because as we talked about in the letter, the goal obviously is to grow again and we want to make sure we have all the resources to do that action. Joey talks about, he's been on earnings goals for now, what, six, seven years. I will back one of the first calls -- one of the first questions he got when he was running the desktop applications business years ago was the longevity and the future of that business. And since he answered that question, probably in 2013, '14, we generated $1 billion of EBITDA out of the desktop applications business. So we think obviously the rumors of its demise are not going to be true. And we think we have some nice cash flow on a go forward basis for a period of time. As Joey said, with the Google deal renewed.

We'll take our next question from Cory Carpenter with JP Morgan.

Thanks for the questions two on ANGI. First Brandon, maybe following up on marketing, you touched on this a bit earlier. Could you expand some on the trends you saw across paid and organic search, maybe where you are today versus six months or a year ago? And then on the international business, could you talk about what impacted revenue growth this quarter and how we should think about that going forward? Thanks.

So in terms of marketing, if you look at where we were this time last year, we had seen on the paid side of things, we'd seen a rapid increase in essentially cost per click within the search environments, unprecedented I think at the time we said it was north of 30% on a year-over-year basis, which is just like something we'd never seen before. And on the organic side this time last year we were seeing a dramatic amount of change on the search results pages and culminating with a pretty big impact that we saw in May, specifically. Since that time on the paid side, we have built out a new approach to how we bid and operate within paid search environments. And we've seen that yield a really dramatic improvements such that paid search is one of the great areas of strength right now for our business in terms of driving consumer acquisition. And we expect that to be a pretty major tailwind throughout 2020. On the organic side that it is the -- look at the page as the environment there has gone through dramatic change over probably the last two plus years, and it's been incredibly volatile, but we believe or at least are optimistic that most of that change is behind us simply just given the nature of the way the pages look today. And our hope is that we see reasonable stability. We have seen that be the case since sort of the drop last May, and we're hopeful that continues throughout the year. Obviously, we don't control that in the future's always a little uncertain there. But I think there are some reasons to be optimistic that the level of volatility that's been present there is not what it has been in the past. And international, if you want to take that. Joey.

What was the question on international?

The question was going to Q4 growth rate and prospects there.

Yes. We're going through an exciting transition actually international where our biggest market we're replatforming that not dissimilar to what Brandon and his team did with ServiceMagic years ago. See, you saw the growth rate was 1% in constant currency is a little higher is about 4%. But with our biggest business going through that platform, and when you go through the platform, you take a half step back to hopefully take three or four steps up, steps forward. So if you break that out, we still have three, four thriving businesses all of whom have grown greater than 30% throughout the course -- throughout the course of the year. And then I think, a couple of dodgeinous items in the fourth quarter in Europe, obviously with the Brexit situation and the strikes in France, but it's largely by design given the replatforming and perhaps. And I think we'll have a good sense of how that replatforming to France has gone in the first half of this year and we'll decide sort of how to invest or how to approach it from there. But the actual technological transition, I think was completed this week and now there's some transition with customers and getting people to adopt a new system, a new platform. And if we can get these businesses operating on common infrastructure, then we start to get Brandon alluded to earlier, we'll leverage in the international business.

We'll take our next question from Jason Helfstein with Oppenhimer.

I'll ask two questions. Well, one on video and then another on Care, or Vimeo. So obviously it's going to get a lot more focus post spin. Any updated thoughts about the advertising opportunity? We obviously understand the subscription opportunity, but just any more thoughts there. And then secondly on care.com. Just maybe elaborate a bit more, and maybe go through number one, the issues that they faced, with kind of verification, was that kind of solved? Do you think internally, before you buying them? Number two, how impaired do you think that brand is out there? And then, I guess the third question, do you have any thoughts on how you solve some of the challenges with consumers going around kind of the paid function and any thought you might have about improving the monetization of it? And I do know it's early, but just any thoughts there? Thank you.

