Angi Inc.

Previous wording

Angi Inc. (“Angi,” the “Company,” “we,” “our,” or “us”) connects quality home professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. There were approximately 168,000 Transacting Professionals (as defined below) during the three months ended December 31, 2024. Additionally, consumers turned to at least one of our businesses to find a professional for approximately 17 million projects during the twelve months ended December 31, 2024.

Current wording

Angi Inc. (“Angi,” the “Company,” “we,” “our,” or “us”) connects quality home professionals (“Pros”) with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. There were approximately 111,000 Average Monthly Active Pros (as defined below) during the three months ended December 31, 2025. Additionally, consumers turned to at least one of our businesses to find a Pro for approximately 16 million projects during the twelve months ended December 31, 2025.

Previous wording

Ads and Leads provides professionals the capability to engage with potential customers, including quoting and invoicing services, and provides consumers with tools and resources to help them find local, pre-screened and customer-rated professionals nationwide for home repair, maintenance and improvement projects. Services consumers can request household services directly through the Angi platform, and such requests are fulfilled by independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. Matching service, the booking of pre-priced services, and related tools and directories are provided to consumers free of charge upon registration.

Current wording

In the United States, the Company provides Pros the capability to engage with potential customers, including quoting and invoicing services, and provides consumers with tools and resources to help them find local, pre-screened and customer-rated Pros nationwide for home repair, maintenance and improvement projects. Consumers can also request household services directly through the Angi platform, and such requests are fulfilled by independently established Pros engaged in a trade, occupation and/or business that customarily provides such services. Matching service, booking of pre-priced services, and related tools and directories are provided to consumers free of charge upon registration. The Company also owns marketplaces in Austria, Canada, France, Germany, Italy, the Netherlands, and the UK which provide Pros the ability to engage with potential customers and consumers the ability to engage with the Pros they need.

Previous wording

On January 13, 2025, IAC announced that its board of directors approved a plan to spin off its full stake in the Company to IAC stockholders. IAC intends to effect the spin-off through a dividend to the holders of its common stock and Class B common stock of all of the common stock of the Company owned by IAC (the “Distribution”). Prior to the effective time of the Distribution, IAC intends to voluntarily convert all of the shares of our Class B common stock that it owns to shares of Class A common stock. The completion of the Distribution remains subject to customary conditions and to the final approval of IAC's board of directors and may not be completed, on the anticipated terms or at all. IAC expects to complete the Distribution as soon as March 31, 2025.

Current wording

On March 31, 2025, IAC completed the spin-off of its ownership in the Company through a special dividend of the common stock of the Company owned by IAC to the holders of IAC common stock and IAC Class B common stock (the “Distribution”). Prior to the effective time of the Distribution, IAC voluntarily converted all of the shares of our Class B Common Stock that it owned to shares of Class A Common Stock. As a result of this conversion, there are no longer any shares of our Class B Common Stock outstanding. After completion of the Distribution, IAC has no ownership in the Company, there are no shares of Class B Common Stock outstanding, and the only class of Angi capital stock with shares outstanding is Class A Common Stock.

Previous wording

•Services Revenue primarily comprises domestic revenue from pre-priced offerings by which the consumer requests services through a Company platform and the Company connects them with a professional to perform the service.

Current wording

•U.S. Revenue– primarily comprised of revenue generated within the U.S. segment, including Lead revenue for consumer matches, revenue from Pros under contract for advertising, membership subscription revenue from Pros and consumers and revenue from pre-priced offerings by which the consumer requests services through a Company platform and the Company connects them with a Pro to perform the service.

Previous wording

•International Revenue primarily comprises 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 professionals.

Current wording

•International Revenue– comprised of revenue generated within the International segment (consisting of businesses in Europe and Canada), including Lead revenue for consumer matches and membership subscription revenue from Pros.

Previous wording

Cost of revenue, which excludes depreciation, consists primarily of (i) credit card processing fees, (ii) hosting fees, and (iii) payments made to independent third-party professionals who perform work contracted under Services arrangements that were entered into prior to January 1, 2023 and the change to net revenue reporting described above.

Current wording

Cost of revenue, which excludes depreciation, consists primarily of (i) credit card processing fees, (ii) hosting fees, and (iii) payments made to independent third-party Pros who perform work.

