ANGI Homeservices(US:ANGI)2025-05-06 20:19Revenue Performance - Domestic revenue decreased by $57.5 million, or 21%, primarily due to a $45.1 million (28%) drop in lead revenue [127]. - International revenue decreased by $2.0 million, or 6%, due to a management decision to change the business model of the Canadian business [128]. - Total revenue for the three months ended March 31, 2025, was $245.9 million, down from $305.4 million in the same period in 2024, representing a decrease of $59.5 million, or 19% [127]. Profitability Metrics - Gross profit decreased by $60.0 million, or 20%, with a gross margin of 95% compared to 96% in the previous year [131]. - Operating income increased to $20.0 million, a 636% increase compared to the previous year, with domestic operating income at $14.0 million and international at $6.0 million [138]. - Adjusted EBITDA decreased by $8.3 million, or 23%, to $27.7 million, with domestic Adjusted EBITDA at $21.6 million, down 26% [141][142]. Expenses Overview - Selling and marketing expenses decreased by $38.5 million, or 25%, driven by reductions in compensation and advertising expenses [132]. - General and administrative expenses decreased by $28.2 million, or 33%, as a percentage of revenue fell from 28% to 23% [134]. - Domestic general and administrative expenses decreased by $28.3 million, or 37%, primarily due to a $15.4 million reduction in compensation expenses and a $5.3 million decrease in the provision for credit losses [135]. - Product development expenses increased by $3.3 million, or 14%, reaching $27.1 million, driven mainly by higher compensation expenses [136]. - Depreciation expenses decreased by $13.9 million, or 58%, totaling $9.9 million, due to reduced capitalized software spending and write-offs related to real estate footprint reduction [137]. - Cost of revenue increased by $0.5 million, or 4%, as a percentage of revenue rose from 4% to 5% [129]. Activity Metrics - Average Monthly Active Pros decreased to 134, down from 157, representing a decline of 14% [127]. - Total service requests decreased by 765, or 19%, from 4,126 to 3,361 [127]. - The number of acquired Pros decreased by 16, or 41%, from 40 to 24 [127]. Cash Flow and Financial Position - As of March 31, 2025, total cash and cash equivalents decreased to $386.6 million from $416.4 million as of December 31, 2024, representing a decline of approximately 7.1% [160]. - Net cash used in operating activities for the three months ended March 31, 2025, was $(3.1) million, a significant decrease compared to $22.3 million provided in the same period of 2024 [161]. - The company reported a net cash outflow of $12.6 million in investing activities primarily for capital expenditures related to capitalized software [163]. - Financing activities resulted in a net cash outflow of $14.3 million, including $9.8 million for the repurchase of 0.6 million shares at an average price of $16.53 per share [164]. - The company believes its existing cash and expected positive cash flows will be sufficient to fund its normal operating requirements for the next twelve months [173]. Share Repurchase and Capital Expenditures - As of May 2, 2025, the company had repurchased a total of 2.3 million shares under its stock repurchase authorization, with no shares remaining from the previous authorization [168]. - The board of directors approved a new stock repurchase authorization of 5 million shares on May 5, 2025 [169]. - The company expects 2025 capital expenditures to increase by approximately 15% to 25% compared to 2024's $50.5 million, driven by investments in capitalized software [171]. Tax and Other Financial Information - The income tax provision increased by $1.2 million, or 35%, to $4.7 million, with an effective income tax rate of 24% [147][148]. - Interest expense remained flat at $5.0 million compared to the same period last year [144]. - Other income, net increased by $0.3 million, or 8%, to $4.5 million, including interest income of $4.3 million [145]. - At March 31, 2025, there was $28.3 million of unrecognized compensation cost related to equity-based awards, expected to be recognized over approximately 2.04 years [140]. - The company may seek additional capital through equity or debt financing for strategic acquisitions or other purposes beyond the next twelve months [173]. - There were no material changes to the company's market-sensitive instruments or positions during the three months ended March 31, 2025 [175]. Net Earnings - The company reported a net earnings attributable to Angi Inc. shareholders of $15.1 million for the three months ended March 31, 2025 [158].