All right, we're ready. Great, we have Ziff Davis with us. Thank you guys for coming.
Great to be here.
We will just jump right in.
Yeah.
You've changed a lot over the years. You're no longer called j2 Global.
Mm.
You no longer have some of your businesses. For those who may not have followed the stories closely, just to start, could you talk about how the company has evolved and the state of the business today?
Sure. I'm Vivek Shah. I'm the CEO. This is Bret Richter, the CFO at Ziff Davis. Great to be here. Maybe I'll go back to 2012. In 2012, j2 Global, which was the name of our company until fairly recently, acquired Ziff Davis, which is how I got into the business. At the time, Ziff Davis was a $50 million revenue company operated in digital publishing in the technology vertical. Over the ensuing, call it nine years, that $50 million business, through a series of acquisitions and organic growth initiatives, grew to about $1.4 billion of revenue and $500 million of EBITDA. That is the Ziff Davis business today.
Really just a systematic approach of acquiring and operating digital media businesses in a handful of verticals, looking for ways in which we can extract value from these various properties. In October 2021, we spun off the original j2 business, which was the Cloud Fax business, and that spun off as a separate public company called Consensus. Today, very much a pure play digital media company. I would say that over that period of, you know, call it 2012 to 2021, an incredible run. you know, we created a ton of shareholder value. The stock was up 500+%. The last four or five quarters have been a little more challenging.
The ad market has been not benign, and we've been fairly inactive from an M&A point of view. Considering that we have been a serial acquirer and a deployer of capital, that's been a little unusual, and we can talk about some of the dynamics that have been in play. Today, a great portfolio of businesses, great track record, strong free cash flow generation, and a really healthy balance sheet that we expect to deploy hopefully in the not too distant future.
First of all, I did a horrible job introducing you.
That's all right.
Thank you.
That's okay.
Thank you for doing that. Before we get into the different ad verticals, we will start with advertising. It's about 55% of your revenue today. You kind of answered this, but how would you broadly characterize the ad market right now? Kinda could you talk about where Ziff Davis falls within the ad ecosystem, just in terms of types of ads, you know, data that you use, privacy issues and stuff like that?
Yeah. I'll just talk generally about the advertising market. Obviously, last five quarters have been challenging, not just for us, but I think for most in the ad ecosystem. As companies have really been focused on profitability, free cash flow, earnings, often what happens in markets like these is that the advertising budget's the first to go. I think sometimes, people don't recognize that even advertising contracts really aren't contractual, right? You can stop spending almost on a dime. We've seen that. We've seen in certain categories some real slowdown in spend. I will say it's category by category, so I'm sure we'll, as you say, we'll go through different categories 'cause there are different dynamics taking place in each of those.
I think with respect to what we do, our advertising business and our advertising products, you know, the first thing I would say is we're very focused on performance marketing, return on advertising spend solutions. We really wanna be in a place where there's a clear line between spend and return. We just find that in the end, often those budgets can be uncapped and that, you know, they can often weather the storm in down markets. You know, the other thing that I would say is that we try to be diversified from a category point of view, being in multiple categories, given that there are different advertisers in each of these categories and different dynamics there. Then we're very much an endemic play. We sell contextual advertising.
We look for harmony between the advertising content and the editorial content, there being a match, versus being a data-driven play, where we're collecting data and then applying it across inventory. There have been challenges with interest-based, data-driven advertising around IDFA and the deprecation of third-party cookie. That doesn't really apply to us. We are looking for, if you're reading about diabetes at Everyday Health, we're looking for a way to match a, you know, diabetic treatment to that. Or if you're reading about a certain type of a multiplayer game, we wanna assign advertising that matches to that. Across all of our verticals, we're looking for endemic and contextual advertising. The last thing I would just say too is that, you know, our ad business is a somewhat concentrated business.
We have a little under 2,000 advertisers, you know, who are spending $400,000 or $500,000 a year with us. Some of the other advertising businesses you'll see will see advertisers in the millions.
Mm-hmm.
They count more SMB within their advertiser universe. We're more enterprise in that sense.
We'll go vertical by vertical. Start with healthcare, your biggest, about 40% to 45% of your ad revenue. What are the key properties you operate, and how is this channel performing in the current environment?
