As filed with the Securities and Exchange Commission on ~~November 8, 2022~~May 9, 2023

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 ~~September 30, 2022~~March 31, 2023


☐			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 ~~November 4, 2022,~~May 5, 2023, the following shares of the Registrant’s common stock were outstanding:


Class A Common Stock			~~82,452,237~~84,547,999
Class B Common Stock			422,019,247
Class C Common Stock			—
Total outstanding Common Stock			~~504,471,484~~506,567,246

TABLE OF CONTENTS


		Page Number
PART I
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of Shareholders’ Equity	6
	Consolidated Statement of Cash Flows	87
	Notes to Consolidated Financial Statements
	Note 1—The Company and Summary of Significant Accounting Policies	98
	Note 2—Income Taxes	11
	Note 3—Financial Instruments and Fair Value Measurements	1312
	Note 4—Long-term Debt	1413
	Note 5—Accumulated Other Comprehensive (~~Loss)~~ (Loss) Income	1514
	Note 6—~~(Loss) Earnings~~Loss Per Share	1514
	Note 7—Segment Information	1715
	Note 8—Consolidated Financial Statement Details	2018
	Note 9—Contingencies	2220
	Note 10—Related Party Transactions with IAC	2320

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2422
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3935
Item 4.	Controls and Procedures	3935
PART II
Item 1.	Legal Proceedings	4137
Item 1A.	Risk Factors	4138
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4239
Item 6.	Exhibits	4340
	Signatures	4441

Table of Contents

~~PART I~~

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In thousands, except par value amounts)					(In thousands, except par value amounts)
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	328,795	$	428,136	Cash and cash equivalents	$	314,960	$	321,155

Accounts receivable, net of reserves of $50,790 and $36,360, respectively		102,947		84,387
Marketable debt securities						Marketable debt securities	12,495		—
Accounts receivable, net						Accounts receivable, net	92,303		93,880
Other current assets	Other current assets	80,678		70,548		Other current assets	66,574		69,167
Total current assets	Total current assets	512,420		583,071		Total current assets	486,332		484,202

Capitalized software, leasehold improvements and equipment, net	Capitalized software, leasehold improvements and equipment, net	167,302		118,267		Capitalized software, leasehold improvements and equipment, net	139,055		153,855
Goodwill	Goodwill	903,134		916,039		Goodwill	883,734		882,949
Intangible assets, net	Intangible assets, net	179,989		193,826		Intangible assets, net	175,592		178,105
Deferred income taxes	Deferred income taxes	136,694		122,693		Deferred income taxes	144,309		145,460
Other non-current assets, net	Other non-current assets, net	68,620		76,245		Other non-current assets, net	59,883		63,207
TOTAL ASSETS	TOTAL ASSETS	$	1,968,159	$	2,010,141	TOTAL ASSETS	$	1,888,905	$	1,907,778

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

Accounts payable	Accounts payable	$	50,354	$	38,860	Accounts payable	$	31,017	$	30,862
Deferred revenue	Deferred revenue	55,224		53,834		Deferred revenue	50,244		50,907
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	194,472		183,815		Accrued expenses and other current liabilities	188,875		200,015
Total current liabilities	Total current liabilities	300,050		276,509		Total current liabilities	270,136		281,784

Long-term debt, net	Long-term debt, net	495,098		494,552		Long-term debt, net	495,469		495,284
Deferred income taxes	Deferred income taxes	1,660		1,883		Deferred income taxes	2,932		2,906
Other long-term liabilities	Other long-term liabilities	82,868		91,670		Other long-term liabilities	72,031		76,426

Commitments and contingencies	Commitments and contingencies					Commitments and contingencies

SHAREHOLDERS’ EQUITY:	SHAREHOLDERS’ EQUITY:					SHAREHOLDERS’ EQUITY:
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 A common stock, $0.001 par value; authorized 2,000,000 shares; issued 104,119 and 102,810 shares, respectively, and outstanding 83,908 and 82,599, respectively						Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 104,119 and 102,810 shares, respectively, and outstanding 83,908 and 82,599, respectively	104		103
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	1,393,214		1,350,457		Additional paid-in capital	1,416,748		1,405,294
Accumulated deficit	Accumulated deficit	(136,731)		(61,629)		Accumulated deficit	(205,404)		(190,079)
Accumulated other comprehensive (loss) income		(5,212)		3,309
Treasury stock, 20,211 and 19,167 shares, respectively		(166,184)		(158,040)
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(711)		(1,172)
Treasury stock, 20,211 and 20,211 shares, respectively						Treasury stock, 20,211 and 20,211 shares, respectively	(166,184)		(166,184)
Total Angi Inc. shareholders’ equity	Total Angi Inc. shareholders’ equity	1,085,611		1,134,619		Total Angi Inc. shareholders’ equity	1,044,975		1,048,384
Noncontrolling interests	Noncontrolling interests	2,872		10,908		Noncontrolling interests	3,362		2,994
Total shareholders’ equity	Total shareholders’ equity	1,088,483		1,145,527		Total shareholders’ equity	1,048,337		1,051,378
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,968,159	$	2,010,141	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,888,905	$	1,907,778

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 September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
		(In thousands, except per share data)								(In thousands, except per share data)
Revenue	Revenue	$	498,036	$	461,565	$	1,449,977	$	1,269,582		Revenue	$	392,407	$	436,159
Cost of revenue (exclusive of depreciation shown separately below)	Cost of revenue (exclusive of depreciation shown separately below)	109,057		99,467		335,826		222,999			Cost of revenue (exclusive of depreciation shown separately below)	42,041		98,998
Gross profit		388,979		362,098		1,114,151		1,046,583
Gross Profit											Gross Profit	350,366		337,161
Operating costs and expenses:	Operating costs and expenses:										Operating costs and expenses:
Selling and marketing expense	Selling and marketing expense	234,397		237,755		711,357		682,626			Selling and marketing expense	204,909		225,801
General and administrative expense	General and administrative expense	128,260		103,086		357,541		298,734			General and administrative expense	102,518		109,655
Product development expense	Product development expense	15,816		17,675		54,629		54,474			Product development expense	25,312		17,859
Depreciation	Depreciation	17,759		14,701		45,112		45,728			Depreciation	25,435		13,999
Amortization of intangibles	Amortization of intangibles	3,805		3,854		11,413		12,616			Amortization of intangibles	2,662		3,804
Total operating costs and expenses	Total operating costs and expenses	400,037		377,071		1,180,052		1,094,178			Total operating costs and expenses	360,836		371,118
Operating loss	Operating loss	(11,058)		(14,973)		(65,901)		(47,595)			Operating loss	(10,470)		(33,957)
Interest expense	Interest expense	(5,030)		(6,032)		(15,078)		(18,463)			Interest expense	(5,029)		(5,022)
Other expense, net		(2,296)		(479)		(4,437)		(1,882)
Other income (expense),net											Other income (expense),net	3,811		(391)
Loss before income taxes	Loss before income taxes	(18,384)		(21,484)		(85,416)		(67,940)			Loss before income taxes	(11,688)		(39,370)
Income tax benefit		945		4,791		10,693		23,209
Income tax (provision) benefit											Income tax (provision) benefit	(3,312)		6,083
Net loss	Net loss	(17,439)		(16,693)		(74,723)		(44,731)			Net loss	(15,000)		(33,287)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(40)		(302)		(379)		(626)			Net earnings attributable to noncontrolling interests	(325)		(103)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(17,479)	$	(16,995)	$	(75,102)	$	(45,357)		Net loss attributable to Angi Inc. shareholders	$	(15,325)	$	(33,390)

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	$	(0.03)	$	(0.03)	$	(0.15)	$	(0.09)		Basic loss per share	$	(0.03)	$	(0.07)
Diluted loss per share	Diluted loss per share	$	(0.03)	$	(0.03)	$	(0.15)	$	(0.09)		Diluted loss per share	$	(0.03)	$	(0.07)

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	$	1,544	$	1,256	$	4,674	$	3,138		Selling and marketing expense	$	1,280	$	1,239
General and administrative expense	General and administrative expense	8,755		5,836		27,052		13,330			General and administrative expense	8,898		9,635
Product development expense	Product development expense	2,077		1,721		7,052		3,922			Product development expense	2,699		2,111
Total stock-based compensation expense	Total stock-based compensation expense	$	12,376	$	8,813	$	38,778	$	20,390		Total stock-based compensation expense	$	12,877	$	12,985

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 September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
		(in thousands)								(in thousands)
Net loss	Net loss	$	(17,439)	$	(16,693)	$	(74,723)	$	(44,731)		Net loss	$	(15,000)	$	(33,287)
Other comprehensive (loss) income:
Other comprehensive income (loss):											Other comprehensive income (loss):
Change in foreign currency translation adjustment	Change in foreign currency translation adjustment	(5,129)		(1,353)		(9,100)		722			Change in foreign currency translation adjustment	502		(746)

Change in unrealized gains on available-for-sale marketable debt securities											Change in unrealized gains on available-for-sale marketable debt securities	2		—
Total other comprehensive income (loss)											Total other comprehensive income (loss)	504		(746)
Comprehensive loss	Comprehensive loss	(22,568)		(18,046)		(83,823)		(44,009)			Comprehensive loss	(14,496)		(34,033)
Components of comprehensive loss (income) attributable to noncontrolling interests:
Components of comprehensive income attributable to noncontrolling interests:											Components of comprehensive income attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(40)		(302)		(379)		(626)			Net earnings attributable to noncontrolling interests	(325)		(103)
Change in foreign currency translation adjustment attributable to noncontrolling interests	Change in foreign currency translation adjustment attributable to noncontrolling interests	310		313		579		(426)			Change in foreign currency translation adjustment attributable to noncontrolling interests	(43)		(57)
Comprehensive loss (income) attributable to noncontrolling interests		270		11		200		(1,052)
Comprehensive income attributable to noncontrolling interests											Comprehensive income attributable to noncontrolling interests	(368)		(160)
Comprehensive loss attributable to Angi Inc. shareholders	Comprehensive loss attributable to Angi Inc. shareholders	$	(22,298)	$	(18,035)	$	(83,623)	$	(45,061)		Comprehensive loss attributable to Angi Inc. shareholders	$	(14,864)	$	(34,193)

