Angi Inc. (ANGI) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed outlook. While there are positive developments in AI integration, platform transformation, and revenue growth, there are concerns about declining SEO performance, macroeconomic pressures, and revenue per lead issues. The delay in platform consolidation and the pause in share repurchases until 2027 further temper optimism. The Q&A section reveals management's cautious tone and lack of detailed insights into key areas, contributing to a neutral sentiment overall.
Key Financial Performance
EBITDA Doubled over the last 3 years while cutting capital expenditures in half. This shift resulted in moving from negative free cash flow to positive free cash flow. The improvement is attributed to operational efficiencies and strategic cost reductions.
Homeowner NPS Increased by more than 30 points over the last 3 years. This improvement reflects enhanced customer satisfaction and service quality.
Customer Churn Reduced by more than 30% over the last 3 years. This reduction is due to better customer retention strategies and improved service offerings.
Customer Success Rates Improved by more than 20% over the last 3 years. This is attributed to better matching of homeowners with service providers and enhanced customer experience.
Customer Repeat Rate Turned positive by about 10% in the fourth quarter. This improvement is due to better customer engagement and satisfaction.
Revenue Achieved a material year-over-year revenue improvement of 700 to 900 basis points in Q4. January showed modest growth, but year-on-year growth is not fully expected in Q1. The improvement is attributed to operational adjustments and strategic investments.
Google SEO Traffic Declined by 35% to 40% year-over-year in mid-2024, improved to mid-double digits by the end of the year, but faced repeated setbacks. The decline is due to external pressures and algorithm changes, while improvements were achieved through product adjustments.
Proprietary Business Growth Grew by 17% in 2025. Expected high single to low double-digit growth in Q1. This growth is driven by investments in branded advertising and customer experience improvements.
Sales and Marketing Expenses Increased by about 8 percentage points as a percent of revenue in Q1 compared to Q4. This increase is due to reinvestment in offline marketing, international TV campaigns, and new creative content.
Adjusted EBITDA Expected to be in the mid-$40 million range for Q2 and Q3, with a slight decline in Q4 due to seasonal revenue decreases. The progression reflects strategic investments and cost management.
Restructuring Savings Achieved $70 million to $80 million in annualized savings, with mid-$60 million in-year savings. This was achieved through cost structure adjustments and operational efficiencies.
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Operating Highlights
AI Integration: Angi has started working with various LLMs (Large Language Models) and announced a deal with Amazon's Alexa. They have also submitted an app to another major LLM and are working on technical integrations. They are deploying LLM technology in their core customer experience, which has improved customer conversion rates by 3.3x.
Proprietary Business Growth: The proprietary business grew 17% in 2025, and the company expects high single to low double-digit growth in Q1 2026. They are focusing on branded advertising and proprietary channels to drive growth.
Cost Structure Optimization: Angi reduced its fixed cost base by $60 million year-over-year through restructuring, enabling investments in brand marketing, online Pro marketing, and sales in the large Pro segment.
EBITDA Growth: The company doubled its EBITDA over the last three years and expects $10 million to $15 million of profit growth year-over-year in 2026.
Focus on Marketplace Role: Angi is emphasizing its role as a marketplace, acting as an agent between homeowners and Pros. They aim to improve customer retention and repeat rates by leveraging proprietary data and systems.
Brand Marketing Investment: The company is reinvesting in brand marketing, including TV, streaming, and social media, to drive high-quality traffic and improve customer experience.
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Risk or Challenges
Google SEO and Network Channel Pressure: The company has faced significant declines in Google SEO and network channel performance, with year-over-year declines of 35%-40% at various points. These declines have impacted revenue growth, and the company has adopted a conservative outlook, assuming no improvement in these channels for the year.
Revenue Growth Challenges: The company expects modest negative growth in the first quarter and low single-digit growth for the year. This is attributed to pressures in Google SEO and network channels, as well as difficult comparisons from prior periods.
Increased Marketing Spend: The company plans to increase offline and online marketing spend, including $3 million for new creative and additional Pro marketing. While this is expected to drive future revenue, it will negatively impact margins in the short term.
Seasonal Revenue Declines: The company anticipates seasonal revenue declines in the fourth quarter, similar to the $25 million decline experienced in the prior year. This will impact EBITDA and overall financial performance.
Restructuring Costs and Savings: The company has undertaken restructuring to reduce costs by $70-$80 million annually. However, the in-year savings are expected to be in the mid-$60 million range, and the restructuring has also led to delays in the product roadmap, impacting short-term revenue.
Competitive Pressures: The company acknowledges that competitors could potentially build alternate marketplace technologies quickly, posing a risk to its market position. However, it believes its existing network and proprietary data provide a competitive advantage.
