As filed with the Securities and Exchange Commission on ~~August 6, 2021~~May 10, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~June 30, 2021~~March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________

Commission File No. 001-38220

Angi Inc.

(Exact name of Registrant as specified in its charter)


Delaware						82-1204801
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3601 Walnut Street, Denver, CO 80205

(Address of Registrant’s principal executive offices)

(303) 963-7200

(Registrant’s telephone number, including area code)

~~(Former name or former address, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Class A Common Stock, par value $0.001

ANGI

The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 30, 2021,~~May 6, 2022, the following shares of the Registrant’s common stock were outstanding:


Class A Common Stock			~~82,217,972~~80,322,073
Class B Common Stock			~~421,977,004~~422,019,247
Class C Common Stock			0—
Total outstanding Common Stock			~~504,194,976~~502,341,320

TABLE OF CONTENTS


		Page Number
PART I
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of Shareholders’ Equity	6
	Consolidated Statement of Cash Flows	87
	Note 1—The Company and Summary of Significant Accounting Policies	98
	Note 2—Income Taxes	1110
	Note 3—Financial Instruments and Fair Value Measurements	1311
	Note 4—Long-term Debt	1513
	Note 5—Accumulated Other Comprehensive Income (Loss)	1513
	Note 6—(Loss) Earnings Per Share	1614
	Note 7—Segment Information	1715
	Note 8—Consolidated Financial Statement Details	2117
	Note 9—Contingencies	2219
	Note 10—Related Party Transactions with IAC	2320
	~~Note 11—Subsequent Events~~	23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2421
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4034
Item 4.	Controls and Procedures	4134
PART II
Item 1.	Legal Proceedings	4236
Item 1A.	Risk Factors	4236
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4437
Item 6.	Exhibits	4539
	Signatures	4640

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)
June 30, 2021 December 31, 2020
(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents $ 584,260 $ 812,705
Marketable debt securities 0 49,995
Accounts receivable, net of reserves of $35,862 and $27,839, respectively 62,052 43,148
Other current assets 67,787 71,958
Total current assets 714,099 977,806
Capitalized software, leasehold improvements and equipment, net 111,054 108,842
Goodwill 892,616 891,797
Intangible assets, net 201,166 209,717
Other non-current assets, net 187,793 180,020
TOTAL ASSETS $ 2,106,728 $ 2,368,182
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Accounts payable $ 53,230 $ 30,805
Deferred revenue 60,053 54,654
Accrued expenses and other current liabilities 178,629 148,219
Total current liabilities 291,912 233,678
Long-term debt, net 494,195 712,277
Deferred income taxes 1,662 1,296
Other long-term liabilities 104,998 111,710
Redeemable noncontrolling interests 4,536 26,364
Commitments and contingencies 0 0
SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 99,111 and 94,238 shares, respectively, and outstanding 82,731 and 78,333, respectively 99 94
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 421,977 and 421,862 shares issued and outstanding 422 422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; 0 shares issued and outstanding 0 0
Additional paid-in capital 1,338,208 1,379,469
(Accumulated deficit) retained earnings (18,613) 9,749
Accumulated other comprehensive income 5,973 4,637
Treasury stock, 16,380 and 15,905 shares, respectively (127,718) (122,081)
Total Angi Inc. shareholders’ equity 1,198,371 1,272,290
Noncontrolling interests 11,054 10,567
Total shareholders’ equity 1,209,425 1,282,857
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,106,728 $ 2,368,182


	March 31, 2022		December 31, 2021
	(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents	$	391,286	$	428,136

Accounts receivable, net of reserves of $37,813 and $36,360, respectively	100,043		84,387
Other current assets	67,646		70,548
Total current assets	558,975		583,071

Capitalized software, leasehold improvements and equipment, net	138,032		118,267
Goodwill	913,384		916,039
Intangible assets, net	189,819		193,826
Deferred income taxes	131,240		122,693
Other non-current assets, net	73,373		76,245
TOTAL ASSETS	$	2,004,823	$	2,010,141

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:

Accounts payable	$	56,558	$	38,860
Deferred revenue	55,255		53,834
Accrued expenses and other current liabilities	194,499		183,815
Total current liabilities	306,312		276,509

Long-term debt, net	494,730		494,552
Deferred income taxes	2,269		1,883
Other long-term liabilities	87,079		91,670



Commitments and contingencies	0		0

SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 100,425 and 99,745 shares, respectively, and outstanding 80,214 and 80,578, respectively	100		100
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 422,019 and 422,019 shares issued and outstanding	422		422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding	—		—
Additional paid-in capital	1,361,540		1,350,457
Accumulated deficit	(95,019)		(61,629)
Accumulated other comprehensive income	2,506		3,309
Treasury stock, 20,211 and 19,167 shares, respectively	(166,184)		(158,040)
Total Angi Inc. shareholders’ equity	1,103,365		1,134,619
Noncontrolling interests	11,068		10,908
Total shareholders’ equity	1,114,433		1,145,527
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,004,823	$	2,010,141

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands, except per share data)
Revenue $ 420,988 $ 375,061 $ 808,017 $ 718,711
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below) 69,704 41,042 123,532 74,271
Selling and marketing expense 239,031 189,984 444,871 379,943
General and administrative expense 107,486 85,451 195,648 180,007
Product development expense 18,752 15,407 36,799 32,491
Depreciation 15,058 12,555 31,027 24,693
Amortization of intangibles 3,688 12,978 8,762 25,958
Total operating costs and expenses 453,719 357,417 840,639 717,363
Operating (loss) income (32,731) 17,644 (32,622) 1,348
Interest expense (5,814) (1,620) (12,431) (3,894)
Other (expense) income, net (636) 212 (1,403) 633
(Loss) earnings before income taxes (39,181) 16,236 (46,456) (1,913)
Income tax benefit (provision) 9,129 (3,025) 18,418 5,940
Net (loss) earnings (30,052) 13,211 (28,038) 4,027
Net earnings attributable to noncontrolling interests (241) (544) (324) (318)
Net (loss) earnings attributable to Angi Inc. shareholders $ (30,293) $ 12,667 $ (28,362) $ 3,709
Per share information attributable to Angi Inc. shareholders:
Basic (loss) earnings per share $ (0.06) $ 0.03 $ (0.06) $ 0.01
Diluted (loss) earnings per share $ (0.06) $ 0.02 $ (0.06) $ 0.01
Stock-based compensation expense by function:
Selling and marketing expense $ 865 $ 720 $ 1,882 $ 1,723
General and administrative expense 7,410 13,131 7,494 36,111
Product development expense 1,268 908 2,201 2,500
Total stock-based compensation expense $ 9,543 $ 14,759 $ 11,577 $ 40,334


	Three Months Ended March 31,
	2022		2021
	(In thousands, except per share data)
Revenue	$	436,159	$	387,029
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	98,998		53,828
Selling and marketing expense	225,801		205,840
General and administrative expense	109,655		88,162
Product development expense	17,859		18,047
Depreciation	13,999		15,969
Amortization of intangibles	3,804		5,074
Total operating costs and expenses	470,116		386,920
Operating (loss) income	(33,957)		109
Interest expense	(5,022)		(6,617)
Other expense, net	(391)		(767)
Loss before income taxes	(39,370)		(7,275)
Income tax benefit	6,083		9,289
Net (loss) earnings	(33,287)		2,014
Net earnings attributable to noncontrolling interests	(103)		(83)
Net (loss) earnings attributable to Angi Inc. shareholders	$	(33,390)	$	1,931

Per share information attributable to Angi Inc. shareholders:
Basic (loss) earnings per share	$	(0.07)	$	0.00
Diluted (loss) earnings per share	$	(0.07)	$	0.00

Stock-based compensation expense by function:

Selling and marketing expense	$	1,239	$	1,017
General and administrative expense	9,635		84
Product development expense	2,111		933
Total stock-based compensation expense	$	12,985	$	2,034

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in thousands)									(in thousands)
Net (loss) earnings	Net (loss) earnings	$	(30,052)	$	13,211	$	(28,038)	$	4,027	Net (loss) earnings	$	(33,287)	$	2,014
Other comprehensive income (loss):
Other comprehensive (loss) income:										Other comprehensive (loss) income:
Change in foreign currency translation adjustment	Change in foreign currency translation adjustment	1,395		4,486		2,075		(2,082)		Change in foreign currency translation adjustment	(746)		679

Total other comprehensive (loss) income										Total other comprehensive (loss) income	(746)		679
Comprehensive (loss) income	Comprehensive (loss) income	(28,657)		17,697		(25,963)		1,945		Comprehensive (loss) income	(34,033)		2,693
Components of comprehensive (income) loss attributable to noncontrolling interests:
Components of comprehensive income attributable to noncontrolling interests:										Components of comprehensive income attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(241)		(544)		(324)		(318)		Net earnings attributable to noncontrolling interests	(103)		(83)
Change in foreign currency translation adjustment attributable to noncontrolling interests	Change in foreign currency translation adjustment attributable to noncontrolling interests	(45)		767		(739)		721		Change in foreign currency translation adjustment attributable to noncontrolling interests	(57)		(693)
Comprehensive (income) loss attributable to noncontrolling interests		(286)		223		(1,063)		403
Comprehensive income attributable to noncontrolling interests										Comprehensive income attributable to noncontrolling interests	(160)		(776)
Comprehensive (loss) income attributable to Angi Inc. shareholders	Comprehensive (loss) income attributable to Angi Inc. shareholders	$	(28,943)	$	17,920	$	(27,026)	$	2,348	Comprehensive (loss) income attributable to Angi Inc. shareholders	$	(34,193)	$	1,917

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021

(Unaudited)

Angi Inc. Shareholders’ Equity
Class A
Common Stock
$0.001
Par Value
Class B
Convertible Common Stock
$0.001
Par Value
Class C
Common Stock
$0.001
Par Value
Total Angi Inc. Shareholders' Equity
Accumulated Other Comprehensive Income Total
Shareholders'
Equity
Redeemable
Noncontrolling
Interests Additional Paid-in Capital (Accumulated Deficit) Retained Earnings Treasury
Stock Noncontrolling
Interests
$ Shares $ Shares $ Shares
(In thousands)
Balance as of March 31, 2021 $ 4,608 $ 98 98,408 $ 422 421,958 $ — — $ 1,333,294 $ 11,680 $ 4,623 $ (126,997) $ 1,223,120 $ 10,823 $ 1,233,943
Net earnings (loss) 48 — — — — — — — (30,293) — — (30,293) 194 (30,099)
Other comprehensive income 8 — — — — — — — — 1,350 — 1,350 37 1,387
Stock-based compensation expense — — — — — — — 11,477 — — — 11,477 — 11,477
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 1 697 — — — — (6,691) — — — (6,690) — (6,690)
Issuance of common stock to IAC pursuant to the employee matters agreement — — 6 — 19 — — — — — — — — —
Purchase of treasury stock — — — — — — — — — — (721) (721) — (721)
Adjustment of redeemable noncontrolling interests to fair value (128) — — — — — 128 — — — 128 — 128
Balance as of June 30, 2021 $ 4,536 $ 99 99,111 $ 422 421,977 $ — — $ 1,338,208 $ (18,613) $ 5,973 $ (127,718) $ 1,198,371 $ 11,054 $ 1,209,425
Balance as of December 31, 2020 $ 26,364 $ 94 94,238 $ 422 421,862 $ — — $ 1,379,469 $ 9,749 $ 4,637 $ (122,081) $ 1,272,290 $ 10,567 $ 1,282,857
Net (loss) earnings (12) — — — — — — — (28,362) — — (28,362) 336 (28,026)
Other comprehensive income 588 — — — — — — — — 1,336 — 1,336 151 1,487
Stock-based compensation expense — — — — — — — 14,019 — — — 14,019 — 14,019
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 2 2,288 — — — — (54,743) — — — (54,741) — (54,741)
Issuance of common stock to IAC pursuant to the employee matters agreement — 3 2,585 — 115 — — (3) — — — — — 0
Purchase of treasury stock — — — — — — — — — — (5,637) (5,637) — (5,637)
Purchase of redeemable noncontrolling interests (22,938) — — — — — — — — — — — — —
Adjustment of redeemable noncontrolling interests to fair value 534 — — — — — — (534) — — — (534) — (534)
Balance as of June 30, 2021 $ 4,536 $ 99 99,111 $ 422 421,977 $ — — $ 1,338,208 $ (18,613) $ 5,973 $ (127,718) $ 1,198,371 $ 11,054 $ 1,209,425

~~The accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~are an integral part of these statements.~~

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY~~

~~Three and Six Months Ended June 30, 2020~~

~~(Unaudited)~~

Angi Inc. Shareholders’ Equity
Class A
Common Stock
$0.001
Par Value
Class B
Convertible Common Stock
$0.001
Par Value
Class C
Common Stock
$0.001
Par Value
Total Angi Inc. Shareholders' Equity
Accumulated Other Comprehensive (Loss) Income Total Shareholders' Equity
Redeemable
Noncontrolling
Interests Additional Paid-in Capital Retained Earnings Treasury
Stock Noncontrolling
Interests
$ Shares $ Shares $ Shares
(In thousands)
Balance as of March 31, 2020 $ 23,813 $ 88 87,624 $ 422 421,757 $ — — $ 1,379,079 $ 7,074 $ (7,993) $ (96,920) $ 1,281,750 $ 9,260 $ 1,291,010
Net earnings 220 — — — — — — — 12,667 — — 12,667 324 12,991
Other comprehensive (loss) income (786) — — — — — — — — 5,253 — 5,253 19 5,272
Stock-based compensation expense — — — — — — — 18,607 — — — 18,607 — 18,607
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 1 1,452 — — — — (8,220) — — — (8,219) — (8,219)
Purchase of treasury stock — — — — — — — — — — (15,888) (15,888) — (15,888)
Adjustment of redeemable noncontrolling interests to fair value 1,846 — — — — — — (1,846) — — — (1,846) — (1,846)
Other — — — — — — — (2) — — — (2) 1 (1)
Balance as of June 30, 2020 $ 25,093 $ 89 89,076 $ 422 421,757 $ — — $ 1,387,618 $ 19,741 $ (2,740) $ (112,808) $ 1,292,322 $ 9,604 $ 1,301,926
Balance as of December 31, 2019 $ 26,663 $ 87 87,007 $ 422 421,570 $ — — $ 1,357,075 $ 16,032 $ (1,379) $ (57,949) $ 1,314,288 $ 9,264 $ 1,323,552
Net (loss) earnings (55) — — — — — — — 3,709 — — 3,709 373 4,082
Other comprehensive loss (687) — — — — — — — — (1,361) — (1,361) (34) (1,395)
Stock-based compensation expense 15 — — — — — — 40,818 — — — 40,818 — 40,818
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 2 2,069 — — — — (10,773) — — — (10,771) — (10,771)
Issuance of common stock to IAC pursuant to the employee matters agreement — — — — 187 — — (791) — — — (791) — (791)
Purchase of treasury stock — — — — — — — — — — (54,859) (54,859) — (54,859)
Purchase of redeemable noncontrolling interests (3,165) — — — — — — — — — — — — —
Adjustment of redeemable noncontrolling interests to fair value 2,322 — — — — — — (2,322) — — — (2,322) — (2,322)
Adjustment pursuant to the tax sharing agreement — — — — — — — 3,613 — — — 3,613 — 3,613
Other — — — — — — — (2) — — — (2) 1 (1)
Balance as of June 30, 2020 $ 25,093 $ 89 89,076 $ 422 421,757 $ — — $ 1,387,618 $ 19,741 $ (2,740) $ (112,808) $ 1,292,322 $ 9,604 $ 1,301,926

~~The accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~are an integral part of these statements.~~

