Good morning, everyone. Glenn Schiffman here. Welcome to the ANGI Homeservices second quarter earnings call. Joining me today is Joey Levin, Chairman of ANGI Homeservices and CEO of IAC, and Brandon Ridenour, CEO of ANGI Homeservices. Joey and I will also address any questions you may have on IAC's second quarter results and its investment in MGM. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter. We will not be reading the shareholder letter on this call. It is currently available on the investor relations section of IAC's website. I will turn the call over to Joey shortly to make a few brief introductory remarks. Then we will open it up to Q&A.
Before we get to that, I'd like to remind you that during this call, we may discuss our outlook and future performance, as well as the prospects for IAC's investment in MGM. 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, ANGI Homeservices, and MGM's second quarter press releases and our respective reports filed with the SEC. 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 the call.
I'll also refer you to our press releases, the IAC shareholder letter, and again, to the investor relations section of our websites for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Joey, let's jump right into it.
Thanks, Glenn. The big news this quarter, on top of I think being a very strong quarter for IAC generally, is the MGM investment. We've gotten, as you'd imagine, a lot of questions and curiosity around that. The big thing I think I want to hit on is, while the form of this investment is a little different than what we've done historically in the sense of it's a public security, it's a minority investment, the concept is totally consistent with what we do and what we've always done, which is be opportunistic and seize opportunities when we see them. Opportunities of a theme. We look for very large market. We have that in gaming for sure, $450 billion globally, maybe a third of that in the U.S., and still less than 10% penetrated online, which could segue to the next one.
Offline to online transition and natural tailwinds. That 10% penetration is definitely getting bigger. It's definitely getting meaningfully bigger. Maybe we'll pick the wrong horse, or maybe the execution won't be there. There's no question that the 10% gets bigger over time, and you benefit from those natural tailwinds. The other thing is scale dynamics here. It's not a typical marketplace business. This business, the customer experience improves in this business. Actually, both their offline business and their online business as more customers are there, it improves for every individual customer. Lastly, which is something that's always been important to us and certainly important to us here, is great value. This is a time where there's a, we think, a temporary dislocation. We don't have any idea when the world comes back to normal. We do believe the world eventually comes back to normal.
We do believe that when it comes back to normal, this business is incredibly well-positioned to benefit from that. There's a value opportunity right now. The key question is whether they have enough capital to get from here to there, and we're highly confident that they do have the capital to get there. When we look at all that combination of offline to online, their real competitive advantages, the value, and we say this is an opportunity for IAC, and this is very consistent with opportunities for IAC that we've taken advantage of in our past, and we drew some analogies in the letter. I know I won't repeat here. The second thing I want to cover is this monthly metrics experiment we've got here, which is we're publishing the figures monthly. You saw we now have numbers out through July.
I think that's important to understanding the business, understanding the flow and the rhythm of the business, and giving you all the information that we have and no longer need to rely on proxies for that information or some people being able to buy certain data sources or things like that with information. We can just publish it so everybody can see. The only thing I'd caution everybody is, again, we said this in the letter and we said this since we started, is we don't manage the business for a month, nor a quarter or a year, but certainly not for a month. Months can be volatile. There's all kinds of things that could be in prior year period or current period, and obviously people will trade on whatever they want to trade on and focus on whatever they want to focus on.
That's not up to us. I'd say that the monthly numbers can move around. We'll do our best to explain them, but we're not overly concerned about any particular month. I'd just encourage you to understand that that's the way that we think about it, and we can explain what's going on as well as we know when we know it. With that, I will turn it to questions. Mark Schneider has also joined us. You can't see him on the camera here, but Mark Schneider, our head of investor relations, is more than 6 ft away from us over there, working the keyboard.
Thanks, Joey. We're going to start with our first question from Ross Sandler at Barclays.
Hey, guys. Thanks for doing the call this way. Really appreciate it. Maybe we can start with MGM. Knowing you guys, you've probably looked at the digital gaming space for a number of years, and there's been a bunch of interesting transactions. The question is, what drew you specifically to MGM? Was it the licenses, the loyalty program that they have? Given their partnership with GVC, what does IAC bring to the table that they maybe don't already have? Glenn, lastly, what's the cost basis on the investment? Thank you.
Yeah. Ross, it's a little bit of all of that and more. I'll probably do that in reverse order, but in the question of what do we bring to the table that they don't already have, the answer is, we don't know. When we entered travel, we didn't bring anything to the table in travel. When we entered home services, we didn't bring anything to the table in home services. When we entered dating, we didn't bring anything to the table in dating. What we looked at is what do we think the future looks like, and I talked about that in the opener a little bit, of is 10% penetration going to be the case 10 years from now? Our answer with high confidence is no, it will be meaningfully higher than that.
When we get into it, we'll learn more, and we'll figure out where we can help. There are some general dynamics that I think that we're very familiar with, that we hope to share with MGM and try and be helpful in terms of things we've seen on conversion channels we think that have been valuable to us, things we've learned in direct marketing, things we've learned in performance marketing what kind of metrics we view as successful metrics in certain channels and what kind of metrics we view as unsuccessful metrics in certain channels. Those general learnings have been helpful to us as we've entered new categories. We'll learn. One of the things that's great about MGM and what they're doing in digital is they have this partnership with GVC, and GVC seems to be quite capable.
