As filed with the Securities and Exchange Commission on ~~August 9,~~November 8, 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~~September 30, 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)

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 ~~August 5,~~November 4, 2022, the following shares of the Registrant’s common stock were outstanding:


Class A Common Stock			~~81,270,011~~82,452,237
Class B Common Stock			422,019,247
Class C Common Stock			—
Total outstanding Common Stock			~~503,289,258~~504,471,484

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	8
	Note 1—The Company and Summary of Significant Accounting Policies	9
	Note 2—Income Taxes	11
	Note 3—Financial Instruments and Fair Value Measurements	13
	Note 4—Long-term Debt	14
	Note 5—Accumulated Other Comprehensive (Loss) Income ~~(Loss)~~	15
	Note 6—(Loss) Earnings Per Share	15
	Note 7—Segment Information	17
	Note 8—Consolidated Financial Statement Details	20
	Note 9—Contingencies	22
	Note 10—Related Party Transactions with IAC	23

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4039
Item 4.	Controls and Procedures	4039
PART II
Item 1.	Legal Proceedings	4241
Item 1A.	Risk Factors	4241
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4342
Item 6.	Exhibits	4443
	Signatures	4544

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(In thousands, except par value amounts)					(In thousands, except par value amounts)
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	360,950	$	428,136	Cash and cash equivalents	$	328,795	$	428,136

Accounts receivable, net of reserves of $46,317 and $36,360, respectively		119,768		84,387
Accounts receivable, net of reserves of $50,790 and $36,360, respectively						Accounts receivable, net of reserves of $50,790 and $36,360, respectively	102,947		84,387
Other current assets	Other current assets	81,864		70,548		Other current assets	80,678		70,548
Total current assets	Total current assets	562,582		583,071		Total current assets	512,420		583,071

Capitalized software, leasehold improvements and equipment, net	Capitalized software, leasehold improvements and equipment, net	156,230		118,267		Capitalized software, leasehold improvements and equipment, net	167,302		118,267
Goodwill	Goodwill	909,964		916,039		Goodwill	903,134		916,039
Intangible assets, net	Intangible assets, net	185,174		193,826		Intangible assets, net	179,989		193,826
Deferred income taxes	Deferred income taxes	135,315		122,693		Deferred income taxes	136,694		122,693
Other non-current assets, net	Other non-current assets, net	68,250		76,245		Other non-current assets, net	68,620		76,245
TOTAL ASSETS	TOTAL ASSETS	$	2,017,515	$	2,010,141	TOTAL ASSETS	$	1,968,159	$	2,010,141

LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:	LIABILITIES:					LIABILITIES:

Accounts payable	Accounts payable	$	41,700	$	38,860	Accounts payable	$	50,354	$	38,860
Deferred revenue	Deferred revenue	56,940		53,834		Deferred revenue	55,224		53,834
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	238,962		183,815		Accrued expenses and other current liabilities	194,472		183,815
Total current liabilities	Total current liabilities	337,602		276,509		Total current liabilities	300,050		276,509

Long-term debt, net	Long-term debt, net	494,913		494,552		Long-term debt, net	495,098		494,552
Deferred income taxes	Deferred income taxes	2,223		1,883		Deferred income taxes	1,660		1,883
Other long-term liabilities	Other long-term liabilities	82,905		91,670		Other long-term liabilities	82,868		91,670

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies

SHAREHOLDERS’ EQUITY:	SHAREHOLDERS’ EQUITY:					SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 100,897 and 99,745 shares, respectively, and outstanding 80,686 and 80,578, respectively		101		100
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 101,749 and 99,745 shares, respectively, and outstanding 81,538 and 80,578, respectively						Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 101,749 and 99,745 shares, respectively, and outstanding 81,538 and 80,578, respectively	102		100
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 422,019 and 422,019 shares issued and outstanding	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 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	Class C common stock, $0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding	—		—		Class C common stock, $0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding	—		—
Additional paid-in capital	Additional paid-in capital	1,374,200		1,350,457		Additional paid-in capital	1,393,214		1,350,457
Accumulated deficit	Accumulated deficit	(119,251)		(61,629)		Accumulated deficit	(136,731)		(61,629)
Accumulated other comprehensive (loss) income	Accumulated other comprehensive (loss) income	(393)		3,309		Accumulated other comprehensive (loss) income	(5,212)		3,309
Treasury stock, 20,211 and 19,167 shares, respectively	Treasury stock, 20,211 and 19,167 shares, respectively	(166,184)		(158,040)		Treasury stock, 20,211 and 19,167 shares, respectively	(166,184)		(158,040)
Total Angi Inc. shareholders’ equity	Total Angi Inc. shareholders’ equity	1,088,895		1,134,619		Total Angi Inc. shareholders’ equity	1,085,611		1,134,619
Noncontrolling interests	Noncontrolling interests	10,977		10,908		Noncontrolling interests	2,872		10,908
Total shareholders’ equity	Total shareholders’ equity	1,099,872		1,145,527		Total shareholders’ equity	1,088,483		1,145,527
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,017,515	$	2,010,141	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,968,159	$	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,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021				2022		2021		2022		2021
		(In thousands, except per share data)								(In thousands, except per share data)
Revenue	Revenue	$	515,782	$	420,988	$	951,941	$	808,017		Revenue	$	498,036	$	461,565	$	1,449,977	$	1,269,582
Cost of revenue (exclusive of depreciation shown separately below)	Cost of revenue (exclusive of depreciation shown separately below)	127,771		69,704		226,769		123,532			Cost of revenue (exclusive of depreciation shown separately below)	109,057		99,467		335,826		222,999
Gross profit	Gross profit	388,011		351,284		725,172		684,485			Gross profit	388,979		362,098		1,114,151		1,046,583
Operating costs and expenses:	Operating costs and expenses:										Operating costs and expenses:
Selling and marketing expense	Selling and marketing expense	251,159		239,031		476,960		444,871			Selling and marketing expense	234,397		237,755		711,357		682,626
General and administrative expense	General and administrative expense	119,626		107,486		229,281		195,648			General and administrative expense	128,260		103,086		357,541		298,734
Product development expense	Product development expense	20,954		18,752		38,813		36,799			Product development expense	15,816		17,675		54,629		54,474
Depreciation	Depreciation	13,354		15,058		27,353		31,027			Depreciation	17,759		14,701		45,112		45,728
Amortization of intangibles	Amortization of intangibles	3,804		3,688		7,608		8,762			Amortization of intangibles	3,805		3,854		11,413		12,616
Total operating costs and expenses	Total operating costs and expenses	408,897		384,015		780,015		717,107			Total operating costs and expenses	400,037		377,071		1,180,052		1,094,178
Operating loss	Operating loss	(20,886)		(32,731)		(54,843)		(32,622)			Operating loss	(11,058)		(14,973)		(65,901)		(47,595)
Interest expense	Interest expense	(5,026)		(5,814)		(10,048)		(12,431)			Interest expense	(5,030)		(6,032)		(15,078)		(18,463)
Other expense, net	Other expense, net	(1,750)		(636)		(2,141)		(1,403)			Other expense, net	(2,296)		(479)		(4,437)		(1,882)
Loss before income taxes	Loss before income taxes	(27,662)		(39,181)		(67,032)		(46,456)			Loss before income taxes	(18,384)		(21,484)		(85,416)		(67,940)
Income tax benefit	Income tax benefit	3,665		9,129		9,748		18,418			Income tax benefit	945		4,791		10,693		23,209
Net loss	Net loss	(23,997)		(30,052)		(57,284)		(28,038)			Net loss	(17,439)		(16,693)		(74,723)		(44,731)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(235)		(241)		(338)		(324)			Net earnings attributable to noncontrolling interests	(40)		(302)		(379)		(626)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(24,232)	$	(30,293)	$	(57,622)	$	(28,362)		Net loss attributable to Angi Inc. shareholders	$	(17,479)	$	(16,995)	$	(75,102)	$	(45,357)

Per share information attributable to Angi Inc. shareholders:	Per share information attributable to Angi Inc. shareholders:										Per share information attributable to Angi Inc. shareholders:
Basic loss per share	Basic loss per share	$	(0.05)	$	(0.06)	$	(0.11)	$	(0.06)		Basic loss per share	$	(0.03)	$	(0.03)	$	(0.15)	$	(0.09)
Diluted loss per share	Diluted loss per share	$	(0.05)	$	(0.06)	$	(0.11)	$	(0.06)		Diluted loss per share	$	(0.03)	$	(0.03)	$	(0.15)	$	(0.09)

Stock-based compensation expense by function:	Stock-based compensation expense by function:										Stock-based compensation expense by function:

Selling and marketing expense	Selling and marketing expense	$	1,891	$	865	$	3,130	$	1,882		Selling and marketing expense	$	1,544	$	1,256	$	4,674	$	3,138
General and administrative expense	General and administrative expense	8,662		7,410		18,297		7,494			General and administrative expense	8,755		5,836		27,052		13,330
Product development expense	Product development expense	2,864		1,268		4,975		2,201			Product development expense	2,077		1,721		7,052		3,922
Total stock-based compensation expense	Total stock-based compensation expense	$	13,417	$	9,543	$	26,402	$	11,577		Total stock-based compensation expense	$	12,376	$	8,813	$	38,778	$	20,390

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 September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021				2022		2021		2022		2021
		(in thousands)								(in thousands)
Net loss	Net loss	$	(23,997)	$	(30,052)	$	(57,284)	$	(28,038)		Net loss	$	(17,439)	$	(16,693)	$	(74,723)	$	(44,731)
Other comprehensive (loss) income:	Other comprehensive (loss) income:										Other comprehensive (loss) income:
Change in foreign currency translation adjustment	Change in foreign currency translation adjustment	(3,225)		1,395		(3,971)		2,075			Change in foreign currency translation adjustment	(5,129)		(1,353)		(9,100)		722

Comprehensive loss	Comprehensive loss	(27,222)		(28,657)		(61,255)		(25,963)			Comprehensive loss	(22,568)		(18,046)		(83,823)		(44,009)
Components of comprehensive loss (income) attributable to noncontrolling interests:	Components of comprehensive loss (income) attributable to noncontrolling interests:										Components of comprehensive loss (income) attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(235)		(241)		(338)		(324)			Net earnings attributable to noncontrolling interests	(40)		(302)		(379)		(626)
Change in foreign currency translation adjustment attributable to noncontrolling interests	Change in foreign currency translation adjustment attributable to noncontrolling interests	326		(45)		269		(739)			Change in foreign currency translation adjustment attributable to noncontrolling interests	310		313		579		(426)
Comprehensive loss (income) attributable to noncontrolling interests	Comprehensive loss (income) attributable to noncontrolling interests	91		(286)		(69)		(1,063)			Comprehensive loss (income) attributable to noncontrolling interests	270		11		200		(1,052)
Comprehensive loss attributable to Angi Inc. shareholders	Comprehensive loss attributable to Angi Inc. shareholders	$	(27,131)	$	(28,943)	$	(61,324)	$	(27,026)		Comprehensive loss attributable to Angi Inc. shareholders	$	(22,298)	$	(18,035)	$	(83,623)	$	(45,061)

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~~Nine Months Ended ~~June~~September 30, 2022

(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																				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																																Accumulated Other Comprehensive (Loss) Income																									Total Shareholders' Equity
		Redeemable Noncontrolling Interests																																		Additional Paid-in Capital					Accumulated Deficit							Treasury Stock					Total Angi Inc. Shareholders' Equity				Noncontrolling Interests							Redeemable Noncontrolling Interests																																													Additional Paid-in Capital					Accumulated Deficit					Treasury Stock	Total Angi Inc. Shareholders' Equity	Noncontrolling Interests
				$			Shares		$								Shares					$			Shares														Total Angi Inc. Shareholders' Equity											$								Shares								$					Shares											$						Shares																							Total Angi Inc. Shareholders' Equity
					(In thousands)																																										(In thousands)
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 June 30, 2022																												Balance as of June 30, 2022				$	—										$	101				100,897							$	422			422,019				$		—				—					$	1,374,200				$	(119,251)					$			(393)					$	(166,184)					$	1,088,895		$	10,977		$	1,099,872
Net (loss) earnings	Net (loss) earnings	—			—			—		—		—		—			—			—			(24,232)			—				—					(24,232)						236		(23,996)		Net (loss) earnings		—								—				—				—					—						—					—						—						(17,479)						—						—						(17,479)						40			(17,439)
Other comprehensive loss	Other comprehensive loss	—			—			—		—		—		—			—			—			—			(2,899)			—					(2,899)						(326)				(3,225)		Other comprehensive loss		—									—				—				—					—						—					—						—					—						(4,819)						—						(4,819)					(310)				(5,129)
Stock-based compensation expense	Stock-based compensation expense	—			—			—		—		—		—			—			14,111			—			—			—					14,111						—				14,111		Stock-based compensation expense		—							—				—				—					—					—					—						13,304						—						—						—						13,304					—				13,304
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1			471		—		—		—			—			(1,451)			—			—			—					(1,450)					—				(1,450)		Issuance of common stock pursuant to stock-based awards, net of withholding taxes		—							1				853				—					—					—					—						(2,121)					—						—						—						(2,120)					—				(2,120)

Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary																												Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary		—							—					—				—					—					—				—				7,835					—					—					—						7,835					(7,835)						—
Other	Other	—			—			—		—		—		—			—			—			—			—			—					—					(1)				(1)		Other		—							—				—				—					—					—					—						(4)					(1)						—						—						(5)					—				(5)
Balance as of June 30, 2022		$	—		$	101		100,897		$	422	422,019		$	—		—			$	1,374,200		$	(119,251)		$	(393)		$	(166,184)				$	1,088,895				$	10,977			$	1,099,872
Balance as of September 30, 2022																												Balance as of September 30, 2022		$	—						$	102				101,750				$	422				422,019					$	—			—				$	1,393,214				$	(136,731)				$	(5,212)				$	(166,184)					$	1,085,611				$	2,872					$	1,088,483

Balance as of December 31, 2021	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	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	Net (loss) earnings	—			—			—		—		—		—			—			—			(57,622)			—			—					(57,622)					339				(57,283)		Net (loss) earnings		—							—				—				—					—					—					—						—					(75,102)						—						—						(75,102)					378				(74,724)
Other comprehensive loss	Other comprehensive loss	—			—			—		—		—		—			—			—			—			(3,702)			—					(3,702)					(269)				(3,971)		Other comprehensive loss		—							—				—				—					—					—					—						—					—						(8,521)						—						(8,521)					(579)				(9,100)
Stock-based compensation expense	Stock-based compensation expense	—			—			—		—		—		—			—			27,667			—			—			—					27,667					—				27,667		Stock-based compensation expense		—							—				—				—					—					—					—						40,971					—						—						—						40,971					—				40,971
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1			1,152		—		—		—			—			(3,924)			—			—			—					(3,923)					—				(3,923)		Issuance of common stock pursuant to stock-based awards, net of withholding taxes		—							2				2,005				—					—					—					—						(6,045)					—						—						—						(6,043)					—				(6,043)

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

Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary																												Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary		—							—					—				—					—					—				—				7,835					—					—					—						7,835					(7,835)						—
Other	Other	—			—			—		—		—		—			—			—			—			—			—					—					(1)				(1)		Other		—							—				—				—					—					—					—						(4)					—						—						—						(4)					—				(4)
Balance as of June 30, 2022		$	—		$	101		100,897		$	422	422,019		$	—		—			$	1,374,200		$	(119,251)		$	(393)		$	(166,184)				$	1,088,895				$	10,977			$	1,099,872
Balance as of September 30, 2022																												Balance as of September 30, 2022		$	—						$	102				101,750				$	422				422,019					$	—			—				$	1,393,214				$	(136,731)				$	(5,212)				$	(166,184)					$	1,085,611				$	2,872					$	1,088,483

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~~Nine Months Ended ~~June~~September 30, 2021

(Unaudited)


					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																					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																																		Accumulated Other Comprehensive Income																										Total Shareholders' Equity
		Redeemable Noncontrolling Interests																																	Additional Paid-in Capital					(Accumulated Deficit) Retained Earnings								Treasury Stock					Total Angi Inc. Shareholders' Equity				Noncontrolling Interests									Redeemable Noncontrolling Interests																																									Additional Paid-in Capital			(Accumulated Deficit) Retained Earnings				Treasury Stock	Total Angi Inc. Shareholders' Equity	Noncontrolling Interests
				$			Shares		$							Shares					$			Shares														Total Angi Inc. Shareholders' Equity												$									Shares										$						Shares									$						Shares																		Total Angi Inc. Shareholders' Equity
					(In thousands)																																										(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
Balance as of June 30, 2021																											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
Net earnings (loss)	Net earnings (loss)	48			—			—		—		—		—		—			—			(30,293)			—				—					(30,293)						194			(30,099)		Net earnings (loss)		61								—					—					—						—							—				—					—						(16,995)					—					—				(16,995)				241		(16,754)
Other comprehensive income		8			—			—		—		—		—		—			—			—			1,350			—					1,350						37					1,387
Other comprehensive loss																											Other comprehensive loss		(73)							—						—					—					—						—					—					—						—						(1,040)				—					(1,040)					(240)					(1,280)
Stock-based compensation expense	Stock-based compensation expense	—			—			—		—		—		—		—			11,477			—			—			—					11,477					—					11,477		Stock-based compensation expense		—							—					—					—						—						—					—				8,817						—					—					—					8,817			—			8,817
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	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 pursuant to stock-based awards, net of withholding taxes		—							—					139					—						—						—					—				(1,066)					—					—					—					(1,066)			—			(1,066)
Issuance of common stock to IAC pursuant to the employee matters agreement		—			—			6		—		19		—		—			—			—			—			—					—					—					—
Issuance of common stock to IAC Inc. pursuant to the employee matters agreement																											Issuance of common stock to IAC Inc. pursuant to the employee matters agreement		—							—					3					—					42						—					—					—						—						—				—					—					—					—
Purchase of treasury stock	Purchase of treasury stock	—			—			—		—		—		—		—			—			—			—			(721)					(721)					—					(721)		Purchase of treasury stock		—							—					—					—						—						—					—				—					—					—					(29,766)					(29,766)			—			(29,766)

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
Purchase of noncontrolling interests																											Purchase of noncontrolling interests		—							—					—					—					—					—					—					—						—						—				—					—					(160)					(160)
Other																											Other		—							—					—					—					—					—					—					(410)						—						—				—					(410)					—					(410)
Balance as of September 30, 2021																											Balance as of September 30, 2021		$	4,524						$	99				99,253					$	422				422,019					$	—				—					$	1,345,549					$	(35,608)					$	4,933			$	(157,484)				$	1,157,911				$	10,895				$	1,168,806

Balance as of December 31, 2020	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	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	Net (loss) earnings	(12)			—			—		—		—		—		—			—			(28,362)			—			—					(28,362)					336					(28,026)		Net (loss) earnings		49							—					—					—						—						—					—				—					(45,357)					—					—					(45,357)			577			(44,780)
Other comprehensive income	Other comprehensive income	588			—			—		—		—		—		—			—			—			1,336			—					1,336					151					1,487		Other comprehensive income		515							—					—					—						—						—					—				—					—					296					—					296			(89)			207
Stock-based compensation expense	Stock-based compensation expense	—			—			—		—		—		—		—			14,019			—			—			—					14,019					—					14,019		Stock-based compensation expense		—							—					—					—						—						—					—				22,836					—					—					—					22,836			—			22,836
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	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 pursuant to stock-based awards, net of withholding taxes		—							2					2,427					—						—						—					—				(55,809)					—					—					—					(55,807)			—			(55,807)
Issuance of common stock to IAC pursuant to the employee matters agreement		—			3			2,585		—		115		—		—			(3)			—			—			—					—					—					—
Issuance of common stock to IAC Inc. pursuant to the employee matters agreement																											Issuance of common stock to IAC Inc. pursuant to the employee matters agreement		—							3					2,588					—					157					—					—					(3)						—						—				—					—					—					—
Purchase of treasury stock	Purchase of treasury stock	—			—			—		—		—		—		—			—			—			—			(5,637)					(5,637)					—					(5,637)		Purchase of treasury stock		—							—					—					—						—						—					—				—					—					—					(35,403)					(35,403)			—			(35,403)

Purchase of redeemable noncontrolling interests	Purchase of redeemable noncontrolling interests	(22,938)			—			—		—		—		—		—			—			—			—			—					—					—					—		Purchase of redeemable noncontrolling interests		(22,938)							—					—					—						—						—					—				—					—					—					—					—			(160)			(160)
Adjustment of redeemable noncontrolling interests to fair value	Adjustment of redeemable noncontrolling interests to fair value	534			—			—		—		—		—		—			(534)			—			—			—					(534)					—					(534)		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
Other																											Other		—							—					—					—					—					—					—					(410)						—						—				—					(410)					—					(410)
Balance as of September 30, 2021																											Balance as of September 30, 2021		$	4,524						$	99				99,253					$	422				422,019					$	—				—					$	1,345,549					$	(35,608)					$	4,933			$	(157,484)				$	1,157,911				$	10,895				$	1,168,806

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,				Nine Months Ended September 30,
		2022		2021				2022		2021
		(In thousands)				(In thousands)
Cash flows from operating activities:	Cash flows from operating activities:						Cash flows from operating activities:
Net loss	Net loss	$	(57,284)	$	(28,038)		Net loss	$	(74,723)	$	(44,731)
Adjustments to reconcile net loss to net cash provided by operating activities:	Adjustments to reconcile net loss to net cash provided by operating activities:						Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for credit losses	Provision for credit losses	47,926		42,731			Provision for credit losses	82,216		66,081
Stock-based compensation expense	Stock-based compensation expense	26,402		11,577			Stock-based compensation expense	38,778		20,390
Depreciation	Depreciation	27,353		31,027			Depreciation	45,112		45,728
Amortization of intangibles	Amortization of intangibles	7,608		8,762			Amortization of intangibles	11,413		12,616
Deferred income taxes	Deferred income taxes	(12,095)		(20,344)			Deferred income taxes	(13,950)		(25,435)

Foreign currency transaction loss							Foreign currency transaction loss	6,520		983
Impairment of long-lived and right-of-use assets	Impairment of long-lived and right-of-use assets	2,195		12,280			Impairment of long-lived and right-of-use assets	2,343		12,280
Non-cash lease expense	Non-cash lease expense	6,612		6,326			Non-cash lease expense	9,793		9,587
Revenue reserves	Revenue reserves	3,009		4,667			Revenue reserves	5,560		6,392
Other adjustments, net	Other adjustments, net	1,976		2,592			Other adjustments, net	(793)		3,243
Changes in assets and liabilities, net of effects of acquisitions and dispositions:	Changes in assets and liabilities, net of effects of acquisitions and dispositions:						Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	Accounts receivable	(84,234)		(63,192)			Accounts receivable	(102,562)		(106,234)
Other assets	Other assets	(11,140)		2,050			Other assets	(10,014)		(3,342)
Accounts payable and other liabilities	Accounts payable and other liabilities	52,661		51,442			Accounts payable and other liabilities	21,283		35,706
Operating lease liabilities	Operating lease liabilities	(8,624)		(8,243)			Operating lease liabilities	(13,229)		(12,435)
Income taxes payable and receivable	Income taxes payable and receivable	1,571		315			Income taxes payable and receivable	2,014		499
Deferred revenue	Deferred revenue	3,143		5,301			Deferred revenue	1,597		4,560
Net cash provided by operating activities	Net cash provided by operating activities	7,079		59,253			Net cash provided by operating activities	11,358		25,888

Cash flows from investing activities:	Cash flows from investing activities:						Cash flows from investing activities:

Acquisitions, net of cash acquired							Acquisitions, net of cash acquired	—		(25,357)
Capital expenditures	Capital expenditures	(62,138)		(35,713)			Capital expenditures	(95,521)		(52,056)

Proceeds from maturities of marketable debt securities	Proceeds from maturities of marketable debt securities	—		50,000			Proceeds from maturities of marketable debt securities	—		50,000
Net proceeds from the sale of a business	Net proceeds from the sale of a business	—		750			Net proceeds from the sale of a business	—		750
Proceeds from sale of fixed assets	Proceeds from sale of fixed assets	164		—			Proceeds from sale of fixed assets	224		—

Net cash (used in) provided by investing activities		(61,974)		15,037
Net cash used in investing activities							Net cash used in investing activities	(95,297)		(26,663)

Cash flows from financing activities:	Cash flows from financing activities:						Cash flows from financing activities:

Principal payments on Term Loan	Principal payments on Term Loan	—		(220,000)			Principal payments on Term Loan	—		(220,000)

Purchase of treasury stock	Purchase of treasury stock	(8,144)		(5,637)			Purchase of treasury stock	(8,144)		(35,403)

Withholding taxes paid on behalf of employees on net settled stock-based awards	Withholding taxes paid on behalf of employees on net settled stock-based awards	(3,513)		(54,596)			Withholding taxes paid on behalf of employees on net settled stock-based awards	(5,587)		(56,135)

Purchase of noncontrolling interests	Purchase of noncontrolling interests	—		(22,938)			Purchase of noncontrolling interests	—		(23,508)

Net cash used in financing activities	Net cash used in financing activities	(11,657)		(303,171)			Net cash used in financing activities	(13,731)		(335,046)

Total cash used	Total cash used	(66,552)		(228,881)			Total cash used	(97,670)		(335,821)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	Effect of exchange rate changes on cash and cash equivalents and restricted cash	(983)		546			Effect of exchange rate changes on cash and cash equivalents and restricted cash	(2,079)		373
Net decrease in cash and cash equivalents and restricted cash	Net decrease in cash and cash equivalents and restricted cash	(67,535)		(228,335)			Net decrease in cash and cash equivalents and restricted cash	(99,749)		(335,448)
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	429,485		813,561			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	Cash and cash equivalents and restricted cash at end of period	$	361,950	$	585,226		Cash and cash equivalents and restricted cash at end of period	$	329,736	$	478,113

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

Table of Contents

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. (“Angi,” 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 ~~256,000~~237,000 domestic service professionals actively sought consumer matches, completed jobs, or advertised work through Angi platforms during the three months ended ~~June~~September 30, 2022. Additionally, consumers turned to at least one of our brands to find a service professional for approximately 3130 million projects during the twelve months ended ~~June~~September 30, 2022.