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Guidance & Outlook
Revenue Growth: The company expects very modest negative growth in the first quarter of 2026, with a material sequential acceleration. For the full year, they anticipate low single-digit growth (1% to 3%), impacted by Google SEO and network channel pressures. Proprietary business is expected to grow at a high single to low double-digit rate in Q1 and mid-single-digit or higher long-term.
Marketing Investments: The company plans to reinvest in brand marketing, including TV, streaming, and social media, returning to 2024 spending levels. They also aim to ramp up online Pro marketing and increase offline marketing internationally, particularly in Europe.
Margins and EBITDA: Margins have been reset, and the company expects adjusted EBITDA to grow by $10 million to $15 million year-over-year. Incremental EBITDA in Q2 is projected to be in the mid-$20 million range, with mid-$40 million EBITDA expected for Q2 and Q3. Q4 EBITDA is expected to be in the low $40 million range.
Capital Expenditures: Capital expenditures have been reduced significantly, freeing up resources for long-term growth investments. The company has restructured to lower fixed costs by $60 million annually, enabling reinvestment in growth areas.
AI and Technology Integration: The company is optimistic about opportunities in the AI landscape, including partnerships with LLMs (e.g., Amazon Alexa) and deploying proprietary AI technology to improve customer experience and Pro matching. They aim to integrate with various software systems to enhance operational efficiency.
Proprietary Business Growth: Proprietary business grew 17% in 2025 and is expected to continue growing at a high single-digit to low double-digit rate in Q1 2026. Long-term growth is projected to be mid-single-digit or higher.
Network and SEO Channels: The company has adopted a conservative outlook for Google SEO and network channels, assuming no improvement in these areas for 2026. They plan to focus on proprietary business growth to offset these challenges.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How should we think about the rollout of AI features on the customer side of the platform over the next 12 months?
A:The main focus is on the AI helper in the SR path, aiming to increase the number of homeowners connecting with the right Pro. Currently, 35% of homeowners use it, and they are 3.3x more likely to choose a Pro. The goal is to increase this to 50-65%. Tests have shown a 5% improvement recently. Other applications include post-lead communication to stabilize and improve homeowner-Pro connections. Integration with LLMs is also being developed to enhance data and AI implementation.
Q:How does owning a consolidated supply-side data position the company when partnering with LLMs?
A:The company has a system of record about customer behavior and success, which allows for better agentic tasks. This data enables effective partnerships with LLMs by comparing context or queries with customer data, running algorithms, and improving connections. This creates a competitive moat due to the scale and years of operation.
Q:What is the rationale for tripling brand spend this year, and what lag should be expected before it translates into incremental service requests?
A:The brand spend is returning to 2024 levels, not exceeding past profitable levels. The company uses data partners to measure ROI from TV ads and has honed its strategy for better results. Incremental spend takes time to pay back, with a tail of months. The decision to increase spend is based on improved customer experience and the multiplier effect of new Pro products.
Q:How should we think about the normalized growth rate for the proprietary channel as Homeowners Choice is lapped this year?
A:Proprietary revenue grew 23% in Q4 and 17% for the full year. Overall revenue is expected to end the year in the mid-single-digit range, with proprietary revenue potentially reaching high single digits or low double digits, depending on Pro capacity and branded marketing impact.
Q:What is happening with Pro capacity as the network is still declining nominally?
A:The company has changed its approach to acquiring Pros, focusing on larger Pros with bigger packages but fewer in number. Capacity per Pro and revenue per Pro are up, resulting in overall capacity growth despite a decline in nominal Pro counts. Acquired Pros are expected to grow year-over-year in 2026, leading to overall network growth in 2027.
Q:What is the status of the global platform consolidation, and are there any expected disruptions?
A:The timeline for the single platform has been extended by a quarter or two due to organizational changes. The first deliverable is a new homeowner experience, followed by the Pro experience. The new platform will be more flexible and componentized, enabling better customer experiences and integrations. No disruptions are anticipated, and enhancements are expected.
Q:What needs to be built or changed in the tech stack to take advantage of AI and move up the marketing funnel?
A:The company is shifting to a modern, AI-first platform, replacing legacy technology. New software is being built with agentic coding and integrated through APIs. The focus is on deploying in a componentized way to multiple channels and using AI to improve matching and customer experience.
Q:What are the macroeconomic trends affecting the business?
A:There is some weakness and pressure on volumes, with lower job values and consideration. In a recessionary environment, it becomes harder to get service requests but easier to retain Pros. The business has resilience due to its focus on nondiscretionary tasks, which make up two-thirds of the business.
Q:What is causing the revenue per lead decline, and how is it being addressed?
