SEGMENT INFORMATION |
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. The following table presents revenue by reportable segment: | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2018 | | 2017 | | 2018 | | 2017 | | (In thousands) | Revenue: | | | | | | | | North America | $ | 286,594 |
| | $ | 167,104 |
| | $ | 800,125 |
| | $ | 470,667 |
| Europe | 16,522 |
| | 14,613 |
| | 53,124 |
| | 42,506 |
| Total | $ | 303,116 |
| | $ | 181,717 |
| | $ | 853,249 |
| | $ | 513,173 |
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The following table presents revenue disaggregated by service for the Company's reportable segments: | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2018 | | 2017 | | 2018 | | 2017 | | (In thousands) | North America | | | | | | | | Marketplace: | | | | | | | | Consumer connection revenue(a) | $ | 195,065 |
| | $ | 141,055 |
| | $ | 531,297 |
| | $ | 398,218 |
| Membership subscription revenue | 17,034 |
| | 14,486 |
| | 49,226 |
| | 40,942 |
| Other revenue | 950 |
| | 1,060 |
| | 2,869 |
| | 2,840 |
| Marketplace revenue | 213,049 |
| | 156,601 |
| | 583,392 |
| | 442,000 |
| Advertising & Other revenue(b) | 73,545 |
| | 10,503 |
| | 216,733 |
| | 28,667 |
| Total North America revenue | 286,594 |
| | 167,104 |
| | 800,125 |
| | 470,667 |
| Europe | | | | | | | | Consumer connection revenue(a) | 12,022 |
| | 10,001 |
| | 38,885 |
| | 29,636 |
| Membership subscription revenue | 4,217 |
| | 4,320 |
| | 13,405 |
| | 12,198 |
| Advertising and other revenue | 283 |
| | 292 |
| | 834 |
| | 672 |
| Total Europe revenue | 16,522 |
| | 14,613 |
| | 53,124 |
| | 42,506 |
| Total revenue | $ | 303,116 |
| | $ | 181,717 |
| | $ | 853,249 |
| | $ | 513,173 |
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___________________________ | | (a) | Fees paid by service professionals for consumer matches. |
| | (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, 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 September 30, | | Nine Months Ended September 30, | | 2018 | | 2017 | | 2018 | | 2017 | | (In thousands) | Revenue | | | | | | | | United States | $ | 283,672 |
| | $ | 164,999 |
| | $ | 791,932 |
| | $ | 466,134 |
| All other countries | 19,444 |
| | 16,718 |
| | 61,317 |
| | 47,039 |
| Total | $ | 303,116 |
| | $ | 181,717 |
| | $ | 853,249 |
| | $ | 513,173 |
|
| | | | | | | | | | September 30, 2018 | | December 31, 2017 | | (In thousands) | Long-lived assets (excluding goodwill and intangible assets) | | | | United States | $ | 53,635 |
| | $ | 49,356 |
| All other countries | 5,140 |
| | 3,936 |
| Total | $ | 58,775 |
| | $ | 53,292 |
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The following tables present operating income (loss) and Adjusted EBTIDA by reportable segment: | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2018 | | 2017 | | 2018 | | 2017 | | (In thousands) | Operating Income (Loss): | | | | | | | | North America | $ | 36,117 |
| | $ | (107,687 | ) | | $ | 56,862 |
| | $ | (99,479 | ) | Europe | (2,602 | ) | | (4,818 | ) | | (10,841 | ) | | (14,474 | ) | Total | $ | 33,515 |
| | $ | (112,505 | ) | | $ | 46,021 |
| | $ | (113,953 | ) |
| | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2018 | | 2017 | | 2018 | | 2017 | | (In thousands) | Adjusted EBITDA(c): | | | | | | | | North America | $ | 78,613 |
| | $ | 60 |
| | $ | 186,306 |
| | $ | 31,356 |
| Europe | $ | (913 | ) | | $ | (2,326 | ) | | $ | (4,987 | ) | | $ | (8,439 | ) |
