Angi Q2 2026 Earnings Call Transcript

Angi (NASDAQ: ANGI ) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Angi Inc. reported a 11% decline in revenue year-over-year for Q2 2026, driven by a shift away from network channels and changes in homeowner behavior due to rising oil and gas prices. The company improved profitability with sequential revenue and adjusted EBITDA growth, reallocating $6 million from inefficient TV spend to higher-ROI channels. S.

reporting unit. Strategic focus is on penetrating the large pro market and leveraging AI to improve pro win rates, with a goal of reaching significant revenue targets by 2027. Angi is developing an AI-first platform and has made progress with its homeowner and pro agents, aiming to enhance lead quality and market penetration. Management remains optimistic about growth opportunities in the large pro segment and anticipates modest improvements in financial performance in the upcoming quarters without providing specific guidance.

Capital allocation priorities include managing upcoming bond maturities, and the company maintains a disciplined approach to marketing spend efficiency. Full Transcript OPERATOR Hello and welcome to the Angi second quarter 2026 earnings conference call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero.

After today's introductory remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note that today's event is being recorded.

I would now like to turn the conference over to Julie Gosal Hoarau, Chief Financial Officer. Please go ahead. Julie Gosal Hoarau, Chief Financial Officer Good morning everyone. , and welcome to the Angi Inc.

second quarter earnings call. Joining me today is Jeff Kipp, CEO of Angi. Angi has published a shareholder letter which is currently available on Angi's website in the Investor Relations section. We will not be reading the shareholder letter on this call.

We will go through a few introductory remarks and then open up to Q&A. Before we get to that, I'd like to remind you that during this presentation we may make certain statements that are considered forward-looking under the federal securities laws. These forward-looking statements may include statements related to our outlook, strategy, and future performance and are based on our current expectations and on information currently available to us.

Actual outcomes and results may differ materially from the future results expressed or implied in these statements due to a number of risks and uncertainties, including those contained in our most recent quarterly reports on Form 10-Q, our most recent annual report on Form 10-K, and in the subsequent reports that we have filed with the SEC. The information provided on this conference call should be considered in light of such risks. We'll also discuss certain non-GAAP measures which, as a reminder, include adjusted EBITDA, which we refer to today as EBITDA for simplicity.

During the call, I'll also refer you to our earnings release, shareholder letter, our public filings with the SEC, and again to the Investor Relations section of our website for all comparable GAAP measures and full reconciliation for all material non-GAAP measures. Now I'll pass it off to Jeff. Jeff Kipp, Chief Executive Officer Good morning everyone. Thanks for coming to the call.

We're very happy with what we've been able to accomplish on our strategy over the last three months and we believe we're well on track. Julie's going to give some commentary on the numbers and then I'm going to come back and discuss our strategy somewhat comprehensively. Julie. Julie Gosal Hoarau, Chief Financial Officer Thank you, Jeff.

So, starting with our revenue, our revenue for the second quarter was down 11% year over year. Three things drove it. First, we continued shifting away from our network channels. Network revenue was down 34% year over year.

Second, we stepped back from lower-quality paid marketing channels. We had ramps in Q2 last year, which makes this a harder compare. And third, our revenue in Q2 was materially impacted by a shift in mix and traffic. Starting about 10 days into March, as oil and gas prices rose sharply following global events, we noticed that homeowner behavior changed and demand moved away from larger jobs, categories like housing and HVAC — and that's where we have the most available pro capacity — toward smaller jobs where we have less capacity, and that left capacity in those categories unmonetized.

We surveyed our homeowners consistently over the last few months. In April we saw more jobs being canceled or postponed. More recently, overall spend is back at expectations, but each job is more expensive, so homeowners are doing fewer jobs, which ties right back to the lower demand we are seeing. We can see all of this in our metrics for the quarter.

S. service requests are down 6%, while leads are down 13%. Our revenue per lead, however, is up 1% year over year. That's due to the mix out of the older, heavily discounted legacy ad products that we had.

As a result, compared to historical seasonality, the second quarter revenue is in the range of double-digit percent lower than on pre—March 11 run rates. We have seen things trending positively, but we remain below our pre—March 11 run rates, and we do expect modest improvements as the quarter progresses. On the profitability side, sequentially from Q1 to Q2 2026, revenue grew and adjusted EBITDA grew faster, with about 50% flow-through. We have improved our marketing ROI, and we reallocated about $6 million of inefficient TV spend in the second quarter to higher-ROI channels.

