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IAC/InterActiveCorp (NASDAQ:IAC)
Q1 2021 Earnings Call
May 7, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, everyone. Glenn Schiffman here, and welcome to the IAC and Angi Inc. First Quarter earnings presentation. Joining me today is Joey Levin, CEO of IAC and Chairman of Angi; and Oisin Hanrahan, CEO of Angi, Inc. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has published its quarterly shareholder letter. We will not be reading the shareholder letter on this -- in this presentation. It is currently available on the Investor Relations section of IAC's 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 presentation, 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 the views expressed here today. Some of these risks have been set forth in IAC's, Vimeo's, and Angi's first-quarter press releases and our respective filings with the Securities and Exchange Commission. We'll also discuss certain non-GAAP measures, which, as a reminder, include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during this call. I'll refer you to our three press releases, the Angi -- sorry, the IAC shareholder letter, and again, to the Investor Relations section of our websites for all comparable GAAP measures and full reconciliations of all material non-GAAP measures. Now let's jump right into it. Joey?

Joey Levin -- Chief Executive Officer

Thank you, Glenn. Thank you all for joining us. I know it's a very busy week for many of you. I'm now almost participating in as many of these calls as some of you are between Match and Angi and IAC and Vimeo. And so I appreciate the work and effort everyone is putting in to be here. Grateful to be here, grateful to be alive and healthy and well, and grateful for a lot of positive momentum in our businesses right now. We had a really strong Q1, and we have a really great outlook for the businesses, for our leaders, for how our customers are interacting with our businesses. It feels like good, solid, positive momentum, and that's always a good place to be to start the year.

I want to just especially thank Glenn for his work in getting prepared for this, and again, not just preparing all of us but also Anjali and Narayan for their first call, who I think did a great job. And also, as you know, he's acting as CFO of Angi, so he's got a few full-time jobs right now and doing a wonderful job and prepping Oisin, who joined us for the first time. So I want to welcome Oisin, who is just doing phenomenally in his first, I don't know, few weeks, feels like months maybe, on the job, moving at a breakneck pace to get things going in the business, change things, grow things and start to take some risks with a big, big ambitious vision. I'm sure you'll have plenty of questions for him, and so I don't want to get in the way of that. But we're in a fun place right now, and it's good to be here. Good to be with all of you. So let's get to those questions.

Questions and Answers:

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Great. Our first question will be from Cory Carpenter at JPMorgan.

Cory Carpenter -- JPMorgan -- Analyst

Great. Thanks for the question. I think Joey's right. Oisin, we're looking forward to hearing from you. So hoping you could start off with your broader vision for Angi, key priorities maybe what changes, what stays the same. And then a follow-up for Glenn just around the rebranding. Why was now the right time? And could you unpack some of the investment areas you talked about in the letter? Thanks.

Oisin Hanrahan -- Chief Executive Officer

Thanks so much, Cory. Great to be here. I'm really excited to share the vision for Angi. I'll start at the very top. So this is a $500 billion market. And I think we've talked about it, we've alluded to it before, but we've never really staked our claim to it. We've talked about the take rate model. We've talked about all the different ways that we can play in it. But I think today, what we're doing is we're saying we're going to shift away from thinking about this as a percentage of a percentage and instead, we're going to think about the whole market. And the reason that's important are the two things I'm going to talk most about today, which is what we're doing for the customer and what we're doing for the pro.

If you think about what the customer really wants, when they come to Angi and say they want to get a toilet replaced or they want to get a deck installed, what they want is to get the job done, and that's the critical thing. It's not they want to be matched with a pro and have a step away and say "So long. Thanks." They actually want to get the job done. And what we're seeing right now, where we offer that service, where we offer the ability for the customer to get the job done, we're seeing really, really strong momentum. You've seen the results in Angi Services, $55 million in Q1, growing 66% a year. The most significant part of that is that we're growing without spending on consumer marketing. So we're growing that off of the demand we've got in our Marketplace business, off of the demand we've got in the leads and ads business, and that's a really significant shift.

On the pro side, it's about ROI for the pro. It's about how we help them grow the business. Whether it's a pro at the beginning of their life cycle where they're starting out and they're trying to make payments on their F-150, whether it's a pro in the middle of their life cycle where they're trying to buy a house and they're trying to get a down payment or a pro toward the more mature part where they're trying to hire more people and they're trying to take the Thursday or Friday afternoon off to hang out with their grandkids, all of them are turning to us to help grow their business, and that's a pretty significant shift we're going to make. Those two things: we're going to help our consumers get the job done, and we're going to help our pros grow their business. And within all of that, we're going after the $500 billion TAM.

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

On the back of that vision, on the back of that excitement, and on the back of that opportunity, we're going to invest. We talked about in the letter a couple of different examples. When we saw different things inside of Vimeo, different things inside of Dotdash, that caused us to get excited and enthusiastic about going all in. And that's what we're doing here against the vision for Angi Services and the vision for making it very simple to do tasks and jobs on your home.

In terms of how that translates into numbers, we talked about a $60 million investment this year in Angi Services. Recall, we invested about $40 million last year in Angi Services, so on a year-over-year basis, obviously, that's $20 million. We talked about in the letter the short-term, this year, investment and financial impact on the rebrand is $40 million. And then you'll also see some expenses against SP acquisition, SP retention, SP engagement, and all the SP initiatives -- sorry, service professional initiatives that Oisin talked about. We're trying to change that dynamic and that ROI dynamic for the service professional. So that will be a significant investment on a year-over-year basis.

To help you with the quarterly cadence around that, we did about $23 million of EBITDA in the first quarter. We think that's about the number for the next couple of quarters, second, third and fourth. And then we'll revisit, obviously, how we think about 2022 as we get closer to 2022. But again, on the back of the vision, on the back of redefining the TAM, on the back of redefining our opportunity, we are looking at single-digit margins for this year and in all likelihood, single-digit margins for next year.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Thanks. Our next question will be from Brent Thill at Jefferies.

