Angi Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s long-term debt. At December 31, 2023, the principal amount of the Company’s outstanding debt comprises $500.0 million of ANGI Group Senior Notes, which bears interest at a fixed rate. If market rates decline relative to interest rates on the ANGI Group Senior Notes, the Company runs the risk that the related required interest payments will exceed those based on market rates. A 100-basis point increase or decrease in the level of interest rates would, respectively, decrease or increase the fair value of the fixed-rate debt by $20.0 million. Such potential increase or decrease in fair value is based on certain simplifying assumptions, including an immediate increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period, nor changes in the credit profile. Foreign Currency Exchange Risk The Company has operations in certain foreign markets, primarily in various jurisdictions within the European Union and the United Kingdom. The Company has exposure to foreign currency exchange risk related to its foreign subsidiaries that transact business in a functional currency other than the U.S. dollar. As a result, as foreign currency exchange rates fluctuate, the translation of the statement of operations of the Company’s international businesses into U.S. dollars affects year-over-year comparability of operating results. In addition, certain of the Company’s U.S. operations have customers in international markets. International revenue, including revenue of our operations located outside the U.S., which is measured based upon where the customer is located, accounted for 9%, 6%, and 6% for the years ended December 31, 2023, 2022 and 2021, respectively. The Company is also exposed to foreign currency transaction gains and losses to the extent it or its subsidiaries conduct transactions in and/or have assets and/or liabilities that are denominated in a currency other than the entity’s functional currency. The Company recorded foreign exchange gains and (losses) of $1.2 million, $(3.4) million, and $(1.7) million for the year ended December 31, 2023, 2022 and 2021, respectively. The Company’s exposure to foreign currency exchange gains or losses have not been material to the Company; therefore, the Company has not hedged its foreign currency exposures. Any growth and expansion of our international operations increases our exposure to foreign exchange rate fluctuations. Significant foreign exchange rate fluctuations, in the case of one currency or collectively with other currencies, could have a significant impact on our future results of operations. 49 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Angi Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Angi Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. 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. 50 Table of Contents Revenue Processed By Highly Automated Proprietary Systems - Leads and Services Description of the Matter As more fully described in Note 2 to the consolidated financial statements, the Company’s revenue primarily consists of domestic Ads and Leads revenue as well as Services revenue. Ads revenue is primarily derived from service professionals under contract for advertising. Leads revenue includes consumer connection revenue for consumer matches as well as membership subscription revenue from service professionals. Services revenue primarily reflects domestic revenue from pre-priced offerings by which the consumer requests services through a Company platform and the Company connects them with a service professional to perform the service. In aggregate, Leads and Services Revenue was approximately $1 billion, as disclosed in Note 9, for the year ended December 31, 2023. The Company’s Leads and Services Revenue is based on contractual terms with the Company’s customers and is comprised of a significant volume of low-dollar transactions. The processing and recording of Leads and Services revenue is highly automated within the Company’s information technology (“IT”) systems that are principally proprietary. Given the complexity of the IT systems involved, auditing Leads and Services Revenue required a significant extent of effort and increased involvement of professionals with expertise in IT to identify, test, and evaluate the Company’s relevant systems and automated controls utilized to process and record these transactions. 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 related to the recording and accounting for Leads and Services Revenue. With the involvement of IT professionals, we identified the relevant systems used by the Company to process, calculate, and record revenue and the related deferred revenue. Where applicable, we tested the IT general controls over those systems, including testing of user access controls, change management controls, and IT operations controls as well as certain automated application controls related to the recording of revenue and the related deferred revenue at period end. We also tested the Company’s controls to address the completeness and accuracy of transaction data. Our audit procedures related to the Company’s Leads and Services Revenue also included reconciling revenue recorded to cash received, testing the details for a sample of specific cash receipts to third party banking information and evidence of the related customer arrangement, testing the calculations of revenue and the related deferred revenue performed within the Company’s systems to the amount recorded in the general ledger, and testing revenue transactions occurring near year-end. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2017. New York, New York February 29, 2024 51 Table of Contents ANGI INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31, 2023 2022 (In thousands, except par value amounts) ASSETS Cash and cash equivalents $ 364,044 $ 321,155 Accounts receivable, net 51,100 71,967 Other current assets 72,075 64,330 Current assets of discontinued operations — 26,750 Total current assets 487,219 484,202 Capitalized software, leasehold improvements and equipment, net 109,527 152,559 Goodwill 886,047 882,949 Intangible assets, net 170,773 178,105 Deferred income taxes 148,183 138,378 Other non-current assets, net 54,466 61,527 Non-current assets of discontinued operations — 10,058 TOTAL ASSETS $ 1,856,215 $ 1,907,778 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES: Accounts payable $ 29,467 $ 30,393 Deferred revenue 49,859 50,129 Accrued expenses and other current liabilities 179,329 182,794 Current liabilities of discontinued operations — 18,468 Total current liabilities 258,655 281,784 Long-term debt, net 496,047 495,284 Deferred income taxes 2,739 2,906 Other long-term liabilities 54,266 75,507 Non-current liabilities of discontinued operations — 919 Commitments and contingencies SHAREHOLDERS’ EQUITY: Class A common stock, $ 0.001 par value; authorized 2,000,000 shares; issued 106,848 and 102,811 shares, respectively, and outstanding 82,208 and 82,600 , respectively 107 103 Class B convertible common stock, $ 0.001 par value; authorized 1,500,000 shares; 422,019 shares issued and outstanding 422 422 Class C common stock, $ 0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding — — Additional paid-in capital 1,447,353 1,405,294 Accumulated deficit ( 231,019 ) ( 190,079 ) Accumulated other comprehensive income (loss) 1,187 ( 1,172 ) Treasury stock, 24,640 and 20,211 shares, respectively ( 177,283 ) ( 166,184 ) Total Angi Inc. shareholders’ equity 1,040,767 1,048,384 Noncontrolling interests 3,741 2,994 Total shareholders’ equity 1,044,508 1,051,378 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,856,215 $ 1,907,778 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 52 Table of Contents ANGI INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Year Ended December 31, 2023 2022 2021 (In thousands, except per share data) Revenue $ 1,358,748 $ 1,764,355 $ 1,619,317 Cost of revenue (exclusive of depreciation shown separately below) 62,547 337,396 274,661 Gross Profit 1,296,201 1,426,959 1,344,656 Operating costs and expenses: Selling and marketing expense 765,205 890,321 871,544 General and administrative expense 359,389 447,140 394,974 Product development expense 96,543 73,821 70,933 Depreciation 93,604 77,523 59,025 Amortization of intangibles 7,958 13,774 16,097 Total operating costs and expenses 1,322,699 1,502,579 1,412,573 Operating loss ( 26,498 ) ( 75,620 ) ( 67,917 ) Interest expense ( 20,137 ) ( 20,107 ) ( 23,485 ) Other income (expense), net 18,427 1,169 ( 2,510 ) Loss from continuing operations before income taxes ( 28,208 ) ( 94,558 ) ( 93,912 ) Income tax (provision) benefit ( 1,839 ) 5,390 29,894 Net loss from continuing operations ( 30,047 ) ( 89,168 ) ( 64,018 ) Loss from discontinued operations, net of tax ( 10,264 ) ( 38,814 ) ( 6,476 ) Net loss ( 40,311 ) ( 127,982 ) ( 70,494 ) Net earnings attributable to noncontrolling interests ( 629 ) ( 468 ) ( 884 ) Net loss attributable to Angi Inc. shareholders $ ( 40,940 ) $ ( 128,450 ) $ ( 71,378 ) Per share information from continuing operations: Basic loss per share $ ( 0.06 ) $ ( 0.18 ) $ ( 0.13 ) Diluted loss per share $ ( 0.06 ) $ ( 0.18 ) $ ( 0.13 ) Per share information attributable to Angi Inc. shareholders: Basic loss per share $ ( 0.08 ) $ ( 0.26 ) $ ( 0.14 ) Diluted loss per share $ ( 0.08 ) $ ( 0.26 ) $ ( 0.14 ) Stock-based compensation expense by function: Selling and marketing expense $ 6,264 $ 5,927 $ 4,033 General and administrative expense 28,386 36,015 19,268 Product development expense 8,764 8,860 4,870 Total stock-based compensation expense $ 43,414 $ 50,802 $ 28,171 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 53 Table of Contents ANGI INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS Year Ended December 31, 2023 2022 2021 (In thousands) Net loss $ ( 40,311 ) $ ( 127,982 ) $ ( 70,494 ) Other comprehensive income (loss): Change in foreign currency translation adjustment 2,501 ( 5,028 ) ( 1,219 ) Comprehensive loss ( 37,810 ) ( 133,010 ) ( 71,713 ) Components of comprehensive (income) loss attributable to noncontrolling interests: Net earnings attributable to noncontrolling interests ( 629 ) ( 468 ) ( 884 ) Change in foreign currency translation adjustment attributable to noncontrolling interests ( 142 ) 547 ( 109 ) Comprehensive (income) loss attributable to noncontrolling interests ( 771 ) 79 ( 993 ) Comprehensive loss attributable to Angi Inc. shareholders $ ( 38,581 ) $ ( 132,931 ) $ ( 72,706 ) The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 54 ANGI INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY Years Ended December 31, 2023, 2022, and 2021 Class A Common Stock $0.001 Par Value Class B Convertible Common Stock $0.001 Par Value Class C Common Stock $0.001 Par Value Total Angi Inc. Shareholders’ Equity Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Redeemable Noncontrolling Interests Additional Paid-in Capital Accumulated Deficit Treasury Stock Noncontrolling Interests $ Shares $ Shares $ Shares (In thousands) Balance as of December 31, 2020 $ 26,364 $ 94 94,238 $ 422 421,862 $ — — $ 1,379,469 $ 9,749 $ 4,637 $ ( 122,081 ) $ 1,272,290 $ 10,567 $ 1,282,857 Net (loss) earnings ( 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 Inc. pursuant to the employee matters agreement — 3 2,588 — 157 — — ( 3 ) — — — — — — Purchase of treasury stock — — — — — — — — — — ( 35,959 ) ( 35,959 ) — ( 35,959 ) Purchase of noncontrolling interest ( 28,318 ) — — — — — — — — — — — ( 160 ) ( 160 ) Adjustment of redeemable noncontrolling interests to redemption amount 1,462 — — — — — — ( 430 ) — — — ( 430 ) — ( 430 ) Other — — — — — — — ( 410 ) — — — ( 410 ) — ( 410 ) Balance as of December 31, 2021 $ — $ 100 99,745 $ 422 422,019 $ — — $ 1,350,457 $ ( 61,629 ) $ 3,309 $ ( 158,040 ) $ 1,134,619 $ 10,908 $ 1,145,527 Net (loss) earnings — — — — — — — — ( 128,450 ) — — ( 128,450 ) 468 ( 127,982 ) 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 ) Purchase of treasury stock — — — — — — — — — — ( 8,144 ) ( 8,144 ) — ( 8,144 ) Adjustment to noncontrolling interests resulting from the reorganization of a foreign subsidiary — — — — — — — 7,580 — — — 7,580 ( 7,835 ) ( 255 ) Other — — — — — — — ( 4 ) — — — ( 4 ) — ( 4 ) Balance as of December 31, 2022 $ — $ 103 102,811 $ 422 422,019 $ — — $ 1,405,294 $ ( 190,079 ) $ ( 1,172 ) $ ( 166,184 ) $ 1,048,384 $ 2,994 $ 1,051,378 Net (loss) earnings — — — — — — — — ( 40,940 ) — — ( 40,940 ) 629 ( 40,311 ) Other comprehensive income — — — — — — — — — 2,359 — 2,359 142 2,501 Stock-based compensation expense — — — — — — — 48,388 — — — 48,388 — 48,388 Issuance of common stock pursuant to stock-based awards, net of withholding taxes — 4 4,037 — — — — ( 6,292 ) — — — ( 6,288 ) — ( 6,288 ) Purchase of treasury stock — — — — — — — — — — ( 11,099 ) ( 11,099 ) — ( 11,099 ) Other — — — — — — — ( 37 ) — — — ( 37 ) ( 24 ) ( 61 ) Balance as of December 31, 2023 $ — $ 107 106,848 $ 422 422,019 $ — — $ 1,447,353 $ ( 231,019 ) $ 1,187 $ ( 177,283 ) $ 1,040,767 $ 3,741 $ 1,044,508 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 55 Table of Contents ANGI INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Years Ended December 31, 2023 2022 2021 (In thousands) Cash flows from operating activities attributable to continuing operations: Net loss $ ( 40,311 ) $ ( 127,982 ) $ ( 70,494 ) Less: Loss from discontinued operations, net of tax ( 10,264 ) ( 38,814 ) ( 6,476 ) Net loss attributable to continuing operations ( 30,047 ) ( 89,168 ) ( 64,018 ) Adjustments to reconcile net loss to net cash provided by operating activities attributable to continuing operations: Depreciation 93,604 77,523 59,025 Provision for credit losses 79,385 104,261 86,594 Stock-based compensation expense 43,414 50,802 28,171 Non-cash lease expense (including impairment of right-of-use assets) 11,878 13,799 20,484 Amortization of intangibles 7,958 13,774 16,097 Deferred income taxes ( 10,009 ) ( 9,758 ) ( 34,217 ) Foreign currency transaction (gain) loss ( 1,291 ) 3,357 1,679 Other adjustments, net 232 ( 811 ) 8,262 Changes in assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable ( 58,168 ) ( 111,865 ) ( 106,966 ) Other assets ( 13,852 ) ( 658 ) 5,600 Accounts payable and other liabilities ( 8,045 ) 11,632 21,737 Operating lease liabilities ( 20,678 ) ( 16,733 ) ( 16,644 ) Income taxes payable and receivable 158 3,213 263 Deferred revenue ( 355 ) ( 2,966 ) ( 1,491 ) Net cash provided by operating activities attributable to continuing operations 94,184 46,402 24,576 Cash flows from investing activities attributable to continuing operations: Capital expenditures ( 47,780 ) ( 115,479 ) ( 69,909 ) Purchases of marketable debt securities ( 12,362 ) — — Proceeds from maturities of marketable debt securities 12,500 — 50,000 Net proceeds from the sale of a business 1,000 — 750 Proceeds from sales of fixed assets 85 162 — Other — — ( 253 ) Net cash used in investing activities attributable to continuing operations ( 46,557 ) ( 115,317 ) ( 19,412 ) Cash flows from financing activities attributable to continuing operations: Principal payments on Term Loan — — ( 220,000 ) Purchases of treasury stock ( 10,932 ) ( 8,144 ) ( 35,403 ) Withholding taxes paid on behalf of employees on net settled stock-based awards ( 5,994 ) ( 8,827 ) ( 61,908 ) Purchase of noncontrolling interests — — ( 27,857 ) Other, net ( 57 ) ( 256 ) — Net cash used in financing activities attributable to continuing operations ( 16,983 ) ( 17,227 ) ( 345,168 ) Total cash provided by (used in) continuing operations 30,644 ( 86,142 ) ( 340,004 ) Net cash provided by (used in) operating activities attributable to discontinued operations 10,661 ( 19,333 ) ( 18,367 ) Net cash provided by (used in) investing activities attributable to discontinued operations 325 ( 769 ) ( 25,660 ) Total cash provided by (used in) discontinued operations 10,986 ( 20,102 ) ( 44,027 ) Effect of exchange rate changes on cash and cash equivalents and restricted cash 535 ( 1,105 ) ( 45 ) Net increase (decrease) in cash and cash equivalents and restricted cash 42,165 ( 107,349 ) ( 384,076 ) Cash and cash equivalents and restricted cash at beginning of period 322,136 429,485 813,561 Cash and cash equivalents and restricted cash at end of period $ 364,301 $ 322,136 $ 429,485 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 56 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1— ORGANIZATION Nature of Operations Angi Inc. connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. Approximately 196,000 transacting service professionals actively sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended December 31, 2023. Additionally, consumers turned to at least one of our businesses to find a service professional for approximately 23 million projects during the year ended December 31, 2023. The Company has three operating segments: (i) Ads and Leads; (ii) Services; and (iii) International (consisting of businesses in Europe and Canada) and operates under multiple brands including Angi, HomeAdvisor, and Handy. 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. 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, 2023, IAC Inc. (“IAC”) owned 84.2 % and 98.1 % of the economic and voting interests, respectively, of the Company. Total Home Roofing, LLC Sale On November 1, 2023, Angi Inc. completed the sale of 100 % of its wholly-owned subsidiary, Total Home Roofing, LLC (“THR,” which comprised its Roofing segment), and has reflected it as a discontinued operation in its financial statements. See “ Note 16 — Discontinued Operations ” for additional details. The financial information for prior periods has been recast to conform to the current year presentation. NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The Company prepares its consolidated financial statements (referred to herein as “financial statements”) in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances between and among the Company and its subsidiaries have been eliminated. In the opinion of management, the assumptions underlying the historical financial statements, including the basis on which the expenses have been allocated from IAC, are reasonable. However, the allocations may not reflect all of the expenses that Angi Inc. may have incurred as a standalone public company for the periods presented. See “ Note 17—Related Party Transactions with IAC ” for information on transactions between Angi and IAC. COVID-19 Update The COVID-19 pandemic and the various responses to it created significant volatility, uncertainty and economic disruption. Recently, there has been a return to normal societal interactions, including the way we operate our business. 57 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As previously disclosed, the impact of COVID-19 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 early 2021, service requests started to decline in May 2021 and continued to decline during 2022 due, in part, to COVID-19 measures that were more widely in place in prior periods. Our ability to monetize service requests rebounded modestly in the second half of 2021 and the first half of 2022; however, that improved monetization plateaued in the third quarter of 2022 returning to monetization rates similar to those experienced pre-COVID-19. Outlook 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 severity of resurgences of COVID-19 caused by variant strains of the virus, the effectiveness of vaccines and attitudes toward receiving them, materials and supply chain constraints, labor shortages, the scope of governmental and other restrictions on travel, discretionary services and other activity, and public reactions to these developments. Accounting Estimates Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its financial statements in accordance with GAAP. These estimates, judgments, and assumptions impact the reported amounts of assets, liabilities, revenue, and expenses and the related disclosure of assets and liabilities. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to: the fair values of cash equivalents and marketable debt securities; 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; the recoverability of right-of-use assets (“ROU assets”); the useful lives and recoverability of capitalized software, leasehold improvements, equipment, and definite-lived intangible assets; the recoverability of goodwill and indefinite-lived intangible assets; contingencies, unrecognized tax benefits; the liability for potential refunds and customer credits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets, and other factors that the Company considers relevant. Revenue Recognition The Company accounts for a contract with a customer when it has approval and commitment from all authorized parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. 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. The Company’s disaggregated revenue disclosures are presented in “ Note 9—Segment Information .” Ads and Leads Revenue Ads and Leads revenue includes consumer connection revenue, which comprises fees paid by service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service), revenue from service professionals under contract for advertising, membership subscription revenue from service professionals and consumers, and revenue from other services. 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 a liability for potential credits issued to services providers. 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. Angi website, mobile and call center advertising revenue is recognized ratably over the contract term. 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 58 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Services Revenue Services revenue primarily reflects revenue from pre-priced offerings by which the consumer requests services through the Company’s platform and the Company engages 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. From January 1, 2020 through December 31, 2022, 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 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 revenue to be reported as the net amount of what is received from the consumer after deducting the amounts owed to the service professional providing the service effective for all arrangements entered into after December 31, 2022. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition. For the years ended December 31, 2022 and 2021, if Services revenue were recorded on a net basis, revenue would have been reduced by $ 242.6 million and $ 180.7 million, respectively. International Revenue International revenue primarily comprises 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. The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue. Arrangements with Multiple Performance Obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers, which are directly observable or based on an estimate if not directly observable. Practical Expedients and Exemptions For contracts that have an original duration of one year or less, the Company uses the practical expedient available under Accounting Standards Codification (“ASC”) 606 (“ASC 606”), applicable to such contracts and does not consider the time value of money. 