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AI

Angi Inc. (ANGI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue of $265.6M declined 10% year over year; GAAP diluted EPS was $0.23. Operating income rose 179% to $21.8M; Adjusted EBITDA increased 12% to $39.7M, reflecting lower depreciation, SBC, and expense discipline .
  • Results versus S&P consensus: revenue slightly missed ($265.6M vs $269.0M*), Primary EPS missed (0.296 vs 0.368*), and EBITDA modestly below ($33.7M* vs $36.1M*)—driven by network channel volume declines offset by strong proprietary channels growth .
  • Proprietary channels strengthened: Proprietary Service Requests +11% YoY and Proprietary Leads +16% YoY; revenue per lead +11% YoY. Network channel leads fell sharply (now <10% of leads), weighing on total leads (-21% YoY) and revenue (-10% YoY) .
  • 2026 outlook reiterated: mid‑single‑digit revenue growth with “a little” EBITDA leverage via fixed‑cost discipline; TV spend to roughly double in 2026; CapEx around $60M in 2025 and similar in 2026 (front‑loaded) .
  • Capital allocation: 1.3M shares repurchased for $20.1M between Aug 4–Oct 31; new 3.2M share authorization approved Sept 17. Year‑to‑date repurchases total ~$111M (~15% of shares), with limits tied to the tax‑free spinoff noted by management .

What Went Well and What Went Wrong

What Went Well

  • Proprietary channel momentum: Proprietary Service Requests +11% YoY, Proprietary Leads +16% YoY; revenue per lead +11% YoY—supported by customer experience improvements and SEM performance .
  • Operating leverage from expense actions: Operating income +179% YoY to $21.8M on lower depreciation and SBC; Adjusted EBITDA +12% to $39.7M as pro acquisition and fixed costs declined year over year .
  • Management execution and strategic clarity: CEO highlighted improving hire/win rates, higher NPS, and improving pro retention; reiterated mid‑single‑digit 2026 growth as proprietary gains offset network drag; AI‑first platform consolidation targeted by 2027 .
    • “Our estimated hire rate is up double digits. Our estimated win rate is up nearly 30%... NPS is up nearly 10 points YoY… Pro churn better by 7% in the last 12 months” .

What Went Wrong

  • Network channel headwinds: Leads in network channels fell 81% YoY; three larger affiliates had volume “bumps down,” pressuring total leads (-21% YoY) and revenue (-10% YoY) despite proprietary strength .
  • Mixed estimate comparison: S&P consensus was modestly higher on revenue and Primary EPS than actual; EBITDA modestly below consensus, reflecting network pressures and timing/capitalization dynamics [GetEstimates].
  • Elevated tax rate: Effective tax rate 49% (tax provision $10.2M), driven by enacted tax law changes, cross‑border effects and state taxes; prior‑year had a $26.6M benefit from valuation allowance release—driving YoY decline in GAAP net earnings (-70%) despite operating improvement .

Financial Results

Headline P&L (GAAP and Adjusted)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$245.9 $278.2 $265.6
Operating Income ($M)$20.0 $17.7 $21.8
Net Earnings ($M)$15.1 $10.9 $10.6
Diluted EPS ($)$0.30 $0.23 $0.23
Adjusted EBITDA ($M)$27.7 $33.0 $39.7

Q3 2025 Actuals vs S&P Global Consensus

MetricActualS&P ConsensusBeat/Miss
Revenue ($M)$265.6 $269.0*Miss
Primary EPS ($)0.296*0.368*Miss
EBITDA ($M)33.7*36.1*Miss

Values marked with * retrieved from S&P Global.

Notes: GAAP diluted EPS was $0.23 . S&P “Primary EPS” reflects a normalized definition and differs from GAAP diluted EPS.

Margins (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
EBITDA Margin %12.18%*10.05%*12.69%*
EBIT Margin %8.13%*6.35%*8.20%*
Net Income Margin %6.14%*3.92%*3.99%*
Gross Profit Margin %94.71%*95.28%*95.31%*

Values marked with * retrieved from S&P Global.

Segment Revenue

Segment ($M)Q1 2025Q2 2025Q3 2025
Domestic$212.6 $245.5 $233.2
International$33.4 $32.7 $32.4
Total$245.9 $278.2 $265.6

KPIs – Service Requests and Leads (’000s)

KPI (’000s)Q1 2025Q2 2025Q3 2025
Service Requests – Proprietary2,773 4,118 3,791
Service Requests – Network588 444 353
Service Requests – Total3,361 4,562 4,144
Leads – Proprietary3,590 4,980 4,946
Leads – Network812 597 495
Leads – Total4,402 5,577 5,441

Additional operating notes: Revenue per lead +11% YoY in Q3; Acquired Pros 22k and Average Monthly Active Pros 118k in Q3 (both down YoY as acquisition is intentionally lower but retention improving) .

Balance Sheet & Cash

  • Cash & equivalents: $340.7M; Senior Notes: $500M 3.875% due Aug 2028 .
  • Cash from operations YTD nine months: $75.0M; Free cash flow YTD: $34.1M .