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENT OF CASH FLOWS~~

~~(Unaudited)~~

Six Months Ended June 30,
2021 2020
(In thousands)
Cash flows from operating activities:
Net (loss) earnings $ (28,038) $ 4,027
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Provision for credit losses 42,731 39,338
Stock-based compensation expense 11,577 40,334
Depreciation 31,027 24,693
Amortization of intangibles 8,762 25,958
Deferred income taxes (20,344) (6,290)
Impairment of long-lived and right-of-use assets 12,280 188
Revenue reserves 4,667 4,070
Other adjustments, net 2,592 1,266
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable (63,192) (48,222)
Other assets 8,376 7,132
Accounts payable and other liabilities 43,199 35,930
Income taxes payable and receivable 315 (502)
Deferred revenue 5,301 (125)
Net cash provided by operating activities 59,253 127,797
Cash flows from investing activities:
Capital expenditures (35,713) (24,665)
Proceeds from maturities of marketable debt securities 50,000 0
Net proceeds from the sale of a business 750 731
Net cash provided by (used in) investing activities 15,037 (23,934)
Cash flows from financing activities:
Principal payments on Term Loan (220,000) (6,875)
Purchase of treasury stock (5,637) (54,400)
Withholding taxes paid on behalf of employees on net settled stock-based awards (54,596) (11,494)
Distribution from IAC pursuant to the tax sharing agreement 0 3,071
Purchase of noncontrolling interests (22,938) (3,165)
Net cash used in financing activities (303,171) (72,863)
Total cash (used) provided (228,881) 31,000
Effect of exchange rate changes on cash and cash equivalents and restricted cash 546 (702)
Net (decrease) increase in cash and cash equivalents and restricted cash (228,335) 30,298
Cash and cash equivalents and restricted cash at beginning of period 813,561 391,478
Cash and cash equivalents and restricted cash at end of period $ 585,226 $ 421,776



				Class A Common Stock $0.001 Par Value			Class B Convertible Common Stock $0.001 Par Value			Class C Common Stock $0.001 Par Value											Total Angi Inc. Shareholders' Equity

																	Accumulated Other Comprehensive Income								Total Shareholders' Equity
	Redeemable Noncontrolling Interests												Additional Paid-in Capital		(Accumulated Deficit) Retained Earnings				Treasury Stock				Noncontrolling Interests
				$		Shares	$		Shares	$		Shares
			(In thousands)
Balance as of December 31, 2021	$	—		$	100	99,745	$	422	422,019	$	—	—	$	1,350,457	$	(61,629)	$	3,309	$	(158,040)	$	1,134,619	$	10,908	$	1,145,527
Net (loss) earnings	—			—		—	—		—	—		—	—		(33,390)		—		—		(33,390)		103		(33,287)
Other comprehensive (loss) income	—			—		—	—		—	—		—	—		—		(803)		—		(803)		57		(746)
Stock-based compensation expense	—			—		—	—		—	—		—	13,556		—		—		—		13,556		—		13,556
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			—		681	—		—	—		—	(2,473)		—		—		—		(2,473)		—		(2,473)

Purchase of treasury stock	—			—		—	—		—	—		—	—		—		—		(8,144)		(8,144)		—		(8,144)




Balance as of March 31, 2022	$	—		$	100	100,426	$	422	422,019	$	—	—	$	1,361,540	$	(95,019)	$	2,506	$	(166,184)	$	1,103,365	$	11,068	$	1,114,433

Balance as of December 31, 2020	$	26,364		$	94	94,238	$	422	421,862	$	—	—	$	1,379,469	$	9,749	$	4,637	$	(122,081)	$	1,272,290	$	10,567	$	1,282,857
Net (loss) earnings	(60)			—		—	—		—	—		—	—		1,931		—		—		1,931		143		2,074
Other comprehensive income (loss)	580			—		—	—		—	—		—	—		—		(14)		—		(14)		113		99
Stock-based compensation expense	—			—		—	—		—	—		—	2,542		—		—		—		2,542		—		2,542
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1		1,591	—		—	—		—	(48,052)		—		—		—		(48,051)		—		(48,051)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			3		2,579	—		96	—		—	(3)		—		—		—		—		—		—
Purchase of treasury stock	—			—		—	—		—	—		—	—		—		—		(4,916)		(4,916)		—		(4,916)
Purchase of redeemable noncontrolling interests	(22,938)			—		—	—		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable noncontrolling interests to fair value	662			—		—	—		—	—		—	(662)		—		—		—		(662)		—		(662)


Balance as of March 31, 2021	$	4,608		$	98	98,408	$	422	421,958	$	—	—	$	1,333,294	$	11,680	$	4,623	$	(126,997)	$	1,223,120	$	10,823	$	1,233,943

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2022		2021
	(In thousands)
Cash flows from operating activities:
Net (loss) earnings	$	(33,287)	$	2,014
Adjustments to reconcile net (loss) earnings to net cash (used in) provided by operating activities:
Provision for credit losses	21,611		19,118
Stock-based compensation expense	12,985		2,034
Depreciation	13,999		15,969
Amortization of intangibles	3,804		5,074
Deferred income taxes	(8,133)		(10,268)

Impairment of long-lived and right-of-use assets	22		2,503
Non-cash lease expense	3,352		3,275
Revenue reserves	1,506		2,910
Other adjustments, net	(215)		1,586
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	(37,757)		(34,638)
Other assets	1,930		(2,702)
Accounts payable and other liabilities	20,601		8,804
Operating lease liabilities	(4,454)		(4,265)
Income taxes payable and receivable	1,909		938
Deferred revenue	1,392		2,993
Net cash (used in) provided by operating activities	(735)		15,345

Cash flows from investing activities:

Capital expenditures	(26,903)		(18,743)

Proceeds from maturities of marketable debt securities	—		50,000

Proceeds from sale of fixed assets	87		—

Net cash (used in) provided by investing activities	(26,816)		31,257

Cash flows from financing activities:

Principal payments on Term Loan	—		(6,875)


Purchase of treasury stock	(8,144)		(4,916)

Withholding taxes paid on behalf of employees on net settled stock-based awards	(1,322)		(48,168)

Purchase of noncontrolling interests	—		(22,938)

Net cash used in financing activities	(9,466)		(82,897)

Total cash used	(37,017)		(36,295)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(205)		384
Net decrease in cash and cash equivalents and restricted cash	(37,222)		(35,911)
Cash and cash equivalents and restricted cash at beginning of period	429,485		813,561
Cash and cash equivalents and restricted cash at end of period	$	392,263	$	777,650

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Angi Inc. ~~(the “Company”~~(“Angi,” the “Company,” “we,” “our,” or “us”)~~, formerly ANGI Homeservices Inc.,~~ connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. Over ~~260,000~~239,000 domestic service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended ~~June 30, 2021.~~March 31, 2022. Additionally, consumers turned to at least one of our brands to find a service professional for approximately 3432 million projects during the twelve months ended ~~June 30, 2021.~~March 31, 2022.

The Company has 2 operating ~~segments~~segments: (i) North America (United States and Canada), which includes Angi ~~(formerly Angie’s List),~~Ads, Angi Leads, and Angi Services; and (ii) Europe. In March 2021, the Company rebranded its North American brands which operate as follows: Angi Ads operates under the Angi brand, Angi Leads operates primarily under the HomeAdvisor, ~~Powered~~powered by Angi brand, and ~~Handy;~~Angi Services operates primarily under the Handy and ~~(ii) Europe, which includes Travaux, MyHammer, MyBuilder, Werkspot, and Instapro.~~

Angi Roofing brands.

As used herein, “Angi, ~~Inc.,~~” the “Company,” “we,” “our,” “us,” and similar terms refer to Angi Inc. and its subsidiaries (unless the context requires otherwise).

At ~~June 30, 2021,~~March 31, 2022, IAC/InterActiveCorp (“IAC”) owned ~~84.1%~~84.5% and ~~98.1%~~98.2% of the economic interest and voting interest, respectively, of the Company.

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances between and among the Company and its subsidiaries have been eliminated. All intercompany transactions between (i) Angi Inc. and (ii) IAC and its subsidiaries ~~with the exception of a promissory note payable to a foreign subsidiary of IAC,~~ are considered to be effectively settled for cash at the time the transaction is recorded. See “Note 10—Related Party Transactions with IAC” for additional information on transactions between Angi Inc. and IAC.

The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. For the purpose of these financial statements, income taxes have been computed on an as if ~~Angi Inc. filed tax returns on a~~ standalone, separate ~~tax~~ return basis.Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement between the Company and IAC and the current tax provision computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital and as financing activities within the statement of cash flows.

~~The accompanying~~In management's opinion, the unaudited interim consolidated financial statements have been prepared ~~in accordance with GAAP~~on the same basis as the annual consolidated financial statements and reflect all adjustments, consisting of normal and recurring adjustments, necessary for ~~interim financial information and with~~ the ~~rules and regulations~~fair presentation of the ~~Securities~~Company's consolidated financial position, consolidated results of operations and ~~Exchange Commission ("SEC"). Accordingly, they do not include all of~~consolidated cash flows for the information and notes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation.periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the ~~annual~~ audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

COVID-19 Update

The impact on the Company from the COVID-19 pandemic and the measures designed to contain its spread has been varied and volatile.

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2021 and, in late 2021 and early 2022, the Omicron variant surge. Moreover, many service professionals’ businesses have been and continue to be adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which continues to negatively impact our ability to monetize service requests. Although our ability to monetize service requests rebounded modestly in the second half of 2021 and first quarter of ~~2021,~~2022, we ~~are~~ still have not ~~back~~returned to levels we experienced pre-COVID-19. No assurances can be provided that we will continue to be able to improve monetization, or that service professionals’ businesses and, as a consequence, our revenue and profitability will not continue to be adversely impacted in the future.

The extent to which developments related to the COVID-19 pandemic and measures designed to curb its spread continue to impact the Company’s business, financial condition, and results of operations will depend on future developments, all of which are highly uncertain and many of which are beyond the Company’s control, including the continuing spread of COVID-19, the severity of resurgences of COVID-19 caused by variant strains of the virus, the effectiveness of vaccines and attitudes toward receiving them, materials and supply chain constraints, labor shortages, the scope of governmental and other restrictions on travel, discretionary services and other activity, and public reactions to these developments.

Accounting Estimates

Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments, and assumptions impact the reported amounts of assets, liabilities, revenue, and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

On an ongoing basis, the Company evaluates its estimates and judgments, including those related to: the fair values of cash equivalents and marketable debt securities; the carrying value of accounts receivable, including the determination of the allowance for credit losses and the determination of revenue reserves; the determination of the customer relationship period for certain costs to obtain a contract with a customer; the carrying value of right-of-use assets (“ROU assets”); the useful lives and recoverability of definite-lived intangible assets and capitalized software, leasehold improvements, and equipment; the recoverability of goodwill and indefinite-lived intangible assets; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets, and other factors that the Company considers relevant.

General Revenue Recognition

Revenue is recognized when control of the promised ~~services~~goods or ~~goods~~services is transferred to the Company’s customers and in the amount that reflects the consideration the Company expects to be entitled to in exchange for those ~~services~~goods or ~~goods.~~

services.

The ~~Company's~~Company’s disaggregated revenue disclosures are presented in “Note 7—Segment Information.”

Deferred Revenue

Deferred revenue consists of payments that are received or are contractually due in advance of the Company’s performance obligation. The Company’s deferred revenue is reported on a contract-by-contract basis at the end of each reporting period.The Company classifies deferred revenue as current when the remaining term of the applicable subscription period or expected completion of its performance obligation is one year or less. At December 31, 2021, the current and non-current deferred revenue balances were $53.8 million and $0.1 million, respectively, and during the three months ended March 31, 2022, the Company recognized $35.5 million of revenue that was included in the deferred revenue balance as of December 31, 2021. At December 31, 2020, the current and non-current deferred revenue balances were $54.7 million and $0.2 million, respectively, and during the ~~six~~three months ended ~~June 30,~~March 31, 2021, the Company recognized ~~$46.0~~$34.4 million of revenue that was included in the deferred revenue balance as of December 31, 2020. At December 31, 2019, the current and non-current deferred revenue balances were $58.2 million and $0.2 million, respectively, and during the six months ended June 30, 2020, the Company recognized $49.5 million of revenue that was included in the deferred revenue balance as of December 31, 2019.

The current and non-current deferred revenue balances at ~~June 30, 2021~~March 31, 2022 are ~~$60.1~~$55.3 million and $0.1 million, respectively. Non-current deferred revenue is included in “Other long-term liabilities” in the accompanying consolidated balance sheet.

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Practical Expedients and Exemptions

As permitted under the practical expedient available under ~~ASU No. 2014-09~~ Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a

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~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which the Company has the right to invoice for services performed.

Commissions Paid to Employees Pursuant to Sales Incentive Programs

The Company has determined that commissions paid to employees pursuant to certain sales incentive programs meet the requirements to be capitalized as the incremental costs to obtain a contract with a customer. When customer renewals are expected and the renewal commission is not commensurate with the initial commission, the average customer life includes renewal periods.Capitalized commissions paid to employees pursuant to these sales incentive programs are amortized over the estimated customer relationship period. The Company calculates the anticipated customer relationship period as the average customer life, which is based on historical data.

For sales incentive programs where the anticipated customer relationship period is one year or less, the Company has elected the practical expedient to expense the ~~costs~~commissions as incurred.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company uses a portfolio approach to assess the accounting treatment of the incremental costs to obtain a contract with a customer. The Company recognizes an asset for these costs if we expect to recover those costs. To the extent that these costs are capitalized, the resultant asset is amortized on a systematic basis consistent with the pattern of the transfer of the services to which the asset relates. The current contract assets are ~~$44.9~~$40.6 million and ~~$49.2~~$38.0 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The non-current assets are $1.3 million and ~~$0.4~~$1.1 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The current and non-current capitalized costs to obtain a contract with a customer are included in ~~"Other~~“Other current ~~assets"~~assets” and ~~"Other~~“Other non-current ~~assets"~~assets” in the accompanying balance sheet.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements adopted or that have not yet been adopted by the Company that are expected to have a material effect on the results of operations, financial condition, or cash flows of the Company.

~~Reclassifications~~

~~Certain prior year amounts have been reclassified to conform to the current year presentation.~~

NOTE 2—INCOME TAXES

The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax benefit and/or provision has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the accompanying consolidated statement of cash flows. The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes. Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the consolidated statement of shareholders’ equity and as financing activities within the consolidated statement of cash flows.

At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.

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~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the Company’s tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision or benefit in the quarter in which the change occurs. ~~Included in the income tax benefit for~~

For the three months ended June 30, 2021 is a benefit of $2.3 million due to a higher estimated annual effective tax rate from that applied to the first quarter’s ordinary loss from continuing operations. The higher estimated annual effective tax rate was primarily due to the increased impact of forecasted nondeductible items had on the increase in forecasted ordinary pre-tax losses.

~~For the three and six months ended June 30, 2021,~~March 31, 2022, the Company recorded an income tax benefit of ~~$9.1 million and $18.4~~$6.1 million, which represents an effective income tax rate of ~~23% and 40%, respectively.~~15%. For the three months ended ~~June 30, 2021,~~March 31, 2022, the effective income tax rate is higher than the statutory rate of 21% due primarily to benefits related to a change in the annual expected effective income tax rate, partially offset by nondeductible share based compensation expense.For the six months ended June 30, 2021, the effective income tax rate is higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting for stock-based awards. For the three months ended June 30, 2020, the Company recorded an income tax provision of $3.0 million, which represents an effective income tax rate of 19%. The effective income tax rate is lower than the statutory rate of 21% due primarily to tax shortfalls generated by the ~~impact of benefiting previously unbenefited~~exercise and vesting for stock-based awards and foreign ~~net operating loss carryforwards.~~income taxed at different tax rates. For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company recorded an income tax benefit of ~~$5.9~~$9.3 million due primarily to ~~a $5.7 million reduction to deferred taxes due to~~excess tax benefits generated by the ~~true-up~~exercise and vesting of ~~the state tax rate for an indefinite-lived intangible asset and the impact of benefiting previously unbenefited foreign net operating loss carryforwards.~~

stock-based awards.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. ~~There~~Accruals for interest are not material and there are currently no accruals for ~~interest and~~ penalties.

The Company is routinely under audit by federal, state, local and foreign authorities in the area of income tax as a result of previously filed separate company and consolidated tax returns with IAC. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service (“IRS”) has substantially completed its audit of IAC’s federal income tax returns for the years ended December 31, 2013 through 2017, and is currently auditing the years December 31, 2018 through 2019, which includes the operations of the Company. The statutes of limitations for the years 2013 through ~~2017~~2019 have been extended to ~~June 30, 2022.~~December 31, 2023. Returns filed in various other jurisdictions are open to examination for various tax years beginning with ~~2009.~~2012. Income taxes payable include unrecognized tax benefits considered sufficient to pay assessments that may result from examination of prior year tax returns. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company has unrecognized tax benefits of ~~$5.5~~$6.6 million and ~~$5.3~~$6.3 million, respectively; all of which are for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at ~~June 30, 2021~~March 31, 2022 are subsequently recognized, the income tax provision would be reduced by ~~$5.2~~$6.3 million. The comparable amount as of December 31, ~~2020~~2021 is ~~$5.1~~$6.0 million.

