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    Angi Inc (ANGI)

    Q3 2024 Earnings Summary

    Reported on Feb 25, 2025 (After Market Close)
    Pre-Earnings Price$1.93Last close (Nov 12, 2024)
    Post-Earnings Price$1.93Open (Nov 13, 2024)
    Price Change
    $0.00(0.00%)
    • Significant Improvement in Customer Satisfaction and Retention Metrics: Angi's 'jobs done well' rate has grown by about 30% in the last year, pro retention has risen materially each quarter, and homeowner NPS is up by almost 60% in the last quarter, indicating enhanced customer satisfaction and loyalty.
    • Profit Growth Amid Revenue Declines: Despite revenue declines, Angi delivered profit growth in 2023 and expects to maintain profitability in 2025, showcasing operational efficiency and effective cost management.
    • Strategic Initiatives Positioning for Future Growth: By moving to a consumer choice model and unifying its Ads and Leads products onto a single platform, Angi is enhancing customer experience and driving commercial efficiency. The company expects to return to revenue growth in 2026 and is uniquely positioned to benefit from upcoming industry changes, such as the FCC's new regulations.
    • Angi expects revenue declines to continue into the first half of 2025, with growth not anticipated until 2026, indicating ongoing challenges in reversing the revenue trend. Management stated, "we do expect our first quarter to be down about as much as the quarter just ended along and in line with what we expect in the fourth quarter," and expects to grow again in 2026. ,
    • New FCC regulations requiring 1-to-1 consent for contacting customers may lead to significant revenue volatility and operational challenges in 2025. Angi is moving to a consumer choice model to comply but admits, "we do expect some volatility in the first half of next year, and we don't know precisely how the impact is going to play out," highlighting uncertainty that may negatively impact revenue and customer acquisition.
    • Declining number of service professionals and monetized transactions raise concerns about the platform's attractiveness and competitiveness. As noted, "service professionals going lower, monetized transactions going lower, albeit slower than service requests," suggesting potential issues in supply and transaction volume.
    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    Revenue Declines

    Q3 2024

    down about 15% year-over-year

    no current guidance

    no current guidance

    Profitability (Adjusted EBITDA)

    Q3 2024

    north of $30 million of adjusted EBITDA

    no current guidance

    no current guidance

    Digital Revenue Growth

    Q4 2024

    no prior guidance

    mid- to high-single-digit growth

    no prior guidance

    Performance Marketing

    Q4 2024

    no prior guidance

    expected to return to growth

    no prior guidance

    Digital Revenue Growth

    2025 and Beyond

    no prior guidance

    10% digital revenue growth

    no prior guidance

    Profitability

    2025

    no prior guidance

    expected to remain stable in 2025

    no prior guidance

    Impact of FCC's 101 Content Rule

    2025

    no prior guidance

    Expected volatility in H1 2025; hold profitability in 2025 and return to revenue growth in 2026

    no prior guidance

    TopicPrevious MentionsCurrent PeriodTrend

    Revenue Declines

    Q1 and Q2 discussions highlighted mid‐teens percentage declines, actions such as shutting down lower‑quality channels, and a deliberate strategy to remove unprofitable revenue.

    Q3 emphasized deliberate revenue declines driven by the transition to a consumer choice model, with expectations of sequential improvement post-Q1 2025 and revenue growth by 2026.

    Recurring – The company consistently cites revenue declines as part of a strategic trade-off for higher quality and long‑term growth, with a cautious near‑term outlook but optimism for recovery.

    Profit Growth and Operational Efficiency

    Q1 discussions emphasized strong profit growth, margin improvement, and operational efficiencies (including restructuring international business and streamlining paid marketing). Q2 reinforced efficiency gains through improved marketing and technology investments.

    Q3 continued to underscore profit growth (e.g., near 30% paid channel profit growth and 28% digital EBITDA growth) and operational efficiency initiatives such as rightsizing the sales force and reengineering marketing.

    Recurring – There is a consistent focus on operational efficiency and profitability despite revenue headwinds, with both periods emphasizing margin improvement and cost discipline.

    Enhanced Customer Satisfaction and Experience

    Q1 and Q2 stressed customer centricity, improvements in “jobs done well,” better online experiences, and efforts through SEO/SEM enhancements and optimized matching to drive repeat business.

    Q3 highlighted an increased focus on customer experience via the consumer choice model, improved metrics such as a nearly 60% increase in homeowner NPS, and higher pro retention.

    Recurring with Deepening Focus – The emphasis on enhancing customer satisfaction remains steady and is now more quantifiable, with stronger metrics driving optimism about long‑term customer loyalty and quality.

    Strategic Business Model Transformation

    Q1 discussions detailed a significant transformation involving the shift to a consumer choice model, consolidating disparate products, and leveraging international playbook learnings.

    Q3 revisited the transformation with renewed focus on integrating Ads Pro and Leads Pro onto a single platform and accelerating the consumer choice model ahead of FCC changes.

    Re‐emerging – Although not discussed in Q2, the transformation theme reappears in Q3 with further integration initiatives, indicating its strategic importance for future profitability and operational simplicity.

    Impact of FCC Regulations

    Not mentioned in Q1 or Q2.

    Q3 introduced the FCC’s 1‑to‑1 consent requirement coming into effect January 2025, with an expected near‑term revenue decline but a long‑term benefit in improved customer trust and performance.

    New Topic – This regulation is an emerging concern with potentially wide‑ranging effects on the operating model, signaling a critical regulatory-driven change that could impact revenue trends in early 2025.

