Table of Contents
As filed with the Securities and Exchange Commission on August 10, 2020

6, 2021
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, 20202021
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
angifinala15.jpgangi-20210630_g1.gif
ANGI HOMESERVICES INC.Angi Inc.
(Exact name of registrantRegistrant as specified in its charter)
Delaware82-1204801
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer

Identification No.)
3601 Walnut Street,, Denver,, CO80205
(Address of registrant'sRegistrant’s principal executive offices)
(303) (303) 963-7200
(Registrant'sRegistrant’s telephone number, including area code)

(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Class A Common Stock, par value $0.001ANGIThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrantRegistrant (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 registrantRegistrant 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 registrantRegistrant 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 registrantRegistrant was required to submit such files). Yes ☒    No ☐
Indicate by check mark whether the registrantRegistrant 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“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company,"” and "emerging“emerging growth company"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 registrantRegistrant 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 registrantRegistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

As of August 7, 2020,July 30, 2021, the following shares of the registrant'sRegistrant’s common stock were outstanding:
Class A Common Stock74,149,51882,217,972 
Class B Common Stock421,756,247421,977,004 
Class C Common Stock—0 
Total outstanding Common Stock495,905,765504,194,976 




TABLE OF CONTENTS
Page
Number
Page
NumberPART I
3
Item 1.
3
3
Consolidated Statement of Operations
4
5
6
8
9
1311
1413
1615
1615
1816
1917
2321
2422
2423
23
2524
4240
4341
PART II
4442
4542
4744
4845
4946




2
Table of Contents
PART I
FINANCIAL INFORMATION
Item 1.    Consolidated Financial Statements
ANGI HOMESERVICES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 2020 December 31, 2019June 30, 2021December 31, 2020
(In thousands, except par value amounts)(In thousands, except par value amounts)
ASSETS   ASSETS
Cash and cash equivalents$420,985
 $390,565
Cash and cash equivalents$584,260 $812,705 
Accounts receivable, net of allowance and reserves of $27,991 and $20,293, respectively49,760
 41,669
Marketable debt securitiesMarketable debt securities0 49,995 
Accounts receivable, net of reserves of $35,862 and $27,839, respectivelyAccounts receivable, net of reserves of $35,862 and $27,839, respectively62,052 43,148 
Other current assets63,598
 67,759
Other current assets67,787 71,958 
Total current assets534,343
 499,993
Total current assets714,099 977,806 
   
Capitalized software, leasehold improvements and equipment, net of accumulated depreciation and amortization104,261
 103,361
Capitalized software, leasehold improvements and equipment, netCapitalized software, leasehold improvements and equipment, net111,054 108,842 
Goodwill882,406
 883,960
Goodwill892,616 891,797 
Intangible assets, net of accumulated amortization225,401
 251,725
Other non-current assets178,980
 182,572
Intangible assets, netIntangible assets, net201,166 209,717 
Other non-current assets, netOther non-current assets, net187,793 180,020 
TOTAL ASSETS$1,925,391
 $1,921,611
TOTAL ASSETS$2,106,728 $2,368,182 
   
LIABILITIES AND SHAREHOLDERS' EQUITY   
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:   LIABILITIES:
Current portion of long-term debt$13,750
 $13,750
Accounts payable44,600
 25,987
Accounts payable$53,230 $30,805 
Deferred revenue58,091
 58,220
Deferred revenue60,053 54,654 
Accrued expenses and other current liabilities138,822
 116,997
Accrued expenses and other current liabilities178,629 148,219 
Total current liabilities255,263
 214,954
Total current liabilities291,912 233,678 
   
Long-term debt, net225,336
 231,946
Long-term debt, net494,195 712,277 
Deferred income taxes1,891
 3,441
Deferred income taxes1,662 1,296 
Other long-term liabilities115,882
 121,055
Other long-term liabilities104,998 111,710 
   
Redeemable noncontrolling interests25,093
 26,663
Redeemable noncontrolling interests4,536 26,364 
   
Commitments and contingencies


 


Commitments and contingencies00
   
SHAREHOLDERS' EQUITY:   
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 89,076 and 87,007 shares, respectively, and outstanding 73,953 and 79,681, respectively89
 87
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 421,757 and 421,570 shares issued and outstanding422
 422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding—
 —
SHAREHOLDERS’ EQUITY:SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 99,111 and 94,238 shares, respectively, and outstanding 82,731 and 78,333, respectivelyClass A common stock, $0.001 par value; authorized 2,000,000 shares; issued 99,111 and 94,238 shares, respectively, and outstanding 82,731 and 78,333, respectively99 94 
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 421,977 and 421,862 shares issued and outstandingClass B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 421,977 and 421,862 shares issued and outstanding422 422 
Class C common stock, $0.001 par value; authorized 1,500,000 shares; 0 shares issued and outstandingClass C common stock, $0.001 par value; authorized 1,500,000 shares; 0 shares issued and outstanding0 0 
Additional paid-in capital1,387,618
 1,357,075
Additional paid-in capital1,338,208 1,379,469 
Retained earnings19,741
 16,032
Accumulated other comprehensive loss(2,740) (1,379)
Treasury stock, 15,123 and 7,326 shares, respectively(112,808) (57,949)
Total ANGI Homeservices Inc. shareholders' equity1,292,322
 1,314,288
(Accumulated deficit) retained earnings(Accumulated deficit) retained earnings(18,613)9,749 
Accumulated other comprehensive incomeAccumulated other comprehensive income5,973 4,637 
Treasury stock, 16,380 and 15,905 shares, respectivelyTreasury stock, 16,380 and 15,905 shares, respectively(127,718)(122,081)
Total Angi Inc. shareholders’ equityTotal Angi Inc. shareholders’ equity1,198,371 1,272,290 
Noncontrolling interests9,604
 9,264
Noncontrolling interests11,054 10,567 
Total shareholders' equity1,301,926
 1,323,552
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$1,925,391
 $1,921,611
Total shareholders’ equityTotal shareholders’ equity1,209,425 1,282,857 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITYTOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$2,106,728 $2,368,182 
The accompanying Notes to Consolidated Financial Statementsare an integral part of these statements.

3
Table of Contents
ANGI HOMESERVICES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands, except per share data)
Revenue$420,988 $375,061 $808,017 $718,711 
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)69,704 41,042 123,532 74,271 
Selling and marketing expense239,031 189,984 444,871 379,943 
General and administrative expense107,486 85,451 195,648 180,007 
Product development expense18,752 15,407 36,799 32,491 
Depreciation15,058 12,555 31,027 24,693 
Amortization of intangibles3,688 12,978 8,762 25,958 
Total operating costs and expenses453,719 357,417 840,639 717,363 
Operating (loss) income(32,731)17,644 (32,622)1,348 
Interest expense(5,814)(1,620)(12,431)(3,894)
Other (expense) income, net(636)212 (1,403)633 
(Loss) earnings before income taxes(39,181)16,236 (46,456)(1,913)
Income tax benefit (provision)9,129 (3,025)18,418 5,940 
Net (loss) earnings(30,052)13,211 (28,038)4,027 
Net earnings attributable to noncontrolling interests(241)(544)(324)(318)
Net (loss) earnings attributable to Angi Inc. shareholders$(30,293)$12,667 $(28,362)$3,709 
Per share information attributable to Angi Inc. shareholders:
Basic (loss) earnings per share$(0.06)$0.03 $(0.06)$0.01 
Diluted (loss) earnings per share$(0.06)$0.02 $(0.06)$0.01 
Stock-based compensation expense by function:
Selling and marketing expense$865 $720 $1,882 $1,723 
General and administrative expense7,410 13,131 7,494 36,111 
Product development expense1,268 908 2,201 2,500 
Total stock-based compensation expense$9,543 $14,759 $11,577 $40,334 
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands, except per share data)
Revenue$375,061
 $343,896
 $718,711
 $647,339
Operating costs and expenses:       
Cost of revenue (exclusive of depreciation shown separately below)41,042
 10,722
 74,271
 20,733
Selling and marketing expense189,984
 196,167
 379,943
 371,469
General and administrative expense85,451
 88,013
 180,007
 172,442
Product development expense15,407
 15,082
 32,491
 30,886
Depreciation12,555
 8,796
 24,693
 15,795
Amortization of intangibles12,978
 13,713
 25,958
 28,252
Total operating costs and expenses357,417
 332,493
 717,363
 639,577
Operating income17,644
 11,403
 1,348
 7,762
Interest expense(1,620) (2,963) (3,894) (5,957)
Other income, net212
 1,047
 633
 3,318
Earnings (loss) before income taxes16,236
 9,487
 (1,913) 5,123
Income tax (provision) benefit(3,025) (2,253) 5,940
 11,962
Net earnings13,211
 7,234
 4,027
 17,085
Net earnings attributable to noncontrolling interests(544) (266) (318) (148)
Net earnings attributable to ANGI Homeservices Inc. shareholders$12,667
 $6,968
 $3,709
 $16,937
        
Earnings per share information attributable to ANGI Homeservices Inc. shareholders:  
Basic earnings per share$0.03
 $0.01
 $0.01
 $0.03
Diluted earnings per share$0.02
 $0.01
 $0.01
 $0.03
        
Stock-based compensation expense by function:       
Selling and marketing expense$720
 $1,046
 $1,723
 $2,005
General and administrative expense13,131
 14,642
 36,111
 30,749
Product development expense908
 1,832
 2,500
 4,048
Total stock-based compensation expense$14,759
 $17,520
 $40,334
 $36,802

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


4
Table of Contents
ANGI HOMESERVICES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS
(Unaudited)
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
Net earnings$13,211
 $7,234
 $4,027
 $17,085
Other comprehensive income (loss):       
Change in foreign currency translation adjustment4,486
 (1,674) (2,082) 191
Change in unrealized gains and losses on available-for-sale debt securities—
 —
 —
 (3)
Total other comprehensive income (loss)4,486
 (1,674) (2,082) 188
Comprehensive income17,697
 5,560
 1,945
 17,273
Components of comprehensive (income) loss attributable to noncontrolling interests:       
Net earnings attributable to noncontrolling interests(544) (266) (318) (148)
Change in foreign currency translation adjustment attributable to noncontrolling interests767
 383
 721
 191
Comprehensive loss attributable to noncontrolling interests223
 117
 403
 43
Comprehensive income attributable to ANGI Homeservices Inc. shareholders$17,920
 $5,677
 $2,348
 $17,316

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(in thousands)
Net (loss) earnings$(30,052)$13,211 $(28,038)$4,027 
Other comprehensive income (loss):
Change in foreign currency translation adjustment1,395 4,486 2,075 (2,082)
Comprehensive (loss) income(28,657)17,697 (25,963)1,945 
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests(241)(544)(324)(318)
Change in foreign currency translation adjustment attributable to noncontrolling interests(45)767 (739)721 
Comprehensive (income) loss attributable to noncontrolling interests(286)223 (1,063)403 
Comprehensive (loss) income attributable to Angi Inc. shareholders$(28,943)$17,920 $(27,026)$2,348 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


5
Table of Contents
ANGI HOMESERVICES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Three and Six Months Ended June 30, 2020 and 20192021
(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 IncomeTotal
Shareholders'
Equity
Redeemable
Noncontrolling
Interests		Additional Paid-in Capital(Accumulated Deficit) Retained EarningsTreasury
Stock		Noncontrolling
Interests
$Shares$Shares$Shares
(In thousands)
Balance as of March 31, 2021$4,608 $98 98,408 $422 421,958 $— — $1,333,294 $11,680 $4,623 $(126,997)$1,223,120 $10,823 $1,233,943 
Net earnings (loss)48 — — — — — — — (30,293)— — (30,293)194 (30,099)
Other comprehensive income8 — — — — — — — — 1,350 — 1,350 37 1,387 
Stock-based compensation expense— — — — — — — 11,477 — — — 11,477 — 11,477 
Issuance of common stock pursuant to stock-based awards, net of withholding taxes— 1 697 — — — — (6,691)— — — (6,690)— (6,690)
Issuance of common stock to IAC pursuant to the employee matters agreement— — 6 — 19 — — — — — — — — — 
Purchase of treasury stock— — — — — — — — — — (721)(721)— (721)
Adjustment of redeemable noncontrolling interests to fair value(128)— — — — —  128 — — — 128 — 128 
Balance as of June 30, 2021$4,536 $99 99,111 $422 421,977 $— — $1,338,208 $(18,613)$5,973 $(127,718)$1,198,371 $11,054 $1,209,425 
Balance as of December 31, 2020$26,364 $94 94,238 $422 421,862 $— — $1,379,469 $9,749 $4,637 $(122,081)$1,272,290 $10,567 $1,282,857 
Net (loss) earnings(12)— — — — — — — (28,362)— — (28,362)336 (28,026)
Other comprehensive income588 — — — — — — — — 1,336 — 1,336 151 1,487 
Stock-based compensation expense— — — — — — — 14,019 — — — 14,019 — 14,019 
Issuance of common stock pursuant to stock-based awards, net of withholding taxes— 2 2,288 — — — — (54,743)— — — (54,741)— (54,741)
Issuance of common stock to IAC pursuant to the employee matters agreement— 3 2,585 — 115 — — (3)— — — — — 0 
Purchase of treasury stock— — — — — — — — — — (5,637)(5,637)— (5,637)
Purchase of redeemable noncontrolling interests(22,938)— — — — — — — — — — — — — 
Adjustment of redeemable noncontrolling interests to fair value534 — — — — — — (534)— — — (534)— (534)
Balance as of June 30, 2021$4,536 $99 99,111 $422 421,977 $— — $1,338,208 $(18,613)$5,973 $(127,718)$1,198,371 $11,054 $1,209,425 
    ANGI Homeservices 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 Homeservices Inc. Shareholders' Equity
    
                   
           
Accumulated
Other
Comprehensive Loss
      
Total
Shareholders'
Equity
 
Redeemable
Noncontrolling
Interests
              Additional Paid-in Capital Retained Earnings (Accumulated Deficit)  
Treasury
Stock
  
Noncontrolling
Interests
 
   $ Shares $ Shares $ Shares       
    (In thousands)  
Balance as of March 31, 2020$23,813
  $88
 87,624
 $422
 421,757
 $—
 —
 $1,379,079
 $7,074
 $(7,993) $(96,920) $1,281,750
 $9,260
 $1,291,010
Net earnings220
  —
 —
 —
 —
 —
 —
 —
 12,667
 —
 —
 12,667
 324
 12,991
Other comprehensive (loss) income(786)  —
 —
 —
 —
 —
 —
 —
 —
 5,253
 —
 5,253
 19
 5,272
Stock-based compensation expense—
  —
 —
 —
 —
 —
 —
 18,607
 —
 —
 —
 18,607
 —
 18,607
Issuance of common stock pursuant to stock-based awards, net of withholding taxes—
  1
 1,452
 —
 —
 —
 —
 (8,220) —
 —
 —
 (8,219) —
 (8,219)
Purchase of treasury stock—
  —
 —
 —
 —
 —
 —
 —
 —
 —
 (15,888) (15,888) —
 (15,888)
Adjustment of redeemable noncontrolling interests to fair value1,846
  —
 —
 —
 —
 —
 —
 (1,846) —
 —
 —
 (1,846) —
 (1,846)
Other—
  —
 —
 —
 —
 —
 —
 (2) —
 —
 —
 (2) 1
 (1)
Balance as of June 30, 2020$25,093
  $89
 89,076
 $422
 421,757
 $—
 —
 $1,387,618
 $19,741
 $(2,740) $(112,808) $1,292,322
 $9,604
 $1,301,926
Balance as of March 31, 2019$23,242
  $85
 84,718
 $421
 421,452
 $—
 —
 $1,331,371
 $(8,828) $(191) $—
 $1,322,858
 $9,043
 $1,331,901
Net earnings160
  —
 —
 —
 —
 —
 —
 —
 6,968
 —
 —
 6,968
 106
 7,074
Other comprehensive loss(335)  —
 —
 —
 —
 —
 —
 —
 —
 (1,291) —
 (1,291) (48) (1,339)
Stock-based compensation expense35
  —
 —
 —
 —
 —
 —
 17,485
 —
 —
 —
 17,485
 —
 17,485
Issuance of common stock pursuant to stock-based awards, net of withholding taxes—
  1
 1,085
 —
 —
 —
 —
 (10,257) —
 —
 —
 (10,256) —
 (10,256)
Issuance of common stock to IAC pursuant to the employee matters agreement—
  —
 —
 —
 1
 —
 —
 —
 —
 —
 —
 —
 —
 —
Adjustment of redeemable noncontrolling interests to fair value319
  —
 —
 —
 —
 —
 —
 (319) —
 —
 —
 (319) —
 (319)
Balance as of June 30, 2019$23,421
  $86
 85,803
 $421
 421,453
 $—
 —
 $1,338,280
 $(1,860) $(1,482) $—
 $1,335,445
 $9,101
 $1,344,546

