angi-20230930

As filed with the Securities and Exchange Commission on November 7, 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, 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 3, 2023, the following shares of the Registrant’s common stock were outstanding:


Class A Common Stock			85,136,000
Class B Common Stock			422,019,247
Class C Common Stock			—
Total outstanding Common Stock			507,155,247

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 (Loss) Income	12
	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	21
	Note 10—Related Party Transactions with IAC	22

	Note 11—Subsequent Events	22
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39
PART II
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 5 .	Other I nformation	42
Item 6.	Exhibits	44
	Signatures	45

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


	September 30, 2023		December 31, 2022
	(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents	$	366,825	$	321,155

Accounts receivable, net	77,269		93,880
Other current assets	71,702		69,167

Total current assets	515,796		484,202

Capitalized software, leasehold improvements and equipment, net	121,244		153,855
Goodwill	883,468		882,949
Intangible assets, net	170,263		178,105
Deferred income taxes	158,495		145,460
Other non-current assets, net	56,493		63,207

TOTAL ASSETS	$	1,905,759	$	1,907,778

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:

Accounts payable	$	52,790	$	30,862
Deferred revenue	55,162		50,907
Accrued expenses and other current liabilities	195,765		200,015

Total current liabilities	303,717		281,784

Long-term debt, net	495,853		495,284
Deferred income taxes	2,923		2,906
Other long-term liabilities	57,989		76,426




Commitments and contingencies

SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 106,026 and 102,811 shares, respectively, and outstanding 84,760 and 82,600, respectively	106		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	1,437,141		1,405,294
Accumulated deficit	(225,459)		(190,079)
Accumulated other comprehensive loss	(937)		(1,172)
Treasury stock, 21,266 and 20,211 shares, respectively	(169,581)		(166,184)
Total Angi Inc. shareholders’ equity	1,041,692		1,048,384
Noncontrolling interests	3,585		2,994
Total shareholders’ equity	1,045,277		1,051,378
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,905,759	$	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,
	2023		2022		2023		2022
	(In thousands, except per share data)
Revenue	$	371,837	$	498,036	$	1,139,312	$	1,449,977
Cost of revenue (exclusive of depreciation shown separately below)	28,737		109,057		102,440		335,826
Gross profit	343,100		388,979		1,036,872		1,114,151
Operating costs and expenses:
Selling and marketing expense	204,006		234,397		621,628		711,357
General and administrative expense	102,476		128,260		301,979		357,541
Product development expense	21,497		15,816		72,358		54,629
Depreciation	22,596		17,759		70,210		45,112
Amortization of intangibles	2,633		3,805		7,958		11,413
Total operating costs and expenses	353,208		400,037		1,074,133		1,180,052
Operating loss	(10,108)		(11,058)		(37,261)		(65,901)
Interest expense	(5,037)		(5,030)		(15,100)		(15,078)
Other income (expense),net	3,891		(2,296)		12,890		(4,437)
Loss before income taxes	(11,254)		(18,384)		(39,471)		(85,416)
Income tax benefit	5,967		945		4,705		10,693


Net loss	(5,287)		(17,439)		(34,766)		(74,723)
Net earnings attributable to noncontrolling interests	(69)		(40)		(614)		(379)
Net loss attributable to Angi Inc. shareholders	$	(5,356)	$	(17,479)	$	(35,380)	$	(75,102)





Per share information attributable to Angi Inc. shareholders:
Basic loss per share	$	(0.01)	$	(0.03)	$	(0.07)	$	(0.15)
Diluted loss per share	$	(0.01)	$	(0.03)	$	(0.07)	$	(0.15)

Stock-based compensation expense by function:

Selling and marketing expense	$	1,822	$	1,544	$	4,586	$	4,674
General and administrative expense	6,906		8,755		22,040		27,052
Product development expense	2,013		2,077		7,122		7,052
Total stock-based compensation expense	$	10,741	$	12,376	$	33,748	$	38,778

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

Table of Contents

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands)
Net loss	$	(5,287)	$	(17,439)	$	(34,766)	$	(74,723)
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	(2,182)		(5,129)		236		(9,100)

