Online home services marketplace ANGI (NASDAQ: ANGI) reported first-quarter 2024 results that exceeded Wall Street analyst expectations, with revenue down 22.2% year over year to $305.4 million. It posted a GAAP loss of $0 per share, an improvement from the loss of $0.03 per share in the same quarter last year.
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Angi (ANGI) Highlights Q1 CY2024:
- Gain: $305.4 million vs. analyst estimates of $297.8 million (2.5% better)
- EPS: $0 vs. analyst expectations of -$0.01 (in line)
- Gross margin (GAAP): 95.9%, compared to 89.3% in the same quarter last year
- Free cash flow of $9.5 million is an increase from -$6.29 million in the previous quarter
- Domestic Customer Service Requests: 4.13 million, down 1.88 million year over year
- Market capitalization: $1.28 billion
Gig Economy The iPhone changed the world and ushered in the era of the ‘always-on’ internet and ‘on-demand’ services – everything anyone wants is just a few taps away. Likewise, the gig economy emerged in a similar way, with a proliferation of tech-enabled freelance job marketplaces, which go hand in hand with many on-demand services. Individuals can now also work on demand. What started with tech-enabled platforms that brought passengers and drivers together 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.
Turnover growth Angi’s turnover has fallen over the past three years, by an average of 1.9% per year. This quarter, Angi beat analyst expectations but reported a 22.2% year-over-year revenue decline.
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Before the earnings results were announced, analysts expected sales to fall 7% over the next twelve months.
Usage Growth As a gig economy marketplace, Angi generates revenue growth by expanding the number of services on its platform (e.g. ride-hailing, deliveries, freelance jobs) and increasing the commission for each service provided.
Angi has struggled to grow service requests, a key performance metric for the company. Over the past two years, requests have fallen 18% annually to 4.13 million. This is one of the lowest growth rates in the consumer internet sector.
In the first quarter, Angi’s service requests decreased by 1.88 million, a decline of 31.3% from last year.
Revenue per request Average revenue per request (ARPR) is a crucial metric to track for consumer internet companies like Angi because it measures how much the company earns in transaction fees from each request. This number also informs us of Angi’s take rate, which reflects the impact of pricing on the ecosystem, or ‘cutting’ each transaction.
Angi’s ARPR growth has been strong over the past two years, averaging 8.9%. While service requests have declined during this time, the company’s ability to successfully increase prices proves the continued value of its platform for existing requests. This quarter, ARPR grew 13.2% year over year to $74.02 per request.
Key Takeaways from Angi’s First Quarter Results It was great to see Angi exceed analyst revenue expectations this quarter as the Advertising and Leads segment outperformed. On the other hand, service requests fell and missed Wall Street estimates. Looking ahead, the company’s full-year adjusted EBITDA guidance of $135 million fell just short of analyst expectations. Overall, this was a mediocre quarter for Angi. The stock is up 1.1% after reporting and is currently trading at $2.65 per share.
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