Q2 2021 IAC/InterActiveCorp and Angi Inc Joint Earnings Call
<unk> of dash across multiple brands, we did that actually when we went to service magic from Wuhan from service match at the home advisor. So so we have seen this we have.
The sister companies who've done this and we've talked to with <unk>.
Expedia did a big 1 relatively recently with verbal.
This is a relatively well worn path, it's hard the thing that that debt as you point out we didn't appreciate or we should have appreciated but we didn't was.
How quickly home advisor without the brand support would would lose audience and search and that has been that has been more severe than we thought it would hang on it as I said in the letter it's actually reinforcing the decision because that brand just didn't have the stickiness too.
It it needed that constant support and I think that the.
The spending on the new brand is going to be much stickier and last much longer and be more enduring but because it didn't have the brand support the audience. We're getting from search fell off more quickly and that gets to your margin question, 2 which is the SCO. The the organic search traffic that comes in.
It's very high margin and so when you lose some of that than that.
Drops down to the bottom pretty quickly.
<unk> there is a bunch of other stuff in there, including the acquisition and the change.
The jump in on this.
Thanks Joey.
You hit the important part, which was we're absolutely committed to where we're going with the angi brand.
And the thing that gave us even more confidence was the rate of which home advisor declines when we stopped standard on so the the constant investment in the home advisor brand.
Was proppant of organic search it was proppant up on yet.
C M. It was profit of a bunch of of channels and once we took that investment out of the home advisor, particularly on television and we invested in angi, we saw a faster degradation than we anticipated.
The upside is the.
On the upside is the shape of the curve were seeing on brand for new Angi is better than anticipated. So what we're seeing is we're transferring the brand equity from Angi list over to angi in terms of how we measure on aided awareness in terms of how we measure aided awareness much much faster than we thought so on a dollar per point of.
Awareness spaces, where performance somewhere between 7 and 10 times better on new angi than we are on our than we were when we first transition from service magic over the home advisor. So we're really excited about that.
It had of it had an impact on the it had an impact on EBITDA.
In terms of the question on total home just to zoom out for a second.
We've effectively got 2 things our 2 businesses inside angi right now.
And if you if you think about the macro environment 1 of them is a business where.
Pros payoffs to access customers and the other is the business, where we pay pros to do work and at a time, where I think it's unprecedented in terms of the change in the macro environment, where we saw this massive contraction in pro supply as a result of Covid and the massive increase in consumer demand.
At the same time that we're asking pros to pay us to access customers that that business is challenged at the moment. So irrespective of the brand transition we're going through.
It's challenged obviously, we believe this is temporary we understand that the the macro environment the macro environment is.
Particularly volatile.
Given the given Covid. However, we think it's our responsibility to lean into the other business at the same time, where we actually have huge product market fit so where we're paying pros to do work that business is performing unbelievably well. So you saw the the the growth rate of 120 odd percent.
Q2 versus Q2 last year you saw the July number of 160 odd percent.
<unk>.
In terms of the total home are the angi roof now angi roofing acquisition that contributed that contributed to the to the growth in AG services on on overall basis July would've been flat on growth versus June without the without the angi roofing acquisition of the total home acquisition just to talk about.
Why we did that for a second.
It's it's kind of got to do with why were why were overall investing in energy services, it's a desire to bring on more supply and build a better customer experience. Our pros want 1 thing it's to help grow their business our customers 1 another which is to get the job done.
What we've done at Angi roofing on what we're doing at total home is we're going deeper into the roofing category and we're building out real expertise to be able to help people get the roofing job done. So today you go to angi using total Homer angi roofing, we can actually do the job really quickly.
The materials dispatch the the roofers, we don't employ the actual individuals doing the work we contract with individual teams, but that's allowing us to bring on more supply because of specializing the work they need to do ever more. So we are really excited really excited to go deeper in this category the great category as I've spoken about before 10000.
The.
Really really high rate of financing attachment, so about 20% of their jobs of finance allows us to get deeper into financing.
And you think about the application of technology, we can apply a lot of technology to allow us to price those roofing roofing jobs in advance using area of lidar or area of photography. So again, it's really bringing it to this at this point, where it's a seamless end to end the experience on angi using using total all are using angi roofing I need to get the.
I need to get the nomenclature I hopefully after this the only call on angi roofing.
But overall overall, we're really excited about where we're angi services going.
And just a couple of things to add when we did the <unk>.
ICEE is done through a couple of its businesses things like the French consolidation before and when we.
<unk> match, the home advisor transition almost 10 years ago.
Roughly 16 months before revenue returned to growth following the commencement of that and similarly adopt dash. When we did the virtualization several years ago on average it took about a year for each of each of those vertical the returned around on the growth. So these things do take time on the July revenue.
