Angi Inc 10-Q for FY2020 Q2

Angi Inc. (ANGI)

10-Q 2020-08-10 For: 2020-06-30

Added on April 07, 2026

About this 10-Q

Angi Inc filed this 10-Q on August 10, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $375.06M; up 9.1% from $343.9M a year earlier
Diluted EPS: $0.02; up 100.0% from $0.01 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →



Delaware		82-1204801
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of exchange on which registered
Class A Common Stock, par value $0.001	ANGI	The Nasdaq Stock Market LLC



Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐



Class A Common Stock	74,149,518
Class B Common Stock	421,756,247
Class C Common Stock	—
Total outstanding Common Stock	495,905,765



		Page Number
PART I
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of Shareholders' Equity	6
	Consolidated Statement of Cash Flows	8
	Note 1—The Company and Summary of Significant Accounting Policies	9
	Note 2—Income Taxes	13
	Note 3—Financial Instruments and Fair Value Measurements	14
	Note 4—Long-term Debt	16
	Note 5—Accumulated Other Comprehensive Loss	16
	Note 6—Earnings Per Share	18
	Note 7—Segment Information	19
	Note 8—Consolidated Financial Statement Details	23
	Note 9—Contingencies	24
	Note 10—Related Party Transactions with IAC	24
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43
PART II
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6.	Exhibits	48
	Signatures	49



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________



	June 30, 2020			December 31, 2019
	(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents	$	420,985		$	390,565
Accounts receivable, net of allowance and reserves of $27,991 and $20,293, respectively	49,760			41,669
Other current assets	63,598			67,759
Total current assets	534,343			499,993

Capitalized software, leasehold improvements and equipment, net of accumulated depreciation and amortization	104,261			103,361
Goodwill	882,406			883,960
Intangible assets, net of accumulated amortization	225,401			251,725
Other non-current assets	178,980			182,572
TOTAL ASSETS	$	1,925,391		$	1,921,611

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Current portion of long-term debt	$	13,750		$	13,750
Accounts payable	44,600			25,987
Deferred revenue	58,091			58,220
Accrued expenses and other current liabilities	138,822			116,997
Total current liabilities	255,263			214,954

Long-term debt, net	225,336			231,946
Deferred income taxes	1,891			3,441
Other long-term liabilities	115,882			121,055

Redeemable noncontrolling interests	25,093			26,663

Commitments and contingencies

SHAREHOLDERS' EQUITY:
Class A common stock, $0.001 par value; authorized 2,000,000 shares; issued 89,076 and 87,007 shares, respectively, and outstanding 73,953 and 79,681, respectively	89			87
Class B convertible common stock, $0.001 par value; authorized 1,500,000 shares; 421,757 and 421,570 shares issued and outstanding	422			422
Class C common stock, $0.001 par value; authorized 1,500,000 shares; no shares issued and outstanding	—			—
Additional paid-in capital	1,387,618			1,357,075
Retained earnings	19,741			16,032
Accumulated other comprehensive loss	(2,740		)	(1,379		)
Treasury stock, 15,123 and 7,326 shares, respectively	(112,808		)	(57,949		)
Total ANGI Homeservices Inc. shareholders' equity	1,292,322			1,314,288
Noncontrolling interests	9,604			9,264
Total shareholders' equity	1,301,926			1,323,552
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,925,391		$	1,921,611



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands, except per share data)
Revenue	$	375,061		$	343,896		$	718,711		$	647,339
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	41,042			10,722			74,271			20,733
Selling and marketing expense	189,984			196,167			379,943			371,469
General and administrative expense	85,451			88,013			180,007			172,442
Product development expense	15,407			15,082			32,491			30,886
Depreciation	12,555			8,796			24,693			15,795
Amortization of intangibles	12,978			13,713			25,958			28,252
Total operating costs and expenses	357,417			332,493			717,363			639,577
Operating income	17,644			11,403			1,348			7,762
Interest expense	(1,620		)	(2,963		)	(3,894		)	(5,957		)
Other income, net	212			1,047			633			3,318
Earnings (loss) before income taxes	16,236			9,487			(1,913		)	5,123
Income tax (provision) benefit	(3,025		)	(2,253		)	5,940			11,962
Net earnings	13,211			7,234			4,027			17,085
Net earnings attributable to noncontrolling interests	(544		)	(266		)	(318		)	(148		)
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	12,667		$	6,968		$	3,709		$	16,937