Total other comprehensive (loss) income	(2,182)		(5,129)		236		(9,100)
Comprehensive loss	(7,469)		(22,568)		(34,530)		(83,823)
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests	(69)		(40)		(614)		(379)
Change in foreign currency translation adjustment attributable to noncontrolling interests	123		310		(1)		579
Comprehensive loss (income) attributable to noncontrolling interests	54		270		(615)		200
Comprehensive loss attributable to Angi Inc. shareholders	$	(7,415)	$	(22,298)	$	(35,145)	$	(83,623)

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, 2023

(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 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
Net (loss) earnings		—			—		—			—		—			—	—		(5,356)		—		—		(5,356)		69		(5,287)
Other comprehensive loss		—			—		—			—		—			—	—		—		(2,059)		—		(2,059)		(123)		(2,182)
Stock-based compensation expense		—			—		—			—		—			—	12,104		—		—		—		12,104		—		12,104
Issuance of common stock pursuant to stock-based awards, net of withholding taxes		1			753		—			—		—			—	(1,243)		—		—		—		(1,242)		—		(1,242)






Balance as of September 30, 2023		$	106		106,026		$	422		422,019		$	—		—	$	1,437,141	$	(225,459)	$	(937)	$	(169,581)	$	1,041,692	$	3,585	$	1,045,277

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		—			—		—			—		—			—	—		(35,380)		—		—		(35,380)		614		(34,766)
Other comprehensive income		—			—		—			—		—			—	—		—		235		—		235		1		236
Stock-based compensation expense		—			—		—			—		—			—	37,242		—		—		—		37,242		—		37,242
Issuance of common stock pursuant to stock-based awards, net of withholding taxes		3			3,215		—			—		—			—	(5,358)		—		—		—		(5,355)		—		(5,355)

Purchase of treasury stock		—			—		—			—		—			—	—		—		—		(3,397)		(3,397)		—		(3,397)



Other		—			—		—			—		—			—	(37)		—		—		—		(37)		(24)		(61)
Balance as of September 30, 2023		$	106		106,026		$	422		422,019		$	—		—	$	1,437,141	$	(225,459)	$	(937)	$	(169,581)	$	1,041,692	$	3,585	$	1,045,277

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, 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 (Loss) Income								Total Shareholders' Equity
																Additional Paid-in Capital		Accumulated Deficit				Treasury Stock				Noncontrolling Interests
	$			Shares		$			Shares		$			Shares
		(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
Net (loss) earnings		—			—		—			—		—			—	—		(17,479)		—		—		(17,479)		40		(17,439)
Other comprehensive loss		—			—		—			—		—			—	—		—		(4,819)		—		(4,819)		(310)		(5,129)
Stock-based compensation expense		—			—		—			—		—			—	13,304		—		—		—		13,304		—		13,304
Issuance of common stock pursuant to stock-based awards, net of withholding taxes		1			853		—			—		—			—	(2,121)		—		—		—		(2,120)		—		(2,120)




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

Other		—			—		—			—		—			—	(4)		(1)		—		—		(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 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		—			—		—			—		—			—	—		(75,102)		—		—		(75,102)		379		(74,723)
Other comprehensive loss		—			—		—			—		—			—	—		—		(8,521)		—		(8,521)		(579)		(9,100)
Stock-based compensation expense		—			—		—			—		—			—	40,971		—		—		—		40,971		—		40,971
Issuance of common stock pursuant to stock-based awards, net of withholding taxes		2			2,005		—			—		—			—	(6,045)		—		—		—		(6,043)		—		(6,043)

Purchase of treasury stock		—			—		—			—		—			—	—		—		—		(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)		(1)		(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

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

Table of Contents

ANGI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2023		2022
	(In thousands)
Cash flows from operating activities:
Net loss	$	(34,766)	$	(74,723)


Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	70,210		45,112
Provision for credit losses	67,288		82,216
Stock-based compensation expense	33,748		38,778
Non-cash lease expense (including impairment of right-of-use assets)	9,571		11,535
Amortization of intangibles	7,958		11,413
Deferred income taxes	(13,015)		(13,950)
Foreign currency transaction (gain) loss	(510)		6,520



