What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-03-01 compared with 2022-03-01 · 369 added, 369 removed, 990 unchanged (43% of the section changed)

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Stock-Based Compensation

Goodwill - Quantitative Impairment Assessment for Angi Services

Description of

the Matter During the year ended December 31, 2021 , the Company recorded stock-based compensation expense of $28.7 million.

As disclosed in Note 10 to the consolidated financial statements, the Company issues various types of equity awards, including stock options, restricted stock units, performance-based stock units, market-based awards and equity instruments denominated in the shares of certain subsidiaries.

Auditing the Company’s accounting for stock-based compensation required complex auditor judgment due to the number and the variety of the types of equity awards, the prevalence of modifications, the subjectivity of assumptions used to value stock-based awards, the use of market-based vesting conditions and the existence of awards denominated in the shares of certain subsidiaries.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over stock-based compensation.

For example, we tested controls over the Company’s process to assess the completeness of its share-based awards and for measuring and recording stock-based compensation, including management’s review of the underlying calculations, the significant assumptions used in valuing certain awards and related valuation reports prepared by its specialists.

To test stock-based compensation expense, we performed audit procedures that included, among others, assessing the completeness of the awards granted and evaluating the methodologies used to estimate the fair value of the awards granted and the significant assumptions described above.

Our procedures also included, evaluating the key terms and conditions of awards granted to assess the accounting treatment for a sample of awards, testing the clerical accuracy of the calculation of the expense recorded and assessing the Company’s accounting for award modifications.

Additionally, for certain awards issued by the Company, we involved our internal valuation specialists to assess the valuation methodologies and assumptions used in estimating the fair value of the awards.

the Matter As of December 31, 2022, the Company’s goodwill balance was $882.9 million.

As disclosed in Note 2 to the consolidated financial statements, goodwill is assessed annually for impairment using either a qualitative or quantitative approach as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

In 2022, the Company performed a quantitative test over the Services reporting unit.

The fair value of the Services reporting unit is determined using both an income approach based on discounted cash flows (“DCF”) and a market approach.

The Company determined the fair value exceeded the carrying value of the Services reporting unit by $ 40 million.

Auditing management’s quantitative impairment test for goodwill recorded for the Angi Services reporting unit was complex and judgmental due to the measurement uncertainty in estimating the fair value of the reporting unit for goodwill.

Specifically, the fair value estimate was sensitive to assumptions such as the discount rate and revenue growth rates used in the DCF model as well as the selection of a peer group of companies used in the market approach.

These assumptions are affected by such factors as expected future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its goodwill impairment review process.

For example, we tested controls over management’s review of the valuation methodologies and significant assumptions used to estimate the fair value of the Angi Services reporting unit for goodwill, including projected financial information, the discount rate, and the selection of a peer group of companies.

To test the estimated fair value of the Company’s Angi Services reporting unit, our audit procedures included, among others, assessing the appropriateness of the valuation methodologies and testing the significant assumptions and underlying data used by the Company.

We evaluated the reasonableness of the projected financial information by comparing the significant assumptions to current industry and economic trends and changes in the Company’s business.

We also evaluated management’s projected financial information to identify, understand and evaluate changes in forecasted results as compared to historical results.

We evaluated the reasonableness of the Company’s selection of a peer group of companies.

We performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the Company’s reporting units for goodwill resulting from changes in the assumptions.

In addition, we involved an internal valuation specialist to assist in evaluating the valuation methodologies and significant assumptions applied in developing the fair value estimates.

/s/ Ernst & Young LLP

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Cash and cash equivalents $ 321,155 $ 428,136

Marketable debt securities — 49,995

Accounts receivable, net of reserves of $ 36,360 and $ 27,839 , respectively

84,387 43,148

Accounts receivable, net 93,880 86,319

Other current assets 69,167 70,548

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Other long-term liabilities 76,426 91,670

Redeemable noncontrolling interests — 26,364

Commitments and contingencies

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Additional paid-in capital 1,405,294 1,350,457

(Accumulated deficit) retained earnings ( 61,629 ) 9,749

Accumulated other comprehensive income 3,309 4,637

Accumulated deficit ( 190,079 ) ( 61,629 )

Accumulated other comprehensive (loss) income ( 1,172 ) 3,309

Treasury stock, 20,211 and 19,167 shares, respectively

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CONSOLIDATED STATEMENT OF OPERATIONS

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

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Revenue $ 1,891,524 $ 1,685,438 $ 1,467,925

Operating costs and expenses:

Cost of revenue (exclusive of depreciation shown separately below) 438,060 325,880 173,281

Gross Profit 1,453,464 1,359,558 1,294,644

Operating costs and expenses:

Selling and marketing expense 913,022 883,643 762,590

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Amortization of intangibles 14,441 16,430 42,902

Goodwill impairment 26,005 — —

Total operating costs and expenses 1,579,769 1,436,071 1,301,012

Operating (loss) income ( 76,513 ) ( 6,368 ) 38,645

Operating loss ( 126,305 ) ( 76,513 ) ( 6,368 )

Interest expense ( 20,107 ) ( 23,485 ) ( 14,178 )

Other (expense) income, net ( 2,509 ) 1,218 6,494

(Loss) earnings before income taxes ( 102,507 ) ( 19,328 ) 33,646

Other income (expense),net 1,178 ( 2,509 ) 1,218

Loss before income taxes ( 145,234 ) ( 102,507 ) ( 19,328 )

Income tax benefit 17,252 32,013 15,168

Net (loss) earnings ( 70,494 ) ( 4,160 ) 35,314

Net loss ( 127,982 ) ( 70,494 ) ( 4,160 )

Net earnings attributable to noncontrolling interests ( 468 ) ( 884 ) ( 2,123 )

Net (loss) earnings attributable to Angi Inc.

Net loss attributable to Angi Inc.

shareholders $ ( 128,450 ) $ ( 71,378 ) $ ( 6,283 )

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(In thousands)

Net (loss) earnings $ ( 70,494 ) $ ( 4,160 ) $ 35,314

Net loss $ ( 127,982 ) $ ( 70,494 ) $ ( 4,160 )

Other comprehensive (loss) income:

Change in foreign currency translation adjustment ( 5,028 ) ( 1,219 ) 6,827

Change in unrealized gains and losses on available-for-sale marketable debt securities — — ( 3 )

Total other comprehensive (loss) income ( 1,219 ) 6,827 396

Comprehensive (loss) income ( 133,010 ) ( 71,713 ) 2,667

Components of comprehensive income attributable to noncontrolling interests:

Components of comprehensive loss (income) attributable to noncontrolling interests:

Net earnings attributable to noncontrolling interests ( 468 ) ( 884 ) ( 2,123 )

Change in foreign currency translation adjustment attributable to noncontrolling interests 547 ( 109 ) ( 811 )

Comprehensive income attributable to noncontrolling interests ( 993 ) ( 2,934 ) ( 399 )

Comprehensive (loss) income attributable to Angi Inc.

Comprehensive loss (income) attributable to noncontrolling interests 79 ( 993 ) ( 2,934 )

Comprehensive loss attributable to Angi Inc.

shareholders $ ( 132,931 ) $ ( 72,706 ) $ ( 267 )

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Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss) Total

Accumulated Other Comprehensive (Loss) Income Total

Shareholders’

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Balance as of December 31, 2019 $ 26,663 $ 87 87,007 $ 422 421,570 $ — — $ 1,357,075 $ 16,032 $ ( 1,379 ) $ ( 57,949 ) $ 1,314,288 $ 9,264 $ 1,323,552

Net earnings 142 — — — — — — — 34,829 — — 34,829 343 35,172

Net (loss) earnings 767 — — — — — — — ( 6,283 ) — — ( 6,283 ) 1,356 ( 4,927 )

Other comprehensive income (loss) 439 — — — — — — — — 6,016 — 6,016 372 6,388

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Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 7 7,231 — — — — ( 62,704 ) — — — ( 62,697 ) — ( 62,697 )

Issuance of common stock to IAC pursuant to the employee matters agreement — — — 1 452 — — ( 1,766 ) — — — ( 1,765 ) — ( 1,765 )

Issuance of common stock to IAC Inc.

pursuant to the employee matters agreement — — — — 292 — — ( 1,445 ) — — — ( 1,445 ) — ( 1,445 )

Purchase of treasury stock — — — — — — — — — — ( 64,132 ) ( 64,132 ) — ( 64,132 )

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Balance as of December 31, 2020 $ 26,364 $ 94 94,238 $ 422 421,862 $ — — $ 1,379,469 $ 9,749 $ 4,637 $ ( 122,081 ) $ 1,272,290 $ 10,567 $ 1,282,857

Net earnings (loss) 767 — — — — — — — ( 6,283 ) — — ( 6,283 ) 1,356 ( 4,927 )

Other comprehensive income 439 — — — — — — — — 6,016 — 6,016 372 6,388

Net (loss) earnings ( 23 ) — — — — — — — ( 71,378 ) — — ( 71,378 ) 907 ( 70,471 )

Other comprehensive income (loss) 515 — — — — — — — — ( 1,328 ) — ( 1,328 ) ( 406 ) ( 1,734 )

Stock-based compensation expense — — — — — — — 33,057 — — — 33,057 — 33,057

Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 3 2,919 — — — — ( 61,226 ) — — — ( 61,223 ) — ( 61,223 )

Issuance of common stock to IAC pursuant to the employee matters agreement — — — — 292 — — ( 1,445 ) — — — ( 1,445 ) — ( 1,445 )

Issuance of common stock to IAC Inc.

pursuant to the employee matters agreement — 3 2,588 — 157 — — ( 3 ) — — — — — —

Purchase of treasury stock — — — — — — — — — — ( 35,959 ) ( 35,959 ) — ( 35,959 )

