What changed in this filing

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Item 1. Business

2021-02-16 compared with 2020-02-28 · 78 added, 43 removed, 149 unchanged (45% of the section changed)

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connects quality home service professionals across 500 different categories, from repairing and remodeling to cleaning and landscaping, with consumers.

Over 250,000 domestic service professionals find work through ANGI Homeservices, and consumers turn to at least one of our brands to find a professional for more than 25 million projects each year.

ANGI Homeservices has established category-transforming products with brands such as HomeAdvisor, Angie’s List, Handy and Fixd Repair.

Over 240,000 domestic service professionals actively sought consumer matches, completed jobs or advertised work through ANGI Homeservices’ platforms and consumers turned to at least one of our brands to find a professional for approximately 32 million projects during the year ended December 31, 2020.

ANGI Homeservices has established category-transforming products with brands such as HomeAdvisor, Angie’s List, and Handy.

The Company has two operating segments:

(i) North America (United States and Canada), which primarily includes the operations HomeAdvisor, Angie's List, Handy, mHelpDesk, HomeStars and Fixd Repair, and (ii) Europe, which includes the operations of Travaux, MyHammer, MyBuilder, Werkspot and Instapro.

(i) North America (United States and Canada), which primarily includes the operations of HomeAdvisor, Angie’s List, Handy, and HomeStars, and (ii) Europe, which includes the operations of Travaux, MyHammer, MyBuilder, Werkspot and Instapro.

As used herein, “ANGI Homeservices,” the “Company,” “we,” “our,” “us” and similar terms refer to ANGI Homeservices Inc.

and its subsidiaries (unless the context requires otherwise).

We were incorporated in the State of Delaware on April 13, 2017 as Halo TopCo, Inc., a wholly-owned subsidiary of IAC/InterActiveCorp (“IAC”), and changed our name to ANGI Homeservices Inc.

on May 4, 2017.

We are a publicly traded holding company that was formed to facilitate the combination of IAC’s HomeAdvisor business and Angie’s List, Inc.

We have been incorporated in the State of Delaware since 2017 and operate under the name ANGI Homeservices Inc.

We are a publicly traded holding company that was formed to facilitate the combination of IAC/InterActiveCorp’s (“IAC”) HomeAdvisor business and Angie’s List, Inc.

(the “Combination”), which was completed on September 29, 2017.

For information regarding the Combination, see “Note 4-Business Combinations" to the consolidated and combined financial statements set forth in "Item 8-Consolidated and Combined Financial Statements and Supplementary Data.”

We acquired Handy Technologies, Inc.

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Prior to its sale on December 31, 2018, we also operated Felix, a pay-per-call advertising service business, which was included in our North America segment.

In January 2019, we acquired Fixd Repair, LLC and Fixd Services LLC (collectively, “Fixd Repair”), a home warranty and service company.

ANGI also owns and operates Fixd Repair, a home warranty and service company, mHelpDesk, a provider of cloud-based field service software for small to mid-size businesses, and CraftJack, a third-party lead generation service that connects home service professionals with consumers looking to complete home projects.

DESCRIPTION OF OUR BUSINESSES

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Handy connects consumers looking for household services (primarily cleaning and handyman services) with top-quality, pre-screened independent service professionals.

Together, we refer to the HomeAdvisor and Handy businesses in the United States as the “Marketplace.” We provide all Marketplace matching services, related tools and directories to consumers free of charge.

As of December 31, 2019, the Marketplace had a network of approximately 220,000 service professionals, each of whom paid for consumer matches or completed a job sourced through the HomeAdvisor and/or Handy platforms in December 2019 and/or had an active HomeAdvisor membership subscription on December 31, 2019.

Collectively, these service professionals provided services in more than 500 categories and 400 discrete markets in the United States, ranging from cleaning and installation services to simple home repairs and larger home remodeling projects.

Consumers request and pay for household services directly through the Handy platform and Handy fulfills the request through the use of independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services.

Together, we refer to the HomeAdvisor and Handy businesses in the United States as the “Marketplace.” All Marketplace matching and pre-priced booking services and related tools and directories are provided to consumers free of charge.

As of December 31, 2020, the Marketplace had a network of approximately 208,000 transacting service professionals, each of whom paid for consumer matches and/or performed a job sourced or booked through HomeAdvisor and/or Handy.

Collectively, this service professional network provided services in more than 500 categories, ranging from cleaning and installation services to simple home repairs and larger home remodeling projects, and 400 discrete geographic areas in the United States.