Other adjustments, net	(100)		(192)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	(50,669)		(102,411)
Other assets	(6,068)		(10,014)
Accounts payable and other liabilities	13,450		26,692
Operating lease liabilities	(17,375)		(13,229)
Income taxes payable and receivable	4,856		2,014
Deferred revenue	4,220		1,597
Net cash provided by operating activities	88,798		11,358

Cash flows from investing activities:

Capital expenditures	(36,105)		(95,521)
Purchases of marketable debt securities	(12,362)		—
Proceeds from maturities of marketable debt securities	12,500		—

Proceeds from sales of fixed assets	336		224

Net cash used in investing activities	(35,631)		(95,297)

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	(4,780)		(5,587)


Other, net	(57)		—
Net cash used in financing activities	(8,234)		(13,731)

Total cash provided (used)	44,933		(97,670)




Effect of exchange rate changes on cash and cash equivalents and restricted cash	127		(2,079)
Net increase (decrease) in cash and cash equivalents and restricted cash	45,060		(99,749)
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	$	367,196	$	329,736

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. connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. Over 202,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended September 30, 2023. Additionally, consumers turned to at least one of our brands to find a service professional for approximately 25 million projects during the twelve months ended September 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 September 30, 2023, IAC Inc. (“IAC”) owned 83.8% 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 (referred to herein as “financial statements”) in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The 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 financial statements have been prepared on the same basis as the annual financial statements and reflect all normal 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 financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Segment Changes

In the fourth quarter of 2022, the Company’s segment presentation was changed and our financial information for all prior periods, including the three and nine months ended September 30, 2022, has been recast to reflect the following operating segments: Ads and Leads, Services, Roofing, and International.

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Accounting Estimates

Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its 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.

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. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition. For the three and nine months ended September 30, 2022, if Services revenue were recorded on a net basis, revenue would have been reduced by $64.8 million and $187.5 million, respectively.

The Company’s disaggregated revenue disclosures are presented in “Note 5—Segment Information.”

Deferred Revenue

Deferred revenue consists of payments that are received or are contractually due in advance of the Company’s performance obligation. The Company’s deferred revenue is reported on a contract-by-contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the remaining term 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 nine months ended September 30, 2023, the Company recognized $47.0 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 months ended September 30, 2022, the Company recognized $51.9 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 September 30, 2023 are $55.2 million and less than $0.1 million, respectively. Non-current deferred revenue is included in “Other long-term liabilities” in the accompanying consolidated balance sheet.

Practical Expedients and Exemptions

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ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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

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)


	September 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	$	196,679	$	—	$	—	$	196,679
Treasury discount notes	—		99,522		—		99,522



Total	$	196,679	$	99,522	$	—	$	296,201


	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 total fair value of the outstanding long-term debt, including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs, and was approximately $390.0 million and $368.8 million at September 30, 2023 and December 31, 2022, respectively.

NOTE 3—LONG-TERM DEBT

Long-term debt consists of:


	September 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	4,147		4,716
Total long-term debt, net	$	495,853	$	495,284

ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of Angi Inc., issued the ANGI Group Senior Notes on August 20, 2020. These notes may be redeemed at the redemption prices, plus accrued and unpaid interest thereon, if any, as 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, 2023, there were no limitations pursuant thereto.

NOTE 4—ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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


	Three Months Ended September 30,
	2023		2022
	Foreign Currency Translation Adjustment			Foreign Currency Translation Adjustment
	(In thousands)
Balance at July 1	$	1,122		$	(393)
Other comprehensive loss	(2,059)			(4,819)
Balance at September 30	$	(937)		$	(5,212)


	Nine Months Ended September 30,
	2023		2022
	Foreign Currency Translation Adjustment			Foreign Currency Translation Adjustment
	(In thousands)
Balance at January 1	$	(1,172)		$	3,309
Other comprehensive income (loss)	235			(8,521)
Balance at September 30	$	(937)		$	(5,212)

At September 30, 2023 and 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.

