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What changed in Angi Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Angi Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+328 added−353 removedSource: 10-K (2024-02-29) vs 10-K (2023-03-01)

Top changes in Angi Inc.'s 2023 10-K

328 paragraphs added · 353 removed · 245 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

49 edited+8 added−17 removed55 unchanged
Biggest changeLastly, 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 Resources Committee of the IAC board of directors has the exclusive authority to determine the treatment of outstanding IAC equity awards.
Biggest changeTo the extent that shares of IAC common stock are issued in settlement of these awards, we are 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. 11 Table of Contents 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.
Consumer Services Consumers can submit requests for work to be done on the Handy and Angi platforms and referrals will be made based on the type of service desired, location and the date and time the consumer wants the service to be provided.
Consumer Services Consumers can submit requests for work to be done on the Angi and Handy platforms and referrals will be made based on the type of service desired, location and the date and time the consumer wants the service to be provided.
We have several registered trademarks in the United States (the most significant of which relate to our Angi and HomeAdvisor brands), as well as other trademarks in Europe and Canada, and several pending trademark applications in the United States and certain other jurisdictions.
We have several registered trademarks in the United States (the most significant of which relate to our Angi and HomeAdvisor brands), as well as certain other trademarks in Europe and Canada, and several pending trademark applications in the United States and certain other jurisdictions.
Any future adverse changes to Section 230 could result in additional compliance costs for us and/or exposure for additional liabilities.
Any future adverse changes to Section 230 could result in additional compliance costs for us and/or exposure to additional liabilities.
Our International Businesses Through the International (Europe and Canada) segment, Angi Inc. also operates several international businesses that connect consumers with home service professionals, including: (i) Travaux, MyHammer and Werkspot, leading home services marketplaces in France, Germany and the Netherlands, respectively, (ii) MyBuilder, one of the leading home services marketplaces in the United Kingdom, (iii) the Austrian operations of MyHammer, (iv) the Italian operations of Werkspot and (v) Homestars, a leading home services marketplace in Canada.
Our International Businesses Through the International segment, Angi Inc. also operates several international businesses that connect consumers with home service professionals, including: (i) Travaux, MyHammer and Werkspot, leading home services marketplaces in France, Germany and the Netherlands, respectively, (ii) MyBuilder, one of the leading home services marketplaces in the United Kingdom, (iii) the Austrian operations of MyHammer, (iv) the Italian operations of Werkspot and (v) Homestars, a leading home services marketplace in Canada.
For example, we are subject to and pay the Digital Services Tax in the United Kingdom, France, and Italy. Certain of our businesses are subject to digital services taxes in one or more of the jurisdictions listed above and similar proposed tax laws could adversely affect our business, financial condition and results of operations.
For example, we are subject to and pay the Digital Services Tax in the United Kingdom and Italy. Certain of our businesses are subject to digital services taxes in one or more of the jurisdictions listed above and similar proposed tax laws could adversely affect our business, financial condition and results of operations.
Services Overview Through our Services business, we provide a pre-priced offering service, pursuant to which consumers can request services through Angi and Handy branded platforms and pay for such services on the applicable platform directly.
Services Overview Through our Services business, we provide a pre-priced offering, pursuant to which consumers can request services through Angi and Handy branded platforms and pay for such services on the applicable platform directly.
We believe that our ability to compete successfully will depend primarily upon the following factors: • our ability to continue to build and maintain awareness of, and trust in and loyalty to, the Angi brand; and • the functionality of our websites and mobile applications and the attractiveness of their features and our products and services generally to consumers and service professionals, as well as our continued ability to introduce new products and services that resonate with consumers and service professionals generally; • the ability of the Services business to expand pre-priced booking services, while balancing the overall mix of service requests and directory services on our platforms generally; • the size, quality, diversity and stability of our network of service professionals and the breadth of our online directory listings; • our ability to consistently generate service requests and pre-priced bookings through our platforms that convert into revenue for our service professionals in a cost-effective manner; • our ability to continue to attract (and increase) traffic to our brands and platforms through search engines, including the ability to ensure that information from such brands and platforms and related links are displayed prominently in free search engine results and that paid search marketing efforts are cost-effective, as well as the ability to respond to changes in the usage and functioning of search engines; • our ability to increasingly engage with consumers directly through our platforms, including our various mobile applications (rather than through search engine marketing or via free search engine referrals); and 7 Table of Contents • the quality and consistency of our service professional pre-screening processes and ongoing quality control efforts, as well as the reliability, depth and timeliness of customer ratings and reviews.
We believe that our ability to compete successfully will depend primarily upon the following factors: • our ability to continue to build and maintain awareness of, and trust in and loyalty to, the Angi brand; and • the functionality of our websites and mobile applications and the attractiveness of their features and our products and services generally to consumers and service professionals, as well as our continued ability to introduce new products and services that resonate with consumers and service professionals generally; • the ability of the Services business to expand pre-priced booking services, while balancing the overall mix of service requests and directory services on our platforms generally; • the size, quality, diversity and stability of our network of service professionals and the breadth of our online directory listings; • our ability to consistently generate service requests and pre-priced bookings through our platforms that convert into revenue for our service professionals in a cost-effective manner; • our ability to continue to attract (and increase) traffic to our brands and platforms through search engines, including the ability to ensure that information from such brands and platforms and related links are displayed prominently in free search engine results and that paid search marketing efforts are cost-effective, as well as the ability to respond to changes in the usage and functioning of search engines and the introduction of new technology; • our ability to increasingly engage with consumers directly through our platforms, including our various mobile applications (rather than through search engine marketing or via free search engine referrals); and • the quality and consistency of our service professional pre-screening processes and ongoing quality control efforts, as well as the reliability, depth and timeliness of customer ratings and reviews.
Service Professional Services Services service professionals are provided with access to a pool of consumers seeking service professionals and must validate their home services experiences, as well as attest to holding the requisite license, and maintain an acceptable rating to remain on Services platforms. In addition, the owner(s) or principal(s) of such service provider must pass certain criminal background checks.
Service Professional Services Services service professionals are provided with access to a pool of consumers seeking service professionals and must validate their home services experience, as well as attest to holding the requisite license(s) and maintain an acceptable rating to remain on Services platforms. In addition, the owner(s) or principal(s) of such service provider must pass certain criminal background checks.
Services Agreement The services agreement currently governs services that IAC has agreed to provide to us through September 29, 2021, with automatic renewal for successive one-year terms, subject to IAC’s continued ownership of a majority of the total combined voting power of our voting stock and any subsequent extension(s) or truncation(s) agreed to by us and IAC.
Services Agreement The services agreement currently governs services that IAC has agreed to provide to us through September 29, 2024, with automatic renewal for successive one-year terms, subject to IAC’s continued ownership of a majority of the total combined voting power of our voting stock and any subsequent extension(s) or truncation(s) agreed to by us and IAC.
As of December 31, 2022, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.1% of our total outstanding shares of capital stock and approximately 98.1% of the total combined voting power of our outstanding capital stock.
As of December 31, 2023, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.2% of our total outstanding shares of capital stock and approximately 98.1% of the total combined voting power of our outstanding capital stock.
For example, many U.S. states have considered enacting legislation that could impact the ability of our businesses to efficiently process auto-renewal payments for, as well as offer promotional or differentiated pricing. The adoption of any law that adversely affects revenue from recurring membership or subscription payments could adversely affect our business, financial condition and results of operations.
In addition, many U.S. states have considered enacting legislation that could impact the ability of our businesses to efficiently process auto-renewal payments for, as well as offer promotional or differentiated pricing. The adoption of any law that adversely affects revenue from recurring membership or subscription payments could adversely affect our business, financial condition and results of operations.
We compete with, among others: (i) search engines and online directories, (ii) home and/or local services-related platforms, (iii) providers of consumer ratings, reviews and referrals and (iv) various forms of traditional offline advertising (primarily local in nature), including radio, direct marketing campaigns, yellow pages, newspapers and other offline directories.
We compete with, among others: (i) search engines and online directories, (ii) home and/or local services-related platforms, (iii) 7 Table of Contents providers of consumer ratings, reviews and referrals and (iv) various forms of traditional offline advertising (primarily local in nature), including radio, direct marketing campaigns, yellow pages, newspapers and other offline directories.
To support the advancement of our employees, we offer training and development programs and encourage advancement from within. In 2020, we launched a learning management system for broader facilitation of training resources. We leverage both formal and informal programs designed to identify, foster, and retain top talent.
To 9 Table of Contents support the advancement of our employees, we offer training and development programs and encourage advancement from within. In 2020, we launched a learning management system for broader facilitation of training resources. We leverage both formal and informal programs designed to identify, foster, and retain top talent.
See “ Item 1A-Risk Factors-Risks Related to Our Business and Industry -The processing, storage, use and disclosure of personal data could give rise to liabilities and increased costs.” We are particularly sensitive to laws and regulations that adversely impact the popularity or growth in use of the Internet and/or online products and services generally, restrict or otherwise unfavorably impact the ability or manner in which we provide our products and services, regulate the practices of third parties upon which we rely to provide our products and services and undermine open and neutrally administered Internet access.
See “ Item 1A-Risk Factors-General Risk Factors -The processing, storage, use and disclosure of personal data could give rise to liabilities and increased costs.” We are particularly sensitive to laws and regulations that adversely impact the popularity or growth in use of the Internet and/or online products and services generally, restrict or otherwise unfavorably impact the ability or manner in which we provide our products and services, regulate the practices of third parties upon which we rely to provide our products and services and undermine open and neutrally administered Internet access.
In addition, consumers who purchase furniture, electronics, appliances and other home-related items from select third-party retail partners online (and in certain markets, in store) can simultaneously purchase assembly, installation and other related services to be fulfilled by Services service professionals, which are then paid for by the consumer directly through the applicable third-party retail partner platform.
In addition, consumers who purchase furniture, electronics, appliances and other home-related items from select third-party retail partners 6 Table of Contents online (and in certain markets, in store) can simultaneously purchase assembly, installation and other related services to be fulfilled by Services service professionals, which are then paid for by the consumer directly through the applicable third-party retail partner platform.
RELATIONSHIP WITH IAC Equity Ownership and Vote We have two classes of capital stock outstanding, Class A common stock and Class B common stock, with one vote and ten votes per share, respectively. Our shares of Class B common stock are convertible into shares of Class A common stock on a share for share basis.
RELATIONSHIP WITH IAC Equity Ownership and Vote 10 Table of Contents We have two classes of capital stock outstanding, Class A common stock and Class B common stock, with one vote and ten votes per share, respectively. Our shares of Class B common stock are convertible into shares of Class A common stock on a share for share basis.
See “ Item 1A-Risk Factors-Risk Factors-Risks Related to Our Business and Industry -There may be adverse tax, legal and other consequences if the contractor classification or employment status of the service professionals who use our platform is challenged.” Human Capital Management As of December 31, 2022, we employed approximately 4,600 employees worldwide, the substantial majority of which provided services to our brands and businesses located in the United States.
See “ Item 1A-Risk Factors-Risks Related to Our Business and Industry -There may be adverse tax, legal and other consequences if the contractor classification or employment status of the service professionals who use our platform is challenged.” Human Capital Management As of December 31, 2023, we employed approximately 3,800 employees worldwide, the substantial majority of which provided services to our brands and businesses located in the United States.
If a service professional fails to meet any eligibility criteria during the membership term, refuses to participate in the complaint resolution process, or engages 5 Table of Contents in what we determine to be prohibited behavior through any Angi platform, the service professional is subject to being removed from the Angi network.
If a service professional fails to meet any eligibility criteria during the membership term, refuses to participate in the complaint resolution process, or engages in what we determine to be prohibited behavior through any Angi platform, the service professional is subject to being removed from the Angi network.
Intellectual Property We regard our intellectual property rights as critical to our success in the United States, with our trademarks, service marks and domain names being especially critical to the continued development and awareness of our brands and our marketing efforts.
Intellectual Property We regard our intellectual property rights as critical to our success, with our trademarks, service marks and domain names being especially critical to the continued development and awareness of our brands and our marketing efforts.
The European Commission and several European countries have recently adopted (or intend to adopt) proposals that would change various aspects of the current tax framework under which our European businesses are taxed, including proposals to change or impose new types of non-income taxes (including digital services taxes based on a percentage of revenue).
The European Commission and several European countries have adopted (or intend to adopt) proposals that impact various aspects of the current tax framework under which our European businesses are taxed, including new types of non-income taxes (including digital services taxes based on a percentage of revenue).
Compliance with this legislation or similar or more stringent legislation in other jurisdictions could be costly, and the failure to comply could result in service interruptions and negative publicity, any or all of which could adversely affect our business, financial condition and results of operations. In addition, in December 2017, the U.S.
Compliance with this legislation or similar or more stringent legislation in other jurisdictions could be costly, and the failure to comply could result in service interruptions and negative publicity, any or all of which could adversely affect our business, financial condition and results of operations.
Consumers can rate Angi service professionals listed in our nationwide directory on a one- to five- star rating scale based on a variety of criteria, including overall experience, availability, price, quality, responsiveness, punctuality and professionalism and other criteria, depending on the type of service provided.
Consumers can rate Angi service professionals on a one- to five- star rating scale based on a variety of criteria, including overall experience, availability, price, quality, responsiveness, punctuality and professionalism and other criteria, depending on the type of service provided.
We are also subject to laws governing marketing and advertising activities conducted by/through telephone, e-mail, mobile devices and the Internet, including the Telephone Consumer Protection Act of 1991, the Telemarketing Sales Rule, the CAN- 8 Table of Contents SPAM Act and similar state laws, as well as federal, state, and local laws and agency guidelines governing background screening.
We are also subject to laws governing marketing and advertising activities conducted by/through telephone, email, mobile devices and the Internet, including the Telephone Consumer Protection Act of 1991 (the “TCPA”), the Telemarketing Sales Rule, the CAN-SPAM Act and similar state laws, as well as federal, state, and local laws and agency guidelines governing background screening.
Ads and Leads Overview This business connects consumers with service professionals for local services through our nationwide online directory of service professionals across more than 500 service categories, as well as provides consumers with valuable tools, services and content (including verified reviews of local service professionals), to help them research, shop and hire for local services.
Ads and Leads Overview This business connects consumers with service professionals for local services through our nationwide network of service professionals across more than 500 service categories, as well as provides consumers with valuable tools, services (including the ability to book appointments online) and content (including verified reviews of local service professionals), to help them research, shop and hire for local home services.