Adjustment pursuant to the tax sharing agreement — — — — — — — 3,613 — — — 3,613 — 3,613

Purchase of redeemable noncontrolling interests ( 3,165 ) — — — — — — — — — — — ( 1,115 ) ( 1,115 )

Adjustment of redeemable noncontrolling interests to fair value 1,645 — — — — — — ( 1,645 ) — — — ( 1,645 ) — ( 1,645 )

Purchase of noncontrolling interests ( 28,318 ) — — — — — — — — — — — ( 160 ) ( 160 )

Adjustment of redeemable noncontrolling interests to fair value 1,462 — — — — — — ( 430 ) — — — ( 430 ) — ( 430 )

Other — — — — — — — ( 410 ) — — — ( 410 ) — ( 410 )

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Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss) Total

Accumulated Other Comprehensive (Loss) Income Total

Shareholders’

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Net (loss) earnings — — — — — — — — ( 128,450 ) — — ( 128,450 ) 468 ( 127,982 )

Other comprehensive income (loss) 515 — — — — — — — — ( 1,328 ) — ( 1,328 ) ( 406 ) ( 1,734 )

Other comprehensive loss — — — — — — — — — ( 4,481 ) — ( 4,481 ) ( 547 ) ( 5,028 )

Stock-based compensation expense — — — — — — — 55,891 — — — 55,891 — 55,891

Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 3 3,066 — — — — ( 8,630 ) — — — ( 8,627 ) — ( 8,627 )

Issuance of common stock to IAC pursuant to the employee matters agreement — 3 2,588 — 157 — — ( 3 ) — — — — — —

Purchase of treasury stock — — — — — — — — — — ( 8,144 ) ( 8,144 ) — ( 8,144 )

Purchase of noncontrolling interests ( 28,318 ) — — — — — — — — — — — ( 160 ) ( 160 )

Adjustment of redeemable noncontrolling interests to fair value 1,462 — — — — — — ( 430 ) — — — ( 430 ) — ( 430 )

Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary — — — — — — — 7,580 — — — 7,580 ( 7,835 ) ( 255 )

Other — — — — — — — ( 4 ) — — — ( 4 ) — ( 4 )

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CONSOLIDATED STATEMENT OF CASH FLOWS

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

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Cash flows from operating activities:

Net (loss) income $ ( 70,494 ) $ ( 4,160 ) $ 35,314

Net loss $ ( 127,982 ) $ ( 70,494 ) $ ( 4,160 )

Adjustments to reconcile net loss to net cash provided by operating activities:

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Deferred income taxes ( 21,611 ) ( 36,306 ) ( 15,278 )

Impairment of long-lived and right-of-use assets 12,671 169 30

Non-cash lease expense 12,880 13,659 12,318

Revenue reserves 8,569 10,251 5,934

Foreign currency transaction loss 3,357 1,679 87

Goodwill impairment 26,005 — —

Non-cash lease expense (including impairment of right-of-use assets) 15,107 20,716 13,659

Other adjustments, net ( 45 ) 8,263 1,784

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Debt issuance costs — — ( 6,484 )

Principal payments on related party debt — — ( 1,008 )

Purchase of treasury stock ( 8,144 ) ( 35,403 ) ( 63,674 )

Proceeds from the exercise of stock options — — 573

Withholding taxes paid on behalf of employees on net settled stock-based awards ( 8,827 ) ( 61,908 ) ( 64,079 )

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Nature of Operations

Angi Inc., formerly ANGI Homeservices, Inc., (“Angi,” the “Company,” “we,” “our,” or “us”) connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping.

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

During the year ended December 31, 2022, over 220,000 domestic service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc.

Additionally, consumers turned to at least one of our brands to find a service professional for approximately 29 million projects during the year ended December 31, 2022.

Angi Ads provides service professionals the capability to engage with potential customers, including quoting, invoicing, and payment services.

Angi Leads provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals.

Angi Services allows consumers to browse and buy common household services at set prices, rather than requesting quotes from vetted service professionals, as well as instantly book appointments online for household services (primarily cleaning and handyman services) with top-quality, pre-screened independent service professionals.

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

Additionally, Angi Services (including Angi Roofing) manages home improvement projects for consumers.

The Company has two operating segments:

(i) North America (United States and Canada), which includes Angi Ads, Angi Leads and Angi Services;

and (ii) Europe.

The brands operate as follows:

Angi Ads (formerly Angie’s List) brand, Angi Leads (formerly HomeAdvisor) brand, and the Angi Services (Handy and Angi Roofing) brand.

Ads and Leads provides service professionals the capability to engage with potential customers, including quote and invoicing services, and provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals nationwide for home repair, maintenance and improvement projects.

Services consumers can request household services directly through the Angi platform and Angi fulfills the request through the use of independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services.

The matching and pre-priced booking services and related tools and directories are provided to consumers free of charge.

Roofing provides roof replacement and repair services through its wholly-owned subsidiary Angi Roofing, LLC.

The Company has four operating segments:

(i) Ads and Leads;

(ii) Services;

(iii) Roofing;

and (iv) International (Europe and Canada) and operates under multiple brands including Angi, HomeAdvisor, Handy, Total Home Roofing, and Angi Roofing.

Roofing includes the business the Company acquired on July 1, 2021 known as Total Home Roofing.

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

and its subsidiaries (unless the context requires otherwise).

At December 31, 2021, IAC/InterActiveCorp (“IAC”) owned 84.5 % and 98.2 % of the economic interest and voting interest, respectively, of the Company.

At December 31, 2022, IAC Inc., formerly known as IAC/InterActiveCorp (“IAC”) owned 84.1 % and 98.1 % of the economic interest and voting interest, respectively, of the Company.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All intercompany transactions and balances between and among the Company and its subsidiaries have been eliminated.

All intercompany transactions between (i) Angi Inc.

and (ii) IAC and its subsidiaries are considered to be effectively settled for cash at the time the transaction is recorded.

See “ Note 1 4 —Related Party Transactions with IAC ” for additional information on transactions between Angi Inc.

See “ Note 14—Related Party Transactions with IAC ” for information on transactions between Angi and IAC.

In the opinion of management, the assumptions underlying the historical consolidated financial statements, including the basis on which the expenses have been allocated from IAC, are reasonable.

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may have incurred as a standalone public company for the periods presented.

Segment Changes

As a result of management’s continued assessments of reporting structure, there was a decision in the fourth quarter of 2022 to refine segments to more effectively measure the businesses’ performance.

Management has identified four reportable segments with discrete financial results to appropriately match operating costs to the revenues generated for these businesses (Ads & Leads, Services, Roofing and International).

Our financial information for prior periods has been recast to conform to the current period presentation.

COVID-19 Update

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

As previously disclosed, the initial impact of COVID-19 on the Company initially resulted in a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects).

While we 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 the brand integration initiative launched in March 2021.

Moreover, many service professionals’ businesses have

The COVID-19 pandemic and the various responses to it created significant volatility, uncertainty and economic disruption.

Recently, there has been a return to more normal societal interactions, including the way we operate our business.

We cannot predict the future impacts of this ongoing and any new pandemic(s).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

been adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which continue to negatively impact our ability to monetize the slightly increased level of service requests.

Although our ability to monetize service requests rebounded modestly in the second half 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 and, as a consequence, our revenue and profitability will not be adversely impacted in the future.

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

Accounting Estimates

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On an ongoing basis, the Company evaluates its estimates and judgments, including those related to:

the fair values of cash equivalents and marketable debt securities;

the carrying value of accounts receivable, including the determination of the allowance for credit losses and the determination of revenue reserves;

the fair values of cash equivalents;

the carrying value of accounts receivable, including the determination of the allowance for credit losses;

the determination of the customer relationship period for certain costs to obtain a contract with a customer;

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Revenue is recognized when control of the promised services or goods is transferred to our customers and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods.

Revenue is primarily derived from consumer connection revenue, which comprises fees paid by Angi Leads service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service).

Ads and Leads Revenue

Primarily reflects domestic ads and leads revenue, including consumer connection revenue for consumer matches, revenue from service professionals under contract for advertising and membership subscription revenue from service professionals and consumers.

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

Consumer connection revenue is generally billed one week following a consumer match, with payment due upon receipt of invoice.

The Company maintains revenue reserves for potential credits issued to Angi Leads services providers.

Revenue is also derived from (i) sales of time-based website, mobile and call center advertising to service professionals, (ii) Angi Leads service professional membership subscription fees, (iii) membership subscription fees from consumers, (iv) service warranty subscription and other services and (v) revenue from completed jobs sourced through the Angi Services platforms.

The Company maintains a liability for potential credits issued to services providers.

Revenue is also derived from (i) sales of time-based website, mobile and call center advertising to service professionals, (ii) service professional membership subscription fees, (iii) membership subscription fees from consumers, and (iv) other services.

Angi service professionals generally pay for advertisements in advance on a monthly or annual basis at the option of the service professional, with the average advertising contract term being approximately one year.

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Revenue from the sale of advertising in the Angie’s List Magazine is recognized in the period in which the publication is distributed.

Service professional membership subscription revenue is initially deferred upon receipt of payment and is recognized using the straight-line method over the applicable

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

subscription period, which is typically one year.

Service professional membership subscription revenue is initially deferred upon receipt of payment and is recognized using the straight-line method over the applicable subscription period, which is typically one year.

Angi prepaid consumer membership subscription fees are recognized as revenue using the straight-line method over the term of the applicable subscription period, which is typically one year.

Consumers typically pay when a job is scheduled through the Angi Services platform, or when the job is completed for Angi Roofing.

Services Revenue

Primarily reflects domestic revenue from pre-priced offerings by which the consumer requests services through Services platforms and we engage a service professional to perform the service.