So those are all good -- good questions on Care and what we each individually spend a lot of time on those questions. So, I'll go through on video quickly advertising. No, we're not planning to change anything with respect to advertising. The thing that we do a little bit and we'll do more is we will offer the creators, the subscribers on Vimeo tools to incorporate advertising to the extent they want to in their videos, but we asked Vimeo are going to be monetizing the video user base with advertising. That's really the best way to think about it as a tool that our subscribers can use if they want to. And that's been fundamental so Vimeo for a very long time, the, the creators, the subscribers control the experience, they control the relationship with their audience and they'll do what makes sense there and they want to add so try and give them tools to help them with that, but we don't plan to near term be fundamentally in the advertising business. On the Care side so starting with background check verification, identity verification and things like that. And one of your questions was in itself, and the answer to that is never saw that we did an ongoing process you have to continue to innovate here, you have to continue to get better and you have to continue to make sure that you're a step ahead of everybody else in terms of the cutting edge products to drive safety for both sides of your marketplace. And we know that from Match, we know that from ANGI, and we will certainly apply that to Care, which is we have to continue to, to innovate there. So one of the things that we've considered and continue to consider is in that area of background checks and identity verification, Care have some products there that verify identity and when people enroll in those products both sides of the marketplace see more engagement and better engagement. The precedents in other markets where people on those platforms favor those services we haven't decided what exactly we're doing or who we might charge or whether we, we pay for those charges in the platform itself, but there's a wide range of options there that we think are viable. And that can actually enhance the experience for everybody on the platform at real value in ways where one side or another of the platform would pay for that incremental value, maybe willing to pay for that incremental value. In terms of the brand, the brand is in, I think excellent shape. Obviously, there was some bad press in 2019, which I think was not good for the ecosystem, but I don't think we should confuse sort of the investor reaction, the stock price and things like that with consumer reactions around the brand. And we're looking at traffic and audience and all those things are in we think really healthy places and meaningfully recover. In terms of providers or care seekers circumventing the platform this is another issue that we're very familiar with, people ask this question about ANGI all the time, which is you find a plumber, and that plumber works you get off the platform. And our answer in that case ANGI case remains the same. That's a totally fine outcome, in fact, that's an excellent outcome. If a bunch of people are coming onto the platform and filling up a book of business by virtue of having been on the platform, then we have succeeded and they have succeeded. And the nature of this category is people come into and out of this category very frequently. And if caregivers are saying, well, I built my entire book of business, I'm here and now I work directly. Great. And if a care seekers are saying, I found a entire fleet of caregivers here and now I work directly, Greg Nelson informed the next generation of people interested in those categories to come onto the platform. But also, and this is really important in terms of how we are planning to innovate in the product, it's -- we have to make it easier. And the easier you make it, the more people want to keep that on the platform. The more it makes sense that this convenience of the platform actually adds real value that you'd rather do things on the platform than off the platform. And we get to that level. I think we get to that stickiness and that's totally possible. And that the economic trade off that'll make a lot of sense for both sides of the platform. Again, very analogous to ANGI. And if we don't do that then people will move off the platform. And I think that really a product innovation issue that I think we're totally capable of handling and really excited to get our hands into.

Coming back to the Vimeo. One of the reasons why advertising isn't a priority is we're really seeing a big opportunity in the SMB and the enterprise -- enterprise ecosystem. You saw us in the letter talk about enterprise revenue grew 45% last quarter. We talked about record bookings. This quarter was another quarter of record bookings and as bookings are accelerating, so we're really seeing a rich and deep vein in our SMB and our enterprise opportunity there and the management team's executing well against it.

We'll take our next question from John Blackledge with Cowen.

Great. On the ANGI fixed price. Could you discuss, Brandon, maybe the conversion uplift you see when you move a task to a fixed price. On Dotdash we saw the recent acquisitions. Joey maybe can you level set how Dotdash is set up for 2020? And how we should think about potential for adding further verticals? And then maybe Glenn or Joey, discontinuing quarterly guide kind of what went into the decision process there. Thank you.

