ANGI : Reports Q2 2023 Results

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ANGI INC. REPORTS Q2 2023

Q2 operating loss improves 20% to $17 million

Q2 Adjusted EBITDA improves 89% to $18 million

DENVER-August 8, 2023-Angi Inc. (NASDAQ: ANGI) released its second quarter results today. A letter to IAC shareholders from Angi Inc. Chairman and CEO 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)

		Q2 2023		Q2 2022	Growth
	Revenue	$ 375.1	$	515.8	-27%
	Pro Forma Net Revenue	375.6		444.7	-16%
	Gross profit	343.4		388.0	-11%
	Operating loss	(16.7)		(20.9)	20%
	Net loss	(14.7)		(24.2)	39%
	Diluted loss per share	(0.03)		(0.05)	40%
	Adjusted EBITDA	18.3		9.7	89%

See reconciliations of GAAP to non-GAAP measures beginning on page 10.

Q2 2023 HIGHLIGHTS

• Revenue was $375 million, reflecting the impact of the change to net revenue recognition for Services, which took effect January 1, 2023. On a pro forma net basis, revenue decreased 16% in Q2 2023 reflecting Ads and Leads revenue of $292 million (down 14% year-over-year), 18% Services declines and 43% Roofing declines, partially offset by 17% International growth.
• Operating loss decreased 20% to $17 million and Adjusted EBITDA increased 89% to $18 million.

1. Services operating loss decreased $16 million to $5 million and Adjusted EBITDA improved $16 million to a $2 million profit

• 1. Ads and Leads operating income decreased 79% to $5 million and Adjusted EBITDA decreased 33% to $28 million
• Transacting Service Professionals were 207,000 and Monetized Transactions were 7.8 million in Q2 2023 (28 million for the trailing twelve months).
• For the six months ended June 30, 2023, net cash provided by operating activities increased $71 million to $78 million. Free Cash Flow increased $111 million to positive $55 million due in part to $40 million lower capital expenditures.
• For the full year 2023, Angi Inc. expects $15-$70 million of operating loss and $100-$130 million of Adjusted
  EBITDA.

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Revenue

	Q2 2023	Q2 2022	Growth
($ in millions; rounding differences may occur)
Ads and Leads	$	292.5	$	341.9	-14%
Services		29.9		108.2	-72%
Roofing		24.5		42.6	-43%
Intersegment eliminations		(1.0)		(1.9)	49%
Total Domestic	$	345.8	$	490.8	-30%
International		29.2		25.0	17%
Total	$	375.1	$	515.8	-27%
Pro Forma Services Net Revenue	$	30.4	$	37.1	-18%
Total Pro Forma Angi Inc. Net Revenue	$	375.6	$	444.7	-16%

• Revenue was $375.1 million, down 27% year-over-year, reflecting the change to net revenue recognition for Services, which took effect January 1, 2023. On a pro forma basis, revenue decreased 16% reflecting:

1. Ads and Leads revenue decreasing 14% due to ongoing user experience enhancements, homeowner and service professional acquisition optimizations and macro impact on overall demand

1. Services revenue decreasing 18% due to exiting complex services at the end of 2022 and margin optimization initiatives

1. Roofing revenue decreasing 43% due to lower demand and exiting certain markets over the past year

1. International revenue increasing 17% driven primarily by a larger service professional network and higher revenue per service professional

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Operating income (Loss) and Adjusted EBITDA

($ in millions; rounding differences may occur)	Q2 2023	Q2 2022	Growth
Operating income (loss)
Ads and Leads	$	4.8	$	23.3	-79%
Services		(5.2)		(21.1)	75%
Roofing		(1.3)		(3.8)	66%
Corporate		(16.6)		(18.1)	8%
Total Domestic	$	(18.3)	$	(19.6)	7%
International		1.6		(1.2)	NM
Total	$	(16.7)	$	(20.9)	20%
Adjusted EBITDA
Ads and Leads	$	28.2	$	42.2	-33%
Services		1.7		(13.9)	NM
Roofing		(1.3)		(3.1)	58%
Corporate		(13.1)		(15.1)	13%
Total Domestic	$	15.5	$	10.1	54%
International		2.8		(0.4)	NM
Total	$	18.3	$	9.7	89%