The channel's performing great. The categories in which we operate, this has been a category that has continued to grow, notwithstanding sort of the advertising market, and certainly prior to some of the challenges in the ad market, had higher rates of growth. It's one we continue to believe is in a strong position for a few reasons. First is very much a pharmaceutical advertising platform, and the pharma industry is really a function of drug pipeline, and drug pipeline is really strong. In addition, we reach both patients and providers. The way pharmaceutical advertising works is you have DTC, direct-to-consumer advertising, and DTP, direct-to-provider advertising. In both cases, we're seeing some interesting dynamics.
On the DTC side, where we operate Everyday Health, where we have exclusive contracts to represent the inventory for Mayo Clinic and Cleveland Clinic, one, two, in the clinical world. We also own BabyCenter and What to Expect When You're Expecting. On that side, you're seeing a big shift of advertising away from television, which is where pharma has traditionally gone for DTC, into digital. I think that has to do partly with just the analog to digital shift, but largely, the drugs that are coming down the pipeline are more narrow patient population drugs, meaning they're targeting a smaller universe of individuals versus everyone. When you have that, targeting really matters, right? Contextual relevance really matters. We feel we have that on the DTC side.
On the direct-to-provider side, where physicians are trying to reach the 1 million prescribing physicians. Understand the pharmaceutical industry is a $250 billion a year revenue industry. All of those drugs have to be written by a healthcare provider, either a physician, a registered nurse, or a physician's assistant. Let's just take the 1 million physicians that are in the United States. I would argue they are the most valuable media audience in the world. Their influence over, you know, the ratio of that 1 million to that $250 billion is pretty attractive. Pre-COVID, the primary way in which pharma would reach doctors was through a process they call detailing, which is sending a sales rep into a doctor's office. That fundamentally changed during COVID and post-COVID. That's almost ground to a halt. Engaging physicians is really important.
We own MedPage, which is a leading doctor news site. We own PRIME, which is continuing medical education platform. Physicians all have to do continuing medical education credits, it's a way in which we can reach physicians. We own HealthE Careers, which is a recruitment platform. We have a number of ways in which to reach physicians. For all those reasons, I love the category. I'll say one other thing about it too, is that you won't see drug-specific advertising in a lot of social media 'cause of regulation.
Mm.
it has a little bit of a different dynamic than some other categories.
Moving to retail, your second biggest vertical. A big part of the story is that you've turned RetailMeNot, returned it to growth.
Yeah.
for three straight quarters now following your acquisition. What's driving the turnaround? Is there anything else to call out in the retail vertical?
We love the shopping vertical. It is a bet on e-commerce, and obviously you've seen pendulum swing, right? A significant amount of e-commerce activity during COVID, kind of a return to normalcy. I would say over the long term, the shift from brick and mortar to e-commerce is real. E-commerce as a percentage of transactions is still relatively small, and we think that a bet on that shift is a wise bet. The acquisition of RetailMeNot started, as you know, which we often do, around focus on profitability and not top-line growth, getting it to a profitable core, and then putting the mechanisms in place to start to grow it, and that's the process that we're happily in now.
We have a couple of other assets in there that, you know, we're also looking to make some adjustments and get into a positive territory. I think we put a lot of focus on RetailMeNot and maybe took our eye off a couple of the other properties. They're smaller, but we've got, you know, we've got activities in place to get those to where we'd like them to get to. There are a lot of factors that go into this. There's traffic, there's conversion, but actually effective commission rate, the commission rates that we're able to charge our retailers, that is the percentage of the cart that we get compensated. That's how this works. We get a percentage of the sales that are generated from the traffic that we send.
That continues to go up, and I think that goes up partly because of mix and where we're driving traffic, and partly because of the quality of the traffic we're driving and the desire for merchants to compete and actually price up for it to win our foot traffic or our digital foot traffic to their properties.
gaming, your two marquee properties, IGN, Humble Bundle, which are coming off a good year from the console cycle refresh. How is this impacting category growth this year? you know, how is gaming in general holding up in the current environment?
You know, Q1 was a tough comp for us 'cause Q1 of last year, of 2022, was just an incredible quarter because of the slate of AAA titles that were released across the industry. You're right, I think it has a lot to do with what's getting released and when. We do see a nice pipeline for the second half, both with respect to the games for which we are a platform for advertising, but also for the very games that we publish. You know, we're a game publisher as well through Humble Games, and we've got a nice slate that should come to market in the second half. It is a little bit of that sort of timing and hit-driven type business.
It's not just in gaming, 'cause we get a fair amount of money from studios and streaming platforms, and so a lot of that has to do with the cadence. You know, I think over the long term, we like it. It is a growth proposition. Quarter to quarter, you can have things move around that can kind of affect a little bit of the year-over-year comps. You know, it's a strong category. Streaming has, in particular, been a very strong category for us.
