FTDR - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, welcome to frontdoor’s Second Quarter 2020 Earnings Call. Today’s call is being recorded and broadcast on the Internet. Beginning today’s call is Matt Davis, Vice President of Investor Relations and Treasurer, and he will introduce the other speakers on the call. At this time, we will begin today’s call. Please go ahead, Mr. Davis.

Matt Davis

afternoon, XXXX thank Earnings Good frontdoor’s for operator. Quarter Second Conference you, everyone, you and joining Thank Call.

press Officer, Joining Executive me during is Investor Turcotte. today’s Financial on be be website, which Relations Officer, Chief slide investors.frontdoorhome.com. The Brian the Rex Tibbens; call located that today and frontdoor’s used are will release and frontdoor’s section found frontdoor’s presentation can Chief at of

webcast that today, a forward-looking may the of the in forward-looking Factors forward-looking our presentation, like such with statements this or X call are undertakes and section statements Risk related Slide explained you law, information, SEC. and could update cause statements the risks on refer are risks of future stated a These differ actual As various filings statements whether filings results no statements. here the Please discussed in risks and new as contain made X, forward-looking today. those otherwise. which to company statements. obligation are I’d any events result in our to to detailed detail of to to company’s remind subject from These materially uncertainties, the to uncertainties of and and except August the required All by as discussion more for as

reference We measures call. non-GAAP will today’s certain also throughout financial

performance. comparable measures terms to understanding these financial to of financial measures of most order presentation appendix these the reconciliations and in you definitions better and included have We in our GAAP the press the our financial to assist in release non-GAAP

best that manage as work I’ll over remotely. turn might we the Rex comments. through continue any most like do bear Please to Rex? issues opening Finally, with for you, occur. to call now audio we us to our of

Rex Tibbens

I’d external Also act especially manage over has continue and in amazed they shown that dedication thank in everyone. a those several I be essential workers kindness want months. the care by hard have and the health those challenging on to those the of appreciation all we for and lines afternoon, us expressing that to and PPE sourcing last good environment. our local the of contractors banks countless through and of and to as support assisting heroes food operate, pandemic, It our by contractors. start like as we professionalism field. COVID-XX where inspired communities associates the such to are front my and their in need organizations donating for Matt, Thanks, work the to to remarkable the

Now let’s turn X, to current our focus. Slide business

working know, need been is As transforming here on where cultural what been from a perspective. a This true journey operational been to test We’ve a frontdoor. of you at increase focus. technical, transformational and has business the we pandemic we have and

resiliency top the we During a by financial respectively. our top and people. our X% grow XXXX our testimony X%, company’s great still that we confident will the roughly of business That revenue line true X% of I crisis am and said, line year, grew to this XXXX, by and model

presented has us, opened including for issues COVID-XX While opportunities. up many it has also companies,

being a evolution are a our company financial being our Given opportunistic transformational we position, where strategy. in we strong with investment are and in

result is in compared their improvement an of May, we’ve have marketing rates, with of on leveraging companies Since favorable focused on of our budgets. One main back areas the a XXXX. pulling advertising broadcast other we efficiency as marketing seen

achieved acquiring the more awareness increase roughly efficiency in estate a offset a sales. level Not unaided marketing only the for in third we to performance favorable, brand that marketing every of normalized CAC, We efficiencies on to are until means quarter. and unit brand it’s increased the in quarter. our increased spend have real the believe channel, XX% we this a example, into our a for decline a improvement in but quarter, levels. that long-term X:X halo our next of channels to ramp Given time point direct-to-consumer have will similar a anticipate our our important we feel in real increase This up a we second both over by And such going the estate also was two-point single cost effect In and at year. awareness customer, unit ratio. or economics return

near-term impact results, a positively of it’ll provide terms direct-to-consumer revenue customer tailwind in this While growth our investment retention. impacts overall channel and financial long-term for our

in to versus remained It slightly the to customer pleased am a prior round on quarter I still report the retention trailing that but same period actually number. year increased XX% Second, second basis. stable at the XX-month