Previous wording

•Selling and marketing expense - consists primarily of (i) advertising expenditures, which include marketing fees to promote the brand to consumers and 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, streaming, and radio advertising, (ii) compensation expense (including stock-based compensation expense) and other employee-related costs for our sales and marketing personnel, (iii) service guarantee expense, (iv) software license and maintenance costs, and (v) outsourced personnel costs.

Current wording

•Selling and marketing expense - consists primarily of (i) advertising expenditures, which include marketing fees to promote the brand to consumers and Pros 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 and marketing personnel, (iii) service guarantee expense, (iv) software license and maintenance costs, and (v) outsourced personnel costs.

Previous wording

•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) rent expense and facilities costs (including impairments of right-of-use assets). Our customer service function includes personnel who provide support to our professionals and consumers.

Current wording

•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) rent expense and facilities costs (including impairments of right-of-use assets). Our customer service function includes personnel who provide support to our Pros and consumers.

Previous wording

Angi gross profit decreased $168.7 million, or 13%, due primarily to the decrease in revenue described in the revenue discussion above.

Current wording

Gross profit decreased $144.4 million, or 13%, due primarily to the decrease in revenue described in the revenue discussion above.

Previous wording

Ads and Leads general and administrative expense decreased $31.7 million, or 15%, due primarily to decreases of $22.9 million in the provision for credit losses, $7.5 million in software license and maintenance costs, and $3.8 million in third-party wages, partially offset by an increase of $3.2 million in lease expense. The decrease in the provision for credit losses is primarily due to lower revenue and improved collection rates. The decrease in software license and maintenance costs and third-party wages are due primarily to reduced costs related to customer support services. The increase in lease expense is primarily due to impairment charges of $6.8 million of right-of-use assets (“ROU assets”) in the first half of 2024, partially offset by a gain on lease termination of $2.0 million in the second half of 2024, both related to the Company reducing its real estate footprint.

Current wording

U.S. general and administrative expense decreased $56.3 million, or 20%, due primarily to decreases of $25.7 million in compensation expense, $9.9 million in the provision for credit losses, $8.0 million in lease expense, $3.1 million in software license and maintenance costs, and $2.5 million in third-party wages. The decrease in compensation expense was primarily due to the reversal of previously recognized stock-based compensation expense of $10.2 million related to IAC restricted stock forfeited by Joseph Levin, former CEO of IAC and current Executive Chairman of Angi, in the first quarter of 2025, and a reduction in headcount. The decrease in the provision for credit losses was primarily due to lower revenue and improved collection rates. The decrease in lease expense was primarily due to impairment charges of right-of-use assets previously recognized in the first half of 2024 and the Company’s reduction of its real estate footprint. The decrease in software license and maintenance costs was due primarily to reduced costs related to data warehousing and customer support services. The decrease in third-party wages is primarily due to reduced costs related to customer support services.

Previous wording

Depreciation decreased $7.6 million, or 8%, due primarily to a reduction in depreciation of capitalized software largely as a result of assets fully depreciating in current and previous periods, partially offset by the impairment of certain leasehold improvements and furniture and equipment in connection with the reduction of our real estate footprint in 2024.

Current wording

Depreciation decreased $40.7 million, or 47%, due primarily to the reduction in capitalized software spend over prior periods and the write-off of certain leasehold improvements and furniture and fixtures in connection with the Company’s reduction of its real estate footprint in 2024.

Previous wording

Operating income increased from an operating loss for 2024 compared to 2023 due primarily to the factors described above in the revenue, cost of revenue, sales and marketing, general and administrative, product development, depreciation, and amortization of intangibles expense discussions.

Current wording

Operating income increased in 2025 compared to 2024 due primarily to the factors described above in the cost of revenue, selling and marketing, general and administrative, and depreciation expense discussions.

Previous wording

At December 31, 2024, there was $36.5 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.14 years.

Current wording

At December 31, 2025, there was $31.7 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.2 years.

Previous wording

International Adjusted EBITDA increased $2.9 million, 22%, to $16.0 million, and increased as a percentage of revenue, driven by an increase in revenue and continued operating expense leverage.

Current wording

International Adjusted EBITDA increased $11.3 million, 71%, to $27.3 million, and increased as a percentage of revenue. The increase was primarily driven by lower selling and marketing expense due to a decrease in compensation expense.

Previous wording

In 2024, the Company recorded an income tax benefit, despite pre-tax income, due primarily to the valuation allowance

Current wording

In 2024, the Company recorded a benefit, despite pre-tax income, due primarily to the valuation allowance release described in the three month discussion and research credits, partially offset by tax shortfalls generated by the vesting of stock-based awards.