Earnings per share information attributable to ANGI Homeservices Inc. shareholders:
Basic earnings per share	$	0.03		$	0.01		$	0.01		$	0.03
Diluted earnings per share	$	0.02		$	0.01		$	0.01		$	0.03

Stock-based compensation expense by function:
Selling and marketing expense	$	720		$	1,046		$	1,723		$	2,005
General and administrative expense	13,131			14,642			36,111			30,749
Product development expense	908			1,832			2,500			4,048
Total stock-based compensation expense	$	14,759		$	17,520		$	40,334		$	36,802



				ANGI Homeservices Inc. Shareholders' Equity
				Class A Common Stock $0.001 Par Value			Class B Convertible Common Stock $0.001 Par Value			Class C Common Stock $0.001 Par Value														Total ANGI Homeservices Inc. Shareholders' Equity

																		Accumulated Other Comprehensive Loss											Total Shareholders' Equity
	Redeemable Noncontrolling Interests												Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)					Treasury Stock						Noncontrolling Interests
	Redeemable Noncontrolling Interests			$		Shares	$		Shares	$		Shares	Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)					Treasury Stock						Noncontrolling Interests
				(In thousands)
Balance as of March 31, 2020	$	23,813		$	88	87,624	$	422	421,757	$	—	—	$	1,379,079		$	7,074	$	(7,993	)	$	(96,920	)	$	1,281,750		$	9,260	$	1,291,010
Net earnings	220			—		—	—		—	—		—	—			12,667		—			—			12,667			324		12,991
Other comprehensive (loss) income	(786		)	—		—	—		—	—		—	—			—		5,253			—			5,253			19		5,272
Stock-based compensation expense	—			—		—	—		—	—		—	18,607			—		—			—			18,607			—		18,607
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1		1,452	—		—	—		—	(8,220		)	—		—			—			(8,219		)	—		(8,219		)
Purchase of treasury stock	—			—		—	—		—	—		—	—			—		—			(15,888		)	(15,888		)	—		(15,888		)
Adjustment of redeemable noncontrolling interests to fair value	1,846			—		—	—		—	—		—	(1,846		)	—		—			—			(1,846		)	—		(1,846		)
Other	—			—		—	—		—	—		—	(2		)	—		—			—			(2		)	1		(1		)
Balance as of June 30, 2020	$	25,093		$	89	89,076	$	422	421,757	$	—	—	$	1,387,618		$	19,741	$	(2,740	)	$	(112,808	)	$	1,292,322		$	9,604	$	1,301,926



Balance as of March 31, 2019	$	23,242		$	85	84,718	$	421	421,452	$	—	—	$	1,331,371		$	(8,828	)	$	(191	)	$	—	$	1,322,858		$	9,043		$	1,331,901
Net earnings	160			—		—	—		—	—		—	—			6,968			—			—		6,968			106			7,074
Other comprehensive loss	(335		)	—		—	—		—	—		—	—			—			(1,291		)	—		(1,291		)	(48		)	(1,339		)
Stock-based compensation expense	35			—		—	—		—	—		—	17,485			—			—			—		17,485			—			17,485
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			1		1,085	—		—	—		—	(10,257		)	—			—			—		(10,256		)	—			(10,256		)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			—		—	—		1	—		—	—			—			—			—		—			—			—
Adjustment of redeemable noncontrolling interests to fair value	319			—		—	—		—	—		—	(319		)	—			—			—		(319		)	—			(319		)
Balance as of June 30, 2019	$	23,421		$	86	85,803	$	421	421,453	$	—	—	$	1,338,280		$	(1,860	)	$	(1,482	)	$	—	$	1,335,445		$	9,101		$	1,344,546