They're a top three player in, I think, 20 countries or more than 20 countries now. They have scaled these businesses, they've built the technology, they've spent the marketing, and so they know what they're doing. When you pair that expertise with the assets that MGM has, which we think are incredibly valuable in this area, we think that that's a winning combination. We look at this theme and say, how do we enter this category with a winning combination? Very little-known fact is we actually did enter this category years ago. We had the timing right, the execution wrong. After DraftKings and FanDuel, we also ran a third player in the market called DraftStreet, which we built from scratch, invested in and went nowhere. I think we sold it. I can't even remember. Sold it is probably a generous term.
I think we gave it to one of DraftKings or FanDuel, and that wasn't our best execution we've ever done. We followed the category for a while, and we've looked for the opportunity. What MGM has uniquely, and again, also with the joint venture, is we view that the offline and the online are a complement to each other. A lot of times in a category, you think the offline incumbent is going to move too slowly, it doesn't have the technical bones to do it, and has some expense infrastructure that is a drag rather than a benefit to the online. You can think about that in areas like retail, where there's a big retail footprint that's expensive, or you can come up with lots of analogies there.
In gaming, our view is that the entertainment experience, the in-person experience in a, hopefully, a post-COVID world, but that experience is not replaceable online, and that experience is a tremendous complement to the online experience. Think about just one little benefit, probably a big benefit that MGM has in this category. They're doing millions of room nights. They're interacting with those customers on check-in. That gives them an opportunity at a margin positive way to create a digital footprint on the device of their customers and a digital interaction point on the device of their customers. When you think about the billions of dollars that we spend on marketing across all of our brands to make that digital footprint and then generate a revenue event or generate a positive customer experience in there, that's a very, very expensive channel for us.
MGM has that with all their customers when they're checking into a room at a margin positive time before they've even started with a digital experience. We think that that is a real significant overlap and a real asset, and we think that there's lots of assets along those lines. When you think about the pure digital players having to deliver a compelling, exciting, fun, physical experience as against the physical players having to deliver a digital experience, I really like MGM's position on that and what they can deliver for the consumer. That is pretty unique in the market. They're the only ones, I think, who've been very aggressive in that combined area, and they're playing to win. That's why we like them, and that's why we're backing them, and that's why we're excited about it.
Hopefully, we can add value over time in the ways that we've been able to add value with lots of these businesses over time. At the start, it's a great team with a great vision and great assets to go after a category that's very large with tailwinds.
Just some of the housekeeping items. We own 59 million shares. We paid $1.018 billion for that. Our basis is about $17.25 or so, and we're left after that investment with $2.9 billion of cash. Don't forget to put that 59 million shares in your sum-of-the-parts. Also from a housekeeping perspective, you saw in our balance sheet that was in marketable securities. In this quarter going forward, it'll be in long-term investments given our posture. It'll be on a quarterly basis mark-to-market, so you'll see the ebb and flow of that investment going through the other income [inaudible] expense line in the income statement.
Which basically means net income will be useless from here on out, not that everyone really focused on that particular metric, but I do view that as a relatively useless data point now.
There'll be volatility for sure.
Okay, our next question will go to Cory Carpenter at J.P. Morgan.
Great. Thanks for the question. On Angi, Brandon, I was hoping you could give us some more color on what drove the demand and supply trends we saw in July. Maybe how those track versus your expectations, also how it informs your thinking into the back half of the year. Thanks.
Thanks, Cory. Obviously we finished Q2 strong, with May and June in particular being strong. In July, we saw a continuation of those same trends. In particular, if you just look at overall revenue, globally, revenue in July was about flat to June, and is actually up a bit in North America. That's relatively in line with how we expect the business to perform on a sequential basis and was, in fact, perhaps incrementally better than our internal views. From an operating metric standpoint, SR volume and consumer demand continues to be elevated in July relative to the post-COVID trends. On the SP sales front, we continue to see a blistering pace of new sales originations. The last four months, including July, have been the highest four months in the history of the company.
In particular with July, we were up 53% in SP sales year-over-year. July was, in fact, a strong month and really a continuation of the trends we saw in the late part of Q2. When you look at the year-over-year sort of headline number, as Joey alluded to earlier, there are a number of things that can affect that. Last year was a particularly volatile year, with weather. If you guys recall, the first half of the year saw a really damp and wet spring. July was a bit of an outlier in terms of strong growth and makes for a difficult comp. Where we sit today, I think that the consumer demand trends as we've seen them are both strong and likely to sustain at this level for the foreseeable future.
