As filed with the Securities and Exchange Commission on August 8, 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 June 30, 2023

Or

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

Commission File No. 001-38220

Angi Inc.

(Exact name of Registrant as specified in its charter)

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

3601 Walnut Street, Denver, CO 80205

(Address of Registrant’s principal executive offices)

(303) 963-7200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of exchange on which registered
Class A Common Stock, par value $0.001	ANGI	The Nasdaq Stock Market LLC

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

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

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

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

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

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

As of August 4, 2023, the following shares of the Registrant’s common stock were outstanding:

Class A Common Stock	84,264,278
Class B Common Stock	422,019,247
Class C Common Stock	—
Total outstanding Common Stock	506,283,525

TABLE OF CONTENTS

		Page Number
PART I
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of Shareholders’ Equity	6
	Consolidated Statement of Cash Flows	8
	Notes to Consolidated Financial Statements
	Note 1—The Company and Summary of Significant Accounting Policies	9
	Note 2—Financial Instruments and Fair Value Measurements	11
	Note 3—Long-term Debt	12
	Note 4—Accumulated Other Comprehensive Income (Loss)	13
	Note 5—Segment Information	13
	Note 6—Income Taxes	17
	Note 7—Loss Per Share	19
	Note 8—Consolidated Financial Statement Details	20
	Note 9—Contingencies	22
	Note 10—Related Party Transactions with IAC	22
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	40
PART II
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures	47

2

PART I

FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

	June 30, 2023		December 31, 2022
	(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents	$	370,579	$	321,155
Accounts receivable, net	78,484		93,880
Other current assets	62,279		69,167
Total current assets	511,342		484,202
Capitalized software, leasehold improvements and equipment, net	129,670		153,855
Goodwill	885,893		882,949
Intangible assets, net	173,388		178,105
Deferred income taxes	148,850		145,460
Other non-current assets, net	53,075		63,207
TOTAL ASSETS	$	1,902,218	$	1,907,778
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Accounts payable	$	36,925	$	30,862
Deferred revenue	53,990		50,907
Accrued expenses and other current liabilities	212,493		200,015
Total current liabilities	303,408		281,784
Long-term debt, net	495,660		495,284
Deferred income taxes	3,014		2,906
Other long-term liabilities	58,252		76,426
Commitments and contingencies
SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 105,273 and 102,810 shares, respectively, and outstanding 84,008 and 82,599, respectively	105		103
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 422,019 and 422,019 shares issued and outstanding	422		422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding	—		—
Additional paid-in capital	1,426,280		1,405,294
Accumulated deficit	(220,103)		(190,079)
Accumulated other comprehensive income (loss)	1,122		(1,172)
Treasury stock, 21,265 and 20,211 shares, respectively	(169,581)		(166,184)
Total Angi Inc. shareholders’ equity	1,038,245		1,048,384
Noncontrolling interests	3,639		2,994
Total shareholders’ equity	1,041,884		1,051,378
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,902,218	$	1,907,778

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

3

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Revenue	$	375,068	$	515,782	$	767,475	$	951,941
Cost of revenue (exclusive of depreciation shown separately below)	31,662		127,771		73,703		226,769
Gross profit	343,406		388,011		693,772		725,172
Operating costs and expenses:
Selling and marketing expense	212,713		251,159		417,622		476,960
General and administrative expense	96,985		119,626		199,503		229,281
Product development expense	25,549		20,954		50,861		38,813
Depreciation	22,179		13,354		47,614		27,353
Amortization of intangibles	2,663		3,804		5,325		7,608
Total operating costs and expenses	360,089		408,897		720,925		780,015
Operating loss	(16,683)		(20,886)		(27,153)		(54,843)
Interest expense	(5,034)		(5,026)		(10,063)		(10,048)
Other income (expense),net	5,188		(1,750)		8,999		(2,141)
Loss before income taxes	(16,529)		(27,662)		(28,217)		(67,032)
Income tax benefit (provision)	2,050		3,665		(1,262)		9,748
Net loss	(14,479)		(23,997)		(29,479)		(57,284)
Net earnings attributable to noncontrolling interests	(220)		(235)		(545)		(338)
Net loss attributable to Angi Inc. shareholders	$	(14,699)	$	(24,232)	$	(30,024)	$	(57,622)
Per share information attributable to Angi Inc. shareholders:
Basic loss per share	$	(0.03)	$	(0.05)	$	(0.06)	$	(0.11)
Diluted loss per share	$	(0.03)	$	(0.05)	$	(0.06)	$	(0.11)
Stock-based compensation expense by function:
Selling and marketing expense	$	1,484	$	1,891	$	2,764	$	3,130
General and administrative expense	6,236		8,662		15,134		18,297
Product development expense	2,410		2,864		5,109		4,975
Total stock-based compensation expense	$	10,130	$	13,417	$	23,007	$	26,402