Balance as of December 31, 2018	$	18,163		$	81	80,515	$	421	421,118	$	—	—	$	1,333,097		$	(18,797	)	$	(1,861	)	$	—	$	1,312,941		$	9,046		$	1,321,987
Net earnings	51			—		—	—		—	—		—	—			16,937			—			—		16,937			97			17,034
Other comprehensive (loss) income	(149		)	—		—	—		—	—		—	—			—			379			—		379			(42		)	337
Stock-based compensation expense	77			—		—	—		—	—		—	36,725			—			—			—		36,725			—			36,725
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			5		5,288	—		—	—		—	(25,448		)	—			—			—		(25,443		)	—			(25,443		)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			—		—	—		335	—		—	(795		)	—			—			—		(795		)	—			(795		)
Adjustment of redeemable noncontrolling interests to fair value	5,279			—		—	—		—	—		—	(5,279		)	—			—			—		(5,279		)	—			(5,279		)
Other	—			—		—	—		—	—		—	(20		)	—			—			—		(20		)	—			(20		)
Balance as of June 30, 2019	$	23,421		$	86	85,803	$	421	421,453	$	—	—	$	1,338,280		$	(1,860	)	$	(1,482	)	$	—	$	1,335,445		$	9,101		$	1,344,546



	June 30, 2020
	(In thousands)
Balance at January 1	$	19,066
Current period provision for credit losses	39,338
Write-offs charged against the allowance	(33,700		)
Recoveries collected	1,283
Balance at June 30	$	25,987


•	Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.


•	Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.



	June 30, 2020
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	156,063	$	—	$	—	$	156,063
Treasury discount notes	—		174,987		—		174,987
Time deposits	—		2,936		—		2,936
Total	$	156,063	$	177,923	$	—	$	333,986



	December 31, 2019
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	291,810	$	—	$	—	$	291,810
Time deposits	—		23,040		—		23,040
Total	$	291,810	$	23,040	$	—	$	314,850



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
North America
Marketplace:
Consumer connection revenue^(a)	$	272,649	$	241,236	$	512,479	$	442,818
Service professional membership subscription revenue	13,017		16,302		26,794		32,702
Other revenue	7,507		3,753		12,676		6,271
Total Marketplace revenue	293,173		261,291		551,949		481,791
Advertising and other revenue^(b)	64,244		63,109		129,600		124,603
Total North America revenue	357,417		324,400		681,549		606,394
Europe
Consumer connection revenue^(c)	13,945		15,232		29,634		32,355
Service professional membership subscription revenue	3,215		3,613		6,514		7,355
Advertising and other revenue	484		651		1,014		1,235
Total Europe revenue	17,644		19,496		37,162		40,945
Total revenue	$	375,061	$	343,896	$	718,711	$	647,339


^(a)	Includes fees paid by service professionals for consumer matches and revenue from pre-priced jobs sourced through the HomeAdvisor and Handy platforms.



	June 30, 2020						December 31, 2019
	Carrying value			Fair value			Carrying value			Fair value
	(In thousands)
Current portion of long-term debt	$	(13,750	)	$	(13,750	)	$	(13,750	)	$	(13,681	)
Long-term debt, net ^(a)	$	(225,336	)	$	(226,875	)	$	(231,946	)	$	(232,581	)


^(a)	At June 30, 2020 and December 31, 2019, the carrying value of long-term debt, net includes unamortized debt issuance costs of $1.5 million and $1.8 million, respectively.



	Three Months Ended June 30, 2020
	Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Loss
	(In thousands)
Balance at April 1	$	(7,993	)	$	(7,993	)
Other comprehensive income	5,253			5,253
Balance at June 30	$	(2,740	)	$	(2,740	)



	Three Months Ended June 30, 2019
	Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Loss
	(In thousands)
Balance at April 1	$	(191	)	$	(191	)
Other comprehensive loss	(1,291		)	(1,291		)
Balance at June 30	$	(1,482	)	$	(1,482	)



	Six Months Ended June 30, 2020
	Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Loss
	(In thousands)
Balance at January 1	$	(1,379	)	$	(1,379	)
Other comprehensive loss	(1,361		)	(1,361		)
Balance at June 30	$	(2,740	)	$	(2,740	)