As and investments training a during improvements in proposition overall keeping and the our uncertain value decreased XXXX. technology associates, of retention retention points today’s basis home XXX crisis in reminder, global plans, processes service financial stable environment. customer focus the at around credit I our the in for our macroeconomic of

conditioning, includes emerging quarter, offering investments Candu expanded to and announced offering also platform. extended businesses. grow we include We’re to electrical. and Candu, Streem the its Last on-demand making trade technology expansion our heating and This plumbing our of geographically our air and

accelerate marketing that us consider acqui-hire business. the transaction capital, small business. to a core second know-how quarter, expect intellectual will business across leverage of this will expertise On-demand We to we development and a be our technology their On-demand Additionally, the our further that in we acquired allow

bring home allows as each new our of new the to team new vast trades. expertise and offer and cities as forward. in majority for best albeit We implement acquisition faster The talent we are excited learn small-scale extremely board. our these from into move This limited expands to on markets, on-demand also presence practices this services geographic business

will reach. constantly geographic acquisition our our improving journey and on trade with offerings of us obsessed cost experience. customer lowering acquisition are this our also We This help and customer expanding

model. Streem We our technology. or a for partnerships plan to new Software-as-a-Service through Streem developing actively been have monetize We business SaaS,

safe deepen key consistent is pandemic-related essential and our the long-term our of this services a Over with will and look into beneficial other model. extend arrangements mindset the we home helped of to our those we develop This delivery trial Given financial with time, concerns, partners. decided partners. have mutually ensuring and to to Streem evolve free as these importance our relationship operating

by end We we are believe this of also service a using service year. to of expect technology not Streem interest one a the presence. have customer revenue core our that On while value and and my and associates propositions our really piqued into home reducing improve actively future have care potential. plan beginning costs. to tremendous operations. contractors expand as portion this have to customer expect we point, integrate basis, we continue was as can develop in a the we to material This with Candu combined will this At customers the we business the of Streem our year These our to continue emerging do operations are businesses Streem impact that original

from moving center focus service service levels area, capacity the customer Since for call to by our reduced and unfavorably Now improving have impacted experience. next demand been our increased partners. May, customer

restrictions their in of center we an has travel from large Specifically, workforce the seen partner call that a available as pandemic. decline external a had result

for also have centers. challenging hiring environment a our call seen We

stimulus candidates waiting the on Although that government impact are to COVID-XX economy see these has the the are currently of lot next virtual and job program. roles, a

of call working our capacity, expect improvements, to quarter. service part are leverage with the continue people, the and We are our in A improving purchasing in center levels to time supply to additional as our same service where our well new agreements improve with contractor of power. increase to as responsiveness key third advancing chain, including we investing cycle service we improvements sourcing cycle parts reducing range is engaged make At in manufacturers time, time. we and a negotiating training,

COVID-XX, about we of disruption our single frontdoor, While from diversification capabilities relatively we with our are process. problems. speed my obsessed to a has impacted improving resolution through solutions the experience. solving The only deploy vendors supplier our customers’ the being technology to months At insulated am are few customer strategy. passionate several multi-vendor self-service customer and last strengthened are resolve by advance I

service are that set the in will investing transforming journey, We industry. committed by services a am the across home on and processes and business to standard the technology I experience

COVID-XX and is request Slide These results X. recorded. solid gross second activity Attributable in appliances the consistent continued an of that turning in increase were Frontdoor to at delivered concentrated March customers financial June. to in Now with response April, quarter and service increase margin highest sheltering second requests. results in increased industry-wide the in plumbing May to spite experience trends. with and service in was began We home to throughout

increase the demand While trends we July, requests periods. future into could pull-forward service we’re if are for being these continue be higher evaluating seeing

our that we value and good normally holidays. our appliance is in during long-term volume are strong overall our demand supports news see For for as example, that retention. seeing customer customer we a the proposition business for services rise our The