The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. At March 31, 2022, the Company has a U.S. gross deferred tax asset of $219.3 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, $49.7 million will be utilized upon the future reversal of deferred tax liabilities and the remaining net deferred tax asset of $169.6 million will be utilized based on forecasts of future taxable income. The Company’s most significant net deferred tax asset relates to U.S. federal net operating loss ~~("NOL"~~(“NOL”) ~~carryforwards.~~carryforwards of $124.6 million. The Company expects to generate sufficient future taxable income ~~to fully realize this deferred tax asset~~of at least $593.4 million prior to the expiration of these NOLs, the majority of which expire between 2030 and 2037, and a portion of which never ~~expire.~~expire, to fully realize this deferred tax asset.

NOTE 3—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

1211

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~NOTE 3—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS~~

Marketable Debt Securities

The Company did 0tnot hold any available-for-sale marketable debt securities at ~~June 30,~~March 31, 2022 and December 31, 2021.

~~At December 31, 2020, current available-for-sale marketable debt securities were as follows:~~

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
(In thousands)
Treasury discount notes $ 49,995 $ 0 $ 0 $ 49,995
Total available-for-sale marketable debt securities $ 49,995 $ 0 $ 0 $ 49,995

~~The contractual maturities of debt securities classified as current available-for-sale at December 31, 2020 were within one year.~~

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

•Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.

•Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.

•Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.

The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:


		June 30, 2021									March 31, 2022
		Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements			Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
		(In thousands)									(In thousands)
Assets:	Assets:									Assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	449,028	$	0	$	0	$	449,028	Money market funds	$	250,077	$	—	$	—	$	250,077

Time deposits		0		407		0		407

Total	Total	$	449,028	$	407	$	0	$	449,435	Total	$	250,077	$	—	$	—	$	250,077

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~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~


		December 31, 2020									December 31, 2021
		Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements			Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
		(In thousands)									(In thousands)
Assets:	Assets:									Assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	374,014	$	0	$	0	$	374,014	Money market funds	$	280,052	$	—	$	—	$	280,052
Treasury discount notes		0		324,995		0		324,995
Time deposits		0		2,721		0		2,721
Marketable debt securities:
Treasury discount notes		0		49,995		0		49,995

Total	Total	$	374,014	$	377,711	$	0	$	751,725	Total	$	280,052	$	—	$	—	$	280,052

Assets measured at fair value on a nonrecurring basis

The Company’s non-financial assets, such as goodwill, intangible assets, ROU assets, capitalized software, leasehold improvements and equipment are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

~~During the three months ended June 30, 2021, the Company recorded $9.6 million in impairment charges on ROU assets, leasehold improvements, and furniture and equipment as a result~~

Table of the Company reducing its real estate footprint. Impairment expense was determined by comparing the carrying value of each asset group related to each office space vacated to the estimated fair market value of cash inflows directly associated with each office space. Based on this analysis, if the carrying amount of the asset group is greater than the estimated future undiscounted cash flows, an impairment charge is recognized, measured as the amount by which the carrying amount exceeds the fair value of the asset.Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Financial instruments measured at fair value only for disclosure purposes

The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes:

June 30, 2021 December 31, 2020
Carrying Value Fair Value Carrying Value Fair Value
(In thousands)
Long-term debt, net (a)
$ (494,195) $ (495,600) $ (712,277) $ (725,700)


	March 31, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)

Long-term debt, net (a)	$	(494,730)	$	(421,500)	$	(494,552)	$	(486,875)

________________________

(a) At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the carrying value of long-term debt, net includes unamortized debt issuance costs of ~~$5.8~~$5.3 million and ~~$7.7~~$5.4 million, respectively.

The fair value of long-term debt is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs.

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~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

NOTE 4—LONG-TERM DEBT

Long-term debt consists of:

June 30, 2021 December 31, 2020
(In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”); interest payable each February 15 and August 15, commencing February 15, 2021 $ 500,000 $ 500,000
ANGI Group Term Loan due November 5, 2023 (“ANGI Group Term Loan”) 0 220,000
Total long-term debt 500,000 720,000
Less: unamortized debt issuance costs 5,805 7,723
Total long-term debt, net $ 494,195 $ 712,277


	March 31, 2022		December 31, 2021
	(In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”); interest payable each February 15 and August 15, which commenced February 15, 2021	$	500,000	$	500,000

Total long-term debt	500,000		500,000

Less: unamortized debt issuance costs	5,270		5,448
Total long-term debt, net	$	494,730	$	494,552

ANGI Group Senior Notes

The ANGI Group Senior Notes were issued on August 20, ~~2020, the proceeds of which are intended for general corporate purposes, including potential future acquisitions and return of capital.~~2020. At any time prior to August 15, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium.Thereafter, these notes may be redeemed at the redemption prices set forth in the indenture governing the notes, plus accrued and unpaid interest thereon, if any, to the applicable redemption date.

The indenture governing the ANGI Group Senior Notes contains a covenant that would limit ANGI Group’s ability to incur liens for borrowed money in the event a default has occurred or ANGI Group’s secured leverage ratio (as defined in the indenture) exceeds 3.75 to 1.0. At ~~June 30, 2021,~~March 31, 2022, there were no limitations pursuant thereto.

ANGI Group Revolving Facility

The ~~$250.0~~$250 million ANGI Group Revolving Facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021. No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.

ANGI Group Term Loan

AsDuring the three months ended March 31, 2021, ANGI Group prepaid $6.9 million of the ANGI Group Term Loan principal that was otherwise due in the first quarter of 2022 and, as of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety. ~~The outstanding balance of the ANGI Group Term Loan at December 31, 2020 was $220.0 million and bore interest at 2.16%.~~

NOTE 5—ACCUMULATED OTHER COMPREHENSIVE INCOME ~~(LOSS)~~

~~The following tables present the components of accumulated other comprehensive income (loss):~~

Three Months Ended June 30,
2021 2020
Foreign
Currency
Translation
Adjustment Accumulated Other Comprehensive Income Foreign
Currency
Translation
Adjustment Accumulated Other Comprehensive Loss
(In thousands)
Balance at April 1 $ 4,623 $ 4,623 $ (7,993) $ (7,993)
Other comprehensive income 1,350 1,350 5,253 5,253
Balance at June 30 $ 5,973 $ 5,973 $ (2,740) $ (2,740)

1513

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Six Months Ended June 30,
2021 2020
Foreign
Currency
Translation
Adjustment Accumulated Other Comprehensive Income Foreign
Currency
Translation
Adjustment Accumulated Other Comprehensive Loss
(In thousands)
Balance at January 1 $ 4,637 $ 4,637 $ (1,379) $ (1,379)
Other comprehensive income (loss) 1,336 1,336 (1,361) (1,361)
Balance at June 30 $ 5,973 $ 5,973 $ (2,740) $ (2,740)
The following tables presents the components of accumulated other comprehensive income and items reclassified out of accumulated other comprehensive income into earnings:


	Three Months Ended March 31,
	2022				2021
	Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income
	(In thousands)
Balance at January 1	$	3,309	$	3,309	$	4,637	$	4,637
Other comprehensive loss	(803)		(803)		(14)		(14)
Balance at March 31	$	2,506	$	2,506	$	4,623	$	4,623

At both ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ there was 0no tax benefit or provision on the accumulated other comprehensive ~~income (loss).~~income.

NOTE 6—(LOSS) EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted (loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:

Three Months Ended June 30,
2021 2020
Basic Diluted Basic Diluted
(In thousands, except per share data)
Numerator:
Net (loss) earnings $ (30,052) $ (30,052) $ 13,211 $ 13,211
Net earnings attributable to noncontrolling interests (241) (241) (544) (544)
Net (loss) earnings attributable to Angi Inc. Class A and Class B Common Stock shareholders $ (30,293) $ (30,293) $ 12,667 $ 12,667
Denominator:
Weighted average basic Class A and Class B common stock shares outstanding 504,469 504,469 495,769 495,769
Dilutive securities (a) (b) (c)
— 0 — 14,765
Denominator for (loss) earnings per share—weighted average shares 504,469 504,469 495,769 510,534
(Loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
(Loss) earnings per share $ (0.06) $ (0.06) $ 0.03 $ 0.02

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~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~


		Six Months Ended June 30,									Three Months Ended March 31,
		2021				2020					2022				2021
		Basic		Diluted		Basic		Diluted			Basic		Diluted		Basic		Diluted
		(In thousands, except per share data)									(In thousands, except per share data)
Numerator:	Numerator:									Numerator:
Net (loss) earnings	Net (loss) earnings	$	(28,038)	$	(28,038)	$	4,027	$	4,027	Net (loss) earnings	$	(33,287)	$	(33,287)	$	2,014	$	2,014
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(324)		(324)		(318)		(318)		Net earnings attributable to noncontrolling interests	(103)		(103)		(83)		(83)
Net (loss) earnings attributable to Angi Inc. Class A and Class B Common Stock shareholders	Net (loss) earnings attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	(28,362)	$	(28,362)	$	3,709	$	3,709	Net (loss) earnings attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	(33,390)	$	(33,390)	$	1,931	$	1,931

Denominator:	Denominator:									Denominator:
Weighted average basic Class A and Class B common stock shares outstanding	Weighted average basic Class A and Class B common stock shares outstanding	502,577		502,577		497,611		497,611		Weighted average basic Class A and Class B common stock shares outstanding	502,005		502,005		500,663		500,663
Dilutive securities (a) (b) (c)		—		0		—		11,136
Dilutive securities (a) (b)										Dilutive securities (a) (b)	—		—		—		9,990
Denominator for (loss) earnings per share—weighted average shares	Denominator for (loss) earnings per share—weighted average shares	502,577		502,577		497,611		508,747		Denominator for (loss) earnings per share—weighted average shares	502,005		502,005		500,663		510,653

(Loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:	(Loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:									(Loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
(Loss) Earnings per share		$	(0.06)	$	(0.06)	$	0.01	$	0.01
(Loss) earnings per share										(Loss) earnings per share	$	(0.07)	$	(0.07)	$	0.00	$	0.00

________________________

(a)For the three and six months ended June 30, 2021, the Company had a loss from operations and as a result, approximately 14.5 million potentially dilutive securities were excluded from computing dilutive earnings per share because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute all earnings per share amounts.

~~(b)~~ If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity and vesting of restricted stock units (“RSUs”). For the three ~~and six~~ months ended ~~June 30, 2020, 4.9~~March 31, 2022 and 2021, 25.1 million and ~~5.4~~5.2 million ~~respectively,~~ of potentially dilutive securities, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute all earnings per share amounts.

~~(c)~~(b) Market-based awards and performance-based stock units (“PSUs”) are considered contingently issuable shares. Shares issuable upon exercise or vesting of market-based awards and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based awards and PSUs is dilutive for the respective reporting periods. For ~~both~~ the three ~~and six~~ months ended ~~June 30, 2020, 3.4~~March 31, 2022 and 2021, 4.5 million ~~shares~~and 1.4 million underlying market-based awards and PSUs, respectively, were excluded from the calculation of diluted earnings per share because the market or performance condition(s) had not been met.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 7—SEGMENT INFORMATION

The ~~overall concept that the~~ Company ~~employs in determining~~has determined its operating segments ~~is to present the financial information in a manner~~ consistent with how the chief operating decision maker views the businesses. ~~In addition, we consider~~Additionally, the Company considers how the businesses are organized as to segment management and the focus of the businesses with regards to the types of services or products offered or the target market.

The following table presents revenue by reportable segment:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(In thousands)									(In thousands)
Revenue:	Revenue:									Revenue:
North America	North America	$	399,945	$	357,417	$	760,986	$	681,549	North America	$	411,172	$	361,041
Europe	Europe	21,043		17,644		47,031		37,162		Europe	24,987		25,988
Total	Total	$	420,988	$	375,061	$	808,017	$	718,711	Total	$	436,159	$	387,029

The following table presents the revenue of the Company’s segments disaggregated by type of service:


	Three Months Ended March 31,
	2022		2021
	(In thousands)
North America
Angi Ads and Leads:
Consumer connection revenue(a)	$	212,796	$	221,430
Advertising revenue(b)	63,776		60,747
Membership subscription revenue(c)	16,237		16,882
Other revenue	5,226		7,278
Total Angi Ads and Leads revenue	298,035		306,337
Angi Services revenue(d)	113,137		54,704
Total North America revenue	411,172		361,041
Europe
Consumer connection revenue(e)	21,803		22,351
Service professional membership subscription revenue	2,890		3,328
Advertising and other revenue	294		309
Total Europe revenue	24,987		25,988
Total revenue	$	436,159	$	387,029

________________________

(a)Includes fees paid by service professionals for consumer matches through the Angi Ads and Leads platforms.

(b)Includes revenue from service professionals under contract for advertising.

(d) Includes revenue from pre-priced offerings and revenue from Angi Roofing.

(e) Includes fees paid by service professionals for consumer matches.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~The following table presents the revenue of the Company’s segments disaggregated by type of service:~~

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
North America
Marketplace:
Consumer connection revenue(a)
$ 240,016 $ 242,015 $ 461,447 $ 450,619
Angi Services revenue(b)
72,819 32,095 127,505 64,956
Service professional membership subscription revenue 12,390 13,017 24,342 26,794
Other revenue 2,372 6,046 5,353 9,580
Total Marketplace revenue 327,597 293,173 618,647 551,949
Advertising and Other revenue(c)
72,348 64,244 142,339 129,600
Total North America revenue 399,945 357,417 760,986 681,549
Europe
Consumer connection revenue(d)
17,345 13,945 39,696 29,634
Service professional membership subscription revenue 3,331 3,215 6,659 6,514
Advertising and other revenue 367 484 676 1,014
Total Europe revenue 21,043 17,644 47,031 37,162
Total revenue $ 420,988 $ 375,061 $ 808,017 $ 718,711

~~________________________~~

~~(a)Includes fees paid by service professionals for consumer matches sourced through the marketplace platforms.~~

~~(b)Includes revenue from pre-priced offerings sourced through the marketplace platforms.~~

~~(c)Includes Angi revenue from service professionals under contract for advertising and Angi membership subscription fees from consumers, as well as revenue from HomeStars.~~

~~(d)~~ ~~Includes fees paid by service professionals for consumer matches.~~

~~Revenue by geography is based on where the customer is located.~~ Geographic information about revenue and long-lived assets is presented below.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(In thousands)									(In thousands)
Revenue	Revenue									Revenue
United States	United States	$	394,538	$	354,000	$	750,982	$	673,821	United States	$	405,508	$	356,444
All other countries	All other countries	26,450		21,061		57,035		44,890		All other countries	30,651		30,585
Total	Total	$	420,988	$	375,061	$	808,017	$	718,711	Total	$	436,159	$	387,029

June 30, 2021 December 31, 2020
(In thousands)
Long-lived assets (excluding goodwill and intangible assets):
United States $ 101,605 $ 97,841
All other countries 9,449 11,001
Total $ 111,054 $ 108,842

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~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~


	March 31, 2022		December 31, 2021
	(In thousands)
Long-lived assets (excluding goodwill and intangible assets):
United States	$	131,338	$	111,136
All other countries	6,694		7,131
Total	$	138,032	$	118,267

The following tables present operating ~~(loss) income~~loss and Adjusted EBITDA by reportable segment:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(In thousands)									(In thousands)
Operating (loss) income:
Operating loss:										Operating loss:
North America	North America	$	(32,127)	$	16,190	$	(22,550)	$	8,082	North America	$	(29,654)	$	9,577
Europe	Europe	(604)		1,454		(10,072)		(6,734)		Europe	(4,303)		(9,468)
Total	Total	$	(32,731)	$	17,644	$	(32,622)	$	1,348	Total	$	(33,957)	$	109

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Adjusted EBITDA(e):
North America $ (5,302) $ 55,041 $ 25,863 $ 96,432
Europe $ 860 $ 2,895 $ (7,119) $ (4,099)

~~________________________~~


	Three Months Ended March 31,
	2022		2021
	(In thousands)
Adjusted EBITDA(f):
North America	$	341	$	31,165
Europe	$	(3,510)	$	(7,979)

~~(e)~~(f) The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating ~~(loss) income~~loss excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between the Company’s performance and that of its competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

