Yahoo Finance Angi Inc (ANGI) Q1 2024 Earnings Call Transcript Highlights: Strategic Insights and Financial ...
Revenue: Not specifically mentioned, but implied positive performance.
Net Income: Not directly mentioned, focus on profit growth implied.
Free Cash Flow: Noted improvement in the quarter.
Adjusted EBITDA: Referred to simply as EBITDA during the call.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Angi Inc. (NASDAQ:ANGI) demonstrated strong profitability in Q1 despite declining revenues, indicating effective cost management and removal of low-value revenues.
The company has a solid partnership with OpenAI, which includes displaying DDM content in ChatGPT responses and collaborating on D/Cipher for intent-based advertising solutions.
Angi Inc. (NASDAQ:ANGI) is seeing opportunities for cost reductions and margin improvements, maintaining confidence in their adjusted EBITDA forecast.
The return of Jeffrey W. Kip as CEO is seen positively due to his deep understanding and historical involvement with Angi Inc. (NASDAQ:ANGI), expected to drive focused improvements.
Angi Inc. (NASDAQ:ANGI) is making strategic investments in areas like content and performance marketing to position Dotdash Meredith for long-term growth.
Negative Points
Angi Inc. (NASDAQ:ANGI) is experiencing revenue declines, with similar percentage declines expected in the upcoming quarter.
The company is facing challenges in performance marketing, particularly in services like financial products which saw a significant decline.
Traffic from Facebook to Dotdash Meredith properties has significantly decreased, impacting overall session growth.
Angi Inc. (NASDAQ:ANGI) had to shutter an unprofitable acquisition, CraftJack, indicating past investment inefficiencies.
Despite strong EBITDA, there is a need for ongoing investment to improve both the consumer and professional experience at Angi Inc. (NASDAQ:ANGI).
Q & A Highlights
Q: Could you unpack the growth within DDM digital revenue across advertising performance and licensing? How should that trend going forward? A: (Christopher P. Halpin - IAC Inc. - Executive VP, CFO & COO) Digital revenue grew by 13%, led by a 19% increase in digital advertising, attributed to 8% core session growth and improved monetization. Performance marketing grew by 3%, pulled down by a 30% decline in services. Licensing returned to growth at 9%, led by strong performance at Apple News. The company expects continued 10%+ revenue growth in Digital each quarter for the year, with advertising leading the way.
: Can you discuss the high-level terms of the DDM, OpenAI deal, including expectations for similar deals with other LLMs like Google, Anthropic, Meta? A: (Joseph M. Levin - IAC Inc. - CEO & Director) The OpenAI deal includes displaying DDM content in ChatGPT responses, using DDM content to enhance model performance, and collaborating on D/Cipher for cookie-less, intent-based targeting ads. It's a multiyear deal involving financial compensation. The deal is not exclusive, allowing potential similar agreements with other companies.
Q: With the Angi CEO transition, what are the strategic priorities moving forward? A: (Jeffrey W. Kip - Angi Inc. - CEO & Director) The strategic vision remains focused on customer-centricity and delivering jobs well done on both sides of the marketplace. The aim is to continue improving the business by focusing on customer experience and operational efficiency.
Q: What are the revenue expectations for Angi this year, and will there be a need for reinvestment to return the business to growth? A: (Christopher P. Halpin - IAC Inc. - Executive VP, CFO & COO) No additional investment is deemed necessary to stabilize and grow Angi's revenue. The focus is on improving the consumer and professional experience, with an adjusted EBITDA forecast of $120 million to $150 million for the year.
Q: Given the stronger Q1 EBITDA, why not raise the full-year guidance for Dotdash and Angi? A: (Christopher P. Halpin - IAC Inc. - Executive VP, CFO & COO) The company prefers to observe further into the year before adjusting guidance, despite confidence in the current momentum. For Angi, the focus is on operational improvements before revising revenue outlooks.
Q: How are you thinking about the evolution of IAC and potential areas for M&A? A: (Joseph M. Levin - IAC Inc. - CEO & Director) The focus is on capital allocation for both existing and new opportunities, with a keen interest in marketplaces and travel and leisure segments. AI is considered more for operational benefits rather than direct M&A due to high valuations in the AI space.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