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


6

Table of Contents

ANGI HOMESERVICES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Three and Six Months Ended June 30, 2020 and 2019
(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) IncomeTotal Shareholders' Equity
Redeemable
Noncontrolling
Interests		Additional Paid-in CapitalRetained EarningsTreasury
Stock		Noncontrolling
Interests
$Shares$Shares$Shares
(In thousands)
Balance as of March 31, 2020$23,813 $88 87,624 $422 421,757 $— — $1,379,079 $7,074 $(7,993)$(96,920)$1,281,750 $9,260 $1,291,010 
Net earnings220 — — — — — — — 12,667 — — 12,667 324 12,991 
Other comprehensive (loss) income(786)— — — — — — — — 5,253 — 5,253 19 5,272 
Stock-based compensation expense— — — — — — — 18,607 — — — 18,607 — 18,607 
Issuance of common stock pursuant to stock-based awards, net of withholding taxes— 1 1,452 — — — — (8,220)— — — (8,219)— (8,219)
Purchase of treasury stock— — — — — — — — — — (15,888)(15,888)— (15,888)
Adjustment of redeemable noncontrolling interests to fair value1,846 — — — — — — (1,846)— — — (1,846)— (1,846)
Other— — — — — — — (2)— — — (2)1 (1)
Balance as of June 30, 2020$25,093 $89 89,076 $422 421,757 $— — $1,387,618 $19,741 $(2,740)$(112,808)$1,292,322 $9,604 $1,301,926 
Balance as of December 31, 2019$26,663 $87 87,007 $422 421,570 $— — $1,357,075 $16,032 $(1,379)$(57,949)$1,314,288 $9,264 $1,323,552 
Net (loss) earnings(55)— — — — — — — 3,709 — — 3,709 373 4,082 
Other comprehensive loss(687)— — — — — — — — (1,361)— (1,361)(34)(1,395)
Stock-based compensation expense15 — — — — — — 40,818 — — — 40,818 — 40,818 
Issuance of common stock pursuant to stock-based awards, net of withholding taxes— 2 2,069 — — — — (10,773)— — — (10,771)— (10,771)
Issuance of common stock to IAC pursuant to the employee matters agreement— — — — 187 — — (791)— — — (791)— (791)
Purchase of treasury stock— — — — — — — — — — (54,859)(54,859)— (54,859)
Purchase of redeemable noncontrolling interests(3,165)— — — — — — — — — — — — — 
Adjustment of redeemable noncontrolling interests to fair value2,322 — — — — — — (2,322)— — — (2,322)— (2,322)
Adjustment pursuant to the tax sharing agreement— — — — — — — 3,613 — — — 3,613 — 3,613 
Other— — — — — — — (2)— — — (2)1 (1)
Balance as of June 30, 2020$25,093 $89 89,076 $422 421,757 $— — $1,387,618 $19,741 $(2,740)$(112,808)$1,292,322 $9,604 $1,301,926 
(Unaudited)
    ANGI Homeservices 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 Homeservices Inc. Shareholders' Equity
    
                   
           
Accumulated
Other
Comprehensive
Loss
      
Total
Shareholders'
Equity
 
Redeemable
Noncontrolling
Interests
              Additional Paid-in Capital Retained Earnings (Accumulated Deficit)  
Treasury
Stock
  
Noncontrolling
Interests
 
   $ Shares $ Shares $ Shares       
    (In thousands)  
Balance as of December 31, 2019$26,663
  $87
 87,007
 $422
 421,570
 $—
 —
 $1,357,075
 $16,032
 $(1,379) $(57,949) $1,314,288
 $9,264
 $1,323,552
Net (loss) earnings(55)  —
 —
 —
 —
 —
 —
 —
 3,709
 —
 —
 3,709
 373
 4,082
Other comprehensive loss(687)  —
 —
 —
 —
 —
 —
 —
 —
 (1,361) —
 (1,361) (34) (1,395)
Stock-based compensation expense15
  —
 —
 —
 —
 —
 —
 40,818
 —
 —
 —
 40,818
 —
 40,818
Issuance of common stock pursuant to stock-based awards, net of withholding taxes—
  2
 2,069
 —
 —
 —
 —
 (10,773) —
 —
 —
 (10,771) —
 (10,771)
Issuance of common stock to IAC pursuant to the employee matters agreement—
  —
 —
 —
 187
 —
 —
 (791) —
 —
 —
 (791) —
 (791)
Purchase of treasury stock—
  —
 —
 —
 —
 —
 —
 —
 —
 —
 (54,859) (54,859) —
 (54,859)
Purchase of redeemable noncontrolling interests(3,165)  —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
Adjustment of redeemable noncontrolling interests to fair value2,322
  —
 —
 —
 —
 —
 —
 (2,322) —
 —
 —
 (2,322) —
 (2,322)
Adjustment pursuant to the tax sharing agreement—
  —
 —
 —
 —
 —
 —
 3,613
 —
 —
 —
 3,613
 —
 3,613
Other—
  —
 —
 —
 —
 —
 —
 (2) —
 —
 —
 (2) 1
 (1)
Balance as of June 30, 2020$25,093
  $89
 89,076
 $422
 421,757
 $—
 —
 $1,387,618
 $19,741
 $(2,740) $(112,808) $1,292,322
 $9,604
 $1,301,926
Balance as of December 31, 2018$18,163
  $81
 80,515
 $421
 421,118
 $—
 —
 $1,333,097
 $(18,797) $(1,861) $—
 $1,312,941
 $9,046
 $1,321,987
Net earnings51
  —
 —
 —
 —
 —
 —
 —
 16,937
 —
 —
 16,937
 97
 17,034
Other comprehensive (loss) income(149)  —
 —
 —
 —
 —
 —
 —
 —
 379
 —
 379
 (42) 337
Stock-based compensation expense77
  —
 —
 —
 —
 —
 —
 36,725
 —
 —
 —
 36,725
 —
 36,725
Issuance of common stock pursuant to stock-based awards, net of withholding taxes—
  5
 5,288
 —
 —
 —
 —
 (25,448) —
 —
 —
 (25,443) —
 (25,443)
Issuance of common stock to IAC pursuant to the employee matters agreement—
  —
 —
 —
 335
 —
 —
 (795) —
 —
 —
 (795) —
 (795)
Adjustment of redeemable noncontrolling interests to fair value5,279
  —
 —
 —
 —
 —
 —
 (5,279) —
 —
 —
 (5,279) —
 (5,279)
Other—
  —
 —
 —
 —
 —
 —
 (20) —
 —
 —
 (20) —
 (20)
Balance as of June 30, 2019$23,421
  $86
 85,803
 $421
 421,453
 $—
 —
 $1,338,280
 $(1,860) $(1,482) $—
 $1,335,445
 $9,101
 $1,344,546

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


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ANGI HOMESERVICES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
20212020
(In thousands)
Cash flows from operating activities:
Net (loss) earnings$(28,038)$4,027 
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Provision for credit losses42,731 39,338 
Stock-based compensation expense11,577 40,334 
Depreciation31,027 24,693 
Amortization of intangibles8,762 25,958 
Deferred income taxes(20,344)(6,290)
Impairment of long-lived and right-of-use assets12,280 188 
Revenue reserves4,667 4,070 
Other adjustments, net2,592 1,266 
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable(63,192)(48,222)
Other assets8,376 7,132 
Accounts payable and other liabilities43,199 35,930 
Income taxes payable and receivable315 (502)
Deferred revenue5,301 (125)
Net cash provided by operating activities59,253 127,797 
Cash flows from investing activities:
Capital expenditures(35,713)(24,665)
Proceeds from maturities of marketable debt securities50,000 0 
Net proceeds from the sale of a business750 731 
Net cash provided by (used in) investing activities15,037 (23,934)
Cash flows from financing activities:
Principal payments on Term Loan(220,000)(6,875)
Purchase of treasury stock(5,637)(54,400)
Withholding taxes paid on behalf of employees on net settled stock-based awards(54,596)(11,494)
Distribution from IAC pursuant to the tax sharing agreement0 3,071 
Purchase of noncontrolling interests(22,938)(3,165)
Net cash used in financing activities(303,171)(72,863)
Total cash (used) provided(228,881)31,000 
Effect of exchange rate changes on cash and cash equivalents and restricted cash546 (702)
Net (decrease) increase in cash and cash equivalents and restricted cash(228,335)30,298 
Cash and cash equivalents and restricted cash at beginning of period813,561 391,478 
Cash and cash equivalents and restricted cash at end of period$585,226 $421,776 
 Six Months Ended June 30,
 2020 2019
 (In thousands)
Cash flows from operating activities:   
Net earnings$4,027
 $17,085
Adjustments to reconcile net earnings to net cash provided by operating activities:   
Stock-based compensation expense40,334
 36,802
Amortization of intangibles25,958
 28,252
Bad debt expense39,338
 32,143
Depreciation24,693
 15,795
Deferred income taxes(6,290) (12,407)
Other adjustments, net5,524
 3,446
Changes in assets and liabilities, net of effects of acquisitions and dispositions:   
Accounts receivable(48,222) (61,889)
Other assets7,132
 10,556
Accounts payable and other liabilities35,930
 29,588
Income taxes payable and receivable(502) 269
Deferred revenue(125) 3,384
Net cash provided by operating activities127,797
 103,024
Cash flows from investing activities:   
Acquisition, net of cash acquired—
 (20,341)
Capital expenditures(24,665) (39,113)
Proceeds from maturities of marketable debt securities—
 25,000
Net proceeds from the sale of a business731
 23,599
Other, net—
 (103)
Net cash used in investing activities(23,934) (10,958)
Cash flows from financing activities:   
Principal payments on term loan(6,875) (6,875)
Principal payments on related-party debt—
 (1,008)
Purchase of treasury stock(54,400) —
Proceeds from the exercise of stock options—
 573
Withholding taxes paid on behalf of employees on net settled stock-based awards(11,494) (26,245)
Distribution from (to) IAC pursuant to the tax sharing agreement3,071
 (11,355)
Purchase of noncontrolling interests(3,165) —
Other, net—
 (3,732)
Net cash used in financing activities(72,863) (48,642)
Total cash provided31,000
 43,424
Effect of exchange rate changes on cash and cash equivalents and restricted cash(702) 157
Net increase in cash and cash equivalents and restricted cash30,298
 43,581
Cash and cash equivalents and restricted cash at beginning of period391,478
 338,821
Cash and cash equivalents and restricted cash at end of period$421,776
 $382,402

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

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ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Angi Inc. (the “Company”), formerly ANGI Homeservices Inc., connects quality home service professionals with consumers across 500 different categories, from repairing and remodeling homes to cleaning and landscaping, with consumers.landscaping. Over 230,000260,000 domestic service professionals actively seeksought consumer matches, completecompleted jobs, or advertiseadvertised work through ANGI Homeservices'Angi Inc. platforms andduring the three months ended June 30, 2021. Additionally, consumers turnturned to at least one of our brands to find a professional for more than 25approximately 34 million projects each year. We’ve established category-transforming products with brands such as HomeAdvisor, Angie’s List, Handy and Fixd Repair.during the twelve months ended June 30, 2021.

The Company has 2 operating segments (i) North America (United States and Canada), which includes Angi (formerly Angie’s List), HomeAdvisor Angie's List, Handy, mHelpDesk, HomeStarsPowered by Angi, and Fixd RepairHandy; and (ii) Europe, which includes Travaux, MyHammer, MyBuilder, Werkspot, and Instapro.

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

At June 30, 2020,2021, IAC/InterActiveCorp ("IAC"(“IAC”) owned 85.1%84.1% and 98.3%98.1% of the economic interest and voting interest, respectively, of ANGI Homeservices.the Company.
COVID-19 Update
The impact on the Company from the COVID-19 outbreak, which has been declared a "pandemic" by the World Health Organization, has been varied. The extent to which developments related to the COVID-19 outbreak 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 speed of contagion, the development and implementation of effective preventative measures and possible treatments, the scope of governmental and other restrictions on travel, discretionary services (including those provided by certain of our service professionals) and other activity, and public reactions to these developments. For example, these developments and measures have resulted in rapid and adverse changes to the operating environment in which we do business, as well as significant uncertainty concerning the near and long term economic ramifications of the COVID-19 outbreak, which have adversely impacted our ability to forecast our results and respond in a timely and effective manner to trends related to the COVID-19 outbreak. The longer the global outbreak and measures designed to curb the spread of the virus continue to adversely affect levels of consumer confidence, discretionary spending and the willingness of consumers to interact with other consumers, vendors and service providers face-to-face (and in turn, adversely affect demand for the Company’s various products and services), the greater the adverse impact is likely to be on the Company’s business, financial condition and results of operations and the more limited will be the Company’s ability to try and make up for delayed or lost revenues.
In March 2020, the Company experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). In the second quarter of 2020, the Company experienced a rebound in service requests, exceeding pre-COVID-19 growth levels, driven by increased demand from homeowners who spent more time at home due to measures taken to reduce the spread of COVID-19. However, many service professionals' businesses have been adversely impacted by labor and material constraints, which negatively impacted the Company's ability to monetize this increased level of service requests. Also, the United States, which represents 94% of the Company's revenue for both the three and six months ended June 30, 2020, has experienced a resurgence of the COVID-19 virus beginning in June 2020. This resurgence could result in a reduction in service requests and/or a reduction in our ability to monetize service requests due to service professional constraints, one or both of which could materially and adversely affect our business, financial condition and results of operations.
Basis of Presentation and Consolidation
The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



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. IntercompanyAll intercompany transactions and accountsbalances between and among the Company and its subsidiaries have been eliminated. All intercompany transactions between (i) Angi Inc. and (ii) IAC and its subsidiaries, with the exception of a promissory note payable to a foreign subsidiary of IAC, are considered to be effectively settled for cash at the time the transaction is recorded. See “Note 10—Related Party Transactions with IAC” for additional information on transactions between Angi Inc. and IAC.

The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. For the purpose of these financial statements, income taxes have been computed as if ANGI HomeservicesAngi Inc. filed tax returns on a standalone, separate tax return basis.Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement between the Company and IAC and the current tax provision computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital and as financing activities within the statement of cash flows.
In management's opinion, the
The accompanying unaudited interim consolidated financial statements have been prepared onin accordance with GAAP for interim financial information and with the same basis asrules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and notes required by GAAP for complete annual consolidatedfinancial statements. In the opinion of management, the accompanying unaudited financial statements and reflectinclude all adjustments consisting(consisting of normal and recurring adjustments,accruals) considered necessary for thea fair presentation of the Company's consolidated financial position, consolidated results of operations and consolidated cash flows for the periods presented.presentation. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.2020.

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

As previously disclosed, the initial impact of COVID-19 on the Company resulted in a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). While we have experienced a rebound in service requests in the second half of 2020 and the first half of 2021, many service professionals’ businesses had been adversely impacted by labor and material constraints and many service professionals had limited capacity to take on new business, which negatively impacted our ability to monetize this increased level of service requests through the first quarter of 2021. Although our ability to monetize service requests rebounded modestly in the second
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ANGI INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
quarter of 2021, we are still not back to levels we experienced pre-COVID-19. No assurances can be provided that we will continue to be able to improve monetization, or that service professionals’ businesses will not be adversely impacted in the future.
The extent to which developments related to the COVID-19 pandemic and measures designed to curb its spread continue to impact the Company’s business, financial condition and results of operations will depend on future developments, all of which are highly uncertain and many of which are beyond the Company’s control, including the continuing spread of COVID-19, the severity of resurgences of COVID-19 caused by variant strains of the virus, the effectiveness of vaccines and attitudes toward receiving them, materials and supply chain constraints, labor shortages, the scope of governmental and other restrictions on travel, discretionary services and other activity, and public reactions to these developments.
Accounting Estimates
Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments, and assumptions impact the reported amounts of assets, liabilities, revenue, and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



Prior to January 1, 2020, Handy recorded revenue on a net basis. Effective January 1, 2020, the Company modified the Handy terms and conditions so that Handy, rather than the service professional, has the contractual relationship with the consumer to deliver the service and Handy, rather than the consumer, has the contractual relationship with the service professional. Consumers request services and pay for such services directly through the Handy platform and then Handy fulfills the request with independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. This change in contractual terms requires gross revenue accounting treatment effective January 1, 2020. Also, in the case of certain tasks, HomeAdvisor provides a pre-priced product offering, pursuant to which consumers can request services through a HomeAdvisor platform and pay HomeAdvisor for the services directly. HomeAdvisor then fulfills the request with independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. Revenue from HomeAdvisor’s pre-priced product offering is also recorded on a gross basis effective January 1, 2020. In addition to changing the presentation of revenue to gross from net, the timing of revenue recognition changed for HomeAdvisor pre-priced jobs and will be later than consumer connection revenue because the Company will not be able to record revenue, generally, until the service professional completes the job on the Company's behalf. The change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020, resulted in an increase in revenue of $15.3 million and $30.5 million during the three and six months ended June 30, 2020, respectively.
Deferred Revenue
Deferred revenue consists of payments that are received or are contractually due in advance of the Company's performance.Company’s performance obligation. The Company’s deferred revenue is reported on a contract by contractcontract-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 the Company'sits performance obligation is one year or less. TheAt December 31, 2020, the current and non-current deferred revenue balances atwere $54.7 million and $0.2 million, respectively, and during the six months ended June 30, 2021, the Company recognized $46.0 million of revenue that was included in the deferred revenue balance as of December 31, 2020. At December 31, 2019, the current and non-current deferred revenue balances were $58.2 million and $0.2 million, respectively. Duringrespectively, and during the six months ended June 30, 2020, the Company recognized $49.5 million of revenue that was included in the deferred revenue balance as of December 31, 2019. During the six months ended June 30, 2019, the Company recognized $50.5 million of revenue that was included in the deferred revenue balance as of December 31, 2018.

The current and non-current deferred revenue balances at June 30, 20202021 are $58.1$60.1 million and $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
As permitted under the practical expedient available under Accounting Standards Update ("ASU")ASU No. 2014-09 Revenue from Contracts with Customers, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a
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ANGI INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which the Company has the right to invoice for services performed.

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

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

Assets Recognized from the Costs to Obtain a Contract with a Customer
The amountCompany 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, sales commissions where the initial customer relationship periodresultant asset is greater than one year is $47.4amortized on a systematic basis consistent with the pattern of the transfer of the services to which the asset relates. The current contract assets are $44.9 million and $39.1$49.2 million at June 30, 20202021 and December 31, 2019,2020, respectively. The non-current assets are $1.3 million and $0.4 million at June 30, 2021 and December 31, 2020, respectively. The current and non-current capitalized sales commissions balancescosts to obtain a contract with a customer are included in "Other current assets" and "Other non-current assets" in the accompanying consolidated balance sheet and are $44.3 million and $3.1 million, and $35.1 million and $4.0 million, at June 30, 2020 and December 31, 2019, respectively.sheet.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



Allowance for Credit Losses and Revenue Reserve
The following table presents the changes in the allowance for credit losses for the six months ended June 30, 2020:
 June 30, 2020
 (In thousands)
Balance at January 1$19,066
Current period provision for credit losses39,338
Write-offs charged against the allowance(33,700)
Recoveries collected1,283
Balance at June 30$25,987

The revenue reserve was $2.0 million and $1.2 million at June 30, 2020 and December 31, 2019, respectively. The total allowance for credit losses and revenue reserve was $28.0 million and $20.3 million as of June 30, 2020 and December 31, 2019, respectively.
Adoption of NewRecent Accounting Pronouncements
Adoption of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
The CompanyThere are no recently issued accounting pronouncements that have not yet been adopted ASU No. 2016-13effective January 1, 2020. ASU No. 2016-13 replaces the “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based onthat are expected rather than incurred losses. The Company adopted ASU No. 2016-13 using the modified retrospective approach and there was 0 cumulative effect arising from the adoption. The adoption of ASU No. 2016-13 did notto have a material impacteffect on the Company's consolidatedresults of operations, financial statements.
Adoption of ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
The Company adopted ASU No. 2019-12 effective January 1, 2020, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes,and clarifies certain aspectscondition or cash flows of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted ASU No. 2019-12 on January 1, 2020 using the modified retrospective basis for those amendments that are not applied on a prospective basis. The adoption of ASU No. 2019-12 did not have a material impact on the Company’s consolidated financial statements.Company.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



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

At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realizabilityrealization 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'sCompany’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 June 30, 2021 is a benefit of $2.3 million due to a higher estimated annual effective tax rate from that applied to the first quarter’s ordinary loss from continuing operations. The higher estimated annual effective tax rate was primarily due to the increased impact of forecasted nondeductible items had on the increase in forecasted ordinary pre-tax losses.