The following tables reconcile operating ~~(loss) income~~loss for the Company’s reportable segments and net ~~(loss) earnings~~loss attributable to Angi Inc. shareholders to Adjusted EBITDA:

Three Months Ended June 30, 2021
Operating Loss Stock-Based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ (32,127) $ 9,455 $ 13,682 $ 3,688 $ (5,302)
Europe (604) $ 88 $ 1,376 $ 0 $ 860
Operating loss (32,731)
Interest expense (5,814)
Other expense, net (636)
Loss before income taxes (39,181)
Income tax benefit 9,129
Net loss (30,052)
Net earnings attributable to noncontrolling interests (241)
Net loss attributable to Angi Inc. shareholders $ (30,293)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Three Months Ended June 30, 2020
Operating Income Stock-Based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ 16,190 $ 14,495 $ 11,467 $ 12,889 $ 55,041
Europe 1,454 $ 264 $ 1,088 $ 89 $ 2,895
Operating income 17,644
Interest expense (1,620)
Other income, net 212
Earnings before income taxes 16,236
Income tax provision (3,025)
Net earnings 13,211
Net earnings attributable to noncontrolling interests (544)
Net earnings attributable to Angi Inc. shareholders $ 12,667


	Three Months Ended March 31, 2022
	Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(29,654)	$	12,994	$	13,197	$	3,804	$	341
Europe	(4,303)		$	(9)	$	802	$	—	$	(3,510)
Operating loss	(33,957)
Interest expense	(5,022)
Other expense, net	(391)
Loss before income taxes	(39,370)
Income tax benefit	6,083
Net loss	(33,287)
Net earnings attributable to noncontrolling interests	(103)
Net loss attributable to Angi Inc. shareholders	$	(33,390)

Six Months Ended June 30, 2021
Operating Loss Stock-Based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ (22,550) $ 11,391 $ 28,260 $ 8,762 $ 25,863
Europe (10,072) $ 186 $ 2,767 $ 0 $ (7,119)
Operating loss (32,622)
Interest expense (12,431)
Other expense, net (1,403)
Loss before income taxes (46,456)
Income tax benefit 18,418
Net loss (28,038)
Net earnings attributable to noncontrolling interests (324)
Net loss attributable to Angi Inc. shareholders $ (28,362)

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~


		Six Months Ended June 30, 2020											Three Months Ended March 31, 2021
		Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
		(In thousands)											(In thousands)
North America	North America	$	8,082	$	39,807	$	22,764	$	25,779	$	96,432	North America	$	9,577	$	1,936	$	14,578	$	5,074	$	31,165
Europe	Europe	(6,734)		$	527	$	1,929	$	179	$	(4,099)	Europe	(9,468)		$	98	$	1,391	$	—	$	(7,979)
Operating income		1,348
Operating loss												Operating loss	109
Interest expense	Interest expense	(3,894)										Interest expense	(6,617)
Other income, net	Other income, net	633										Other income, net	(767)
Loss before income taxes	Loss before income taxes	(1,913)										Loss before income taxes	(7,275)
Income tax benefit	Income tax benefit	5,940										Income tax benefit	9,289
Net earnings	Net earnings	4,027										Net earnings	2,014
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(318)										Net earnings attributable to noncontrolling interests	(83)
Net earnings attributable to Angi Inc. shareholders	Net earnings attributable to Angi Inc. shareholders	$	3,709									Net earnings attributable to Angi Inc. shareholders	$	1,931

NOTE 8—CONSOLIDATED FINANCIAL STATEMENT DETAILS

Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying balance sheet to the total amounts shown in the accompanying statement of cash flows:

June 30, 2021 December 31, 2020 June 30, 2020 December 31, 2019
(In thousands)
Cash and cash equivalents $ 584,260 $ 812,705 $ 420,985 $ 390,565
Restricted cash included in other current assets 236 407 379 504
Restricted cash included in other non-current assets 730 449 412 409
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows $ 585,226 $ 813,561 $ 421,776 $ 391,478

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	March 31, 2022		December 31, 2021		March 31, 2021		December 31, 2020
	(In thousands)
Cash and cash equivalents	$	391,286	$	428,136	$	777,041	$	812,705
Restricted cash included in other current assets	92		156		176		407
Restricted cash included in other non-current assets	885		1,193		433		449
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	392,263	$	429,485	$	777,650	$	813,561

Restricted cash included in other current assets at ~~June 30,~~March 31, 2022 primarily consisted of cash reserved to fund insurance claims.

Restricted cash included in other current assets at December 31, 2021, March 31, 2021 and December 31, 2020 consisted of cash reserved to fund insurance claims and cash received from customers through the marketplace platforms, representing funds collected for payments to service providers, which were not settled as of the period ~~end, and cash reserved to fund insurance claims.~~

~~Restricted cash included in other current assets at June 30, 2020 primarily consisted of a deposit related to corporate credit cards and cash reserved to fund insurance claims at Angi Inc.~~

~~Restricted cash included in other current assets at December 31, 2019 primarily consisted of a deposit related to corporate credit cards.~~end.

Restricted cash included in other non-current assets for all periods presented above primarily consisted of deposits related to leases. Restricted cash included in other non-current assets at March 31, 2022 and December 31, 2021 also included cash held related to a check endorsement guarantee for Angi Roofing.

Credit Losses and Revenue Reserve

The following table presents the changes in the credit loss reserve for the three months ended March 31, 2022 and 2021:


	2022		2021
	(In thousands)
Balance at January 1	$	33,652	$	26,046
Current period provision for credit losses	21,586		19,118
Write-offs charged against the credit loss reserve	(21,371)		(20,570)
Recoveries collected	1,213		758
Balance at March 31	$	35,080	$	25,352

The revenue reserve was $2.7 million and $3.5 million at March 31, 2022 and 2021, respectively. The total allowance for credit losses and revenue reserve was $37.8 million and $28.9 million as of March 31, 2022 and 2021, respectively.

Accumulated Amortization and Depreciation

The following table provides the accumulated amortization and depreciation within the consolidated balance sheet:


Asset Category	March 31, 2022		December 31, 2021
	(In thousands)
Right-of-use assets (included in “other non-current assets”)	$	45,622	$	40,757
Capitalized software, leasehold improvements, and equipment	$	119,026	$	108,235
Intangible assets	$	162,346	$	159,356

2118

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~Credit Losses and Revenue Reserve~~

~~The following table presents the changes in the credit loss reserve for the six months ended June 30, 2021 and 2020:~~

2021 2020
(In thousands)
Balance at January 1 $ 26,046 $ 19,066
Current period provision for credit losses 42,731 39,338
Write-offs charged against the credit loss reserve (37,051) (33,700)
Recoveries collected 1,351 1,283
Balance at June 30 $ 33,077 $ 25,987

The revenue reserve was $2.8 million and $2.0 million at June 30, 2021 and 2020, respectively. The total allowance for credit losses and revenue reserve was $35.9 million and $28.0 million as of June 30, 2021 and 2020, respectively.

~~Accumulated Amortization and Depreciation~~

~~The following table provides the accumulated amortization and depreciation within the consolidated balance sheet:~~

Asset Category June 30, 2021 December 31, 2020
(In thousands)
Right-of-use assets (included in “other non-current assets”) $ 50,345 $ 40,800
Capitalized software, leasehold improvements, and equipment $ 87,347 $ 95,438
Intangible assets $ 152,134 $ 162,627

Other ~~(expense) income,~~expense, net

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Interest income $ 50 $ 161 $ 147 $ 1,432
Foreign exchange gains (losses) 407 78 (453) (345)
Loss on extinguishment of debt(a)
(1,110) 0 (1,110) 0
Gain (loss) from acquisition/sale of a business(b)
17 (27) 13 (454)
Other (expense) income, net $ (636) $ 212 $ (1,403) $ 633

~~________________________~~


	Three Months Ended March 31,
	2022		2021

Interest income	$	64	$	97

Foreign exchange losses	(456)		(860)

Other	1		(4)
Other expense, net	$	(391)	$	(767)

~~(a)Represents the write-off of deferred debt issuance costs related to the ANGI Group Term Loan, which was repaid in its entirety during the second quarter of 2021.~~

~~(b)~~Loss from acquisition/sale of a business for the six months ended June 30, 2020 includes a $0.2 million mark-to-market charge for an indemnification charge related to the Handy acquisition that was settled in Angi Inc. shares during the first quarter of 2020 and a $0.3 million charge related to the final earn-out settlement related to the sale of Felix

NOTE 9—CONTINGENCIES

In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. As a result, a $4 million legal reserve is established. Management has ~~not~~also identified certain other legal matters where we believe an unfavorable outcome is ~~probable and estimable; therefore, 0 reserve is established.~~not probable. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See “Note 2—Income Taxes” for additional information related to income tax contingencies.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 10—RELATED PARTY TRANSACTIONS WITH IAC

Angi Inc. and IAC have entered into certain agreements to govern their relationship. These agreements include: a contribution agreement; an investor rights agreement; a services agreement; a tax sharing agreement; and an employee matters agreement.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company was charged ~~$1.2~~$0.4 million and ~~$2.3 million, and $1.2 million and $2.4~~$1.1 million, respectively, by IAC for services rendered pursuant to the services agreement. There ~~were 0~~was $0.5 million of outstanding receivables orpursuant to the services agreement at March 31, 2022 and no outstanding receivables pursuant to the services agreement at December 31, 2021. There were no outstanding payables pursuant to the services agreement at ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~

2021.

Additionally, the Company subleases office space to IAC and charged IAC $0.4 million and ~~$0.8 million, and~~ $0.4 ~~million and $0.9~~ million of rent for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, respectively. IAC subleases office space to the Company and ~~2020, respectively.~~charged the Company $0.3 million of rent for the three months ended March 31, 2022. At ~~June 30,~~March 31, 2022 and December 31, 2021, there were 0no outstanding receivables or payables pursuant to the sublease agreements. ~~At December 31, 2020 there was an outstanding receivable of less than $0.1 million due from IAC pursuant to the sublease agreements, which was subsequently paid in full in the first quarter of 2021.~~

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had outstanding payables of ~~$1.5~~$0.8 million and ~~$0.9~~$0.3 million, respectively, due to IAC pursuant to the tax sharing agreement, which are included in “Accrued expenses and other current liabilities,” in the accompanying consolidated balance sheet. There were 0no payments to or refunds from IAC pursuant to this agreement during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021. ~~There were $3.1 million of refunds received from IAC pursuant to this agreement during the three and six months ended June 30, 2020.~~

For the three ~~and six~~ months ended ~~June 30, 2021, less than 0.1 million and 0.1 million~~March 31, 2022, no shares ~~respectively,~~ of Angi Inc. Class B common stock were issued to IAC pursuant to the employee matters agreement as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Angi Inc. employees. For the ~~six~~three months ended ~~June 30, 2020, 0.2~~March 31, 2021, 0.1 million shares of Angi Inc. Class B common stock were issued to IAC pursuant to the employee matters agreement. ~~There were 0 shares issued to IAC pursuant to the employee matters agreement for~~For the three months ended ~~June 30, 2020. For the three and six months ended June 30, 2021, less than 0.1 million and 2.6 million~~March 31, 2022, no shares ~~respectively,~~ of Angi Inc. Class A common stock were issued to IAC pursuant to the employee matters agreement as reimbursement for IAC common stock issued in connection with the exercise and settlement of certain Angi Inc. stock appreciation rights. ~~There were 0~~For the three months ended March 31, 2021, 2.6 million shares of Angi Inc. Class A common stock were issued to IAC ~~during~~pursuant to the ~~three and six months ended June 30, 2020.~~

~~NOTE 11—SUBSEQUENT EVENTS~~

~~On July 1, 2021, Angi Inc. acquired certain assets and assumed certain liabilities of Total Home Roofing, Inc., a leading residential roofing company, to accelerate the Angi Services roofing category.~~

~~The $250.0 million ANGI Group Revolving Facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021.No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.~~

employee matters agreement.

2320

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

Management Overview

Angi Inc.~~, formerly ANGI Homeservices, Inc.,~~ (“Angi, ~~Inc.,~~” the “Company,” “we,” “our,” or “us”) connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. ~~Over 260,000 domestic~~Approximately 239,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended ~~June 30, 2021.~~March 31, 2022. Additionally, consumers turned to at least one of our brands to find a professional for approximately 3432 million projects during the twelve months ended ~~June 30, 2021.~~March 31, 2022.

The Company has two operating ~~segments~~segments: (i) North America (United States and Canada), which includes Angi ~~(formerly Angie’s List),~~Ads, Angi Leads, and Angi Services; and (ii) Europe. In March 2021, the Company rebranded its North American brands which operate as follows: Angi Ads operates under the Angi brand, Angi Leads operates primarily under the HomeAdvisor, ~~Powered~~powered by Angi brand, and ~~Handy;~~Angi Services operates primarily under the Handy and ~~(ii) Europe, which includes Travaux, MyHammer, MyBuilder, Werkspot, and Instapro.~~Angi Roofing brands.

For a more detailed description of the Company’s operating businesses, see the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Defined Terms and Operating Metrics:

Unless otherwise indicated or as the context otherwise requires, certain terms, which include the principal operating metrics we use in managing our business, ~~used in this quarterly report~~ are defined below:

•~~Marketplace~~Angi Ads and Leads Revenue primarily reflects domestic ~~marketplace revenues,~~ads and leads revenue, including consumer connection revenue for consumer matches, ~~revenue from Angi Services offerings sourced through marketplace platforms, and membership subscription revenue from service professionals.~~

•~~Advertising and OtherRevenue~~ ~~primarily includes~~ revenue from service professionals under contract for advertising and membership subscription ~~fees~~revenue from service professionals and consumers.

•Angi Services Revenue ~~are the Company’s~~primarily reflects domestic revenue from pre-priced offerings by which the consumer purchases services directly from the Company and the Company engages a service professional to perform the ~~service. This will include the~~service and includes revenue from Total Home Roofing, ~~acquisition,~~Inc. (“Angi Roofing”), which ~~closed~~was acquired on July 1, 2021.

•~~Marketplace~~Angi Service Requests (“Service Requests”) are fully completed and submitted domestic customer service requests and includes Angi Services requests ~~sourced through the marketplace platforms~~ in the period.

•~~Marketplace~~Angi Monetized Transactions are fully completed and submitted domestic customer service requests that were matched to and paid for by a service professional and includes completed and in-process Angi Services jobs ~~sourced through the marketplace platforms~~ in the period.

•~~Marketplace~~Angi Transacting Service Professionals (“~~Marketplace~~ Transacting SPs”) are the number of ~~marketplace~~ service professionals that paid for consumer matches through Angi Leads or performed an Angi Services job ~~sourced through~~during the ~~marketplace platforms in the~~most recent quarter.

•Angi Advertising Service Professionals (“Advertising SPs”) are the number of service professionals under contract for advertising at the end of the period.

•Senior Notes - On August 20, 2020, ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of the Company, issued $500.0 million of its 3.875% Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year, ~~commencing~~which commenced February 15, 2021.

•~~ANGI Group Revolving Facility -~~ ~~the $250.0 million ANGI Group revolving credit facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021.No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.~~

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Components of Results of Operations

Sources of Revenue

~~Marketplace~~Angi Ads and Leads Revenue is primarily derived from (i) advertising revenue, which includes revenue from service professionals under contract for advertising, (ii) consumer connection revenue, which is comprised of fees paid by service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service), ~~(ii) Angi Services, which is comprised of~~and (iii) membership subscription revenue from ~~completed jobs sourced through the marketplace platforms,~~service professionals and ~~(iii) service professional membership subscription fees.~~consumers. Consumer connection revenue varies based upon several factors including the service requested, product experience offered, and geographic location of service. ~~Advertising and Other Revenue~~Angi

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Services is primarily ~~derived~~comprised of revenue from jobs (i) ~~sales~~sourced through the “Book Now” feature which allows consumers to book and schedule on demand (ii) under managed projects (including Angi Roofing) which are larger home improvement projects, and (iii) through retail partnerships for installation of ~~time-based website, mobile, and call center advertising to service professionals, and (ii) membership subscription fees from consumers.~~furniture or other household items.

Operating Costs and Expenses:

•Cost of revenue - consists primarily of (i) payments made to independent service professionals who perform work contracted under Angi Services arrangements, ~~through the marketplace platforms,~~(ii) credit card processing fees, (iii) hosting fees, and ~~hosting fees.~~(iv) roofing materials costs associated with Angi Roofing.

