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Well, it's sort of like hitting your finger with a hammer. We've all done that. It really hurts. And I'm just pointing this out because we did see shares of Angie dropping thirty five percent last Wednesday following its latest earnings release, after the online portal for home improvement reported first quarter revenue that missed expectations. They also plan to stop issuing quarterly guidance, and outliner outlined a major strategic pivot to
refocus on AI. I do want to be fair. Though the stock did bounce back the following two days after the earning share price drop, getting about twenty one percent in that bounce back. Stock is down though another twelve percent in today's session. It's about a two hundred and seven million dollar market cap stock. It is down tim about sixty percent year to date.
After that intro, I'm gonna.
Let you, yeah, Jeff, if you want to come in, we do welcome you back. We like talking to you. We think it's an interesting platform, tells us a lot of small business owners, talks to us about the consumer and about kind of the home market, and then so much more. Jeffkip is the CEO of Angie. He joins us from Gohaset, Massachusetts. You guys have a lot going on, Jeff, since we talked with you in mid February, got changes to your CFO and COO that happened in March and April.
What's what happened that you guys said? We got to do something different.
So we have been working on the same technologies at Home Advisor for over twenty years from the Angie's List and handy businesses a little less, but we've had three old platforms we've been working on. The older your technology gets, the more code is layered on top of other code slows you down, makes innovation harder, and we have been plotting a path to a new platform, but we have just decided now's the time we needed to move quicker.
The big catalysts are what I would call the biggest changes in technology and a generation, which we really saw February when you saw things like open Claw claud Opus zero point six released. And now our engineers are able to move a lot faster and the capabilities we have are a lot greater, and it's time for us to stop fighting the old platform and kind of move into the present, if you will.
So what does that look like? Not just from you know, this is a two sided market, So what does it look like from the provider and the home services professional standpoint, but also from the customer standpoint?
So if you think about the homeowner customer, I think we are going to be able to have a more nuanced, more natural language conversation with the homeowner. Homeowners are not natural experts at describing their problems that they need pros to work on, and we're going to be able to ask better questions, upload photos, and get to a better identification of the details that need work, give the homeowner better estimates. So we'll be going there over the course
of the next year. The first stage of our new platform is to put the homeowner experience into place over the course of this year.
On the pro side, we're going to.
Build a set of tools for the pro We refer to it in our release and our letter as the Angie Pro Chief Revenue Officer. Pros are very good at doing work. They're not always good at calling the homeowner right away. They're not always good at making sure there's a sales trained technician or a salesperson at the appointment they're not always good at following up. They're juggling a lot of balls in the air. We believe that agents really change the game for pros. You can already see
it out there. There's startups out there doing pieces of this. We believe we can build a toolkit to make sure that our pros win jobs at a much higher rate, gets more value from the platform. And then if our pros are winning, the homeowners are getting more value from the platform too because their jobs are getting done well by our pros.
So what are the changes that happen internally at Angie to facilitate something like this, and what can investors understand about how this changes margins, what it looks like for the business, and where they actually see differences.
So internally, we need to change the way our teams work and the way they code.
What Cloude Opus.
Four point six did, and you can read about all over the place, is that now you can not only write code, but you can write more code and you can check code using AI. Now you still have to have engineers who understand systems, understand the business, and understand the ultimate product. They also need to understand how to test and spot issues in the code. But there's really a game changer there that it's going to allow our organization.
To move much quicker.
One piece of what we're doing is we were midstream on building our homeowner experience afresh. We're now writing some of that with AI. But we're going to rebuild our entire pro back end much faster using AI, so effectively, our teams are going to move to AI first coding. So we're going through a really material transition with our product technology, UX and data teams to make sure that we can do this effectively. But we think it's going to double our speed to market.
You know, if some analysts are out with different views, I'm just going to read from Benchmark's note. They say we have no idea how much this is going to cost and over what timeframe we should expect to return on investment. What would you say to Benchmark?
So Dan is a great guy, very very smart guy. I think that we are going to fund it effectively internally. In other words, we're not going to add headcount. We are probably going to add some token and AI software costs, but not massive, So.
We're going to fund it internally. I think what we're really talking about is.
Opportunity costs where the reason we decided to pull our guidance is instead of working away at our old platform to optimize revenue and deliver product changes that deliver revenue, which ultimately are hard to do on the old code, we are going to go fast forward to the new platform and be able to develop from there. We've estimated it's going to take us a year or so to get to the new platform, and in that time we're also going to start building our first pro agents, which
we don't plan to monetize. We plan for it to improve the experience of our pros and maybe ultimately will monetize it if they want to use it for other leads from other platforms. But effectively, what we said is we're not going to talk to you about where our revenue is going for a year. We gave some very rough directional comments and so that's really going to be the cast.
Hey, one of the things well, and also in that note from Benchmark that we also got, Jeff, he said, but b U, given the out of the blue nature of the new game plan, we suspect investors are simply going to assume that Angie's core business model just is not working. The strategy could work out, but a lot of questions have to be answered for investors to get even remotely comfortable. Is that the case that the core
business model was not working? And I bring up to the decline in revenue fifty six percent drop in network revenue related to the implementation of Homeowner Choice last year as a practice of letting homeowners on the platform select which professionals they match with. Was it a strategy mistake? And was the is the core busines is not working? Because is this just a case that creative Yeah, the.
Core business is working quite well. Fundamentally.
If you look at Angie over the last few years, we've gone from one point five billion to roughly a billion in revenue in the last few years. Most of that is giving up less profitable and lower quality revenue. So we've actually made a decision to move off what you might have termed an inflated model, bring it down so that the quality of the experience is much better for the homeowner and for the pro You can see that our NPS has moved thirty points over three years.
That is a cataclysmic change in the world of NPS. Our pro churt has come down thirty percent. We see that our win rate for pros has moved directionally about the same amount in terms of improvement, so we've dramatically changed the experience. We had a bit of an over built revenue base, but we've pivoted and we still have the strongest brand, the best acquisition machine, and the largest pro network of anybody in our space.
And we are spinning the flywheel as we go through this.
Jeff, real quickly, twenty seconds. How long is this going to take to kind of play have an impact? Positively? Much more positively? Real quickly.
We think we need a year.
To get our new platform in place and build out the first set of agents, but we think we should start seeing good moves by the end of this year and start accelerating our revenue in twenty twenty seven.
Well, we look forward to continue the conversation with you as you guys evolve. Jeff Kip here's the CEO of Angie, joining us right here on Bloomberg Business Week. Deli