Consumers are billed when a job is scheduled through the Services platform.

Billing practices are governed by the contract terms of each project as negotiated with the consumer.

Billings do not necessarily correlate with revenue recognized over time as this is based on the timing of when the consumer receives the promised services.

Prior to January 1, 2020, Handy recorded revenue on a net basis.

Effective January 1, 2020, the Company modified the Handy terms and conditions so that Handy, rather than the service professional, has the contractual relationship with the consumer to deliver the service and Handy, rather than the consumer, has the contractual relationship with the service professional.

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

This change in contractual terms requires gross revenue accounting treatment was effective January 1, 2020 and resulted in an increase in revenue of $ 73.8 million during the year ended December 31, 2020.

From January 1, 2020 through December 31, 2022, Angi Services recorded revenue on a gross basis.

Effective January 1, 2023, Angi Inc.

modified the Services terms and conditions so that the service professional, rather than Angi, Inc., has the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

contractual relationship with the consumer to deliver the service and our performance obligation to the consumer is to connect them with the service professional.

This change in contractual terms requires net revenue accounting treatment effective January 1, 2023.

There is no impact to operating income or Adjusted EBITDA.

Roofing Revenue

Primarily reflects revenue from the roof replacement business offering by which the consumer purchases services directly from the Roofing business, which was acquired on July 1, 2021, and we then engage a service professional to perform the service.

Consumers typically pay when a job is completed and revenue is recognized based on the Company’s progress in satisfying the roofing service.

International Revenue

Primarily reflects revenue generated within the International segment (comprised of businesses in Europe and Canada), including consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers.

Transaction Price

The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for its services or goods, including amounts that are variable.

Contracts may include sales incentives, such as rebates, which are accounted for as variable consideration when estimating the transaction price.

The Company also maintains a liability for potential future refunds and customer credits, which is recorded as a reduction of revenue.

All estimates of variable consideration are based upon historical experience and customer trends.

The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate each reporting period.

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

During the years ended December 31, 2021 and 2020 and the Company recognized expense of $ 84.7 million and $ 64.8 million, respectively, related to the amortization of these costs.

The current contract assets are $ 38.0 million and $ 49.2 million at December 31, 2021, and 2020, respectively.

The non-current contract asset balances are $ 1.1 million and $ 0.4 million at December 31, 2021 and 2020, respectively.

The current and non-current contract assets are included in “Other current assets” and “Other non-current assets,” respectively, in the accompanying consolidated balance sheet.

Performance Obligations

The following table provides information about our contract asset balances at the balance sheet dates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed.

Accounts Receivables, Net of Credit Loss and Revenue Reserves

Classification December 31, 2022 December 31, 2021

(In thousands)

Contract Assets

Other current assets $ 37,220 $ 37,971

Other non-current assets $ 1,904 $ 1,109

During the years ended December 31, 2022 and 2021, the Company recognized expense of $ 77.4 million and $ 84.7 million, respectively, related to the amortization of these costs.

Performance Obligations

As permitted under the practical expedient available under ASC 606, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed.

Accounts Receivables, Net of the Allowance for Credit Losses

Accounts receivable include amounts billed and currently due from customers.

The credit loss reserve is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history and the specific customer’s ability to pay its obligation.

The allowance for credit loss is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history and the specific customer’s ability to pay its obligation.

The time between the Company’s issuance of an invoice and payment due date is not significant;

customer payments that are not collected in advance of the transfer of promised services or goods are generally due no later than 30 days from invoice date.

The Company also maintains reserves for potential credits issued to service professionals or other revenue adjustments.

The amounts of these revenue reserves are based primarily upon historical experience.

Credit Losses and Revenue Reserve

The following table presents the changes in the credit loss reserve for the years ended December 31, 2021 and 2020:

Credit Losses

The following table presents the changes in the allowance for credit loss for the years ended December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

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Current period provision for credit losses 108,151 88,076

Write-offs charged against the credit loss reserve ( 82,911 ) ( 73,682 )

Write-offs charged against the allowance for credit loss ( 103,985 ) ( 82,911 )

Recoveries collected 5,342 2,441

Balance at December 31 $ 43,160 $ 33,652

The revenue reserve was $ 2.7 million and $ 1.8 million at December 31, 2021 and 2020, respectively.

The total credit loss and revenue reserve was $ 36.4 million and $ 27.8 million as of December 31, 2021 and 2020.

Deferred Revenue

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The current deferred revenue balances are $ 50.9 million and $ 53.8 million at December 31, 2022 and 2021, respectively.

The non-current deferred revenue balances are $ 0.1 million and $ 0.2 million at December 31, 2021 and 2020, respectively.

The non-current deferred revenue balances are $ 0.1 million at both December 31, 2022 and 2021.

Non-current deferred revenue is included in “Other long-term liabilities” in the accompanying consolidated balance sheet.

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Internationally, there are no cash equivalents at December 31, 2022 and 2021.

Investments in Marketable Debt Securities

The Company invests in marketable debt securities with active secondary or resale markets to ensure portfolio liquidity to fund current operations or satisfy other cash requirements as needed.

Marketable debt securities are adjusted to fair value each quarter, and the unrealized gains and losses, net of tax, are included in accumulated other comprehensive income (loss) as a separate component of shareholders’ equity.

The specific-identification method is used to determine the cost of debt securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income (loss) into

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investments in Marketable Debt Securities

The Company invests in marketable debt securities with active secondary or resale markets to ensure portfolio liquidity to fund current operations or satisfy other cash requirements as needed.

Marketable debt securities are adjusted to fair value each quarter, and the unrealized gains and losses, net of tax, are included in accumulated other comprehensive (loss) income as a separate component of shareholders’ equity.

The Company reviews its debt securities for impairment, including from risk of credit loss, each reporting period.

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The Company also considers whether it will be required to sell the security before recovery of its amortized cost basis and whether the amortized cost basis cannot be recovered because of credit losses.

If an impairment is considered to be other-than-temporary, the debt security will be written down to its fair value and the loss will be recognized within other (expense) income, net.

The Company held no marketable debt securities at December 31, 2021.

The Company held $ 50.0 million in marketable debt securities at December 31, 2020.

If an impairment is considered to be other-than-temporary, the debt security will be written down to its fair value and the loss will be recognized within other income (expense), net.

The Company held no marketable debt securities at December 31, 2022 and 2021.

Capitalized Software, Leasehold Improvements and Equipment

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The Company assesses goodwill and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset has declined below its carrying value.

At October 1, 2021, the Company has two reporting units:

North America and Europe.

At October 1, 2022, the Company has four reporting units:

Ads and Leads, Services, Roofing and International.

When the Company elects to perform a qualitative assessment and concludes it is not more likely than not that the fair value of the reporting unit is less than its carrying value, no further assessment of that reporting unit’s goodwill is necessary;

otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined.

If the carrying value of the reporting unit exceeds its fair value an impairment equal to the excess is recorded.

For the Company’s annual goodwill test at October 1, 2021, a qualitative assessment of the North America and Europe reporting units’ goodwill was performed and it was concluded that it was more likely than not that the fair value of these reporting units was in excess of their respective carrying values.

In the aggregate, Angi’s October 1, 2021 market capitalization of $ 6.2 billion exceeded its carrying value by approximately $ 5.0 billion.

The primary factor that the Company considered in its qualitative assessment for its Europe reporting unit were valuations performed during 2021 that indicated a fair value in excess

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of the carrying value.

The fair value based on the valuation that was most proximate to, but not as of, October 1, 2021 exceeded the carrying value of the Europe reporting unit by $ 164.2 million.

The primary factor that the Company considered in its qualitative assessment for its North America reporting unit was the significant excess of the estimated fair value of the North America reporting unit over its carrying value.

The fair value of the North America reporting unit was estimated by subtracting the fair value of the Europe reporting unit, based on the valuation described above, from the October 1, 2021 market capitalization of the Company;

the estimated fair value of the North America reporting unit exceeded its carrying value by approximately $ 4.9 billion.

The fair value of the Company’s Europe reporting unit is determined using both an income approach based on discounted cash flows (“DCF”) and a market approach when it tests goodwill for impairment, either on an interim basis or annual basis as of October 1 each year.

otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined.

If the carrying value of the reporting unit exceeds its fair value an impairment equal to the excess is recorded.

In the fourth quarter of 2022, our segment presentation was changed to reflect our four new operating segments, which now include (i) Ads and Leads, (ii) Services, (iii) Roofing and (iv) International (includes Europe and Canada).

Goodwill was allocated to reflect the new segment presentation.

The allocation of goodwill to Roofing and Canada reflects their respective historical carrying values because of the lack of operational integration with Angi North America;

the allocation of the remaining goodwill to Ads and Leads and Services was based upon their relative fair values as of October 1, 2022.

For the Company’s annual goodwill test at October 1, 2022, as a result of the significant changes in the operating segments and reporting units, we elected to perform a quantitative assessment of the reporting units’ goodwill first, instead of performing a qualitative assessment.

The quantitative test for the reporting units of Ads & Leads, Services and International included use of both an income approach based on discounted cash flows (“DCF”) and a market approach.

The quantitative test for the reporting unit of Roofing only included an income approach based on DCF as there were no relevant publicly traded company comparables to perform a market approach.

Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates.

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Assumptions used in the DCF analyses, including the discount rate, are assessed based on the reporting units' current results and forecasted future performance, as well as macroeconomic and industry specific factors.

The discount rate used in determining the fair value of the Company’s Europe reporting unit was 15 % in both 2021 and 2020.

The discount rate used in determining the fair value of the Company’s Ads & Leads, Services, Roofing and International reporting units was 12 %, 15 %, 16 % and 18.5 %, respectively for 2022 and 15.0 % for the International reporting unit in 2021.

Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies.

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To determine a peer group of companies for our respective reporting units, we considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors.

As a result of the valuation process, we determined that the fair value of the Ads & Leads, Services and International reporting units exceeded the carrying value and thus there was no impairment of goodwill in 2022.

The fair value based on the valuation exceeded the carrying value of the Ads & Leads, Services, and International reporting units by $ 1.3 billion, $ 40 million, and $ 143 million.

For the Roofing reporting unit, we determined the carrying value exceeded the fair value, resulting in an impairment being recorded to goodwill totaling $ 26 million in 2022.

While the Company has the option to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values, the Company’s policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1, in part, because the level of effort required to perform the quantitative and qualitative assessments is essentially equivalent.

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The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 12.0 % to 18.5 % in 2022 and 11.1 % to 15.0 % in 2021, and the royalty rates used ranged from 2.0 % to 4.5 % in 2022 and 2.0 % to 5.0 % in 2021.

The 2021, 2020 and 2019 annual assessments of goodwill and indefinite-lived intangible assets identified no impairments.

The 2022, 2021 and 2020 annual assessments of indefinite-lived intangible assets identified no impairments.

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Long-Lived Assets and Intangible Assets with Definite Lives

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The three levels of the fair value hierarchy are:

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

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Legal costs are expensed as incurred.

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The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings.

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A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized.

The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense.

The Company records interest, net of any applicable related income tax benefit, for uncertain tax positions as a component of income tax expense.

The Company elects to recognize the tax on Global Intangible Low-Taxed Income as a period expense in the period the tax is incurred.

The Company evaluates and accounts for uncertain tax positions using a two-step approach.

Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination.

Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon

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ultimate settlement with a taxing authority that has full knowledge of all relevant information.

Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained.

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Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders’ equity in the accompanying consolidated balance sheet.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In connection with the acquisition of certain subsidiaries, management of these businesses has retained an ownership interest.

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During the year ended December 31, 2021, the remaining redeemable non-controlling interest was exercised.

One of these arrangements was exercised during the year ended December 31, 2020, and none of these arrangements were exercised during the year ended December 31, 2019.

One of these arrangements was exercised during the year ended December 31, 2020.

Because these put arrangements are exercisable by the counter-party outside the control of the Company, to the extent that the fair value of these interests exceeds the value determined by normal noncontrolling interest accounting, the value of such interests is adjusted to fair value with a corresponding adjustment to additional paid-in capital.

During the years ended December 31, 2021, 2020 and 2019, the Company recorded adjustments of $ 28.3 million, $ 1.6 million and $ 8.2 million, respectively, to increase these interests to fair value.

During the years ended December 31, 2021 and 2020, the Company recorded adjustments of $ 28.3 million and $ 1.6 million, respectively, to increase these interests to fair value.

Fair value determinations require high levels of judgment and are based on various valuation techniques, including market comparables and discounted cash flow projections.

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The Company’s business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents and marketable debt securities.

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Recent Accounting Pronouncements

Accounting Pronouncements Adopted by the Company

ASU 2021-08 – Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the Financial Accounting Standards Board issued ASU No.

2021-08, which changes how entities will recognize assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers.

The provisions of ASU No.

2021-08 will require acquiring entities to recognize and measure contract assets and contract liabilities, including deferred revenue, acquired in a business combination in accordance with ASU No.

2014-09 (Topic 606), Revenue from Contracts with Customers, as if it had originated the contracts.

The provisions of ASU No.

2021-08 are effective for fiscal years beginning after December 15, 2022, with early adoption permitted, including adoption in an interim period.

The Company early adopted ASU 2021-08 effective in the fourth quarter of 2021.

An entity that early adopts in an interim period is required to apply the amendments (i) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early adoption and (ii) prospectively to all business combinations that occur on or after the date of initial application.

Early adoption has no retrospective impact on the Company.

The adoption of ASU 2021-08 may have a material impact on the purchase accounting for prospective business combinations.

Accounting Pronouncements Not Yet Adopted by the Company

There are no recently issued accounting pronouncements that have not yet been adopted that are expected to have a material effect of the financial statement of the Company.

There are no recently issued accounting pronouncements adopted or that have not yet been adopted by the Company that are expected to have a material effect on the results of operations, financial condition, or cash flows of the Company.

Reclassifications

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The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes.

Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the consolidated statement of shareholders’ equity and financing activities within the consolidated statement of cash flows.

Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision or benefit computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the consolidated statement of shareholders’ equity and financing activities within the consolidated statement of cash flows.

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(In thousands)

Current income tax provision:

Current income tax provision (benefit):

Federal $ 27 $ 36 $ ( 306 )

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Current income tax provision 4,359 4,293 110

Deferred income tax benefit

Deferred income tax (benefit) provision

Federal ( 19,898 ) ( 29,889 ) ( 5,163 )

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Long-term lease liabilities 22,338 26,182

Stock-based compensation 5,390 18,955

Tax credit carryforwards 21,588 13,411

Capitalized software, leasehold improvements and equipment, net 8,393 —

Other 32,440 27,363

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Deferred tax liabilities:

Intangible assets ( 46,591 ) ( 47,858 )

Capitalized software, leasehold improvements and equipment ( 18,624 ) ( 16,152 )

Intangible assets, net ( 41,068 ) ( 46,591 )

Right-of-use assets ( 14,199 ) ( 17,270 )

Capitalized costs to obtain a contract with a customer ( 9,264 ) ( 9,263 )

Capitalized software, leasehold improvements and equipment, net — ( 18,624 )

Other ( 83 ) ( 87 )

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Of these federal NOLs, $ 215.8 million can be carried forward indefinitely and $ 300.1 million, if not utilized, will expire at various times between 2032 and 2037.

The state NOLs, if not utilized, will expire at various times primarily between 2025 and 2041.

Of these state NOLs, $ 32.2 million will be carried forward indefinitely and $ 420.0 million will expire at various times primarily between 2025 and 2042.

Federal and state NOLs of $ 322.5 million and $ 230.4 million, respectively, can be used against future taxable income without restriction and the remaining NOLs will be subject to limitations under Section 382 of the Internal Revenue Code, separate return limitations, and applicable state law.

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gross deferred tax asset of $ 206.8 million that the Company expects to fully utilize on a more likely than not basis.

During 2021, the Company’s valuation allowance decreased by $ 10.5 million primarily due to a decrease in state and foreign NOLs and currency translation adjustments on foreign NOLs.

At December 31, 2021, the Company has a valuation

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

allowance of $ 66.6 million related to the portion of NOLs and other items for which it is more likely than not that the tax benefit will not be realized.

During 2022, the Company’s valuation allowance decreased by $ 1.6 million primarily due to currency translation adjustments and a net decrease in foreign NOLs, partially offset by an increase in unbenefited capital losses and state tax attributes.

At December 31, 2022, the Company has a valuation allowance of $ 65.0 million related to the portion of NOLs and other items for which it is more likely than not that the tax benefit will not be realized.

A reconciliation of the income tax benefit to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:

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(In thousands)

Income tax (benefit) provision at the federal statutory rate of 21% $ ( 21,527 ) $ ( 4,058 ) $ 7,066

Income tax (benefit) at the federal statutory rate of 21% $ ( 30,499 ) $ ( 21,527 ) $ ( 4,058 )

State income taxes, net of effect of federal tax benefit ( 1,450 ) ( 1,379 ) 1,641

Stock-based compensation ( 10,331 ) ( 2,914 ) ( 12,768 )

Unbenefited losses 7,942 4,481 2,899

Change in judgement on beginning of the year valuation allowance ( 4,165 ) ( 3,544 ) —

Research credit ( 7,123 ) ( 2,431 ) ( 2,494 )

Deferred tax adjustment for enacted changes in tax law and rates 768 ( 5,244 ) 502

Non-deductible executive compensation 4,731 3,312 5,743

Foreign income taxed at a different statutory tax rate 4,519 — —

Stock-based compensation 4,104 ( 13,643 ) ( 8,657 )

Change in judgement on beginning of the year valuation allowance 966 ( 4,165 ) ( 3,544 )

Net adjustment related to the reconciliation of income tax provision accruals to tax returns ( 886 ) 335 ( 743 )

Deferred tax adjustment for enacted changes in tax law and rates 178 768 ( 5,244 )

Other, net 266 2,236 ( 711 )

Income tax benefit $ ( 17,252 ) $ ( 32,013 ) $ ( 15,168 )

In 2022, there was an increase in the foreign income taxed at different rates from the effects of capitalization and amortization of R&D expenses in 2022 as required by the 2017 Tax Cuts and Jobs Act.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows:

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The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision.

At December 31, 2021, accruals for interest are not material and there are no accruals for penalties.

At December 31, 2020, there are no accruals for interest and penalties.

At December 31, 2022 and 2021, accruals for interest are not material and there are no accruals for penalties.

The Company is routinely under audit by federal, state, local and foreign authorities in the area of income tax as a result of previously filed separate company and consolidated tax returns with IAC.

These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions.

The Internal Revenue Service (“IRS”) has substantially completed its audit of IAC’s federal income tax returns for the years ended December 31, 2013 through 2017, and has begun its audit of the years December 31, 2018 through 2019, which includes the operations of the Company.

The statutes of limitations for the years 2013 through 2019 have been extended to December 31, 2023.

The Internal Revenue Service (“IRS”) has completed its audit of IAC’s federal income tax returns for the years ended December 31, 2013 through 2019, which includes the operations of the Company.

The settlement of these tax years has been submitted to the Joint Committee of Taxation for approval.

The statutes of limitations for the years 2013 through 2019 have been extended to

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December 31, 2023.

