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Angi Homeservices (ANGI) Q4 Earnings and Revenues Up Y/Y

Zacks Equity Research

Shares of ANGI Homeservices Inc. ANGI have gained marginally since the announcement of its fourth-quarter 2018 results on Feb 7.

The company reported earnings of 7 cents per share against a loss of 12 cents per share in the year-ago quarter.

Pro forma revenues increased 21% year over year to $279.5 million. The increase in revenues was driven by robust growth in Marketplace business.

Notably, the stock has returned 25.3% against the industry’s decline of 16.7% in the past year.



Top-Line Details

Marketplace business witnessed growth of 37% year over year. Robust growth in Marketplace business was attributed to a 24% increase in service requests to 5.3 million. Additionally, paying service professionals and revenue per paying service professional increased 18% and 16% respectively, in the reported quarter.

However, Advertising & other business witnessed a 7% year-over-year decline to $71.1 million.

While pro forma revenues from North America increased 22% year over year, revenues from Europe stayed flat at 13% year over year.

Management stated that its top line was fueled by 20% revenue growth in six key areas including Match, Angie, Dotdash, Vimeo, Mosaic and BlueCrew.

Angi witnessed 9% growth in Vimeo in the fourth quarter, coupled with Average revenue per user (ARPU) strength of 22%.

The company benefited from robust growth in Mobile business, which increased 136% year over year.

Angi’s capacity growth was 36%, up 2% sequentially, in the reported quarter. This reflects Angi’s efforts to absorb market demand.

Further, the company completed the sale of Felix in the reported quarter.

ANGI Homeservices Inc. Price, Consensus and EPS Surprise

ANGI Homeservices Inc. Price, Consensus and EPS Surprise | ANGI Homeservices Inc. Quote

Operating Details

Angi recorded operating income of $17.9 million against a loss of $33.9 million in the year- ago quarter.

The company witnessed a decline in selling and marketing expenses, as a percentage of revenues, year over year.

Further, adjusted EBITDA came at $66.2 million compared with $16.2 million in fourth-quarter 2017.  Adjusted EBITDA margin was 25% compared with 7% in the year-ago quarter.

Full Year Details

For 2018, Angi recorded revenues of $1.13 billion compared with 736.4 million in 2017. Earnings per share were 15 cents against loss of 24 cents in the past year.

Operating income was $149.2 million and adjusted EBITDA was $260.3 million in 2018.

Full year 2018 net cash provided by operations increased from $181.9 million in 2017 to $223.7 million and free cash flow increased from $161.7 million to $176.7 million. 

Balance Sheet & Other Details

As of Dec 31, 2018, Angi had cash and cash equivalents of $336.9 million compared with $221.5 million as of Dec 31, 2017.

The company exited the quarter with total debt of $244.9 million compared with $258.3 million at the end of the year-ago quarter.

Guidance

Angi expects its Vimeo business to witness growth of 20-30% in the near term. Further, the company will be repurchasing 15 million shares in 2019.

The company expects marketing expenses as a percentage of revenues to be lower in 2019.

Zacks Rank and Other Stocks to Consider

Angi currently carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the same sector include Jabil, Inc. JBL, MeetMe, Inc. MEET and Twilio Inc. TWLO. All the three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for Jabil, MeetMe and Twilio is projected to be 12%, 20% and 9%, respectively.

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