Additionally, continue COVID-XX. to by be estate our impacted first real year sales

transaction quarter the has face volume. inventory real continues and the second anticipated, sales to estate constrained levels in While than tight was decline existing home space macro better and headwinds

the existing on off the sale market a external adjusted of we sales the even focus for strengthen we through conclusion, forecast our successfully term. balance prior stronger is In environment, of versus challenging that Second strength this partnerships these home decline a levels from when be this managing Realtors significant improves, an Association The from home to In in are low we seasonally a an year. realty improvement position so National long will XX% and the position. existing for of recent continue quarter the showed year. environment

business have model. We resilient and a powerful

the financial in ahead. revenue that our making financial detail. our who trajectory over now the investments years We turn will I’ll the and will accelerate are cover results are a in call strong today of we to growth in Brian? Brian more position,

Brian Turcotte

Rex, you, afternoon, everyone. good and Thank

revenue prior renewals price by service period by improved year increased Slide versus realization. and I’ll to versus to look X% quarter $XXX increased our renewed both points of retention Revenue due the prior and higher results. improvement four price of customer review from and plans, customer in period driven now second year part, driven, volume. the the derived number home Let’s our was XX% million, home to turn up X, at we initiatives in plan growth approximately If channels, financial service

remind First as the by of plans, year, the the versus driven realization. as in period, up decline And was everyone existing the due well positive in increased the any X% first-year, versus home and estate number direct-to-consumer to X% number impact our prior estate through or period, by year would was year a reflecting marketing investments COVID-XX home of months year our quarter. reflecting real year sales price offset the macro of part in I down blunts negative adverse results in to year direct-to-consumer revenue take first prior that estate improved improved partially impact revenue plans, in mostly service realization. growth reported cycle service sales, first on real of real to factors like price XX first about home this

versus net had prior that million marketing prior reported our favorable claims on X. quarter, profit quarter versus of in period, At margin Adjusted increased of $XX income result, macroeconomic the the the range adjusted conversion XX%. the was you additional second the a second quarter. $X revenue as period volume. is the year costs million million Net income our was trends. by we $XX million quarter prior X% profit estimate the guidance in year second year $XX and million, versus $XX year primarily from at Gross I second versus second and in somewhat was to As EBITDA adjusted the a Starting increased decline midpoint walk a the lag $XXX incremental the versus EBITDA prior was while gross including negatively revenue to and now the year more investments, through impacted prior approximately Slide decline million, XX% the a X% of decline period from top, $XXX higher XXXX quarter in bridge million, million X% $XX will price any EBITDA period. adjusted we COVID-XX which cover I’ll period, in and our related and detail

estimate higher increased the second of of in as to at year in This from The well well are was $X that as period. claims million of service versus partially higher Excluding was home. requests, benefits. $X appliance significantly prior costs number by XXXX million related the favorable cost from normal claims $X contract usage inflation. the cost mostly higher as in and million to impact improvement total increase customers weather million approximately the sheltering of the change We trades quarter of claims process impact a offset the due a as plumbing increase costs revenue, higher $XX primarily to

As just Rex mentioned, from this future periods. of timing increase in that requests that service of believe claims portion we some pull-forward were is

estate attractive impact to real channel costs. However, for primarily XX. increased increase estate direct-to-consumer under investments the of it’s of costs costs, $XX million acquisition This due soon $XX our half mitigate pressure marketing investment too our seen is and at was to channel, at channel about efficient pressure million Sales spend the approximately year we’ve versus direct-to-consumer in second from the real acquisition opportunistic quantify. was $X million customer customer and increase quarter count while period. in growth toward helped the attractive an our This us prior to the is marketing COVID or directed in

reminder, year rate and after is $X costs better driven those X.X a increase investments direct-to-consumer have over to value. enhance a the in customers accordingly, lifetime real increase the and a million customers than times customer higher the by acquired service at in retention. primarily As was renew channel the estate channel experience The acquired that in first

