Frontdoor (FTDR) 4 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, welcome to Frontdoor's Third Quarter 2024 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'll begin today's call. Please go ahead, Mr. Davis.

Monday morning, XXXX thank a Earnings you joining Good Frontdoor's for special operator. for Quarter election. Third Conference the you, everyone, you and joining thank Thank the before Call. And

me and Chief Cobb; are Officer, Jessica Frontdoor's Chairman Chief Financial and Joining Executive today Bill Ross. Officer, Frontdoor's

detail which presentation is will on section Relations in the used release our at is at and today's There during about website, investors.frontdoorhome.com. located press Google additional at App the app The in that call brand and also Investor new of slide Play. Store our download be that frontdoor.com can found Frontdoor Frontdoor's be can you and mobile

filings webcast These forward-looking Slide presentation, risk to actual SEC. more These of the are detail statements. to the statements. those on explained discussion Please various for remind statements in I'd today. are and stated subject you uncertainties the risks factors and such differ and to Risk our X discussed cause section contain call of could may here filings in with detailed uncertainties, refer which to forward-looking to As a our the from and statements the materially risks results like that Factors related company's in this

made future to information, any new update forward-looking All otherwise. X. And as today, no obligation result the or are of of forward-looking except statements law, November statements, as undertakes as required company by events a whether

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

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

call the for to turn opening comments. now Cobb Bill? will Bill I over

start Today, our of at show are high. gross gross such margin came changed. When by in can to Thanks, and improvement an point to we has all-time about over the the frame. last I low years. short into a an increasing margin our margins in good morning, XXXX dramatic an were basis outlook I XX%. X-plus That companies all-time XX%, over X,XXX highlighting Matt many time business our wanted Not improvement Davis, everyone. XXXX,

discounting Slide delivered third repurchase the to quarter. performance XX% X. expanded increased we XX%. million. grew X.X margin financial we have will ago. $XXX year versus to forecasting now XX% our record quarter the grew basis quarter, show news $XXX to Adjusted probably will The million profit in Turning grew million. shortly, and we And count XXXX We second points of through Gross a in $XXX line in Net million be to X% the Revenue XXX marketing best income to year-to-date count with DTC you working. as that customer DTC EBITDA third million, all, August. the $XXX and efforts customer used and actually ending shares to are our are

progress we working have is the This toward. been

#X strategic business, customer our our continues we trajectory priority. While pleased with the recent very growing to the home of warranty base DTC be are

the key to X-XX other to and are warranty. Our homebuyers our priorities close acquisition strategic business on-demand expand of

acquisition completion, from Speaking California. to quarter. just in to X-XX smooth approval close line, with remains a continues the transition. of integration the track now for is process for approval The to our fourth on waiting acquisition, prepare team nearing regulatory we work Bottom and the are

Okay.

out next to here's how minutes. So I'm going the lay few

app. our the estate channels, customer momentum a real AHS to experience going new and with in major what's happening then our the by milestone warranties I'm journey, in on-demand, both finally, followed DTC renewals discuss First, home and, in

decreased the annual to continues the X.X with Realtors, home Starting sales National Association of the XX the or rate estate. market flounder. report September homes, from years. to million real lowest NAR, in The of to According run

Additionally, opportunities sold, home fewer there attach put, with Simply warranty. are to remain homes being mortgage elevated. rates to fewer home and prices

For quarter versus some prior years first context, count more the half and year is XX% down X than third our the year from customer down in ago. almost real estate

momentum But mortgage there at the X inventory some is positive from months year it's now some down supply, been movement. years. are positive is X.X -- the highest rising, is home Existing of ago. which a last Further, in rates

home Home to share maintain its warranties purchases. American attached Shield continued has leading to Finally, of category

channel. Turning to direct-to-consumer Slide XX and the

the Let's working. the it of marketing is start campaign. In performance with short,