Changes in these laws, or a proceeding of this nature, could have an adverse effect on us due to legal costs, impacts on business operations, diversion of management resources, negative publicity, and other factors. See “Item 3-Legal Proceedings-FTC Administrative Proceeding against HomeAdvisor.” We are also generally sensitive to the adoption of new tax laws.
Changes in these laws, or a proceeding of this nature, could have an adverse effect on us due to legal costs, impacts on business operations, diversion of management resources, negative publicity, and other factors. We are also generally sensitive to the adoption of new tax laws.
Item 1. Business OVERVIEW Who We Are Angi Inc. connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. During the year ended December 31, 2022, over 220,000 domestic service professionals actively sought consumer leads, completed jobs or advertised work through Angi Inc. platforms.
Item 1. Business OVERVIEW Who We Are 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 sought consumer matches, completed jobs, or advertised work through Angi Inc. platforms during the three months ended December 31, 2023.
Certified service professionals rotate among the first service professionals listed in our nationwide online directory search results for an applicable category (together with their company name, overall rating, number of reviews, certification badge and basic profile information), with non-certified service professionals appearing below certified service professionals in directory search results. Certified service professionals can also provide exclusive promotions to members.
Certified service professionals are sorted preferentially in search results for an applicable category (together with their company name, overall rating, number of reviews, certification badge and basic profile information), with non-certified service professionals appearing below certified service professionals in search results. Certified service professionals can also provide exclusive promotions to members.
Revenue Ads and Leads Revenue is primarily derived from (i) consumer connection revenue, which is comprised of fees paid by service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service), (ii) advertising revenue, which includes revenue from service professionals under contract for advertising, and (iii) membership subscription revenue from service professionals and consumers.
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.
We have also registered a variety of domestic and international domain names, the most significant of which relate to our Angi brand. In addition, we have one patent that expires in November 2035 and three patent applications pending.
We have also registered a variety of domestic and international domain names, the most significant of which relate to our Angi brand. In addition, we have two patents that expire in November 2035.
Depending on the nature of the service request and the path through which it was submitted, consumers are generally matched with service professionals from the Leads digital marketplace, a Services service professional or a combination of Ads and Leads service professionals (as and if available for the given service request).
Depending on the nature of the service request and the path through which it was submitted, consumers are generally matched with a combination of Ads, Leads, and Services service professionals.
In addition, we also are subject to various other federal, state, and local laws, rules and regulations focused on consumer protection. These laws, rules and regulations are enforced by governmental entities such as the Federal Trade Commission and state Attorneys General offices and may confer private rights of action on consumers as well.
These laws, rules and regulations are enforced by governmental entities such as the Federal Trade Commission and state Attorneys General offices and may confer private rights of action on consumers as well.
These agreements include the following: Contribution Agreement Under the contribution agreement: (i) we agreed to assume all of the assets and liabilities related to the HomeAdvisor business and indemnify IAC against any losses arising out of any breach by us of the contribution agreement or any other transaction related agreement described below and (ii) IAC agreed to indemnify us against any losses arising out of any breach by IAC of the contribution agreement or any other transaction related agreement described below. 10 Table of Contents Investor Rights Agreement Under the investor rights agreement, IAC has certain registration, preemptive and governance rights related to us and the shares of our capital stock it holds.
These agreements include the following: Contribution Agreement Under the contribution agreement: (i) we agreed to assume all of the assets and liabilities related to the HomeAdvisor business and indemnify IAC against any losses arising out of any breach by us of the contribution agreement or any other transaction related agreement described below and (ii) IAC agreed to indemnify us against any losses arising out of any breach by IAC of the contribution agreement or any other transaction related agreement described below.
Failure to comply with the Digital Services Act could result in the imposition of fines in an amount of up to 6% of a given online intermediary or platform’s annual worldwide turnover in the preceding fiscal year.
For example, the Digital Services Act applies to our European businesses effective February 17, 2024. Failure to comply with the Digital Services Act could result in the imposition 8 Table of Contents of fines in an amount of up to 6% of a given online intermediary or platform’s annual worldwide turnover in the preceding fiscal year.
This includes consumers access to Angi’s online True Cost Guide, which provides project cost information for more than 400 project types nationwide, as well as a library of home services-related content consisting primarily of articles about home improvement, repair and maintenance, tools to assist consumers with the research, planning and management of their projects and general advice for working with service professionals.
This includes consumers access to Angi’s online True Cost Guide, which provides project cost information for more than 400 project types nationwide, as well as a library of home services-related content consisting primarily of articles about home improvement, repair and maintenance, tools to assist consumers with the research, planning and management of their projects, and general advice for working with service professionals. 5 Table of Contents Matches are made by way of our proprietary algorithm, based on several factors (including the type of services desired, location and the number of service professionals available to fulfill the request).
Both generally, and in connection with the brand integration initiative, we have made (and expect we will continue to make) substantial investments in digital and traditional offline marketing (with continued expansion into new and existing digital platforms) to consumers and service professionals to promote our products and services and drive visitors to our various platforms and service professionals.
We have made, and expect we will continue to make, substantial investments in digital and traditional offline marketing to consumers and service professionals to promote our products and services and drive visitors to our various platforms and service professionals.
We market our various products and services to consumers primarily through digital marketing (primarily paid and free search engine marketing, display advertising and third-party affiliate agreements) as well as through traditional offline marketing (national television and radio campaigns), and e-mail.
International revenue primarily comprises consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers. Marketing We market our various products and services to consumers primarily through digital marketing (primarily paid and free search engine marketing, display advertising and third-party affiliate agreements), as well as through traditional offline marketing (national television and radio campaigns), and email.
We also focus many programs on employee wellness and have implemented solutions including mental health support access, telemedicine, meditation, and fitness programs. We also offer our US-based full-time employees a 401(k) retirement plan with a Company match.
In recent years, we have supported growing families by including adoption and surrogacy support and expanded the time provided for bonding leave. We also focus many programs on employee wellness and have implemented solutions including mental health support access and telemedicine. We also offer our US-based full-time employees a 401(k) retirement plan with a Company match.
DESCRIPTION OF OUR BUSINESSES Our Domestic Businesses In the United States, the Company, through several differentiated experiences, provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals, matching consumers with independently established home services professionals engaged in a trade, occupation and/or businesses that customarily provides such services and provides consumers with tools to communicate with service professionals and pay for related services: • an Ads and Leads experience where service professionals pay for connections to consumers; • a Services experience where consumers make payment through the Angi platform for a specific job and the Angi platform assigns that job to a service professional who completes it and receives a portion of the job fee; and • a Roofing business that provides roof replacement and repair services directly to consumers.
DESCRIPTION OF OUR BUSINESSES Our Domestic Businesses In the United States, the Company, through several differentiated experiences, provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals, matches consumers with independently established home services professionals engaged in a trade, occupation and/or businesses that customarily provides such services and provides consumers with tools to communicate with service professionals and pay for related services.
As used herein, “Angi,” the “Company,” “we,” “our,” “us,” and similar terms refer to Angi Inc. and its subsidiaries (unless the context requires otherwise). History We were incorporated in the State of Delaware as ANGI Homeservices Inc. in 2017 in connection with the combination of IAC’s HomeAdvisor business and Angie’s List, Inc. (the “Combination”), which was completed in September 2017.
History We were incorporated in the State of Delaware as ANGI Homeservices Inc. in 2017 in connection with the combination of IAC’s HomeAdvisor business and Angie’s List, Inc. (the “Combination”), which was completed in September 2017.
And as proposed, failure to comply with the Online Safety Bill could result in significant fines, blocking of services and personal liability for senior management. To the extent our businesses are required to implement new measures and/or make changes to our products and services to ensure compliance, our business, financial condition and results of operations could be adversely affected.
To the extent our businesses are required to implement new measures and/or make changes to our products and services to ensure compliance, our business, financial condition and results of operations could be adversely affected.
Consumer Services Consumers can search for a service professional in our nationwide online directory and/or be matched with a service professional through our digital marketplace and certain third-party affiliate platforms. They also have access to related basic tools and services, ratings, reviews, and certain promotions.
Consumers can access our network and related basic tools and services free of charge upon registration, as well as by way of purchased membership packages. Consumer Services Consumers can search for a service professional in our nationwide online directory and/or be matched with a service professional through our digital marketplace and certain third-party affiliate platforms.
Further, the United Kingdom is expected to enact in 2023 the Online Safety Bill that would significantly increase responsibilities of online platforms to control illegal or harmful activity and grant broad authority to the UK communications regulator to enforce its provisions.
In addition, t he United Kingdom has passed the Online Safety Act 2023 that increases responsibilities of online platforms to control illegal or harmful activity and grants broad authority to the UK communications regulator to enforce its provisions.
Consumer connection revenue varies based upon several factors, including the service requested, product experience offered, and geographic location of service. Services is primarily comprised of revenue from jobs sourced directly through the platform and through retail partnerships and completed by a service professional assigned by our platform. Roofing is comprised of revenue from roofing projects.
Consumer connection revenue varies based upon several factors, including the service requested, product experience offered, and geographic location of service. 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.
The investor rights agreement also provides certain governance rights for the benefit of stockholders other than IAC.
Investor Rights Agreement Under the investor rights agreement, IAC has certain registration, preemptive and governance rights related to us and the shares of our capital stock it holds. The investor rights agreement also provides certain governance rights for the benefit of stockholders other than IAC.
We have offered paid leave for COVID-related illness that meet local requirements. Code of Business Conduct and Ethics Our US-based employees are required to annually certify to their familiarity and compliance with our Code of Business Conduct and Ethics.
Community We encourage our employees to become involved in their communities by providing full-time employees with paid-time off each year to volunteer in local community-based programs. Code of Business Conduct and Ethics Our US-based employees are required to annually certify to their familiarity and compliance with our Code of Business Conduct and Ethics.
Additionally, consumers turned to at least one of our businesses to find a service professional for approximately 29 million projects during the year ended December 31, 2022.
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 (includes Europe and Canada) and operates under multiple brands including Angi, HomeAdvisor, and Handy.
Access to Service platforms will be revoked for service professionals that repeatedly receive low customer satisfaction ratings. Roofing Overview The business within our Roofing segment provides roof replacement and repair services, primarily in Florida (and, to a lesser extent, in Arizona and Texas).
Access to Service platforms will be revoked for service professionals that repeatedly receive low customer satisfaction ratings.
Our financial information for prior periods has been recast to conform to the current period presentation. Angi is a public company controlled by IAC Inc. (formerly known as IAC/InterActiveCorp (“IAC”)). As of December 31, 2022, IAC’s economic and voting interest in Angi were 84.1% and 98.1%, respectively.
Angi is a public company controlled by IAC Inc. (“IAC”). As of December 31, 2023, IAC’s economic and voting interest in Angi were 84.2% and 98.1%, respectively. As used herein, “Angi,” the “Company,” “we,” “our,” “us,” and similar terms refer to Angi Inc. and its subsidiaries (unless the context requires otherwise).
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In the fourth quarter of 2022, our segment presentation was changed to reflect out four operating segments, which now include: (i) Ads and Leads, (ii) Services, (iii) Roofing, and (iv) International (includes Europe and Canada), and the various businesses within those segments operate under multiple brands, including Angi, HomeAdvisor, Handy, Total Home Roofing, Angi Roofing, MyBuilder, and Travaux.com.
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These experiences primarily include: • an Ads and Leads experience, where service professionals pay for connections to consumers; and • a Services experience, where consumers make payment through the Angi platform for a specific job and the Angi platform assigns that job to a service professional who completes it and receives a portion of the job fee.
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Consumers can access our nationwide online directory and related basic tools and services free of charge upon registration, as well as by way of purchased membership packages. Our Ads business also sells term-based website and mobile and digital magazine advertising to service professionals, as well as provides them with quoting, invoicing, and payment services.
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They also have access to related basic tools and services, ratings, reviews, and certain promotions.
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Our Leads digital marketplace service connects consumers with service professionals nationwide for home repair, maintenance, and improvement projects.
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With respect to the TCPA, we are subject to ruling of the Federal Trade Commission’s (“FCC”), which requires one-to-one prior express written consent for a business to contact a consumer via phone or text message when using automated technology.
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Our Leads business provides consumers with tools and resources to help them find local, pre-screened and customer-rated service professionals, as well as instantly book appointments online, connect with service professionals 4 Table of Contents instantly by telephone, and access several home services-related resources, such as cost guides for different home services projects.
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The result of this rule is that a business that wishes to contact a consumer for marketing purposes via phone or text using automated technology must receive its own specific express written consent.
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Matches are made by way of our proprietary algorithm, based on several factors (including the type of services desired, location and the number of service professionals available to fulfill the request).
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Certain of our businesses will be required to make changes to our products, services, and third-party affiliate relationships to ensure compliance, and such changes may have an adverse effect on our business, financial condition and results of operations.
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Requests for roof replacement and repair services are currently fulfilled via Angi Roofing, LLC, the entity that was formed by Angi Inc. in July 2021 to acquire certain assets and liabilities of Total Home Roofing, LLC.
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See “Item 1A—Risk Factors—Risks Related to Our Business and Industry—Changes to certain requirements applicable to certain communications with consumers may adversely impact our ability to generate leads for our service professionals.” In addition, we also are subject to various other federal, state, and local laws, rules and regulations focused on consumer protection.
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Consumer Services Roofing consumers are identified through lead generation services, as well as organically through consumers that reach out directly, who are able to receive roof replacement services. Service Professional Services Angi Roofing contracts with independent roofing professional in each market to fulfil the services.
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In addition, certain U.S. states have adopted or are considering adopting similar laws applicable to revenue attributable to digital advertising and other forms of digital commerce.
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International is primarily comprised of revenue from consumer connection revenue for consumer matches and membership subscription from service professionals and consumers.
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In 2022, we expanded our tuition waiver program, both in reimbursement amount that employees are eligible to receive and to include certificate programs to support our team members’ pursuit of educational opportunities outside of traditional degree programs.
Removed
Marketing 6 Table of Contents In March 2021, the Company changed its name to Angi Inc. and updated one of its leading websites and brands, Angie’s List, to Angi, and concentrated its marketing investment in the Angi brand in order to focus its marketing, sales, and branding efforts to a single brand.
Removed
For example, the Digital Markets Act and the Digital Services Act (which both came into force in November 2022) form a single set of new rules that will be applicable to online intermediaries and platforms across the whole EU to seek to create a safer and more open digital space.
Removed
Federal Communications Commission (the “FCC”) adopted an order reversing net neutrality protections in the United States, including the repeal of specific rules against blocking, throttling or “paid prioritization” of content or services by Internet service providers.
