Angi (NASDAQ:ANGI) executives highlighted what they described as a multi-year transformation toward higher-quality revenue, improved customer outcomes, and stronger cash generation, while laying out a more conservative near-term revenue outlook amid ongoing pressure from Google SEO and the company’s network channel.
Management cites multi-year shift in mix and customer metrics
CEO Jeff Kip said the company has “given up about $500 million of lower quality revenue” over the past three years, while “doubl[ing] our EBITDA” and cutting capital expenditures in half, which he said swung Angi from negative to positive free cash flow.
- Homeowner Net Promoter Score (NPS) up “more than 30 points”
- Churn down “more than 30%”
- Customer success rates up “more than 20%”
- Customer repeat rate turning positive in the fourth quarter by “about 10%”
He added that Angi is seeing a “material stairstep improvement” in year-over-year revenue changes, estimating “700-900 basis points,” and said January showed “very modest” growth, though management does not “fully expect growth” in the first quarter.
AI and LLM strategy: integrations, on-site conversion lift, and “agent” positioning
Kip framed large language models (LLMs) as both a top-of-funnel opportunity and a channel diversification effort. He said Angi has started working with “every LLM,” announced a deal with Amazon’s Alexa, submitted an app to “another major LLM,” and is discussing “two technical integrations” based on the same underlying technology. However, he noted Angi does not yet have anything “live” and characterized current LLM-related traffic as modest and difficult to parse.
Within Angi’s own experience, Kip said the company has deployed LLM technology in its service request (SR) path and is training it using proprietary data. He said about 35% of homeowners touch that part of the experience, and those users convert “about 3.3 times as well to a pro selection” as users who do not. In Q&A, Kip said Angi is testing ways to increase adoption of that AI helper toward 50% to 65%, and cited a recent test that increased usage by about 5%.
Beyond on-site AI assistance, management described Angi’s longer-term opportunity as an “agent” between homeowners and professionals, potentially using AI to help with post-lead communication, appointment booking into pro and homeowner calendars, follow-ups, and deeper integrations with pro software systems. Kip said that today, “if five homeowners come to us with a job, three of them hire a pro,” but only one hires an Angi pro; he said the company believes agents can lift that toward two and eventually three.
Revenue outlook: conservative stance on SEO and network; proprietary channels remain focus
Kip said Angi’s outlook has become more conservative versus prior commentary. Instead of targeting modest first-quarter growth and mid-single-digit growth for the year, management is now expecting “very modest negative growth” and “low single digits for the year,” citing extended pressure in Google SEO and the network channel.
He described a pattern of SEO volatility, noting Google SEO declines were “down 35%-40%” in mid-2024, improved into the double digits late in the year, then deteriorated again and partially recovered before another hit in late summer. For planning purposes, he said Angi is now assuming SEO remains at a lower level and is making a similar conservative assumption for the network channel rather than embedding a turnaround in guidance.
CFO Andrew Russakoff (“Russi”) quantified current SEO exposure at around 7% of service requests/leads/revenue. He said Angi is treating SEO as a source to capture where possible, but is focused primarily on proprietary traffic sources.
In contrast, management emphasized proprietary momentum. Kip said proprietary business grew 17% in 2025, and the company expects high-single-digit to low-double-digit growth in proprietary channels in the first quarter. He said the company plans to lean back into branded advertising (TV, streaming, social), returning spend from lower 2025 levels to 2024 levels.
For quarterly expectations, Kip guided first-quarter revenue to be down 1% to 3%, with the second quarter “flat, maybe a little bit down,” and mid-single-digit growth expected in the second half as network stabilizes and proprietary growth continues. He also cited a product roadmap delay in the first quarter tied to a reduction in force.
Marketing investment and margin bridge: higher Q1 spend, seasonal lift, and restructuring savings
Russakoff said Q1 will include increased offline marketing, including U.S. spending, international TV spend (where Angi historically saw strong results in Europe in Q1), and $3 million of new creative. He also said the company has begun ramping online pro marketing.
He said sales and marketing expense will rise about eight points as a percentage of revenue in Q1 versus Q4, with only part of the returns realized within the quarter due to lag. Directionally, he said the company expects $35 million to $40 million of incremental revenue in Q2 versus Q1, alongside $10 million to $12 million more in marketing to acquire incremental service requests, and no additional creative expense in Q2. Russakoff said these dynamics would drive incremental EBITDA in the “mid-$20 million” range in Q2 versus Q1 and result in overall EBITDA in the “mid-40s” for both Q2 and Q3, with Q4 EBITDA returning to the “low $40 million range” seasonally.
On restructuring, Russakoff said Angi targeted three outcomes: right-sizing the cost structure, creating room for investment, and delivering year-over-year profit growth. He said the restructuring is expected to generate $70 million to $80 million of annualized savings, translating to in-year savings in the “mid-60s,” including $25 million of capitalized labor. He also detailed 2025 fixed costs as $223 million of fixed OpEx and $60 million of CapEx, describing a “total cash fixed cost basis” of $283 million. He said that prior to restructuring, fixed cost base would have increased about $20 million year over year, but post-restructuring it is expected to be approximately $40 million lower year over year.
Management said investment priorities include brand marketing, online pro marketing (described as lifetime value positive but P&L negative “in-year” as it ramps), and increased sales focus on large pros. Kip said pros with 10 to 20 employees or more represent “two-thirds to three-quarters of the market,” and he said Angi is “under 1% penetrated there,” compared with “4%+ penetrated” among small pros.
Pro supply, platform consolidation, and capital allocation
Russakoff said average monthly active pros are still down year over year, but “capacity per pro is up,” as the company has shifted toward larger pros with larger packages. He said acquired pros were down 23% in the quarter but down 41% in Q1, and management expects acquired pros to return to year-over-year growth in 2026 as online enrollment ramps, with overall average monthly active pros growth following in 2027.
On technology modernization, Kip said Angi’s global platform consolidation timeline has been extended “by a quarter” after reducing the organization by 40%, but he said the company does not expect disruption, describing a staged rebuild focused first on the homeowner service request path and project management experience. He said the goal is a more “componentized” platform that can start users at different points in the flow depending on channel context (including potential partner and LLM integrations).
On capital allocation, management said share repurchases are paused post-spin, and Russakoff said the company is monitoring its capital structure. He also corrected an earlier remark during Q&A, clarifying that debt matures in 2028. Russakoff said the company is not opposed to value-creating tuck-in acquisitions, though none are currently planned, and said dividends are not “off the table,” while emphasizing no imminent actions.
Executives closed by reiterating a focus on returning to growth while maintaining stronger margins and cash flow, with Kip describing Angi as “stronger in terms of profit and cash flow than we were before” and positioning the company to benefit from AI-driven changes in consumer discovery and marketplace execution.
About Angi (NASDAQ:ANGI)
Angi (NASDAQ: ANGI) operates a digital marketplace that connects homeowners and renters with service professionals for home improvement, maintenance and repair projects. Through its flagship platform, Angi provides user-friendly tools that allow consumers to research service providers, compare prices, read verified reviews and book appointments. The company’s services span a wide range of home needs, including plumbing, electrical work, landscaping, painting, cleaning, remodeling and general handyman tasks.
Originally founded in 1995 as Angie’s List, the company built its reputation on a subscription-based model and a comprehensive database of customer reviews.
