Youssef Squali

Youssef Squali inquired about Peloton's strategy to achieve top-line growth, given strong profitability and balance sheet improvements but persistent revenue declines. He asked for confidence drivers for future growth, particularly regarding Q4 fiscal 2026 guidance and the impact of existing versus new member equipment sales.

Answer

CEO Peter Stern acknowledged the need for improved growth, highlighting the company's progress in profitability and balance sheet strength as foundational. He outlined a path to growth through enhanced product offerings, appropriate subscription pricing, improved net churn, and exploiting new avenues like the commercial business unit. Stern clarified that Q2's revenue miss was due to existing members' longer upgrade cycles for durable equipment, not a lack of resonance with new customers. CFO Liz Coddington added that the updated guidance for the latter half of the fiscal year reflects the Q2 sales mix and favorable subscription revenue, without assuming a timing recovery for existing member sales softness.

Youssef Squali inquired about the long-term secular growth outlook for the business beyond near-term pricing actions and asked for a more detailed breakdown of gross margin expectations for fiscal 2026.

Answer

President & CEO Peter Stern expressed strong optimism, citing a U.S. serviceable addressable market of 17 million households, of which Peloton has captured only a fraction. He believes the market is expanding as wellness becomes a priority, creating new growth vectors. CFO Liz Coddington added that the fiscal 2026 gross margin outlook reflects a 140 basis point improvement (adjusted for overhead allocation), driven by gains in both Connected Fitness (lower service/warranty costs) and Subscription (content and music royalty optimizations) segments.

Youssef Squali asked for CEO Peter Stern's perspective on progress against key initiatives, the primary challenges to returning to revenue growth, and the rationale behind the recent executive team changes.

Answer

CEO Peter Stern stated that progress is strong, highlighting cost reductions, improved unit economics, and a healthy LTV to CAC ratio as evidence of 'earning the right to grow.' He identified hardware innovation and expanding Peloton's presence in retail, gyms, and hotels as key to future growth. Regarding management changes, Stern explained the new COO, Charles Kirol, was hired to improve innovation, supply chain agility, and product quality, while searches for a CIO, CMO, and Chief Communications Officer are underway to address tech debt, drive top-line growth, and better communicate the company's story.

Youssef Houssaini Squali asked about the health of the U.S. consumer and how Oddity manages to outperform despite a mixed earnings season for consumer-oriented companies. Squali also inquired about the 2026 growth algorithm, specifically the 20% top-line and 20% adjusted EBITDA margin targets, and marketing efficiency.

Answer

Oran Holtzman, Co-founder and CEO, ODDITY, acknowledged external softness but affirmed strong internal results, attributing resilience to high repeat purchases offsetting increased acquisition costs. Lindsay Drucker Mann, CFO, ODDITY, confirmed no change to the 20% revenue growth and 20% adjusted EBITDA margin algorithm, nor to the Il Makiage $1 billion by 2028 target. She noted higher acquisition costs in Q3 but an improved media environment in Q4, with SG&A up around 30% due to growth initiatives.

Youssef Squali asked for management's view on the health of the U.S. consumer and how ODDITY continues to outperform despite a mixed earnings season for consumer-oriented companies. He also inquired if the 2026 growth algorithm of 20% top-line and 20% adjusted EBITDA margins remains unchanged, and about current marketing efficiency.

Answer

Oran Holtzman, Co-founder and CEO of ODDITY, attributed the company's strong performance to massive repeat business offsetting higher acquisition costs, despite external market softness. Lindsay Drucker Mann, CFO of ODDITY, confirmed no change to the 20% revenue growth and 20% adjusted EBITDA margin algorithm for 2026, nor the Il Makiage $1 billion revenue target by 2028. She noted higher acquisition costs in Q3 but an improved media environment in Q4, with SG&A remaining manageable.

Youssef Squali of Truist Securities inquired about the drivers behind the sequential compression in the Q3 gross margin guidance and sought confirmation that the 2026 growth outlook of 20% does not depend on revenue from the upcoming Brand 3 launch.