TV has been less effective this year than in previous years, so we pulled it back, and we do expect to take out a comparable amount moving into Q3. We remain on target with our overall adjusted EBITDA minus CapEx range for the year. Jeff said on the last earnings call that we would be happy with about $50 million a year of EBITDA minus CapEx, and we are right on track for that. July EBITDA margin is already several hundred basis points above Q2, and further reduction in ineffective TV spend should support a stronger Q3.

I also want to discuss the impairments that we registered for goodwill and trade names. S. reporting units. The trigger was a sustained decline in our market capitalization since year-end.

That requires an interim test, which compares the estimated fair value of each reporting unit to its carrying value. S. reporting unit. International came through with substantial headroom.

So this is not a reflection of our business on a consolidated basis. There is no effect on cash, liquidity, or our covenants. Looking ahead, our annual test for goodwill impairment is in October, and earlier if there's another triggering event. So a further charge is possible if the market conditions, the valuation assumptions, or the operating performance deteriorate.

That's a function of the accounting rules. We've disclosed the sensitivities in the 10-Q. So in closing, we're not reinstating guidance at this time. Our focus remains on building out the strategy described in the shareholder letter.

We have laid out the reasons to believe, and we expect that to show up in an acceleration in 2027, as Jeff explained on the last call. I will now pass it back to Jeff, who will go into more insights on our strategy. Jeff Kipp, Chief Executive Officer Thanks Julie. Let's get up in the helicopter and look at our market opportunity and our strategy to win it comprehensively.

I think as many people know, we estimate the overall market for completed home services work in the US at about 700 billion. That is the total revenue available to our pro customers. 5% of that flows through our platform. So we have a material opportunity to continue to penetrate that significant market.

Our core lead business targets the 70 to 80 billion dollars of total customer acquisition spend that all pros make across the United States. About 65% of that spend comes from pros with more than 20 employees. We have less than half a percent of that market and probably in the range of 4ish percent of the 35% of the market that is small to mid sized businesses. So we under-index significantly against the large pro segment.

5 billion in revenue. And we think that's a very reasonable target for our existing core business. That of course ignores any improvements in pro lifetime value and engagement reducing churn, which is the focus of our strategy. For example, reducing churn by 25%, all else equal, would add 10 points to our annual growth rates versus what we can do otherwise.

Executing on both opportunities, that is penetrating the large pro market and reducing our churn, would put us within striking distance of the 5 billion in revenue we talked about in our last letter, before we penetrate the pro software and services market at all. That market for pro software and services to run their businesses and close down their leads is, we estimate, about the same size as the market for total spend on marketing and lead acquisition. So we have a material opportunity in front of us. Our strategy is to be the trusted revenue partner for pros and go after both markets.

So effectively the entire marketing and lead acquisition market for pros and also the services and software business. What gives us the right to win in this $150 billion revenue market? Well, first, our core leads business. This is our competitive wedge in the pro revenue cycle.

We play a key role today at the top of funnel for hundreds of thousands of pros. And with the improvements in lead quality and win rates we've made over the last couple of years, we're consistently improving our competitive position. Secondly, our market-leading distribution and customer acquisition assets. We have over 100,000 active pros in the United States, a network any software and services company would love to have for distribution.

We'll also acquire more than 70,000 new marketplace pros per year in the coming years. Also a great distribution opportunity. Thirdly, our 30 years of brand equity in the industry, which opens many doors. Fourthly, our ability to generate cash to fund our strategy and continue delivering on our commitments.

And finally, our AI strategy and development capabilities, which are already producing results. We have a homeowner agent already touching 50% of our homeowner traffic, converting that traffic at three times the rate of traffic that doesn't touch it, and contributing to our rise in success metrics. We've deployed our first pro agent, the AI front desk, in just a few months. We're now in the market and booking appointments already at a solid baseline rate when compared to human call center performance that we observed.

As we said on our last call, we believe that we're in the middle of the greatest technological transformation in a generation. We believe that AI affords us the ability to build products which greatly improve both the experience for and the success of our customers and build them much faster. The three core footings of our overall strategy are: 1) return the core business to growth through large pro market segment penetration; 2) finish building and migrate to our new AI-first single platform; and 3) drive pro win rate, success, and revenue through our AI strategy consisting of A) the Angi Pro Chief Revenue Officer Agent suite and B) our homeowner agent.

