Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Angi Inc. (ANGI, Financial) demonstrated strong profitability in Q1 despite declining revenues, indicating effective cost management and removal of low-value revenues.
- The company has a solid partnership with OpenAI, which includes displaying DDM content in ChatGPT responses and collaborating on D/Cipher for intent-based advertising solutions.
- Angi Inc. (ANGI) is seeing opportunities for cost reductions and margin improvements, maintaining confidence in their adjusted EBITDA forecast.
- The return of Jeffrey W. Kip as CEO is seen positively due to his deep understanding and historical involvement with Angi Inc. (ANGI), expected to drive focused improvements.
- Angi Inc. (ANGI) is making strategic investments in areas like content and performance marketing to position Dotdash Meredith for long-term growth.
Negative Points
- Angi Inc. (ANGI) is experiencing revenue declines, with similar percentage declines expected in the upcoming quarter.
- The company is facing challenges in performance marketing, particularly in services like financial products which saw a significant decline.
- Traffic from Facebook to Dotdash Meredith properties has significantly decreased, impacting overall session growth.
- Angi Inc. (ANGI) had to shutter an unprofitable acquisition, CraftJack, indicating past investment inefficiencies.
- Despite strong EBITDA, there is a need for ongoing investment to improve both the consumer and professional experience at Angi Inc. (ANGI).
Q & A Highlights
Q: Could you unpack the growth within DDM digital revenue across advertising performance and licensing? How should that trend going forward?
A: (Christopher P. Halpin - IAC Inc. - Executive VP, CFO & COO) Digital revenue grew by 13%, led by a 19% increase in digital advertising, attributed to 8% core session growth and improved monetization. Performance marketing grew by 3%, pulled down by a 30% decline in services. Licensing returned to growth at 9%, led by strong performance at Apple News. The company expects continued 10%+ revenue growth in Digital each quarter for the year, with advertising leading the way.
: Can you discuss the high-level terms of the DDM, OpenAI deal, including expectations for similar deals with other LLMs like Google, Anthropic, Meta?
A: (Joseph M. Levin - IAC Inc. - CEO & Director) The OpenAI deal includes displaying DDM content in ChatGPT responses, using DDM content to enhance model performance, and collaborating on D/Cipher for cookie-less, intent-based targeting ads. It's a multiyear deal involving financial compensation. The deal is not exclusive, allowing potential similar agreements with other companies.
Q: With the Angi CEO transition, what are the strategic priorities moving forward?
A: (Jeffrey W. Kip - Angi Inc. - CEO & Director) The strategic vision remains focused on customer-centricity and delivering jobs well done on both sides of the marketplace. The aim is to continue improving the business by focusing on customer experience and operational efficiency.
Q: What are the revenue expectations for Angi this year, and will there be a need for reinvestment to return the business to growth?
A: (Christopher P. Halpin - IAC Inc. - Executive VP, CFO & COO) No additional investment is deemed necessary to stabilize and grow Angi's revenue. The focus is on improving the consumer and professional experience, with an adjusted EBITDA forecast of $120 million to $150 million for the year.
Q: Given the stronger Q1 EBITDA, why not raise the full-year guidance for Dotdash and Angi?
A: (Christopher P. Halpin - IAC Inc. - Executive VP, CFO & COO) The company prefers to observe further into the year before adjusting guidance, despite confidence in the current momentum. For Angi, the focus is on operational improvements before revising revenue outlooks.
Q: How are you thinking about the evolution of IAC and potential areas for M&A?
A: (Joseph M. Levin - IAC Inc. - CEO & Director) The focus is on capital allocation for both existing and new opportunities, with a keen interest in marketplaces and travel and leisure segments. AI is considered more for operational benefits rather than direct M&A due to high valuations in the AI space.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