Yes, sure. This is Brandon. I'm just starting with a conversion uplift. As I mentioned earlier, our philosophy here is to give people the option, the choice as to whether they want to connect directly with the high quality local business or purchase a service through us directly. And that is being presented relatively as an either or choice. I mentioned earlier that, we sort exit the your understanding of baseline run rate and through that can be confident and the contribution to our growth rate this year. But let me share a little bit of data that made us so excited and drove us to go even faster than we originally anticipated. We're seeing user satisfaction for folks to buy a fixed price transaction is -- it was more than 35 points higher than it is in our traditional model. We're seeing those customers come back and reuse our service at greater than a 50% increased rate. And we are seeing that same audience engage with our mobile app at a greater than 30% increased rate. And it was sort of these side effects if you will that really, really led by our customers drove us to understand that the -- there's a dramatic interest in this if there's good engagement with it, and that it's going to drive some of the behavioral changes that we think are really important for the long-term help of the business. I think what we had the opportunity to do going forward is to drive more and more engagement with fixed price offering, as a percentage of our transactions. And obviously the first stage of this is simply just making it available, which is what we've been focused on for last six to eight months. But over the coming year we'll be optimizing that offering. We'll be optimizing pricing right now our pricing for the task is generally at a national level and the power of getting that pricing in a more sophisticated place where it's localized, it's going to drive a much higher engagement. And then in the very long-term, we can start to look at pricings and promotions and other ways to drive engagement with these services. And as long as we're seeing -- as long as we're seeing these improvements to the characteristics of our customers in terms of satisfaction, in terms of repeat use and in terms of engagement with our mobile app, which is a strategic priority for us, we're going to continue to lean in to drive people more and more to engage on the fixed price side of things.

On Dotdash two things. In terms of M&A, we're not counting on any M&A for 2020 as it relates to our growth objective. We're certainly going to keep looking and hope to find things to add there I don't think we need any more verticals, I think we have a lot of opportunities in our existing verticals, beauty, which is one we added in 2019 we think has significant room. Now maybe we can ask some things within beauty, but there's significant room there I think there's significant room in health, we think there's significant room in finance. We just added the sustainability vertical, which actually standalone is a really interesting category, but also has knock on effects to all the other categories where people in beauty very much care about sustainability and people in health very much care about sustainability and home care about sustainability, et cetera. So I don't think we need more verticals, but we'll keep our eyes open there, and acquisitions overall, I mean, 2019 work a huge factor in driving the growth in that business. All of our acquisitions that we've done in that business are very small, they get a lot of attention because media likes to cover media, but they're, they're very tiny deal for us and even really for Dotdash. In terms of 2020 growth there's a lot of good things that push us into 2021 and you just start with a bigger audience baseline in some of the key areas that in particular the amount of sizeable areas and that from the time and investment we've made over the last few years and continue to make in terms of just winning with the best content. The other area that's been growing fastest is our performance marketing where we're not just selling the impressions and we've done a very nice job selling impressions but also selling transactions. So either clicks or clicks to go through to ultimately do transactions and because our audience, and we keep saying this and we've been saying this to the display advertisers for a long time, because our audience is so intent based that audience performs well for advertisers. And we've, in essence, we're putting our money where our mouth is and saying, well, we will allocate a lot of our inventory to say we only get paid on performance because we know this audience is so intent. The other benefit of that right now in particular in media is there's a big movement right now. I'm sure you've all seen to any cookies and most of the big platforms blocking cookies in one way or another or limiting the reach of cookies in one way or another. And what cookies do is they just put a Mark on a user's computer just to identify that user in one way or, or identify some traits of that user. And so that's been historically an important tool for a lot of advertisers. That tool is not nearly as important to Dotdash and Dotdash is properties because we don't need it. The reason we all need it is because our content shows what the user wants, we don't have to get that this is a 40 year old female interested in shoes, they're looking at an article that's about shoes for women and they're trying to figure out which is the right shoe to buy in that context that you've imagined is very effective media for somebody who wants to buy that kind of advertising? And that, especially enhanced by the fact that people were, were out trying to target these users with cookies have less options to do that. And now they're looking at, okay, where can we find that within intent. It's similar, although I think it's ambitious of us, but Google has always been the ultimate intent-based media. We buy with over $3 billion to $4 billion with media from Google and hundreds of millions of dollars a year from Google on that intent information. And I think, we have similar dynamics here with -- with Dotdash in the sense that we are providing the answers, people are going to Google with a question and very often Dotdash is the answer to that which means we're at the right place to reach those users. And the other thing that you see with our advertisers, which I've talked about a lot, which is stat we're hugely proud of is the repeat rate on advertisers. So we entered 2020 with a good base of advertisers, those advertisers are significantly repeating and now we're adding new advertisers to grow on top of that. We have a lot of reasons to be optimistic about Dotdash, I could go on for awhile, but we are -- we're really excited about the team that we have there and the assets that we've built. And your last question was quarterly guidance. The philosophy there in terms of pulling it back is we don't manage the business reporters. We don't want to manage the business reporters. And we're trying to put sort of our money where our mouth is thereby saying and thereby then let's pull away this quarterly guidance so that it doesn't become a trap for the business. I think, we have always tried to avoid organize it by quarters, but when you put out the quarterly guidance that lend a little more weight to it and we really want to focus on longer term. And so we are going to continue to talk about the year and I think that our shareholders should know how we think about the year, and how we think about the future and what our ambitions are for the future. But breaking that down into individual quarters we think is too narrow or too shortsighted and so we don't want to continue to do that in new IAC. We didn't want to do a sort of abrupt pullback in that so we did this quarter, but really looking forward for new IoT we don't think quarters are as important in thinking about how to build a business and how to build long-term value.