    Decline in Service Professionals

    Q1 noted the shutdown of CraftJack resulted in a decline of roughly 5,000 service professionals, which was framed as margin‐accretive. Q2 did not specifically address this topic.

    Q3 mentioned a continuing decline in the number of service professionals and monetized transactions, although with improved retention among the remaining base and a slower pace of decline compared to service request drops.

    Recurring with an Evolved Focus – The trend of reducing low‑quality service professional acquisitions continues, but now there is a focus on enhancing the quality and retention of the remaining professionals, signaling a shift towards improved unit economics.

    Fluctuations in SEO Performance and Matching Technology

    Q2 detailed a stabilization in SEO performance after a downward trend, along with improvements in matching technology through enhanced Q&A processes.

    Not mentioned in Q3.

    Dropped – While it was a topic of discussion in Q2, the absence of mention in Q3 may suggest that SEO and matching improvements have stabilized or become a lower priority as focus shifts to other strategic areas.

    Macroeconomic Influences on Home Improvement Demand

    Q2 provided insights on macroeconomic factors such as potential Federal Reserve rate cuts boosting home improvement demand, with a discussion on reduced home turnovers and discretionary versus nondiscretionary service impacts. Q1 did not address this topic.

    Q3 offered indirect commentary noting a stable consumer base and observations on advertising trends without explicit focus on macroeconomic factors.

    Reduced Emphasis – The topic was prominent in Q2 but is less central in Q3, indicating a potential shift away from macro-driven concerns as the focus returns to internal and regulatory issues.

    Leadership Transition and Capital Allocation Strategies

    Q1 extensively covered the leadership transition (promotion of Jeffrey Kip) and a detailed discussion on capital allocation strategies including share buybacks, AI investments, and M&A plans. Q2 also touched on disciplined capital allocation and M&A opportunities.

    Q3 mentioned leadership transition in the context of the Care segment with Brad Wilson and reiterated that capital allocation strategies remain open, with a focus on maintaining liquidity and flexibility.

    Consistent with Evolution – Leadership and capital allocation remain high‑priority topics. While Q1 and Q2 focused on broader corporate strategy and U.S. market leadership, Q3 shows a segment‐specific transition, suggesting maturity and nuance in current strategies.

    Discontinuation of Non-core Operations

    Q1 discussed the CraftJack shutdown as a strategic move to remove non‑core, low‑profitability operations and improve margins, noting a decline of about 5,000 service professionals.

    Not mentioned in Q2 or Q3.

    No Longer Mentioned – The absence of further discussion suggests that the shutdown has been completed or is no longer a strategic focus, indicating successful execution of that part of the transformation.

    1. Angi Spin-Off
      Q: Why are you exploring the Angi spin now?
      A: The decision to explore spinning off Angi is based on a confluence of factors. Angi is now comfortably profitable, generating cash flow, and on the right strategic path. We believe it can stand alone in the public markets, benefiting from a more liquid currency, direct investor access, and the ability to use its currency for M&A or compensation. Spinning off Angi also allows IAC to focus on fewer things and execute better. Additionally, the spin would be tax-efficient, as it would be tax-free.

    2. Angi Revenue Growth Confidence
      Q: Why are you confident in Angi returning to revenue growth?
      A: Over the past two years, we've improved the quality of the business by focusing on customer experience and moving to consumer choice. Jobs done well rate has grown about 30% in the last year, pro retention has risen materially each quarter, and homeowner NPS is up by almost 60% in this last quarter. We've optimized our unit economics, driving profit growth despite revenue declines. We expect to hold our profit in 2025 and grow again in 2026.

    3. FCC's 101 Content Rule Impact
      Q: How will the FCC's 101 content rule affect Angi?
      A: The FCC's order, effective January 2025, requires businesses using auto-dial technology to have one-to-one consent from customers. We're accelerating our move to consumer choice to comply with this order. While we expect some volatility in the first half of next year, we're uniquely positioned to benefit from the new landscape post-order due to our size, quality network, and ability to provide deep liquidity with one-to-one consents.

    4. DDM Digital Revenue Outlook
      Q: Can you discuss DDM's revenue drivers and outlook?
      A: Third-quarter digital performance was excellent, with Digital Advertising revenues growing 26%, led by 14% growth in core sessions. Traffic growth was particularly strong in our entertainment and food properties. However, October was softer than expected, with Digital revenues up only 7% for the month due to consumer distractions and advertiser caution. For Q4, we're guiding to mid- to high-single-digit digital revenue growth. Looking ahead to 2025, we remain confident in 10% digital revenue growth as a baseline for DDM.

    5. Unlocking Angi's Growth Potential
      Q: Why should investors believe you've figured out growth for Angi now?
      A: The fundamental difference now is our absolute obsession with customer experience and jobs done well. By focusing on customer satisfaction, we're improving pro retention and homeowner repeat rates, which changes the economics of the business and allows us to reinvest. We're building a compelling direct brand for home services, and this focus on customer experience differentiates us and positions us to capture more of the market.

    6. MGM Stake and Tax Treatment
      Q: What's the basis and tax treatment if you sell the MGM stake?
      A: We currently hold 64.7 million shares of MGM with a basis just below $1.3 billion. IAC has net operating losses in excess of $1 billion, which can offset any taxable gain. At current trading levels, with an $1.1 billion gain, we have more than enough NOLs to offset, so the market value of the shares is the appropriate way to think about our holdings.