Angi's (NASDAQ:ANGI) Q4 Earnings Results: Revenue In Line With Expectations But Stock Drops

Kayode Omotosho /
2022/02/15 4:39 pm EST
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Home services online marketplace ANGI (NASDAQ: ANGI) reported results in line with analyst expectations in Q4 FY2021 quarter, with revenue up 15.7% year on year to $415.8 million. Angi made a GAAP loss of $25.7 million, down on its loss of $13.3 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) Q4 FY2021 Highlights:

  • Revenue: $415.8 million vs analyst estimates of $415.3 million (small beat)
  • EPS (GAAP): -$0.05
  • Free cash flow was negative $37.8 million, compared to negative free cash flow of $49.7 million in previous quarter
  • Gross Margin (GAAP): 75.2%, down from 85.9% same quarter last year
  • Domestic Customer Service Requests : 6.89 million, down 330 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.

Angi Total Revenue

This quarter, Angi reported a moderate 15.7% year on year revenue growth, roughly in line with what analysts expected.

There are others doing even better than Angi. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. You can find it on our platform for free.

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.

Over the last two years the number of Angi's service requests, a key usage metric for the company, grew 3.69% annually to 6.89 million users. This is a bit slower growth than what we see in some of the hottest consumer apps.

Angi Domestic Customer Service Requests

Unfortunately, in Q4 the number of service requests decreased by 330 thousand, a 4.56% drop year on year.

Key Takeaways from Angi's Q4 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 $4.27 billion and more than $428.1 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We struggled to find many strong positives in these results. On the other hand, there was a decline in number of users and the revenue growth was quite weak. Overall, this quarter's results were not the best we've seen from Angi. The company is down 9.9% on the results and currently trades at $8 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.