What changed in this filing

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Item 1A. Risk Factors

2022-03-01 compared with 2021-02-16 · 105 added, 126 removed, 306 unchanged (43% of the section changed)

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Generally, we compete with search engines, online marketplaces and social media platforms that have the ability to market their products and services online in a more prominent and cost-effective manner than we can, as well as better tailor their products and services to individual users.

in search results and elsewhere in a more prominent manner than our products and services, which could adversely affect our business, financial condition and results of operations.

Any of these advantages could enable these competitors to offer products and services that are more appealing to consumers and service professionals than our products and services, respond more quickly and/or cost effectively than we do to evolving market opportunities and trends, and/or display their own integrated or related home services products and services in search results and elsewhere in a more prominent manner than our products and services, which could adversely affect our business, financial condition and results of operations.

In addition, since most home services products and services are offered to consumers for free, consumers can easily switch among home services offerings (or use multiple home services offerings simultaneously) at no cost to them.

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The failure or delay of a meaningful number of consumers and/or service professionals to migrate online and/or the return of a meaningful number of existing participants in the online home services market to offline solutions, could adversely affect our business, financial condition and results of operations.

Our brands and businesses are sensitive to general economic events or trends, particularly those that adversely impact consumer confidence and spending behavior.

We have historically been, and will continue to be, particularly sensitive to events and trends that result in consumers delaying or foregoing home services projects and/or service professionals being less likely to pay for consumer matches and Marketplace subscriptions.

Any such event or trend (for example, a general economic downturn or sudden disruption in business conditions, consumer confidence, spending levels and access to credit) could result in decreases in Marketplace service requests, pre-priced bookings and directory searches.

Any such decreases could result in turnover at the Marketplace and/or any of our directories, adversely impact the number and quality of service professionals at the Marketplace and our directories and/or adversely impact the reach of (and breath of services offered through) the Marketplace and our directories, any or all of which could adversely affect our business, financial condition and results of operations.

Our brands and businesses are sensitive to general economic events and trends, particularly those that adversely impact consumer confidence and spending behavior.

subscriptions.

Any such event or trend (for example, a general economic downturn or sudden disruption in business conditions, consumer confidence, spending levels and access to credit) could result in decreases in service requests, pre-priced bookings and directory searches.

Any such decreases could adversely impact the number and quality of service professionals at Angi Leads and Angi Services and at our directories and/or adversely impact the reach of (and breath of services offered through) the Angi Leads and Angi Services and our directories, any or all of which could adversely affect our business, financial condition and results of operations.

Lastly, we have historically been, and will continue to be, sensitive to events and trends that could result in decreased marketing and advertising expenditures by service professionals.

Adverse economic conditions and trends could result in service professionals decreasing and/or delaying fees paid for consumer matches, pre-priced bookings, membership subscriptions and/or time-based advertising spend, any or all of which would result in decreased revenue and could adversely affect our business, financial condition and results of operations.

The expansion of our pre-priced booking services, while balancing the overall mix of our service request and directory services in our Marketplace, is critical to our business, financial condition and results of operations.

For our pre-priced booking services offering, we contract with a service professional to perform a specific task for a consumer at a contracted price.

Compared to our Marketplace service requests, which match a service professional to a consumer opportunity, our pre-priced booking services contractually connect a service professional to a consumer’s task.

The expansion of our pre-priced booking services, while balancing the overall mix of our service request and directory services on our platforms, is critical to our business, financial condition and results of operations.

For our Angi Services offerings, we contract with a service professional to perform a specific task for a consumer at a contracted price.

Pre-priced booking services potentially offer higher margin opportunities, but also involve greater financial risk because we bear the impact of cost overruns, which could result in increased costs and expenses.

An increase in the percentage of pre-priced booking services may also reduce service professional’s level of participation in our Marketplace service request and directory offering(s).

As we expand our pre-priced booking services, we expect our mix of pre-priced booking services will be increasing over time.

An increase in the percentage of pre-priced booking services in our mix of offerings could increase the risk that we suffer losses if we underestimate the level of effort or costs required to perform the consumer’s task.

An increase in the percentage of pre-priced booking services may also reduce service professional’s level of participation in our Angi Ads and Angi Leads offerings.

As we expand our pre-priced booking services, we expect our mix of pre-priced booking services will be increasing over time, which could increase the risk that we suffer losses if we underestimate the level of effort or costs required to perform the consumer’s task.

Our profits could be adversely affected if our costs exceed the assumptions we used in offering the contracted task.

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Our business, financial condition and results of operations could be adversely affected if our actual costs exceed the assumptions we used in offering the contracted task in our pre-priced booking service.

The global outbreak of COVID-19 and other similar outbreaks could adversely affect our business, financial condition and results of operations.

The coronavirus outbreak (“COVID-19”) has caused a widespread global health crisis, resulting in significant social disruption and has had (and is likely to continue to have) an adverse effect on economic conditions generally, as well as on consumer confidence and spending, all of which could have an adverse effect on our businesses, financial condition and results of operations.

COVID-19 and other similar outbreaks could adversely affect our business, financial condition and results of operations.