As we said in the shareholder letter we do expect.
That sort of organic run rate to continue for the next few months of sort of in and around that 7%. We saw major in July and then you layer on the acquisition and just the how people size.
Of that acquisition.
For compared to total angi, it's relatively small it's a little outsized in terms of the growth just remember that this is an R&D services, the bucket, which recognizes revenue of growth as <unk> said. These are 10000 dollar tickets or more type jobs, and then seasonally obviously the summer months. The roofing is there extra.
So with that we'll go to our next question from John Blackledge.
Great. Thanks couple of questions got dash, the revenue and EBITDA growth was strong again in the second quarter could you discuss the quarter and then we saw the top line <unk> in July if you can.
Julian maybe offers of you on Doctor ask the second half growth and any.
Color on the longer term growth vectors for that segment and then just 2 other quick ones on the Terra Dot com.
Any update on the progress there since the acquisition thoughts about kind of of the longer term opportunity I'm curious when we might start.
To hear more about that segment more regularly and then just any update on the CFO search will be greater.
Thank you.
Sure Thanks, John on.
Ah.
Maybe I'll do them in reverse order on.
So I don't forget CFO.
Our.
Got a great pipeline of candidates.
The good news on the <unk>.
CFO search.
As you know Glenn.
Think an exceptional CFO and has big shoes to fill and so we're.
We've got a high standard forward looking for but we have time and we have flexibility on that.
Again, I think I don't want to give a timeline on when we will do it because of there's maybe some candidates we could go quickly and maybe there is it.
On a chance it could take longer.
But we have a fantastic finance staff here, we built over many years were all I think exceptional in their field that talked about Mr. Schneider already we've got a head of accounting, whose exceptional we have of head of treasury as exceptional.
The same for internal audit for tax and so when we think about when I think about all of those finance functions.
And.
Confidence level, and making sure that things are running smoothly and we're all well protected.
The absolute certainty on that.
So we're going to make sure we find the right person to add value to that equation in terms of capital deployment and being a real.
Value add on the on the executive team and on.
Constant will get somebody great on.
Care Dot com.
In terms of breaking it out I don't know debt is sort of the the.
Next step in evolution for the business when we think about business of the 19, we'd like to put them in emerging for awhile and then.
Graduated from emerging to their own segments, and then hopefully long term of eventually graduate and to being their own business.
Standalone on their own.
But but right now business is doing very well.
I think I've talked about before that the enterprise business was the most.
Positive pleasant surprise for us since we acquired it that some meaningful contributors of the business growing very nicely and.
Is a a I think as a beneficiary of the.
Important tailwind right now, which is employers increasingly taking on the responsibility of believing the need to take on the responsibility to help their employees with childcare and it's unequivocal that theres a direct correlation between taking on that responsibility and diversity in the.
Work force and so of course, the unequivocal of the important the diversity of that workforce.
Positive impact on the business so.
When people now realize that in a lot of that has become even even more clear over the course of COVID-19 in terms of both government realizing that and employers realize that I think that's going to be a tailwind for the end of continued tailwind for the enterprise business.
On the but but that aside the core business of care is growing fast certainly the fastest since we've owned it and probably the fastest since since for a while before that.
That's the product of a few things we've got improved as I mentioned in the letter improved conversion and retention.
Those are key to the key building blocks to the business.
And of course, when you get those things going that build the LTV and we can get the LTV going that enables you to do more marketing. So we've got marketing substantially up in that business right right now too and that becomes a virtuous cycle.
So that that's all encouraging the other piece is it's not just in childcare, we of all or at least I have defaulted to childcare as the definition of care Dot com, but senior care is an increasingly big and important component and I think also have the demographic tailwind behind it the number.
1 people want an aging population number 2 of people wanting to age in their homes or in their family homes as opposed to an end.
Nursing homes, and certainly Covid didn't help the brand of nursing homes generally so I look at all of that and say we're doing.
We're doing very well and we're excited about it or not in a rush to break it out as its own segment, because we like kind of of the anonymity of the <unk>.
Being able to work with a lot of the tools.
Behind the scenes and not worry about any particular metric right now in terms of of.
Public performance, but it ought to get there I can't see a reason why it won't end.
The product development is probably going to be the biggest driver of that meaning getting some new products launched getting some momentum behind that and once we do we'll probably want to break it off on its own.
Scott the Ashford your other question.
Dot Dash is also as you point out doing very well exceptional quarter.
It did decelerate, but we always expected it to decelerate in the back half of this year and you can see that in July and giving you. Some context like the display advertising business in Q2 of 'twenty was down 8% year over year, everyone cut back their spend.