Brent Thill -- Jefferies -- Analyst

Thanks. Good morning. Joey, Dotdash accelerated again 67%. You said in the letter it's underappreciated. I'm curious if you can walk through the underappreciated component that you see. And as a follow-up, I'd love to hear a little more about Care and what the next chapter is there.

Joey Levin -- Chief Executive Officer

Sure. So there's really two big things happening at Dotdash right now that I think are leading to what is the current performance and what I think is a sustainable future outperformance relative to other publishing businesses. And the reason I say underappreciated is maybe it's our own insecurities, but people don't talk about Dotdash as much as they talk about other publishing businesses, and that's OK. But the thing that is -- the two things that are working for the business is, one, it performs for advertisers. So we've talked about this top 25 advertisers concept in Dotdash before. I think of the top 25, those people are spending in 2021 -- Q1 of 2021, those -- that cohort in aggregate is spending 110% in 2021 what it did in 2020. I think that was like 103% in 2020 to 2019.

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

That's right.

Joey Levin -- Chief Executive Officer

The fact that those advertisers are coming back, I mean, you just don't typically see that in a publishing business -- an advertiser publishing business because advertisers come in and out based on their budgets and what they're doing, but ours are recurring there because the content performs. And the reason the content performs, this gets to the second point, is because it has real utility and it has real context. So we're not guessing what somebody is interested in, and we don't need any personally identifiable information. We know that somebody who's making lasagna is making lasagna -- or who's asking about making lasagna is making lasagna. And the people who want to sell products to the people who are making lasagna can reach them at that moment when they're cooking, when they're in the kitchen, when they're getting ready to go shopping to make a meal.

And same is true for planning a trip or for thinking about their healthcare. And when you see the rest of the market, what's happening is there is a large portion of the market that was using certain -- using other content as an excuse to aggregate personally identifiable information and then use that to triangulate what somebody might be interested in. That is a very effective way of figuring out what people might be interested in, and that can lead to performance.

But what we're seeing in the market right now is the platforms and individuals are making decisions that say that trade-off isn't a fair trade-off anymore. It's just not a trade-off people are willing to do anymore. And what happens is now the advertisers who are spending on that model need another model to spend to know where to reach users who may be interested in their products. And they can do that now through our platform without any personal information. We -- all of our users are anonymous. All of our users can be anonymous, can remain anonymous and they can still see ads that are relevant to what they want to do, which works for the user and works for the advertiser.

The other -- the thing that has to underline all of that is fantastic, fresh content, and we're investing an enormous amount in content. We're spending more as a percentage of revenue on content now than we ever have; more absolute dollars, of course, because revenue is up but even more as a percentage of revenue. And we want that to continue to outpace everybody else in the market to have the best content. When you put those things together, that's a really compelling business. And I think we keep doing that and staying true to our values of having the best content, not over-monetizing, in fact, under-monetizing relative to the competition. I think that we can continue to pull away from the rest of the market and outpacing growth. And we have done acquisitions there, and we're going to continue to do acquisitions there because I think we've got a system that works. And we have a really phenomenal team who's, I think, underutilized in terms of their ability to scale. So we want to put more there. That's Dotdash.

Oh, Care was your other question. Care is still very early for us but we're making good progress. I think the most exciting thing -- I think in the core business, we're going to do that -- I have pretty high confidence we're going to do that well, which is just making enrollment simpler on the seeker side, making enrollment simpler on the provider side, collecting better information for both sides to enable better matching and ultimately, like Oisin was talking about in Angi, figuring out how to really complete the transaction on the platform to get to something closer to on-demand. We're going to do all those things. But the thing that we're really starting to get excited about is defining the market much larger and the other things we can participate in.

So the Care@Work business for enterprises is a good example of something that was a small portion of the business and is now a very large portion of the business and is growing very fast, the fastest-growing piece of the business. That part is growing over 100% year on year. That's been the case for the last four quarters in a row, and I think it can continue at a pretty high growth rate there. And the reason for that is certainly a macro trend, and what COVID has done for the workforce is -- firstly in the workforce is not good. Women have lost way more jobs than men over this period. And the -- part of that is child care. And I think that enterprises are realizing that if they want to have the workforce -- the diversity in the workforce, in particular around gender, that they desire, that this is something they're going to have to help out with. And Care is there to provide that solution. And we're seeing that increasingly with all the biggest corporations -- a lot of the biggest corporations, a lot of the biggest names you've heard of looking at our platform.

But even beyond all that, I think we can define the business bigger when you start to think about how can Care be helpful. Either -- you can go from child care to senior care, to remote care, mental health, healthcare in general. I think all these things are adjacencies that we could start to look into. That's on the very long term, not the short term. The short term is just nailing the product, making it seamless, making it seamless for seekers and providers, and also bringing the enterprise into the system to help fund some of this, bringing government into the system perhaps to help fund some of this. But all those things, I think, are big opportunities for us. And we see a very large market, but we're early in it. $77 million of revenue in the quarter is a teeny tiny drop in the bucket of what can happen in this area.

Brent Thill -- Jefferies -- Analyst

Thanks.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Our next question will be from Justin Patterson at KeyBanc.

Justin Patterson -- KeyBanc -- Analyst

Great. Thank you. For Oisin, welcome to the IAC and Angi calls. Could you talk about the opportunities you see from unifying Angi under one brand? Likewise, SP capacity has long been a challenge for Angi. Does it make sense for you to take a more aggressive approach around controlling the supplier relationship like Zillow and others have done? And then for Glenn, given the past experience with transitions from About.com and Service Magic, what's your expectation for when we could see that Angi brand and domain changes switch from a headwind to a tailwind?

Oisin Hanrahan -- Chief Executive Officer

Thanks, Justin. Great to be here. I'll start with your brand question. So if an alien came down from space tomorrow and decided to hang out with us and talk about home services and home improvement and they looked at our brand chart and then they looked at our org chart and saw three customer service teams, three product teams, three operations teams, three pro acquisition teams, they would either think that we are incredibly smart or our brand is a work in progress.