The COVID-19 pandemic has caused a widespread global health crisis, resulting in significant disruption and has had (and is likely to continue to have) an adverse effect on economic conditions generally, as well as on consumer confidence and spending, all of which could have an adverse effect on our businesses, financial condition and results of operations.

When COVID-19 first impacted North America and Europe in the early spring of 2020, we experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects).

Toward the end of the spring of 2020, we experienced a rebound in service requests, exceeding pre-COVID-19 growth levels, driven by increased demand from consumers who spent more time at home due to measures taken to reduce the spread of COVID-19.

However, throughout 2020 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 impacted our ability to monetize this increased level of service requests.

Also, North America, which represents 95% of our revenue for twelve months ended December 31, 2020, experienced a significant resurgence of the COVID-19 virus with record levels of infections being reported during the fourth quarter of 2020 and continuing into the first quarter of 2021.

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 materially and adversely affect our business, financial condition and results of operations.

While we experienced a rebound in service requests in the second half of 2020 and through early 2021, service requests did start to decline in May 2021 compared to the comparable months of 2020 as a result of the surge in 2020 and due to impacts of our brand integration initiative that we commenced in March 2021.

Moreover, 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 negatively impacted our ability to monetize the increased level of service requests through the first quarter of 2021.

Although our ability to monetize service requests rebounded modestly in the second half of 2021, we still have not returned to levels we experienced pre-COVID-19.

No assurances can be provided that we will continue to be able to improve monetization, or that service professionals’ businesses will not be adversely impacted in the future.

The extent to which developments related to the COVID-19 pandemic and measures designed to curb its spread continue to impact our business, financial condition and results of operations will depend on future developments, all of which are highly uncertain and many of which are beyond the Company’s control, including the continuing spread of COVID-19, the severity of resurgences of COVID-19 caused by variant strains of the virus, the effectiveness of vaccines and attitudes toward receiving them, materials and supply chain constraints, labor shortages, the scope of governmental and other restrictions on travel, discretionary services and other activity, and public reactions to these developments.

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.

For example, we have taken several precautions that could adversely impact employee productivity, such as requiring employees to work remotely, 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.

Lastly, moving employees back to the office

may introduce distraction that could have a temporary negative impact on the Company’s productivity, and in turn, revenue.

We may also experience increased operating costs as we gradually resume normal operations and enhance preventative measures, including with respect to real estate, compliance and insurance-related expenses.

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Any of these measures or impairments could adversely affect our business, financial condition and results of operations.

The COVID-19 outbreak may also have the effect of heightening many of the other risks described in this “Risks Related to Our Business and Industry” section.

We must establish and maintain relationships with quality service professionals.

We must continue to attract, retain and grow the number of skilled and reliable service professionals who can provide services that consumers want in a timely manner across our various brands and businesses.

If we do not offer innovative products and services that resonate with consumers and service professionals generally, as well provide service professionals with an attractive return on their marketing and advertising investments (quality matches and leads that convert into jobs), the number of service professionals affiliated with our various brands and businesses could decrease.

Any such decrease would result in smaller and less diverse networks and directories of service professionals, and in turn, decreases in number of pre-priced bookings, service requests and directory searches, which could adversely affect our business, financial condition and results of operations.

The trustworthiness of our Marketplaces and the connections within our Marketplace are important to our success.

Our success will depend, in substantial part, on our ability to maintain and/or enhance our various brands.

We own and operate two of the leading home services brands in the United States (Angie’s List and HomeAdvisor), as well as leading brands in several foreign jurisdictions.

We believe that our success depends, in substantial part, on our continued ability to maintain and enhance our established brands, as well as build awareness of (and loyalty to) new and emerging brands.

Success depends, in substantial part, on our ability to maintain and/or enhance our brands, which could be negatively impacted by various factors.

We own and operate two of the leading home services brands in the United States (Angi and HomeAdvisor), as well as leading brands in several foreign jurisdictions.

In March 2021, we updated one of our leading websites and brands, Angie’s List, to Angi, and concentrated our marketing investment in the Angi brand in order to focus our marketing, sales, and branding efforts on a single brand.

We believe that our success depends, in substantial part, on our continued ability to build awareness and loyalty to our Angi brand, maintain and enhance our established brands, as well as build awareness of (and loyalty to) new and emerging brands.

Events that could negatively impact our brands and brand-building efforts include (among others):

product and service quality concerns, service professional quality concerns, consumer and service professional complaints and lawsuits, lack of awareness of our policies or confusion about how the policies are applied, a failure to respond to feedback from our service professionals and consumers, ineffective advertising, inappropriate and/or unlawful acts perpetrated by service professionals and consumers, actions or proceedings commenced by governmental or regulatory authorities, data protection and security breaches and related bad publicity.

Any factors that negatively impact the Angie’s List and/or HomeAdvisor brand(s) could materially and adversely affect our business, financial condition and results of operations.

product and service quality concerns;

service professional quality concerns;

consumer and service professional complaints and lawsuits;

lack of awareness of our policies or confusion about how the policies are applied;

a failure to respond to feedback from our service professionals and consumers;

ineffective advertising;

inappropriate and/or unlawful acts perpetrated by service professionals and consumers;

actions or proceedings commenced by governmental or regulatory authorities;

and inadequate data protection and security breaches including related bad publicity.

