Angi Inc. (ANGI): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at Angi Inc. right now, and honestly, the picture is complex: the company is navigating a brutal strategic pivot-the full rollout of its homeowner choice model in January 2025-which has clearly hit the top line, evidenced by a 10% year-over-year revenue drop to $265.6 million in Q3 2025, and a 17% contraction in its service professional base to 131,000 active pros. Still, as a seasoned analyst, I see the flip side: this aggressive pruning within the massive $0.87 trillion US home services market has led to a 179% surge in operating income, showing management is finally getting a handle on costs post-spin-off from IAC on March 31, 2025. To truly understand where Angi Inc. stands against rivals like Thumbtack and the threat of DIY, we need to break down the raw competitive pressure points using Porter's Five Forces framework below.

Angi Inc. (ANGI) - Porter's Five Forces: Bargaining power of suppliers

The bargaining power of suppliers, in Angi Inc.'s case, rests with the service professionals on its platform. This power is generally kept in check by the sheer scale of the marketplace, though recent strategic shifts are altering the balance for the remaining active professionals.

The large network of over 250,000 service professionals listed on Angi Inc. as of 2024 inherently limits the leverage of any single professional. This scale provides Angi Inc. with significant optionality in sourcing talent. However, the company's 2025 strategy has focused on quality over quantity, which concentrates power among the remaining, higher-value professionals.

Switching costs for professionals who can list on multiple competing platforms are low, meaning the threat of them leaving for a competitor's platform is a constant pressure point for Angi Inc.'s terms and pricing structure.

Angi Inc.'s average commission rate was reported at 15.7% in 2023, which established a baseline for the revenue stream the company derives from supplier activity. More recently, the value captured per supplier interaction has been rising, with Revenue per Lead increasing 11% year-over-year in Q3 2025.

The deliberate reduction in professional acquisition has directly impacted the total pool, which slightly elevates the relative power of those who remain active and engaged. The trend is clear when looking at the trailing twelve-month figures:

The outline point regarding the Average Monthly Active Pros decreasing 14% year-over-year to 139,000 by Q2 2025, driven by lower Pro acquisition, suggests that the remaining active pros hold slightly more leverage due to reduced overall capacity.

The focus on quality over volume is evident in the acquisition metrics:

• Acquired Pros in Q2 2025 were down 39% year-over-year.
• Aggregate Pro lifetime value sold in Q2 2025 was down only 4% year-over-year.
• Pro win rates on the core platform were up over 20% into June 2025.
• Average Monthly Churn for the TTM ended Q3 2025 was 5.9%, a 7% reduction from the prior year's 6.4%.

Angi Inc. (ANGI) - Porter's Five Forces: Bargaining power of customers

The bargaining power of homeowners remains significant, primarily due to the ease of moving between options, though Angi Inc. has strategically shifted power dynamics within its own ecosystem.

The full implementation of the 'homeowner choice' model in January 2025 directly increased buyer control by requiring homeowners on Network Channels to select their professional, rather than relying on automated matching. This shift resulted in a severe contraction of the legacy channel volume. For the third quarter of 2025, Network Channel Service Requests fell by 67% year-over-year, and Network Channel Leads plunged by 81% compared to the prior year period. Even in the second quarter of 2025, Network Channel Service Requests were down 59% year-over-year, with Network Channel Leads declining by 76%.

Conversely, this change empowered customers within Angi Inc.'s proprietary channels. Proprietary Service Requests increased by 7% year-over-year in Q2 2025, and Proprietary Leads saw a 16% increase over the same period. This focus on a better experience is reflected in customer sentiment; Angi Inc.'s Net Promoter Score climbed over 30 points in the two years leading up to the first quarter of 2025. Furthermore, the likelihood of professionals getting hired, a direct measure of job conversion, saw pro win rates up 10% over the period leading up to Q2 2025.

The sheer volume of demand highlights the customer base's importance. In the first quarter of 2025, Angi Inc. recorded total Service Requests of 3,361 thousand. This volume, even with the strategic shift, underscores the large, engaged customer base that dictates market activity.

