Angi Inc. Q4 FY2025 earnings call

Past progress

• Gave up about half a billion of lower quality revenue.
• Doubled EBITDA, cut capital expenditures in half, swung from negative free cash flow to positive.
• Moved homeowner NPS over 30 points, cut churn by over 30%, improved customer success rates over 20%, and turned customer repeat rate positive in Q4 (about 10%).

AI and LLM initiatives

• Deployed LLM technology in SSR and SR paths, core customer experience, with 35% of homeowners touching this technology converting 3.3 times better to pro selection. Actively working with LLMs, announced deal with Amazon's Alexa, and have apps submitted to other major LLMs.

Business strategy

• Conservative outlook for Google SEO and network channels, assuming they stay at lower levels for the year. Focus on proprietary business, which grew 17% in 2025 and expected high single low double digits in Q1. Leaning back into branded advertising with TV, streaming, and social spend to return to pre-2025 levels.

Platform consolidation

• Rebuilding homeowner experience in a componentized and AI-first way, intending to integrate AI effectively and deploy new software with AI considerations, with no expected disruption to the business.

Proprietary channel: Grew 17% in 2025, with 23% in Q4. Expected high single low double digits in Q1. Network channel: Facing pressure, with assumed lower performance for the year. Proprietary revenue contributes significantly to the overall business, while network channel has been impacted by factors like Google SEO changes.

Revenue outlook

• First quarter expected to be minus 1 to minus 3 due to Google SEO and network decline baked in and product roadmap delay. Second quarter expected to be flat or a little bit down. Mid-single digit growth in the second half of the year as network channel stabilizes. Overall low single digits (1 to 3) for the year, impacted by Google SEO and network outlook but positive from brand spend.

AI deployment

• Continued experimentation with AI helper in SR path to drive more homeowners to connect with the right pro, running tests and looking at other applications like post lead communication.

Brand marketing

• Returning to 2024 levels of brand spend, confident in spending at these levels due to strong brand and positive customer experience movement.

Market channel risks

• Pressure from Google SEO and network channels, with Google having less incentive to provide free traffic and algorithm changes potentially impacting performance.

Market environment risks

• Weakness and pressure on volumes due to consumer confidence surveys showing decline, affecting job values and consideration.

AI partnership risks

• Uncertainty in the integration and performance of AI with LLMs, as well as the time it takes for brand spend to pay back.

Q: Curious how to think about the rollout of AI features over the next twelve months and how it gives visibility into return to growth on the platform? And how owning consolidated supply side data positions relative to partnering with LLMs?

A: On AI features, focus on AI helper in SR path, continuing to experiment to drive more homeowners to connect with the right pro, with tests showing positive results. On supply side data, the system of record about customer behavior allows for more effective agentic task, putting Angi in a good position to partner with LLMs by comparing context from LLMs with customer data.

Q: Rationale for tripling brand spend this year and timing? And normalized growth rate for proprietary?

A: Returning to 2024 levels of brand spend, confident due to ability to measure ROI from TV spend and strong brand. Paid proprietary revenue expected to be high single digits, continuing to grow with progress in paid proprietary channels and branded marketing impact. Normalized growth rate for proprietary is high single digits or even low double digits depending on pro capacity and paid proprietary channels progress.

Q: What is happening with pro capacity given network is still declining nominally? And update on global platform consolidation?

A: Pro capacity has shifted with bigger pros having less impact on nominal accounts but driving more capacity, and online enroll expected to bring smaller pros at greater scale. Platform consolidation is rebuilding homeowner experience in a componentized and AI-first way, with no expected disruption, first delivering new homeowner experience and then moving on to pro experience, with a quarter or two delay but enhancing the business.

Q: What to build or change in tech stack to take advantage and be a destination platform? And thoughts on macro cost currents?

A: Build new software with AI first, integrating AI effectively and using conversational AI interfaces. On macro cost currents, saw weakness and pressure on volumes in late 2025 and January, with business having ballast due to nondiscretionary tasks making up a material amount of the business.

Q: Talk about revenue per lead decline and capital allocation?

A: Revenue per lead decline due to delivering additional leads to subscription pros which may not be monetized immediately, but features to monetize better are rolling out. Capital allocation includes monitoring debt due in 2028, considering value creating tuck-in acquisitions, and potential share buybacks or dividends in the future.

Q: Quantify current exposure to SEO headwinds and evolution? And Google competitive front?

A: Current SEO exposure is around 7% of SRs, leads revenue. Google incented to capture own real estate, with aggressive moves like local services advertising and pulling paid ads up in SERP, but Angi has a team working to stay on right side of algorithm changes and continues to buy ads in AI mode.

Q: Follow-up on AI and LLMs integration, early learnings? And margin profile of SRs and leads across channels?

A: Actively integrated with major LLMs, but no live flow yet, with testing in controlled environments showing positive conversion. Margin profile of SRs through channels is now comparable between proprietary and network channels, maybe a little higher on network channel after homeowner choice implementation.

Q: Follow-up on leads per service request increase in 4Q and consumer marketing expense in 4Q?

A: Leads per service request increase due to sending additional leads to subscription pros. Consumer marketing expense in 4Q was consistent with second quarter, with overall increase as lean into paid channels effective, following through the year.