We'll take our next question from Dan Salmon with BMO Capital Markets.

Brandon maybe just a quick update on some of your partnerships with Nextdoor and Realogy others as yet make efforts to tap into different pools of demand and the traffic and then just one for Joey, obviously Matches gotten the most the attention rate, you also made some other small divestments from the portfolio over the past year, so can you just give us an update on those efforts and whether we should expect more that is well.

Yes, sure. This is Brandon. So on the partnership front. 2019 was I think an exciting year. Nextdoor partnership is something obviously we're excited about in terms of the audience that we're reaching there as a large and growing audience of neighbors who oftentimes are looking for local services so that the synergies there in terms of intents are significant. The national partnership is already a meaningful contributor to our business, but we think, it's just in early stages and really has a far greater potential. And we're working actively with the team there and looking forward to what additional value we can unlock in 2020. In terms of Realogy it's a very different animal in the sense that it gives us sort of entree into real estate transactions that are offline. And so the ability to -- the ability to serve a home seller, while they are in the process of selling their home and to be able to reach them through agents is a powerful new avenue for us to reach people at the right moment for when they're looking for home services. The other thing that makes it very different is that it's very much a market by market sort of ground game. And so in 2019, we started with testing in just four markets, but we have very, very, very quickly expanded that to dozens and dozens of markets and looking forward very much to seeing that scale meaningfully in 2020. The other thing that's interesting about the Realogy partnership is it really gives us a fundamentally new capability that we'll be able to take to market and offer to other similar providers or situations where we can reach people offline at a time when they have significant Homeservices needs. So I think on both of those partnerships we're obviously very excited about the potential for growth in 2020. And then we have -- we're very focused on sort of a partnership pipeline and hope to have more to talk about.

Dan, in terms of divestments, I'll try to be really quick so we can squeeze in one more question. I think we've largely done the cleanup that we were set out to do over the last couple of years and we're in a nice place. Now that doesn't mean that we won't -- businesses aren't working or things change. Obviously we'll continue to clean up, but right now we're at a place where I think we're, -- we have cleaned up all this or the vast majority of the things we intended to clean up. So let's go to one more quick question.

We'll take our next question from Youssef Squali with SunTrust Robinson.

So Joey, going back to your letter and given what you said about valuations in the private market, are your return expectations changing I'm trying to understand how you guys balance the return threshold expectations that we just held fast. You want to deploy your new found capital and on the ANGI, can you maybe speak to the pace of buyback, I know you bought some stock back. It wasn't a lot. You still have a fair amount of dry powder and considering the performance of the stock over the last several quarters was wondering if there are any plans to accelerate that? Thank you.

On speed to deploy the capital and return thresholds, I don't think anything has changed, we are not in a rush to deploy the capital, we've never been in a rush to deploy the capital, it's really opportunities specific, we've generally been overcapitalized and I think our plan generally is to remain overcapitalized to be flexible for the right opportunities. And that's a good segue to your second question, which is share repurchases, we certainly want to have some powder for share repurchases to make that available, if it makes sense, we did some share repurchases of ANGI in the last quarter and it's definitely going to continue to look at over the future and as we always do. I think that's it. We're out of time. We're grateful as always, for everybody for joining us for this call. And look forward to talking to you next quarter. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.