Previous wording

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

Current wording

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable; and (4) restructuring. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between its performance and that of its competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

Previous wording

The following tables reconcile operating income (loss) to Adjusted EBITDA for the Company's reportable segments and net earnings (loss) attributable to Angi shareholders:

Current wording

The following tables reconcile net earnings attributable to Angi shareholders to Adjusted EBITDA for the Company's reportable segments and net earnings (loss) attributable to Angi shareholders:

Previous wording

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. Non-cash adjustments include depreciation, provision for credit losses, stock-based compensation expense, non-cash lease expense (including impairment of right-of-use assets), deferred income taxes, and amortization and impairment of intangibles.

Current wording

Net cash provided by operating activities consists of earnings adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments include depreciation, provision for credit losses, stock-based compensation expense, non-cash lease expense (including impairment of right-of-use assets), deferred income taxes, and amortization of intangibles.

Previous wording

Adjustments to net loss attributable to continuing operations consist primarily of $93.6 million of depreciation, $79.4 million of provision for credit losses, $43.4 million of stock-based compensation expense, $11.9 million of non-cash lease expense, and $8.0 million of amortization of intangibles, partially offset by $10.0 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase of $58.2 million in accounts receivable, a decrease of $20.7 million in operating lease liabilities, an increase of $13.9 million of other assets, and a decrease of $8.0 million in accounts payable and other liabilities. The increase in accounts receivable is due primarily to timing of cash receipts. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in other assets is due primarily to a $10.9 million receivable related to insurance coverage for previously incurred legal fees. The decrease in accounts payable and other liabilities is due to a decrease in accrued advertising.

Current wording

Adjustments to net earnings attributable to continuing operations consist primarily of $45.3 million of depreciation, $14.8 million of stock-based compensation expense, $13.2 million of deferred income taxes and $7.4 million of non-cash lease expense. The decrease from changes in working capital is due primarily to a decrease of $20.0 million in deferred revenue and a decrease of $13.1 million in operating lease liabilities, partially offset by a decrease of $13.4 million in other assets. The increase in accounts receivable, coupled with the non-cash impact from the provision for credit losses, resulted in a $4.7 million decrease in accounts receivable, net, excluding foreign currency impact of $1.1 million. The reduction in accounts receivable, net is due to lower revenue. The decrease in deferred revenue is due primarily to the mix shift in customer packages towards monthly subscriptions, lowering the prevalence of memberships and annual and quarterly prepaid packages. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The decrease in other assets is due to lower capitalized sales commissions, which were impacted by a reduction in the size of the sales force, a larger portion of sales commissions being expensed rather than capitalized in the period, and a shift to annual bonuses for roles that previously received commissions.

Previous wording

Net cash used in investing activities attributable to continuing operations includes capital expenditures of $47.8 million primarily related to investments in capitalized software to support the Company’s products and services and purchases of marketable debt securities of $12.4 million, partially offset by maturities of marketable debt securities of $12.5 million and $1.0 million of proceeds for the sale of THR.

Current wording

Net cash used in investing activities attributable to continuing operations includes capital expenditures of $59.6 million primarily related to investments in capitalized software to support the Company’s products and services.

Previous wording

Net cash used in financing activities attributable to continuing operations includes $28.6 million for the repurchase of 12.6 million shares of the Company’s Class A common stock, on a settlement date basis, at an average price of $2.27 per share,

Current wording

Net cash used in financing activities attributable to continuing operations includes $148.7 million for the repurchase of 10.5 million shares of the Company’s Class A Common Stock, on a settlement date basis, at an average price of $14.15 per share, $8.0 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled, and $1.7 million of debt issuance costs in connection with the $175.0 million senior secured revolving credit facility.

Previous wording

Adjustments to net earnings attributable to continuing operations consist primarily of $86.1 million of depreciation, $57.3 million of provision for credit losses, $34.8 million of stock-based compensation expense, $16.0 million of non-cash lease expense (including impairment of right-of-use assets), partially offset by $24.0 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase of $45.4 million in accounts receivable and decreases of $19.4 million in operating lease liabilities and $7.7 million in deferred revenue, partially offset by a decrease of $28.9 million in other assets. The increase in accounts receivable is due to timing of cash receipts. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The decrease in deferred revenue is due primarily to lower annual memberships, primarily at Ads and Leads. The decrease in other assets is due primarily to lower capitalized sales commissions which were impacted by a reduction in the size of the salesforce, a larger portion of sales commissions being expensed rather than capitalized in the period, and a shift to annual bonuses for roles that previously received commissions as well as a payment received related to insurance coverage for previously incurred legal fees and a decrease in prepaid hosting services.