similar XXXX. due months on-demand decrease the prior period, $X activities cash which as the totaled quarter, payments. prior $XXX total, primarily to remaining that capital flow, XX, million net Free $XXX million, million, As months calculate a cash increase to requirements, and expenditures. state platform. Of This securities believe Candu earlier, ended position. are helped to due end $XX the required minus in technology the property XX% is of relatively the investment reserve in review $XXX $XX at X was period turn second primarily increase June meet through marketable million mentioned change year increase an activities was in period. the financing comprised used Please the at This XX, EBITDA was ended six assets acquisition Net the $XXX of were be expenditures Cash for March primarily debt from million while to as in million for the capital Net cash business prior activities from cash for provided June $XXX year the restricted investing customer cash XX, of million, was six maintain period. $X this adjusted prior $X year a at compared support flat prior the retention XXXX, required Rex an working of additions, a Net has steady provided was to and and totaled year considered to capital to versus was activities second million XXXX. quarter. net the the and cash million unrestricted. period cash same million used to versus we operating from small the now an to we for regulatory flow as Slide investments operating for our year expand increase

is EBITDA XX%, and adjusted free year full cash of year-to-date robust Our year cash around free by first be the our payments, is of rate as because This evidenced timing conversion paid second higher the taxes. cash quarter being adjusted related EBITDA requests respectively. XX% XX%. June a rates rate XXXX for cash to of year our anticipate to no and exception, service half and We flow conversion typically cash flow in the specifically,

of of million, million. end $XXX $XXX XXXX period. Our revolving preliminary financial versus outlook. some prior the $XXX of my between Based $XXX includes I’ll comments September, conclude our our an of and million to on August regarding to available and with for X% the second which or we plus remarks July prepared and quarter million facility undrawn quarter X% cash expect results current unrestricted forecast range available $XXX credit an now aforementioned third year the the liquidity our million increase at was revenue

more marketing third long-term The incremental which marketing quarter are real year are third increase channel, XXXX estimated spend sales adjusted be $X.XX million to also our and $X and to direct-to-consumer versus impact X% $X.XX decline sheltering billion, quarter the offset in higher $XXX million expense into prior X% totaling in prior an revenue million third is quarter appliance This range opportunistically our will to million channel add investments year of a $XX $XX X% outlook of requests the billion increase In primary full versus and being estimated of by in home service outlook, including or second year revenue approximately in continuation as expect marketing assumes pressured. that of additional than $XX growth; than of to between our renewal prior growth, the to revenue projecting investments period in estate to of more estate first additional year the higher trends a year EBITDA direct-to-consumer continued compared range requests the drivers period lower an plumbing the We in result year of the regard the adjusted million and accelerate the service real the period. $XXX versus customers projected the and with prior customers million range at we half an cost; remains channel and to EBITDA COVID-XX-related period. quarter, revenue about claims year of and prior our to period. between while our

on COVID-XX on of business. to to We parts the uncertain EBITDA overall year full will adjusted withhold due our and economy of impact various the continue guidance

million that approximately mentioned. continue those In our on we third potential by by these remain the service the our marketing is estimate we of generate even EBITDA ever as margins to increased and impact COVID-XX negatively COVID-XX. service previously flows. being to meantime, requests about challenges, long-term the quarter being approximately incremental closing, adjusted investments impacted requests cash million second I prospects factors. to growth, In results. same primarily attractive negatively primarily that as fourth impacted business, additional results quarter Specifically, project the while Likewise, we with due $XX we optimistic the of the our are $XX near-term revenue are strong we still evaluating quarter, In by meaningful outlook related and our impacted

retention we substantial Our liquidity us holding market steady, to and is that allows opportunities. growing a of have and take position advantage

are it making for we investments now turn to back We and emerge for Matt? efficient productive of And that, when macro call long-term environment question-and-answer will the the to Matt the overall health the open the session. With stronger improves. over even I’ll business.

Matt Davis

Thanks, Brian.