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 Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 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																																																			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																			Accumulated Other Comprehensive (Loss) Income				Total Shareholders' Equity
					(In thousands)																																											(In thousands)
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 December 31, 2022																											Balance as of December 31, 2022													$	103					102,811					$	422							422,019					$	—					—				$	1,405,294					$	(190,079)				$	(1,172)						$	(166,184)				$	1,048,384		$	2,994				$	1,051,378
Net (loss) earnings	Net (loss) earnings	—			—			—		—		—		—		—			—			(17,479)			—				—				(17,479)							40			(17,439)			Net (loss) earnings										—					—							—				—						—					—						—						(15,325)					—					—					(15,325)				325				(15,000)
Other comprehensive loss		—			—			—		—		—		—		—			—			—			(4,819)			—				(4,819)							(310)						(5,129)
Other comprehensive income, net of tax																											Other comprehensive income, net of tax								—							—						—					—						—					—						—				—						461					—						461					43					504
Stock-based compensation expense	Stock-based compensation expense	—			—			—		—		—		—		—			13,304			—			—			—				13,304						—						13,304			Stock-based compensation expense									—					—							—				—						—					—						13,870					—					—					—					13,870				—				13,870
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			853		—		—		—		—			(2,121)			—			—			—				(2,120)					—						(2,120)			Issuance of common stock pursuant to stock-based awards, net of withholding taxes									1					1,308						—					—					—						—					(2,411)						—					—					—					(2,410)				—				(2,410)

Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary		—			—			—		—		—		—		—			7,835			—			—			—				7,835					(7,835)						—

Other	Other	—			—			—		—		—		—		—			(4)			(1)			—			—				(5)					—						(5)			Other									—											—					—					—						—					(5)					—					—					—					(5)				—				(5)
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 March 31, 2023																											Balance as of March 31, 2023								$	104					104,119						$	422				422,019					$	—				—						$	1,416,748			$	(205,404)					$	(711)				$	(166,184)					$	1,044,975				$	3,362				$	1,048,337

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	—			—			—		—		—		—		—			—			(75,102)			—			—				(75,102)					378						(74,724)			Net (loss) earnings									—					—						—					—					—						—					—					(33,390)					—					—					(33,390)				103				(33,287)
Other comprehensive loss		—			—			—		—		—		—		—			—			—			(8,521)			—				(8,521)					(579)						(9,100)
Other comprehensive (loss) income																											Other comprehensive (loss) income								—						—						—					—					—					—						—				—						(803)					—						(803)					57					(746)
Stock-based compensation expense	Stock-based compensation expense	—			—			—		—		—		—		—			40,971			—			—			—				40,971					—						40,971			Stock-based compensation expense									—					—						—					—					—						—					13,556					—					—					—					13,556				—				13,556
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			2,005		—		—		—		—			(6,045)			—			—			—				(6,043)					—						(6,043)			Issuance of common stock pursuant to stock-based awards, net of withholding taxes									—					681						—					—					—						—					(2,473)					—					—					—					(2,473)				—				(2,473)

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		—			—			—		—		—		—		—			7,835			—			—			—				7,835					(7,835)						—
Other		—			—			—		—		—		—		—			(4)			—			—			—				(4)					—						(4)
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 March 31, 2022																											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

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 Nine Months Ended 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
Accumulated Other Comprehensive Income Total
Shareholders'
Equity
Redeemable
Noncontrolling
Interests Additional Paid-in Capital (Accumulated Deficit) Retained Earnings Treasury
Stock Noncontrolling
Interests
$ Shares $ Shares $ Shares
(In thousands)
Balance as of 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) 61 — — — — — — — (16,995) — — (16,995) 241 (16,754)
Other comprehensive loss (73) — — — — — — — — (1,040) — (1,040) (240) (1,280)
Stock-based compensation expense — — — — — — — 8,817 — — — 8,817 — 8,817
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 Inc. pursuant to the employee matters agreement — — 3 — 42 — — — — — — — — —
Purchase of treasury stock — — — — — — — — — — (29,766) (29,766) — (29,766)
Purchase of noncontrolling interests — — — — — — — — — — — — (160) (160)
Other — — — — — — — (410) — — — (410) — (410)
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 $ 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 49 — — — — — — — (45,357) — — (45,357) 577 (44,780)
Other comprehensive income 515 — — — — — — — — 296 — 296 (89) 207
Stock-based compensation expense — — — — — — — 22,836 — — — 22,836 — 22,836
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 Inc. pursuant to the employee matters agreement — 3 2,588 — 157 — — (3) — — — — — —
Purchase of treasury stock — — — — — — — — — — (35,403) (35,403) — (35,403)
Purchase of redeemable noncontrolling interests (22,938) — — — — — — — — — — — (160) (160)
Adjustment of redeemable noncontrolling interests to fair value 534 — — — — — — (534) — — — (534) — (534)
Other — — — — — — — (410) — — — (410) — (410)
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.~~

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ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


		Nine Months Ended September 30,				Three Months Ended March 31,
		2022		2021				2023		2022
		(In thousands)				(In thousands)
Cash flows from operating activities:	Cash flows from operating activities:						Cash flows from operating activities:
Net loss	Net loss	$	(74,723)	$	(44,731)		Net loss	$	(15,000)	$	(33,287)
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	82,216		66,081			Provision for credit losses	24,872		21,611
Stock-based compensation expense	Stock-based compensation expense	38,778		20,390			Stock-based compensation expense	12,877		12,985
Depreciation	Depreciation	45,112		45,728			Depreciation	25,435		13,999
Amortization of intangibles	Amortization of intangibles	11,413		12,616			Amortization of intangibles	2,662		3,804
Deferred income taxes	Deferred income taxes	(13,950)		(25,435)			Deferred income taxes	1,147		(8,133)
Foreign currency transaction loss		6,520		983
Impairment of long-lived and right-of-use assets		2,343		12,280
Non-cash lease expense		9,793		9,587
Revenue reserves		5,560		6,392

Non-cash lease expense (including impairment of right-of-use assets)							Non-cash lease expense (including impairment of right-of-use assets)	3,672		3,352

Other adjustments, net	Other adjustments, net	(793)		3,243			Other adjustments, net	(433)		(193)
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	(102,562)		(106,234)			Accounts receivable	(23,187)		(37,769)
Other assets	Other assets	(10,014)		(3,342)			Other assets	1,740		1,930
Accounts payable and other liabilities	Accounts payable and other liabilities	21,283		35,706			Accounts payable and other liabilities	(9,829)		22,119
Operating lease liabilities	Operating lease liabilities	(13,229)		(12,435)			Operating lease liabilities	(5,074)		(4,454)
Income taxes payable and receivable	Income taxes payable and receivable	2,014		499			Income taxes payable and receivable	843		1,909
Deferred revenue	Deferred revenue	1,597		4,560			Deferred revenue	(665)		1,392
Net cash provided by operating activities		11,358		25,888
Net cash provided by (used in) operating activities							Net cash provided by (used in) operating activities	19,060		(735)

Cash flows from investing activities:	Cash flows from investing activities:						Cash flows from investing activities:
Acquisitions, net of cash acquired		—		(25,357)

Capital expenditures	Capital expenditures	(95,521)		(52,056)			Capital expenditures	(11,862)		(26,903)
Purchases of marketable debt securities							Purchases of marketable debt securities	(12,362)		—

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

Proceeds from sales of fixed assets							Proceeds from sales of fixed assets	68		87

Net cash used in investing activities	Net cash used in investing activities	(95,297)		(26,663)			Net cash used in investing activities	(24,156)		(26,816)

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

Principal payments on Term Loan		—		(220,000)

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

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

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	(5,587)		(56,135)			Withholding taxes paid on behalf of employees on net settled stock-based awards	(1,379)		(1,322)

Purchase of noncontrolling interests		—		(23,508)

Net cash used in financing activities	Net cash used in financing activities	(13,731)		(335,046)			Net cash used in financing activities	(1,379)		(9,466)

Total cash used	Total cash used	(97,670)		(335,821)			Total cash used	(6,475)		(37,017)
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	(2,079)		373			Effect of exchange rate changes on cash and cash equivalents and restricted cash	179		(205)
Net decrease in cash and cash equivalents and restricted cash	Net decrease in cash and cash equivalents and restricted cash	(99,749)		(335,448)			Net decrease in cash and cash equivalents and restricted cash	(6,296)		(37,222)
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	322,136		429,485
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	329,736	$	478,113		Cash and cash equivalents and restricted cash at end of period	$	315,840	$	392,263

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

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Angi Inc. ~~(“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 237,000 domestic~~During the three months ended March 31, 2023, over 206,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi ~~platforms during the three months ended September 30, 2022.~~Inc. platforms. Additionally, consumers turned to at least one of our brands to find a service professional for approximately 3029 million projects during the twelve months ended ~~September 30, 2022.~~March 31, 2023.

The Company has ~~two~~four operating segments: (i) ~~North America (United States~~Ads and Leads; (ii) Services; (iii) Roofing; and (iv) International (consisting of businesses in Europe and Canada)~~, which includes~~ and operates under multiple brands including Angi, ~~Ads, Angi Leads,~~HomeAdvisor, Handy, Total Home Roofing, and Angi ~~Services;~~Roofing.

Ads and ~~(ii) Europe. In March 2021,~~Leads provides service professionals the ~~Company rebranded its North American brands which operate as follows: Angi Ads operates under~~capability to engage with potential customers, including quote and invoicing services, and provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals nationwide for home repair, maintenance and improvement projects. Services consumers can request household services directly through the Angi ~~brand, Angi Leads operates primarily under the HomeAdvisor, powered by Angi brand,~~platform and Angi ~~Services operates primarily under~~fulfills the ~~Handy~~request through the use of independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. The matching and pre-priced booking services and related tools and directories are provided to consumers free of charge. Roofing provides roof replacement and repair services through its wholly-owned subsidiary Angi Roofing, ~~brands.~~LLC.

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 ~~September 30, 2022,~~March 31, 2023, IAC Inc., formerly known as IAC/InterActiveCorp (“IAC”) owned ~~84.3%~~83.9% and ~~98.2%~~98.1% 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. See “Note 10—Related Party Transactions with IAC” for 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.~~2022.

~~COVID-19 Update~~

~~The impact on the Company from the COVID-19 pandemic and the measures designed to contain its spread continues to have a negative impact on our year-over-year financial performance.~~Segment Changes

As ~~previously disclosed, the impact~~a result of ~~COVID-19 initially resulted in~~management’s continued assessments of reporting structure, there was a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). While 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 during 2022 due, in part, to COVID-19 measures that were more widely in place in prior periods. Our ability to monetize service requests rebounded modestlydecision in the ~~second half of 2021 and the first half~~fourth quarter of 2022 ~~however, that~~to refine segments to more effectively measure the businesses’ performance. Management has identified four reportable

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~improved monetization plateaued in~~segments with discrete financial results to appropriately match operating costs to the ~~third~~revenues generated for these businesses (Ads and Leads, Services, Roofing and International). Our financial information for the first quarter of 2022 ~~and is now in line with monetization rates experienced pre-COVID-19.~~

~~Future Outlook~~

~~The extent~~has been recast to ~~which developments related~~conform 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.current period presentation.

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;~~losses; the determination of the customer relationship period for certain costs to obtain a contract with a customer; the ~~carrying value~~recoverability 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

The Company accounts for a contract with a customer when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. 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.”