And I think we've got a huge opportunity to pull it all together under a single brand, a huge opportunity to focus on the problem that the customer actually faces, which is to get the job done, and the problem the pro faces, which is to grow their business. And you know this from slicing financials and looking at other companies, there's only so many ways you can segment the business. And today, we're segmenting by brand, but that's not what the customer cares about. What the customer cares about is getting the job done, and that means segmenting by verticals. The customer that comes into you that wants to get their toilet repaired, the customer that comes into you that wants to get a deck replaced, the customer that comes into you that wants a bathroom remodeled, at that moment in time, they don't care about the other services, and they care that you've got a great, amazing experience in that particular category.

So by focusing on a particular brand, instead of segmenting all those teams that I just talked about, we can segment by category, we can segment by vertical. And we can point teams that's saying, "How do we take our TV mounting business from a $30 million, $40 million business to a couple of hundred million dollar business? How do we take each individual vertical, each individual category where today we're in the tens of millions of dollars of revenue and turn them into large significant businesses?" As my -- I have a two-year-old daughter. And whenever I give her oatmeal, her response to every single -- every single time, it doesn't matter how much oatmeal I give her, "It's not enough, Dada. That's teeny tiny." And I would look at each of these categories, and I would say they're all individually subscale. They are all teeny tiny. And we've got this opportunity to go out and take every single category, 201, and become best-in-class by category. And that's going to take time.

Glenn will talk about the investment, but that's what we're talking about. We're talking about investing category by category, building best-in-class experiences. We've got the right pricing, we've got the right pros, we've got the right product, and that's going to take a huge amount of investment to get it right category by category.

I'll touch on your question on capacity. I think we've got a huge opportunity to go after more capacity in our Marketplace business. The way I think about our Marketplace business is it gives us unbelievable breadth. So 32 million service requests from 20-odd million households served by 0.25 million pros, that's given us more breadth than anyone else. What it's failed to do is give us depth, and that's the services business. So the service business is giving us much deeper supply, and we're seeing that as we bring on more capacity.

So you rewind to last April, I think our biggest day in the services business was around $300,000 of work done in a single day. In April this year, we hit over $1 million of work done in a single day. That's a huge amount of capacity we're adding to our marketplace in terms of services, just the services business. Of course, we got to do better on raw capacity in the Marketplace business, too, in our leads and ads business. And I think about that as: How do we get better in self-enrolled? How do we get better in terms of pricing? And how do we think about retention in the context of ancillary benefits for our approach?

So one of the biggest things we rolled out recently is we rolled out a payments product. It's now clipping about $2 million a week in payment volume for our pros, call it $100 million run rate. I think in the last few weeks, I've seen multiple days over $400,000 of payments processed in a day. Pros that use payments retain at a far higher rate. So we're looking at this very holistically to say, "How do we get the job done for consumers vertical by vertical under a single brand?" and for pros, "How do we deliver them more ROI through better pricing using Angi Services and ancillary benefits like payments?

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

And to answer your question on headwinds with the brand, headwinds, and tailwinds are a good way to think about the year, frankly. We think the brand change, the brand unification will probably create a headwind for the entire year, maybe into first quarter of 2022. We'll see. The supply constraint, obviously, is also a slight headwind, and then some of our comps may be a slight headwind. But the massive tailwind we have is the Angi Services business. And notwithstanding the tailwinds -- sorry, the headwinds of which I spoke, we think we still hit the revenue numbers that we talked about for this year, maybe even a scooch higher.

So as we look into the second quarter, I think we're looking at probably mid-double digits, maybe a little bit lower in terms of second-quarter revenue growth; in terms of third-quarter, again, mid-double digits. And the fourth quarter, again, on the back of Angi Services, on the back of, hopefully, some of the supply constraints lifting and the more muted effect of this brand change will pierce through 20%, we think and accelerate into next year.

Now the path will not be linear, and with the monthly metrics, you'll see continued volatility. For example, May last year -- you'll recall, in April, we were down, what, 2% year-over-year last year. In May, we were up 15%. So I think you'll see May print in terms of our monthly metrics around 10%; probably June, 10%. But we'll average again for the quarter in that mid-double digit and then accelerate from there.

We're also seeing potentially lumpiness in our underlying metrics, where I think you could see SRs decline in May, SRs decline in June, SRs decline in the third quarter. But again, given we're servicing our customers a lot better, you're going to see monetized transactions go up. And remember, we get paid on monetized transactions. We don't necessarily get paid on SRs. And that's what we're doing on our investments in SP acquisition, retention, and engagement, and that's what we're doing with Angi Services. We're kind of changing that dynamic under Oisin's leadership.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Our next question is from Ross Sandler at Barclays.

Ross Sandler -- Barclays -- Analyst

Hey, Joey, just going back to Dotdash. So the 1Q and the April run rate is obviously robust and both the one-year and the two-year stack accelerating, and digital advertising is on fire right now. So I guess can you put some numbers around how we should think about growth for the balance of the year, 2Q, and beyond, as you get to the tougher comps later this year? And do you need to build out revenue beyond that top 25 you mentioned?

And then lastly, there's been a lot of M&A recently with Yahoo and AOL trading to private equity. Now that Dotdash is kind of firing on all cylinders, has it changed your thinking around the appetite for larger versus kind of the more smaller kind of vertical tuck-ins that you've done for that segment? Thanks a lot.

Joey Levin -- Chief Executive Officer

Sure, Ross. I'm going to let Glenn do the growth rates, but I'll cover the other two. So beyond the top 25, yes, absolutely, we have to build that out. Of course, we are. But I think there's two areas to think about that. When we think about the top 25, that's like direct-sold through relationships, premium advertising, and premium pricing. There's also the private marketplace, and there's also just kind of everything else. And some of that stuff is -- sorry, and then separate from that, there's the Performance Marketing, which we now break out separately.