Guidance Changes

Metric/TopicPeriodPrevious GuidanceCurrent GuidanceChange
Revenue growthFY2026Mid‑single‑digit growth (prior call)Mid‑single‑digit growth reiterated Maintained
EBITDA leverageFY2026“A little” leverage via fixed‑cost discipline (prior call)Reiterated fixed‑cost discipline; modest leverage Maintained
CapExFY2025/FY2026N/A~$60M in 2025; similar in 2026, front‑loaded New/updated
TV/Brand marketingFY2026N/A“Double‑ish” TV spend planned New
Active Pro growthLate 2026/early 2027N/AExpect return to nominal active pro growth by end of 2026/beginning 2027 New
Technology platformBy 2027Multi‑platformSingle modern, AI‑first global platform by 2027 New milestone
Share repurchases20255M authorization (1.3M remaining as of Aug 1) New 3.2M authorization approved Sept 17; 1.3M bought Aug 4–Oct 31 ($20.1M) Increased authorization

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesPlatform consolidation mentioned; focus on efficiency; metrics revamped in Q1 Move to AI‑first; target single modern platform by 2027; AI Helper improving conversion; building apps on major LLMs Accelerating investment; clearer roadmap
Marketing/TVMarketing optimization; higher consumer marketing cost per SR post‑homeowner choice in Q2 Plan to “double‑ish” TV spend in 2026 given brand ROI; AI Max >10% of Google spend Brand spend to re‑accelerate in 2026
Homeowner choice & network channelHomeowner choice implemented Jan ’25; Q1/Q2 SR/lead pressure, proprietary improving Network leads <10% (was ~40% YoY); affiliate volume bumps; proprietary SR +11%, leads +16% Ongoing mix shift to proprietary; network de‑emphasized
Pro base (acquisition/retention)Sales force consolidation; lower pro acquisition expense; TTM retention improved Half the sales headcount YoY but higher lifetime margin; online enroll ramping; expect active pro growth late ’26/early ’27 Better unit economics; capacity growth targeted
MacroN/A in Q1/Q2 releasesMacro “steady as she goes”; no clear income‑cohort divergence Neutral
Capital allocationQ1: 5M buyback authorization; Q2: 3.7M shares repurchased YTD through Aug 1 $20.1M repurchased Aug–Oct; new 3.2M authorization; ~$111M YTD (~15%) with spinoff limits noted Aggressive within constraints

Management Commentary

  • CEO on customer experience momentum: “Our estimated hire rate is up double digits… win rate is up nearly 30%… NPS up nearly 10 points YoY… Pro retention continues to improve” .
  • Strategic focus and 2026 outlook: “We are looking forward very optimistically to 2026 and beyond… strong paid proprietary channel execution… mid‑single‑digit [growth] target… reinvest in branded advertising next year” .
  • Platform strategy: “Target of getting to a single modern global and AI‑first platform by 2027” .
  • CFO on CapEx/timing: “Around $60 million of CapEx this year, around a similar amount next year, but… front‑loaded next year” .
  • Network channel stance: “Today, the [network] channel is less than 10% of our leads… not a strategic channel” .

Q&A Highlights

  • 2026 growth reaffirmed: Management maintained mid‑single‑digit revenue growth view for 2026, with “a little” EBITDA leverage via fixed‑cost discipline; brand spend to increase materially (TV ~2x) .
  • CapEx and capitalization: CapEx ~$60M in 2025 and similar in 2026 (front‑loaded), with higher capitalization related to unified platform work through 1H26 .
  • Network dynamics: Three larger affiliates had volume reductions; network now <10% of leads; proprietary channels remain the growth driver .
  • Ads migration: More than half complete; ~three‑quarters done by mid‑Nov; no material disruptions; sunsetting legacy Ads platform to lower costs .
  • AI deployment: AI Helper and broader AI‑native software approach intended to lift conversion and speed product iteration; working with major LLMs and Google’s AI ad surfaces .

Estimates Context

  • Q3 2025 vs S&P consensus: Revenue $265.6M vs $269.0M* (miss); Primary EPS 0.296 vs 0.368* (miss); EBITDA $33.7M* vs $36.1M* (miss). GAAP diluted EPS reported at $0.23 . Values marked with * retrieved from S&P Global.
  • Implications: Street models may trim near‑term revenue/EBITDA given network channel underperformance and higher capitalization/CapEx cadence, while factoring in sustained proprietary channel growth, revenue per lead gains, and 2026 brand reinvestment .

Key Takeaways for Investors

  • Proprietary engine is working: Double‑digit proprietary SR/lead growth and revenue per lead +11% YoY support the transition away from low‑quality network volume; this underpins the 2026 return‑to‑growth plan .
  • Mixed quarter vs consensus: Slight top‑line and EPS misses with EBITDA a touch below S&P forecasts*, mainly from network headwinds and timing/cap costs—offset by expense control and mix improvements [GetEstimates] .
  • 2026 setup: Reaffirmed mid‑single‑digit revenue growth and modest EBITDA leverage via fixed‑cost discipline; significant brand/TV reinvestment planned, which could pressure near‑term margin but support demand and brand traffic .
  • AI‑first transformation: Consolidation to a single modern platform by 2027 and deployment of AI‑enabled experiences are expected to improve conversion and speed of iteration—potential upside not yet explicitly in guidance .
  • Capital allocation remains active: ~$111M (~15%) repurchased YTD with new 3.2M authorization, constrained near term by spinoff limitations; $340.7M cash and $500M notes provide flexibility .
  • Watch items: Pace of network stabilization, sustainability of proprietary growth, execution on platform migration and AI rollout, and marketing ROI as TV spend ramps.

Values marked with * retrieved from S&P Global.

Citations:

  • Q3 2025 8‑K press release and financials: .
  • Q2 2025 8‑K press release and financials: .
  • Q1 2025 8‑K press release and financials: .
  • Q3 2025 earnings call transcript: .