Home services online marketplace ANGI (NASDAQ: ANGI) reported Q2 FY2022 results that beat analyst expectations, with revenue up 22.5% year on year to $515.7 million. Angi made a GAAP loss of $23.9 million, improving on its loss of $30 million, in the same quarter last year.
Is now the time to buy Angi? Access our full analysis of the earnings results here, it's free.
Angi (ANGI) Q2 FY2022 Highlights:
- Revenue: $515.7 million vs analyst estimates of $495.4 million (4.11% beat)
- EPS (GAAP): -$0.05
- Free cash flow was negative $27.5 million, compared to negative free cash flow of $27.6 million in previous quarter
- Gross Margin (GAAP): 75.2%, down from 83.4% same quarter last year
- Domestic Customer Service Requests : 8.49 million, down 921 thousand year on year
Created by IAC’s mergers of Angie’s List and HomeAdvisor, ANGI (NASDAQ: ANGI) operates the largest online marketplace for home services in the US.
The iPhone changed the world, ushering in the era of the “always-on” internet and “on-demand” services - anything someone could want is just a few taps away. Likewise, the gig economy sprang up in a similar fashion, with a proliferation of tech-enabled freelance labor marketplaces, which work hand and hand with many on demand services. Individuals can now work on demand too. What began with tech enabled platforms that aggregated riders and drivers has expanded over the past decade to include food delivery, groceries, and now even a plumber or graphic designer are all just a few taps away.
Sales Growth
Angi's revenue growth over the last three years has been mediocre, averaging 14.2% annually. While Angi's revenue growth was negatively impacted when the pandemic first hit, it has re-accelerated since then.
This quarter, Angi beat analyst estimates and reported a decent 22.5% year on year revenue growth.
Ahead of the earnings results the analysts covering the company were estimating sales to grow 13.6% over the next twelve months.
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Usage Growth
As a gig economy marketplace, Angi generates revenue growth by a combination of the volume of services users order and how much commission it earns.
Angi has been struggling over the last two years as the number of service requests, a key usage metric for the company, declined 1.34% annually to 8.49 million. This is one of the lowest levels of growth in the consumer internet sector.
The number of service requests decreased by 921 thousand, a 9.77% drop year on year.
Key Takeaways from Angi's Q2 Results
Since it has still been burning cash over the last twelve months it is worth keeping an eye on Angi’s balance sheet, but we note that with a market capitalization of $3.07 billion and more than $360.9 million in cash, the company has the capacity to continue to prioritise growth over profitability.
It was good to see Angi outperform Wall St’s revenue expectations this quarter. That feature of these results really stood out as a positive. On the other hand, there was a decline in number of users. Overall, this quarter's results could have been better. The company is down 2.12% on the results and currently trades at $6 per share.
Angi may have had a tough quarter, but does that actually create an opportunity to invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.
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The author has no position in any of the stocks mentioned.