Angi Q3 Earnings Call Highlights

Key Points

• Revenue fell 8.9% year over year to $242 million, while adjusted EBITDA increased 6.3% to $42.2 million. Service-request declines eased to 2.4%, and revenue from larger pros grew 20%.
• Angi is prioritizing cash flow and efficiency, with new cost cuts expected to generate $40 million to $50 million in annualized operating-expense savings. Free cash flow rose to $14.4 million from $4.9 million a year earlier.
• Management expects EBITDA less capital expenditures to grow meaningfully in 2027 and sees a potential return to revenue growth in the second half of the year. The company is also developing AI-powered products and expanding distribution through platforms including ChatGPT and Gemini.

Angi NASDAQ: ANGI reported third-quarter revenue of $242 million, down 8.9% from a year earlier, while adjusted EBITDA rose 6.3% to $42.2 million as the home-services marketplace reduced fixed expenses and tightened marketing spending.

New CEO Mike Steib, who recently joined the company, said Angi is building from a more stable base after several years of declining service requests and leads. He outlined priorities centered on cash flow, operating efficiency, AI-enabled products, and expanding the company’s presence across large language model platforms.

“We have a healthier business to build on now, and I see clear opportunities to improve our products, run the company more profitably, and return to growth,” Steib said.

Demand and Marketplace Metrics

Angi said third-quarter service requests declined 2.4% year over year to roughly 4 million, an improvement from a 5.5% decline in the prior quarter. Leads fell 17.6% to 4.5 million, reflecting the wind-down of a legacy advertising product and lower pro capacity following a reduction in the company’s sales organization.

Chief Financial Officer Julie Hoarau said the company’s average monthly active U.S. pros declined 14.4% to about 101,000. The decline reflected Angi’s purposeful shift toward larger service providers, which typically have higher budgets, better lead-conversion capabilities, and longer tenure on the platform.

Average pro capacity increased in the low double digits, partially offsetting the reduction in active pros, while total pro capacity declined in the mid-single digits. Revenue per lead rose 9.8% to $47 as Angi exited the discounted legacy advertising product and increased its mix of larger pros.

Large-pro revenue increased 20% year over year, while revenue from smaller pros declined 13%, according to Hoarau. Steib said the large-pro segment has recorded its second consecutive quarter of more than 20% growth.

Management emphasized that pro capacity, rather than the total number of pros or reported churn, is the key marketplace metric. Hoarau said churn increased in part because Angi expanded its online enrollment product, which allows pros to join without an upfront payment or commitment. Those pros have lower acquisition costs but also tend to churn at higher rates, she said. Excluding online-enrolled pros, churn among providers acquired through Angi’s traditional sales channel was meaningfully lower year over year.

Cost Reductions and Cash Flow Focus

Angi said it reduced headcount by about 300 roles, primarily in middle management and support functions. The actions are expected to produce approximately $40 million to $50 million in annualized operating-expense savings and reduce capital expenditures by about $10 million.

The company expects to incur roughly $18 million to $30 million in one-time restructuring costs, primarily for severance. Angi expects to achieve the full annualized savings run rate by the end of the first half of 2027. The latest actions are incremental to the $70 million to $80 million of savings the company announced earlier in 2026.

Steib said he expects at least half of the newly announced savings to reach the bottom line, with any reinvestment directed toward the company’s strategic priorities. He described the latest restructuring as an effort to put leaders closer to operating decisions and reduce layers of management, noting that the average Angi manager previously oversaw about three people.

“My first priority is going to be maximizing and growing cash flow,” Steib said.

During the quarter, fixed expenses fell $14 million, or 24.4% year over year, reflecting a workforce reduction announced in the first quarter. Consumer marketing expense declined sequentially by $13 million, falling to 37% of revenue in the third quarter from 41.4% in the second quarter. Hoarau attributed the lower spending to reduced television and offline advertising where returns were insufficient, alongside a shift toward higher-return channels such as paid social.

Operating cash flow was $28.5 million, compared with $21 million a year earlier. Capital expenditures were $14.1 million, producing free cash flow of $14.4 million, up from $4.9 million in the prior-year period. Angi ended the quarter with $202 million in cash and about $400 million in debt, with no borrowings on its revolving credit facility.

AI, Platform Work and LLM Distribution

Steib said AI will be central to Angi’s product and operating strategy. On the homeowner side, the company is developing AI-powered experiences intended to better understand project needs, help users find and book appropriate professionals, and encourage repeat use. On the pro side, Angi is developing tools designed to help service providers respond to leads, follow up with homeowners, and convert inquiries into appointments.

The company’s Pro CRO testing has expanded to about 1,000 pros, Steib said. Early results indicate that appointment-conversion rates are in line with those achieved when a human contacts a homeowner, though he cautioned that the work remains early.

Angi also said its technology replatforming, which is intended to combine elements of its U.S. and international technology stacks, remains on schedule and on budget. A large portion of homeowners and revenue has moved to the new platform, while an alpha launch for pros began during the week of the call.

The company is also pursuing distribution through LLMs. Steib said Angi’s applications are live in ChatGPT and Gemini, while the company is developing ChatGPT advertising. According to internal data cited by Steib, Angi has the highest share of voice in its category in AI-generated answers.

Unbranded organic search now represents about 5% of service requests, Steib said, after falling by roughly two-thirds since 2023 due to changes in Google’s search experience. Affiliate sources account for about 6% of service requests after Angi reduced affiliate marketing channels by about 80% since 2023.

2027 Outlook

Angi did not issue detailed 2027 guidance, but management said it expects EBITDA less capital expenditures to grow meaningfully next year and to be substantially above the $50 million floor previously discussed for 2026.

Steib said revenue comparisons will remain challenging over the next several quarters because the company has removed lower-quality or unprofitable marketing and sales activity. Still, he said management’s expectation for a return to growth in the second half of 2027 “makes sense” based on what he has seen so far.

Hoarau cautioned investors not to extrapolate the third-quarter margin result on a quarter-by-quarter basis, citing seasonality, marketing variability, channel mix, and investment timing. However, she said Angi expects its lower fixed-cost base and the majority of new savings to support higher adjusted EBITDA and stronger cash flow over time.

About Angi (NASDAQ:ANGI)

Angi Inc NASDAQ: ANGI operates a digital marketplace that connects homeowners with professionals who provide home improvement, maintenance and repair services. Through its online and mobile platforms, the company helps consumers find, compare and contact service providers for projects ranging from remodeling and landscaping to plumbing, electrical work and cleaning.

Angi's business includes consumer-facing brands and services such as Angi and HomeAdvisor, as well as the Angi Leads and Angi Services offerings.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.