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 59 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. The Company also applies the practical expedient for sales commissions where the anticipated customer relationship period is one year or less as noted below. Costs to Obtain a Contract with a Customer The Company has determined that commissions paid to employees pursuant to certain sales incentive programs, meet the requirements to be capitalized as a cost of obtaining a contract. Capitalized sales commissions are amortized over the estimated customer relationship period and are included in “Selling and marketing expense” in the statement of operations. The Company calculates the anticipated customer relationship period as the average customer life, which is based on historical data. When customer renewals are expected and the renewal commission is not commensurate with the initial commission, the average customer life includes renewal periods. For sales incentive programs where the anticipated customer relationship period is one year or less, the Company has elected the practical expedient to expense the costs as incurred. Beginning October 1, 2022, commissions earned on certain transactions within the Ads & Leads segment were expensed as incurred after determining the related customer relationship was less than one year. The following table presents the capitalized sales commissions balances and balance sheet classification at the balance sheet dates: Classification December 31, 2023 December 31, 2022 (In thousands) Other current assets $ 34,927 $ 37,220 Other non-current assets $ 3,528 $ 1,904 During the years ended December 31, 2023 and 2022, the Company recognized expense of $ 61.4 million and $ 77.4 million, respectively, related to the amortization of these capitalized costs. Accounts Receivable, Net of the Allowance for Credit Losses Accounts receivable include amounts billed and currently due from customers. The allowance for credit losses is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the specific customer’s ability to pay its obligation and any other forward-looking data regarding customers’ ability to pay that is available. 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. Deferred Revenue Deferred revenue consists of payments that are received or are contractually due in advance of the Company’s performance obligation. The Company’s deferred revenue is reported on a contract-by-contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the remaining term or expected completion of its performance obligation is one year or less. At December 31, 2022, the current and non-current deferred revenue balances were $ 50.1 million and less than $ 0.1 million, respectively, and during the year ended December 31, 2023, the Company recognized $ 48.0 million that was included in the deferred revenue balance as of December 31, 2022. At December 31, 2021, the current and non-current deferred revenue balances were $ 53.2 million and $ 0.1 million, respectively, and during the year ended December 31, 2022, the Company recognized $ 52.8 million of revenue that was included in the deferred revenue balance at December 31, 2021. The current and non-current deferred revenue balances at December 31, 2023 are $ 49.9 million and less than $ 0.1 million, respectively. Non-current deferred revenue is included in “Other long-term liabilities” in the balance sheet. 60 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Fair Value Measurements The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are: • Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets. • Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used. • Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities. The Company’s non-financial assets, such as goodwill, intangible assets, ROU assets, capitalized software, leasehold improvements and equipment are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs. Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments, with maturities of less than 91 days from the date of purchase. Domestically, cash equivalents consist of AAA rated government money market funds, treasury discount notes, and time deposits. Internationally, there are no cash equivalents at December 31, 2023 and 2022. Investments in Marketable Debt Securities At times, 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 earnings. The Company reviews its debt securities for impairment, including from risk of credit loss, each reporting period. The Company recognizes an unrealized loss on debt securities in net loss when the impairment is determined to be other-than-temporary. Factors the Company considers in making such determination include the duration, severity and reason for the decline in value and the potential recovery and our intent to sell the debt security. 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 income (expense), net. The Company held no marketable debt securities at December 31, 2023 and 2022. Capitalized Software, Leasehold Improvements and Equipment Capitalized software, leasehold improvements and equipment, including significant improvements, are recorded at cost or at fair value to the extent acquired in a business combination. Repairs and maintenance costs are expensed as incurred. Amortization of leasehold improvements, which is included in “Depreciation” in the statement of operations, and depreciation are computed using the straight-line method over the estimated useful lives of the assets, or, in the case of leasehold improvements, the lease term, if shorter. 61 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Asset Category Estimated Useful Lives Capitalized software and computer equipment 2 to 3 Years Furniture and other equipment 5 to 7 Years Leasehold improvements 5 to 25 Years The Company capitalizes certain internal use software costs including external direct costs utilized in developing or obtaining the software and compensation for personnel directly associated with the development of the software. Capitalization of such costs begins when the preliminary project stage is complete and ceases when the project is substantially complete and ready for its intended purpose. The net book value of capitalized internal use software was $ 92.3 million and $ 128.6 million at December 31, 2023 and 2022, respectively. Business Combinations The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. The Company usually obtains the assistance of outside valuation experts to assist in the allocation of purchase price to the identifiable intangible assets acquired. While outside valuation experts may be used, management has ultimate responsibility for the valuation methods, models and inputs used and the resulting purchase price allocation. The excess purchase price over the value of net tangible and identifiable intangible assets acquired is recorded as goodwill and is assigned to the reporting unit(s) that is expected to benefit from the business combination as of the acquisition date. Goodwill and Indefinite-Lived Intangible Assets 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, 2023, the Company had four reporting units: Ads and Leads, Services, Roofing, and International. THR was sold on November 1, 2023 and is reflected as a discontinued operation in the Company’s financial statements. See “ Note 1—Organization ” for additional information. 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 estimated fair value, a goodwill impairment equal to the excess is recorded. For the Company’s annual goodwill test at October 1, 2023, a qualitative assessment of the Ads and Leads, Services, and International reporting units was performed by the Company to evaluate whether it is more likely than not that the fair value of these reporting units was in excess of their respective carrying values. The primary factors that the Company considered in its qualitative assessment for each of these reporting units are described below: • The Company considered the strong forecasted operating performance, in addition to actual operating results in the current year, of the Ads and Leads, Services, and International reporting units. • The Company also considered the prior year annual valuations of the Ads and Leads, Services, and International reporting units prepared as of October 1, 2022, and valuations of the International reporting unit prepared approximate to, however, not as of, October 1, 2023, in connection with the issuance and/or settlement of equity awards that are denominated in the equity of this business. Based on these factors we concluded that it is not more likely than not that the fair value of the reporting units is below their respective carrying amounts. As of October 1, 2023, prior to its sale on November 1, 2023, the Roofing reporting unit had no goodwill or indefinite-lived intangible assets. 62 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) If and when a quantitative test is performed, the fair value of the Company’s reporting units are determined using both an income approach based on discounted cash flows (“DCF”) and 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. The expected cash flows used in the DCF analyses are based on the Company’s most recent forecast and budget and, for years beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows of the respective reporting units. 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. 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. From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit. 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. 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. The Company determines the fair value of indefinite-lived intangible assets other than goodwill using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company’s trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 15.0 % to 17.0 % in 2023 and 12.0 % to 18.5 % in 2022, and the royalty rates used ranged from 2.5 % to 4.5 % in 2023 and 2.0 % to 4.5 % in 2022. The October 1, 2023 and 2021 annual assessments of goodwill and indefinite-lived intangible assets did not identify any impairments. The October 1, 2022 annual assessment identified a $ 26.0 million goodwill impairment at the Roofing reporting unit, which is reflected as a discontinued operation in the Company’s financial statements. Long-Lived Assets Long-lived assets, other than goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. Advertising Costs Advertising costs are expensed in the period incurred (when the advertisement first runs for production costs that are initially capitalized) and represent online marketing, including fees paid to search engines, offline marketing, which is primarily television advertising and partner-related payments to those who direct traffic to our platforms. Advertising expense was $ 459.4 million, $ 558.4 million and $ 553.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. Legal Costs Legal costs, other than certain costs incurred to obtain financing, are expensed as incurred. Debt Issuance Costs 63 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Costs incurred to obtain financing are deferred and amortized to “Interest expense” in the statement of operations over the related financing period using the effective interest method. The Company records debt issuance costs as a direct reduction of the carrying value of the related debt. Income Taxes The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax provision and/or benefit has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the statement of cash flows. The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. 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, 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 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. Earnings Per Share Basic earnings per share is computed by dividing net earnings attributable to Angi Inc. shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock appreciation rights, stock options and other commitments to issue common stock were exercised or equity awards vested resulting in the issuance of common stock that could share in the earnings of the Company. See “ Note 13—Loss per share ” for additional information on dilutive securities. Foreign Currency Translation and Transaction Gains and Losses The financial position and operating results of foreign entities whose primary economic environment is based on their local currency are consolidated using the local currency as the functional currency. These local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenue and expenses of these operations are translated at average rates of exchange during the period. Translation gains and losses are included in accumulated other comprehensive income (loss) as a component of shareholders’ equity. Transaction gains and losses resulting from assets and liabilities denominated in a currency other than the functional currency are included in the statement of operations as a component of other income (expense), net. Translation gains and losses relating to foreign entities that are liquidated or substantially liquidated are reclassified out of accumulated other comprehensive income (loss) into earnings. See “ Note 14—Financial Statement Details ” for additional information regarding foreign currency exchange gains and losses. Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is expensed over the requisite service period. See “ Note 10—Stock‑based Compensation ” for a discussion of the Company’s stock-based compensation plans. 64 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Redeemable Noncontrolling Interests Noncontrolling interests in the subsidiaries of the Company are ordinarily reported on the balance sheet within shareholders’ equity, separately from the Company’s equity. However, securities that are redeemable at the option of the holder and not solely within the control of the issuer must be classified outside of shareholders’ equity. Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders’ equity in the balance sheet. In connection with the acquisition of certain subsidiaries, management of these businesses has retained an ownership interest. The Company is party to fair value put and call arrangements with respect to these interests. These put and call arrangements allow management of these businesses to require the Company to purchase their interests or allow the Company to acquire such interests at fair value, respectively. The put arrangements do not meet the definition of a derivative instrument as the put agreements do not provide for net settlement. These put and call arrangements become exercisable by the Company and the counter-party at various dates in the future. These put arrangements are exercisable by the counter-party outside the control of the Company. Accordingly, to the extent that the redemption amount of these interests exceeds the value determined by normal noncontrolling interest accounting, the value of such interests is adjusted to the redemption amount with a corresponding adjustment to additional paid-in capital. During the year ended December 31, 2021, the remaining redeemable non-controlling interest was exercised for which the Company had recorded an adjustment of $ 0.4 million to increase this interest to its redemption amount. Adjustments to this interest required high levels of judgment and were based on various valuation techniques, including market comparables and discounted cash flow projections. Certain Risks and Concentrations 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. Financial instruments, which potentially subject the Company to concentration of credit risk, consist of cash and cash equivalents. Cash and cash equivalents are maintained with financial institutions and are in excess of any applicable third-party insurance limits, such as the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted by the Company There are no recently issued accounting pronouncements adopted by the Company during the year ended December 31, 2023. Recent Accounting Pronouncements Not Yet Adopted by the Company ASU 2023-07— Segment Reporting (Topic 280)— Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07 , which is intended to provide users of financial statements with more decision-useful information about reportable segments of a public business entity, primarily through enhanced disclosures of significant segment expenses. This ASU requires annual and interim disclosures of significant expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss and an amount and description of its composition of other segment items. The provisions of this ASU also require entities to include all annual disclosures required by Topic 280 in the interim periods and permits entities to include multiple measures of a segment's profit or loss if such measures are used by the CODM to assess segment performance and determine allocation of resources, provided that at least one of those measures is determined in a way that is consistent with the measurement principles under GAAP. The amendments in ASU 2023-07 apply retrospectively and is effective for fiscal years beginning after December 15, 2023 and interim periods after December 15, 2024. Early adoption is permitted. The Company does not plan to early adopt and is currently assessing the impact of adopting the updated guidance on the financial statements. 65 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ASU 2023-09— Income Taxes (Topic 740)— Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, which establishes required categories and a quantitative threshold to the annual tabular rate reconciliation disclosure and disaggregated jurisdictional disclosures of income taxes paid. The guidance’s annual requirements are effective for the Company beginning with the December 31, 2025 reporting period. Early adoption is permitted and prospective disclosure should be applied, however, retrospective disclosure is permitted. The Company is currently assessing the pronouncement and its impact on its income tax disclosures, but it does not impact the Company’s results of operations, financial condition, or cash flows. NOTE 3— FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Fair Value Measurements Instruments measured at fair value on a recurring basis The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis: December 31, 2023 Quoted Market Prices for Identical Assets in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Measurements (In thousands) Assets: Cash equivalents: Money market funds $ 215,891 $ — $ — $ 215,891 Treasury discount notes — 74,802 — 74,802 Total $ 215,891 $ 74,802 $ — $ 290,693 December 31, 2022 Quoted Market Prices for Identical Assets in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Measurements (In thousands) Assets: Cash equivalents: Money market funds $ 189,000 $ — $ — $ 189,000 Treasury discount notes — 24,961 — 24,961 Total $ 189,000 $ 24,961 $ — $ 213,961 Financial instruments measured at fair value only for disclosure purposes The total fair value of the outstanding long-term debt, including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs, and was approximately $ 418.1 million and $ 368.8 million at December 31, 2023 and December 31, 2022, respectively. 66 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4— GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets, net are as follows: December 31, 2023 2022 (In thousands) Goodwill $ 886,047 $ 882,949 Intangible assets with indefinite lives 170,773 170,147 Intangible assets with definite lives, net of accumulated amortization — 7,958 Total goodwill and intangible assets, net $ 1,056,820 $ 1,061,054 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, 2023: Balance at December 31, 2022 Foreign Currency Translation Balance at December 31, 2023 (In thousands) Ads and Leads $ 761,133 $ — $ 761,133 Services 51,197 — 51,197 International 70,619 3,098 73,717 Total goodwill $ 882,949 $ 3,098 $ 886,047 67 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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, 2021 Deductions Reporting Unit Allocation Adjustment Impairments Foreign Currency Translation Balance at December 31, 2022 (In thousands) North America $ 843,193 $ ( 816 ) $ ( 841,800 ) $ — $ ( 577 ) $ — Europe 72,846 — ( 61,334 ) — ( 11,512 ) — Ads and Leads — — 761,133 — — 761,133 Services — — 51,197 — — 51,197 International — — 64,799 — 5,820 70,619 Total 916,039 ( 816 ) ( 26,005 ) — ( 6,269 ) 882,949 Roofing (included in discontinued operations) — — 26,005 ( 26,005 ) — — Total goodwill $ 916,039 $ ( 816 ) $ — $ ( 26,005 ) $ ( 6,269 ) $ 882,949 Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions. At December 31, 2023 and 2022, intangible assets with definite lives are as follows: December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Weighted-Average Useful Life (Years) (Dollars in thousands) Technology $ 82,234 $ ( 82,234 ) $ — 5.5 Service professional relationships 5,619 ( 5,619 ) — 2.5 Trade names 1,376 ( 1,376 ) — 5.0 Total $ 89,229 $ ( 89,229 ) $ — 5.3 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Weighted-Average Useful Life (Years) (Dollars in thousands) Technology $ 82,114 $ ( 74,156 ) $ 7,958 5.5 Service professional relationships 95,858 ( 95,858 ) — 3.0 Trade names 1,327 ( 1,327 ) — 5.0 Total $ 179,299 $ ( 171,341 ) $ 7,958 4.1 The decreases in gross carrying amount and accumulated amortization of intangible assets from December 31, 2022 was due primarily to the retirement of certain fully amortized service professional relationships within Ads and Leads of $ 90.5 million as these assets are no longer in use. 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. 68 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 5— LEASES The Company primarily leases office space used in connection with its operations under various operating leases, the majority of which contain escalation clauses. ROU assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the present value of the Company’s obligation to make payments arising from these leases. ROU assets and related lease liabilities are based on the present value of fixed lease payments over the lease term using the Company’s incremental borrowing rate on the lease commencement date, the date of acquisition for any leases acquired in connection with a business combination, or January 1, 2019, the date ASC Topic 842, Leases (“ASC 842”) was adopted, for leases that commenced prior to that date. The Company combines the lease and non-lease components of lease payments in determining ROU assets and related lease liabilities. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less (“short-term leases”) are not recorded on the balance sheet. Variable lease payments consist primarily of common area maintenance, utilities, and taxes, which are not included in the recognition of ROU assets and related lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The following table presents the balances of ROU assets and lease liabilities within the balance sheet: December 31, Leases Balance Sheet Classification 2023 2022 (In thousands) Assets: ROU assets Other non-current assets $ 45,971 $ 56,313 Liabilities: Current lease liabilities Accrued expenses and other current liabilities $ 17,797 $ 16,328 Long-term lease liabilities Other long-term liabilities 51,550 72,688 Total lease liabilities $ 69,347 $ 89,016 The following table presents the net lease expense within the statement of operations: Years Ended December 31, Lease Expense Statement of Operations Classification 2023 2022 2021 (In thousands) Fixed lease expense Cost of revenue $ 392 $ 437 $ 346 Fixed lease expense Selling and marketing expense 116 2,669 7,305 Fixed lease expense General and administrative expense 11,225 11,122 16,461 Fixed lease expense Product development expense 399 492 1,232 Total fixed lease expense (a) 12,132 14,720 25,344 Variable lease expense Selling and marketing expense 36 200 1,087 Variable lease expense General and administrative expense 5,071 4,444 2,438 Variable lease expense Product development expense 156 23 567 Total variable lease expense 5,263 4,667 4,092 Net lease expense $ 17,395 $ 19,387 $ 29,436 69 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ________________________________ (a) Includes (i) lease impairment charges of $ 0.7 million, $ 1.7 million, and $ 7.8 million, and (ii) sublease income of $ 4.3 million, $ 4.7 million, and $ 1.8 million for the years ended December 31, 2023, 2022, and 2021, respectively. Maturities of lease liabilities as of December 31, 2023 (b) are summarized below: Years Ending December 31: (In thousands) 