That went back to growing 9% year over year in Q3 of 'twenty and so that's a big difference in the comp.
From this year from Q2 to Q3, and that's something to to pay at the antigen. We expected that deceleration is it the business is exiting again I don't know if we can say exiting COVID-19 anymore, but it is exiting COVID-19 at a faster growth rate than than when it entered.
On a higher base, which is fantastic and.
So that's important we're going to keep investing in content in that business I think that's our competitive advantage I think where our content investments up 50% year over year. This year and I hope to continue to grow that faster than revenue for a while.
And underlying that the.
There is there is a few trends that do help that are completely independent of the pandemic..1 is what's happening to privacy and data privacy and some of the tools for tracking users and how those things of become weaker on the internet over time are on wound.
On mobile over time.
And I think that trend continues for awhile that day.
<unk> is a beneficiary of that because that that doesn't need that data dot dash is selling to advertisers a product, which is we know somebody is doing ex because of their reading about doing ex theyre looking for information on doing ex do you want to reach of reader who's doing that you don't need to know their name you don't need to know their age you don't need to know.
Where they came from on the Internet or some other things. They were doing you need to know exactly what they're looking for which is is obviously, we don't need any data for that and I think there are a lot of advertisers who appreciate that now number 1 they appreciate it because they can't spend the dollars of elsewhere, where they were the way they were tracking on a different basis, but number 2 they like to be able to to target.
The audience with effect of $1 without having to.
The violate personal space or worry about privacy concerns and I think that's really important and we can see it in the advertisers. So the love quoting the stat I think I quoted every quarter top 25 advertisers I was just looking at that again this morning from.
From 2019 to 2021 of the top 25 advertisers. The same 25 names are spending of 139% in 2021 of what they were spending in.
2019, and I think of 123% or something like that of what they were spending in 2020 and.
People like the concepts of net revenue retention, we've learned from Vimeo and if you think about that as in that context, it's pretty amazing and again. The reason is what I said, it's what they offer but it's also performs and they they can see that advertisers can see that it performance of they stick with it. So that's all very encouraging.
In terms of long term growth rate.
I like to think of it as 20% north of 20% and I don't know exactly how that plays out in the second half of the year, but I think that that's a bogey for us and the things that drive that are more content.
And getting.
Not more ads.
That is something that we're not pushing.
But getting more content getting more efficient on the AD getting better performance on the ads and then in each vertical we can get deeper in terms of how we deliver of customer to an advertiser. So in categories like finance and invest the PDR brokerage or credit cards or things like that there's a lot of revenue to be found there in getting.
Delivering a more qualified customer to an advertiser and because we are at sit at that top of the funnel I think we have the opportunity to do that Mark you want to add.
Yes, I'll add a little bit.
The second half expectations so.
Why we look at that north of 20% of sort of our target and what we think of.
Online publisher of really healthy number just look at some of the I'll update some of the data points that the Glen called out on the last call of it. So now what 10 of the last 12 quarters. We felt that that has grown over 20% 6 of the last 9 quarters over 30% and 13th straight months of over 20%. So we do think that 20%.
North of 20% is a good way to think about the business and as Joey said the comps do get tougher last year Q2 grew 18% and that accelerated the 26% of the 33% in Q4.
On margins for this business remember that 2020 was a bit of a pull forward in terms of the margin for not that like a lot of other businesses at the onset of Covid kind of pumped the brakes on investment.
For the year margins were 31% last year that was up from 24% in 2019 and this year, we're leaning back in the constant Joey mentioned that where we expect to grow content, our content expense investment 50% year over year.
So I think you should expect to see some contraction is that sort of cycle through over the back half of the year as we lean more into it.
So some contraction over the second half of the year for the full year, we should be relatively flattish in line to that 31%, we did last year, but.
To get there you have to have some contraction over the back half of the year.
And so far on our next question, we'll go to Cory Carpenter of JP Morgan.
Hey, Thanks for the thanks for the question.
You can see on here, Mike So on Angi services, how do you think about the sustainability of the recent growth in <unk>.
And we'll continue to drive further penetration in the machine, maybe if you could talk a bit about some of the progress you've made on your product initiatives on the ADT home advisor pay income to refinancing.
Thanks Corey.
So just on Angi services to start as you pointed out the growth accelerated to 127% of up to $73 million for Q2.
Just to understand for a second of the different components of Angi services, you've got 3 different businesses inside there you got a retail business, where we partner with the largest retailers of the world.
1 of the largest retailers on the world of sell in store online on their site. So you go to buy furniture, and we we sell we sell of furniture Assembly alongside of the furniture. The second part is the the book now business, where you come to Angi and you make it instant booking for service you fully pay and we show up and do the work and then the third part is.