A number -- the ads below premium are -- a lot of that is automated. So people come in and out of the market relatively frequently, and the work for us is to move those people into a direct relationship and to -- at a higher price and more guaranteed inventory. And that is definitely the work for us, to grow that top 25 and start talking about the top 50. And I don't actually know the stat off the top of my head in that, but that's something that we should start to talk about -- or the top 100 or the top 500, whatever we get to there. And then the performance side, that, I think, is a fantastic business.

You're right that advertising's on fire. It's been on fire for a little while. Performance has been a big beneficiary of that. I think those growth rates probably are not sustainable forever. I think that's going to decelerate just with the amount of volume. I think the amount of -- people are going to go outside again. People are going to start doing things in real life again. And I think that those growth rates will come down somewhat. But we still have a lot of different categories to go into in Performance Marketing. And what we're doing there pretty methodically is looking at categories where users are looking to make decisions. And the content out there isn't unbiased, clean, good work to help a consumer make a decision. Most of the products out there are way over monetized and not leading consumers to make the best decisions.

And so we're out there now finding these categories and building the content, building the content in a purely editorial way, unbiased, not driven by the monetization and finding that if we just make the links on those -- that content work, it ends up being very monetizable. And we still have a lot of categories to go there. So there's probably a macro deceleration I'd expect, but there's some micro things that we're doing to grow into more categories there.

And then on the acquisition side, yes, we're looking bigger, for sure. I think there's not a lot bigger available, but we are definitely looking bigger. Everything we've done so far has been relatively small. I think the biggest we've done there is $50 million or $75 million or somewhere in that area. But we don't really have an appetite for bigger and we'd like to. But whether we'll be able to find something, I don't know.

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

Yes. And remember, Ross, we're still an attacker. We're still not number one in any of these categories, and they are very large categories. Each of the categories in which we compete are tens of billions of dollars in size, so there's a fair amount of running room. In terms of the revenue cadence, I'll point to two statistics. nine out of the last 11 quarters, greater than 20% revenue growth. five out of the last eight quarters, greater than 30% revenue growth. I think the advertising growth will decelerate toward -- as we go through the year. Obviously, we're enjoying strong economic times, strong ad rates right now, and a favorable comp.

Last year, as you recall, in the second quarter -- in the first quarter and into the second quarter, every company tapped the brakes on variable expenses and slammed the brakes on advertising expenses. So we're -- we'll see a deceleration throughout the year. And then on the performance-based marketing business, we obviously clocked, what, nearly 100% growth in this quarter. That will naturally decelerate. We're -- again, we're comping the COVID behavioral shift when more people were online and more people were transacting online. So I think you'll see a steady deceleration, but we feel confident that this business is a north of 20% grower for as far as the eye can see at these attractive margins.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Our next question will be from Kunal Madhukar at Deutsche Bank.

Kunal Madhukar -- Deutsche Bank -- Analyst

Thanks, Mark. Thanks for taking the question. A couple, if I may. One, I was intrigued by the chart that you had in the letter where you were talking about like frequency and how that kind of changes with the fixed price experience. And then at the top of that chart was member with apps, which was like almost seven times. I was wondering -- that would almost suggest that for every service request that the customer could have had in their household, they are coming to Angi. So from that, it flows -- in terms of the -- you building liquidity, is -- how much of those service requests are you able to fulfill now? And as you invest another $60 million in liquidity throughout the year, how much more will you be able to do by the -- let's say, by the end of this year? Thank you.

Joey Levin -- Chief Executive Officer

Kunal, I'm going to let Oisin answer this one, but I do want to say one piece, which is you're right. We've talked about that we think the homeowner does maybe six to eight jobs a year. And so when you look at the member with the app doing 6.9 jobs with us, that could be all of them. But one thing that is -- that we believe is possible and that we may be seeing in these numbers but is very hard to know for sure is that homeowners can do a lot more than jobs or would or should do a lot more jobs than the number that they are doing in a year. And the reason that's the case is because the process is unpleasant, and not just our process, the category, in general, is unpleasant. I was talking to a reporter yesterday who used our product and was surprised that after doing a fixed price to fix his gutters, nobody came into his house or knocked on his door and said, "Okay, now you got to pay me more money" or "Now it turns out, you got to change this other thing or fix this other thing."

The default experience in the category is one where there's a lot of haggling, there's a lot of hassle, there's a lot of inconvenience. And so when you look at a job to get done, you frequently just don't do it because you don't want to go through that. We think that if we deliver the experience that we have been delivering and that we think is possible in a lot of categories, that the number of jobs that homeowners will do will increase in aggregate. And then what portion of that we get, I don't know. But we do think that's possible when you change the default -- it's a strange category where the default experience is to be unpleasant, to get hosed, or get inconvenienced in some way. We're going for a default experience that is exactly what you'd hope it would be, exactly what you believe it should be, would be pleasant. And if we can pull that off, which we're doing at a relatively small scale, if we can pull that off, we think that is transformational. But go ahead, Oisin.

Oisin Hanrahan -- Chief Executive Officer

It sounds hard when you say it, to get the job done at a price that's fair for the customer and at a price that delivers ROI for the pro. It should be easier but it's hard. And I think that's why we're so proud of this chart, this graph in here. I'll just walk through it so we're all talking the same thing. On the left-hand side of this, what you can see is what the repeat rate is for a consumer if they come into our traditional service request business. So that's where they come in, they submit a lead. They repeat 1.8 times in the first 365 days, so in the first year.

To the right of that, you've got three different segments where the consumer comes in, and instead of having a service request as their first booking or their first experience, they have a full Angi service job. So they come in, they go through the service request path. But at the end of that path, they actually take out their credit card and they make a booking. And the Angi Services business takes over, fulfills that booking, sends the pro to their home, pro does a great job and we pay the pro.