From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis. Effective January 1, 2023, we modified the Services terms and conditions so that the service professional, rather than Angi Inc., has the contractual relationship with the consumer to deliver the service and our performance obligation to the consumer is to connect them with the service professional. This change in contractual terms requires revenue be reported as the net amount of what is received from the consumer after deducting the amounts owed to the service professional providing the service effective for all arrangements entered into after December 31, 2022. This change in accounting treatment resulted in a decrease in revenue of $25.7 million for the three months ended March 31, 2023. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition.

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, 2022, the current and non-current deferred revenue balances were $50.9 million and $0.1 million, respectively, and during the three months ended March 31, 2023, the Company recognized $31.9 million of revenue that was included in the deferred revenue balance as of December 31, 2022. At December 31, 2021, the current and non-current deferred revenue balances were $53.8 million and $0.1 million, respectively, and during the ~~nine~~three months ended ~~September 30,~~March 31, 2022, the Company recognized ~~$51.9~~$35.5 million of revenue that was included in the deferred revenue balance as of December 31, 2021. At December 31, 2020, the current and non-current deferred revenue balances were $54.7 million and $0.2 million, respectively, and during the nine months ended September 30, 2021, the Company recognized $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 ~~September 30, 2022~~March 31, 2023 are ~~$55.2~~$50.2 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

109

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

AsFor contracts that have an original duration of one year or less, the Company uses the practical expedient available under Accounting Standards Codification (“ASC”) ASC 606, applicable to such contracts and does not consider the time value of money.

In addition, as permitted under the practical expedient available under ~~Accounting Standard Codification (“ASC”)~~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~~Assets Recognized from the Costs to ~~Employees Pursuant~~Obtain a Contract with a Customer

The Company uses a portfolio approach to ~~Sales Incentive Programs~~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 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~~capitalized sales commissions are ~~$47.2~~$33.8 million and ~~$38.0~~$37.2 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The non-current ~~assets~~capitalized sales commissions are ~~$0.8~~$2.5 million and ~~$1.1~~$1.9 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The current and non-current capitalized ~~costs to obtain a contract with a customer~~sales commissions 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.

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~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 nine months ended September 30, 2022, the Company recorded an income tax benefit of $0.9 million and $10.7 million, which represents an effective income tax rate of 5% and 13%, respectively. For the three 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 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 nine months ended September 30, 2021, the Company recorded an income tax benefit of $4.8 million and $23.2 million, which represents an effective income tax rate of 22% and 34%, respectively. For the three months ended 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 annual expected income tax rate, partially offset by foreign income taxed at different tax rates. For the nine months ended 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 of stock-based 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 September 30, 2022 and December 31, 2021, the Company has unrecognized tax benefits of $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 September 30, 2022 are subsequently recognized, the income tax provision would be reduced by $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.

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~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 September 30, 2022, the Company has a U.S. gross deferred tax asset of $225.7 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, $50.6 million will be utilized upon the future reversal of deferred tax liabilities and the remaining net deferred tax asset of $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 $593.8 million prior to the expiration of these NOLs, 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 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~~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.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Recent Accounting Pronouncements

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 provision and/or benefit 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 ~~financial instruments~~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 extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are ~~measured~~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 ~~fair value~~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.

For the three months ended March 31, 2023, the Company recorded an income tax provision of $3.3 million, despite a ~~recurring basis:~~pre-tax loss, due primarily to nondeductible stock-based compensation, foreign income taxed at different rates, and state taxes, partially offset by research credits. For the three months ended March 31, 2022, the Company recorded an income tax benefit of $6.1 million, which represents an effective income tax rate of 15%. For the three months ended March 31, 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 foreign income taxed at different rates.

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
(In thousands)
Assets:
Cash equivalents:
Money market funds $ 204,538 $ — $ — $ 204,538
Total $ 204,538 $ — $ — $ 204,538
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’s income taxes are routinely under audit by federal, state, local and foreign authorities 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 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 settlement of these tax years has been submitted to the Joint Committee of Taxation for approval. The statutes of limitations for the years 2013 through 2019 have been extended to

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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
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 March 31, 2023 and December 31, 2022, the Company has unrecognized tax benefits of $6.6 million and $6.2 million, respectively; all of which are for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at March 31, 2023 are subsequently recognized, the income tax provision would be reduced by $6.2 million. The comparable amount as of December 31, 2022 is $5.8 million.

The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. At March 31, 2023, the Company has a U.S. gross deferred tax asset of $205.6 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, $22.8 million will be utilized upon the future reversal of deferred tax liabilities and the remaining net deferred tax asset of $182.8 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 $108.0 million. The Company expects to generate sufficient future taxable income of at least $514.5 million prior to the expiration of these NOLs, the majority of which expire between 2032 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

At March 31, 2023, current available-for-sale marketable debt securities were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Treasury discount notes	$	12,493	$	2	$	—	$	12,495
Total available-for-sale marketable debt securities	$	12,493	$	2	$	—	$	12,495

The contractual maturities of debt securities classified as current available-for-sale at March 31, 2023 are within one year.

The Company did not hold any available-for-sale marketable debt securities at December 31, 2022.

Fair Value Measurements

Instruments measured at fair value on a recurring basis

Cash and cash equivalents are measured at fair value and classified within Level 1 and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	March 31, 2023
	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	$	213,747	$	—	$	—	$	213,747
Treasury discount notes	—		24,917		—		24,917

Marketable debt securities:
Treasury discount notes	—		12,495		—		12,495
Total	$	213,747	$	37,412	$	—	$	251,159


	December 31, 2022
	Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	189,000	$	—	$	—	$	189,000
Treasury discount notes	—		24,961		—		24,961



Total	$	189,000	$	24,961	$	—	$	213,961

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 nine months ended 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, 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:

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)


	March 31, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)

Long-term debt, net (a)	$	(495,469)	$	(386,250)	$	(495,284)	$	(368,750)

________________________

(a) At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the carrying value of long-term debt, net includes unamortized debt issuance costs of ~~$4.9~~$4.5 million and ~~$5.4~~$4.7 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:

September 30, 2022 December 31, 2021
(In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”); interest payable each February 15 and August 15, which commenced February 15, 2021 $ 500,000 $ 500,000
Total long-term debt 500,000 500,000
Less: unamortized debt issuance costs 4,902 5,448
Total long-term debt, net $ 495,098 $ 494,552

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	March 31, 2023		December 31, 2022
	(In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”); interest payable each February 15 and August 15	$	500,000	$	500,000



Less: unamortized debt issuance costs	4,531		4,716
Total long-term debt, net	$	495,469	$	495,284

ANGI Group Senior Notes

~~The~~ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of Angi Inc., issued 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.~~date set forth in the indenture governing the notes.

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 ~~September 30, 2022,~~March 31, 2023, 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 nine months ended 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 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

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


	Three Months Ended March 31,
	2023						2022
	Foreign Currency Translation Adjustment		Unrealized Gains on Available-For-Sale Debt Securities		Accumulated Other Comprehensive Loss		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income
	(In thousands)
Balance at January 1	$	(1,172)	$	—	$	(1,172)	$	3,309	$	3,309
Other comprehensive income (loss)	459		2		461		(803)		(803)
Balance at March 31	$	(713)	$	2	$	(711)	$	2,506	$	2,506

At ~~both September 30,~~March 31, 2023 there was an inconsequential amount of tax provision on the accumulated other comprehensive income.

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

NOTE 6—~~(LOSS) EARNINGS~~LOSS PER SHARE

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

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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:~~

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)


		Nine Months Ended September 30,									Three Months Ended March 31,
		2022				2021					2023				2022
		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	$	(74,723)	$	(74,723)	$	(44,731)	$	(44,731)	Net loss	$	(15,000)	$	(15,000)	$	(33,287)	$	(33,287)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(379)		(379)		(626)		(626)		Net earnings attributable to noncontrolling interests	(325)		(325)		(103)		(103)
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	$	(75,102)	$	(75,102)	$	(45,357)	$	(45,357)	Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	(15,325)	$	(15,325)	$	(33,390)	$	(33,390)

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	502,558		502,558		502,859		502,859		Weighted average basic Class A and Class B common stock shares outstanding	505,033		505,033		502,005		502,005
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	502,558		502,558		502,859		502,859		Denominator for loss per share—weighted average shares	505,033		505,033		502,005		502,005

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	$	(0.15)	$	(0.15)	$	(0.09)	$	(0.09)	Loss per share	$	(0.03)	$	(0.03)	$	(0.07)	$	(0.07)

________________________

(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 nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, 22.9~~29.6 million and ~~21.2~~25.1 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.

~~Table of Contents~~

~~ANGI INC. AND SUBSIDIARIES~~

~~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 ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ 0.9 million and ~~6.9~~4.5 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.

As a result of management’s continued assessments of reporting structure, there was a decision in the fourth quarter of 2022 to refine segments to more effectively measure the businesses’ performance. Management has identified four reportable segments with discrete financial results to appropriately match operating costs to the revenues generated for these businesses (Ads and Leads, Services, Roofing and International). Our financial information for prior periods has been recast to conform to the current period presentation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents revenue by reportable segment:


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
		(In thousands)								(In thousands)
Revenue:	Revenue:										Revenue:
North America		$	479,602	$	443,531	$	1,386,588	$	1,204,517
Europe		18,434		18,034		63,389		65,065
Domestic											Domestic
Ads and Leads											Ads and Leads	$	293,506	$	294,746
Services											Services	32,059		76,450
Roofing											Roofing	38,372		36,687
Intersegment eliminations (a)											Intersegment eliminations (a)	(1,462)		(1,677)
Total Domestic											Total Domestic	362,475		406,206
International											International	29,932		29,953
Total	Total	$	498,036	$	461,565	$	1,449,977	$	1,269,582		Total	$	392,407	$	436,159

________________________

(a)Intersegment eliminations related to Ads and Leads revenue earned from sales to Roofing.