Manage managed services or managed projects, where we give you an initial quote online you put down the small deposit and then we organized the complete the job.
By phone and you can pay for the job completely so the average ticket on that on that 1 it's closer to $710000. All 3 of those experienced pretty significant growth.
As you can imagine the levers the levers of different in each 1 we're really only scratching the surface on the book now and on managed projects in particular, so the the early read on those at the NPS is really strong both for customers for homeowners and for our pros and we're seeing significant pro engagements significant cut.
<unk> engagement.
If you think about it on a category level is probably 10 categories. We have identified already where we think we can build a half of $1 billion business and each category, where we look at it and say okay. In roofing alone. It's a $45 billion category in the U S. There's no reason why we shouldnt be able to build the very large business in that category. So the the levers for future growth.
There the levers for future growth of really vertical of Asian going deep into each category in the book now business. We started to build out those category teams already got about a half of dozen of those teams that are now now nearly fully staffed in terms of.
The category managers for that for those individuals sub verticals, it's been enough product work.
Make that experience better and the levers are really around added the completed better job pricing more accurate more accurate request by the customer allows us to do an even better job spin through injury rate for the customer repeat rate for the pro and overall just mix of business better on the manage project side again, we're.
We're deep in 1 category with roofing to start we've got a number were across quite a few categories already.
We're really going deep on roofing, we're also going deep into fencing is the category.
And really looking at saying how do we make sure that in that category. We build a great experience you pointed out angi key end.
On payments.
On the payments product of $26 million I think in Q2.70 odd percent growth.
Q1 to Q2, so we're really excited about that I think it hit $3 million.
In in July and the way I look at that as I look at it and I think where are we really getting deep with the customer where we really completing the loop and actually.
Looking at it and saying how do we know that we've completed the whole transaction for the customer and of the pros getting paid or they are using A&D service. We know that broke back. So I look at Q2 and actually when I think about jobs that we know that we've completed and we know we process. The payment on I look at the $26 million I think about the $73 million I think those are jobs that were.
Either fulfilled by angi or we actually completed the payment of made sure. The pro got paid so I think that's the.
It's a really significant.
The really significant deepening of our relationship with the customer and deepening of our relationship with the pro and it flips it back around from the propane us to us making sure the pro gets guests.
Gets paid.
We've got we've got more pros that we're rolling out payments too so it's not across the entire pro base yet. So we're we recently.
Rebranded.
Home advisor to Angi leads and lift the angi ads there are a number of add pros that don't yet have the access to payments. So we're continuing to roll that out. So we will expect to see continued growth in the in.
And payments as we go deeper into it.
<unk> is also an important part of payments again very early on the data, but I think it I think it's tripled in terms of financing volume again on the tiny numbers Q1 to Q2 and again the roofing business gets us deeper into financing as well. So it's all of this virtuous loop of getting closer to the customer managing the payments getting into financing.
Really really really getting to a place where we know that the job is getting done for the customer Angi key was the I think the last part of your question again, great growth month over month, or sorry quarter over quarter of 140000 members now the price point on that is up to $29 of 30 Bucks.
A year.
We're still of pay to save.
Pay to save program I think there is a lot more we can do there in terms of value add is I think you were asking your question of where we've taken it.
Or does it look like I think some of that has to do with helping the customer helping the homeowner has access to more information. Some of it has to do with educating the customer perhaps elevated levels of service I think financing also plays an important role into that so could we could we think about the financing for angi key members of preferential rates and then I think there.
A lot of <unk>.
More of tangential things to do with the home that we could do with angi key as well, but we're early on we're exploring but we think it's we think it's a really powerful.
And it really fits the long term vision of the long term vision for <unk> as you know.
How do we have of single brand that most of our people are members. They use our mobile app and they turned to angi to get everything done inside their home and you think about services you think about angi key think about payments and you think about our broader marketplace business that really broadens and gives you access to all of the services. They all fit together in the I think you're hitting on.
On the Youre hitting on all of the.
The important building blocks.
But that go into that.
Just had 1 small thing to that last sentence from Athene, which is you.
You would go to in that World that day describes with all of those features of that he described what's important and there is also you go to angi first because it's faster it's easier it's reliable it's going to deliver the service.
It's going to delivery of the service at a fair price, but the point is you go there first it will make more sense to go there first and it will to go anywhere else first and get a list or after the sort through things or have to read reviews or have to pick from 10 or whatever it is.
You will be going first setting up the infrastructure that it makes.