The key for us, and what's been most difficult, is that we have seen the provider side of the equation under some pressure as an industry. What I mean by that, we run a monthly, sorry, a weekly sentiment survey, and right now more than two-thirds of SPs say their business is being negatively impacted by COVID. About 40% have indicated they're operating at a lower level of capacity. We track this every single week, we are seeing, and did see incremental improvement throughout June and July. It's a little slower than I think we would've hoped. I personally hoped coming out of the lockdowns that we would see a very fast resumption of former sort of capacity levels. We're seeing that as more of a week to week, few points a week type of recovery.
The reason for that, as reported by SPs, is they're dealing with supply chain issues in certain categories. They've had some challenges hiring. There's good and bad here. I think the good on the provider side is that I don't believe you have to see an end of COVID-19 to see these businesses come back to full capacity. On the other hand, I think it's going to be an incremental process that takes place over the second half of the year.
Just a couple of numbers, Cory, to support what Brandon said. Our SRs in July at 24% growth was actually the third highest monthly growth rate in SR since 2018. I think that's nice and elevated. Second of all, Brandon talked about the volatility. As you know, last year, we grew revenue 20%. The dispersion of the monthly growth rates went from 15%-26% throughout the year. As Brandon said, it depends on the year-over-year comps. Mondays, for example, are a big day for us, and last July we had five Mondays in the calendar. This July we had four Mondays in the calendar. And the 26% growth rate actually was July of last year, and the difference between the 15% and the 20% was over a three-month period.
You asked about the back half of the year. We expect it to accelerate clearly off of the July levels. We're optimistic the third quarter will slightly accelerate off of the 9% that we clocked in the second quarter. The fourth quarter, we expect to continue to accelerate. Why? Because as Brandon said, we think our COVID induced supply constraint, where the SPs are to some extent impaired, we expect that to lift during the year. As it does, our ability to monetize each transaction, and continue to add value to our SPs, we think that will increase during the year, especially given the strong sales performance of which Brandon spoke.
Okay. Our next question will be from Eric Sheridan at UBS.
Morning, everyone. Brandon, maybe I'll follow up on Cory's question and pull the frame out a little bit. When you see the environment you're sitting in right now, how do you think about aligning your strategic priorities about what's in your control versus what's out of your control on both the demand and the supply side, when you sort of try to align those investments against your medium to long-term goals for where you try to take the business? Thanks.
Yeah, it's a great question. Our goals and sort of pipeline of initiatives haven't changed from the beginning of the year. Obviously, COVID has presented some additional supply challenges. Our two primary goals remain. First, creating a stickier relationship with homeowners, a more durable relationship. Second, obviously, we need to bring more provider capacity to the marketplace. When I think about the key investments we're making, first of all, we have plans to rapidly grow our sales force in the second half of the year. We were intending to do that in Q2. As we moved our workforce remote, we had to learn all over again how do you actually hire and onboard salespeople in a remote fashion. We've been working through that for the last few months and are deeply scaling that at this point. We continue to scale fixed price.
That is a huge lever to bring more capacity to the marketplace. This is another situation where, in the later days of March, we pulled back perhaps on our pace of scaling providers, when if we had had perfect foresight, we would've actually ramped our investment. We've corrected that as of late Q2 and are working feverishly to bring on as many providers as possible. We also have a number of new monetization models that we've already got live and are testing. It's hard to say exactly which of those are going to work, but I think the theme here is that we're going to bring a number of different tools and methods to the marketplace to get SPs engaged, as we all know, an enormous amount of consumer demand that's currently going unmonetized.
On the consumer side and provider side, we've introduced a new payments platform, HomeAdvisor Pay, over the last quarter. That has grown really rapidly, and we intend to continue to see that scale over the remainder of the year. We'll soon layer on top of that a financing option for consumers that, frankly, we're very excited about. We don't really believe that consumers have had an at-your-fingertips financing option when it comes to home projects and home services ever available to them. We think this is a first-of-its-kind offering. We continue to focus very heavily on driving engagement with our mobile app. We have set several records over the last few months in terms of active mobile app users, crossing the million-user mark, I think, for two or three months now. Over the last three months, we've grown that audience by 85% year-over-year.
You put all those things together and you can kind of see the story, which is we're trying to drive deeper engagement, more long-lasting relationships with consumers, and we're trying to offer features and benefits that drive up the value proposition. We're seeing that resonate with the things we've already launched, and we've got a lot in the pipeline to go forward. In terms of what we can't really control, we can't really control supply chain issues in the industry. We need those to be alleviated somewhat in order to unlock additional capacity. We know these businesses are out there working actively to try to recover from the things that are sort of hindering them related to COVID. We feel like they're solvable. We're seeing them be incrementally solved.
While that's outside of our control, I think we feel optimistic that that recovery will continue over the back half of the year.
Eric, another great data point this quarter that we think bodes really well for the future is our SRs from new consumers to the platform grew 25% this quarter and actually accelerated through the quarter. That used to be about flat. That shows us that either we're taking share from other solutions in the marketplace, or we're driving offline-to-online conversion, given all the great product work that's going on with Brandon and his team. That is really interesting because that creates tomorrow's repeat use and that creates tomorrow's customer as well. We think we have an opportunity here to steal a march on our competitor, be it somewhat competitors, be it someone else or offline.