Current wording

Adjustments to net earnings attributable to continuing operations consist primarily of $86.1 million of depreciation, $57.3 million of provision for credit losses, $34.8 million of stock-based compensation expense, and $16.0 million of non-cash lease expense (including impairment of right-of-use assets), partially offset by $24.0 million of deferred income taxes. The decrease from changes in working capital consists primarily of an increase of $45.4 million in accounts receivable and decreases of $19.4 million in operating lease liabilities and $7.7 million in deferred revenue, partially offset by a decrease of $28.9 million in other assets. The increase in accounts receivable is due to timing of cash receipts. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The decrease in deferred revenue is due primarily to lower annual memberships, primarily at in the U.S. The decrease in other assets is due primarily to lower capitalized sales commissions which were impacted by a reduction in the size of the salesforce, a larger portion of sales commissions being expensed rather than capitalized in the period, and a shift to annual bonuses for roles that previously received commissions as well as a payment received related to insurance coverage for previously incurred legal fees and a decrease in prepaid hosting services.

Previous wording

Net cash used in financing activities attributable to continuing operations includes $10.9 million for the repurchase of 4.4 million shares of the Company’s Class A common stock, on a settlement date basis, at an average price of $2.50 per share and $6.0 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

Current wording

Net cash used in financing activities attributable to continuing operations includes $28.6 million for the repurchase of 1.3 million shares of the Company’s Class A Common Stock, on a settlement date basis, at an average price of $22.74 per share, $16.0 million for the purchase of the remaining noncontrolling interests of a foreign subsidiary, and $7.6 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

Previous wording

During the year ended December 31, 2024, the Company repurchased 12.5 million shares of its Class A common stock, on a trade date basis, at an average price of $2.27 per share, or $28.4 million in aggregate. During the fourth quarter of 2023, the Company announced its intent to repurchase the 14.0 million shares remaining in its stock repurchase authorization from March 2020 (the “2020 Share Authorization”). On August 2, 2024, the board of directors of the Company approved a new stock repurchase authorization of 25 million shares (the “2024 Share Authorization”). As of August 19, 2024, the Company had no shares remaining under the 2020 Authorization. From January 1, 2025 through February 7, 2025, the Company did not repurchase any additional shares. As of February 7, 2025, the Company had 23.1 million shares remaining in the 2024 Share Authorization.

Current wording

During the year ended December 31, 2025, the Company repurchased 10.5 million shares of its Class A Common Stock, on a trade date basis, at an average price of $14.15 per share, or $148.7 million in aggregate. On August 2, 2024, the board of directors of the Company approved a stock repurchase authorization of 2.5 million shares (the “2024 Share Authorization”), all of which were exhausted during the second quarter of 2025. On May 5, 2025 and September 17, 2025, the board of directors of the Company approved a new stock repurchase authorization of 5.0 million shares of its Class A Common Stock (“May 2025 Share Authorization”) and approximately 3.2 million shares of its Class A Common Stock (“September 2025 Share Authorization,” and collectively with the 2024 Share Authorization and May 2025 Share Authorization, the “Share Repurchase Programs”), respectively. Both the May 2025 Share Authorization and September 2025 Share Authorization were exhausted during the fourth quarter of 2025. As of December 31, 2025, there were no shares remaining in any of the Share Repurchase Programs.

Previous wording

The Company enters into various contractual arrangements as a part of its continued operations. Material contractual obligations described in the accompanying notes to the financial statements within “Item 8. 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.”

Current wording

The Company enters into various contractual arrangements as a part of its continued operations. Material contractual obligations described in the accompanying notes to the consolidated financial statements within “Item 8. 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 7—Long-term Debt.”

Previous wording

Purchase obligations include $11.5 million related to technology contracts spend to be made in 2025.

Current wording

Purchase obligations include $17.3 million related to cloud computing spend to be made in 2026.

Previous wording

The Company’s 2025 capital expenditures are expected to be higher than 2024 capital expenditures of $50.5 million by approximately 15% to 25% due to an increase related to capitalized software.

