An earlier version of this report misstated Angi’s adjusted earnings before interest, taxes, depreciation, and amortization for the latest quarter. It has been corrected.
The home-improvement frenzy is slowing down, and that’s actually proving beneficial for Angi Inc.
The company, which combines the former Angie’s List and HomeAdvisor services, grew revenue by 23% in its latest quarter, highlighted by improved performance in Angi’s
ANGI,
ads and leads business.
One way that Angi makes money is when home-services professionals take out ads or engage in “performance marketing” aimed at driving new customers. During the height of the pandemic, those professionals were so busy with jobs that they didn’t need to actively search for new business, but now that home-improvement trends are cooling, they’ve proven more willing to wade into paid campaigns.
“Consumer demand has slowed, particularly on discretionary tasks,” Chief Executive Oisin Hanrahan told MarketWatch. “This has led to pros being more engaged, because every job we have is worth more to a pro.”
Angi’s ads and leads business grew revenue by 5% in the latest quarter, marking the first quarter of growth since the second quarter of 2021.
“It’s a net good thing for Angi if there are pros who want to spend to drive their book of business,” Hanrahan continued, adding that the company is looking for a “moderate” balance between supply and demand.
Read: People are getting ‘squeezed’ by soaring rents, especially Gen Z, according to Bank of America data
Overall, Angi grew revenue to $515.8 million from $421.0 million a year ago, while analysts tracked by FactSet were projecting $495.4 million.
Hanrahan pointed to a mix of big-picture trends in the latest quarter. While consumers are pulling back on non-discretionary projects, there’s still “sustained demand” for discretionary projects like electrical maintenance or air-conditioning repairs.
Even within the realm of the non-discretionary, priorities are changing. Now that consumers are leaving their homes more, they’re not breaking as many toilets, dishwashers and ovens as they might have earlier in the pandemic. But they’re still showing a strong need for heating, ventilation and air-conditioning (HVAC) maintenance, given high temperatures.
Angi also makes money through a services business in which homeowners pay the company for services that professionals list on the platform. Trends there have “definitely softened,” but the company is trying to “push for profitability” in this part of the business, according to Hanrahan.
The company generated a total net loss of $24.2 million, or 5 cents a share, in the latest quarter, down from $30.3 million, or 6 cents a share, in the year-earlier period. Analysts were modeling a GAAP loss per share of 6 cents for the second quarter.
Angi posted adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $9.7 million, versus a loss of $4.4 million on that metric a year before. The FactSet consensus was for $3 million in adjusted Ebitda.
Hanrahan noted that the company continued to see a “very strong growth rate” in its ads and leads business for July, though services growth slowed as the company lapped its acquisition of a roofing business and also dealt with some operational challenges in that business.
Angi ads and leads revenue ticked up 7% in June relative to a year before, while services revenue growth came in at 18%, below the 107% rate seen in the second quarter. Overall revenue increased 10%.
IAC/InterActiveCorp.
IAC,
has majority economic interest in Angi, and IAC posted second-quarter results as well Tuesday.
IAC generated a net loss of $869.1 million, or $10.02 a share, in the latest period, whereas it recorded net income of $194.8 million, or $2.02 a share, in the year-earlier quarter. The net-loss figure reflects unrealized losses from the company’s investment in MGM Resorts International
MGM,
and an $87 million impairment charge related to the company’s Mosaic business, among other factors.
Analysts tracked by FactSet were projecting a 65-cent GAAP loss on a per-share basis.
IAC reported adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $37.4 million, up from $26.4 million a year before, while the FactSet consensus was for $40 million.
IAC’s revenue rose to $1.36 billion from $829.5 million, whereas analysts were modeling $1.38 billion. Revenue at the company’s Dotdash media unit grew by 568%, buoyed by the company’s acquisition of Meredith brands late last year.