Returns filed in various other jurisdictions are open to examination for various tax years beginning with 2014.

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The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

At December 31, 2022 and 2021, the Company has unrecognized tax benefits, including interest, of $ 6.2 million and $ 6.3 million respectively;

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The comparable amount as of December 31, 2021 is $ 6.0 million.

At December 31, 2021, all of the Company’s international cash can be repatriated without any significant tax consequences.

NOTE 4— GOODWILL AND INTANGIBLE ASSETS

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The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2022:

Balance at December 31, 2020 Additions (Deductions) Foreign

Balance at December 31, 2021 Deductions Reporting Unit Allocation Adjustment Impairments Foreign

Translation Balance at December 31, 2022

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Europe 72,846 — ( 61,334 ) — ( 11,512 ) —

Ads and Leads — — 761,133 — — 761,133

Services — — 51,197 — — 51,197

Roofing — — 26,005 ( 26,005 ) — —

International — — 64,799 — 5,820 70,619

Total goodwill $ 916,039 $ ( 816 ) $ — $ ( 26,005 ) $ ( 6,269 ) $ 882,949

In July, 2021, Angi acquired certain assets and assumed certain liabilities of Total Home Roofing (“Angi Roofing”) (included in the North America segment), including $ 26.8 million of goodwill.

See “ Note 2—Summary of Significant Accounting Policies ” for further discussion of the Company’s assessments of impairment of goodwill and indefinite-lived intangible assets.

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The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2021:

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Total goodwill $ 891,797 $ 26,822 $ — $ ( 2,580 ) $ 916,039

Additions relate to immaterial acquisition activity during the year (included in the North America segment).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In July 2021, Angi acquired certain assets and assumed certain liabilities of Total Home Roofing (“Roofing”), including $ 26.8 million of goodwill.

Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions.

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Technology 82,351 ( 60,619 ) 21,732 5.5

Memberships 15,900 ( 15,900 ) — 3.0

Customer lists and user base 800 ( 192 ) 608 8.0

Trade names 1,415 ( 1,415 ) — 5.0

Total $ 181,755 $ ( 159,356 ) $ 22,399 4.1

At December 31, 2021, amortization of intangible assets with definite lives for each of the next five years and thereafter is estimated to be as follows:

Years Ending December 31, (In thousands)

2022 $ 14,441

Total $ 22,399

At December 31, 2022, amortization of intangible assets with definite lives is estimated to be $ 8.0 for the year ended December 31, 2023 and none thereafter.

NOTE 5— FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Marketable Debt Securities

The Company did no t hold any available-for-sale marketable debt securities at December 31, 2021.

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

The Company did no t hold any available-for-sale marketable debt securities at December 31, 2022 and December 31, 2021.

For the year ended December 31, 2021, proceeds from maturities of available-for-sale marketable debt securities was $ 50.0 million.

There were no gross realized gains or losses from the maturities of available-for-sale marketable debt securities for the year ended December 31, 2021.

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Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

(In thousands)

Treasury discount notes $ 49,995 $ — $ — $ 49,995

Total available-for-sale marketable debt securities $ 49,995 $ — $ — $ 49,995

The contractual maturities of debt securities classified as current available-for-sale at December 31, 2020 were within one year.

For the years ended December 31, 2021 and 2020, proceeds from maturities of available-for-sale marketable debt securities were $ 50.0 million, respectively.

There were no gross realized gains or losses from the maturities of available-for-sale marketable debt securities for the years ended December 31, 2021 and 2020.

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability.

The three levels of the fair value hierarchy are:

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

Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data.

The fair values of the Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded.

Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.

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

Instruments measured at fair value on a recurring basis

Cash and cash equivalents are measured at fair value and classified within Level 1 and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets.

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

December 31, 2022

Quoted Market Prices for Identical Assets in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs

Quoted Market Prices for Identical Assets in Active Markets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) Total

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Money market funds $ 189,000 $ — $ — $ 189,000

Treasury discount notes — 24,961 — 24,961

Total $ 189,000 $ 24,961 $ — $ 213,961

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December 31, 2021

Quoted Market Prices for Identical Assets in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs

Quoted Market Prices for Identical Assets in Active Markets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) Total

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Money market funds $ 280,052 $ — $ — $ 280,052

Treasury discount notes — 324,995 — 324,995

Time deposits — 2,721 — 2,721

Marketable debt securities:

Treasury discount notes — 49,995 — 49,995

Total $ 280,052 $ — $ — $ 280,052

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Such fair value measurements are based predominantly on Level 3 inputs.

During the year ended December 31, 2021, the Company recorded $ 12.7 million in impairment charges on ROU assets, leasehold improvements, and furniture and equipment, of which $ 9.6 million is a result of the Company reducing its real estate footprint in 2021.

During the year ended December 31, 2022 and December 31, 2021, the Company recorded $ 2.8 million and $ 12.7 million in impairment charges on ROU assets and leasehold improvements and furniture and equipment, respectively.

Impairment expense was determined by comparing the carrying value of each asset group related to each office space vacated to the estimated fair market value of cash inflows directly associated with each office space.

Based on this analysis, if the carrying amount of the asset group is greater than the estimated future undiscounted cash flows, an impairment charge is recognized, measured as the amount by which the carrying amount exceeds the fair value of the asset.

During the year ended December 31, 2022 the Company recorded $ 10.9 million and $ 4.6 million in impairment charges on capitalized software within the Services and Ads and Leads segments, respectively.

Impairment expense was determined by comparing the carrying value to the fair value of each capitalized software asset group.

Based on this analysis, the carrying amount was determined to not be recoverable and an impairment charge was recognized in the amount of the carrying value and is included within depreciation expense.

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Financial instruments measured at fair value only for disclosure purposes

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Long-term debt consists of:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2022 December 31, 2021

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3.875 % ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”);

interest payable each February 15 and August 15, commencing February 15, 2021

interest payable each February 15 and August 15, which commenced February 15, 2021

$ 500,000 $ 500,000

ANGI Group Term Loan due November 5, 2023 (“ANGI Group Term Loan”) — 220,000

Total long-term debt 500,000 500,000

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The ANGI Group Senior Notes were issued on August 20, 2020, the proceeds of which have been used for general corporate purposes, including the acquisition of Total Home Roofing, Inc.

(“Angi Roofing”) on July 1, 2021, and treasury share repurchases.

(“Roofing”) on July 1, 2021, and treasury share repurchases.

At any time prior to August 15, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium.

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2025 and thereafter 100.000 %

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The indenture governing the ANGI Group Senior Notes contains a covenant that would limit ANGI Group’s ability to incur liens for borrowed money in the event a default has occurred or ANGI Group’s secured leverage ratio exceeds 3.75 to 1.0, provided that ANGI Group is permitted to incur such liens under certain permitted credit facilities indebtedness notwithstanding the ratio, all as defined in the indenture.

At December 31, 2022, there were no limitations pursuant thereto.

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Holders of the Company’s Class A common stock, Class B common stock and Class C common stock do not have cumulative voting rights in the election of directors.

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Shares of Angi Inc.

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issues or proposes to issue any shares of Angi Inc.

Class A common stock, Class B common stock or Class C common stock (with certain limited exceptions), including shares issued upon the exercise, conversion or exchange of options, warrants and convertible securities, IAC will generally have a purchase right that permits it to purchase for fair market value, as defined in the agreement, up to such number of shares of the same class as the issued shares as would (i) enable IAC to maintain the same ownership interest in the Company that it had immediately prior to such issuance or proposed issuance, with respect to issuances of our voting capital stock, or (ii) enable IAC to maintain ownership of at least 80.1 % of each class of the Company’s non-voting capital stock, with respect to issuances of our non-voting capital stock.

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proposed issuance, with respect to issuances of our voting capital stock, or (ii) enable IAC to maintain ownership of at least 80.1 % of each class of the Company’s non-voting capital stock, with respect to issuances of our non-voting capital stock.

Reserved Common Shares

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common stock for aggregate consideration, on a trade date basis, of $ 35.4 million.

At December 31, 2021, the Company had approximately 16.1 million shares remaining in its share repurchase authorization.

During the year ended December 31, 2022, the Company repurchased 1.0 million shares of Angi Inc.

common stock for aggregate consideration, on a trade date basis, of $ 8.1 million.

At December 31, 2022, the Company has approximately 15.0 million shares remaining in its share repurchase authorization.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8— ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables presents the components of accumulated other comprehensive income (loss) and items reclassified out of accumulated other comprehensive income (loss) into earnings :

NOTE 8— ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following tables presents the components of accumulated other comprehensive (loss) income and items reclassified out of accumulated other comprehensive (loss) income into earnings:

Years Ended December 31,

2022 2021 2020

Adjustment Accumulated Other Comprehensive Income Foreign

Adjustment Accumulated Other Comprehensive Income (Loss) Foreign

Adjustment Unrealized Gains on Available-For-Sale Debt Securities Accumulated Other Comprehensive (Loss) Income

Adjustment Accumulated Other Comprehensive Income Foreign

Adjustment Accumulated Other Comprehensive (Loss) Income

(In thousands)

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Balance at December 31 $ ( 1,172 ) $ ( 1,172 ) $ 3,309 $ 3,309 $ 4,637 $ 4,637

At December 31, 2021, 2020, and 2019, there was no tax benefit or provision on the accumulated other comprehensive income (loss).

NOTE 9— (LOSS) EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted (loss) earnings per share attributable to Angi Inc.

At December 31, 2022, 2021, and 2020, there was no tax benefit or provision on the accumulated other comprehensive (loss) income.

NOTE 9— LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per share attributable to Angi Inc.