The Marketplace generated approximately 32 million service requests during the year ended December 31, 2020.

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Consumer Services

Consumers can submit a request to be matched with a Marketplace service professional through the HomeAdvisor and Handy platforms, as well as through certain paths on the Angie’s List platform and various third-party affiliate platforms.

Consumers can submit a request to be matched with a Marketplace service professional through the HomeAdvisor and Handy platforms, as well as through certain paths on the Angie’s List, Inc.

(“Angie’s List”) platform and various third-party

affiliate platforms.

Depending on the nature of the service request and the path through which it was submitted, consumers are generally matched with up to four HomeAdvisor service professionals, a Handy service professional or a combination of HomeAdvisor service professionals and service professionals from the Angie’s List nationwide directory (as and if available for the given service request).

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Consumers are under no obligation to work with any service professional(s) referred by or found through any of our branded or third-party affiliate platforms.

For matches described above, in the case of HomeAdvisor service professionals, consumers are responsible for booking the service and paying the service professional directly.

For matches described above, in the case of HomeAdvisor service professionals, consumers are responsible for booking the service and paying the service professional directly either separately or via the HomeAdvisor Pro-Pay App.

Our mobile payments platform on our app allows consumers to pay service professionals directly through our mobile app.

In 2020, we expanded our mobile payment platform with the launch of a financing payment option, administered by a third party, to provide consumers a convenient, contactless alternative to pay for any home improvement job, no matter the project type or size.

In the case of Handy service professionals, 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.

In addition to the general matching services described above, HomeAdvisor also provides several on-demand services, including Instant Booking and Instant Connect (patent-pending).

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.

In addition to the general matching services described above, HomeAdvisor also provides several on-demand services, including Instant Booking and Instant Connect.

Also, in the case of certain tasks, HomeAdvisor provides a pre-priced booking service, 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.

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Service Professional Services

HomeAdvisor service professionals pay fees for consumer matches and membership subscription fees for HomeAdvisor memberships and related mHelpDesk subscription products and services (described below), which are available for purchase at the option of service professionals through our sales force.

HomeAdvisor service professionals pay fees for consumer matches and membership subscription fees for HomeAdvisor memberships, which are available for purchase through our sales force.

The basic HomeAdvisor annual membership package includes membership in the HomeAdvisor network of service professionals, as well as access to consumer matches through HomeAdvisor platforms and a listing in the HomeAdvisor online directory and certain other affiliate directories.

Membership also includes a business profile page on HomeAdvisor.com , a mobile application and access to various online tools designed to help service professionals more effectively market to, and manage and connect with, consumers with whom they are matched.

Handy service professionals who self-register on the Handy platform are provided with access to a pool of consumers seeking service professionals.

mHelpDesk subscription products and services include (among other products and services) mobile office management software that allows service professionals to complete several job-related tasks (such as scheduling, managing job flow, creating and distributing estimates and invoices and processing payments) real time while on the go, as well as custom website development and hosting services.

Membership also includes a business profile page on HomeAdvisor.com, a mobile application and access to various online tools designed to help service professionals more effectively market to, manage and connect with, consumers with whom they are matched.

In addition to the commercial membership terms, in order to be admitted into the HomeAdvisor network, service professionals must satisfy certain criteria, including verification of any required state-level licensing and the owner or principal passing certain criminal background checks.

Once in the network, the service professional must maintain at least a three-star customer rating.

If a service professional in the HomeAdvisor network fails to meet any eligibility criteria during the term of its contract, refuses to participate in our complaint resolution process, or engages in what we determine to be prohibited behavior through any of our service channels, the service professional is subject to being removed from our network.

Service professionals on the Handy platform are provided with access to a pool of consumers seeking service professionals.

Professionals must validate their home service experience as well as satisfy credential verification and a background check, either as an individual professional or as the owner or principal of the business.

Service professionals must maintain an acceptable rating to remain on the Handy platform.

Access to the Handy platform will be revoked for repeatedly receiving low customer satisfactions ratings.

Angie’s List connects consumers with service professionals for local services through a nationwide online directory of service professionals in over 700 service categories, as well as provides consumers with valuable tools, services and content (including verified reviews of local service professionals), to help them research, shop and hire for local services.

Consumers can access the Angie’s List nationwide online directory and related basic tools and services free of charge, as well as purchase membership packages.

Consumers can access the Angie’s List nationwide online directory and related basic tools and services free of charge, as well as via purchased membership packages.

Angie’s List also sells time-based website, mobile and call center advertising to service professionals.