Answer

CFO Lindsay Drucker Mann clarified that the company manages to contribution margin, not gross margin, and the guidance includes conservatism. She noted that the back half of the year has some seasonality with a higher mix of repeat sales and less leverage on fixed COGS. She confirmed that neither the 2025 nor 2026 growth targets rely on Brand 3, as Il Makiage and Spoiled Child provide a sufficient growth runway. The company remains committed to its 20% growth and 20% adjusted EBITDA margin algorithm.

Youssef Squali of Truist Securities inquired about the contribution of international markets to Q1 growth, whether SpoiledChild is expanding internationally, and the potential business impact of the FTC's new 'click-to-cancel' rule.

Answer

CEO Oran Holtzman confirmed that international markets performed well in Q1, contributing to double-digit growth alongside the U.S., and are a key part of the strategy to grow IL MAKIAGE. Global CFO Lindsay Drucker Mann stated the company does not expect the 'click-to-cancel' rule to be an issue, as their subscription model is already opt-in, cancellations are self-serve, and internal testing showed no major business impact.

Youssef Squali of Truist Securities asked about the impact of macro concerns on Oddity's consumer base, such as potential weakness or trade-downs, and questioned the potential business impact if TikTok were to be banned in the U.S.

Answer

CEO Oran Holtzman stated that a potential TikTok shutdown would have no material impact on the business, as the company's internal teams can shift advertising spend to other platforms very quickly. Regarding the macro environment, he explained that the ongoing consumer shift to online channels presents a significant opportunity for Oddity, insulating it from the promotional pressures and inventory issues affecting brick-and-mortar-focused competitors.

Youssef Squali asked CEO Jeff Green about the potential implications of the Google Antitrust lawsuit for The Trade Desk and how advertisers are preparing for industry changes. He also requested Jeff to highlight one or two new products expected to have the biggest impact in the next 12-18 months.

Answer

CEO Jeff Green predicted that Google would likely reduce its focus on the open internet due to antitrust pressures, shifting more towards owned and operated inventory, which benefits The Trade Desk. Regarding new products, he emphasized Kokai as the best platform iteration, and highlighted Deal Desk for foundational forward market development, trading modes for diverse customer servicing, and Audience Unlimited for its significant implications in retail and measurement.

Youssef Squali from Truist Securities inquired about the evolving competitive landscape, specifically asking for an assessment of Amazon's advertising efforts with its DSP and Prime Video inventory.

Answer

CEO Jeff Green explained that The Trade Desk's strategy remains focused on providing objective, transparent access to the entire open internet. He positioned Amazon as not a direct competitor, arguing that walled gardens are inherently biased toward their own media, like Prime Video. Green suggested that Amazon's large inventory creates conflicts that weaken its objectivity claims and that Amazon is a more likely potential partner than a long-term competitor for buying across the open internet.

Youssef Squali asked for more detail on Jeff Green's comments about Google exiting the open internet, questioning if a shift in advertiser sentiment is already being observed. He also asked for the political ad contribution in Q4.

Answer

Co-Founder and CEO Jeff Green clarified his view is based on Google's network business shrinking for years and its strategic focus shifting to priorities like AI, Cloud, and YouTube. He argued that Google's regulatory issues stem from its open internet business, creating an incentive to distance itself and leaving a large opportunity for The Trade Desk. CFO Laura Schenkein answered the second question, stating that political ad spend constituted about 5% of the business in the fourth quarter.

Youssef Squali from Truist Financial Corporation inquired about the specifics of the Microsoft deal, including its duration and unit economics, and asked about the prospects for new deals across IAC's other businesses.

Answer

Neil Vogel, CEO of People Inc., stated that the terms of the Microsoft deal are confidential and were not disclosed. He clarified that it is a 'publisher content marketplace' operating on an 'à la carte' basis, contrasting it with their 'all-you-can-eat' blanket deal with OpenAI. He also reiterated that he anticipates more new deals coming forward.

Youssef Squali (question asked by Robert) asked for details on the Microsoft AI deal, including its duration and unit economics, and prospects for new deals across other businesses.