The Company has 2two operating segments: (i) North America (United States and Canada), which includes Angi 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 by Angi brand, and Angi Services operates primarily under the Handy and Angi Roofing brands.

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

At ~~June~~September 30, 2022, IAC Inc., formerly known as IAC/InterActiveCorp (“IAC”) owned ~~84.5%~~84.3% and 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 and (ii) IAC and its subsidiaries 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 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 standalone, separate 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 or benefit 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.

In management's opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of the Company's consolidated financial position, consolidated results of operations and consolidated cash flows for the 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 audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 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. The~~continues to have a negative impact ~~of COVID-19 has been difficult to precisely identify and measure in 2021 and beyond because we launched the rebranding initiative in March 2021.~~on our year-over-year financial performance.

Table of Contents

ANGI INC. AND SUBSIDIARIES

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

(Unaudited)

May 2021 and continued to decline into early 2022 due to the launch of Angi Inc.’s brand integration in March 2021, and the Omicron variant surge in late 2021 and early 2022. Our ability to monetize service requests rebounded modestlyimproved monetization plateaued in the ~~second half of 2021, continued to increase in the first half~~third quarter of 2022 and is ~~approaching levels~~now in line with monetization rates 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 by COVID-19 in the future.

Future Outlook

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 goods or 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 goods or services.

The 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 ~~six~~nine months ended ~~June~~September 30, 2022, the Company recognized ~~$45.8~~$51.9 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~~nine months ended ~~June~~September 30, 2021, the Company recognized ~~$46.0~~$52.3 million of revenue that was included in the deferred revenue balance as of December 31, 2020.

The current and non-current deferred revenue balances at ~~June~~September 30, 2022 are ~~$56.9~~$55.2 million and less than $0.1 million, respectively. Non-current deferred revenue is included in “Other long-term liabilities” in the accompanying consolidated balance sheet.

Practical Expedients and Exemptions

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

As permitted under the practical expedient available under 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 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 and are included in “Selling and marketing expense” in the accompanying statement of operations. 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 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 ~~$47.6~~$47.2 million and $38.0 million at ~~June~~September 30, 2022 and December 31, 2021, respectively. The non-current assets are ~~$1.0~~$0.8 million and $1.1 million at ~~June~~September 30, 2022 and December 31, 2021, respectively. The current and non-current capitalized costs to obtain a contract with a customer are included in “Other current assets” and “Other non-current 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 or benefit 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 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 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.

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 the three months ended September 30, 2022 is a provision of $1.2 million due to a lower estimated annual effective tax rate from that applied to the second quarter’s year to date ordinary loss from continuing operations. The lower estimated annual effective tax rate was primarily due to unrecognized state tax losses.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recorded an income tax benefit of ~~$3.7~~$0.9 million and ~~$9.7~~$10.7 million, which represents an effective income tax rate of ~~13%~~5% and ~~15%~~13%, respectively. For the three ~~and six~~ months ended ~~June~~September 30, 2022, the effective income tax rate is lower than the statutory rate of 21% due primarily to ~~unbenefited foreign losses and~~ tax shortfalls generated by the exercise and vesting for stock-based ~~awards.~~awards and provisions related to a change in the annual expected effective income tax rate. For the nine months ended September 30, 2022, the effective income tax rate is lower than the statutory rate of 21% due primarily to tax shortfalls generated by the exercise and vesting for stock-based awards and nondeductible stock-based compensation expense. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recorded an income tax benefit of ~~$9.1~~$4.8 million and ~~$18.4~~$23.2 million, which represents an effective income tax rate of ~~23%~~22% and ~~40%~~34%, respectively. For the three months ended ~~June~~September 30, 2021, 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.~~foreign income taxed at different tax rates. For the ~~six~~nine months ended ~~June~~September 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~~of stock-based ~~awards.~~awards, partially offset by foreign income taxed at different tax rates.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Accruals for interest are not material and there are currently no accruals for 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 2019, which includes the operations of the Company. The statutes of limitations for the years 2013 through 2019 have been extended to December 31, 2023. Returns filed in various other jurisdictions are open to examination for various tax years beginning with 2014. 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~~September 30, 2022 and December 31, 2021, the Company has unrecognized tax benefits of ~~$6.7~~$7.1 million and $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~~September 30, 2022 are subsequently recognized, the income tax provision would be reduced by ~~$6.4~~$6.8 million. The comparable amount as of December 31, 2021 is $6.0 million.The Company believes it is reasonably possible that its unrecognized tax benefits could decrease by $1.9 million by September 30, 2023 due to settlements, all of which would reduce the income tax provision.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 ~~June~~September 30, 2022, the Company has a U.S. gross deferred tax asset of ~~$223.4~~$225.7 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, ~~$49.7~~$50.6 million will be utilized upon the future reversal of deferred tax liabilities and the remaining net deferred tax asset of ~~$173.7~~$175.1 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”) carryforwards of $124.7 million. The Company expects to generate sufficient future taxable income of at least ~~$593.7~~$593.8 million prior to the expiration of these NOLs,

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

~~(Unaudited)~~

the majority of which expire between 2030 and 2037, and a portion of which never expire, to fully realize this deferred tax asset.

NOTE 3—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Marketable Debt Securities

The Company did not hold any available-for-sale marketable debt securities at ~~June~~September 30, 2022 and December 31, 2021.

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, 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
(In thousands)
Assets:
Cash equivalents:
Money market funds $ 225,464 $ — $ — $ 225,464
Total $ 225,464 $ — $ — $ 225,464


		December 31, 2021									September 30, 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	$	280,052	$	—	$	—	$	280,052	Money market funds	$	204,538	$	—	$	—	$	204,538

Total	Total	$	280,052	$	—	$	—	$	280,052	Total	$	204,538	$	—	$	—	$	204,538

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	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
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	280,052	$	—	$	—	$	280,052




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~~nine months ended ~~June~~September 30, 2022 and September 30, 2021, the Company recorded $2.3 million and $12.3 million in impairment charges on ROU assets, leasehold improvements, and furniture and ~~equipment.~~equipment, respectively. 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.

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, 2022 December 31, 2021
Carrying Value Fair Value Carrying Value Fair Value
(In thousands)
Long-term debt, net (a)
$ (494,913) $ (382,050) $ (494,552) $ (486,875)


	September 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)

Long-term debt, net (a)	$	(495,098)	$	(351,250)	$	(494,552)	$	(486,875)

________________________

(a) At ~~June~~September 30, 2022 and December 31, 2021, the carrying value of long-term debt, net includes unamortized debt issuance costs of ~~$5.1~~$4.9 million and $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.

NOTE 4—LONG-TERM DEBT

Long-term debt consists of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(In thousands)					(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	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	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	Total long-term debt	500,000		500,000		Total long-term debt	500,000		500,000

Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	5,087		5,448		Less: unamortized debt issuance costs	4,902		5,448
Total long-term debt, net	Total long-term debt, net	$	494,913	$	494,552	Total long-term debt, net	$	495,098	$	494,552

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

ANGI Group Senior Notes

The ANGI Group Senior Notes were issued on August 20, 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.

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~~ANGI INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

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 exceeds 3.75 to 1.0, provided that ANGI Group is permitted to incur such liens under certain permitted credit facilities indebtedness notwithstanding the ratio, all as defined in the indenture. At ~~June~~September 30, 2022, there were no limitations pursuant thereto.

ANGI Group Revolving Facility

The $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

During the ~~six~~nine months ended ~~June~~September 30, 2021, ANGI Group prepaid the remaining balance of $220.0 million of the ANGI Group Term Loan principal, which otherwise would have matured on November 5, 2023.

NOTE 5—ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following tables presents the components of accumulated other comprehensive (loss) income and items reclassified out of accumulated other comprehensive (loss) income into earnings:

Three Months Ended June 30,
2022 2021
Foreign
Currency
Translation
Adjustment Accumulated Other Comprehensive (Loss) Income Foreign
Currency
Translation
Adjustment Accumulated Other Comprehensive Income
(In thousands)
Balance at April 1 $ 2,506 $ 2,506 $ 4,623 $ 4,623
Other comprehensive (loss) income (2,899) (2,899) 1,350 1,350
Balance at June 30 $ (393) $ (393) $ 5,973 $ 5,973


	Three Months Ended September 30,
	2022				2021
	Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Loss		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income
	(In thousands)
Balance at July 1	$	(393)	$	(393)	$	5,973	$	5,973
Other comprehensive loss	(4,819)		(4,819)		(1,040)		(1,040)
Balance at September 30	$	(5,212)	$	(5,212)	$	4,933	$	4,933


		Six Months Ended June 30,									Nine Months Ended September 30,
		2022				2021					2022				2021
		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income			Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income
		(In thousands)									(In thousands)
Balance at January 1	Balance at January 1	$	3,309	$	3,309	$	4,637	$	4,637	Balance at January 1	$	3,309	$	3,309	$	4,637	$	4,637
Other comprehensive (loss) income	Other comprehensive (loss) income	(3,702)		(3,702)		1,336		1,336		Other comprehensive (loss) income	(8,521)		(8,521)		296		296
Balance at June 30		$	(393)	$	(393)	$	5,973	$	5,973
Balance at September 30										Balance at September 30	$	(5,212)	$	(5,212)	$	4,933	$	4,933

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

NOTE 6—(LOSS) EARNINGS PER SHARE

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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:

~~Table of Contents~~


	Three Months Ended September 30,
	2022				2021
	Basic		Diluted		Basic		Diluted
	(In thousands, except per share data)
Numerator:
Net loss	$	(17,439)	$	(17,439)	$	(16,693)	$	(16,693)
Net earnings attributable to noncontrolling interests	(40)		(40)		(302)		(302)
Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	(17,479)	$	(17,479)	$	(16,995)	$	(16,995)

Denominator:
Weighted average basic Class A and Class B common stock shares outstanding	503,202		503,202		503,416		503,416
Dilutive securities (a) (b)	—		—		—		—
Denominator for loss per share—weighted average shares	503,202		503,202		503,416		503,416

Loss per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
Loss per share	$	(0.03)	$	(0.03)	$	(0.03)	$	(0.03)

~~ANGI INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

Three Months Ended June 30,
2022 2021
Basic Diluted Basic Diluted
(In thousands, except per share data)
Numerator:
Net loss $ (23,997) $ (23,997) $ (30,052) $ (30,052)
Net earnings attributable to noncontrolling interests (235) (235) (241) (241)
Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders $ (24,232) $ (24,232) $ (30,293) $ (30,293)
Denominator:
Weighted average basic Class A and Class B common stock shares outstanding 502,453 502,453 504,469 504,469
Dilutive securities (a) (b)
— — — —
Denominator for loss per share—weighted average shares 502,453 502,453 504,469 504,469
Loss per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
Loss per share $ (0.05) $ (0.05) $ (0.06) $ (0.06)


		Six Months Ended June 30,									Nine Months Ended September 30,
		2022				2021					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	Net loss	$	(57,284)	$	(57,284)	$	(28,038)	$	(28,038)	Net loss	$	(74,723)	$	(74,723)	$	(44,731)	$	(44,731)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(338)		(338)		(324)		(324)		Net earnings attributable to noncontrolling interests	(379)		(379)		(626)		(626)
Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders	Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	(57,622)	$	(57,622)	$	(28,362)	$	(28,362)	Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	(75,102)	$	(75,102)	$	(45,357)	$	(45,357)

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	502,231		502,231		502,577		502,577		Weighted average basic Class A and Class B common stock shares outstanding	502,558		502,558		502,859		502,859
Dilutive securities (a) (b)	Dilutive securities (a) (b)	—		—		—		—		Dilutive securities (a) (b)	—		—		—		—
Denominator for loss per share—weighted average shares	Denominator for loss per share—weighted average shares	502,231		502,231		502,577		502,577		Denominator for loss per share—weighted average shares	502,558		502,558		502,859		502,859

Loss per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:	Loss per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:									Loss per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
Loss per share	Loss per share	$	(0.11)	$	(0.11)	$	(0.06)	$	(0.06)	Loss per share	$	(0.15)	$	(0.15)	$	(0.09)	$	(0.09)

________________________

(a) 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~~nine months ended ~~June~~September 30, 2022 and 2021, ~~28.7~~22.9 million and ~~14.5~~21.2 million 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

(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 the three

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~~ANGI INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, ~~4.4~~0.9 million and ~~3.7~~6.9 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.