•Selling and marketing expense - consists primarily of (i) advertising expenditures, which include online marketing, including fees paid to search engines, (ii) offline marketing, which is primarily television ~~advertising,~~advertising; and partner-related payments to those who direct traffic to our brands, (iii) compensation expense (including stock-based compensation expense) and other employee-related costs for our sales force and marketing personnel, (iv) software license and maintenance costs, and (v) facilities costs.

•General and administrative expense - consists primarily of (i) compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions, (ii) fees for professional services (including transaction-related costs related to acquisitions), (iii) provision for credit losses, (iv) software license and maintenance costs, and (v) facilities costs. Our customer service function includes personnel who provide support to our service professionals and consumers.

•Product development expense - consists primarily of (i) compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology and (ii) software license and maintenance ~~costs, and facilities~~ costs.

Non-GAAP financial measure

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is a non-GAAP financial measure. See “Principles of Financial Reporting” for the definition of Adjusted EBITDA and a reconciliation of net (loss) earnings attributable to Angi Inc. shareholders to operating (loss) income to consolidated Adjusted EBITDA for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

Brand Integration Initiative

OnIn March ~~17,~~ 2021, the Company changed its name to Angi Inc. and updated one of its leading websites and brands, Angie’s List, to Angi, and since then, has concentrated its marketing investment in the Angi brand in order to focus its marketing, sales, and branding efforts on a single brand.

We rely heavily on free, or organic, search results from search engine optimization, and paid search engine marketing to drive traffic to our ~~platforms.~~websites. Our brand integration initiative has adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results as Angi does not have the same domain history as Angie’s List. In addition, we shifted marketing to support Angi, away from HomeAdvisor, powered by Angi, which has negatively affected the efficiency of our search engine marketing efforts.

~~During~~Since the ~~second quarter~~beginning of ~~2021,~~the integration process, these efforts have had a pronounced negative impact on ~~Marketplace Service Requests~~service requests from organic search results, ~~and via our mobile applications,~~ which in turn has resulted in increased paid search engine marketing to generate ~~Marketplace Service Requests. The combined effect of this during the three months ended June 30, 2021, has reduced revenue and~~service requests. These factors have increased marketing spend and reduced revenue materially more than expected atsince the launch of the brand initiative in ~~the first quarter of 2021 and more significantly than our forecasts at the beginning of May~~March 2021. We expect the pronounced negative impact to

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organic search results, the increased paid search engine marketing costs, and the reduced monetization from our mobile applications to continue until such time as the new brand establishes search engine optimization ranking and consumer awareness is established.

Angi Services Investment

Angi Services was launched in August 2019 and ~~for the three and six months ended June 30, 2021 revenue grew 127% and 96%, respectively, versus the comparable prior year periods. We~~we have invested significantly in Angi Services and expect to continue to do so going forward. InSince the ~~second half~~launch of ~~2021,~~Angi Services, we have experienced and expect significant future revenue growth as we expand the business, refine the overall experience, and increase penetration in certain ~~geographies.~~ geographies and service categories.

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This increased investment in Angi Services has contributed to ~~lower profitability~~losses for the Company for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and this investment is expected to continue ~~to negatively impact profits~~ through ~~the remainder of 2021.~~at least 2023.

COVID-19 Update

The impact on the Company from the COVID-19 pandemic and the measures designed to contain its spread has been varied and volatile.

As previously disclosed, the ~~initial~~ impact of COVID-19 on the Company initially resulted in a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). While we ~~have~~ experienced a rebound in service requests from mid-2020 through early 2021, service requests started to decline in ~~the second half of 2020~~May 2021 and continued to decline into the first ~~half~~quarter of 2022 because of Angi Inc.’s brand integration that began in March 2021 and, in late 2021 and early 2022, the Omicron variant surge. Moreover, many service professionals’ businesses ~~had~~have been and continue to be adversely impacted by labor and material constraints and many service professionals ~~had~~have limited capacity to take on new business, which continues to negatively ~~impacted~~impact our ability to monetize ~~this increased level of~~ service ~~requests through the first quarter of 2021.~~requests. Although our ability to monetize service requests rebounded modestly in the second half of 2021 and first quarter of ~~2021,~~2022, we ~~are~~ still have not ~~back~~returned to levels we experienced pre-COVID-19. No assurances can be provided that we will continue to be able to improve monetization, or that service professionals’ businesses and, as a consequence, our revenue and profitability will not continue to be adversely impacted in the future.

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Results of Operations for the three ~~and six~~ months ended ~~June 30, 2021 compared to the three and six months ended June 30, 2020~~

~~Revenue~~

Three Months Ended June 30, Six Months Ended June 30,
2021 $ Change % Change 2020 2021 $ Change % Change 2020
(Dollars in thousands)
Revenue:
Marketplace:
Consumer connection revenue $ 240,016 $ (1,999) (1)% $ 242,015 $ 461,447 $ 10,828 2% $ 450,619
Angi Services revenue 72,819 40,724 127% 32,095 127,505 62,549 96% 64,956
Service professional membership subscription revenue 12,390 (627) (5)% 13,017 24,342 (2,452) (9)% 26,794
Other revenue 2,372 (3,674) (61)% 6,046 5,353 (4,227) (44)% 9,580
Total Marketplace Revenue 327,597 34,424 12% 293,173 618,647 66,698 12% 551,949
Advertising and Other revenue 72,348 8,104 13% 64,244 142,339 12,739 10% 129,600
North America 399,945 42,528 12% 357,417 760,986 79,437 12% 681,549
Europe 21,043 3,399 19% 17,644 47,031 9,869 27% 37,162
Total revenue $ 420,988 $ 45,927 12% $ 375,061 $ 808,017 $ 89,306 12% $ 718,711
Percentage of Total Revenue:
North America 95 % 95 % 94 % 95 %
Europe 5 % 5 % 6 % 5 %
Total revenue 100 % 100 % 100 % 100 %
Three Months Ended June 30, Six Months Ended June 30,
2021 Change % Change 2020 2021 Change % Change 2020
(In thousands, rounding differences may occur)
Operating metrics:
Marketplace Service Requests 9,419 38 —% 9,381 17,128 1,779 12% 15,349
Marketplace Monetized Transactions 5,006 492 11% 4,514 9,199 1,095 14% 8,104
Marketplace Transacting SPs 225 31 16% 194
Advertising SPs 40 3 6% 37

~~For the three months ended June 30, 2021~~March 31, 2022 compared to the three months ended ~~June 30, 2020~~March 31, 2021

Revenue


	Three Months Ended March 31,
	2022			$ Change		% Change	2021
	(Dollars in thousands)
North America
Angi Ads and Leads:
Consumer connection revenue	$	212,796		$	(8,634)	(4)%	$	221,430
Advertising revenue	63,776			3,029		5%	60,747
Membership subscription revenue	16,237			(645)		(4)%	16,882
Other revenue	5,226			(2,052)		(28)%	7,278
Total Angi Ads and Leads revenue	298,035			(8,302)		(3)%	306,337
Angi Services revenue	113,137			58,433		107%	54,704
Total North America revenue	411,172			50,131		14%	361,041
Europe	24,987			(1,001)		(4)%	25,988
Total revenue	$	436,159		$	49,130	13%	$	387,029

Percentage of Total Revenue:
North America	94		%				93		%
Europe	6		%				7		%
Total revenue	100		%				100		%

	Three Months Ended March 31,
	2022			Change		% Change	2021
	(In thousands, rounding differences may occur)
Operating metrics:
Service Requests	6,701			(1,008)		(13)%	7,709
Monetized Transactions	3,889			(304)		(7)%	4,193
Transacting SPs	204			(8)		(4)%	212
Advertising SPs	35			(5)		(11)%	40

North America revenue increased ~~$42.5~~$50.1 million, or ~~12%~~14%, driven by ~~increases in Marketplace Revenue~~growth of ~~$34.4~~$58.4 million, or ~~12%~~107%, ~~and Advertising and Other revenue of $8.1 million, or 13%. The increase in Marketplace Revenue is due to an increase~~ in Angi Services revenue, partially offset by a decrease in Angi Ads and Leads of ~~$40.7~~$8.3 million, or ~~127%, due primarily to an 11% increase in Marketplace Monetized Transactions to 5.0 million, despite Marketplace Service Requests being flat. The increase in Advertising and Other Revenue~~3%. Angi Services revenue growth is due primarily to ~~an increase~~Angi Roofing, acquired July 1, 2021, and to a lesser extent, organic growth. The decrease in Angi Ads and Leads revenue ~~driven by~~is primarily due to a ~~6% increase~~decrease in ~~Advertising SPs.~~Service Requests during the quarter of 13%.

Europe revenue ~~increased $3.4~~decreased $1.0 million, or ~~19%~~4%, due to ~~strong growth in its largest markets due to increased consumer demand and~~ the ~~favorable~~$1.5 million unfavorable impact of the ~~weakening~~strengthening of the U.S dollar relative to the Euro and the British ~~Pound.~~Pound, which more than offset $0.5 million of revenue growth expressed in constant currency.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

North America revenue increased $79.4 million, or 12%, driven by increases in Marketplace Revenue of $66.7 million, or 12%, and Advertising and Other revenue of $12.7 million, or 10%. The increase in Marketplace Revenue is due to an increase in Angi Services revenue of $62.5 million, or 96%, and an increase in consumer connection revenue of $10.8 million, or 2%, due primarily to an increase of 12% in Marketplace Service Requests to 17.1 million, resulting in a 14% increase in Marketplace Monetized Transactions to 9.2 million, slightly outpacing the increase in Marketplace Service Requests. The increase in Advertising and Other Revenue is due primarily to the factors described above in the three-month section.

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Europe revenue increased $9.9 million, or 27%, due to strong growth across its markets due to increased consumer demand and the favorable impact of the weakening of the U.S dollar relative to the Euro and the British Pound.

Cost of revenue


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
		2021		$ Change		% Change	2020		2021		$ Change		% Change	2020			2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below)	Cost of revenue (exclusive of depreciation shown separately below)	$	69,704	$	28,662	70%	$	41,042	$	123,532	$	49,261	66%	$	74,271	Cost of revenue (exclusive of depreciation shown separately below)	$	98,998	$	45,170	84%	$	53,828
As a percentage of revenue	As a percentage of revenue	17%					11%		15%					10%		As a percentage of revenue	23%					14%

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

North America cost of revenue increased ~~$28.6~~$45.2 million, or 70%, due primarily to the growth of Angi Services, resulting in higher payments made to independent third-party service professionals who perform work contracted under Angi Services arrangements to complete service requests from consumers.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

~~North America cost of revenue increased $49.3 million, or 67%~~85%, and increased as a percentage of revenue, due primarily to ~~factors described above in~~$27.2 million of costs attributable to Angi Roofing acquired July 1, 2021, primarily for roofing materials and third-party contractors. The remaining increase is primarily due the ~~three-month discussion.~~growth of Angi Services including costs incurred for third-party service professionals for other Angi Services arrangements.

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Selling and marketing expense


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
		2021		$ Change		% Change	2020		2021		$ Change		% Change	2020			2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Selling and marketing expense	Selling and marketing expense	$	239,031	$	49,047	26%	$	189,984	$	444,871	$	64,928	17%	$	379,943	Selling and marketing expense	$	225,801	$	19,961	10%	$	205,840
As a percentage of revenue	As a percentage of revenue	57%					51%		55%					53%		As a percentage of revenue	52%					53%

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

~~On a consolidated basis, selling and marketing expense increased to 57% of revenue from 51% of revenue due primarily to the increase in selling and marketing expense at North America.~~

North America selling and marketing expense increased ~~$47.7~~$19.2 million, or ~~26%~~10%, driven by increases in advertising expense of ~~$29.0~~$8.9 million, ~~compensation~~ expense of ~~$14.2~~$6.2 million ~~and consulting costs~~from inclusion of $4.2 million. The increase in advertising expense was due primarily to increases of $21.9 million in online marketing and $6.8 million in television spend. The increase in online marketing spend was attributable to the brand integration initiative described above under “Brand Integration Initiative”. The increase in television spend in 2021 reflects the return to historical spending amounts as compared to the cost cutting initiatives experienced during the second quarter of 2020 due to the impact of COVID-19. The increase in compensation expense was due primarily to increased commission expense, in addition toAngi Roofing, an ~~increase in sales force headcount. The~~ increase in consulting costs ~~was due primarily to various sales initiatives at Angi Services.~~

~~Europe selling~~of $2.8 million and ~~marketing expense increased $1.3 million, or 21%, driven by~~ an increase in ~~advertising expense~~software maintenance costs of ~~$1.9~~$1.6 million, partially offset by ~~a decrease~~decreases in lease expense of $1.5 million and compensation expense of ~~$0.5 million from lower headcount.~~

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

~~On a consolidated basis, selling and marketing expense increased to 55% of revenue from 53% of revenue due primarily to the increase in selling and marketing expense at North America.~~

North America selling and marketing expense increased $64.4 million, or 18%, driven by increases in advertising expense of $35.0 million, compensation expense of $23.2 million, and outsourced personnel and consulting costs of $7.1$1.0 million. The increase in advertising expense was due primarily to an increase in ~~online marketing~~television spend ~~partially~~of $11.4 million offset by ~~a decrease~~decreases in ~~television spend.~~online and app advertising of $4.1 million. The increase in ~~online marketing spend was due primarily to the “Brand Integration Initiative,” described above. The decrease in~~ television spend ~~was due primarily~~in 2022 reflects the return to ~~reduced spend in the first quarter of 2021~~historical spending levels as compared to the ~~prior~~

~~Table~~cost cutting initiatives during 2021 due to the impact of ~~Contents~~

~~year period in anticipation of the aforementioned “Brand Integration Initiative,” described above.~~COVID-19 and is consistent with 2020 spend prior to COVID-19. The increase in ~~compensation expense~~consulting and software maintenance costs was ~~due primarily to the factors described above in the three-month discussion. The increase in outsourced personnel and consulting costs were~~ due primarily to various sales initiatives at Angi Services. The decrease in lease expense is a result of the Company reducing its real estate footprint in 2021. The decrease in compensation expense was due primarily to decreased commission expense.

Europe selling and marketing expense increased ~~$0.5~~$0.7 million, or 2%5%, driven by an increase in advertising expense of ~~$1.7~~$1.0 million partially offset by a decrease in compensation expense of ~~$1.1 million from lower headcount.~~$0.4 million.

General and administrative expense


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
		2021		$ Change		% Change	2020		2021		$ Change		% Change	2020			2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
General and administrative expense	General and administrative expense	$	107,486	$	22,035	26%	$	85,451	$	195,648	$	15,641	9%	$	180,007	General and administrative expense	$	109,655	$	21,493	24%	$	88,162
As a percentage of revenue	As a percentage of revenue	26%					23%		24%					25%		As a percentage of revenue	25%					23%

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

North America general and administrative expense increased ~~$20.1~~$28.5 million, or ~~25%~~39%, due primarily to ~~$9.6~~an increase of $15.0 million in ~~one-time costs~~compensation expense, $6.9 million of expense from the inclusion of Angi Roofing, $4.7 million in professional fees and $1.9 million in software maintenance costs. The increase in compensation expense is due to an increase of $8.9 million in stock-based compensation expense and an increase of $4.6 million in wage-related expense. The increase in stock-based compensation expense is the result of the reversal of previously recognized stock-based compensation as a result of the ~~Company reducing its real estate footprint, an $8.4 million increase in professional fees, and a $1.9 million increase~~forfeiture of unvested awards due to management departures in the ~~provision for credit losses. The real estate related costs are the result~~first quarter of ~~impairments of right-of-use lease assets, leasehold improvements~~2021 and ~~furniture and equipment associated with office space we are vacating.~~new awards granted since Q1 2021. The increase in professional fees is due primarily to an increase in legal fees and outsourced personnel costs, ~~legal fees,~~ and to a lesser extent, recruiting fees. The increase in outsourced personnel costs is due primarily to an increase in call volume related to our customer service function. The increase in ~~the provision for credit losses is driven by higher Marketplace Revenue.~~

Europe general and administrative expense increased $2.0 million, or 34%, due primarily to a $0.9 million increase in professional fees related to corporate restructuring activities and a $0.5 million increase in compensation expense.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

North America general and administrative expense increased $6.9 million, or 4%, due primarily to an increase of $11.4 million in professional fees, $9.6 million in one-time costs related to the Company reducing its real estate footprint described above in the three-month discussion, a $3.2 million increase in the provision for credit losses, and a $2.3 million increase in software license and maintenance costs, partially offset by a decrease of $22.0 million in compensation expense. The increase in professional fees and provision for credit losses were due primarily to the factors described above in the three-month discussion. The increase in software license and maintenance expense ~~was~~is due primarily to increased ~~investment in~~spend on software to support our customer service function. The decrease in compensation expense was due primarily to a decrease of stock-based compensation expense of $28.2 million, partially offset by an increase of $5.5 million in wage related expenses resulting primarily from annual wage increases. The decrease in stock-based compensation expense was due primarily to $17.3 million in stock appreciation rights expense recognized in the first half of 2020, which was not incurred in 2021 as the awards became fully vested in 2020, and a net decrease of $7.7 million due to the reversal of previously recognized expense related to unvested awards that were forfeited due to management departures in the first quarter of 2021, partially offset by the issuance of new equity awards since 2020.

