Angi Inc. Q3 FY2024 earnings call

• Contemplating a spin-off of Angi, which would make it a standalone company with more liquid currency and standalone strategy. - At Angi, focus on improving customer experience, with jobs done well rate, pro retention, and homeowner NPS showing significant improvements. - DDM Digital saw strong Q3 performance in advertising, with growth in core sessions and licensing, though Performance Marketing had some weakness. - Care segment has potential in various areas like senior care and pet care, with a new CEO focusing on product and customer experience improvement. - D/Cipher technology is being developed with OpenAI integration to expand reach beyond DDM inventory. - Capital allocation remains open, with focus on slimming down and executing strongly against core areas.

Angi Inc.: Profits and cash flow have improved meaningfully. Jobs done well rate grew about 30% in the last year, pro retention rose materially each quarter, and homeowner NPS year-over-year was up by almost 60% in the last quarter. Revenue contribution not explicitly stated in absolute % but key performance metrics highlighted. DDM Digital: Digital Advertising revenues grew 26% in Q3, led by core session growth; Performance Marketing was down 7% but expected to grow in Q4; Licensing was solid, up 17% in Q3 driven by OpenAI partnership. Care: $365 million of revenue and $45 million of adjusted EBITDA over the last 12 months, with potential in childcare, senior care, pet care, and enterprise demand for care services.

• Angi expects revenue to bump down in Q1 2025 but stair step-up and grow in 2026. Profitability expected to hold in 2025. - DDM Digital Q4 revenue guided to mid- to high single digits. Long-term baseline of 10% revenue growth for DDM driven by traffic growth and improved monetization.

• Impact of FCC's 101 content rule on Angi, with potential volatility in early 2025. - Election-related advertiser caution and consumer distraction affecting Digital Advertising in October. - M&A valuation challenges, with focus on finding opportunities that meet high bar.

Q: Can you get more detail on reducing corporate costs post Angi spin?

A: Active analysis of corporate costs, with everything on the table, and will be clearer next quarter.

Q: Macro environment in Digital Advertising?

A: Consumer seems healthy, but October was light with broad-based slowdown in advertising spend, but some categories rebounding.

Q: On licensing deals, contributions of OpenAI?

A: Licensing revenue up in Q3 driven by OpenAI license, with active dialogues on other licensing deals.

Q: Why float Angi spin-off idea now?

A: Tactical and legal processes, to explore details and clear constituents, highly likely to spin but processes to check.

Q: On Angi's monetized transactions per service requests?

A: Monetized transactions per SR improving as RSRs are managed, with growth expected in 2026 as consumer choice and consent efforts take effect.

Q: On M&A learnings?

A: Key is having an edge in pursued areas, with past acquisition like Meredith showing strategic value despite macro headwinds.