Removed
In the wake of the FCC’s repeal of its net neutrality laws, many states, including California and New York, have adopted their own neutrality laws imposing some degree of regulation on internet service providers operating in those states.
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Many of these regulations remain subject to legal challenge in the courts, although some, including California’s have been allowed to take effect while those challenges are concluded. To the extent Internet service providers take such actions, our business, financial condition and results of operations could be adversely affected.
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Community 9 Table of Contents We encourage our employees to become involved in their communities by providing full-time employees with paid-time off each year to volunteer in local community-based programs. COVID Response In response to the COVID-19 pandemic, we quickly implemented safety and health standards and protocols for our employees to ensure a safe work environment.
Removed
Employees in our offices have been working remotely since March 2020 and we have moved our sales employees to work fully remotely. Our corporate employees near our Denver, Colorado, New York City and Indianapolis, Indiana offices returned to the office in mid-2022 and continued to adhere to the recommended protocols of the Centers for Disease Control or local regulations.
Removed
The services agreement has been renewed through September 29, 2023.
Removed
To the extent that shares of IAC common stock are issued in settlement of these awards, we are 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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+25 added−20 removed144 unchanged
Biggest changeIn addition, our failure to respond to rapid and frequent changes in the pricing and operating dynamics of search engines, as well as changing policies and guidelines applicable to keyword advertising (which may unilaterally be updated by search engines without advance notice), could adversely affect our paid search engine marketing efforts (and free search engine traffic).
Biggest changeIn addition, if we fail to comply with the policies of third-party sellers, publishers and/or marketing affiliates, our advertisements could be removed without notice or our accounts could be suspended or terminated, any of which could adversely affect our business, financial condition and results of operations. 12 Table of Contents In addition, our failure to respond to rapid and frequent changes in the pricing and operating dynamics of search engines, as well as changing policies and guidelines applicable to keyword advertising (which may unilaterally be updated by search engines without advance notice), could adversely affect our paid search engine marketing efforts (and free search engine traffic).
As a result, we cannot assure you that these parties will not limit or prohibit us from purchasing certain types of advertising (including the purchase by Angi of advertising with preferential placement), advertising certain of our products and services and/or using one or more current or prospective marketing channels in the future.
As a result, we cannot assure you that these parties will not limit or prohibit us from purchasing certain types of advertising (including the purchase by Angi of advertising with preferential placement), advertising certain of our products and services or using one or more current or prospective marketing channels in the future.
If the quality and/or convertibility of traffic and leads do not meet the expectations of our users and/or Angi Leads service professionals, they could leave our network and/or decrease their budgets for consumer matches or participation in pre-priced booking services, any or all of which could adversely affect our business, financial condition and results of operations.
If the quality or convertibility of traffic and leads do not meet the expectations of our users or Angi Leads service professionals, they could leave our network or decrease their budgets for consumer matches or participation in pre-priced booking services, any or all of which could adversely affect our business, financial condition and results of operations.
Any event of this nature that we experience could damage our systems, technology and infrastructure and/or those of our users, prevent us from providing our products and services, compromise the integrity of our products and services, damage our reputation, erode our brands and/or be costly to remedy, as well as subject us to investigations by regulatory authorities, fines and/or litigation that could result in liability to third parties.
Any event of this nature that we experience could damage our systems, technology and infrastructure or those of our users, prevent us from providing our products and services, compromise the integrity of our products and services, damage our reputation, erode our brands or be costly to remedy, as well as subject us to investigations by regulatory authorities, fines or litigation that could result in liability to third parties.
Any event of this nature could prevent us from providing our products and services at all (or result in the provision of our products and services on a delayed or intermittent basis) and/or result in the loss of critical data.
Any event of this nature could prevent us from providing our products and services at all (or result in the provision of our products and services on a delayed or intermittent basis) or result in the loss of critical data.
Additionally, to the extent multiple U.S. state-level (or European Union member-state level) laws are introduced with inconsistent or conflicting standards and there is no federal or European Union regulation to preempt such laws, compliance could be even more difficult to achieve and our potential exposure to the risks discussed above could increase.
Additionally, to the extent multiple U.S. state (or European Union member-state) laws are introduced with inconsistent or conflicting standards and there is no federal or European Union regulation to preempt such laws, compliance could be even more difficult to achieve and our potential exposure to the risks discussed above could increase.
As a result, IAC has (and we expect will continue to have) the ability to control significant corporate activities, including: • the election of our board of directors (subject to certain provisions of the investor rights agreement between us and IAC) and, through our board of directors, decision-making with respect to our business direction and policies, including the appointment and removal of our officers; • acquisitions or dispositions of businesses or assets, mergers or other business combinations; 19 Table of Contents • issuances of shares of our Class A common stock, Class B common stock and Class C common stock and our capital structure generally; • corporate opportunities that may be suitable for us and IAC, subject to the corporate opportunity provisions in our amended and restated certificate of incorporation (as described below); • our financing activities, including the issuance of debt securities and/or the incurrence of other indebtedness generally; • stock repurchases or the payment of one-time or recurring dividends; and • the number of shares available for issuance under our equity incentive plans.
As a result, IAC has (and we expect will continue to have) the ability to control significant corporate activities, including: • the election of our board of directors (subject to certain provisions of the investor rights agreement between us and IAC) and, through our board of directors, decision-making with respect to our business direction and policies, including the appointment and removal of our officers; • acquisitions or dispositions of businesses or assets, mergers or other business combinations; • issuances of shares of our Class A common stock, Class B common stock and Class C common stock and our capital structure generally; • corporate opportunities that may be suitable for us and IAC, subject to the corporate opportunity provisions in our amended and restated certificate of incorporation (as described below); • our financing activities, including the issuance of debt securities and/or the incurrence of other indebtedness generally; • stock repurchases or the payment of one-time or recurring dividends; and • the number of shares available for issuance under our equity incentive plans.
We could be subject to claims of non-compliance with applicable privacy and data protection policies, laws and regulations and industry standards and practices that we may not be able to successfully defend and/or significant fines and penalties.
We may be subject to claims of non-compliance with applicable privacy and data protection policies, laws and regulations and industry standards and practices that we may not be able to successfully defend or significant fines and penalties.
In addition, if any of the search engines, digital app stores or social media platforms through which we market, distribute and monetize our products and services were to experience a breach, third parties could gain unauthorized access to personal data about our users and subscribers, which could harm the reputation of our brands and businesses and in turn, adversely affect our business, financial condition and results of operations.
In addition, if any of the search engines, digital app stores or social media platforms through which we market, distribute and monetize our products and services were to experience a breach, third parties could gain unauthorized access to personal data about our users and subscribers, which could indirectly harm the reputation of our brands and business and, in turn, adversely affect our business, financial condition and results of operations.
When breaches of security (ours or that of any third-party we engage to store information) occur, we could face governmental enforcement actions, significant fines, litigation (including consumer class actions) and the reputation of our brands and business could be harmed, which could adversely affect our business, financial condition and results of operations.
When breaches of security (ours or that of any third party that we engage to store such information) occur, we could face governmental enforcement actions, significant fines, litigation (including consumer class actions) and the reputation of our brands and business could be harmed, any or all of which could adversely affect our business, financial condition and results of operations.
As global economic conditions continue to be volatile and/or economic uncertainty remains, particularly in light of increasing inflation and interest rates, trends affecting our business also remain unpredictable. Any such event or trend could result in decreases in service requests, pre-priced bookings and directory searches.
As global economic conditions continue to be volatile and/or economic uncertainty remains, particularly in light of high inflation and interest rates, trends affecting our business also remain unpredictable. Any such event or trend could result in decreases in service requests, pre-priced bookings and directory searches.
For a more complete summary of our various agreements with IAC, see “ Note 14-Related Party Transactions with IAC ” to the consolidated financial statements included in “ Item 8-Consolidated Financial Statements and Supplementary Data. ” Until such time as IAC no longer controls or has the ability to substantially influence us, we will continue to face the risks described in this “Risk Factors” section relating to IAC’s control of us and the potential conflicts of interest between us and IAC.
For a more complete summary of our various agreements with IAC, see “ Note 1 7 — Related Party Transactions with IAC ” to the consolidated financial statements included in “ Item 8-Consolidated Financial Statements and Supplementary Data. ” Until such time as IAC no longer controls or has the ability to substantially influence us, we will continue to face the risks described in this “Risk Factors” section relating to IAC’s control of us and the potential conflicts of interest between us and IAC.
The devotion of significant costs to compliance (versus the development of products and services) could result in delays in the development of new products and services, us ceasing to provide problematic products and services in existing jurisdictions and us being prevented from introducing products and services in new and existing jurisdictions, which could adversely affect our business, financial condition and results of operations.
The devotion of significant expenditures to compliance (versus the development of products and services) could result in delays in the development of new products and services, us ceasing to provide problematic products and services in existing jurisdictions and us being prevented from introducing products and services in new and existing jurisdictions, which could adversely affect our business, financial condition and results of operations.
Any factors that negatively impact the Angi and/or HomeAdvisor brand(s) could materially and adversely affect our business, financial condition and results of operations. In addition, trust in the integrity and objective, unbiased nature of the ratings and reviews found across our various brands contributes significantly to public perception of these brands and their ability to attract consumers and service professionals.
Any factors that negatively impact the Angi and/or HomeAdvisor brand(s) could materially and adversely affect our business, financial condition and results of operations. 16 Table of Contents In addition, trust in the integrity and objective, unbiased nature of the ratings and reviews found across our various brands contributes significantly to public perception of these brands and their ability to attract consumers and service professionals.
As of December 31, 2022, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.1% of our total outstanding shares of capital stock and approximately 98.1% of the total combined voting power of our outstanding capital stock.
As of December 31, 2023, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.2% of our total outstanding shares of capital stock and approximately 98.1% of the total combined voting power of our outstanding capital stock.
These decisions could include: • corporate opportunities; • the impact that operating or capital decisions (including the incurrence of indebtedness) relating to our business may have on IAC's consolidated financial statements and/or current or future indebtedness (including related covenants); • business combinations involving us; 20 Table of Contents • our dividend and stock repurchase policies; • management stock ownership; and • the intercompany agreements and services between us and IAC.
These decisions could include: • corporate opportunities; • the impact that operating or capital decisions (including the incurrence of indebtedness) relating to our business may have on IAC's consolidated financial statements and/or current or future indebtedness (including related covenants); • business combinations involving us; • our dividend and stock repurchase policies; • management stock ownership; and • the intercompany agreements and services between us and IAC.
Alternatively, if a court were to find our choice of forum provision to be inapplicable or unenforceable in an action, we could incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. Item 1B. Unresolved Staff Comments Not applicable.
Alternatively, if a court were to find our choice of forum provision to be inapplicable or unenforceable in an action, we could incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. 23 Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
Our success depends on the ability of our products and services to maintain a prominent position in search results, and in the event operators of search engines promote their own competing products in the future in a manner that has the effect of reducing the prominence or ranking of our products and services, our business, financial condition and results of operations could be adversely affected.
Our success depends on the ability of our products and services to maintain a prominent position in search results, and in the event operators of search engines promote their own competing products in the future in a manner that 13 Table of Contents has the effect of reducing the prominence or ranking of our products and services, our business, financial condition and results of operations could be adversely affected.
To the extent IAC fails to pay taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or one of its subsidiaries that includes us or any of our subsidiaries, the 21 Table of Contents relevant taxing authority could seek to collect such taxes (including taxes for which IAC is responsible under the tax sharing agreement) from us or our subsidiaries.
To the extent IAC fails to pay taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or one of its subsidiaries that includes us or any of our subsidiaries, the relevant taxing authority could seek to collect such taxes (including taxes for which IAC is responsible under the tax sharing agreement) from us or our subsidiaries.
Each of these intentions may cause IAC not to support transactions that we wish to pursue that involve issuing shares of our capital stock, including for capital-raising purposes, as consideration for an acquisition or as equity incentives to our employees, or otherwise impact our overall capital management strategy.
Each of these intentions may cause IAC not to support transactions that we wish to pursue that involve issuing shares of our capital stock, including for capital-raising purposes, as consideration for an acquisition or as equity incentives to our employees, or otherwise impact our 21 Table of Contents overall capital management strategy.
A continued and significant erosion in our ability to communicate with consumers and service professionals via e-mail could adversely impact the overall user experience, consumer and service professional engagement levels and conversion rates, which could adversely affect our business, financial condition and results of operations.
A continued and significant erosion in our ability to communicate with consumers and service professionals via email could adversely impact the overall user experience, consumer and service professional engagement levels and conversion rates, which could adversely affect our business, financial condition and results of operations.
Lastly, we have historically been, and will continue to be, sensitive to events and trends that could result in decreased marketing and advertising expenditures by service professionals.
In addition, we have historically been, and will continue to be, sensitive to events and trends that could result in decreased marketing and advertising expenditures by service professionals.
These forward-looking statements are based on the expectations 11 Table of Contents and assumptions of our management about future events as of the date of this annual report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
These forward-looking statements are based on the expectations and assumptions of our management about future events as of the date of this annual report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Other U.S. states, such as Virginia, Utah, Connecticut, and Colorado, have passed consumer privacy laws that become effective later in 2023 and 2024.
Other U.S. states, such as Virginia, Utah, Connecticut, and Colorado, have passed consumer privacy laws that became effective later in 2023 and in 2024.
Through e-mail, we provide consumers and service professionals with service request and pre-priced offering updates, as well as present or suggest new products and services (among other things) and market our products and services in a cost-effective manner.
Through email, we provide consumers and service professionals with service request and pre-priced offering updates, as well as present or suggest new products and services (among other things) and market our products and services in a cost-effective manner.
Our success depends on our ability to expand our pre-priced offerings, while balancing the overall mix of our service requests and directory services on Angi platforms. 13 Table of Contents Our Services business provides a pre-priced offering, pursuant to which consumers can request services through Services platforms and pay for such services on the applicable platform directly.
Our success depends on our ability to continue to expand our pre-priced offerings, while balancing the overall mix of our service requests and directory services on Angi platforms. Our Services business provides a pre-priced offering, pursuant to which consumers can request services through Services platforms and pay for such services on the applicable platform directly.
If so, our customer relationship management efforts, our ability to identify, target and reach new segments of our user base and the population generally, and the efficiency of our paid marketing efforts could be adversely affected.
If so, our customer relationship management efforts, our ability to identify, target and reach new 14 Table of Contents segments of our user base and the population generally, and the efficiency of our paid marketing efforts could be adversely affected.