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

4

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Net loss	$	(14,479)	$	(23,997)	$	(29,479)	$	(57,284)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	1,916		(3,225)		2,418		(3,971)
Change in unrealized gains on available-for-sale marketable debt securities	(2)		—		—		—
Total other comprehensive income (loss)	1,914		(3,225)		2,418		(3,971)
Comprehensive loss	(12,565)		(27,222)		(27,061)		(61,255)
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests	(220)		(235)		(545)		(338)
Change in foreign currency translation adjustment attributable to noncontrolling interests	(81)		326		(124)		269
Comprehensive (income) loss attributable to noncontrolling interests	(301)		91		(669)		(69)
Comprehensive loss attributable to Angi Inc. shareholders	$	(12,866)	$	(27,131)	$	(27,730)	$	(61,324)

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

5

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three and Six Months Ended June 30, 2023

(Unaudited)

	Angi Inc. Shareholders’ Equity
	Class A Common Stock $0.001 Par Value			Class B Convertible Common Stock $0.001 Par Value			Class C Common Stock $0.001 Par Value											Total Angi Inc. Shareholders' Equity
														Accumulated Other Comprehensive (Loss) Income								Total Shareholders' Equity
										Additional Paid-in Capital		Accumulated Deficit				Treasury Stock				Noncontrolling Interests
	$		Shares	$		Shares	$		Shares
	(In thousands)
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
Net (loss) earnings	—		—	—		—	—		—	—		(14,699)		—		—		(14,699)		220		(14,479)
Other comprehensive income	—		—	—		—	—		—	—		—		1,833		—		1,833		81		1,914
Stock-based compensation expense	—		—	—		—	—		—	11,268		—		—		—		11,268		—		11,268
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	1		1,154	—		—	—		—	(1,704)		—		—		—		(1,703)		—		(1,703)
Purchase of treasury stock	—		—	—		—	—		—	—		—		—		(3,397)		(3,397)		—		(3,397)
Other	—			—		—	—		—	(32)		—		—		—		(32)		(24)		(56)
Balance as of June 30, 2023	$	105	105,273	$	422	422,019	$	—	—	$	1,426,280	$	(220,103)	$	1,122	$	(169,581)	$	1,038,245	$	3,639	$	1,041,884
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	—		—	—		—	—		—	—		(30,024)		—		—		(30,024)		545		(29,479)
Other comprehensive income	—		—	—		—	—		—	—		—		2,294		—		2,294		124		2,418
Stock-based compensation expense	—		—	—		—	—		—	25,138		—		—		—		25,138		—		25,138
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	2		2,462	—		—	—		—	(4,115)		—		—		—		(4,113)		—		(4,113)
Purchase of treasury stock	—		—	—		—	—		—	—		—		—		(3,397)		(3,397)		—		(3,397)
Other	—		—	—		—	—		—	(37)		—		—		—		(37)		(24)		(61)
Balance as of June 30, 2023	$	105	105,273	$	422	422,019	$	—	—	$	1,426,280	$	(220,103)	$	1,122	$	(169,581)	$	1,038,245	$	3,639	$	1,041,884

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

6

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three and Six Months Ended June 30, 2022

(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 (Loss)								Total Shareholders' Equity
										Additional Paid-in Capital		Accumulated Deficit				Treasury Stock				Noncontrolling Interests
	$		Shares	$		Shares	$		Shares
	(In thousands)
Balance as of March 31, 2022	$	100	100,426	$	422	422,019	$	—	—	$	1,361,540	$	(95,019)	$	2,506	$	(166,184)	$	1,103,365	$	11,068	$	1,114,433
Net (loss) earnings	—		—	—		—	—		—	—		(24,232)		—		—		(24,232)		235		(23,997)
Other comprehensive loss	—		—	—		—	—		—	—		—		(2,899)		—		(2,899)		(326)		(3,225)
Stock-based compensation expense	—		—	—		—	—		—	14,111		—		—		—		14,111		—		14,111
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	1		471	—		—	—		—	(1,451)		—		—		—		(1,450)		—		(1,450)
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, 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	—		—	—		—	—		—	—		(57,622)		—		—		(57,622)		338		(57,284)
Other comprehensive loss	—		—	—		—	—		—	—		—		(3,702)		—		(3,702)		(269)		(3,971)
Stock-based compensation expense	—		—	—		—	—		—	27,667		—		—		—		27,667		—		27,667
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	1		1,152	—		—	—		—	(3,924)		—		—		—		(3,923)		—		(3,923)
Purchase of treasury stock	—		—	—		—	—		—	—		—		—		(8,144)		(8,144)		—		(8,144)
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

