Angi Inc.

We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”). This measure is considered a primary segment measure of profitability and one of the metrics by which we evaluate the performance of our businesses, and on which our internal budgets are based, and may also 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 non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. We endeavor to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure, which we discuss below.

Definition of Non-GAAP Measure

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.

Non-Cash Expenses That Are Excluded from Our Non-GAAP Measure

Stock-based compensation expense consists of expense associated with the grants, including unvested grants assumed in acquisitions, of stock appreciation rights, restricted stock units (“RSUs”), stock options, performance-based RSUs (“PSUs”), and market-based awards. These expenses are not paid in cash and we view the economic costs of stock-based awards to be the dilution to our share base; we also include the related shares in our fully diluted shares outstanding for GAAP earnings per share using the treasury stock method. PSUs and market-based awards are included only to the extent the applicable performance or market condition(s) have been met (assuming the end of the reporting period is the end of the contingency period). The Company is currently settling all stock-based awards on a net basis and remits the required tax-withholding amounts from its current funds.

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.

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 professional relationships, technology, and trade names, are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. 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.

Restructuring are costs associated with a formal restructuring plan that are primarily related to workforce reductions. The Company excludes these expenses because they are not reflective of ordinary course ongoing business and operating results.

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

FINANCIAL POSITION, LIQUIDITY, AND CAPITAL RESOURCES

Financial Position

At September 30, 2026, all of the Company’s international cash can be repatriated without significant consequences.

For a detailed description of long-term debt, see “Note 5—Long-term Debt” to the financial statements included in “Item 1—Consolidated Financial Statements.”

Cash Flow Information

In summary, the Company’s cash flows are as follows:

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 impairment of intangibles.

Adjustments to net earnings consist primarily of $225.6 million of goodwill impairment, $52.6 million of depreciation, $16.8 million of stock-based compensation expense, $9.6 million of impairment of intangibles, $5.7 million of non-cash lease expense, $2.4 million of deferred income taxes, and other adjustments, net of $0.9 million, partially offset by an $8.4 million net gain on extinguishment of debt. The decrease in cash from changes in working capital consists primarily of a decrease of $22.5 million in accounts payable and other liabilities, a decrease of $11.9 million in operating lease liabilities, an increase in accounts receivable, net, of $1.3 million which includes the non-cash impact from the provision for credit losses of $30.1 million and excludes foreign currency impact of $0.3 million, partially offset by a decrease of $3.0 million in other assets, an increase of $1.8 million in income taxes payable and receivable, and an increase of $1.8 million in deferred revenue. The decrease in accounts payable and other liabilities was due primarily to payments under the IAC tax sharing agreement, legal settlement previously accrued, compensation previously accrued, and interest. The increase in accounts receivable was due primarily to timing of invoicing and cash receipts. The decrease in operating lease liabilities was due to cash payments on leases net of interest accretion. The decrease in other assets was due primarily tolower capitalized sales commissions, which were impacted by a reduction in the size of the sales force and a shift to annual bonuses for roles that previously received commissions. The increase in deferred revenue was due primarily to changes in the timing of billings and revenue recognized.

Net cash used in investing activities includes capital expenditures of $44.8 million primarily related to investments in capitalized software to support the Company’s products and services.

Net cash used in financing activities includes $91.2 million for the repurchase of ANGI Group Senior Notes and $2.4 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

Adjustments to net earnings consist primarily of $37.3 million of provision for credit losses, $32.1 million of depreciation, $16.9 million of deferred income taxes, $8.7 million of stock-based compensation expense and $5.5 million of non-cash lease expense. The decrease from changes in working capital consists primarily of an increase of $37.9 million in accounts receivable, a decrease of $13.9 million in accounts payable and other liabilities, a decrease of $12.2 million in deferred revenue, and a decrease of $9.7 million in operating lease liabilities, partially offset by a decrease of $14.5 million in other assets. The increase in accounts receivable is due primarily to timing of cash receipts. The decrease in accounts payable and other liabilities is due primarily to accrued compensation and timing of payments. The decrease in deferred revenue is due primarily to a decrease in advertising sales and lower memberships. 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.

Net cash used in investing activities includes capital expenditures of $40.9 million primarily related to investments in capitalized software to support the Company’s products and services.

Net cash used in financing activities includes $102.7 million for the repurchase of 6.7 million shares of the Company’s Class A Common Stock, on a settlement date basis, at an average price of $15.31 per share and $6.9 million for the payment of withholding taxes on behalf of employees for stock-based awards that were net settled.