2024 $ 21,396 2025 17,581 2026 16,865 2027 12,488 2028 6,266 Thereafter 5,329 Total 79,925 Less: Interest 10,578 Present value of lease liabilities $ 69,347 ________________________________ (b) At December 31, 2023 there were no legally binding minimum lease payments for leases signed but not yet commenced. The following are the weighted average assumptions used for lease term and discount rate: December 31, 2023 2022 Remaining lease term 4.4 years 5.3 years Discount rate 6.59 % 6.19 % The following is the supplemental cash flow information: Years Ended December 31, 2023 2022 2021 (In thousands) ROU assets obtained in exchange for lease liabilities $ 6,696 $ 2,911 $ 2,848 Derecognition of ROU assets due to termination or modification $ ( 5,266 ) $ ( 772 ) $ ( 1,555 ) Cash paid for amounts included in the measurement of lease liabilities $ 25,806 $ 22,484 $ 23,285 NOTE 6— LONG-TERM DEBT Long-term debt consists of: December 31, 2023 December 31, 2022 (In thousands) 3.875 % ANGI Group Senior Notes due August 15, 2028 (“ANGI Group Senior Notes”); interest payable each February 15 and August 15 $ 500,000 $ 500,000 Less: unamortized debt issuance costs 3,953 4,716 Total long-term debt, net $ 496,047 $ 495,284 70 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ANGI Group Senior Notes ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of Angi Inc., issued the ANGI Group Senior Notes were issued on August 20, 2020. These notes may be redeemed at the redemption prices set forth below, plus accrued and unpaid interest thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on August 15 of the years indicated below: Year Percentage 2023 101.938 % 2024 100.969 % 2025 and thereafter 100.000 % 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, 2023, there were no limitations pursuant thereto. ANGI Group Revolving Facility The $ 250 million ANGI Group Revolving Facility, which otherwise would have expired on November 5, 2023, was terminated effective August 3, 2021. No amounts were ever drawn under the ANGI Group Revolving Facility prior to its termination. ANGI Group Term Loan During 2021, ANGI Group prepaid the remaining balance of $ 220.0 million of the ANGI Group Term Loan principal, which otherwise would have matured on November 5, 2023. NOTE 7— SHAREHOLDERS’ EQUITY Description of Class A Common Stock, Class B Convertible Common Stock and Class C Common Stock Except as described herein, shares of Angi Inc. Class A common stock, Class B common stock and Class C common stock are identical. Holders of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Holders of Class B common stock are entitled to ten votes per share on all matters to be voted upon by stockholders. Holders of Class C common stock have no voting rights, except as otherwise required by the laws of the State of Delaware, in which case holders of Class C common stock are entitled to one one-hundredth ( 1 /100) of a vote per share. 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. Shares of Angi Inc. Class B common stock are convertible into shares of our Class A common stock at the option of the holder at any time on a share for share basis. Such conversion ratio will in all events be equitably preserved in the event of any recapitalization of Angi Inc. by means of a stock dividend on, or a stock split or combination of, our outstanding Class A common stock or Class B common stock, or in the event of any merger, consolidation or other reorganization of Angi Inc. with another corporation. Upon the conversion of a share of our Class B common stock into a share of our Class A common stock, the applicable share of Class B common stock will be retired and will not be subject to reissue. Shares of Class A common stock and Class C common stock have no conversion rights. The holders of shares of Angi Inc. Class A common stock, Class B common stock and Class C common stock are entitled to receive, share for share, such cash dividends as may be declared by Angi Inc. Board of Directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up, holders of the Company’s Class A common stock, 71 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Class B common stock and Class C common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of all liabilities and accrued but unpaid dividends and liquidation preferences on any outstanding preferred stock. At December 31, 2023, IAC holds all 422.0 million outstanding shares of the Company’s Class B common stock, and 2.6 million outstanding shares of the Company’s Class A common stock, in total representing approximately 84.2 % economic interest and 98.1 % voting interest in the Company. In the event that Angi Inc. 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. Reserved Common Shares In connection with outstanding awards under our equity compensation plans, 42.9 million shares of Angi Inc. Class A common stock are reserved for future issuances at December 31, 2023. Common Stock Repurchases On March 9, 2020, the Board of Directors of Angi Inc. authorized the Company to repurchase up to 20 million shares of its common stock. During the fourth quarter of 2023, Angi Inc. put in place a share repurchase plan with the intent of utilizing the remaining shares in its stock repurchase authorization. The plan is subject to price and volume limitations. During the years ended December 31, 2023, 2022, and 2021, the Company repurchased 4.4 million, 1.0 million, and 3.2 million of Angi Inc. common stock for aggregate consideration, on a trade date basis, of $ 11.1 million, $ 8.1 million, and $ 35.4 million, respectively. At December 31, 2023, the Company has approximately 10.6 million shares remaining in its share repurchase authorization. NOTE 8— ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables present the components of accumulated other comprehensive income (loss), which exclusively consists of foreign currency translation adjustment: Years Ended December 31, 2023 2022 2021 (In thousands) Balance at January 1 $ ( 1,172 ) $ 3,309 $ 4,637 Other comprehensive income (loss) 2,359 ( 4,481 ) ( 1,328 ) Balance at December 31 $ 1,187 $ ( 1,172 ) $ 3,309 There were no items reclassified out of accumulated other comprehensive income (loss) into earnings during the years ended December 31, 2023, 2022, and 2021. At December 31, 2023, 2022, and 2021, there was no tax benefit or provision on the accumulated other comprehensive income (loss). NOTE 9— 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 the CODM’s view of 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. 72 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents revenue by reportable segment: Years Ended December 31, 2023 2022 2021 (In thousands) Revenue: Domestic Ads and Leads $ 1,124,908 $ 1,282,061 $ 1,227,074 Services 118,033 381,256 289,948 Total Domestic 1,242,941 1,663,317 1,517,022 International 115,807 101,038 102,295 Total $ 1,358,748 $ 1,764,355 $ 1,619,317 The following table presents the revenue of the Company’s segments disaggregated by type of service: Years Ended December 31, 2023 2022 2021 (In thousands) Domestic Ads and Leads: Consumer connection revenue $ 781,089 $ 954,735 $ 898,422 Advertising revenue 290,799 265,466 252,206 Membership subscription revenue 52,305 60,411 68,062 Other revenue 715 1,449 8,384 Total Ads and Leads revenue 1,124,908 1,282,061 1,227,074 Services revenue 118,033 381,256 289,948 Total Domestic revenue 1,242,941 1,663,317 1,517,022 International Consumer connection revenue 92,635 71,851 68,686 Service professional membership subscription revenue 22,548 28,192 32,367 Advertising and other revenue 624 995 1,242 Total International revenue 115,807 101,038 102,295 Total revenue $ 1,358,748 $ 1,764,355 $ 1,619,317 Geographic information about revenue and long-lived assets is presented below. Years Ended December 31, 2023 2022 2021 (In thousands) Revenue United States $ 1,242,092 $ 1,660,373 $ 1,514,930 All other countries 116,656 103,982 104,387 Total $ 1,358,748 $ 1,764,355 $ 1,619,317 73 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2023 December 31, 2022 (In thousands) Long-lived assets (excluding goodwill and intangible assets): United States $ 145,710 $ 199,744 All other countries 9,788 9,128 Total $ 155,498 $ 208,872 The following tables present operating income (loss) and Adjusted EBITDA by reportable segment: Years Ended December 31, 2023 2022 2021 (In thousands) Operating income (loss): Ads and Leads $ 50,043 $ 85,593 $ 65,485 Services ( 23,450 ) ( 95,166 ) ( 63,984 ) Corporate ( 61,377 ) ( 61,794 ) ( 56,196 ) International 8,286 ( 4,253 ) ( 13,222 ) Total $ ( 26,498 ) $ ( 75,620 ) $ ( 67,917 ) Years Ended December 31, 2023 2022 2021 (In thousands) Adjusted EBITDA (a) : Ads and Leads $ 147,357 $ 168,952 $ 136,260 Services 8,123 ( 52,126 ) ( 48,203 ) Corporate ( 50,076 ) ( 49,866 ) ( 46,066 ) International 13,074 ( 481 ) ( 6,615 ) Total $ 118,478 $ 66,479 $ 35,376 (a) 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; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. We consider operating income (loss) to be the financial measure calculated and presented in accordance with GAAP that is most directly comparable to our segment reporting performance measure, Adjusted EBITDA. The following tables reconcile operating income (loss) for the Company’s reportable segments and net loss attributable to Angi Inc. shareholders to Adjusted EBITDA: 74 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended December 31, 2023 Operating Income (Loss) Stock-Based Compensation Expense Depreciation Amortization of Intangibles Adjusted EBITDA (b) (In thousands) Ads and Leads $ 50,043 $ 23,145 $ 66,211 $ 7,958 $ 147,357 Services ( 23,450 ) 7,586 23,987 — 8,123 Corporate ( 61,377 ) 11,301 — — ( 50,076 ) International 8,286 1,382 3,406 — 13,074 Total ( 26,498 ) $ 43,414 $ 93,604 $ 7,958 $ 118,478 Interest expense ( 20,137 ) Other income, net 18,427 Loss from continuing operations before income taxes ( 28,208 ) Income tax provision ( 1,839 ) Net loss from continuing operations ( 30,047 ) Loss from discontinued operations, net of tax ( 10,264 ) Net loss ( 40,311 ) Net earnings attributable to noncontrolling interests ( 629 ) Net loss attributable to Angi Inc. shareholders $ ( 40,940 ) Year Ended December 31, 2022 Operating Income (Loss) Stock-Based Compensation Expense Depreciation Amortization of Intangibles Adjusted EBITDA (b) (In thousands) Ads and Leads $ 85,593 $ 19,972 $ 52,737 $ 10,650 $ 168,952 Services ( 95,166 ) 18,012 21,904 3,124 ( 52,126 ) Corporate ( 61,794 ) 11,928 — — ( 49,866 ) International ( 4,253 ) 890 2,882 — ( 481 ) Total ( 75,620 ) $ 50,802 $ 77,523 $ 13,774 $ 66,479 Interest expense ( 20,107 ) Other income, net 1,169 Loss from continuing operations before income taxes ( 94,558 ) Income tax benefit 5,390 Net loss from continuing operations ( 89,168 ) Loss from discontinued operations, net of tax ( 38,814 ) Net loss ( 127,982 ) Net earnings attributable to noncontrolling interests ( 468 ) Net loss attributable to Angi Inc. shareholders $ ( 128,450 ) 75 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended December 31, 2021 Operating Income (Loss) Stock-Based Compensation Expense Depreciation Amortization of Intangibles Adjusted EBITDA (In thousands) Ads and Leads $ 65,485 $ 12,722 $ 46,025 $ 12,028 $ 136,260 Services ( 63,984 ) 4,672 7,049 4,060 ( 48,203 ) Corporate ( 56,196 ) 10,121 — 9 ( 46,066 ) International ( 13,222 ) 656 5,951 — ( 6,615 ) Total ( 67,917 ) $ 28,171 $ 59,025 $ 16,097 $ 35,376 Interest expense ( 23,485 ) Other expense, net ( 2,510 ) Loss from continuing operations before income taxes ( 93,912 ) Income tax benefit 29,894 Net loss from continuing operations ( 64,018 ) Loss from discontinued operations, net of tax ( 6,476 ) Net loss ( 70,494 ) Net earnings attributable to noncontrolling interests ( 884 ) Net loss attributable to Angi Inc. shareholders $ ( 71,378 ) The following table presents capital expenditures by reportable segment: Years Ended December 31, 2023 