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

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
(In thousands)
North America
Angi Ads and Leads:
Consumer connection revenue(a)
$ 260,242 $ 238,421 $ 732,075 $ 699,867
Advertising revenue(b)
67,045 63,953 195,906 187,308
Membership subscription revenue(c)
14,795 17,079 46,586 51,026
Other revenue 5,658 6,703 16,127 21,412
Total Angi Ads and Leads revenue 347,740 326,156 990,694 959,613
Angi Services revenue(d)
131,862 117,375 395,894 244,904
Total North America revenue 479,602 443,531 1,386,588 1,204,517
Europe
Consumer connection revenue(a)
15,576 14,530 54,320 54,226
Service professional membership subscription revenue 2,575 3,215 8,203 9,874
Advertising and other revenue 283 289 866 965
Total Europe revenue 18,434 18,034 63,389 65,065
Total revenue $ 498,036 $ 461,565 $ 1,449,977 $ 1,269,582


	Three Months Ended March 31,
	2023		2022
	(In thousands)
Domestic
Ads and Leads:
Consumer connection revenue	$	212,935	$	214,347
Advertising revenue	67,181		63,902
Membership subscription revenue	13,199		16,237
Other revenue	191		260
Total Ads and Leads revenue	293,506		294,746
Services revenue	32,059		76,450
Roofing revenue	38,372		36,687
Intersegment eliminations (a)	(1,462)		(1,677)
Total Domestic revenue	362,475		406,206
International
Consumer connection revenue	24,745		21,803
Service professional membership subscription revenue	5,058		7,856
Advertising and other revenue	129		294
Total International revenue	29,932		29,953
Total revenue	$	392,407	$	436,159

________________________

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

~~(b)Includes~~Intersegment eliminations related to Ads and Leads revenue earned from ~~service professionals under contract for advertising.~~

~~(c)~~ ~~Includes membership subscription revenue from service professionals and consumers.~~

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021					2023		2022
		(In thousands)								(In thousands)
Revenue	Revenue											Revenue
United States	United States	$	473,835	$	437,872	$	1,369,392	$	1,188,854			United States	$	362,226	$	405,508
All other countries	All other countries	24,201		23,693		80,585		80,728				All other countries	30,181		30,651
Total	Total	$	498,036	$	461,565	$	1,449,977	$	1,269,582			Total	$	392,407	$	436,159


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In thousands)					(In thousands)
Long-lived assets (excluding goodwill and intangible assets):
Long-lived assets (excluding goodwill, intangible assets, and ROU assets):						Long-lived assets (excluding goodwill, intangible assets, and ROU assets):
United States	United States	$	160,879	$	111,136	United States	$	133,403	$	147,322
All other countries	All other countries	6,423		7,131		All other countries	5,652		6,533
Total	Total	$	167,302	$	118,267	Total	$	139,055	$	153,855

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

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
(In thousands)
Operating (loss) income:
North America $ (12,518) $ (14,719) $ (62,228) $ (37,269)
Europe 1,460 (254) (3,673) (10,326)
Total $ (11,058) $ (14,973) $ (65,901) $ (47,595)

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
(In thousands)
Adjusted EBITDA(f):
North America $ 20,792 $ 11,213 $ 31,152 $ 37,076
Europe $ 2,090 $ 1,182 $ (1,750) $ (5,937)


	Three Months Ended March 31,
		2023		2022
		(In thousands)
Operating income (loss):
Ads and Leads		$	13,480	$	15,486
Services		(12,452)		(25,750)
Roofing		411		(6,150)
Corporate		(14,939)		(13,022)
International		3,030		(4,521)
Total		$	(10,470)	$	(33,957)


	Three Months Ended March 31,
		2023		2022
		(In thousands)
Adjusted EBITDA(b):
Ads and Leads		$	39,851	$	34,325
Services		$	(2,168)	$	(18,567)
Roofing		$	821	$	(5,026)
Corporate		$	(12,354)	$	(10,450)
International		$	4,354	$	(3,451)

~~(f)~~(b) The Company’s primary financial measure and GAAP segment measure is Adjusted EBITDA, which is defined as operating ~~loss~~income (loss) excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


		Three Months Ended September 30, 2022											Three Months Ended March 31, 2023
		Operating (Loss) Income		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(b)
		(In thousands)											(In thousands)
North America		$	(12,518)	$	12,282	$	17,223	$	3,805	$	20,792
Europe		1,460		$	94	$	536	$	—	$	2,090
Ads and Leads												Ads and Leads	$	13,480	$	5,491	$	18,218	$	2,662	$	39,851
Services												Services	(12,452)		$	4,209	$	6,075	$	—	$	(2,168)
Roofing												Roofing	411		$	165	$	245	$	—	$	821
Corporate												Corporate	(14,939)		$	2,585	$	—	$	—	$	(12,354)
International												International	3,030		$	427	$	897	$	—	$	4,354
Operating loss	Operating loss	(11,058)										Operating loss	(10,470)
Interest expense	Interest expense	(5,030)										Interest expense	(5,029)
Other expense, net		(2,296)
Other income, net												Other income, net	3,811
Loss before income taxes	Loss before income taxes	(18,384)										Loss before income taxes	(11,688)
Income tax benefit		945
Income tax provision												Income tax provision	(3,312)
Net loss	Net loss	(17,439)										Net loss	(15,000)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(40)										Net earnings attributable to noncontrolling interests	(325)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(17,479)									Net loss attributable to Angi Inc. shareholders	$	(15,325)

Three Months Ended September 30, 2021
Operating Loss Stock-Based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ (14,719) $ 8,727 $ 13,351 $ 3,854 $ 11,213
Europe (254) $ 86 $ 1,350 $ — $ 1,182
Operating loss (14,973)
Interest expense (6,032)
Other income, net (479)
Loss before income taxes (21,484)
Income tax benefit 4,791
Net earnings (16,693)
Net earnings attributable to noncontrolling interests (302)
Net earnings attributable to Angi Inc. shareholders $ (16,995)

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~~ANGI INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

Nine Months Ended September 30, 2022
Operating Loss Stock-Based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ (62,228) $ 38,715 $ 43,252 $ 11,413 $ 31,152
Europe (3,673) $ 63 $ 1,860 $ — $ (1,750)
Operating loss (65,901)
Interest expense (15,078)
Other expense, net (4,437)
Loss before income taxes (85,416)
Income tax benefit 10,693
Net loss (74,723)
Net earnings attributable to noncontrolling interests (379)
Net loss attributable to Angi Inc. shareholders $ (75,102)


		Nine Months Ended September 30, 2021											Three Months Ended March 31, 2022
		Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(b)
		(In thousands)											(In thousands)
North America		$	(37,269)	$	20,118	$	41,611	$	12,616	$	37,076
Europe		(10,326)		$	272	$	4,117	$	—	$	(5,937)
Ads and Leads												Ads and Leads	$	15,486	$	4,920	$	11,257	$	2,662	$	34,325
Services												Services	(25,750)		$	4,540	$	1,668	$	975	$	(18,567)
Roofing												Roofing	(6,150)		$	830	$	127	$	167	$	(5,026)
Corporate												Corporate	(13,022)		$	2,572	$	—	$	—	$	(10,450)
International												International	(4,521)		$	123	$	947	$	—	$	(3,451)
Operating loss	Operating loss	(47,595)										Operating loss	(33,957)
Interest expense	Interest expense	(18,463)										Interest expense	(5,022)
Other income, net		(1,882)
Other expense, net												Other expense, net	(391)
Loss before income taxes	Loss before income taxes	(67,940)										Loss before income taxes	(39,370)
Income tax benefit	Income tax benefit	23,209										Income tax benefit	6,083
Net earnings		(44,731)
Net loss												Net loss	(33,287)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(626)										Net earnings attributable to noncontrolling interests	(103)
Net earnings attributable to Angi Inc. shareholders		$	(45,357)
Net loss attributable to Angi Inc. shareholders												Net loss attributable to Angi Inc. shareholders	$	(33,390)

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)


		September 30, 2022		December 31, 2021		September 30, 2021		December 31, 2020			March 31, 2023		December 31, 2022		March 31, 2022		December 31, 2021
		(In thousands)									(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	328,795	$	428,136	$	476,625	$	812,705	Cash and cash equivalents	$	314,960	$	321,155	$	391,286	$	428,136
Restricted cash included in other current assets	Restricted cash included in other current assets	101		156		272		407		Restricted cash included in other current assets	—		107		92		156
Restricted cash included in other non-current assets	Restricted cash included in other non-current assets	840		1,193		1,216		449		Restricted cash included in other non-current assets	880		874		885		1,193
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	$	329,736	$	429,485	$	478,113	$	813,561	Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	315,840	$	322,136	$	392,263	$	429,485

Restricted cash included in ~~other~~“Other current ~~assets~~assets” in the accompanying consolidated balance sheets at ~~September 30,~~December 31, 2022 and March 31, 2022 primarily consisted of cash reserved to fund insurance claims.

Restricted cash included in ~~other~~“Other current ~~assets~~assets” in the accompanying consolidated balance sheet at December 31, 2021 ~~September 30, 2021 and December 31, 2020~~primarily consisted of ~~cash reserved to fund insurance claims and cash received from customers through the marketplace platforms, representing~~ funds collected from services providers for disputed payments ~~to service providers,~~ which were not settled as of the period ~~end.~~end, in addition to cash reserved to fund insurance claims.

Restricted cash included in ~~other~~"”Other non-current ~~assets~~assets” in the accompanying consolidated balance sheets for all periods presented above primarily consisted of deposits related to leases. Restricted cash included in ~~other~~"”Other non-current ~~assets~~assets” in the accompanying consolidated balance sheet at ~~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 nine months ended September 30, 2022 and 2021:~~

2022 2021
(In thousands)
Balance at January 1 $ 33,652 $ 26,046
Current period provision for credit losses 82,216 66,081
Write-offs charged against the credit loss reserve (72,212) (56,102)
Recoveries collected 4,136 1,896
Balance at September 30 $ 47,792 $ 37,921

~~The revenue reserve was $3.0 million and $2.4 million at September 30, 2022 and 2021, respectively. The total~~ allowance for credit losses for the three months ended March 31, 2023 and ~~revenue reserve was $50.8 million and $40.3 million as of September 30, 2022 and 2021, respectively.~~2022:


	2023		2022
	(In thousands)
Balance at January 1	$	43,160	$	33,652
Current period provision for credit losses	24,872		21,611
Write-offs charged against the allowance for credit losses	(28,608)		(21,396)
Recoveries collected	1,402		1,213
Balance at March 31	$	40,826	$	35,080

Accumulated Amortization and Depreciation

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


Asset Category	Asset Category	September 30, 2022		December 31, 2021		Asset Category	March 31, 2023		December 31, 2022
		(In thousands)					(In thousands)
Right-of-use assets (included in “other non-current assets”)	Right-of-use assets (included in “other non-current assets”)	$	74,431	$	40,757	Right-of-use assets (included in “other non-current assets”)	$	65,474	$	61,818
Capitalized software, leasehold improvements, and equipment	Capitalized software, leasehold improvements, and equipment	$	139,242	$	108,235	Capitalized software, leasehold improvements, and equipment	$	162,645	$	146,608
Intangible assets	Intangible assets	$	168,436	$	159,356	Intangible assets	$	175,136	$	172,341

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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

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

Interest income $ 1,556 $ 31 $ 2,135 $ 178
Foreign exchange losses (3,852) (515) (6,572) (968)
Loss on extinguishment of debt(a)
— — — (1,110)
Gain (loss) from acquisition/sale of a business — 18 — 31
Other — (13) — (13)
Other expense, net $ (2,296) $ (479) $ (4,437) $ (1,882)

~~________________________~~


	Three Months Ended March 31,
	2023		2022

Interest income	$	3,423	$	64

Foreign exchange gains (losses)	387		(456)

Other	1		1
Other income (expense), net	$	3,811	$	(391)

~~(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 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 September 30, 2022, the~~The total accrual for legal ~~contingencies was $10.5 million.~~matters is $17.7 million at March 31, 2023. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no accrual is established. Although management currently believes that resolving claims against ~~the Company,~~us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including uncertain income tax positions 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 uncertain income tax ~~contingencies.~~positions.

