As filed with the Securities and Exchange Commission on ~~November~~ ~~6, 2020~~May 7, 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 ~~September 30, 2020~~March 31, 2021


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

Commission File No. 001-38220

~~ANGI HOMESERVICES INC.~~Angi Inc.

(Exact name of ~~registrant~~Registrant as specified in its charter)


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

3601 Walnut Street, Denver, CO 80205

(Address of ~~registrant's~~Registrant’s principal executive offices)

(303) 963-7200

(~~Registrant's~~Registrant’s telephone number, including area code)

ANGI Homeservices Inc.

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Class A Common Stock, par value $0.001

ANGI

The Nasdaq Stock Market LLC

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

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

Indicate by check mark whether the ~~registrant~~Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~"large~~“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 ~~registrant~~Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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

As o~~f October~~of April 30, ~~2020,~~2021, the following shares of the ~~registrant's~~Registrant’s common stock were outstanding:


Class A Common Stock			~~77,938,213~~82,445,011
Class B Common Stock			~~421,859,085~~421,958,021
Class C Common Stock			0
Total outstanding Common Stock			~~499,797,298~~504,403,032

TABLE OF CONTENTS


		Page Number
PART I
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of ~~Shareholders'~~Shareholders ’ Equity	6
	Consolidated Statement of Cash Flows	87
	Note 1—The Company and Summary of Significant Accounting Policies	98
	Note 2—Income Taxes	1210
	Note 3—Financial Instruments and Fair Value Measurements	1411
	Note 4—Long-term Debt	1513
	Note 5—Accumulated Other Comprehensive ~~Loss~~Income (Los s )	1714
	Note 6—Earnings (L oss )Per Share	1815
	Note 7—Segment Information	1915
	Note 8—Consolidated Financial Statement Details	2319
	Note 9—Contingencies	2420
	Note 10—Related Party Transactions with IAC	2420
	Note 11 —Subsequent Eve nts	21
Item 2.	~~Management's~~Management ’s Discussion and Analysis of Financial Condition and Results of Operations	2522
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4237
Item 4.	Controls and Procedures	4338
PART II
Item 1.	Legal Proceedings	4439
Item 1A.	Risk Factors	4540
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4741
Item 6.	Exhibits	4843
	Signatures	4944

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

September 30, 2020 December 31, 2019
(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents $ 855,044 $ 390,565
Marketable debt securities 49,992 0
Accounts receivable, net of allowance and reserves of $29,787 and $20,293, respectively 51,721 41,669
Other current assets 69,500 67,759
Total current assets 1,026,257 499,993
Capitalized software, leasehold improvements and equipment, net of accumulated depreciation and amortization 104,323 103,361
Goodwill 884,696 883,960
Intangible assets, net of accumulated amortization 212,927 251,725
Other non-current assets 186,398 182,572
TOTAL ASSETS $ 2,414,601 $ 1,921,611
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Current portion of long-term debt $ 13,750 $ 13,750
Accounts payable 42,973 25,987
Deferred revenue 58,169 58,220
Accrued expenses and other current liabilities 153,566 116,997
Total current liabilities 268,458 214,954
Long-term debt, net 715,408 231,946
Deferred income taxes 2,088 3,441
Other long-term liabilities 119,112 121,055
Redeemable noncontrolling interests 25,774 26,663
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 92,660 and 87,007 shares, respectively, and outstanding77,537 and 79,681, respectively 93 87
Class B common stock, $0.001 par value; authorized 1,500,000 shares; 421,859 and 421,570 shares issued and outstanding 422 422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; 0 shares issued and outstanding 0 0
Additional paid-in capital 1,362,977 1,357,075
Retained earnings 24,213 16,032
Accumulated other comprehensive loss (985) (1,379)
Treasury stock, 15,123 and 7,326 shares, respectively (112,808) (57,949)
Total ANGI Homeservices Inc. shareholders' equity 1,273,912 1,314,288
Noncontrolling interests 9,849 9,264
Total shareholders' equity 1,283,761 1,323,552
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,414,601 $ 1,921,611


	March 31, 2021		December 31, 2020
	(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents	$	777,041	$	812,705
Marketable debt securities	—		49,995
Accounts receivable, net of reserves of $28,908 and $27,839, respectively	56,915		43,148
Other current assets	74,037		71,958
Total current assets	907,993		977,806

Capitalized software, leasehold improvements and equipment, net	111,431		108,842
Goodwill	891,286		891,797
Intangible assets, net	204,626		209,717

Other non-current assets	186,253		180,020
TOTAL ASSETS	$	2,301,589	$	2,368,182

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:

Accounts payable	35,251		30,805
Deferred revenue	57,675		54,654
Accrued expenses and other current liabilities	154,394		148,219
Total current liabilities	247,320		233,678

Long-term debt, net	705,987		712,277
Deferred income taxes	1,315		1,296
Other long-term liabilities	108,416		111,710

Redeemable noncontrolling interests	4,608		26,364

Commitments and contingencies	0		0

SHAREHOLDERS’ EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 98,408 and 94,283 shares, respectively, and outstanding 82,088 and 78,333, respectively	98		94
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 421,958 and 421,862 shares issued and outstanding	422		422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; 0 shares issued and outstanding	0		0
Additional paid-in capital	1,333,294		1,379,469
Retained earnings	11,680		9,749
Accumulated other comprehensive income	4,623		4,637
Treasury stock, 16,320 and 15,905 shares, respectively	(126,997)		(122,081)
Total Angi Inc. shareholders’ equity	1,223,120		1,272,290
Noncontrolling interests	10,823		10,567
Total shareholders’ equity	1,233,943		1,282,857
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,301,589	$	2,368,182

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

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(In thousands, except per share data)									(In thousands, except per share data)
Revenue	Revenue	$	389,913	$	357,358	$	1,108,624	$	1,004,697	Revenue	$	387,029	$	343,650
Operating costs and expenses:	Operating costs and expenses:									Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	Cost of revenue (exclusive of depreciation shown separately below)	48,253		13,312		122,524		34,045		Cost of revenue (exclusive of depreciation shown separately below)	53,828		33,229
Selling and marketing expense	Selling and marketing expense	210,171		195,542		590,114		567,011		Selling and marketing expense	205,840		189,959
General and administrative expense	General and administrative expense	90,122		82,344		270,129		254,786		General and administrative expense	88,162		94,556
Product development expense	Product development expense	17,577		16,021		50,068		46,907		Product development expense	18,047		17,084
Depreciation	Depreciation	13,921		11,244		38,614		27,039		Depreciation	15,969		12,138
Amortization of intangibles	Amortization of intangibles	12,888		14,169		38,846		42,421		Amortization of intangibles	5,074		12,980
Total operating costs and expenses	Total operating costs and expenses	392,932		332,632		1,110,295		972,209		Total operating costs and expenses	386,920		359,946
Operating (loss) income		(3,019)		24,726		(1,671)		32,488
Operating income (loss)										Operating income (loss)	109		(16,296)
Interest expense	Interest expense	(3,699)		(3,007)		(7,593)		(8,964)		Interest expense	(6,617)		(2,274)
Other income, net		223		1,505		856		4,823
(Loss) earnings before income taxes		(6,495)		23,224		(8,408)		28,347
Income tax benefit (provision)		11,698		(4,900)		17,638		7,062
Net earnings		5,203		18,324		9,230		35,409
Net earnings attributable to noncontrolling interests		(731)		(325)		(1,049)		(473)
Net earnings attributable to ANGI Homeservices Inc. shareholders		$	4,472	$	17,999	$	8,181	$	34,936
Other (expense) income, net										Other (expense) income, net	(767)		421
Loss before income taxes										Loss before income taxes	(7,275)		(18,149)
Income tax benefit										Income tax benefit	9,289		8,965
Net earnings (loss)										Net earnings (loss)	2,014		(9,184)
Net (earnings) loss attributable to noncontrolling interests										Net (earnings) loss attributable to noncontrolling interests	(83)		226
Net earnings (loss) attributable to Angi Inc. shareholders										Net earnings (loss) attributable to Angi Inc. shareholders	$	1,931	$	(8,958)

Earnings per share information attributable to ANGI Homeservices Inc. shareholders:
Basic earnings per share		$	0.01	$	0.04	$	0.02	$	0.07
Diluted earnings per share		$	0.01	$	0.04	$	0.02	$	0.07
Per share information attributable to Angi Inc. shareholders:										Per share information attributable to Angi Inc. shareholders:
Basic earnings (loss) per share										Basic earnings (loss) per share	$	0.00	$	(0.02)
Diluted earnings (loss) per share										Diluted earnings (loss) per share	$	0.00	$	(0.02)

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

Selling and marketing expense	Selling and marketing expense	$	2,346	$	796	$	4,069	$	2,801	Selling and marketing expense	$	1,017	$	1,003
General and administrative expense	General and administrative expense	10,866		6,375		46,977		37,124		General and administrative expense	84		22,980
Product development expense	Product development expense	1,485		1,613		3,985		5,661		Product development expense	933		1,592
Total stock-based compensation expense	Total stock-based compensation expense	$	14,697	$	8,784	$	55,031	$	45,586	Total stock-based compensation expense	$	2,034	$	25,575

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

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(In thousands)
Net earnings $ 5,203 $ 18,324 $ 9,230 $ 35,409
Other comprehensive income (loss), net of income taxes:
Change in foreign currency translation adjustment 3,053 (3,071) 971 (2,880)
Change in unrealized gains and losses on available-for-sale debt securities 0 0 0 (3)
Total other comprehensive income (loss), net of income taxes 3,053 (3,071) 971 (2,883)
Comprehensive income, net of income taxes 8,256 15,253 10,201 32,526
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net earnings attributable to noncontrolling interests (731) (325) (1,049) (473)
Change in foreign currency translation adjustment attributable to noncontrolling interests (1,298) 390 (577) 581
Comprehensive (income) loss attributable to noncontrolling interests (2,029) 65 (1,626) 108
Comprehensive income attributable to ANGI Homeservices Inc. shareholders $ 6,227 $ 15,318 $ 8,575 $ 32,634


	Three Months Ended March 31,
	2021		2020

Net earnings (loss)	$	2,014	$	(9,184)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	679		(6,568)


Comprehensive income (loss)	2,693		(15,752)
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net (earnings) loss attributable to noncontrolling interests	(83)		226
Change in foreign currency translation adjustment attributable to noncontrolling interests	(693)		(46)
Comprehensive (income) loss attributable to noncontrolling interests	(776)		180
Comprehensive income (loss) attributable to Angi Inc. shareholders	$	1,917	$	(15,572)

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

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

(Unaudited)

ANGI Homeservices Inc. Shareholders' Equity
Class A
Common Stock
$0.001
Par Value
Class B
Common Stock
$0.001
Par Value
Class C
Common Stock
$0.001
Par Value
Total
ANGI Homeservices Inc. Shareholders' Equity
Accumulated
Other
Comprehensive (Loss) Income 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 June 30, 2020 $ 25,093 $ 89 89,076 $ 422 421,757 $ 0 0 $ 1,387,618 $ 19,741 $ (2,740) $ (112,808) $ 1,292,322 $ 9,604 $ 1,301,926
Net earnings 438 — — — — — — — 4,472 — — 4,472 293 4,765
Other comprehensive income, net of income taxes 920 — — — — — — — — 1,755 — 1,755 378 2,133
Stock-based compensation expense 0 — — — — — — 13,846 — — — 13,846 — 13,846
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 4 3,584 — — — — (37,842) — — — (37,838) — (37,838)
Issuance of common stock to IAC pursuant to the employee matters agreement — — — — 102 — — (632) — — — (632) — (632)
Adjustment of redeemable noncontrolling interests to fair value (677) — — — — — — 677 — — — 677 — 677
Purchase of noncontrolling interests — — — — — — — — — — — (1,115) (1,115)
Other — — — — — — — (690) — — — (690) 689 (1)
Balance as of September 30, 2020 $ 25,774 $ 93 92,660 $ 422 421,859 $ 0 0 $ 1,362,977 $ 24,213 $ (985) $ (112,808) $ 1,273,912 $ 9,849 $ 1,283,761

Balance as of June 30, 2019 $ 23,421 $ 86 85,803 $ 421 421,453 $ 0 0 $ 1,338,280 $ (1,860) $ (1,482) $ 0 $ 1,335,445 $ 9,101 $ 1,344,546
Net earnings 233 — — — — — — — 17,999 — — 17,999 92 18,091
Other comprehensive loss (365) — — — — — — — — (2,681) — (2,681) (25) (2,706)
Stock-based compensation expense 36 — — — — — — 8,748 — — — 8,748 — 8,748
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 0 272 — — — — (2,357) — — — (2,357) — (2,357)
Issuance of common stock to IAC pursuant to the employee matters agreement — — — 1 117 — — (971) — — — (970) — (970)
Purchase of treasury stock — — — — — — — — — — (34,157) (34,157) — (34,157)
Purchase of redeemable noncontrolling interests (71) — — — — — — — — — — — — —
Adjustment of redeemable noncontrolling interests to fair value (1,255) — — — — — — 1,255 — — — 1,255 — 1,255
Other — — — — — — — 1 — — — 1 — 1
Balance as of September 30, 2019 $ 21,999 $ 86 86,075 $ 422 421,570 $ 0 0 $ 1,344,956 $ 16,139 $ (4,163) $ (34,157) $ 1,323,283 $ 9,168 $ 1,332,451


				Angi Inc. Shareholders’ Equity
				Class A Common Stock $0.001 Par Value			Class B Convertible Common Stock $0.001 Par Value			Class C Common Stock $0.001 Par Value											Total Angi Inc. Shareholders’ Equity

																	Accumulated Other Comprehensive Income (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, 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	(60)			—		—	—		—	—		—	—		1,931		—		—		1,931		143		2,074
Other comprehensive income (loss)	580			—		—	—		—	—		—	—		—		(14)		—		(14)		113		99
Stock-based compensation expense	0			—		—	—		—	—		—	2,542		—		—		—		2,542		—		2,542
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1		1,591	—		—	—		—	(48,052)		—		—		—		(48,051)		—		(48,051)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			3		2,579	—		96	—		—	(3)		—		—		—		—		—		0
Purchase of treasury stock	—			—		—	—		—	—		—	—		—		—		(4,916)		(4,916)		—		(4,916)
Purchase of redeemable noncontrolling interests	(22,938)			—		—	—		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable noncontrolling interests to fair value	662			—		—	—		—	—		—	(662)		—		—		—		(662)		—		(662)


Balance as of March 31, 2021	$	4,608		$	98	98,408	$	422	421,958	$	—	—	$	1,333,294	$	11,680	$	4,623	$	(126,997)	$	1,223,120	$	10,823	$	1,233,943

Balance as of 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	(275)			—		—	—		—	—		—	—		(8,958)		—		—		(8,958)		49		(8,909)
Other comprehensive income (loss)	99			—		—	—		—	—		—	—		—		(6,614)		—		(6,614)		(53)		(6,667)
Stock-based compensation expense	15			—		—	—		—	—		—	22,211		—		—		—		22,211		—		22,211
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1		617	—		—	—		—	(2,553)		—		—		—		(2,552)		—		(2,552)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			—		—	—		187	—		—	(791)		—		—		—		(791)		—		(791)
Purchase of treasury stock	—			—		—	—		—	—		—	—		—		—		(38,971)		(38,971)		—		(38,971)
Purchase of redeemable noncontrolling interests	(3,165)			—		—	—		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable noncontrolling interests to fair value	476			—		—	—		—	—		—	(476)		—		—		—		(476)		—		(476)
Adjustment pursuant to the tax sharing agreement	—			—		—	—		—	—		—	3,613		—		—		—		3,613		—		3,613
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

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

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF ~~SHAREHOLDERS' EQUITY~~

~~Nine Months Ended September 30, 2020 and 2019~~CASH FLOWS

(Unaudited)