Any factors that negatively impact the Angi and/or HomeAdvisor brand(s) could materially and adversely affect our business, financial condition and results of operations.

In addition, trust in the integrity and objective, unbiased nature of the ratings and reviews found across our various brands contributes significantly to public perception of these brands and their ability to attract consumers and service professionals.

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This could deter consumers and service professionals from using our products and services, which in turn could adversely affect our business, financial condition and results of operations.

Our success depends, in part, on our ability to establish and maintain relationships with quality and trustworthy service professionals.

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.

We have incurred and may continue to incur substantial costs as a result of our brand integration initiative that we commenced in March 2021, and we 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.

Our Company relies heavily on free and paid search engine marketing efforts to drive traffic to our platforms.

Our brand initiative has adversely affected the placement and ranking of Angi Inc.

websites, particularly Angi.com, in organic search results as Angi does not have the same domain history as Angie’s List.

In addition, we shifted marketing to support the Angi brand, away from the HomeAdvisor brand, which has negatively affected the efficiency of our search engine marketing efforts.

Since the beginning of the integration process, these efforts have had a pronounced negative impact on service requests from organic search results and via our mobile applications, which in turn has resulted in increased paid search engine marketing to generate service requests.

These factors have increased marketing spend and reduced revenue during the year ended December 31, 2021, materially more than expected at the launch of the brand initiative in March 2021.

We expect the pronounced negative impact to organic search results, increased paid search engine marketing and reduced monetization from our mobile applications will continue until such time as the new brand establishes search engine optimization ranking and consumer awareness is more established.

Any or all of these impacts could continue to increase our marketing costs (particularly to the extent free traffic is replaced with paid traffic) and adversely affect the effectiveness of our marketing efforts overall.

Finally, as we align and focus the organization around a single brand, we could experience financial and operational challenges and reduced service professional participation across our various product lines.

Depending on market acceptance, our brand integration initiative could adversely affect our ability to attract and retain customers and service professionals, which could cause us not to realize some or all of the anticipated benefits contemplated by the brand integration initiative.

Our success depends, in substantial part, on our ability to establish and maintain relationships with quality and trustworthy service professionals.

We must continue to attract, retain and grow the number of skilled and reliable service professionals who can provide services across our platforms.

If we do not offer innovative products and services that resonate with consumers and service professionals generally, as well provide service professionals with an attractive return on their marketing and advertising investments, the number of service professionals affiliated with our platforms, would decrease.

If we do not offer innovative products and services that resonate with consumers and service professionals generally, as well as provide service professionals with an attractive return on their marketing and advertising investments, the number of service professionals affiliated with our platforms would decrease.

Any such decrease would result in smaller and less diverse networks and directories of service professionals, and in turn, decreases in service requests, pre-priced bookings and directory searches, which could adversely impact our business, financial condition and results of operations.

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These efforts may not be successful or cost-effective.

Historically, we have had to increase marketing expenditures over time to attract and retain users and service professionals and sustain our growth.

Historically, we have had to increase marketing expenditures over time to attract and retain consumers and service professionals and sustain our growth.

Our ability to market our brands on any given property or channel is subject to the policies of the relevant third-party seller, publisher of advertising (including search engines and social media platforms with extraordinarily high levels of traffic and numbers of users) or marketing affiliate.

As a result, we cannot assure you that these parties will not limit or prohibit us from purchasing certain types of advertising (including the purchase by ANGI Homeservices of advertising with preferential placement), advertising certain of our products and services and/or using one or more current or prospective marketing channels in the future.

As a result, we cannot assure you that these parties will not limit or prohibit us from purchasing certain types of advertising (including the purchase by Angi of advertising with preferential placement), advertising certain of our products and services, and/or using one or more current or prospective marketing channels in the future.

If a significant marketing channel took such an action generally, for a significant period of time and/or on a recurring basis, our business, financial condition and results of operations could be adversely affected.

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Evolving consumer behavior (specifically, increased consumption of media through digital means) can also affect the availability of profitable marketing opportunities.

To continue to reach and engage consumers and service professionals and grow in this environment, we will need to continue to identify and devote more of our overall marketing expenditures to newer

digital advertising channels (such as online video and other digital platforms), as well as target consumers and service professionals via these channels.

To continue to reach and engage consumers and service professionals and grow in this environment, we will need to continue to identify and devote more of our overall marketing expenditures to newer digital advertising channels (such as online video and other digital platforms), as well as target consumers and service professionals via these channels.

Since newer advertising channels are undeveloped and unproven relative to traditional channels (such as television), it could be difficult to assess returns on marketing investments in newer channels, which could adversely affect our business, financial condition and results of operations.

Lastly, we also enter into various arrangements with third parties to drive visitors to our HomeAdvisor platforms.

Lastly, we also enter into various arrangements with third parties to drive visitors to our Angi platforms.