Yeah. I'll just add to that. We do a sentiment survey every week at scale with SPs, and surprisingly, about 50% of them are telling us they're seeing lower consumer demand. That obviously does not match up with what we're seeing in terms of our marketplace and the overall level of consumer demand. We believe that we're really sitting at the nexus of two different trends. One is obviously people are focusing more on their home. As they look for solutions and services, they're, I think, disproportionately coming online and looking for digital means to accomplish that. Those are obviously both very positive in terms of providing a structural tailwind for us.
Okay. Our next question will come from Brad Erickson at Needham.
Thanks. Just a couple follow-ups for Brandon. We kind of talked about this a little bit but wanted to go a little deeper on the SP constraints. I guess, something like 50% of SRs went unmonetized this quarter. Is there any concern that if that level of zero accepts persists, that you're maybe losing some of those customers, maybe forever? Second, just related to Google, when you think about HomeAdvisor, is HomeAdvisor going after the same types of SPs that Google is, or do you think there's maybe been sort of a separation in terms of the types of SPs who draw value from a platform like HomeAdvisor versus Google? Just any thoughts there would be great.
Yeah, those are both great questions. First of all, whether or not we monetize a request doesn't indicate whether or not we've satisfied a customer. Even if we're not able to monetize, we still have a deep reservoir, the deepest reservoir of providers to draw upon and to connect consumers with. The fact that we are seeing such significant growth in consumer demand and such an elevated level of Service Requests today is sort of filling our database and filling our CRM pipeline or our email pipeline, and will drive further growth for the remainder of the year and into next year. If we weren't able to satisfy those customers, that might be a different story, but monetization really is not an indication of whether or not we make those customers happy.
In fact, with the offering of fixed price, we now offer, I can't think of the percentage off the top of my head, but of the 200 - 500 projects, we're always offering a solution. Even if folks decide not to engage or pull the trigger, they still had a good experience and were still offered a viable outcome. I would think of that a little bit like if you go to Google and search, you don't necessarily need to see an ad at the top or Google doesn't need to monetize for you to have had a successful outcome in finding what you're looking for. We treat it a little bit the same way, which is we're going to try to make that consumer happy and fulfilled, even if we aren't able to monetize.
The fact that we have this huge influx of demand is going to pay off for quite a while for us. I think when it comes to Google, it's a very different product. If you think about the way Google's product generally works, they are reacting to something like a search for plumbers in Denver. It's a level higher than us. It's less targeted, and they don't really offer the same types of capabilities around targeting zip codes or targeting individual project types, because that's not the way people search in Google. I generally think that the types of service providers that are attracted to Google's offering are those folks that really want to get an inbound phone call more than anything else, and that want to compete in an environment where there's less price competition.
I do think there's some segmentation that's happening naturally, but I don't have the data to back that up. We haven't really seen, as evidenced by our sales productivity and four record sales months, we haven't really seen that competition put pressure on us. It's not to say that we won't ever in the future, but I do think the products are sufficiently different that either the market's so big that we just don't bump into each other or somehow we're tapping into different SP segments and not really overlapping as much as one might think.
Okay. Our next question will be from John Blackledge at Cowen.
Great. Thanks. On Vimeo, the mid-teen ARPU growth was a great outcome, particularly with the enterprise ARPU as a key driver at +20% year-over-year. Could you guys discuss the enterprise adoption during COVID-19 and the enterprise demand signals thus far in the third quarter? Should we expect the enterprise ARPU growth levels to be sustained in 3Q and as we head towards the end of the year? Glenn, if you could just talk about the gross margins at Vimeo, what you saw in the quarter, that would be great, too. Thank you.
Enterprise is doing very well right now, and the product works and certainly the timing works. When you think about it, just using IAC as a microcosm, and we're as harsh on our own businesses as we are on external businesses, but going into COVID, I was saying to the Vimeo team if anybody at IAC tried to expense $10,000 for a town hall software, I'd say we've got a big problem with that individual paying $10,000 for town hall software. Now if somebody says, "We don't have the best town hall software," I'd say, "Well, we've got a big problem with that individual if they weren't able to find us the best town hall software independent of price." I don't think that changes, right? Now we're accustomed to this. We've got this format and this call where we're all using video.
We're not using Vimeo for this, but where we're using video. This is just a better way of doing it. We're going to do that going forward. Town halls, we never have had everybody in the same room. You could do it in one location, but you can't have all locations. We're going to continue to do that forever, and we're going to want to use the best software to do that, the system that is flawless, the system that has all the features that you want. I think that is true of most enterprises now. What we're seeing is we're going into these enterprises where we already have somebody or a group of people using it, and they're using it in just charging it on a credit card or using it in disparate ways.
We're going to that enterprise and saying, we can now be your video solution where everybody can access it. Everybody can access it from one place. It's at one reasonable price, but that is generally higher than, or sometimes meaningfully higher than it's been for one person using it in one spot. Giving the enterprise access to multi-seat licenses in a place is a very natural thing for us to do, a very natural place for us to go, and it's working. Again, I do believe that's sticky. Once you've gone to software for video to solve these problems for you want that. The physical isn't going to replace that completely. It'll replace some small instances of it, but you're going to want this as a supplement forever.