Last but not least, but maybe least for now-.
Yeah.
Not for long. Tech, even clear, the category remains a challenge. You know, we've heard from Walmart, Target, others the last few weeks, consumer discretionary still under pressure. You know, I guess my question for you is, are you seeing any signs or any hope of hitting a trough soon or reason for optimism? You know, how much is this weighing on your company's total growth?
I'm an optimist, I always see reasons for optimism, but I'm also a realist. Look, I think this has been, as I said in our call, the tech vertical's about 10% of our company's revenue, but it was 100% of the reason that we declined in the first quarter. You know, excluding tech, the business was actually grew in Q1. It has had a disproportionate impact on the company, and I think that has a lot to do with what's happening in the tech sector in general, and then go back to there's a lot of cost-cutting going on, and there's a lot of headcount reduction, and you're seeing it, and we feel that.
I think it's a cycle I've been through at least four of these ad cycles before, so I know they come back. Our tech business is split almost evenly between B2B tech, where it's tech vendors trying to reach business and IT decision-makers, and then B2C tech, where you're trying to reach consumers. Both have had challenges, actually, the B2B side has been more challenging than the B2C side. Our anchor brand on that side is called Spiceworks. We announced in our Q1 call, we are in a process, where we are looking at strategic alternatives and options for that business, so we'll see where we land there. Ziff Davis has a long history in tech. For most people, when they think Ziff Davis, they do think of the tech vertical.
It's an important one for us, and so we're gonna continue to be in it, certainly with PCMag and Mashable and Lifehacker, which is a new brand that we added to our roster. We'll see where we land with Spiceworks.
Last one on advertising. Just, we're in a tough environment right now. Over time, how do you think about sustainable growth? Do you have a target level of growth and margins for your ad business overall?
We have target growth for the company which apply equally to the advertising business. You know, we expect to grow, roughly, you know, sort of mid-teens total growth, with half being organic, which is growth from the existing businesses in the portfolio, the other half emanating from acquisition with a mid-30s EBITDA margin and strong conversion of free cash flow. That hasn't changed. That continues to be how we think about the company. Even when we think about the acquisition program, we want to ensure that we are adding businesses that are at parity or accretive to the overall organic growth rates of the business. As you know, these sometimes take time. These are a multi-year process. When we bought the Everyday Health business, again, focused on profitability and then top-line growth.
They didn't happen simultaneously, they often happen sequentially, same with RetailMeNot. They happen, right? We're patient right now. You know, we're obviously in a very good position from a balance sheet point of view. We have been quiet from an acquisition point of view. We think that will in time, you know, we'll start to see some more activity and get some more deals done.
Moving on to subscription segment, it's about 40% of your revenue.
Yeah.
We won't go through every business like we just did for. I don't think we have time for advertising. What are the main ones investors should focus on and some of the key trends that you're seeing?
Well, I'd start with the connectivity business, which is Ookla and Ekahau and RootMetrics. This is a series of assets that we own that help network operators really optimize and manage their networks, whether they're, you know, wireless networks or broadband fixed networks or fixed wireless networks, whatever they are, we are a source of important data and insights into those businesses. It's a fast-growing, high-margin business for us. It's one where if we do talk about AI, it's one where we see some really interesting potential around applications, around machine learning more than anything else with the data set. We're in a very privileged position there. I think we understand more about networks than anyone else on the planet, including the network owners themselves. They may have visibility into their own networks. We have visibility into the entire ecosystem.
That's why ISPs, carriers, device makers, you know, regulatory agencies, et cetera, really do rely on our data to understand the state of broadband in various markets. You know, the other two subscription businesses, cybersecurity. We own endpoint security awareness training, email and VPN as a combination. That combination of businesses is moving from the profitability phase to the growth phase, and we're getting close. You know, we're seeing growth in sort of your classic endpoint, email and security awareness training. We had some challenges in VPN, but we feel like we're turning the corner there. Then in marketing technology, that's both email marketing solutions as well as SEO solutions. The email marketing solutions have been in the house longer. They are growing businesses. The SEO business is a newer business, Moz. Again, it's, we've achieved...
It was a business that wasn't profitable. It now has a very strong margin, and we're now looking to return that to growth. You know, we find power in the combination of all of these businesses.