Warrantina in relaunch have due also starters, significantly over today marketing XXXX Recent aided the about we up. space, that X XX% For least Ad X number. the a media Google a AHS' XX% for grown XX% In also campaign. is research brand TV jumped and to AHS to from It's awareness. of at crowded brand of are awareness up shows homeowners that's searches very spots. year-over-year. recognize good now

confusion some according But are to There down here. a point Trends. Google that I need make to has searches been key

me is relative clarity. some analytics. Let should snapshot It is brand's not use Google or not of Google all terms. your representative for term specific a over popular you says provide insights performance search Trends Trends of Even is a predictive how search Google to time.

through September. So AHS fact Google actually is searches the are for up

brand-specific, over we that. directly much know time and How This volume information that? is and We information do we represents do true from Google, certainly accurate more and comprehensive. for get pay our

of first to So year be successful. the clear, has campaign been the

leads. into and brand campaign, the build move we approach the builds continue through of focused will phase forward a AHS to second targeted in marketing XXXX more and awareness consideration we grows As that

much will in XX. these February York our on Day We at in plans New more Investor share detail

is are we our is are This must In aggressive this within softness, have conversion do. what suggest be up, it's discounting strong of optimizing a consumer searches long-term strategy. We clear, smart strategy, We count and times awareness brands seeing towards. is market discounting. brands brand where up. are channel, To price are and been not are it's on what Again, demand In solely up, we and summary, also up behavior. relying demand changing DTC not understand but working we conversion. our customer the is

Now let warranty on-demand home me about business. and business step from our talk our traditional away

We to to on-demand program this deliver revenue to over expect new million results. due generate primarily HVAC great which year, our continues in $XXX

Regarding our announced Moen, as with new business partnership are release in press X we that states. our expanding currently week, additional last to

Georgia Frontdoor in Carolina. California, to valves be of addition South Oregon, installer and Moen shut-off In will Arizona, the exclusive soon Idaho, Texas, Utah, smart

are excellent targeting their different We XX% membership, way with we alternative by AARP of example home market. on warranties DTC and AARP of a go unit to been different segments have to By grow is an demographics marketing great making to distribution. channels of able progress year-over-year. also sales to

us. amazing. story great improved Now turning continues This That third XXX renewals. to a points XX.X%. quarter Retention be the in to of rates to is record basis a for high

mix the more driver, preferred the is use pay tremendous also improvement primary members on our and customer of for service, work channel is the increasing lot contractors, expanding this a While journey. customer result member of throughout getting auto of shift team, improving engagement

few requests, deal, Thursday. we members the a experience. is we of will an and information, plan our enhancing all their milestone, advantage the make service access on can progress account a make their phone. we now and at our and are In track things quickly easy convenience of their to payment is announcement With fingertips, their special convenience them on app information, the one big making launched days public manage I'm major our right a take excited AHS customer their most about This service formal ago. offers of Finally,

months. coming have additional over will We enhancements the the app to

enhancements American We believe will Home Shield these the competition. from further differentiate

We about App download Store. the through the I app, are Play now or Google to super and encourage listening excited everyone the app

be you'll think impressed. I

that, the on call third for Jessica now quarter I'll with financials. turn So to over record Jessica? our more

to want the and a good stronger. outlook another start position of full stakeholders. Bill, to time financial been for We Frontdoor's message I second has beat. morning, this never delivered all our year exceptional Thanks, increased our adjusted We with EBITDA everyone. year. clear

share a to we investors through generating that cash, are amount We cash on record focused remain and of repurchases. returning

prior our EBITDA to $XXX third million. XX% increased $XXX will adjusted income quarter increased that Net financial to X% increased million. Slide summary period $XXX XX, versus million and to you XX% year Specific see the on revenue to

which This is million. moment a million. third $XXX review take to $XXX midpoint $X beat almost our revenue, at million landed of versus quarter Let's a about our of guided

basis on XX%. points million, Now to Slide to see XXX record versus profit profit increased XX% XX, gross you period the a will improved and margin gross year prior $XXX

decline in period. Let's now X% we by the top, had prior Starting EBITDA increase offset Slide driven This million revenue adjusted XX. partially move to favorable a over at year bridge X% conversion $XX a the by was of price on in volume. the

reminder, an of warranty in partially which by million $XX a volume, home was the includes As sales. impact nonwarranty this increase offset lower