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

7

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2023		2022
	(In thousands)
Cash flows from operating activities:
Net loss	$	(29,479)	$	(57,284)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	47,614		27,353
Provision for credit losses	46,876		47,926
Stock-based compensation expense	23,007		26,402
Non-cash lease expense (including impairment of right-of-use assets)	6,677		8,354
Amortization of intangibles	5,325		7,608
Deferred income taxes	(3,326)		(12,095)
Other adjustments, net	(1,830)		2,429
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	(31,184)		(84,105)
Other assets	5,621		(11,140)
Accounts payable and other liabilities	16,131		55,541
Operating lease liabilities	(12,913)		(8,624)
Income taxes payable and receivable	2,258		1,571
Deferred revenue	3,002		3,143
Net cash provided by operating activities	77,779		7,079
Cash flows from investing activities:
Capital expenditures	(22,315)		(62,138)
Purchases of marketable debt securities	(12,362)		—
Proceeds from maturities of marketable debt securities	12,500		—
Proceeds from sales of fixed assets	256		164
Net cash used in investing activities	(21,921)		(61,974)
Cash flows from financing activities:
Purchases of treasury stock	(3,397)		(8,144)
Withholding taxes paid on behalf of employees on net settled stock-based awards	(4,124)		(3,513)
Other, net	(57)		—
Net cash used in financing activities	(7,578)		(11,657)
Total cash provided (used)	48,280		(66,552)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	543		(983)
Net increase (decrease) in cash and cash equivalents and restricted cash	48,823		(67,535)
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	$	370,959	$	361,950

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

8

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. connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. Over 207,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended June 30, 2023. Additionally, consumers turned to at least one of our brands to find a service professional for approximately 27 million projects during the twelve months ended June 30, 2023.

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

Ads and Leads provides service professionals the 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 platform and Angi fulfills the 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, 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 June 30, 2023, IAC Inc. (“IAC”), formerly known as IAC/InterActiveCorp, owned 83.9% and 98.1% of the economic and voting interests, 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, 2022.

9

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Segment Changes

In the fourth quarter of 2022, the Company’s segment presentation was changed to reflect the following operating segments: Ads and Leads, Services, Roofing and International. Our financial information for all prior periods, including the three and six months ended June 30, 2022 included herein, has been recast to reflect this four operating segment 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 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; the determination of the customer relationship period for certain costs to obtain a contract with a customer; the 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 liability for potential refunds and customer credits; 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 5—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 to 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. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition. For the three and six months ended June 30, 2022, if Services revenue were recorded on a net basis, revenue would have been reduced by $71.1 million and $122.8 million, respectively.

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 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 six months ended June 30, 2023, the Company recognized $40.1 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 six months ended June 30, 2022, the Company recognized $45.8 million of revenue that was included in the deferred revenue balance as of December 31, 2021.

The current and non-current deferred revenue balances at June 30, 2023 are $54.0 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.

10

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Practical Expedients and Exemptions

For 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 ASC 606, 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.

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 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.

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—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Marketable Debt Securities

The Company did not hold any available-for-sale marketable debt securities at June 30, 2023 and December 31, 2022.

Fair Value Measurements

Instruments measured at fair value on a recurring basis

11

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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:

	June 30, 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	$	293,434	$	—	$	—	$	293,434

	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

Financial instruments measured at fair value only for disclosure purposes

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

	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
Long-term debt, net (a)	$	(495,660)	$	(405,000)	$	(495,284)	$	(368,750)

________________________

(a)    At June 30, 2023 and December 31, 2022, the carrying value of long-term debt, net includes unamortized debt issuance costs of $4.3 million and $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 3—LONG-TERM DEBT

Long-term debt consists of:

	June 30, 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	4,340		4,716
Total long-term debt, net	$	495,660	$	495,284

12

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

ANGI Group Senior Notes

ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of Angi Inc., issued the ANGI Group Senior Notes 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, plus accrued and unpaid interest thereon, if any, to the applicable redemption 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 June 30, 2023, there were no limitations pursuant thereto.

NOTE 4—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present the components of accumulated other comprehensive income (loss). There were no items reclassified out of accumulated other comprehensive income (loss) into earnings during the three and six months ended June 30, 2023 and 2022.

	Three Months Ended June 30,
	2023						2022
	Foreign Currency Translation Adjustment		Unrealized Gains on Available-For-Sale Debt Securities		Accumulated Other Comprehensive (Loss) Income		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance at April 1	$	(713)	$	2	$	(711)	$	2,506	$	2,506
Other comprehensive income (loss)	1,835		(2)		1,833		(2,899)		(2,899)
Balance at June 30	$	1,122	$	—	$	1,122	$	(393)	$	(393)

	Six Months Ended June 30,
	2023						2022
	Foreign Currency Translation Adjustment		Unrealized Gains on Available-For-Sale Debt Securities		Accumulated Other Comprehensive (Loss) Income		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance at January 1	$	(1,172)	$	—	$	(1,172)	$	3,309	$	3,309
Other comprehensive income (loss)	2,294		—		2,294		(3,702)		(3,702)
Balance at June 30	$	1,122	$	—	$	1,122	$	(393)	$	(393)

At June 30, 2023 and June 30, 2022 there was no tax benefit or provision on the accumulated other comprehensive loss.