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Free registration is required in order to access the directory and related basic tools and services.

Two premium membership packages are available for a fee, which packages include varying degrees of online and phone support, access to exclusive promotions and features and the award-winning Angie’s List print magazine.

Two premium membership packages are available for a fee, which include varying degrees of online and phone support, access to exclusive promotions and features and the award-winning Angie’s List print magazine.

Consumers can rate service professionals listed in the Angie’s List nationwide online directory on an “A” to “F” grading scale based on a variety of criteria, including overall experience, availability, price, quality, responsiveness, punctuality and professionalism and other criteria, depending on the type of service provided.

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Generally, service professionals with an overall member grade below a “B” are not eligible for certification.

Service professionals must satisfy certain criteria for certification, including retaining the requisite member grade, passing certain criminal background checks and attesting to proper licensure requirements.

Service professionals must satisfy certain criteria for certification, including retaining the requisite member grade, and the owner passing certain criminal background checks and attesting to applicable licensure requirements.

Once eligibility criteria are satisfied, service professionals must purchase term-based advertising to obtain certification.

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(i) Travaux, MyHammer and Werkspot, the leading home services marketplaces in France, Germany and the Netherlands, respectively, (ii) MyBuilder, HomeStars and Instapro, leading home services marketplaces in the United Kingdom, Canada and Italy, respectively, and (iii) the Austrian operations of MyHammer.

We own controlling interests in MyHammer, MyBuilder and HomeStars and wholly-own Travaux, Werkspot and Instapro.

We own controlling interests in MyHammer and MyBuilder and wholly-own HomeStars, Travaux, Werkspot and Instapro.

The business models of our international businesses vary by jurisdiction and differ in certain respects from the HomeAdvisor and Handy business models.

Our revenue is primarily derived from:

(i) consumer connection revenue, which consists of fees paid by HomeAdvisor service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service) and fees from completed jobs sourced through the HomeAdvisor and Handy platforms, and (ii) HomeAdvisor service professional membership subscription fees.

Our revenue is primarily derived from consumer connection revenue, which consists of fees paid by HomeAdvisor service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service) and revenue from completed jobs sourced through the HomeAdvisor and Handy platforms.

Consumer connection revenue varies based upon several factors, including the service requested, product experience offered and geographic location of service.

Revenue is also derived from:

(i) sales of time-based website, mobile and call center advertising to service professionals by Angie's List, (ii) membership subscription fees from consumers and (iii) service warranty subscription and other services revenue.

(i) sales of time-based website, mobile and call center advertising to service professionals by Angie’s List, (ii) HomeAdvisor service professional membership subscription fees, (iii) membership subscription fees from consumers and (iv) service warranty subscription and other services revenue.

We market our various products and services to consumers primarily through digital marketing (primarily paid search engine marketing, display advertising and third-party affiliate agreements) and traditional offline marketing (national television and radio campaigns), as well as through e-mail.

Pursuant to third-party affiliate agreements, third parties agree to advertise and promote HomeAdvisor products and services (and those of HomeAdvisor service professionals) on their platforms.

exchange for these efforts, these third parties are paid a fixed fee when visitors from their platforms click through and submit a valid service request through HomeAdvisor, or when visitors submit a valid service request on the affiliate platform and the affiliate transmits the service request to HomeAdvisor.

Pursuant to third-party affiliate agreements, third parties agree to advertise and promote our products and services (and those of our service professionals) on their platforms.

In exchange for these efforts, these third parties are paid a fixed fee when visitors from their platforms click through and submit a valid service request through our platforms, or when visitors submit a valid service request on the affiliate platform and the affiliate transmits the service request to us.

We also market our products and services to consumers through relationships with select third-party retail partners and, to a lesser extent, through partnerships with other contextually related websites and direct mail.

We market HomeAdvisor matching services and membership subscriptions and related mHelpDesk subscription products and services to service professionals primarily through our Golden, Colorado based sales force, as well as through sales forces in Denver, Colorado;

Colorado Springs, Colorado (through December 31, 2019);

We market HomeAdvisor matching services and membership subscriptions to service professionals primarily through our sales forces based in the Denver, Colorado area;

Lenexa, Kansas;

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and Chicago, Illinois;

These products and services are also marketed, together with our Handy products and services and HomeAdvisor’s various directories, through paid search engine marketing, digital media advertising and direct relationships with trade associations and manufacturers.

as well as remotely based sales representatives.

These products and services are also marketed, together with our Handy products and services and our pre-priced bookings and various directories, through paid search engine marketing, digital media advertising and direct relationships with trade associations and manufacturers.