For the three and six months ended June 30, 2021, the Company recorded an income tax benefit of $9.1 million and $18.4 million, which represents an effective income tax rate of 23% and 40%, respectively.For the three months ended June 30, 2021, the effective income tax rate is higher than the statutory rate of 21% due primarily to benefits related to a change in the annual expected effective income tax rate, partially offset by nondeductible share based compensation expense.For the six months ended June 30, 2021, the effective income tax rate is higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting for stock-based awards. For the three months ended June 30, 2020, the Company recorded an income tax provision of $3.0 million, which represents an effective income tax rate of 19%. The effective income tax rate is lower than the statutory rate of 21% due primarily to the impact of benefiting (previously unbenefited)previously unbenefited foreign net operating loss carryforwards. For the six months ended June 30, 2020, the Company recorded an income tax benefit of $5.9 million due primarily to a $5.7 million reduction to deferred taxes due to the true-up of the state tax rate for an indefinite-lived intangible asset and the impact of benefiting previously unbenefited foreign net operating loss carryforwards. For the three months ended June 30, 2019, the Company recorded an income tax provision of $2.3 million, which represents an effective income tax rate of 24% and is higher than the statutory rate of 21% due primarily to unbenefited foreign losses and state taxes, partially offset by excess tax benefits generated by the exercise and vesting of stock-based awards. For the six months ended June 30, 2019, the Company recorded an income tax benefit of $12.0 million due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



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, 20102013 through 2016,2017, which includes the operations of the HomeAdvisor businesses. The IRS began its audit of the year ended December 31, 2017 in the second quarter of 2020.Company. The statutes of limitations for the years 2010 through 2012 and for the years 2013 through 20162017 have been extended to May 31, 2021 and March 31, 2021, respectively.June 30, 2022. Returns filed in various other jurisdictions are open to examination for various tax years beginning with 2009. Income taxes payable include unrecognized tax benefits considered sufficient to pay assessments that may result from examination of prior year tax returns. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

At June 30, 20202021 and December 31, 2019,2020, the Company has unrecognized tax benefits including interest of $3.9$5.5 million and $4.1$5.3 million, respectively, were included in unrecognized tax positionsrespectively; all of which are for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at June 30, 20202021 are subsequently recognized, the income tax provision would be reduced by $3.7$5.2 million. The comparable amount as of December 31, 20192020 is $4.0$5.1 million. The Company believes it is reasonably possible that its unrecognized tax benefits could decrease by $0.5 million by June 30, 2021 due to settlements, all of which would reduce the income tax provision.

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. As of June 30, 2020, the Company has a U.S. federal and state gross deferred tax asset of $178.2 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, $65.0 million will be utilized upon the future reversal of deferred tax liabilities and the remainingThe Company’s most significant net deferred tax asset of $113.2 million will be utilized based on forecasts ofrelates to U.S. federal net operating loss ("NOL") carryforwards. The Company expects to generate sufficient future taxable income.income to fully realize this deferred tax asset prior to the expiration of these NOLs, the majority of which expire between 2030 and 2037, and a portion of which never expire.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 3—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Marketable Debt Securities
The Company did 0t hold any available-for-sale marketable debt securities at June 30, 2021.

At December 31, 2020, current available-for-sale marketable debt securities were as follows:
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(In thousands)
Treasury discount notes$49,995 $0 $0 $49,995 
Total available-for-sale marketable debt securities$49,995 $0 $0 $49,995 
The contractual maturities of debt securities classified as current available-for-sale at December 31, 2020 were within one year.

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

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

•Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company'sCompany’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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:
June 30, 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$449,028 $0 $0 $449,028 
Time deposits0 407 0 407 
Total$449,028 $407 $0 $449,435 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
 June 30, 2020
 Quoted Market Prices in Active Markets for Identical Assets (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$156,063
 $—
 $—
 $156,063
Treasury discount notes—
 174,987
 —
 174,987
Time deposits—
 2,936
 —
 2,936
Total$156,063
 $177,923
 $—
 $333,986
 December 31, 2019
 Quoted Market Prices in Active Markets for Identical Assets (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$291,810
 $—
 $—
 $291,810
Time deposits—
 23,040
 —
 23,040
Total$291,810
 $23,040
 $—
 $314,850

December 31, 2020
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$374,014 $0 $0 $374,014 
Treasury discount notes0 324,995 0 324,995 
Time deposits0 2,721 0 2,721 
Marketable debt securities:
Treasury discount notes0 49,995 0 49,995 
Total$374,014 $377,711 $0 $751,725 
Assets measured at fair value on a nonrecurring basis
The Company’s non-financial assets, such as goodwill, intangible assets, ROU assets, capitalized software, leasehold improvements and equipment are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

During the three months ended June 30, 2021, the Company recorded $9.6 million in impairment charges on ROU assets, leasehold improvements, and furniture and equipment as a result of the Company reducing its real estate footprint. Impairment expense was determined by comparing the carrying value of each asset group related to each office space vacated to the estimated fair market value of cash inflows directly associated with each office space. Based on this analysis, if the carrying amount of the asset group is greater than the estimated future undiscounted cash flows, an impairment charge is recognized, measured as the amount by which the carrying amount exceeds the fair value of the asset.

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, 2021December 31, 2020
Carrying ValueFair ValueCarrying ValueFair Value
(In thousands)
Long-term debt, net (a)
$(494,195)$(495,600)$(712,277)$(725,700)
 June 30, 2020 December 31, 2019
 Carrying value Fair value Carrying value Fair value
 (In thousands)
Current portion of long-term debt$(13,750) $(13,750) $(13,750) $(13,681)
Long-term debt, net (a)
$(225,336) $(226,875) $(231,946) $(232,581)
________________________
_________________
(a)
At June 30, 2020 and December 31, 2019, the carrying value of long-term debt, net includes unamortized debt issuance costs of $1.5 million and $1.8 million, respectively(a)    .
At June 30, 20202021 and December 31, 2019,2020, the carrying value of long-term debt, net includes unamortized debt issuance costs of $5.8 million and $7.7 million, respectively.

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





15
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



NOTE 4—LONG-TERM DEBT
Long-term debt consists of:
 June 30, 2021December 31, 2020
 (In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”); interest payable each February 15 and August 15, commencing February 15, 2021$500,000 $500,000 
ANGI Group Term Loan due November 5, 2023 (“ANGI Group Term Loan”)0 220,000 
Total long-term debt500,000 720,000 
Less: unamortized debt issuance costs5,805 7,723 
Total long-term debt, net$494,195 $712,277 
 June 30, 2020 December 31, 2019
 (In thousands)
Term Loan due November 5, 2023$240,625
 $247,500
Less: current portion of Term Loan13,750
 13,750
Less: unamortized debt issuance costs1,539
 1,804
Total long-term debt, net$225,336
 $231,946

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

The outstanding balance ofindenture governing the term loan ("Term Loan") was $240.6 million and $247.5 million at June 30, 2020 and December 31, 2019, respectively. There are quarterly principal payments of $3.4 million through December 31, 2021, $6.9 million for the one-year period ending December 31, 2022 and $10.3 million through maturity of the loan when the final amount of $161.6 million is due. Additionally, interest payments are due at least quarterly through the term of the loan. At both June 30, 2020 and December 31, 2019, the Term Loan bore interest at LIBOR plus 1.50%, or 1.70% and 3.25%, respectively. The spread over LIBOR is subject to change in future periods based on the Company's consolidated net leverage ratio.
The terms of the Term Loan require the Company to maintainANGI Group Senior Notes contains a consolidated net leverage ratio of not more than 4.5 to 1.0 and a minimum interest coverage ratio of not less than 2.0 to 1.0 (in each case as defined in the credit agreement). The Term Loan also contains covenantscovenant that would limit the Company'sANGI Group’s ability to pay dividends, make distributions or repurchase its stockincur liens for borrowed money in the event a default has occurred or its consolidated netANGI Group’s secured leverage ratio (as defined in the indenture) exceeds 4.253.75 to 1.0. At June 30, 2020,2021, there were no limitations pursuant thereto. There are additional covenants under the Term Loan that limit the ability of the Company and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions.

ANGI Group Revolving Facility
The $250$250.0 million revolving credit facility (the "Credit Facility") expiresANGI Group Revolving Facility, which otherwise would have expired on November 5, 2023. At June 30, 2020 and2023, 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
As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety. The outstanding balance of the ANGI Group Term Loan at December 31, 2019, there were 0 outstanding borrowings under the Credit Facility. The annual commitment fee on undrawn funds is based on the consolidated net leverage ratio most recently reported2020 was $220.0 million and was 25 basis points at both June 30, 2020 and December 31, 2019. Any future borrowings under the Credit Facility would bearbore interest at the Company's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is based on the Company's consolidated net leverage ratio. The financial and other covenants are the same as those for the Term Loan.2.16%.
The Term Loan and Credit Facility are guaranteed by the Company's wholly-owned material domestic subsidiaries and are secured by substantially all assets of the Company and the guarantors, subject to certain exceptions.
NOTE 5—ACCUMULATED OTHER COMPREHENSIVE LOSSINCOME (LOSS)
The following tables present the components of accumulated other comprehensive loss:income (loss):
Three Months Ended June 30,
20212020
Foreign
Currency
Translation
Adjustment		Accumulated Other Comprehensive IncomeForeign
Currency
Translation
Adjustment		Accumulated Other Comprehensive Loss
(In thousands)
Balance at April 1$4,623 $4,623 $(7,993)$(7,993)
Other comprehensive income1,350 1,350 5,253 5,253 
Balance at June 30$5,973 $5,973 $(2,740)$(2,740)

15
 Three Months Ended June 30, 2020
 Foreign
Currency
Translation
Adjustment		 Accumulated
Other
Comprehensive Loss
 (In thousands)
Balance at April 1$(7,993) $(7,993)
Other comprehensive income5,253
 5,253
Balance at June 30$(2,740) $(2,740)


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



 Three Months Ended June 30, 2019
 Foreign
Currency
Translation
Adjustment		 Accumulated
Other
Comprehensive
Loss
 (In thousands)
Balance at April 1$(191) $(191)
Other comprehensive loss(1,291) (1,291)
Balance at June 30$(1,482) $(1,482)

 Six Months Ended June 30, 2020
 Foreign
Currency
Translation
Adjustment		 Accumulated
Other
Comprehensive Loss
 (In thousands)
Balance at January 1$(1,379) $(1,379)
Other comprehensive loss(1,361) (1,361)
Balance at June 30$(2,740) $(2,740)

 Six Months Ended June 30, 2019
 Foreign
Currency
Translation
Adjustment		 Unrealized Gains (Losses) On Available-For-Sale Debt Securities Accumulated
Other
Comprehensive
Loss
 (In thousands)
Balance at January 1$(1,864) $3
 $(1,861)
Other comprehensive income (loss)382
 (3) 379
Balance at June 30$(1,482) $—
 $(1,482)

Six Months Ended June 30,
20212020
Foreign
Currency
Translation
Adjustment		Accumulated Other Comprehensive IncomeForeign
Currency
Translation
Adjustment		Accumulated Other Comprehensive Loss
(In thousands)
Balance at January 1$4,637 $4,637 $(1,379)$(1,379)
Other comprehensive income (loss)1,336 1,336 (1,361)(1,361)
Balance at June 30$5,973 $5,973 $(2,740)$(2,740)
At both June 30, 20202021 and 2019,2020, there was 0 tax benefit or provision on the accumulated other comprehensive loss.income (loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



NOTE 6—(LOSS) EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted (loss) earnings per share attributable to ANGI HomeservicesAngi Inc. Class A and Class B Common Stock shareholders:
 Three Months Ended June 30,
 2020 2019
 Basic Diluted Basic Diluted
 (In thousands, except per share data)
Numerator:       
Net earnings$13,211
 $13,211
 $7,234
 $7,234
Net earnings attributable to noncontrolling interests(544) (544) (266) (266)
Net earnings attributable to ANGI Homeservices Inc. shareholders$12,667
 $12,667
 $6,968
 $6,968
        
Denominator:       
Weighted average basic shares outstanding495,769
 495,769
 506,725
 506,725
Dilutive securities (a) (b)
—
 14,765
 —
 13,904
Denominator for earnings per share—weighted average shares495,769
 510,534
 506,725
 520,629
        
Earnings per share attributable to ANGI Homeservices Inc. shareholders:    
Earnings per share$0.03
 $0.02
 $0.01
 $0.01
 Three Months Ended June 30,
 20212020
 BasicDilutedBasicDiluted
 (In thousands, except per share data)
Numerator:
Net (loss) earnings$(30,052)$(30,052)$13,211 $13,211 
Net earnings attributable to noncontrolling interests(241)(241)(544)(544)
Net (loss) earnings attributable to Angi Inc. Class A and Class B Common Stock shareholders$(30,293)$(30,293)$12,667 $12,667 
Denominator:
Weighted average basic Class A and Class B common stock shares outstanding504,469 504,469 495,769 495,769 
Dilutive securities (a) (b) (c)
— 0 — 14,765 
Denominator for (loss) earnings per share—weighted average shares504,469 504,469 495,769 510,534 
(Loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
(Loss) earnings per share$(0.06)$(0.06)$0.03 $0.02 
16
 Six Months Ended June 30,
 2020 2019
 Basic Diluted Basic Diluted
 (In thousands, except per share data)
Numerator:       
Net earnings$4,027
 $4,027
 $17,085
 $17,085
Net earnings attributable to noncontrolling interests(318) (318) (148) (148)
Net earnings attributable to ANGI Homeservices Inc. shareholders$3,709
 $3,709
 $16,937
 $16,937
        
Denominator:       
Weighted average basic shares outstanding497,611
 497,611
 505,548
 505,548
Dilutive securities (a) (b)
—
 11,136
 —
 16,313
Denominator for earnings per share—weighted average shares497,611
 508,747
 505,548
 521,861
        
Earnings per share attributable to ANGI Homeservices Inc. shareholders:    
Earnings per share$0.01
 $0.01
 $0.03
 $0.03
________________________

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ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


 Six Months Ended June 30,
 20212020
 BasicDilutedBasicDiluted
 (In thousands, except per share data)
Numerator:
Net (loss) earnings$(28,038)$(28,038)$4,027 $4,027 
Net earnings attributable to noncontrolling interests(324)(324)(318)(318)
Net (loss) earnings attributable to Angi Inc. Class A and Class B Common Stock shareholders$(28,362)$(28,362)$3,709 $3,709 
Denominator:
Weighted average basic Class A and Class B common stock shares outstanding502,577 502,577 497,611 497,611 
Dilutive securities (a) (b) (c)
— 0 — 11,136 
Denominator for (loss) earnings per share—weighted average shares502,577 502,577 497,611 508,747 
(Loss) earnings per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
(Loss) Earnings per share$(0.06)$(0.06)$0.01 $0.01 

________________________
(a)    For the three and six months ended June 30, 2021, the Company had a loss from operations and as a result, approximately 14.5 million potentially dilutive securities were excluded from computing dilutive earnings per share because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute all earnings per share amounts.
(b)    If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity and vesting of restricted stock units (“RSUs”). For the three and six months ended June 30, 2020, 4.9 million and 5.4 million, respectively, of potentially dilutive securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
(c) Market-based awards and performance-based stock units (“PSUs”) are considered contingently issuable shares. Shares issuable upon exercise or vesting of market-based awards and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based awards and PSUs is dilutive for the respective reporting periods. For both the three and six months ended June 30, 2020, 3.4 million shares underlying market-based awards and PSUs were excluded from the calculation of diluted earnings per share because the market or performance condition(s) had not been met.
(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, subsidiary denominated equity, and vesting of restricted stock units ("RSUs"). For the three and six months ended June 30, 2020, 4.9 million and 5.4 million potentially dilutive securities, respectively, are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For both the three and six months ended June 30, 2019, 4.2 million potentially dilutive securities are excluded from the calculation of diluted securities per share because their inclusion would have been anti-dilutive.
(b)
Market-based awards and performance-based stock units ("PSUs") are considered contingently issuable shares. Shares issuable upon exercise or vesting of market-based awards and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based awards and PSUs is dilutive for the respective reporting periods. For both the three and six months ended June 30, 2020, 3.4 million shares underlying market-based awards and PSUs were excluded from the calculation of diluted earnings per share because the market or performance condition(s) had not been met. For both the three and six months ended June 30, 2019, 2.8 million shares underlying market-based awards and PSUs 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 overall concept that the Company employs in determining its operating segments is to present the financial information in a manner consistent with:with how the chief operating decision maker views the businesses;businesses. In addition, we consider how the businesses are organized as to segment management;management and the focus of the businesses with regards to the types of services or products offered or the target market.

