INCOME TAXES |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | NOTE 7—INCOME TAXES 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 the periods through March 31, 2025, the income tax provision and/or benefit 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 consolidated 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 consolidated statement of shareholders’ equity and financing activities within the consolidated statement of cash flows. Based on the tax sharing agreement, Angi has a $11.4 million payable to IAC as of March 31, 2026. At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs. For the three months ended March 31, 2026, the Company recorded an income tax benefit of $0.7 million. The effective income tax rate is lower than the statutory rate of 21% primarily due to $2.9 million of discrete restructuring tax benefit incurred in Q1 2026. For the three months ended March 31, 2025, the Company recorded an income tax provision of $4.7 million which represents an effective income tax rate of 24%. The effective income tax rate is higher than the statutory rate of 21% due primarily to tax shortfalls generated by the vesting of stock-based awards, unbenefited losses, and foreign income taxed at different rates, partially offset by nontaxable cumulative previously recognized stock-based compensation expense related to the IAC restricted stock forfeited by Joseph Levin, former CEO of IAC and current Executive Chairman of Angi, and research credits. The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Accruals for interest are not material and there are currently no accruals for penalties. The Company’s income taxes are routinely under audit by federal, state, local and foreign authorities as a result of previously filed separate company and consolidated tax returns with IAC. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service has initiated an audit of IAC’s federal income tax return for fiscal year ending December 31, 2023, which includes operations of Angi legal entities. The start of this audit has not resulted in any changes to Angi’s financial positions. Returns filed in various other jurisdictions are open to examination for tax years beginning with 2016. At March 31, 2026 and December 31, 2025, the Company has unrecognized tax benefits, including interest, of $14.3 million and $14.1 million, respectively. If unrecognized tax benefits at March 31, 2026 are subsequently recognized, the income tax provision would be reduced by $13.1 million. The comparable amount as of December 31, 2025 is $12.9 million. The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. The Company expects to fully utilize their gross deferred tax assets on a more likely than not basis, except in certain foreign jurisdictions.
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