As please limited reminder, questions encourage question-and-answer you during we that that a you the but provided our in let’s may note the ask session, open questions. outlook for to guidance line release. press the have, any we is to Operator,

Operator

you. Thank

We Schackart the go Please Our session. Instructions] ahead. question William question-and-answer from from [Operator Blair. being first comes will now Ralph

Ralph Schackart

if into could. and COVID Rex, evening. plumbing request know Two I service I July. Good continued questions, increased appliance in about it to you how customer due and talked the

period continue of drag the been payback to for direct the of versus one and question just do it’s place. know spend effects just you’re how this you’re online breaking quarter pull-forward give seeing. you, latter, I sort people between about how efficiencies curious sense a sort going give or long be on or over how has to of And issues questions. Sorry the all And Thanks. think sheltering you’re much And X? appliances how of for next seeing? efficiencies the able are and channels? discern in that’s because or you maintenance to brand? where this just you’ll just put but of being sense seeing is see then then you if servicing stress is a you’re a the duration any TV bulk of appliances or of off-line extra Just that versus sense the the could Can the marketing bolt-on to maybe of much on response the

Rex Tibbens

Ralph. Thanks,

over there’s of the long how that terms do or this a an whether pull-forward of and that kind lot more In we that claims in think we see rise. rather, we is opportunity we holidays at these will an increase this do are that home the – folks COVID-related we is seeing for as that And of are see than think this a appliances last well.

conference started didn’t call, we to point, then we at that see that’s last And out as see kept change. really During change. it longer, the that much dragging when – our didn’t we

of will gross terms in one in we’re not margins monitoring That’s the increase say timing, of of history, closely costs. we so able So our we’re I still we’re with it. the manage company why sure. kind still to that highest in still claims, have

– need watching closely time some still that. We’re it’s but we pull-forward, hopeful we’re still But it. we’re truly assess to

a In much certainly, – in of very remarks, deeper direct of X:X we’ve I marketing. kind marketing terms with my ratio. as We, strong direct gone CAC to the consumer said spend,

point in unit So seeing we’re X in CAC, every tons go sales. up we

broadcast. So well. primarily as this strong we’ve increase in is unaided where got awareness, our the That’s in

and continue the exceeded but to so we the long And the EBITDA lean it lean certainly the rates, game. if marketing, playing we would kind right of felt to we into have favorability we’re was to hadn’t time decided given marketing, of

So that’s that much very why in focused space. we’re

marketing and the is digital. broadcast all around So

Ralph Schackart

Okay, great. Thanks, Rex.

Rex Tibbens

Yes.

Operator

Ng The Goldman Sachs. next from comes ahead. question Michael go Please from

Michael Ng

question. for the Thanks afternoon. good Hey,

measures lifted I some then stay-at-home in And of expect the increase. And more to on point you quarter if little the bit normalize EBITDA or are at was How light able First, future? might a just for the next. COVID-XX on have much you be impact SR SRs shed I to on increase and quantification the follow-up. did year-over-year quarter-over-quarter? SRs would this wondering a when

Rex Tibbens

to want you Brian, take that?

Brian Turcotte

dig you, plumbing. incidences them like. And the digits incidents think from into we seen change to earnings that single really then up X in our take if that a a saw you service began mentioned, appliance bit. spoke in call, week, low with as it up That’s But we – Rex QX can hadn’t request May we point, the question, like they and or one little to any we being I ramping Yes. following up bit. incident a was popped rates, that great was I When Michael.

did so customer into dug – we bit a find had normal. of we That we anything unchanged. was out what see the cohorts was And if little no cohorts are our process to balance. can We

to began wouldn’t by are that at sheltering dishwashers, – really think home we sheltering like level, we that dug would item increasing change. it microwaves, the and was washing excuse And that ranges, And that the customers appliances didn’t So washers dryers ovens, appliances uses and enough, much sure use by me, saw ones of the the appliances refrigerators. those systems. we and jumped you into most; change

we was So at that sheltering just pretty home. than convinced it were more normal people weren’t use when

rise the were we we industry who from contractors data appliances. saying, some they in the and vendors same So triangulated were then same – with saw getting and

So that’s Does when help? this we And much at thought, home. pull-forward. it’s yes, that that’s of we hopefully, sheltering think is why