The following table presents revenue by reportable segment:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
Revenue:
North America$399,945 $357,417 $760,986 $681,549 
Europe21,043 17,644 47,031 37,162 
Total$420,988 $375,061 $808,017 $718,711 
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
Revenue:       
North America$357,417
 $324,400
 $681,549
 $606,394
Europe17,644
 19,496
 37,162
 40,945
Total$375,061
 $343,896
 $718,711
 $647,339
The following table presents the revenue of the Company's segments disaggregated by type of service:
17
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
North America       
Marketplace:       
Consumer connection revenue(a)
$272,649
 $241,236
 $512,479
 $442,818
Service professional membership subscription revenue13,017
 16,302
 26,794
 32,702
Other revenue7,507
 3,753
 12,676
 6,271
Total Marketplace revenue293,173
 261,291
 551,949
 481,791
Advertising and other revenue(b)
64,244
 63,109
 129,600
 124,603
Total North America revenue357,417
 324,400
 681,549
 606,394
Europe       
Consumer connection revenue(c)
13,945
 15,232
 29,634
 32,355
Service professional membership subscription revenue3,215
 3,613
 6,514
 7,355
Advertising and other revenue484
 651
 1,014
 1,235
Total Europe revenue17,644
 19,496
 37,162
 40,945
Total revenue$375,061
 $343,896
 $718,711
 $647,339
________________________

19
ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


The following table presents the revenue of the Company’s segments disaggregated by type of service:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
North America
Marketplace:
Consumer connection revenue(a)
$240,016 $242,015 $461,447 $450,619 
Angi Services revenue(b)
72,819 32,095 127,505 64,956 
Service professional membership subscription revenue12,390 13,017 24,342 26,794 
Other revenue2,372 6,046 5,353 9,580 
Total Marketplace revenue327,597 293,173 618,647 551,949 
Advertising and Other revenue(c)
72,348 64,244 142,339 129,600 
Total North America revenue399,945 357,417 760,986 681,549 
Europe
Consumer connection revenue(d)
17,345 13,945 39,696 29,634 
Service professional membership subscription revenue3,331 3,215 6,659 6,514 
Advertising and other revenue367 484 676 1,014 
Total Europe revenue21,043 17,644 47,031 37,162 
Total revenue$420,988 $375,061 $808,017 $718,711 
________________________
(a)Includes fees paid by service professionals for consumer matches sourced through the marketplace platforms.
(b)Includes revenue from pre-priced offerings sourced through the marketplace platforms.
(c)Includes Angi revenue from service professionals under contract for advertising and Angi membership subscription fees from consumers, as well as revenue from HomeStars.
(d)    Includes fees paid by service professionals for consumer matches.

(a)
Includes fees paid by service professionals for consumer matches and revenue from pre-priced jobs sourced through the HomeAdvisor and Handy platforms.
(b)
Includes Angie's List revenue from service professionals under contract for advertising and Angie's List membership subscription fees from consumers, as well as revenue from mHelpDesk and HomeStars.
(c)
Includes fees paid by service professionals for consumer matches.
Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below.
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
Revenue
United States$394,538 $354,000 $750,982 $673,821 
All other countries26,450 21,061 57,035 44,890 
Total$420,988 $375,061 $808,017 $718,711 
June 30, 2021December 31, 2020
Three Months Ended June 30, Six Months Ended June 30,(In thousands)
2020 2019 2020 2019
(In thousands)
Revenue:       
Long-lived assets (excluding goodwill and intangible assets):Long-lived assets (excluding goodwill and intangible assets):
United States$354,000
 $320,701
 $673,821
 $599,179
United States$101,605 $97,841 
All other countries21,061
 23,195
 44,890
 48,160
All other countries9,449 11,001 
Total$375,061
 $343,896
 $718,711
 $647,339
Total$111,054 $108,842 

 June 30, 2020 December 31, 2019
 (In thousands)
Long-lived assets (excluding goodwill, intangible assets and ROU assets):   
United States$95,173
 $95,822
All other countries9,088
 7,539
Total$104,261
 $103,361
18

The following tables present operating income (loss) and Adjusted EBITDA by reportable segment:
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
Operating income (loss):       
North America$16,190
 $12,473
 $8,082
 $13,215
Europe1,454
 (1,070) (6,734) (5,453)
Total$17,644
 $11,403
 $1,348
 $7,762
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
Adjusted EBITDA(d):
       
North America$55,041
 $51,606
 $96,432
 $91,295
Europe$2,895
 $(174) $(4,099) $(2,684)
________________________
(d)
The Company’s primary financial measure is Adjusted EBITDA, which 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. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between the Company's performance and that of its competitors. The above items are excluded from the Company's Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
The following tables reconcile operating income (loss) to Adjusted EBITDA for the Company’s reportable segments:

20
ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


The following tables present operating (loss) income and Adjusted EBITDA by reportable segment:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
Operating (loss) income:
North America$(32,127)$16,190 $(22,550)$8,082 
Europe(604)1,454 (10,072)(6,734)
Total$(32,731)$17,644 $(32,622)$1,348 
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
Adjusted EBITDA(e):
North America$(5,302)$55,041 $25,863 $96,432 
Europe$860 $2,895 $(7,119)$(4,099)
________________________
(e)    The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating (loss) 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. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between the Company’s performance and that of its competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

The following tables reconcile operating (loss) income for the Company’s reportable segments and net (loss) earnings attributable to Angi Inc. shareholders to Adjusted EBITDA:
Three Months Ended June 30, 2021
Operating LossStock-Based
Compensation Expense		DepreciationAmortization
of Intangibles		Adjusted
EBITDA
(In thousands)
North America$(32,127)$9,455 $13,682 $3,688 $(5,302)
Europe(604)$88 $1,376 $0 $860 
Operating loss(32,731)
Interest expense(5,814)
Other expense, net(636)
Loss before income taxes(39,181)
Income tax benefit9,129 
Net loss(30,052)
Net earnings attributable to noncontrolling interests(241)
Net loss attributable to Angi Inc. shareholders$(30,293)
19
 Three Months Ended June 30, 2020
 Operating
income		 Stock-based
compensation expense		 Depreciation Amortization
of intangibles		 Adjusted
EBITDA
 (In thousands)
North America$16,190
 $14,495
 $11,467
 $12,889
 $55,041
Europe1,454
 $264
 $1,088
 $89
 $2,895
Operating income17,644
        
Interest expense(1,620)        
Other income, net212
        
Earnings before income taxes16,236
        
Income tax provision(3,025)        
Net earnings13,211
        
Net earnings attributable to noncontrolling interests(544)        
Net earnings attributable to ANGI Homeservices Inc. shareholders$12,667
        
 Three Months Ended June 30, 2019
 Operating
income (loss)		 Stock-based
compensation expense		 Depreciation Amortization
of intangibles		 Adjusted
EBITDA
 (In thousands)
North America$12,473
 $17,387
 $8,227
 $13,519
 $51,606
Europe(1,070) $133
 $569
 $194
 $(174)
Operating income11,403
        
Interest expense(2,963)        
Other income, net1,047
        
Earnings before income taxes9,487
        
Income tax provision(2,253)        
Net earnings7,234
        
Net earnings attributable to noncontrolling interests(266)        
Net earnings attributable to ANGI Homeservices Inc. shareholders$6,968
        

21
ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Three Months Ended June 30, 2020
Operating IncomeStock-Based
Compensation Expense		DepreciationAmortization
of Intangibles		Adjusted
EBITDA
(In thousands)
North America$16,190 $14,495 $11,467 $12,889 $55,041 
Europe1,454 $264 $1,088 $89 $2,895 
Operating income17,644 
Interest expense(1,620)
Other income, net212 
Earnings before income taxes16,236 
Income tax provision(3,025)
Net earnings13,211 
Net earnings attributable to noncontrolling interests(544)
Net earnings attributable to Angi Inc. shareholders$12,667 

Six Months Ended June 30, 2021
Operating LossStock-Based
Compensation Expense		DepreciationAmortization
of Intangibles		Adjusted
EBITDA
(In thousands)
North America$(22,550)$11,391 $28,260 $8,762 $25,863 
Europe(10,072)$186 $2,767 $0 $(7,119)
Operating loss(32,622)
Interest expense(12,431)
Other expense, net(1,403)
Loss before income taxes(46,456)
Income tax benefit18,418 
Net loss(28,038)
Net earnings attributable to noncontrolling interests(324)
Net loss attributable to Angi Inc. shareholders$(28,362)
20
 Six Months Ended June 30, 2020
 Operating
income (loss)		 Stock-based
compensation expense		 Depreciation Amortization
of intangibles		 Adjusted
EBITDA
 (In thousands)
North America$8,082
 $39,807
 $22,764
 $25,779
 $96,432
Europe(6,734) $527
 $1,929
 $179
 $(4,099)
Operating income1,348
        
Interest expense(3,894)        
Other income, net633
        
Loss before income taxes(1,913)        
Income tax benefit5,940
        
Net earnings4,027
        
Net earnings attributable to noncontrolling interests(318)        
Net earnings attributable to ANGI Homeservices Inc. shareholders$3,709
        
 Six Months Ended June 30, 2019
 Operating
income (loss)		 Stock-based
compensation expense		 Depreciation Amortization
of intangibles		 Adjusted
EBITDA
 (In thousands)
North America$13,215
 $36,459
 $14,434
 $27,187
 $91,295
Europe(5,453) $343
 $1,361
 $1,065
 $(2,684)
Operating income7,762
        
Interest expense(5,957)        
Other income, net3,318
        
Earnings before income taxes5,123
        
Income tax benefit11,962
        
Net earnings17,085
        
Net earnings attributable to noncontrolling interests(148)        
Net earnings attributable to ANGI Homeservices Inc. shareholders$16,937
        


22
Table of Contents
ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Six Months Ended June 30, 2020
Operating Income (Loss)Stock-Based
Compensation Expense		DepreciationAmortization
of Intangibles		Adjusted
EBITDA
(In thousands)
North America$8,082 $39,807 $22,764 $25,779 $96,432 
Europe(6,734)$527 $1,929 $179 $(4,099)
Operating income1,348 
Interest expense(3,894)
Other income, net633 
Loss before income taxes(1,913)
Income tax benefit5,940 
Net earnings4,027 
Net earnings attributable to noncontrolling interests(318)
Net earnings attributable to Angi Inc. shareholders$3,709 

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 consolidatedaccompanying balance sheet to the total amounts shown in the consolidatedaccompanying statement of cash flows:
 June 30, 2020 December 31, 2019 June 30, 2019 December 31, 2018
 (In thousands)
Cash and cash equivalents$420,985
 $390,565
 $380,563
 $336,984
Restricted cash included in other current assets379
 504
 1,419
 1,417
Restricted cash included in other non-current assets412
 409
 420
 420
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows$421,776
 $391,478
 $382,402
 $338,821

June 30, 2021December 31, 2020June 30, 2020December 31, 2019
(In thousands)
Cash and cash equivalents$584,260 $812,705 $420,985 $390,565 
Restricted cash included in other current assets236 407 379 504 
Restricted cash included in other non-current assets730 449 412 409 
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows$585,226 $813,561 $421,776 $391,478 
Restricted cash included in other current assets at June 30, 2021 and December 31, 2020 consisted of cash received from customers through the marketplace platforms, representing funds collected for payments to service providers which were not settled as of the period end, and cash reserved to fund insurance claims.
Restricted cash included in other current assets at June 30, 2020 primarily consisted of a deposit related to corporate credit cards and cash reserved to fund insurance claims at Angi Inc.
Restricted cash included in other current assets at December 31, 2019 primarily consistsconsisted of a deposit related to corporate credit cards.
Restricted cash included in other non-current assets for all periods presented above consisted of deposits related to leases.
21
ANGI INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Credit Losses and Revenue Reserve
The following table presents the changes in the credit loss reserve for the six months ended June 30, 2021 and 2020:
20212020
(In thousands)
Balance at January 1$26,046 $19,066 
Current period provision for credit losses42,731 39,338 
Write-offs charged against the credit loss reserve(37,051)(33,700)
Recoveries collected1,351 1,283 
Balance at June 30$33,077 $25,987 
The revenue reserve was $2.8 million and $2.0 million at June 30, 20192021 and December 31, 2018 primarily consists2020, respectively. The total allowance for credit losses and revenue reserve was $35.9 million and $28.0 million as of a cash collateralized letter of creditJune 30, 2021 and a deposit related to corporate credit cards.2020, respectively.
Accumulated Amortization and Depreciation
The following table provides the accumulated amortization and depreciation within the consolidated balance sheet:
Asset CategoryJune 30, 2020 December 31, 2019
 (In thousands)
Right-of-use assets (included in "other non-current assets")$30,216
 $19,416
Capitalized software, leasehold improvements and equipment$83,970
 $68,227
Intangible assets$166,838
 $141,208

Asset CategoryJune 30, 2021December 31, 2020
 (In thousands)
Right-of-use assets (included in “other non-current assets”)$50,345 $40,800 
Capitalized software, leasehold improvements, and equipment$87,347 $95,438 
Intangible assets$152,134 $162,627 
Other (expense) income, net
Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
 (In thousands)
Interest income$50 $161 $147 $1,432 
Foreign exchange gains (losses)407 78 (453)(345)
Loss on extinguishment of debt(a)
(1,110)0 (1,110)0 
Gain (loss) from acquisition/sale of a business(b)
17 (27)13 (454)
Other (expense) income, net$(636)$212 $(1,403)$633 
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
 (In thousands)
Other income, net$212
 $1,047
 $633 $3,318
________________________

(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.
For(b)Loss from acquisition/sale of a business for the threesix months ended June 30, 2020 compared to the three months ended June 30, 2019
Other income, net in 2020 principally includes interest income ofa $0.2 million.
Other income, net in 2019 principally includes interest income of $2.2 million, partially offset by a $1.1 million mark-to-market charge for an indemnification claimcharge related to the Handy acquisition that was settled in ANGIAngi Inc. shares during the first quarter of 2020.
For the six months ended June 30, 2020 compared to the six months ended June 30, 2019
Other income, net in 2020 principally includes interest income of $1.4 million, partially offset by net foreign currency exchange losses ofand a $0.3 million and a $0.2 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in ANGI shares during the first quarter of 2020.

23
Table of Contents
ANGI HOMESERVICES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



Other income, net in 2019 principally includes interest income of $4.3 million and net foreign currency exchange gains of $0.3 million, partially offset by a $1.1 million mark-to-market charge for an indemnification claimfinal earn-out settlement related to the Handy acquisition that was settled in ANGI shares during the first quartersale of 2020.Felix
NOTE 9—CONTINGENCIES
In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has alsonot identified certain other legal matters where the Company believeswe believe an unfavorable outcome is not probable and estimable; therefore, 0 reserve 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
22
ANGI INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of 1one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See "“Note 2—Income Taxes"” for additional information related to income tax contingencies.
NOTE 10—RELATED PARTY TRANSACTIONS WITH IAC
The CompanyAngi Inc. and IAC have entered into certain agreements to govern our relationship with IAC following the combination of IAC's HomeAdvisor business and Angie's List, Inc. on September 29, 2017 (the "Combination").their relationship. These agreements include: a contribution agreement; an investor rights agreement; a services agreement; a tax sharing agreement; and an employee matters agreement.

For the three and six months ended June 30, 20202021 and 2019,2020, the Company was charged $1.2 million and $2.4 million; and $1.3$2.3 million, and $2.7$1.2 million and $2.4 million, respectively, by IAC for services rendered pursuant to the services agreement. There were 0 outstanding receivables or payables pursuant to the services agreement as ofat June 30, 20202021 or December 31, 2019.2020.
Separately,
Additionally, the Company subleases office space to IAC and charged IAC $0.4 million and $0.8 million, and $0.4 million and $0.9 million of rent for the three and six months ended June 30, 2021 and 2020, respectively, and $0.5 million of rent for both the three and six months endedrespectively. At June 30, 2019. These amounts2021, there were 0 outstanding receivables pursuant to the sublease agreements. At December 31, 2020 there was an outstanding receivable of less than $0.1 million due from IAC pursuant to the sublease agreements, which was subsequently paid in full by IAC at June 30, 2020 and 2019, respectively.in the first quarter of 2021.
At June 30, 20202021 and December 31, 2019,2020, the Company had outstanding payables of $0.7$1.5 million and $0.2$0.9 million, respectively, due to IAC pursuant to the tax sharing agreement, which are included in "Accrued“Accrued expenses and other current liabilities"liabilities,” in the accompanying consolidated balance sheet. There were 0 payments to or refunds from IAC pursuant to this agreement during the three and six months ended June 30, 2021. There were $3.1 million of refunds received from IAC pursuant to this agreement during the three and six months ended June 30, 2020. During the first quarter of 2019, $11.4 million was paid to IAC pursuant to this agreement.

For the three and six months ended June 30, 2020, 0.22021, less than 0.1 million and 0.1 million shares, respectively, of ANGI HomeservicesAngi 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 HomeservicesAngi Inc. employees. For the six months ended June 30, 2020, 0.2 million shares of Angi Inc. Class B common stock were issued to IAC pursuant to the employee matters agreement. There were 0 shares issued to IAC pursuant to the employee matters agreement for the three months ended June 30, 2020. For the three and six months ended June 30, 2019,2021, less than 0.1 million and 0.32.6 million shares, respectively, of ANGI HomeservicesAngi Inc. Class BA common stock were issued to IAC pursuant to the employee matters agreement.agreement as reimbursement for IAC common stock issued in connection with the exercise and settlement of certain Angi Inc. stock appreciation rights. There were 0 shares of Angi Inc. Class A common stock issued to IAC during the three and six months ended June 30, 2020.

NOTE 11—SUBSEQUENT EVENTS
On July 1, 2021, Angi Inc. acquired certain assets and assumed certain liabilities of Total Home Roofing, Inc., a leading residential roofing company, to accelerate the Angi Services roofing category.

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


23
Item 2.    Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations
GENERAL
Management Overview
Angi Inc., formerly ANGI Homeservices, Inc. ("ANGI Homeservices,", (“Angi Inc.,” the "Company," "ANGI," "we," "our,"“Company,” “we,” “our,” or "us"“us”) connects quality home service professionals with consumers across 500 different categories, from repairing and remodeling homes to cleaning and landscaping, with consumers.landscaping. Over 230,000260,000 domestic service professionals actively seeksought consumer matches, completecompleted jobs, or advertiseadvertised work through ANGI Homeservices'Angi Inc. platforms andduring the three months ended June 30, 2021. Additionally, consumers turnturned to at least one of our brands to find a professional for more than 25approximately 34 million projects each year. We’ve established category-transforming products with brands such as HomeAdvisor, Angie’s List, Handy and Fixd Repair.during the twelve months ended June 30, 2021.

The Company has two operating segments:segments (i) North America (United States and Canada), which includes Angi (formerly Angie’s List), HomeAdvisor Angie's List, Handy, mHelpDesk, HomeStarsPowered by Angi, and Fixd RepairHandy; and (ii) Europe, which includes Travaux, MyHammer, MyBuilder, Werkspot, and Instapro.

For a more detailed description of the Company'sCompany’s operating businesses, see the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2019.2020.