That's my next question is, we do often get asked, you know, does it make sense for Ziff Davis to have digital media and subscription businesses under the same umbrella? You know, how do you think about this, and what types of synergies do you see between the two?
Well, I think some of the subscription businesses are digital media businesses, but put maybe advertising and subscription, I certainly like the balance that they bring together. You know, you can have some choppiness in the advertising business and certainly a fair amount of stability in the subscription business. There are also very common skill sets. We find that traffic acquisition or building audience is not very different than customer acquisition, particularly as a lot of our customer acquisition is online-based anyway in our subscription businesses. We see a lot of overlap in the skills and our expertise in how we can either generate traffic to support advertising or we can generate customer acquisition to support the subscription business. There are adjacencies, right?
When we acquired Ookla, which main brand is Speedtest, which is on 600 million devices worldwide, all organically installed. That is the basis for the data that becomes the subscription business. The thing that you have to figure out is how to get that level of install base. Yes, it's a subscription business, but it requires an install base, right? That, again, very much aligned to the tech media audience that we have. When we buy Lose It!, the great opportunity for us to leverage the Everyday Health audience to drive subscription acquisition for Lose It!, but also we've incorporated advertising into Lose It!. In each one of these, we find an adjacency, we find a reason for them, for them to be connected.
Look, I think at the same time, we're a portfolio company, and I think we have different parts of the portfolio that, particularly in markets like this, that have been really challenging for advertising businesses. I'm grateful that we have the subscription businesses in the fold.
A few, we'll do capital allocation, then we have AI, a few on financials. We'll weave you in, Bret.
I'll get it. Throw capital allocation this way.
If you do have any questions in the audience, we'll open it up in about five minutes or so. We haven't forgotten. Let's start with share buybacks. Just you turn those on in 2Q for the first time, I think in about 1 year. Why now, and how aggressive could we expect you to be?
Why now is really, I mean, share buybacks are a core element of our overall capital allocation strategy, and capital allocation is one of the primary things we do at corporate leadership. It running straight through the DNA of the company is a focus on profitable growth and focus on each of our entities contributing cash-on-cash returns on a quarter-over-quarter basis. I think that shows in the significant free cash flow that the company generates. We generated over $80 million last quarter alone. We allocate that capital top-down. When we think about capital allocation, we really think about four primary activities. We can reinvest that capital in our businesses. We do that. Our businesses get the capital they need to grow, pursue their growth opportunities, you know, maintain and improve their customer experiences.
When talking about capital allocation, it's almost after that first category, because we're giving them the capital they need, we can then strengthen our balance sheet. We're in a very fortunate position to have as strong a balance sheet as company's had in its 20-plus year history with our net leverage approaching half a turn and an enormous amount of flexibility. On the margin, the balance sheet probably doesn't need an excess dollar capital. Our two other alternatives are return of capital to shareholders or external investment in M&A, and the company has a strong bias towards allocating capital to M&A because we believe that we could attractively acquire profitable companies, make them more profitable and/or, and particularly, and grow them over time. That has been a little bit challenging in the last year plus.
Our M&A activity is at a much lower rate of close than we would anticipate. Then stock buybacks have always a portion of that strategy, but the simple answer leading up to it is at these levels, we're a significant investor in our stock. In Q2, we reinitiated that alternative. You know, as we said two weeks ago on our call, we anticipate being a buyer at the levels of stocks at now and even at, you know, higher levels.
Like you've alluded to this a few times, but on the M&A front, you have been quieter. Bret, as you just said, you know, your cash position is about $900 million, which is the highest it's been in a while. Yeah, I think the question is maybe a quick overview of your philosophy in M&A and just your strategy, but then also what verticals do you find more interesting right now? And I'd be curious, sorry, this is a mouthful now. I'd be curious this. We'll get to AI, but does the risk of generative AI to online publishing, does that impact your appetite in that space at all for acquisitions?
Let me start with what hasn't changed. What hasn't changed is our system around sourcing deals, our system around evaluating these deals, and the framework and the benchmarks we look for in these deals. Sourcing works in our company. We're a highly decentralized company. We have 4,300 employees, about 60 of them are in corporate, everyone else is in a business unit. We have our business units each have a leader. They fully run those business unit. Their resources are theirs. They manage those businesses. They generate cash. Cash comes upstairs. All capital allocation decisions happen upstairs, all sourcing of deals happen locally but also centrally. We get a huge pipeline of opportunities. That's important. That hasn't changed.