Class A and Class B Common Stock shareholders:

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended December 31,

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(In thousands, except per share data)

Net (loss) earnings $ ( 70,494 ) $ ( 70,494 ) $ ( 4,160 ) $ ( 4,160 ) $ 35,314 $ 35,314

Net loss $ ( 127,982 ) $ ( 127,982 ) $ ( 70,494 ) $ ( 70,494 ) $ ( 4,160 ) $ ( 4,160 )

Net earnings attributable to noncontrolling interests ( 468 ) ( 468 ) ( 884 ) ( 884 ) ( 2,123 ) ( 2,123 )

Net (loss) earnings attributable to Angi Inc.

Net loss attributable to Angi Inc.

Class A and Class B Common Stock shareholders $ ( 128,450 ) $ ( 128,450 ) $ ( 71,378 ) $ ( 71,378 ) $ ( 6,283 ) $ ( 6,283 )

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Dilutive securities (a) (b)

— — — — — 13,044

Denominator for (loss) earnings per share—weighted average shares 502,761 502,761 498,159 498,159 504,875 517,919

(Loss) earnings per share attributable to Angi Inc.

Denominator for loss per share—weighted average shares 503,008 503,008 502,761 502,761 498,159 498,159

Loss per share attributable to Angi Inc.

shareholders:

(Loss) earnings per share $ ( 0.14 ) $ ( 0.14 ) $ ( 0.01 ) $ ( 0.01 ) $ 0.07 $ 0.07

Loss per share $ ( 0.26 ) $ ( 0.26 ) $ ( 0.14 ) $ ( 0.14 ) $ ( 0.01 ) $ ( 0.01 )

________________________

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a) If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity and vesting of restricted stock units (“RSUs”).

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Stock options and stock appreciation rights granted under the Plan generally vest in equal annual installments over a four-year period from the grant date.

RSU awards granted under the Plan generally vest either in one installment over a three-year period or in equal annual installments over a four-year period, in each case, from the grant date.

RSU awards granted under the Plan generally vest either in one installment over a three-year period, in equal annual installments over a four-year period, or a three-year graded schedule (installments of 57 % in first year, 29 % in second year, and 14 % in last year), in each case, from the grant date.

MSU awards granted under the Plan generally vest in five installments over a two-year period from the grant date.

PSU awards granted subsequent to the Combination generally cliff vest in a two to five-year period from the grant date.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock-based compensation expense recognized in the consolidated statement of operations includes expense related to:

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The total income tax benefit recognized in the accompanying consolidated statement of operations for the years ended December 31, 2022, 2021, and 2020 related to all stock-based compensation is $ 3.6 million, $ 16.9 million, $ 24.3 million, respectively.

The aggregate income tax benefit recognized related to the exercise of stock options and stock appreciation rights for the years ended December 31, 2021, 2020, and 2019 is $ 10.8 million, $ 11.4 million, and $ 27.9 million, respectively.

The aggregate income tax (detriment)/benefit recognized related to the exercise of stock options and stock appreciation rights for the years ended December 31, 2022, 2021, and 2020 is $( 0.3 ) million, $ 10.8 million, and $ 11.4 million, respectively.

There may be some delay in the timing of the realization of the cash benefit of the income tax deductions related to stock-based compensation because it will be dependent upon the amount and timing of future taxable income and the timing of estimated income tax payments.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Options and Stock Appreciation Rights

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The total intrinsic value of awards exercised during the years ended December 31, 2022, 2021, and 2020 is $ 1.3 million, $ 103.8 million and $ 120.9 million, respectively.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the information about stock options and stock appreciation rights outstanding and exercisable at December 31, 2022:

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equity awards resulting in a modification charge.

Included in stock-based compensation expense in the years ended December 31, 2021, 2020, and 2019 were charges of $ 0.9 million, $ 21.1 million, and $ 29.0 million, respectively, related to these modified awards, and the remaining charge will be recognized over the remaining vesting period of the modified awards.

There were no charges included in stock-based compensation expense in the year ended December 31, 2022 and charges of $ 0.9 million and $ 21.1 million, for the years ended December 31, 2021 and 2020 respectively, related to these modified awards.

No cash was received from stock option exercises during the years ended December 31, 2022, 2021 and 2020 because they were net settled in shares of Angi Inc.

common stock.

Cash received from stock option exercises was $ 0.6 million for the year ended December 31, 2019.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company currently settles all equity awards on a net basis with the Company remitting withholding taxes on behalf of the employee or on a gross basis with the Company issuing a sufficient number of Class A shares to cover the withholding taxes.

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reimburses IAC in either cash or through the issuance of Class A shares to IAC.

Assuming all of the stock appreciation rights outstanding on December 31, 2021 were net settled on that date, ANGI would have issued 0.3 million Class A shares (either to award holders or to IAC as reimbursement) and ANGI would have remitted $ 2.9 million in cash for withholding taxes (assuming a 50 % withholding rate).

Assuming all of the stock appreciation rights outstanding on December 31, 2022 were net settled on that date, ANGI would have issued no Class A shares (either to award holders or to IAC as reimbursement) and ANGI would have remitted nothing in cash for withholding taxes (assuming a 50 % withholding rate).

Assuming all other ANGI equity awards outstanding on December 31, 2022, were net settled on that date, including stock options, RSUs and subsidiary denominated equity described below, ANGI would have issued 11.1 million Class A shares and would have remitted $ 26.2 million in cash for withholding taxes (assuming a 50 % withholding rate).

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Unvested RSUs, MSUs, and PSUs outstanding at December 31, 2022 and changes during the year ended December 31, 2022 are as follows:

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

RSUs MSUs PSUs

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The MSUs and PSUs in the table above includes these awards at their maximum potential payout.

In 2019, the Company granted certain MSUs that are liability-classified stock-settled awards with a market condition.

In 2019, the Company granted certain MSUs that were liability-classified stock-settled awards with a market condition.

The fair value of these awards were subject to remeasurement each reporting period until settlement of the award occurred in 2021.

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There were no MSUs granted during the year ended December 31, 2020.

The weighted average fair value

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of PSUs granted during the years ended December 31, 2021, 2020, and 2019 based on market prices of Angi Inc.

There were no PSUs granted during the year ended December 31, 2022.

The weighted average fair value of PSUs granted during the years ended December 31, 2021 and 2020 based on market prices of Angi Inc.

common stock on the grant date was $ 13.51 and $ 6.92 , respectively.

The total fair value of RSUs that vested during the years ended December 31, 2022, 2021, and 2020 was $ 20.8 million, $ 35.2 million and $ 23.4 million, respectively.

The total fair value of MSUs that vested during the years ended December 31, 2021, 2020, and 2019 was $ 2.1 million, $ 5.2 million, and $ 3.2 million, respectively.

The total fair value of PSUs that vested during the year ended December 31, 2021 was $ 3.6 million.

There were no PSUs that vested during the years ended December 31, 2020 and 2019.

There were no MSUs that vested during the year ended December 31, 2022.

The total fair value of MSUs that vested during the years ended December 31, 2021 and 2020 was $ 2.1 million, and $ 5.2 million, respectively.

The total fair value of PSUs that vested during the year ended December 31, 2022 and 2021 was $ 0.1 million and $ 3.6 million, respectively.

There were no PSUs that vested during the year ended December 31, 2020.

Equity Instruments Denominated in the Shares of Certain Subsidiaries

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NOTE 11— SEGMENT INFORMATION

The overall concept that the Company employs in determining its operating segments is to present the financial information in a manner consistent with how the chief operating decision maker views the businesses.

In addition, the Company considers how the businesses are organized as to segment management and the focus of the businesses with regards to the types of services or products offered or the target market.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has determined its operating segments consistent with how the chief operating decision maker views the businesses.

Additionally, the Company considers how the businesses are organized as to segment management and the focus of the businesses with regards to the types of services or products offered or the target market.

The following table presents revenue by reportable segment:

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(In thousands)

North America $ 1,602,571 $ 1,395,428 $ 1,249,892

Europe 82,867 72,497 76,313

Ads and Leads $ 1,282,061 $ 1,227,074 $ 1,218,755

Services 381,256 289,948 162,539

Roofing 137,509 68,028 —

Intersegment eliminations (a)

( 10,340 ) ( 1,907 ) —

Total Domestic 1,790,486 1,583,143 1,381,294

International 101,038 102,295 86,631

$ 1,891,524 $ 1,685,438 $ 1,467,925

________________________

(a) Intersegment eliminations related to Ads and Leads revenue earned from the sale of leads to Roofing.

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

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(In thousands)

North America

Angi Ads and Leads:

Consumer connection revenue (a)

$ 896,711 $ 899,175 $ 867,307

Advertising revenue (b)

252,010 226,505 214,259

Membership subscription revenue (c)

68,062 74,073 92,975

Ads and Leads:

Consumer connection revenue $ 954,735 $ 898,422 $ 899,175

Advertising revenue 265,466 252,206 226,505

Membership subscription revenue 60,411 68,062 74,073

Other revenue 1,449 8,384 19,002

Total Angi Ads and Leads revenue 1,244,595 1,232,889 1,198,385

Angi Services revenue (d)

357,976 162,539 51,507

Total North America revenue 1,602,571 1,395,428 1,249,892

Consumer connection revenue (e)

Total Ads and Leads revenue 1,282,061 1,227,074 1,218,755

Services revenue 381,256 289,948 162,539

Roofing revenue 137,509 68,028 —

Intersegment eliminations (a)

( 10,340 ) ( 1,907 ) —

Total Domestic revenue 1,790,486 1,583,143 1,381,294

International

Consumer connection revenue 71,851 68,686 57,692

Service professional membership subscription revenue 28,192 32,367 27,225

Advertising and other revenue 995 1,242 1,714

Total Europe revenue 82,867 72,497 76,313

Total International revenue 101,038 102,295 86,631

Total revenue $ 1,891,524 $ 1,685,438 $ 1,467,925

________________________

(a) Includes fees paid by service professionals for consumer matches through the Angi Ads and Leads platforms.