Defined Terms and Operating Metrics:

Unless otherwise indicated or as the context otherwise requires certain terms, used in this quarterly report, which include the principal operating metrics we use in managing our business, used in this quarterly report are defined below:
•
•Marketplace Revenue primarily reflects domestic marketplace revenues, including consumer connection revenue for consumer matches, revenue from Angi Services offerings sourced through marketplace platforms, and membership subscription revenue from service professionals.

•Advertising and OtherRevenue primarily includes revenue from service professionals under contract for advertising and membership subscription fees from consumers.
•Angi Services are the Company’s pre-priced offerings by which the consumer purchases services directly from the Company and the Company engages a service professional to perform the service. This will include the Total Home Roofing acquisition, which closed on July 1, 2021.

•Marketplace Service Requests are fully completed and submitted domestic customer service requests and includes Angi Services requests sourced through the marketplace platforms in the period.
•Marketplace Monetized Transactions are fully completed and submitted domestic customer service requests that were matched to and paid for by a service professional and includes completed and in-process Angi Services jobs sourced through the marketplace platforms in the period.
•Marketplace Transacting Service Professionals (“Marketplace Transacting SPs”) are the number of marketplace service professionals that paid for consumer matches or performed an Angi Services job sourced through the marketplace platforms in the quarter.
•Advertising Service Professionals (“Advertising SPs”) are the number of service professionals under contract for advertising at the end of the period.
•Senior Notes - On August 20, 2020, ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of the Company, issued $500.0 million of its 3.875% Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year, commencing February 15, 2021.
•ANGI Group Revolving Facility - the $250.0 million ANGI Group revolving credit facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021.No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination.
24

 includes revenue from the HomeAdvisor, Handy and Fixd Repair domestic marketplaces, including consumer connection revenue for consumer matches, revenue from jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms and service professional membership subscription revenue. It excludes revenue from Angie's List, mHelpDesk and HomeStars. Effective January 1, 2020, Fixd Repair has been moved to Marketplace from Advertising & Other and prior year amounts have been reclassified to conform to the current year presentation.
•
Advertising & OtherRevenue includes Angie’s List revenue (revenue from service professionals under contract for advertising and membership subscription fees from consumers) as well as revenue from mHelpDesk and HomeStars.
•
Marketplace Service Requests are fully completed and submitted domestic customer service requests to HomeAdvisor and jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms.
•
Marketplace Monetized Transactions - are fully completed and submitted domestic customer service requests to HomeAdvisor that were matched to and paid for by a service professional and jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms during the period.
•
Marketplace Transacting Service Professionals ("Marketplace Transacting SPs") are the number of HomeAdvisor, Handy and Fixd Repair domestic service professionals that paid for consumer matches or performed a job sourced through the HomeAdvisor, Handy and Fixd Repair platforms during the quarter.
•
Advertising Service Professionals ("Advertising SPs") are the total number of Angie’s List service professionals under contract for advertising at the end of the period.
•
Term Loan - due November 5, 2023. The outstanding balance of the Term Loan as of June 30, 2020 is $240.6 million and quarterly principal payments are required. At both June 30, 2020 and December 31, 2019, the Term Loan bears interest at LIBOR plus 1.50%. The interest rate was 1.70% and 3.25% at June 30, 2020 and December 31, 2019, respectively.
•
Credit Facility - $250 million revolving credit facility expires on November 5, 2023. At June 30, 2020 and December 31, 2019, there were no outstanding borrowings under the Credit Facility.

Components of Results of Operations
Sources of Revenue
Marketplace Revenue is primarily derived from (i) consumer connection revenue, which comprisesis comprised of fees paid by HomeAdvisor service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service) and fees, (ii) Angi Services, which is comprised of revenue from completed jobs sourced through the HomeAdvisor, Handy and Fixd Repairmarketplace platforms, and (ii) HomeAdvisor(iii) service professional membership subscription fees. Consumer connection revenue varies based upon several factors, including the service requested, product experience offered, and geographic location of service. Advertising &and Other Revenue is primarily derived from (i) sales of time-based website, mobile, and call center advertising to service professionals, and (ii) membership subscription fees from consumers and (iii) service warranty subscription and other services.
Prior to January 1, 2020, Handy recorded revenue on a net basis. Effective January 1, 2020, we modified the Handy terms and conditions so that Handy, rather than the service professional, has the contractual relationship with the consumer to deliver the service and Handy, rather than the consumer, has the contractual relationship with the service professional. Consumers request services and pay for such services directly through the Handy platform and then Handy fulfills the request with independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. This change in contractual terms requires gross revenue accounting treatment effective January 1, 2020. Also, in the case of certain tasks, HomeAdvisor provides a pre-priced product offering, pursuant to which consumers can request services through a HomeAdvisor platform and pay HomeAdvisor for the services directly. HomeAdvisor then fulfills the request with independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. Revenue from HomeAdvisor’s pre-priced product offering is also recorded on a gross basis effective January 1, 2020. In addition to changing the presentation of revenue to gross from net, the timing of revenue recognition changed for HomeAdvisor pre-priced jobs and will be later than consumer connection revenue because we will not be able to record revenue, generally, until the service professional completes the job on our behalf. The change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020, resulted in an increase in revenue of $15.3 million and $30.5 million during the three and six months ended June 30, 2020, respectively.consumers.
Operating Costs and Expenses:
•
•Cost of revenue-consists primarily of payments made to independent service professionals who perform work contracted under Angi Services arrangements through the marketplace platforms, credit card processing fees, and hosting fees.
•Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing, including fees paid to search engines, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to our brands, compensation expense (including stock-based compensation expense) and other employee-related costs for our sales force and marketing personnel, and facilities costs.
•General and administrative expense - consists primarily of 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, fees for professional services (including transaction-related costs related to acquisitions), provision for credit losses, software license and maintenance costs, and facilities costs. Our customer service function includes personnel who provide support to our service professionals and consumers.
• - consists primarily of payments made to independent service professionals who perform work contracted under pre-priced arrangements through the HomeAdvisor and Handy platforms, credit card processing fees, compensation expense and other employee-related costs at Fixd Repair for service work performed, and hosting fees.
•
Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing, including fees paid to search engines, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to our brands, compensation expense (including stock-based compensation expense) and other employee-related costs for our sales force and marketing personnel, and facilities costs.
•
General and administrative expense - consists primarily of 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, fees for professional services (including transaction-related costs related to acquisitions), bad debt expense, software license and maintenance costs and facilities costs. Our customer service function includes personnel who provide support to our service professionals and consumers.
•
Product development expense - consists primarily of 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, software license and maintenance costs, and facilities costs.
Non-GAAP financial measure
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is a non-GAAP financial measure. See “Principles of Financial Reporting” for the definition of Adjusted EBITDA and a reconciliation of net (loss) earnings attributable to ANGI HomeservicesAngi Inc. shareholders to operating (loss) income to consolidated Adjusted EBITDA for the three and six months ended June 30, 20202021 and 2019.2020.

Brand Integration Initiative
Overview—Consolidated ResultsOn March 17, 2021, the Company updated one of its leading websites and brands, Angie’s List, to Angi, and concentrated its marketing investment in the Angi brand in order to focus its marketing, sales, and branding efforts on a single brand.
We rely heavily on free, or organic, search results from search engine optimization, and paid search engine marketing to drive traffic to our platforms. Our brand initiative has adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results as Angi does not have the same domain history as Angie’s List. In addition, we shifted marketing to support Angi, away from HomeAdvisor, which has negatively affected the efficiency of our search engine marketing efforts.
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Revenue:               
North America$357,417
 $33,017
 10 % $324,400
 $681,549
 $75,155
 12 % $606,394
Europe17,644
 (1,852) (10)% 19,496
 37,162
 (3,783) (9)% 40,945
Total$375,061
 $31,165
 9 % $343,896
 $718,711
 $71,372
 11 % $647,339
                
Operating Income (Loss):      
  
      
North America$16,190
 $3,717
 30 % $12,473
 $8,082
 $(5,133) (39)% $13,215
Europe1,454
 2,524
 NM
 (1,070) (6,734) (1,281) (23)% (5,453)
Total$17,644
 $6,241
 55 % $11,403
 $1,348
 $(6,414) (83)% $7,762
                
Adjusted EBITDA:               
North America$55,041
 $3,435
 7 % $51,606
 $96,432
 $5,137
 6 % $91,295
Europe2,895
 3,069
 NM
 (174) (4,099) (1,415) (53)% (2,684)
Total$57,936
 $6,504
 13 % $51,432
 $92,333
 $3,722
 4 % $88,611
________________________
NM = Not meaningful.
ForDuring the second quarter of 2021, these efforts had a pronounced negative impact on Marketplace Service Requests from organic search results and via our mobile applications, which in turn has resulted in increased paid search engine marketing to generate Marketplace Service Requests. The combined effect of this during the three months ended June 30, 2020:
Revenue2021, has reduced revenue and increased $31.2 million, or 9%, driven by growth in North Americamarketing spend, materially more than expected at the launch of $33.0 million, or 10%, partially offset by a decline in Europe of $1.9 million, or 10%. North America revenue growth was driven by increases in Marketplace Revenue of $31.9 million, or 12%, and Advertising & Other Revenue of $1.1 million, or 2%.
Operating income increased $6.2 million, or 55%, to $17.6 million due primarily to an increase in Adjusted EBITDA of $6.5 million, described below, and decreases of $2.8 million in stock-based compensation expense and $0.7 million in amortization of intangibles, partially offset by an increase of $3.8 million in depreciation. The decrease in stock-based compensation expense was due primarily to a decrease of $4.7 millionthe brand initiative in the modification charge relatedfirst quarter of 2021 and more significantly than our forecasts at the beginning of May 2021. We expect the pronounced negative impact to
25
organic search results, the Combination, partially offset byincreased paid search engine marketing costs and the issuance ofreduced monetization from our mobile applications to continue until such time as the new equity awards since 2019. The decreasebrand establishes search engine optimization ranking and consumer awareness is established.
Angi Services Investment

Angi Services was launched in amortization of intangibles was due primarily to lower expense from certain intangible assets that became fully amortized in 2019. The increase in depreciation was due primarily toAugust 2019 and for the development of capitalized software to support our productsthree and services, as well as leasehold improvements related to additional office space.
Adjusted EBITDA increased 13% to $57.9 million, due primarily to higher revenue and lower selling and marketing expense as a percentage of revenue, partially offset by an increase in cost of revenue and an increase of $3.7 million in bad debt expense due to higher Marketplace Revenue and anticipated losses from Advertising SPs.
For the six months ended June 30, 2020:
Revenue increased $71.4 million, or 11%2021 revenue grew 127% and 96%, driven by growthrespectively, versus the comparable prior year periods. We have invested significantly in North AmericaAngi Services and expect to continue to do so going forward. In the second half of $75.2 million, or 12%, partially offset by a decline in Europe of $3.8 million, or 9%. North America2021, we expect significant revenue growth was driven by increasesas we expand the business, refine the overall experience, and increase penetration in Marketplace Revenue of $70.2 million, or 15%, and Advertising & Other Revenue of $5.0 million, or 4%.

Operating income decreased $6.4 million, or 83%,certain geographies. This increased investment in Angi Services has contributed to $1.3 million, due primarily to increases of $8.9 million in depreciation and $3.5 million in stock-based compensation expense, partially offset by an increase in Adjusted EBITDA of $3.7 million, described below, and a decrease of $2.3 million in amortization of intangibles. The increase in depreciation and decrease in amortization of intangibles were due primarily due to the factors described above in the three-month discussion. The increase in stock-based compensation expense was due primarily to the issuance of new equity awards since 2019, partially offset by a decrease of $2.8 million in the modification charge related to the Combination.
In the first quarter of 2020,lower profitability for the Company recorded additional stock-based compensation expense of $5.9 million related to the previously issued HomeAdvisor unvested awards that were modified in connection with the Combination. The initial modification charge related to these awards was $139.9 million. The cumulative $5.9 million adjustment includes an increase of $3.4 million to adjust forfeitures for the remaining unvested awardsthree and $2.5 millionsix months ended June 30, 2021 and is expected to correctcontinue to negatively impact profits through the attributionremainder of expense by period. The adjustment primarily impacted general and administrative expense. The effect on prior periods is immaterial.
Adjusted EBITDA increased 4% to $92.3 million, growing slower than revenue due primarily to increased European losses, an increase in cost of revenue and an increase of $7.2 million in bad debt expense due to higher Marketplace Revenue, the impact from COVID-19 on expected credit losses and anticipated losses from Advertising SPs.2021.
COVID-19 Update

The impact on the Company from the COVID-19 outbreak, whichpandemic and the measures designed to contain its spread has been declaredvaried and volatile.
As previously disclosed, the initial impact of COVID-19 on the Company resulted in a "pandemic"decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). While we have experienced a rebound in service requests in the World Health Organization, hassecond half of 2020 and the first half of 2021, many service professionals’ businesses had been varied. adversely impacted by labor and material constraints and many service professionals had limited capacity to take on new business, which negatively impacted our ability to monetize this increased level of service requests through the first quarter of 2021. Although our ability to monetize service requests rebounded modestly in the second quarter of 2021, we are still not back to levels we experienced pre-COVID-19. No assurances can be provided that we will continue to be able to improve monetization, or that service professionals’ businesses will not be adversely impacted in the future.
The extent to which developments related to the COVID-19 outbreakpandemic 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 speedcontinuing spread of contagion,COVID-19, the developmentseverity of resurgences of COVID-19 caused by variant strains of the virus, the effectiveness of vaccines and implementation of effective preventative measuresattitudes toward receiving them, materials and possible treatments,supply chain constraints, labor shortages, the scope of governmental and other restrictions on travel, discretionary services (including those provided by certain of our service professionals) and other activity, and public reactions to these developments. For example, these developments and measures have resulted in rapid and adverse changes to the operating environment in which we do business, as well as significant uncertainty concerning the near and long term economic ramifications





26
In March 2020, the Company experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). In the second quarter of 2020, the Company experienced a rebound in service requests, exceeding pre-COVID-19 growth levels, driven by increased demand from homeowners who spent more time at home due to measures taken to reduce the spread of COVID-19. However, many service professionals' businesses have been adversely impacted by labor and material constraints, which negatively impacted the Company's ability to monetize this increased level of service requests. Also, the United States, which represents 94% of the Company's revenue for both the three and six months ended June 30, 2020, has experienced a resurgence of the COVID-19 virus beginning in June 2020. This resurgence could result in a reduction in service requests and/or a reduction in our ability to monetize service requests due to service professional constraints, one or both of which could materially and adversely affect our business, financial condition and results of operations.


Results of Operations for the three and six months ended June 30, 20202021 compared to the three and six months ended June 30, 20192020
Revenue
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
Revenue:
Marketplace:
Consumer connection revenue$240,016 $(1,999)(1)%$242,015 $461,447 $10,828 2%$450,619 
Angi Services revenue72,819 40,724 127%32,095 127,505 62,549 96%64,956 
Service professional membership subscription revenue12,390 (627)(5)%13,017 24,342 (2,452)(9)%26,794 
Other revenue2,372 (3,674)(61)%6,046 5,353 (4,227)(44)%9,580 
Total Marketplace Revenue327,597 34,424 12%293,173 618,647 66,698 12%551,949 
Advertising and Other revenue72,348 8,104 13%64,244 142,339 12,739 10%129,600 
North America399,945 42,528 12%357,417 760,986 79,437 12%681,549 
Europe21,043 3,399 19%17,644 47,031 9,869 27%37,162 
Total revenue$420,988 $45,927 12%$375,061 $808,017 $89,306 12%$718,711 
Percentage of Total Revenue:
North America95 %95 %94 %95 %
Europe5 %5 %6 %5 %
Total revenue100 %100 %100 %100 %
Three Months Ended June 30,Six Months Ended June 30,
2021Change% Change20202021Change% Change2020
(In thousands, rounding differences may occur)
Operating metrics:
Marketplace Service Requests9,419 38 —%9,381 17,128 1,779 12%15,349 
Marketplace Monetized Transactions5,006 492 11%4,514 9,199 1,095 14%8,104 
Marketplace Transacting SPs225 31 16%194 
Advertising SPs40 3 6%37 
 Three Months Ended June 30, Six Months Ended June 30,
 2020
$ Change
% Change
2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Revenue:               
Marketplace:               
Consumer connection revenue$272,649
 $31,413
 13 % $241,236
 $512,479
 $69,661
 16 % $442,818
Service professional membership subscription revenue13,017
 (3,285) (20)% 16,302
 26,794
 (5,908) (18)% 32,702
Other revenue7,507
 3,754
 100 % 3,753
 12,676
 6,405
 102 % 6,271
Total Marketplace Revenue293,173
 31,882
 12 % 261,291
 551,949
 70,158
 15 % 481,791
Advertising & Other Revenue64,244
 1,135
 2 % 63,109
 129,600
 4,997
 4 % 124,603
North America357,417
 33,017
 10 % 324,400
 681,549
 75,155
 12 % 606,394
Europe17,644
 (1,852) (10)% 19,496
 37,162
 (3,783) (9)% 40,945
Total Revenue$375,061
 $31,165
 9 % $343,896
 $718,711
 $71,372
 11 % $647,339
                
Percentage of Total Revenue:              
North America95%     94% 95%     94%
Europe5%     6% 5%     6%
Total Revenue100%     100% 100%     100%
                
 Three Months Ended June 30, Six Months Ended June 30,
 2020 Change % Change 2019 2020 Change % Change 2019
 (Amounts in thousands)
Operating metrics:              
Marketplace Service Requests9,381
 1,417
 18 % 7,964
 15,349
 1,558
 11 % 13,791
Marketplace Monetized Transactions4,514
 93
 2 % 4,421
 8,105
 109
 1 % 7,996
Marketplace Transacting SPs194
 6
 3 % 188
        
Advertising SPs37
 1
 4 % 36
        
For the three months ended June 30, 20202021 compared to the three months ended June 30, 20192020
North America revenue increased $33.0$42.5 million, or 10%12%, driven by increases in Marketplace Revenue of $31.9$34.4 million, or 12%, and Advertising &and Other Revenuerevenue of $1.1$8.1 million, or 2%13%. The increase in Marketplace Revenue is due to an increase in consumer connectionAngi Services revenue of $31.4$40.7 million, or 13%127%, which was due primarily to an 11% increase of 2% in Marketplace Monetized Transactions to 4.55.0 million, driven by an increase of 18% indespite Marketplace Service Requests to 9.4 million, and, to a lesser extent, an increase in revenue of $15.3 million due to the change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020.being flat. The increase in Advertising &and Other Revenue is due primarily to an increase in Angie's ListAngi revenue driven by a 4%6% increase in Advertising SPs.
Europe revenue decreased $1.9increased $3.4 million, or 10%19%, due primarily to the impact of COVID-19, lower monetization from transitioning the businessstrong growth in Franceits largest markets due to a common European technology platform with the businesses in the Netherlands and Italy, which began in early February 2020,increased consumer demand and the unfavorablefavorable impact of the strengtheningweakening of the U.S.U.S dollar relative to the Euro and the British Pound.