That's what Enterprise is benefiting from. We can see it in the length of the sales cycle, which I think in late March, early April, was literally cut in half. That's come out a little bit, but it's still meaningfully better than it was going into COVID. Going into COVID, it was actually a very relative, it was a 30-day sales cycle. Now we're maybe at a 20-day sales cycle. At the peak, it was at probably 15. The amount of spend is there, the ARPU is hanging in there, and we continue to add features. I view that as something that I think is reliable for quite some time from here. I think that answered the bulk of the question.
Yeah.
Oh, there was some stuff about ARPU and gross margin.
Yeah. On the numbers, Enterprise is clearly our fastest-growing line of business. This quarter it actually grew greater than 70%, bookings were triple digits. We have a nice runway there. As you articulated, one of the reasons why it's growing at that clip is because of ARPU. I think we had a case study in Anjali's recent presentation, it might've been at your conference, where we talked about a retailer that used to be spending $660 with Vimeo on the self-serve. 40% of our Enterprise customers have graduated from self-serve. This retailer used to spend $660 with us. We converted them to an Enterprise customer, as Joey talked about, that more people in that organization said, "Wow, this is a great solution." Now we're getting $660,000 from that Enterprise customer, that has lift ARPU, that will lift ARPU.
In terms of gross margin, we laid out, I think about two years ago, the target of 70%. We're closing in on that. We're making such progress there that we think 70% may ultimately prove to be conservative.
Great. Thank you.
Thank you.
Our next question will come from Youssef Squali at SunTrust.
Okay, great. Thank you so much.
Youssef.
Joey, couple questions maybe on MGM again. How do you affect change by being a minority investor in a public company like MGM? You guys have been known best as basically taking over entire companies, extracting more value, using your tried and true playbook. Just trying to understand how you guys do that as a minority shareholder. Then, will you, as a minority shareholder, actually need a license, be licensed by gaming authorities or you don't need to? I know there is a certain threshold. I don't know what that threshold is. Maybe you can help us with that. One of the things we've heard is that it was just very expensive and burdensome process to go through that has traditionally stopped other companies from getting into this space. Any clarity there would be great.
Sure. The second one, yes, we're going to. It varies by state, but there's some rules at a 5% ownership threshold and some other rules at a 10% ownership threshold. In each state, basically, we're going to have to go through a regulatory process, which is, as we understand, quite burdensome. We are prepared for that, and that will go through in its course. Other than the hassle of it, we're not particularly worried about that, but that is a process that we're going to have to go through. On your first question as it relates to minority investment and affecting change, again, our goal here is not to, quote unquote, "affect change." Our goal here is to be helpful. I think that we can be helpful in a number of ways as a minority investor.
MGM did say that they intend to invite us to the board, which we think is fantastic. We think we can be very helpful in that way. Separately, we can help through access to our people, our businesses, our learnings. Remember, one of the things I always say with our internal businesses, whether we own 100% or less than 100%, is the biggest synergy between our businesses, the biggest synergy that exists in IAC is we never force the businesses to work with each other. We do force the businesses, and it doesn't need to be forced because everyone wants to do it, is to share data, share information, share learnings. People like sharing what they know, and they like learning from others, and especially in areas where people have been successful in showing off things that they've done well.
I had a call with the CEOs of IAC's businesses yesterday, and I said we should treat MGM in this area in the same way in the sense of it's a totally open book. Share anything you want to the extent there's anybody who wants to learn something of anything that we're doing, which they may not, but to the extent they do, we're a totally open book. We've got a billion dollars into this investment. That's more cash capital than actually we've invested in any of the other IAC businesses that are currently in the portfolio. Using that information, we should use that information liberally for anyone's benefit, or sorry, anyone at MGM's benefit wherever we can. That's something that we certainly can and will do, and hopefully, that's helpful.
As we get more involved, as we learn more, we'll try and find other ways to add value and help the business reach what we think is enormous potential. Again, not dissimilar from other areas where we've tried to help businesses involved with IAC reach enormous potential.
Thank you.
Great. Our next question will come from Jason Helfstein at Oppenheimer.
Thanks. Two questions. One, if you could talk a bit about the Vimeo product pipeline for the second half. Any color on what the team is working on? Second, maybe just broadly on acquisition direction, Joey. You did Turo minority investment. You just did MGM minority into a public. Should investors expect you to get back to, again, historically what you've done, which is more like a Care.com, finding something that you can control, that time works in your favor to fix broken or businesses that have more opportunity? Thanks.
Yeah. Again, I'll do it in reverse order. The short answer to your second question is yes. You should expect us to focus on buying businesses, buying entire businesses, and shaping those businesses. That's where we would expect to put the bulk of our capital and potentially share repurchases and all the other places where we have historically put cash. I think that is more likely than minority investments from here. Again, anything's possible. We always say anything's possible. We always say we'll be opportunistic and look for things, I do think that it's more likely more of our capital goes into those things which you've seen more historically. In product at Vimeo, there's a very robust pipeline. One of the things that we're focused on right now is how to verticalize the product a bit in certain categories.