Liquidity and Capital Resources

Debt

As of December 31, 2025, we had $500.0 million aggregate principal amount of 3.875% senior notes due August 15, 2028 (the “ANGI Group Senior Notes”). During the first and second quarter of 2026, ANGI Group repurchased a portion of the outstanding principal amount of ANGI Group Senior Notes, as further described below. As of September 30, 2026, $400 million aggregate principal amount of ANGI Group Senior Notes remained outstanding. Interest on the ANGI Group Senior Notes is paid semi-annually in arrears on February 15 and August 15 of each year. In December 2025, ANGI Group amended the indenture governing the ANGI Group Senior Notes to add certain U.S. subsidiaries of ANGI Group that are guarantors under the Credit Agreement (defined below) as additional guarantors under such indenture.

In November 2025, ANGI Group entered into a credit agreement (the “Credit Agreement”), with the lenders and issuing lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, providing for a senior secured revolving facility in an aggregate principal amount of $175.0 million, including a letter of credit sublimit of up to $25.0 million (the “Revolving Facility”). While the Revolving Facility has a stated maturity of November 6, 2030, the Credit Agreement provides that the maturity date will at all times be no later than the 91st day prior to the maturity date of the ANGI Group Senior Notes. As a result, unless the ANGI Group Senior Notes are repaid or refinanced prior to that date, the maturity of the Revolving Facility will accelerate to May 16, 2028. As of September 30, 2026, there were no outstanding borrowings under the Revolving Facility. For additional details, see “Note 5—Long-term Debt” to the consolidated financial statements included in “Item 1. Consolidated Financial Statements.”

Debt Repurchase Activity

During the nine months ended September 30, 2026, the Company repurchased a total of $100.0 million aggregate principal amount of the ANGI Group Senior Notes, maturing in 2028, for total cash consideration, including $0.7 million of accrued and unpaid interest, of $91.9 million. The repurchases of the ANGI Group Senior Notes resulted in an aggregate net gain on extinguishment of debt of $8.4 million, which is included in other income, net in the consolidated statement of operations for the nine months ended September 30, 2026. There were no repurchases of the ANGI Group Senior Notes during the three months ended September 30, 2026.

Contractual Obligations

As of September 30, 2026, there were no material changes outside the ordinary course of business to the Company’s contractual obligations disclosures as of December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Capital Expenditures

The Company’s 2026 capital expenditures are expected to be consistent with 2025 capital expenditures.

Liquidity Assessment

The Company’s liquidity could be negatively affected by a decrease in demand for its products and services due to economic or other factors.

The Company believes its existing cash, cash equivalents, expected positive cash flows generated from operations, and if necessary, its 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.

Additional financing may not be available on terms favorable to the Company or at all, and may also be impacted by any disruptions in the financial markets. In addition, the Company’s existing indebtedness could limit its ability to obtain additional financing.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. 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. Because of the size of the financial statement elements to which they relate, some of our accounting policies and estimates have a more significant impact on our financial statements than others. Our significant accounting policies are described in Note 1—The Company and Summary of Significant Accounting Policies to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and in the notes to the consolidated financial statements included in Part II, Item 8 of the Annual Report. There have been no material changes to our critical accounting estimates since our Annual Report, except as described below.

Recoverability of Goodwill and Indefinite-Lived Intangible Assets

The Company’s U.S. and International reporting units are separate operating segments. See “Note 7—Segment Information” for additional information regarding the Company’s method of determining operating and reportable segments.

The Company assesses goodwill and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset has declined below its carrying value.

If the conclusion of the Company’s qualitative assessment is that there are indicators of impairment and a quantitative test is required, the annual or interim quantitative test of the recovery of goodwill involves a comparison of the estimated fair value of the Company’s reporting unit that is being tested to its carrying value. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. If the carrying value of a reporting unit exceeds its estimated fair value, a goodwill impairment equal to the excess is recorded. During the second quarter of 2026, the Company concluded that the continued decrease in stock price and market capitalization since December 31, 2025 constituted a triggering event such that the Company performed quantitative impairment assessments of its goodwill and indefinite-lived intangible assets as of May 31, 2026.