ANGI Homeservices Inc. Shareholders' Equity
Class A
Common Stock
$0.001
Par Value
Class B
Common Stock
$0.001
Par Value
Class C
Common Stock
$0.001
Par Value
Total
ANGI Homeservices Inc. Shareholders' Equity
Accumulated
Other
Comprehensive
(Loss) Income 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 $ 0 0 $ 1,357,075 $ 16,032 $ (1,379) $ (57,949) $ 1,314,288 $ 9,264 $ 1,323,552
Net earnings 383 — — — — — — — 8,181 — — 8,181 666 8,847
Other comprehensive income, net of income taxes 233 — — — — — — — — 394 — 394 344 738
Stock-based compensation expense 15 — — — — — — 54,664 — — — 54,664 — 54,664
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 6 5,653 — — — — (48,615) — — — (48,609) — (48,609)
Issuance of common stock to IAC pursuant to the employee matters agreement — — — — 289 — — (1,423) — — — (1,423) — (1,423)
Purchase of treasury stock — — — — — — — — — — (54,859) (54,859) — (54,859)
Purchase of redeemable noncontrolling interests (3,165) — — — — — — — — — — — — —
Adjustment of redeemable noncontrolling interests to fair value 1,645 — — — — — — (1,645) — — — (1,645) — (1,645)
Purchase of noncontrolling interests — — — — — — — — — — — — (1,115) (1,115)
Adjustment pursuant to the tax sharing agreement — — — — — — — 3,613 — — — 3,613 — 3,613
Other — — — — — — — (692) — — — (692) 690 (2)
Balance as September 30, 2020 $ 25,774 $ 93 92,660 $ 422 421,859 $ 0 0 $ 1,362,977 $ 24,213 $ (985) $ (112,808) $ 1,273,912 $ 9,849 $ 1,283,761

Balance as of December 31, 2018 $ 18,163 $ 81 80,515 $ 421 421,118 $ 0 0 $ 1,333,097 $ (18,797) $ (1,861) $ 0 $ 1,312,941 $ 9,046 $ 1,321,987
Net earnings 284 — — — — — — — 34,936 — — 34,936 189 35,125
Other comprehensive loss (514) — — — — — — — — (2,302) — (2,302) (67) (2,369)
Stock-based compensation expense 113 — — — — — — 45,473 — — — 45,473 — 45,473
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 5 5,560 — — — — (27,805) — — — (27,800) — (27,800)
Issuance of common stock to IAC pursuant to the employee matters agreement — — — 1 452 — — (1,766) — — — (1,765) — (1,765)
Purchase of treasury stock — — — — — — — — — — (34,157) (34,157) — (34,157)
Purchase of redeemable noncontrolling interests (71) — — — — — — — — — — — — —
Adjustment of redeemable noncontrolling interests to fair value 4,024 — — — — — — (4,024) — — — (4,024) — (4,024)
Other — — — — — — — (19) — — — (19) — (19)
Balance as of September 30, 2019 $ 21,999 $ 86 86,075 $ 422 421,570 $ 0 0 $ 1,344,956 $ 16,139 $ (4,163) $ (34,157) $ 1,323,283 $ 9,168 $ 1,332,451


	Three Months Ended March 31,
	2021		2020
	(In thousands)
Cash flows from operating activities:
Net earnings (loss)	$	2,014	$	(9,184)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Stock-based compensation expense	2,034		25,575
Amortization of intangibles	5,074		12,980
Provision for credit losses	19,118		17,807
Depreciation	15,969		12,138
Deferred income taxes	(10,268)		(8,348)

Impairment of long-lived assets	1,854		0
Revenue reserves	2,910		2,140
Other adjustments, net	2,235		1,076
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	(34,638)		(21,226)
Other assets	573		3,043
Accounts payable and other liabilities	4,539		21,008
Income taxes payable and receivable	938		(873)
Deferred revenue	2,993		(230)
Net cash provided by operating activities	15,345		55,906
Cash flows from investing activities:

Capital expenditures	(18,743)		(13,236)

Proceeds from maturities of marketable debt securities	50,000		—
Net proceeds from the sale of a business	0		767


Net cash provided by (used in) investing activities	31,257		(12,469)
Cash flows from financing activities:

Principal payments on Term Loan	(6,875)		(3,438)


Purchase of treasury stock	(4,916)		(38,512)

Withholding taxes paid on behalf of employees on net settled stock-based awards	(48,168)		(3,222)

Purchase of noncontrolling interests	(22,938)		(3,165)

Net cash used in financing activities	(82,897)		(48,337)
Total cash used	(36,295)		(4,900)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	384		(1,327)
Net decrease in cash and cash equivalents and restricted cash	(35,911)		(6,227)
Cash and cash equivalents and restricted cash at beginning of period	813,561		391,478
Cash and cash equivalents and restricted cash at end of period	$	777,650	$	385,251

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

~~Table of Contents~~

ANGI ~~HOMESERVICES INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENT OF CASH FLOWS~~

~~(Unaudited)~~

Nine Months Ended September 30,
2020 2019
(In thousands)
Cash flows from operating activities:
Net earnings $ 9,230 $ 35,409
Adjustments to reconcile net earnings to net cash provided by operating activities:
Stock-based compensation expense 55,031 45,586
Amortization of intangibles 38,846 42,421
Provision for credit losses 60,090 49,294
Depreciation 38,614 27,039
Deferred income taxes (18,081) (8,294)
Other adjustments, net 8,694 6,371
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable (70,705) (66,596)
Other assets 5,200 15,701
Accounts payable and other liabilities 46,941 30,609
Income taxes payable and receivable (570) 1,628
Deferred revenue (105) 2,916
Net cash provided by operating activities 173,185 182,084
Cash flows from investing activities:
Acquisition, net of cash acquired 0 (20,341)
Capital expenditures (37,637) (54,801)
Purchases of marketable debt securities (49,987) 0
Proceeds from maturities of marketable debt securities — 25,000
Net proceeds from the sale of a business 730 23,615
Other, net — (103)
Net cash used in investing activities (86,894) (26,630)
Cash flows from financing activities:
Proceeds from the issuance of Senior Notes 500,000 0
Principal payments on Term Loan (10,313) (10,313)
Principal payments on related-party debt 0 (1,008)
Debt issuance costs (5,635) 0
Purchase of treasury stock (54,400) (33,979)
Proceeds from the exercise of stock options 0 573
Withholding taxes paid on behalf of employees on net settled stock-based awards (49,993) (30,039)
Distribution from (to) IAC pursuant to the tax sharing agreement 3,071 (11,355)
Purchase of noncontrolling interests (4,280) (71)
Other, net 0 (3,732)
Net cash provided by (used in) financing activities 378,450 (89,924)
Total cash provided 464,741 65,530
Effect of exchange rate changes on cash and cash equivalents and restricted cash (354) 387
Net increase in cash and cash equivalents and restricted cash 464,387 65,917
Cash and cash equivalents and restricted cash at beginning of period 391,478 338,821
Cash and cash equivalents and restricted cash at end of period $ 855,865 $ 404,738

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

~~Table of Contents~~

~~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 ~~230,000~~250,000 domestic service professionals actively ~~seek~~sought consumer matches, ~~complete~~completed jobs, or ~~advertise~~advertised work through ~~ANGI Homeservices' platforms~~Angi Inc. platforms; and consumers ~~turn~~turned to at least one of our brands to find a professional for ~~more than 25~~approximately 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 March 31, 2021.

The Company has 2 operating segments (i) North America (United States and Canada), which includes HomeAdvisor, ~~Angie's List,~~Angi (formerly Angie’s List), Handy, ~~mHelpDesk, HomeStars~~ and ~~Fixd Repair~~HomeStars; 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 Homeservices~~Angi Inc. and its subsidiaries (unless the context requires otherwise).

At ~~September 30, 2020,~~March 31, 2021, IAC/InterActiveCorp ~~("IAC"~~(“IAC”) owned ~~84.5%~~84.2% and 98.2% of the economic interest and voting interest, respectively, of ~~ANGI Homeservices.~~the Company.

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances between and among the Company and its subsidiaries have been eliminated. All intercompany transactions between (i) Angi 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.

For the purpose of these financial statements, income taxes have been computed as if Angi 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 unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of the Company's consolidated financial position, consolidated results of operations and consolidated cash flows for the periods presented.Interim results are not necessarily indicative of the results that may be expected for the full year.The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

COVID-19 Update

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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, th~~e 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. The Company continued to experience strong demand for home services in the third quarter of 2020. However, Additionally, many service ~~professionals'~~professionals’ businesses have been adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which has negatively impacted the ~~Company's~~Company’s ability to monetize ~~this~~on increased ~~level~~levels of service requests.

In addition, the United States, which represents 94% of the Company's revenue for both the three and nine months ended September 30, 2020, has experienced a significant resurgence of the COVID-19 virus with record levels of infection being reported in the weeks following September 30, 2020. Europe, which is the second largest market for the Company's products and services, has also seen a dramatic resurgence in COVID-19. This resurgence and the measures designed to curb its spread could result in continued variability 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.

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~Basis of Presentation and Consolidation~~

~~The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”).~~

The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated.

For the purpose of these financial statements, income taxes have been computed as if ANGI Homeservices 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 unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of the Company's consolidated financial position, consolidated results of operations and consolidated cash flows for the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

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 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's~~Company’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."”

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

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

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 $20.8 million and $51.3 million during the three and nine months ended September 30, 2020, respectively.

Deferred Revenue

Deferred revenue consists of payments that are received or are contractually due in advance of the ~~Company's~~Company’s performance. ~~The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period.~~ The Company classifies deferred revenue as current when the remaining term of the applicable subscription period or expected completion of the ~~Company's~~Company’s performance obligation is one year or less. The current and non-current deferred revenue balances at December 31, ~~2019~~2020 were ~~$58.2~~$54.7 million and $0.2 million, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, the Company recognized $34.4 million of revenue that was included in the deferred revenue balance as of December 31, 2020. During the three months ended March 31, 2020, the Company recognized ~~$55.7~~$37.1 million of revenue that was included in the deferred revenue balance as of December 31, 2019. ~~During the nine months ended September 30, 2019, the Company recognized $58.5 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 ~~September 30, 2020~~March 31, 2021 are ~~$58.2~~$57.7 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") No. 2014-09,~~ ASC 606 Revenue from Contracts with Customers, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which the Company has the right to invoice for services performed.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

For sales incentive programs where the customer relationship period is one year or less, the Company has elected the practical expedient to expense the costs as incurred. The amount of capitalized sales commissions where the initial customer relationship period is greater than one year is ~~$52.2~~$49.2 million and ~~$39.1~~$49.6 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The current and non-current capitalized sales commissions balances are included in ~~"Other~~“Other current ~~assets"~~assets” and ~~"Other~~“Other non-current ~~assets"~~assets” in the accompanying consolidated balance sheet and are ~~$50.0~~$48.7 million and ~~$2.2~~$49.2 million, and ~~$35.1~~$0.5 million and ~~$4.0~~$0.4 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

~~Allowance for Credit Losses and Revenue Reserve~~

~~The following table presents the changes in the allowance for credit losses for the nine months ended September 30, 2020:~~


	~~September 30, 2020~~
	~~(In thousands)~~
~~Balance at January 1~~	$	~~19,066~~
~~Current period provision for credit losses~~	~~60,090~~
~~Write-offs charged against the allowance~~	~~(53,208)~~
~~Recoveries collected~~	~~1,883~~
~~Balance at September 30~~	$	~~27,831~~

~~The revenue reserve~~ ~~was~~ $2.0 million and $1.2 million at September 30, 2020 and December 31, 2019, respectively. The total allowance for credit losses and revenue reserve was $29.8 million and $20.3 million as of September 30, 2020 and December 31, 2019, respectively.

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~Adoption of New~~Recent Accounting Pronouncements

~~Adoption of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~

~~The Company~~There 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 on~~that 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 not~~to have a material ~~impact~~effect on the ~~Company's consolidated~~results 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 aspects~~condition 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.

NOTE 2—INCOME TAXES

The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax ~~benefit/~~benefit and/or provision ~~have~~has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the ~~Company's~~Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the accompanying consolidated statement of cash flows. The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes. Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision 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.

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 ~~realizability~~realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the ~~Company's~~Company’s tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in ~~the~~ income tax ~~provision/~~provision or benefit in the quarter in which the change occurs.

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

For the three months ended ~~September 30, 2020,~~March 31, 2021, the Company recorded an income tax benefit of ~~$11.7~~$9.3 million due primarily to excess tax benefits generated by the exercise and vesting offor stock-based awards. For the ~~nine~~three months ended ~~September 30,~~March 31, 2020, the Company recorded an income tax benefit of ~~$17.6~~$9.0 million, which represents an effective income tax rate of 49% and is higher than the statutory rate of 21% due primarily to ~~excess tax benefits generated by the exercise and vesting of stock-based awards and~~ a $5.7 million reduction to deferred taxes due to the true-up of the state tax rate for an indefinite-lived intangible asset,. For the three months ended September 30, 2019, the Company recorded an income tax provision of $4.9 million, which represents an effective income tax rate of 21% and approximates the statutory rate of 21% due primarily to partially offset by unbenefited foreign ~~losses and state taxes, offset by research credits and excess tax benefits generated by the exercise and vesting of stock-based awards.~~ For the nine months ended September 30, 2019, the Company recorded an income tax benefit, despite pre-tax income, of $7.1 million due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.losses.

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

Table of Contents

ANGI INC. AND SUBSIDIARIES

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, 2010 through ~~2016,~~2017, which includes the operations of the Company. ~~The IRS began its audit of the year ended December 31, 2017 in the second quarter of 2020.~~ The statutes of limitations for the years 2010 through 2012 and for the years 2013 through 2017 have been extended to May 31, 2021 and ~~December 31, 2021,~~June 30, 2022, respectively. 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 ~~the~~ liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company has unrecognized tax benefits ~~including interest~~ of ~~$4.2~~$5.6 million and ~~$4.1~~$5.3 million, ~~respectively, were included in unrecognized tax positions~~respectively; all of which are for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at ~~September 30, 2020~~March 31, 2021 are subsequently recognized, the income tax provision would be reduced by ~~$4.1~~$5.4 million. The comparable amount as of December 31, ~~2019~~2020 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 ~~September 30, 2021~~March 31, 2022 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 September 30, 2020, the Company has a U.S. federal and state gross deferred tax asset of $190.1 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, $65.2 million will be utilized upon the future reversal of deferred tax liabilities and the remaining net deferred tax asset of $124.9 million will be utilized based on forecasts of future taxable income.

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

NOTE 3—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Marketable Debt Securities

~~At September 30, 2020, current available-for-sale marketable debt securities are as follows:~~

Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value
(In thousands)
Treasury discount notes $ 49,991 $ 1 $ 0 $ 49,992
Total available-for-sale marketable debt securities $ 49,991 $ 1 $ 0 $ 49,992

The Company did 0tnot hold any available-for-sale marketable debt securities at March 31, 2021.

At December 31, ~~2019.~~2020, current available-for-sale marketable debt securities were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Treasury discount notes	$	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 ~~September 30,~~December 31, 2020 ~~are~~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's~~Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

•Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.

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


		September 30, 2020									March 31, 2021
		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			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)									(In thousands)
Assets:	Assets:									Assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	269,013	$	0	$	0	$	269,013	Money market funds	$	552,024	$	0	$	0	$	552,024
Treasury discount notes	Treasury discount notes	0		474,976		0		474,976		Treasury discount notes	0		100,000		0		100,000
Time deposits	Time deposits	0		2,988		0		2,988		Time deposits	0		1,586		0		1,586
Marketable debt securities:	Marketable debt securities:									Marketable debt securities:
Treasury discount notes	Treasury discount notes	0		49,992		0		49,992		Treasury discount notes	0		0		0		0
Total	Total	$	269,013	$	527,956	$	0	$	796,969	Total	$	552,024	$	101,586	$	0	$	653,610

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~


		December 31, 2019									December 31, 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			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)									(In thousands)
Assets:	Assets:									Assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	291,810	$	0	$	0	$	291,810	Money market funds	$	374,014	$	0	$	0	$	374,014
Treasury discount notes										Treasury discount notes	0		324,995		0		324,995
Time deposits	Time deposits	0		23,040		0		23,040		Time deposits	0		2,721		0		2,721
Marketable debt securities:										Marketable debt securities:
Treasury discount notes										Treasury discount notes	0		49,995		0		49,995
Total	Total	$	291,810	$	23,040	$	0	$	314,850	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.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Financial instruments measured at fair value only for disclosure purposes

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

September 30, 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)
$ (715,408) $ (715,288) $ (231,946) $ (232,581)


	March 31, 2021				December 31, 2020
	Carrying value		Fair value		Carrying value		Fair value
	(In thousands)

Long-term debt, net (a)	$	(705,987)	$	(710,692)	$	(712,277)	$	(725,700)

~~_________________~~________________________

(a) At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the carrying value of long-term debt, net includes unamortized debt issuance costs of ~~$8.0~~$7.1 million and ~~$1.8~~$7.7 million, respectively.

~~At September 30, 2020 and December 31, 2019, the~~

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.