To go deeper in faith, to go deeper in fitness, to go deeper in education or whatever it might be, the areas where we're going to prioritize and make sure that the tools that we're building really work for verticals. We're not building any bespoke tools for any individual customer, but we are starting to think about what are tools we could build that really help in the relevance for a vertical. We want to do that because we think that's really good for our customers. We want to do that because we don't want to open up the competitive opportunity for someone else to come in and start picking off verticals. We're doing a bunch in that area. There's also, with the world now in remote, a lot of the tools are. There's new tools that are relevant.
For example, one thing we're using right now is screen recording and things like that, where you can access more of the enterprise or find new entry points into the enterprise. We've got products along those lines that we're working on. One of the other things we're talking about right now, this is more generic, but because we are generating more, I'll say, cash flow at Vimeo, we can be investing more every quarter. We're very focused right now on Vimeo in how can we put more in, where can we put more? Every month now, every quarter, there's more dollars to invest there. Even before choosing to go negative, there's more dollars we can be investing there.
We're trying to grow the product pipeline right now and grow the product resources to release more products and invest some of this incremental benefit that we're seeing at the business.
Okay, thanks.
Great. Our next question will go to Benjamin Black at Evercore.
Great. Thanks for the question here. Could you guys talk a little bit about the marketing environment at Angi? Does it remain as favorable as you mentioned just last month? If some of the supply tightness remains intact, how willing are you to lean into marketing investments in the back half of the year? On fixed price, you mentioned it's available on 200 tasks or so. I'd be curious to hear how high that could go, and what do you think about fixed price revenue contribution at Angi over the next, call it, 12 - 18 months? Thank you.
Yeah. Great questions. The marketing environment, I think just broadly remains really favorable, and that's a combination of, I think, just generally lower rates across most channels, combined with organically higher levels of consumer intent and consumer demand. When you look at things like the TV environment, I think rates are favorable 20% or 30% relative to where we thought they would be. You see similar levels of favorability in other channels as well. We definitely pulled back in Q2. It was just particularly early in Q2. It was obviously a highly uncertain environment. By June, we had begun to lean in and ramp up, particularly on TV. What I would say, the answer to this question is, for most channels, we manage them clearly on an ROI basis. We will spend as much as the channel will return on a profitable basis.
With a channel like TV, it's a longer payback period and there are secondary and tertiary benefits that are long-lasting. We started to lean in in June. I think we'll continue to spend there for the remainder of the year, particularly if rates remain in the ballpark of where they are now. That will be a difference on a go-forward basis relative to the expense line in the second quarter.
For fixed price, we're on 200 tasks. That makes up about 30% of the requests we get, meaning 30% of the customers that come and submit a request are exposed to a fixed price offering. What we've been doing over the course of this year is launching into some much higher priced categories. We did that in Q1 originally, and our first proof point was to figure out if consumers, homeowners would actually buy a project online that costs $5,000. We were able to really figure out quickly that there was a desire for that amongst consumers. There was a willingness to pull out a credit card and purchase a project at that level. That's all we really needed to know to know that there is a market there in these higher priced projects.
I think I've said this before, the first section of projects we went after have a TAM in the U.S. of about $50 billion. The next set we're tackling have a TAM of about $200 billion. These are things like installing a wood privacy fence, installing a deck, so on and so forth. The nature of these projects are such that we have to go project by project and figure out how to accurately price in an upfront manner these more complex projects. We're working through that now. We're seeing growth that I think is certainly at or above our expectations. In terms of how far it goes, the truth of the matter is we have to do each project and see how it works, because they're all so very different.
The contribution over the next 12-18 months, we, in our internal plans, we expect this to grow rapidly and be a meaningful contributor to our growth rate over not just the next 18 months, but over the next five years. In terms of how high it'll get in the next 18 months, I don't think we've been specific on that. I'll leave that open for the moment.
Look, in terms of our investments in marketing, of which Brandon spoke, as well as fixed price, that's why we stand by our EBITDA posture for the year. That is, we do not expect margins to go up this year. We're going to continue to invest to take share throughout the marketplace. Just to frame up the opportunity that we see in fixed price and the opportunity when our supply constraint gets lifted. You saw we did 9.4 million Service Requests this quarter, and on a latest 12 months basis, about 29 million. You saw our zero accepts were 50%. Just divide monetized transactions by Service Requests, okay? If we only get from that 50% to 40%, our historical average, and our goal is a lot lower than 40%, that's 940,000 SRs. You saw we monetized SRs at $30 a clip.
That's nearly $30 million of quarterly revenue. A vast preponderance of it, if not all of it, falls to the bottom line. That's our opportunity going forward. That's why we're so focused on product. That's why we're so focused on marketing. That's why we're so focused on penetrating the category, because that's our opportunity, and that's just one quarter.