More sense the go to Andy first of its more efficient to go on Angi first is a significant portion of the groundwork were laying right now I think thats, a really good point and I might even push further I might even push further to say you go there first for the discretionary things for the urgent things.
But actually because you have a relationship with us because we.
We know your home because we know of probably better than any other professional any other company, we can actually anticipate and take care of the background maintenance for you. So you go there first for discretionary things because we build a great brand and got the mobile App to remember you engage with us and trust us.
And hopefully we anticipate the maintenance for you and we can actually take care of of behind the scenes or we can proactively prompt you to say hey would you like us to do gooders gutter cleaning at this time of year would you like us to do sprinkler blowouts at this time of year can we do these things for you.
In an automated or of magical way so.
We're definitely going to prioritize our existing businesses for M&A.
I've talked for a little while now and continue to believe that debt.
Dot dash and publishing would be a priority of there because I think we have a great team that is building a great business, that's proven their ability to do acquisitions integrate acquisitions and add value in those acquisitions and.
It's scalable so I want to add there if we can find the opportunities, which I do believe exists that's 1 for sure.
And all of our existing businesses.
Are going to prioritize over new businesses for acquisitions, but we continue to be in the on for new categories to to get into I don't think it will.
Well as we've always said I don't think we will look for of debt the company type of acquisition, but I think that.
Finding businesses that generate real cash flow and where we have a unique angle is something that we're going to that we are looking for and continue to look for.
And is the priority. The last 1 you mentioned is share repurchases. That's always in the consideration set we will continue to be in the consideration set.
It's basically a variation on putting more capital into our existing businesses because.
So it just effectively buying more of them and so that's an easy 1.
And it's definitely something that we always have looked at and we will continue to look at.
We.
Of the same story on the on the Angi side as it relates to the.
Share repurchases on acquisitions I don't think Andrew is going to get into a brand new business with capital.
But looking to do small acquisitions like the roofing, 1 where we can talk something in and really make a difference and also.
Consider share repurchases if it makes sense.
Great. Thank you.
So our next question will be from Jason <unk> at Oppenheimer.
Thanks, I, just wanted to dig a bit deeper into the angi.
How much you're willing to draw a line in the fans of kind of whole of the revenue growth, let's say, 7% to 10% for the foreseeable future given that the headwinds youre facing at home advisor from of traffic standpoint.
We'll take time.
And obviously it is the balance so just help us understand kind of.
How bad it can get over the next several quarters.
I'll start and then the.
Jump in but we're not holding any lines it would be crazy the old any line of if it's not we.
We can't there is nothing sort.
The sacred we'd say, we'd do anything for.
4.
The 7% to 10% revenue growth of what we're saying right now is that what we're seeing.
On the organic side and Thats now bigger.
As a result of the acquisition, that's what we're seeing and we don't see a reason why it should be worse than that but we're in a very volatile environment for 2 reasons from.
Probably more than that but for sure there's still a lot of ups and downs as it relates to the pandemic and People's willingness to do work availability to do work and things like that and we created our own volatility with this brand thing and so some components of that are out of our control. We know what we're seeing today, we know what direction. It's generally headed in the various pieces.
Some of some down and so we've made assumptions on on how those hold but things can change for the positive or the negative there.
And that's always going to be the case.
Yes, I'd Echo that we know where we're going we know we're trying to build.
<unk> like the destination as Joey said in the letter.
<unk>.
I just put the slightly more contexts on it we've essentially got 2 businesses that are performing very differently because of the macro environment and because of the brand. So the <unk>.
Services business in the current environment has.
Fantastic product market fit and is growing like crazy, obviously, a smaller part of the business, but growing like crazy and you've got the lead business that is challenged from 2 perspectives..1 is the <unk>.
1 of the brand in 2 of the pandemic and we believe the brand is temporary and we will be in a stronger place on the other side of it and the pandemic. Hopefully is also I think we all hope it's very temporary.
And.
You look at the math of when those 2 lines are going to cross of when a smaller faster growing business is going to help with the the overall.
We're focused on the long term we're focused on what we wanted to accomplish overall, we're not focused on how do we hold the line in a particular place. This quarter's set anything it's a what we're all about is making sure we're making the right long term decisions, we want to make sure that we're set up for success.
The absolute confidence that if we build the right product for the homeowner that helps them get the job done we build the right product for the pro that actually helps them grow their business will be in a stronger spot. We are in addition to the brand change on the the home advisor business I'm, sorry on the lead business.
We're also making significant investment there and actually making the product from the experience better for pros. So we've got of pricing tests out in a small number of markets right now that significantly changes the ROI calculation for our pros.
Very early very early results.
They broadly seen they broadly seen positive at this point.
We're obviously investing in payments to <unk>.