For the six months ended June 30, 20202021 compared to the six months ended June 30, 20192020
North America revenue increased $75.2$79.4 million, or 12%, driven by increases in Marketplace Revenue of $70.2$66.7 million, or 15%12%, and Advertising &and Other Revenuerevenue of $5.0$12.7 million, or 4%10%. The increase in Marketplace Revenue is due to an increase in Angi Services revenue of $62.5 million, or 96%, and an increase in consumer connection revenue of $69.7$10.8 million, or 16%2%, which was due primarily to an increase of 1%12% in Marketplace Service Requests to 17.1 million, resulting in a 14% increase in Marketplace Monetized Transactions to 8.19.2 million, driven by anslightly outpacing the increase of 11% in Marketplace Service Requests to 15.3 million, and, to a lesser extent, an increase in revenue of $30.5 million due to the change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020.Requests. The increase in Advertising &and Other Revenue is due primarily to an increasethe factors described above in Angie's List revenue.the three-month section.
27
Europe revenue decreased $3.8increased $9.9 million, or 9%27%, due primarily to the impact of COVID-19, lower monetization from transitioning the business in Francestrong growth across its markets due to a common European technology platform with the businesses in the Netherlands and Italy, which began in early February 2020,increased consumer demand and the unfavorablefavorable impact of the strengtheningweakening of the U.S.U.S dollar relative to the Euro and the British Pound.

Cost of revenue (exclusive of depreciation shown separately below)
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below)$69,704 $28,662 70%$41,042 $123,532 $49,261 66%$74,271 
As a percentage of revenue17%11%15%10%
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below)$41,042
 $30,320
 283% $10,722
 $74,271
 $53,538
 258% $20,733
As a percentage of revenue11%     3% 10%     3%
For the three months ended June 30, 20202021 compared to the three months ended June 30, 20192020
North America cost of revenue increased $30.3$28.6 million, or 294%70%, due primarily to the changegrowth of Angi Services, resulting in higher payments made to independent third-party service professionals who perform work contracted under Angi Services arrangements to complete service requests from net to gross revenue reporting for Handy and HomeAdvisor's pre-priced product offering, effective January 1, 2020.consumers.
For the six months ended June 30, 20202021 compared to the six months ended June 30, 20192020
North America cost of revenue increased $53.4$49.3 million, or 269%67%, and increased as a percentage of revenue, due primarily to factors described above in the change from net to gross revenue reporting for Handy and HomeAdvisor's pre-priced product offering, effective January 1, 2020.three-month discussion.
Selling and marketing expense
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
Selling and marketing expense$239,031 $49,047 26%$189,984 $444,871 $64,928 17%$379,943 
As a percentage of revenue57%51%55%53%
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Selling and marketing expense$189,984
 $(6,183) (3)% $196,167
 $379,943
 $8,474
 2% $371,469
As a percentage of revenue51%     57% 53%     57%
For the three months ended June 30, 20202021 compared to the three months ended June 30, 20192020
On a consolidated basis, selling and marketing expense increased to 57% of revenue from 51% of revenue due primarily to the increase in selling and marketing expense at North America.

North America selling and marketing expense decreased $2.9increased $47.7 million, or 2%26%, driven by a decrease of $6.5 millionincreases in advertising expense partially offset by an increase inof $29.0 million, compensation expense of $3.5$14.2 million, and consulting costs of $4.2 million. The decreaseincrease in advertising expense was due primarily to a decreaseincreases of $21.9 million in online marketing and $6.8 million in television spend. The increase in online marketing spend was attributable to the brand integration initiative described above under “Brand Integration Initiative”. The increase in television spend resulting fromin 2021 reflects the return to historical spending amounts as compared to the cost cutting initiatives experienced during the second quarter of 2020 due to the impact of COVID-19, partially offset by an increase in online marketing, due in part to higher online cost per paid Marketplace Service Request. Beginning mid-way through 2019, the proportion of service requests through Google free traffic declined while service requests through Google paid traffic increased. In addition, paid service requests became considerably more expensive on average than in the first half of 2019. In response to this continuing trend, we implemented new processes in the second half of 2019 and as a result we expect the year over year increase in cost per paid service request to be more modest in the back half of 2020.COVID-19. The increase in compensation expense was due primarily to growthincreased commission expense, in theaddition to an increase in sales force.force headcount. The increase in consulting costs was due primarily to various sales initiatives at Angi Services.


Europe selling and marketing expense decreased $3.3increased $1.3 million, or 35%21%, driven by decreasesan increase in advertising expense of $2.2$1.9 million, andpartially offset by a decrease in compensation expense of $0.9 million. The decrease in advertising expense is due, in part, to mitigating the negative impact of COVID-19 on revenue.$0.5 million from lower headcount.
For the six months ended June 30, 20202021 compared to the six months ended June 30, 20192020
On a consolidated basis, selling and marketing expense increased to 55% of revenue from 53% of revenue due primarily to the increase in selling and marketing expense at North America.
North America selling and marketing expense increased $10.3$64.4 million, or 3%18%, driven by increases in advertising expense of $35.0 million, compensation expense of $11.9$23.2 million, and outsourced personnel and consulting costs of $2.3 million and facility costs of $1.1 million,$7.1 million. The increase in advertising expense was due primarily to an increase in online marketing spend, partially offset by a decrease in advertising expensetelevision spend. The increase in online marketing spend was due primarily to the “Brand Integration Initiative,” described above. The decrease in television spend was due primarily to reduced spend in the first quarter of $4.3 million.2021 compared to the prior
28
year period in anticipation of the aforementioned “Brand Integration Initiative,” described above. The increase in compensation expense was due primarily to growththe factors described above in the sales force.three-month discussion. The increase in outsourced personnel and consulting costs waswere due primarily to various sales initiatives at Handy. The decrease in advertising expense was due primarily to a decrease in television spend, partially offset by an increase in online marketing. Online marketing spend was negatively impacted by traffic sourced through Google as described above in the three-month discussion.Angi Services.
Europe selling and marketing expense decreased $1.9increased $0.5 million, or 8%2%, driven by an increase in advertising expense of $1.7 million, partially offset by a decrease in compensation expense of $1.5$1.1 million primarily resulting from a reduction in sales force headcount associated with the platform migration in France.lower headcount.
General and administrative expense
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
General and administrative expense$107,486 $22,035 26%$85,451 $195,648 $15,641 9%$180,007 
As a percentage of revenue26%23%24%25%
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
General and administrative expense$85,451
 $(2,562) (3)% $88,013
 $180,007
 $7,565
 4% $172,442
As a percentage of revenue23%     26% 25%     27%
For the three months ended June 30, 20202021 compared to the three months ended June 30, 20192020
North America general and administrative expense decreased $1.1increased $20.1 million, or 1%25%, due primarily to decreases of $3.8$9.6 million in compensation expense, $1.0one-time costs as a result of the Company reducing its real estate footprint, an $8.4 million in travel related expenses resulting from the impact of COVID-19 and $0.7 million in software license and maintenance costs, partially offset by increases of $3.8 million in bad debt expense due to higher Marketplace Revenue and anticipated losses from Advertising SPs and $1.4 millionincrease in professional fees. The decrease in compensation expense is due primarily to a reduction in headcountfees, and a decrease of $1.7$1.9 million in stock-based compensation expense due primarily to a decrease of $3.5 millionincrease in the modification chargeprovision for credit losses. The real estate related tocosts are the Combination, partially offset by the issuanceresult of new equity awards since 2019.impairments of right-of-use lease assets, leasehold improvements and furniture and equipment associated with office space we are vacating. The increase in professional fees is due primarily to an increase in outsourced personnel costs, legal fees, and recruiting fees. The increase in outsourced personnel costs is due primarily to an increase in call volume related to our customer service function. The increase in the provision for credit losses is driven by higher Marketplace Revenue.

Europe general and administrative expense decreased $1.4increased $2.0 million, or 20%34%, due primarily to decreases of $0.6a $0.9 million increase in professional fees related to corporate restructuring activities and a $0.5 million increase in compensation expense and $0.2 million in travel related expenses resulting from the impact of COVID-19.expense.
For the six months ended June 30, 20202021 compared to the six months ended June 30, 20192020
North America general and administrative expense increased $8.0$6.9 million, or 5%4%, due primarily to increasesan increase of $6.8$11.4 million in bad debt expense dueprofessional fees, $9.6 million in one-time costs related to higher Marketplace Revenue, the impact from COVID-19 on expectedCompany reducing its real estate footprint described above in the three-month discussion, a $3.2 million increase in the provision for credit losses, and anticipated losses from Advertising SPsa $2.3 million increase in software license and $2.5 million in compensation expense,maintenance costs, partially offset by a decrease of $1.3$22.0 million in software license and maintenance costs.compensation expense. The increase in compensation expense is due primarily to an increase of $5.1 million in stock-based compensation expense due primarily to a cumulative adjustment recorded in the first quarter of 2020 in connection with the modification charge related to the Combination described above under "Overview".
Europe generalprofessional fees and administrative expense decreased $0.4 million, or 3%, due primarily to a decrease of $0.7 million in compensation expense, partially offset by an increase of $0.4 million in bad debt expense due, in part, from the impact of COVID-19 on expectedprovision for credit losses.

Product development expense
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Product development expense$15,407
 $325
 2% $15,082
 $32,491
 $1,605
 5% $30,886
As a percentage of revenue4%     4% 5%     5%
For the three months ended June 30, 2020 compared to the three months ended June 30, 2019
North America product development expense increased $0.4 million, or 3%, due primarily to an increase in compensation expense of $0.3 million.
For the six months ended June 30, 2020 compared to the six months ended June 30, 2019
North America product development expense increased $1.6 million, or 6%, due primarily to increases in compensation expense of $1.0 million and software license and maintenance costs of $0.7 million.
Depreciation
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Depreciation$12,555
 $3,759
 43% $8,796
 $24,693
 $8,898
 56% $15,795
As a percentage of revenue3%     3% 3%     2%
For the three months ended June 30, 2020 compared to the three months ended June 30, 2019
North America depreciation increased $3.2 million, or 39%, due primarily to the development of capitalized software to support our products and services, as well as leasehold improvements related to additional office space. Europe depreciation increased $0.5 million.
For the six months ended June 30, 2020 compared to the six months ended June 30, 2019
North America depreciation increased $8.3 million, or 58%,losses were due primarily to the factors described above in the three-month discussion.
Operating income (loss)
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
North America$16,190
 $3,717
 30% $12,473
 $8,082
 $(5,133) (39)% $13,215
Europe1,454
 2,524
 NM
 (1,070) (6,734) (1,281) (23)% (5,453)
Total$17,644
 $6,241
 55% $11,403
 $1,348
 $(6,414) (83)% $7,762
                
As a percentage of revenue5%     3% —%     1%
________________________
NM = Not meaningful

For the three months ended June 30, 2020 compared to the three months ended June 30, 2019
North America operating income increased $3.7 million, or 30%, due to an The increase in Adjusted EBITDAsoftware license and maintenance expense was due primarily to increased investment in software to support our customer service function. The decrease in compensation expense was due primarily to a decrease of $3.4 million, described below, and decreases of $2.9 million in stock-based compensation expense and $0.6of $28.2 million, in amortization of intangibles, partially offset by an increase of $3.2$5.5 million in depreciation.wage related expenses resulting primarily from annual wage increases. The decrease in stock-based compensation expense was due primarily to $17.3 million in stock appreciation rights expense recognized in the first half of 2020, which was not incurred in 2021 as the awards became fully vested in 2020, and a net decrease of $4.7$7.7 million due to the reversal of previously recognized expense related to unvested awards that were forfeited due to management departures in the modification charge related to the Combination,first quarter of 2021, partially offset by the issuance of new equity awards since 2019.2020.

Europe general and administrative expense increased $8.8 million, or 65%, due primarily to a charge of $6.0 million related to the acquisition of an additional 21% interest in our MyBuilder business at a premium to fair value, and a $1.4 million increase in professional fees related to restructuring in Germany.
Product development expense
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
Product development expense$18,752 $3,345 22%$15,407 $36,799 $4,308 13%$32,491 
As a percentage of revenue4%4%5%5%


29
For the three months ended June 30, 2021 compared to the three months ended June 30, 2020
North America product development expense increased $1.5 million, or 11%, due primarily to increases in compensation expense of $0.8 million, and software license and maintenance expense of $0.4 million. The increase in compensation expense is driven by higher salary expense, due, in part, to increased headcount, partially offset by capitalized internally developed software expenses.
Europe product and development expense increased $1.9 million, or 75%, due to an increase in compensation expense of $1.6 million as a result of fewer projects being capitalized.
For the six months ended June 30, 2021 compared to the six months ended June 30, 2020
North America product development expense increased $1.0 million, or 4%, due primarily to increases in outsourced personnel and consulting costs of $0.7 million and software license and maintenance expense of $0.4 million. The increase in outsourced personnel and consulting costs were in support of projects for the Angi brand change.
Europe product and development expense increased $3.3 million, or 63%, due to an increase in compensation expense of $3.1 million due primarily to factors described above in the three-month discussion.
Depreciation
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
Depreciation$15,058 $2,503 20%$12,555 $31,027 $6,334 26%$24,693 
As a percentage of revenue4%3%4%3%
For the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020
North America and Europe depreciation in 2021 increased from 2020 due primarily to investments in capitalized software to support our products and services.
Operating (loss) income
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)
North America$(32,127)$(48,317)NM$16,190 $(22,550)$(30,632)NM$8,082 
Europe(604)(2,058)NM1,454 (10,072)(3,338)(50)%(6,734)
Total$(32,731)$(50,375)NM$17,644 $(32,622)$(33,970)NM$1,348 
As a percentage of revenue(8)%5%(4)%—%
________________________
NM = Not meaningful
For the three months ended June 30, 2021 compared to the three months ended June 30, 2020
North America operating income decreased $48.3 million to a loss of $32.1 million due to a decrease in Adjusted EBITDA of $60.3 million, described below, and an increase of $2.2 million in depreciation, partially offset by decreases of $9.2 million in amortization of intangibles was due primarily to lower expense from certain intangible assets that became fully amortizedand $5.0 million in 2019.stock-based compensation expense. The increase in depreciation was due primarily to the development ofinvestments in capitalized software to support our products and services,services. The decrease in stock-based compensation expense was due primarily to $5.6 million for stock appreciation rights and options expense recognized in the second quarter of 2020 which were not incurred in 2021 as well as leasehold improvements relatedthe awards became fully vested. The decrease in the amortization of intangibles was due primarily to additional office space.certain intangible assets becoming fully amortized during 2020.

30
Europe operating income increaseddecreased $2.1 million to $1.5 million from a loss of $1.1$0.6 million due primarily to an increase in Adjusted EBITDA loss of $3.1$2.0 million, described below, and an increase of $0.2 million in stock-based compensation expense, partially offset by a decrease of $0.1 million in amortization of intangibles, partially offset by increases of $0.5 million in depreciation and $0.1 million in stock-based compensation expense.intangibles.

At June 30, 2020,2021, there is $100.4$74.3 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 2.32.7 years.
For the six months ended June 30, 20202021 compared to the six months ended June 30, 20192020
North America operating income decreased $5.1$30.6 million or 39%,to a loss of $22.5 million due primarily to increasesa decrease in Adjusted EBITDA of $8.3$70.6 million, described below, and an increase of $5.5 million in depreciation, and $3.3partially offset by decreases of $28.4 million in stock-based compensation expense partially offset by an increase in Adjusted EBITDA of $5.1 million, described below, and a decrease of $1.4$17.0 million in amortization of intangibles. The increase in depreciation and decrease in stock-based compensation expense was due primarily to the factors discussed in the general and administrative expense section above. The decrease in amortization of intangibles werewas due primarily to the factors described above in the three-month discussion. The increase in stock-based compensation expense was due primarily to the issuance of new equity awards since 2019, partially offset by a decrease of $2.8 million in the modification charge related to the Combination.

Europe operating loss increased $1.3$3.3 million, or 23%50%, to a loss of $6.7 million due primarily to an increase in Adjusted EBITDA loss of $1.4$3.0 million, described below, and increasesan increase of $0.6 million in depreciation and $0.2$0.3 million in stock-based compensation expense, partially offset by a decrease of $0.9$0.2 million in amortization of intangibles.
Adjusted EBITDA
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
2020 $ Change % Change 2019 2020 $ Change % Change 20192021$ Change% Change20202021$ Change% Change2020
(Dollars in thousands)(Dollars in thousands)
North America$55,041
 $3,435
 7% $51,606
 $96,432
 $5,137
 6 % $91,295
North America$(5,302)$(60,343)NM$55,041 $25,863 $(70,569)(73)%$96,432 
Europe2,895
 3,069
 NM
 (174) (4,099) (1,415) (53)% (2,684)Europe860 (2,035)(70)%2,895 (7,119)(3,020)(74)%(4,099)
Total$57,936
 $6,504
 13% $51,432
 $92,333
 $3,722
 4 % $88,611
Total$(4,442)$(62,378)NM$57,936 $18,744 $(73,589)(80)%$92,333 
               
As a percentage of revenue15%     15% 13%     14% As a percentage of revenue(1)%15%2%13%
For a reconciliation of net (loss) earnings attributable to ANGI HomeservicesAngi Inc. shareholders to operating (loss) income to consolidated Adjusted EBITDA, see "“Principles of Financial Reporting."” For a reconciliation of operating (loss) income (loss) to Adjusted EBITDA for the Company'sCompany’s reportable segments, see "“Note 7—Segment Information"” to the consolidated financial statements included in "“Item 1. Consolidated Financial Statements."”
For the three months ended June 30, 20202021 compared to the three months ended June 30, 20192020
North America Adjusted EBITDA increased $3.4decreased $60.3 million or 7%, to $55.0a loss of $5.3 million, growing slower thandespite higher revenue of $45.9 million, due primarily to an increaseincreases in selling and marketing expense of $47.7 million, cost of revenue of $28.6 million, and an increasegeneral and administrative expense of $3.8$25.6 million in bad debt expense due to higher Marketplace Revenue and anticipated losses from Advertising SPs.(excluding stock-based compensation expense); each of which are described above.
Europe Adjusted EBITDA increased $3.1decreased $2.0 million, to $2.9or 70%, as higher revenue of $3.4 million from a losswas more than offset by the increases in general and administrative expense of $0.2$2.2 million despite the decrease(excluding stock-based compensation expense), product development expense of $1.9 million in revenue due primarily to a decreaseand selling and marketing expense of $2.2 million in advertising expense due, in part, to mitigating the negative impact$1.3 million; each of COVID-19 on revenue, and a decrease in compensation expense.which are described above.