A:The decline is due to additional leads being delivered to subscription Pros who are already at their caps, resulting in unmonetized leads. Features to better monetize these leads are being rolled out, similar to functionality in Europe.
Q:How is capital allocation being approached post-spin, and what are the plans for share repurchases?
A:The company is focused on managing $500 million of debt due in 2028, with plans to cover it through cash flow, balance sheet, and credit line. Tuck-in acquisitions are considered but not imminent. Share repurchases are paused until April 2027, but long-term plans include potential buybacks or dividends.
Q:What is the current exposure to SEO headwinds, and how is it evolving?
A:SEO accounts for 7% of service requests, leads, and revenue, and its share has been declining. The company is focusing on growing proprietary traffic through other channels while continuing to acquire homeowners through SEO as much as possible.
Q:What is the impact of Google’s competitive actions, and how is the company managing it?
A:Google has reduced free real estate and increased paid ads, impacting SEO. The company is focusing on high-quality pages and effective paid ad strategies, including AI Max. Despite challenges, the company has grown its SEM by over 50% and continues to adapt to Google’s changes.
Q:What are the early insights into LLM integrations and their impact on traffic and customer acquisition costs?
A:The company is in discussions with major LLM players and has submitted an app to one. Modest traffic is being received from some platforms, performing similarly to organic traffic. Controlled environment tests show promising results, with 3.3x conversion to Pro selection when using LLMs on the company’s site.
Q:What is the difference in margin profile between service requests and leads across proprietary versus network channels?
A:Margins are now comparable between proprietary and network channels due to changes from Homeowner Choice. Previously, network channels were more profitable.
Q:What explains the increase in leads per service request in Q4?
A:The increase is due to additional leads being sent to subscription Pros who are already at their caps, resulting in more leads per service request.
Q:Why was there an increase in consumer marketing expense in Q4?
A:The increase was consistent with Q2 levels and reflects a shift from SEO to paid channels. Marketing as a percentage of revenue has increased through the year due to this shift.
Q:Review of Unclear Management Responses
A:Management avoided directly naming the LLM platforms they are integrating with, citing confidentiality. They also provided limited data on the performance of traffic from LLMs, stating it is too early to report significant insights. Additionally, while discussing macroeconomic trends, the response lacked specific data or detailed analysis of the impact on the business.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI landscape
Agentic coding
Alexa app
Google SEO
Pro homeowner
SEO network
acceleration
agent
appointment
base
basis point
calendar
cash flow
channel Google
compare
conversation
deal
et cetera
garage
homeowner Pro
job Pro
layer
marketplace software
opportunity LLMs
partner LLMs
plumber
pressure
progress
repeat
software coding
system record
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ANGI Transcript
Angi Inc. (ANGI) Q4 2025 Earnings Call Transcript
Unknown2-11
The earnings call presents a mixed outlook. While there are positive developments in AI integration, platform transformation, and revenue growth, there are concerns about declining SEO performance, macroeconomic pressures, and revenue per lead issues. The delay in platform consolidation and the pause in share repurchases until 2027 further temper optimism. The Q&A section reveals management's cautious tone and lack of detailed insights into key areas, contributing to a neutral sentiment overall.
Angi Inc. (ANGI) Q3 2025 Earnings Call Transcript
Unknown11-5
The earnings call summary and Q&A session present a mixed picture. While there is optimism about proprietary channel growth and platform consolidation, concerns exist over declining network channel performance and unresolved vendor issues. The company's stable macro environment and increased share buyback are positives, but lack of specific guidance and modest revenue expectations temper enthusiasm. Overall, the sentiment is balanced, leading to a neutral stock price prediction.
Angi Inc. (ANGI) Q2 2025 Earnings Call Transcript
Unknown8-6
The earnings call reveals a mixed outlook. While there is optimism about revenue growth in 2026 and strategic AI integration, current financial performance shows stabilization rather than immediate growth. The Q&A highlights uncertainties in marketing ROI and potential risks in platform transitions. The focus on paid channels due to declining organic traffic and the cautious macroeconomic environment further contribute to a neutral sentiment. Without a market cap, the lack of strong catalysts or negative factors suggests minimal short-term stock movement, resulting in a neutral prediction.
Angi Inc. (ANGI) Q1 2025 Earnings Call Transcript
Unknown5-7
The earnings call highlights significant declines in revenue, network service requests, and leads, primarily due to the implementation of homeowner choice, which negatively impacted lead volume. Despite some improvements in pro retention and activation rates, the overall financial performance is weak. The Q&A section reveals economic uncertainties and competitive risks, with management providing vague responses about future projections. No share buyback or dividend program was announced, further dampening investor sentiment. These factors suggest a negative stock price reaction over the next two weeks.
ANGI Slides
ANGI Report
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