NOTE 4—LONG-TERM DEBT

Long-term debt consists of:

September 30, 2020 December 31, 2019
(In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 ("Senior Notes"); interest payable each February 15 and August 15, commencing February 15, 2021 $ 500,000 $ 0
ANGI Group Term Loan due November 5, 2023 ("Term Loan") 237,188 247,500
Total long-term debt 737,188 247,500
Less: current portion of Term Loan 13,750 13,750
Less: unamortized debt issuance costs 8,030 1,804
Total long-term debt, net $ 715,408 $ 231,946

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~


	March 31, 2021		December 31, 2020
	(In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 (“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	213,125		220,000
Total long-term debt	713,125		720,000

Less: unamortized debt issuance costs	7,138		7,723
Total long-term debt, net	$	705,987	$	712,277

ANGI Group Senior Notes

OnThe ANGI Group Senior Notes were issued on August 20, 2020, ANGI Group, LLC ("ANGI Group"), a direct, wholly-owned subsidiary of the Company, issued $500 million in aggregate principal amount of the Senior Notes, the proceeds of which are intended for general corporate purposes, including potential future acquisitions and return of capital.2020. At any time prior to August 15, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, these notes may be redeemed at the redemption prices set forth ~~below,~~in the indenture governing the notes, plus accrued and unpaid interest thereon, if any, to the applicable redemption ~~date, if redeemed during the twelve-month period beginning on August 15 of the years indicated below:~~date.

Year Percentage
2023 101.938 %
2024 100.969 %
2025 and thereafter 100.000 %

The indenture governing the Senior Notes contains a covenant that would limit ANGI Group’s ability to incur liens for borrowed money in the event a default has occurred or ANGI Group’s secured leverage ratio (as defined in the indenture) exceeds 3.75 to 1.0. At ~~September 30, 2020,~~March 31, 2021, there were no limitations pursuant thereto.

ANGI Group Term Loan and ANGI Group Revolving Facility

ANGI was a party to a credit agreement that terminates on November 5, 2021. The credit agreement governs the Term Loan and revolving credit facility (the "Revolving Facility"). On August 12, 2020, ANGI Group entered into a joinder agreement with the Company, the other subsidiaries of the Company that are party to the credit agreement, and each of the other loan parties to the credit agreement, pursuant to which ANGI Group became the successor borrower under the credit agreement and ANGI Homeservices Inc.'s obligations thereunder were terminated. In addition, on August 12, 2020, the definition of "Permitted Unsecured Ratio Debt" in the credit agreement was amended to remove the requirement that guarantees of certain indebtedness of the borrower be subordinated to the guarantees under the credit agreement.

The outstanding balance of the ANGI Group Term Loan was ~~$237.2~~$213.1 million and ~~$247.5~~$220.0 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. ~~There are quarterly principal payments of $3.4 million through December~~During the three months ended March 31, 2021, ANGI Group prepaid $6.9 million ~~for~~that was otherwise due in the ~~one-year period ending December 31,~~first quarter of 2022, and ~~$10.3 million through maturity~~as of May 6, 2021, 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 September 30, 2020 and December 31, 2019, the~~outstanding balance was repaid in its entirety. The Term Loan bore interest at LIBOR plus ~~1.50%~~2.00%, or ~~1.66%~~2.10% and ~~3.25%,~~2.16% at March 31, 2021 and December 31, 2020, respectively. ~~The spread over LIBOR is subject to change in future periods based on ANGI Group's consolidated net leverage ratio.~~

The ~~Term Loan~~ANGI Group Credit Agreement requires ANGI Group 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 (in each case as defined in the credit agreement).~~1.0. The ~~credit agreement~~ANGI Group Credit Agreement also contains covenants that would limit ANGI ~~Group's~~Group’s ability to pay dividends, or make distributions in the event a default has occurred or ANGI ~~Group's~~Group’s consolidated net leverage ratio exceeds 4.25 to 1.0. At ~~September 30, 2020,~~March 31, 2021, there were no limitations pursuant thereto.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The ~~$250~~$250.0 million ANGI Group Revolving Facility expires on November 5, 2023. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, there were 0 outstanding borrowings under the ANGI Group Revolving Facility. The ~~annual~~ commitment fee, ~~on undrawn funds~~which is based on ANGI Group's consolidated net leverage ratio most recently reported and the average daily dollar amount of the available revolving commitments, was 2535 basis points at both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. Any future borrowings under the ANGI Group Revolving Facility would bear interest, at ANGI ~~Group's~~Group’s option, at either a base rate or LIBOR, in each case plus an applicable margin, which is based on ANGI ~~Group's~~Group’s consolidated net leverage ratio. The financial and other covenants are the same as those for the ANGI Group Term Loan.

~~Table of Contents~~

The ANGI ~~HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

~~The~~Group Senior Notes ~~Ter~~and the ANGI Group Credit Agreement~~m Loan and Revolving Facility~~ are guaranteed by certain of ANGI ~~Group's~~Group’s wholly-owned material domestic subsidiaries and ANGI ~~Group's~~Group’s obligations under the ~~Term Loan and the Revolving Facility~~ANGI Group Credit Agreement are secured by substantially all assets of ANGI Group and the guarantors, subject to certain exceptions. ~~The Term Loan and outstanding~~Outstanding borrowings ~~if any,~~ under the ANGI Group Revolving Facility ~~rank equally with each other, and~~ have priority over the ANGI Group Senior Notes to the extent of the value of the assets securing the borrowings under the ~~credit agreement.~~ANGI Group Credit Agreement.

Long-term Debt Maturities:

Long-term debt maturities as of ~~September 30, 2020~~March 31, 2021 are summarized in the table below:


Years Ending December 31,				Years Ending December 31,	(In thousands)
		(In thousands)
Remainder of 2020		$	3,438
2021		13,750
2022	2022	27,500		2022	$	20,625
2023	2023	192,500		2023	192,500
2028	2028	500,000		2028	500,000
Total	Total	737,188		Total	713,125
Less: current portion of Term Loan		13,750
Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	8,030		Less: unamortized debt issuance costs	7,138
Total long-term debt, net	Total long-term debt, net	$	715,408	Total long-term debt, net	$	705,987

NOTE 5—ACCUMULATED OTHER COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

The following tables present the components of accumulated other comprehensive ~~loss:~~income (loss):

Three Months Ended September 30,
2020 2019
Foreign
Currency
Translation
Adjustment Accumulated
Other
Comprehensive Loss Foreign
Currency
Translation
Adjustment Accumulated
Other
Comprehensive
Loss
(In thousands)
Balance at July 1 $ (2,740) $ (2,740) $ (1,482) $ (1,482)
Other comprehensive income (loss) 1,755 1,755 (2,681) (2,681)
Balance at September 30 $ (985) $ (985) $ (4,163) $ (4,163)


	Three Months Ended March 31, 2021
	Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Income
	(In thousands)
Balance at January 1	$	4,637	$	4,637
Other comprehensive loss	(14)		(14)
Balance at March 31	$	4,623	$	4,623

Nine Months Ended September 30,
2020 2019
Foreign
Currency
Translation
Adjustment Accumulated
Other
Comprehensive Loss Foreign
Currency
Translation
Adjustment Unrealized Gains (Losses) On Available-For-Sale Debt Securities Accumulated
Other
Comprehensive
Loss
(In thousands)
Balance at January 1 $ (1,379) $ (1,379) $ (1,864) $ 3 $ (1,861)
Other comprehensive income (loss ) 394 394 (2,299) (3) (2,302)
Balance at September 30 $ (985) $ (985) $ (4,163) $ 0 $ (4,163)

~~At both September 30, 2020 and 2019, there was 0 tax benefit or provision on the accumulated other comprehensive loss.~~


	Three Months Ended March 31, 2020
	Foreign Currency Translation Adjustment		Accumulated Other Comprehensive Loss
	(In thousands)
Balance at January 1	$	(1,379)	$	(1,379)
Other comprehensive loss	(6,614)		(6,614)
Balance at March 31	$	(7,993)	$	(7,993)

1714

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

At both March 31, 2021 and 2020, there was 0 tax benefit or provision on the accumulated other comprehensive income (loss).

NOTE 6—EARNINGS (LOSS) PER SHARE

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

Three Months Ended September 30,
2020 2019
Basic Diluted Basic Diluted
(In thousands, except per share data)
Numerator:
Net earnings $ 5,203 $ 5,203 $ 18,324 $ 18,324
Net earnings attributable to noncontrolling interests (731) (731) (325) (325)
Net earnings attributable to ANGI Homeservices Inc. shareholders $ 4,472 $ 4,472 $ 17,999 $ 17,999
Denominator:
Weighted average basic shares outstanding 497,501 497,501 505,836 505,836
Dilutive securities (a) (b)
— 17,218 — 6,241
Denominator for earnings per share—weighted average shares 497,501 514,719 505,836 512,077
Earnings per share attributable to ANGI Homeservices Inc. shareholders:
Earnings per share $ 0.01 $ 0.01 $ 0.04 $ 0.04

Nine Months Ended September 30,
2020 2019
Basic Diluted Basic Diluted
(In thousands, except per share data)
Numerator:
Net earnings $ 9,230 $ 9,230 $ 35,409 $ 35,409
Net earnings attributable to noncontrolling interests (1,049) (1,049) (473) (473)
Net earnings attributable to ANGI Homeservices Inc. shareholders $ 8,181 $ 8,181 $ 34,936 $ 34,936
Denominator:
Weighted average basic shares outstanding 497,574 497,574 505,661 505,661
Dilutive securities (a) (b)
— 13,901 — 12,955
Denominator for earnings per share—weighted average shares 497,574 511,475 505,661 518,616
Earnings per share attributable to ANGI Homeservices Inc. shareholders:
Earnings per share $ 0.02 $ 0.02 $ 0.07 $ 0.07


	Three Months Ended March 31,
	2021				2020
	Basic		Diluted		Basic		Diluted
	(In thousands, except per share data)
Numerator:
Net earnings (loss)	$	2,014	$	2,014	$	(9,184)	$	(9,184)
Net (earnings) loss attributable to noncontrolling interests	(83)		(83)		226		226
Net earnings (loss) attributable to Angi Inc. Class A and Class B Common Stock shareholders	$	1,931	$	1,931	$	(8,958)	$	(8,958)

Denominator:
Weighted average basic Class A and Class B common stock shares outstanding	500,663		500,663		499,454		499,454
Dilutive securities (a) (b) (c)	—		9,990		—		0
Denominator for earnings (loss) per share—weighted average shares	500,663		510,653		499,454		499,454

Earnings (loss) per share attributable to Angi Inc. Class A and Class B Common Stock shareholders:
Earnings (loss) per share	$	0.00	$	0.00	$	(0.02)	$	(0.02)

________________________

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

(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 appreciation rights, stock options and subsidiary denominated equity and vesting of restricted stock units ~~("RSUs"~~(“RSUs”). For the three ~~and nine~~ months ended ~~September 30, 2020, 1.4 million and 5.4~~March 31, 2021, 5.2 million potentially dilutive securities ~~respectively,~~ are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and nine months ended September 30, 2019, 6.4 million and 6.0 million potentially dilutive securities, respectively, 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~~performance-based stock units are included in the denominator for earnings per share if (i) the applicable ~~market~~performance or ~~performance~~market condition(s) has been met and (ii) the inclusion of the market-based ~~awards~~award and ~~PSUs~~performance-based stock units is dilutive for the respective reporting periods. For ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2020, 1.2~~March 31, 2021, 1.4 million shares underlying market-based awards and ~~PSUs~~performance-based stock awards were excluded from the calculation of diluted earnings per share because the ~~market~~performance or ~~performance~~market condition(s) had not been met.

(c) For ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2019, 4.8~~March 31, 2020, the Company had a loss from operations and as a result, approximately 38.0 million ~~shares underlying market-based awards and PSUs~~potentially dilutive securities were excluded from ~~the calculation of diluted~~computing dilutive earnings per share because the ~~market or performance condition(s) had not~~impact would have been ~~met.~~anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute all earnings per share amounts.

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; and the focus of the businesses with regards to the types of services or products offered or the target market.

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents revenue by reportable segment:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
		(In thousands)										(In thousands)
Revenue:	Revenue:									Revenue:
North America	North America	$	372,226	$	339,144	$	1,053,775	$	945,538	North America		$	361,041	$	324,132
Europe	Europe	17,687		18,214		54,849		59,159		Europe		25,988		19,518
Total	Total	$	389,913	$	357,358	$	1,108,624	$	1,004,697	Total		$	387,029	$	343,650

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
		(In thousands)										(In thousands)
North America	North America									North America
Marketplace:	Marketplace:									Marketplace:
Consumer connection revenue(a)	Consumer connection revenue(a)	$	287,568	$	252,552	$	800,047	$	695,370	Consumer connection revenue(a)		$	272,353	$	239,830

Service professional membership subscription revenue	Service professional membership subscription revenue	12,195		15,995		38,989		48,697		Service professional membership subscription revenue		11,952		13,777
Other revenue	Other revenue	6,944		4,915		19,620		11,186		Other revenue		6,745		5,169
Total Marketplace revenue	Total Marketplace revenue	306,707		273,462		858,656		755,253		Total Marketplace revenue		291,050		258,776
Advertising and other revenue(b)	Advertising and other revenue(b)	65,519		65,682		195,119		190,285		Advertising and other revenue(b)		69,991		65,356
Total North America revenue	Total North America revenue	372,226		339,144		1,053,775		945,538		Total North America revenue		361,041		324,132
Europe	Europe									Europe
Consumer connection revenue(c)	Consumer connection revenue(c)	14,006		14,125		43,640		46,480		Consumer connection revenue(c)		22,351		15,689
Service professional membership subscription revenue	Service professional membership subscription revenue	3,278		3,465		9,792		10,820		Service professional membership subscription revenue		3,328		3,299
Advertising and other revenue	Advertising and other revenue	403		624		1,417		1,859		Advertising and other revenue		309		530
Total Europe revenue	Total Europe revenue	17,687		18,214		54,849		59,159		Total Europe revenue		25,988		19,518
Total revenue	Total revenue	$	389,913	$	357,358	$	1,108,624	$	1,004,697	Total revenue		$	387,029	$	343,650

________________________

(a) Includes fees paid by service professionals for consumer matches and revenue from ~~pre-priced jobs~~Angi Services sourced through the ~~HomeAdvisor and Handy~~marketplace platforms.

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

(b) Includes ~~Angie's List~~Angi revenue from service professionals under contract for advertising and ~~Angie's List~~Angi membership subscription fees from consumers, as well as revenue from ~~mHelpDesk and~~ HomeStars.

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
		(In thousands)										(In thousands)
Revenue:
Revenue										Revenue
United States	United States	$	368,082	$	335,230	$	1,041,903	$	934,409	United States		$	356,444	$	319,821
All other countries	All other countries	21,831		22,128		66,721		70,288		All other countries		30,585		23,829
Total	Total	$	389,913	$	357,358	$	1,108,624	$	1,004,697	Total		$	387,029	$	343,650

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

September 30, 2020 December 31, 2019
(In thousands)
Long-lived assets (excluding goodwill, intangible assets and ROU assets):
United States $ 94,341 $ 95,822
All other countries 9,982 7,539
Total $ 104,323 $ 103,361


	March 31, 2021		December 31, 2020
	(In thousands)
Long-lived assets (excluding goodwill and intangible assets):
United States	$	101,151	$	97,841
All other countries	10,280		11,001
Total	$	111,431	$	108,842

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
		(In thousands)										(In thousands)
Operating income (loss):	Operating income (loss):									Operating income (loss):
North America	North America	$	295	$	27,194	$	8,377	$	40,409	North America		$	9,577	$	(8,108)
Europe	Europe	(3,314)		(2,468)		(10,048)		(7,921)		Europe		(9,468)		(8,188)
Total	Total	$	(3,019)	$	24,726	$	(1,671)	$	32,488	Total		$	109	$	(16,296)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
		(In thousands)										(In thousands)
Adjusted EBITDA(d):	Adjusted EBITDA(d):									Adjusted EBITDA(d):
North America	North America	$	40,454	$	60,509	$	136,886	$	151,804	North America		$	31,165	$	41,391
Europe	Europe	$	(1,967)	$	(1,586)	$	(6,066)	$	(4,270)	Europe		$	(7,979)	$	(6,994)

________________________

(d) The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating income (loss) excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between the ~~Company's~~Company’s performance and that of its competitors. The above items are excluded from the ~~Company's~~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.