Low switching costs, coupled with the propensity of consumers to try new products and services generally, will most likely result in the continued emergence of new products and services, entrants and business 15 Table of Contents models in the home services industry.
Low switching costs, coupled with the propensity of consumers to try new products and services generally, will most likely result in the continued emergence of new products and services, entrants and business models in the home services industry.
General Risk Factors Our brands and businesses operate in an especially competitive and evolving industry. The home services industry is competitive, with a consistent and growing stream of new products, services and entrants.
General Risk Factors Our brands and businesses operate in an especially competitive and evolving industry. 15 Table of Contents The home services industry is competitive, with a consistent and growing stream of new products, services and entrants.
As these channels continue to evolve relative to traditional channels (such as television), it could continue to be difficult to assess returns on related marketing investments, which could adversely affect our business, financial condition and results of operations. 12 Table of Contents Lastly, we also enter into various arrangements with third parties to drive visitors to Angi platforms.
As these channels continue to evolve relative to traditional channels (such as television), it could continue to be difficult to assess returns on related marketing investments, which could adversely affect our business, financial condition and results of operations. In addition, we also enter into various arrangements with third parties to drive visitors to Angi platforms.
Historically, one of our primary means of communicating with consumers and service professionals and keeping them engaged with our products and services has been via e-mail communication.
Historically, one of our primary means of communicating with consumers and service professionals and keeping them engaged with our products and services has been via email communication.
If we are required to reclassify these individuals as employees and/or their classification is challenged for any reason, we could be exposed to various liabilities and additional costs for prior and future periods, including under federal, state and local tax laws, workers’ compensation and unemployment benefits, minimum and overtime wage laws, and other labor and employment laws, as well as potential liability for penalties and interest.
If we are required to reclassify service professionals from independent contractors to employees and/or their classification is challenged for any reason, we could be exposed to various liabilities and additional costs for prior and future periods, including under federal, state and local tax laws, workers’ compensation and unemployment benefits, minimum and overtime wage laws, and other labor and employment laws, as well as potential liability for penalties and interest.
As of December 31, 2022, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.1% of our total outstanding shares of capital stock and approximately 98.1% of the total combined voting power of our outstanding capital stock.
As of December 31, 2023, IAC owned all of our outstanding shares of Class B common stock, and 2,588,180 outstanding shares of the Company’s Class A common stock, in total representing approximately 84.2% of our total outstanding shares of 19 Table of Contents capital stock and approximately 98.1% of the total combined voting power of our outstanding capital stock.
To the extent that any or all of them do so, our business, financial condition and results of operations could be adversely affected. 14 Table of Contents Our ability to communicate with consumers and service professionals via e-mail (or other sufficient means) is critical to our success.
To the extent that any or all of them do so, our business, financial condition and results of operations could be adversely affected. Our ability to communicate with consumers and service professionals via email (or other sufficient means) is critical to our success.
The CPRA becomes fully enforceable on July 1, 2023 and will further restrict our ability to use personal California user and subscriber information in connection with our various products, services and operations and/or impose additional operational requirements, which could result in increased costs.
The CPRA became fully enforceable on July 1, 2023 and further restricts our ability to use personal California user and subscriber information in connection with our various products, services and operations and/or imposes additional operational requirements, which could result in increased costs.
Such changes could adversely affect paid listings (both their placement and pricing), as well as the ranking of our brands and businesses within search results, any or all of which could increase our marketing expenditures (particularly if free traffic is replaced with paid traffic).
Such changes, including any phasing out (or blocking) of third-party cookies by web browsers, could adversely affect paid listings (both their placement and pricing), as well as the ranking of our brands and businesses within search results, any or all of which could increase our marketing expenditures (particularly if free traffic is replaced with paid traffic).
Any such decreases could adversely impact the number and quality of service professionals and/or adversely impact the reach of (and breath of services offered through) the Leads and Services and our directories, any or all of which could adversely affect our business, financial condition and results of operations.
Any such decreases could adversely impact the number and quality of service professionals and/or adversely impact the reach of, and breadth of, our services offerings, any or all of which could adversely affect our business, financial condition and results of operations.
As consumers increasingly communicate via mobile and other digital devices and messaging and social media apps, usage of e-mail (particularly among younger consumers) has declined and we expect this trend to continue. In addition, deliverability and other restrictions could limit or prevent our ability to send e-mails to consumers and service professionals.
As consumers increasingly communicate via mobile and other digital devices and messaging and social media apps, usage of email (particularly among younger consumers) has declined and we expect this trend to continue. In addition, deliverability and other restrictions could limit or prevent our ability to send emails to consumers and service professionals. Recently, email providers have tightened their spam thresholds.
Risks Related to Our Indebtedness We may not be able to generate sufficient cash to service our indebtedness. Our ability to satisfy our debt obligations will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control.
Our ability to satisfy our debt obligations will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control. 22 Table of Contents We may not be able to generate sufficient cash flow from our operations to meet our scheduled debt obligations.
We have no control over any of these third parties or their operations. The framework described above could be damaged or interrupted at any time due to fire, power loss, telecommunications failure, natural disasters, acts of war or terrorism, acts of God and other similar events or disruptions.
The framework described above could be damaged or interrupted at any time due to fire, power loss, telecommunications failure, natural disasters, acts of war or terrorism, acts of God and other similar events or disruptions.
While we and the third parties upon whom we rely have certain backup systems in place for certain aspects of our respective frameworks, none of our frameworks are fully redundant and disaster recovery planning is not sufficient for all eventualities. In addition, we may not have adequate insurance coverage to compensate us for losses from a major interruption.
The backup systems that we and the third parties upon whom we rely have in place for certain aspects of our respective frameworks may be insufficient for all recovery eventualities. In addition, we may not have adequate insurance coverage to compensate us for losses from a major interruption.
Our brands and businesses are sensitive to general economic events and trends, particularly those that adversely impact consumer confidence and spending behavior. We have historically been, and will continue to be, particularly sensitive to events and trends that result in consumers delaying or foregoing home services projects and/or service professionals being less likely to pay for consumer matches and subscriptions.
We have historically been, and will continue to be, particularly sensitive to events and trends that result in consumers delaying or foregoing home services projects and/or service professionals being less likely to pay for consumer matches and subscriptions.
Risks Related to Ownership of Our Class A Common Stock The multiclass structure of our capital stock has the effect of concentrating voting control with IAC and limiting the ability of holders of our Class A common stock to influence corporate matters. 22 Table of Contents Each share of our Class B common stock has ten votes per share and each share of our Class A common stock has one vote per share.
Risks Related to Ownership of Our Class A Common Stock The multiclass structure of our capital stock has the effect of concentrating voting control with IAC and limiting the ability of holders of our Class A common stock to influence corporate matters.
Any future outbreak of a widespread health epidemic or pandemic (or the continuing outbreak of COVID-19) and measures designed to contain its spread could adversely impact our ability to conduct ordinary course business activities and employee productivity and increase operating costs.
Lastly, given the adverse financial and operational impact we experienced as a result of the coronavirus and measures designed to contain its spread, any future outbreak of a widespread health epidemic or pandemic could adversely impact our ability to conduct ordinary course business activities and employee productivity and increase operating costs.
We may not be able to generate sufficient cash flow from our operations to meet our scheduled debt obligations. If so, we could be forced to reduce or delay capital expenditures, sell assets or seek additional capital in a manner that complies with the terms (including certain restrictions and limitations) of our current indebtedness.
If so, we could be forced to reduce or delay capital expenditures, sell assets or seek additional capital in a manner that complies with the terms (including certain restrictions and limitations) of our current indebtedness.
If the amounts related to such liabilities and additional costs are significant, our business, financial condition and results of operations could be adversely affected.
If the amounts related to such liabilities and additional costs are significant, our business, financial condition and results of operations could be adversely affected. See Item 8 - Consolidated Financial Statements and Supplementary Data - Note 15 - Contingencies .
Despite these efforts, some of our systems have experienced past security incidents, none of which had a material adverse effect on our business, financial condition and results of operations, and we could experience significant events of this nature in the future.
Despite these efforts, some of our systems have experienced past security incidents and we could experience significant events of this nature in the future.
If we (or any third-party with whom we do business or otherwise rely upon) experience(s) an event of this nature, our business, financial condition and results of operations could be adversely affected.
We may not have adequate insurance coverage to compensate for losses resulting from any of these events. If we (or any third-party with whom we do business or on which we otherwise rely) experience(s) an event of this nature, our business, financial condition and results of operations could be adversely affected.
We are regularly under attack by perpetrators of malicious technology-related events, such as the use of botnets, malware or other destructive or disruptive software, distributed denial of service attacks, phishing, attempts to misappropriate user information and account login credentials and other similar malicious activities. The incidence of events of this nature (or any combination thereof) is on the rise worldwide.
We are regularly under attack by threat actors through the use of botnets, malware or other destructive or disruptive software, distributed denial of service attacks, phishing, attempts to misappropriate user information and account login credentials, and intercept payments intended for legitimate third parties, and other similar malicious activities.
Conflicts of interest between us and IAC could be resolved in a manner unfavorable to us and our other stockholders. Various conflicts of interest between us and IAC could arise. As of the date of this report, six of our eleven directors are nominated by IAC and four of our eleven directors are current directors or executive officers of IAC.
As of the date of this report, six of our eleven directors are nominated by IAC and four of our eleven directors are current directors or executive officers of IAC.
We receive, process, store and transmit a significant amount of personal, confidential or sensitive user information and, in certain cases, enable users to share their personal information with each other. We cannot guarantee that inadvertent or unauthorized use or disclosure will not occur or that third parties will not gain unauthorized access to this information.
We receive, process, store and transmit a significant amount of personal, confidential or sensitive user and subscriber information and, in the case of certain of our products and services, enable users and subscribers to share their personal information with each other.
Our success depends, in substantial part, on our ability to maintain and/or enhance our brands, which could be negatively impacted by various factors. We own and operate two of the leading home services brands in the United States (Angi and HomeAdvisor), as well as leading brands in several foreign jurisdictions.
We own and operate two of the leading home services brands in the United States (Angi and HomeAdvisor), as well as leading brands in several foreign jurisdictions.
We may not be able to protect our systems, technology and infrastructure from cyberattacks and cyberattacks experienced by third parties may adversely affect us.
This could deter consumers and service professionals from using our products and services, which in turn could adversely affect our business, financial condition and results of operations. We may not be able to protect our systems, technology and infrastructure from cyberattacks or cyberattacks experienced by third parties may adversely affect us.
We cannot assure you that any alternative means of communication (for example, push notifications and text messaging) will be as effective as e-mail has been historically. There may be adverse tax, legal and other consequences if the contractor classification or employment status of the service professionals who use our platform is challenged.
There may be adverse tax, legal and other consequences if the contractor classification or employment status of the service professionals who use our platform is challenged.
Moreover, we may also experience business disruption if the ordinary course operations of our contractors, vendors and/or business partners are adversely affected. Any of these measures could adversely affect our business, financial condition and results of operations.
Moreover, we could also experience business disruption if the ordinary course operations of our third-party affiliates, partners and vendors are adversely affected, which could adversely affect our business, financial condition and results of operation. Our success depends, in substantial part, on our ability to maintain and/or enhance our brands, which could be negatively impacted by various factors.
We continuously develop and maintain systems designed to detect and prevent events of this nature from impacting our systems, technology, infrastructure, products, services and users.
Our efforts to develop and maintain systems designed to detect and prevent events of this nature from impacting our systems, technology, infrastructure, products, services, payment processes and procedures, and users are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated.
Even if we do not experience such events firsthand, the impact of any such events experienced by third parties could have a similar effect. We may not have adequate insurance coverage to compensate for losses resulting from any of these events.
Even if we do not experience such events directly, the impact of any such events experienced by third parties could have a similar effect. If we were to experience future events involving third-party service providers, the impacts could adversely affect our business, financial condition and results of operations in a significant or material manner.
This could deter consumers and service professionals from using our products and services, which in turn could adversely affect our business, financial condition and results of operations. COVID-19 and other similar outbreaks could continue to adversely affect our business, financial condition and results of operations.
This may reduce the number of consumers who opt-in to receiving both marketing and transactional texts from us and our service professionals, which could further adversely impact our ability to generate leads for our service professionals and, in turn, our business, financial condition and results of operation.
Removed
In addition, if we fail to comply with the policies of third-party sellers, publishers and/or marketing affiliates, our advertisements could be removed without notice and/or our accounts could be suspended or terminated, any of which could adversely affect our business, financial condition and results of operations.
Added
For example, artificial intelligence could be utilized to better educate homeowners on how to perform their own home improvement projects, thereby reducing the need for our business, or artificial intelligence could eventually transform the way search engines currently work, thereby creating unknown challenges to our marketing channels.
Removed
The Angi brand integration initiative may continue to involve substantial costs, including as a result of a continued negative impact on our organic search placement.
Added
Exceeding these more stringent spam thresholds could result in some or all of the emails from our businesses being delayed or blocked, and therefore less likely to be opened.
Removed
In March 2021, we updated one of our leading websites and brands, Angie’s List, to Angi, and since then, have concentrated our marketing investment on the Angi brand in order to focus our marketing, sales and branding efforts on a single brand.
Added
We cannot assure you that any alternative means of communication (for example, push notifications and text messaging) will be as effective as email has been historically. Changes to certain requirements applicable to certain communications with consumers may adversely impact our ability to generate leads for our service professionals.
Removed
To date, we have incurred (and we expect to continue to incur) substantial costs as a result of this brand integration initiative and the Angi brand may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by Angie’s List.
Added
In connection with the marketing of our products and services and efforts to generate leads for our service professionals, we have historically relied on our ability (and the ability of our service professionals) to communicate with consumers via phone and text, in some cases using automated technology, as have third party affiliates through which we market our products and services.
Removed
We rely heavily on free (or organic) search results from search engine optimization and paid search engine marketing efforts to drive traffic to Angi platforms. The brand integration initiative initially adversely affected the placement and ranking of our websites, particularly Angi.com , in organic search results as Angi does not have the same domain history as Angie’s List.
Added
In an effort to reduce robocalls and robotexts, there has been an increased effort by U.S. regulatory authorities and telecommunications carriers to ensure that consumers opt in to receiving certain marketing calls and texts from businesses.
Removed
Organic search results have continued to decline year-over-year and remain below pre-March 2021 levels. In addition, the shift of marketing support to the Angi brand (away from the HomeAdvisor brand) continues to negatively affect (and we expect that it will continue to negatively affect) the efficiency of our search engine marketing efforts.