You see three different segments there. When that happens, repeat goes from 1.8 to 3.3. We've also layered on what happens when someone becomes a member. So in that checkout flow, we also offer the ability for the consumer to become a member. For $30 a year, you can get up to 20% off a number of home services, a number of our services. And when you see that happen, you get to a repeat rate of around 5.8 in the first year. We have about 100,000 members today that fall in that category, and that 5.8, to the point that was made earlier, is a combination of both bookings, so Angi Services jobs and also service requests.

So you're seeing the people that come back who make their first booking as an Angi service booking, they also submit more service requests. So it's this really positive loop where you do more jobs but also you submit more service requests. And then the last bar here is the 6.9, which is the one we're all really excited about. So that's you come in, you have an Angi service booking as your first booking, you join as a member and you also join -- you also download the mobile app. So those are our most engaged users. And when we think about like where we're trying to go here, we've got this business doing, call it, $250 million run rate, $55 million in the last quarter, growing, as Glenn said earlier, 66% year-on-year.

The key point again is we're doing that without spending incremental marketing, and that comes from this repeat use. So this repeat use here is the key driver, along with the fact that we've got the -- all the unmonetized demand on the traditional leads and ads business. So that's what we're really excited about. Yes, we've got to bring on more supply to make sure that we're fulfilling these jobs. We know that. We're working really hard on it. Glenn spoke to the investment we're making and bringing on that supply. But it's -- if we unlock this, then that's what unlocks the growth as we think about making Angi Services win in the future.

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

And Kunal, let's have some fun with numbers, as I enjoy doing. 32 million service requests last year from 18 million homeowners, that's how we get to the 1.8. If we can take -- on that 18 million homeowner base if we could take 1.8 to 2.0, and our ambition is significantly higher than that, that will -- you apply that 0.2 against the 18 million, that's 3.6 million additional service requests that we don't have to pay a dime of marketing for. We monetize service requests at $70 million. So if we can achieve that, and our ambitions are far greater and this will take years, but that's $250 million of high-margin revenue that will just fall obviously straight to the bottom line. That's why we're so excited about that. That's what we see in the numbers, and that's why we're greenlighting a significant investment in this.

Kunal Madhukar -- Deutsche Bank -- Analyst

Thanks.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Our next question, can we go to Jason Helfstein at Oppenheimer?

Jason Helfstein -- Oppenheimer -- Analyst

Hi. Joey, I want to ask a bit more about M&A and uses of capital. So when you guys have done the spin in the past, you've had businesses that were generating meaningfully more cash flow. So I guess, first, is it important kind of now post Vimeo that you have a business that generates cash flow? And then if not, to the extent you guys tend to be more value-ish buyers, I think in some of the verticals, you've been excited about valuations have kind of been high, whether that's in Dotdash, obviously in gaming. I think everything is particularly expensive right now. So maybe kind of help us understand how we should think about use of the balance sheet. And do you need to buy a business that's cash flow generating given the kind of investment mode of Angi in the short term?

Joey Levin -- Chief Executive Officer

Sure. So number one, that is a debate, a discussion, actually, that we have quite a bit internally. I'm not sure you're right that we have less cash flow now than we have in previous ones. Glenn will verify that, but I think we actually have more -- we're in the same neighborhood. The -- but look, having a source of cash flow certainly provides an important safety net or an important flow to continue to reinvest, and that is something we'll look at.

There's always opportunities in every market. I agree with you completely that things seem very rich. Things certainly seem rich in gaming and similar areas. But in -- we thought that maybe because we're cheap or something or we're value-ish, as you said, I think I kind of like that, we felt for a long time the market has been expensive, and multiples have continued to go up. And we find opportunities in all of those markets. We found Care.com in a market that was, I think, largely considered expensive by historical standards, and we found other things, too. So I'm optimistic that we'll find things that make sense on an economic basis.

By the way, we don't have to buy things at low multiples. We have -- at low current multiples. We have to buy things where we have a very clear vision for a very large future, and that can exist in any market. I think it's probably harder in this market than it was in other markets, but it can exist in any market. And where we're looking is, yes, certainly in -- as always, our priority is our existing businesses, and that means two things. That means, number one, we can find new things in publishing and we can find new things in Care, we can find new things in Angi that will have a priority on our cash. But also, if in aggregate, the post-Vimeo IAC is in a position where it makes sense to buy back stock, we'll buy back stock. And we've gone through periods after spins where we've bought back half the company. We've gone through periods after spins where we've bought new companies. I think both of those are possibilities. And I'm always optimistic that we're going to find opportunities in any market to find acquisitions.

In terms of new categories, that's a hard one to answer. We're looking at several. I think there's a few that are very, very interesting in terms of their current valuation relative to long-term prospects. I do think we're probably going to buy smaller on things, and our sweet spot has been the several hundred million dollar acquisitions. And that's probably where we'll focus, but there's opportunity.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Our next question is from Dan Salmon at BMO.

Dan Salmon -- BMO -- Analyst

Good morning, everyone. Can we get into the details of the $60 million investment at Angi? In particular, how much of that is learning to price jobs? Is it fair to compare that to sort of promotional spend that we see in other marketplaces like mobility and delivery? Or do you really have critical mass here on both sides and it's really simply a matter of learning how to price and scale better? And then, Glenn, thanks for the near-term revenue guidance and comments a little bit earlier. The 20%, 25% target for the business that we talked about over the long term, you spoke about getting to that rate to exit the year. We understand the change in margins as you have more of a gross approach to your TAM versus net. Is that sort of growth rate still the right number for the top line over the mid to long term?

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

Look, I'll take the whole thing. Yes, we do think that north of 20% is absolutely the right growth rate for the long term. And it's -- that obviously opens up, obviously, a fair amount of revenue. We're now -- as Oisin mentioned, we're going after a $500 billion TAM, not a take rate against that TAM. And on the back of that $500 million of TAM, you add on payments, you add on financing, you add on subscription. So I think we're also creating TAM as we're approaching the market. So not only will you see a higher revenue base over time, but as you think about our margin against that, we're less focused clearly on the percentage of margin as we are on the aggregate EBITDA pull-through from there.

