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Angi CEO, Oisin Hanrahan, joins Yahoo Finance to discuss Angi Services Q2 earnings and how the company plans to continue its growth streak by fully investing in the brand of Angi to connect homeowners and professionals with the right services and opportunities.
- All right, welcome back to Yahoo Finance Live on this Friday morning. Taking a look here at shares of Angi, stock off about 1.5%. Company out last night with a quarter that was ever-so-slightly shy of revenue estimates, and a slightly wider-than-expected loss. Generally in line with estimates, though, across the board.
Joining us now to talk about the state of Angi's business, Oisin Hanrahan, the company's CEO. Oisin, thanks for jumping on this morning. I want to start with something that came up at the beginning of the call last night, and Joey talked about it at length, which is sort of the new brand-- the way you guys have put some brands together under the Angi umbrella. And I'm just curious if you could kind of spell out what's in there now and sort of how that strategy is playing out for you guys.
OISIN HANRAHAN: For sure. Thanks for having me. Great to be here today. So we're really excited about the opportunity we've got to build a really durable, longstanding consumer brand that people turn to for everything in their home. You think about the great brands that have been built, and there's a big opportunity for us to build a brand around Angi.
The Angie's List brand has been around for a really long time. It's been around for 20 years, loved by consumers, a lot of resonance with that brand. The issue is it's a little bit too literal in that it was originally a list, and Angi is no longer a list. Consumer expectations have changed. You think about all the ways that consumers want to engage with things now. They want to tap a button on their phone and get something done. And that's why we dropped "List" from the brand, and we've really leaned into the Angi brand in the last few months.
We've rebranded Angie's List to Angi. We've put Angi as our primary consumer brand, our flagship brand, and we're really getting behind that brand. We've invested in it in terms of moving our mobile app over, invested TV behind it. And we're now at a point where we're seeing really strong growth in the aided and unaided awareness for that brand. So it's really about building this one location that every consumer trusts to take care of everything inside their home.
- Part of the secret sauce, I imagine, is the ability just to go online and search for your brand. So you made that domain shift, and that has pressured results. Has the search traffic to your site, has that bottomed? Are you starting to see that turn the corner?
OISIN HANRAHAN: We've got a number of different things going on. So we've got the Angie's List to Angi domain transition. And that's doing really well. So IAC has done this many times before with some of their Dotdash brands, and that is performing, frankly, better than expected. So the Angie's List to Angi domain transition, doing really well. The traffic is rebounding. It's accelerating off the decline that we would have seen from the domain transition.
Where we're seeing a little bit of challenges on the Home Advisor brand, where as we've shifted our advertising dollars over from Home Advisor to Angi, what we're actually seeing is that brand is degrading at a faster rate than we would have thought. And that, frankly, has given us more confidence than ever to invest behind the Angi brand. So we're getting somewhere between seven and 10 times more awareness per dollar spent on Angi than we ever were on Home Advisor, which, again, perhaps speaks to the literal nature of the name. It's perhaps a little too generic. Whereas Angi as a brand, it really stands out. It's a great brand that we're excited to invest behind.
- So Oisin, let's talk a little bit about what's on there right now. And I to ask about supply, because-- and really competition, let's say, in the pro market. Competition to get jobs done. Anybody who owns a home now is trying to do anything to their home, knows how hard it is to get someone on the phone, let alone get them to come and do something. What has that have been like for you guys in the last year?
Because you noted, basically, during COVID, everything stopped. And now it's at this speed that sort of has felt unsustainable. I don't know how you guys are seeing, maybe, the other side of this.
OISIN HANRAHAN: Look, I think you've got some pretty unprecedented things going on, where you saw consumer demand accelerated, probably the fastest rate it's ever accelerated for anything in the home. And then you had supply contract at probably the fastest rate it's ever contracted, and then gradually start to rebound. And then you add on top of that the complications of actual supply chains of shingles, concrete, steel, et cetera. And it's been a challenging environment.
So we've got two businesses within Angi, two primary business models. One where pros pay us to access customers, and that business has been challenged. So where pros are as busy as they have been, it's obvious that they're-- there's challenges getting them to invest more in growing their customer base.
The second business we've got is the Angi services model, where customers pay us to do work. And that business has been incredible. So that business is up 127% year on year in Q2 to $73 million. You think about that growth rate at a business of that scale, it's frankly incredible. And then you look at July, where it's up 166% year on year in July.
So our Angi services business is the one where we're really seeing phenomenal growth. Obviously, we think that the supply-demand imbalance that you've got going on is probably temporary, and we expect to see some normalization there. And we expect to see significant recovery, significant recovery in the ratio between supply and demand as we get through this pandemic.
But we've really been very fortunate in our ability to bring on more and more supply into that Angi services model. And I think that speaks to-- it speaks to a great product market fit. It speaks to the fact that consumers are trusting Angi. They're saying yes, I will pay Angi to do work inside my home. And pros are saying, yeah, I'd love to sell work directly through Angi. Let me sign up to do that.
So the fact that even during all this shortage, the fact that we can grow that business 127% year on year Q2 v. Q2 last year is a great result.
- We've seen, I would say, over the past year or so, a Home Depot, a Lowe's getting more involved with services. I think Home Depot is now loaning out tools. Has that had any impact on your business?
OISIN HANRAHAN: So one of the parts of the Angi services model is, actually, we partner with major retailers. So when you go to certain retailers and you want to get a TV mounted, or you want to get a TV, for example, at Walmart, you can actually buy the TV mounting service provided by Angi in a Walmart store.
So we actually-- one of our models for Angi services is to meet the customer wherever they are. If the customer wants to pick service first, which we hope they will, and they come to Angi, then we're going to sell them the service right there on the site or in the mobile app. If they want to pick the product first, then we're going to partner with major retailers to sell the service alongside the product. So it really is a multi-channel distribution strategy that brings the best experience possible to customers.
Ultimately, we have two goals, right? We want to make sure that whatever the homeowner wants to get done inside their home, they turn to Angi to get the job done. And whatever way a pro wants to grow their business, that they turn to Angi to help them grow that business. When we do those two things, we'll be on the right path.
- All right, we'll leave it there. Angi CEO Oisin Hanrahan. Appreciate the time this morning. Best of luck, and I know we'll be in touch.
OISIN HANRAHAN: Thanks.