2017

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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


		Three Months Ended September 30, 2020											Three Months Ended March 31, 2021
		Operating Income (Loss)		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA			Operating Income (Loss)		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
		(In thousands)											(In thousands)
North America	North America	$	295	$	14,599	$	12,767	$	12,793	$	40,454	North America	$	9,577	$	1,936	$	14,578	$	5,074	$	31,165
Europe	Europe	(3,314)		$	98	$	1,154	$	95	$	(1,967)	Europe	(9,468)		$	98	$	1,391	$	0	$	(7,979)
Operating loss		(3,019)
Operating income (loss)												Operating income (loss)	109
Interest expense	Interest expense	(3,699)										Interest expense	(6,617)
Other income, net		223
Other loss, net												Other loss, net	(767)
Loss before income taxes	Loss before income taxes	(6,495)										Loss before income taxes	(7,275)
Income tax benefit	Income tax benefit	11,698										Income tax benefit	9,289
Net earnings	Net earnings	5,203										Net earnings	2,014
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	(731)										Net earnings attributable to noncontrolling interests	(83)
Net earnings attributable to ANGI Homeservices Inc. shareholders		$	4,472
Net earnings attributable to Angi Inc. shareholders												Net earnings attributable to Angi Inc. shareholders	$	1,931

Three Months Ended September 30, 2019
Operating
Income (Loss) Stock-based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ 27,194 $ 8,648 $ 10,690 $ 13,977 $ 60,509
Europe (2,468) $ 136 $ 554 $ 192 $ (1,586)
Operating income 24,726
Interest expense (3,007)
Other income, net 1,505
Earnings before income taxes 23,224
Income tax provision (4,900)
Net earnings 18,324
Net earnings attributable to noncontrolling interests (325)
Net earnings attributable to ANGI Homeservices Inc. shareholders $ 17,999


	Three Months Ended March 31, 2020
	Operating Loss		Stock-Based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(8,108)	$	25,312	$	11,297	$	12,890	$	41,391
Europe	(8,188)		$	263	$	841	$	90	$	(6,994)
Operating loss	(16,296)
Interest expense	(2,274)
Other income, net	421
Loss before income taxes	(18,149)
Income tax benefit	8,965
Net loss	(9,184)
Net loss attributable to noncontrolling interests	226
Net loss attributable to Angi Inc. shareholders	$	(8,958)

2118

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Nine Months Ended September 30, 2020
Operating
Income (loss) Stock-based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ 8,377 $ 54,406 $ 35,531 $ 38,572 $ 136,886
Europe (10,048) $ 625 $ 3,083 $ 274 $ (6,066)
Operating loss (1,671)
Interest expense (7,593)
Other income, net 856
Loss before income taxes (8,408)
Income tax benefit 17,638
Net earnings 9,230
Net earnings attributable to noncontrolling interests (1,049)
Net earnings attributable to ANGI Homeservices Inc. shareholders $ 8,181

Nine Months Ended September 30, 2019
Operating
Income (Loss) Stock-based
Compensation Expense Depreciation Amortization
of Intangibles Adjusted
EBITDA
(In thousands)
North America $ 40,409 $ 45,107 $ 25,124 $ 41,164 $ 151,804
Europe (7,921) $ 479 $ 1,915 $ 1,257 $ (4,270)
Operating income 32,488
Interest expense (8,964)
Other income, net 4,823
Earnings before income taxes 28,347
Income tax benefit 7,062
Net earnings 35,409
Net earnings attributable to noncontrolling interests (473)
Net earnings attributable to ANGI Homeservices Inc. shareholders $ 34,936

~~Table of Contents~~

~~ANGI HOMESERVICES INC. AND SUBSIDIARIES~~

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

~~(Unaudited)~~

NOTE 8—CONSOLIDATED FINANCIAL STATEMENT DETAILS

Cash and Cash Equivalents and Restricted ~~Cash~~Cash:

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the ~~consolidated~~accompanying balance sheet to the total amounts shown in the ~~consolidated~~accompanying statement of cash flows:


		September 30, 2020		December 31, 2019		September 30, 2019		December 31, 2018			March 31, 2021		December 31, 2020		March 31, 2020		December 31, 2019
		(In thousands)									(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	855,044	$	390,565	$	402,914	$	336,984	Cash and cash equivalents	$	777,041	$	812,705	$	384,230	$	390,565
Restricted cash included in other current assets	Restricted cash included in other current assets	392		504		1,421		1,417		Restricted cash included in other current assets	176		407		623		504
Restricted cash included in other non-current assets	Restricted cash included in other non-current assets	429		409		403		420		Restricted cash included in other non-current assets	433		449		398		409
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	855,865	$	391,478	$	404,738	$	338,821	Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	777,650	$	813,561	$	385,251	$	391,478

Restricted cash included in other current assets at ~~September 30,~~March 31, 2021 and December 31, 2020 consisted of cash reserved to fund insurance claims and cash received from customers through the marketplace platforms, representing funds collected for payments to service providers, which were not settled as of the period end.

Restricted cash included in other current assets at March 31, 2020 and December 31, 2019 primarily ~~consists~~consisted of a deposit related to corporate credit cards. ~~Restricted cash included in other current assets at~~ ~~September 30, 2019 and December 31, 2018~~ p~~rimarily consists of a cash collateralized letter of credit and a deposit related to corporate credit cards.~~

Restricted cash included in other non-current assets ~~for all periods presented consists~~at March 31, 2021 and 2020 consisted of deposits related to leases.

Credit Losses and Revenue Reserve

The following table presents the changes in the credit loss reserve for the three months ended March 31, 2021 and 2020:


	2021		2020
	(In thousands)
Balance at January 1	$	26,046	$	19,066
Current period provision for credit losses	19,118		17,070
Write-offs charged against the credit loss reserve	(20,570)		(16,298)
Recoveries collected	758		737
Balance at March 31	$	25,352	$	20,575

The revenue reserve was $3.5 million and $1.8 million at March 31, 2021 and 2020, respectively. The total allowance for credit losses and revenue reserve was $28.9 million and $22.4 million as of March 31, 2021 and 2020, respectively.

Accumulated Amortization and Depreciation

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

Asset Category September 30, 2020 December 31, 2019
(In thousands)
Right-of-use assets included in other non-current assets $ 35,511 $ 19,416
Capitalized software, leasehold improvements and equipment $ 93,842 $ 68,227
Intangible assets $ 157,999 $ 141,208


Asset Category	March 31, 2021		December 31, 2020
	(In thousands)
Right-of-use assets (included in “other non-current assets”)	$	46,446	$	40,800
Capitalized software, leasehold improvements, and equipment	$	80,052	$	95,438
Intangible assets, net	$	148,319	$	162,627

~~Other income, net~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(In thousands)
Interest income $ 129 $ 2,103 $ 1,561 $ 6,378
Loss on the sale of a business 0 0 (273) (142)
Foreign exchange gains (losses) 88 278 (256) 606
Mark-to-market loss related for an indemnification claim related to the Handy acquisition 0 (945) (181) (1,999)
Other 6 69 5 (20)
Other income, net $ 223 $ 1,505 $ 856 $ 4,823

2319

Table of Contents

ANGI ~~HOMESERVICES~~ INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Other (expense) income, net


	Three Months Ended March 31,
	2021		2020
	(In thousands)
Interest income	$	97	$	1,271

Foreign exchange losses	(860)		(423)

Loss from acquisition/sale of a business	(4)		(427)
Other (expense) income, net	$	(767)	$	421

Loss from acquisition/sale of a business for the three months ended March 31, 2020 includes a $0.2 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in Angi Inc. shares during the first quarter of 2020 and a $0.2 million charge related to the final earn-out settlement related to the sale of 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 ~~also~~not identified certain other legal matters where ~~the Company believes~~we believe an unfavorable outcome is ~~not~~ probable and, 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 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 Company~~

Angi 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 nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the ~~Company~~company was charged ~~$1.3~~$1.1 million and ~~$3.6 million; and $1.0 million and $3.7~~$1.2 million, respectively, by IAC for services rendered pursuant to the services agreement. At March 31, 2021, the Company had outstanding payables of less than $0.1 million due to IAC, pursuant to the services agreement. There were 0 outstanding receivables or payables pursuant to the services agreement as of ~~September 30, 2020 or~~ December 31, ~~2019.~~2020.

~~Additionally,~~

Separately, the Company subleases office space to IAC and charged IAC ~~$0.5 million and $1.4 million; and $0.5 million and $1.0~~$0.4 million of rent for both the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019, respectively.~~2020. At ~~both September 30, 2020 and 2019,~~March 31, 2021, 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 ~~were~~was subsequently paid in full in ~~each respective fourth quarter.~~the first quarter of 2021.

At ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019,~~2020, the Company had outstanding payables of ~~$0.6~~$0.9 million, ~~and $0.2 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 $3.1 million of refunds received from IAC pursuant to this agreement during the nine months ended September 30, 2020.~~ There were 0 payments to or refunds from IAC pursuant to this agreement during the three months ended ~~September 30,~~March 31, 2021 and 2020. ~~During the first quarter of 2019, $11.4 million was paid to IAC pursuant to this agreement.~~

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, 0.1 million and ~~0.3~~0.2 million shares, respectively, of ~~ANGI Homeservices~~Angi Inc. Class B common stock were issued to IAC pursuant to the employee matters agreement as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by ~~ANGI Homeservices~~Angi Inc. employees. For the three ~~and nine~~ months ended ~~September 30, 2019, less than 0.1 million and 0.5~~March 31, 2021, 2.6 million shares ~~respectively,~~ of ~~ANGI Homeservices~~Angi Inc. Class BA common stock were issued to IAC pursuant to the

Table of Contents

ANGI INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 during the three months ended March 31, 2020.

NOTE 11—SUBSEQUENT EVENTS

As of May 6, 2021, the Company paid off the outstanding balance of the Term Loan of $213.1 million.

2421

Table of Contents

Item 2. ~~Management's~~Management’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 ~~230,000~~250,000 domestic service professionals actively ~~seek~~sought consumer matches, ~~complete~~completed jobs, or ~~advertise~~advertised work through ~~ANGI Homeservices' platforms~~Angi Inc. platforms; and consumers ~~turn~~turned to at least one of our brands to find a professional for ~~more than 25~~approximately 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 March 31, 2021.

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

For a more detailed description of the ~~Company's~~Company’s operating businesses, see the ~~Company's~~Company’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 requires 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 ~~includes revenue from the HomeAdvisor, Handy and Fixd Repair~~primarily reflects domestic ~~marketplaces,~~marketplace revenues, including consumer connection revenue for consumer matches, revenue from ~~pre-priced jobs~~Angi Services (pre-priced) offerings sourced through ~~the HomeAdvisor, Handy and Fixd Repair~~marketplace 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.service professionals.

•Advertising &and Other Revenue primarily 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.~~consumers.

•Marketplace Service Requests are fully completed and submitted domestic customer service requests ~~to HomeAdvisor~~ and includes ~~pre-priced jobs~~Angi Services requests sourced through the ~~HomeAdvisor, Handy and Fixd Repair platforms.~~marketplace platforms in the period.

•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 includes ~~pre-priced~~completed and in-process Angi Services jobs sourced through the ~~HomeAdvisor, Handy and Fixd Repair~~marketplace platforms ~~during~~in the period.

•Marketplace Transacting Service Professionals ("(“Marketplace Transacting ~~SPs"~~SPs”) are the number of ~~HomeAdvisor, Handy and Fixd Repair domestic~~marketplace service professionals that paid for consumer matches or performed aan Angi Services job sourced through the ~~HomeAdvisor, Handy and Fixd Repair~~marketplace platforms ~~during~~in the quarter.

•Advertising Service Professionals ("(“Advertising ~~SPs"~~SPs”) are the total number of ~~Angie’s List~~ service professionals under contract for advertising at the end of the period.

•Senior Notes - - On August 20, 2020, ANGI Group, LLC ("(“ANGI ~~Group"~~Group”), a direct wholly-owned subsidiary of the Company, issued ~~$500~~$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. ~~The proceeds from the offering will be used for general corporate purposes, including future potential acquisitions and return of capital.~~

~~Table of Contents~~

•ANGI Group Term Loan - due November 5, 2023. The outstanding balance of the Term Loan as of ~~September 30, 2020 is $237.2~~March 31, 2021 was $213.1 million and quarterly principal payments are required. Pursuant to the joinder agreement entered into on August 12, 2020, ANGI Group became the successor borrower under the Term Loan and ANGI Homeservices Inc.'s obligations thereunder were terminated. At both September 30, 2020 and December 31, 2019, the Term Loan bore interest at LIBOR plus ~~1.50%~~2.00%, or 2.10%. ~~The interest rate~~As of May 6, 2021, the outstanding balance of the Term Loan was ~~1.66% and 3.25% at September 30, 2020 and December 31, 2019, respectively.~~repaid in its entirety.

•ANGI Group Revolving Facility - - The ANGI Group ~~$250~~$250.0 million revolving credit facility expires on November 5, 2023. Pursuant to the joinder agreement entered into on August 12, 2020, ANGI Group became the successor borrower under the Revolving Facility and ANGI Homeservices Inc.'s obligations thereunder were terminated. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, there were no outstanding borrowings under the ANGI Group Revolving Facility. The ANGI Group Revolving Facility and ANGI Group Term Loan are collectively referred to as the ANGI Group Credit Agreement.

Table of Contents

Components of Results of Operations

Sources of Revenue

Marketplace Revenue is primarily derived from (i) consumer connection revenue, which comprises fees paid by ~~HomeAdvisor~~ service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service) and ~~fees~~revenue from completed jobs sourced through the ~~HomeAdvisor, Handy and Fixd Repair~~marketplace platforms and (ii) ~~HomeAdvisor~~ 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 $20.8 million and $51.3 million during the three and nine months ended September 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 pre-priced arrangements through the ~~HomeAdvisor, Handy and Fixd Repair~~marketplace 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,~~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.

~~Table of Contents~~

•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 earnings (loss) attributable to ~~ANGI Homeservices~~Angi Inc. shareholders to operating income (loss) ~~income~~ to consolidated Adjusted EBITDA for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

~~Overview—Consolidated Results~~Brand Integration Initiative

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Revenue:
North America $ 372,226 $ 33,082 10 % $ 339,144 $ 1,053,775 $ 108,237 11 % $ 945,538
Europe 17,687 (527) (3) % 18,214 54,849 (4,310) (7) % 59,159
Total $ 389,913 $ 32,555 9 % $ 357,358 $ 1,108,624 $ 103,927 10 % $ 1,004,697
Operating Income (Loss):
North America $ 295 $ (26,899) (99) % $ 27,194 $ 8,377 $ (32,032) (79) % $ 40,409
Europe (3,314) (846) (34) % (2,468) (10,048) (2,127) (27) % (7,921)
Total $ (3,019) $ (27,745) NM $ 24,726 $ (1,671) $ (34,159) NM $ 32,488
Adjusted EBITDA:
North America $ 40,454 $ (20,055) (33) % $ 60,509 $ 136,886 $ (14,918) (10) % $ 151,804
Europe (1,967) (381) (24) % (1,586) (6,066) (1,796) (42) % (4,270)
Total $ 38,487 $ (20,436) (35) % $ 58,923 $ 130,820 $ (16,714) (11) % $ 147,534

~~________________________~~

~~NM = Not meaningful.~~

~~For~~On March 17, 2021, our Company updated one of its leading websites and brands, Angie’s List, to Angi, and began the ~~three months ended September 30, 2020:~~

•~~Revenue increased $32.6 million, or 9%, driven by growth in North America~~process of ~~$33.1 million, or 10%, partially offset by~~consolidating under a decline in Europe of $0.5 million, or 3%. North America revenue growth was driven by increases in Marketplace Revenue of $33.2 million, or 12%, partially offset by a decrease in Advertising & Other Revenue of $0.2 million.

•Operating income decreased $27.7 million to a loss of $3.0 million due primarily to a decrease in Adjusted EBITDA of $20.4 million, described below, and increases of $5.9 million in stock-based compensation expense and $2.7 million in depreciation, partially offset by a decrease of $1.3 million in amortization of intangibles. The increase in stock-based compensation expense was due primarily to the issuance of new equity awards since 2019 and the reversalsingle brand. Going forward we will concentrate our marketing investment in the ~~third quarter~~Angi brand in order to focus our marketing, sales, and branding efforts on a single brand.

Our Company relies heavily on free and paid search engine marketing efforts to drive traffic to our properties, which has been adversely affected by this initiative. Specifically, our brand initiative has adversely affected the placement and ranking of ~~2019~~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 ~~$7.6 million of expense related~~our search engine marketing efforts.