In terms of the investment in 60 -- the $60 million investment in Angi Services, one, it's to -- it is to price the jobs, but I wouldn't say promotional. It's the diligence around pricing the job because remember, we're doing this at national scale in 40% of our categories, so call it 200 categories. So there's an investment to price the jobs. Two, there's an investment to fulfill the jobs, not the pro pay but to make sure the pro shows up and shows up on time. Three, it's to make sure the job was done well and to follow up and to intervene throughout that process to ensure an excellent experience, and there is human intervention in all of those three. And then fourth, probably the biggest investment that we're doing is to automate the top three and making sure, over time, a human is not involved and we could productize home services the way Oisin and his team did so well in building the Handy business. And that's our blueprint that we're looking at. We see how that got done. We see the fulfillment rates there, and we're following that through our 200 different categories.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

For our next question, can we go to Nick Jones at Citi?

Nick Jones -- Citi -- Analyst

Great. Thanks for taking the questions. I guess just an update on consumer behavior at Angi. Are homeowners more willing to let service providers in their home today? And then second question on creating liquidity at Angi. I mean how much is maybe becoming more focused and making sure you can drive volume to the best service providers versus continuing to add breadth? Because I think a lot of service providers have lumpy work, so by being able to provide consistent work, maybe the prices come down or you get more consistent metrics. Any color there'd be great.

Oisin Hanrahan -- Chief Executive Officer

Sure. So there's a few things going on in terms of macro trends. You've obviously got the snapback where people are clearly leaving their homes, returning to some element of normality, and transitioning away from some of the work they were getting done in outdoor tasks. So we're seeing a softness in terms of outdoor tasks as everyone moves away from getting their backyard and deck and new firepit put into more indoor tasks.

The other thing we are seeing is we're seeing this pent-up demand for new homeowners. I think we've all seen the 1.8 trillion sitting on the sidelines. We've seen the shift toward millennials from "Hey, maybe they'll never buy homes" to they're going to be the largest buyers of homes. And the homes they're buying need more and more work because there's less and less inventory out there. And then the last thing we're seeing is this shift from offline to online. So there's -- those are three or four trends put together that we think, as Glenn alluded to earlier, we're seeing softness in the next couple of months in terms of service requests but expect that you see the shift toward homeownership increase and probably will play out in a positive way for us.

In terms of the spread of consumer demand across the pro base, what we're seeing is for Angi service pros, where we get to density in a market -- and density is fewer jobs than you would think, but when we get to density in a market, we see those pros really engage much more in the platform. So we see the more jobs we drive to a market, the more bookings that individual pro does, the longer they stay on the platform. We also see in the Marketplace business an opportunity to think about better pricing for our pros.

Glenn alluded earlier on to the huge impact on -- or potential EBITDA positive impact if we drive more consumer demand in addition to the possibility to let that drop to the bottom line. The other thing we can do with that is we can invest it directly in better pricing for our pros to help them grow their businesses. And I think that's the key here. It's about how do we get the job done for consumers, how do we help pros grow their business.

Right now, we've got work to do in terms of helping pros self-enroll in the platform, helping them actually fine-tune what their geo/task combo should be, and helping them get the best possible pricing for the leads that they need so that they can successfully grow their business. Our pros want to grow their business. Like there's no doubt about that. On average, the pros want to grow their business. It's just a matter of how they can do it within the Angi ecosystem. And we think if we focus maniacally on the pros that we've got -- we've got more pros than anyone else. We've got 0.25 million pros working on the platform.

If we focus maniacally on helping them grow, we can actually grow capacity in a really positive way. And that probably involves the combo of our different products. So you think, today, we've got leads, we've got ads and we've got Angi Services, our fixed price product, all under different brands historically and available to individual set of pros. As we pull those together, we've got this opportunity to help pros like really think about how they decide to grow from each segment of our marketplace.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

For our next question, can we go to John Blackledge at Cowen?

John Blackledge -- Cowen -- Analyst

Great. Thanks. A couple of questions. On MGM, could you just, Joey, provide some thoughts on the investment, which was a different use of capital than you typically see with IAC? Kind of what's the endgame there? And would you look to get a bigger stake over time? And then online employment marketplaces, you have stakes in Bluecrew; Vivian, which, I guess, formerly called NurseFly. What's the opportunity in this emerging segment? And just curious with Bluecrew. For that segment of the labor pool, are you seeing a tight market given the stimulus? Thanks.

Joey Levin -- Chief Executive Officer

Sure. On MGM, we are, first of all, very happy with where we are right now. I think we had a few ideas of what we hoped would happen, could happen, and I think that's largely playing out probably faster than we thought. One is that MGM could make it to the other side. Well, that's clear. MGM is overcapitalized now, has way more than enough capital. Two is whether people will come back to Vegas. I think that's crystal clear already. The convention business is the only thing that's still not officially proven, but we're pretty optimistic based on what the consumer is doing so far. And the third critical thing for us was this digital business. And they just shared some numbers publicly recently of that business growing 400% year-on-year, and that is, I think, a very, very compelling business. The thing that hasn't happened yet, I mean it does happen, it's already happened but hasn't sort of happened in the magical flywheel way yet, is the full integration of physical to digital and digital to physical in a sort of clear consumer experience. And we still believe that has a lot of potential, and so we're excited about it.

As far as owning more, sure. We could, we'd love to. It's a great business. It had to be something that makes sense for us, but we're open-minded to anything there. And we're still looking at the category more broadly if it makes sense to do something outside of there. I think our first choice in everything would be to be through MGM because I think that they're just -- their team is doing a great job. The BetMGM team is doing a great job, and that would be optimal. But if it makes sense to do something outside of that, that's possible, too.