• Operating loss decreased $4.2 million to $16.7 million and Adjusted EBITDA improved $8.6 million to $18.3 million driven by:

1. Services operating loss decreased 75% to $5.2 million reflecting:
2. • Adjusted EBITDA increasing $15.6 million to a $1.7 million profit due to:
   • • Higher gross profit due to pricing and fulfillment optimization efforts over the past year
     • Lower operating expenses due to a reduced overall cost base as a result of exiting complex services
   • Lower stock-based compensation expense as a result of exiting complex services
   • Higher depreciation due to investments in capitalized software in the prior year

1. International operating income increased $2.8 million to $1.6 million and Adjusted EBITDA increased $3.2 million to $2.8 million due primarily to a 17% increase in revenue and operating expense leverage across all expense categories

1. Roofing operating loss decreased $2.5 million to $1.3 million and Adjusted EBITDA loss decreased $1.8 million to $1.3 million due primarily to:
2. • Lower and more efficient marketing spend

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• Lower general and administrative expense due to lower headcount primarily driven by exiting certain markets

1. Ads and Leads operating income decreased 79% to $4.8 million reflecting:
2. • Adjusted EBITDA decreasing 33% to $28.2 million due to:
   • • 14% lower revenue
     • Partially offset by lower selling and marketing expense due to improved marketing efficiency, and lower general and administrative expense due to lower compensation costs and other operating expenses
   • Higher depreciation due to investments in capitalized software in the prior year

Income Taxes

The Company recorded an income tax benefit of $2.1 million in Q2 2023 for an effective tax rate of 12%, which is lower than the statutory rate due primarily to non-deductiblestock-based compensation and foreign income taxed at different rates, partially offset by research credits and an adjustment to the forecasted annual effective tax rate. The Company recorded an income tax benefit of $3.7 million in Q2 2022 for an effective tax rate of 13%, which is lower than the statutory rate due primarily to unbenefited foreign losses.

Operating Metrics

	Q2 2023	Q2 2022	Growth
Service Requests (in thousands)	6,862	8,631	-21%
Monetized Transactions (in thousands)	7,805	8,303	-6%
Transacting Service Professionals (in thousands)	207	264	-22%

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Free Cash Flow

For the six months ended June 30, 2023, net cash provided by operating activities was $77.8 million, a $70.7 million increase year-over-year. Free Cash Flow increased $110.5 million to $55.5 million due primarily to $39.8 million lower capital expenditures, favorable working capital and higher Adjusted EBITDA.

($ in millions; rounding differences may occur)		Six Months Ended June 30,
	2023		2022
Net cash provided by operating activities	$	77.8	$	7.1
Capital expenditures		(22.3)		(62.1)
Free Cash Flow	$	55.5	$	(55.1)

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2023:

• Angi Inc. had 506.0 million Class A and Class B common shares outstanding.
• IAC's economic interest in Angi Inc. was 83.9% and IAC's voting interest in Angi Inc. was 98.1%.
• Angi Inc. had $371 million in cash and cash equivalents and $500 million of debt (due August 15, 2028), which was held at ANGI Group, LLC (a subsidiary of Angi Inc.).

In Q2 2023 Angi Inc. repurchased 1.1 million common shares for an aggregate of $3.4 million (average price of $3.22 per share).

Angi Inc. has 14.0 million shares remaining in its stock repurchase authorization.

Angi Inc. may repurchase shares pursuant to this authorization 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.

CONFERENCE CALL

IAC and Angi Inc. will host a conference call to answer questions regarding their second quarter results on Wednesday, August 9, 2023, at 8:30 a.m. Eastern Time. This conference call will include the disclosure of certain information, including forward- looking information, which may be material to an investor's understanding of IAC's and Angi Inc.'s businesses. The conference call will be open to the public at ir.angi.comand ir.iac.com.