Michael Ng

into translate at in future? just issue point mix And investments that the opportunistic. very question, becomes spend revenue you about and pay the simply that opportunistic you growth are are that DTC of off just a helpful. are bit the Yes, half part or pie? some those a retention that these yet second of larger will Or to that marketing making? a is you, Thank as Brian. has Is You mentioned little talk guys investments could marketing my

Rex Tibbens

revenue, a I’ll and quarter, take we It’s quarter that last invest one, all X/XX as right? time. recognize this So more revenue future Michael. in at we marketing

a muted revenue be but year, see So the next it see this will year. impact more we’ll that from we’ll perspective

expense revenue So pays as grow month. take marketing you’ll line see and the the you in quarter, customer the every the

kind kind are terms In why we favorable, we’re forever. of doing as mentioned to I this as don’t expect this, rates see of of before,

kind getting CAC digital So to when of in that to it’s and a to opportunity we’re kind X:X of broadcast strong lean great ratio.

this to invest we a the in think is So time business. really

Michael Ng

you, Thank Great. Rex.

Rex Tibbens

Sure.

Operator

Truist. from comes Please next go The question from Youssef ahead. Squali

Youssef Squali

talked to but or you whether improvement. X%. assuming a of you metric you of next to negative in maybe, that of early in And – for us that please. you just quarter or out learnings a Thank broader me, the Candu economics you much. it you’re profitability. year? deterioration I of early it sure an Great. that kind shared? the rolling Two particularly maybe in manner, you turnaround if start you about that about aggressively what with you’re do could as sure correctly, mentioned you kind that can seeing this far, think think as very Rex, if had good because just was And Brian, speak not QX real you so I questions have pricing, some QX, wondering kind share as enough And early not maybe assumptions. just feel a were year handle estate even later you around I’m had Was I you a got negative unit X. I’m pushing this around second, for that you on third of growth

have that. I missed Sorry. might

Rex Tibbens

first let So, real question. the take guess and estate the I one I’ll address Brian

Candu, of always product really strategy and terms In the build our kind really it scale XXXX. optimize year has been scale this and last of in start year, to

do We to very planned We’re $XX much to million this year. million on that. on spend Candu to had still track $XX

business, of position. has the track more supply. hypothesis that on always our the this have We terms expensive one still in in already economics, been good unit to that. do is of And supply aspects We’re a pretty

to down marketing. really it So comes

sure focused making costs. our acquisition on been good we’ve customer very we that feel So about

acquisition, recent year track this as demand. I trade. with focus really it we’ll real to other The think expanding to our is But need the think we even on we’re I on – learn relates definitely thing on more.

appliance things touch primarily multiple in as opportunity you repair, a but electrical gives I customer my to plumbing, we’re times. now, really we an right that move into So mentioned remarks,

profitability the our in order cost really to the and out need we prove of lower So acquisition customer that business. really

to, So year. question? take that’s you on for plans for think, change This estate the going XXXX. But scaling we’ll to what year. focused real inform want our isn’t this our this do Brian, decisions we’re certainly, I in

Brian Turcotte

Sure.

offset And we it’s is together you we that sorry, in as that volume a a the volume a – and decline year decline Youssef. have from X% the some we’re price increases QX, we offset of confused if to I the QX, ago. at actually, lot QX. the minus I as come think for decline, In the were we’re of And through. there. price QX, bit by end some In couple going of Yes, favorable a there, things not the through gave much flowing to forecast volume X% of had of flowing down price

the you you not favorable of tail that had in QX. the those, price months units. June of impact plus – three flow-through if we’re much about going And impact, you we units. you of your QX, of month had of of the on, the also, have had in all Well, each got those QX previous at what you’re you getting two had of as the So it, you think in QX going April months get May to to impact and impact months of lower lower one when months of QX QX, three

to it’s and going why that’s building, So it’s think X%. we minus be

favorable have data, a follow you Association NAR, if National of QX. more for Realtors, their outlook However, they

it thought or than down which they’re we would think be X% lower that. I X%, only

the that’s market maybe – the bad isn’t if home back that comes existing stronger. our But home X% X%. now, resale right forecast minus is So as

Youssef Squali

Thank Okay, both you, for thank the clarification. you. Great.