During the three months ended September 30, 2026, the Company evaluated whether any events occurred or circumstances changed that would indicate it was more likely than not that the fair value of a reporting unit or an indefinite-lived intangible asset had declined below its carrying value. In making this evaluation, the Company considered macroeconomic and industry conditions, changes in its stock price and market capitalization since June 30, 2026, its actual financial results relative to the forecast used in the quantitative assessments and other entity-specific events. The Company concluded that no triggering event occurred during the three months ended September 30, 2026.

As a result of the quantitative impairment assessment performed as of May 31, 2026, the Company determined that the carrying value of the U.S. reporting unit exceeded the fair value by $225.6 million, resulting in a goodwill impairment charge of $225.6 million which is presented as a separate line item on the consolidated statement of operations during the nine months ended September 30, 2026. No goodwill impairment was recorded for the U.S. reporting unit during the three months ended September 30, 2026. The estimated fair value of the International reporting unit exceeded its carrying value by approximately $200.0 million, or 70%, and accordingly no goodwill impairment was recorded during the three and six months ended June 30, 2026.

The fair value of the Company's reporting units was determined using both an income approach based on discounted cash flows (“DCF”) and a market approach. The income approach and market approach were each weighted 50% in determining the concluded fair value of each reporting unit. The fair value measurements used in the quantitative impairment tests are classified as Level 3 measurements within the fair value hierarchy, as they incorporate significant unobservable inputs.

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, discount rates, and the long-term growth rate used to estimate terminal value. The expected cash flows used in the DCF analyses were based on the Company’s most recent forecast, and for years beyond the periods covered by the forecast, the Company’s estimates of forecasted long-term growth rates. The discount rates used in the DCF analyses are intended to reflect the risks, which consider macroeconomic and industry specific factors, inherent in the expected future cash flows of the respective reporting units. The discount rates used in the quantitative tests as of June 30, 2026 for determining the fair value of the Company’s U.S. and International reporting units were 16.0% and 17.5%, respectively. The long-term growth rate used to estimate terminal value in the DCF analyses as of June 30, 2026 was 3.0% for the U.S. and International reporting units.

Following the impairment charge, the carrying value of the U.S. reporting unit equals its approximate fair value as of September 30, 2026. Accordingly, any adverse change in key assumptions could result in additional impairment. A 100 basis point increase in the discount rate would result in approximately $35.0 million of additional impairment. A 100 basis point decrease in the long-term growth rate would result in approximately $20.0 million of additional impairment.

Determining fair value using a market approach considers multiples of financial metrics based on EBITDA 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. The EBITDA trading multiples used in the quantitative test as of June 30, 2026 for determining the fair value of the Company’s U.S. reporting unit were between 6.5x and 8.5x. The EBITDA trading multiples used in the quantitative test as of June 30, 2026 for determining the fair value of the Company’s International reporting unit were between 6.5x and 10.0x.

In the second quarter of 2026, the Company recorded an impairment charge of $9.6 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 16.0%, the royalty rate was 2.0% and a long-term growth rate was 3.0%. The impairment of the indefinite-lived intangible asset is included in “Impairment of intangibles” in the consolidated statement of operations for the nine months ended September 30, 2026. No impairment of indefinite-lived intangible assets was recorded during the three months ended September 30, 2026. No other indefinite-lived intangible assets were impaired as a result of the assessment.

The Company determines the fair value of indefinite-lived intangible assets using a relief from royalty DCF valuation analysis. The fair value measurements used in the quantitative relief from royalty DCF valuations are classified as Level 3 measurements within the fair value hierarchy, as they incorporate significant unobservable inputs. Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future revenue. 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 expected cash flows used in the relief from royalty analyses were based on the Company’s most recent forecast, and for years beyond the periods covered by the forecast, the Company’s estimates of forecasted long-term growth rates. The discount rates used in the Company’s indefinite-lived impairment assessment ranged from 16.0% to 17.5%, the royalty rates used ranged from 2.0% to 4.5% and the long-term growth rate used to estimate the terminal value in the DCF analyses was 3.0%, in each case as of June 30, 2026.

Following the impairment charge, the carrying value of the indefinite-lived trade names equals its fair value as of September 30, 2026. Accordingly, any adverse change in key assumptions could result in additional impairment. A 100 basis point increase in the discount rate would result in approximately $0.4 million of additional impairment. A 100 basis point decrease in the royalty rate would result in approximately $2.4 million of additional impairment. A 100 basis point decrease in the long-term growth rate would result in approximately $0.2 million of additional impairment.