Angi Inc.

Good day everyone and welcome to the ANGIE Second Quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please send in a conference specialist by pressing the star key followed by 0. After introductory remarks, there will be an opportunity to ask questions. To ask a question, you may press star and then 1 on your telephone keypads. To withdraw your questions, you may press star and 2. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Andrew Ruskoff, Chief Financial Officer. Please go ahead.

Thank you very much and good morning everyone. Rusty here, CFO of ANGIE Inc. and welcome to the ANGIE Inc. Second Quarter earnings call. Joining me today is Jeff Kipps, CEO of ANGIE. ANGIE has also published a shareholder letter, which is currently available on the investor relations section of ANGIE's website. We will not be reading the shareholder letter on this call. I'll soon pass it over to Jeff for a few introductory remarks and then open it up to Q&A. Before we get to that, I'd like to remind you that during this presentation, we may make certain statements that are considered forward-looking under the federal securities laws. These forward-looking statements may include statements related to our outlook, strategy, and future performance, and are based on our current expectations and on information currently available to us. Actual outcomes and results may differ materially from the future results expressed or implied in these statements due to a number of risks and opportunities, including those contained in our most recently quarterly report on Form 10Q, our most recent annual report on Form 10K, and in the subsequent reports that we file with the SEC. The information provided on this conference call should be considered in light of such risks. We will also discuss certain non-GAAP measures, which as a reminder include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during the call. I'll also refer you to our earnings release shareholder letter, our public filings with the SEC, and again to the investor relations section of our website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Now I'll pass it off to Jeff.

Thanks, Rusty. Good morning, everybody. The first thing I'd like to do is thank everyone for joining us this morning. We appreciate it. Our internal research indicates that this is the busiest earnings morning of the quarter, and we know everybody's working really hard. So thank you. This is our second earnings call since Angie spun off from IAC as an independent public company. I think it's worth taking a minute and reminding everyone again of the multi-year journey we've been on. Last night we reported our first quarter of proprietary volume growth since the beginning of 2021. It's a big milestone for us and our journey. To state the obvious, that everybody knows we have over the last few years shed over $400 million in revenue. That is on the face of the P&L. To the untrained eye, many people have thought this looks like a bad thing, and under normal circumstances, maybe it would be. We would actually argue it is all a very good thing and quite the opposite for the long-term success of both our customers and the company. What we've really done is first, we've shed lower quality revenue, which was in fact deprecating our customer lifetime value and thus the long-term value of the enterprise. Poor quality transactions mean that customers leave or they don't come back. Secondly, we've removed the material amount of unprofitable marketing and sales expense. In other words, we were spending money to acquire customers at negative profit. Now that we've adjusted that, you can see our profitability has improved greatly. Both our adjusted EBITDA and our free cash flow are up materially from 2022, where in fact our free cash flow was negative. Additionally, today, and I'm already excited about this, you can see the key markers of our return to revenue growth. This time it will be profitable revenue growth. And that is first, the strong proprietary volume growth, which I just mentioned the first time in several years. And secondly, the stabilization of our network channel traffic. It's down a little bit quarter to quarter, but we now think it's at a stable exit rate. And so we think it is going to be flat to moderately down next year. And those two together point us to growth next year, along with the growth in revenue per lead. Finally, you can see the strong value creation looking ahead in what we've done in terms of being much higher value at lower sales force in our pro acquisition. The other key point in terms of what we've done over the last few years is the improvement in the quality of our customer experience. You can see it in our customer metrics over the last couple of years. We've invested in the core product functionality and coupled with what we've done in terms of pruning our lower quality traffic. This has resulted in moving homeowner net promoter score by 30 points over the last two years. We mentioned this last quarter, but it's still an accomplishment and it's still true this quarter. And we've moved the total retention across all cohorts of our pros by nearly 20 percent over the last two years in this last quarter. We've moved both the higher and win rates. And by that, I mean a higher is when a homeowner who submits a service request on our platform hires a pro who's paid for that lead. Obviously, when the pro pays for a lead and they win it, that's their win rate. In June, our win rates on our core pro platform are up over 20 percent. And in July, our internal early data is tracking to more than 30 percent up year over year. And the higher rates are coming right along with those win rates. So we have done this progressively over the last couple of years. And at the same time, we've been improving the technology we operate on a year and a half ago. We had four different technical platforms with relatively low fidelity integration in the U.S. and three platforms internationally. By the end of this year, we will only be operating on two in the United States and one internationally. And at some point in the future, we see us as progressively step by step getting to a single modern international platform, which will give us a great deal of operating efficiency and more speed to market. So we are quarter by quarter, piece by piece, putting all the pieces together to serve the trajectory that we project. And we think steadily, piece by piece, putting the evidence out so that you can see it too. We still think we're in the early innings, and we still think we have a lot of work to do. But we're very optimistic going forward and excited to answer your questions today on the progress to date and where we're trying to go. And with that, I'll turn it back over to you, Operator.