2022 2021 (In thousands) Capital expenditures: Ads and Leads $ 44,692 $ 76,786 $ 50,026 Services 2,551 35,833 17,439 International 537 2,860 2,444 Total $ 47,780 $ 115,479 $ 69,909 NOTE 10— STOCK-BASED COMPENSATION The Company currently has one active stock plan, which became effective on September 29, 2017 (“the Combination”). The 2017 plan (“the Plan”) covers stock options, stock appreciation rights and RSU awards, including those that are linked to the achievement of the Company’s stock price, known as market-based awards (“MSUs”) and those that are linked to the achievement of a performance target, known as performance-based awards (“PSUs”), denominated in shares of Angi Inc. common stock, as well as provides for the future grant of these and other equity awards. The Plan authorizes the Company to grant awards to its employees, officers, directors and consultants. At December 31, 2023, there are 14.0 million shares available for grant under the Plan. The Plan has a stated term of ten years , and provides that the exercise price of stock options and stock appreciation rights granted will not be less than the market price of the Company’s common stock on the grant date. The Plan does not specify grant dates or vesting schedules for awards, as those determinations have been delegated to the Compensation Committee of Angi Inc. Board of Directors (the “Committee”). Each grant agreement reflects the grant date and vesting schedule for that particular grant as determined by the Committee. Stock options and stock appreciation rights granted under the Plan generally 76 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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, 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. PSU and MSU awards granted subsequent to the Combination generally cliff vest in a two to five-year period from the grant date. Stock-based compensation expense recognized in the statement of operations includes expense related to: (i) the Company’s RSUs, stock options and stock appreciation rights; (ii) equity instruments denominated in shares of its subsidiaries; and (iii) IAC denominated restricted stock. The amount of stock-based compensation expense recognized is net of estimated forfeitures. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods if actual forfeitures differ from the estimated rate. The expense ultimately recorded is for the awards that vest. At December 31, 2023, there was $ 47.8 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.29 years. The total income tax benefit recognized in the statement of operations for the years ended December 31, 2023, 2022, and 2021 related to all stock-based compensation is $ 2.9 million, $ 3.6 million, $ 16.8 million, respectively. The aggregate income tax benefit/(detriment) recognized related to the exercise of stock options and stock appreciation rights for the years ended December 31, 2023, 2022, and 2021 is $ 0.1 million, $( 0.3 ) million, and $ 10.8 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. Restricted Stock Units, Market-based Stock Units and Performance-based Stock Units RSUs, MSUs, and PSUs are awards in the form of phantom shares or units denominated in a hypothetical equivalent number of shares of Angi Inc. common stock and with the value of each RSU and PSU equal to the fair value of Angi Inc. common stock at the date of grant. The value of each MSU is estimated using a lattice model that incorporates a Monte Carlo simulation of Angi Inc.’s stock price. Each RSU, MSU, and PSU grant is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. MSUs also include market-based vesting, tied to the stock price of Angi Inc. before an award vests and PSUs include performance-based vesting, where certain performance targets set at the time of grant must be achieved before an award vests. For RSU grants, the expense is measured at the grant date as the fair value of Angi Inc. common stock and expensed as stock-based compensation over the vesting term. For MSU grants, the expense is measured using a lattice model and expensed as stock-based compensation over the requisite service period. For PSU grants, the expense is measured at the grant date as the fair value of Angi Inc. common stock and expensed as stock-based compensation over the vesting term if the performance targets are considered probable of being achieved. Unvested RSUs, MSUs, and PSUs outstanding at December 31, 2023 and changes during the year ended December 31, 2023 are as follows: RSUs MSUs PSUs Number of Shares Weighted Average Grant Date Fair Value Number of Shares (a) Weighted Average Grant Date Fair Value Number of Shares (a) Weighted Average Grant Date Fair Value (Shares in thousands) Unvested at January 1, 2023 21,690 $ 7.04 409 $ 12.97 507 $ 3.14 Granted 17,152 2.53 55 2.51 — — Vested ( 5,991 ) 7.42 ( 1 ) 12.83 — — Forfeited ( 5,853 ) 5.66 ( 358 ) 12.49 ( 240 ) 13.51 Unvested at December 31, 2023 26,998 $ 4.39 105 $ 3.35 268 $ 10.42 77 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ___________________________ (a) Included in the table are MSUs and PSUs which vests in varying amounts depending upon certain market or performance conditions. The MSUs and PSUs in the table above includes these awards at their maximum potential payout. 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. The total expense related to these awards recognized was $ 10.4 million, equal to the number of shares vested based on the fair value of Angi Inc. common stock on the settlement date. The weighted average fair value of RSUs granted during the years ended December 31, 2023, 2022, and 2021 based on market prices of Angi Inc. common stock on the grant date was $ 2.53 , $ 4.95 , and $ 12.73 , respectively. The weighted average fair value of MSUs granted during the years ended December 31, 2023, 2022, and 2021 based on the lattice model, was $ 2.51 , $ 6.39 , and $ 14.39 , respectively. There were no PSUs granted during the years ended December 31, 2023 and 2022. The weighted average fair value of PSUs granted during the year ended December 31, 2021, based on market prices of Angi Inc. common stock on the grant date, was $ 13.51 . The total fair value of RSUs that vested during the years ended December 31, 2023, 2022, and 2021 was $ 15.5 million, $ 20.8 million and $ 35.2 million, respectively. The total fair value of MSUs that vested during the years ended December 31, 2023 and 2021 was $ 0.1 million and $ 2.1 million, respectively. There were no MSUs that vested during the year ended December 31, 2022. There were no PSUs that vested during the year ended December 31, 2023. The total fair value of PSUs that vested during the years ended December 31, 2022, and 2021 was $ 0.1 million, and $ 3.6 million, respectively. Stock Options and Stock Appreciation Rights Stock options and stock appreciation rights outstanding at December 31, 2023 and changes during the year ended December 31, 2023 were as follows: December 31, 2023 Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value (Shares and intrinsic value in thousands) Outstanding at January 1, 2023 1,087 $ 9.26 Granted — — Exercised — — Forfeited — — Expired ( 192 ) 15.32 Outstanding at December 31, 2023 895 $ 7.95 2.2 $ — Exercisable 895 $ 7.95 2.2 $ — The aggregate intrinsic value in the table above represents the difference between Angi Inc. closing stock price on the last trading day of 2023 and the exercise price, multiplied by the number of in-the-money awards that would have been exercised had all award holders exercised their awards on December 31, 2023. There were no stock options or stock appreciation rights exercised during the year ended December 31, 2023. The total intrinsic value of awards exercised during the years ended December 31, 2022 and 2021 is $ 1.3 million and $ 103.8 million, respectively. 78 Table of Contents ANGI INC. 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, 2023: Awards Outstanding & Exercisable Range of Exercise Prices Outstanding at December 31, 2023 Weighted Average Remaining Contractual Life (In Years) Weighted Average Exercise Price (Shares in thousands) $ 0.01 to $ 10.00 539 1.8 $ 4.74 $ 10.01 to $ 20.00 356 2.8 12.81 895 2.2 $ 7.95 There were no stock options or stock appreciation rights granted by the Company for the years ended December 31, 2023, 2022, and 2021. In connection with the Combination, the previously issued HomeAdvisor (US) stock appreciation rights were converted into Angi Inc. equity awards resulting in a modification charge. There were no charges included in stock-based compensation expense in the years ended December 31, 2023 and 2022 and charges of $ 0.9 million for the year ended December 31, 2021 related to these modified awards. No cash was received from stock option exercises during the years ended December 31, 2023, 2022 and 2021 because they were net settled in shares of Angi Inc. common stock. 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. In addition, at IAC’s option, certain awards can be settled in either Class A shares of Angi Inc. or shares of IAC common stock. If settled in IAC common stock, Angi Inc. 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, 2023 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, 2023, were net settled on that date, including stock options, RSUs and subsidiary denominated equity described below, ANGI would have issued 13.8 million Class A shares and would have remitted $ 34.3 million in cash for withholding taxes (assuming a 50 % withholding rate). Equity Instruments Denominated in the Shares of Certain Subsidiaries Angi Inc. has granted stock appreciation rights denominated in the equity of certain non-publicly traded subsidiaries to employees and management of those subsidiaries. These equity awards vest over a period of years, which is typically four years . The value of the stock appreciation rights is tied to the value of the common stock of these subsidiaries, which is determined by the Company using a variety of valuation techniques including a combination of market based and discounted cash flow valuation methodologies. Accordingly, these interests only have value to the extent the relevant business appreciates in value above the initial value utilized to determine the exercise price. These interests can have significant value in the event of significant appreciation. The fair value of these interests is generally determined by the board of directors of the applicable subsidiary when settled, which will occur at various dates through 2027 and are ultimately settled in IAC common stock or Angi Inc. Class A common stock, at IAC’s election. These equity awards are settled on a net basis, with the award holder entitled to receive a payment in shares equal to the intrinsic value of the award at exercise less an amount equal to the required cash tax withholding payment. The expense associated with these equity awards is initially measured at fair value, using the Black-Scholes option pricing model, at the grant date and is expensed as stock-based compensation over the vesting term. The plans under which these awards are granted establish specific settlement dates or liquidity events for which the valuation of the relevant subsidiary is determined for purposes of settlement of the awards. 