Current wording

The Company’s 2026 capital expenditures are expected to be lower than 2025 capital expenditures of $59.6 million by approximately 5% to 10% due to reduction in capitalized software.

Previous wording

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. We may elect to raise additional capital through the sale of additional equity or debt financing to fund business activities such as strategic acquisitions, share repurchases, or other purposes beyond the next twelve months.

Current wording

The Company believes its existing cash, cash equivalents, expected positive cash flows generated from operations, and if necessary, our borrowing capacity under the Revolving Facility, 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 may consider additional forms of liquidity. These forms of liquidity could subject us to operating and financial covenants that may restrict our business activities, including the incurrence of additional indebtedness, investments and certain payments. From time to time, we may also elect to raise additional capital through the sale of additional equity or debt financing to fund business activities such as strategic acquisitions, share repurchases, or other purposes.

Previous wording

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. 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. The duration of time between the Company’s issuance of an invoice and payment due date is not significant. The carrying value of the credit loss allowance is $20.5 million and $24.7 million at December 31, 2024 and 2023, respectively. The provision for credit losses was $57.3 million and $79.4 million for the years ended December 31, 2024 and 2023, respectively.

Current wording

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. 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. The duration of time between the Company’s issuance of an invoice and payment due date is not significant. The carrying value of the credit loss allowance is$15.9 million and $20.5 million at December 31, 2025 and 2024, respectively. The provision for credit losses was$48.5 million and $57.3 million for the years ended December 31, 2025 and 2024, respectively.

Previous wording

The carrying value of goodwill is $883.4 million and $886.0 million at December 31, 2024 and 2023, respectively. Indefinite-lived intangible assets, which consist of the Company’s acquired trade names and trademarks, have a carrying value of $167.7 million and $170.8 million at December 31, 2024 and 2023, respectively.

Current wording

The carrying value of goodwill is $890.1 million and $883.4 million at December 31, 2025 and 2024, respectively. Indefinite-lived intangible assets, which consist of the Company’s acquired trade names and trademarks, have a carrying value of$167.1 million and $167.7 million at December 31, 2025 and 2024, respectively.

Previous wording

Given the decline in the Company’s stock price after October 1, 2024, the Company subsequently quantitatively tested all reporting units with goodwill as of December 31, 2024, and no impairments were noted.

Current wording

For the Company’s annual goodwill test at October 1, 2025, the Company quantitatively tested the U.S. and International reporting units. The Company’s quantitative tests resulted in no impairments. Given the decline in the Company’s stock price after October 1, 2025, the Company subsequently quantitatively tested all reporting units with goodwill as of December 31, 2025, and no impairments were noted.

Previous wording

The fair value of the Company's reporting units is determined using both an income approach based on discounted cash flows (“DCF”) and a market approach when it tests goodwill for impairment, either on an interim basis or annual basis as of October 1 each year. Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the DCF analyses are based on the Company’s most recent forecast and budget and, for years beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows of the respective reporting units. Assumptions used in the DCF analyses, including the discount rate, are assessed based on the reporting units' current results and forecasted future performance, as well as macroeconomic and industry specific factors. The discount rates used in the quantitative tests as of December 31, 2024 for determining the fair value of the Company’s Ads and Leads, Services, and International reporting units were 13%, 14%, and 15%, respectively. The discount rates used in the quantitative tests as of October 1, 2024 for determining the fair value of the Company’s Ads and Leads and Services reporting units were 12.5% and 13.5%, respectively. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit. To determine a peer group of companies for our respective reporting units, we considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors.

Current wording

The fair value of the Company's reporting units is determined using both an income approach based on discounted cash flows (“DCF”) and a market approach when it tests goodwill for impairment, either on an interim basis or annual basis as of October 1 each year. Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the DCF analyses are based on the Company’s most recent forecast and budget and, for years beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows of the respective reporting units. Assumptions used in the DCF analyses, including the discount rate, are assessed based on the reporting units' current results and forecasted future performance, as well as macroeconomic and industry specific factors. The discount rates used in the quantitative tests as of December 31, 2025 for determining the fair value of the Company’s U.S. and International reporting units were 12.0% and 14.0%, respectively. The discount rates used in the quantitative tests as of October 1, 2025 for determining the fair value of the Company’s U.S. and International reporting units were 12.0% and 14.5%, respectively. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit. To determine a peer group of companies for our respective reporting units, we considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors.