$XX Turning service and million. was by transition higher per primarily to to continued lower a trade requests a contract number improvement of This process customer, decreased fees service claims costs, initiatives. which driven

a those. Let's now of to unpack each take moment

rates seen, reasons. the of to we were incidence customer primarily quarter due some that Third ever lowest have X

prior million days had we versus weather year $XX First, of degree period. were favorable down XX% cooling the as

over made have are the better ever. years, than now process and executing we improvements last significant Second, X we

and better We to reduces getting right right customer noise the are at a time, doing contractor which in job our customer and of system. right in the a costs better the results experience

prices. optimize given a, decline short-term include: And more fees, of leveraging is accustomed bulk is trade service the claims going the achieve become and change season; third availability our We suppliers expected service an we our of the third a higher program; and new with had to jobs as contractors. middle in until a This requests the improvements review our Some our of to and result, is per of especially XX% contractors. our temporary rate which transition moving record was c, our with typically of down purchasing to the our preferred preferred amount. has incidence high resulted better behavior customer in power quarter process see service reason in peak requests number a customer they b, summer to outstanding in high-cost this the that to

fees increase lower trade service in is in The XXXX. service request driving a cost net also per

third are as inflationary inflation flat. you inflation. dollars was increase recall, service expense mostly may with Frontdoor's the our quarter Again, a net fees claims offset rate contra basis cost essentially a per service income on normalized service cost this environment, When trade a in external statement. combined our request on fee As is to

weather, In $X summary, due million and driven million adjusted $XX of process by million of $XX which the development The difference EBITDA SG&A over $XX increased timing, to by better-than-expected favorable to midpoint outlook million. cost exceeded from favorable of improvements. of our benefits $XXX approximately is million, primarily lower claims

X million in of our statement working provided primarily earnings our flows. months of review was and a and ended of flows. earnings earnings $XX used cash adjusted capital. of With exceptionally strong for million for for September in a XX Net strong activities cash from XX as cash comprised $XXX Slide was to million turn noncash strong $XXX operating the charges now Let's for come record result cash a

used capital for of $XX expenditures $XX cash cash activities repurchases was investments related payments. to million million million used $XXX of was activities as comprised share investing was debt well Net $XXX million was Net scheduled primarily comprised and of of for technology. and financing as in

This to And a million cash. shares. XX. our focused we was ended cash $XXX We $XXX X and ended cash. using million unrestricted remain cash the for increased buy million restricted quarter September flow of $XXX months to on XX% of the back of comprised with million cash $XXX Free in record

million it pleased able share we share are For year were September. XXXX. X-year we paused almost extremely a early for repurchase especially in before This expired that $XXX complete is to program since example, we repurchases in the impressive

repurchase X-year share As last amount that X. on September authorization This started our we our X-year is XX% a previous new quarter, reminder, announced than $XXX authorization. higher million

to turn let's our outlook on Now Slide XX.

to point is in quarter ranges. our we year is are volume that our the Given the that fourth estimates and typically versus less lowest than providing remaining months outlook moving X there quarter,

this that felt would we estimates our While standard for from our help this is understand practice a year. quarter, for remainder departure the our of investors this better the

we DTC decline channel approximately estate channel, our due quarter, be to XX% $X fourth real million, $XXX our reflects strategy a discounting decline and primarily in in the revenue revenue. a volume, a low an million to of by increase for approximately our approximately increase our which single-digit approximately in of in driven renewals other Now XX% our expect channel

million. approximately fourth come EBITDA the expected For adjusted $XX quarter, to in is at