79 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 11— BENEFIT PLANS The Company’s employees in the U.S. can elect to participate in a retirement savings program offered by IAC, which is qualified under Section 401(k) of the Internal Revenue Code. Under the IAC Inc. Retirement Savings Plan (the “IAC Plan”), participating employees may contribute up to 50 % of their eligible compensation, but not more than statutory limits. The Company matches fifty cents for each dollar a participant contributes in the IAC Plan, with a maximum contribution of 3 % of a participant’s eligible earnings. The IAC Plan limits Company matching contributions to $ 10,000 per participant on an annual basis. Matching contributions under the IAC Plan for the years ended December 31, 2023, 2022, and 2021 were $ 8.1 million, $ 9.3 million, and $ 8.3 million, respectively. Matching contributions are invested in the same manner as each participant’s voluntary contributions in the investment options provided under the IAC Plan. An investment option in the IAC Plan is IAC common stock, but neither participant nor matching contributions are required to be invested in IAC common stock. The Company also has or participates in various benefit plans, primarily defined contribution plans, for its international employees. The Company’s contributions to these plans for the years ended December 31, 2023, 2022, and 2021 were $ 1.0 million, $ 0.8 million, and $ 0.7 million, respectively. NOTE 12— INCOME TAXES The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax provision and/or benefit has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the statement of cash flows. The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes. Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision or benefit computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the statement of shareholders’ equity and financing activities within the statement of cash flows. U.S. and foreign (loss) earnings from continuing operations before income taxes and noncontrolling interests are as follows: Years Ended December 31, 2023 2022 2021 (In thousands) U.S. $ ( 38,717 ) $ ( 87,557 ) $ ( 80,182 ) Foreign 10,509 ( 7,001 ) ( 13,730 ) Total $ ( 28,208 ) $ ( 94,558 ) $ ( 93,912 ) 80 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The components of the income tax provision (benefit) are as follows: Years Ended December 31, 2023 2022 2021 (In thousands) Current income tax provision: Federal $ 1,373 $ 27 $ 36 State 3,198 2,650 3,038 Foreign 7,277 1,691 1,249 Current income tax provision 11,848 4,368 4,323 Deferred income tax (benefit) provision: Federal ( 8,232 ) ( 8,045 ) ( 27,800 ) State ( 1,499 ) ( 2,894 ) ( 8,712 ) Foreign ( 278 ) 1,181 2,295 Deferred income tax benefit ( 10,009 ) ( 9,758 ) ( 34,217 ) Income tax provision (benefit) $ 1,839 $ ( 5,390 ) $ ( 29,894 ) The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below. The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized. December 31, 2023 2022 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 182,386 $ 187,449 Tax credit carryforwards 26,519 21,588 Capitalized research & development expenditures 18,919 12,551 Long-term lease liabilities 16,288 21,902 Capitalized software, leasehold improvements and equipment, net 10,923 — Other 33,485 30,980 Total deferred tax assets 288,520 274,470 Less valuation allowance ( 76,821 ) ( 64,877 ) Net deferred tax assets 211,699 209,593 Deferred tax liabilities: Intangible assets, net ( 46,571 ) ( 47,016 ) Right-of-use assets ( 10,588 ) ( 13,919 ) Capitalized costs to obtain a contract with a customer ( 9,004 ) ( 9,264 ) Capitalized software, leasehold improvements and equipment, net — ( 3,839 ) Other ( 92 ) ( 83 ) Total deferred tax liabilities ( 66,255 ) ( 74,121 ) Net deferred tax assets $ 145,444 $ 135,472 81 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The portion of the December 31, 2023 deferred tax assets that will be payable to IAC pursuant to the tax sharing agreement, upon realization, is $ 92.9 million. At December 31, 2023, the Company has federal and state NOLs of $ 480.9 million and $ 431.0 million, respectively, available to offset future income. Of these federal NOLs, $ 214.2 million can be carried forward indefinitely and $ 266.7 million, if not utilized, will expire at various times between 2033 and 2037. Of these state NOLs, $ 25.5 million will be carried forward indefinitely and $ 405.5 million will expire at various times primarily between 2025 and 2043. Federal and state NOLs of $ 396.6 million and $ 331.3 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. At December 31, 2023, the Company has foreign NOLs of $ 329.9 million available to offset future income. Of these foreign NOLs, $ 317.5 million can be carried forward indefinitely and $ 12.4 million, if not utilized, will expire at various times between 2038 and 2043. During 2023, the Company recognized tax benefits related to NOLs of $ 0.5 million. At December 31, 2023, the Company has tax credit carryforwards of $ 34.1 million relating to federal and state tax credits for research activities. Of these credit carryforwards, $ 1.7 million can be carried forward indefinitely and $ 32.4 million, if not utilized, will expire between 2024 and 2043. The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. At December 31, 2023, the Company has a U.S. gross deferred tax asset of $ 209.6 million that the Company expects to fully utilize on a more likely than not basis. During 2023, the Company’s valuation allowance increased by $ 11.9 million primarily due to an increase in unbenefited capital losses, foreign NOLs, and currency translation adjustments. At December 31, 2023, the Company has a valuation allowance of $ 76.8 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 provision (benefit) to the amounts computed by applying the statutory federal income tax rate to earnings (loss) from continuing operations before income taxes is shown as follows: Years Ended December 31, 2023 2022 2021 (In thousands) Income tax (benefit) at the federal statutory rate of 21% $ ( 5,924 ) $ ( 19,857 ) $ ( 19,722 ) State income taxes, net of effect of federal tax benefit 1,510 362 ( 1,040 ) Research credit ( 4,912 ) ( 7,123 ) ( 2,431 ) Stock-based compensation 4,546 3,917 ( 13,643 ) Non-deductible executive compensation 3,514 4,731 3,312 Unbenefited losses 3,352 7,106 1,610 Net adjustment related to the reconciliation of income tax provision accruals to tax returns ( 2,430 ) ( 1,212 ) 335 Foreign income taxed at a different statutory tax rate 1,216 5,355 2,872 Change in judgement on beginning of the year valuation allowance 399 966 ( 4,165 ) Deferred tax adjustment for enacted changes in tax law and rates 99 178 768 Other, net 469 187 2,210 Income tax provision (benefit) $ 1,839 $ ( 5,390 ) $ ( 29,894 ) 82 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows: December 31, 2023 2022 2021 (In thousands) Balance at January 1 $ 6,181 $ 6,298 $ 5,268 Additions based on tax positions related to the current year 1,564 1,342 1,317 Additions for tax positions of prior years 545 1,006 264 Reductions for tax positions of prior years ( 88 ) — ( 91 ) Settlements ( 188 ) ( 2,465 ) ( 460 ) Balance at December 31 $ 8,014 $ 6,181 $ 6,298 The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. At December 31, 2023 and 2022, accruals for interest are not material and there are no accruals for penalties. The Company’s income taxes are routinely under audit by federal, state, local and foreign authorities 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. On June 27, 2023 the Joint Committee of Taxation completed its review of the federal income tax returns for the years ended December 31, 2013 through 2019, which includes the operations of the Company, and approved the audit settlement previously agreed to with the Internal Revenue Service. The statutes of limitations for the years 2013 through 2019 expired December 31, 2023. Returns filed in various other jurisdictions are open to examination for tax years beginning with 2013. Income taxes payable include unrecognized tax benefits considered sufficient to pay assessments that may result from the examination of prior year tax returns. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. At December 31, 2023 and 2022, the Company has unrecognized tax benefits, including interest, of $ 8.1 million and $ 6.2 million respectively; all of which are for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at December 31, 2023 are subsequently recognized, the income tax provision would be reduced by $ 7.6 million. The comparable amount as of December 31, 2022 is $ 5.8 million. The Company believes it is reasonably possible that its unrecognized tax benefits could decrease by $ 0.2 million by December 31, 2024 due to settlements, all of which would reduce the income tax provision. NOTE 13— 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: 83 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Years Ended December 31, 2023 2022 2021 Basic Diluted Basic Diluted Basic Diluted (In thousands, except per share data) Numerator: Net loss from continuing operations $ ( 30,047 ) $ ( 30,047 ) $ ( 89,168 ) $ ( 89,168 ) $ ( 64,018 ) $ ( 64,018 ) Net earnings attributable to noncontrolling interests of continuing operations ( 629 ) ( 629 ) ( 468 ) ( 468 ) ( 884 ) ( 884 ) Net loss from continuing operations attributable to Angi Inc. Class A and Class B Common Stock shareholders ( 30,676 ) ( 30,676 ) ( 89,636 ) ( 89,636 ) ( 64,902 ) ( 64,902 ) Loss from discontinued operations, net of taxes ( 10,264 ) ( 10,264 ) ( 38,814 ) ( 38,814 ) ( 6,476 ) ( 6,476 ) Net loss attributable to Angi Inc. Class A and Class B Common Stock shareholders $ ( 40,940 ) $ ( 40,940 ) $ ( 128,450 ) $ ( 128,450 ) $ ( 71,378 ) $ ( 71,378 ) Denominator: Weighted average basic Class A and Class B common stock shares outstanding 505,900 505,900 503,008 503,008 502,761 502,761 Dilutive securities (a) (b) — — — — — — Denominator for loss per share—weighted average shares 505,900 505,900 503,008 503,008 502,761 502,761 Loss per share: Loss per share from continuing operations $ ( 0.06 ) $ ( 0.06 ) $ ( 0.18 ) $ ( 0.18 ) $ ( 0.13 ) $ ( 0.13 ) Loss per share from discontinued operations, net of tax ( 0.02 ) ( 0.02 ) ( 0.08 ) ( 0.08 ) ( 0.01 ) ( 0.01 ) Loss per share attributable to Angi Inc. Class A and Class B Common Stock shareholders $ ( 0.08 ) $ ( 0.08 ) $ ( 0.26 ) $ ( 0.26 ) $ ( 0.14 ) $ ( 0.14 ) ________________________ (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”). For the years ended December 31, 2023, 2022, and 2021, 28.5 million, 23.6 million, and 17.5 million of potentially dilutive securities, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute all loss per share amounts. (b) MSUs and PSUs are considered contingently issuable shares. Shares issuable upon exercise or vesting of MSUs and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the MSUs and PSUs is dilutive for the respective reporting periods. For the years ended December 31, 2023, 2022, and 2021, 0.5 million, 0.8 million and 2.2 million underlying market-based awards and PSUs, respectively, were excluded from the calculation of diluted loss per share because the market or performance condition(s) had not been met. NOTE 14— FINANCIAL STATEMENT DETAILS Cash and Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying balance sheet to the total amounts shown in the accompanying statement of cash flows: 84 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2023 2022 2021 2020 (In thousands) Cash and cash equivalents $ 364,044 $ 321,155 $ 428,136 $ 812,705 Restricted cash included in other current assets — 107 156 407 Restricted cash included in other non-current assets 257 371 693 449 Restricted cash included in other non-current assets of discontinued operations — 503 500 — Total cash and cash equivalents, and restricted cash as shown on the statement of cash flows $ 364,301 $ 322,136 $ 429,485 $ 813,561 Restricted cash included in “Other current assets” in the balance sheet at December 31, 2022 primarily consisted of cash reserved to fund insurance claims. Restricted cash included in “Other current assets” in the balance sheet 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” in the balance sheet 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” in the balance sheets for all periods presented above primarily consisted of deposits related to leases. Restricted cash included in “Other non-current assets” in the balance sheet at December 31, 2020 also included cash reserved to fund consumer claims. Credit Losses The following table presents the changes in the allowance for credit loss for the years ended December 