Term-based advertising and related products are marketed to service professionals primarily through our Indianapolis based sales force.

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• the size, quality, diversity and stability of our network of service professionals and the breadth of our online directory listings;

our ability to consistently generate service requests and jobs through the Marketplace and leads through our online directories that convert into revenue for our service professionals in a cost-effective manner;

• our ability to consistently generate service requests and pre-priced bookings through the Marketplace and leads through our online directories that convert into revenue for our service professionals in a cost-effective manner;

• our ability to increasingly engage with consumers directly through our platforms, including our various mobile applications (rather than through search engine marketing or via free search engine referrals);

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Government Regulation

We are subject to laws and regulations that affect companies conducting business on the Internet generally and thruogh mobile applications, including laws relating to the liability of providers of online services for their operations and the activities of their users.

We are subject to laws and regulations that affect companies conducting business on the Internet generally and through mobile applications, including laws relating to the liability of providers of online services for their operations and the activities of their users.

As a result, we could be subject to claims based on negligence, various torts and trademark and copyright infringement, among other actions.

In addition, because we receive, transmit, store and use a substantial amount of information received from or generated by consumers and service professionals, we are also impacted by laws and regulations governing privacy, the storage, sharing, use, processing, disclosure and protection of personal data and data breaches.

See “Item 1A-Risk Factors- Risks Related to Our

Business and Industry-The processing, storage, use and disclosure of personal data could give rise to liabilities and increased costs.”

See “Item 1A-Risk Factors-Risks Related to Our Business and Industry-The processing, storage, use and disclosure of personal data could give rise to liabilities and increased costs.”

We are particularly sensitive to laws and regulations that adversely impact the popularity or growth in use of the Internet and/or online products and services generally, restrict or otherwise unfavorably impact the ability or manner in which we provide our products and services, regulate the practices of third parties upon which we rely to provide our products and services and undermine open and neutrally administered Internet access.

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To the extent Internet service providers take such actions, our business, financial condition and results of operations could be adversely affected.

Similarly, there have been various legislative efforts to restrict the scope of the protections available to online platforms under Section 230 of the Communications Decency Act, and our current protections from liability for third-party content in the United States could decrease or change as a result.

Any future adverse changes to Section 230 could result in additional compliance costs for us and/or exposure for additional liabilities.

We are also generally sensitive to the adoption of new tax laws.

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The proposal, which is applicable retroactively to revenues earned from and after January 1, 2019, would likely apply to our operations in France.

The United Kingdom previously enacted a similar proposal, the Digital Services Tax, which is applicable to revenues of social media platforms, online marketplaces and search engines linked to users residing in the United Kingdom and earned from and after April 1, 2020, which would likely apply to certain of our operations in United Kingdom.

The United Kingdom previously enacted a similar proposal, the Digital Services Tax, which is applicable to revenues of social media platforms, online marketplaces and search engines linked to users residing in the United Kingdom and earned from and after April 1, 2020, which applies to certain of our operations in United Kingdom.

One or more of these or similar proposed tax laws could adversely affect our business, financial condition and results of operations.

As a provider of products and services with a membership-based element, we are also sensitive to the adoption of laws and regulations affecting the ability of our businesses to periodically charge for recurring membership or subscription payments.

For example, the European Union Payment Services directive, which became effective in 2018, could impact the ability of our businesses to process auto-renewal payments for, as well offer promotional or differentiated pricing to, users who reside in the European Union, and similar new (and proposed changes to similar existing) legislation or regulations, are being considered in many U.S.

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We are also subject to laws governing marketing and advertising activities conducted by/through telephone, e-mail, mobile devices and the Internet, including the Telephone Consumer Protection Act of 1991, the Telemarketing Sales Rule, the CAN-SPAM Act and similar state laws, as well as federal, state, and local laws and agency guidelines governing background screening.

As of December 31, 2019, we had approximately 5,000 full-time employees worldwide, the substantial majority of which provided services to our brands and businesses located in the United States.

We believe that we generally have good relationships with our employees.

Human Capital Management

As of December 31, 2020, we employ approximately 5,100 full-time employees worldwide, the substantial majority of which provided services to our brands and businesses located in the United States.

We also retain consultants, independent contractors, and temporary and part-time workers.

Talent and Development

The development, attraction and retention of employees is critical to our success.

We strive to provide an atmosphere that fosters teamwork and growth.

We are investing in a more productive, engaged, diverse and inclusive workforce.

