Angi (ANGI) Q2 Revenue Beats by 6%

Key Points

• Revenue (GAAP) was $278.2 million in Q2 2025, beating GAAP revenue estimates by 6.3%, but Diluted EPS (GAAP) of $0.23 missed forecasts by 11.7%.

• Proprietary service requests and leads increased for the first time since Q1 2021, reflecting early success in platform changes.

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Angi (NASDAQ:ANGI), a leading digital platform that connects homeowners with local service professionals, released its earnings report on August 5, 2025. The most significant news: revenue (GAAP) exceeded analyst expectations at $278.2 million, up 6.3% on the consensus GAAP estimate of $261.6 million. However, Diluted earnings per share (GAAP) missed the mark at $0.23, falling short of the $0.26 expected by analysts. The quarter displayed notable progress in proprietary engagement metrics but also reflected continued contraction in revenue and cash flow.

Source: Analyst estimates for the quarter provided by FactSet.

Understanding Angi's Business and Key Focus Areas

Angi operates a digital platform that connects consumers seeking home services with skilled professionals (pros) across the United States and internationally. The core of its business is facilitating matches between homeowners and local pros for jobs ranging from home repairs to remodeling. Angi generates revenue by charging professionals to access job leads and for enhanced placement in search results.

Angi's recent strategic focus has centered on platform quality, user experience, and building consumer trust. Critical priorities include boosting proprietary engagement channels (fully controlled by Angi), modernizing its technology stack, and enhancing the quality of matches through both product changes and investments in artificial intelligence. Brand recognition, robust platform functionality, strong regulatory compliance, and navigating a competitive marketplace remain fundamental to the company's long-term prospects.

Quarter Highlights: Financial and Operational Developments

The quarter showed progress in metrics that management has called critical to a sustainable business model. Revenue (GAAP) of $278.2 million surpassed expectations, yet still flagged a 12% decline in GAAP revenue compared to Q2 2024. Diluted earnings per share (GAAP) climbed to $0.23, sharply up from last year but shy of Wall Street forecasts, reflecting elevated consumer marketing expenses and shrinking adjusted EBITDA, which was $33.0 million, down 22% from a year ago.

Central to these results was a marked improvement in proprietary engagement: service requests in Angi-owned channels rose 7% to 4.118 million, and proprietary leads (unique job opportunities) increased by 16%. This reversed a multi-year decline and highlighted momentum from the company's January 2025 platform update. The "homeowner choice" system, which allows users to directly select their professional, boosted customer satisfaction—Angi’s Net Promoter Score, a gauge of client approval, climbed over 30 points in the two years leading up to Q1 2025—and increased the likelihood that pros engage and get hired, with pro win rates up 10% over the period.

However, these gains came with deliberate trade-offs. Total service requests dropped 8%, and leads from the network channel—sources controlled by third-party affiliates—plunged by 76%. This drop was intentional; Angi shifted away from low-quality, less profitable volume in favor of direct engagement on its own platform. The professional network contracted in size: acquired pros fell 39% to 24,000, and Average monthly active pros dropped 20% to 126,000. This marks a strategy of acquiring fewer but higher-value professionals and improving long-term retention and activation rates, as evidenced by Angi's shift in Q1 2025 to focus on average monthly active professionals and cohort-based retention metrics, with reported improvements in both retention and activation rates, as seen in moderate increases in activity among established pros.

The financial improvement in operating income, which nearly doubled year over year to $17.7 million, stemmed largely from lower depreciation expenses tied to write-offs in the prior year. Adjusted EBITDA (non-GAAP) and free cash flow trended lower, underscoring continued underlying cost pressures. These investments have partially offset declines in pro acquisition and certain fixed expenses.

Regulatory compliance costs—particularly from European digital identity requirements and stricter data privacy rules—contributed to lower professional acquisition internationally, including a 5% to 8% impact on the network from the implementation of the Digital Services Act and related ID checks. Angi’s full spin-off from IAC provided operational independence, though management noted little immediate impact on strategy or capital allocation. The company had $362.5 million in cash and $500 million in debt as of June 30, 2025.

Product Evolution: Focusing on User Experience and Technology

Angi’s product lines center on two main experiences: lead generation for pros and job request facilitation for homeowners, delivered across web and mobile platforms. The period marked a turning point for the proprietary experience. The January rollout of the "homeowner choice" user interface empowered consumers to select the professionals they wished to contact, moving away from the historical model where matches were automated. This shift led to better customer approval scores and increased pro engagement, as more jobs sent via Angi’s proprietary path converted to hires for professionals.

The company continues to invest in technology, rolling out new artificial intelligence features to improve job-pro matching. Angi introduced an AI helper, based on a large language model, into the job request process. Its purpose is to capture precise job details and recommend appropriate local pros, improving match quality while not reducing how often homeowners complete the submission. Early results suggest that these changes are helping increase both consumer satisfaction and pro hiring rates.

Looking Ahead: Management Outlook and Key Metrics to Watch

Management did not issue specific quantitative financial guidance for the remainder of FY2025 or the full year, but it shared color on near-term expectations. With revenue declines are expected to slow in 2025 and reverse to growth in 2026. Margin improvement is expected if revenue stabilizes and grows over the fixed cost base. Future growth depends on the successful scaling of online, self-serve professional acquisition, especially in the United States, and ongoing investments in product and technology to deepen engagement and transaction conversion.

Investors should monitor several data points in upcoming quarters: trends in proprietary engagement (service requests and leads), the number and quality of active professionals, and the effectiveness of technology initiatives like AI-driven matching. The trajectory of cash flow, marketing efficiency, and capital deployment, including any further share repurchases, will also be important. Risks remain around the shrinking pro network and lead pool, potential regulatory challenges in international markets, and the ongoing need for significant marketing spend to drive platform engagement.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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