31, 2023 and 2022: December 31, 2023 2022 (In thousands) Balance at January 1 $ 38,846 $ 28,712 Current period provision for credit losses 79,385 104,261 Write-offs charged against the allowance for credit loss ( 98,649 ) ( 99,469 ) Recoveries collected 5,102 5,342 Balance at December 31 $ 24,684 $ 38,846 December 31, 2023 2022 (In thousands) Other current assets: Capitalized sales commissions $ 34,927 $ 37,220 Prepaid expenses 21,485 23,997 Other 15,663 3,113 Other current assets $ 72,075 $ 64,330 85 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2023 2022 (In thousands) Capitalized software, leasehold improvements and equipment, net: Capitalized software and computer equipment $ 275,377 $ 247,176 Leasehold improvements 27,140 27,780 Furniture and other equipment 10,387 10,819 Projects in progress 11,980 12,653 Capitalized software, leasehold improvements and equipment 324,884 298,428 Accumulated depreciation and amortization ( 215,357 ) ( 145,869 ) Capitalized software, leasehold improvements and equipment, net $ 109,527 $ 152,559 December 31, 2023 2022 (In thousands) Accrued expenses and other current liabilities: Accrued employee compensation and benefits $ 59,765 $ 48,990 Accrued advertising expense 25,648 40,312 Current lease liabilities 17,797 16,328 Current legal liabilities 5,242 13,585 Other 70,877 63,579 Accrued expenses and other current liabilities $ 179,329 $ 182,794 Other income (expense), net Years Ended December 31, 2023 2022 2021 (In thousands) Interest income $ 17,149 $ 4,529 $ 238 Foreign exchange gains (losses) 1,238 ( 3,364 ) ( 1,656 ) Loss on extinguishment of debt (a) — — ( 1,110 ) Gain on the sale of a business — — 31 Other 40 4 ( 13 ) Other income (expense), net $ 18,427 $ 1,169 $ ( 2,510 ) ________________________ (a) Represents the write-off of deferred debt issuance costs related to the ANGI Group Term Loan, which was repaid in its entirety during the second quarter of 2021. 86 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Supplemental Disclosure of Cash Flow Information: Years Ended December 31, 2023 2022 2021 (In thousands) Cash (paid) received during the year for: Interest expense—third-party $ ( 19,375 ) $ ( 19,375 ) $ ( 21,450 ) Income tax payments, including amounts paid to IAC for Angi Inc.'s share of IAC's consolidated tax liability $ ( 4,957 ) $ ( 1,551 ) $ ( 4,647 ) Income tax refunds, including amounts received from IAC for Angi Inc.’s share of IAC's consolidated tax liability $ 282 $ 396 $ 587 87 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 15— CONTINGENCIES In the ordinary course of business, the Company is a party to various lawsuits. 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 $ 5.2 million and $ 13.5 million at December 31, 2023 and 2022, respectively. Management has also identified certain other legal matters where it believes an unfavorable outcome is not probable and, therefore, no accrual is established. Although management currently believes that resolving claims against the Company, including claims where an unfavorable outcome is reasonably possible and for which the Company cannot estimate a loss or range of loss, 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 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 12 —Income Taxes ” for information related to uncertain income tax positions. NOTE 16— DISCONTINUED OPERATIONS On November 1, 2023, Angi Inc. completed the sale of 100 % of its wholly-owned subsidiary, THR, and has reflected it as a discontinued operation in its financial statements. The financial information for prior periods has been recast to conform to the current year presentation. The components of assets and liabilities of discontinued operations in the balance sheet at December 31, 2022 consisted of the following: December 31, 2022 (In thousands) Current assets Accounts receivable, net $ 21,913 Other current assets 4,837 Total current assets of discontinued operations $ 26,750 Non-current assets Capitalized software, leasehold improvements and equipment, net $ 1,296 Deferred income taxes 7,082 Other non-current assets, net 1,680 Total non-current assets of discontinued operations $ 10,058 Current liabilities Accounts payable $ 469 Deferred revenue 778 Accrued expenses and other current liabilities 17,221 Total current liabilities of discontinued operations $ 18,468 Non-current liabilities Lease liability $ 919 Total non-current liabilities of discontinued operations $ 919 88 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The components of the loss from discontinued operations for the periods January 1, 2023 through November 1, 2023, and the years ended December 31, 2022 and 2021 in the statement of operations consisted of the following: January 1 through November 1, Years Ended December 31, 2023 2022 2021 (in thousands) Revenue $ 90,557 $ 137,509 $ 68,028 Operating costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) 61,476 100,664 51,219 Selling and marketing expense 17,667 33,041 14,006 General and administrative expense 14,516 27,070 10,845 Depreciation 555 747 221 Amortization of intangibles — 667 333 Goodwill impairment — 26,005 — Total operating costs and expenses 94,214 188,194 76,624 Operating loss from discontinued operations ( 3,657 ) ( 50,685 ) ( 8,596 ) Interest income 9 9 1 Loss on sale of discontinued operations ( 1,213 ) — — Loss from discontinued operations before tax ( 4,861 ) ( 50,676 ) ( 8,595 ) Income tax (provision) benefit ( 5,403 ) 11,862 2,119 Loss from discontinued operations, net of tax $ ( 10,264 ) $ ( 38,814 ) $ ( 6,476 ) During the period in which Angi owned the Roofing segment, the Ads & Leads segment provided services totaling $ 3.5 million, $ 10.3 million, and $ 1.9 million to the Roofing segment for the period January 1, 2023 through November 1, 2023, and the years ended December 31, 2022 and 2021, respectively. Such services have and will continue in periods subsequent to the disposition of the Roofing segment on November 1, 2023. NOTE 17— RELATED PARTY TRANSACTIONS WITH IAC Allocation of CEO Compensation and Certain Expenses Joseph Levin, CEO of IAC and Chairman of Angi, was appointed CEO of Angi on October 10, 2022. For the year ended December 31, 2023 and for the period from October 10, 2022 to December 31, 2022, IAC allocated $ 9.4 million and $ 2.1 million, respectively, 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. Levin. Management considers the allocation method to be reasonable. The allocated costs also include costs directly attributable to the Company that were initially paid for by IAC and billed by IAC to the Company. The Combination and Related Agreements The Company and IAC, in connection with the Combination, entered into a contribution agreement; an investor rights agreement; a services agreement; a tax sharing agreement; and an employee matters agreement, which collectively govern the relationship between IAC and Angi Inc. Contribution Agreement The contribution agreement sets forth the agreements between the Company and IAC regarding the principal transactions necessary for IAC to separate the Angi business from IAC's other businesses, as well as governs certain aspects of our 89 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) relationship. 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 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. Services Agreement The services agreement governs services that IAC provides to the Company including, among others: (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, 2023, 2022 and 2021, the Company was charged $ 6.4 million, $ 3.8 million and $ 3.9 million, respectively, by IAC for services rendered pursuant to the services agreement. There were no outstanding payables pursuant to the services agreement as of December 31, 2023. There was $ 0.8 million in outstanding payables pursuant to the services agreement as of December 31, 2022. Tax Sharing Agreement The tax sharing agreement governs the rights, responsibilities, and obligations of the Company and IAC with respect to tax liabilities and benefits, entitlements to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes. Under the tax sharing agreement, the Company is generally responsible and required to indemnify IAC for: (i) all taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or its subsidiaries that includes 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. At December 31, 2023 and 2022, the Company had outstanding payables of $ 2.1 million and $ 1.4 million, respectively, due to IAC pursuant to the tax sharing agreement, which are included in “Accrued expenses and other current liabilities,” in the balance sheet. There were no payments to or refunds from IAC pursuant to this agreement during the years ended December 31, 2023 and 2022. There were $ 1.5 million of payments to IAC pursuant to this agreement during the year ended December 31, 2021. Employee Matters Agreement The employee matters agreement addresses certain compensation (including stock-based compensation) and benefit issues related to the allocation of liabilities associated with: (i) employment or termination of employment, (ii) employee benefit plans and (iii) equity awards. Under the employee matters agreement, the Company's employees participate in IAC’s U.S. health and welfare plans, 401(k) plan and flexible benefits plan and the Company reimburses IAC for the costs of such participation. In the event IAC no longer retains shares representing at least 80 % of the aggregate voting power of shares entitled to vote in the election of 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 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 90 Table of Contents ANGI INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 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 and Human Capital 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. During the years ended December 31, 2023 and 2022, there have been no IAC equity awards held by Angi Inc. employees exercised or vested, and no exercises and settlements of stock appreciation rights, that would require, pursuant to the employee matters agreement, reimbursement to IAC in Class A and Class B common stock. During the year ended December 31, 2021, pursuant to the employee matters agreement, 2.6 million shares of Class A common stock were issued to a subsidiary of IAC as reimbursement for IAC common stock issued in connection with the exercise and settlement of certain stock appreciation rights and 0.2 million shares of Angi Inc. Class B common stock were issued to a subsidiary of IAC as reimbursement for shares of IAC common stock in connection with the exercise and vesting of IAC equity awards held by Angi Inc. employees. Other Arrangements Additionally, the Company subleases office space to IAC and charged rent pursuant to a lease agreement of $ 0.6 million, $ 1.7 million, and $ 1.6 million for the years ended December 31, 2023, 2022, and 2021, respectively. IAC subleases office space to the Company and charged rent pursuant to a lease agreement of $ 1.3 million, $ 1.3 million, and $ 0.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023, the Company has an outstanding receivable of $ 0.3 million due from IAC pursuant to the sublease agreements. This amount is included in “Other non-current assets” in the balance sheet. At December 31, 2022, there were no outstanding receivables due from IAC or payables due to IAC pursuant to the sublease agreements. The Company incurred advertising expense of $ 6.5 million, $ 7.0 million, and $ 1.0 million for the years ended December 31, 2023, 2022 and 2021, respectively, related to advertising and audience targeted advertising purchased from another IAC owned business. At December 31, 2023 and December 31, 2022, there were related outstanding payables of $ 2.2 million and $ 1.1 million, respectively, included in “Accrued expenses and other current liabilities” in the balance sheet. 91 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.