ANGI Homeservices Reports Q3 2021 Results

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ANGI INC. REPORTS Q3 2021 - Q3 REVENUE INCREASES 18% TO $462 MILLION

DENVER- November 4, 2021-Angi Inc. (NASDAQ: ANGI) released its third quarter results today. Monthly metrics for Angi Inc. through October 2021 are included on page 3 of this release. A letter to IAC shareholders from Angi Inc. Chairman and IAC CEO Joey Levin is available on the Investor Relations section of IAC's website at ir.iac.com.

	ANGI INC. SUMMARY RESULTS
	($ in millions except per share amounts)
		Q3 2021		Q3 2020	Growth
Revenue	$	461.6	$	389.9	18%
Operating loss		(15.0)		(3.0)	-396%
Net (loss) earnings		(17.0)		4.5	NM
GAAP Diluted EPS		(0.03)		0.01	NM
Adjusted EBITDA		12.4		38.5	-68%
See reconciliations of GAAP to non-GAAP measures beginning on page 9.

Q3 2021 HIGHLIGHTS

• Revenue increased 18% year-over-year, the fourth consecutive quarter of double-digit growth reflecting:

1. 160% growth from Angi Services to $117 million is attributable to Angi Roofing (Total Home Roofing) acquired on July 1, 2021 and continued investment in Angi Services. Angi Services revenue totaled $297 million in the trailing twelve months.

1. Flat Angi Ads and Leads growth

• 1. 2% growth in Europe
• Transacting Service Professionals increased 7% year-over-year to 222,000.
• Advertising Service Professionals increased 1% year-over-year to 39,000.
• Monetized Transactions increased 1% to 4.8 million with nearly 18 million in the trailing twelve months.
• Angi Inc. repurchased 2.1 million Class A common shares at an average price of $10.67 between August 4, 2021 and November 3, 2021.

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Revenue

	Q3	2021	Q3	2020	Growth
($ in millions; rounding differences may occur)
Angi Ads and Leads	$	326.2	$	327.1	0%
Angi Services		117.4		45.1	160%
Total North America	$	443.5	$	372.2	19%
Europe		18.0		17.7	2%
Total Revenue	$	461.6	$	389.9	18%

Operating (loss) income and Adjusted EBITDA

	Q3 2021	Q3 2020	Growth
($ in millions; rounding differences may occur)
Operating (loss) income:
North America	$	(14.7)	$	0.3	NM
Europe		(0.3)		(3.3)	92%
Total	$	(15.0)	$	(3.0)	-396%
Adjusted EBITDA:
North America	$	11.2	$	40.5	-72%
Europe		1.2		(2.0)	NM
Total	$	12.4	$	38.5	-68%

• Operating loss increased $12.0 million to $15.0 million and Adjusted EBITDA declined $26.1 million to $12.4 million reflecting:
  o Increased selling and marketing expense due primarily to commencing the process of consolidating under a single brand on March 17, 2021, which has adversely affected both free and paid search engine marketing efforts
  o Continued investment in Angi Services
  o Partially offset by $5.9 million lower stock-based compensation expense due primarily to stock appreciation rights and option expense recognized in Q3 2020 which were not incurred in 2021 as the awards became fully vested

Income Taxes

The Company recorded an income tax benefit of $4.8 million in Q3 2021 for an effective tax rate of 22%, which is higher than the statutory rate due primarily to an adjustment to non-deductiblestock-based compensation, largely offset by foreign income taxed at different rates. The Company recorded an income tax benefit of $11.7 million in Q3 2020 due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.

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Operating Metrics

	Q3 2021	Q3 2020	Growth
Angi Service Requests (in thousands)	8,707	9,837	-11%
Angi Monetized Transactions (in thousands)	4,783	4,716	1%
Angi Transacting Service Professionals (in thousands)	222	207	7%
Angi Advertising Service Professionals (in thousands)	39	39	1%

Monthly Metrics (year-over-year growth trends) (a)