These efforts have had a pronounced negative impact on Marketplace Service Requests from organic search results, and reduced monetization via our mobile applications, which in turn has resulted in relatively more Marketplace Service Requests from paid search engine marketing. The combined effect has reduced revenue and increased marketing spend, which we expect to ~~certain performance-based awards that did not vest, partially offset by a decrease of $2.2 million~~result in lower profits in the ~~modification charge related~~quarter ending June 30, 2021. We expect this trend to continue until such time as the ~~combination of IAC's HomeAdvisor business~~new brand establishes search engine optimization ranking and ~~Angie's List, Inc. on September 29, 2017 (the "Combination"). The increase~~consumer awareness is established. We expect the reduction in depreciation was due primarily to the investments in capitalized software to support our products and services and leasehold improvements related to additional office space. The decrease in amortization of intangibles was due primarily to lower expense as certain intangible assets became fully amortized in 2019.

•~~Adjusted EBITDA decreased 35% to $38.5 million, despite higher~~ revenue, ~~due primarily to~~ an ~~increase in cost of revenue, increased investment in fixed price, an increase in compensation expense and an increase of $3.6 million in bad debt expense due to higher Marketplace Revenue.~~

2723

Table of Contents

~~For~~increased marketing expense, and lower profits to continue for the ~~nine months ended September 30, 2020:~~

•~~Revenue increased $103.9 million, or 10%, driven by growth in North America~~remainder of ~~$108.2 million, or 11%, partially offset by a decline in Europe of $4.3 million, or 7%. North America revenue growth was driven by increases in Marketplace Revenue of $103.4 million, or 14%,~~2021 and ~~Advertising & Other Revenue of $4.8 million, or 3%.~~

•Operating income decreased $34.2 million to a loss of $1.7 million due primarily to a decrease in Adjusted EBITDA of $16.7 million, described below, and increases of $11.6 million in depreciation and $9.4 million in stock-based compensation expense, partially offset by a decrease of $3.6 million in amortization of intangibles. The increases in depreciation and stock-based compensation andpotentially into 2022, with the ~~decrease in amortization of intangibles were due primarily to the factors described above~~most significant impact in the ~~three-month discussion.~~

~~In the first~~second quarter of ~~2020, the~~2021. The Company ~~recorded additional stock-based compensation expense of $5.9 million related to the previously issued HomeAdvisor unvested awards that were modified~~has also increased its investment 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 awards and $2.5 million to correct the attribution of expense by period. The adjustment primarily impacted general and administrative expense. The effect on prior periods is immaterial.Angi Services, our pre-priced product offering, which will reduce profits more than planned during 2021.

•~~Adjusted EBITDA decreased 11% to $130.8 million, despite higher revenue due primarily to an increase in cost of revenue, an increase of $10.8 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, and increased European losses.~~

COVID-19 Update

The impact on the Company from the COVID-19 outbreak, which has been declared a ~~"pandemic"~~“pandemic” by the World Health Organization, has been ~~varied.~~varied and volatile. 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~~continuing spread of ~~contagion,~~COVID-19, the development and implementation of effective preventative measures (including the global distribution of vaccines) 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.

InWhen COVID-19 first impacted us in March 2020, ~~the Company~~we experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor ~~project~~s)projects). InDuring the second quarter of 2020, th~~e Company~~we 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. The Company continued to experience strong demand for home services in the ~~third~~second half of 2020 and the first quarter of ~~2020.~~2021. However, many service ~~professionals'~~professionals’ businesses have been adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which has negatively impacted ~~the Company's~~our ability to monetize this increased level of service requests.

~~In addition the United States, which represents 94% of the Co~~mpany's revenue for both the three and nine months ended September 30, 2020, has experienced a significant resurgence of the COVID-19 virus with record levels of infection being reported in the weeks following September 30, 2020. Europe, which is the second largest market for the Company's products and services, has also seen a dramatic resurgence in COVID-19. This resurgence and the measures designed to curb its spread could result in continued variability 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.

2824

Table of Contents

Results of Operations for the three ~~and nine~~ months ended ~~September 30, 2020 compared to the three and nine months ended September 30, 2019~~

~~Revenue~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Revenue:
Marketplace:
Consumer connection revenue $ 287,568 $ 35,016 14 % $ 252,552 $ 800,047 $ 104,677 15 % $ 695,370
Service professional membership subscription revenue 12,195 (3,800) (24) % 15,995 38,989 (9,708) (20) % 48,697
Other revenue 6,944 2,029 41 % 4,915 19,620 8,434 75 % 11,186
Total Marketplace Revenue 306,707 33,245 12 % 273,462 858,656 103,403 14 % 755,253
Advertising & Other Revenue 65,519 (163) — % 65,682 195,119 4,834 3 % 190,285
North America 372,226 33,082 10 % 339,144 1,053,775 108,237 11 % 945,538
Europe 17,687 (527) (3) % 18,214 54,849 (4,310) (7) % 59,159
Total Revenue $ 389,913 $ 32,555 9 % $ 357,358 $ 1,108,624 $ 103,927 10 % $ 1,004,697
Percentage of Total Revenue:
North America 95 % 95 % 95 % 94 %
Europe 5 % 5 % 5 % 6 %
Total Revenue 100 % 100 % 100 % 100 %
Three Months Ended September 30, Nine Months Ended September 30,
2020 Change % Change 2019 2020 Change % Change 2019
(Amounts in thousands)
Operating metrics:
Marketplace Service Requests 9,837 2,196 29 % 7,641 25,186 3,754 18 % 21,432
Marketplace Monetized Transactions 4,716 349 8 % 4,367 12,821 458 4 % 12,363
Marketplace Transacting SPs 207 17 9 % 190
Advertising SPs 39 2 5 % 37

~~For the three months ended September 30, 2020~~March 31, 2021 compared to the three months ended ~~September 30, 2019~~March 31, 2020

Revenue


	Three Months Ended March 31,
	2021			$ Change		% Change	2020

Revenue:
Marketplace:
Consumer connection revenue	$	272,353		$	32,523	14%	$	239,830

Service professional membership subscription revenue	11,952			(1,825)		(13)%	13,777
Other revenue	6,745			1,576		30%	5,169
Total Marketplace Revenue	291,050			32,274		12%	258,776
Advertising and Other Revenue	69,991			4,635		7%	65,356
North America	361,041			36,909		11%	324,132
Europe	25,988			6,470		33%	19,518
Total Revenue	$	387,029		$	43,379	13%	$	343,650

Percentage of Total Revenue:
North America	93		%				94		%
Europe	7		%				6		%
Total Revenue	100		%				100		%

	Three Months Ended March 31,
	2021			$ Change		% Change	2020

Operating metrics:
Marketplace Service Requests	7,709			1,741		29%	5,968
Marketplace Monetized Transactions	4,193			603		17%	3,590
Marketplace Transacting SPs	212			21		11%	191
Advertising SPs	40			3		8%	37

North America revenue increased $33.1 million, or 10%, driven by an increase in Marketplace Revenue of $33.2 million or 12%, partially offset by a decrease in Advertising & Other Revenue of $0.2 million. The increase in Marketplace Revenue is due to an increase in consumer connection revenue of $35.0 million, or 14%, which was due primarily to an increase of 8% in Marketplace Monetized Transactions to ~~4.7 million,~~ ~~driven by an increase~~ ~~of 29% in Marketplace Service Requests~~ ~~to 9.8 million, and~~ ~~an increase in revenue of~~ ~~$20.8 million due~~ ~~to the change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020.~~

Europe revenue decreased $0.5 million, or 3%, due primarily to lower monetization from transitioning the business in France to a common European technology platform with the businesses in the Netherlands and Italy, which began in early February 2020, partially offset by the favorable impact of the weakening of the U.S. dollar relative to the Euro and British Pound.

~~Table of Contents~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

~~North America revenue increased $108.2~~$36.9 million, or 11%, driven by increases in Marketplace Revenue of ~~$103.4~~$32.3 million or ~~14%~~12%, and Advertising &and Other Revenue of ~~$4.8~~$4.6 million, or 3%7%. The increase in Marketplace Revenue is due to an increase in consumer connection revenue of ~~$104.7~~$32.5 million, or ~~15%~~14%, ~~which was~~ due primarily to an increase of 4%29% in Marketplace Service Requests to 7.7 million, resulting in a 17% increase in Marketplace Monetized Transactions t~~o 12.8 million, driven by an increase of 18% in Marketplace Service Requests~~ to ~~25.2 million, and an increase in revenue of $51.3 million due~~ ~~to the change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020.~~4.2 million. The increase in Advertising &and Other Revenue is due primarily to an increase in ~~Angie's List~~Angi revenue driven by ana 8% increase in Advertising SPs.

Europe revenue ~~decreased $4.3~~increased $6.5 million, or 7%33%, due ~~primarily~~to strong growth across its markets due to increased consumer demand and the favorable impact of the weakening of the U.S dollar relative to the ~~impact of COVID-19~~Euro and ~~lower monetization from transitioning~~ the ~~business in France to a common European technology platform with the businesses in the Netherlands and Italy, which began in early February 2020.~~British Pound.

Cost of revenue ~~(exclusive of depreciation shown separately below)~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below) $ 48,253 $ 34,941 262 % $ 13,312 $ 122,524 $ 88,479 260 % $ 34,045
As a percentage of revenue 12 % 4 % 11 % 3 %

~~For the three months ended September 30, 2020 compared to the three months ended September 30, 2019~~


	Three Months Ended March 31,
	2021		$ Change		% Change	2020

Cost of revenue (exclusive of depreciation shown separately below)	$	53,828	$	20,599	62%	$	33,229
As a percentage of revenue	14%					10%

North America cost of revenue increased ~~$35.1~~$20.7 million, or ~~272%~~63%, and as a percentage of revenue due primarily to ~~the change from net to gross revenue reporting for Handy and HomeAdvisor's~~growth of Angi Services (the pre-priced product ~~offering, effective January 1, 2020.~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

offering) which has lower margins than other sources of North America ~~cost of revenue increased $88.5 million, or 270%, due primarily to the change from net to gross revenue reporting for Handy and HomeAdvisor's pre-priced product offering, effective January 1, 2020.~~revenue.

3025

Table of Contents

Selling and marketing expense


		Three Months Ended September 30,										Nine Months Ended September 30,											Three Months Ended March 31,
		2020			$ Change		% Change		2019			2020			$ Change		% Change		2019				2021		$ Change		% Change	2020
		(Dollars in thousands)
Selling and marketing expense	Selling and marketing expense	$	210,171		$	14,629	7	%	$	195,542		$	590,114		$	23,103	4	%	$	567,011		Selling and marketing expense	$	205,840	$	15,881	8%	$	189,959
As a percentage of revenue	As a percentage of revenue	54		%					55		%	53		%					56		%	As a percentage of revenue	53%					55%

~~For the three months ended September 30, 2020 compared to the three months ended September 30, 2019~~

North America selling and marketing expense increased ~~$15.8~~$16.7 million, or 8%10%, driven by increases in compensation expense of ~~$9.1~~$9.0 million, in advertising ~~expense, $5.3~~expense of $6.0 million, ~~in compensation expense~~ and ~~$1.1 million in~~ outsourced personnel and consulting costs ~~partially offset by a decrease~~ of ~~$1.2 million in~~ ~~travel related expense~~s resulting from the impact of COVID-19. While service requests from both Google paid traffic and free traffic increased, advertising expense increased due primarily to an increase in online marketing costs as the proportion of service requests from Google paid traffic increased. The Company continues to benefit from the search engine marketing strategy that was implemented in the second half of 2019, which focuses on the lifetime profitability of rather than cost per service request. This increase in online marketing was partially offset by a decrease in television spend resulting from cost cutting initiatives due to the impact of COVID-19.$2.5 million. The increase in compensation expense was due primarily to increased commission expense, ~~to the sales force resulting~~ ~~from higher revenue. The increase~~ in ~~outsourced personnel costs was due primarily~~addition to ~~various sales initiatives at Handy.~~

~~Europe selling and marketing expense decreased $1.2 million, or 12%, driven by a decrease in advertising expense~~ ~~of $1.9 million, partially offset by~~ an increase in ~~compensation expense of $0.8 million. The decrease in advertising expense is due, in part, to mitigating the negative impact of COVID-19 on revenue. The increase in compensation expense was due primarily~~ ~~to severance costs~~ ~~recorded in the third quarter of 2020~~ ~~associated with headcount reductions in France.~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

~~North America selling and marketing expense increased $26.1 million, or 5%, driven by increases in compensation expense of $17.2 million, advertising expense of $4.8 million, outsourced personnel and consulting costs of~~ ~~$4.4 million~~ ~~and facility costs of $1.5 million, partially offset by a decrease of~~ ~~$2.5 million~~ in ~~travel related expenses resulting from the impact of COVID-19. The increase in compensation expense was due primarily to growth in the~~ sales force ~~and increased commission expense.~~ headcount. The increase in advertising expense was due primarily to ~~the factors described above~~an increase in ~~the three-month discussion.~~online marketing, partially offset by a decrease in television spend. The increase in outsourced personnel and consulting costs was due primarily to various sales initiatives ~~at Handy.~~in Angi Services.

Europe selling and marketing expense decreased ~~$3.0~~$0.8 million, or 9%6%, driven by ~~decreases~~a decrease in compensation expense of $0.6 million from lower headcount and a decrease in advertising of $0.1 million.

General and administrative expense


	Three Months Ended March 31,
	2021		$ Change		% Change	2020

General and administrative expense	$	88,162	$	(6,394)	(7)%	$	94,556
As a percentage of revenue	23%					28%

North America general and administrative expense decreased $13.2 million, or 15%, due primarily to a decrease of ~~$1.9~~$20.0 million in compensation expense, partially offset by increases in professional fees of $3.0 million, provision for credit loss of $1.3 million, and ~~compensation expens~~esoftware license and maintenance costs of ~~$0.7~~$0.8 million. The decrease in compensation expense is due ~~primarily~~ to a ~~reduction~~decrease of $22.7 million in ~~sales force headcount associated with the platform migration in France,~~stock-based compensation expense, partially offset by ~~severance cost recorded~~an increase of $2.8 million primarily resulting from annual wage increases. The decrease in stock-based compensation expense for the ~~third~~first quarter of ~~2020 associated with headcount reductions in France.~~

~~General and administrative expense~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
General and administrative expense $ 90,122 $ 7,778 9 % $ 82,344 $ 270,129 $ 15,343 6 % $ 254,786
As a percentage of revenue 23 % 23 % 24 % 25 %

~~For the three months ended September 30, 2020 compared to the three months ended September 30, 2019~~

~~North America general and administrative expense increased $6.7 million, or 9%, due primarily to increases of~~ ~~$4.3 million in compensation expense, $3.7 million in bad~~ ~~debt expense due to higher Marketplace Revenue,~~ ~~and $1.2 million in outsourced personal costs, partially offset by a decrease of $1.1 million in travel related expenses resulting from the impact of COVID-19. The increase in compensation expense~~2021 is due primarily to ~~an increa~~se$11.9 million for stock appreciation rights expense recognized in ~~stock-based compensation~~the first quarter of 2020 which were not incurred in 2021 as the awards became fully vested in 2020, a net decrease of $7.7 million due to the reversal of previously recognized expense related to unvested awards that were forfeited due ~~primarily~~ to management departures in the first quarter of 2021, partially offset by the issuance of new equity awards since ~~2019~~2020. The increase in professional fees is due primarily to an increase in outsourced personnel costs and ~~the reversal in the third quarter of 2019 of $7.3 million of expense related to certain performance-based awards that did not vest, partially offset by a decrease~~ ~~of $2.9 million in the modification charge related to the Combination.~~legal 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 provision for credit loss is driven by higher Marketplace Revenue.

Europe general and administrative expense increased $6.8 million, or 88%, 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 $0.6 million increase in professional fees related to the platform migration in France.

Product development expense


	Three Months Ended March 31,
	2021		$ Change		% Change	2020

Product development expense	$	18,047	$	963	6%	$	17,084
As a percentage of revenue	5%					5%

North America product development expense decreased $0.5 million, or 3%, due primarily to decreases in compensation expense of $0.8 million and travel related expenses of $0.2 million, partially offset by an increase in outsourced personnel and consulting costs of $0.5 million. The increase in outsourced personnel and consulting costs were in support of projects for the Angi brand change.