These arrangements are generally more cost-effective than traditional marketing efforts.

If we are unable to renew existing (and enter into new) arrangements of this nature, sales and marketing costs as a percentage of revenue would increase over the long-term, which could adversely affect our business, financial condition and results of operations.

In addition, the quality and convertibility of traffic and leads generated through third-party arrangements are dependent on many factors, most of which are outside our control.

If the quality and/or convertibility of traffic and leads do not meet the expectations of our users and/or HomeAdvisor service professionals, they could leave the Marketplace and/or decrease their budgets for consumer matches or participation in pre-priced booking services, any or all of which could adversely affect our business, financial condition and results of operations.

In addition, the quality and convertibility of traffic and leads generated through third-party arrangements are dependent on many factors, most of which are

outside our control.

If the quality and/or convertibility of traffic and leads do not meet the expectations of our users and/or Angi Leads service professionals, they could leave our network and/or decrease their budgets for consumer matches or participation in pre-priced booking services, any or all of which could adversely affect our business, financial condition and results of operations.

We rely on Internet search engines to drive traffic to our various properties.

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We cannot assure you that the value we ultimately derive from any such additional traffic would exceed the cost of acquisition, and any increase in marketing expense may in turn harm our operating results.

The amount of traffic we attract from search engines is due in large part to how and where information from (and links to websites offering our products and services) are displayed on search engine results pages.

The amount of traffic we attract from search engines is due in large part to how and where information about our brands (and links to websites offering our products and services) are displayed on search engine results pages.

The display, including rankings, of unpaid search results can be affected by a number of factors, many of which are not in our direct control, and may change frequently.

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If so, our customer relationship management efforts, our ability to identify, target and reach new segments of our user base and the population generally, and the efficiency of our paid marketing efforts could be adversely affected.

We cannot assure you that search engines, digital app stores and social media platforms upon which we rely will not limit or increasingly limit, eliminate or otherwise interfere with our ability to access, collect and use personal data about users of our products and services that they have collected.

have collected.

To the extent that any or all of them do so, our business, financial condition and results of operations could be adversely affected.

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We are particularly sensitive to the adoption of worker classification laws, specifically, laws that could effectively require us to change our classification of certain of our service professionals from independent contractors to employees, as well as changes to state and local laws or judicial decisions related to the definition and/or classification of independent contractors.

For example, California recently passed a worker classification statute (AB 5), which effectively narrowed the definition of an independent contractor by requiring hiring entities to use a stricter test to determine a given worker’s classification.

In addition, AB 5 places the burden of proof for classifying workers as independent contractors on the hiring entity and provides enforcement powers to the state and certain cities.

In addition, AB 5 has been the subject of widespread national discussion and it is possible that other jurisdictions, including New York and New Jersey, may enact similar laws.

For example, in 2019, California passed a worker classification statute (AB 5), which effectively narrowed the definition of an independent contractor by requiring hiring entities to use a stricter test to determine a given worker’s classification placed the burden of proof for classifying workers as independent contractors on the hiring entity, and provided enforcement powers to the state and certain cities.

AB 5 has been the subject of widespread national discussion and it is possible that other jurisdictions may enact similar laws.

Since we currently treat service professionals who provide services through our business as independent contractors for all purposes, we do not withhold federal, state and local income or other employment related taxes, make federal or state unemployment tax or Federal Insurance Contributions Act payments or provide workers’ compensation insurance with respect to these individuals.

If we are required as the result of new laws to reclassify these individuals as employees, we could be exposed to various liabilities and additional costs, including exposure (for prior and future periods) under federal, state and local tax laws, and workers’ compensation, unemployment benefits, labor, and employment laws, as well as potential liability for penalties and interest, any or all of which could adversely affect our business, financial condition and results of operations.

If we are required as the result of new laws, interpretations or orders to reclassify these individuals as employees, we could be exposed to various liabilities and additional costs, including exposure (for prior and future periods) under federal, state and local tax laws, and workers’ compensation, unemployment benefits, labor, and employment laws, as well as potential liability for penalties and interest, any or all of which could adversely affect our business, financial condition and results of operations.

We are involved in various legal proceedings and investigations challenging the classification of these individuals as independent contractors, and may become involved in other proceedings and investigations in the future.

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We continuously develop and maintain systems designed to detect and prevent events of this nature from impacting our systems, technology, infrastructure, products, services and users.

We have invested

(and continue to invest) heavily in these efforts and related personnel and training and deploy data minimization strategies (where appropriate), these efforts are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated.

We have invested (and continue to invest) heavily in these efforts and related personnel and training and deploy data minimization strategies (where appropriate), but these efforts are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated.

Despite these efforts, some of our systems have experienced past security incidents, none of which had a material adverse effect on our business, financial condition and results of operations, and we could experience significant events of this nature in the future.

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Even if we do not experience such events firsthand, the impact of any such events experienced by third parties could have a similar effect.

For example, although we did not experience any material impacts from the SolarWinds Orion cybersecurity breach that was widely publicized in December 2020, we cannot assure you that we will not experience future events involving third party service providers that may be material.