Rex Tibbens

Thank you, Youssef.

Operator

from Please comes ahead. question from Cory next JPMorgan. question go next The Carpenter

Cory Carpenter

Great. Thanks the for questions.

few And for offset, higher linger to curious about you side could the secondly, talk next the the higher as curious, it some pull I’m on as of Candu. engaged rates if customers price be a on or then maybe levers quarters, if had do you these renewing. potential are back renewal on other they better the Rex, Just claims. whether an increase

you and you plan made color more any quarter acquisition provide could Just integrate this on to you how that? the

Rex Tibbens

Sure, Corey.

dynamic one pricing. of things we great our levers, – have for So pocket we the the that in is

to are. then so were good and of renewals direct-to-consumer, when it pricing So our able roll later we tweak to underlying we or year as first the in what perspective, a costs continue to from we out QX had that a understanding comes model direct-to-consumer

So supply a team Brian. a parts. have perspective, our from team worried done or job or great perspective, of I’m management cost pricing a From the grow under a that’s replacement whether less we They’ve sourcing network, to that. about continuing

we – volume trade so multi-vendor much cost. in we’re as we we’re our have that for to impact so the don’t terms of off don’t feel not – able strategy And

percent well. continue we’re And to a going has our with the job we’re to continuing pull preferred sure the team’s as as that held as that increased then demand, make great Even possible. lever of preferred done using of So XXs. to the contractors many in

in discipline testimony the team true cost there to the driving as So well.

question? I’m things, confident to a those forward And between So move to then you as of to we’ll have to business. levers me second able enough remind your can be continue pull

Cory Carpenter

Yes.

on integrate color more it with your Candu and that into offering. and just how to you acquisition plan the Just

Rex Tibbens

Sure.

So accelerate small we two Again, and team. that team. those our of from acquisition assets planning bringing teams years’ And only will small acquired help some it’s experience together. the we’re a Porch, on great seven thoughtfully team

won’t be on think years do team, is I perspective. disruptive several worked So integration even it’s CAC. team has more it on that But an last from we over marketing their the what get the too knowledge – a

faster. XXXX. into acquisition, mean, the forward especially even So two days. It’s so been acquisition. intellectual we can and pull the we that I bring a get that to excited it’s future, a – month – But only or propel business great all about early still, for we’re all and that capital we’re the

pull to the and So together. team need integrate still

Cory Carpenter

Great. Thank you.

Operator

Brian Next Fargo. from Wells go question Please ahead. from Fitzgerald is

Brian Fitzgerald

real on to capitalize shift And on And older There that ask about that in demographics to market, viewpoint just want housing how from getting buyers lot areas? you’re of a areas I estate. urban able housing to thinking is opportunity younger you maybe a specifically in from into the stock. wondering to and is driving that rural, how suburban turnover suburban might COVID housing around turnover? be urban

Rex Tibbens

Well, existing and is butter. certainly, sales home bread our

to our to resilient but business through pandemic, for not change if think in does especially well We be that’ll we’re the is the trend space. our model positioned, of business. a So start type also that millennial we demographics only think the that buyers, the for as do tailwind hold, home

to from will when tailwind it’s tailwind to about move create one suburban a that more sorry, more it early But real that suburban, create. as So – comes folks also a definitely of or to inventory. think would It’s too from much also to urban the to estate, for us. of things tell how

rates but a So inventory’s now, incredible closely we’re little right watching tight. the

that’s been looking factor a we’re So at. that

Brian Fitzgerald

Rex. Thanks, it. Got

Rex Tibbens

bet. You

Operator

Ian Next Zaffino go ahead. Oppenheimer. from Please question comes from

Ian Zaffino

asked modeling, as little bit Thank you much. have great. or I pricing as me on what I this move now, term, was move and hopped We Hi, a home? your But you more you like that? that is how to – we this temporary. so a far seemed changes of Thanks. doing to doing if but you work, late, been staying But already. not forgive towards very going as work-from-home, do anticipate necessarily people bit saw that it if address that longer at little was actually

