Angi (ANGI) Q2 Revenue Beats by 6%

Core Insights - Angi's Q2 2025 earnings report revealed revenue of $278.2 million, exceeding analyst expectations but showing a 12% decline year-over-year [1][5] - Diluted earnings per share (EPS) was $0.23, missing the expected $0.26, despite a significant increase from $0.07 in Q2 2024 [2][5] - The company is focusing on improving platform quality, user experience, and consumer trust while navigating a competitive marketplace [4] Financial Performance - Revenue (GAAP) of $278.2 million was up 6.3% from the consensus estimate of $261.6 million but down 12% from $315.1 million in Q2 2024 [1][2] - Adjusted EBITDA decreased by 22% to $33.0 million compared to the previous year [2][5] - Operating income nearly doubled year-over-year to $17.7 million, attributed to lower depreciation expenses [2][8] Business Model and Strategy - Angi connects homeowners with local service professionals, generating revenue by charging professionals for job leads and enhanced placement [3] - The company is shifting focus from low-quality leads to direct engagement on its platform, resulting in a 76% drop in network channel leads [7] - The professional network contracted, with acquired professionals down 39% to 24,000, indicating a strategy to prioritize higher-value professionals [7] Engagement Metrics - Proprietary engagement metrics showed improvement, with service requests in Angi-owned channels rising 7% to 4.118 million and proprietary leads increasing by 16% [6] - The "homeowner choice" system improved customer satisfaction, reflected in a Net Promoter Score increase of over 30 points [6][10] - The company is investing in technology, including AI features to enhance job-pro matching and improve consumer satisfaction [11] Regulatory and Operational Context - Regulatory compliance costs, particularly from European digital identity requirements, impacted professional acquisition internationally [9] - Angi's operational independence post-spin-off from IAC has not significantly altered its strategy or capital allocation [9] - As of June 30, 2025, the company had $362.5 million in cash and $500 million in debt [9] Future Outlook - Management expects revenue declines to slow in 2025 and anticipates a return to growth in 2026, contingent on successful scaling of online professional acquisition [12] - Key metrics to monitor include trends in proprietary engagement, the quality of active professionals, and the effectiveness of technology initiatives [13]