Shares of ANGI Homeservices (NASDAQ:ANGI) were climbing today after the home-services marketplace topped bottom-line estimates in its first-quarter results and expressed optimism about the recovery. Management said Americans were beginning to spend on home improvement again after a sharp decline when the pandemic first started.
The stock was up 9.4% as of 12:23 p.m. EDT.
ANGI said revenue rose 13% in the quarter to $343.6 million as growth in January and February was up 19% and 21%, respectively, but then decelerated to just 1% in March as shutdowns rolled through the country. That result was short of estimates of $348.2 million. Adjusted EBITDA slipped 7% to $34.4 million as its European business was hit especially hard, and the company posted a loss of $0.02 per share compared to a $0.02 per-share profit, but the loss was still a penny better than estimates.
Headwinds persisted into April with sales down 2% last month, but CEO Brandon Ridenour said that sales were trending positive by the end of the month in all of its categories except for indoor discretionary services, such as cleaning, which he attributed to fears about COVID-19. As lockdown orders lift, Ridenour was optimistic that demand for home services would continue to recover.
Historically, ANGI Homeservices has had a shortage of service providers on its platform, but the shock of the pandemic led to a surge in engagement from service providers. This includes provider growth on both its marketplace business (5% growth) led by HomeAdvisor, and its advertising business, consisting of Angie's List, which grew 4%. That increase in interest should help the business as demand recovers.
The company has pulled back on marketing and other costs and is being mindful on spending given the uncertainty in the market, but the recovery in recent weeks and its strength with service providers seems to have reassured investors that the company can get past the crisis.