Angi Inc. (NASDAQ:ANGI) Q4 2022 Earnings Call Transcript

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So, you can’t when you’re doing this innovation, new things, lose sight of the basics. And we did lose sight of some of the basics around SEO, SEM, fundamental cost management, and things like that because we are in this growth mindset and that growth orientation got away from some of the efficiency orientation. And I think you can and should accomplish a balance of both, then that’s what we’re trying to accomplished now, but 2023 is an adjustment certainly relative to that 2022.

Jason Helfstein: Okay. And just a quick follow-up. If you’re not going to build, I mean, the whole reason you were trying to get into the services where you are, the general contractor, is because you basically, I think, thought you could get a better take rate, right? Because when you provide ads and leads, at the end of the day, there’s a diminishment, right? Because the service provider has to compete to close that with other service providers. And so, you don’t get the full cut. So, I mean, do you agree with that thesis? And just if the bulk of the business is going to be in their ads and leads, we just have to think about, kind of a lower conversion rate of that 10% to 20% of advertising over time? Thanks.

Joey Levin: No, it’s not that. What put us into the services business was trying to drive the customer experience. So, trying to be able to get greater coverage in more categories or give the homeowner more options. So, what that means is, for example, where advertising doesn’t work because there’s a supply demand imbalance, you can’t go to the service professional and say, well, come on our platform and we’ll give you all the leads for or even better we’ll pay you to take the leads to make sure the customers get a better experience. What you can do in services is, you can price those things to make it attractive to service professionals to service the customer on your platform. So, what we’re trying to get to is, more homeowners who come on to our platform have a solution that works for them.

Now, we have to do that in an economically feasible way and doing that in the complex services wasn’t working out economically for us, but in these other areas, it does. And so, we can service more customers with a solution. The other thing is that homeowners, many homeowners, in particular, younger homeowners, want to do less work or I should say, are comfortable with the platform doing more work. So, that means that they trust the platform to give a fair price. They trust the platform to find a reasonable service professional and they allow us to do that work on their behalf. And yes, that does lead to more take rate in that example, but really what’s driving that is having a compelling customer experience, which I think we can deliver. Okay.

On the long-term revenue growth and margins, we think this is €“ should be a double-digit revenue grower. Again, 2023 is going to be choppy because we’re removing some empty calories and changing a bunch of things in the business, but kind of after 2023, I think double-digit revenue growth is absolutely achievable with expanding margins and there’s a lot of leverage to expand margin. We talked about cost savings and efficiency, much of which we’ve already realized. But we do think that we can grow margins just by incremental revenue on a fixed cost base from here and that’s what we expect in the business. Thank you. Next question?

Operator: Thank you. Our next question comes from Cory Carpenter with J.P. Morgan. Please go ahead.

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