3126

Table of Contents

Europe ~~general~~product and ~~administrative expense increased $1.1 million, or 14%, due primarily to an increase~~ ~~of $1.7 million~~ ~~in compensation expense resulting from~~ ~~severance costs~~ ~~recorded in the third quarter of 2020~~ ~~associated with headcount reductions in France, partially offset by decreases of $0.5 million in the digital services tax and other non-payroll taxes and $0.2 million in travel related expenses resulting from the impact of COVID-19.~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

~~North America general and administrative expense increased $14.7 million, or 6%, due primarily to increases~~ ~~of $10.5 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, $6.8 million in compensation expense~~ ~~and $3.1 million in professional fees, partially offset by decreases of $2.0 million in travel related expenses resulting from the impact of COVID-19 and $1.9 million in software license and maintenance costs. The increase in compensation expense is due primarily to an increase of $9.6 million~~ in stock-based compensation expense due primarily to the factors described above in the three-month discussion and a cumulative adjustment recorded in the first quarter of 2020 in connection with the modification charge related to the Combination described under the "Overview" section above. The increase in professional fees is due primarily to a~~n increase in legal fees.~~

~~Europe general and administrative expense increased $0.7 million, or 3%, due primarily to an increase~~ of $1.1 million in compensation expense resulting from severance costs recorded in the third quarter of 2020 associated with headcount reductions in France and an increase of $0.3 million in bad debt expense due, in part, from the impact of COVID-19 on expected credit losses, partially offset by decreases of $0.5 million in digital services tax and other non-payroll taxes and $0.4 million in travel related expenses resulting from the impact of COVID-19.

~~Product development expense~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Product development expense $ 17,577 $ 1,556 10 % $ 16,021 $ 50,068 $ 3,161 7 % $ 46,907
As a percentage of revenue 5 % 4 % 5 % 5 %

~~For the three months ended September 30, 2020 compared to the three months ended September 30, 2019~~

~~North America product~~ development expense increased $1.5 million, or ~~12%~~51%, due ~~primarily~~ to an increase in compensation ~~expense.~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

~~North America product development expense increased $3.2 million, or 8%, due primarily to increases in compensation~~ expense of ~~$2.5~~$1.5 million ~~and~~as a result of fewer internally developed software ~~license and maintenance costs of $0.7 million.~~expenses being capitalized.

Depreciation

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Depreciation $ 13,921 $ 2,677 24 % $ 11,244 $ 38,614 $ 11,575 43 % $ 27,039
As a percentage of revenue 4 % 3 % 3 % 3 %

~~For the three months ended September 30, 2020 compared to the three months ended September 30, 2019~~


	Three Months Ended March 31,
	2021		$ Change		% Change	2020

Depreciation	$	15,969	$	3,831	32%	$	12,138
As a percentage of revenue	4%					4%

North America depreciation increased ~~$2.1~~$3.3 million, or ~~19%~~29%, due primarily to ~~the~~ investments in capitalized software to support our products and ~~services and leasehold improvements related to additional office space.~~ services.

Europe depreciation increased ~~$0.6 million.~~

~~Table of Contents~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

~~North America depreciation increased $10.4~~$0.5 million, or ~~41%~~65%, due primarily to the ~~factors described above in the three-month discussion. Europe depreciation increased $1.2 million.~~continued development of capitalized software to support our products and services.

Operating income (loss)


		Three Months Ended September 30,										Nine Months Ended September 30,											Three Months Ended March 31,
		2020			$ Change		% Change		2019			2020			$ Change		% Change		2019				2021		$ Change		% Change	2020
		(Dollars in thousands)
North America	North America	$	295		$	(26,899)	(99)	%	$	27,194		$	8,377		$	(32,032)	(79)	%	$	40,409		North America	$	9,577	$	17,685	NM	$	(8,108)
Europe	Europe	(3,314)			(846)		(34)	%	(2,468)			(10,048)			(2,127)		(27)	%	(7,921)			Europe	(9,468)		(1,280)		(16)%	(8,188)
Total	Total	$	(3,019)		$	(27,745)	NM		$	24,726		$	(1,671)		$	(34,159)	NM		$	32,488		Total	$	109	$	16,405	NM	$	(16,296)

As a percentage of revenue	As a percentage of revenue	(1)		%					7		%	—		%					3		%	As a percentage of revenue	—%					(5)%

________________________

NM = Not meaningful

~~For~~North America operating income was $9.6 million for the three months ended ~~September 30, 2020~~March 31, 2021, an increase of $17.7 million compared to the three months ended ~~September 30, 2019~~

~~North America operating income decreased $26.9 million, or 99%, due to~~March 31, 2020, despite a decrease in Adjusted EBITDA of ~~$20.1~~$10.2 million, described below, ~~and increases~~due primarily to decreases of ~~$6.0~~$23.4 million in stock-based compensation expense and ~~$2.1 million in depreciation, partially offset by a decrease of $1.2~~$7.9 million in amortization of ~~intangibles.~~intangibles, partially offset by an increase of $3.8 million in depreciation. The ~~increase~~decrease in stock-based compensation expense was due primarily to the ~~issuance of new equity awards since 2019 and the reversal~~factors discussed in the ~~third quarter~~general and administrative expense section above. The decrease in the amortization of ~~2019 of $7.6 million of expense related~~intangibles was due primarily to certain ~~performance-based awards that did not vest, partially offset by a decrease of $2.2 million in the~~ ~~modification charge related to the Combination.~~intangible assets becoming fully amortized during 2020. The increase in depreciation was due primarily to the ~~investments in~~development of capitalized software to support our products and services and leasehold improvements related to additional office space. The decrease in amortization of intangibles was due primarily to lower expense as certain intangible assets became fully amortized in 2019.services.

Europe operating loss increased ~~$0.8~~$1.3 million, or ~~34%~~16%, due primarily to an increase ~~of $0.6 million in depreciation and a decrease~~ in Adjusted EBITDA loss of ~~$0.4~~$1.0 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.

At ~~September 30, 2020,~~March 31, 2021, there is ~~$79.3~~$89.5 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 ~~2.1~~2.7 years.

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

North America operating income decreased $32.0 million, or 79%, due primarily to a decrease in Adjusted EBITDA of $14.9 million, described below, and increases of $10.4 million in depreciation and $9.3 million in stock-based compensation expense, partially offset by a decrease of $2.6 million in amortization of intangibles. The increases in depreciation and stock-based compensation expense and decrease in amortization of intangibles were due primarily to the factors described above in the three-month discussion.

Europe operating loss increased $2.1 million, or 27%, due primarily to a decrease in Adjusted EBITDA loss of $1.8 million, described below, and increases of $1.2 million in depreciation and $0.1 million in stock-based compensation expense, partially offset by a decrease of $1.0 million in amortization of intangibles.

3327

Table of Contents

Adjusted EBITDA


		Three Months Ended September 30,										Nine Months Ended September 30,											Three Months Ended March 31,
		2020			$ Change		% Change		2019			2020			$ Change		% Change		2019				2021		$ Change		% Change	2020
		(Dollars in thousands)
North America	North America	$	40,454		$	(20,055)	(33)	%	$	60,509		$	136,886		$	(14,918)	(10)	%	$	151,804		North America	$	31,165	$	(10,226)	(25)%	$	41,391
Europe	Europe	(1,967)			(381)		(24)	%	(1,586)			(6,066)			(1,796)		(42)	%	(4,270)			Europe	(7,979)		(985)		(14)%	(6,994)
Total	Total	$	38,487		$	(20,436)	(35)	%	$	58,923		$	130,820		$	(16,714)	(11)	%	$	147,534		Total	$	23,186	$	(11,211)	(33)%	$	34,397

As a percentage of revenue	As a percentage of revenue	10		%					16		%	12		%					15		%	As a percentage of revenue	6%					10%

For a reconciliation of net earnings (loss) attributable to ~~ANGI Homeservices~~Angi Inc. shareholders to operating income (loss) ~~income~~ to consolidated Adjusted EBITDA, see "“Principles of Financial Reporting."” For a reconciliation of operating income (loss) to Adjusted EBITDA for the ~~Company's~~Company’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 September 30, 2020 compared to the three months ended September 30, 2019~~

North America Adjusted EBITDA decreased ~~$20.1~~$10.2 million, or ~~33%~~25%, to ~~$40.5 million, despite higher revenue due primarily to an~~ ~~increase in cost of revenue, increased investment in fixed price and an increase of $3.7 million in bad debt expense due to higher Marketplace Revenue.~~

~~Europe Adjusted EBITDA loss increased $0.4 million, or 24%, to a loss of $2.0 million, due primarily to a decrease in revenue and an increase in compensation expense due to severance~~ ~~costs~~ ~~recorded in the third quarter of 2020~~ ~~associated with headcount reductions in France, partially offset by a decrease of $1.9 million in~~ ~~advertising expense due, in part, to mitigating the negative impact of COVID-19 on revenue.~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

~~North America Adjusted EBITDA decreased $14.9 million, or 10%, to $136.9~~$31.2 million, despite higher revenue, due primarily to an increase of $20.6 million in cost of revenue and an increase of ~~$10.5~~$15.9 million i~~n bad debt~~in selling and marketing expense, ~~due~~both described above. This was also impacted by $4.0 million in expense related to ~~higher Marketplace Revenue,~~impairments in Fixd Services business and from management changes at the ~~impact from COVID-19 on expected credit losses and anticipated losses from Advertising SPs.~~Company.

Europe Adjusted EBITDA loss increased ~~$1.8~~$1.0 million, or ~~42%~~14%, ~~to a loss of $6.1 million,~~ due primarily to a charge of $6.0 million related to the ~~decrease~~acquisition of ~~$4.3 million~~an additional 21% interest in ~~revenue~~MyBuilder at a premium to fair value and anthe increase in ~~bad debt expense~~product development expense of ~~$0.3~~$1.5 million, ~~due, in part, from the impact of COVID-19 on expected credit losses,~~ partially offset by ~~a decrease~~an increase of ~~$1.9~~$6.5 million in ~~advertising expense.~~revenue.

Interest expense

Interest expense relates to interest on the Senior Notes and Term Loan and commitment fees on the undrawn Revolving ~~Facility~~.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 September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Interest expense $ 3,699 $ 692 23 % $ 3,007 $ 7,593 $ (1,371) (15) % $ 8,964

~~For the three months ended September 30, 2020 compared to the three months ended September 30, 2019~~


	Three Months Ended March 31,
	2021		$ Change		% Change	2020

Interest expense	$	6,617	$	4,343	NM	$	2,274

Interest expense ~~in 2020~~ increased ~~from 2019~~ due primarily to the issuance of the Senior Notes in August 2020, partially offset by a decrease in interest expense onof the Term Loan due primarily to lower interest rates due to lower interest rates and the decrease in the average outstanding balance ~~of the Term Loan~~ compared to the prior year period.

~~Table of Contents~~

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

Interest expense in 2020 decreased from 2019 due primarily to lower interest rates and the decrease in the average outstanding balance of the Term Loan compared to the prior year period, partially offset by the issuance of the Senior Notes in August 2020.

Other (expense) income, net

Three Months Ended September 30, Nine Months Ended September 30,
2020 $ Change % Change 2019 2020 $ Change % Change 2019
(Dollars in thousands)
Other income, net $ 223 $ (1,282) (85) % $ 1,505 $ 856 $ (3,967) (82) % $ 4,823


	Three Months Ended March 31,
	2021		$ Change		% Change	2020

Other (expense) income, net	$	(767)	$	(1,188)	NM	$	421

~~For the three months ended September 30, 2020 and 2019~~

Other ~~income,~~expense, net in ~~2020~~2021 principally includes ~~interest income of $0.1 million and foreign currency exchange gains of $0.1 million.~~

~~Other income, net in 2019 principally includes interest income of $2.1 million, and~~ net foreign currency exchange ~~gains~~losses of ~~$0.3~~$0.9 million, partially offset by ~~a $0.9 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in ANGI shares during the first quarter~~interest income of ~~2020.~~

~~For the nine months ended September 30, 2020 and 2019~~$0.1 million.

Other income, net in 2020 principally includes interest income of ~~$1.6~~$1.3 million, partially offset by net foreign currency exchange losses of ~~$0.3~~$0.4 million and a $0.2 million mark-to-market charge for an indemnification claim related to the Handy acquisition that was settled in ~~ANGI~~Angi Inc. shares during the first quarter of 2020.

~~Other income, net in 2019 principally includes interest income~~

Table of $6.4 million and net foreign currency exchange gains of $0.6 million, partially offset by a $2.0 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.Contents

Income tax benefit ~~(provision)~~


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
		2020		$ Change		% Change	2019			2020		$ Change		% Change		2019			2021		$ Change		% Change	2020
		(Dollars in thousands)
Income tax benefit (provision)		$	11,698	$	16,598	NM	$	(4,900)		$	17,638	$	10,576	150	%	$	7,062
Income tax benefit																		Income tax benefit	$	9,289	$	324	4%	$	8,965
Effective income tax rate	Effective income tax rate	NM					21		%	NM						NM		Effective income tax rate	NM					49%

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 September 30, 2020 compared to the three months ended September 30, 2019~~

In ~~2020,~~2021, the income tax benefit was due primarily to excess tax benefits generated by the exercise and vesting offor stock-based awards.

In 2019, the effective income tax rate approximates the statutory rate of 21% due primarily to unbenefited foreign losses and state taxes, offset by research credits and excess tax benefits generated by the exercise and vesting of stock-based awards.

~~For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019~~

In 2020, the Company recorded an income tax benefit of ~~$17.6 million.~~$9.0 million, which represented an effective tax rate of 49%. The effective income tax ~~benefit~~rate was higher than the statutory rate of 21% due primarily to ~~excess tax benefits generated by the exercise and vesting of stock-based awards and~~ a $5.7 million reduction to deferred taxes due to the true-up of the state tax rate of an indefinite-lived intangible ~~asset.~~asset, partially offset by unbenefited foreign losses.

In 2019, the Company recorded an income tax benefit of $7.1 million, despite pre-tax income. The income tax benefit was due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.

3529

Table of Contents

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 earnings (loss) attributable to ~~ANGI Homeservices~~Angi Inc. shareholders to operating income (loss) ~~income~~ to consolidated Adjusted EBITDA:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
		(In thousands)										(In thousands)
Net earnings attributable to ANGI Homeservices Inc. shareholders		$	4,472	$	17,999	$	8,181	$	34,936
Net earnings (loss) attributable to Angi Inc. shareholders										Net earnings (loss) attributable to Angi Inc. shareholders		$	1,931	$	(8,958)
Add back:	Add back:									Add back:
Net earnings attributable to noncontrolling interests		731		325		1,049		473
Income tax (benefit) provision		(11,698)		4,900		(17,638)		(7,062)
Other income, net		(223)		(1,505)		(856)		(4,823)
Net earnings (loss) attributable to noncontrolling interests										Net earnings (loss) attributable to noncontrolling interests		83		(226)
Income tax benefit										Income tax benefit		(9,289)		(8,965)
Other expense (income), net										Other expense (income), net		767		(421)
Interest expense	Interest expense	3,699		3,007		7,593		8,964		Interest expense		6,617		2,274
Operating (loss) income		(3,019)		24,726		(1,671)		32,488
Operating income (loss)										Operating income (loss)		109		(16,296)
Stock-based compensation expense	Stock-based compensation expense	14,697		8,784		55,031		45,586		Stock-based compensation expense		2,034		25,575
Depreciation	Depreciation	13,921		11,244		38,614		27,039		Depreciation		15,969		12,138
Amortization of intangibles	Amortization of intangibles	12,888		14,169		38,846		42,421		Amortization of intangibles		5,074		12,980
Adjusted EBITDA	Adjusted EBITDA	$	38,487	$	58,923	$	130,820	$	147,534	Adjusted EBITDA		$	23,186	$	34,397

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

Non-Cash Expenses That Are Excluded from 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 ~~cost~~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 RSUs~~PSUs and market-based awards are included only to the extent the applicable performance or market condition(s) have been met (assuming the end of the reporting period is the end of the contingency period). The Company is currently settling all stock-based awards on a net basis and remits the required tax-withholding ~~amount~~amounts from its current funds.

~~Table of Contents~~

Depreciation is a non-cash expense relating to our capitalized software, leasehold improvements and equipment ~~that~~and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.

Table of Contents

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.