Added
For example, the FCC has adopted an amendment to the express consent requirements of the TCPA to require a 1:1 consent for a business to contact a consumer via phone or text using automated technology.
Removed
The continuing occurrence of any or all of these events and trends could adversely affect our business, financial condition and results of operations.
Added
This means that each business that wishes to contact a consumer for marketing purposes via phone or text using automated technology must receive its own specific express written consent from the consumer.
Removed
For example, in 2019, California passed a worker classification statute (AB 5), which effectively narrowed the definition of an independent contractor, using a strict test to determine a given worker’s classification and placing the burden of proof for meeting that test on the hiring entity.
Added
While the amendment is not yet finalized, as proposed, it will require revisions to some of our processes and certain aspects of our product experience as well as to our third-party affiliate relationships. These revisions could result in increased expenses.
Removed
AB5 also provided enforcement powers to the state and certain cities, leading the state and certain cities to initiate litigation to enforce the new law, particularly against app-based platform companies.
Added
Further, the increased disclosures and consent requirements under the proposed rule could adversely impact consumer engagement levels and consumer conversion in the case of our products and services, which would decrease leads generated on our platforms, as well as our ability to obtain leads through our third party affiliate relationships, which, in turn, could adversely affect our business, financial condition and results of operations.
Removed
AB 5 has been the subject of widespread national discussion, leading other jurisdictions (including Massachusetts, New Jersey and New York, among others) to bring enforcement action against alleged independent contractor misclassification and/or to propose legislation adopting a legal test similar to the one set forth in AB 5.
Added
Independent of the proposed TCPA amendment, phone carriers increasingly dictate rules for obtaining consumers’ consent to receive text messages.
Removed
At the same time, there has been a trend of the Internal Revenue Service entering into work and information sharing agreements with the U.S. Department of Labor and state taxing authorities to address worker classification issues.
Added
We continue to monitor the worker classification laws to ensure compliance with their laws.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest change(a wholly-owned subsidiary of the Company and thus, an entity affiliated with HomeAdvisor) and two unrelated entities. In February 2019, the defendants opposed the motion on various grounds. In September 2019, the court issued an order granting the plaintiffs’ motion.
Biggest changeIn September 2019, the court issued an order granting the plaintiffs’ renewed motion for leave to file a consolidated second amended complaint, naming as defendants, in addition to HomeAdvisor, the Company and IAC, CraftJack, Inc. (a wholly-owned subsidiary of the Company) and two unrelated entities.
HomeAdvisor, Inc. et al. , No. 1:18-cv-1802, on behalf of the same nine SPs proposed as new plaintiffs in the Airquip case, naming as defendants HomeAdvisor, Angi and IAC (as well as an unrelated company), and asserting 45 claims largely duplicative of those asserted in a proposed second amended complaint in the Airquip case.
HomeAdvisor, Inc. et al. , No. 1:18-cv-1802, on behalf of the same nine SPs proposed as new plaintiffs in the Airquip case, naming as defendants HomeAdvisor, the Company and IAC (as well as an unrelated company), and asserting 45 claims largely duplicative of those asserted in a proposed second amended complaint in the Airquip case.
Legal Proceedings Overview 23 Table of Contents In the ordinary course of business, the Company and its subsidiaries are (or may become) parties to claims, suits, regulatory and government investigations, and other proceedings involving property, personal injury, intellectual property, privacy, tax, labor and employment, competition, commercial disputes, consumer protection and other claims, as well as stockholder derivative actions, class action lawsuits and other matters.
Legal Proceedings Overview In the ordinary course of business, the Company and its subsidiaries are (or may become) parties to claims, suits, regulatory and government investigations, and other proceedings involving property, personal injury, intellectual property, privacy, tax, labor and employment, competition, commercial disputes, consumer protection and other claims, as well as stockholder derivative actions, class action lawsuits and other matters.
Although the results of legal proceedings and claims cannot be predicted with certainty, neither the Company nor any of its subsidiaries is currently a party to any legal proceedings the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations.
Although the results of legal proceedings 25 Table of Contents and claims cannot be predicted with certainty, neither the Company nor any of its subsidiaries is currently a party to any legal proceedings the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations.
District Court for the District of Colorado. The complaint, as amended in November 2016, alleges that HomeAdvisor engages in certain deceptive practices affecting the service professionals (“SPs”) who join its network, including charging them for substandard customer leads and failing to disclose certain charges.
The complaint, as amended in November 2016, alleges that HomeAdvisor engages in certain deceptive practices affecting the service professionals (“SPs”) who join its network, including charging them for substandard customer leads and failing to disclose certain charges.
The Company believes that the allegations in this lawsuit are without merit and will continue to defend vigorously against them. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II
The Company believes that the allegations in this lawsuit are without merit and will continue to defend vigorously against them. Item 4. Mine Safety Disclosures Not applicable. PART II
In October and December 2019, the four defendants affiliated with HomeAdvisor filed motions to dismiss certain claims in the amended complaint. In September 2020, the court issued an order granting in part and denying in part the defendants’ motions to dismiss. On May 5, 2022, the plaintiffs moved for class certification.
In October and December 2019, the four defendants affiliated with HomeAdvisor filed motions to dismiss certain claims in the amended complaint. In September 2020, the court issued an order granting in part and denying in part the defendants’ motions to dismiss. In May 2022, the plaintiffs filed a motion for class certification; the defendants opposed the motion.
The complaint seeks certification of a nationwide class consisting of all HomeAdvisor SPs since October 2012, asserts claims for fraud, breach of implied contract, unjust enrichment and violation of the federal RICO statute and the Colorado Consumer Protection Act (“CCPA”), and seeks injunctive relief and damages in an unspecified amount.
The complaint sought certification of a nationwide class consisting of all HomeAdvisor SPs since October 2012, asserted claims including fraud, breach of implied contract and unjust enrichment and sought injunctive relief and damages in an unspecified amount. In July 2018, the plaintiffs’ counsel filed a separate putative class action in the U.S.
In November 2018, the judge presiding over the Airquip case issued an order consolidating the two cases to proceed before him under the caption In re HomeAdvisor, Inc. Litigation . In January 2019, the plaintiffs renewed their motion for leave to file a consolidated second amended complaint, naming as defendants, in addition to HomeAdvisor, Angi and IAC, CraftJack, Inc.
In November 2018, the judge presiding over the Airquip case issued an order consolidating the two cases to proceed before him under the caption In re HomeAdvisor, Inc. Litigation .
On January 23, 2023, the Commission accepted the proposed consent order, subject to a public-comment period that will end on March 8, 2023. Service Professional Class Action Litigation against HomeAdvisor In July 2016, a putative class action, Airquip, Inc. et al. v. HomeAdvisor, Inc. et al. , No. 1:16-cv-1849, was filed in the U.S.
Service Professional Class Action Litigation against HomeAdvisor In July 2016, a putative class action, Airquip, Inc. et al. v. HomeAdvisor, Inc. et al. , No. 1:16-cv-1849, was filed in the U.S. District Court for the District of Colorado.
In July 2018, the plaintiffs’ counsel filed a separate putative class action in the U.S. District Court for the District of Colorado, Costello et al. v.
District Court for the District of Colorado, Costello et al. v.
Removed
FTC Administrative Proceeding against HomeAdvisor On March 11, 2022, the Federal Trade Commission (“FTC”) filed an administrative complaint against HomeAdvisor, alleging that certain of HomeAdvisor’s business practices related to leads provided to service professionals (“SPs”) and its mHelpDesk product are unfair or deceptive in violation of the FTC Act and requesting injunctive relief.
Added
On January 10, 2024, the court entered an order largely denying plaintiffs’ motion for class certification. While the court certified certain classes seeking only injunctive relief based upon alleged misappropriation of SPs’ intellectual property, the court declined to certify any of the proposed classes challenging lead quality and seeking monetary relief.
Removed
The Company disputes these allegations and believes that its business practices are fully in compliance with the law. On April 7, 2022, the FTC staff filed a motion for summary decision before the Commission, which the Commissioners denied on August 2, 2022. Settlement discussions between the parties ensued.
Added
On January 24, 2024, the plaintiffs filed a motion for reconsideration of the court’s partial denial of class certification; on February 14, 2024, the defendants opposed the motion, which remains pending. On February 26, 2024, the parties filed motions for summary judgement on the remaining class claim regarding misappropriation of SPs’ intellectual property.
Removed
On December 2, 2022, the FTC withdrew the matter from adjudication for the purpose of considering a proposed consent order negotiated by the Company and the FTC staff.
Removed
Under the proposed consent order, HomeAdvisor would undertake certain commitments concerning representations to SPs and related reporting obligations and would fund up to $7.2 million for restitutionary payments to SPs (with any unclaimed amounts reverting to HomeAdvisor) and settlement administration costs.
Removed
On June 27, 2022, the Company opposed the plaintiffs’ motion for class certification, which remains pending.
Removed
The Company believes that the allegations in this lawsuit are without merit and will continue to defend vigorously against them. 24 Table of Contents False Advertising Litigation against HomeAdvisor In March 2018, the San Francisco District Attorney filed a lawsuit in the Superior Court of California, People of the State of California v. HomeAdvisor, Inc. , No. CGC-18-565008.
Removed
The lawsuit alleges that HomeAdvisor violated California’s Unfair Competition Law and False Advertising Law by misleading California consumers about the scope of its background check program. The claims focus on certain television commercials, radio advertisements, and website disclosures during the 2014-18 period.
Removed
In May 2018, the court issued a preliminary injunction against the Company barring it from airing the then-current versions of the advertisements. In May 2020, the state Court of Appeals affirmed the preliminary injunction. The trial court recently set a trial date of April 3, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The Company did not purchase any shares of its Class A common stock during the quarter ended December 31, 2022. As of that date, 15.0 million shares of ANGI Class A common stock remained available for repurchase under the Company's previously announced March 2020 repurchase authorization.
Biggest change(2) Represents the total number of shares of Class A common stock that remained available for repurchase as of December 31, 2023 pursuant to the March 2020 share repurchase authorization.
The Company may repurchase shares pursuant to this repurchase authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors Company management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.
The Company may repurchase shares pursuant to this share repurchase authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors Company management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.
Any future cash dividend or other dividend declarations are subject to the determination of the Company’s Board of Directors. Unregistered Sales of Equity Securities There were no unregistered sales of our capital stock during the quarter ended December 31, 2022.
Any future cash dividend or other dividend declarations are subject to the determination of the Company’s Board of Directors. Unregistered Sales of Equity Securities There were no unregistered sales of our capital stock during the quarter ended December 31, 2023.
As of February 10, 2023, there was one holder of record and beneficial shareholder of our Class B common stock. Dividends We do not currently expect that any cash or other dividends will be paid to holders of our Class A or Class B common stock in the near future.
As of February 9, 2024, there was one holder of record and beneficial shareholder of our Class B common stock. Dividends We do not currently expect that any cash or other dividends will be paid to holders of our Class A or Class B common stock in the near future.
As of February 10, 2023, there were 32 holders of record of our Class A common stock. Because the substantial majority of the outstanding shares of our Class A common stock are held by brokers and other institutions on behalf of shareholders, we are not able to estimate the total number of beneficial shareholders represented by these record holders.
Because the substantial majority of the outstanding shares of our Class A common stock are held by brokers and other institutions on behalf of shareholders, we are not able to estimate the total number of beneficial shareholders represented by these record holders.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Registrant’s Common Equity and Related Stockholder Matters Our Class A common stock is quoted on The Nasdaq Global Select Market (“NASDAQ”) under the ticker symbol “ANGI.” There is no established public trading market for our Class B common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Registrant’s Common Equity and Related Stockholder Matters Our Class A common stock is quoted on The Nasdaq Global Select Market (“NASDAQ”) under the ticker symbol “ANGI.” There is no established public trading market for our Class B common stock. 26 Table of Contents As of February 9, 2024, there were 26 holders of record of our Class A common stock.
From January 1, 2023 through February 10, 2023, the Company did not repurchase and shares. As of February 10, 2023, there were approximately 15.0 million shares remaining in the March 2020 share repurchase authorization. Item 6. Reserved
From January 1, 2024 through February 9, 2024, the Company repurchased an additional 2.7 million shares at an average price of $2.36 per share. As of February 9, 2024, there were approximately 7.9 million shares remaining in the March 2020 share repurchase authorization. Item 6. Reserved
Added
Issuer Purchases of Equity Securities The following table sets forth purchases by the Company of its Class A common stock during the quarter ended December 31, 2023: Period (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (2) October 2023 — $ — — 13,971,371 November 2023 1,345,414 $ 2.03 1,345,414 12,625,957 December 2023 2,028,875 $ 2.45 2,028,875 10,597,082 Total 3,374,289 $ 2.28 3,374,289 10,597,082 ________________________________________ (1) Reflects repurchases made pursuant to the share repurchase authorization previously announced in March 2020.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeConsolidated Financial Statements and Supplementary Data 51 Note 1—Organization 59 Note 2—Summary of Significant Accounting Policies 59 Note 3—Income Taxes 67 Note 4—Goodwill and Intangible Assets 71 Note 5—Financial Instruments and Fair Value Measurements 72 Note 6—Long-term Debt 74 Note 7—Shareholders’ Equity 75 Note 8—Accumulated Other Comprehensive Income (Loss) 76 Note 9— Loss Per Share 76 Note 10—Stock-based Compensation 77 Note 11—Segment Information 80 Note 12—Leases 85 Note 13— Contingencies 87 Note 14—Related Party Transactions with IAC 87 Note 15—Benefit Plans 89 Note 16—Consolidated Financial Statement Details 89
Biggest changeConsolidated Financial Statements and Supplementary Data 50 Note 1—Organization 57 Note 2—Summary of Significant Accounting Policies 57 Note 3 —Financial Instruments and Fair Value Measurements 66 Note 4—Goodwill and Intangible Assets 67 Note 5 —Leases 69 Note 6—Long-term Debt 70 Note 7—Shareholders’ Equity 71 Note 8—Accumulated Other Comprehensive Income (Loss) 72 Note 9 —Segment Information 72 Note 10—Stock-based Compensation 76 Note 1 1 —Benefit Plans 80 Note 1 2 —Income Taxes 80 Note 13 —Loss Per Share 83 Note 1 4 — Financial Statement Details 84 Note 1 5 —Contingencies 88 Note 1 6 — Discontinued Operations 88 Note 1 7 —Related Party Transactions with IAC 89
Item 6. Reserved 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 50 Item 8.