We may not have adequate insurance coverage to compensate for losses resulting from any of these events.

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When breaches of security (ours or that of any third-party we engage to store information) occur, we could face governmental enforcement actions, significant fines, litigation (including consumer class actions) and the reputation of our brands and business could be harmed, which could adversely affect our business, financial condition and results of operations.

In addition, if any of the search engines, digital app store or social media platform through which we market, distribute and monetize our products and services were to experience a breach, third parties could gain unauthorized access to personal data about our users and subscribers, which could indirectly harm the reputation of our brands and businesses and in turn, adversely affect our business, financial condition and results of operations.

See also “The processing, storage, use and disclosure of personal data could give rise to liabilities and increased costs.”

In addition, if any of the search engines, digital app stores or social media platforms through which we market, distribute and monetize our products and services were to experience a breach, third parties could gain unauthorized access to personal data about our users and subscribers, which could harm the reputation of our brands and businesses and in turn, adversely affect our business, financial condition and results of operations.

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

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The GDPR will continue to be interpreted by European Union Data protection regulators, which may require that we make changes to our business practices and could generate additional risks and liabilities.

The European Union is also considering an update to its Privacy and Electronic Communications Directive to impose stricter rules regarding the use of cookies.

Data protection regulators in European union member states have taken a strict view of cookie consent requirements after the enactment of the GDPR and enforcement actions are on the rise.

Also, the exit from the European Union by the United Kingdom could result in the application of new and conflicting data privacy and protection laws and standards to our operations in the United Kingdom and our handling of personal data of users located in the United Kingdom.

At the same time, many jurisdictions abroad in which we do business have already or are currently considering adopting privacy and data protection laws and regulations.

Moreover, multiple legislative proposals concerning privacy and the protection of user information are being considered by the U.S.

Congress and various state legislatures (including those in Illinois, New York, Virginia and Washington).

Congress and various state legislatures.

state legislatures have already enacted privacy legislation, one of the strictest and most comprehensive of which is the California Consumer Privacy Act of 2018, which became effective January 1, 2020 (the “CCPA”).

The CCPA provides new data privacy rights for California consumers, including the right to know what personal information is being collected about them and how it is being used, as well as significant rights over the use of their personal information (including the right to have

such information deleted and the right to object to the sale of such information) and new operational requirements for businesses (primarily providing consumers with enhanced privacy-related disclosures).

The CCPA provides data privacy rights for California consumers, including the right to know what personal information is being collected about them and how it is being used, as well as significant rights over the use of their personal information and operational requirements for businesses.

The CCPA restricts the ability of our businesses to use personal California user and subscriber information in connection with our various products, services and operations, which could adversely affect our business, financial condition and results of operations.

The CCPA also provides consumers with a private right of action for security breaches, as well as provides for statutory damages of up to $750 per violation, with the California Attorney General maintaining authority to enforce the CCPA and seek civil penalties for intentional violations of the CCPA of up to $7,500 per violation.

In addition, California Privacy Rights Act (“CPRA”) was passed in November 2020 and will take effect on January 1, 2023, which could further restrict the ability of our businesses to use personal California user and subscriber information in connection with our various products, services and operations and/or impose additional operational requirements on our businesses, which could adversely affect our business, financial condition and results of operations.

Lastly, the Federal Trade Commission has also increased its focus on privacy and data security practices, as evidenced by the first-of-its-kind, $5 billion dollar fine against a social media platform for privacy violations.

While we believe that we comply with applicable privacy and data protection policies, laws and regulations and industry standards and practices in all material respects, we could still be subject to claims of non-compliance that we may not be able to successfully defend and/or significant fines and penalties.

In addition, California Privacy Rights Act (“CPRA”) will take effect on January 1, 2023, and will revise and significantly expand the scope of the CCPA.

The CPRA also creates a new California data protection agency authorized to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information security enforcement.

This could further restrict the ability of our businesses to use personal California user and subscriber information in connection with our various products, services and operations and/or impose additional operational requirements on our businesses, which could adversely affect our business, financial condition and results of operations.

Virginia and Colorado also passed comprehensive privacy legislation in 2021.

These state laws have similar requirements to those under the CCPA and penalties that range up to $7,500 per violation.

Both laws take effect in 2023 could restrict the ability of our businesses to use personal user and subscriber information of Virginia and Colorado users in connection with our various products, services, and operations and/or impose additional operational requirements on our business, which could adversely affect our business, financial condition, and results of operations.

Lastly, the Federal Trade Commission has also increased its focus on privacy and data security practices and we anticipate this focus to continue.

We could be subject to claims of non-compliance with applicable privacy and data protection policies, laws and regulations and industry standards and practices that we may not be able to successfully defend and/or significant fines and penalties.

Moreover, any non-compliance or perceived non-compliance by us (or any third-party we engage to store or process information) or any compromise of security that results in unauthorized access to (or use or transmission of) personal information could result in a variety of claims against us, including governmental enforcement actions, significant fines, litigation (including consumer class actions), claims of breach of contract and indemnity by third parties and adverse publicity.

