People Incorporated (PPLI) Oppenheimer 27th Virtual Annual Technology, Internet & Communications Conference summary

Digital advertising and DDM performance

• Digital revenue returned to double-digit growth, with guidance for 15%+ revenue growth in Q3 and continued acceleration in core sessions and traffic metrics.

• Ad market remains stable, with strength in health, pharma, beauty, and retail, while categories like technology and home have stabilized at lower levels.

• Monetization is driven by a mix of direct/premium and programmatic channels, with direct making up two-thirds of ad revenue and programmatic pricing growing 36%, outpacing the market.

• D/Cipher, a predictive analytics product, is now part of over half of premium deals, delivering superior outcomes versus cookies and driving advertiser adoption.

• AI licensing, including a partnership with OpenAI, is a growing revenue stream, with expectations for more deals and variable contract structures over time.

Strategic direction and M&A

• Focus remains on established brands with scale, as launching new brands is no longer a priority; scale and brand strength are seen as key competitive advantages.

• M&A targets are intent-driven brands that can benefit from D/Cipher and the tech platform, with ongoing evaluation of opportunities in the open web.

• Long-term digital Adjusted EBITDA margin target is mid-30s, with current investments in content, marketing, and technology expected to support incremental margin growth.

• Consideration of a DDM spin-off is based on strategic fit and value creation, not tied to margin levels; cash flow and leverage targets influence timing.

• DDM debt structure is flexible, with improved credit quality and ongoing evaluation of optimal capital structure.

Angi business update

• Progress made in improving consumer experience and pro quality, with reduced outbound marketing and enhanced product features using predictive analytics and AI.

• Pro retention and lead quality have improved, with continued focus on better matching and increased monetized transactions per service request.

• Demand remains a headwind due to proactive marketing cuts, but reinvigorating consumer demand is a key focus for future growth.

• Lower interest rates and a more dynamic housing market are expected to be neutral to positive, especially for discretionary jobs.

• Long-term Adjusted EBITDA margin target for Angi is 20%, with recent quarters showing improvement.