For the six months ended June 30, 20202021 compared to the six months ended June 30, 20192020
North America Adjusted EBITDA increased $5.1decreased $70.6 million, or 6%73%, to $96.4$25.9 million, growing slower thandespite higher revenue of $89.3 million, due primarily to an increaseincreases in selling and marketing expense $64.4 million, cost of revenue $49.3 million, and general and administrative expense (excluding stock-based compensation expense) of $35.1 million; each of which are described above. Included in these increases are $4.0 million in expense related to impairments at the Fixd Services business and from management changes in the first quarter of 2021, and an increase of $6.8$3.2 million in bad debt expenseprovision for credit losses due to the factors described above in the three-month discussion and from the impact of COVID-19 on expected credit losses.higher Marketplace Revenue.
Europe Adjusted EBITDA loss increased $1.4$3.0 million, or 53%74%, to a loss of $4.1 million, due primarily to the decrease of $3.8 million in revenue and an increase in bad debtgeneral and administrative expense of $0.4$9.1 million due,(excluding stock-based compensation expense), including a charge of $6.0 million related to the
31
acquisition of an additional 21% interest in part, fromMyBuilder at a premium to fair value, and the impactincrease in product development expense of COVID-19 on expected credit losses,$3.3 million, partially offset by a decreasean increase of $9.9 million in compensation expense primarily resulting from a reduction in sales force headcount associated with the platform migration in France.revenue.

Interest expense

Interest expense relates to interest on the ANGI Group Senior Notes and ANGI Group Term Loan and commitment fees on the undrawn CreditANGI Group Revolving Facility.
For a detailed description of long-term debt, net, see "“Note 4—Long-term Debt"” to the consolidated financial statements included in "“Item 1. Consolidated Financial Statements."”
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Interest expense$1,620
 $(1,343) (45)% $2,963
 $3,894
 $(2,063) (35)% $5,957
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(In thousands)
Interest expense$5,814 $4,194 NM$1,620 $12,431 $8,537 NM$3,894 
For the three months andended June 30, 2021 compared to the three months ended June 30, 2020
Interest expense increased due primarily to the issuance of the ANGI Group Senior Notes in August 2020, partially offset by a decrease in interest expense due to the repayment of the ANGI Group Term Loan during the second quarter of 2021.
For the six months ended June 30, 2021 compared to the six months ended June 30, 2020 compared to the three and six months ended June 30, 2019
Interest expense increased due primarily to the issuance of the Senior Notes in August 2020, decreased from 2019partially offset by a decrease in interest expense of the ANGI Group Term Loan due primarily to lower interest rates and the decrease in the average outstanding balance of the Term Loan compared to the prior year period.
Other (expense) income, net
 Three Months Ended June 30, Six Months Ended June 30,
 2020 $ Change % Change 2019 2020 $ Change % Change 2019
 (Dollars in thousands)
Other income, net$212
 $(835) (80)% $1,047
 $633
 $(2,685) (81)% $3,318
Three Months Ended June 30,Six Months Ended June 30,
2021$ Change% Change20202021$ Change% Change2020
(In thousands)
Other (expense) income, net$(636)$(848)NM$212 $(1,403)$(2,036)NM$633 
For the three months ended June 30, 20202021 and 20192020
Other expense, net in 2021 primarily includes the write-off of $1.1 million of deferred debt issuance costs related to the ANGI Group Term Loan which was repaid in its entirety during the second quarter of 2021, partially offset by a net foreign currency exchange gain of $0.4 million and interest income of $0.1 million.
Other income, net in 2020 principally includes interest income of $0.2 million.
Other income, net in 2019 principally includes interest income of $2.2 million, partially offset by a $1.1 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in ANGI shares during the first quarter of 2020.
For the six months ended June 30, 20202021 and 20192020
Other expense, net in 2021 primarily includes the write-off of $1.1 million of deferred debt issuance costs related to the ANGI Group Term Loan which was repaid in its entirety during the second quarter of 2021 and net foreign currency exchange losses of $0.5 million, partially offset by interest income of $0.1 million.
Other income, net in 2020 principallyprimarily includes interest income of $1.4 million, partially offset by net foreign currency exchange losses of $0.3 million, and a $0.2 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in ANGIAngi Inc. shares during the first quarter of 2020.
Other income, net in 2019 principally includes interest income
32

Income tax benefit (provision) benefit
Three Months Ended June 30,Six Months Ended June 30,
Three Months Ended June 30, Six Months Ended June 30,2021$ Change% Change20202021$ Change% Change2020
2020 $ Change % Change 2019 2020 $ Change % Change 2019(Dollars in thousands)
(Dollars in thousands)
Income tax (provision) benefit$(3,025) $(772) (34)% $(2,253) $5,940
 $(6,022) (50)% $11,962
Income tax benefit (provision)Income tax benefit (provision)$9,129 $12,154 NM$(3,025)$18,418 $12,478 210%$5,940 
Effective income tax rate19%     24% NM
     NM
Effective income tax rate23%19%40%NM
For further details of income tax matters, see "“Note 2—Income Taxes"” to the consolidated financial statements included in "“Item 1. Consolidated Financial Statements."”
For the three months ended June 30, 20202021 compared to the three months ended June 30, 20192020
In 2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to the benefit of the change in the annual expected effective income tax rate, partially offset by nondeductible stock-based compensation expense.
In 2020, the effective income tax rate was lower than the statutory rate of 21% due primarily to benefiting (previously unbenefited)previously unbenefited foreign net operating loss carryforwards.
For the six months ended June 30, 2021 compared to the six months ended June 30, 2020
In 2019,2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to unbenefited foreign losses and state taxes, partially offset by excess tax benefits generated by the exercise and vesting of stock-based awards.
For the six months ended June 30, 2020 compared to the six months ended June 30, 2019
In 2020, the Company recorded an income tax benefit of $5.9 million. The income tax benefit was due primarily to a $5.7 million reduction to deferred taxes due to the true-up of the state tax rate of an indefinite-lived intangible asset and benefiting previously unbenefited foreign net operating loss carryforwards.
In 2019, the Company recorded an income tax benefit
33

PRINCIPLES OF FINANCIAL REPORTING
We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles ("GAAP"(“GAAP”). This measure is one of the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. We endeavor to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure, which we discuss below.
Definition of Non-GAAP Measure
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("(“Adjusted EBITDA"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. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
The following table reconciles net (loss) earnings attributable to ANGI HomeservicesAngi Inc. shareholders to operating (loss) income to consolidated Adjusted EBITDA:
Three Months Ended June 30,Six Months Ended June 30,
Three Months Ended June 30, Six Months Ended June 30, 2021202020212020
2020 2019 2020 2019 (In thousands)
(In thousands)
Net earnings attributable to ANGI Homeservices Inc. shareholders$12,667
 $6,968
 $3,709
 $16,937
Net (loss) earnings attributable to Angi Inc. shareholdersNet (loss) earnings attributable to Angi Inc. shareholders$(30,293)$12,667 $(28,362)$3,709 
Add back:       Add back:
Net earnings attributable to noncontrolling interests544
 266
 318
 148
Net earnings attributable to noncontrolling interests241 544 324 318 
Income tax provision (benefit)3,025
 2,253
 (5,940) (11,962)
Other income, net(212) (1,047) (633) (3,318)
Income tax (benefit) provisionIncome tax (benefit) provision(9,129)3,025 (18,418)(5,940)
Other expense (income), netOther expense (income), net636 (212)1,403 (633)
Interest expense1,620
 2,963
 3,894
 5,957
Interest expense5,814 1,620 12,431 3,894 
Operating income17,644
 11,403
 1,348
 7,762
Operating (loss) incomeOperating (loss) income(32,731)17,644 (32,622)1,348 
Add back:Add back:
Stock-based compensation expense14,759
 17,520
 40,334
 36,802
Stock-based compensation expense9,543 14,759 11,577 40,334 
Depreciation12,555
 8,796
 24,693
 15,795
Depreciation15,058 12,555 31,027 24,693 
Amortization of intangibles12,978
 13,713
 25,958
 28,252
Amortization of intangibles3,688 12,978 8,762 25,958 
Adjusted EBITDA$57,936
 $51,432
 $92,333
 $88,611
Adjusted EBITDA$(4,442)$57,936 $18,744 $92,333 
For a reconciliation of operating (loss) income to Adjusted EBITDA for the Company'sCompany’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 principally of expense associated with the grants, including unvested grants assumed in acquisitions, of stock appreciation rights, restricted stock units ("RSUs"(“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. Performance-based RSUsPSUs 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). To the extent thatThe Company is currently settling all stock-based awards are settled on a net basis the Companyand remits the required tax-withholding amountamounts from its current funds.
Depreciation is a non-cash expense relating to our capitalized software, leasehold improvements and equipment thatand 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.

34
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.

35
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Position
June 30, 2021December 31, 2020
(In thousands)
Cash and cash equivalents and marketable debt securities:
United States$563,024 $793,679 
All other countries21,236 19,026 
Total cash and cash equivalents584,260 812,705 
Marketable debt securities (United States)— 49,995 
Total cash and cash equivalents and marketable debt securities$584,260 $862,700 
Long-term debt:
Senior Notes$500,000 $500,000 
Term Loan— 220,000 
Total long-term debt500,000 720,000 
Less: unamortized debt issuance costs5,805 7,723 
Total long-term debt, net$494,195 $712,277 
  June 30, 2020 December 31, 2019
  (In thousands)
Cash and cash equivalents    
United States $404,845
 $377,648
All other countries (a)
 16,140
 12,917
Total cash and cash equivalents $420,985
 $390,565
     
Long-term debt    
Term Loan due November 5, 2023 $240,625
 $247,500
Less: current portion of Term Loan 13,750
 13,750
Less: unamortized debt issuance costs 1,539
 1,804
Total long-term debt, net $225,336
 $231,946
The Company’s international cash can be repatriated without significant tax consequences.
________________________
(a)
If needed for U.S. operations, the cash and cash equivalents held by the Company's foreign subsidiaries could be repatriated without significant tax consequences.
For a detailed description of long-term debt, see "“Note 4—Long-term Debt"” to the consolidated financial statements included in "“Item 1. Consolidated Financial Statements."”
Cash Flow Information
In summary, the Company'sCompany’s cash flows are as follows:
Six Months Ended June 30,Six Months Ended June 30,
2020 201920212020
(In thousands)(In thousands)
Net cash provided by (used in):   Net cash provided by (used in):
Operating activities$127,797
 $103,024
Operating activities$59,253 $127,797 
Investing activities$(23,934) $(10,958)Investing activities$15,037 $(23,934)
Financing activities$(72,863) $(48,642)Financing activities$(303,171)$(72,863)
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, bad debt expense,provision for credit losses, amortization of intangibles, depreciation, impairment of long-lived and right-of-use assets, and deferred income taxes.
2021
Adjustments to earnings consist primarily of $42.7 million of provision for credit losses, $31.0 million of depreciation, $12.3 million of impairment charges on long-lived and right-of-use assets, $11.6 million of stock-based compensation expense, $8.8 million of amortization of intangibles, and $4.7 million of revenue reserves, partially offset by $20.3 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase of $63.2 million in accounts receivable partially offset by increases of $43.2 million in accounts payable and other liabilities and $5.3 million of deferred revenue. The increase in accounts receivable is due primarily to revenue growth in North America. The increase in accounts payable and other liabilities is due primarily to an increase in accrued advertising and related payables. The increase in deferred revenue is driven primarily by increases in membership payments.
36
Net cash provided by investing activities includes proceeds of $50.0 million from the maturities of marketable debt securities, partially offset by $35.7 million 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 $220.0 million for the prepayment of the ANGI Group Term Loan, which otherwise would have matured on November 5, 2023, $54.6 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $22.9 million for the purchase of redeemable noncontrolling interests, and $5.6 million for the repurchase of 0.5 million shares of Angi Inc. Class A common stock, on a settlement date basis, at an average price of $11.87 per share.
2020
Adjustments to earnings consist primarily of $40.3 million of stock-based compensation expense, $39.3 million of bad debtprovision for credit losses expense, $26.0 million of amortization of intangibles, and $24.7 million of depreciation, partially offset by $6.3 million of deferred income taxes. The deferred income tax benefit primarily relates to an adjustment to deferred taxes resulting from a true-up of the state tax rate. The decrease from changes in working capital consists primarily of an increase in accounts receivable of $48.2 million, partially offset by an increase in accounts payable and other liabilities of $35.9 million. The increase in accounts receivable is due primarily to revenue growth in North America. The increase in accounts payable and other liabilities is due primarily to an increase in accrued advertising and related payables.

Net cash provided by investing activities includes capital expenditures of $24.7 million, primarily related to investments in the development of capitalized software to support the Company's products and services and leasehold improvements.
Net cash used in financing activities includes $54.4 million for the repurchase of 7.7 million shares of ANGI common stock, on a settlement date basis, at an average price of $7.02 per share, $11.5 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $6.9 million for the principal payments on the ANGI Group Term Loan, and $3.2 million for the purchase of redeemable noncontrolling interests, partially offset by a $3.1 million payment from IAC pursuant to the tax sharing agreement.
2019
Adjustments to earnings consist primarily of $36.8 million of stock-based compensation expense, $32.1 million of bad debt expense, $28.3 million of amortization of intangibles, and $15.8 million of depreciation, partially offset by $12.4 million of deferred income taxes. The deferred income tax benefit primarily relates to the net operating loss created by the exercise and vesting of stock-based awards. The decrease from changes in working capital consists primarily of an increase in accounts receivable of $61.9 million, partially offset by an increase in accounts payable and other liabilities of $29.6 million and a decrease in other assets of $10.6 million. The increase in accounts receivable was due primarily to revenue growth in North America and the timing of cash receipts. The increase in accounts payable and other liabilities is due primarily to an increase in accrued advertising and related payables. The decrease in other assets is due, in part, to a decrease in prepaid marketing.
Net cash used in investing activities includes capital expenditures of $39.1 million, primarily related to investments in the development of capitalized software to support the Company's products and services and leasehold improvements, $20.3 million of cash principally related to the acquisition of Fixd Repair, partially offset by $25.0 million of proceeds from maturities of marketable debt securities, $23.6 million of net proceeds from the December 31, 2018 sale of Felix.
Net cash used in financing activities includes $26.2 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, a $11.4 million payment to IAC pursuant to the tax sharing agreement and a $6.9 million principal payment on the Term Loan.
Liquidity and capital resourcesCapital Resources
Financing Arrangements
The ANGI Group Senior Notes were issued on August 20, 2020, the proceeds of which are intended for general corporate purposes, including potential future acquisitions and return of capital.

As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety.The outstanding balance of the ANGI Group Term Loan as of June 30, 2020 is $240.6 million. There are quarterly principal payments of $3.4 million throughat December 31, 2021, $6.92020 was $220.0 million for the one-year period ending December 31, 2022 and $10.3 million through maturity of the loan when the final amount of $161.6 million is due. Additionally, interest payments are due at least quarterly through the term of the loan. At June 30, 2020, the Term Loan bearsbore interest at LIBOR plus 1.50%, or 1.70%2.16%.

The spread over LIBOR is subject to change in future periods based on the Company's consolidated net leverage ratio.
The Credit$250.0 million ANGI Group Revolving Facility, of $250 million expireswhich otherwise would have expired on November 5, 2023. At June 30, 2020 and December 31, 2019, there2023, was terminated effective August 3, 2021.No amounts were no outstanding borrowingsever drawn under the Credit Facility. The annual commitment fee on undrawn funds is currently 25 basis pointsANGI Group Revolving Facility prior to its termination.

Share Repurchase Authorizations and is based on the consolidated net leverage ratio most recently reported. Borrowings under the Credit Facility bear interest, at the Company's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is determined based on the Company's consolidated net leverage ratio.Activity
Both the Term Loan and Credit Facility borrowings are guaranteed by the Company's wholly-owned material domestic subsidiaries and are secured by substantially all assets of the Company and the guarantors, subject to certain exceptions. The terms of the Credit Facility and the Term Loan require ANGI to maintain a consolidated net leverage ratio of not more than 4.5 to 1.0 and a minimum interest coverage ratio of not less than 2.0 to 1.0. There are additional covenants under both the Term Loan and the Credit Facility that limit the ability of the Company and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions.
DuringDuring the six months ended June 30, 2020,2021, the Company repurchased 7.60.5 million shares, on a trade date basis, of its Class A common stock at an average price of $7.00$11.87 per share, or $53.4$5.6 million in aggregate. At June 30, 2020, the CompanyFrom July 1, 2021 through August 3, 2021, Angi Inc. repurchased an additional 0.7 million shares at an average price of $11.68 per share, or $7.7 million in aggregate. Angi Inc. has 20.118.1 million shares remaining in its share repurchase authorization.authorization as of August 3, 2021. The Company may purchase shares over an indefinite period of time on the open market and in privately negotiated transactions, depending on those factors ANGIAngi Inc. 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 upon factors deemed relevant at the time, and if settledon a net basis, with Angi remits withholding taxes on behalf of the employee At IAC/InterActiveCorp’s (“IAC”) 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
37
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. Assuming
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 ANGIor part of IAC equity awards outstanding on August 7, 2020immediately prior to the distribution into equity awards denominated in shares of Angi Class A Common Stock for no compensation, which Angi would be obligated to assume and which would be dilutive to Angi’s stockholders.
The following table summarizes the aggregate intrinsic value of all awards outstanding as of July 30, 2021;assuming these awards were net settled on that date, includingthe withholding taxes that would be paid by the Company on behalf of employees upon exercise or vesting that would be payable (assuming these equity awards are net settled with a 50% tax rate), and the shares that would have been issued are as follows:
Aggregate intrinsic value of awards outstandingEstimated withholding taxes payableEstimated shares to be issued
(In thousands)
Stock appreciation rights$8,455 $4,228 367 
Other equity awards(a)(b)
164,636 69,216 6,157 
Total outstanding employee stock-based awards$173,091 $73,444 6,524 
_______________
(a)Includes stock options, RSUs, and subsidiary-denominatedsubsidiary denominated equity.
(b)The number of shares ultimately needed to settle subsidiary denominated equity ANGI wouldawards 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.