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The more sizable a given affected third-party’s customer base, the greater the number of accounts impacted and the more likely it will be that our service professionals and consumers would be impacted by such a breach.

If such a breach were to impact our service professionals and consumers were affected, we would need to contact affected service professionals and consumers to obtain new payment information.

If such a breach were to impact our service professionals and consumers, we would need to contact affected service professionals and consumers to obtain new payment information.

It is likely that we would not be able to reach all affected service professionals and consumers, and even if we could, new payment information for some may not be obtained and pending payments may not be processed, which could adversely affect our business, financial condition and results of operations.

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any such interruption could arise for any number of reasons.

connection with the provision of our products and services generally, as well as to facilitate and process certain payment and other transactions with users.

We also rely on third-party data center service providers and cloud-based, hosted web service providers, as well as third-party computer systems and a variety of communications systems and service providers in connection with the provision of our products and services generally, as well as to facilitate and process certain payment and other transactions with users.

We have no control over any of these third parties or their operations.

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When such damages, interruptions or outages occur, our reputation could be harmed and the competitive positions of our various brands and businesses could be diminished, any or all of which could adversely affect our business, financial condition and results of operations.

We also continually work to expand and enhance the efficiency and scalability of our framework to improve the consumer and service professional experience, accommodate substantial increases in the number of visitors to our various platforms, ensure acceptable load times for our various products and services and keep up with changes in technology and user preferences.

ensure acceptable load times for our various products and services, and keep up with changes in technology and user preferences.

If we do not do so in a timely and cost-effective manner, the user experience and demand across our brands and businesses could be adversely affected, which could adversely affect our business, financial condition and results of operations.

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• successfully integrate the operations, as well as the various functions and systems, of acquired businesses with our existing operations, functions and systems;

• successfully identify and realize potential synergies among acquired and existing business;

• successfully identify and realize potential synergies among acquired and existing businesses;

• retain or hire senior management and other key personnel at acquired businesses;

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• differing levels (or lack) of social and technological acceptance of online services generally, as well as online home services offerings specifically;

• slow or lagging growth in the commercial use and acceptance of the Internet;

• foreign currency fluctuations;

• restrictions on the transfer of funds among countries and back to the United States and related repatriation costs;

• differing and potentially adverse tax laws;

• compliance challenges;

• differing and potentially complex laws and regulations, including related to tax, data privacy, cybersecurity and data protection, and related compliance challenges;

• competitive environments that favor local businesses;

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We rely on a combination of laws and contractual restrictions on access to and use of proprietary information with employees, customers, suppliers, affiliates and others to establish and protect our and their various intellectual property rights.

For examples, we have generally registered and continue to apply to register and renew, or secure by contract where appropriate, trademarks and service marks as they are developed and used, and reserve, register and renew domain names as we deem appropriate.

We also generally seek to apply for patents or for similar statutory protections as and if we deem appropriate, based on then current facts and circumstances, and will continue to do so in the future.

For example, we have generally registered and continue to apply to register and renew, or secure by contract where appropriate, trademarks and service marks as they are developed and used, and reserve, register and renew domain names as we deem appropriate.

We also generally seek to apply for patents or for similar statutory protections as and if we deem appropriate, based

on then current facts and circumstances, and will continue to do so in the future.

No assurances can be given that these efforts will result in adequate trademark and service mark protection, adequate domain name rights and protections, the issuance of a patent or adequate patent protection against competitors and similar technologies.

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Competition for well-qualified employees across our various businesses is intense and we must attract new (and retain existing) employees to compete effectively.

While we have established programs, we may not be able to continue to attract new (and retain existing) key and other employees in the future, especially in the technical fields of engineering and product.

In addition, if we do not ensure the effective transfer of knowledge and smooth transitions (particularly in the case of senior and executive management) across our various businesses, our business, financial condition and results of operations, could be adversely affected.

Launch of consumer financing payment operation could be interrupted as a result of conditions outside of our control.

Our ability to launch a new consumer financing option for our consumers could be negatively affected by conditions outside our control.

If capital market conditions have a material negative change, there is a risk that our business partner that administers the consumer financing program may not be able to fulfill its obligations under that agreement.

In addition, the tightening of credit markets may restrict the ability and willingness of consumers to make book services in our Marketplace.

Failure to obtain and maintain required licenses or to comply with applicable regulations could adversely affect our business, financial condition and results of operations.

We may be required under certain state and local government regulations to obtain and maintain licenses to perform pre-priced booking services in our Marketplace.

We may be required under certain state and local government regulations to obtain and maintain licenses to perform pre-priced booking services on our platforms.

Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time.

In some jurisdictions, the loss of a license for cause may lead to the loss of licenses in other jurisdictions and could make it more difficult to obtain additional licenses.

Although we do not anticipate any material difficulties occurring in the future, the failure to receive or retain a license, or any other required permit, in a particular location, or to continue to qualify for, or renew licenses, could negatively impact our business.

The failure to receive or retain a license, or any other required permit, in a particular location, or to continue to qualify for, or renew licenses, could negatively impact our business.

We may also spend significant amounts of money and effort to obtain licenses and continued compliance with applicable regulations.

