Angi Inc.

Good day, and thank you for standing by. Welcome to the Angie, Inc. Third Quarter 2025 Earnings Conference Call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After introductory remarks today, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note that today's event is being recorded. I would now like to turn the conference over to Andrew Russakoff, Chief Financial Officer. Please go ahead, sir.

Andrew Russakoff Good morning, everyone. Rusty here, CFO of Angie Inc., and welcome to the Angie Inc. Third Quarter Earnings Call. Joining me today is Jeff Kipp, 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 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 Security Clause. 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 the statement due to a number of risks and uncertainties, including those contained in our most recent quarterly report on Form 10-Q, our most recent annual report on Form 10-K, 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'll 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 filing for 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. And I'll pass it off to Jeff.

Thanks, Rusty. Morning, everybody. We know you're all exceptionally busy and working very hard in this earnings season, and we very much appreciate you taking the time to join us this morning. As you know, our mission at Angie is to deliver more jobs done well to our customers, and our commitment to our shareholders is to return to growth in 2026 and beyond and generate more value. In the third quarter, we again posted the key markers for both. The most important metrics we look at to judge our customer experience are, one, our hire rate, the rate at which a homeowner submitting a service request on our platform hires a pro paying for that lead on our platform. Our pro win rate, which is the rate at which a pro wins the lead they pay for on our platform. Three, our homeowner net promoter score, which we survey on a rolling basis. And four, our pro retention. We again delivered improvement across these metrics in the third quarter as we have all year. Our estimated higher rate is up double digits. Our estimated win rate is up nearly 30%. Our net promoter score is up nearly 10 points year over year, nearly 30 over the last two years. Pro retention continues to improve with overall churn better by 7% in the last 12 months year over year, and up 26% versus two years ago. And we're not done yet. We're continuing to invest against the better veteran customer experience. We also continue to post the key markers for our return to profitable revenue growth. Proprietary service request growth accelerated in the third quarter to a positive 11%. And with proprietary lead growth at 16% and revenue for lead growth at 11%, the through line to growth in 2027 is clearer and clearer to us and hopefully to all of you. Our network channel has gone from nearly 40% of our leads a year ago to less than 10% this year, third quarter over third quarter, making the rate of growth or decline there an impact on our overall growth. But that will change trajectory as we start to compare next year. Our strong proprietary growth is mathematically the key marker for 2026 growth. We'll likely talk about this a little bit more in response to questions later. We're also generating materially more value for the business with our sales channel in pro acquisition. We have only about half the sales headcount we had a year ago, but we're actually producing more overall lifetime margin, meaning the margin for pro and the lifetime capacity for pro are materially up. So with the step change that we've delivered in our sales effectiveness and our recent launch and now ramp up of online enroll, we have the key pieces to grow our overall pro capacity 2026, and we expect return to nominal active growth growth by the end of the year, the beginning of 2027. So, with all these key markers in place, we're accelerating our platform transformation. Today, we operate on four platforms, three in the United States and one internationally. The U.S. platforms in particular have significant tech debt. and legacy code, which has materially slowed the speed and efficiency of our product innovation and the business in the US. And with the rate of change in the landscape increasing with the rapidly growing presence of AI, we have to move forward and get onto a modern technology stack and get off pieces of software, which are in some cases 20 years old. We've been progressively already rebuilding key pieces of our architecture over the last couple of years. But we're now leaning in with the target of getting to a single modern global and AI-first platform by 2027. We've been and will be delivering new AI-first and AI-enabled software and improving the customer experience with it and our business efficiency as well as we go. So this is going to be a progressive improvement. There's no big bang here. And this effort isn't going to hinder our trajectory. It's all built into our outlook. And if anything, the platform work will allow us to accelerate our efforts in the business as we go forward and hit our milestones. Again, with all of this in place, we are looking forward very optimistically to 2026 and beyond. We're never going to be happy with everything, but we do feel very good about where Angie is. We have even higher confidence that we're going to deliver against our mission and goals going forward. So with that, I think, operator, we're ready to take questions.