Item 6. Reserved 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 49 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

112 edited+47 added−63 removed63 unchanged
Biggest changeRevenue Years Ended December 31, 2022 $ Change % Change 2021 $ Change % Change 2020 (Dollars in thousands) Domestic Ads and Leads: Consumer connection revenue $ 954,735 $ 56,313 6% $ 898,422 $ (753) —% $ 899,175 Advertising revenue 265,466 13,260 5% 252,206 25,701 11% 226,505 Membership revenue 60,411 (7,651) (11)% 68,062 (6,011) (8)% 74,073 Other revenue 1,449 (6,935) (83)% 8,384 (10,618) (56)% 19,002 Total Ads and Leads revenue 1,282,061 54,987 4% 1,227,074 8,319 1% 1,218,755 Services revenue 381,256 91,308 31% 289,948 127,409 78% 162,539 Roofing revenue 137,509 69,481 102% 68,028 68,028 NM — Intersegment eliminations (10,340) (8,433) (442)% (1,907) (1,907) NM — Total Domestic revenue 1,790,486 207,343 13% 1,583,143 201,849 15% 1,381,294 International Consumer connection revenue 71,851 3,165 5% 68,686 10,994 19% 57,692 Service professional membership subscription revenue 28,192 (4,175) (13)% 32,367 5,142 19% 27,225 Advertising and other revenue 995 (247) (20)% 1,242 (472) (28)% 1,714 Total International revenue 101,038 (1,257) (1)% 102,295 15,664 18% 86,631 Total revenue $ 1,891,524 $ 206,086 12% $ 1,685,438 $ 217,513 15% $ 1,467,925 Percentage of Total Revenue: Domestic 95 % 94 % 94 % International 5 % 6 % 6 % Total revenue 100 % 100 % 100 % Years Ended December 31, 2022 Change % Change 2021 Change % Change 2020 (In thousands, rounding differences may occur) Operating metrics: Service Requests 29,459 (4,054) (12)% 33,513 (414) (1)% 33,927 Monetized Transactions 28,938 (2,572) (8)% 31,510 (1,192) (4)% 32,702 Transacting SPs 220 (31) (12)% 251 — —% 251 For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads revenue increased $55.0 million, or 4%, due primarily to an increase in consumer connection revenue of $56.3 million, or 6%, primarily as a result of price increases implemented during the second quarter of 2022 and increase in advertising revenue driven by a growth in sales.
Biggest changeRevenue Years Ended December 31, 2023 2022 2021 2023 Change 2022 Change $ % $ % (Dollars in thousands) Domestic Ads and Leads: Consumer connection revenue $ 781,089 $ 954,735 $ 898,422 $ (173,646) (18)% $ 56,313 6% Advertising revenue 290,799 265,466 252,206 25,333 10% 13,260 5% Membership subscription revenue 52,305 60,411 68,062 (8,106) (13)% (7,651) (11)% Other revenue 715 1,449 8,384 (734) (51)% (6,935) (83)% Total Ads and Leads revenue 1,124,908 1,282,061 1,227,074 (157,153) (12)% 54,987 4% Services revenue 118,033 381,256 289,948 (263,223) (69)% 91,308 31% Total Domestic revenue 1,242,941 1,663,317 1,517,022 (420,376) (25)% 146,295 10% International Consumer connection revenue 92,635 71,851 68,686 20,784 29% 3,165 5% Service professional membership subscription revenue 22,548 28,192 32,367 (5,644) (20)% (4,175) (13)% Advertising and other revenue 624 995 1,242 (371) (37)% (247) (20)% Total International revenue 115,807 101,038 102,295 14,769 15% (1,257) (1)% Total revenue $ 1,358,748 $ 1,764,355 $ 1,619,317 $ (405,607) (23)% $ 145,038 9% Percentage of Total Revenue: Domestic 91 % 94 % 94 % International 9 % 6 % 6 % Total revenue 100 % 100 % 100 % Years Ended December 31, 2023 2022 2021 2023 Change 2022 Change # % # % (In thousands, rounding differences may occur) Operating metrics: Service Requests 23,255 29,459 33,513 (6,204) (21)% (4,054) (12)% Monetized Transactions 27,111 28,938 31,510 (1,827) (6)% (2,572) (8)% Transacting SPs 196 220 251 (24) (11)% (31) (12)% For the year ended December 31, 2023 compared to the year ended December 31, 2022 Ads and Leads revenue decreased $157.2 million, or 12%, due primarily to a decrease in consumer connection revenue of $173.6 million, or 18%, and a decrease in membership subscription revenue of $8.1 million, or 13%, due to a decline in Monetized Transactions and a decline in service professionals in the Angi network, respectively, partially offset by an increase of $25.3 million, or 10%, in advertising revenue.
The decrease in compensation is primarily due to a decrease in headcount. Services selling and marketing expense increased $13.6 million, or 22%, driven by increases of $17.6 million in compensation expense, $3.7 million in professional fees and $1.6 million of software maintenance costs, partially offset by a decrease $9.5 million of advertising expense.
The decrease in compensation is primarily due to a decrease in headcount. Services selling and marketing expense increased $13.6 million, or 22%, driven by increases of $17.6 million in compensation expense, $3.7 million in professional fees and $1.6 million of software maintenance costs, partially offset by a $9.5 million decrease in advertising expense.
Corporate Adjusted EBITDA loss increased $3.8 million, or 8%, to $49.9 million, primarily due an increase in compensation expense, partially offset by a decrease in lease expense.
Corporate Adjusted EBITDA loss increased $3.8 million, or 8%, to $49.9 million, primarily due to an increase in compensation expense, partially offset by a decrease in lease expense.
International Adjusted EBITDA loss decreased $6.1 million, or 93%, due to a decrease in general and administrative expense of $8.6 million, which was primarily due to the 2021 charge of $7.0 million related the acquisition of an additional interest in MyBuilder at a premium to fair value.
International Adjusted EBITDA loss decreased $6.1 million, or 93%, due to a decrease in general and administrative expense of $8.6 million, which was primarily due to the 2021 charge of $7.0 million related to the acquisition of an additional interest in MyBuilder at a premium to fair value.
Historically, the Company’s acquisitions have been complementary to these reporting units and the goodwill has been assigned to the reporting unit. The allocation of purchase price to the assets acquired and liabilities assumed based upon their fair values is complex because of the judgments involved in determining these values.
Historically, the Company’s acquisitions have been complementary to these reporting units and the goodwill has been assigned to the reporting unit. The allocation of purchase price to the assets acquired and liabilities assumed is based upon their fair values and is complex because of the judgments involved in determining these values.
Due to the higher degree of complexity associated with the valuation of intangible assets, the Company usually obtains the assistance of outside valuation experts in the allocation of purchase price to the identifiable intangible assets acquired, which can be both definite-lived, such as acquired technology, customer and contractor relationships, or indefinite lived, such as acquired trade names and trademarks.
Due to the higher degree of complexity associated with the valuation of acquired intangible assets, the Company usually obtains the assistance of outside valuation experts in the allocation of purchase price to the identifiable intangible assets acquired, which can be both definite-lived, such as acquired technology, customer and contractor relationships, or indefinite lived, such as acquired trade names and trademarks.
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.
While outside valuation experts may be used, management has the ultimate responsibility for the valuation methods, models and inputs used and the resulting purchase price allocation.
While the Company also has the option under GAAP 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 quantitatively 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.
While the Company also has the option under GAAP 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.
This measure is one of the primary metrics by which we evaluate the performance of our businesses and our internal budgets are based and may impact management compensation. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results.
This measure is one of the primary metrics by which we evaluate the performance of our businesses, and on which our internal budgets are based and may impact management compensation. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results.
The Company is currently settling all stock-based awards on a net basis and remits the required tax-withholding amounts from its current funds. 40 Table of Contents Depreciation is a non-cash expense relating to our capitalized software, leasehold improvements and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.
The Company is currently settling all stock-based awards on a net basis and remits the required tax-withholding amounts from its current funds. 39 Table of Contents Depreciation is a non-cash expense relating to our capitalized software, leasehold improvements and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.
Although management currently believes changes to unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and 48 Table of Contents 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.
Although management currently believes changes to unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and 47 Table of Contents 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.
Operating Costs and Expenses: • Selling and marketing expense - consists primarily of (i) advertising expenditures, which include marketing fees to promote the brand to consumers and service professionals with (a) online marketing, including fees paid to search engines and other online marketing platforms, partners who direct traffic to our brands, and app platforms, (b) offline marketing, which is primarily television and radio advertising, (ii) compensation expense (including stock-based compensation expense) and other employee-related costs for our sales force and marketing personnel, (iii) software license and maintenance costs, (iv) outsourced personnel costs, and (v) facilities costs. • General and administrative expense - consists primarily of (i) compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions, (ii) fees for professional services (including transaction-related costs related to acquisitions), (iii) provision for credit losses, (iv) software license and maintenance costs, (v) outsourced personnel costs for personnel engaged in assisting in customer service functions, and (vi) facilities costs.
Operating Costs and Expenses: • Selling and marketing expense - consists primarily of (i) advertising expenditures, which include marketing fees to promote the brand to consumers and service professionals with (a) online marketing, including fees paid to search engines and other online marketing platforms, partners who direct traffic to our brands, and app platforms, and (b) offline marketing, which is primarily television and radio advertising, (ii) compensation expense (including stock-based compensation expense) and other employee-related costs for our sales force and marketing personnel, (iii) service guarantee expense, (iv) software license and maintenance costs, and (v) outsourced personnel costs. • General and administrative expense - consists primarily of (i) compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions, (ii) provision for credit losses, (iii) software license and maintenance costs, (iv) outsourced personnel costs for personnel engaged in assisting in customer service functions, (v) fees for professional services, and (vi) facilities costs.
Our customer service function includes personnel who provide support to our service professionals and consumers. • Product development expense - consists primarily of (i) compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology and (ii) software license and maintenance costs.
Our customer service function includes personnel who provide support to our service professionals and consumers. • Product development expense - consists primarily of (i) compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology, (ii) software license and maintenance costs, and (iii) outsourced personnel costs for personnel engaged in product development.
These estimates, judgments and assumptions impact the reported amount of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
These estimates, judgments and assumptions impact the reported amount of assets, liabilities, revenue and expenses and the related disclosure of assets and liabilities. Actual results could differ from these estimates.
In addition, the Company’s existing indebtedness could limit its ability to obtain additional financing. 45 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES The following disclosure is provided to supplement the descriptions of Angi’s accounting policies contained in “ Note 2—Summary of Significant Accounting Policies ” to the consolidated financial statements included “ Item 8.
In addition, the Company’s existing indebtedness could limit its ability to obtain additional financing. 44 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES The following disclosure is provided to supplement the descriptions of Angi’s accounting policies contained in “ Note 2—Summary of Significant Accounting Policies ” to the consolidated financial statements included “ Item 8.
Stock-Based Compensation The stock-based compensation expense reflected in our statements of operations includes expense related to the Company’s stock options, stock appreciation rights, 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”), equity instruments denominated in shares of subsidiaries, and IAC denominated stock options.
Stock-based compensation expense reflected in our statements of operations includes expense related to the Company’s 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”), stock options, stock appreciation rights, equity instruments denominated in shares of subsidiaries, and an allocation of expense related to IAC denominated restricted stock.
Consumers can request household 26 Table of Contents 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.
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.
The increase in professional fees is primarily from an increase of $4.1 million in outsourced personnel costs for improving the customer service experience offset by a decrease of $0.4 million in consulting costs primarily due to fees paid in 2021 that were a part of the investment in Services in 2021.
The increase in professional fees is primarily from an increase of $4.1 million in outsourced personnel costs for 33 Table of Contents improving the customer service experience offset by a decrease of $0.4 million in consulting costs primarily due to fees paid in 2021 that were a part of the investment in Services in 2021.
Management makes two critical determinations at the time of an acquisition, the reporting unit that will benefit from the acquisition and to which goodwill will be assigned and the allocation of the purchase price of the business to the assets acquired and the liabilities assumed based upon their fair values.
Management makes two critical determinations at the time of an acquisition: (1) the reporting unit(s) that will benefit from the acquisition and to which goodwill will be assigned and (2) the allocation of the purchase price of the acquired business to the assets acquired and the liabilities assumed based upon their fair values.
Net cash used in financing activities includes $220.0 million for the prepayment of the ANGI Group Term Loan, which otherwise would have matured on November 5, 2023, $61.9 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $35.4 million for the repurchase of 3.2 million shares of Angi Inc.
Net cash used in financing activities attributable to continuing operations includes $220.0 million for the prepayment of the ANGI Group Term Loan, which otherwise would have matured on November 5, 2023, $61.9 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, $35.4 million for the repurchase of 3.2 million shares of Angi Inc.
Corporate general and administrative expense increased $9.3 million, or 20%, due primarily to increases of $14.4 million in compensation expense and $1.5 million of software license and maintenance expense, partially offset by a decrease of $4.4 million in lease expense.
Corporate general and administrative expense increased $9.3 million, or 20%, due primarily to increases of $14.4 million in compensation expense and $1.5 million of software license and maintenance expense, partially offset by a decrease of $4.4 34 Table of Contents million in lease expense.
For further details of income tax matters, see “ Note 3—Income Taxes ” to the consolidated financial statements included in “ Item 8. Consolidated Financial Statements and Supplementary Data .” 39 Table of Contents PRINCIPLES OF FINANCIAL REPORTING We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”).
For further details of income tax matters, see “ Note 12—Income Taxes ” to the consolidated financial statements included in “ Item 8. Consolidated Financial Statements and Supplementary Data .” 38 Table of Contents PRINCIPLES OF FINANCIAL REPORTING We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”).
The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and is assigned to the reporting unit that is expected to benefit from the business combination as of the acquisition date.
The excess purchase price over the value of the 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.
The increase in professional fees is due 34 Table of Contents primarily to an increase in legal expense of $6.0 million due to certain legal matters in the current quarter. The increase in software license and maintenance expense is due primarily to general maintenance.
The increase in professional fees is due primarily to an increase in legal expense of $6.0 million due to certain legal matters in the current quarter. The increase in software license and maintenance expense is due primarily to general maintenance.
Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as service professional relationships, technology, memberships, customer lists and user base, and trade names, are valued and amortized over their estimated lives.
Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as service professional relationships, technology, and trade names, are valued and amortized over their estimated lives.
The determination of purchase price and the fair value of monetary assets acquired and liabilities assumed is typically the least complex aspect of the Company’s accounting for business combinations due to management’s experience and the inherently lower level of complexity.
The determination of purchase price and the fair value of monetary assets acquired and liabilities assumed is typically the least complex aspect of the Company’s accounting for business combinations due to management’s experience and/or the inherently lower level of judgement required.