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IAC controls our company and will have the ability to control the direction of our business.

As of January 31, 2021, IAC owned all of our outstanding Class B common stock, representing approximately 84.3% of our total outstanding shares of capital stock and approximately 98.2% of the total combined voting power of our outstanding capital stock.

As of December 31, 2021, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.5% of our total outstanding shares of capital stock and approximately 98.2% of the total combined voting power of our outstanding capital stock.

For so long as IAC owns shares of our capital stock that represent a majority of the combined voting power of our outstanding capital stock, it will be able to control any corporate action that requires a stockholder vote, regardless of the vote of any other stockholder (subject to certain limited exceptions for certain class votes).

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• corporate opportunities that may be suitable for us and IAC, subject to the corporate opportunity provisions in our amended and restated certificate of incorporation (as described below);

• stock repurchases;

• our financing activities, including the issuance of debt securities and/or the incurrence of other indebtedness generally;

• the payment of one-time or recurring dividends;

• stock repurchases or the payment of one-time or recurring dividends;

• the number of shares available for issuance under our equity incentive plans.

This voting control will limit the ability of other stockholders to influence corporate matters and, as a result, we may take actions that stockholders other than IAC do not view as beneficial.

This voting control may also discourage transactions involving a change of control of our company, including transactions in which holders of shares of our Class A common stock might otherwise receive a premium for their shares.

This voting control may also discourage transactions

involving a change of control of our company, including transactions in which holders of shares of our Class A common stock might otherwise receive a premium for their shares.

Even if IAC owns shares of our capital stock representing less than a majority of the total combined voting power of our outstanding capital stock, so long as IAC owns shares representing a significant percentage of our total combined voting power, IAC will have the ability to substantially influence these significant corporate activities.

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Various conflicts of interest between us and IAC could arise.

As of the date of this report, five of our eleven directors are current directors or executive officers of IAC.

As of the date of this report, four of our twelve directors are current directors or executive officers of IAC.

Ownership interests of these individuals and IAC in our capital stock and ownership interests of our directors and officers in IAC capital stock, or service by an individual as either a director and/or officer of both companies, could create or appear to create potential conflicts of interest when such individuals are faced with decisions relating to us.

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sales or other disposals by IAC of all or a portion of its ownership interest in us;

• business combinations involving us.

and business combinations involving us.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated third-party.

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Because IAC owns more than 50% of the combined voting power of our outstanding capital stock, we are a “controlled company” under the Marketplace Rules of The Nasdaq Stock Market, LLC (the “Marketplace Rules”).

As a “controlled company,” we are exempt from compliance with certain Marketplace Rules related to corporate governance, including the following requirements:

• that a majority of our board of directors consists of “independent directors” (as defined in the Marketplace Rules);

• that we have a nominating/governance committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

As a “controlled company,” we are exempt from compliance with certain Marketplace Rules related to corporate governance, including that a majority of our board of directors consists of “independent directors” (as defined in the Marketplace Rules) and that we have a nominating/governance committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

Accordingly, for so long as we are a “controlled company” and avail ourselves of these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Marketplace Rules.

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IAC has advised us that it does not have any present intention or plans to undertake such a tax-free distribution.

However, IAC does currently intend to use its majority voting interest to retain its ability to engage in such a

However, IAC does currently intend to use its majority voting interest to retain its ability to engage in such a transaction.

In addition, IAC must maintain ownership of at least 80% of our outstanding capital stock in order to maintain tax consolidation with us for U.S.

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Pursuant to our tax sharing agreement with IAC, we generally will be responsible and will be 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 (excluding certain taxes attributable to Angie’s List and its subsidiaries for taxable periods (or portions thereof) ending on or before the completion of the Combination), as determined under the tax sharing agreement, and (ii) all taxes imposed with respect to any consolidated, combined, unitary or separate tax returns of ours or any of 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 (excluding certain taxes attributable to Angi and its subsidiaries for taxable periods (or portions thereof) ending on or before the completion of the Combination), as determined under the tax sharing agreement, and (ii) all taxes imposed with respect to any consolidated, combined, unitary or separate tax returns of ours or any of our subsidiaries.

To the extent IAC fails to pay taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or one of its subsidiaries that includes us or any of our subsidiaries, the relevant taxing authority could seek to collect such taxes (including taxes for which IAC is responsible under the tax sharing agreement) from us or our subsidiaries.

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To preserve the tax-free treatment of any potential future spin-off by IAC of its interest in us, the tax sharing agreement restricts us and our subsidiaries, for the two-year period following any such spin-off (except in specific circumstances), from:

(i) entering into any transaction pursuant to which shares of our capital stock would be acquired above a certain threshold, (ii) merging, consolidating or liquidating, (iii) selling or transferring assets above certain thresholds, (iv) redeeming or repurchasing stock (with certain exceptions), (v) altering the voting rights of our capital stock, (vi) actions and inactions that are inconsistent with representations or covenants in any tax opinion or private letter ruling document or (vii) ceasing to engage in any active trade or business as defined in the Code.

are inconsistent with representations or covenants in any tax opinion or private letter ruling document or (vii) ceasing to engage in any active trade or business as defined in the Code.