To close the loop again, the read on pros that use payments significantly higher retention significantly more engagement and.
And overall, we're looking at we're looking at vertical <unk> of that business too. So we've talked before I think loosely about verticalizing that sales force that's something we're actively going after again with the view that with the view that as we Verticalizing. The sales force, we built a better experience for pros that will engage with the product more.
The thing that has given us confidence on that as an on boarding and Onboarding program. We've run for our AD Sps, where we put them through a pretty heavy touch pretty heavy touch on boarding test. That's yielded really good results on really good results on win rate really good results of 90 day retention and again, we're really saying how do we not.
Say oh, the pandemic is there let's.
It'll it'll pass, but how do we say, let's make the AD business and the lead business higher ROI for pros and how do we make sure that we come out of the other side of this in a really strong place and all the while we continue to have the other the other option, which is how do we create our own supply, which I think with angi services and some other thing.
Other than that you have like a lot of kind of greenfield how to videos and definitions and stuff like that but is there other things that you've thought about that could tap into that growing retail trading group and investopedia of material part of dog Dash at this point like whereas the stand relative to the 300 odd million dollars. They were gonna do.
And the segment of this year.
Sure show.
On emerging the next tier aftercare mosaic is.
What we called the future of work and we have 2 businesses in that area of both tiny but both growing very nicely.
And both still unproven of one's called Blue crew of the others called Vivian it used to be called <unk> change the name of the <unk>.
They are the the concept of both of those businesses is that matching employer's with employees.
Is a thing that can be done meaningfully better with software overtime and that in a number of categories qualifications for a job or binary and so the historic tools for that resumes and lists and interviews and things like that are much.
Basically.
Not that valuable and what would be more valuable is software and data so somebody's ability to show up the ability to show up on time ability to with the box or lift of certain wage for operating a certain machine or things like that.
Where qualifications are binary or the qualifications can be taught within 20 minutes or something like that and in those things. We think that software is better and we're certain itself were as bad as of every customer. We go to now in the business is.
When they start using our solution they love using our solution and they immediately can recognize the difference between our solution and what it just the previously on the market and that's the leading to very high growth rates in those businesses.
Yeah, I'd say, it's not proven as of business, yet because it's still expensive for us to deliver that product and we're still <unk> net negative investing in those both of those businesses and as both in terms of fixed costs and in N E.
The the sort of contribution margin you could argue in either of them is probably positive, but there's scenarios, where where it could be negative and so.
Where now we don't need to continue to scale of those business and deliver those businesses and.
<unk> H N I multi hundred billion dollar categories with incumbents that I think leave plenty of room for for new competition and we're seeing also that the some other players are now getting funding in there. We've heard we know 1 just raised a lot of money.
Day of the big valuation and we know another 1 is trying to raise money a lot of money at a big day <unk> sorry, 3 of them I can think of now which I think is fantastic for the category cause that's more people out there educating the customer on what's possible that 4 people out there pushing the the limits of innovation and challenging each other on innovation.
I think that's very good and and and we're pretty excited about that but again, the they're very small businesses today with with lots of prove in N.
That's an important place for us to be for us to be playing the other thing and they're in emerging out of that I'll mention.
Is what we call Newco, which is our new incubator and we're building new businesses. There. We've got 2 businesses that are real ish media. We've now got a product that's out on the market that's being tested and we've got we're we're going to continue to build more and as of this before but I think we're going to focus that from here.
On business is that use the blockchain to to build the the customer experience when we the the work we've done around blockchain is very clear that it's going to transform many categories just make it more efficient the operator or or interact with.
With different sides of of marketplace and and would therefore really excited about investing in those things that we think about the last incubator. We had was focused on mobile when mobile apps became of thing that we we launched an incubator very early on that called <unk>, which was entirely focused on building mobile apps and that's where.
The tender came out of and I think we're gonna focus new Oh on the blog chain and we'll see what comes out of there are first of business isn't nothing to do with the black team, but they're pretty interesting and who will <unk> will.
We'll continue the end of it your other question was Investopedia.
I think in terms of there's 4 big segments of that the <expletive> finance.
Health lifestyle, and beauty finance health of lifestyle or all of roughly equivalent and beauties of little bit smaller then then the other 3 they are they're all important categories. I think it's true what you said of Investopedia I think this is true of others too is we do have the ability to go deeper and we do have.
The ability to big build build wheel business is benefiting from some of the trends of people trying to find information. So. The example, you haven't invested P of retail investors and some of the momentum beyond retail investors. I think is really important and has been fantastic for investopedia for sure and I think that they're of similar trends that we can point to around beauty for example, and.
And people taking control of their beauty and the the the slicing beauty into smart narrower and narrower.
