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AI

Angi Inc. (ANGI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue fell 19% year over year to $245.9M as the January rollout of “homeowner choice” sharply curtailed Network channel lead volume; GAAP operating income rose to $20.0M (vs. $2.7M LY) and diluted EPS was $0.30 (vs. $(0.03) LY) .
  • Results beat S&P Global consensus: revenue $245.9M vs $239.7M*, EPS $0.27 (Primary) vs $(0.06); revenue beat by ~$6.2M (+2.6%), EPS beat by ~$0.33 as execution and cost discipline offset volume headwinds in Network channels .
  • Adjusted EBITDA of $27.7M declined year over year (–23%) on lower revenue, but cost reductions (sales headcount, consumer marketing, real estate/software) and better unit economics supported profitability; negative stock-based compensation (reversal) aided GAAP but is excluded from EBITDA .
  • Strategic updates/catalysts: homeowner choice fully implemented (now essentially 0% automatch), Proprietary channel trends improved sequentially, revenue-per-lead expected to start growing in Q2’25, and Board approved a new 5M‑share repurchase authorization (2.3M shares repurchased for $32M through May 2) .
  • Corporate actions: 1-for-10 reverse split (Mar 24) and completion of IAC spin-off (Mar 31); FY25 guidance affirmed post-spin (OI $25–$60M; Adj. EBITDA $135–$150M), and Q1 delivered well ahead of the prior “breakeven OI and >$20M EBITDA” outlook .

Consensus values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Homeowner choice improved marketplace quality: NPS moved from below –30 two years ago to near positive; pro win rates rose ~10% post-implementation, signaling higher conversion and job success .
    • Proprietary channels stabilized: proprietary service request declines decelerated and improved sequentially each month in Q1; proprietary leads were nearly flat year over year, laying groundwork for a return to revenue growth alongside coming revenue-per-lead increases .
    • Cost discipline and focus: reduced sales headcount and lower consumer marketing, real estate, and software costs supported profitability; FY fixed expense plus capex down ~$100M vs 2022, positioning for high incremental margins as growth resumes .

  • What Went Wrong

    • Revenue declines concentrated in Network channel: Service Requests down 33% and Leads down 57% in Network due to requiring homeowners to actively choose a pro; management said this accounted for nearly all the lead and revenue drop in Q1 .
    • Adjusted EBITDA down 23% YoY to $27.7M on lower revenue despite cost offsets; negative SBC reversal boosted GAAP but reduced Adjusted EBITDA via add-back methodology .
    • International softness: revenue declined 6% YoY as Canada transitioned off a high-touch model and Europe absorbed Digital Services Act (KYC) frictions (5–8% network impact); profitability remains high-teens with expectations to normalize .

Financial Results

Overall P&L vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$296.7 $267.9 $245.9
Operating Income ($USD Millions)$7.8 $2.2 $20.0
Diluted EPS (GAAP)$0.07 $(0.00) $0.30
Adjusted EBITDA ($USD Millions)$35.4 $31.8 $27.7
Operating Margin %2.6% (calc.)0.8% (calc.)8.1% (calc.)
Adjusted EBITDA Margin %11.9% (calc.)11.9% (calc.)11.3% (calc.)

Q1 2025 vs S&P Global consensus

MetricConsensus*ActualSurprise ($)Surprise (%)
Revenue ($USD Millions)$239.7*$245.9 +$6.2+2.6%
Primary EPS ($)$(0.06)*$0.27*+$0.33NM

Consensus values marked with * retrieved from S&P Global. Note: Company-reported GAAP diluted EPS was $0.30, while S&P Global Primary EPS “actual” records $0.27 due to methodology differences .

Free cash flow and balance sheet (Q1 2025)

MetricQ1 2025
Free Cash Flow ($USD Millions)$(15.7)
Cash & Cash Equivalents ($USD Millions)$386.6
Long-term Debt ($USD Millions)$500.0 (3.875% due 2028)

Segment revenue

Segment ($USD Millions)Q1 2024Q1 2025YoY %
Domestic$270.0 $212.6 –21%
International$35.4 $33.4 –6%
Total$305.4 $245.9 –19%

Key performance indicators (KPIs)

KPIQ1 2024Q1 2025YoY %
Service Requests – Proprietary (000s)3,248 2,773 –15%
Service Requests – Network (000s)878 588 –33%
Service Requests – Total (000s)4,126 3,361 –19%
Leads – Proprietary (000s)3,644 3,590 –1%
Leads – Network (000s)1,867 812 –57%
Leads – Total (000s)5,511 4,402 –20%
Transacting Pros (000s)192 156 –18%
Average Monthly Active Pros (000s)157 134 –14%
Acquired Pros (000s)40 24 –41%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating IncomeQ1 2025~$0 (breakeven) N/A (Actual $20.0M) Outperformed
Adjusted EBITDAQ1 2025>$20M N/A (Actual $27.7M) Outperformed
Operating IncomeFY 2025$25–$60M Affirmed post-spin Maintained
Adjusted EBITDAFY 2025$135–$150M Affirmed post-spin Maintained