NOTE 7—SEGMENT INFORMATION

The Company has determined its operating segments consistent with how the chief operating decision maker views the businesses. 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 September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021					2022		2021		2022		2021
		(In thousands)								(In thousands)
Revenue:	Revenue:											Revenue:
North America	North America	$	495,814	$	399,945	$	906,986	$	760,986			North America	$	479,602	$	443,531	$	1,386,588	$	1,204,517
Europe	Europe	19,968		21,043		44,955		47,031				Europe	18,434		18,034		63,389		65,065
Total	Total	$	515,782	$	420,988	$	951,941	$	808,017			Total	$	498,036	$	461,565	$	1,449,977	$	1,269,582

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,					Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021					2022		2021		2022		2021
		(In thousands)								(In thousands)
North America	North America											North America
Angi Ads and Leads:	Angi Ads and Leads:											Angi Ads and Leads:
Consumer connection revenue(a)	Consumer connection revenue(a)	$	259,037	$	240,016	$	471,833	$	461,446			Consumer connection revenue(a)	$	260,242	$	238,421	$	732,075	$	699,867
Advertising revenue(b)	Advertising revenue(b)	65,085		62,608		128,861		123,355				Advertising revenue(b)	67,045		63,953		195,906		187,308
Membership subscription revenue(c)	Membership subscription revenue(c)	15,554		17,065		31,791		33,947				Membership subscription revenue(c)	14,795		17,079		46,586		51,026
Other revenue	Other revenue	5,243		7,431		10,469		14,709				Other revenue	5,658		6,703		16,127		21,412
Total Angi Ads and Leads revenue	Total Angi Ads and Leads revenue	344,919		327,120		642,954		633,457				Total Angi Ads and Leads revenue	347,740		326,156		990,694		959,613
Angi Services revenue(d)	Angi Services revenue(d)	150,895		72,825		264,032		127,529				Angi Services revenue(d)	131,862		117,375		395,894		244,904
Total North America revenue	Total North America revenue	495,814		399,945		906,986		760,986				Total North America revenue	479,602		443,531		1,386,588		1,204,517
Europe	Europe											Europe
Consumer connection revenue(e)		16,941		17,345		38,744		39,696
Consumer connection revenue(a)												Consumer connection revenue(a)	15,576		14,530		54,320		54,226
Service professional membership subscription revenue	Service professional membership subscription revenue	2,738		3,331		5,628		6,659				Service professional membership subscription revenue	2,575		3,215		8,203		9,874
Advertising and other revenue	Advertising and other revenue	289		367		583		676				Advertising and other revenue	283		289		866		965
Total Europe revenue	Total Europe revenue	19,968		21,043		44,955		47,031				Total Europe revenue	18,434		18,034		63,389		65,065
Total revenue	Total revenue	$	515,782	$	420,988	$	951,941	$	808,017			Total revenue	$	498,036	$	461,565	$	1,449,977	$	1,269,582

________________________

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

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

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

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

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Geographic information about revenue and long-lived assets is presented below.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021					2022		2021		2022		2021
		(In thousands)								(In thousands)
Revenue	Revenue											Revenue
United States	United States	$	490,049	$	394,538	$	895,557	$	750,982			United States	$	473,835	$	437,872	$	1,369,392	$	1,188,854
All other countries	All other countries	25,733		26,450		56,384		57,035				All other countries	24,201		23,693		80,585		80,728
Total	Total	$	515,782	$	420,988	$	951,941	$	808,017			Total	$	498,036	$	461,565	$	1,449,977	$	1,269,582


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(In thousands)					(In thousands)
Long-lived assets (excluding goodwill and intangible assets):	Long-lived assets (excluding goodwill and intangible assets):					Long-lived assets (excluding goodwill and intangible assets):
United States	United States	$	149,232	$	111,136	United States	$	160,879	$	111,136
All other countries	All other countries	6,998		7,131		All other countries	6,423		7,131
Total	Total	$	156,230	$	118,267	Total	$	167,302	$	118,267

The following tables present operating loss and Adjusted EBITDA by reportable segment:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021					2022		2021		2022		2021
		(In thousands)								(In thousands)
Operating loss:
Operating (loss) income:												Operating (loss) income:
North America	North America	$	(20,056)	$	(32,127)	$	(49,710)	$	(22,550)			North America	$	(12,518)	$	(14,719)	$	(62,228)	$	(37,269)
Europe	Europe	(830)		(604)		(5,133)		(10,072)				Europe	1,460		(254)		(3,673)		(10,326)
Total	Total	$	(20,886)	$	(32,731)	$	(54,843)	$	(32,622)			Total	$	(11,058)	$	(14,973)	$	(65,901)	$	(47,595)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021					2022		2021		2022		2021
		(In thousands)								(In thousands)
Adjusted EBITDA(f):	Adjusted EBITDA(f):											Adjusted EBITDA(f):
North America	North America	$	10,019	$	(5,302)	$	10,360	$	25,863			North America	$	20,792	$	11,213	$	31,152	$	37,076
Europe	Europe	$	(330)	$	860	$	(3,840)	$	(7,119)			Europe	$	2,090	$	1,182	$	(1,750)	$	(5,937)

(f) The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating 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 following tables reconcile operating loss for the Company’s reportable segments and net loss attributable to Angi Inc. shareholders to Adjusted EBITDA:

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


		Three Months Ended June 30, 2022											Three Months Ended September 30, 2022
		Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating (Loss) Income		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
		(In thousands)											(In thousands)
North America	North America	$	(20,056)	$	13,439	$	12,832	$	3,804	$	10,019	North America	$	(12,518)	$	12,282	$	17,223	$	3,805	$	20,792
Europe	Europe	(830)		$	(22)	$	522	$	—	$	(330)	Europe	1,460		$	94	$	536	$	—	$	2,090
Operating loss	Operating loss	(20,886)										Operating loss	(11,058)
Interest expense	Interest expense	(5,026)										Interest expense	(5,030)
Other expense, net	Other expense, net	(1,750)										Other expense, net	(2,296)
Loss before income taxes	Loss before income taxes	(27,662)										Loss before income taxes	(18,384)
Income tax benefit	Income tax benefit	3,665										Income tax benefit	945
Net loss	Net loss	(23,997)										Net loss	(17,439)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(235)										Net earnings attributable to noncontrolling interests	(40)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(24,232)									Net loss attributable to Angi Inc. shareholders	$	(17,479)


		Three Months Ended June 30, 2021											Three Months Ended September 30, 2021
		Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
		(In thousands)											(In thousands)
North America	North America	$	(32,127)	$	9,455	$	13,682	$	3,688	$	(5,302)	North America	$	(14,719)	$	8,727	$	13,351	$	3,854	$	11,213
Europe	Europe	(604)		$	88	$	1,376	$	—	$	860	Europe	(254)		$	86	$	1,350	$	—	$	1,182
Operating loss	Operating loss	(32,731)										Operating loss	(14,973)
Interest expense	Interest expense	(5,814)										Interest expense	(6,032)
Other income, net	Other income, net	(636)										Other income, net	(479)
Loss before income taxes	Loss before income taxes	(39,181)										Loss before income taxes	(21,484)
Income tax benefit	Income tax benefit	9,129										Income tax benefit	4,791
Net earnings	Net earnings	(30,052)										Net earnings	(16,693)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(241)										Net earnings attributable to noncontrolling interests	(302)
Net earnings attributable to Angi Inc. shareholders	Net earnings attributable to Angi Inc. shareholders	$	(30,293)									Net earnings attributable to Angi Inc. shareholders	$	(16,995)

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


		Six Months Ended June 30, 2022											Nine Months Ended September 30, 2022
		Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
		(In thousands)											(In thousands)
North America	North America	$	(49,710)	$	26,433	$	26,029	$	7,608	$	10,360	North America	$	(62,228)	$	38,715	$	43,252	$	11,413	$	31,152
Europe	Europe	(5,133)		$	(31)	$	1,324	$	—	$	(3,840)	Europe	(3,673)		$	63	$	1,860	$	—	$	(1,750)
Operating loss	Operating loss	(54,843)										Operating loss	(65,901)
Interest expense	Interest expense	(10,048)										Interest expense	(15,078)
Other expense, net	Other expense, net	(2,141)										Other expense, net	(4,437)
Loss before income taxes	Loss before income taxes	(67,032)										Loss before income taxes	(85,416)
Income tax benefit	Income tax benefit	9,748										Income tax benefit	10,693
Net loss	Net loss	(57,284)										Net loss	(74,723)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(338)										Net earnings attributable to noncontrolling interests	(379)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(57,622)									Net loss attributable to Angi Inc. shareholders	$	(75,102)


		Six Months Ended June 30, 2021											Nine Months Ended September 30, 2021
		Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
		(In thousands)											(In thousands)
North America	North America	$	(22,550)	$	11,391	$	28,260	$	8,762	$	25,863	North America	$	(37,269)	$	20,118	$	41,611	$	12,616	$	37,076
Europe	Europe	(10,072)		$	186	$	2,767	$	—	$	(7,119)	Europe	(10,326)		$	272	$	4,117	$	—	$	(5,937)
Operating loss	Operating loss	(32,622)										Operating loss	(47,595)
Interest expense	Interest expense	(12,431)										Interest expense	(18,463)
Other income, net	Other income, net	(1,403)										Other income, net	(1,882)
Loss before income taxes	Loss before income taxes	(46,456)										Loss before income taxes	(67,940)
Income tax benefit	Income tax benefit	18,418										Income tax benefit	23,209
Net earnings	Net earnings	(28,038)										Net earnings	(44,731)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(324)										Net earnings attributable to noncontrolling interests	(626)
Net earnings attributable to Angi Inc. shareholders	Net earnings attributable to Angi Inc. shareholders	$	(28,362)									Net earnings attributable to Angi Inc. shareholders	$	(45,357)

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:

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


		June 30, 2022		December 31, 2021		June 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021		September 30, 2021		December 31, 2020
		(In thousands)									(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	360,950	$	428,136	$	584,260	$	812,705	Cash and cash equivalents	$	328,795	$	428,136	$	476,625	$	812,705
Restricted cash included in other current assets	Restricted cash included in other current assets	130		156		236		407		Restricted cash included in other current assets	101		156		272		407
Restricted cash included in other non-current assets	Restricted cash included in other non-current assets	870		1,193		730		449		Restricted cash included in other non-current assets	840		1,193		1,216		449
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	361,950	$	429,485	$	585,226	$	813,561	Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	329,736	$	429,485	$	478,113	$	813,561

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

Restricted cash included in other current assets at December 31, 2021, ~~June~~September 30, 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.

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 ~~June~~September 30, 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 ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		2022		2021				2022		2021
		(In thousands)				(In thousands)
Balance at January 1	Balance at January 1	$	33,652	$	26,046		Balance at January 1	$	33,652	$	26,046
Current period provision for credit losses	Current period provision for credit losses	47,926		42,731			Current period provision for credit losses	82,216		66,081
Write-offs charged against the credit loss reserve	Write-offs charged against the credit loss reserve	(40,764)		(37,051)			Write-offs charged against the credit loss reserve	(72,212)		(56,102)
Recoveries collected	Recoveries collected	2,709		1,351			Recoveries collected	4,136		1,896
Balance at June 30		$	43,523	$	33,077
Balance at September 30							Balance at September 30	$	47,792	$	37,921

The revenue reserve was ~~$2.8~~$3.0 million and ~~$2.8~~$2.4 million at ~~June~~September 30, 2022 and 2021, respectively. The total allowance for credit losses and revenue reserve was ~~$46.3~~$50.8 million and ~~$35.9~~$40.3 million as of ~~June~~September 30, 2022 and 2021, respectively.

Accumulated Amortization and Depreciation

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


Asset Category	Asset Category	June 30, 2022		December 31, 2021		Asset Category	September 30, 2022		December 31, 2021
		(In thousands)					(In thousands)
Right-of-use assets (included in “other non-current assets”)	Right-of-use assets (included in “other non-current assets”)	$	50,330	$	40,757	Right-of-use assets (included in “other non-current assets”)	$	74,431	$	40,757
Capitalized software, leasehold improvements, and equipment	Capitalized software, leasehold improvements, and equipment	$	128,114	$	108,235	Capitalized software, leasehold improvements, and equipment	$	139,242	$	108,235
Intangible assets	Intangible assets	$	165,582	$	159,356	Intangible assets	$	168,436	$	159,356

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Other expense, net


		Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021				2022		2021		2022		2021

Interest income	Interest income	$	515	$	50	$	579	$	147		Interest income	$	1,556	$	31	$	2,135	$	178

Foreign exchange (losses) gains		(2,264)		407		(2,720)		(453)
Foreign exchange losses											Foreign exchange losses	(3,852)		(515)		(6,572)		(968)
Loss on extinguishment of debt(a)	Loss on extinguishment of debt(a)	—		(1,110)		—		(1,110)			Loss on extinguishment of debt(a)	—		—		—		(1,110)
Gain (loss) from acquisition/sale of a business	Gain (loss) from acquisition/sale of a business	—		17		—		13			Gain (loss) from acquisition/sale of a business	—		18		—		31
Other	Other	(1)		—		—		—			Other	—		(13)		—		(13)
Other expense, net	Other expense, net	$	(1,750)	$	(636)	$	(2,141)	$	(1,403)		Other expense, net	$	(2,296)	$	(479)	$	(4,437)	$	(1,882)

________________________

(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.

