SEGMENT INFORMATION

The overall concept that ANGI employs in determining its operating segments is to present the financial information in a manner consistent with: how the chief operating decision maker views the businesses; how the businesses are organized as to segment management; and the focus of the businesses with regards to the types of services or products offered or the target market.



	Three Months Ended March 31,
	2018		2017
	(In thousands)
Revenue:
North America	$	236,026	$	138,072
Europe	19,285		12,673
Total	$	255,311	$	150,745



	Three Months Ended March 31,
	2018			2017
	(In thousands)
Operating (Loss) Income:
North America	$	(5,365	)	$	6,424
Europe	(5,391		)	(5,036		)
Total	$	(10,756	)	$	1,388



	Three Months Ended March 31,
	2018			2017
	(In thousands)
Adjusted EBITDA^(a):
North America	$	39,605		$	14,184
Europe	(2,965		)	(3,972		)
Total	$	36,640		$	10,212

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^(a)

The Company’s primary financial measure is Adjusted EBITDA, which 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. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments, and this measure is one of the primary metrics on which our internal budgets are based and by which management is compensated. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations in that it does not take into account the impact to ANGI Homeservices Inc.'s statement of operations of certain expenses.

The following table presents revenue disaggregated by service for the Company's reportable segments:



	Three Months Ended March 31,
	2018		2017
	(In thousands)
North America
Marketplace:
Consumer connection revenue^(b)	$	149,060	$	116,000
Membership subscription revenue	15,627		12,752
Other revenue	921		892
Marketplace revenue	165,608		129,644
Advertising & Other revenue^(c)	70,418		8,428
Total North America revenue	236,026		138,072
Europe
Consumer connection revenue^(b)	14,367		8,465
Membership subscription revenue	4,671		4,006
Advertising and other revenue	247		202
Total Europe revenue	19,285		12,673
Total revenue	$	255,311	$	150,745

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^(b)	Fees paid by service professionals for consumer matches.


^(c)	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, HomeStars and Felix.

Geographic information about revenue and long-lived assets is presented below. Revenue by geography is based on where the customer is located.



	Three Months Ended March 31,
	2018		2017
	(In thousands)
Revenue
United States	$	233,475	$	137,466
All other countries	21,836		13,279
Total	$	255,311	$	150,745



	March 31, 2018		December 31, 2017
	(In thousands)
Long-lived assets (excluding goodwill and intangible assets)
United States	$	42,420	$	49,356
All other countries	4,551		3,936
Total	$	46,971	$	53,292

The following tables reconcile operating (loss) income for the Company’s reportable segments and net (loss) earnings attributable to ANGI Homeservices Inc. shareholders to Adjusted EBITDA:



	Three Months Ended March 31, 2018
	Operating loss			Stock-based compensation expense		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(5,365	)	$	24,575	$	5,574	$	14,821	$	39,605
Europe	(5,391		)	$	331	$	610	$	1,485	$	(2,965	)
Operating loss	(10,756		)
Interest expense—third party	(2,654		)
Interest expense—related party	(45		)
Other income, net	356
Loss before income taxes	(13,099		)
Income tax benefit	3,985
Net loss	(9,114		)
Net loss attributable to noncontrolling interests	229
Net loss attributable to ANGI Homeservices Inc. shareholders	$	(8,885	)



	Three Months Ended March 31, 2017
	Operating income (loss)			Stock-based compensation expense		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	6,424		$	4,001	$	2,885	$	874	$	14,184
Europe	(5,036		)	$	460	$	111	$	493	$	(3,972	)
Operating income	1,388
Interest expense—related party	(1,592		)
Other income, net	231
Earnings before income taxes	27
Income tax benefit	25,860
Net earnings	25,887
Net loss attributable to noncontrolling interests	726
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	26,613