Capital Expenditures
The Company’s 2021 capital expenditures are expected to be higher than 2020 capital expenditures of $52.5 million by approximately 35% to 40%, due primarily to increased investment in capitalized software to support the development of our products and services.
Liquidity Assessment
The Company’s liquidity could be negatively affected by a decrease in demand for its products and services due to COVID-19 or other factors. As described in the “COVID-19 Update” section above, to date, the COVID-19 outbreak and measures designed to curb its spread have issued 12.8 millionadversely impacted the Company’s business.

At June 30, 2021, IAC held all Class AB shares of Angi Inc., which represent 84.1% of the economic interest and would98.1% of the voting interest of the Company. As a result, IAC has the ability to control Angi Inc.’s financing activities, including the issuance of additional debt and equity securities by Angi Inc. or any of its subsidiaries, or the incurrence of other indebtedness generally. While Angi Inc. is expected to have remitted $201.2 million in cash for withholding taxes (assuming a 50% withholding rate).the ability to access debt and equity markets if needed, such transactions may require the approval of IAC due to its control of the majority of the outstanding voting power of Angi Inc.’s capital stock and its representation on the Angi Inc. board of directors. Additional financing may not be available on terms favorable to the Company or at all. In addition, the Company’s existing indebtedness could limit its ability to obtain additional financing.
The Company believes its existing cash, cash equivalents, available borrowings under the Credit Facility and expected positive cash flows generated from operations will be sufficient to fund its normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net-settled stock-based awards, and investing and other commitments, for the foreseeable future. The Company's 2020 capital expenditures are expected to be lower than 2019 capital expenditures
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CONTRACTUAL OBLIGATIONS
During the "COVID-19 Update" section above, to date, the COVID-19 outbreak and measures designed to curb its spread have had an impact on the Company's business. The longer the global outbreak and measures designed to curb the spread of the virus have adverse impacts on economic conditions generally, the greater the adverse impact is likely to be on the Company's business, financial condition and results of operations. The Company believes it has ample access to capital to navigate current and coming economic pressures.
The Company’s indebtedness could limit its ability to: (i) obtain additional financing to fund working capital needs, acquisitions, capital expenditures or debt service or other requirements; and (ii) use operating cash flow to make certain acquisitions or investments, in the event a default has occurred or, in certain circumstances, if its leverage ratio (as defined in the Credit Facility and Term Loan) exceeds the ratios set forth in the Term Loan. There were no such limitations atsix months ended June 30, 2020. The Company's ability to obtain additional financing may also be impacted by any disruptions in2021, other than the financial markets caused by COVID-19 or otherwise.
At June 30, 2020, IAC held all Class B shares of ANGI, which represent 85.1% of the economic interest and 98.3% of the voting interest of ANGI. 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 majorityrepayment of the outstanding voting powerbalance of ANGI’s capital stock and its representation on the ANGI boardGroup Term Loan of directors. Additional financing may not be available on terms favorable to the Company or at all.

CONTRACTUAL OBLIGATIONS
At June 30, 2020,$220.0 million, there have been no material changes to the Company'sCompany’s contractual obligations since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2019.2020.


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Item 3.    Quantitative and Qualitative Disclosures About Market Risk
During the six months ended June 30, 2020,2021, there have been no material changes to the Company'sCompany’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, 2019.2020, other than the repayment of the outstanding balance of the ANGI Group term loan of $220.0 million, which bore interest at a variable rate, reducing the Company’s exposure risk related to changes in interest rates.


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Item 4.    Controls and Procedures
The Company monitors and evaluates on an ongoing basis its disclosure controls and procedures and internal control over financial reporting in order to improve their overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“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'sCompany’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'sCompany’s disclosure controls and procedures were effective as of the end of the period covered by this report in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission'sCommission’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'sCompany’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Overview

In the ordinary course of business, the Company and its subsidiaries are (or may become) parties to litigation involving property, personal injury, contract, intellectual property and other claims, as well as stockholder derivative actions, class action lawsuits and other matters. 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.

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

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

Service Professional Class Action Litigation against HomeAdvisor

This purported class action pending in Colorado is described in detail on page 2427 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2020. See Airquip, Inc. et al. v. HomeAdvisor, Inc. et al., No. l:16-cv-1849 and Costello et al. v. HomeAdvisor, Inc. et al., No. 1:18-cv-1802, both filed in U.S. District Court in Colorado and consolidated under the caption In re HomeAdvisor, Inc. Litigation. This lawsuit alleges that our HomeAdvisor business engages in certain deceptive practices affecting the service professionals who join its network, including charging them for substandard customer leads or failing to disclose certain charges. There have been no material or otherwise noteworthy developments in this case since the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2020. The Company believes that the allegations in this lawsuit are without merit and will continue to defend vigorously against them.


Item 1A.    Risk Factors
Cautionary Statement Regarding Forward-Looking Information
This quarterly report on Form 10-Q contains "forward-looking statements"“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"“anticipates,” “estimates,” “expects,” “plans” and "believes,"“believes,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to the Company'sCompany’s future financial performance, business prospects and strategy, anticipated trends and prospects in home services industry and other similar matters. These forward-looking statements are based on Company management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
These forward-looking statements include, among others, statements relating to the Company’s future financial performance, business prospects and strategy, anticipated trends and prospects in the home services industry and other similar matters. Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: (i) the impact of the COVID-19 outbreak on our businesses, (ii) our ability to compete, (iii) the failure or delay of the home services market to migrate online, (iv) adverse economic events or trends (particularly those that adversely
42
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, (vii) our ability to market our various products and services in a successful and cost-effective manner, (viii) the continued display of links to websites offering our products and services in a prominent manner in search results, (ix) our continued ability to communicate with consumers and service professionals via e-mail (or other sufficient means), (x) our ability to access, share and use personal data about consumers, (xi) our ability to develop and monetize versions of our products and services for mobile and other digital devices, (xii) any challenge to the contractor classification or employment status of our Handy service professionals, (xiii) our ability to protect our systems, technology and infrastructure from cyberattacks and to protect personal and confidential user information, (xiv) the occurrence of data security breaches, fraud and/or additional regulation involving or impacting credit card payments, (xv) the integrity, efficiency and scalability of our technology systems and infrastructures (and those of third parties with whom we do business), (xvi) operational and financial risks relating to acquisitions and our continued ability to identifythe integration of suitable acquisition candidates,targets, (xvii) our ability to operate (and expand into) international markets successfully, (xviii) our ability to adequately protect our intellectual property rights and not infringe the intellectual property rights of third parties, (xix) changes in key personnel, (xx) various risks related to our relationship with IAC and (xxi) various risks related to our outstanding indebtedness.
Certain of these and other risks and uncertainties are discussed in our filings with the SEC, including in Part I-Item 1A-Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Part II-Item 1A-Risk Factors of our Quarterly Report on 10-Q for the fiscal quarter ended March 31, 2020. Other unknown or unpredictable factors that could also adversely affect our business, financial condition and operating results may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of Company management as of the date of this quarterly report. We do not undertake to update these forward-looking statements.
Risk Factors
In additionRecent changes in our executive management may not result in growth of our business or enhance stockholder value, and our management transition may not be successful.
During 2021, we announced the appointment of a new Chief Executive Officer, a new Chief Financial Officer and the search for a new Chief Marketing Officer. Our executive management team is critical to the risk factor relating to the impactoverall management of the outbreak of the COVID-19 coronavirus onCompany and also plays a key role in maintaining our businessesculture and other information set forthsetting our strategic direction. In connection with these executive management changes, we have experienced, and may continue to experience, employee and management turnover in this quarterly report, you should carefully consider the risk factors set forthcertain areas. These recent changes in Part I-Item 1A-Risk Factorsour executive management may also cause or result in: disruption of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019business and Part II-Item 1A-Risk Factorsoperations; difficulty recruiting, hiring, motivating and retaining talented and skilled personnel; further departures of other members of management; increased stock price volatility; and difficulty in establishing, maintaining or negotiating business or strategic relationships or transactions. Furthermore, these transitions could be a distraction to our Quarterly Report on 10-Q for the fiscal quarter ended March 31, 2020, which could materiallyexecutive management, business operations, service professionals and adversely affectcustomers. If we do not succeed in attracting well-qualified employees, retaining and motivating existing employees or integrating new executives and employees, our business, financial condition and results of operations. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and results of operations.
The global outbreak of the COVID-19 virus and other similar outbreaks could adversely affect our business, financial condition and results of operations.
Our business could be materially and adversely affected by the outbreakaffected.

Our Angi brand integration initiative may involve substantial costs, including as a result of a widespread health epidemiccontinued negative impact on our organic search placement, and may not be favorably received by customers and service professionals.
On March 17, 2021, the Company updated one of its leading websites and brands, Angie’s List, to Angi, and concentrated its marketing investment in the Angi brand in order to focus its marketing, sales, and branding efforts on a single brand.
We have incurred and may continue to incur substantial costs as a result of our brand integration initiative and may not be able to achieve or pandemic, includingmaintain brand name recognition or status that is comparable to the outbreakrecognition and status previously enjoyed by Angie’s List, and our customers and service professionals may be confused as we transition and focus on the Angi brand. Our Company relies heavily on free and paid search engine marketing efforts to drive traffic to our platforms. Our brand initiative has adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results as Angi does not have the coronavirus ("COVID-19"),same domain history as Angie’s List. In addition, we shifted marketing to support the Angi brand, away from the HomeAdvisor brand, which has been declared a "pandemic" bynegatively affected the World Health Organization. To date, the outbreakefficiency of the COVID-19 virus has caused a widespread global health crisis, and governments in affected regions have implemented measures designed to curb the spread of the virus, such as social distancing, government imposed quarantines and lockdowns, travel bans and other public health safety measures. These measures have resulted inour search engine marketing efforts.


significant social disruption and have had (and are likely to continue to have) an adverse effect on economic conditions generally, as well as on consumer confidence and spending, all of which could have an adverse effect on our businesses, financial condition and results of operations. For example, in March 2020, we experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). InDuring the second quarter of 2020, we experienced2021, these efforts had a reboundpronounced negative impact on Marketplace Service Requests from organic search results and via our mobile applications, which in service requests, exceeding pre-COVID 19 growth levels, driven byturn has resulted in increased demand from homeowners who spent more time at home duepaid search engine marketing to measures taken to reducegenerate Marketplace Service Requests. The combined effect of this during the spread of the COVID-19 virus. However, many service professionals' businesses have been adversely impacted by labor and material constraints, which negatively impacted our ability to monetize this increased level of service requests. Also, the United States, which represents 94% of our revenue for both the three and six months ended June 30, 2020,2021, has experienced a resurgencereduced revenue and increased marketing spend, materially more than expected at the launch of the COVID-19 virus beginning in June 2020. This resurgence could result in a reduction in service requests and/or a reduction in our ability to monetize service requests due to service professional constraints, one or both of which could materially and adversely affect our business, financial condition and results of operations.
In addition, in response to the COVID-19 virus and government-imposed measures to control its spread, our ability to conduct ordinary course business activities has been (and may continue to be) impaired for an indefinite period of time. For example, we have taken several precautions that could adversely impact employee productivity, such as requiring employees to work remotely for the first time in the Company's history, as well as imposing travel restrictions and temporarily closing office locations. While we have found that our employees (including call center and sales employees) have transitioned to working remotely with limited disruption to date, no assurances can be provided that their productivity and efficiency will remain at pre-pandemic levels, particularly if they are required to continue working remotely for an extended period of time. Also, working remotely may involve increased operational risks, such as increased risks of "phishing," other cybersecurity attacks or the unauthorized dissemination of personally identifiable information or proprietary and confidential information. Lastly, moving employees back to the office may introduce distraction that could have a temporary negative impact on the Company’s productivity, and in turn, revenue. We may also experience increased operating costs as we gradually resume normal operations and enhance preventative measures, including with respect to real estate, compliance and insurance-related expenses. Moreover, we may also experience business disruption if the ordinary course operations of our contractors, vendors or business partners are adversely affected. Any of these measures or impairments could adversely affect our business, financial condition and results of operations.
The extent to which developments related to the COVID-19 virus and measures designed to curb its spread continue to impact our business, financial condition and results of operations will depend on future developments, all of which are highly uncertain and many of which are beyond our control, including the speed of contagion, the development and implementation of effective preventative measures and possible treatments, the scope of governmental and other restrictions on travel, discretionary services (including those provided by certain of our service professionals) and other activity, and public reactions to these developments. For example, these developments and measures have resulted in rapid and adverse changes to the operating environment in which we do business, as well as significant uncertainty concerning the near and long term economic ramifications of the COVID-19 virus, which have adversely impacted our ability to forecast our results and respond in a timely and effective manner to trends related to the COVID-19 virus. The longer the global outbreak and measures designed to curb the spread of the COVID-19 virus continue to adversely affect levels of consumer confidence, discretionary spending and the willingness of consumers to interact with other consumers, vendors and service providers face-to-face (and in turn, adversely affect demand for home services provided by our service professionals and our products and services generally), the greater the adverse impact is likely to be on our business, financial condition and results of operations and the more limited our ability will be to try and make up for delayed or lost revenues.
The COVID-19 pandemic may also have the effect of heightening many of the other risks described in Part I-Item 1A-Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Part II-Item 1A-Risk Factors of our Quarterly Report on 10-Q for the fiscal quarter ended March 31, 2020. We will continue to evaluate the nature and extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations.
Furthermore, because the COVID-19 virus did not begin to impact our results until latebrand initiative in the first quarter of 2020, any current2021 and more significantly than our forecasts at the beginning of May 2021. We expect the pronounced negative impact to organic search results, increased paid search engine marketing and reduced monetization from our mobile applicationswill continue until such time as the new brand establishes search engine optimization ranking and consumer awareness is
43
established. Any or futureall of these impacts maycould continue to increase our marketing costs (particularly if free traffic is replaced with paid traffic) and adversely affect the effectiveness of our marketing efforts overall. Finally, as we align and focus the organization around a single brand, we could experience financial and operational challenges and reduced service professional participation across our various product lines. Depending on market acceptance, our brand integration initiative could adversely affect our ability to attract and retain customers and service professionals, which could cause us not be directly comparable to any historical periods and are not necessarily indicative of any future impacts that the COVID-19 virus may have on our results for the remainder of 2020realize some or any subsequent periods. The impactall of the COVID-19 virus on our revenues and expenses may also fluctuate differently overanticipated benefits contemplated by the duration of the pandemic.brand integration initiative.


Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
The Company did not issueemployee matters agreement dated as of September 29, 2017, by and between us and IAC, provides, among other things, that we will reimburse IAC for the cost of certain equity awards held by our current and former employees and that IAC may elect to receive payment either in cash or sell any shares of itsour capital stock.
Pursuant to the employee matters agreement, 5,931 shares of Class A common stock or any otherand 18,983 shares of Class B common stock were issued to IAC on June 30, 2021 as reimbursement for shares of IAC common stock issued in connection with the settlement of certain equity securities pursuant to unregistered transactionsawards held by our employees during the quarterthree months ended June 30, 2020.2021. This issuance did not involve any underwriters or public offerings and we believe that such issuance was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof.
Issuer Purchases of Equity Securities
The following table sets forth purchases by the Company of its Class A common stock during the quarterthree months ended June 30, 2020:2021:
Period

(a)
Total Number of Shares Purchased
 

(b)
Average Price Paid Per Share
 

(c)
Total Number of Shares Purchased as Part of
Publicly
Announced
Plans or
Programs(1)
 
(d)
Maximum Number of Shares that May Yet Be Purchased Under Publicly
Announced
Plans or
Programs(2)
April 20201,895,113
   $5.97
   1,895,113
   20,718,845
  
May 2020665,315
   $6.87
   665,315
   20,053,530
  
June 2020-
    -
   -
   20,053,530
  
  Total2,560,428
   $6.21
   2,560,428
   20,053,530
  
Period(a)
Total Number of Shares Purchased		(b)
Average Price Paid Per Share		(c)
Total Number of Shares Purchased as Part of
Publicly
Announced
Plans or
Programs(1)		(d)
Maximum Number of Shares that May Yet Be Purchased Under Publicly
Announced
Plans or
Programs(2)
April 2021— $— — 18,856,841 
May 202160,055 $12.00 60,055 18,796,786 
June 2021— $— — 18,796,786 
Total60,055 $— 60,055 18,796,786 

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

Table of Contents
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 NumberDescriptionLocation
3.1
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of ANGI HomeservicesAngi Inc.

3.2
Amended and Restated Bylaws of ANGI HomeservicesAngi Inc.

4.1Form of Angi Inc. Common Stock Certificate. (1)

10.1Employment Agreement between Jeff Pedersen and Angi Inc., dated as of June 18, 2021. (2)

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)(3)
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)(3)
101.INS
Inline XBRL Instance (1)
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.

(1)Filed herewith.
(2)Reflects management contracts and management and director compensatory plans.
(3)Furnished herewith.



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SIGNATURES

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

Dated:August 6, 2021
Angi Inc.
Dated:August 10, 2020By:/s/ JEFFREY W. PEDERSEN
ANGI Homeservices Inc.Jeffrey W. Pedersen
By:/s/ JAMIE COHEN
Jamie Cohen
Chief Financial Officer


SignatureTitleDate
SignatureTitleDate
/s/ JAMIE COHENJEFFREY W. PEDERSENChief Financial OfficerAugust 10, 20206, 2021
Jamie CohenJeffrey W. Pedersen


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