(b) Includes revenue from service professionals under contract for advertising.

(d) Includes revenue from pre-priced offerings and revenue from Angi Roofing.

(e) Includes fees paid by service professionals for consumer matches.

Revenue by geography is based on where the customer is located.

(a) Intersegment eliminations related to Ads and Leads revenue earned from the sale of leads to Roofing.

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

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(In thousands)

Long-lived assets (excluding goodwill and intangible assets):

Long-lived assets (excluding goodwill, intangible assets, and ROU assets):

United States $ 147,322 $ 111,136

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Total $ 153,855 $ 118,267

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

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Years Ended December 31,

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(In thousands)

Operating (loss) income:

North America $ ( 63,316 ) $ 4,811 $ 48,967

Europe ( 13,197 ) ( 11,179 ) ( 10,322 )

Operating income (loss):

Ads and Leads $ 85,593 $ 65,485 $ 133,365

Services ( 95,166 ) ( 63,984 ) ( 44,592 )

Roofing ( 50,685 ) ( 8,596 ) —

Corporate ( 61,794 ) ( 56,196 ) ( 84,674 )

International ( 4,253 ) ( 13,222 ) ( 10,467 )

Total $ ( 126,305 ) $ ( 76,513 ) $ ( 6,368 )

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(In thousands)

Adjusted EBITDA (f) :

North America $ 35,328 $ 178,854 $ 208,192

Europe $ ( 7,463 ) $ ( 6,050 ) $ ( 5,895 )

(f) The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating (loss) income excluding:

Adjusted EBITDA (b) :

Ads and Leads $ 168,952 $ 136,260 $ 230,797

Services $ ( 52,126 ) $ ( 48,203 ) $ ( 29,253 )

Roofing $ ( 21,400 ) $ ( 7,511 ) $ —

Corporate $ ( 49,866 ) $ ( 46,066 ) $ ( 23,870 )

International $ ( 481 ) $ ( 6,615 ) $ ( 4,870 )

(b) The Company’s primary financial measure and GAAP segment measure is Adjusted EBITDA, which is defined as operating income (loss) excluding:

(1) stock-based compensation expense;

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and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable.

The following tables reconcile operating (loss) income for the Company’s reportable segments and net loss attributable to Angi Inc.

The following tables reconcile operating income (loss) for the Company’s reportable segments and net loss attributable to Angi Inc.

shareholders to Adjusted EBITDA:

Year Ended December 31, 2022

Operating Loss Stock-Based

Operating Income (Loss) Stock-Based

Compensation Expense Depreciation Amortization

of Intangibles Adjusted

of Intangibles Goodwill Impairment Adjusted

(In thousands)

North America $ ( 63,316 ) $ 28,399 $ 53,815 $ 16,430 $ 35,328

Europe ( 13,197 ) $ 303 $ 5,431 $ — $ ( 7,463 )

Ads and Leads $ 85,593 $ 19,972 $ 52,737 $ 10,650 $ — $ 168,952

Services ( 95,166 ) $ 18,012 $ 21,904 $ 3,124 $ — $ ( 52,126 )

Roofing ( 50,685 ) $ 1,866 $ 747 $ 667 $ 26,005 $ ( 21,400 )

Corporate ( 61,794 ) $ 11,928 $ — $ — $ — $ ( 49,866 )

International ( 4,253 ) $ 890 $ 2,882 $ — $ — $ ( 481 )

Operating loss ( 126,305 )

Interest expense ( 20,107 )

Other expense, net ( 2,509 )

Other income, net 1,178

Loss before income taxes ( 145,234 )

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(In thousands)

North America $ 4,811 $ 82,933 $ 48,515 $ 42,595 $ 178,854

Europe ( 11,179 ) $ 716 $ 4,106 $ 307 $ ( 6,050 )

Ads and Leads $ 65,485 $ 12,722 $ 46,025 $ 12,028 $ 136,260

Services ( 63,984 ) $ 4,672 $ 7,049 $ 4,060 $ ( 48,203 )

Roofing ( 8,596 ) $ 531 $ 221 $ 333 $ ( 7,511 )

Corporate ( 56,196 ) $ 10,121 $ — $ 9 $ ( 46,066 )

International ( 13,222 ) $ 656 $ 5,951 $ — $ ( 6,615 )

Operating loss ( 76,513 )

Interest expense ( 23,485 )

Other income, net 1,218

Other expense, net ( 2,509 )

Loss before income taxes ( 102,507 )

Income tax benefit 32,013

Net earnings ( 4,160 )

Net loss ( 70,494 )

Net earnings attributable to noncontrolling interests ( 884 )

Net earnings attributable to Angi Inc.

Net loss attributable to Angi Inc.

shareholders $ ( 71,378 )

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(In thousands)

North America $ 48,967 $ 67,646 $ 37,481 $ 54,098 $ 208,192

Europe ( 10,322 ) $ 609 $ 2,434 $ 1,384 $ ( 5,895 )

Operating income 38,645

Ads and Leads $ 133,365 $ 14,241 $ 44,748 $ 38,443 $ 230,797

Services ( 44,592 ) $ 7,601 $ 3,638 $ 4,100 $ ( 29,253 )

Roofing — $ — $ — $ — $ —

Corporate ( 84,674 ) $ 60,752 $ — $ 52 $ ( 23,870 )

International ( 10,467 ) $ 1,055 $ 4,235 $ 307 $ ( 4,870 )

Operating loss ( 6,368 )

Interest expense ( 14,178 )

Other income, net 1,218

Earnings before income taxes 33,646

Loss before income taxes ( 19,328 )

Income tax benefit 15,168

Net earnings 35,314

Net loss ( 4,160 )

Net earnings attributable to noncontrolling interests ( 2,123 )

Net earnings attributable to Angi Inc.

Net loss attributable to Angi Inc.

shareholders $ ( 6,283 )

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents capital expenditures by reportable segment:

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Capital expenditures:

North America $ 67,772 $ 50,462 $ 64,215

Europe 2,443 2,026 4,589

Ads and Leads $ 76,786 $ 50,026 $ 37,849

Services 35,833 17,439 7,981

Roofing 873 306 —

International 2,860 2,444 6,658

Total $ 116,352 $ 70,215 $ 52,488

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12— LEASES

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Total lease liabilities $ 90,515 $ 105,521

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Lease Cost Income Statement Classification 2022 2021 2020

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16,506 25,712 19,627

Variable lease cost Cost of revenue — —

Variable lease cost Selling and marketing expense 200 1,087 2,314

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________________________________

(a) The years ended December 31, 2021 and 2020 includes $ 0.1 million and $ 0.04 million of short-term lease cost, respectively, and $ 1.8 million of sublease income for both years.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a) Includes (i) short-term lease expense of $ 0.4 million, $ 0.1 million, and $ 0.04 million, (ii) lease impairment charges of $ 2.3 million, $ 7.8 million, and $ 0.2 million, and (iii) sublease income of $ 4.7 million, $ 1.8 million, and $ 1.8 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Maturities of lease liabilities as of December 31, 2022 (b) :

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Discount rate 6.15 % 5.97 %

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2022 2021 2020

(In thousands)

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Cash paid for amounts included in the measurement of lease liabilities $ 23,117 $ 23,506 $ 20,939

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13— COMMITMENTS AND CONTINGENCIES

The Company has entered into certain off-balance sheet commitments that require the future purchase of services (“purchase obligations”).

Future payments under non-cancelable unconditional purchase obligations as of December 31, 2021 are as follows:

Amount of Commitment Expiration Per Period

(In thousands)

Purchase obligations $ 26,262 $ 4,515 $ — $ — $ 30,777

Purchase obligations include (i) payments of $ 13.0 million related to advertising commitments to be made in 2022, (ii) payments of $ 6.6 million related to technology contracts spend, (iii) payments of $ 6.1 million related to communication spend, and (iv) payments of $ 3.1 million related to background check services.

NOTE 13— CONTINGENCIES

In the ordinary course of business, the Company is a party to various lawsuits.

The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.

As a result, a $ 3.8 million legal reserve is established.

The Company establishes accruals for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.

The total accrual for legal matters is $ 13.5 million at December 31, 2022.

Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable.

Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss.

The Company also evaluates other contingent matters, including uncertain income tax positions and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss.

It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company.

See “ Note 3—Income Taxes ” for additional information related to income tax contingencies.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

See “ Note 3—Income Taxes ” for additional information related to uncertain income tax contingencies.

NOTE 14— RELATED PARTY TRANSACTIONS WITH IAC

Relationship with IAC

and IAC have entered into certain agreements to govern their relationship.

Allocation of CEO Compensation and Certain Expenses

Effective October 10, 2022, Joseph Levin, CEO of IAC and Chairman of Angi, was appointed CEO of Angi.

Levin serves as both CEO of IAC and Angi following his appointment.

For the period from October 10, 2022 to December 31, 2022, IAC allocated $ 2.1 million in costs to Angi (including salary, benefits, stock-based compensation and costs related to the CEO’s office).

These costs were allocated from IAC based upon time spent on Angi by Mr.

Management considers the allocation method to be reasonable.

Costs directly attributable to the Company that were initially paid for by IAC were billed by IAC to the Company.

Additionally, Angi and IAC have entered into certain agreements to govern their relationship.

These agreements include:

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Under the contribution agreement, the Company agreed to assume all of the assets and liabilities related to the Angi business and agreed to indemnify IAC against any losses arising out of any breach by the Company of the contribution agreement or the other transaction related agreements described below.

