ANGI Q2 Deep Dive: Platform Transition and Marketing Efficiency Drive Operating Margin Gains

Home services online marketplace ANGI (NASDAQ: ANGI) reported Q2 CY2025 results topping the market’s revenue expectations, but sales fell by 11.7% year on year to $278.2 million. Its non-GAAP profit of $0.30 per share was 19.6% below analysts’ consensus estimates.

Is now the time to buy ANGI? Find out in our full research report (it’s free).

StockStory’s Take

Angi’s second quarter results were met with a significant positive market reaction, as management pointed to the company’s ongoing transition to a more efficient, higher-quality revenue base. CEO Jeffrey W. Kip emphasized that the focus on shedding low-value transactions and optimizing customer acquisition costs led to improved operating margins. Kip highlighted, “Both our adjusted EBITDA and our free cash flow are up materially from 2022, where, in fact, our free cash flow was negative.” The migration to a single technology platform and enhancements to the customer and pro experience were also cited as foundational steps for sustainable profitability.

Looking ahead, Angi’s outlook is shaped by continued investment in proprietary customer acquisition, product upgrades, and a migration of legacy professionals to the unified platform. Management believes these actions will drive revenue growth through increased revenue per lead and improved conversion rates. CFO Andrew Russakoff noted, “With modest growth in service request volumes and revenue per lead, we expect to get to solid revenue growth, likely mid-single digits percent versus 2025 with healthy pro network dynamics on top of that.” The company also plans to incrementally increase marketing spend, particularly on television and branded campaigns, to support longer-term growth.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to improved platform efficiency, higher customer retention, and a strategic mix shift in marketing and pro acquisition.

• Pro platform migration: Angi accelerated its transition of legacy professionals to a unified technology platform, aiming to improve both matching quality and operational efficiency. Management expects this shift to lift revenue per lead as more pros are migrated from discounted lead bundles to the core offering.
• Customer experience enhancement: The company invested in technology to raise homeowner satisfaction, including upgrades to its service request process and the implementation of machine learning-based question-and-answer tools. These changes contributed to a 30-point increase in Net Promoter Score over two years.
• Marketing mix optimization: There was a deliberate shift from organic traffic, which continues to decline, to paid proprietary channels. Management indicated this mix shift results in higher average acquisition costs but is offset by better conversion and profitability analytics.
• Salesforce and pro acquisition strategy: Angi reduced the number of new pros acquired but increased the lifetime value of each, focusing sales resources on higher-value prospects and mid-sized professional businesses. This approach led to nearly flat year-over-year pro lifetime value sold despite a 39% reduction in pro acquisitions.
• Network traffic stabilization: After several quarters of decline, network channel traffic has stabilized, setting a foundation for growth as improvements in matching and user experience take hold.

Drivers of Future Performance

Angi’s guidance for the remainder of the year is driven by expected gains in platform efficiency and incremental revenue per lead.

• Unified platform roll-out: The migration of all professionals to a single platform is projected to improve lead matching, increase win rates, and enable better monetization, particularly as the legacy discounted ad products are phased out.
• Strategic marketing investments: Management plans to increase spend on proprietary digital channels and television advertising, believing these efforts will sustain customer acquisition momentum and build brand equity. There is acknowledgment that marketing expense as a percent of revenue may rise, but the company targets incremental breakeven on spend.
• Pro network expansion focus: Angi aims to grow the share of larger, higher-capacity professionals on the platform, seeing an opportunity to increase both pro capacity and engagement. Management believes targeting under-indexed segments will expand the network’s overall revenue potential.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will be monitoring (1) the successful migration of legacy professionals to the unified platform and the resulting changes in revenue per lead, (2) the impact of increased marketing investments—especially in TV and branded campaigns—on customer acquisition and retention, and (3) the company’s progress in expanding the participation of larger professionals. Sustained improvements in both homeowner satisfaction and pro engagement will also be important to watch.

Angi currently trades at $18.05, up from $15.66 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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