NOTE 9—CONTINGENCIES

In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes ~~an estimated liability~~accruals for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. As of ~~June~~September 30, 2022, ~~a $4.1 million~~the total accrual for legal ~~liability~~contingencies was recorded, and while the Company does not expect the ultimate resolution of these matters, individually or in the aggregate, to be material, charges in excess of the established $4.1 million legal liability already recorded could be recorded in the future, which may have a material adverse effect on the Company’s financial position, results of operations or liquidity. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable.$10.5 million. Although management currently believes that resolving claims against ~~us,~~the Company, 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 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.

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 10—RELATED PARTY TRANSACTIONS WITH IAC

Angi 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~~nine months ended ~~June~~September 30, 2022 and 2021, the Company was charged $0.8 million and $2.1 million, and $0.9 million and ~~$1.3 million, and $1.2 million and $2.3~~$3.2 million, respectively, by IAC for services rendered pursuant to the services agreement. There were no outstanding receivables or payables pursuant to the services agreement at ~~June~~September 30, 2022 and December 31, 2021.

Additionally, the Company subleases office space to IAC and charged IAC $0.4 million and ~~$0.8 million, and $0.4 million and $0.8~~$1.2 million of rent for ~~the~~both three and ~~six~~nine months ended ~~June~~September 30, 2022 and ~~2021, respectively.~~2021. IAC subleases office space to the Company and charged the Company ~~$0.3~~$0.4 million and ~~$0.6~~$1.0 million of rent for the three and ~~six~~nine months ended ~~June~~September 30, 2022. At ~~June~~September 30, 2022 and December 31, 2021, there were no outstanding receivables or payables pursuant to the sublease agreements.

At ~~June~~September 30, 2022 and December 31, 2021, the Company had outstanding payables of ~~$1.1~~$1.4 million and $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 no payments to or refunds from IAC pursuant to this agreement during the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, no shares 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 three and ~~six~~nine months ended ~~June~~September 30, 2021, less than 0.1 million and ~~0.1~~0.2 million shares, respectively, of Angi Inc. Class B common stock were issued to IAC pursuant to the employee matters agreement. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, no shares 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. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, less than 0.1 million and 2.6 million shares, respectively, of Angi Inc. Class A common stock were issued to IAC pursuant to the employee matters agreement.

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

GENERAL

Management Overview

Angi Inc. (“Angi,” 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. Approximately ~~256,000~~237,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended ~~June~~September 30, 2022. Additionally, consumers turned to at least one of our brands to find a professional for approximately 3130 million projects during the twelve months ended ~~June~~September 30, 2022.

The Company has two operating segments: (i) North America (United States and Canada), which includes Angi 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 by Angi brand, and Angi Services operates primarily under the Handy and 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, 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, are defined below:

•Angi Ads and Leads Revenue primarily reflects domestic ads and leads revenue, including consumer connection revenue for consumer matches, revenue from service professionals under contract for advertising and membership subscription revenue from service professionals and consumers.

•Angi Services Revenue 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 and includes revenue from Total Home Roofing, Inc. (“Angi Roofing”), which was acquired on July 1, 2021.

•Angi Service Requests (“Service Requests”) are fully completed and submitted domestic customer service requests and includes Angi Services requests in the period.

•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 in the period.

•Angi Transacting Service Professionals (“Transacting SPs”) are the number of service professionals that paid for consumer matches through Angi Leads or performed an Angi Services job during 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, which commenced February 15, 2021.

Components of Results of Operations

Sources of Revenue

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), and (iii) membership subscription revenue from service professionals and consumers. Consumer connection revenue varies based upon several factors including the service requested, product experience offered, and geographic location of service. Angi

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Services is primarily comprised of revenue from jobs (i) 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 furniture or other household items.

Cost of Revenue and Gross Profit

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

Gross profit is revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue.

Operating Costs and Expenses:

•Selling and marketing expense - consists primarily of (i) advertising expenditures, which include marketing fees to promote the brand to ~~Consumers~~consumers and ~~Service Professionals~~service professionals with (a) online marketing, including fees paid to search engines and other online marketing platforms, app platforms, and partners who direct traffic to our brands, (b) offline marketing, which is primarily television and radio advertising, (ii) compensation expense (including stock-based compensation expense) and other employee-related costs for our sales force and marketing personnel, (iii) software license and maintenance costs, and (iv) 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.

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 attributable to Angi Inc. shareholders to operating loss to consolidated Adjusted EBITDA for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

Brand Integration Initiative

In March 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 websites. Our brand integration initiative initially adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results. We have now passed the anniversary of the rebranding and organic search results ~~in the second quarter of 2022 have improved~~continue to improve relative to the same period in 2021. We expect this positive trend to continue. However, organic search results are still below pre-March 2021 levels. The shift of marketing to support Angi, away from HomeAdvisor, powered by Angi, has had and continues to have a negative effect on the efficiency of our search engine marketing efforts. We will continue to optimize the efficiency and conversion of marketing to HomeAdvisor to maintain profitable demand generation to that domain for the foreseeable future but we do expect the trend of declining traffic to continue due to sustained marketing emphasis in favor of Angi.

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Angi Services Investment

Angi Services was launched in August 2019, and we have invested and continue to invest significantly in Angi Services since then. ~~However, we believe we reached the peak~~Our investment in Angi Services peaked in the first quarter of 2022. ~~The investment in Angi Services had~~As a ~~smaller~~result, on a sequential basis, the negative impact on profits has declined in ~~the second quarter of 2022 than in the first~~each quarter of 2022 and ~~we expect this sequential trend~~is expected to ~~continue. However, we do not expect an~~decline in the fourth quarter of 2022 relative to the third quarter. On a year-over-year basis, the positive impact on ~~year-over-year~~ profits ~~until~~began in the ~~fourth~~third quarter of 2022 and we expect that positive year-over-year trend to continue in the fourth quarter of 2022 and into 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. The~~continues to have a negative impact ~~of COVID-19 has been difficult to precisely identify and measure in 2021 and beyond because, as is described above, we launched the rebranding initiative in March 2021.~~on our year-over-year financial performance.

As previously disclosed, the impact of COVID-19 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 ~~these businesses~~we experienced a rebound in service requests from mid-2020 through early 2021, service requests started to decline in May 2021 and have continued to decline ~~into early~~during 2022 due, in part, to ~~the launch of Angi Inc.’s brand integration~~COVID-19 measures that were more widely in ~~March 2021, and the Omicron variant surge~~place in ~~late 2021 and early 2022.~~prior periods. Our ability to monetize service requests rebounded modestly in the second half of 2021 ~~continued to increase in~~and the first half of 2022, however, that improved monetization plateaued in the third quarter of 2022 and is ~~approaching levels~~now in line with monetization rates 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 by COVID-19 in the future.

Future Outlook

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Results of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2022 compared to the three and ~~six~~nine months ended ~~June~~September 30, 2021

Revenue


		Three Months Ended June 30,									Six Months Ended June 30,										Three Months Ended September 30,									Nine Months Ended September 30,
		2022			$ Change		% Change	2021			2022			$ Change		% Change	2021				2022			$ Change		% Change	2021			2022			$ Change		% Change	2021
		(Dollars in thousands)																			(Dollars in thousands)
North America	North America																			North America
Angi Ads and Leads:	Angi Ads and Leads:																			Angi Ads and Leads:
Consumer connection revenue	Consumer connection revenue	$	259,037		$	19,021	8%	$	240,016		$	471,833		$	10,387	2%	$	461,446		Consumer connection revenue	$	260,242		$	21,821	9%	$	238,421		$	732,075		$	32,208	5%	$	699,867
Advertising revenue	Advertising revenue	65,085			2,477		4%	62,608			128,861			5,506		4%	123,355			Advertising revenue	67,045			3,092		5%	63,953			195,906			8,598		5%	187,308
Membership subscription revenue	Membership subscription revenue	15,554			(1,511)		(9)%	17,065			31,791			(2,156)		(6)%	33,947			Membership subscription revenue	14,795			(2,284)		(13)%	17,079			46,586			(4,440)		(9)%	51,026
Other revenue	Other revenue	5,243			(2,188)		(29)%	7,431			10,469			(4,240)		(29)%	14,709			Other revenue	5,658			(1,045)		(16)%	6,703			16,127			(5,285)		(25)%	21,412
Total Angi Ads and Leads revenue	Total Angi Ads and Leads revenue	344,919			17,799		5%	327,120			642,954			9,497		1%	633,457			Total Angi Ads and Leads revenue	347,740			21,584		7%	326,156			990,694			31,081		3%	959,613
Angi Services revenue	Angi Services revenue	150,895			78,070		107%	72,825			264,032			136,503		107%	127,529			Angi Services revenue	131,862			14,487		12%	117,375			395,894			150,990		62%	244,904
Total North America revenue	Total North America revenue	495,814			95,869		24%	399,945			906,986			146,000		19%	760,986			Total North America revenue	479,602			36,071		8%	443,531			1,386,588			182,071		15%	1,204,517
Europe	Europe	19,968			(1,075)		(5)%	21,043			44,955			(2,076)		(4)%	47,031			Europe	18,434			400		2%	18,034			63,389			(1,676)		(3)%	65,065
Total revenue	Total revenue	$	515,782		$	94,794	23%	$	420,988		$	951,941		$	143,924	18%	$	808,017		Total revenue	$	498,036		$	36,471	8%	$	461,565		$	1,449,977		$	180,395	14%	$	1,269,582

Percentage of Total Revenue:	Percentage of Total Revenue:																			Percentage of Total Revenue:
North America	North America	96		%				95		%	95		%				94		%	North America	96		%				96		%	96		%				95		%
Europe	Europe	4		%				5		%	5		%				6		%	Europe	4		%				4		%	4		%				5		%
Total revenue	Total revenue	100		%				100		%	100		%				100		%	Total revenue	100		%				100		%	100		%				100		%

		Three Months Ended June 30,									Six Months Ended June 30,										Three Months Ended September 30,									Nine Months Ended September 30,
		2022			Change		% Change	2021			2022			Change		% Change	2021				2022			Change		% Change	2021			2022			Change		% Change	2021
		(In thousands, rounding differences may occur)																			(In thousands, rounding differences may occur)
Operating metrics:	Operating metrics:																			Operating metrics:
Service Requests	Service Requests	8,498			(921)		(10)%	9,419			15,199			(1,929)		(11)%	17,128			Service Requests	7,784			(923)		(11)%	8,707			22,984			(2,851)		(11)%	25,835
Monetized Transactions	Monetized Transactions	4,740			(266)		(5)%	5,006			8,629			(570)		(6)%	9,199			Monetized Transactions	4,309			(474)		(10)%	4,783			12,938			(1,044)		(7)%	13,982
Transacting SPs~~(a)~~	Transacting SPs~~(a)~~	220			(5)		(2)%	225												Transacting SPs~~(a)~~	200			(22)		(10)%	222
Advertising SPs	Advertising SPs	37			(3)		(8)%	40												Advertising SPs	37			(2)		(5)%	39

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

For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

North America revenue increased ~~$95.9~~$36.1 million, or ~~24%~~8%, driven by increases in Angi ~~Services revenue of $78.1 million, or 107%, and Angi~~ Ads and Leads revenue of ~~$17.8~~$21.6 million, or ~~5%.~~7%, and Angi Services revenue ~~growth is due primarily to Angi Roofing, acquired July 1, 2021, and to a lesser extent, organic growth.~~of $14.5 million, or 12%. The increase in Angi Ads and Leads revenue is primarily due to an increase in consumer connection revenue of ~~$19.0~~$21.8 million, or 8%9%, primarily as a result of price increases implemented during the ~~three~~second quarter of 2022. Angi Services revenue growth is due primarily to a $25.7 million increase largely from Book Now and managed projects, partially offset by an $11.4 million decrease in revenue from Angi Roofing.

Europe revenue increased $0.4 million, or 2%, due to strong growth across its major markets, partially offset by the unfavorable impact of the strengthening of the U.S. dollar relative to the Euro and the British Pound.

For the nine months ended ~~June~~September 30, 2022 compared to the nine months ended September 30, 2021

North America revenue increased $182.1 million, or 15%, due primarily to increases in Angi Services revenue of $151.0 million, or 62%, and Angi Ads and Leads revenue of $31.1 million, or 3%. Angi Services revenue growth is due primarily to an $82.3 million increase largely from Book Now and managed projects, and to a lesser extent, $67.9 million in revenue attributable to Angi Roofing, acquired July 1, 2021. The increase in Angi Ads and Leads revenue is due primarily to the factor described above in the three-month discussion and the anniversary of the initial impact from the brand integration that began in March ~~2021, and higher service professional engagement.~~2021.

Europe revenue decreased ~~$1.1~~$1.7 million, or 5%3%, due ~~primarily~~ to the unfavorable impact of the strengthening of the ~~U.S~~U.S. dollar relative to the Euro and the British Pound.