On Bluecrew and Vivian -- I'm impressed, by the way. You've got the -- that's only like a day old, that new name for NurseFly. So congratulations on that. Yes, it's -- so yes, Bluecrew saw this. It's abated a bit, but for probably -- a couple of weeks ago, for a little while, it was we couldn't get people to work. They were saying, even at a higher premium, "I'm making X dollars an hour on the couch. To make $2 more an hour to work, it's probably not worth it. I'd rather make $2 less on the couch." And that was hard. That's starting to thaw a bit, and we're getting people working again. And I think that is a short-term problem. That definitely was real for a little while.

On that category more broadly, not a lot of people know Bluecrew or Vivian, formerly NurseFly, but our thesis there is that there's a better way to match employers with workers in these -- in certain categories, where one of the criteria, I think this is a short-term criteria but it's easier to understand than the long-term criteria, is kind of whether you're qualified for the job is somewhat binary. You have the certification, you can lift a certain amount of weight, you can operate a certain kind of machine, or just as simple as you can show up guaranteed on time. And in those things, like interviews, I don't think, are particularly valuable. I don't think that most of the historical hiring methods add value. I think software has the most value here.

So we can say whether somebody is capable of, in fact, showing up on time. We can verify whether somebody has historically shown up on time. And we can verify whether they have certifications and things like that. And when you have that -- those sort of binary questions to answer about the ability to hire, a platform like ours can allow employers to scale up or scale down much more quickly and to -- most frequently, the issue is scaling up quickly. And the way our platform works is we enable that through software and bringing people into work. I think that's just fundamentally a better way. And if you -- this is one of the things we say all the time, where the future is obvious. I do believe, in this category, the future is obvious. Are you going to use phones and/or pulling up to a Home Depot to find workers? Or are you going to use software and going to press a button and workers and employers can match and get work done? And by the way, software can shorten commutes. Software can reduce the cost of commutes.

Software can do a lot of things that physical just with less information can't do. And so we're very optimistic about that category. We're tiny -- both Bluecrew and Vivian are tiny businesses but both growing nicely, making real progress in the category, both a fraction of a fraction of a point of the market. But we view that as opportunity in terms of addressable market. And we're going to keep putting capital in that area and feel pretty good about it. But we've still got a lot to prove in both of those businesses before where we know we have something real.

John Blackledge -- Cowen -- Analyst

Would you -- sorry, just one. Would you build and/or buy other verticals within that?

Joey Levin -- Chief Executive Officer

Absolutely. Yes, absolutely. And we're looking at that. We've been looking at that for a while, and we continue to. But that's a place we'd love to put more capital.

John Blackledge -- Cowen -- Analyst

Thank you.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Our next question will be from Youssef Squali at Truist.

Youssef Squali -- Truist -- Analyst

Great. Thank you, guys, for taking the question. So I have two. One, more clarification from Glenn. So Glenn, tell me if I'm thinking about this correctly, but on the Angi Services side, on the fixed price, as you recognize revenues, they're obviously recognized on a gross basis, right, not on a net basis. So as you look about the growth trajectory, shouldn't it be -- shouldn't it accelerate even more than what you have historically talked about, again, just because of that pure accounting practice? And then as -- and I think by simple math, fixed price is already like 15% of your revenues.

And then on the long-term margin, you've talked historically about how Angi could support maybe 35%-plus margin profile. As the accounting changes a little bit, can you help us maybe think about the potential for the long-term margin there? And then just one question for Oisin. Been tracking your progress with Handy years ago, and you did a great job there. But as you try to kind of take the Handy playbook and move into a much larger platform, can you maybe just speak to like the one or two toughest friction points that we have to worry about as investors looking from the outside in?

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

Yes. Let me start, Oisin, and then you could pick up. On the gross revenue, recall we changed our revenue recognition in 2020, right? So we had an artificial lift there in 2020 against 2019 as we shift from net to gross. Now all the numbers you see are gross to gross. And yes, there's a slight uptick as we get into more larger tasks than medium consideration tasks. I think it was rounded to about a 1% accretion in growth rate, that mix shift. But sure, there'll be a slight lift but it's not material there.

On the long-term margin, obviously, we've long talked about the 35% target for this business. As we've been talking about over the last several quarters, that's in respect of our traditional Marketplace business, the former HomeAdvisor, the former Angie's List. And we still believe that holds. But now that we're making a much more aggressive push into Angi Services and now that we think Angi Services can be a significant component of the overall mix, we've talked about maybe even 50%, I don't know if that's a five-year time frame, a seven-year time frame or even longer than that, Angi Services is not a 35% margin business and may not be a positive margin business for two to three years from now as we grow and as we take over more tasks and go deeper and wider in each of these tasks.

So I think you have to think about what the balance is between Angi Services and our traditional business in terms of percentage of the whole, apply your 35% against our traditional business and apply, I think, a substantially lower number, again negative for a bunch of years, to get to a blended margin. Said another way, we'll make progress on scale and sales and marketing.

We've talked about those numbers before, 10% to 15%, probably over the next intervening -- the next few years. We'll make progress on product development and G&A. I've talked about 5% or 10% progress there, again, maybe five to seven years. And we'll give back a lot of that on the increase in cost of goods sold. So that's how to kind of frame up the long-term margin. But importantly, I alluded to this earlier but maybe didn't do it as crisply as I should have, we're reframing the opportunity here. We are absolutely less focused on the percent margin as we are the aggregate EBITDA dollars and our ability to add on not only the full totality of our total addressable market, that $500 billion, but even more services beyond that.

So as you compare to the way we thought about the business years ago, margins will definitely be -- percentage margins will definitely be down and we think aggregate EBITDA opportunity will be up. But it will take, as we've talked about, some time. This is a long-term build for sure as we hopefully continue to transform the category.

Oisin Hanrahan -- Chief Executive Officer

Yes. We're tiny. We're less than $2 billion of a $500 billion TAM and a true $500 billion TAM, not a take rate part of it. And I think the opportunity is one that we are very, very excited about going after in a very forceful way. And as we continue to invest in Angi Services, I think we're going to transition from the tasks that you mentioned before that Handy was great at into the much bigger tasks. So the stuff that Handy was good at, true automated enroll, automated job fulfillment, that works. So we've got that. That flywheel is spinning. We're continuing to see that grow. Where we're pushing is into the bigger tasks, so the $3,000, $4,000, $5,000, $7,000, $10,000 tasks.