Table of Contents

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Position


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(In thousands)					(In thousands)
Cash and cash equivalents and marketable debt securities
Cash and cash equivalents and marketable debt securities:						Cash and cash equivalents and marketable debt securities:
United States	United States	$	837,611	$	377,648	United States	$	756,860	$	793,679
All other countries ~~(a)~~	All other countries ~~(a)~~	17,433		12,917		All other countries ~~(a)~~	20,181		19,026
Total cash and cash equivalents	Total cash and cash equivalents	855,044		390,565		Total cash and cash equivalents	777,041		812,705
Marketable debt securities (United States)	Marketable debt securities (United States)	49,992		—		Marketable debt securities (United States)	—		49,995
Total cash and cash equivalents and marketable debt securities	Total cash and cash equivalents and marketable debt securities	$	905,036	$	390,565	Total cash and cash equivalents and marketable debt securities	$	777,041	$	862,700

Long-term debt
Long-term debt:						Long-term debt:
Senior Notes	Senior Notes	$	500,000	$	—	Senior Notes	$	500,000	$	500,000
Term Loan	Term Loan	237,188		247,500		Term Loan	213,125		220,000
Total long-term debt	Total long-term debt	737,188		247,500		Total long-term debt	713,125		720,000
Less: current portion of Term Loan		13,750		13,750

Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	8,030		1,804		Less: unamortized debt issuance costs	7,138		7,723
Total long-term debt, net	Total long-term debt, net	$	715,408	$	231,946	Total long-term debt, net	$	705,987	$	712,277

~~________________________~~

~~(a)~~ ~~If needed for U.S. operations, the~~The Company’s international cash ~~and cash equivalents held by the Company's foreign subsidiaries could~~can be repatriated without significant tax consequences.

For a detailed description of long-term debt, see “Note 4—Long-term Debt” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements.” As of May 6, 2021, the outstanding balance of the Term Loan of $213.1 million was repaid in its entirety.

~~Long-term Debt~~Cash Flow Information

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


	Three Months Ended March 31,
	2021		2020
	(In thousands)
Net cash provided by (used in):
Operating activities	$	15,345	$	55,906
Investing activities	31,257		(12,469)
Financing activities	(82,897)		(48,337)

Net cash provided by operating activities consists of earnings adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments include stock-based compensation expense, provision for credit losses, amortization of intangibles, depreciation, and deferred income taxes.

2021

Adjustments to earnings consist primarily of $19.1 million of provision for credit losses, $16.0 million of depreciation, $5.1 million of amortization of intangibles, $2.9 million of revenue reserves, and $2.0 million of stock-based compensation expense, partially offset by $10.3 million of deferred income taxes. The decrease from changes in working capital consists primarily of increases in accounts receivable of $34.6 million, partially offset by increases in accounts payable and other liabilities of $4.5 million and deferred revenue of $3.0 million. 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 memberships. The increase in accounts receivable is due primarily to revenue growth in North America.

Table of Contents

Net cash provided by investing activities includes proceeds of $50.0 million from the maturities of marketable debt securities, net of capital expenditures of $18.7 million, primarily related to investments in the development of capitalized software to support the Company’s products and services.

Net cash used in financing activities includes $48.2 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, $6.9 million for the prepayment on the Term Loan required quarterly payments that was otherwise due in the first quarter of 2022, and $4.9 million for the repurchase of 0.4 million shares of Angi Inc. Class A common stock, on a settlement and trade date basis, at an average price of $11.85 per share.

2020

Adjustments to earnings consist primarily of $25.6 million of stock-based compensation expense, $17.8 million of bad debt expense, $13.0 million of amortization of intangibles, and $12.1 million of depreciation, partially offset by $8.3 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 increase from changes in working capital consists primarily of an increase in accounts payable and other liabilities of $21.0 million, partially offset by an increase in accounts receivable of $21.2 million. The increase in accounts payable and other liabilities is primarily due to an increase in accrued advertising and related payables. The increase in accounts receivable is primarily due to revenue growth in North America.

Net cash provided by investing activities includes capital expenditures of $13.2 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 $38.5 million for the repurchase of 5.2 million shares of Angi Inc. Class A common stock, on a settlement date basis, at an average price of $7.43 per share, $3.4 million for the principal payment on the Term Loan, $3.2 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, and $3.2 million for the purchase of redeemable noncontrolling interests.

Liquidity and Capital Resources

Financing Arrangements

The outstanding balance of the Term Loan as of ~~September 30, 2020 is $237.2 million. There are quarterly principal payments of $3.4 million through December~~March 31, 2021 ~~$6.9~~was $213.1 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 September 30, 2020, the Term Loan bore interest at LIBOR plus ~~1.50%~~2.00%, or ~~1.66%~~2.10%. ~~The spread over LIBOR is subject to change~~As of May 6, 2021, the outstanding balance of the Term Loan was repaid in ~~future periods based on ANGI Group's consolidated net leverage ratio.~~its entirety.

On August 20, 2020, ANGI Group issued ~~$500~~$500.0 million of its Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year, commencing February 15, 2021. The proceeds from the offering ~~will be~~are being used for general corporate purposes, ~~including~~which may include potential future acquisitions and return of capital.

~~On August 12, 2020, ANGI Group entered into a joinder agreement with the Company, the other subsidiaries~~The Credit Facility of the Company that are party to the credit agreement, and each of the other loan parties to the credit agreement, pursuant to which ANGI Group became the successor borrower under the credit agreement and ANGI Homeservices Inc.'s obligations thereunder were terminated. The credit agreement governs the Term Loan and Revolving Facility. In addition, on August 12, 2020, the definition of "Permitted Unsecured Ratio Debt" in the credit agreement was amended to remove the requirement that guarantees of certain indebtedness of the borrower be subordinated to the guarantees under the credit agreement.

~~The~~ $250 million ~~Revolving Facility~~ expires on November 5, 2023. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, there were no outstanding borrowings under the ~~Revolving~~Credit Facility. The ~~annual~~ commitment fee, ~~on undrawn funds is currently 25 basis points and~~which is based on ANGI Group's consolidated net leverage ratio most recently ~~reported.~~reported and the average daily dollar amount of the available revolving commitments, was 35 basis points at both March 31, 2021 and December 31, 2020. Borrowings under the ~~Revolving~~Credit Facility bear interest, at ANGI ~~Group's~~Group’s option, at either a base rate or LIBOR, in each case plus an applicable margin, which is determined based on ANGI ~~Group's~~Group’s consolidated net leverage ratio.

~~Table of Contents~~

~~The Senior Notes, Term Loan and Revolving~~ Any borrowings under the ANGI Group Credit Facility are guaranteed by ~~certain of~~ ANGI Group's wholly-owned material domestic subsidiaries and ~~ANGI Group’s obligations under the Term Loan and the Revolving Facility~~ are secured by substantially all assets of ANGI Group and the guarantors, subject to certain exceptions. The Term Loan and outstanding borrowings, if any, under the Revolving Facility rank equally with each other, and have priority over the Senior Notes to the extent of the value of the assets securing the borrowings under the credit agreement.

The terms of the ~~Revolving~~Credit Facility ~~and the Term Loan~~ require ~~ANGI Group~~Angi Inc. 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 (in each case as defined in~~1.0. There are additional covenants under the ~~credit agreement). In addition,~~Credit Facility that limit the ~~credit agreement contains covenants that would limit~~ability of ANGI ~~Group's ability~~Group and its subsidiaries to, among other things, incur indebtedness, pay dividends or make ~~distributions in~~distributions.

Share Repurchase Authorizations and Activity

During the ~~event a default has occurred or if ANGI Group's consolidated net leverage ratio exceeds 4.25 to 1.0.~~

~~Cash Flow Information~~

~~In summary,~~quarter ended March 31, 2021, the ~~Company's cash flows are as follows:~~

Nine Months Ended September 30,
2020 2019
(In thousands)
Net cash provided by (used in):
Operating activities $ 173,185 $ 182,084
Investing activities $ (86,894) $ (26,630)
Financing activities $ 378,450 $ (89,924)

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 provision for credit losses, stock-based compensation expense, amortization of intangibles, depreciation, and deferred income taxes.

~~2020~~

~~Adjustments to earnings consist primarily of $60.1~~Company repurchased 0.4 million of provision for credit losses, $55.0 million of stock-based compensation expense, $38.8 million of amortization of intangibles, and $38.6 million of depreciation, partially offset by $18.1 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase in accounts receivable of $70.7 million, partially offset by an increase in accounts payable and other liabilities of $46.9 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, and accrued compensation costs due, in part, to the deferral of payroll tax payments under the Coronavirus Aid, Relief, and Economic Security Act.

Net cash used in investing activities includes purchases of marketable debt securities of $50.0 million and capital expenditures of $37.6 million, primarily related to investments in capitalized software to support the Company's products and services, and leasehold improvements.

Net cash provided by financing activities includes $500.0 million of proceeds from the issuance of the Senior Notes and a $3.1 million payment from IAC pursuant to the tax sharing agreement, partially offset by $54.4 million for the repurchase of 7.7 million shares, ~~of Class A common stock,~~ on a settlement and trade date basis, of its common stock at an average price of ~~$7.02~~$11.85 per share. The Company had 18.9 million shares remaining in its share ~~$50.0 million for the payment~~repurchase authorization as of ~~withholding taxes on behalf~~March 31, 2021. The Company may purchase shares over an indefinite period of employees for stock-based awards that were net settled, $10.3 million in principal payments on the Term Loan, $5.6 million for debt issuance costs, and $4.3 million for the purchase of redeemable noncontrolling interests.

~~2019~~

Adjustments to earnings consist primarily of $49.3 million of provision for credit losses, $45.6 million of stock-based compensation expense, $42.4 million of amortization of intangibles, and $27.0 million of depreciation, partially offset by $8.3 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 $66.6 million, partially offset by an increase in accounts payable and other liabilities of $30.6 million and a decrease in other assets of $15.7 million. The increase in accounts receivable was 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 decrease in other assets is due, in part, to a receipt of tenant improvement allowances.time

3933

Table of Contents

Net cash used in investing activities includes capital expenditures of $54.8 million, primarily related to investments in 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 $34.0 million for the repurchase of 4.1 million shares of Class A common stock, on a settlement date basis, at an average price of $8.23 per share, $30.0 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 $10.3 million for the principal payments on the Term Loan.

~~Liquidity and Capital Resources~~

During the nine months ended September 30, 2020, the Company repurchased 7.6 million shares of its Class A common stock, on a trade date basis, at an average price of $7.00 per share, or $53.4 million in aggregate. At September 30, 2020, the Company has 20.1 million shares remaining in its share repurchase authorization. The Company may purchase its shares over an indefinite period of time on the open market and in privately negotiated transactions, depending on those factors Angi 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.Certain Angi stock appreciation rights are settleable, at the Company’s option, on a net basis with Angi remitting withholding taxes on behalf of the employee or on a gross basis with the Company issuing a sufficient number of Class A shares to cover the withholding taxes. In addition, at IAC/InterActiveCorp’s (“IAC”) option, these awards can be settled in either Class A shares of Angi or shares of IAC common stock. If settled in IAC common stock, the Company reimburses IAC in either cash or through the issuance of Class A shares to IAC. The Company currently settles all equity awards on a net basis. ~~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 or part of IAC equity awards outstanding ~~on October~~immediately prior to the distribution into equity awards denominated in shares of Angi Class A Common Stock, 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 April 30, ~~2020~~2021;assuming these awards were net settled on that date, ~~including~~the withholding taxes that would be paid by the Company on behalf of employees upon exercise or vesting that would be payable (assuming these equity awards are net settled with a 50% tax rate), and the shares that would have been issued are as follows:


	Aggregate intrinsic value of awards outstanding		Estimated withholding taxes payable		Estimated shares to be issued
	(In thousands)				(Shares in thousands)
Stock appreciation rights	$	15,283	$	7,642	477
Other equity awards(a)	167,304		82,432		5,301
Total outstanding employee stock-based awards	$	182,587	$	90,074	5,778

_______________

(a)Includes stock options, RSUs, and ~~subsidiary-denominated~~subsidiary denominated equity.

(b)The number of shares ultimately needed to settle subsidiary denominated equity ~~ANGI would have issued 10.0 million~~awards and the cash withholding tax obligation may vary significantly as a result of the determination of the fair value of the relevant award at the time of exercise. In addition, the number of shares ~~of its Class A common~~required to settle these awards will be impacted by movement in the Company’s stock ~~and would have remitted $106.3 million in cash for withholding taxes (assuming a~~ price.

~~50%~~
~~withholding rate).~~

Capital Expenditures

The ~~Company's 2020~~Company’s 2021 capital expenditures are expected to be ~~lower~~higher than ~~2019~~2020 capital expenditures of ~~$68.8~~$52.5 million by approximately ~~15%~~50% to ~~20%~~60%, due primarily to ~~lower leasehold improvements.~~ increased investment in capitalized software to support the development of our products and services.

Liquidity Assessment

The ~~Company's~~Company’s liquidity could be negatively affected by a decrease in demand for ~~our~~its products and services due to COVID-19 or other factors. As described in the ~~"COVID-19 Update"~~“COVID-19 Update” section above, to date, the COVID-19 outbreak and measures designed to curb its spread have ~~had an impact on~~adversely impacted the ~~Company's~~Company’s business. The longer the global outbreak and measures designed to curb the spread of the ~~virus~~COVID-19 outbreak have adverse impacts on economic conditions generally, the greater the adverse impact is likely to be on the ~~Company's~~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 ~~ANGI Group's~~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 at ~~September 30, 2020.~~March 31,

Table of Contents

2021. The ~~Company's~~Company’s ability to obtain additional financing may also be impacted by any disruptions in the financial markets caused by COVID-19 or otherwise.

The Company believes its existing cash, cash equivalents, ~~marketable debt securities,~~ available borrowings under the ~~Revolving~~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.

At ~~September 30, 2020,~~March 31, 2021, IAC held all Class B shares of ~~ANGI,~~Angi Inc., which represent ~~84.5%~~84.2% of the economic interest and 98.2% of the voting interest of ~~ANGI.~~the Company. As a result, IAC has the ability to control ~~ANGI’s~~Angi Inc.’s financing activities, including the issuance of additional debt and equity securities by ~~ANGI~~Angi Inc. or any of its subsidiaries, or the incurrence of other indebtedness generally. While ~~ANGI~~Angi Inc. is expected to have the ability to access debt and equity markets if needed, such transactions may require the approval of IAC due to its control of the majority of the outstanding voting power of ~~ANGI’s~~Angi Inc.’s capital stock and its representation on the ~~ANGI~~Angi Inc. board of directors. Additional financing may not be available on terms favorable to the Company or at all.

4035

Table of Contents

CONTRACTUAL OBLIGATIONS

~~At September 30, 2020,~~During the three months ended March 31, 2021, there have been no material changes to the ~~Company's~~Company’s contractual obligations since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2019 except for the issuance, by ANGI Group, on August 20, 2020 of $500 million aggregate principal amount of its Senior Notes due August 15, 2028. The proceeds from the offering will be used for general corporate purposes, including potential future acquisitions and return of capital.2020.

4136

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~At September 30, 2020,~~During the three months ended March 31, 2021, there have ~~bee~~nbeen no material changes to the ~~Company's~~Company’s instruments or positions that are sensitive to market risk since the disclosure in our Annual Report on Form 10-K for the year ended December 31, ~~2019, other than the issuance of the ANGI Group Senior Notes on August 20, 2020, which increased the Company's exposure to interest rate risk.~~2020.

If market interest rates decline, the Company runs the risk that the related required payments of the ANGI Group Senior Notes will exceed those based on market rates. A 100-basis point increase or decrease in the level of interest rates would, respectively, decrease or increase the fair value of the fixed-rate debt by $33.4 million. Such potential increase or decrease in fair value is based on certain simplifying assumptions, including an immediate increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period. The outstanding balances of $237.2 million on the ANGI Group Term Loan bears interest at LIBOR plus 1.50%. As of September 30, 2020, the rate in effect was 1.66%. If LIBOR were to increase or decrease by 100 basis points, then the annual interest expense on the ANGI Group Term Loan would increase or decrease by $2.4 million. ~~The decline in interest rates in 2020 relative to 2019 has reduced the Company's interest expense by approximately~~ ~~$1.3 million and $3.1 million for the three and nine months ended September 30, 2020.~~

4237

Table of Contents

Item 4. Controls and Procedures

Evaluation of Disclosure 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.

Changes in Internal Control Over Financial Reporting

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's~~Company’s disclosure controls and procedures as defined by Rule 13a-15(e) under the Exchange Act. Based on this evaluation, management has concluded that the ~~Company's~~Company’s disclosure controls and procedures were effective as of the end of the period covered by this report in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the ~~Commission's~~Commission’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There were no changes to the ~~Company's~~Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

4338

Table of Contents

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 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 has opened a dialogue with the staff to discuss the matter.