Previous wording

As a result of the valuation process, we determined that the fair value of the Ads and Leads and Services reporting units exceeded the carrying value and thus there was no impairment of goodwill in 2024. The fair value based on the valuation exceeded the carrying value of the Ads and Leads and Services reporting units by $494.5 million and $20.0 million, respectively, as of December 31, 2024.

Current wording

As a result of the valuation process, we determined that the fair value of the U.S. and International reporting units exceeded the carrying value and thus there was no impairment of goodwill in 2025. The fair value based on the valuation exceeded the carrying value of the U.S. and International reporting units by $109.7 million and $242.1 million, respectively, as of December 31, 2025.

Previous wording

The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company’s trade names and trademarks. The future cash flows are based on the Company's most recent forecast and budget and, for years beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth rates. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 12.5% to 14.5% in 2024 and 15% to 17% in 2023, and the royalty rates used ranged from 2.5% to 4.5% in both 2024 and 2023.

Current wording

The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company’s trade names and trademarks. The future cash flows are based on the Company's most recent forecast and budget and, for years beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth rates. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 12.0% to 14.5% in 2025 and 12.5% to 14.5% in 2024 and the royalty rates used ranged from 2.0% to 4.5% in 2025 and 2.5% to 4.5% in 2024.

Previous wording

In the fourth quarter of 2024, the Company identified an impairment charge of $2.6 million related to a certain indefinite-lived trade name at Services. The discount rate used to value this trade name was 14.0%, and the royalty rate was 2.5%. The impairment of the indefinite-lived intangible asset is included in “Amortization of intangibles” in the statement of operations.

Current wording

In the fourth quarter of 2024, the Company identified an impairment charge of $2.6 million related to a certain indefinite-lived trade name at the U.S. reporting unit. The discount rate used to value this trade name was 14.0%, and the royalty rate was 2.5%. The impairment of the indefinite-lived intangible asset is included in “Amortization of intangibles” in the statement of operations.

Previous wording

We capitalize internally developed software costs (including employee payroll costs, stock-based compensation and benefit costs as well as third party production costs) subsequent to identifying technological feasibility of the software project. Significant management judgement is required in assessing when technological feasibility is established.

Current wording

We capitalize internally developed software costs (including employee payroll costs, stock-based compensation and benefit costs as well as third party production costs) subsequent to identifying technological feasibility of the software project. Significant management judgment is required in assessing when technological feasibility is established.

Previous wording

Depreciation of internally developed software commences when the software is available for release for its intended use and is recorded on a straight-line basis over the estimated useful life of the software, which is typically 2-3 years. The net carrying value of capitalized software is $73.1 million and $92.3 million at December 31, 2024 and 2023, respectively.

Current wording

Depreciation of internally developed software commences when the software is available for release for its intended use and is recorded on a straight-line basis over the estimated useful life of the software, which is typically 2-3 years. The net carrying value of capitalized software is $94.6 million and $73.1 million at December 31, 2025 and 2024, respectively.

Previous wording

The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax benefit and/or provision has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the statement of cash flows. The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes. Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision or benefit computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the statement of shareholders’ equity and financing activities within the statement of cash flows. The portion of the December 31, 2024 deferred tax assets that will be payable to IAC pursuant to the tax sharing agreement, upon realization, is $87.3 million.

Current wording

Through March 31, 2025, the Company was included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax benefit and/or provision has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the statement of cash flows. The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes. Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision or benefit computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the statement of shareholders’ equity and financing activities within the statement of cash flows.

Previous wording

The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized. At December 31, 2024 and 2023, the balance of the Company’s net deferred tax asset is $167.6 million and $145.4 million, respectively.

Current wording

The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized. At December 31, 2025 and 2024, the balance of the Company’s net deferred tax asset is $124.7 million and $167.6 million, respectively.

Previous wording

The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. This measurement step is inherently difficult and requires subjective estimations of such amounts to determine the probability of various possible outcomes. At December 31, 2024 and 2023, the Company has unrecognized tax benefits, including interest, of $9.7 million and $8.1 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. 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 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.

Current wording

The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. This measurement step is inherently difficult and requires subjective estimations of such amounts to determine the probability of various possible outcomes. At December 31, 2025 and 2024, the Company has unrecognized tax benefits, including interest, of $14.1 million and $9.7 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. 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 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.