IAC also agreed to indemnify the Company against losses arising out of any breach by IAC of the contribution agreement or any of the other transaction related agreements described below.

IAC also agreed to indemnify the Company against any losses arising out of any breach by IAC of the contribution agreement or any of the other transaction related agreements described below.

Investor Rights Agreement

The investor rights agreement provides IAC with certain registration, preemptive, and governance rights related to the Company and the shares of its capital stock it holds, as well as certain governance rights for the benefit of stockholders other than IAC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Services Agreement

The services agreement governs services that IAC provides to the Company including, among others:

(i) assistance with certain legal, M&A, human resources, finance, risk management, internal audit and treasury functions, health and welfare benefits, information security services and insurance and tax affairs, including assistance with certain public company and unclaimed property reporting obligations;

(ii) accounting, controllership and payroll processing services;

(iii) investor relations services;

(iv) tax compliance services;

and (v) such other services as to which IAC and the Company may agree.

(i) assistance with certain legal, M&A, finance, risk management, internal audit and treasury functions, health and welfare benefits, information security services and insurance and tax affairs, including assistance with certain public company and unclaimed property reporting obligations and (ii) accounting, investor relations services, and tax compliance services.

The services agreement automatically renews annually for an additional one-year period for so long as IAC continues to own a majority of the outstanding shares of the Company’s common stock.

For the years ended December 31, 2022, 2021 and 2020, the Company was charged $ 3.8 million, $ 3.9 million and $ 4.8 million, respectively, by IAC for services rendered pursuant to the services agreement.

There were no outstanding receivables or payables pursuant to the services agreement as of December 31, 2021 and 2020, respectively.

There was $ 0.8 million in outstanding payables pursuant to the services agreement as of December 31, 2022.

There were no outstanding payables or receivables pursuant to the services agreement as of December 31, 2021.

Separately, the Company subleases office space to IAC and charged rent of $ 1.7 million, $ 1.6 million, and $ 1.8 million for the years ended December 31, 2022, 2021, and 2020, respectively.

IAC subleases office space to the Company and charged the Company $ 0.6 million of rent for the year ended December 31, 2021.

IAC did not sublease office space to the Company for the years ended December 31, 2020 and 2019.

There were no outstanding receivables due from IAC or payables due to IAC, pursuant to sublease agreements, for the year ended December 31, 2021.

At both December 31, 2020 and 2019, there were outstanding receivables of less than $ 0.1 million due from IAC, pursuant to sublease agreements, which were subsequently paid in full in the first quarter of 2021 and 2020, respectively.

IAC subleases office space to the Company and charged the Company $ 1.3 million and $ 0.6 million of rent for the years ended December 31, 2022 and 2021.

IAC did not sublease office space to the Company for the year ended December 31, 2020.

There were no outstanding receivables due from IAC or payables due to IAC, pursuant to sublease agreements, for the years ended December 31, 2022 and 2021.

At December 31, 2020, there were outstanding receivables of less than $ 0.1 million due from IAC, pursuant to sublease agreements, which were subsequently paid in full in the first quarter of 2021.

Tax Sharing Agreement

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

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

At December 31, 2022 and 2021, the Company had outstanding payables of $ 1.4 million and $ 0.3 million, respectively, due to IAC pursuant to the tax sharing agreement, which are included in “Accrued expenses and other current liabilities,” in the accompanying consolidated balance sheet.

There were no payments to or refunds from IAC pursuant to this agreement during the year ended December 31, 2022.

There were $ 1.5 million of payments to IAC pursuant to this agreement during the year ended December 31, 2021.

There were $ 3.1 million of refunds received from IAC pursuant to this agreement during the year ended December 31, 2020.

Employee Matters Agreement

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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 the Company’s Board of Directors, Angi will no longer participate in IAC’s employee benefit plans, but will establish its own employee benefit plans that will be substantially similar to the plans sponsored by IAC prior to the Combination.

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

This agreement also provides that IAC may require stock appreciation rights granted prior to the closing of the Combination and equity awards in our subsidiaries to be settled in either shares of our Class A common stock or IAC common stock.

To the extent shares of IAC common stock are issued in settlement of these awards, the Company is obligated to reimburse IAC for the cost of those shares by issuing shares of our Class A common stock in the case of stock appreciation rights granted prior to the closing of the Combination and shares of our Class B common stock in the case of equity awards in our subsidiaries.

In addition, the employee matters agreement requires the Company to reimburse IAC for the cost of any IAC equity awards held by Angi current and former employees, with IAC having the ability to elect to receive payment in cash or shares of our Class B common stock.

This agreement also provides that IAC has the ability to require that stock appreciation rights granted prior to the closing of the Combination and equity awards denominated in shares of our subsidiaries to be settled in either shares of our Class A common stock or IAC common stock.

To the extent that shares of IAC common stock are issued in settlement of these awards, the Company is obligated to reimburse IAC for the cost of those shares by issuing shares of our

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Class A common stock in the case of stock appreciation rights granted prior to the closing of the Combination and shares of our Class B common stock in the case of equity awards denominated in shares of our subsidiaries.

Lastly, pursuant to the employee matters agreement, in the event of a distribution of Angi Inc.

capital stock to IAC stockholders in a transaction intended to qualify as tax-free for U.S.

federal income tax purposes, the Compensation Committee of the IAC Board of Directors has the exclusive authority to determine the treatment of outstanding IAC equity awards.

Class A Common Stock, which Angi Inc.

would be obligated to assume and which would be dilutive to Angi Inc.'s stockholders.

For the years ended December 31, 2021, 2020, and 2019, 0.2 million, 0.3 million, and 0.5 million shares of Angi Class B common stock were issued to IAC, respectively, pursuant to the employee matters agreement as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Angi employees.

For the years ended December 31, 2021, 2.6 million shares of Angi Inc.

Class A common stock were issued to IAC pursuant to the employee matters agreement as reimbursement for IAC common stock issued in connection with the exercise and settlement of certain Angi Inc.

federal income tax purposes, the Compensation and Human Resources Committee of the IAC Board of Directors has the exclusive authority to determine the treatment of outstanding IAC equity awards.

Such authority includes (but is not limited to) the ability to convert all or part of IAC equity awards outstanding immediately prior to the distribution into equity awards denominated in shares of our Class A Common Stock, which we would be obligated to assume and which would be dilutive to our stockholders.

For the year ended December 31, 2022, no Class A or Class B common stock was issued to IAC pursuant to the employee matters agreement as reimbursement for IAC common stock issued in connection with the exercise and settlement of certain Angi Inc.

stock appreciation rights.

There were no shares of Angi Inc.

Class A common stock issued to IAC during the years ended December 31, 2020 and 2019.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2021, 0.2 million and 2.6 million shares of Angi Class B common stock and Class A common stock were issued to IAC, respectively, pursuant to the employee matters agreement as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Angi employees.

For the year ended December 31, 2020, 0.3 million shares of Angi Class B common stock and no shares of Class A common stock were issued to IAC, respectively, pursuant to the employee matters agreement as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Angi employees.

NOTE 15— BENEFIT PLANS

7 unchanged sentences

The Company’s contributions for these plans for the years ended December 31, 2022, 2021, and 2020 were $ 0.8 million, $ 0.7 million, and $ 0.6 million, respectively.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 16— CONSOLIDATED FINANCIAL STATEMENT DETAILS

1 unchanged sentence

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

December 31, 2021 December 31, 2020

December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019

(In thousands)

3 unchanged sentences

Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows $ 322,136 $ 429,485 $ 813,561 $ 391,478

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted cash included in other current assets at December 31, 2022 primarily consisted of cash reserved to comply with insurance company claim payment requirements.

Restricted cash included in other current assets at December 31, 2021 primarily consisted of funds collected from service providers for disputed payments which were not settled as of the period end, in addition to cash reserved to fund insurance claims.

Restricted cash included in other current assets at December 31, 2020 primarily consists of cash received from customers at Angi Inc.

through the Handy platform, representing funds collected for payment to service providers, which were not settled as of the period end.

Restricted cash included in other non-current assets for all periods presented above primarily consisted of deposits related to leases.

Restricted cash included in other non-current assets at December 31, 2021 also included cash held related to a check endorsement guarantee for Angi Roofing.

Restricted cash included in other non-current assets at December 31, 2021 also included cash held related to a check endorsement guarantee for Roofing.

(In thousands)

13 unchanged sentences

Capitalized software, leasehold improvements and equipment, net $ 153,855 $ 118,267

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands)

2 unchanged sentences

Accrued advertising expense 40,312 36,231

Current legal liabilities 13,585 3,831

Current lease liabilities 16,908 17,098

1 unchanged sentence

Accrued expenses and other current liabilities $ 200,015 $ 185,747

Other (expense) income, net

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other income (expense), net

Years Ended December 31,

3 unchanged sentences

Gain (loss) on the sale of a business (a)

31 ( 454 ) ( 218 )

Foreign exchange (losses) gains ( 1,656 ) ( 57 ) 559

Foreign exchange losses ( 3,364 ) ( 1,656 ) ( 57 )

Loss on extinguishment of debt (b)

1 unchanged sentence

Other 5 ( 13 ) 4

Other (expense) income, net $ ( 2,509 ) $ 1,218 $ 6,494

Other income (expense), net $ 1,178 $ ( 2,509 ) $ 1,218

________________________

8 unchanged sentences

Interest expense—third-party $ 19,375 $ 21,450 $ 5,367

Interest expense—related party — — 54

Income tax payments, including amounts paid to IAC for Angi Inc.'s share of IAC's consolidated tax liability $ 1,551 $ 4,647 $ 1,789

3 unchanged sentences

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 7A. Quantitative and Qualitative Disclosures About Market Risk