Products to serve different customers I think it's something that that we benefit from in terms of being able to leverage Influencers I think there's something there that we benefit from and each 1 of these categories. We absolutely can go deeper we absolutely can deliver we can deliver products of the customer that that gives them exactly the information that they're looking for.
And deliver advertising surrounding that that is very very qualified for the for the advertised the delivered the customer is very very qualified for the advertising.
Our next question will be from Justin Patterson of Keybanc.
Great. Thank you 1 for Joey on 1 floor, Oh, Shane Joey Uncared off the it's been a unique period with some tailwind senator of fries and some headwinds elsewhere. How should we think about just what normal growth should look like going forward as well as the investment level of the sport.
The <unk> I wanted to tackle the angi rebrand from a different angle. The pros perspective, how are they reacting to the new brand. What's traffic adversely affected are you insuring that we don't have a new capacity problem form. Thank you.
Thanks, <unk>, you're you're right. It was the <unk> you need to turn the care of as a tailwind brand of your fries and headwind for for.
Consumer and I think that the the consumer is now coming back we can see that very clearly again latest until the date of May change all of that but we can see very clearly records on the daily records on subscribers new subscribers at care the.
The in terms of investment the business is profitable today I think it will be profitable for.
Awhile forever.
Hard to say forever, because maybe there's an opportunity but it is uhm right now I think the the level of investment necessary in that business to do the things that we want to do allows us to maintain profitability. There in terms of the growth rate I I don't know Mark you Wanna.
Take that 1 sure yeah like I think we are again work where early with our ownership of of this business of the old in her about a year, we think the the Tam here is.
It's 300 billion, it's the penetration is less than 1%. So we think there's a long runway here you know you look at other marketplace businesses, you know north of North of 20, Uhm like that that is a potentially of longterm number here nowhere nowhere near where we wanna be in terms of our penetration and product and an investment. So we've got a long way.
[noise] to go but we think and we've said the this is a Pam that is growing and the opportunity here could longer term be as big as as what we think we have with Angie, but we've got a lot of work to do to get there. So it it's a little hard to to to give longterm revenue in longterm margin given our earlier stage, but you look at other marketplace business. If you can get the sense.
I can yeah of ashamed I'm gonna hit the sure 3 branch so just to to talk about the re random froze. We started the rebrand by moving and G. S list angi for both add pros and and useless customers more recent.
Lee in the last month and a half we flipped over home advisor to read his angi leads for pro so the the the the pros now are either angi add customers are angi lead customers. The there's a few things going on there 1 is the pro sentiment towards the <unk>.
G is better than the pro sentiment towards from advisor. So that's the net when right out of the gate, where pros B L. A they feel better about the angi brands on the home advisor brand in terms of the their their association with the brand. The second is we've got overlap of customers, who are angi add pros and.
Angie lead prose for the for the first time, we've invested in having a dedicated point of contact for those pros. So they know each of a single point of contact to help the manage the accounts on on both ads and leaves which is no. It sounds obvious but is is is the step forward for them. So they they go to 1 place and they got questions concerns and.
And then the third is the third opportunity I I'd say is we've obviously got different sales forces selling those different products and how we think about being more integrated on on that is is is a pretty significant opportunities. There's there's a lot of product work to go on to make it happen.
Where today you still you still do have 2 distinct accounts 2 different sets of of customers that come to you or at least the come to you through those accounts, but I I think now that we've we got him under the same name effectively there's a pretty big opportunity to integrate those more tightly before we take on the next.
Phase, which would be getting those same prose access to angi services jobs in the future as well. So you know I I think we're we're on a path here. It's it's clear, we're making incremental steps of to me I I feel very impatiens on any given day or week or month that were or were not.
Not moving fast enough to to get to a place where where we've got it all in in the in a single place where all our pros can access all of our products of the single location, but I know that I I I know of the team's doing phenomenal work to pull that together and you know the fact that we rebranded at a at a pretty fast clip on the on the pro side of.
On ads and leads just speaks to our commitment to do this we know what's the right thing to do we know what's gonna ultimately lead to better R. O Y for our pros and of better experience overall, so I think we're we're we're getting through the the the pro rebranded I think there's a bunch of upside and as you know S. P return.
<unk> is a a significant lever for the business and if we move that through a combination of better better pricing better brand connection and ultimately a better product as well. So there are things we're doing below the surface to actually make the product and the experience better for the pros as we move on to this new brand, we can see we could see upcycle.
Alright, our next question will be from Brian Fitzgerald at Wells Fargo.