The activity around seeing a lot of things, which I think is very important to any acquisition system, is vital. We look for things, we look for opportunities where we can uniquely create value in ways others can't. Whether that's an attach, a bundle, leveraging a platform, leveraging a technology, leveraging monetization, finding a cost synergy, something that makes us uniquely advantaged here. It's not just about finding good uses of capital and buying good companies. We do that. We need to underwrite against value creation that is in excess of what we think anyone else can do. Historically, our hurdle rates have been 20% cash-on-cash returns.
I'd argue we are looking for higher than that right now, largely because of the cost of capital, but also I think that as this market rotates, we've done, you know, we've done close to $3 billion of acquisitions during what I would consider, a seller's market, and I think we're rotating into a buyer's market. Hasn't happened yet. When it does, I think we should expect better returns than what we've historically seen, but I think 20% cash-on-cash returns are outstanding on their own. None of those things have changed. Look, the bid-ask spread between buyers and sellers right now is still pretty wide.
I think we're close enough to 2021 that you've got individuals who wanna be valued on 2021. I'd love to be back at 2021, but that's not where we are right now. I think this is a matter of time. I think being patient matters. It allows us to be really focused on the businesses we own, that we've always been focused on, but it gives us a little bit of time, and we've had the opportunity, I think, to bring in some new exciting talent.
As we've seen people dislocated in other places, it's been an opportunity for us to scoop some really interesting people up, attract interesting people like Stephen Bye, who's running our connectivity business, who was the Chief Commercial Officer at DISH and now on the board at DISH to run that business is, you know, for us, a significant move. Focusing on talent like that, I think is really important. You had a generative AI question, which does...
Well, you know, we'll get into AI now, actually, maybe we'll weave them together. After AI, I promise I'll open up for questions. You know, I guess we'll start on the risk side because that's where we were, which I think, you know, on the risk side, what we're hearing from a lot of investors is, you know, an example, right? When I type in what's the best PC for gaming into Google, you know, the first result that pops up, PCMag.com. It's an organic result. I think the biggest investor concern is that generative AI, once that's built into search, you know, instead we'll see maybe an AI-produced summary that pulled some PCMag content and some other content elsewhere, and maybe PCMag no longer gets the chance to serve ads.
how big of a risk do you think this is, and how can you know, address it?
Look, I mean, I don't want to be dismissive, right? What I can say is that if you think about the search experience, there's the answer engine part of it and then the research engine part of it. Today, 50% of Google Search queries end in zero-click. Those are called zero-click searches 'cause no one clicks out. That's 'cause they got the answer. Today, if the, if your query has a clear, specific, short, objective answer, you're getting that today. We've been dealing with that. By the way, that 50% was 0% a decade ago. This isn't, you know, this has happened over time.
I think if what you're doing is research, you know, you're having a baby, your A1C levels are high, you're stuck at a certain level in a game, I think you're doing more research, you're going deeper, you're looking for multiple sources, you're doing travel. I've been looking to arrange you know, a trip this summer. I tried. I tried to build an itinerary. It gave me a lot of great places to start. I needed to continue. There were certain things that I just needed to do to get to where I needed to get to. I think it's gonna be game- changing in a process. I'm not sure it replaces what you're describing. Even if it did, we generate traffic direct, we generate traffic through app, we generate traffic through email, we generate traffic through social platforms.
We have a diversified set of traffic, so it's not as if all of our traffic is coming from a singular source. All media companies and content companies have always had to deal with evolving dynamics in sources of traffic. I don't view that as new. I also will tell you, I do remember when smart speakers came out. I was asked the exact same question. If we can ask Alexa the question, why would we ever go and enter in a search? We know that that has certainly not happened. There's a smart speaker in every room in every house, and it hasn't changed those dynamics at all. Having said all that, I see a lot of positives for AI in our business.
Yeah.
I put them into three categories. I put them into the content workflow. I think that AI can help us in increasing the velocity by which we create content. There are steps in our process and in all content processes that I think can be made more efficient. I think either that's a margin gain or a productivity gain or both. I think that's real. In my own work and what I do day-to-day, and I'm sure for many of you, I find use cases where it helps me with a first draft or helps me rephrase something. I think that's valuable. I think it's like a thesaurus on steroids. I think the second piece is creating experiences, conversational experiences. Our experiences are generally one- way. Take our Lose It! app. We have 1 million paying subscribers.