Our next question will be from Michael Eng at Goldman Sachs.
Hey, good morning. Thank you very much for the question. I just had a couple on MGM. First, could you discuss your views on the incrementality of online betting and if it ends up being somewhat cannibalistic, is that a net positive for MGM? Then, second, Joey, to your earlier point, it's clear that online gaming penetration should continue to increase over time. Do you think MGM's well-positioned to capture more than its share of online gaming relative to its traditional gaming base? Thanks.
I do think a significant portion of that actually is incremental, but who knows? I think there's always potential for cannibalization, but I do think it's meaningfully potentially incremental. Their ability to take share is, again, what I said earlier, I think that the combination of offline and online in this category, in that whole experience where somebody who's playing and a customer of the company in a digital capacity has the ability to enter a physical place and get some benefit of their digital play, I think is a real advantage. We expect that to accrue to MGM's benefit in share. When you think about the category, it's all the same sports. It's generally roughly the same lines, odds, payouts, things like that. How do you differentiate? You got to differentiate with a customer experience.
We think that MGM has lots of tools in its toolkit to differentiate meaningfully in a customer experience. That's the thing that excites us there. We would hope that they can take real share there.
Great. Just as a follow-up.
Sure.
Could you just talk about your long-term plans with the MGM stake in success three to five years from now? Do you expect that stake to increase over time? Is there an opportunity to do something with the online betting joint venture? I would just love to hear your thoughts around that. Thank you very much.
Sure. It's an important question. I don't have a great answer for it in the sense of we haven't thought that far ahead. We've said that once we're in this, we're in it for the long term. In it for the long term could mean anything. Before COVID, MGM was very much focused on repurchasing shares with the excess capital that they had generated in the asset-light strategy. If there's a time where MGM has the ability to repurchase shares, we'd hope that our ownership would accrete over time. Who knows? Lots of other things could intervene in there that could accelerate or decelerate that, really anything could happen. We're totally open to the range of options here. The only thing I'll say is we're certainly not flipping it. We're certainly not in this to try and flip for a quick profit.
Great. Thank you very much.
Our next question will be from Brian Fitzgerald at Wells Fargo.
Thanks, guys. A quick one on Angi and then one on Dotdash. Any update on consumer intent or comfort levels that you're seeing with indoor jobs versus outdoor jobs, discretionary versus non-discretionary? What's been the trend there over the last couple of months? On Dotdash, we saw a number of advertisers pause advertising coming through Q2 as they made adjustments to and made sure they weren't clashing with messaging with current events. Can you talk to the trends there, what you're seeing in terms of resurgence in brand, maybe substituting out of performance? Thanks, guys.
Yeah, thanks, Brian.
Go ahead, Brandon.
Thanks. This will be brief. We've seen a strong recovery in really every category of work, but it's definitely disproportionately over-indexing in outdoor work and then required work. Some of the big projects like bath remodels and kitchen remodels and large indoor discretionary projects have returned to, I'll call it flat to up modestly year-over-year from a consumer demand standpoint, which I think is great given the context and given the fact that there's close personal contact related to those projects. But it's lagging where we would've otherwise thought it would be in our general 20% sort of growth goals. So we're happy with the recovery, but it's not quite where we think it would be otherwise, and there does continue to be some impact there that will resolve as the fear around COVID resolves.
On Dotdash, I can't speak to the broader ad market, or I can because we see some data on that, but Dotdash has certainly defied my expectations and odds generally in the category in that they continue to generate advertising dollars, continue to see real interest from advertisers. Obviously, travel, there's no travel advertising right now, that category is basically short-term gone. Other categories have more than made up for it. This business is growing ad dollars. It's seeing interest among advertisers. One of the issues that we don't need to confront is we are not in the, at Dotdash, we're not in the news business, so we're not in controversial stories. We have this intent-based media, which is people trying to get specific things done.
People are advertising around those specific things people are trying to get done, and there's always providers, advertisers who want to reach the consumer when they're trying to get that specific thing done, whether it's pharma around health or whether it's CPG around cooking, things like that. There seems to be advertisers there and engaging. I keep waiting for, don't tell him this, Neil Vogel to say that we're not growing and we're struggling with the ad dollars and it's going to be rough. He keeps saying the opposite of that, which is, I think, pretty amazing and a testament to what they've built and how well they're executing.
Thanks, Joey. Thanks, Brandon.
Great. Our next question will come from Ygal Arounian at Wedbush.
Hey, thanks, guys. I have two questions, one on MGM and M&A and then one on Angi. Historically, after you enter a space, you noted travel, home services, dating, kind of continue to consolidate there, continue to be active in the space. With taking a minority stake here in MGM, is that roadmap still applicable to you guys? Can you continue to be active? Does the partnership allow you to take full stakes in other areas and kind of skirt around the regulatory environment, or are you kind of hitched MGM and the path that they go on? On Angi, I just wanted to ask about the partnership with Lowe's. Would love to hear a little bit more about that, expectations around how that can drive both SP and SR growth in the near term and long term. Thanks.