	Six Months Ended June 30, 2019
	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) On Available-For-Sale Debt Securities			Accumulated Other Comprehensive Loss
	(In thousands)
Balance at January 1	$	(1,864	)	$	3		$	(1,861	)
Other comprehensive income (loss)	382			(3		)	379
Balance at June 30	$	(1,482	)	$	—		$	(1,482	)


^(b)	Includes Angie's List revenue from service professionals under contract for advertising and Angie's List membership subscription fees from consumers, as well as revenue from mHelpDesk and HomeStars.


^(c)	Includes fees paid by service professionals for consumer matches.



	Three Months Ended June 30, 2020
	Operating income			Stock-based compensation expense		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	16,190		$	14,495	$	11,467	$	12,889	$	55,041
Europe	1,454			$	264	$	1,088	$	89	$	2,895
Operating income	17,644
Interest expense	(1,620		)
Other income, net	212
Earnings before income taxes	16,236
Income tax provision	(3,025		)
Net earnings	13,211
Net earnings attributable to noncontrolling interests	(544		)
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	12,667



	Three Months Ended June 30, 2019
	Operating income (loss)			Stock-based compensation expense		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	12,473		$	17,387	$	8,227	$	13,519	$	51,606
Europe	(1,070		)	$	133	$	569	$	194	$	(174	)
Operating income	11,403
Interest expense	(2,963		)
Other income, net	1,047
Earnings before income taxes	9,487
Income tax provision	(2,253		)
Net earnings	7,234
Net earnings attributable to noncontrolling interests	(266		)
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	6,968



	June 30, 2020		December 31, 2019		June 30, 2019		December 31, 2018
	(In thousands)
Cash and cash equivalents	$	420,985	$	390,565	$	380,563	$	336,984
Restricted cash included in other current assets	379		504		1,419		1,417
Restricted cash included in other non-current assets	412		409		420		420
Total cash and cash equivalents, and restricted cash as shown on the consolidated statement of cash flows	$	421,776	$	391,478	$	382,402	$	338,821



Asset Category	June 30, 2020		December 31, 2019
	(In thousands)
Right-of-use assets (included in "other non-current assets")	$	30,216	$	19,416
Capitalized software, leasehold improvements and equipment	$	83,970	$	68,227
Intangible assets	$	166,838	$	141,208


•	Advertising & Other Revenue includes Angie’s List revenue (revenue from service professionals under contract for advertising and membership subscription fees from consumers) as well as revenue from mHelpDesk and HomeStars.


•	Marketplace Service Requests are fully completed and submitted domestic customer service requests to HomeAdvisor and jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms.


•	Marketplace Monetized Transactions - are fully completed and submitted domestic customer service requests to HomeAdvisor that were matched to and paid for by a service professional and jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms during the period.


•	Marketplace Transacting Service Professionals ("Marketplace Transacting SPs") are the number of HomeAdvisor, Handy and Fixd Repair domestic service professionals that paid for consumer matches or performed a job sourced through the HomeAdvisor, Handy and Fixd Repair platforms during the quarter.


•	Advertising Service Professionals ("Advertising SPs") are the total number of Angie’s List service professionals under contract for advertising at the end of the period.


•	Term Loan - due November 5, 2023. The outstanding balance of the Term Loan as of June 30, 2020 is $240.6 million and quarterly principal payments are required. At both June 30, 2020 and December 31, 2019, the Term Loan bears interest at LIBOR plus 1.50%. The interest rate was 1.70% and 3.25% at June 30, 2020 and December 31, 2019, respectively.


•	Credit Facility - $250 million revolving credit facility expires on November 5, 2023. At June 30, 2020 and December 31, 2019, there were no outstanding borrowings under the Credit Facility.


•	Cost of revenue - consists primarily of payments made to independent service professionals who perform work contracted under pre-priced arrangements through the HomeAdvisor and Handy platforms, credit card processing fees, compensation expense and other employee-related costs at Fixd Repair for service work performed, and hosting fees.