Answer

Neil Vogel, CEO of People Inc., stated that the terms of the Microsoft deal are confidential but described it as an 'à la carte' publisher content marketplace, contrasting it with the 'all-you-can-eat' OpenAI deal. He also anticipated more new deals in the future, emphasizing the increasing clarity of content value to AI players.

Represented by Robert Zeller, Youssef Squali asked if the renewed Google partnership included cloud savings, about the traffic impact from Google's AI Overviews, and for clarity on the drivers of programmatic advertising softness.

Answer

Christopher Halpin, an IAC executive, confirmed the Google deal was for Search only, with no cloud component. Neil Vogel, CEO of DDM, stated that while Google's AI Overviews cause a 'little performance decline,' the overall impact is not significant as search is only about one-third of DDM's traffic. Halpin clarified that programmatic softness was driven by both lower available impressions in Q1 and a softening in market pricing, which has gone from strong growth to flat year-over-year.

Youssef Squali inquired about the impact of integrating OpenAI technology into D/Cipher on performance metrics like conversion and pricing. He also asked Barry Diller how IAC's engagement with MGM might change after the Angi spin-off.

Answer

Christopher Halpin, an IAC executive, noted that D/Cipher has over 30 case studies proving its outperformance and that integrating OpenAI allows for even better contextual targeting using video and images. Barry Diller, Senior Executive and Chairman, described MGM as a 'forever asset,' stating that IAC may increase its ownership stake over time as MGM continues to buy back its own undervalued stock. Joseph Levin, CEO of IAC, added that the relationship between MGM and its JV partner remains strong.

Youssef Squali asked about the financial contribution from the OpenAI deal, the pipeline for similar licensing deals, and the rationale for the timing of the potential Angi spin-off announcement.

Answer

Executive Christopher Halpin noted the OpenAI deal was the primary driver of a $4.1M year-over-year increase in Q3 licensing revenue. IAC CEO Joey Levin added that while other term sheets are in hand, no new large-scale deals have been finalized. Regarding the Angi spin-off, Levin explained the disclosure was a necessary legal and tactical step to begin detailed planning with all constituents, stating that a spin-off is 'highly likely' but requires a formal process.

Youssef Squali asked if IAC was signaling a potential M&A move into a new business category and how it would manage investor perception of that risk. He also inquired about the pipeline for additional AI data licensing deals following the one with OpenAI.

Answer

IAC CEO Joey Levin stated that while IAC has a history of entering new categories, it follows a rule of never 'betting the company' on a single opportunity. On data licensing, he expressed high confidence in signing more deals, noting that the value of DDM's trusted content is increasing as AI models seek quality and accuracy. He expects a mix of cash and revenue-share deals in the future.

Yousef Squali (Truist Securities) asked CEO Mark Zuckerberg about the profitability of Meta's wearables investment, specifically whether hardware sales alone will recoup costs or if new revenue streams like advertising and commerce on the platform are essential. He also asked CFO Susan Li about the balance between on-balance sheet and off-balance sheet financing for AI initiatives, referencing the Blue Owl data center deal, and its impact on 2026 CapEx and future CapEx growth.

Answer

CEO Mark Zuckerberg stated that Ray-Ban Meta and Oakley Meta Vanguards are performing well and could become very profitable, with revenue from device sales, services, and AI. He expects AI to become the primary use case, driving a highly profitable business once scaled to hundreds of millions or billions of people. CFO Susan Li explained that the Blue Owl joint venture is an example of external capital partnership for data centers, offering long-term optionality. She clarified that future construction costs for this JV will not be recorded as CapEx, with Meta contributing 20% of remaining costs as other investing cash flows.

Youssef Squali asked about the profitability of Meta's wearables hardware, whether it depends on new revenue avenues like advertising or commerce, and the gating factors. He also questioned the on-balance sheet versus off-balance sheet financing of AI initiatives, specifically the Blue Owl deal for the Louisiana data center and its impact on 2026 CapEx growth.