	Jul '21	Aug '21	Sep '21	Oct '21
Angi Ads and Leads	-3%	2%	0%	-2%
Angi Services (b)	169%	164%	148%	124%
Total North America Revenue	17%	22%	19%	16%
Europe Revenue	0%	2%	4%	4%
Total Revenue	16%	21%	18%	15%
Angi Service Requests	-13%	-13%	-8%	-11%
Angi Monetized Transactions	0%	2%	2%	-4%
Angi Transacting Service Professionals	12%	9%	7%	5%
Angi Advertising Service Professionals	4%	2%	1%	1%

1. As of the date of this document, the Company has not yet completed its financial close process for October 2021. As a result, the information herein for October 2021 is preliminary and based upon information available to the Company as of the date of this document. During the course of the financial close process, the Company may identify items that would require it to make adjustments, which may impact growth rates and be material to the information presented above.
2. Includes revenue from Total Home Roofing, Inc. ("Angi Roofing"), which was acquired on July 1, 2021.

Free Cash Flow

For the nine months ended September 30, 2021, net cash from operations decreased $147.3 million to $25.9 million and Free Cash Flow decreased $161.7 million to negative $26.2 million due primarily to lower Adjusted EBITDA, higher capital expenditures and unfavorable working capital.

		Nine Months Ended September 30,
($ in millions; rounding differences may occur)		2021		2020
Net cash provided by operating activities	$	25.9	$	173.2
Capital expenditures		(52.1)		(37.6)
Free Cash Flow	$	(26.2)	$	135.5

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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2021:

• Angi Inc. had 502.2 million Class A and Class B common shares outstanding.
• IAC's economic interest in Angi Inc. was 84.6% and IAC's voting interest in Angi Inc. was 98.2%.
• Angi Inc. had $477 million in cash and cash equivalents and $500 million of debt, which was held at ANGI Group, LLC (a subsidiary of Angi Inc.).

Between August 4, 2021 and November 3, 2021, Angi Inc. repurchased 2.1 million Class A common shares at an

average price of $10.67. Angi Inc. has 16.1 million shares remaining in its stock repurchase authorization.

Angi Inc. may repurchase shares over an indefinite period on the open market and in privately negotiated transactions, depending on those factors management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

VIDEO CONFERENCE CALL

IAC and Angi Inc. will live stream a joint video conference call to answer questions regarding their third quarter results on Friday, November 5, 2021, at 10:00 a.m. Eastern Time. This live stream will include the disclosure of certain information, including forward-looking information, which may be material to an investor's understanding of IAC and Angi Inc.'s business. The live stream will be open to the public at ir.angi.comor ir.iac.com.

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DILUTIVE SECURITIES

Angi Inc. has various dilutive securities. The table below details these securities as well as potential dilution at various stock prices (shares in millions; rounding differences may occur).

		Avg.
		Exercise	As of
	Shares	Price	10/29/21				Dilution at:
Share Price				$12.53	$	13.00	$	14.00	$	15.00	$	16.00
Absolute Shares as of 10/29/21	502.4			502.4		502.4		502.4		502.4		502.4
SARs	1.0	$	2.80	0.3		0.3		0.3		0.3		0.3
Options	0.7	$	13.30	0.0		0.0		0.0		0.0		0.0
RSUs and subsidiary denominated equity awards	15.2			4.0		4.0		4.0		4.0		4.0
Total Dilution				4.3		4.3		4.4		4.4		4.4
% Dilution				0.9%		0.9%		0.9%		0.9%		0.9%
Total Diluted Shares Outstanding				506.7		506.7		506.7		506.8		506.8

The dilutive securities presentation is calculated using the method and assumptions described below, which are different from those used for GAAP dilution, which is calculated based on the treasury stock method.

The Company currently settles all equity awards on a net basis; therefore, the dilutive effect is presented as the net number of shares expected to be issued upon exercise or vesting, and in the case of options, assuming no proceeds are received by the Company. Any required withholding taxes are paid in cash by the Company on behalf of the employees assuming a withholding tax rate of 50%. In addition, the estimated income tax benefit from the tax deduction received upon the exercise or vesting of these awards is assumed to be used to repurchase Angi Inc. shares. Assuming all awards were exercised or vested on October 29, 2021, withholding taxes paid by the Company on behalf of the employees upon net settlement would have been $99.2 million, assuming a stock price of $12.53 and a 50% withholding rate. The table above assumes no change in the fair value estimate of the non-publicly traded subsidiary denominated equity awards from the values used at September 30, 2021.