No explicit revenue, margin %, OpEx, OI&E, tax rate or dividend guidance was provided beyond the above; management reiterated plans for sequential improvement in revenue declines during 2025 and a return to revenue growth in 2026 as revenue per lead rises and Proprietary channel grows .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
Homeowner choice / matchingNot highlighted in Q3/Q4 press releases Automatch effectively 0%; NPS near positive; pro win rate +10% post-rollout Quality up; short-term volume hit in Network
Channel mix (Proprietary vs Network)No split disclosed in Q3/Q4 Network SR –33% and Leads –57% YoY; Proprietary SR decline decelerated, leads ~flat Shift toward Proprietary
Revenue trajectoryRev –16% (Q3) and –11% (Q4) YoY Rev –19% YoY; expecting sequential improvement in declines and revenue-per-lead growth from Q2’25 Decline moderating; RPL tailwind
AI/technologyNot highlighted in Q3/Q4 press releases LLM-based AI helper improving SR quality without hurting conversion; broader AI use cases outlined Increasing AI leverage
International+9% YoY (Q3), +5% YoY (Q4) –6% YoY; Canada model transition; EU DSA KYC 5–8% network drag; margins high-teens Temporary regulatory/transition headwinds
Capital allocationBuybacks active in 2024/early 2025 2.3M shares repurchased ($32M) and new 5M authorization; disciplined M&A posture Returning cash; optionality

Management Commentary

  • “A year ago, about 40% of our leads were automatched and, today, essentially none are... our homeowner Net Promoter Score [is] near positive... [and] our pro win rate... jumped 10% from before homeowner choice to after.” — CEO Jeff Kip .
  • “This change accounts for nearly all of our lead volume drop and thus... nearly all of our revenue drop in the first quarter.” — CEO Jeff Kip on Network channel declines after homeowner choice .
  • “We expect revenue per lead to start growing in the second quarter of 2025... flat network volume + growing proprietary volume + revenue per lead growth... adds up to revenue growth in 2026.” — CEO Jeff Kip .
  • “Combined fixed expenses and CapEx [were] reduced by $100 million versus 2022... we are well staffed to... return to growth in 2026.” — CFO Andrew “Rusty” Russakoff .
  • “We have added an LLM-based AI helper in [the homeowner] path, which... is increasing the quality of the match without... hurting conversion.” — CEO Jeff Kip .

Q&A Highlights

  • Macro and demand mix: Early April saw a “modest bump down” in homeowner volume and smaller job mix, a 3–5 ppt impact vs run-rate; management noted countercyclical benefits as pros seek incremental demand when order books soften .
  • Capital allocation: Company repurchased shares and will opportunistically offset dilution; M&A remains disciplined with focus on core integration; stock unlikely as near-term acquisition currency post spin-off .
  • Product roadmap and AI: Continued SR question-set iteration (2H’25), migration to single pro product to improve matching, and scaling AI in onboarding, chat/care, and voice/text interfaces to raise conversion and efficiency .
  • International headwinds: Canada shifting to higher-ROI, online acquisition model; EU DSA KYC requirements temporarily reduced network by ~5–8%; underlying business at high-teens margins remains healthy .
  • Pro network/capacity: Fewer acquired pros but higher capacity per pro; significant latent capacity (leads/pro fell from ~15 in Q3’24 to ~11 in Q1’25), supporting 2026 growth without raw headcount expansion .

Estimates Context

  • Q1 2025 delivered a broad beat vs consensus: revenue $245.9M vs $239.7M*, Primary EPS $0.27 vs $(0.06)*; margin quality improved as operating margin expanded to ~8% (from ~1% in Q4’24) .
  • Directionally, consensus may need to reflect: (1) revenue-per-lead uplift starting Q2’25, (2) Proprietary channel stabilization and growth, and (3) operating leverage on a leaner fixed-cost base; offset by Network channel demand elasticity, macro sensitivity, and EU regulatory frictions discussed on the call .

Forward consensus snapshot (S&P Global)

MetricQ3 2025Q4 2025
Revenue Consensus Mean ($USD Millions)269.0*245.1*
Primary EPS Consensus Mean ($)0.37*0.42*
# of Estimates (Rev / EPS)8 / 5*8 / 5*

Consensus values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • The quality pivot is working: homeowner choice is improving NPS and win rates, with Proprietary channel stabilizing; the cost structure is reset, enabling operating leverage as volumes recover .
  • Near-term revenue declines should narrow sequentially in 2025; watch for revenue-per-lead expansion beginning Q2’25 and Ads-to-single-product migration in Q3’25 as catalysts .
  • Network channel is the drag; impacts are self-inflicted and tied to product changes that should raise long-term quality—monitor whether Network stabilizes “flattish” as implied .
  • International headwinds are largely transitional/regulatory (Canada model shift, EU DSA KYC); margins remain healthy, suggesting medium-term recovery potential .
  • Capital return is active with a fresh 5M-share authorization and $386.6M in cash versus $500M notes due 2028; liquidity supports selective investment and buybacks .
  • Non-GAAP nuance: negative SBC reversal aided GAAP but lowered Adjusted EBITDA via add-back rules; use both GAAP and non-GAAP to triangulate sustainable earnings power .
  • Risk checks: macro elasticity (smaller-ticket mix), Network channel sensitivity, EU privacy/KYC regulations, and execution on AI and single-pro migration remain the key variables to watch .