At December 31, 2022 and 2021, the Company has unrecognized tax benefits, including interest, of $6.2 million and $6.3 million, respectively. We consider many factors when evaluating and estimating our tax positions and unrecognized tax benefits, which may require periodic adjustment and which may not accurately anticipate actual outcomes.
At December 31, 2023 and 2022, the Company has unrecognized tax benefits, including interest, of $8.1 million and $6.2 million, respectively. We consider many factors when evaluating and estimating our tax positions and unrecognized tax benefits, which may require periodic adjustment and which may not accurately anticipate actual outcomes.
Credit Losses The Company makes judgments as to its ability to collect outstanding receivables and provides reserves when it has determined that all or a portion of the receivable will not be collected. The Company maintains a credit loss reserve to provide for the estimated amount of accounts receivable that will not be collected.
Credit Losses The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance when it has determined that all or a portion of the receivable will not be collected. The Company maintains an allowance for credit losses to provide for the estimated amount of accounts receivable that will not be collected.
Consolidated Financial Statements and Supplementary Data. ” For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads Adjusted EBITDA increased $32.7 million, or 24%, to $169.0 million, and increased as a percentage of revenue, due primarily to higher revenue of $55.0 million, partially offset by an increase in general and administrative expense of $23.7 million.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads Adjusted EBITDA increased $32.7 million, or 24%, to $169.0 million, and increased as a percentage of revenue, due primarily to higher revenue of $55.0 million, partially offset by an increase in general and administrative expense of $23.7 million.
International is primarily comprised of revenue from consumer connection revenue for consumer matches and membership subscription from service professionals and consumers. From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis.
International revenue primarily comprises consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers. From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis.
For stock appreciation rights and stock options, including equity instruments denominated in shares of subsidiaries, the grant date fair value of the award is recognized as an expense on a straight-line basis, net of estimated forfeitures, over the requisite service period, which is the vesting period of the award. The Company also issues RSUs, PSUs and MSUs.
For stock appreciation rights and stock options, including equity instruments denominated in shares of subsidiaries, the grant date fair value of the award is recognized as an expense on a straight-line basis, net of estimated forfeitures, over the requisite service period, which is the vesting period of the award.
Other expense, net in 2021 primarily includes net foreign currency exchange losses of $1.7 million and the write-off of $1.1 million of deferred debt issuance costs related to the ANGI Group Term Loan which was repaid in its entirety during the second quarter of 2021, partially offset by interest income of $0.2 million.
Other income, net in 2022 primarily includes interest income of $4.5 million, partially offset by net foreign currency exchange losses of $3.4 million. 37 Table of Contents Other expense, net in 2021 primarily includes net foreign currency exchange losses of $1.7 million and the write-off of $1.1 million of deferred debt issuance costs related to the ANGI Group Term Loan, which was repaid in its entirety during the second quarter of 2021, partially offset by interest income of $0.2 million.
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 28 Table of Contents the service professional.
Effective January 1, 2023, we 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.
The Company estimates the fair value of newly granted or modified stock appreciation rights and stock options, including equity instruments denominated in shares of subsidiaries, using the Black-Scholes option-pricing model.
The Company also issues stock options and stock appreciation rights. The Company estimates the fair value of newly granted or modified stock appreciation rights and 48 Table of Contents stock options, including equity instruments denominated in shares of subsidiaries, using the Black-Scholes option-pricing model.
For the year ended December 31, 2021 compared to the year ended December 31, 2020 Ads and Leads cost of revenue decreased $3.6 million, or 8%, and decreased as a percentage of revenue, due primarily to a $10.1 million decrease resulting from the disposition of a business in the second quarter 2021, partially offset from the increase of $2.1 million in website hosting and $2.4 million in transaction processing costs.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads cost of revenue decreased $1.6 million, or 4%, and decreased as a percentage of revenue, due primarily to a $6.0 million decrease resulting from the disposition of a business in the second quarter of 2021, partially offset by increases of $3.1 million in transaction processing costs, and $2.8 million in website hosting fees.
These modified awards finished vesting in the first quarter of 2021, therefore, there was no modification charge for the awards in the year ended December 31, 2022.
These modified awards finished vesting in the first quarter of 2021, therefore, there was no modification charge for the awards in the years ended December 31, 2023 and 2022.
Additionally, in the first quarter of 2021, the Company recognized a net decrease of $7.7 million due to the reversal of previously recognized expense related to unvested awards that were forfeited due to management departures.
Additionally, in the first quarter of 2021, the Company recognized a net decrease of $7.7 million due to the reversal of previously recognized expense related to unvested awards that were forfeited due to management departures. The Company issues RSUs, PSUs and MSUs.
The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in accounts payable and other liabilities is due primarily to increases in accrued advertising and related payables and accrued roofing material costs related to Roofing.
The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in accounts payable and other liabilities is due primarily to increases in accrued advertising.
Gross margin is gross profit expressed as a percentage of revenue.
Gross profit is revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue.
The reporting unit determination is important beyond the initial allocation of purchase price because future impairment assessments of goodwill, as described below, are performed at the reporting unit level. At October 1, 2022, the Company has four reporting units: Ads and Leads, Services, Roofing and International.
The reporting unit determination is important beyond the initial allocation of purchase price because future impairment assessments of goodwill, as described below, are performed at the reporting unit level. At October 1, 2023, the Company had four reporting units: Ads and Leads, Services, Roofing (subsequently sold as described above) and International.
As of December 31, 2022, the Company is in a three-year cumulative loss position. The Company’s most significant net deferred tax asset relates to U.S. federal net operating loss (“NOL”) carryforwards of $108.3 million.
As of December 31, 2023, the Company is in a three-year cumulative loss position. The Company’s most significant net deferred tax asset relates to U.S. federal net operating loss (“NOL”) carryforwards of $101.0 million.
At December 31, 2022 and 2021, the balance of the Company’s net deferred tax asset is $142.6 million and $120.8 million, respectively. 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.
At December 31, 2023 and 2022, the balance of the Company’s net deferred tax asset is $145.4 million and $135.5 million, respectively. 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.
The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 12.0% to 18.5% in 2022 and 11.1% to 15.0% in 2021, and the royalty rates used ranged from 2.0% to 4.5% in 2022 and 2.0% to 5.0% in 2021.
The 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.
In 2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards and a change in judgment about the valuation allowance at the beginning of the year, partially offset by unbenefited foreign losses.
In 2021, the effective income tax rate was higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards and a change in judgment about the valuation allowance at the beginning of the year, partially offset by nondeductible stock-based compensation expense and foreign income taxed at different rates.
The Company recorded stock-based compensation expense of $52.7 million and $28.7 million for the years ended December 31, 2022 and 2021, respectively. Included in stock-based compensation expense in the year ended December 31, 2022, the Company recognized a net decrease of $2.1 million due to management departures.
The Company recorded stock-based compensation expense of $43.4 million, $50.8 million, and $28.2 million for the years ended December 31, 2023, 2022, and 2021, respectively. Included in stock-based compensation expense in the year ended December 31, 2022, the Company recognized a net decrease of $2.1 million due to management departures.
The Company’s annual assessment of the recovery of goodwill begins with management’s reassessment of its operating segments and reporting units. A reporting unit is an operating segment or one level below an operating segment, which is referred to as a component. This reassessment of reporting units is also made each time the Company changes its operating segments.
The Company’s annual assessment of the recovery of goodwill begins with management’s reassessment of its operating segments and reporting units. A reporting unit is an operating segment or one level below an operating segment, which is referred to as a component.
The decrease from changes in working capital consists primarily of an increase of $114.1 million in accounts receivable, and a decrease of $16.8 million in operating lease liabilities, partially offset by an increase of $21.3 million in accounts payable and other liabilities. The increase in accounts receivable is due primarily to revenue growth, primarily attributable to Services.
The decrease from changes in working capital consists primarily of an increase of $107.0 million in accounts receivable, and a decrease of $16.6 million in operating lease liabilities, partially offset by an increase of $21.7 million in accounts payable and other liabilities. The increase in accounts receivable is due primarily to revenue growth, primarily attributable to Services.
The increase in accounts payable and other liabilities is due primarily to increases in accrued expenses related to the brand integration and accrued roofing material costs related to Roofing. The increase in income taxes payable and receivable is due primarily to accrual of taxes in excess of payments.
The increase in accounts payable and other liabilities is due primarily to increases in accrued expenses related to the 2021 brand integration initiative. The increase in income taxes payables and receivable is due primarily to accrual of taxes in excess of payments.
Consolidated Financial Statements and Supplementary Data ” include principal and interest payments long-term as debt described in “ Note 6 — Long-term Debt ,” operating leases as described in “ Note 12—Leases ,” and postretirement benefits as described in “ Note 15—Benefit Plans .” The Company has material purchase obligations which represent legally binding agreements to purchase goods and services that specify all significant terms.
Consolidated Financial Statements and Supplementary Data ” includes operating leases as described in “ Note 5—Leases ,” and principal and interest payments on long-term as debt described in “ Note 6 — Long-term Debt .” The Company has material purchase obligations which represent legally binding agreements to purchase goods and services that specify all significant terms.
We have made, and expect to continue to make, substantial investments in digital and traditional advertising (with continued expansion into new and existing digital platforms) to consumers and service professionals to promote our products and services and to drive traffic to our various platforms and service professionals. 27 Table of Contents Defined Terms and Operating Metrics: Unless otherwise indicated or as the context otherwise requires, certain terms, which include the principal operating metrics we use in managing our business, are defined below: • Ads and Leads Revenue primarily reflects domestic ads and leads revenue, including consumer connection revenue for consumer matches, revenue from service professionals under contract for advertising and membership subscription revenue from service professionals and consumers. • Services Revenue primarily reflects domestic revenue from pre-priced offerings by which the consumer requests services through a Company platform and the Company engages a service professional to perform the service. • Roofing Revenue primarily reflects revenue from the roof replacement business offering by which the consumer purchases services directly from the Company and the Company engages a service professional to perform the service. • Corporate primarily reflects costs for corporate initiatives, shared costs, such as executive and public company costs, and other expenses not allocated to the operating segments. • International Revenue primarily reflects revenue generated within the International segment (comprised of businesses in Europe and Canada), including consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers. • Service Requests are (i) fully completed and submitted domestic service requests for connections with Ads and Leads service professionals, (ii) contacts to Ads and Leads service professionals generated via the service professional directory from unique users in unique categories (such that multiple contacts from the same user in the same category in the same day are counted as one Service Request) and (iii) requests to book Services jobs in the period. • Monetized Transactions are (i) Service Requests that are matched to a paying Ads and Leads service professional in the period and (ii) completed and in-process Services jobs in the period; a single Service Request can result in multiple monetized transactions. • Transacting Service Professionals (“Transacting SPs”) are the number of (i) Ads and Leads service professionals that paid for consumer matches or advertising and (ii) Services service professionals that performed a Services job, during the most recent quarter. • Senior Notes - On August 20, 2020, ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of the Company, issued $500.0 million of its 3.875% Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year, which commenced February 15, 2021.
Consolidated Financial Statements and Supplementary Data .” Defined Terms and Operating Metrics: Unless otherwise indicated or as the context otherwise requires, certain terms, which include the principal operating metrics we use in managing our business, are defined below: • Ads and Leads Revenue primarily reflects domestic consumer connection revenue for consumer matches, revenue from service professionals under contract for advertising and membership subscription revenue from service professionals and consumers. • 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. • International Revenue primarily reflects revenue generated within the International segment (consisting of businesses in Europe and Canada), including consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers. • Corporate primarily reflects costs for corporate initiatives, shared costs, such as executive and public company costs, and other expenses not allocated to the operating segments. • Service Requests are (i) fully completed and submitted domestic service requests for connections with Ads and Leads service professionals, (ii) contacts to Ads and Leads service professionals generated via the service professional directory from unique users in unique categories (such that multiple contacts from the same user in the same category in the same day are counted as one Service Request) and (iii) requests to book Services jobs in the period. • Monetized Transactions are (i) Service Requests that are matched to a paying Ads and Leads service professional in the period and (ii) completed and in-process Services jobs in the period; a single Service Request can result in multiple monetized transactions. • Transacting Service Professionals (“Transacting SPs”) are the number of (i) Ads and Leads service professionals that paid for consumer matches or advertising and (ii) Services service professionals that performed a Services job, during the most recent quarter. 28 Table of Contents • ANGI Group Senior Notes - On August 20, 2020, ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of the Company, issued $500.0 million of its 3.875% Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year.
The Company may purchase their shares and debt instruments over an indefinite period of time on the open market and in privately negotiated transactions, depending on those factors the Company’s management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.
The Company may purchase its shares pursuant to its authorization over an indefinite period of time in the open market and in privately negotiated transactions, 42 Table of Contents depending on those factors the Company’s management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.
The portion of the December 31, 2022 deferred tax assets that will be payable to IAC pursuant to the tax sharing agreement, upon realization, is $93.7 million.
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.
Components of Results of Operations Sources of Revenue Ads and Leads Revenue is primarily derived from (i) consumer connection revenue, which is comprised of fees paid by service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service), (ii) advertising revenue, which includes revenue from service professionals under contract for advertising, and (iii) membership subscription revenue from service professionals and consumers.
Components of Results of Operations Sources of 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.
Services cost of revenue increased $64.1 million, or 28%, due primarily to a $58.1 million increase in payments to third-party professional service providers, however, cost of revenue decreased as a percentage of revenue.
Services cost of revenue increased $64.1 million, or 28%, due primarily to a $58.1 million increase in payments to third-party professional service providers, however, cost of revenue decreased as a percentage of revenue. International cost of revenue increased $0.2 million, or 9%, and increased as a percentage of revenue, due primarily to increased website hosting fees.
The decrease from changes in working capital consists primarily of an increase of $116.5 million in accounts receivable, a decrease of $17.3 million in operating lease liabilities, and a decrease of $2.8 million in deferred revenue, partially offset by an increase of $11.6 million in accounts payable and other liabilities, and an increase of $3.2 million in income taxes payable and receivable.
The decrease from changes in working capital consists primarily of an increase of $111.9 million in accounts receivable, a decrease of $16.7 million in operating lease liabilities, and a decrease of $3.0 million in deferred revenue, partially offset by increases of $11.6 million in accounts payable and other liabilities and $3.2 million in income taxes payable and receivable.