Answer

CEO Mark Zuckerberg stated that Ray-Ban Meta and Oakley Meta products are performing well and could become a very profitable investment, generating revenue from device sales and future services/AI. He aims to scale these products to hundreds of millions or billions of people for an extremely profitable business. CFO Susan Li explained that the Blue Owl JV is an example of partnering with external capital for data center development. She clarified that future construction costs for the JV data center will not be recorded as CapEx, but Meta will contribute 20% of remaining costs as other investing cash flows.

Youssef Squali of Truist Securities asked about the progress of smart glasses as a new computing platform and whether they are expected to replace smartphones. He also questioned how Meta plans to manage stock-based compensation (SBC) and minimize shareholder dilution amid aggressive hiring.

Answer

CEO Mark Zuckerberg expressed excitement about the progress with Ray-Ban Meta glasses, calling them the ideal form factor for AI. He believes that not having AI glasses in the future will be a significant cognitive disadvantage. CFO Susan Li stated that increased SBC from AI hires is factored into the expense outlook. She affirmed Meta's focus on managing dilution, noting the company's financial strength allows for continued share repurchases and dividends to offset equity compensation.

Youssef Squali inquired about the progress of smart glasses as a computing platform and asked about the outlook for stock-based compensation (SBC) and plans to minimize shareholder dilution.

Answer

CEO Mark Zuckerberg expressed excitement about the progress of Ray-Ban Meta glasses, calling them the ideal form factor for AI and a key part of the future. CFO Susan Li stated that increased SBC from AI talent acquisition is factored into the expense outlook and that the company plans to manage dilution through its share repurchase program, supported by a strong financial position.

Youssef Squali from Truist Securities asked for an update on the progress of AI glasses as a new computing platform and whether they are expected to replace smartphones. He also inquired about the outlook for stock-based compensation (SBC) and plans to minimize shareholder dilution.

Answer

CEO Mark Zuckerberg expressed excitement about the progress with Ray-Ban Meta glasses, stating they are the ideal form factor for AI by allowing the AI to see and hear the user's environment. He believes that in the future, not having AI glasses will be a cognitive disadvantage. CFO Susan Li noted that increased compensation costs, including SBC, are factored into the expense outlook. She affirmed that Meta's strong financial position allows it to support these investments while continuing its share buyback program to offset dilution.

Youssef Squali inquired whether the AI chatbot market will be a 'winner-takes-most' or fragmented landscape and asked about Meta AI's key competitive advantages. He also requested details on the potential financial impact of the EU's DMA decision.

Answer

CEO Mark Zuckerberg predicted there will be a number of different AI agents, with personalization becoming a key differentiator over time. CFO Susan Li addressed the EU DMA decision, stating it is too early to specify changes but noted that the impacted European region represented 16% of worldwide revenue in 2024. She added that Meta is actively engaging with the European Commission.

Youssef Squali asked if Meta plans to test ads on commercial queries within Meta AI to create an 'answer engine.' He also questioned if Reality Labs is approaching peak operating losses and which products hold the most potential.

Answer

CFO Susan Li responded that the immediate focus for Meta AI is on creating a valuable consumer experience, with monetization opportunities to be explored later. For Reality Labs, she did not provide guidance beyond 2024 but noted excitement around smart glasses. She affirmed that Reality Labs remains a strategic long-term priority and will continue to be an area of significant investment.

Youssef Squali asked how Etsy balances traffic generation from GenAI platforms with direct mobile traffic, given the potentially higher value of the latter. He also asked CFO Lanny Baker to elaborate on the nature of Depop's Q4 investments that will compress margins and whether this is a short-term or structural phenomenon.

Answer

CEO Josh Silverman stated that GenAI and direct mobile are complementary, not zero-sum. He believes agentic commerce will disproportionately benefit Etsy by presenting its unique offerings and reminding consumers of the brand, creating a virtuous cycle. CFO Lanny Baker explained that Depop's marketing investment is a brand campaign aimed at expanding awareness and scale in a large market, extending into the first half of next year. He noted that while it will compress margins near-term, Depop has demonstrated strong incremental revenue growth to the bottom line, and the investment is for long-term value.