The structural reality of low switching costs for homeowners moving to rival platforms or traditional methods is evidenced by the massive year-over-year drop in Network Channel volume following the January 2025 platform change. The ability for customers to compare costs across platforms remains a constant pressure point, even if specific comparison data is not publicly quantified by Angi Inc.

Here is a summary of the operational shifts reflecting customer control:

• Proprietary Service Requests (Q3 2025 YoY growth): 11%
• Network Channel Leads (Q3 2025 YoY decline): 81%
• Homeowner NPS improvement (2 years leading to Q1 2025): Over 30 points
• Total Service Requests (Q1 2025, in thousands): 3,361

The shift in control is also visible in the professional side's response. The aggregate pro lifetime value sold by the salesforce, net of acquisition cost, grew more than +300% year-over-year in Q2 2025, even as newly acquired pro volume was down (39)%. This suggests professionals are being acquired at a higher perceived value to serve the more discerning, higher-control homeowner base.

Finance: draft 13-week cash view by Friday.

Angi Inc. (ANGI) - Porter's Five Forces: Competitive rivalry

You're looking at a battlefield, not a quiet marketplace, when you assess the competitive rivalry facing Angi Inc. The intensity here is high, driven by the sheer scale of the industry and the digital nature of the platforms.

The home services market itself is massive, setting the stage for fierce competition. Estimates for the US market size in 2025 hover around $0.87 trillion, though the segment serving single-family houses is pegged closer to $500.2 billion. Even using a more conservative range from early 2025, the market was estimated between $650 billion and $750 billion annually. This huge Total Addressable Market (TAM) attracts everyone from established giants to nimble, specialized players.

Angi Inc.'s recent financial performance clearly reflects this pressure. For the third quarter of 2025, Angi Inc. reported revenue of $265.6 million, which marked a 10% year-over-year decline. This top-line contraction is a direct signal of competitive dynamics eroding volume, defintely. This contrasts sharply with the performance of its own channels, showing where the pressure is most acute.

The platform competition is stark when you look at lead generation, which is the lifeblood of this business model. Angi Inc. has been losing market share in terms of app monthly active users (MAUs) to rivals like Thumbtack, which is reportedly gaining ground by offering more detailed professional profiles. Here's a look at the lead volume dynamics reported for Q3 2025, which illustrates the shift in platform engagement:

The data shows a clear internal struggle: the shift away from the legacy Network Channels is severe, while the Proprietary Channels are showing growth, though not enough to offset the overall revenue decline. This suggests that while Angi Inc. is attempting to steer users to its preferred model, competitors are successfully capturing users in the broader, more traditional lead-sharing space.

The competitive set is broad, forcing constant adaptation. You are competing against established platforms and specialized niche players simultaneously. This environment mandates continuous investment in service innovation and pricing strategy to maintain relevance. Key competitive factors include:

• Rivals like Thumbtack are noted for offering more detailed pro profiles.
• Angi Inc. must fight for visibility, as its leads are shared, unlike some newer models promising exclusivity.
• The pressure forces Angi Inc. to increase marketing spend, which impacts profitability metrics.
• Competitors include large entities and specialized players, leading to constant price and service innovation.

The market structure means that even when Angi Inc. improves internal efficiency-like reporting a 179% increase in operating income to $21.8 million in Q3 2025-the top-line revenue struggle persists due to external competitive forces.

Angi Inc. (ANGI) - Porter's Five Forces: Threat of substitutes

You're assessing competitive threats for Angi Inc. (ANGI), and the substitutes are definitely a major factor. These are not direct competitors offering the same platform model, but alternative ways customers solve their home service needs, which directly impacts demand for Angi Inc.'s services.

The most persistent substitute is the age-old method: personal recommendation. Traditional word-of-mouth referrals remain a dominant substitute, relied on by 64% of consumers in 2022. While digital proof is key now, that personal endorsement still carries weight, bypassing any platform fee structure entirely.

Also, consumers can simply decide to do the work themselves. The DIY home improvement market is a significant alternative, and projections for 2025 show its scale. One estimate places the market size at $920.91 billion in 2025, growing from $863.57 billion in 2024. Another projection estimated the market size at USD 0.98 trillion in 2025. This self-service route completely removes the need for a hired professional, substituting the entire service category.