Europe general and administrative expense ~~increased $8.8~~decreased $7.0 million, or ~~65%~~48%, ~~due primarily to~~driven by a ~~charge~~decrease in compensation expense of $7.1 million which was caused by a one-time expense of $6.0 million related to the acquisition of an additional 21% interest in ~~our~~ MyBuilder ~~business at a premium to fair value,~~in the first quarter of 2021, lower headcount, and ~~a $1.4 million increase in professional fees related to restructuring in Germany.~~lower average compensation.

Product development expense

Three Months Ended June 30, Six Months Ended June 30,
2021 $ Change % Change 2020 2021 $ Change % Change 2020
(Dollars in thousands)
Product development expense $ 18,752 $ 3,345 22% $ 15,407 $ 36,799 $ 4,308 13% $ 32,491
As a percentage of revenue 4% 4% 5% 5%


	Three Months Ended March 31,
	2022		$ Change		% Change	2021
	(Dollars in thousands)
Product development expense	$	17,859	$	(188)	(1)%	$	18,047
As a percentage of revenue	4%					5%

2925

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~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

North America product development expense ~~increased $1.5~~decreased $0.9 million, or ~~11%~~6%, due primarily to ~~increases~~decreases in compensation expense of ~~$0.8~~$1.5 million and lease expense of $0.6 million, partially offset by an increase in software license and maintenance expense of $0.7 million and an increase in outsourced personnel and consulting costs of $0.4 million. The ~~increase~~decrease in compensation expense is ~~driven by higher salary expense,~~primarily due to an increase in ~~part, to increased headcount, partially offset by~~ capitalized ~~internally developed~~wages from additional capitalized software ~~expenses.~~projects and a reduction in headcount.

Europe product and development expense increased ~~$1.9~~$0.7 million, or ~~75%~~16%, due to an increase in compensation expense of ~~$1.6~~$0.5 million ~~as a result of fewer projects being capitalized.~~from higher headcount and higher average compensation.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

Depreciation


	Three Months Ended March 31,
	2022		$ Change		% Change	2021
	(Dollars in thousands)
Depreciation	$	13,999	$	(1,970)	(12)%	$	15,969
As a percentage of revenue	3%					4%

North America ~~product development expense increased $1.0~~depreciation in 2022 decreased $1.4 million, or 4%9%, due primarily to ~~increases in outsourced personnel and consulting costs~~the write-off of ~~$0.7 million and~~certain capitalized software ~~license and maintenance expense of $0.4 million. The increase in outsourced personnel and consulting costs were in support of~~ projects ~~for the Angi brand change.~~

~~Europe product and development expense increased $3.3 million, or 63%, due to an increase in compensation expense of $3.1 million due primarily to factors described above~~ in the ~~three-month discussion.~~three-months ended March 31, 2021.

~~Depreciation~~

Three Months Ended June 30, Six Months Ended June 30,
2021 $ Change % Change 2020 2021 $ Change % Change 2020
(Dollars in thousands)
Depreciation $ 15,058 $ 2,503 20% $ 12,555 $ 31,027 $ 6,334 26% $ 24,693
As a percentage of revenue 4% 3% 4% 3%

~~For the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020~~

~~North America and~~ Europe depreciation in ~~2021 increased from 2020 due primarily to investments in~~2022 decreased $0.6 million, or 42%, as capitalized software ~~to support our products and services.~~projects reached the end of their depreciable lives.

Operating (loss) income


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
		2021		$ Change		% Change	2020		2021		$ Change		% Change	2020			2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
North America	North America	$	(32,127)	$	(48,317)	NM	$	16,190	$	(22,550)	$	(30,632)	NM	$	8,082	North America	$	(29,654)	$	(39,231)	NM	$	9,577
Europe	Europe	(604)		(2,058)		NM	1,454		(10,072)		(3,338)		(50)%	(6,734)		Europe	(4,303)		5,165		55%	(9,468)
Total	Total	$	(32,731)	$	(50,375)	NM	$	17,644	$	(32,622)	$	(33,970)	NM	$	1,348	Total	$	(33,957)	$	(34,066)	NM	$	109

As a percentage of revenue	As a percentage of revenue	(8)%					5%		(4)%					—%		As a percentage of revenue	(8)%					—%

________________________

NM = Not meaningful

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

North America operating income decreased ~~$48.3~~$39.2 million to a loss of ~~$32.1~~$29.7 million due to a decrease in Adjusted EBITDA of ~~$60.3~~$30.8 million, described below, and an increase of ~~$2.2~~$11.0 million in ~~depreciation,~~stock-based compensation expense, partially offset by decreases of ~~$9.2~~$1.4 million in depreciation expense and $1.3 million in amortization of intangibles ~~and $5.0 million in stock-based compensation~~ expense. The increase ~~in depreciation was due primarily to the investments in capitalized software to support our products and services. The decrease~~ in stock-based compensation expense was due primarily due to ~~$5.6 million for stock appreciation rights and options expense~~the reversal of previously recognized stock-based compensation due to forfeitures from management departures in the ~~second~~first quarter of ~~2020 which were not incurred~~2021 and new awards granted since the first quarter of 2021, noted above. The decrease in ~~2021 as~~depreciation primarily to the ~~awards became fully vested.~~write-off of certain capitalized software projects in the three-months ended March 31, 2021. The decrease in the amortization of intangibles was due primarily to certain intangible assets becoming fully amortized during ~~2020.~~

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2021.

Europe operating ~~income decreased $2.1~~loss increased $5.2 million to a loss of ~~$0.6~~$4.3 million due primarily to an increase in Adjusted EBITDA loss of ~~$2.0~~$4.5 million, described below, and ~~an increase of $0.2 million in stock-based compensation expense, partially offset by~~ a decrease in depreciation expense of ~~$0.1 million in amortization of intangibles.~~$0.6 million.

At ~~June 30, 2021,~~March 31, 2022, there is ~~$74.3~~$111.2 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately ~~2.7~~3 years.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

~~North America operating income decreased $30.6 million to a loss~~

Table of $22.5 million due to a decrease in Adjusted EBITDA of $70.6 million, described below, and an increase of $5.5 million in depreciation, partially offset by decreases of $28.4 million in stock-based compensation expense and $17.0 million in amortization of intangibles. The increase in depreciation and decrease in stock-based compensation expense was due primarily to the factors discussed in the general and administrative expense section above. The decrease in amortization of intangibles was due primarily to the factors described above in the three-month discussion.

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Europe operating loss increased $3.3 million, or 50%, due primarily to an increase in Adjusted EBITDA loss of $3.0 million, described below, and an increase of $0.3 million in stock-based compensation expense, partially offset by a decrease of $0.2 million in amortization of intangibles.

Adjusted EBITDA


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
		2021		$ Change		% Change	2020		2021		$ Change		% Change	2020			2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
North America	North America	$	(5,302)	$	(60,343)	NM	$	55,041	$	25,863	$	(70,569)	(73)%	$	96,432	North America	$	341	$	(30,824)	(99)%	$	31,165
Europe	Europe	860		(2,035)		(70)%	2,895		(7,119)		(3,020)		(74)%	(4,099)		Europe	(3,510)		4,469		56%	(7,979)
Total	Total	$	(4,442)	$	(62,378)	NM	$	57,936	$	18,744	$	(73,589)	(80)%	$	92,333	Total	$	(3,169)	$	(26,355)	NM	$	23,186

As a percentage of revenue	As a percentage of revenue	(1)%					15%		2%					13%		As a percentage of revenue	(1)%					6%

For a reconciliation of net ~~(loss) earnings~~loss attributable to Angi Inc. shareholders to operating ~~(loss) income~~loss to consolidated Adjusted EBITDA, see “Principles of Financial Reporting.” For a reconciliation of operating ~~(loss) income~~loss to Adjusted EBITDA for the Company’s reportable segments, see “Note 7—Segment Information” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements.”

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

North America Adjusted EBITDA decreased ~~$60.3~~$30.8 million, or 99%, to $0.3 million, and decreased as a ~~loss~~percentage of ~~$5.3 million,~~revenue, despite higher revenue of ~~$45.9~~$50.1 million, due primarily to an increases in cost of revenue of $45.2 million, general and administrative expense of $28.5 million, and selling and marketing expense of ~~$47.7~~$19.2 million, ~~cost~~each of ~~revenue of $28.6~~which are explained above.

Europe Adjusted EBITDA increased $4.5 million, ~~and~~as general and administrative expenses were lower by $7.0 million, which was partially offset by lower revenue of $1.0 million and higher selling and marketing expense of ~~$25.6~~$0.7 million, ~~(excluding stock-based compensation expense);~~and product development expense of $0.7 million, each of which are described above.

Europe Adjusted EBITDA decreased $2.0 million, or 70%, as higher revenue of $3.4 million was more than offset by the increases in general and administrative expense of $2.2 million (excluding stock-based compensation expense), product development expense of $1.9 million and selling and marketing expense of $1.3 million; each of which are described above.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

North America Adjusted EBITDA decreased $70.6 million, or 73%, to $25.9 million, despite higher revenue of $89.3 million, due primarily to increases in selling and marketing expense $64.4 million, cost of revenue $49.3 million, and general and administrative expense (excluding stock-based compensation expense) of $35.1 million; each of which are described above. Included in these increases are $4.0 million in expense related to impairments at the Fixd Services business and from management changes in the first quarter of 2021, and an increase of $3.2 million in provision for credit losses due to higher Marketplace Revenue.

Europe Adjusted EBITDA loss increased $3.0 million, or 74%, due primarily to the increase in general and administrative expense of $9.1 million (excluding stock-based compensation expense), including a charge of $6.0 million related to the

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acquisition of an additional 21% interest in MyBuilder at a premium to fair value, and the increase in product development expense of $3.3 million, partially offset by an increase of $9.9 million in revenue.

Interest expense

Interest expense relates to interest on the ANGI Group Senior Notes, ~~and~~ ANGI Group Term Loan, and commitment fees on the ~~undrawn~~ ANGI Group Revolving Facility. As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety. The ANGI Group Revolving Facility was terminated effective August 3, 2021. No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.

For a detailed description of long-term debt, net, see “Note 4—Long-term Debt” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements.”

Three Months Ended June 30, Six Months Ended June 30,
2021 $ Change % Change 2020 2021 $ Change % Change 2020
(In thousands)
Interest expense $ 5,814 $ 4,194 NM $ 1,620 $ 12,431 $ 8,537 NM $ 3,894

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~


	Three Months Ended March 31,
	2022		$ Change		% Change	2021
	(In thousands)
Interest expense	$	5,022	$	(1,595)	(24)%	$	6,617

Interest expense ~~increased due~~decreased primarily ~~to the issuance of the ANGI Group Senior Notes in August 2020, partially offset by a decrease in interest expense~~ due to the repayment of the ANGI Group Term Loan during the second quarter of 2021.

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~

Interest expense increased due primarily to the issuance of the Senior Notes in August 2020, partially offset by a decrease in interest expense of the ANGI Group Term Loan due primarily to lower interest rates and the decrease in the average outstanding balance compared to the prior year period.

Other ~~(expense) income,~~expense, net

Three Months Ended June 30, Six Months Ended June 30,
2021 $ Change % Change 2020 2021 $ Change % Change 2020
(In thousands)
Other (expense) income, net $ (636) $ (848) NM $ 212 $ (1,403) $ (2,036) NM $ 633


	Three Months Ended March 31,
	2022		$ Change		% Change	2021
	(In thousands)
Other expense, net	$	(391)	$	376	49%	$	(767)

~~For the three months ended June 30, 2021 and 2020~~

Other expense, net in 2022 principally includes a net foreign currency exchange loss of $0.5 million.

Other expense, net in 2021 primarily includes the write-off of $1.1 million of deferred debt issuance costs related to the ANGI Group Term Loan which was repaid in its entirety during the second quarter of 2021, partially offset by a net foreign currency exchange gain of $0.4 million and interest income of $0.1 million.

~~Other income, net in 2020~~ principally includes ~~interest income of $0.2 million.~~

~~For the six months ended June 30, 2021 and 2020~~

Other expense, net in 2021 primarily includes the write-off of $1.1 million of deferred debt issuance costs related to the ANGI Group Term Loan which was repaid in its entirety during the second quarter of 2021 and net foreign currency exchange losses of ~~$0.5~~$0.9 million, partially offset by interest income of $0.1 million.

Other income, net in 2020 primarily includes interest income of $1.4 million, partially offset by net foreign currency exchange losses of $0.3 million, and a $0.2 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in Angi Inc. shares during the first quarter of 2020.

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Income tax benefit ~~(provision)~~


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
		2021		$ Change		% Change	2020		2021		$ Change		% Change	2020			2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Income tax benefit (provision)		$	9,129	$	12,154	NM	$	(3,025)	$	18,418	$	12,478	210%	$	5,940
Income tax benefit																Income tax benefit	$	6,083	$	(3,206)	(35)%	$	9,289
Effective income tax rate	Effective income tax rate	23%					19%		40%					NM		Effective income tax rate	15%					NM

For further details of income tax matters, see “Note 2—Income Taxes” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements.”

~~For the three months ended June 30, 2021 compared to the three months ended June 30, 2020~~

In 2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to the benefit of the change in the annual expected effective income tax rate, partially offset by nondeductible stock-based compensation expense.

~~In 2020,~~2022, the effective income tax rate was lower than the statutory rate of 21%, due primarily to ~~benefiting previously unbenefited~~tax shortfalls generated by the exercise and vesting of stock-based awards and foreign ~~net operating loss carryforwards.~~

~~For the six months ended June 30, 2021 compared to the six months ended June 30, 2020~~income taxed at different tax rates.

In 2021, the ~~effective~~ income tax ~~rate~~benefit was ~~higher than the statutory rate of 21%~~ due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.

In 2020, the Company recorded an income tax benefit of $5.9 million. The income tax benefit was due primarily to a $5.7 million reduction to deferred taxes due to the true-up of the state tax rate of an indefinite-lived intangible asset and benefiting previously unbenefited foreign net operating loss carryforwards.

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PRINCIPLES OF FINANCIAL REPORTING

We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”). This measure is one of the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. We endeavor to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure, which we discuss below.

Definition of Non-GAAP Measure

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

The following table reconciles net (loss) earnings attributable to Angi Inc. shareholders to operating (loss) income to consolidated Adjusted EBITDA:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(In thousands)									(In thousands)
Net (loss) earnings attributable to Angi Inc. shareholders	Net (loss) earnings attributable to Angi Inc. shareholders	$	(30,293)	$	12,667	$	(28,362)	$	3,709	Net (loss) earnings attributable to Angi Inc. shareholders	$	(33,390)	$	1,931
Add back:	Add back:									Add back:
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	241		544		324		318		Net earnings attributable to noncontrolling interests	103		83
Income tax (benefit) provision		(9,129)		3,025		(18,418)		(5,940)
Other expense (income), net		636		(212)		1,403		(633)
Income tax benefit										Income tax benefit	(6,083)		(9,289)
Other income, net										Other income, net	391		767
Interest expense	Interest expense	5,814		1,620		12,431		3,894		Interest expense	5,022		6,617
Operating (loss) income	Operating (loss) income	(32,731)		17,644		(32,622)		1,348		Operating (loss) income	(33,957)		109
Add back:	Add back:									Add back:
Stock-based compensation expense	Stock-based compensation expense	9,543		14,759		11,577		40,334		Stock-based compensation expense	12,985		2,034
Depreciation	Depreciation	15,058		12,555		31,027		24,693		Depreciation	13,999		15,969
Amortization of intangibles	Amortization of intangibles	3,688		12,978		8,762		25,958		Amortization of intangibles	3,804		5,074
Adjusted EBITDA	Adjusted EBITDA	$	(4,442)	$	57,936	$	18,744	$	92,333	Adjusted EBITDA	$	(3,169)	$	23,186

For a reconciliation of operating (loss) income to Adjusted EBITDA for the Company’s reportable segments, see “Note 7—Segment Information” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements.”