~~For the six months ended June 30, 2022 compared to the six months ended June 30, 2021~~

~~North America revenue increased $146.0 million, or 19%, due primarily to factors described above in the three-month discussion.~~

~~Europe revenue decreased $2.1 million, or 4%, due primarily to factors described above in the three-month discussion.~~

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Cost of revenue


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		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)	$	127,771	$	58,067	83%	$	69,704	$	226,769	$	103,237	84%	$	123,532	Cost of revenue (exclusive of depreciation shown separately below)	$	109,057	$	9,590	10%	$	99,467	$	335,826	$	112,827	51%	$	222,999
As a percentage of revenue	As a percentage of revenue	25%					17%		24%					15%		As a percentage of revenue	22%					22%		23%					18%

For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

North America cost of revenue increased ~~$58.1~~$9.6 million, or ~~84%~~10%, and ~~increased~~remained constant as a percentage of revenue, due primarily to ~~$31.4~~$12.8 million of costs attributable ~~to Angi Roofing for roofing materials and third-party contractors. The remaining increase is primarily due~~ to the growth of Angi Services including costs incurred for third-party service professionals for ~~other~~certain Angi Services ~~arrangements.~~arrangements, offset by a decrease of $4.9 million for costs attributable to decreases in Angi Roofing revenue, described above in the revenue discussion.

For the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021

North America cost of revenue increased ~~$103.2~~$112.8 million, or ~~84%~~51%, and increased as a percentage of revenue, due primarily to ~~factors described above~~$55.2 million of costs attributable to the growth of Angi Services and $53.7 million of costs attributable to the inclusion of three quarters’ costs of Angi Roofing in ~~the three-month discussion.~~2022 compared to one quarter of costs in 2021.

Gross profit


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Revenue	Revenue	$	515,782	$	94,794	23%	$	420,988	$	951,941	$	143,924	18%	$	808,017	Revenue	$	498,036	$	36,471	8%	$	461,565	$	1,449,977	$	180,395	14%	$	1,269,582
Cost of revenue (exclusive of depreciation shown separately below)	Cost of revenue (exclusive of depreciation shown separately below)	127,771		58,067		83%	69,704		226,769		103,237		84%	123,532		Cost of revenue (exclusive of depreciation shown separately below)	109,057		9,590		10%	99,467		335,826		112,827		51%	222,999
Gross profit	Gross profit	$	388,011	$	36,727	10%	$	351,284	$	725,172	$	40,687	6%	$	684,485	Gross profit	$	388,979	$	26,881	7%	$	362,098	$	1,114,151	$	67,568	6%	$	1,046,583

Gross margin	Gross margin	75%				(8)%	83%		76%				(9)%	85%		Gross margin	78%				—%	78%		77%				(5)%	82%

For the three and ~~six~~nine months ended ~~June~~September 30, 2022 compared to the three and ~~six~~nine months ended ~~June~~September 30, 2021

Gross profit increased for the three and ~~six~~nine months ended ~~June~~September 30, 2022, primarily due to the revenue growth described in the ~~Revenue~~revenue discussions above. Gross margin decreased for the ~~three and six~~nine months ended ~~June~~September 30, 2022, due primarily to increased cost of revenue factors described above in the ~~Cost~~cost of ~~Revenue discussions.~~revenue discussion.

Selling and marketing expense


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Selling and marketing expense	Selling and marketing expense	$	251,159	$	12,128	5%	$	239,031	$	476,960	$	32,089	7%	$	444,871	Selling and marketing expense	$	234,398	$	(3,357)	(1)%	$	237,755	$	711,358	$	28,732	4%	$	682,626
As a percentage of revenue	As a percentage of revenue	49%					57%		50%					55%		As a percentage of revenue	47%					52%		49%					54%

For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

North America selling and marketing expense ~~increased $11.5~~decreased $2.4 million, or 5%1%, driven by ~~expense~~decreases in professional fees of ~~$6.2~~$2.9 million, from the inclusion of Angi Roofing, increases in consulting costs of $2.6 million, compensation expense of $2.4 million, and software maintenance costs of $1.1 million, partially offset by decreases in advertising expense of ~~$1.7~~$1.9 million, and lease expense of $1.3 ~~million. The increase in compensation expense is primarily due to an increase in wage-related expense from higher headcount~~million, partially offset by ~~a decrease~~increases in ~~commissions expense. The increase in consulting and~~ software maintenance costs ~~was due primarily to various sales initiatives at Angi Services.~~of $1.5 million and compensation expense of $0.6 million. The decrease in ~~advertising expense is~~professional fees was primarily due to decreases in ~~fees~~outsourced personnel and consulting costs for creative advertising agencies. The decrease in advertising

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expense is primarily due to decreases in fees paid to app platforms and service professional marketing as a part of the investment in Angi Services in 2021 ~~offset by an increase in search engine~~and overall offline marketing ~~and television~~ spend. The increase in search engine marketing spend is due to the continued brand integration initiative. The increase in television spend in 2022 reflects the return to historical spending levels as compared to the cost cutting initiatives during 2021 due to the impact of COVID-19 and is consistent with spend prior to COVID-19. The decrease in lease expense is a result of the Company ~~reducing~~repurposing its real estate ~~footprint~~space for general and administrative functions. The increase in ~~2021.~~software maintenance costs was due primarily to general maintenance. The increase in compensation expense is primarily due to an increase in wage-related expense partially offset by a decrease in commissions expense.

Europe selling and marketing expense ~~increased $0.6~~decreased $0.9 million, or 8%15%, driven by ~~an increase~~decreases in advertising expense of ~~$0.7~~$0.6 million as the company was more efficient in its online marketing campaigns and compensation expense of $0.2 million.

For the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021

North America selling and marketing expense increased ~~$30.7~~$28.3 million, or 7%4%, driven by expense of ~~$12.4~~$10.0 million from the inclusion of Angi Roofing, increases in advertising expense of ~~$7.3~~$6.1 million, ~~consulting costs~~professional fees of ~~$5.5~~$4.4 million, software maintenance costs of ~~$2.8~~$4.0 million and compensation expense of ~~$1.3~~$3.1 million, partially offset by a decrease in lease expense of ~~$2.8~~$4.1 million. The increase in advertising expense was due primarily to ~~increases~~an increase of ~~$12.5 million in television spend and $4.0~~$19.7 million in search engine marketing spend offset by decreases in fees paid to app platforms and service professional marketing ~~that were a part~~ of ~~the investment in Angi Services in 2021. The increase in television~~$12.5 million and offline marketing spend ~~in 2022 reflects the return to historical spending levels as compared to the cost cutting initiatives during 2021 due to the impact~~ of ~~COVID-19 and is consistent with spend prior to COVID-19.~~$1.6 million. The increase in search engine marketing spend is due to the continued brand integration ~~initiative.~~initiative at the beginning of 2022 and increased costs to obtain service requests later in 2022. The decrease in service professional marketing is primarily due to fees paid in 2021 that were a part of the investment in Angi Services in 2021. The decrease in offline marketing spend in 2022 reflects the return to historical spending levels in 2021 as compared to the shift to online marketing from television marketing. The increase in professional fees was primarily due to an increase in consulting ~~and~~costs for creative advertising agencies. The increase in software maintenance costs was due primarily to ~~various sales initiatives at Angi Services.~~general maintenance. The increase in compensation is primarily due to a general increase in wage-related expense from higher headcount partially offset by a decrease in commissions expense. The decrease in lease expense is a result of the Company repurposing its real estate space for general and administrative functions and reducing its real estate footprint in 2021.

Europe selling and marketing expense increased ~~$1.3~~$0.4 million, or 6%1%, driven by an increase in advertising expense of ~~$1.7~~$1.1 million partially offset by a decrease in compensation expense of ~~$0.4~~$0.6 million, which was caused by lower headcount.

General and administrative expense


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
General and administrative expense	General and administrative expense	$	119,625	$	12,139	11%	$	107,486	$	229,280	$	33,632	17%	$	195,648	General and administrative expense	$	128,261	$	25,175	24%	$	103,086	$	357,541	$	58,807	20%	$	298,734
As a percentage of revenue	As a percentage of revenue	23%					26%		24%					24%		As a percentage of revenue	26%					22%		25%					24%

For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

North America general and administrative expense increased ~~$13.2~~$25.1 million, or ~~13%~~26%, due primarily to ~~an increase~~increases of ~~$7.1~~$10.8 million in the provision for credit losses, $7.6 million in compensation expense, ~~$6.0 million of expense from the inclusion of Angi Roofing, $3.0~~and $6.3 million in ~~software maintenance costs, $1.8 million in professional fees and a $1.5 million~~legal expense. The increase in the provision for credit losses ~~partially offset by a decrease of $7.5 million in impairment charges of right-of-use assets and related leasehold improvements, furniture and equipment.~~is due primarily to revenue growth. The increase in compensation expense is due to an increase of ~~$5.5~~$4.2 million in wage-related expense from higher headcount and ~~$1.2~~$3.0 million in stock-based compensation expense. The increase in stock-based compensation is primarily due to management departures and new awards granted. The increase in legal expense is primarily due to accruals for certain legal matters in the current quarter.

Europe general and administrative expense decreased slightly, or 1%, driven by a decrease in professional fees of $0.3 million, offset by an increase in software maintenance of $0.2 million and compensation expense of $0.1 million. The decrease of professional fees relates to a decrease in consultants. The increase in software license and maintenance expense is due primarily to increased spend on software to support our customer service function.

For the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

North America general and administrative expense increased $66.8 million, or 25%, due primarily to an increase of $30.3 million in compensation expense, $12.0 million of expense from the inclusion of Angi Roofing, increases of $13.7 million in the provision for credit losses, $6.3 million in legal expense, $5.9 million in professional fees, and $5.4 million in software maintenance costs, partially offset by a decrease of $8.2 million in impairment charges of right-of-use assets and

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related leasehold improvements, furniture and equipment. The increase in compensation expense is due to an increase of $14.6 million in stock-based compensation expense and $12.8 million in wage-related expense from higher headcount. The increase in stock-based compensation expense is the result of the reversal of previously recognized stock-based compensation as a result of the forfeiture of unvested awards due to management departures in the first quarter of 2021, management departures in the third quarter of 2022, and new awards granted through the third quarter of 2022. The increase in the provision for credit losses is due primarily to revenue growth. The increase in legal expense is primarily due to accruals for certain legal matters that occurred in the third quarter of 2022. The increase in professional fees is due primarily to an increase in legal and consulting fees, and to a lesser extent, outsourced personnel costs. The increase in ~~the provision for credit losses~~software license and maintenance expense is due primarily to ~~higher receivable balances from revenue growth.~~increased spend on software to support our customer service function. The decrease in impairments of right-of-use assets and related leasehold improvements, furniture and equipment was due primarily to charges of $2.3 million in 2022 relative to $9.6 million in 2021, primarily due to Angi Inc. reducing its real estate footprint in 2021.

Europe general and administrative expense decreased ~~$1.0 million, or 13%, driven by a decrease in compensation expense of $0.9 million which was caused by lower headcount and lower average compensation.~~

~~For the six months ended June 30, 2022 compared to the six months ended June 30, 2021~~

North America general and administrative expense increased $41.6 million, or 24%, due primarily to an increase of $22.0 million in compensation expense, $12.9 million of expense from the inclusion of Angi Roofing, $6.5 million in professional fees, $4.9 million in software maintenance costs and a $2.7 million increase in the provision for credit losses,

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partially offset by a decrease of $8.2 million in impairment charges of right-of-use assets and related leasehold improvements, furniture and equipment. The increase in compensation expense is due to an increase of $11.0 million in wage-related expense from higher headcount and $10.1 million in stock-based compensation 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 forfeiture of unvested awards due to management departures in the first quarter of 2021 and new awards granted through Q2 2022. The increase in professional fees is due primarily to an increase in legal and consulting fees, and to a lesser extent, outsourced personnel costs. The increase in software license and maintenance expense is due primarily to increased spend on software to support our customer service function. The increase in the provision for credit losses is due primarily to higher receivable balances from revenue growth. The decrease in impairment charges is due primarily to factors described above in the three-month discussion.

~~Europe general and administrative expense decreased~~ $8.0 million, or ~~36%~~28%, due primarily to a 2021 charge of $6.0 million in compensation expense related to the acquisition of an additional interest in our MyBuilder business at a premium to fair value and lower headcount and lower average compensation. This impact was partially offset by higher professional fees of ~~$0.6~~$0.3 million related to restructuring of the European ~~businesses.~~businesses and an increase of $0.5 million in the provision for credit losses.

Product development expense


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Product development expense	Product development expense	$	20,954	$	2,202	12%	$	18,752	$	38,813	$	2,014	5%	$	36,799	Product development expense	$	15,817	$	(1,858)	(11)%	$	17,675	$	54,630	$	156	—%	$	54,474
As a percentage of revenue	As a percentage of revenue	4%					4%		4%					5%		As a percentage of revenue	3%					4%		4%					4%

For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

North America product development expense ~~increased $1.8~~decreased $2.2 million, or ~~13%~~16%, due primarily to ~~increases~~decreases in compensation expense of $2.1 million and software maintenance expense of ~~$0.9~~$0.4 million, partially offset by an increase in telecommunications expense of $0.3 million. The decrease in compensation expense is due primarily to the reduction of head-count for those in product development who do not work on capitalized projects.

Europe product and development expense increased $0.4 million, or 9%, due to an increase in compensation expense of $0.4 million from higher headcount and higher average compensation.