Thanks, guys, maybe 2 quick ones with respect to the rebranding effort maybe from an S. M. S. U perspective, as we reopen there's been heightened demand for kind of bottom of funnel perform an AD 4 match to get ahead of that resurgent consumer spent it sounds like you may be seen this kind of of <unk> dot dash 2.
What was that impacting the speed or the efficacy with which you guys roll out of your kind of exercise rebrand playbook.
And then second 1 of them is just on key 50% of new customers shopping in giving a discount on the first job. That's that's a great.
Deal, what's the impact that's having on repeat rates and how Ah repeat rates performing versus what you thought they would going into the the key rollout.
Yeah, I'll I'll I'll take I'll take the key and work work work backwards from there, perhaps Joey can chime in on the the the S. U M part as well so just the hit the key part we released the the data and a number of different segments. So we we compare it to service requests someone who just of services someone who does services as.
The key member and then G member with the with the App. The starts of services, we're continuing to roll that out obviously at 140000 members now we we released the the date of the the first time in the last letter that that show the significant outperformance, it's it's degraded slightly but it is still in.
Credibly strong in terms of the the the gap between service requests service requests S service request customer of someone who was at the at the opposite end of the spectrum. So it is a 3 ex delta. So if you think about the the person who downloads the mobile app engages with uhm engages with N G T and has a booking.
That's the 3 ex Delta, which is really really strong and we're excited to continue to roll that out and get to get the scale on that and again I I think it's super early on key it's Super early in terms of in terms of like the value profit still pay this a I think I alluded to some of the things early on the week.
Take on with the <unk>, but it really should be the beginning of of relationship with with the the homeowner around how we help the manage the home of the fact that they've invested in us by buying the key membership should give us confidence to go on invest in them and get to know their home and think about what other things you can do in terms of.
In terms of F E M. A N N S. L. I think we're seeing more volatility in terms of algorithm updates on S. C O, which is definitely have an impact in terms of how people are thinking about the and and how their how other how they're buying an S. M. The biggest thing is you know that we're we're seeing as as we <unk>.
Taken dollars out of out of home advisor T V brand, what we've seen on the what we've seen in terms of click through rates as as change what we've done as we we decided to push further into the angi brand.
I'm not sure I totally.
Understand the question on F. C M, but part of it was did did any of this impact the timing of when we chose the role of things out of the answer is no although.
We did you it is convenient that a time when we were at risk of of reducing our demand funnel, meaning in the brand change in the domain change producing a brand file that that was a convenient time to do it on account of there being left.
Supply available given the supply of crunch in the market. So it would be less impactful on the business overall that was 1 factor of the other thing, which I again, it's maybe your question may not be but I think in general when we look at S. E M and we look at the way that the market is and the the market share of.
Search.
I think it is safe to assume generally that the cost of S. M. In all categories for all businesses continues to go out of overtime because that's the way. It works when you have that kind of market share concentrated I think that's not.
It's not ideal for the world, but I do think that debt add that happens what you see happening is the price. It goes up that gets passed through the constituents that play in the search.
In the search marketplaces, and then that ultimately gets passed through to the customer and that's the reality of of.
Of that world.
Yep.
Thanks, guys. That's the Joy that's exactly what I saw the 4 appreciate okay. Thanks Bye.
So I think we of time for for 1 more quick 1 so let's go to Nick Jones from city.
Great. Thanks for taking the question I guess, just 1 is you know the call.
At a bit of confusion around what the what the impact of the Delta <unk> is going to be in and out how are you thinking about the risks kind of going into the the rest of the year. If other people kind of pullback from letting people and other home.
And maybe the second on not Angi Kid this get more point of just driving more proactive request in in its early day. Thanks.
<unk>.
Yeah. So as you pointed out of I think it's really hard to really hard to predict what's gonna happen with the Delta variance Uhm what we've.
Observed thus far is when people are in their homes, they lean into spending more on their homes and it has been a huge boon for for for the the service of side of that business I think as <unk> as we all observed at its leftist challenged on the supply side, but I I.
Think there's no.
Hope that the whole hope that we'll see continued.
Hope hope that we will see has come out of this this huge and balance of supply and demand over the next over the next few quarters in terms of the <unk>. Yeah. We we we are seeing we are seeing increased both bookings and service request on an incremental basis from the users who become Angie.
T remember so they both <unk> they both create more bookings so for angi services and the submit more service request overall and again that's amplified further when we when we when we get those users to download get those homeowners to download the mobile App, which is a really important driver for us are really important push for us as we think of that.
The rest of the year and as we think about 22, we're really thinking about how to how to make sure we get more <unk> more of our homeowners into that segment of key members, who have our mobile app.
Alright, we've run over time here really appreciate everyone's spending their morning, with us and look forward to talking to the next border. So on.