By Connor Hart

Homeowners are delaying improvements and downsizing to smaller projects as they face heightened inflation and economic uncertainty, Angi Chief Executive Jeff Kip said.

A recent survey by the home-services company, formerly known as Angi's List, showed that about 70% of homeowners will postpone projects they planned to tackle this year. At the same time, though, some 70% of homeowners said they would increase focus on preventative maintenance this year in hopes of avoiding costlier projects later.

The result: Angi is cautiously optimistic that these countering forces will balance each other out over the long term, Kip said Tuesday.

"This is all very normal," he said. "When we see economic shocks and uncertainty, and when we see declines in consumer confidence, we tend to see the homeowner traffic and submissions on our platform decline."

About two-thirds of the company's business stems from non-discretionary service requests, which Kip said stands to benefit the company moving forward. Historically, the company has also experienced an uptick in demand from service providers during volatile economic periods.

"The vast majority of our revenue comes from the pros," Kip said. "So, it tends to balance out for us."

The Denver-based company, which completed its spinoff from IAC on March 31, expects macroeconomic conditions to hurt revenue growth by 3% to 5% in the current quarter.

In the second quarter, Angi expects revenue to decline 15% to 18% from last year. Analysts polled by FactSet are looking for sales of $265.2 million, representing a 16% decrease. Still, the company backed its full-year outlook, which calls for sales to fall 12% to 16% from last year. Analysts forecast revenue of $1.02 billion, down 14% from a year earlier.

Kip attributed the revenue declines to the company's efforts to move away from third-party networks, instead favoring in-house channels that he said are better suited to connect homeowners and service providers. He added that the company plans to continue investing in software and artificial intelligence to improve its platform and proprietary systems.

The move away from third-party networks also hurt sales in the first quarter, during which revenue fell 19% to $245.9 million. Analysts modeled $239.4 million.

During the recent quarter, Angi swung to a profit of $15.1 million, compared with a loss of $1.6 million a year earlier. The company consolidated its sales representatives into a single team, helping improve margins and reduce costs.

Quarterly earnings of 30 cents a share topped analyst expectations for a loss of 6 cents a share, according to FactSet.

Operating income rose to $20 million from $2.7 million a year ago, while adjusted Ebitda--or earnings before interest, taxes, depreciation and amortization--fell to $27.7 million from $36 million.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

May 06, 2025 16:14 ET (20:14 GMT)

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