To support the advancement of our employees, we offer training and development programs and encourage advancement from within.

In 2020, we launched a Learning Management system for broader facilitation of training resources.

We leverage both formal and informal programs to identify, foster, and retain top talent.

We believe that our rich culture enables us to create, develop and fully leverage the strengths of our workforce to exceed consumer expectations and meet our growth objectives.

We also place a high value on inclusion, engaging employees in our Diversity, Equity and Inclusion Council, or DEI, which is staffed by employees with diverse backgrounds, experiences or characteristics who share a common interest in professional development, improving corporate culture and delivering sustained business results.

Recent DEI initiatives include unconscious bias training and a women in leadership program.

Total Rewards and Benefits

As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent.

These programs include base wages and incentives in support of our pay for performance culture, as well as health, welfare, and retirement benefits, vision, dental, life, prescription, and long-term disability insurance plans.

We also provide employee paid supplemental life and accident insurance plans.

To help employees cover medical expenses pre-tax, we offer employees a Flexible Spending Account.

We also focus many programs on employee wellness and have implemented solutions including mental health support access, telemedicine, and fitness programs.

We also offer our US-based full-time employees a 401(k) retirement plan with a Company match.

We encourage our employees to become involved in their communities by providing full-time employees eight hours of paid-time off to volunteer in local community-based programs.

COVID Response

In response to the COVID-19 pandemic, we quickly implemented safety and health standards and protocols for our employees to ensure a safe work environment.

Employees in our offices have been working remotely since March 2020.

When our employees return to the office, we will adhere to the recommended protocols of the Centers for Disease Control or local regulations.

Our employees are required to annually agree to comply with our Code of Business Conduct and Ethics and any deviations by our directors and executive officers are required to be approved by our Board.

We also maintain an Ethics Hotline that is available to all of our employees to report (anonymously if desired) any matter of concern.

Communications to the hotline (which is facilitated by an independent third party) are routed to appropriate functions (whether Human Resources, Legal or Finance) for investigation and resolution.

In addition, any shareholder or other interested party may send communications to the Board of Directors, either individually or as a group, through a process that is outlined in the Investor Relations section of our website.

Additional Information

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Code of Ethics

Our code of ethics applies to all of our employees (including our principal executive officer, principal financial officer and principal accounting officer) and directors and is posted on our website at http://ir.angihomservices.com under the heading “Code of Ethics.” This code of ethics complies with Item 406 of SEC Regulation S-K and the rules of The Nasdaq Stock Market LLC.

Our code of ethics applies to all of our employees (including our principal executive officer, principal financial officer and principal accounting officer) and directors and is posted on our website at http://ir.angihomeservices.com under the heading “Code of Ethics.” This code of ethics complies with Item 406 of SEC Regulation S-K and the rules of The Nasdaq Stock Market LLC.

Any changes to this code of ethics that affect the provisions required by Item 406 of Regulation S-K (and any waivers of such provisions of the code of ethics for our executive officers, senior financial officers or directors) will also be disclosed on our website.

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Under the tax sharing agreement, we are generally responsible and required to indemnify IAC for:

(i) all taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or its subsidiaries that includes us or any of our subsidiaries (to the extent attributable to us or any of our subsidiaries, as determined under the tax sharing agreement) and (ii) all taxes imposed with respect to any consolidated, combined, unitary or separate tax returns of us or our subsidiaries.

(i) all taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or its subsidiaries that includes us or

any of our subsidiaries (to the extent attributable to us or any of our subsidiaries, as determined under the tax sharing agreement) and (ii) all taxes imposed with respect to any consolidated, combined, unitary or separate tax returns of us or our subsidiaries.

Employee Matters Agreement

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health and welfare plans, 401(k) plan and flexible benefits plan and we reimburse IAC for the costs of such participation.

In the event IAC no longer retains shares representing at least 80% of the aggregate voting power of shares entitled to vote in the election of our board of directors, we will no longer

participate in IAC’s employee benefit plans, but will establish our own employee benefit plans that will be substantially similar to the plans sponsored by IAC.

In the event IAC no longer retains shares representing at least 80% of the aggregate voting power of shares entitled to vote in the election of our board of directors, we will no longer participate in IAC’s employee benefit plans, but will establish our own employee benefit plans that will be substantially similar to the plans sponsored by IAC.

In addition, under the employee matters agreement, we are required to reimburse IAC for the cost of any IAC equity awards held by our current and former employees, with IAC electing to receive payment either in cash or shares of our Class B common stock.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business