Youssef Squali from Truist Securities asked about balancing traffic acquisition from Gen AI platforms versus direct mobile channels, considering the value accrual to Etsy. He also inquired about the nature of Depop's planned Q4 investments, specifically if they are a one-quarter phenomenon or a more structural, ongoing strategy that will compress margins.

Answer

CEO Josh Silverman clarified that Gen AI and direct mobile are complementary, creating a virtuous cycle where Etsy's unique offerings are highlighted. CFO Lanny Baker and CEO Josh Silverman described Depop's Q4 marketing investment as a structural, longer-term brand campaign aimed at expanding awareness and scale, acknowledging it will compress margins but is opportunistic given Depop's strong product-market fit and long-term profitability potential.

Youssef Squali asked for the main factors that could improve Etsy's GMS performance post-Q1 and whether a return to GMS growth is anticipated by year-end. He also inquired about the 10% decline in active sellers and if GMS growth can occur without seller growth.

Answer

CEO Josh Silverman expressed optimism for GMS improvement after Q1, citing the shift of product teams back to near-term GMS-driving work after focusing on foundational, long-term projects in 2024. CFO Lanny Baker addressed the seller count, explaining the decline was due to purposeful friction in the sign-up process to improve seller quality. He stated that the current breadth of selection is sufficient to support GMS growth, making seller growth not a prerequisite.

Youssef Squali inquired about the strategic opportunity unlocked by the SevenRooms acquisition and asked for an update on the profitability progression of new, non-restaurant verticals.

Answer

CEO & Chair Tony Xu positioned SevenRooms as a key part of DoorDash's commerce platform, adding marketing and data analytics capabilities to help merchants understand their customers. He sees it as a third major B2B product alongside Drive and Storefront. CFO Ravi Inukonda stated that while they are investing in SevenRooms, its bottom-line impact will be minimal. For new verticals, he confirmed that unit economics improved year-over-year and that the focus remains on driving scale, which in turn drives efficiency and improves economics.

Youssef Squali asked for more detail on the affordability initiatives and mix shift that caused a sequential decline in net revenue margins and what would drive them higher. He also questioned if structural issues in Europe make Deliveroo's margins lower and if they can be improved.

Answer

CFO Ravi Inukonda explained the margin dip was due to seasonality and specific investments in affordability and selection, but expects take rates to be higher in Q2 and H2. CEO Tony Xu addressed Deliveroo, stating the focus is on maximizing long-term profit dollars, not unit margins, and that adding scale in Europe presents an opportunity to improve profit potential.

Youssef Squali asked a follow-up on advertising, focusing on the importance of DSP partnerships like The Trade Desk, and questioned the reason for the sequentially flat take rate in Q4.

Answer

CEO Tony Xu described DSP partnerships as a natural step in building out a comprehensive ad platform for all merchant types. CFO Ravi Inukonda explained that the Q4 take rate was impacted by seasonal factors, mainly higher Dasher pay to support strong holiday volume, and reiterated that the company optimizes for total profit dollars, not a specific take rate percentage.

Youssef Squali questioned the drivers behind the Q2 revenue outperformance compared to the guidance provided at Innovation Day and asked for an explanation of the significant improvement in Measured Transaction Fees (MTF), which declined only 1%.

Answer

CEO Mark Zagorski credited the outperformance to a strong activation quarter, particularly the 23% year-over-year growth in the Authentic Brand Suitability (ABS) product. CFO Nicola Allais explained that the MTF improvement was not due to pricing changes but was a direct result of a favorable product mix, driven by strong upsells of the premium-priced ABS solution. She added that future social activation products should also positively impact MTF.

Youssef Squali questioned the health of the advertising ecosystem and DV's long-term growth sustainability given several recent one-time negative items. He also asked for a breakdown of the factors driving the decline in the average impression price (MTF) and the outlook beyond 2025.

Answer

CEO Mark Zagorski acknowledged the isolated challenges but expressed confidence, noting DV is now better positioned to capture ad spend shifting to proprietary platforms with new activation tools. CFO Nicola Allais and CEO Mark Zagorski attributed the MTF decline to a mix shift toward international and social, plus competitive pricing for large former Moat clients. They expect the trend to continue in 2025 but aim to offset it long-term with new premium products, while maintaining strong gross margins above 80%.

