Oisin Hanrahan, Angi CEO joins Yahoo Finance's Brian Sozzi and the Yahoo Finance Live panel to discuss the company's recent earnings report.
BRIAN CHEUNG: Another earnings load for you. I want to highlight Angi, again, the merged entity of Angi's List and Home Advisor. You've probably used it if you had to look for a handy person to do work on the house. Shares are down over 4% after they reported earnings. Earnings clocking in at $461.6 million for the quarter for a loss of $0.03 on the bottom line.
So for more on this conversation, let's bring in the CEO of that company, Oisin Hanrahan, who is the CEO over there. It's great to have you on the program. We also want to join in Yahoo Finance's Brian Sozzi, who's been covering this space as well. And Oisin, a lot of drivers for your business. I imagine there's been a lot of stories about the hot housing market, right? People doing a lot of work also at home through the pandemic, just because they were bored. Did you see those catalysts sticking around in the third quarter?
OISIN HANRAHAN: Yes, so we got a lot going on. I'm very happy with how the quarter closed out, up 18% year on year. And the real interesting thing going on there, exactly as you pointed out, there's real still pent-up consumer demand. So we got two businesses. We've got our ads and leads business, where we've got a lot of pros. It's still a full order books. That business obviously definitely impacted by the pandemic.
And then we've got our Angi Services business, where we deliver that service directly to the homeowner, where that business is up 160% year on year to $117 million for the quarter. That's a really strong growth that we're seeing out of that business. And what we continue to expect is more and more people turning to Angi Services as they need to get work done inside their home and we expect that trend to really continue.
As you think about the other things going on inside earnings, we really invest in the homeowner experience, really invest in the pro experience, to make sure that they have access to payments, access to financing, and more recently, access to Angi's key membership program as well. So they can get the best value when they're taking care of their home.
BRIAN SOZZI: Are you able to measure the impact in the quarter from labor shortages and even material shortages for those folks on the platform?
OISIN HANRAHAN: Yeah, so there is a real impact, particularly in our ads and leads business, where pros are definitely affected by all the things we've read about. And we've heard about the supply shortages, ports being clogged up, particularly in California. That affects tools. It affects materials. It affects supplies. And then the other shortage that's impacting people is the labor shortage. So the fact that the vast majority of our pros are struggling to hire more people to grow their businesses.
And the surprising part of all that is despite everything going on there, we've got 160% growth in our Angi Services business. It just speaks to the amazing product market fit that we can add so much pro capacity in that business, despite all the shortages that we've got, despite everything going on. It's just an incredible testament to the team and to the product market fit of Angi Services that it can continue to grow at more than double year over year when we're in the midst of this particularly challenging time, obviously, around labor shortages and actual supply shortages as well.
BRIAN CHEUNG: Can you give us a view of what segments are particularly hot right now, at least as of the third quarter or maybe leading into the next quarter? You do have that roofing business that you acquired in July. Is that pretty hot right now? I mean, obviously, there's handymen. There's plumbers. There's all different types of services available on the platform. But what right now is truly hot?
OISIN HANRAHAN: Yeah, so roofing is definitely an important category for us. Roofing's a $50 billion category in the US. We have two million service requests a year come through Angi for roofing, $10,000 order price. And we're really excited about the growth we're seeing in roofing. We launched three new markets for our roofing business in Q3. We'll launch two more new markets in Q4. And I expect early next year, you'll see us play off that confidence that we hope to gain in Q4 and launch a bunch more markets in roofing. So roofing is definitely an important category.
And then you've got a bunch of seasonal stuff going on. So as people think about the holidays, they're definitely getting their homes ready, getting rooms painted, getting things completed for the holidays. And there's the classic of holiday lights which, you know, doesn't sound like a big business. But there will be a lot of people this year who will be staying at home and really entertaining for the first time in a while in their home and really want to invest in having a very special experience in their home. So we expect to see very significant business in holiday Christmas lights this year as well. So all of that is the seasonal stuff.
And then you got to remember about 60 plus percent of our tasks, the things we service in people's homes, they're essential tasks. So it's just affected by the more people stay at home, and we do see reports that say more and more people are just spending ever more time at home, even though their offices have reopened. And that just puts pressure on the home. So it's essential tasks like HVAC, maintenance plumbing, electrical, and all the things that just go into keeping a home running every single day. The more time you spend at home, the more stuff is going to break.
BRIAN SOZZI: Yeah, that much is for sure. I've broken a lot of stuff over the past year and a half. Zillow said this week, they're selling billions in dollars worth of homes as they pivot their model. Is that a tailwind for your business in any way?
OISIN HANRAHAN: Look, as we think about the drivers of people spending on their home, it's just the raw spend ability. So health of the consumer is definitely a driver in terms of how much people are spending on their home. Second is home size. So one of the trends we've seen in the pandemic is people buying bigger and people living further away.
So those two things go hand in hand. So people are definitely living in more square feet than before as they think about almost this transition of having some of their workspace be at home means that they've got to have more space at home. So it's almost like this quasi commercial space for your home office that you've built inside your residential space that you're taking care of as a homeowner. So that trend is super interesting and very important.
And then the other thing is that the shortage in the supply chains, the shortage in the housing stock has pushed people into older homes. So this trend towards buying bigger, further away, and older is all linked to people needing to invest in the core infrastructure of their home. Typically, first-time buyers buy starter homes. Because that inventory has been so tight, we've seen first-time buyers buy more homes that need more work.
And older homes where they thought they were buying into, a home that might just need cosmetic work, it actually needs infrastructure work. So the core utilities of water, electricity, sewage, gas, all might need core work done in the home. So those are the three big things that we see. It's bigger, it's older, it's further away. And that's driving an increase in demand for home services.
BRIAN CHEUNG: Yeah, and all those first-time homeowners are going to be also more likely to probably want to seek help when they do some of those repairs and changes. But Oisin Hanrahan, Angi CEO, thanks again for breaking down your earnings on our show today. We'll have you on again soon.