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~~ANGI INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

NOTE 10—RELATED PARTY TRANSACTIONS WITH IAC

Allocation of CEO Compensation and Certain Expenses

Joseph Levin, CEO of IAC and Chairman of Angi, was appointed CEO of Angi on October 10, 2022. As a result, for the three months ended March 31, 2023, IAC allocated $2.3 million in costs to Angi (including salary, benefits, stock-based compensation and costs related to the CEO’s office). These costs were allocated from IAC based upon time spent on Angi by Mr. Levin. Management considers the allocation method to be reasonable. The allocated costs also include costs directly attributable to the Company that were initially paid for by IAC and billed by IAC to the Company.

Additionally, 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 nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company was charged ~~$0.8~~$1.5 million and ~~$2.1 million, and $0.9 million and $3.2~~$0.4 million, respectively, by IAC for services rendered pursuant to the services agreement. There were no outstanding receivables orpursuant to the services agreement at March 31, 2023 and December 31, 2022. There were no outstanding payables pursuant to the services agreement at ~~September 30, 2022~~March 31, 2023 and $0.8 million in outstanding payables pursuant to the services agreement at December 31, ~~2021.~~2022.

Additionally, the Company subleases office space to IAC and charged IAC $0.4 million ~~and $1.2 million~~ of rent for ~~both~~the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022. IAC subleases office space to the Company and charged the Company ~~$0.4 million and $1.0~~$0.3 million of rent for the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023. At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, there were no outstanding receivables or payables pursuant to the sublease agreements.

At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had outstanding payables of ~~$1.4~~$1.8 million and ~~$0.3~~$1.4 million, respectively, due to IAC pursuant to the tax sharing agreement, which are included in “Accrued expenses and other current

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

liabilities,” in the accompanying consolidated balance sheet. There were no payments to or refunds from IAC pursuant to this agreement during the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 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 nine~~ months ended ~~September 30, 2021, less than 0.1 million~~March 31, 2023 and ~~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 nine months ended 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 nine months ended 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 ~~237,000~~206,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended ~~September 30, 2022.~~March 31, 2023. Additionally, consumers turned to at least one of our brands to find a professional for approximately 3029 million projects during the twelve months ended ~~September 30, 2022.~~March 31, 2023.

Ads and ~~(ii) Europe. In March 2021,~~Leads provides service professionals the ~~Company rebranded its North American brands, which operate as follows: Angi Ads operates under~~capability to engage with potential customers, including quote and invoicing services, and provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals nationwide for home repair, maintenance and improvement projects. Services consumers can request household services directly through the Angi ~~brand, Angi Leads operates primarily under the HomeAdvisor, powered by Angi brand,~~platform and Angi ~~Services operates primarily under~~fulfills the ~~Handy~~request through the use of independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. The matching and pre-priced booking services and related tools and directories are provided to consumers free of charge. Roofing provides roof replacement and repair services through its wholly-owned subsidiary Angi Roofing, ~~brands.~~LLC.

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.~~2022.

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 requests services through a Company platform and the Company connects them with a service professional to perform the service.

•Roofing Revenue primarily reflects revenue from the roof replacement business offeringby 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.~~service.

•~~Angi~~ Corporate primarily reflects costs for corporate initiatives, shared costs, such as executive and public company costs, and other expenses not allocated to the operating segments.

•International Revenue primarily reflects revenue generated within the International segment (consisting of businesses in Europe and Canada), including consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers.

•Service Requests ~~(“Service Requests”)~~ are (i) fully completed and submitted domestic ~~customer~~ service requests for connections with Ads and ~~includes Angi Services requests~~Leads service professionals, (ii) contacts to Ads and Leads service professionals generated via the service professional directory from unique users in unique categories (such that multiple contacts from the same user in the ~~period.~~

•~~Angi Monetized Transactions~~same category in the same day are ~~fully completed~~counted as one Service Request) and ~~submitted domestic customer service~~(iii) requests ~~that were matched~~ to ~~and paid for by a service professional and includes completed and in-process Angi~~book Services jobs in the period.

•~~Angi~~ Monetized Transactions are (i) Service Requests that are matched to a paying Ads and Leads service professional in the period and (ii) completed and in-process Services jobs in the period; a single Service Request can result in multiple

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monetized transactions.

•Transacting Service Professionals (“Transacting SPs”)are the number of (i) Ads and Leads service professionals that paid for consumer matches ~~through Angi Leads~~ or advertising and (ii) Services service professionals that performed ~~an Angi~~a 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.~~

•ANGI Group 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.~~year.

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), (ii) advertising revenue, which includes revenue from service professionals under contract for advertising, 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 directly through the ~~“Book Now” feature, which allows consumers to book~~platform and ~~schedule on demand, (ii) under managed projects (including Angi Roofing), which are larger home improvement projects, and (iii)~~ through retail partnerships and completed by a service professional assigned by our platform. Roofing consists of revenue from roofing projects. International is primarily comprised of revenue from consumer connection revenue for ~~installation~~consumer matches and membership subscription from service professionals and consumers.

From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis. Effective January 1, 2023, we modified the Services terms and conditions so that the service professional, rather than Angi Inc., has the contractual relationship with the consumer to deliver the service and our performance obligation to the consumer is to connect them with the service professional. This change in contractual terms requires revenue be reported as the net amount of ~~furniture~~what is received from the consumer after deducting the amounts owed to the service professional providing the service effective for all arrangements entered into after December 31, 2022. This change in accounting treatment resulted in a decrease in revenue of $25.7 million for the three months ended March 31, 2023. There is no impact to operating loss or ~~other household items.~~Adjusted EBITDA from this change in revenue recognition.

Cost of Revenue and Gross Profit

Cost of revenue, which excludes depreciation, consists primarily of (i) roofing materials costs associated with Roofing, (ii) payments made to independent third-party service professionals who perform work contracted under ~~Angi~~ Services arrangements ~~(ii)~~that were entered into prior to January 1, 2023 and the change to net revenue reporting or Roofing arrangements, (iii) credit card processing fees, ~~(iii) hosting fees,~~ and (iv) ~~roofing materials costs associated with Angi Roofing.~~hosting fees.

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 and 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, and app platforms, (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) service guarantee expense, (iv) software license and maintenance costs, and ~~(iv) facilities~~(v) outsourced personnel 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, (iii) outsourced personnel costs for personnel engaged in assisting in customer service functions, (iv) software license and maintenance costs, (v) fees for professional services, and ~~(v)~~(vi) facilities costs. Our customer service function includes personnel who provide support to our service professionals and consumers.

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•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 nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

~~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 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. Our investment in Angi Services peaked in the first quarter of 2022. As a result, on a sequential basis, the negative impact on profits has declined in each quarter of 2022 and is expected to decline in the fourth quarter of 2022 relative to the third quarter. On a year-over-year basis, the positive impact on profits began in the 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 continues to have a negative impact 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 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 during 2022 due, in part, to COVID-19 measures that were more widely in place in prior periods. Our ability to monetize service requests rebounded modestly in the second half of 2021 and the first half of 2022, however, that improved monetization plateaued in the third quarter of 2022 and is now in line with monetization rates experienced pre-COVID-19.

~~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.

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

~~Revenue~~
Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
North America
Angi Ads and Leads:
Consumer connection revenue $ 260,242 $ 21,821 9% $ 238,421 $ 732,075 $ 32,208 5% $ 699,867
Advertising revenue 67,045 3,092 5% 63,953 195,906 8,598 5% 187,308
Membership subscription revenue 14,795 (2,284) (13)% 17,079 46,586 (4,440) (9)% 51,026
Other revenue 5,658 (1,045) (16)% 6,703 16,127 (5,285) (25)% 21,412
Total Angi Ads and Leads revenue 347,740 21,584 7% 326,156 990,694 31,081 3% 959,613
Angi Services revenue 131,862 14,487 12% 117,375 395,894 150,990 62% 244,904
Total North America revenue 479,602 36,071 8% 443,531 1,386,588 182,071 15% 1,204,517
Europe 18,434 400 2% 18,034 63,389 (1,676) (3)% 65,065
Total revenue $ 498,036 $ 36,471 8% $ 461,565 $ 1,449,977 $ 180,395 14% $ 1,269,582
Percentage of Total Revenue:
North America 96 % 96 % 96 % 95 %
Europe 4 % 4 % 4 % 5 %
Total revenue 100 % 100 % 100 % 100 %
Three Months Ended September 30, Nine Months Ended September 30,
2022 Change % Change 2021 2022 Change % Change 2021
(In thousands, rounding differences may occur)
Operating metrics:
Service Requests 7,784 (923) (11)% 8,707 22,984 (2,851) (11)% 25,835
Monetized Transactions 4,309 (474) (10)% 4,783 12,938 (1,044) (7)% 13,982
Transacting SPs 200 (22) (10)% 222
Advertising SPs 37 (2) (5)% 39

~~For the three months ended September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022

~~North America revenue increased $36.1 million, or 8%, driven by increases in Angi~~ Revenue


	Three Months Ended March 31,
	2023			$ Change		% Change	2022
	(Dollars in thousands)
Domestic
Ads and Leads:
Consumer connection revenue	$	212,935		$	(1,412)	(1)%	$	214,347
Advertising revenue	67,181			3,279		5%	63,902
Membership subscription revenue	13,199			(3,038)		(19)%	16,237
Other revenue	191			(69)		(27)%	260
Total Ads and Leads revenue	293,506			(1,240)		0%	294,746
Services revenue	32,059			(44,391)		(58)%	76,450
Roofing revenue	38,372			1,685		5%	36,687
Intersegment eliminations	(1,462)			215		13%	(1,677)
Total Domestic revenue	362,475			(43,731)		(11)%	406,206
International revenue	29,932			(21)		0%	29,953
Total revenue	$	392,407		$	(43,752)	(10)%	$	436,159

Percentage of Total Revenue:
Domestic	92		%				93		%
International	8		%				7		%
Total revenue	100		%				100		%

	Three Months Ended March 31,
	2023			Change		% Change	2022
	(In thousands, rounding differences may occur)
Operating metrics:
Service Requests	6,004			(814)		(12)%	6,818
Monetized Transactions	6,451			(348)		(5)%	6,799
Transacting SPs	206			(43)		(17)%	249

Ads and Leads revenue decreased $1.2 million, due primarily to decreases in membership subscription revenue of ~~$21.6~~$3.0 million, or ~~7%,~~19% and ~~Angi Services revenue 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 ~~$21.8~~$1.4 million, or 9%1%, partially offset by an increase in advertising revenue of $3.3 million, or 5% driven by a growth in sales.

Services revenue decreased $44.4 million, or 58%, due primarily to decreases of $25.7 million from the change to net revenue reporting for pre-priced product offerings and $18.0 million due to the shift away from complex and less profitable offerings.