our to move full outlook, with now revenue. Let's starting year

outlook partially approximately renewal decline in revenue assumes by our a $X.XX This roughly which increase estate to We realized and in includes a billion million. offset will X% XX% price, are increase which in XX% increase channel, It assumes real $XXX also volume. the other revenue, mid-single-digit approximately increasing or mid-single-digit DTC a the realized mid-single-digit decline a a in to on-demand channels. increase includes

growth brief driven HVAC The entirely note almost by over here. One prior higher the $XX is year trending sales, is which XXXX. million caution in towards of new

includes more warranties amount go, minor perspective, we Investor a details only the revenue Moen still of early. excited are X% XXXX. about It's approximately we guide And this relationship to a decline while very expect Day. provide will in total customer from in number our at where we Our home count From can of XXXX. still

margin than XXXX. that slightly inflation we Because and for new much in then, over I outlook the XXXX. on our to in run has to in strategy. fourth now it model, pricing has XXXX our because We that, to lower the costs comments of also and will taken the nearly course. our for their inflation inflation We want But Since As highly years were significantly on increases bridge guide, in a have to increase context environment dramatic additional I in to inflationary expected. and benefit our for raised experienced but X pricing expected not increase the gross service price my initiated response external mid-single-digit into only price prices in quarter carry of those XXXX, close some provide revenue customers. come

for to moving would gross margin business. which year profit, are our our where full Now we record approximately be a to raising XX%, outlook new be

favorable incorporate several However, it does items.

with a We has of our have taken stressed we of claims. and high not favorable lot been weather levels have of system had price, a lot

our which expect EBITDA turn inputs, adjusted be $XXX are be approximately to guide to we our Based to full let's SG&A outlook, Now full about million. increasing on these we of year all million. $XXX year

outlook annual reflects capital and be full Our be million effective expense income finally, approximately stock interest $XX we includes million. full our and also expect of to $XX XX%. tax year approximately approximately expenditures the $XX compensation year And to million of rate

In summary, position Frontdoor's been financial stronger. never has

We a earnings, cash are record to and are buy back flows, generating amount of we shares. record record on target

strength. so am we how investments a I see the extremely investments from drive this excited making are business, grow We future to will those to and are doing of position And growth.

XXXX questions, we today. discuss that pending, Finally, we're top make but finalize account beyond. for want XXXX still sure we is before for ready plan take for to plan we quite your acquisition our I'm X-XX sure our of and to that not for and we of is plan you, before mind The

those be at all of will Investor to to We ready present details Day. you

it With that, I start Q&A. turn now the will to over operator to

from coming is question Carpenter first Our Instructions] Cory JPMorgan. with [Operator

Bill, launch. I the app about wanted to you AHS ask

provide? your that out? over and on marketing Just business a how Jess. picture, impacting Any for how I follow-up And And see rolling do details bigger have then you you this plan then do time? you could

member-focused it, It's Okay. I it rolled Yes, we hope just download app. out. Cory. you a

deal service directly this to having phone. to efficient downstream user app So our through mean, user really it to designed members. about is can process the benefits, our all up as It's enhancing more experience. people experience. to some opposed makes It's our and I request always there's appeal that the pick our

So And lot brand from think user a I benefits move. a come of there's the it's that modern experience.

will for further the can be down that also catalyst we have enhancements It road. the

But as it think starting far you you'll to I think our of just marketing existing will, I of brand our terms our announce broader a And we don't going overall as in mean, will marketing have I communications, members. app. if part we see be in to action. be by, it, image. brand it then character, So necessarily we'll it's new

members. And help broadly can it will hopefully for do will look think about drive modernity excited additional us us to the give what we're our So it I members.

a on that year? XQ believe. Jessica, And roll increase, that you're in of how kind price mentioned percent or that next a the your to bit, you're channels certain is expect across that you -- targeting? your then do prepared remarks initiating the all just mid-single-digit And just you through channels P&L expand Could I you in