NOTE 5—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.

13

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents revenue by reportable segment:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)
Revenue:
Domestic
Ads and Leads	$	292,487	$	341,862	$	585,993	$	636,608
Services	29,867		108,232		61,926		184,682
Roofing	24,482		42,650		62,854		79,337
Intersegment eliminations(a)	(1,001)		(1,950)		(2,463)		(3,627)
Total Domestic	345,835		490,794		708,310		897,000
International	29,233		24,988		59,165		54,941
Total revenue	$	375,068	$	515,782	$	767,475	$	951,941

________________________

(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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)
Domestic:
Ads and Leads:
Consumer connection revenue	$	209,013	$	260,896	$	421,948	$	475,243
Advertising revenue	70,047		65,189		137,228		129,091
Membership subscription revenue	13,231		15,554		26,430		31,791
Other revenue	196		223		387		483
Total Ads and Leads revenue	292,487		341,862		585,993		636,608
Services revenue	29,867		108,232		61,926		184,682
Roofing revenue	24,482		42,650		62,854		79,337
Intersegment eliminations(a)	(1,001)		(1,950)		(2,463)		(3,627)
Total Domestic	345,835		490,794		708,310		897,000
International:
Consumer connection revenue	23,371		16,941		48,116		38,744
Service professional membership subscription revenue	5,753		7,758		10,811		15,614
Advertising and other revenue	109		289		238		583
Total International	29,233		24,988		59,165		54,941
Total revenue	$	375,068	$	515,782	$	767,475	$	951,941

________________________

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

14

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)
Revenue:
United States	$	345,618	$	490,049	$	707,844	$	895,557
All other countries	29,450		25,733		59,631		56,384
Total	$	375,068	$	515,782	$	767,475	$	951,941

	June 30, 2023		December 31, 2022
	(In thousands)
Long-lived assets (excluding goodwill, intangible assets, and ROU assets):
United States	$	124,685	$	147,322
All other countries	4,985		6,533
Total	$	129,670	$	153,855

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)
Operating income (loss):
Ads and Leads	$	4,791	$	23,292	$	18,271	$	38,778
Services	(5,175)		(21,051)		(17,627)		(46,801)
Roofing	(1,302)		(3,789)		(891)		(9,939)
Corporate	(16,568)		(18,091)		(31,507)		(31,113)
International	1,571		(1,247)		4,601		(5,768)
Total	$	(16,683)	$	(20,886)	$	(27,153)	$	(54,843)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands)
Adjusted EBITDA(b):
Ads and Leads	$	28,155	$	42,164	$	68,006	$	76,489
Services	$	1,700	$	(13,913)	$	(468)	$	(32,480)
Roofing	$	(1,294)	$	(3,090)	$	(473)	$	(8,116)
Corporate	$	(13,109)	$	(15,102)	$	(25,463)	$	(25,552)
International	$	2,837	$	(370)	$	7,191	$	(3,821)

(b)    The Company’s primary financial measure and GAAP segment measure is Adjusted EBITDA, which is defined as operating 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 income (loss) for the Company’s reportable segments and net loss attributable to Angi Inc. shareholders to Adjusted EBITDA:

15

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	Three Months Ended June 30, 2023
	Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(b)
	(In thousands)
Ads and Leads	$	4,791	$	5,307	$	15,394	$	2,663	$	28,155
Services	(5,175)		$	1,192	$	5,683	$	—	$	1,700
Roofing	(1,302)		$	(167)	$	175	$	—	$	(1,294)
Corporate	(16,568)		$	3,459	$	—	$	—	$	(13,109)
International	1,571		$	339	$	927	$	—	$	2,837
Operating loss	(16,683)
Interest expense	(5,034)
Other income, net	5,188
Loss before income taxes	(16,529)
Income tax benefit	2,050
Net loss	(14,479)
Net earnings attributable to noncontrolling interests	(220)
Net loss attributable to Angi Inc. shareholders	$	(14,699)

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	Three Months Ended June 30, 2022
	Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(b)
	(In thousands)
Ads and Leads	$	23,292	$	5,404	$	10,805	$	2,663	$	42,164
Services	(21,051)		$	4,513	$	1,650	$	975	$	(13,913)
Roofing	(3,789)		$	385	$	148	$	166	$	(3,090)
Corporate	(18,091)		$	2,989	$	—