For the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

North America product development expense decreased $1.3 million, or 3%, due primarily to decreases in compensation expense of $3.0 million and lease expense of $1.1 million, partially offset by an increase in software license and maintenance expense of $1.2 million and outsourced personnel and consulting costs of ~~$0.7 million and~~$1.1 million. The decrease in compensation expense ~~of $0.6 million, partially offset by a~~is due primarily to the factor described above in the three-month discussion. The decrease in lease expense is a result of ~~$0.5 million.~~the Company reducing its real estate footprint in 2021. The increase in software maintenance expense is due primarily to increased spend on software licensing.

Europe product and development expense increased ~~$0.4~~$1.4 million, or 9%11%, due to an increase in compensation expense of ~~$0.5~~$1.4 million from higher headcount and higher average compensation.

~~For the six months ended June 30, 2022 compared to the six months ended June 30, 2021~~

North America product development expense increased $0.9 million, or 3%, due primarily to increases in software license and maintenance expense of $1.6 million and outsourced personnel and consulting costs of $1.2 million, partially offset by decreases in lease expense of $1.1 million and compensation expense of $0.9 million. The increase in software maintenance expense is due primarily to increased spend on software licensing.

~~Europe product and development expense increased $1.1 million, or 12%, due primarily to factors described above in the three-month discussion.~~

Depreciation


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Depreciation	Depreciation	$	13,354	$	(1,704)	(11)%	$	15,058	$	27,353	$	(3,674)	(12)%	$	31,027	Depreciation	$	17,759	$	3,058	21%	$	14,701	$	45,112	$	(616)	(1)%	$	45,728
As a percentage of revenue	As a percentage of revenue	3%					4%		3%					4%		As a percentage of revenue	4%					3%		3%					4%

For the three ~~and six~~ months ended ~~June~~September 30, 2022 compared to the three ~~and six~~ months ended ~~June~~September 30, 2021

~~North America depreciation in 2022 decreased from 2021 due primarily to the write-off of capitalized software projects in the first half of 2021.~~

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North America depreciation increased primarily to investments in capitalized software to support our employees, products, and services partially offset by a decrease in capitalized computer equipment depreciation.

Europe depreciation ~~in 2022~~ decreased ~~from 2021~~ due primarily to capitalized software projects reaching the end of their depreciable lives.

For the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

North America depreciation increased due primarily to the factors described above in the three-month discussion.

Europe depreciation decreased due primarily to the factor described above in the three-month discussion.

Operating ~~loss~~(loss) income


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
North America	North America	$	(20,056)	$	12,071	38%	$	(32,127)	$	(49,710)	$	(27,160)	(120)%	$	(22,550)	North America	$	(12,518)	$	2,201	15%	$	(14,719)	$	(62,228)	$	(24,959)	(67)%	$	(37,269)
Europe	Europe	(830)		(226)		(37)%	(604)		(5,133)		4,939		49%	(10,072)		Europe	1,460		1,714		NM	(254)		(3,673)		6,653		64%	(10,326)
Total	Total	$	(20,886)	$	11,845	(36)%	$	(32,731)	$	(54,843)	$	(22,221)	NM	$	(32,622)	Total	$	(11,058)	$	3,915	26%	$	(14,973)	$	(65,901)	$	(18,306)	NM	$	(47,595)

As a percentage of revenue	As a percentage of revenue	(4)%					(8)%		(6)%					(4)%		As a percentage of revenue	(2)%					(3)%		(5)%					(4)%

________________________

NM = Not meaningful

For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

~~North America operating~~Operating loss decreased ~~$12.1 million to a loss of $20.1 million~~for the three months ended September 30, 2022, primarily due to ~~an increase~~the factors described above in ~~Adjusted EBITDA~~the revenue, cost of ~~$15.3 million, described below,~~revenue, sales and ~~a decrease of $0.9 million in~~marketing, general and administrative, product development, and depreciation expense partially offset by an increase of $4.0 million in stock-based compensation expense and a $0.7 million loss from the inclusion of Angi Roofing. The decrease in depreciation primarily to the write-off of certain capitalized software projects subsequent to June 30, 2021. The increase in stock-based compensation expense was due primarily new awards granted through Q2 2022.

Europe operating loss decreased $0.2 million to a loss of $0.8 million due primarily to a decrease in Adjusted EBITDA of $1.2 million, described below, partially offset by a decrease in depreciation expense of $0.9 million.discussions.

At ~~June~~September 30, 2022, there is ~~$120.5~~$84.7 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 ~~2.9~~2.7 years.

For the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021

~~North America operating~~Operating loss increased $27.2 million to a loss of $49.7 million due to a decrease in Adjusted EBITDA of $15.5 million, described below, an increase in stock-based compensation expenses of $15.0 million, and a $3.7 million loss fromfor the ~~inclusion of Angi Roofing, partially offset by decreases of $2.2 million in depreciation and $1.2 million in amortization of intangibles. The increase in stock-based compensation expense was due~~nine months ended September 30, 2022, primarily due to the ~~reversal of previously recognized stock-based compensation due to forfeitures from management departures~~factors described above in the ~~first quarter~~revenue, cost of ~~2021~~revenue, sales and new awards granted through Q2 2022, noted above. The decrease in depreciation primarily to the write-off of certain capitalized software projects subsequent to June 30, 2021. The decrease in the amortization of intangibles was due primarily to certain intangible assets becoming fully amortized during 2021.

~~Europe operating loss decreased $4.9 million, or 49%, due primarily to an increase in Adjusted EBITDA of $3.3 million, described below,~~marketing, general and ~~a decrease in~~administrative, product development, and depreciation expense ~~of $1.4 million.~~discussions.

Adjusted EBITDA

Three Months Ended June 30, Six Months Ended June 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
North America $ 10,019 $ 15,321 NM $ (5,302) $ 10,360 $ (15,503) (60)% $ 25,863
Europe (330) (1,190) NM 860 (3,840) 3,279 46% (7,119)
Total $ 9,689 $ 14,131 NM $ (4,442) $ 6,520 $ (12,224) (65)% $ 18,744
As a percentage of revenue 2% (1)% 1% 2%

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	Three Months Ended September 30,							Nine Months Ended September 30,
	2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
	(Dollars in thousands)
North America	$	20,792	$	9,579	85%	$	11,213	$	31,152	$	(5,924)	(16)%	$	37,076
Europe	2,090		908		77%	1,182		(1,750)		4,187		71%	(5,937)
Total	$	22,882	$	10,487	85%	$	12,395	$	29,402	$	(1,737)	(6)%	$	31,139

As a percentage of revenue	5%					3%		2%					2%

For a reconciliation of net loss attributable to Angi Inc. shareholders to operating loss to consolidated Adjusted EBITDA, see “Principles of Financial Reporting.” For a reconciliation of operating 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.”

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For the three months ended ~~June~~September 30, 2022 compared to the three months ended ~~June~~September 30, 2021

North America Adjusted EBITDA increased ~~$15.3~~$9.6 million, to ~~$10.0~~$20.8 million, and increased as a percentage of revenue, primarily due to higher revenue of ~~$95.9~~$36.1 million, ~~offset by increases~~decreases in ~~cost of revenue of $58.1 million, general and administrative~~product development expense of ~~$13.2~~$2.2 million and selling and marketing expense of ~~$11.5~~$2.4 million, ~~as well as growth~~offset by increases in general and administrative expense of ~~Angi Services due to factors described above in the~~$25.1 million and cost of revenue ~~and selling and marketing discussions.~~of $9.6 million.

Europe Adjusted EBITDA ~~decreased $1.2~~increased $0.9 million to ~~a loss of $0.3~~$2.1 million, due primarily to the ~~decrease~~increase in revenue of ~~$1.1~~$0.4 million, the ~~increase~~decrease in selling and marketing ~~expenses~~expense of ~~$0.6~~$0.9 million, ~~and~~partially offset by the increase in product development ~~expenses~~expense of $0.4 million, ~~which was partially offset by a $1.0 million decrease in general and administrative expenses,~~ each of which are described above.

For the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021

North America Adjusted EBITDA decreased ~~$15.5~~$5.9 million, or ~~60%~~16%, to ~~$10.4~~$31.2 million, and ~~decreased~~remained consistent as a percentage of revenue, despite higher revenue of ~~$146.0~~$182.1 million, due primarily to increases in cost of revenue of ~~$103.2~~$112.8 million, general and administrative expense of ~~$41.6~~$66.8 million, and selling and marketing expense of ~~$30.7 million as well as growth of Angi Services due to factors described above in the cost of revenue and selling and marketing discussions.~~$28.3 million.

Europe Adjusted EBITDA increased ~~$3.3~~$4.2 million, or ~~46%~~71%, due to ana decrease in general and administrative expense of $8.0 million, which was primarily due to the 2021 charge of $6.0 million related the acquisition of an additional interest in MyBuilder at a premium to fair value. This was partially offset by a decrease of ~~$2.1~~$1.7 million in revenue, an increase of ~~$1.7~~$1.4 million in ~~advertising~~product development expense and an increase of $1.1 million in ~~product development~~advertising expense.

Interest expense

Interest expense relates to interest on the ANGI Group Senior Notes, ANGI Group Term Loan, and commitment fees on the 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,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(In thousands)
Interest expense $ 5,026 $ (788) (14)% $ 5,814 $ 10,048 $ (2,383) (19)% $ 12,431


	Three Months Ended September 30,							Nine Months Ended September 30,
	2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
	(In thousands)
Interest expense	$	5,030	$	(1,002)	(17)%	$	6,032	$	15,078	$	(3,385)	(18)%	$	18,463

For the three ~~and six~~ months ended ~~June~~September 30, 2022 compared to the three ~~and six~~ months ended ~~June~~September 30, 2021

Interest expense decreased primarily due to the inclusion of the write-off of deferred debt issuance costs associated with the termination of the ANGI Group Revolving Facility during the third quarter of 2021.

For the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

Interest expense decreased primarily due to the repayment of the ANGI Group Term Loan during the second quarter of 2021.

Other expense, net

Three Months Ended June 30, Six Months Ended June 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(In thousands)
Other expense, net $ (1,750) $ (1,114) (175)% $ (636) $ (2,141) $ (738) (53)% $ (1,403)

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	Three Months Ended September 30,							Nine Months Ended September 30,
	2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
	(In thousands)
Other expense, net	$	(2,296)	$	(1,817)	(379)%	$	(479)	$	(4,437)	$	(2,555)	(136)%	$	(1,882)

For the three months ended ~~June 30, 2022 and 2021~~

~~Other expense, net in 2022 primarily includes a net foreign currency exchange loss of $2.3 million, partially offset by interest income 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.

~~For the six months ended June~~September 30, 2022 and 2021

Other expense, net in 2022 primarily includes net foreign currency exchange losses of ~~$2.7~~$3.9 million, partially offset by interest income of ~~$0.6~~$1.6 million.

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Other expense, net in 2021 primarily includes a net foreign currency exchange loss of $0.5 million.

For the nine months ended September 30, 2022 and 2021

Other expense, net in 2022 primarily includes net foreign currency exchange losses of $6.6 million, partially offset by interest income of $2.1 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 and net foreign currency exchange losses of ~~$0.5~~$1.0 million, partially offset by interest income of ~~$0.1~~$0.2 million.

Income tax benefit


		Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,							Nine Months Ended September 30,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2022		$ Change		% Change	2021		2022		$ Change		% Change	2021
		(Dollars in thousands)															(Dollars in thousands)
Income tax benefit	Income tax benefit	$	3,665	$	(5,464)	(60)%	$	9,129	$	9,748	$	(8,670)	(47)%	$	18,418	Income tax benefit	$	945	$	(3,846)	(80)%	$	4,791	$	10,693	$	(12,516)	(54)%	$	23,209
Effective income tax rate	Effective income tax rate	13%					23%		15%					NM		Effective income tax rate	5%					22%		13%					34%

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~~September 30, 2022 compared to the three months ended ~~June 30, 2021~~

In 2022, the effective income tax rate was lower than the statutory rate of 21%, due primarily to unbenefited foreign losses and tax shortfalls generated by the exercise and vesting of stock-based awards.

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.

~~For the six months ended June 30, 2022 compared to the six months ended June~~September 30, 2021

In 2022, the effective income tax rate was lower than the statutory rate of 21% due primarily to tax shortfalls generated by the exercise and vesting of stock-based awards and ~~unbenefited~~provisions related to a change in the annual expected effective income tax rate driven by unrecognized state tax losses.

In 2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to the benefit from the change in the annual expected effective income tax rate driven by the reduced impact of forecasted nondeductible stock-based compensation expense had on the increase in forecasted ordinary pre-tax losses, partially offset by foreign ~~losses.~~income taxed at different tax rates.

For the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

In 2022, the effective income tax rate was lower than the statutory rate of 21% due primarily to tax shortfalls generated by the exercise and vesting of stock-based awards and nondeductible stock-based compensation expense.

In 2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting of stock-based ~~awards.~~awards, partially offset by foreign income taxed at different tax rates.