Youssef Squali asked for more detail on the more gradual revenue ramp in the Measurement segment and inquired about the specific timing for testing and launching the new pre-bid avoidance product for Meta.

Answer

CFO Nicola Allais confirmed that social measurement growth slowed to 21% in Q3 from 47% in H1, attributing it to a more gradual adoption of Meta's brand safety tool as some advertisers now await the forthcoming pre-bid activation solution. CEO Mark Zagorski added that the pre-bid solution is expected to launch in alpha in Q1 2025 and that its earlier-than-expected announcement caused some advertisers to pause measurement adoption to wait for the combined offering.

Youssef Squali asked about the drivers of the self-serve business's strong performance, the underlying reasons for continued subscriber declines, and the assumptions behind the company's goal of achieving double-digit growth by year-end. He also requested more detail on the slowdown in enterprise bookings and the factors driving confidence in a second-half reacceleration.

Answer

CEO Philip Moyer attributed the 11% growth in self-serve bookings to new leadership, improved pricing and packaging that boosted retention, and the rollout of new product features, including AI. CFO Gillian Munson added that while subscriber growth is likely a 2026 event, pricing provides significant room for growth, and the self-serve segment could become a double-digit grower. Regarding the enterprise slowdown, Munson explained it was due to a large, bandwidth-focused international customer who did not adopt other features, which served as a key learning. Moyer expressed confidence in a reacceleration driven by winning competitive deals, improving customer retention processes, and expanding existing accounts with new offerings like 'workspaces' and revenue-generating AI translation services.

Youssef Squali from Truist Financial asked about the current macroeconomic environment and customer feedback for both the Self-Serve and Enterprise segments. He followed up by questioning the significant deceleration in Enterprise bookings growth, the impact of the sales team transition, and the outlook for Q2.

Answer

Executive Philip Moyer noted consistency in the self-serve macro environment and highlighted a new sales leader and foundational changes in the Enterprise business. He explained that while some deals slipped from Q1 to Q2, the sales motion is focused on cost take-out for customers. Moyer attributed the bookings lumpiness to larger deals and stated that the company will focus more on revenue as a key metric going forward, while maintaining aggressive growth goals.

Youssef Squali of Truist inquired about Vimeo's high-level capital allocation strategy, specifically the balance between organic investment and returning cash to shareholders. He also asked for more detail on the Q1 guidance, particularly the expected growth contributions from the Self-Serve versus Enterprise segments.

Answer

Executive Gillian Munson stated that after buying back over $30 million in stock in 2024, the company sees organic investment as a primary focus for 2025, with an appetite for up to $30 million in investments to drive growth. She emphasized that the goal is to exit the year with a line of sight to double-digit growth. Regarding Q1 guidance, she clarified that while the Enterprise segment will be the primary growth driver, the company expects the Self-Serve business to return to growth mode as the year progresses, contributing to accelerating overall growth. CEO Philip Moyer added that recent R&D investments have proven effective, with 40% of Q4 deals driven by new AI capabilities, justifying the investment strategy.

Youssef Squali of Truist Securities inquired about Vimeo's high-level capital allocation strategy, questioning the balance between organic investment and returning cash to shareholders. He also asked for more detail on the Q1 guidance, specifically the growth expectations for the Self-Serve versus Enterprise segments.

Answer

Executive Gillian Munson stated that while Vimeo bought back over $30 million in stock in 2024 and continues to do so, the primary focus for 2025 is investing up to $30 million in the business to drive growth, which is expected to generate a strong return. Executive Philip Moyer supported this by noting that 40% of Q4 deals were driven by new AI capabilities, proving R&D investments yield results. For the Q1 outlook, Munson clarified that while the Enterprise segment will be the primary growth driver, they expect the Self-Serve business to return to a growth mode as 2025 progresses, contributing to overall accelerating growth.