So I think right now, we've got two or three tasks going where one of them is $150,000, one of them is a $200,000 essential remodel of someone's home, where we're taking full responsibility for the job and we're actually project managing and getting it done. And I think that's where we've got work to do. And we've deliberately -- one of the first things I did was we split the ownership in terms of the business. We said, hey, we're going to have a dedicated person in Bryan Ellis running the Marketplace business, which is leads and ads. We're going to have Umang, my co-founder from Handy, running the Angi Services business. And it's to give it that dedicated focus because it's going to be bumpy.

So we're aware that it's going to be challenging. I think Glenn has obviously given the numbers. If I was guessing right now, it's probably going to cost more than we think, but it's probably going to grow faster than you think if I was like to over/under it. And I think we're really excited about the -- we're really excited about the potential to see this grow at a much faster rate largely because of the data we're seeing in the customer retention, the data we're seeing in the repeat use, and the engagement we're seeing on the pro side when we help them grow their business using the Angi Services model together with the marketplace model.

No one else is doing it. Like you think about the competitive set, yes, there's people out there doing leads and doing ads. There's people out there doing a GC model or a services model. There's nobody that's put them together and said, "This category winner, this is how this is going to work."

Joey Levin -- Chief Executive Officer

Mr. Schneider, let us take one more question in. We are over time and we will go through very quickly.

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Okay. We'll take our last question from Ygal Arounian at Wedbush.

Ygal Arounian -- Wedbush -- Analyst

Hi there. Thanks for [Indecipherable] in. I have a couple but I promise they're shorter ones. Just on the rebrand and the impact, is there any way to quantify what that's been so far? And you talked about being at 40% of the categories for Angi Services. Historically, you talked about 50-50 -- the goal to getting there, 50-50 on revenue. Can you talk about the goal in getting there in terms of categories? And on the payment side, that really seems pretty interesting. What are the benefits for pros using that? And do you expect to kind of bring on all the pros that are using Angi Services into your own payments railways? Thanks.

Oisin Hanrahan -- Chief Executive Officer

Why don't I hit two and three and then you get one? So let's start with the payments and work backwards. So today, we've got the payments actually available to the marketplace pros. So that's $2 million a week. Those are our lead and ad pros that are helping collect -- or collecting money from their customers and getting paid through the Angi Services -- or sorry, through the Angi mobile app. The really interesting part of that is 1/3 of those payment requests are going to non-Angi customers. So those are actually our pros going out doing customer acquisition for us by requesting payment from their non-Angi customers who then have to download the Angi mobile app to make payment. So that's like a really interesting shift that we're seeing there. I have completely blanked and forgotten your second question, sorry. What was it?

Ygal Arounian -- Wedbush -- Analyst

The second question was on the 40-40 -- or the 40% split in categories.

Oisin Hanrahan -- Chief Executive Officer

Yes. So what we're seeing today, as Glenn said, is we're seeing about 40% of our service requests being shown some version of Angi Services. That doesn't mean they see it on the top of the page. And there's a way in which we can show at top of the page, middle, bottom, and as a slide over. And we've really got an opportunity to think about how to throttle that. Probably it's really only being shown in an aggressive way to less than half those people today.

Long term, I have a view that we should be able to offer Angi Services for nearly every single task. So if we're able to do $150,000 or $200,000 remodel, we should be able to offer Angi Services for every task as an option to the consumer to sit alongside that marketplace model of leads and ads.

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

Ygal, respectfully, I'd rather not mark us to market on exactly where we are on the impact of the rebrand. It's been six weeks. Our observable inputs are what obviously gave rise for a $40 million EBITDA impact for the year. And we think we're -- we've hit bottom, and we think we're building from here. But as I said earlier, it's -- it will be a slow build, and the headwinds could continue into the first quarter of next year. We may also decide to spend a little more to try and fuel the recapture and fuel more domain authority around the new brand. We'll see. Obviously, as always, we'll keep you posted. And I'll turn it over to Joey to make a few concluding remarks.

Joey Levin -- Chief Executive Officer

Yes. Just I'll add a little bit though to what Glenn said. We have -- we're past the most harrowing part. We've been through a few of these rebranding things, Service Magic, many a Dotdash. And what happens -- the biggest impact is in search, and what happens is your traffic goes down and then it goes back up. We're past the going down part. We're in the going back up part. So that's comforting. That's the most harrowing part.

Now the question is just pace of going back up, and we really don't know and it's hard to predict. We do our best to predict that. Hopefully, we get it right, but it's really hard to know. What we do know is we're confident it's the right decision for the business. We're confident that we are now doing what we probably should have done a very long time ago. And we are -- we're in the right place to sort of build and win the long, real, enduring brand product in the category. And maybe that's a good summary for where we are overall.

We're excited about where we're headed. We've got big bets, we've got scary bets, we've got fun bets, and we're excited about where we're going. So thank you all for joining us, and we will speak to you in a quarter.

Duration: 65 minutes

Call participants:

Joey Levin -- Chief Executive Officer

Mark Schneider -- Senior Vice President, Finance and Investor Relations

Oisin Hanrahan -- Chief Executive Officer

Glenn H. Schiffman -- Executive Vice President and Chief Financial Officer

Cory Carpenter -- JPMorgan -- Analyst

Brent Thill -- Jefferies -- Analyst

Justin Patterson -- KeyBanc -- Analyst

Ross Sandler -- Barclays -- Analyst

Kunal Madhukar -- Deutsche Bank -- Analyst

Jason Helfstein -- Oppenheimer -- Analyst

Dan Salmon -- BMO -- Analyst

Nick Jones -- Citi -- Analyst

John Blackledge -- Cowen -- Analyst

Youssef Squali -- Truist -- Analyst

Ygal Arounian -- Wedbush -- Analyst

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