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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~~and our internal budgets are based and ~~by which~~may impact management ~~is compensated.~~compensation. 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 attributable to Angi Inc. shareholders to operating loss to consolidated Adjusted EBITDA:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(In thousands)									(In thousands)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(24,232)	$	(30,293)	$	(57,622)	$	(28,362)	Net loss attributable to Angi Inc. shareholders	$	(17,479)	$	(16,995)	$	(75,102)	$	(45,357)
Add back:	Add back:									Add back:
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	235		241		338		324		Net earnings attributable to noncontrolling interests	40		302		379		626
Income tax benefit	Income tax benefit	(3,665)		(9,129)		(9,748)		(18,418)		Income tax benefit	(945)		(4,791)		(10,693)		(23,209)
Other expense, net	Other expense, net	1,750		636		2,141		1,403		Other expense, net	2,296		479		4,437		1,882
Interest expense	Interest expense	5,026		5,814		10,048		12,431		Interest expense	5,030		6,032		15,078		18,463
Operating loss	Operating loss	(20,886)		(32,731)		(54,843)		(32,622)		Operating loss	(11,058)		(14,973)		(65,901)		(47,595)
Add back:	Add back:									Add back:
Stock-based compensation expense	Stock-based compensation expense	13,417		9,543		26,402		11,577		Stock-based compensation expense	12,376		8,813		38,778		20,390
Depreciation	Depreciation	13,354		15,058		27,353		31,027		Depreciation	17,759		14,701		45,112		45,728
Amortization of intangibles	Amortization of intangibles	3,804		3,688		7,608		8,762		Amortization of intangibles	3,805		3,854		11,413		12,616
Adjusted EBITDA	Adjusted EBITDA	$	9,689	$	(4,442)	$	6,520	$	18,744	Adjusted EBITDA	$	22,882	$	12,395	$	29,402	$	31,139

For a reconciliation of operating 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.”

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, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(In thousands)					(In thousands)
Cash and cash equivalents:	Cash and cash equivalents:					Cash and cash equivalents:
United States	United States	$	335,468	$	404,277	United States	$	302,046	$	404,277
All other countries	All other countries	25,482		23,859		All other countries	26,749		23,859
Total cash and cash equivalents	Total cash and cash equivalents	$	360,950	$	428,136	Total cash and cash equivalents	$	328,795	$	428,136

Long-term debt:	Long-term debt:					Long-term debt:
Senior Notes	Senior Notes	$	500,000	$	500,000	Senior Notes	$	500,000	$	500,000

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

Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	5,087		5,448		Less: unamortized debt issuance costs	4,902		5,448
Total long-term debt, net	Total long-term debt, net	$	494,913	$	494,552	Total long-term debt, net	$	495,098	$	494,552

At ~~June~~September 30, 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,					Nine Months Ended September 30,
		2022		2021			2022		2021
		(In thousands)					(In thousands)
Net cash (used in) provided by:	Net cash (used in) provided by:					Net cash (used in) provided by:
Operating activities	Operating activities	$	7,079	$	6,209	Operating activities	$	11,358	$	25,888
Investing activities	Investing activities	$	(61,974)	$	(45,072)	Investing activities	$	(95,297)	$	(26,663)
Financing activities	Financing activities	$	(11,657)	$	(345,168)	Financing activities	$	(13,731)	$	(335,046)

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 ~~$47.9~~$82.2 million of provision for credit losses, ~~$27.4~~$45.1 million of depreciation, ~~$26.4~~$38.8 million of stock-based compensation expense, ~~$6.6~~$9.8 million of non-cash lease expense, and ~~$7.6~~$11.4 million of amortization of intangibles. The decrease from changes in working capital consists primarily of an increase of ~~$84.2~~$102.6 million in accounts receivable, ~~an increase of $11.1 million in other assets, an increase of $1.6 million in income taxes payable and receivable, and~~ a decrease of ~~$8.6~~$13.2 million in operating lease liabilities, and an increase of $10.0 million in other assets, partially offset by increases of ~~$52.7~~$21.3 million in accounts payable and other liabilities. The increase in accounts receivable is due primarily to revenue growth, primarily attributable to Angi Services. The ~~increase in other assets is due to an increase in capitalized commissions. The increase in income taxes payable and receivable is due to accruals in excess of payments. The~~ decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in other assets is due to an increase in capitalized commissions. 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 ~~$62.1~~$95.5 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and services.

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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 ~~$3.5~~$5.6 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~~$66.1 million of provision for credit losses, ~~$31.0~~$45.7 million of depreciation, $20.4 million of stock-based compensation expense, $12.6 million of amortization of intangibles, $12.3 million of impairment charges on long-lived and right-of-use assets, ~~$11.6~~$9.6 million of ~~stock-based compensation~~non-cash lease expense, ~~$8.8 million of amortization of intangibles,~~ and ~~$4.7~~$6.4 million of revenue reserves, partially offset by ~~$20.3~~$25.4 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase of ~~$63.2~~$106.2 million in accounts receivable partially offset by increases of ~~$51.4~~$23.3 million in accounts payable and other liabilities and ~~$5.3~~$4.6 million of deferred revenue. The increase in accounts ~~payable~~receivable and is due primarily to revenue growth, ~~in North America.~~primarily attributed to Angi Services. The increase in accounts payable and other liabilities is due primarily to ~~an increase~~increases in accrued advertising and related ~~payables.~~payables and accrued roofing material costs related to Angi Roofing, partially offset by the reduction in lease liabilities. The increase in deferred revenue is driven primarily by increases in annual membership ~~payments.~~payments and an increase in customer deposits for Angi Services jobs.

Net cash ~~provided by~~used in investing activities includes ~~proceeds of $50.0 million from the maturities of marketable debt securities, partially offset by $35.7~~$52.1 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and ~~services.~~services, $25.4 million of cash principally related to the acquisition of Angi Roofing, partially offset by proceeds of $50.0 million from the maturities of marketable debt securities.

Net cash used in financing activities includes $220.0 million for the prepayment of the ~~remaining balance of the~~ ANGI Group Term Loan, which otherwise would have matured on November 5, 2023, ~~$54.6~~$56.1 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, and $5.6~~$35.4 million for the repurchase of ~~0.5~~3.2 million shares of Angi Inc. Class A common stock, on a settlement ~~and trade~~ date basis, at an average price of ~~$11.87~~$11.06 per ~~share.~~share, and $23.5 million for the purchase of redeemable noncontrolling interests.

Liquidity and Capital Resources

Financing Arrangements

~~The ANGI Group Senior Notes were issued on August 20, 2020. At any time prior to August 15, 2023, these notes may be redeemed at~~For a ~~redemption price equal~~detailed description of long-term debt, see “Note 4—Long-term Debt” 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~~consolidated financial statements included 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 exceeds 3.75 to 1.0, provided that ANGI Group shall be permitted to incur such liens under certain permitted credit facilities indebtedness notwithstanding the ratio, all as defined in the indenture. At June 30, 2022 there were no limitations pursuant thereto.

~~During the six months ended June 30, 2021, ANGI Group prepaid $220.0 million of the ANGI Group Term Loan principal, which otherwise would have matured on November 5, 2023.~~

~~The $250.0 million ANGI Group Revolving Facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021.~~“Item 1. Consolidated Financial Statements~~No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.~~.”

Share Repurchase Authorizations and Activity

During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company repurchased 1.0 million shares, on a trade date basis, of its common stock at an average price of $7.80 per share, or $8.1 million in aggregate. The Company has 15.0 million shares remaining in its share repurchase authorization as of ~~August 5,~~November 4, 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 the Company’s management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

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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, Angi remits withholding taxes on behalf of the employee. At 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 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 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 ~~August 5,~~November 4, 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
(In thousands)
Stock appreciation rights $ 1,265 $ 633 109
Other equity awards(a)(b)
136,321 66,881 11,931
Total outstanding employee stock-based awards $ 137,586 $ 67,514 12,040

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	Aggregate intrinsic value of awards outstanding		Estimated withholding taxes payable		Estimated shares to be issued
	(In thousands)
Stock appreciation rights	$	—	$	—	—
Other equity awards(a)(b)	40,582		19,877		10,728
Total outstanding employee stock-based awards	$	40,582	$	19,877	10,728

_______________

(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 ~~June~~September 30, 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 2022 capital expenditures are expected to be higher than 2021 capital expenditures of $70.2 million by approximately ~~20% to 25%~~70%, 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~~economic 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.~~factors, including COVID-19.

At ~~June~~September 30, 2022, IAC held all Class B shares of Angi Inc., which represent ~~84.5%~~84.3% of the economic interest and 98.2% of the voting interest of the Company. As a result, IAC has the ability to control Angi’s financing activities, including the issuance of additional debt and equity securities by Angi or any of its subsidiaries, or the incurrence of other indebtedness generally. While Angi is expected to have the ability to access debt and equity markets if needed, such transactions may require the

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approval of IAC due to its control of the majority of the outstanding voting power of Angi’s capital stock and its representation on the Angi board of directors.

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 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.

Additional financing may not be available on terms favorable to the Company or at all, and may also be impacted by any disruptions in the financial ~~markets caused by COVID-19 or otherwise.~~markets. In addition, the Company’s existing indebtedness could limit its ability to obtain additional financing.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the ~~six~~nine months ended ~~June~~September 30, 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, 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 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 proceedings which we are defending, including the ones described below, involve or are likely to involve amounts of that magnitude. The litigation and administrative matters described below involve issues or claims that we believe may be of particular interest to our stockholders, regardless of whether 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 Proceeding Regarding Certain HomeAdvisor Business Practices

In 2021, the staff of the Federal Trade Commission (“FTC”) informed HomeAdvisor that 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 HomeAdvisor’s business practices related to leads provided to service professionals and its mHelpDesk product are unfair or deceptive in violation of the FTC Act and requesting injunctive relief. On April 7, 2022, complaint counsel for the FTC filed a motion for summary decision, which the FTC denied on August 2, 2022. While HomeAdvisor believes that the claims are without merit and is defending vigorously against them, the FTC administrative proceeding is ongoing, and the outcome cannot be predicted at present.

Service Professional Class Action Litigation against HomeAdvisor

This purported class action pending in Colorado is described in detail on pages 26-27 of our Annual Report on Form 10-K for the fiscal year ended December 31, 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~~Plaintiffs have ~~been no material or otherwise noteworthy developments in this case since the filing~~filed for class certification, which was fully briefed as of ~~our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.~~August 8, 2022 and remains pending. 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,” “intends,” “will continue,” “may”, “could” and “believes,” among similar expressions, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to our future business, financial condition, results of operations and financial performance, our business prospects and strategy, trends and prospects in home services industry and other similar matters. These forward-looking statements are based on Company management's 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 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, (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, (x) our continued ability to communicate with consumers and service professionals via e-mail (or other sufficient means), (xi) our ability to access, share and use personal data about consumers, (xii) our ability to develop and monetize versions of our products and services for mobile and other digital devices, (xiii) any challenge to the contractor classification or employment status of our service professionals, (xiv) our ability to protect our systems, technology and infrastructure from cyberattacks and to protect personal and confidential user information, (xv) the occurrence of data security breaches, fraud and/or additional regulation involving or impacting credit card payments, (xvi) the integrity, quality, efficiency and scalability of our technology systems and infrastructures (and those of third parties with whom we do business), (xvii) operational and financial risks relating to acquisitions and the integration of suitable targets, (xviii) our ability to operate (and expand into) international markets successfully, (xix) our ability to adequately protect our intellectual property rights and not infringe the intellectual property rights of third parties, (xx) changes in key personnel, (xxi) various risks related to our relationship with IAC and (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, 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.

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

Unregistered Sales of Equity Securities

The Company did not issue or sell any shares of its common stock or any other equity securities pursuant to unregistered transactions during the quarter ended ~~June~~September 30, 2022.

Issuer Purchases of Equity Securities

The Company did not purchase any shares of its common stock during the quarter ended ~~June~~September 30, 2022. As of that date, 15,025,714 shares of Angi Class A common stock remained available for repurchase under the Company's previously announced March 2020 repurchase authorization. The Company may repurchase shares pursuant to this repurchase authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors 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.

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.

10.1

~~Employment~~Separation Agreement, ~~between Andrew Russakoff and Angi Inc.,~~ dated as of ~~June 9, 2022.~~October 10, 2022, by and between Angi Inc. and Oisin Hanrahan.

Exhibit ~~10.1~~99.2 to the Registrant’s Current Report on Form 8-K, filed on ~~June 9,~~October 11 , 2022.

~~10.2~~

~~Separation Agreement, dated as of June 7, 2022, by and between Angi Inc. and Jeffrey Pedersen~~

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.(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.(2)

101.INS

Inline XBRL Instance (the instance document
does not appear in the Interactive Data File because
its XBRL tags are embedded within the Inline XBRL
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)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 9,~~November 8, 2022

Angi Inc.

By:

/s/ ANDREW RUSSAKOFF

Andrew Russakoff

Chief Financial Officer



Signature	Title	Date

/s/ ANDREW RUSSAKOFF	Chief Financial Officer	~~August 9,~~November 8, 2022
Andrew Russakoff

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