The following table presents revenue by reportable segment:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Revenue:
Domestic
Ads and Leads	$	291,993	$	345,529	$	877,986	$	982,137
Services	29,964		105,892		91,890		290,574
Roofing	21,400		25,993		84,254		105,330
Intersegment eliminations(a)	(794)		(2,825)		(3,257)		(6,452)
Total Domestic	342,563		474,589		1,050,873		1,371,589
International	29,274		23,447		88,439		78,388
Total revenue	$	371,837	$	498,036	$	1,139,312	$	1,449,977

________________________

(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:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Domestic:
Ads and Leads:
Consumer connection revenue	$	203,579	$	262,934	$	625,527	$	738,177
Advertising revenue	75,074		67,165		212,302		196,256
Membership subscription revenue	13,167		14,795		39,597		46,586
Other revenue	173		635		560		1,118
Total Ads and Leads revenue	291,993		345,529		877,986		982,137
Services revenue	29,964		105,892		91,890		290,574
Roofing revenue	21,400		25,993		84,254		105,330
Intersegment eliminations(a)	(794)		(2,825)		(3,257)		(6,452)
Total Domestic	342,563		474,589		1,050,873		1,371,589
International:
Consumer connection revenue	23,144		15,567		71,260		54,311
Service professional membership subscription revenue	6,023		7,597		16,834		23,211
Advertising and other revenue	107		283		345		866
Total International	29,274		23,447		88,439		78,388
Total revenue	$	371,837	$	498,036	$	1,139,312	$	1,449,977

________________________

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

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Revenue:
United States	$	342,342	$	473,835	$	1,050,186	$	1,369,392
All other countries	29,495		24,201		89,126		80,585
Total	$	371,837	$	498,036	$	1,139,312	$	1,449,977


	September 30, 2023		December 31, 2022
	(In thousands)
Long-lived assets (excluding goodwill, intangible assets, and ROU assets):
United States	$	116,942	$	147,322
All other countries	4,302		6,533
Total	$	121,244	$	153,855

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Operating income (loss):
Ads and Leads	$	8,115	$	22,754	$	26,386	$	61,532
Services	(3,887)		(10,780)		(21,514)		(57,581)
Roofing	(2,246)		(8,545)		(3,137)		(18,484)
Corporate	(14,854)		(15,542)		(46,361)		(46,655)
International	2,764		1,055		7,365		(4,713)
Total	$	(10,108)	$	(11,058)	$	(37,261)	$	(65,901)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Adjusted EBITDA(b):
Ads and Leads	$	32,198	$	43,344	$	100,204	$	119,833
Services	$	3,534	$	(1,942)	$	3,066	$	(34,422)
Roofing	$	(1,983)	$	(7,871)	$	(2,456)	$	(15,987)
Corporate	$	(11,933)	$	(12,550)	$	(37,396)	$	(38,102)
International	$	4,046	$	1,901	$	11,237	$	(1,920)

(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:


	Three Months Ended September 30, 2023
	Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(b)
	(In thousands)
Ads and Leads	$	8,115	$	6,082	$	15,368	$	2,633	$	32,198
Services	(3,887)		$	1,096	$	6,325	$	—	$	3,534
Roofing	(2,246)		$	160	$	103	$	—	$	(1,983)
Corporate	(14,854)		$	2,921	$	—	$	—	$	(11,933)
International	2,764		$	482	$	800	$	—	$	4,046
Total	(10,108)
Interest expense	(5,037)
Other income, net	3,891
Loss before income taxes	(11,254)
Income tax benefit	5,967


Net loss	(5,287)
Net earnings attributable to noncontrolling interests	(69)
Net loss attributable to Angi Inc. shareholders	$	(5,356)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Three Months Ended September 30, 2022
	Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(b)
	(In thousands)
Ads and Leads	$	22,754	$	4,979	$	12,948	$	2,663	$	43,344
Services	(10,780)		$	4,015	$	3,848	$	975	$	(1,942)
Roofing	(8,545)		$	195	$	312	$	167	$	(7,871)
Corporate	(15,542)		$	2,992	$	—	$	—	$	(12,550)
International	1,055		$	195	$	651	$	—	$	1,901
Total	(11,058)
Interest expense	(5,030)
Other expense, net	(2,296)
Loss before income taxes	(18,384)
Income tax benefit	945


Net loss	(17,439)
Net earnings attributable to noncontrolling interests	(40)
Net loss attributable to Angi Inc. shareholders	$	(17,479)

Nine Months Ended September 30, 2023

Operating Income (Loss)

Stock-Based
Compensation Expense

Depreciation