Let's walk through them one by one, starting with the Large Pro Segment. We have a 10x opportunity in the large pro segment by simply matching our small to mid sized segment penetration. We're already acting with velocity here and are watching the segment grow more than 20% year over year with less than a third of our fully stepped headcount in place yet. How are we doing this?

First, we're progressively building out a fully enriched target database and leveraging it. Secondly, we're putting the right team in place. We've achieved our growth rate to date with less than 10 sellers and we'll reach 30 by year end. Thirdly, we've changed our go to market from "here's a bunch of leads and here's a volume discount" to an operating partnership.

We make sure each pro is set up to win with the right software and operational approaches, and we work through their lead-to-close funnels with them on a regular basis. Finally, the truth is that our core lead product is a better product-market fit for large pros because: 1) large pros already work against a high volume of leads, many different lead types, and they're focused on their overall cost of marketing versus won revenue rather than winning or losing each individual lead; 2) it helps that we've invested so much in our lead quality and win rates. We see our win rates up roughly 20% from a year ago, and even more than that versus two years ago.

We think we've gone from pros winning roughly one in nine leads two summers ago to roughly one in six now, and our pros experience this and lean in to our product. But why couldn't we do this before? I'll take the blame. My first year in the job we were looking at the wrong data with the wrong team, which meant the wrong execution.

We started taking the segment of our operations apart a little over a year ago, and we put everything back together to get to the trajectory we're now on. We're seeing real results and we expect to accelerate from here. Let's talk about our progress on moving to a new AI-first platform. We've talked plenty, and we've covered all the ground regarding the limitations of our legacy technology.

We froze the old stack and we're now in full flight with the build of and migration to our new platform. We're building all new software and technology, AI-first, meaning set up to deploy AI and our data assets across all product and platform surfaces. We're already hitting milestones in our replatforming execution path. Our homeowner account experience is now live on the new technology.

It's not visible to the eye because we've maintained the design and the UX. We've also implemented new messaging technology. It's the same technology which drove greater engagement and success when we deployed it internationally. We'll deploy AI-driven UX in the future on this surface, suggesting, curating, and automatically sending messages to get from contact to closed job, again improving the experience and success rates for our core business.

We expect to finish both building and migrating our homeowner experience to the new technology by year end, and then we'll start iteratively improving that experience AI-first. At the same time, we've started working on our new Pro Experience platform, and we're targeting migrating our first test cohort by the end of the first quarter of 2027. Across all of this work, we are simplifying and removing friction from the product and customer experience, and we're merging the international and US systems, creating a best-in-breed hybrid.

It is worth noting that starting around six months or so of tenure, pro churn on the international platform is about half that of the US rate. We believe we can capture a chunk of this benefit through both platform migration and our Angi Pro CRO. Again, if we get half that delta, we'll have a 10% tailwind for future growth. We just need to execute.

This is a core opportunity for us. It's not yet guidance though. Let's talk about our AI strategy. There's two core topics to talk about: 1) how AI is changing the traffic acquisition landscape; 2) how we plan to leverage AI strategically in that changing landscape.

First, in terms of the landscape, we would say that AI today is compressing the value of surfacing information and discovery and impacting where homeowners look for help. LLM engines are taking a growing share of the informational searches that historically brought homeowners to marketplaces like us. The most visible near-term pressure is on unbranded organic search. However, Google’s been putting its own pressure on unbranded organic search for years now.

Effectively, they've reduced our reliance on their free search traffic. Our unbranded SEO channel is down close to 5% of our total service request volume, and our plan does not assume recovery there. So what's our plan for LLM traffic? Well, we intend to be present wherever demand forms, and we intend to match those homeowners to our pros on Angi through traditional search, social, and increasingly through LLMs and personal agents.

We believe that at the same time AI is commoditizing informational inquiries, it's also increasing the relative value of matching homeowners to the right pro and getting the job won and done well, and creating the data to reinforce that loop. As a side note, we're actually doing reasonably well with LLM share of voice. Our most recent data says we're at the top of the industry and double the share of our closest competitor. But share of voice on LLMs is not where we believe the action is because it does not deliver conversion the way it does in SEO.