Cory. thanks, our focused no, those With Well, price are increases, really through channel. renewal the

that renewals hopefully, answers We out So your those roll question. the through book.

obviously Because been. estate, the has market hold way Yes. pretty we constant and real the

pricing any then And we looking action stuff of We there. about DTCX is talked the aren't at all discounting earlier. part

think it renewals So as of as through said, the channel. Jessica

from is Ian Oppenheimer. question next coming with Zaffino Our

on ask just you and balancing your understand of also price increases? kind of kind volume. we're trying and price between are of demand, pricing decision, to down at wanted I your to the arriving some guess I and side how kind facing

prepared Yes. the for in high I No, think as I my priced remarks, inflationary shared XXXX. in environment we obviously

forward, definitely inflation seeing with our strategy that be and we're Ian, mean, know renewal As I those will perspective. pricing line what think roll in be you going more amongst an I also our pricing And that that pricing from we're as should capability used dynamic we -- got think, channel. increases we we've

are is the into strong. things do is business, fortunate, we're renewal monitor book. our Jessica bringing retention all primarily happening. channel, the of as price time. in you the channel where feeder Ian, our the to year which being we first is, really on elasticities the one heard, So members, in In aggressive we're is continues rate which increases DTC said, And as the the our be backbone very the obviously quite renewal of we

in is the in of AHS of differences any this the are of Frontdoor app. the kind concern What And launch launch the cannibalization at then there about talk Frontdoor the maybe Talk product difference maybe all? launch. there? then and And that Okay. about

Yes. business. the an app business. our also warranty Frontdoor point No, is for members AHS on is for existing to The important our app and and on-demand note. focused designed overall open it's The it anyone is home the is catalyst to

tandem working -- see we is we them so serving markets. in because don't different that see So are -- they

both So serve think can Frontdoor, in of we're Inc. X I excited purposes different overall business. a they to tandem. work as that part the And have

is with question Segura coming from next Sergio KeyBanc. Our

I channel. wanted real estate to guess, with the start I

rates? guys this in slightly you're you we've if revenue broadly, just attach So it strong and home count in any market, that sellers wondering stable, I And you're was quarter. now. more maybe sales I market we're looked for signs declining existing real that some like sellers more customer balanced implies there actually was Are that stuck returning to a the where been guided there above despite a estate? came think in seeing seeing market any previously improvements in time

Yes.

very I as being think I you better market. tough overall, think I the said, it's notwithstanding a trend still credit,

our job Some of excellent that execution every has for grinding the unit sales we've an really can. done, done team they

I ahead want on to So estate. of don't get real ourselves

we we market is listings there to heard rates may But over there now rate of coming a about. continues months' talked elements, to flounder. very a The soon. today worth continue should the I X are be few said, As cut as fall. supply. Mortgage

competition. rate good up our job done of have We attach a to relative keeping our

years all worst ahead don't the ourselves there So seem calling like. to the way, on We've in that. want for experts' to professional and market believe the been is our elements macro We on along. still be kind side that all are real point, of get but coming market we your estate XX the to rebound, this going to some of

to this this very way I a more think the hope at up to want Day all think talk But don't be things we'll they're in stabilizing, it turn certainly tailwind we going want I this -- to going is February. at I -- point. call Investor are I go and don't So about soon. to to

you latest that can seeing count We more Was And last the of like saw Got SG&A results. Or back strategy? we the the And DTC drivers there, guys you on that helpful. that, marketing lowering the about saw then you second that That's is when of so think you're Was lower channel? I that if that talk more if you any one the maybe just the reaccelerated so, talked strategy? more success, marketing a about pull that. that customer targeted spend a driving it. behind was the is guys the that. outlook. success congrats given strategy channel. discounting there? Hoping some on the marketing in quarter, you're that just why of that did And of maybe

kind me let questions. of yes, Serge, and and I your yes, go yes love unpack It's that. but

searches since a awareness Google and our with point the about Demand from -- talk us. the you believe, our Google So are we up. up. numbers But has been thing campaign, very are got been keen and we information have well The good earlier. to Google to conversion look, is wanted trends. information for worked certainly out Discounting has very I cited we