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. ~~On September 29, 2020, the court issued an order granting in part and denying in part the defendants’ motions to dismiss and with the exception of this development, there~~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.

Table of Contents

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's~~Company’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.

Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: (i) the impact of the COVID-19 outbreak on our businesses, (ii) our ability to compete, (iii) the failure or delay of the home services market to migrate online, (iv) adverse economic events or trends (particularly those that adversely impact consumer confidence and spending behavior), (v) our ability to establish and maintain relationships with quality service professionals, (vi) our ability to build, maintain and/or enhance our various brands, (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 the integration of suitable 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 Reports on 10-Q for the fiscal quarters ended March 31, 2020 and June 30,~~ 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 addition~~Our changes in executive management may not result in growth of our business or enhance stockholder value, and our transition to a new Chief Executive Officer and search for a permanent Chief Financial Officer and Chief Marketing Officer may not be successful.

On December 9, 2020, the Company announced the resignation of Jamie Cohen, Chief Financial Officer and the appointment of Glenn H. Schiffman as Interim Chief Financial Officer, while the Company initiated a national search for a permanent replacement. Craig Smith’s resignation from the Board and as Chief Operating Officer became effective on December 18, 2020. On February 24, 2021, the Company announced the appointment of Oisin Hanrahan as Chief Executive Officer, following the resignation of William B. Ridenour and Allison Lowrie, Chief Marketing Officer. Our executive management team is critical to the ~~risk factor relating to the impact~~overall management of the ~~COVID-19 outbreak~~Company and also plays a key role in maintaining our culture and setting our strategic direction. These recent changes in our executive management and composition of the Board, may cause or result in: disruption of our business and operations; difficulty recruiting, hiring, motivating and retaining talented and skilled personnel; departures of other members of management; increased stock price volatility; and difficulty in establishing, maintaining or negotiating business or strategic relationships or transactions. Furthermore, the transition to a new Chief Executive Officer and permanent Chief Financial Officer and Chief Marketing Officer could be a distraction to our executive management, business operations, service professionals and customers. The search could also result in significant recruiting and relocation costs. If we fail to successfully and timely attract and appoint executive officers with the appropriate level of expertise, we could experience adverse impacts on our businesses and other information set forth in this quarterly report, you should carefully consider the risk factors set forth 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 Reports on 10-Q for the fiscal quarters ended March 31, 2020 and June 30, 2020, which could materially and adversely affect 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 ofCOVID-19 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 outbreak of a widespread health epidemic or pandemic, including the outbreak of the coronavirus ("COVID-19"), which has been declared a "pandemic" by the World Health Organization. To date, the outbreak of COVID-19 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 in 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

4540

Table of Contents

Our Angi brand integration initiative may involve substantial costs, including as a result of a continued negative impact on our organic search placement, and may not be favorably received by customers and service professionals.

On March 17, 2021, our Company updated one of its leading websites and brands, Angie’s List, to Angi, and began concentrating its marketing investment in the Angi brand in order to focus our marketing, sales, and branding efforts on a single brand.

We may incur substantial costs as a result of our brand integration initiative and may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition 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 as against our other brands. Our Company relies heavily on free and paid search engine marketing efforts to drive traffic to our properties, which has been adversely affected by this initiative. Specifically, 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 ~~operations. For example,~~our search engine marketing efforts, and which in ~~March 2020, we experienced a decline~~turn reduced revenue and increased marketing spend that is expected to result in ~~demand~~lower profits for ~~service requests, driven primarily by decreases~~the quarter ending June 30, 2021. This trend is expected to continue for the remainder of 2021 (and potentially into 2022), with the most significant impact expected in ~~demand in certain categories of jobs (particularly discretionary indoor projects). In~~ the second quarter of ~~2020, we 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~~2021. Any or all of these impacts could continue to measures taken to reduce the spread of COVID-19. We continued to experience strong demand for home services in the third quarter of 2020. However, many service professionals' businesses have been adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which has negatively impactedincrease 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 nine months ended September 30, 2020, has experienced a significant resurgence of COVID-19~~marketing costs (particularly if free traffic is replaced with record levels of infection being reported in the weeks following the end of the third quarter or 2020. Lastly, Europe, which is the second largest market for the Company's product and services, has also seen a dramatic resurgence of COVID-19. These resurgences and the measures designed to curb their spread could result in continued variability 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 materiallypaid traffic) and adversely affect the effectiveness of our ~~business, financial condition and results of operations.~~

In addition, in response to the COVID-19 outbreak 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 costsmarketing efforts overall. Finally, as we ~~gradually resume normal operations~~align and ~~enhance preventative measures,~~focus the organization around a single brand, we could experience financial and operational challenges, including ~~with respect to real estate, compliance~~a distracted salesforce and ~~insurance-related expenses. Moreover, we may also experience business disruption if the ordinary course operations of~~reduced service professional participation across our ~~contractors, vendors or business partners are adversely affected. Any of these measures or impairments~~various product lines. Depending on market acceptance, our brand integration initiative could adversely affect our ~~business, financial condition~~ability to attract and ~~results of operations.~~

~~The extent~~retain customers and service professionals, which could cause us not to ~~which developments related to COVID-19 and measures designed to curb its spread continue to impact our business, financial condition and results of operations will depend on future developments,~~realize some or all of ~~which are highly uncertain and many of which are beyond our control, including~~ the ~~speed of contagion,~~anticipated benefits contemplated by 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 COVID-19. The longer the global outbreak and measures designed to curb the spread of COVID-19 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.brand integration initiative.

The COVID-19 outbreak 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 Reports on 10-Q for the fiscal quarters ended March 31, 2020 and June 30, 2020. We will continue to evaluate the nature and extent of the impact of the COVID-19 outbreak on our business, financial condition and results of operations.

Furthermore, because COVID-19 did not begin to impact our results until late in the first quarter of 2020, any current or future impacts may not be directly comparable to any historical periods and are not necessarily indicative of any future impacts that COVID-19 may have on our results for the remainder of 2020 or any subsequent periods. The impact of COVID-19 on our revenues and expenses may also fluctuate differently over the duration of the pandemic.

~~Table of Contents~~

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

Unregistered Sales of Equity Securities

The ~~Employee Matters Agreement~~employee matters agreement dated as of September 29, 2017, by and between us and IAC, ~~(the "Employee Matters Agreement"),~~ 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 shares of our Class B common stock.

Pursuant to the ~~Employee Matters Agreement, 102,838~~employee matters agreement, 2,579,264 shares of Class A common stock and 96,031 shares of Class B common stock were issued to IAC on ~~September 30, 2020~~March 31, 2021 as reimbursement for shares of IAC common stock issued in connection with the settlement of certain equity awards held by our employees during the quarter ended ~~September 30, 2020.~~March 31, 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"~~“Securities Act”), pursuant to Section 4(a)(2) thereof.

Issuer Purchases of Equity Securities

The following table sets forth purchases by the Company ~~did not purchase any shares~~ of its Class A common stock during the quarter ended ~~September 30, 2020. As~~March 31, 2021:

Table of ~~that date, 20,053,530~~Contents


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)
January 2021	414,720	$	11.85	414,720	18,856,841
February 2021	—	$	—	—	18,856,841
March 2021	—	$	—	—	18,856,841
Total	414,720	$	11.85	414,720	18,856,841

(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 ~~ANGI~~ Class A common stock that remained available for repurchase ~~under~~as of March 31, 2021 pursuant to the ~~Company's previously announced~~March 2020 and February 2019 ~~and March 2020~~share repurchase authorizations. The Company may repurchase shares pursuant to ~~these~~this share repurchase ~~authorizations~~authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors ~~ANGI~~Company management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

4742

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 Number

Description

Location

3.1

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of ~~ANGI Homeservices~~Angi Inc.

Exhibit 3.1 to the ~~Registrant's~~Registrant’s Current Report on Form 8-K, filed on ~~October 2, 2017~~March 17, 2021.

3.2

Amended and Restated Bylaws of ~~ANGI Homeservices~~Angi Inc.

Exhibit 3.2 to the ~~Registrant's~~Registrant’s Current Report on Form 8-K, filed on ~~October 2, 2017~~March 17, 2021.

4.1

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

~~Indenture, dated as of August 20, 2020, among ANGI Group, LLC, the guarantors party thereto and Computershare Trust Company, N.A., as trustee.~~

~~Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on August 20, 2020~~.

10.1

~~Amendment No. 1,~~Employment Agreement between Oisin Hanrahan and ANGI Homeservices Inc., dated as of ~~August 12, 2020, among ANGI Homeservices Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.~~February 24, 2021.(3)

Exhibit 10.1 to the ~~Registrant's Current Report on Form 8-K,~~ ~~filed on August 12, 2020~~.

~~10.2~~

Joinder and Reaffirmation Agreement, dated as of August 12, 2020, among ANGI Homeservices Inc., ANGI Group, LLC, each of the parties listed on Schedule 1 thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.

~~Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed on August 12, 2020.~~

~~10.3~~

~~Advisory Agreement, dated September 8, 2020, between ANGI Homeservices Inc. and Craig Smith.~~

~~Exhibit 10.1 to the~~ ~~Registrant's~~Registrants Current Report on Form 8-K, filed on ~~September 11, 2020~~February 25, 2021.

10.2

Employment Agreement between Kulesh Shanmugasundaram and Angi Inc., dated as of March 25, 2021. (1) (3)

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 Interim Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)

32.2

Certification of the Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)

101.INS

Inline XBRL Instance (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.

(3)Reflects management contracts and management and director compensatory plans.

Table of Contents

SIGNATURES

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

Dated:

~~November 6, 2020~~May 7, 2021

~~ANGI Homeservices~~Angi Inc.

By:

/s/ ~~JAMIE COHEN~~GLENN H. SCHIFFMAN

~~Jamie Cohen~~Glenn H. Schiffman

Interim Chief Financial Officer



Signature	Title	Date

/s/ ~~JAMIE COHEN~~GLENN H. SCHIFFMAN	Interim Chief Financial Officer	~~November 6, 2020~~May 7, 2021
~~Jamie Cohen~~Glenn H. Schiffman

4944


			ANGI Homeservices Inc. Shareholders' Equity
			Class A Common Stock $0.001 Par Value			Class B Common Stock $0.001 Par Value			Class C Common Stock $0.001 Par Value											Total ANGI Homeservices Inc. Shareholders' Equity

																Accumulated Other Comprehensive (Loss) Income								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 June 30, 2020	$	25,093	$	89	89,076	$	422	421,757	$	0	0	$	1,387,618	$	19,741	$	(2,740)	$	(112,808)	$	1,292,322	$	9,604	$	1,301,926
Net earnings	438		—		—	—		—	—		—	—		4,472		—		—		4,472		293		4,765
Other comprehensive income, net of income taxes	920		—		—	—		—	—		—	—		—		1,755		—		1,755		378		2,133
Stock-based compensation expense	0		—		—	—		—	—		—	13,846		—		—		—		13,846		—		13,846
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—		4		3,584	—		—	—		—	(37,842)		—		—		—		(37,838)		—		(37,838)
Issuance of common stock to IAC pursuant to the employee matters agreement	—		—		—	—		102	—		—	(632)		—		—		—		(632)		—		(632)


Adjustment of redeemable noncontrolling interests to fair value	(677)		—		—	—		—	—		—	677		—		—		—		677		—		677

Purchase of noncontrolling interests	—		—		—	—			—		—	—		—		—		—		—		(1,115)		(1,115)

Other	—		—		—	—		—	—		—	(690)		—		—		—		(690)		689		(1)
Balance as of September 30, 2020	$	25,774	$	93	92,660	$	422	421,859	$	0	0	$	1,362,977	$	24,213	$	(985)	$	(112,808)	$	1,273,912	$	9,849	$	1,283,761


Balance as of June 30, 2019	$	23,421	$	86	85,803	$	421	421,453	$	0	0	$	1,338,280	$	(1,860)	$	(1,482)	$	0	$	1,335,445	$	9,101	$	1,344,546
Net earnings	233		—		—	—		—	—		—	—		17,999		—		—		17,999		92		18,091
Other comprehensive loss	(365)		—		—	—		—	—		—	—		—		(2,681)		—		(2,681)		(25)		(2,706)
Stock-based compensation expense	36		—		—	—		—	—		—	8,748		—		—		—		8,748		—		8,748
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—		0		272	—		—	—		—	(2,357)		—		—		—		(2,357)		—		(2,357)
Issuance of common stock to IAC pursuant to the employee matters agreement	—		—		—	1		117	—		—	(971)		—		—		—		(970)		—		(970)
Purchase of treasury stock	—		—		—	—		—	—		—	—		—		—		(34,157)		(34,157)		—		(34,157)
Purchase of redeemable noncontrolling interests	(71)		—		—	—		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable noncontrolling interests to fair value	(1,255)		—		—	—		—	—		—	1,255		—		—		—		1,255		—		1,255
Other	—		—		—	—		—	—		—	1		—		—		—		1		—		1
Balance as of September 30, 2019	$	21,999	$	86	86,075	$	422	421,570	$	0	0	$	1,344,956	$	16,139	$	(4,163)	$	(34,157)	$	1,323,283	$	9,168	$	1,332,451


Balance as of December 31, 2018	$	18,163	$	81	80,515	$	421	421,118	$	0	0	$	1,333,097	$	(18,797)	$	(1,861)	$	0	$	1,312,941	$	9,046	$	1,321,987
Net earnings	284		—		—	—		—	—		—	—		34,936		—		—		34,936		189		35,125
Other comprehensive loss	(514)		—		—	—		—	—		—	—		—		(2,302)		—		(2,302)		(67)		(2,369)
Stock-based compensation expense	113		—		—	—		—	—		—	45,473		—		—		—		45,473		—		45,473
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—		5		5,560	—		—	—		—	(27,805)		—		—		—		(27,800)		—		(27,800)
Issuance of common stock to IAC pursuant to the employee matters agreement	—		—		—	1		452	—		—	(1,766)		—		—		—		(1,765)		—		(1,765)
Purchase of treasury stock	—		—		—	—		—	—		—	—		—		—		(34,157)		(34,157)		—		(34,157)
Purchase of redeemable noncontrolling interests	(71)		—		—	—		—	—		—	—		—		—		—		—		—		—
Adjustment of redeemable noncontrolling interests to fair value	4,024		—		—	—		—	—		—	(4,024)		—		—		—		(4,024)		—		(4,024)
Other	—		—		—	—		—	—		—	(19)		—		—		—		(19)		—		(19)
Balance as of September 30, 2019	$	21,999	$	86	86,075	$	422	421,570	$	0	0	$	1,344,956	$	16,139	$	(4,163)	$	(34,157)	$	1,323,283	$	9,168	$	1,332,451


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Treasury discount notes	$	49,991	$	1	$	0	$	49,992
Total available-for-sale marketable debt securities	$	49,991	$	1	$	0	$	49,992


Year	Percentage
2023	101.938	%
2024	100.969	%
2025 and thereafter	100.000	%


	Three Months Ended September 30, 2019
	Operating Income (Loss)		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	27,194	$	8,648	$	10,690	$	13,977	$	60,509
Europe	(2,468)		$	136	$	554	$	192	$	(1,586)
Operating income	24,726
Interest expense	(3,007)
Other income, net	1,505
Earnings before income taxes	23,224
Income tax provision	(4,900)
Net earnings	18,324
Net earnings attributable to noncontrolling interests	(325)
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	17,999


	Nine Months Ended September 30, 2020
	Operating Income (loss)		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	8,377	$	54,406	$	35,531	$	38,572	$	136,886
Europe	(10,048)		$	625	$	3,083	$	274	$	(6,066)
Operating loss	(1,671)
Interest expense	(7,593)
Other income, net	856
Loss before income taxes	(8,408)
Income tax benefit	17,638
Net earnings	9,230
Net earnings attributable to noncontrolling interests	(1,049)
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	8,181


	Nine Months Ended September 30, 2019
	Operating Income (Loss)		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA
	(In thousands)
North America	$	40,409	$	45,107	$	25,124	$	41,164	$	151,804
Europe	(7,921)		$	479	$	1,915	$	1,257	$	(4,270)
Operating income	32,488
Interest expense	(8,964)
Other income, net	4,823
Earnings before income taxes	28,347
Income tax benefit	7,062
Net earnings	35,409
Net earnings attributable to noncontrolling interests	(473)
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	34,936