The digital landscape offers substitutes that connect users directly to service providers without using a managed marketplace like Angi Inc. Local community platforms are a prime example. Nextdoor, for instance, has a base of over 100 million verified neighbors, and its Q2 2025 Platform Weekly Active Users (Platform WAU) stood at 21.8 million. These platforms facilitate direct, non-platform service recommendations, effectively creating a free referral network.

Furthermore, bypassing the platform for direct hiring is simple. Customers can use general search engines or established local business directories. Yelp, a major directory, recorded 120.33 million visits in October 2025. Historically, Yelp has attracted around 178 million unique visitors monthly across all platforms. This direct engagement with a listed contractor or business skips the lead-generation and service-matching functions that Angi Inc. provides.

Here's a quick look at the scale of these substitute channels as of the latest available data:

The threat is amplified by the nature of these substitutes:

• Word-of-mouth offers high trust with zero platform cost.
• DIY appeals to cost-conscious consumers and those seeking personalization.
• Community platforms like Nextdoor offer hyper-local, trusted recommendations.
• Direct directory use allows users to vet service providers independently.

What this estimate hides is the conversion rate from a substitute action (like a Nextdoor recommendation) to a completed job versus an Angi Inc. lead. Finance: draft 13-week cash view by Friday.

Angi Inc. (ANGI) - Porter's Five Forces: Threat of new entrants

You're looking at the threat of new players entering the home services marketplace, and honestly, it's a mixed bag. The initial hurdle for a basic digital matching platform can look deceptively low, but scaling up is where the real money-and risk-comes in.

Low initial capital is required to launch a basic digital matching platform. For a lean, service-based online operation in 2025, startup costs can be as low as $1,000. Even for a more professional service provider launch, the realistic middle ground for initial capital is often cited between $20,000-$50,000. To put that in perspective against the incumbents, Angi Inc.'s market capitalization as of November 26, 2025, stood at $495.37 million.

Significant barrier to entry is the capital needed for customer acquisition and building network effects. Competing on scale means matching massive marketing budgets. For instance, in Q2 2025, Angi Inc.'s Consumer Marketing expense consumed 35% of its revenue, a significant jump from 27% in Q2 2024. A new entrant would need substantial funding to sustain that level of spend just to get noticed. Furthermore, Angi Inc. maintains significant liquidity with $340.7 million in cash and cash equivalents as of September 30, 2025, against $500 million in Senior Notes due in 2028.

Angi Inc.'s established brand recognition and network of 139,000 Average Monthly Active Pros create a scale advantage, though the latest reported figure shows a slight contraction. As of the trailing twelve months ended Q3 2025, the Average Monthly Active Pros figure was 131,000. This network size, built over years, represents a massive installed base that new entrants must replicate. The sheer scale is a moat, even if the number is trending down slightly.

New entrants must overcome the challenge of vetting and ensuring quality for service professionals to build consumer trust. Trust is earned through performance, and Angi Inc. has metrics showing this focus. The rate at which homeowners hired an Angi pro after submitting a service request jumped 22% versus 2023. Also, the 6-month pro retention rate for a cohort improved to 18% cumulative retention after one year for Pros acquired in Q3 2023 - Q2 2024, up from 15% for the prior cohort. If you can't guarantee quality matches quickly, consumers will default to the known brand.

Here's a quick look at the capital disparity between a small service startup and the scale of the established player's operational costs:

The operational spending of Angi Inc. highlights the required investment to maintain market presence. You defintely need to factor in these ongoing costs when assessing competitive viability.

Consider these key efficiency and scale metrics from recent periods:

• Pro Acquisition expense as a percentage of revenue fell from 22% (Q2 2024) to 14% (Q2 2025).
• Revenue per Lead increased 11% year-over-year in Q3 2025.
• The LTV to CAC ratio for the salesforce improved by +41% in 2024 over 2023.
• Average Monthly Churn was 5.9% over the trailing twelve months ended Q3 2025.

Finance: draft 13-week cash view by Friday.