Look, I think anything is possible at MGM and more in the space. Our goal would certainly be to help MGM or participate as MGM is as aggressive as we would be when we believe in a space, and they seem to be very keen on being aggressive and winning. You use all the tools that are available in being aggressive and winning, I think that is a great vehicle to do it. We have flexibility and options, and we'll always maintain flexibility and options. I think that answers the MGM question. The other one was Angi?
Yes.
Yeah. The new partnership with Lowe's is something we're very excited about. It's new and it's multifaceted, and I'll talk a bit about it. I think first, just understanding it conceptually, if you look at ANGI Homeservices, we've had 29 million requests for service submitted by homeowners over the last 12 months, which is obviously an enormous scale. If you think about that services-led approach that we have combined with Lowe's as one of the premier retail offers of building supplies, materials, and products for the home, it's natural that there's opportunities to combine those two together and create value. First, we offer fixed price services, I think in their retail environment. That's one opportunity for us to drive consumers through our experience via Handy.
Secondly, with the partnership we explicitly announced, Lowe's is able to offer a membership to ANGI Homeservices and HomeAdvisor to their pros as a benefit of being a customer of Lowe's. The intent there is to create some loyalty amongst service providers to Lowe's, and obviously being the destination they go to get building materials and products for the budget. That then ultimately drives those providers to ANGI Homeservices and HomeAdvisor to join at a discounted rate. This is a situation where the provider wins, Lowe's is able to build a more loyal relationship with those providers, and then we hopefully will be able to expand our network as well. I think we're in the early stages of this. Obviously, we just announced it. I personally feel like the synergy opportunities are pretty extensive.
Hopefully, this works out well and leads to bigger, better things over time.
Great. Thanks, guys.
I think we got room for one.
Yeah, we'll take our last question from Dan Salmon at BMO.
Okay, great. Thanks, everyone. Joey and Glenn, we know you'll keep the plans for the cash to yourself. Would it be fair to say that another big acquisition is a lower probability now, or is another billion or multi-billion acquisition still a likely outcome amongst the different options you're looking at? A follow-up for Brandon. I can't remember if you mentioned it today, but at the investor day, you talked about having separate sales teams for the traditional SPs versus the ones coming in at fixed price, and that you were planning to integrate those more in the back half of the year. Can you just talk a little bit more about that?
I hope I got the details right, and the impact you expect from it, and how that may relate to the comment you made earlier about picking up sales hiring in the back half, too. Thank you.
Dan, you faded a little bit, but I think I got the gist of it, which is, do we have a mega acquisition planned, or are we less likely on a mega multi-billion acquisition? I think nothing massive planned right now. I don't know that it's any more or less likely right now. I think always doing something very large has a very high bar here. We've preferred smaller things, tuck-in things. I think the things that we're working on very actively right now are quite small and add-ins to our existing businesses. We'll be as likely, which is not highly likely, but we'll be as likely now as we were previously to look at things that are larger. I think, again, you go to the overall environment, things are not generally particularly cheap right now. Everything has only gone up for a very long time.
That is what it is. There's a whole SPAC situation going on where there's this avalanche of SPACs taking companies public, which we actually think is long-term very good for us in the sense that getting a company public via SPAC is not a very high bar because the way the incentives work in that system. I'll just say it that way. There's going to be a lot of companies that can go public that may not have otherwise been able to go public. We view the public markets generally, we've talked about this or written about this. We view the public markets as generally much more honest than the private markets or much more true than the private markets.
I think if all these SPACs can bring companies that are in or around our area or internet consumer technology companies public, that will over the medium term, not immediately, but over the medium term, give us a much better landscape of companies to look at, and we'd be excited about a trend like that. I think it'll take a little while to play out, but we're cheering the SPAC parade on of more capital being raised and more of these companies coming out and into the light and us and others getting a chance to look at them for good or for bad.
Just briefly on the fixed price question. You did have that right. We run these sales forces separately for fixed price versus our traditional advertising or leads model. It's likely that we'll always run separate sales forces because they really are very different, and the challenge of going out and selling fixed price, which is frankly not selling at all, it's offering people get paid to do jobs, is very different from selling advertising. I think those will stay separate. What you're touching on, which I think is important, is we do plan to bring these offerings together so that once a provider comes into the ecosystem, let's say they're sold on a leads model, leads advertising model, that they can also receive offerings for fixed price services.
We will bring those things together so that every provider has the opportunity to engage in all of these products once in the environment. I think the key there, the way we think about it is that once you do come into the HomeAdvisor ecosystem, you actually will never leave. You may decide to stop advertising on leads, but you stay because why not see the fixed price opportunities that come across from time to time, and you can choose to engage with those when you want and not when you don't want. That's the concept, and I think that is perhaps last quarter of the year or first part of next year where we begin to bring those things together.
Thank you, guys.
Great. Thanks, Brandon. Thank you all for joining us again, embracing the new format, which I really like and we're definitely going to stick with going forward. I hope everyone stays safe and healthy, and we'll talk to you again soon.
Terrific to see you.
Bye.