Non-Cash Expenses That Are Excluded from Our Non-GAAP Measure

Stock-based compensation expense consists of expense associated with the grants, including unvested grants assumed in acquisitions, of stock appreciation rights, restricted stock units (“RSUs”), stock options, performance-based RSUs (“PSUs”) and market-based awards. These expenses are not paid in cash and we view the economic costs of stock-based awards to be the dilution to our share base; we also include the related shares in our fully diluted shares outstanding for GAAP earnings per share using the treasury stock method. PSUs and market-based awards are included only to the extent the applicable performance or market condition(s) have been met (assuming the end of the reporting period is the end of the contingency period). The Company is currently settling all stock-based awards on a net basis and remits the required tax-withholding amounts from its current funds.

Depreciation is a non-cash expense relating to our capitalized software, leasehold improvements and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.

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Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as service professional relationships, technology, memberships, customer lists and user base, and trade names, are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.

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FINANCIAL POSITION, LIQUIDITY, AND CAPITAL RESOURCES

Financial Position


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In thousands)					(In thousands)
Cash and cash equivalents and marketable debt securities:
Cash and cash equivalents:						Cash and cash equivalents:
United States	United States	$	563,024	$	793,679	United States	$	364,703	$	404,277
All other countries	All other countries	21,236		19,026		All other countries	26,583		23,859
Total cash and cash equivalents	Total cash and cash equivalents	584,260		812,705		Total cash and cash equivalents	$	391,286	$	428,136
Marketable debt securities (United States)		—		49,995
Total cash and cash equivalents and marketable debt securities		$	584,260	$	862,700

Long-term debt:	Long-term debt:					Long-term debt:
Senior Notes	Senior Notes	$	500,000	$	500,000	Senior Notes	$	500,000	$	500,000
Term Loan		—		220,000

Total long-term debt	Total long-term debt	500,000		720,000		Total long-term debt	500,000		500,000

Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	5,805		7,723		Less: unamortized debt issuance costs	5,270		5,448
Total long-term debt, net	Total long-term debt, net	$	494,195	$	712,277	Total long-term debt, net	$	494,730	$	494,552

~~The~~At March 31, 2022, all of the Company’s international cash can be repatriated without significant tax consequences.

~~For a detailed description of long-term debt, see “Note 4—Long-term Debt” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements~~.”

Cash Flow Information

In summary, the Company’s cash flows are as follows:


		Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
		(In thousands)					(In thousands)
Net cash provided by (used in):
Net cash (used in) provided by:						Net cash (used in) provided by:
Operating activities	Operating activities	$	59,253	$	127,797	Operating activities	$	(735)	$	6,209
Investing activities	Investing activities	$	15,037	$	(23,934)	Investing activities	$	(26,816)	$	(45,072)
Financing activities	Financing activities	$	(303,171)	$	(72,863)	Financing activities	$	(9,466)	$	(345,168)

Net cash provided by operating activities consists of earnings adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments include stock-based compensation expense, provision for credit losses, amortization of intangibles, depreciation, impairment of long-lived and right-of-use assets, non-cash lease expense, and deferred income taxes.

2022

Adjustments to earnings consist primarily of $21.6 million of provision for credit losses, $14.0 million of depreciation, $13.0 million of stock-based compensation expense, $3.8 million of amortization of intangibles, and $3.4 million of non-cash lease expense. The decrease from changes in working capital consists primarily of an increase of $37.8 million in accounts receivable and a decrease of $4.5 million in operating lease liabilities, partially offset by increases of $20.6 million in accounts payable and other liabilities. The increase in accounts receivable is due primarily to revenue growth, primarily attributable to Angi Services. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in accounts payable and other liabilities is due primarily to increases in accrued expenses related to the factors described in the “Brand Integration Initiative” and accrued roofing material costs related to Angi Roofing.

Net cash used in investing activities includes $26.9 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and services.

Net cash used in financing activities includes $8.1 million for the repurchase of 1.0 million shares of Angi Inc. Class A common stock, on a settlement date basis, at an average price of $7.80 per share and $1.3 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

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2021

Adjustments to earnings consist primarily of ~~$42.7~~$19.1 million of provision for credit losses, ~~$31.0~~$16.0 million of depreciation, ~~$12.3~~$5.1 million of ~~impairment charges on long-lived~~amortization of intangibles, $2.9 million of revenue reserves, and ~~right-of-use assets, $11.6~~$2.0 million of stock-based compensation expense, ~~$8.8 million of amortization of intangibles, and $4.7 million of revenue reserves,~~ partially offset by ~~$20.3~~$10.3 million of deferred income taxes. The decrease from changes in working capital consists primarily of ~~an increase of $63.2 million~~increases in accounts receivable of $34.6 million, partially offset by increases ~~of $43.2 million~~ in accounts payable and other liabilities of $8.8 million and ~~$5.3 million~~deferred revenue of ~~deferred revenue. The increase in accounts receivable is due primarily to revenue growth in North America.~~$3.0 million. The increase in accounts payable and other liabilities is due primarily to an increase in accrued advertising and related payables. The increase in deferred revenue is driven primarily by increases in ~~membership payments.~~

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memberships. The increase in accounts receivable is due primarily to revenue growth in North America.

Net cash provided by investing activities includes proceeds of $50.0 million from the maturities of marketable debt securities, ~~partially offset by $35.7 million~~net of capital expenditures of $18.7 million, primarily related to investments in the development of capitalized software to support the Company’s products and services.

Net cash used in financing activities includes ~~$220.0 million for the prepayment of the ANGI Group Term Loan, which otherwise would have matured on November 5, 2023, $54.6~~$48.2 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $22.9 million for the purchase of redeemable noncontrolling interests, $6.9 million for the prepayment on the Term Loan required quarterly payments that was otherwise due in the first quarter of 2022, and ~~$5.6~~$4.9 million for the repurchase of ~~0.5~~0.4 million shares of Angi Inc. Class A common stock, on a settlement and trade date basis, at an average price of ~~$11.87~~$11.85 per share.

~~2020~~

Adjustments to earnings consist primarily of $40.3 million of stock-based compensation expense, $39.3 million of provision for credit losses expense, $26.0 million of amortization of intangibles, and $24.7 million of depreciation, partially offset by $6.3 million of deferred income taxes. The deferred income tax benefit primarily relates to an adjustment to deferred taxes resulting from a true-up of the state tax rate. The decrease from changes in working capital consists primarily of an increase in accounts receivable of $48.2 million, partially offset by an increase in accounts payable and other liabilities of $35.9 million. The increase in accounts receivable is due primarily to revenue growth in North America. The increase in accounts payable and other liabilities is due primarily to an increase in accrued advertising and related payables.

Net cash provided by investing activities includes capital expenditures of $24.7 million, primarily related to investments in capitalized software to support the Company's products and services and leasehold improvements.

Net cash used in financing activities includes $54.4 million for the repurchase of 7.7 million shares of ANGI common stock, on a settlement date basis, at an average price of $7.02 per share, $11.5 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $6.9 million for the principal payments on the ANGI Group Term Loan, and $3.2 million for the purchase of redeemable noncontrolling interests, partially offset by a $3.1 million payment from IAC pursuant to the tax sharing agreement.

Liquidity and Capital Resources

Financing Arrangements

The ANGI Group Senior Notes were issued on August 20, ~~2020,~~2020. At any time prior to August 15, 2023, these notes may be redeemed at a redemption price equal to the ~~proceeds~~sum of ~~which are intended~~the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, these notes may be redeemed at the redemption prices set forth in the indenture governing the notes, plus accrued and unpaid interest thereon, if any, to the applicable redemption date.

The indenture governing the ANGI Group Senior Notes contains a covenant that would limit ANGI Group’s ability to incur liens for ~~general corporate purposes, including potential future acquisitions~~borrowed money in the event a default has occurred or ANGI Group’s secured leverage ratio (as defined in the indenture) exceeds 3.75 to 1.0. At March 31, 2022 there were no limitations pursuant thereto.

During the three months ended March 31, 2021, ANGI Group prepaid $6.9 million of the ANGI Group Term Loan principal that was otherwise due in the first quarter of 2022 and, ~~return of capital.~~

Asas of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety.~~The outstanding balance of the ANGI Group Term Loan at December 31, 2020 was~~ ~~$220.0 million~~ ~~and bore interest at 2.16%.~~

The $250.0 million ANGI Group Revolving Facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021. No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.

Share Repurchase Authorizations and Activity

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, the Company repurchased ~~0.5~~1.0 million shares, on a trade date basis, of its common stock at an average price of ~~$11.87~~$7.80 per share, or ~~$5.6~~$8.1 million in aggregate. ~~From July 1, 2021 through August 3, 2021, Angi Inc. repurchased an additional 0.7 million shares at an average price of $11.68 per share, or~~ ~~$7.7 million~~ ~~in aggregate. Angi Inc.~~The Company has ~~18.1~~15.0 million shares remaining in its share repurchase authorization as of ~~August 3, 2021.~~May 6, 2022. The Company may purchase shares over an indefinite period of time on the open market and in privately negotiated transactions, depending on those factors ~~Angi Inc.~~the Company’s management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

Outstanding Stock-based Awards

The Company may settle equity awards on a gross or a net basis depending upon factors deemed relevant at the time, and if settled on a net basis, ~~with~~ Angi remits withholding taxes on behalf of the ~~employee~~employee. At ~~IAC/InterActiveCorp’s (“IAC”)~~IAC’s option, certain Angi stock appreciation rights can be settled in either Class A shares of Angi or shares of IAC common stock. If settled in IAC

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common stock, the Company reimburses IAC in either cash or through the issuance of Class A shares to IAC. The Company currently settles all equity awards on a net basis.

Pursuant to the employee matters agreement, in the event of a distribution of Angi capital stock to IAC stockholders in a transaction intended to qualify as tax-free for U.S. federal income tax purposes, the Compensation Committee of the IAC Board

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of Directors has the exclusive authority to determine the treatment of outstanding IAC equity awards. Such authority includes (but is not limited to) the ability to convert all or part of IAC equity awards outstanding immediately prior to the distribution into equity awards denominated in shares of Angi Class A Common Stock for no compensation, which Angi would be obligated to assume and which would be dilutive to Angi’s stockholders.

The following table summarizes the aggregate intrinsic value of all awards outstanding as of ~~July 30, 2021;~~May 6, 2022; assuming these awards were net settled on that date, the withholding taxes that would be paid by the Company on behalf of employees upon exercise or vesting that would be payable (assuming these equity awards are net settled with a 50% tax rate), and the shares that would have been issued are as follows:


		Aggregate intrinsic value of awards outstanding		Estimated withholding taxes payable		Estimated shares to be issued		Aggregate intrinsic value of awards outstanding		Estimated withholding taxes payable		Estimated shares to be issued
		(In thousands)						(In thousands)
Stock appreciation rights	Stock appreciation rights	$	8,455	$	4,228	367	Stock appreciation rights	$	943	$	471	115
Other equity awards(a)(b)	Other equity awards(a)(b)	164,636		69,216		6,157	Other equity awards(a)(b)	88,069		43,637		10,811
Total outstanding employee stock-based awards	Total outstanding employee stock-based awards	$	173,091	$	73,444	6,524	Total outstanding employee stock-based awards	$	89,012	$	44,108	10,926

_______________

(a)Includes stock options, RSUs, and subsidiary denominated equity.

(b)The number of shares ultimately needed to settle subsidiary denominated equity awards and the cash withholding tax obligation may vary significantly as a result of the determination of the fair value of the relevant award at the time of exercise. In addition, the number of shares required to settle these awards will be impacted by movement in the Company’s stock price.

Contractual Obligations

At March 31, 2022, there have been no material changes outside the ordinary course of business to the Company's contractual obligations since the disclosures for the year ended December 31, 2021, included in the Company's Annual Report on Form 10-K.

Capital Expenditures

The Company’s ~~2021~~2022 capital expenditures are expected to be higher than ~~2020~~2021 capital expenditures of ~~$52.5~~$70.2 million by approximately ~~35%~~20% to ~~40%~~25%, due primarily to increased investment in capitalized software to support the development of our products and services.

Liquidity Assessment

The Company’s liquidity could be negatively affected by a decrease in demand for its products and services due to COVID-19 or other factors. As described in the “COVID-19 Update” section above, to date, the COVID-19 outbreak and measures designed to curb its spread have adversely impacted the Company’s business.

At ~~June 30, 2021,~~March 31, 2022, IAC held all Class B shares of Angi Inc., which represent ~~84.1%~~84.5% of the economic interest and ~~98.1%~~98.2% of the voting interest of the Company. As a result, IAC has the ability to control Angi Inc.’s financing activities, including the issuance of additional debt and equity securities by Angi Inc. or any of its subsidiaries, or the incurrence of other indebtedness generally. While Angi Inc. is expected to have the ability to access debt and equity markets if needed, such transactions may require the approval of IAC due to its control of the majority of the outstanding voting power of Angi Inc.’s capital stock and its representation on the Angi Inc. board of directors. Additional financing may not be available on terms favorable to the Company or at all. In addition, the Company’s existing indebtedness could limit its ability to obtain additional financing.

The Company believes its existing cash, cash equivalents, and expected positive cash flows generated from operations will be sufficient to fund its normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net-settled stock-based awards, and investing and other commitments, for the ~~foreseeable future.~~next twelve months. We may elect to raise additional capital through the sale of additional equity or debt financing to fund business activities such as strategic acquisitions, share repurchases, or other purposes beyond the next twelve months.

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~~CONTRACTUAL OBLIGATIONS~~

During the six months ended June 30, 2021, other than the repayment of the outstanding balance of the ANGI Group Term Loan of $220.0 million, there have been no material changes to the Company’s contractual obligations since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2020.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, there have been no material changes to the Company’s instruments or positions that are sensitive to market risk since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2020, other than the repayment of the outstanding balance of the ANGI Group term loan of $220.0 million, which bore interest at a variable rate, reducing the Company’s exposure risk related to changes in interest rates.2021.

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Item 4. Controls and Procedures

The Company monitors and evaluates on an ongoing basis its disclosure controls and procedures and internal control over financial reporting in order to improve their overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management, including our principal executive and principal financial officers, or persons performing similar functions, evaluated the effectiveness of the Company’s disclosure controls and procedures as defined by Rule 13a-15(e) under the Exchange Act. Based on this evaluation, management has concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There were no changes to the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Overview

In the ordinary course of business, the Company and its subsidiaries are (or may become) parties to ~~litigation~~claims, suits, regulatory and government investigations, and other proceedings involving property, personal injury, contract, intellectual property, privacy, tax, labor and employment, competition, commercial disputes, consumer protection and other claims, as well as stockholder derivative actions, class action lawsuits and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences and could subject us to costs, including legal fees, require us to change our business practices, divert resources and the attention of management from our business, or otherwise adversely affect our business. The amounts that may be recovered in such matters may be subject to insurance coverage. Although the results of legal proceedings and claims cannot be predicted with certainty, neither the Company nor any of its subsidiaries is currently a party to any legal proceedings, the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations.

However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

Rules of the Securities and Exchange Commission require the description of material pending legal proceedings (other than ordinary, routine litigation incident to the registrant’s business) and advise that proceedings ordinarily need not be described if they primarily involve damages claims for amounts (exclusive of interest and costs) not exceeding 10% of the current assets of the registrant and its subsidiaries on a consolidated basis. In the judgment of Company management, none of the pending ~~litigation matters~~proceedings which we are defending, including the ~~one~~ones described below, ~~involves~~involve or isare likely to involve amounts of that magnitude. The litigation ~~matter~~ and ~~the investigation~~administrative matters described below ~~involves~~involve issues or claims that we believe may be of particular interest to our stockholders, regardless of whether ~~this matter~~the matters may be material to our financial position or operations, based upon the standard set forth in the rules of the Securities and Exchange Commission.