Roofing revenue increased $1.7 million, or 5%, due primarily to the residual impact from Hurricane Ian.

Cost of revenue


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below)	$	42,041	$	(56,957)	(58)%	$	98,998
As a percentage of revenue	11%					23%

Ads and Leads cost of revenue decreased $1.3 million, or 81%, and stayed consistent as a percentage of revenue, due primarily to the decrease in revenue of $1.2 million.

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Services cost of revenue decreased $53.5 million, or 86%, and decreased as a percentage of revenue, due primarily to a $47.7 million decrease in payments to third-party professional service providers primarily as a result of ~~price increases implemented during~~ the ~~second quarter~~decrease of ~~2022. Angi Services~~$25.7 million change in revenue ~~growth is~~recognition to net reporting resulting in professional payments offsetting revenue instead of being reported as a component of cost of revenue. Additionally, payments to third-party professional service providers decreased as a result of the shift away from complex and less profitable offerings.

Roofing cost of revenue decreased $2.1 million, or 8%, and decreased as a percentage of revenue, due primarily to a ~~$25.7~~$1.4 million ~~increase largely from Book Now~~decrease in roofing material costs.

Gross profit


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
Revenue	$	392,407	$	(43,752)	(10)%	$	436,159
Cost of revenue (exclusive of depreciation shown separately below)	42,041		(56,957)		(58)%	98,998
Gross profit	$	350,366	$	13,205	4%	$	337,161

Gross margin	89%				12%	77%

Angi gross profit increased $13.2 million, or 4%, due primarily to the decreased cost of revenue as a percentage of revenue described in the cost of revenue discussion above, partially offset by a decrease in revenue described in the revenue discussion above.

Selling and ~~managed projects,~~marketing expense


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
Selling and marketing expense	$	204,909	$	(20,892)	(9)%	$	225,801
As a percentage of revenue	52%					52%

Ads and Leads selling and marketing expense decreased $4.3 million, or 2%, driven by decreases in advertising expense of $10.5 million and professional fees of $1.6 million, partially offset by an ~~$11.4 million~~increase in compensation expense of $7.6 million. The decrease in ~~revenue from Angi Roofing.~~advertising expense was primarily due to a decrease in online advertising spend. The decrease in professional fees is primarily due to a decrease in marketing and branding consultancy fees. The increase in compensation is primarily due to increased sales commissions driven by sales growth and the immediate expensing of commissions for certain transactions beginning October 1, 2022 rather than recording commissions as an asset to be amortized over the duration of the related customer relationship period due to the average customer relationship being assessed as less than one year.

~~Europe revenue increased $0.4~~Services selling and marketing expense decreased $6.1 million, or 2%33%, ~~due to strong growth across its major markets,~~driven by decreases of $4.9 million in professional fees and third-party wages, $2.9 million in compensation expense, and $1.1 million in advertising expense, partially offset by ~~the unfavorable impact~~an increase of ~~the strengthening of the U.S. dollar relative~~$3.5 million in service guarantee expense. The decrease in third-party wages and professional fees is primarily due to $3.6 million less in phone-based sales wages primarily resulting from increased reliance on more profitable digital conversion channels and $1.3 million less due to streamlined fulfillment operations, partially driven by fewer complex services. The decrease in compensation expense is primarily due to a reduction in headcount. The decrease in advertising expense is primarily due to a decrease in service professional marketing spend. The increase in service guarantee expense is due to the ~~Euro~~aforementioned change in contractual terms and conditions such that this expense is no longer a component of cost of revenue, which is where the ~~British Pound.~~expense was recorded prior to January 1, 2023.

Roofing selling and marketing expense decreased $1.1 million, or 14%, driven by a decrease in advertising expense.

International selling and marketing expense decreased $8.2 million, or 47%, driven by a decrease of $8.9 million in advertising expense. The decrease in advertising expense is primarily due to improved online efficiency and a decrease in television advertising expense.

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General and administrative expense


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
General and administrative expense	$	102,518	$	(7,137)	(7)%	$	109,655
As a percentage of revenue	26%					25%

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

~~North America revenue increased $182.1~~Ads and Leads general and administrative expense decreased $6.7 million, or ~~15%~~10%, due primarily to decreases of $6.3 million in compensation expense and $1.4 million in recruiting fees, partially offset by an increase of $3.1 million in the provision for credit losses. The decrease in compensation expense and recruiting fees is primarily due to a reduction in headcount. The increase in the provision for credit losses is primarily due to lower collection rates.

Services general and administrative expense decreased $2.0 million, or 14%, due primarily to decreases of $0.9 million in third-party wages and $0.9 million in the provision for credit losses. The decrease in third-party wages is primarily due to a decrease in customer care costs. The decrease in the provision for credit losses is primarily due to improved collection rates.

Roofing general and administrative expense decreased $1.6 million, or 22%, due primarily to decreases of $1.2 million in compensation expense. The decrease in compensation expense is primarily due to a decrease in stock-based compensation.

Corporate general and administrative expense increased $3.2 million, or 30%, due primarily to increases of $2.2 million in ~~Angi Services revenue~~lease expense due to repurposing of ~~$151.0~~real estate space for general and administrative functions in 2022.

Product development expense


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
Product development expense	$	25,312	$	7,453	42%	$	17,859
As a percentage of revenue	6%					4%

Product development expense increased $7.5 million, or ~~62%, and Angi Ads and Leads revenue of $31.1~~42%. This contrasts with a $15.0 million, or ~~3%. Angi Services revenue growth~~56%, decrease in capital expenditures from March 31, 2022, which 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.~~comprised of internally developed software. The increase in ~~Angi Ads and Leads revenue is due primarily~~product development expense was driven by a decrease in the percentage of internally developed software that was subject to capitalization in the first quarter of 2023 compared to the ~~factor described above in the three-month discussion and the anniversary~~first quarter of ~~the initial impact from the brand integration that began in March 2021.~~2022.

~~Europe revenue decreased $1.7 million, or 3%,~~

Depreciation


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
Depreciation	$	25,435	$	11,436	82%	$	13,999
As a percentage of revenue	6%					3%

Depreciation increased primarily due to capitalized software placed in service after the ~~unfavorable impact~~first quarter of ~~the strengthening of the U.S. dollar relative to the Euro and the British Pound.~~2022.

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~~Cost of revenue~~Operating loss

Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
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 22% 22% 23% 18%

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

North America cost of revenue increased $9.6 million, or 10%, and remained constant as a percentage of revenue, due primarily to $12.8 million of costs attributable to the growth of Angi Services including costs incurred for third-party service professionals for certain Angi Services 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 nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

North America cost of revenue increased $112.8 million, or 51%, and increased as a percentage of revenue, due primarily to $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 2022 compared to one quarter of costs in 2021.

~~Gross profit~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
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) 109,057 9,590 10% 99,467 335,826 112,827 51% 222,999
Gross profit $ 388,979 $ 26,881 7% $ 362,098 $ 1,114,151 $ 67,568 6% $ 1,046,583
Gross margin 78% —% 78% 77% (5)% 82%

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

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

~~Selling and marketing expense~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
Selling and marketing expense $ 234,398 $ (3,357) (1)% $ 237,755 $ 711,358 $ 28,732 4% $ 682,626
As a percentage of revenue 47% 52% 49% 54%

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

North America selling and marketing expense decreased $2.4 million, or 1%, driven by decreases in professional fees of $2.9 million, advertising expense of $1.9 million, and lease expense of $1.3 million, partially offset by increases in software maintenance costs of $1.5 million and compensation expense of $0.6 million. The decrease in professional fees was primarily due to decreases in 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 and overall offline marketing spend. The decrease in lease expense is a result of the Company repurposing its real estate space for general and administrative functions. The increase in 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 decreased $0.9 million, or 15%, driven by decreases in advertising expense of $0.6 million as the company was more efficient in its online marketing campaigns and compensation expense of $0.2 million.

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

North America selling and marketing expense increased $28.3 million, or 4%, driven by expense of $10.0 million from the inclusion of Angi Roofing, increases in advertising expense of $6.1 million, professional fees of $4.4 million, software maintenance costs of $4.0 million and compensation expense of $3.1 million, partially offset by a decrease in lease expense of $4.1 million. The increase in advertising expense was due primarily to an increase of $19.7 million in search engine marketing spend offset by decreases in fees paid to app platforms and service professional marketing of $12.5 million and offline marketing spend of $1.6 million. The increase in search engine marketing spend is due to the continued brand integration 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 costs for creative advertising agencies. The increase in software maintenance costs was due primarily to 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 $0.4 million, or 1%, driven by an increase in advertising expense of $1.1 million partially offset by a decrease in compensation expense of $0.6 million, which was caused by lower headcount.

~~General and administrative expense~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
General and administrative expense $ 128,261 $ 25,175 24% $ 103,086 $ 357,541 $ 58,807 20% $ 298,734
As a percentage of revenue 26% 22% 25% 24%

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

North America general and administrative expense increased $25.1 million, or 26%, due primarily to increases of $10.8 million in the provision for credit losses, $7.6 million in compensation expense, and $6.3 million in legal expense. The increase in the provision for credit losses is due primarily to revenue growth. The increase in compensation expense is due to an increase of $4.2 million in wage-related expense from higher headcount and $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 software license and maintenance expense is due primarily to 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 $8.0 million, or 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 $0.3 million related to restructuring of the European businesses and an increase of $0.5 million in the provision for credit losses.

~~Product development expense~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
Product development expense $ 15,817 $ (1,858) (11)% $ 17,675 $ 54,630 $ 156 —% $ 54,474
As a percentage of revenue 3% 4% 4% 4%

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

North America product development expense decreased $2.2 million, or 16%, due primarily to decreases in compensation expense of $2.1 million and software maintenance expense of $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 $1.1 million. The decrease in compensation expense is due primarily to the factor described above in the three-month discussion. The decrease in lease expense is a result of 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 $1.4 million, or 11%, due to an increase in compensation expense of $1.4 million from higher headcount and higher average compensation.~~

~~Depreciation~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 $ Change % Change 2021 2022 $ Change % Change 2021
(Dollars in thousands)
Depreciation $ 17,759 $ 3,058 21% $ 14,701 $ 45,112 $ (616) (1)% $ 45,728
As a percentage of revenue 4% 3% 3% 4%

~~For the three months ended September 30, 2022 compared to the three months ended September 30, 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 decreased 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) income~~


		Three Months Ended September 30,							Nine Months Ended September 30,								Three Months Ended March 31,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2023		$ Change		% Change	2022
		(Dollars in thousands)															(Dollars in thousands)
North America		$	(12,518)	$	2,201	15%	$	(14,719)	$	(62,228)	$	(24,959)	(67)%	$	(37,269)
Europe		1,460		1,714		NM	(254)		(3,673)		6,653		64%	(10,326)
Ads and Leads																Ads and Leads	$	13,480	$	(2,006)	(13)%	$	15,486
Services																Services	(12,452)		13,298		52%	(25,750)
Roofing																Roofing	411		6,561		NM	(6,150)
Corporate																Corporate	(14,939)		(1,917)		(15)%	(13,022)
Total Domestic																Total Domestic	(13,500)		15,936		54%	(29,436)
International																International	3,030		7,551		NM	(4,521)
Total	Total	$	(11,058)	$	3,915	26%	$	(14,973)	$	(65,901)	$	(18,306)	NM	$	(47,595)	Total	$	(10,470)	$	23,487	(69)%	$	(33,957)

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

________________________

NM = Not meaningful

~~For~~Operating losses for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~

~~Operating loss~~March 31, 2022 decreased ~~for the three months ended September 30, 2022,~~due primarily ~~due~~ to the factors described above in the revenue, cost of revenue, sales and marketing, general and administrative, product development, and depreciation expense discussions.