So there's element. one I not think

instrument, I but of a effective long-term blunt the a think customer. bit been effective it's and of terms especially value the of the feel discounting we in is

part -- to have So in and what taking brand, we're this is generate we that's doing. QX We're that reinvest us of see growth advantage of that EBITDA what ability the that's in you did. that the we to for really

to to which the incremental some is really impact looking of some are use do marketing, going to XXXX. We SG&A

it your continue. love I hopefully right. is will yes, trend, are And instincts So the It we and board. think across the

is question Blair. next Jeff from Schmitt with William Our coming

prices new you on an do how anything on could any there Question impact have they'll that quarter when is impact up retention well. promotional last think learned you have? add there that those of will I much customers? more up strategy But will an think for you on much you hold How or there your step that mentioned the channel. direct think of rates you

Yes.

discounting deep So the last started we March in of year.

as we closely So go cohort forward. we've tracking been very that

retention X that year not are else. anybody that holding, is Fortunately, relative we the the the we cancel have renew to cetera, -- as to out, et outsized seen rate renewals start that

at question how X on impact touch this Day, it's ask, but I it we'll the think more to does Investor right year later.

on we've far, the been pleased year so off. first And the the after renewal effort XX% with

And how the any attachment were years? few the last quarters sort today the estate channel it back towards of few is do where They Like And I then at or have concerns, guess, real X. with last heading you Okay. mortgage up? is trending? in versus rate even rates moving

Now they're going north.

So that on an any if have thoughts will here? impact

first share the we're a Let has point the take and then is at in part. in the around XXs. The fallen attach maintained share where second earlier and rate. -- high that XX% warranties, separate has home It's the me rate fair attachment the steady But it part fallen be for pretty happened, our industry, the that to What concern now or have for used making the attachment of terms industry. we rate was as of our teens. has

to falling are going equity just have I old will the of want buy different overall it effect to as have they're think the terms don't than market, want will to the take their to they I a will it like, sell in going are house, people house, mortgage rates mean, that mortgage rates and that want any hopefully raise to -- they new that see there. to In start people

on of impact different an I natural the know, a of attachment lot a rate. going don't on if the have see much take you we have will that. are why market the think interest Jessica, improve. I reasons to But don't rates So

No, I I think agree.

rates I little the seeing with as up back just think a just slowing. kind of recent mortgage they're them thing right one popping now But see the interest bit. in we rates, we're times,

optimistic we're be it that being cautiously -- So on will front.

from Sachs. Eric Goldman question next with is coming Our Sheridan

could. if I Maybe two,

Just on broadly landscape. the competitive first,

I call think are demand business. the how landscape? But landscape yourself finding far the both sides you the so competitive you on in, of in how And of where a we lot is about find talked on maybe either maybe year of elevated sort more elevated anticipated think competition this the XXXX beginning when played where or out? and you you than less there pockets the

X-XX And some in know the broadly and get about inorganically I any the key an we're Analyst more might building from growth of XXXX the products acquisition into elements of through then that strategy the maybe the update elements business going involve inform to But takeaways Day. at beyond? and yourself scaling learnings are key accelerating XXXX acquisition that of versus on

the one one, and the take first you to want take second Jessica. Yes. I'll

In competitors competition, terms are our number there a of companies. direct of -- private

So aggressive we what obviously don't division seen hear and have marketplace. the a lot a have have public we a in -- except are of There of public They company. it's information of a in couple discounting generally, they can responded that. our

think been in effective I that regard. we've

the think there product any competitors enhancements of business. or I estate anything isn't So of on number focused note, are real a

we're Our higher DTC business is both. though even estate, than a share for us #X in it is in real

want in good Do take competitively, like shape So on think second you we're to that. one? the we I feel

you just it, landscape, from M&A Eric. And Yes. hit an

We can very, are and still we X-XX very learn what on from focused that.