We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business. 41 Table of Contents FINANCIAL POSITION, LIQUIDITY, AND CAPITAL RESOURCES Financial Position December 31, 2022 December 31, 2021 (In thousands) Cash and cash equivalents: United States $ 311,422 $ 404,277 All other countries 9,733 23,859 Total cash and cash equivalents $ 321,155 $ 428,136 Long-term debt: Senior Notes $ 500,000 $ 500,000 Total long-term debt 500,000 500,000 Less: unamortized debt issuance costs 4,716 5,448 Total long-term debt, net $ 495,284 $ 494,552 At December 31, 2022, all of the Company’s international cash can be repatriated without significant tax consequences.
We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business. 40 Table of Contents FINANCIAL POSITION, LIQUIDITY, AND CAPITAL RESOURCES Financial Position December 31, 2023 December 31, 2022 (In thousands) Cash and cash equivalents: United States $ 354,341 $ 311,422 All other countries 9,703 9,733 Total cash and cash equivalents $ 364,044 $ 321,155 Long-term debt: ANGI Group Senior Notes $ 500,000 $ 500,000 Less: unamortized debt issuance costs 3,953 4,716 Total long-term debt, net $ 496,047 $ 495,284 At December 31, 2023, all of the Company’s international cash can be repatriated without significant consequences.
Net cash used in investing activities includes $70.2 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and services, and $25.6 million of cash principally related to the acquisition of Roofing, partially offset by proceeds of $50.0 million from the maturities of marketable debt securities.
Net cash used in investing activities attributable to continuing operations includes $69.9 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and services, partially offset by proceeds of $50.0 million from the maturities of marketable debt securities.
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 more normal societal interactions, including the way we operate our business. We cannot predict the future impacts of this ongoing and any new pandemic(s).
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.
For the year ended December 31, 2021 compared to the year ended December 31, 2020 Angi gross profit increased $64.9 million, or 5%, due primarily to the acquisition of Roofing and revenue growth described in the revenue discussion above, partially offset by the increased cost of revenue as a percentage of revenue described in the cost of revenue discussion above.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Angi gross profit increased $82.3 million, or 6%, due primarily to the revenue growth described in the revenue discussion above, partially offset by the increased cost of revenue as a percentage of revenue described in the cost of revenue discussion above.
Class A common stock, on a settlement date basis, at an average price of $7.80 per share. 2021 Adjustments to earnings consist primarily of $88.1 million of provision for credit losses, $59.2 million of depreciation, $28.7 million of stock-based compensation expense, $20.7 million of non-cash lease expense, $16.4 million of amortization of intangibles, and $1.7 million in foreign currency transaction losses, partially offset by $36.3 million of deferred income taxes.
Class A common stock, on a settlement date basis, at an average price of $7.80 per share. 2021 Adjustments to net loss attributable to continuing operations consist primarily of $86.6 million of provision for credit losses, $59.0 million of depreciation, $28.2 million of stock-based compensation expense, $20.5 million of non-cash lease expense, and $16.1 million of amortization of intangibles, partially offset by $34.2 million of deferred income taxes.
Services revenue increased $91.3 million, or 31%, due primarily to an increase in average revenue per Monetized Transaction due to higher average-order-value jobs in complex service categories and an increase in Monetized Transactions in 2022 relative to 2021, as well as price increases in certain job categories. 31 Table of Contents Roofing revenue increased $69.5 million, or 102%, due primarily to a full year of Service Requests in 2022 compared to two quarters in 2021.
Services revenue increased $91.3 million, or 31%, due primarily to an increase in average revenue per Monetized Transaction due to higher average-order-value jobs in complex service categories and an increase in Monetized Transactions in 2022 relative to 2021, as well as price increases in certain job categories.
The Company also markets its services to consumers through email, digital display advertisements, partnerships with other contextually related websites and, to a lesser extent, through relationships with certain retailers, direct mail and radio advertising.
In the U.S., the Company primarily markets its services to consumers through search engine marketing, affiliate agreements with third parties, and television advertising. The Company also markets its services to consumers through email, digital display advertisements, partnerships with other contextually related websites and, to a lesser extent, through relationships with certain retailers, direct mail and radio advertising.
For the year ended December 31, 2021 compared to the year ended December 31, 2020 Ads and Leads general and administrative expense increased $32.5 million, or 14%, driven by an increase in $9.7 million of outsourced personnel costs, compensation expense of $9.4 million, professional fees expense of $6.2 million, and software license and maintenance expense of $5.7 million, partially offset by a decrease of $0.4 million in the provision for credit losses.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads general and administrative expense increased $23.7 million, or 9%, due primarily to an increase of $16.4 million in provision for credit losses, $6.6 million in outsourced personnel costs, and $5.7 million in legal expense, partially offset by a decrease of $2.9 million in compensation expense.
Goodwill and indefinite-lived intangible assets are assessed annually for impairment 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 46 Table of Contents or the fair value of an indefinite-lived intangible asset has declined below its carrying value.
Indefinite-lived intangible assets, which consist of the Company’s acquired trade names and trademarks, have a carrying value of $170.8 million and $170.1 million at December 31, 2023 and 2022, respectively. 45 Table of Contents Goodwill and indefinite-lived intangible assets are assessed annually for impairment 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.
The Company expects to generate future taxable income of at least $515.9 million prior to the expiration of these NOLs, $300.1 million of which expire between 2032 and 2037, and the remainder of which never expire, to fully realize this deferred tax asset.
The Company expects to generate future taxable income of at least $480.9 million prior to the expiration of these NOLs, $266.7 million of which expire between 2033 and 2037, and the remainder of which never expire, to fully realize this deferred tax asset. Stock-Based Compensation Stock-based compensation at the Company is inherently complex.
Angi’s ability to access the debt and equity markets may require the approval of IAC due to its control of the majority of the outstanding voting power of Angi’s capital stock and its representation on the Angi board of directors. 44 Table of Contents The Company believes its existing cash, cash equivalents, and expected positive cash flows generated from operations will be sufficient to fund its normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net-settled stock-based awards, and investing and other commitments, for the next twelve months.
The Company believes its existing cash, cash equivalents, and expected positive cash flows generated from operations will be sufficient to fund its normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net-settled stock-based awards, and investing and other commitments, for the next twelve months.
Income tax benefit Years Ended December 31, 2022 $ Change % Change 2021 (Dollars in thousands) Income tax benefit $ 17,252 $ (14,761) (46)% $ 32,013 Effective income tax rate 12% 31% In 2022, the effective income tax rate was lower than the statutory rate of 21% due primarily to unbenefited realized losses, nondeductible stock-based compensation expense, and foreign income subject to tax in the United States, partially offset by research credits.
In 2022, the effective income tax rate was lower than the statutory rate of 21% due primarily to unbenefited realized losses, foreign income subject to tax in the United States, and nondeductible stock-based compensation expense, partially offset by research credits.
The decrease in lease expense is a result of the Company repurposing its real estate space for general and administrative functions and reducing its real estate footprint in 2021. International selling and marketing expense decreased $1.8 million, or 4%, driven by a decrease in compensation expense of $1.6 million, which was primarily due to lower headcount.
Corporate selling and marketing expense decreased $4.9 million, or 55%, driven by a decrease in lease expense of $5.4 million. The decrease in lease expense is a result of the Company repurposing its real estate space for general and administrative functions and reducing its real estate footprint in 2021.
Selling and marketing expense Years Ended December 31, 2022 $ Change % Change 2021 $ Change % Change 2020 (Dollars in thousands) Selling and marketing expense $ 913,022 $ 29,379 3% $ 883,643 $ 121,053 16% $ 762,590 As a percentage of revenue 48% 52% 52% For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads selling and marketing expense increased $11.9 million, or 2%, driven by increases in advertising expense of $20.9 million and software maintenance costs of $3.5 million partially offset by a decrease in compensation expense of $10.3 million.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Ads and Leads selling and marketing expense increased $11.9 million, or 2%, driven by increases in advertising expense of $20.9 million and software maintenance costs of $3.5 million partially offset by a decrease in compensation expense of $10.3 million.
Consolidated Financial Statements and Supplementary Data .” Share Repurchase Authorizations and Activity Du ring the year ended December 31, 2022, the Company repurchased 1.0 million shares, on a trade date basis, of its common stock at an average price of $7.80 per share, or $8.1 million in aggregate.
Liquidity and Capital Resources Share Repurchase Authorizations and Activity Du ring the year ended December 31, 2023, the Company repurchased 4.4 million shares, on a trade date basis, of its common stock at an average price of $2.50 per share, or $11.1 million in aggregate.
Stock-based compensation at the Company is complex due to our desire to attract, retain, inspire and reward outstanding entrepreneurs and managers at the Company, including recently acquired companies, by allowing them to benefit directly from the value they help to create.
Our desire is to attract, retain, inspire and reward our management team and employees at the Company, including those employed by recently acquired companies, as applicable, by allowing them to benefit directly from the value they help to create.
Non-GAAP financial measure Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is a non-GAAP financial measure. See “ Principles of Financial Reporting ” for the definition of Adjusted EBITDA and a reconciliation of net loss attributable to Angi Inc. shareholders to operating loss to consolidated Adjusted EBITDA for the years ended December 31, 2022, 2021, and 2020.
See “ Principles of Financial Reporting ” for the definition of Adjusted EBITDA and a reconciliation of net 29 Table of Contents loss attributable to Angi Inc. shareholders to operating loss to consolidated Adjusted EBITDA for the years ended December 31, 2023, 2022, and 2021.
The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, the most significant of which include expected term, expected volatility of the underlying shares, risk-free interest rates and the expected dividend yield.
The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, the most significant of which include expected term, expected volatility of the underlying shares, risk-free interest rates and the expected dividend yield. In addition, the recognition of stock-based compensation expense is impacted by our estimated forfeiture rates, which are based, in part, on historical forfeiture rates.
If the goodwill of a reporting unit is allocated to newly formed reporting units, the allocation is usually made to each reporting unit based upon their relative fair values.
This reassessment of reporting units is also made each time the Company changes its operating segments to the extent that this also results in a change in reporting units. If the goodwill of a reporting unit is allocated to newly formed reporting units, the allocation is usually made to each reporting unit based upon their relative fair values.
Cash Flow Information In summary, the Company’s cash flows are as follows: Years Ended December 31, 2022 2021 (In thousands) Net cash (used in) provided by: Operating activities $ 27,069 $ 6,209 Investing activities $ (116,086) $ (45,072) Financing activities $ (17,227) $ (345,168) Net cash provided by operating activities consists of earnings adjusted for non-cash items and the effect of changes in working capital.
Cash Flow Information In summary, the Company’s cash flows are as follows: Years Ended December 31, 2023 2022 2021 (In thousands) Net cash provided by (used in): Operating activities attributable to continuing operations $ 94,184 $ 46,402 $ 24,576 Investing activities attributable to continuing operations $ (46,557) $ (115,317) $ (19,412) Financing activities attributable to continuing operations $ (16,983) $ (17,227) $ (345,168) Net cash provided by operating activities attributable to continuing operations consists of earnings adjusted for non-cash items and the effect of changes in working capital.
Net cash used in investing activities includes $116.4 million of capital expenditures, primarily related to investments in capitalized software to support the Company’s products and services. 42 Table of Contents Net cash used in financing activities includes $8.8 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled and $8.1 million for the repurchase of 1.0 million shares of Angi Inc.
Net cash used in financing activities attributable to continuing operations includes $8.8 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled and $8.1 million for the repurchase of 1.0 million shares of Angi Inc.
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.
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. 46 Table of Contents The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis.
Cost of Revenue and Gross Profit Cost of revenue, which excludes depreciation, consists primarily of (i) payments made to independent service professionals who perform work contracted under Services or Roofing arrangements, (ii) credit card processing fees, (iii) hosting fees, and (iv) roofing materials costs associated with Roofing. Gross profit is revenue less cost of revenue.
Cost of Revenue and Gross Profit Cost of revenue, which excludes depreciation, consists primarily of (i) payments made to independent third-party service professionals who perform work contracted under Services arrangements that were entered into prior to January 1, 2023 and the change to net revenue reporting, (ii) credit card processing fees, and (iii) hosting fees.
Future payments under these agreements at December 31, 2022 are as follows: Amount of Commitment Expiration Per Period Less Than 1 Year 1–3 Years 3–5 Years More Than 5 Years Total (In thousands) Purchase obligations $ 39,401 $ 13,263 $ — $ — $ 52,664 Purchase obligations include (i) payments of $25.5 million related to a three-year cloud computing arrangement, with payments of $12.5 million expected to be made within the next twelve months and the remaining payments of approximately $13.0 million expected to be made by September 2024, (ii) $17.9 million related to media spend to be made in 2023, (iii) $6.9 million related to technology contracts spend, and (iv) payments of $2.3 million related to communication spend.
Future payments under these agreements at December 31, 2023 are as follows: Amount of Commitment Expiration Per Period Less Than 1 Year 1–3 Years 3–5 Years More Than 5 Years Total (In thousands) Purchase obligations $ 25,147 $ 2,091 $ — $ — $ 27,238 Purchase obligations include (i) $13.0 million for the final payment related to a three-year cloud computing arrangement, with the final payment expected to be made by September 2024, (ii) $8.4 million related to technology contracts spend, and (iii) $3.5 million related to media spend to be made in 2024. 43 Table of Contents Capital Expenditures The Company’s 2024 capital expenditures are expected to be higher than 2023 capital expenditures of $47.8 million by approximately 15% to 30% due to an increase in the capitalization rate of software development projects.
The credit loss reserve is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history and the specific customer’s ability to pay its obligation to the Company. The duration of time between the Company’s issuance of an invoice and payment due date is not significant.
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 to the Company and any other forward-looking data regarding customers’ ability to pay that is available.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIf market rates decline, the Company runs the risk that the related required payments of the ANGI Group Senior Notes will exceed those based on market rates. A 100-basis point increase or decrease in the level of interest rates would, respectively, decrease or increase the fair value of the fixed-rate debt by $23.3 million.
Biggest changeIf 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.
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. 50 Table of Contents
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
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.
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.
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, 2022, the principal amount of the Company’s outstanding debt is comprised of $500.0 million of ANGI Group Senior Notes, which bears interest at a fixed rate.
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.
The Company recorded foreign exchange gains and (losses) of $3.4 million, $1.2 million, and $(0.1) million for the year ended December 31, 2022, 2021 and 2020, 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 any foreign currency exposures.
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.
International revenue, which is measured based upon where the customer is located, accounted for 5%, 6%, and 6% for the years ended December 31, 2022, 2021 and 2020, respectively.
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.

Other ANGI 10-K year-over-year comparisons