Youssef Squali questioned the reasons for the single-digit decline in open web measurement revenue and asked why the full-year guidance was raised by less than the Q1 earnings beat.

Answer

CEO Lisa Utzschneider explained the open web decline is due to both industry-wide softness in display advertising and a strategic budget shift by clients from measurement to optimization products. Regarding guidance, she stated it reflects extensive customer feedback on macroeconomic conditions and the company's direct line of sight into its forecast.

Youssef Squali asked about pricing dynamics, specifically for clients won from Oracle's Moat, and questioned if the new prebid product on Meta provided a lift to measurement revenue in Q4.

Answer

CEO Lisa Utzschneider explained that while the Oracle Moat client wins were competitive and involved pricing dynamics, the company achieved a high win rate due to product differentiation. She clarified that the measurement revenue uptick was driven by broader adoption of Total Media Quality (TMQ) and expansion to new platforms like Snap and Pinterest. The Meta prebid product is ramping well and showing value, but it's still in its early days.

Youssef Squali requested a breakdown of the Q4 revenue guidance, specifically the assumed trends for the optimization and measurement segments. He also asked if the competitive process for winning Oracle's business led to significant pricing pressure.

Answer

CFO Tania Secor stated the Q4 guide assumes continued lower volume growth in CPG/retail and slower new product monetization, but anticipates a slight uptick in advertising revenue growth (both measurement and optimization) while publisher growth moderates. CEO Lisa Utzschneider acknowledged the Oracle process was competitive but stressed that IAS led with value and offered competitive rates with a clear path to upsell premium products, as Oracle's offerings were more basic.

Asked about the strategy for marketing the new NEXT platform and its associated costs, as well as the rationale for the new WAU metric disclosure and its potential impact on advertiser perception.

Answer

Awareness for NEXT will be driven primarily through improved product experience and notifications, earned media, and leveraging the existing user base, without a significant marketing spend. The new platform WAU metric is a forward-looking change to align with consumer behavior and strategic focus, and the company believes advertisers will value the higher-quality engagement of NEXT.

Youssef Squali asked for the drivers behind the expected return to MUU growth in 2026, NerdWallet's strategy for maintaining presence on AI-driven search platforms, and the organic growth of the mortgage business excluding the Next Door Lending acquisition.

Answer

CFO Jun Lee reiterated that while the MUU metric is retired, the forecast for a return to growth is based on stabilizing trends in the search landscape. Co-Founder and CEO Tim Chen added that NerdWallet's high-quality content and concierge-like experiences position it well for AI search referrals. Regarding organic growth, Jun Lee stated that Next Door Lending added about one point of growth to the overall business in Q1, and the loans business would have grown modestly without it.

Youssef Squali asked about the sustainable long-term growth rate for the insurance business post-hypergrowth and sought more detail on investment areas impacting the full-year profit guide.

Answer

CEO Tim Chen suggested long-term insurance growth would be driven by factors like GDP, risk trends, and the channel shift from agents to digital, likely resulting in slightly above-GDP growth. CFO Lauren St. Waugh clarified the full-year non-GAAP OI guide of $50-60M reflects lower seasonal brand spend in Q2-Q4 compared to Q1. CEO Tim Chen added that the cost base is mature, with non-variable costs expected to grow at a slower rate.

Youssef Squali sought a long-term historical perspective on the 'steady state' growth for the insurance business in a normalized environment. He also asked about LendingTree's SEO strategy and organic traffic mix, noting the company appeared less affected by recent Google algorithm changes than its competitors.

Answer

Scott Peyree, COO, explained that historically, after downturns, the insurance business resets to a new, higher plateau as more marketing spend shifts to online channels. Douglas Lebda, CEO, and Scott Peyree added that organic traffic constitutes 15-20% of total traffic and that SEO revenue grew 30% year-over-year in Q4. They attributed this success to a focus on high-quality, unique content, which aligns with Google's recent algorithm priorities.

Inquired about the recovery trajectory for the core Content business, the revenue visibility for the Data business into 2025, and the reasons for increased optimism about the recently acquired Envato.