___________________________ | | (c) | 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 businesses, 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 tables reconcile operating income (loss) for the Company’s reportable segments and net earnings (loss) attributable to ANGI Homeservices Inc. shareholders to Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2018 | | Operating income (loss) | | Stock-based compensation expense | | Depreciation | | Amortization of intangibles | | Adjusted EBITDA | | (In thousands) | North America | $ | 36,117 |
| | $ | 22,256 |
| | $ | 5,563 |
| | $ | 14,677 |
| | $ | 78,613 |
| Europe | (2,602 | ) | | $ | 218 |
| | $ | 537 |
| | $ | 934 |
| | $ | (913 | ) | Operating income | 33,515 |
| | | | | | | | | Interest expense—third party | (3,132 | ) | | | | | | | | | Interest expense—related party | (23 | ) | | | | | | | | | Other income, net | 1,566 |
| | | | | | | | | Earnings before income taxes | 31,926 |
| | | | | | | | | Income tax provision | (5,140 | ) | | | | | | | | | Net earnings | 26,786 |
| | | | | | | | | Net earnings attributable to noncontrolling interests | (169 | ) | | | | | | | | | Net earnings attributable to ANGI Homeservices Inc. shareholders | $ | 26,617 |
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| | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2017 | | Operating loss | | Stock-based compensation expense | | Depreciation | | Amortization of intangibles | | Adjusted EBITDA | | (In thousands) | North America | $ | (107,687 | ) | | $ | 103,565 |
| | $ | 3,085 |
| | $ | 1,097 |
| | $ | 60 |
| Europe | (4,818 | ) | | $ | 415 |
| | $ | 406 |
| | $ | 1,671 |
| | $ | (2,326 | ) | Operating loss | (112,505 | ) | | | | | | | | | Interest expense—related party | (1,864 | ) | | | | | | | | | Other income, net | 1,364 |
| | | | | | | | | Loss before income taxes | (113,005 | ) | | | | | | | | | Income tax benefit | 40,847 |
| | | | | | | | | Net loss | (72,158 | ) | | | | | | | | | Net loss attributable to noncontrolling interests | 397 |
| | | | | | | | | Net loss attributable to ANGI Homeservices Inc. shareholders | $ | (71,761 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2018 | | Operating income (loss) | | Stock-based compensation expense | | Depreciation | | Amortization of intangibles | | Adjusted EBITDA | | (In thousands) | North America | $ | 56,862 |
| | $ | 68,652 |
| | $ | 16,491 |
| | $ | 44,301 |
| | $ | 186,306 |
| Europe | (10,841 | ) | | $ | 781 |
| | $ | 1,679 |
| | $ | 3,394 |
| | $ | (4,987 | ) | Operating income | 46,021 |
| | | | | | | | | Interest expense—third party | (8,797 | ) | | | | | | | | | Interest expense—related party | (102 | ) | | | | | | | | | Other income, net | 2,975 |
| | | | | | | | | Earnings before income taxes | 40,097 |
| | | | | | | | | Income tax benefit | 598 |
| | | | | | | | | Net earnings | 40,695 |
| | | | | | | | | Net loss attributable to noncontrolling interests | (64 | ) | | | | | | | | | Net earnings attributable to ANGI Homeservices Inc. shareholders | $ | 40,631 |
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| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2017 | | Operating loss | | Stock-based compensation expense | | Depreciation | | Amortization of intangibles | | Adjusted EBITDA | | (In thousands) | North America | $ | (99,479 | ) | | $ | 118,961 |
| | $ | 8,862 |
| | $ | 3,012 |
| | $ | 31,356 |
| Europe | (14,474 | ) | | $ | 1,319 |
| | $ | 843 |
| | $ | 3,873 |
| | $ | (8,439 | ) | Operating loss | (113,953 | ) | | | | | | | | | Interest expense—related party | (5,538 | ) | | | | | | | | | Other income, net | 2,100 |
| | | | | | | | | Loss before income taxes | (117,391 | ) | | | | | | | | | Income tax benefit | 71,095 |
| | | | | | | | | Net loss | (46,296 | ) | | | | | | | | | Net loss attributable to noncontrolling interests | 1,402 |
| | | | | | | | | Net loss attributable to ANGI Homeservices Inc. shareholders | $ | (44,894 | ) | | | | | | | | |
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