They log every day, every meal, and our ability to now use that data set, create a nutritionist AI inside of the app to help guide choices, encourage, some discussion around choices, I think just adds to the experience. I think you can create conversational experiences, particularly trained on proprietary data. The last piece is more machine learning than LLM. We're all talking about generative stuff, word assembly, which is what this is. When you think about, take Ookla, and the connectivity businesses, I think the data sets that we collect are beyond any human's ability to find all the signal from noise. We've been trying. We have a team of data scientists, PhDs in data science, and it's just hard. The quantum is enormous.
I think against machine learning models, we're gonna be able to start predicting very valuable things and providing insights that are very valuable to our customers. I view this as I look at. I'm in the category of people that say, this was not unlike when I first saw the Mosaic browser in the early 1990s. This is a big deal. This is not nothing. I just don't think it's gonna necessarily develop in the way that I've heard some of these, you know, 'cause I think we often just kinda go straight to, well, what could. You know, what might this harm? In the end, the Internet was more of an enabling technology than a destroying technology for the most part. I kinda look at AI the same way.
Any questions in the audience?
Hey, I want to touch on AI. You could probably guess asking on it. I want to kind of come at this from the side of culture, maybe at the company. Correct me if you think my framing is wrong, but editorial and content production teams generally want to write and edit. It's what they do. It's kind of what they're, you know, that's how they self-identify. Oftentimes these team wanna grow, right? You don't want headcount growing if you're a manager. I think you understand what I mean, but for example, writers kind of want their names embossed up on the top of an article, stuff like that. How are you thinking about aligning your workforce with kind of what may be a new reality?
Could be financial incentives or otherwise, where LLMs are becoming a bigger part of content writing, even if you're not replacing the human element entirely.
It's, it's a great question, and it is what we're focused on. Interestingly, it's come through the editorial organization. When this all sort of developed, I thought this might have to come a little top-down, which can sometimes be challenging, particularly with content creators. They've embraced it from bottoms up and saying, "How do we use this to develop headlines? How do we use this to create outlines? How do we use this to check and fact check what we've done?" I think there's an understanding in the end that the combination of human and artificial intelligence probably trumps human intelligence alone, certainly trumps artificial intelligence alone. I think there's an embrace of that the combination and that. Yes, that may affect the nature of who you're employing, right?
Who's producing what in that workflow. I think there's a recognition that harnessing this is critical to their careers, and it's critical to where this is going. I've been pleased by how the content creators have embraced this. We've got about 50 different experiments inside of the company right now of different ways in which to leverage AI. There's some that you just would never have thought of and, you know, that are quite interesting. Each has. It's a dial here, it's a dial there. Look, it's early. You know, that's the other thing. It's just, it's come so quickly. We see the adoption. We've all played with it. We feel its import. We see its power.
I still think it's gonna be a little while before, we can incorporate in a way that's gonna really drive outcomes and results. Again, we view it as positive.
We have one minute. Any last question? Otherwise, I'll take the honor. All right. Bret, you reiterated your guide just a few weeks ago, I'm not expecting an update today. Just could you talk about some of the assumptions you're making and, you know, what could be the bigger swing factors to the upper downside?
Yeah. No update today. Brand new. I think we were off the conference call since two weeks ago. If we look at 2023 relative to 2022, there we see the trends in the business coming out of the back end to 2022 and the beginning of 2023. Vivek covered a number of the elements where we've seen some strength. We continue to see strength in connectivity, continue to see strength in health. We're also starting to lap some of the dynamics that we saw in 2023, everything from the accelerated pressure on advertising in the back half of the year. As we get into the back half of the year, our comparisons year-to-year are a little bit easier, a little bit more favorable.
If we continue to remain in this FX environment, last year FX was a significant headwind to the business. The portion of our business, which is international, could be anywhere from 15% to 20%ish, really closer to 15. We saw, you know, headwinds in that. FX has been more benign. Some of the progress that we've made in some of our properties that post-acquisition were in the revenue contraction, cost-cutting, reach profitability stage and are now turning into stability and into growth. Some of our subscription businesses as we get into the back half of the year, some of the pressure that was on the top line from the end of 2021 into 2022 starts to abate. We see, you know, more strength. There's a lot of elements that feed into our confidence.
What I will say is that when we look to the back half of 2023, we're looking for stability and continued stability. We are not looking for a dramatic improvement in the macro, but nor are we anticipating any significant further pressures in the macro. Any overall change to the macroeconomic environment and any that in particular hits any of our verticals could have an impact.
Awesome. Well, thank you both. Appreciate the time.
Thanks, Corey.