Answer

The core Content business is showing sequential improvement and is expected to continue that trend, aided by AI product adoption. The Data business has limited long-term visibility but is outperforming expectations, with land-and-expand opportunities improving durability. Envato is outperforming due to successful site improvements and rebranding, leading to higher subscriber growth than anticipated.

Youssef Squali asked for an update on the recovery trajectory of the core Content business (excluding Envato) and the level of visibility into the Data business pipeline for Q4 and 2025. He also asked about the growth outlook for Envato.

Answer

CEO Paul Hennessy noted the core Content business's rate of decline is improving sequentially, from -9% to -7%, with expectations for further improvement in Q4, driven by pricing changes and AI content adoption. CFO Jarrod Yahes described the Data business as lumpy with limited visibility but noted that land-and-expand opportunities are increasing its durability. Regarding Envato, Paul Hennessy expressed increased optimism, stating that post-acquisition site improvements and a rebrand have driven subscriber growth beyond initial expectations.

Youssef Squali asked about the recovery trajectory for the core Content business (excluding Envato), the visibility into the Data business pipeline for 2025, and the drivers behind Envato's outperformance.

Answer

CEO Paul Hennessy noted the core Content business's rate of decline is improving sequentially, from -9% to -7%, and is expected to improve further, but he did not provide a specific timeline for a return to growth. CFO Jarrod Yahes explained the Data business has limited visibility but is seeing improved durability from land-and-expand deals. Regarding Envato, Mr. Hennessy attributed its strong performance to a successful rebrand and site enhancements that are driving subscriber growth beyond initial expectations.

Robert Zeller, on behalf of Youssef Squali, asked for quantification of non-cash or 'barter' transactions in the quarter and for an update on partnerships with hyperscalers and major AI players amid a tightening regulatory environment.

Answer

CEO Paul Hennessy emphasized that the evolving regulatory landscape, such as the EU AI Act, makes licensed, ethically sourced training data mission-critical for AI players, positioning Shutterstock as a key partner. He noted that major companies have chosen Shutterstock after deep diligence on its data and metadata. CFO Jarrod Yahes specified that revenue received in the form of equity was approximately $12 million in the second quarter.

Robert Zeller, on for Youssef Squali, asked for quantification of non-cash (barter) data transactions and an update on partnerships with major AI players amid a changing regulatory landscape.

Answer

CFO Jarrod Yahes specified that revenue received in the form of equity was approximately $12 million in the second quarter. CEO Paul Hennessy added that the evolving regulatory environment, such as the EU AI Act, makes Shutterstock's licensable, ethically-sourced data mission-critical for AI companies, reinforcing its partnership value.

Asked about the impact of AI on the e-commerce business, its expected progression in 2024, and how to track its performance after the reporting change. He also inquired about the timeline and revenue potential of the 3D generative model partnership with NVIDIA.

Answer

Executives stated they are not seeing customers at scale replacing stock with AI-generated content. They attribute e-commerce softness to moving away from free trials. The 3D generative model is expected in the first half, possibly Q1 2024, and will initially be an API offering for large, sophisticated customers, with significant excitement around its potential.

Youssef Squali questioned the timeline for returning to revenue growth by the end of fiscal 2026, asking about the primary gating factors and whether the active client growth forecast follows a similar trajectory.

Answer

CEO Matt Baer explained that the company's methodical, multi-phase transformation requires time to overhaul the assortment and build a strong foundation for sustainable growth. CFO David Aufderhaar added that the FY25 guidance reflects sequential improvements in revenue and client trends, building confidence in the FY26 target, which includes a return to quarter-over-quarter active client growth during that year.

Youssef Squali noted that CapEx more than doubled year-over-year and asked if this is a sustainable run rate. He also inquired about the ROI framework for these AI investments and any early signs of success.

Answer

CFO Toby Xu confirmed that the significant CapEx increase was driven by strong demand and that a similar level of investment is expected in the coming quarters. CEO Eddie Wu added that the ROI is very high because the investment meets existing, unmet demand, giving an example that new servers are running at full capacity 'instantly' upon deployment.