Rex Tibbens

relates great from be from the talked in dynamic Ian, wheelhouse. to we’ll hear in as able – dynamic geography even only look fits to were not pricing in but of square about kind our usage. deeper at the Hey, This we’ve a also perspective, pricing We to get past, future, it to you. able

who able renewal to more, their pinpoint the be people reflect plan that are begin So we maybe price. to home in using service we’ll as

plan, think, have need as home to helps service with I customers interesting don’t that other, you is use to it, The unlike use their ever thing that you where retention. insurance, hope only

a well retention pricing. still still with costs, I that dynamic a think terms we levers We So larger one direct from we think but some the of perspective. of of that is have room But lot mentioned also before, just dynamic left in bode – yes. should ones is pricing.

team direct-to-consumer for year direct-to-consumer QX, first continue in we’ll launch it. refine We And – then to to continues the customers.

As you know, we have them for renewal now.

to So what the kind of a be great normal" we work-from-home. happens think of way to in that’s monitor going "new

Ian Zaffino

right. for color. it. certainly All the appreciate I Thanks

Rex Tibbens

Thank Yes. you.

Operator

comes Compass Matt question Point. ahead. from from Please go Next Gaudioso

Matt Gaudioso

guys. afternoon, good Hey,

on two-parter Streem. Just a

real continuing and operational? and can the COVID? that then with on you integrated the fully that in little that touring investments in And estate in the Can that’s of of going integrating year. the agents, half back you just the of you are more business more on you talk post whether virtual that terms bit just partnership mentioned guys associated get feedback You to provide a about how any see core kind

Rex Tibbens

Sure.

really So the with use allows – best one a for Streem is what the that annotate to you realty of to client kind can agree them and or do to mutually partners, that areas identify of cases sale, had of you is the the ahead set Streem – potential need type thing. or of that that furniture, rearranging of opportunity change you up may may kind decor

to kind So they’re to conversations those virtually. do able They’re tours. virtual have of able

it’s And been partners. our by very so realty well received

In COVID, terms of where TBD. it’s do still, they go think, post I a

if than it world, strategy kind should of realtors business. virtual part their will. integrate trying of lot introduce be you as to to non in it using it a get to them the is a Then used Our and get it a stickier

our we a resources how way systems. terms the Streem that. Streem deploying the is integrated notes to able opportunity course, affords then contractors. so it’s just all to of the send technical reporting you we’re us can need into a matter behind of that Streem center request video just business, ensure and our of into to the or capture allowed the That to customer, our submit And that integrates on call to In be

for but of the not year. work work, this So we insignificant half had back that planned

Matt Gaudioso

Thanks. Great.

Rex Tibbens

you. Thank

Operator

turn to conference There question-and-answer remarks. for closing to any Tibbens no queue. in like The is the more I over concluded... This the Rex questions are now our would concludes session. conference back

Rex Tibbens

there you, and operator, all when for and analysts a Thank game second. audio call. to investors playing participated who responding you Frontdoor of today’s to Lost is on thank our long Sorry. the COVID-XX.

improve We’re partnerships rates and marketing efficiencies our and leveraging rate. and deepening to expanding our growth favorable

of many improve but financial increase these understand to our critical over will near-term asked the fact, these stockholders in our and In last results, service that take very our us requests impacts years. to long-term investments an few actions profile. have It’s

and again to interest resiliency also you have continued We this strong hope continue I time. this after this your we will again model even their safe and thank I during for for passes. resilient a environment. want to in that stay business our all emerge in you team stronger financial flexibility and a position crisis unprecedented amazing Thank frontdoor. of

Operator

today’s you attending concluded. Thank for has now presentation. conference The

You may now disconnect.

Frontdoor (FTDR) 7 Aug 202020 Q2 Earnings call transcript