Home services online marketplace ANGI (NASDAQ: ANGI) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 10.1% year on year to $240.8 million. Its non-GAAP profit of $0.31 per share was 46.9% below analysts’ consensus estimates.
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Angi (ANGI) Q4 CY2025 Highlights:
- Revenue: $240.8 million vs analyst estimates of $243.7 million (10.1% year-on-year decline, 1.2% miss)
- Adjusted EPS: $0.31 vs analyst expectations of $0.59 (46.9% miss)
- Adjusted EBITDA: $10.35 million vs analyst estimates of $40.05 million (4.3% margin, 74.2% miss)
- Operating Margin: 2.5%, up from 0.8% in the same quarter last year
- Market Capitalization: $479.6 million
StockStory’s Take
Angi’s fourth quarter results were marked by continued revenue declines and a significant miss relative to Wall Street expectations, prompting a notably negative market reaction. Management attributed the underperformance to persistent headwinds in both Google SEO and network channels, which have pressured the company’s top line for several quarters. CEO Jeffrey W. Kip acknowledged, “We’ve essentially said we don’t think we’re gonna make progress back,” referencing the company’s decision to adopt a more conservative outlook for these channels after repeated setbacks. The quarter also saw Angi double down on operational changes, including targeted cost reductions and a renewed focus on its proprietary business, which management claims is showing signs of customer repeat growth and improved customer experience metrics.
Looking ahead, Angi’s management is betting on increased investment in brand marketing, further integration of artificial intelligence (AI) into its platform, and ongoing cost discipline to drive a return to growth. CEO Kip described the future as “AI first,” highlighting efforts to integrate large language models (LLMs) and agentic coding to improve pro-customer matching and streamline the homeowner experience. CFO Andrew Russakoff cautioned that while these investments are expected to yield long-term benefits, there could be a lag before incremental marketing spend and technology upgrades translate into higher service requests and improved margins.
Key Insights from Management’s Remarks
Angi’s management emphasized that ongoing declines in network and SEO traffic, alongside increased investment in technology and marketing, shaped the quarter’s performance and set the stage for strategic shifts in 2026.
- SEO and network channel headwinds: Management cited continued declines in Google SEO and network channels as central to the revenue shortfall. These channels faced algorithm changes and a reduction in free traffic, leading Angi to adopt a more conservative outlook for 2026.
- Proprietary business gains: Despite top-line pressure, Angi’s proprietary channels—which include direct, paid, and branded traffic—grew 17% year-on-year in 2025. Management sees high-single digit growth potential in these channels and highlighted a positive inflection in customer repeat rates.
- AI technology deployment: Angi accelerated the rollout of AI-powered features, such as the AI helper in the service request (SR) path. Management reported that 35% of homeowners now engage with this tool, resulting in a conversion rate 3.3 times higher than non-users. The company is also pursuing integrations with major LLM platforms, including Amazon Alexa, to diversify acquisition channels.
- Brand marketing investment: After a period of reduced spend, Angi is restoring brand marketing investments to pre-2025 levels. Management believes this is supported by improved customer experience and expects offline marketing (TV, streaming, and social) to deliver ROI, albeit with a multi-quarter lag.
- Restructuring and cost discipline: Angi executed a significant restructuring, reducing fixed costs by approximately $60 million on an annualized basis. CFO Russakoff stated that this creates capacity for renewed investment in growth, while still targeting year-over-year profit improvement through higher adjusted EBITDA and lower capitalized wages.
Drivers of Future Performance
Management’s guidance for 2026 rests on the dual priorities of investing in brand and AI-driven product enhancements, while managing through ongoing SEO and network channel headwinds.
- AI and platform modernization: Angi is adopting an "AI first" approach, integrating conversational AI and agentic coding to improve customer-pro matching and automate post-lead communications. Management expects these upgrades to boost conversion rates and differentiate Angi as LLMs become more prominent in home services discovery.
- Brand marketing and channel mix: The return to historical levels of brand spending is intended to counteract lost SEO and network traffic. Management explained that measurement tools now provide greater visibility into TV advertising ROI, but acknowledged that the benefits of increased spend will materialize gradually, with some payback occurring outside the current year.
- Macroeconomic and competitive risks: Management highlighted consumer confidence volatility and Google’s continued reduction of free search traffic as potential headwinds. While Angi’s business mix is weighted toward non-discretionary services, management remains cautious about the pace of recovery in service request volumes and competitive dynamics with Google’s paid local services ads.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) measurable improvements in customer repeat rates and engagement with new AI-powered features, (2) the effectiveness and payback period of increased brand marketing spend in driving proprietary channel growth, and (3) stabilization or recovery in service request volumes as Angi navigates SEO and network channel challenges. The pace of platform modernization and new LLM integrations will also be important indicators of strategic execution.
Angi currently trades at $10.57, down from $11.96 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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