At ~~September 30, 2022,~~March 31, 2023, there is ~~$84.7~~$69.1 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately ~~2.7~~2.65 years.

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

Operating loss increased for the nine months ended September 30, 2022, primarily due to the factors described above in the revenue, cost of revenue, sales and marketing, general and administrative, product development, and depreciation expense discussions.

Adjusted EBITDA

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%


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(Dollars in thousands)
Ads and Leads	$	39,851	$	5,526	16%	$	34,325
Services	(2,168)		16,399		88%	(18,567)
Roofing	821		5,847		NM	(5,026)
Corporate	(12,354)		(1,904)		(18)%	(10,450)
Total Domestic	26,150		25,868		NM	282
International	4,354		7,805		NM	(3,451)
Total	$	30,504	$	33,673	NM	$	(3,169)

As a percentage of revenue	8%					(1)%

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

Ads and Leads Adjusted EBITDA increased $5.5 million, or 16%, to $39.9 million, and increased as a percentage of revenue, driven by lower selling and marketing expense due to improved marketing efficiency and lower general and administrative expense due to lower compensation costs and other operating expenses.

Services Adjusted EBITDA loss decreased $16.4 million, or 88%, to a loss of $2.2 million, and decreased as a percentage of revenue, driven by higher gross profit due to pricing and fulfillment optimization efforts over the past year and lower operating expenses due to a reduced overall cost base as a result of exiting complex and less profitable offerings.

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

~~North America~~Roofing Adjusted EBITDA increased ~~$9.6~~$5.8 million to ~~$20.8~~$0.8 million, and increased as a percentage of revenue, ~~primarily~~driven by higher gross profit due to higher revenue and margin optimization efforts, more efficient marketing, and lower general and administrative expense due to headcount rationalization.

Corporate Adjusted EBITDA loss increased $1.9 million, or 18%, to $12.4 million, driven by an increase in general and administrative expense.

International Adjusted EBITDA increased $7.8 million, from a loss of ~~$36.1~~$3.5 million ~~decreases in product development expense~~to income of ~~$2.2~~$4.4 million, ~~and~~driven by lower selling and marketing expense ~~of $2.4 million, offset by increases in general and administrative expense of $25.1 million and cost of revenue of $9.6 million.~~

Europe Adjusted EBITDA increased $0.9 million to $2.1 million, due primarily to the increase in revenue of $0.4 million, the decrease in selling and marketing expense of $0.9 million, partially offset by the increase in product development expense of $0.4 million, each of which are described above.

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

North America Adjusted EBITDA decreased $5.9 million, or 16%, to $31.2 million, and remained consistent as a percentage of revenue, despite higher revenue of $182.1 million, due primarily to increases in cost of revenue of $112.8 million, general and administrative expense of $66.8 million, and selling and marketing expense of $28.3 million.

~~Europe Adjusted EBITDA increased $4.2 million, or 71%,~~ due to a 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 $1.7 million in revenue, an increase of $1.4 million in product development expense and an increase of $1.1 million in advertising expense.more efficient marketing spend.

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.Notes.

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 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


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(In thousands)
Interest expense	$	5,029	$	7	—%	$	5,022

~~For the three months ended September 30, 2022~~

Interest expense remained consistent compared to the ~~three months ended 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~~first 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.~~2022.

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

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 September 30, 2022 and 2021~~


	Three Months Ended March 31,
	2023		$ Change		% Change	2022
	(In thousands)
Other income (expense), net	$	3,811	$	4,202	NM	$	(391)

Other ~~expense,~~income (expense), net in ~~2022~~2023 primarily includes ~~net foreign currency exchange losses of $3.9 million, partially offset by~~ interest income of ~~$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 $1.0 million, partially offset by interest income of $0.2$3.4 million.

Income tax (provision) benefit


		Three Months Ended September 30,							Nine Months Ended September 30,								Three Months Ended March 31,
		2022		$ Change		% Change	2021		2022		$ Change		% Change	2021			2023		$ Change		% Change	2022
		(Dollars in thousands)															(Dollars in thousands)
Income tax benefit		$	945	$	(3,846)	(80)%	$	4,791	$	10,693	$	(12,516)	(54)%	$	23,209
Income tax (provision) benefit																Income tax (provision) benefit	$	(3,312)	$	(9,395)	NM	$	6,083
Effective income tax rate	Effective income tax rate	5%					22%		13%					34%		Effective income tax rate	NM					15%

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~~In 2023, the ~~three months ended September 30, 2022 compared~~Company recorded a provision despite a pre-tax loss due primarily to ~~the three months ended September 30, 2021~~

nondeductible stock-based compensation, foreign income taxed at different rates, and state taxes, partially offset by research credits.

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 ~~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 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, 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, and our internal budgets are based and may impact management 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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In thousands)									(In thousands)
Net loss attributable to Angi Inc. shareholders	Net loss attributable to Angi Inc. shareholders	$	(17,479)	$	(16,995)	$	(75,102)	$	(45,357)	Net loss attributable to Angi Inc. shareholders	$	(15,325)	$	(33,390)
Add back:	Add back:									Add back:
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	40		302		379		626		Net earnings attributable to noncontrolling interests	325		103
Income tax benefit		(945)		(4,791)		(10,693)		(23,209)
Other expense, net		2,296		479		4,437		1,882
Income tax provision (benefit)										Income tax provision (benefit)	3,312		(6,083)
Other (income) expense, net										Other (income) expense, net	(3,811)		391
Interest expense	Interest expense	5,030		6,032		15,078		18,463		Interest expense	5,029		5,022
Operating loss	Operating loss	(11,058)		(14,973)		(65,901)		(47,595)		Operating loss	(10,470)		(33,957)
Add back:	Add back:									Add back:
Stock-based compensation expense	Stock-based compensation expense	12,376		8,813		38,778		20,390		Stock-based compensation expense	12,877		12,985
Depreciation	Depreciation	17,759		14,701		45,112		45,728		Depreciation	25,435		13,999
Amortization of intangibles	Amortization of intangibles	3,805		3,854		11,413		12,616		Amortization of intangibles	2,662		3,804
Adjusted EBITDA	Adjusted EBITDA	$	22,882	$	12,395	$	29,402	$	31,139	Adjusted EBITDA	$	30,504	$	(3,169)

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


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In thousands)					(In thousands)
Cash and cash equivalents:	Cash and cash equivalents:					Cash and cash equivalents:
United States	United States	$	302,046	$	404,277	United States	$	304,521	$	311,422
All other countries	All other countries	26,749		23,859		All other countries	10,439		9,733
Total cash and cash equivalents	Total cash and cash equivalents	$	328,795	$	428,136	Total cash and cash equivalents	314,960		321,155
Marketable debt securities (United States)						Marketable debt securities (United States)	12,495		—
Total cash and cash equivalents and marketable debt securities						Total cash and cash equivalents and marketable debt securities	$	327,455	$	321,155

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

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

Total long-term debt		500,000		500,000

Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	4,902		5,448		Less: unamortized debt issuance costs	4,531		4,716
Total long-term debt, net	Total long-term debt, net	$	495,098	$	494,552	Total long-term debt, net	$	495,469	$	495,284

At ~~September 30, 2022,~~March 31, 2023, all of the Company’s international cash can be repatriated without significant ~~tax~~ consequences.

Cash Flow Information

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


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(In thousands)					(In thousands)
Net cash (used in) provided by:
Net cash provided by (used in):						Net cash provided by (used in):
Operating activities	Operating activities	$	11,358	$	25,888	Operating activities	$	19,060	$	(735)
Investing activities	Investing activities	$	(95,297)	$	(26,663)	Investing activities	$	(24,156)	$	(26,816)
Financing activities	Financing activities	$	(13,731)	$	(335,046)	Financing activities	$	(1,379)	$	(9,466)

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, depreciation, stock-based compensation expense, non-cash lease expense (including impairment of right-of-use assets), amortization of intangibles, ~~depreciation, impairment of long-lived and right-of-use assets, non-cash lease expense,~~ and deferred income taxes.

~~2022~~2023

Adjustments to earnings consist primarily of ~~$82.2~~$25.4 million of depreciation, $24.9 million of provision for credit losses, ~~$45.1 million of depreciation, $38.8~~$12.9 million of stock-based compensation expense, ~~$9.8~~$3.7 million of non-cash lease expense, and ~~$11.4~~$2.7 million of amortization of intangibles. The decrease from changes in working capital consists primarily of an increase of ~~$102.6~~$23.2 million in accounts receivable, a decrease of ~~$13.2~~$9.8 million in accounts payable and other liabilities, and a decrease of $5.1 million in operating lease liabilities. The increase in accounts receivable is due primarily to timing of cash receipts for credit card transactions. The decrease in accounts payable and other liabilities is due, in part, to payments for accrued compensation. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion.

Net cash used in investing activities includes purchases of marketable debt securities of $12.4 million and capital expenditures of $11.9 million, primarily related to investments in capitalized software to support the Company’s products and services.

Net cash used in financing activities includes $1.4 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

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2022

Adjustments to earnings consist primarily of $21.6 million of provision for credit losses, $14.0 million of depreciation, $13.0 million of stock-based compensation expense, $3.8 million of amortization of intangibles, and $3.4 million of non-cash lease expense, partially offset by deferred taxes of $8.1 million. The decrease from changes in working capital consists primarily of an increase of $37.8 million in accounts receivable and a decrease of $4.5 million in operating lease liabilities, ~~and an increase of $10.0 million in other assets,~~ partially offset by increases of ~~$21.3~~$22.1 million in accounts payable and other liabilities. The increase in accounts receivable is due primarily to revenue growth, primarily attributable to ~~Angi~~ Services. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in ~~other assets is due to an increase in capitalized commissions. The increase in~~ accounts payable and other liabilities is primarily due ~~primarily~~ to increases in accrued expenses related to the ~~factors described in the “Brand Integration Initiative”~~2021 brand integration initiative and accrued roofing material costs related to ~~Angi~~ Roofing.

Net cash used in investing activities includes ~~$95.5~~$26.9 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and services.