The indemnity obligations and other limitations under the tax sharing agreement could have an adverse effect on our business, financial condition and results of operations.

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Risks Related to Our Indebtedness

Our current and future indebtedness could affect our ability to operate our business, which could have a material adverse effect on our financial condition and results of operations.

As of December 31, 2020, we had total debt outstanding of approximately $500.0 million related our senior notes, $220.0 million under our term loan agreement, and borrowing availability of $250.0 million under our revolving credit facility.

The indebtedness outstanding under our term loan agreement is (and indebtedness under our revolving credit facility will be) guaranteed by our wholly owned material domestic subsidiaries and secured by substantially all of our assets and those of our guarantors, subject to certain exceptions.

Our term loan agreement and revolving credit facility contain several covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

• create liens on certain assets;

• incur additional indebtedness;

• make certain investments and acquisitions;

• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

• sell certain assets;

• pay dividends on (or make distributions in respect of) our capital stock or make restricted payments or stock repurchases;

• enter into certain transactions with our affiliates;

• place restrictions on distributions from subsidiaries.

Any of these restrictions could limit our ability to plan for or react to market conditions and could otherwise restrict how we operate our business.

Any failure to comply with these covenants could result in a default under the term loan agreement, which if not waived, could cause our lenders to foreclose on the assets we pledged to secure our term loan indebtedness and force us into bankruptcy or liquidation.

In addition, a default under our term loan agreement could trigger a cross default under other current of future agreements (including our revolving credit facility).

In addition to the restrictions that limit our flexibility in operating our business, the terms of our indebtedness could:

• limit our ability to obtain additional financing to fund working capital needs, acquisitions, capital expenditures, other debt service requirements or for other purposes;

• limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service our indebtedness;

• limit our ability to compete with other companies who are not as highly leveraged;

• restrict us from making strategic acquisitions, developing properties or exploiting business opportunities;

• limit our ability to react to changing general economic conditions and market conditions in our industry.

Subject to certain restrictions, we and our subsidiaries may incur additional unsecured and secured indebtedness.

If additional indebtedness incurred in compliance with these restrictions is significant, the risks described above could increase.

We may not be able to generate sufficient cash to service all of our indebtedness.

Our ability to satisfy our debt obligations will depend upon, among other things:

• our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control;

• our future ability to borrow under our revolving credit facility, the availability of which will depend on, among other things, our ability to comply with the covenants governing our indebtedness.

We may not be able to generate sufficient cash flow from our operations and/or borrow under our revolving credit facility in amounts sufficient to meet our scheduled debt obligations.

We may not be able to generate sufficient cash to service our indebtedness.

Our ability to satisfy our debt obligations will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control.

We may not be able to generate sufficient cash flow from our operations to meet our scheduled debt obligations.

If so, we could be forced to reduce or delay capital expenditures, sell assets or seek additional capital in a manner that complies with the terms (including certain restrictions and limitations) of our current indebtedness.

If these efforts do not generate sufficient funds to meet our scheduled debt obligations, we would need to seek additional financing and/or negotiate with our lenders to restructure or refinance our indebtedness.

If these efforts do not generate sufficient funds to meet our scheduled debt obligations, we would need to seek additional financing and/or negotiate with our bondholders to restructure or refinance our indebtedness.

Our ability to do so would depend on the condition of the capital markets and our financial condition at such time.

Any such financing, restructuring or refinancing could be on less favorable terms than those governing our current indebtedness and would need to comply with the terms (including certain restrictions and limitations) of our existing indebtedness.

Our variable rate indebtedness subjects us to interest rate risk.

As of December 31, 2020, we have $220.0 million of indebtedness outstanding under our term loan, which bears interest at variable rates.

Indebtedness under our term loan is (and any indebtedness under our revolving credit facility will be) at variable interest rates, which exposes us to interest rate risk.

For details regarding interest rates applicable to the indebtedness outstanding under our term loan as of December 31, 2020, see “Item 7A-Quantitative and Qualitative Disclosures About Market Risk.”

Risks Related to Ownership of Our Class A Common Stock

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Each share of our Class B common stock has ten votes per share and each share of our Class A common stock has one vote per share.

As of January 31, 2021, IAC owned all of the shares of our outstanding Class B common stock, representing economic and voting interests in us of approximately 84.4% and 98.2%, respectively.

Due to the ten-to-one voting ratio between our Class B common stock and Class A common stock, IAC (and any future holders of our Class B common stock, collectively) will continue to control a substantial majority of the combined voting power of our capital stock.

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statutory and regulatory prohibitions and other limitations;

• the terms of any credit agreement or other borrowing arrangements that restrict our ability to pay cash dividends, including our term loan agreement and revolving credit facility;

the terms of any credit agreement or other borrowing arrangements that restrict our ability to pay cash dividends;

general economic conditions;

• other factors deemed relevant by our board of directors.

and other factors deemed relevant by our board of directors.

We are not obligated to pay dividends on our Class A common stock or 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 1A. Risk Factors