FTC Investigation ofProceeding Regarding Certain HomeAdvisor Business Practices

~~On April 19,~~In 2021, the staff of the Federal Trade Commission (“FTC”) informed HomeAdvisor that ~~upon investigation it believes~~the FTC was investigating certain of HomeAdvisor’s business practices. On March 11, 2022, the FTC filed a complaint against HomeAdvisor with the FTC’s administrative law judge, alleging that certain of ~~the company’s~~HomeAdvisor’s business practices ~~relating~~related to leads provided to service professionals and its mHelpDesk product are unfair or deceptive in violation of the FTC ~~Act. The staff proposed to resolve its potential claims via a consent judgment mandating certain business practice changes (and an unspecified payment amount)~~Act and ~~invited the company to engage in settlement discussions to resolve the matter.~~requesting injunctive relief. While HomeAdvisor believes that ~~any such~~the claims ~~would be~~are without merit and is ~~prepared to defend~~defending vigorously against ~~any enforcement proceeding, the company is continuing a dialogue with~~them, the FTC ~~to discuss the matter~~administrative proceeding is ongoing, and ~~cannot currently predict~~ the outcome ~~of this investigation and related discussions.~~

cannot be predicted at present.

Service Professional Class Action Litigation against HomeAdvisor

This purported class action pending in Colorado is described in detail on ~~page 27~~pages 26-27 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021. See Airquip, Inc. et al. v. HomeAdvisor, Inc. et al., No. l:16-cv-1849 and Costello et al. v. HomeAdvisor, Inc. et al., No. 1:18-cv-1802, both filed in U.S. District Court in Colorado and consolidated under the caption In re HomeAdvisor, Inc. Litigation. This lawsuit alleges that our HomeAdvisor business engages in certain deceptive practices affecting the service professionals who join its network, including charging them for substandard customer leads or failing to disclose certain charges. There have been no material or otherwise noteworthy developments in this case since the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021. The Company believes that the allegations in this lawsuit are without merit and will continue to defend vigorously against them.

Item 1A. Risk Factors

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “estimates,” “expects,” ~~“plans”~~“plans,” “intends,” “will continue,” “may”, “could” and “believes,” among ~~others,~~similar expressions, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to ~~the Company’s~~our future business, financial condition, results of operations and financial performance, our business prospects and strategy, ~~anticipated~~ trends and prospects in home services industry and other similar matters. These forward-looking statements are based on Company management's ~~current~~ expectations and assumptions

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about future events as of the date of this report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: (i) the impact of the COVID-19 outbreak on our businesses, (ii) our ability to compete, (iii) the failure or delay of the home services market to migrate online, (iv) adverse economic events or trends (particularly those that adversely

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impact consumer confidence and spending behavior), (v) our ability to establish and maintain relationships with quality service professionals, (vi) our ability to build, maintain and/or enhance our various brands, including through our Angi brand integration initiative, (vii) our ability to expand our pre-priced bookings offerings, (viii) our ability to market our various products and services in a successful and cost-effective manner, ~~(viii)~~(ix) our ability to drive traffic to our properties and businesses, including through the continued display of links to websites offering our products and services in a prominent manner in search results, ~~(ix)~~(x) our continued ability to communicate with consumers and service professionals via e-mail (or other sufficient means), ~~(x)~~(xi) our ability to access, share and use personal data about consumers, ~~(xi)~~(xii) our ability to develop and monetize versions of our products and services for mobile and other digital devices, ~~(xii)~~(xiii) any challenge to the contractor classification or employment status of our ~~Handy~~ service professionals, ~~(xiii)~~(xiv) our ability to protect our systems, technology and infrastructure from cyberattacks and to protect personal and confidential user information, ~~(xiv)~~(xv) the occurrence of data security breaches, fraud and/or additional regulation involving or impacting credit card payments, ~~(xv)~~(xvi) the integrity, quality, efficiency and scalability of our technology systems and infrastructures (and those of third parties with whom we do business), ~~(xvi)~~(xvii) operational and financial risks relating to acquisitions and the integration of suitable targets, ~~(xvii)~~(xviii) our ability to operate (and expand into) international markets successfully, ~~(xviii)~~(xix) our ability to adequately protect our intellectual property rights and not infringe the intellectual property rights of third parties, ~~(xix)~~(xx) changes in key personnel, ~~(xx)~~(xxi) various risks related to our relationship with IAC and ~~(xxi)~~(xxii) various risks related to our outstanding indebtedness.

Certain of these and other risks and uncertainties are discussed in our filings with the SEC, including in Part I-Item 1A-Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021. Other unknown or unpredictable factors that could also adversely affect our business, financial condition and operating results may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of Company management as of the date of this quarterly report. We do not undertake to update these forward-looking statements.

~~Risk Factors~~

~~Recent changes in our executive management may not result in growth of our business or enhance stockholder value, and our management transition may not be successful.~~

During 2021, we announced the appointment of a new Chief Executive Officer, a new Chief Financial Officer and the search for a new Chief Marketing Officer. Our executive management team is critical to the overall management of the Company and also plays a key role in maintaining our culture and setting our strategic direction. In connection with these executive management changes, we have experienced, and may continue to experience, employee and management turnover in certain areas. These recent changes in our executive management may also cause or result in: disruption of our business and operations; difficulty recruiting, hiring, motivating and retaining talented and skilled personnel; further departures of other members of management; increased stock price volatility; and difficulty in establishing, maintaining or negotiating business or strategic relationships or transactions. Furthermore, these transitions could be a distraction to our executive management, business operations, service professionals and customers. If we do not succeed in attracting well-qualified employees, retaining and motivating existing employees or integrating new executives and employees, our business could be materially and adversely affected.

Our Angi brand integration initiative may involve substantial costs, including as a result of a continued negative impact on our organic search placement, and may not be favorably received by customers and service professionals.

On March 17, 2021, the Company updated one of its leading websites and brands, Angie’s List, to Angi, and concentrated its marketing investment in the Angi brand in order to focus its marketing, sales, and branding efforts on a single brand.

We have incurred and may continue to incur substantial costs as a result of our brand integration initiative and may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by Angie’s List, and our customers and service professionals may be confused as we transition and focus on the Angi brand. Our Company relies heavily on free and paid search engine marketing efforts to drive traffic to our platforms. Our brand initiative has adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results as Angi does not have the same domain history as Angie’s List. In addition, we shifted marketing to support the Angi brand, away from the HomeAdvisor brand, which has negatively affected the efficiency of our search engine marketing efforts.

During the second quarter of 2021, these efforts had a pronounced negative impact on Marketplace Service Requests from organic search results and via our mobile applications, which in turn has resulted in increased paid search engine marketing to generate Marketplace Service Requests. The combined effect of this during the three months ended June 30, 2021, has reduced revenue and increased marketing spend, materially more than expected at the launch of the brand initiative in the first quarter of 2021 and more significantly than our forecasts at the beginning of May 2021. We expect the pronounced negative impact to organic search results, increased paid search engine marketing and reduced monetization from our mobile applications~~will continue until such time as the new brand establishes search engine optimization ranking and consumer awareness is~~

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established. Any or all of these impacts could continue to increase our marketing costs (particularly if free traffic is replaced with paid traffic) and adversely affect the effectiveness of our marketing efforts overall. Finally, as we align and focus the organization around a single brand, we could experience financial and operational challenges and reduced service professional participation across our various product lines. Depending on market acceptance, our brand integration initiative could adversely affect our ability to attract and retain customers and service professionals, which could cause us not to realize some or all of the anticipated benefits contemplated by the brand integration initiative.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

The employee matters agreement dated as of September 29, 2017, by and between us and IAC, provides, among other things, that we will reimburse IAC for the cost of certain equity awards held by our current and former employees and that IAC may elect to receive payment either in cash or shares of our capital stock.

Pursuant to the employee matters agreement, ~~5,931~~no shares of Class A common stock and ~~18,983~~no shares of Class B common stock were issued to IAC ~~on June 30, 2021 as reimbursement for shares of IAC common stock issued in connection with the settlement of certain equity awards held by our employees~~ during the ~~three months~~quarter ended June 30, 2021. This issuance did not involve any underwriters or public offerings and we believe that such issuance was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof.March 31, 2022.

Issuer Purchases of Equity Securities

The following table sets forth purchases by the Company of its Class A common stock during the three months ended ~~June 30, 2021:~~March 31, 2022:

Period (a)
Total Number of Shares Purchased (b)
Average Price Paid Per Share (c)
Total Number of Shares Purchased as Part of
Publicly
Announced
Plans or
Programs(1) (d)
Maximum Number of Shares that May Yet Be Purchased Under Publicly
Announced
Plans or
Programs(2)
April 2021 — $ — — 18,856,841
May 2021 60,055 $ 12.00 60,055 18,796,786
June 2021 — $ — — 18,796,786
Total 60,055 $ — 60,055 18,796,786

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Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	(d) Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs(2)
January 2022	954,447	$	7.78	954,447	15,115,389
February 2022	89,675	$	7.99	89,675	15,025,714
March 2022	—	$	—	—	15,025,714
Total	1,044,122	$	7.80	1,044,122	15,025,714

(1)Reflects repurchases made pursuant to the share repurchase authorizations previously announced in March ~~2020 and February 2019.~~2020.

(2)Represents the total number of shares of Class A common stock that remained available for repurchase as of ~~June 30, 2021~~March 31, 2022 pursuant to the March 2020 ~~and February 2019~~ share repurchase authorizations. ~~From July 1, 2021 through August 3, 2021, the Company repurchased an additional 656,207 shares at an average price of $11.68 per share.~~ The Company may repurchase shares pursuant to this share repurchase authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors Company management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

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Item 6. Exhibits

The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith, incorporated by reference to the location indicated or furnished herewith.

Exhibit Number

Description

Location

3.1

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Angi Inc.

Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on March 17, ~~2021~~2021..

3.2

Amended and Restated Bylaws of Angi Inc.

Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed on March 17, ~~2021~~2021..

~~4.1~~

~~Form of Angi Inc. Common Stock Certificate. (1)~~

~~Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q, filed on May 10, 2021.~~

~~10.1~~

~~Employment Agreement between Jeff Pedersen and Angi Inc., dated as of June 18, 2021. (2)~~

~~Exhibit 10.1 to the Registrant~~’~~s Current Report on Form 8-K, filed on June 24, 2021.~~

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1)

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1)

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ~~(3)~~(2)

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ~~(3)~~(2)

101.INS

Inline XBRL Instance ~~(1)~~

~~The~~(the instance document
does not appear in the ~~interactive data file~~Interactive Data File because
its XBRL tags are embedded within the Inline XBRL ~~document.~~
document)

101.SCH

Inline XBRL Taxonomy Extension Schema(1)

101.CAL

Inline XBRL Taxonomy Extension Calculation(1)

101.DEF

Inline XBRL Taxonomy Extension Definition(1)

101.LAB

Inline XBRL Taxonomy Extension Labels(1)

101.PRE

Inline XBRL Taxonomy Extension Presentation(1)

104

Cover Page Interactive Data File (formatted as Inline
XBRL and contained in Exhibit 101)

(1)Filed herewith.

(2)~~Reflects management contracts and management and director compensatory plans.~~

~~(3)~~Furnished herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:

~~August 6, 2021~~May 10, 2022

Angi Inc.

By:

/s/ JEFFREY W. PEDERSEN

Jeffrey W. Pedersen

Chief Financial Officer



Signature	Title	Date

/s/ JEFFREY W. PEDERSEN	Chief Financial Officer	~~August 6, 2021~~May 10, 2022
Jeffrey W. Pedersen

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				Angi Inc. Shareholders’ Equity
				Class A Common Stock $0.001 Par Value			Class B Convertible Common Stock $0.001 Par Value			Class C Common Stock $0.001 Par Value											Total Angi Inc. Shareholders' Equity

																	Accumulated Other Comprehensive Income								Total Shareholders' Equity
	Redeemable Noncontrolling Interests												Additional Paid-in Capital		(Accumulated Deficit) Retained Earnings				Treasury Stock				Noncontrolling Interests
				$		Shares	$		Shares	$		Shares
			(In thousands)
Balance as of March 31, 2021	$	4,608		$	98	98,408	$	422	421,958	$	—	—	$	1,333,294	$	11,680	$	4,623	$	(126,997)	$	1,223,120	$	10,823	$	1,233,943
Net earnings (loss)	48			—		—	—		—	—		—	—		(30,293)		—		—		(30,293)		194		(30,099)
Other comprehensive income	8			—		—	—		—	—		—	—		—		1,350		—		1,350		37		1,387
Stock-based compensation expense	—			—		—	—		—	—		—	11,477		—		—		—		11,477		—		11,477
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1		697	—		—	—		—	(6,691)		—		—		—		(6,690)		—		(6,690)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			—		6	—		19	—		—	—		—		—		—		—		—		—
Purchase of treasury stock	—			—		—	—		—	—		—	—		—		—		(721)		(721)		—		(721)

Adjustment of redeemable noncontrolling interests to fair value	(128)			—		—	—		—	—			128		—		—		—		128		—		128


Balance as of June 30, 2021	$	4,536		$	99	99,111	$	422	421,977	$	—	—	$	1,338,208	$	(18,613)	$	5,973	$	(127,718)	$	1,198,371	$	11,054	$	1,209,425

Balance as of December 31, 2020	$	26,364		$	94	94,238	$	422	421,862	$	—	—	$	1,379,469	$	9,749	$	4,637	$	(122,081)	$	1,272,290	$	10,567	$	1,282,857
Net (loss) earnings	(12)			—		—	—		—	—		—	—		(28,362)		—		—		(28,362)		336		(28,026)
Other comprehensive income	588			—		—	—		—	—		—	—		—		1,336		—		1,336		151		1,487
Stock-based compensation expense	—			—		—	—		—	—		—	14,019		—		—		—		14,019		—		14,019
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			2		2,288	—		—	—		—	(54,743)		—		—		—		(54,741)		—		(54,741)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			3		2,585	—		115	—		—	(3)		—		—		—		—		—		0
Purchase of treasury stock	—			—		—	—		—	—		—	—		—		—		(5,637)		(5,637)		—		(5,637)
Purchase of redeemable noncontrolling interests	(22,938)			—		—	—		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable noncontrolling interests to fair value	534			—		—	—		—	—		—	(534)		—		—		—		(534)		—		(534)


Balance as of June 30, 2021	$	4,536		$	99	99,111	$	422	421,977	$	—	—	$	1,338,208	$	(18,613)	$	5,973	$	(127,718)	$	1,198,371	$	11,054	$	1,209,425


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Treasury discount notes	$	49,995	$	0	$	0	$	49,995
Total available-for-sale marketable debt securities	$	49,995	$	0	$	0	$	49,995


	Three Months Ended June 30, 2021
	Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(32,127)	$	9,455	$	13,682	$	3,688	$	(5,302)
Europe	(604)		$	88	$	1,376	$	0	$	860
Operating loss	(32,731)
Interest expense	(5,814)
Other expense, net	(636)
Loss before income taxes	(39,181)
Income tax benefit	9,129
Net loss	(30,052)
Net earnings attributable to noncontrolling interests	(241)
Net loss attributable to Angi Inc. shareholders	$	(30,293)


	Three Months Ended June 30, 2020
	Operating Income		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	16,190	$	14,495	$	11,467	$	12,889	$	55,041
Europe	1,454		$	264	$	1,088	$	89	$	2,895
Operating income	17,644
Interest expense	(1,620)
Other income, net	212
Earnings before income taxes	16,236
Income tax provision	(3,025)
Net earnings	13,211
Net earnings attributable to noncontrolling interests	(544)
Net earnings attributable to Angi Inc. shareholders	$	12,667


	Six Months Ended June 30, 2021
	Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(22,550)	$	11,391	$	28,260	$	8,762	$	25,863
Europe	(10,072)		$	186	$	2,767	$	0	$	(7,119)
Operating loss	(32,622)
Interest expense	(12,431)
Other expense, net	(1,403)
Loss before income taxes	(46,456)
Income tax benefit	18,418
Net loss	(28,038)
Net earnings attributable to noncontrolling interests	(324)
Net loss attributable to Angi Inc. shareholders	$	(28,362)


	June 30, 2021		December 31, 2020		June 30, 2020		December 31, 2019
	(In thousands)
Cash and cash equivalents	$	584,260	$	812,705	$	420,985	$	390,565
Restricted cash included in other current assets	236		407		379		504
Restricted cash included in other non-current assets	730		449		412		409
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	585,226	$	813,561	$	421,776	$	391,478