Net cash used in financing activities includes $8.1 million for the repurchase of 1.0 million shares of Angi Inc. Class A common stock, on a settlement date basis, at an average price of $7.80 per share and ~~$5.6~~$1.3 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

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~~2021~~

Adjustments to earnings consist primarily of $66.1 million of provision for credit losses, $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, $9.6 million of non-cash lease expense, and $6.4 million of revenue reserves, partially offset by $25.4 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase of $106.2 million in accounts receivable partially offset by increases of $23.3 million in accounts payable and other liabilities and $4.6 million of deferred revenue. The increase in accounts receivable and is due primarily to revenue growth, primarily attributed to Angi Services. The increase in accounts payable and other liabilities is due primarily to increases in accrued advertising and related 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 and an increase in customer deposits for Angi Services jobs.

Net cash used in investing activities includes $52.1 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and 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 ANGI Group Term Loan, which otherwise would have matured on November 5, 2023, $56.1 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $35.4 million for the repurchase of 3.2 million shares of Angi Inc. Class A common stock, on a settlement date basis, at an average price of $11.06 per share, and $23.5 million for the purchase of redeemable noncontrolling interests.

Liquidity and Capital Resources

Financing Arrangements

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.”

Share Repurchase Authorizations and Activity

During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company ~~repurchased 1.0 million~~did not repurchase any 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.~~stock. The Company has 15.0 million shares remaining in its share repurchase authorization as of ~~November 4, 2022.~~May 5, 2023. The Company may purchase their shares and debt instruments 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.

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 ~~November 4, 2022;~~May 5, 2023; 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:

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		Aggregate intrinsic value of awards outstanding		Estimated withholding taxes payable		Estimated shares to be issued		Aggregate intrinsic value of awards outstanding		Estimated withholding taxes payable		Estimated shares to be issued
		(In thousands)						(In thousands)
Stock appreciation rights		$	—	$	—	—

Other equity awards(a)(b)	Other equity awards(a)(b)	40,582		19,877		10,728	Other equity awards(a)(b)	61,846		30,410		12,884
Total outstanding employee stock-based awards	Total outstanding employee stock-based awards	$	40,582	$	19,877	10,728	Total outstanding employee stock-based awards	$	61,846	$	30,410	12,884

_______________

(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 ~~September 30, 2022,~~March 31, 2023, 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,~~2022, included in the Company's Annual Report on Form 10-K.

Capital Expenditures

The Company’s ~~2022~~2023 capital expenditures are expected to be ~~higher~~lower than ~~2021~~2022 capital expenditures of ~~$70.2~~$116.4 million by approximately ~~70%~~60%, due primarily to ~~increased~~decreased investment in capitalized ~~software to support the development of our products and services.~~software.

Liquidity Assessment

The Company’s liquidity could be negatively affected by a decrease in demand for its products and services due to economic or other ~~factors, including COVID-19.~~factors.

At ~~September 30, 2022,~~March 31, 2023, IAC held all Class B shares of Angi Inc., which represent ~~84.3%~~83.9% of the economic interest and ~~98.2%~~98.1% 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 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. 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 ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, 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.~~2022.

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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. InDuring 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 (the “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~~.consequences. 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~~litigation matters which we are defending, including ~~the ones~~those described below, ~~involve~~involves or ~~are~~is 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~~they 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~~Administrative Proceeding ~~Regarding Certain~~against HomeAdvisor ~~Business Practices~~

~~In 2021, the staff of~~On March 11, 2022, 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 aan administrative 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 (“SPs”) and its mHelpDesk product are unfair or deceptive in violation of the FTC Act and requesting injunctive relief. The Company disputes these allegations and believes that its business practices are fully in compliance with the law. On April 7, 2022, ~~complaint counsel for~~ the FTC staff filed a motion for summary decision before the Commission, which the ~~FTC~~Commissioners denied on August 2, 2022. ~~While HomeAdvisor believes that~~Settlement discussions between the ~~claims are without merit and is defending vigorously against them,~~parties ensued. On December 2, 2022, the FTC ~~administrative proceeding is ongoing,~~withdrew the matter from adjudication for the purpose of considering a proposed consent order negotiated by the Company and the ~~outcome cannot be predicted at present.~~FTC staff, pursuant to which HomeAdvisor would undertake certain commitments concerning representations to SPs and related reporting obligations and would fund up to $7.2 million for restitutionary payments to SPs (with any unclaimed amounts reverting to HomeAdvisor) and settlement administration costs. On April 20, 2023, the Commission voted to approve the final consent order.

Service Professional Class Action Litigation against HomeAdvisor

~~This purported~~In July 2016, a putative 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:1:16-cv-1849, was filed in the U.S. District Court for the District of Colorado. The complaint, as amended in November 2016, alleges that HomeAdvisor engages in certain deceptive practices affecting the SPs who join its network, including charging them for substandard customer leads and failing to disclose certain charges. The complaint seeks certification of a nationwide class consisting of all HomeAdvisor SPs since October 2012, asserts claims for fraud, breach of implied contract, unjust enrichment and violation of the federal RICO statute and the Colorado Consumer Protection Act (“CCPA”), and seeks injunctive relief and damages in an unspecified amount.

In July 2018, plaintiffs’ counsel filed a separate putative class action in the U.S. District Court for the District of Colorado, Costello et al. v. HomeAdvisor, Inc. et al., No. 1:18-cv-1802, ~~both filed~~on behalf of the same nine SPs proposed as new plaintiffs in ~~U.S. District Court~~the Airquip case, naming as defendants HomeAdvisor, Angi and IAC (as well as an unrelated company), and asserting 45 claims largely duplicative of those asserted in ~~Colorado and consolidated~~a proposed second amended complaint in the Airquip case. In November 2018, the judge presiding over the Airquip case issued an order consolidating the two cases to proceed before him under the captionIn re HomeAdvisor, Inc. ~~Litigation.~~Litigation ~~This lawsuit alleges that our~~.

In January 2019, the plaintiffs renewed their motion for leave to file a consolidated second amended complaint, naming as defendants, in addition to HomeAdvisor, ~~business engages~~Angi and IAC, CraftJack, Inc. (a wholly-owned subsidiary of the Company) and two unrelated entities. In February 2019, the defendants opposed the motion on various grounds. In September 2019, the court issued an order granting the plaintiffs’ motion. In October and December 2019, the four defendants affiliated with HomeAdvisor filed motions to dismiss certain claims in ~~certain deceptive practices affecting~~ the ~~service professionals who join its network, including charging them for substandard customer leads or failing~~amended complaint. In September 2020, the court issued an order

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granting in part and denying in part the defendants’ motions to ~~disclose certain charges. Plaintiffs have~~dismiss. In May 2022, the plaintiffs filed a motion for class ~~certification,~~certification. In June 2022, the Company opposed the motion, which ~~was fully briefed as of 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.

False Advertising Litigation against HomeAdvisor

In March 2018, the San Francisco District Attorney filed a lawsuit in the Superior Court of California, People of the State of California v. HomeAdvisor, Inc., No. CGC-18-565008. The lawsuit alleges that HomeAdvisor violated California’s Unfair Competition Law and False Advertising Law by misleading California consumers about the scope of its background check program. The claims focus on certain television commercials, radio advertisements, and website disclosures during the 2014-18 period. In May 2018, the court issued a preliminary injunction against the Company barring it from airing the then-current versions of the advertisements. In May 2020, the state Court of Appeals affirmed the preliminary injunction. The parties have been engaged in productive settlement negotiations with the assistance of a mediator. The Company believes that the allegations in this lawsuit are without merit and will continue to defend vigorously against them, if necessary.

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~~continued migration 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)(ii) 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~~(iii) the continued display of links to websites offering our products and services in a prominent manner in search results, ~~(x)~~(iv) our ability to successfully implement our brand initiative and expand Services (our pre-priced offerings), while balancing the overall mix of service requests and directory services on Angi platforms, (v) our ability to establish and maintain relationships with quality and trustworthy service professionals, (vi) our continued ability to develop and monetize versions of our products and services for mobile and other digital devices, (vii) our ability to access, share and use personal data about consumers, (viii) 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)~~(xix) any challenge to the contractor classification or employment status of our service professionals, (x) our ability to compete, (xi) adverse economic events or trends (particularly those that impact consumer confidence and spending behavior), (xii) our ability to build, maintain and/or enhance our various brands, (xiii) the adverse impact of COVID-19 and other similar outbreaks on our businesses, (xiv) our ability to protect our systems, technology and infrastructure from cyberattacks and to protect personal and confidential user information (including credit card information), as well as the impact of cyberattacks experienced by third parties, (xv) the occurrence of data security breaches ~~fraud~~ and/or ~~additional regulation involving or impacting credit card payments,~~fraud, (xvi) increased liabilities and costs related to the processing, storage, use and disclosure of personal and confidential user information, (xvii) the integrity, quality, efficiency and scalability of our systems, 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)~~(xix) various risks related to our relationship with IAC, (xx) our ability to generate sufficient cash to service our indebtedness and ~~(xxii) various~~(xxi) certain risks related to ownership of our ~~outstanding indebtedness.~~Class A common stock.

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.~~2022. 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.

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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 ~~September 30, 2022.~~March 31, 2023.

Issuer Purchases of Equity Securities

The Company did not purchase any shares of its common stock during the quarter ended ~~September 30, 2022.~~March 31, 2023. 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

~~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.~~2022.

10.1

~~10.1~~

~~Separation~~Employment Agreement between David Fleischman and Angi Inc., dated as of ~~October 10, 2022, by and between Angi Inc. and Oisin Hanrahan.~~February 6, 2023.(1)(3)(4)

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

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:

~~November 8, 2022~~May 9, 2023

Angi Inc.

By:

/s/ ANDREW RUSSAKOFF

Andrew Russakoff

Chief Financial Officer



Signature	Title	Date

/s/ ANDREW RUSSAKOFF	Chief Financial Officer	~~November 8, 2022~~May 9, 2023
Andrew Russakoff

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	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


	Three Months Ended September 30, 2021
	Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(14,719)	$	8,727	$	13,351	$	3,854	$	11,213
Europe	(254)		$	86	$	1,350	$	—	$	1,182
Operating loss	(14,973)
Interest expense	(6,032)
Other income, net	(479)
Loss before income taxes	(21,484)
Income tax benefit	4,791
Net earnings	(16,693)
Net earnings attributable to noncontrolling interests	(302)
Net earnings attributable to Angi Inc. shareholders	$	(16,995)


	Nine Months Ended September 30, 2022
	Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(62,228)	$	38,715	$	43,252	$	11,413	$	31,152
Europe	(3,673)		$	63	$	1,860	$	—	$	(1,750)
Operating loss	(65,901)
Interest expense	(15,078)
Other expense, net	(4,437)
Loss before income taxes	(85,416)
Income tax benefit	10,693
Net loss	(74,723)
Net earnings attributable to noncontrolling interests	(379)
Net loss attributable to Angi Inc. shareholders	$	(75,102)