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    Angi Inc (ANGI)

    Q1 2024 Earnings Summary

    Reported on Feb 25, 2025 (After Market Close)
    Pre-Earnings Price$2.54Last close (May 8, 2024)
    Post-Earnings Price$2.55Open (May 9, 2024)
    Price Change
    $0.01(+0.39%)

    What went well

    • Angi is generating strong profitability despite declining revenues, demonstrating that the revenues they've removed produced limited profitability and value. They feel confident about achieving $30+ million a quarter of adjusted EBITDA for the remainder of the year, reaffirming guidance of $120 million to $150 million in adjusted EBITDA for the year.
    • Jeff Kip has been appointed CEO of Angi, bringing extensive experience from improving the international business, where he achieved close to 20% revenue growth and close to 20% EBITDA margins. There is optimism that he can replicate this success in the U.S. by focusing on delivering jobs done well and improving the customer experience.
    • The company is considering stock buybacks as a response to the undervalued stock price, indicating management's confidence in the company's prospects and capital position.

    What went wrong

    • Angi is experiencing mid-teens percentage revenue declines, and expects similar declines in the next quarter.
    • The company is shutting down operations like CraftJack, leading to further loss of revenue and a decline of about 5,000 service professionals.
    • Despite improved profitability, there is still more work to do in improving both the consumer and professional experience, indicating core operational challenges remain.

    Q&A Summary

    1. Revenue Guidance and EBITDA Outlook
      Q: Given strong Q1 EBITDA, why not raise full-year guidance?
      A: Management reaffirmed their full-year adjusted EBITDA guidance, expressing confidence in momentum but noting seasonality with second-half weighting. They expect $30+ million EBITDA per quarter for Angi and foresee continued margin improvements, even amid revenue declines.

    2. Angi CEO Transition and Strategic Priorities
      Q: Why was now the right time for Angi's CEO change?
      A: Joey Levin explained that having a full-time CEO is better, and Jeff Kip's success in the international business made him the right choice. Jeff aims to continue the current strategy, focusing on delivering a better online experience and ensuring jobs are done well on both sides of the marketplace.

    3. OpenAI Deal and Impact on DDM
      Q: Can you discuss the DDM OpenAI deal's key terms?
      A: The multiyear deal includes displaying DDM content in ChatGPT responses, using DDM content to enhance OpenAI's models, and partnering on the D/Cipher cookie-less intent-based ad solution. It involves financial compensation and is not exclusive, allowing for additional partnerships. They expect others to follow OpenAI's lead over time.

    4. Share Buybacks and Capital Allocation
      Q: Will you lean into buybacks if the stock doesn't improve?
      A: Management stated that buybacks are on the table. They've improved operations and have excess cash, considering attractive valuation a prerequisite. They're weighing opportunity costs, including internal investments and liquidity from their over 20% stake in MGM, though they have no intention of exiting that investment.

    5. M&A Strategy and Future of IAC
      Q: How are you thinking about the future of IAC and M&A?
      A: Joey Levin is focusing on capital allocation in existing and new opportunities. AI is of interest, but pure-play AI companies are priced to perfection. They remain opportunistic, considering various sectors, including travel and leisure, and may add another segment to the business.

    6. AI Impact on Search Traffic
      Q: Any change in referral traffic as AI integrates into search?
      A: Joey Levin acknowledged that Google continues to keep more traffic, a long-term trend. However, Dotdash Meredith sites are still growing within Google due to their strong content investments, and they've not seen a direct impact from AI integration yet.

    7. D/Cipher Benefits and AI Partnership
      Q: Thoughts on D/Cipher benefits from the AI partnership?
      A: The OpenAI collaboration enhances D/Cipher by scaling intent mapping across more of the internet, improving intent-based targeting while protecting user privacy. They see this as a significant accelerant to the business with only upside potential.

    8. Update on Care.com
      Q: Can we get an update on Care?
      A: Care.com is healthy profit-wise, with the enterprise business growing nicely. Focus is on driving growth in consumer areas, improving marketing fundamentals, and enhancing the instant booking experience. They are optimistic about growth in senior care and pet care segments.

    9. M&A Environment and Valuations
      Q: Are M&A valuations becoming more rational?
      A: Joey Levin noted that opportunities are now available, with the market feeling balanced. While AI sectors may be overheated, there are rational opportunities elsewhere, and they are focused on finding these.

    10. Emerging Business Momentum
      Q: Anything exciting in emerging businesses?
      A: Vivian, matching healthcare professionals with employers, is showing healthy revenue growth with minimal capital use. Additionally, The Daily Beast has new leadership and is undergoing an exciting reboot.

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