ANGI Homeservices(ANGI) - 2024 Q3 - Quarterly Results

Executive Summary & Q3 2024 Highlights Angi Inc. reported Q3 2024 revenue decline but improved profitability, announced a potential IAC spin-off, and issued positive FY2024 guidance Key Financial Highlights Angi Inc. reported a 16% year-over-year revenue decrease in Q3 2024, reaching $296.7 million, but operating income significantly improved to $7.8 million from a loss of $7.9 million in Q3 2023, and Adjusted EBITDA increased by 27% to $35.4 million, primarily driven by the Ads and Leads and Services segments Q3 2024 Summary Financial Results | Metric | Q3 2024 ($ millions) | Q3 2023 ($ millions) | Growth | | :-------------------------- | :------------------- | :------------------- | :------- | | Revenue | 296.7 | 351.2 | -16 % | | Operating income (loss) | 7.8 | (7.9) | NM | | Net earnings (loss) | 35.2 | (5.4) | NM | | Diluted earnings (loss) per share | $0.07 | ($0.01) | NM | | Adjusted EBITDA | 35.4 | 27.8 | 27 % | - Operating income increased $16 million to $8 million and Adjusted EBITDA increased 27% to $35 million, driven by Ads and Leads and Services[3] - International revenue grew 9% year-over-year[3] Strategic Announcements IAC announced it is considering a spin-off of its ownership stake in Angi Inc. to its shareholders - IAC is considering a spin-off of its ownership stake in Angi Inc. to its shareholders[2] Share Repurchase Activity Angi Inc. repurchased 2.5 million common shares for $6.2 million between August 2 and November 8, 2024, at an average price of $2.48 per share, bringing total repurchases to 15.9 million shares since November 2023 - Angi Inc. repurchased 2.5 million common shares for $6.2 million (average $2.48 per share) between August 2, 2024, and November 8, 2024[4] - Since November 2023, Angi Inc. has repurchased 15.9 million shares[4] Year-to-Date Performance For the nine months ended September 30, 2024, Angi Inc. saw significant improvements in profitability and cash flow, with operating income increasing by $54 million to $20 million, Adjusted EBITDA rising by 47% to $114 million, and Free Cash Flow increasing by $29 million to $78 million - Year-to-date operating income increased $54 million to $20 million[3] - Year-to-date Adjusted EBITDA increased 47% to $114 million[3] - For the nine months ended September 30, 2024, net cash provided by operating activities increased $31 million to $116 million, and Free Cash Flow increased $29 million to $78 million[4] Full Year 2024 Outlook Angi Inc. expects full-year 2024 operating income to be between $10 million and $35 million, and Adjusted EBITDA to range from $140 million to $145 million Full Year 2024 Outlook | Metric | FY 2024 Outlook ($ millions) | | :------------- | :--------------------------- | | Operating income | $10-$35 | | Adjusted EBITDA | $140-$145 | - Angi Inc. expects $10-$35 million of operating income and $140-$145 million of Adjusted EBITDA for the full year 2024[5] Financial Performance Analysis This section analyzes Angi Inc.'s Q3 2024 financial performance, including revenue breakdown, operating income, Adjusted EBITDA, and income taxes Revenue Breakdown Total revenue for Q3 2024 was $296.7 million, a 16% decrease year-over-year, primarily due to declines in Ads and Leads and Services revenue, while International revenue grew by 9% Q3 2024 Revenue by Segment | Segment | Q3 2024 ($ millions) | Q3 2023 ($ millions) | Growth | | :-------------- | :------------------- | :------------------- | :------- | | Ads and Leads | 241.2 | 292.0 | -17 % | | Services | 23.7 | 30.0 | -21 % | | Total Domestic | 264.9 | 322.0 | -18 % | | International | 31.8 | 29.3 | 9 % | | Total | 296.7 | 351.2 | -16 % | - Ads and Leads revenue decreased 17% due to ongoing user-experience enhancements, lower sales and marketing spend, resulting in lower Service Requests and new professional acquisitions[6] - Services revenue decreased 21% due to margin-optimization initiatives and lower Service Requests[6] - International revenue increased 9% primarily due to a larger professional network and higher revenue per professional[6] Operating Income (Loss) and Adjusted EBITDA Overall operating income increased by $15.7 million to $7.8 million, and Adjusted EBITDA improved by 27% to $35.4 million, largely driven by the Ads and Leads segment's strong performance due to reduced expenses Q3 2024 Operating Income (Loss) and Adjusted EBITDA by Segment | Segment | Q3 2024 Operating Income (Loss) ($ millions) | Q3 2023 Operating Income (Loss) ($ millions) | Growth | | :-------------- | :------------------------------------------- | :------------------------------------------- | :------- | | Ads and Leads | 21.1 | 8.1 | 160 % | | Services | (0.3) | (3.9) | 92 % | | Corporate | (15.7) | (14.9) | -6 % | | Total Domestic | 5.1 | (10.6) | NM | | International | 2.7 | 2.8 | -1 % | | Total | 7.8 | (7.9) | NM | | | | | | | Segment | Q3 2024 Adjusted EBITDA ($ millions) | Q3 2023 Adjusted EBITDA ($ millions) | Growth | | :-------------- | :------------------------------------------- | :------------------------------------------- | :------- | | Ads and Leads | 42.2 | 32.2 | 31 % | | Services | 3.9 | 3.5 | 10 % | | Corporate | (14.4) | (11.9) | -21 % | | Total Domestic | 31.7 | 23.8 | 33 % | | International | 3.7 | 4.0 | -9 % | | Total | 35.4 | 27.8 | 27 % | Ads and Leads Segment Performance The Ads and Leads segment's operating income surged by 160% to $21.1 million, and Adjusted EBITDA increased by 31% to $42.2 million, primarily due to reduced selling, marketing, and general and administrative expenses - Ads and Leads operating income increased 160% to $21.1 million[7] - Ads and Leads Adjusted EBITDA increased 31% to $42.2 million, driven by lower selling and marketing expense and lower general and administrative expense[7] - The segment experienced $2.6 million lower amortization of intangibles and $2.0 million lower depreciation[7] Services Segment Performance The Services segment's operating loss decreased by 92% to $0.3 million, and Adjusted EBITDA increased by 10% to $3.9 million, mainly attributed to better unit economics and lower operating expenses - Services operating loss decreased 92% to $0.3 million[7] - Services Adjusted EBITDA increased 10% to $3.9 million due to improved unit economics and lower operating expenses, partially offset by lower revenue[7] - The segment benefited from $2.8 million lower depreciation[7] International Segment Performance International operating income decreased by 1% to