about forward. about And I we're and organic going capital allocation, always evaluate to we think to think as with focus growth. forward, continue going that that balances how healthy think I inorganic to on growth going our want

grow we're I strategy, on that going thing in the focused grow of the one and think revenue, out still EBITDA. things our at customers terms looking we'd just there deal market, grow are be in to what's and very

Yes.

have Just absorb to of clear, X-XX. the with integration Eric, a be we to lot

always So acquisition can open. keep there's we an nothing I would I that from the perspective. mean, that on say horizon

shares cash. excess buying with to back committed very are our We

what lot. won't it take We'll a So excited We're talk a future. that be not focus the It's we of But terms heavy the for road. absorbing point it at at to our is lift in that's about going, it's going down that some look to But where in going immediate X-XX we're can about us. do. for right February. more now,

is from today coming Securities. Mark Truist question final Hughes Our with

the the different dynamics you've different out done to of HVAC sales, rolling to ramping that are On really contractors? contributor for there? there outsized growth, potential be regions, well still What that up. it kind to Is

Yes.

that they're you sale I doing contractors our new think a a new this. We installed the market. economics from past. have proposition. And onboard customer because out a you market the we've the It's about to contractor they can great want team, I'm the nailed It consumer it. get And my break. this relations is a HVAC by with week. it's to last of get HVAC, talked that -- we're What just give value a in be rolling onboard. contractors

but about numbers. that can't fourth Mark, will part the I guess, quarter, talk So I be of

doing weeks in we're were ago. City a piece couple We're enhancing But Kansas going overall [ no, market the market we ]. is by what of

stronger what have there's can lot note full put out markets. to we we we of there analysis is of regard HVAC. I caution think to a -- when a But then the get out for that potential we And think there. of blue about kind with sky February. haven't We Jessica talk Moen, And said

great You them. a more say they're say we but in we're have and heard think love about working states. X that's we a me We'll partner, with on expanding February, build and that more nice to it

materiality at you be of points Moen, least? material few that can think, Do in XXXX,

I talk still Investor there. our ahead to a we're City. York Because middle. up that's just about XX jump February tee don't more with the We'll want in Well, New now. Day, great in it

We additional haven't even to those out here. rolled states

we've good as for us. expanding I of think us It's to you lot into going it, we Mark, Like growth great from well. been opportunity new give a I learnings lot hit a a And that's as about point other capabilities it. think learned though, right? HVAC, think is, the

the What would trade you dampened might maybe ask to of used mentioned that something more. that usual service the I the until timing think is frequency does consumer one it. well. fourth quarter How I And gets of fair? talked claims process? had that as sort the Jessica, was If about that... fees long impact that Is

I the a it's it, to about those very think I to -- think out roll have mean, -- we think I pricing it, about similar way you increase.

and out. claims item process the XX But like exactly on that So launched it's months to contra roll a to XXXX half back pricing. on of They're costs. our XX the we takes

at fee in or perspective, just QX, higher just a run for doing its reaching that typically, repairs TSFs of for maybe kind trade again. behavior the from pricing are a thing. to about to service calling look we think we same start as and people so And get So year in then

say to run that course. because commented that probably fair that Is it's you've its

Yes, It's what saying. course. it's run exactly I'm its

Thank you much. so

of We have our the reached end question-and-answer session.

will the now turn Mr. I for So remarks. over his call Bill closing Cobb to

very you much. Thank

sign reiterate we off, points. final to Before I some want

last plan and As repeating and our you about me say near-term heard worth optimism. and here, realism long-term it's is quarter, strategy

providers, very awareness bullish we member While consideration. macroeconomic all strategy our category growth continue this to factors and continue driving to about for remain warranty and especially home challenge

new been There reflect who are program. on what's to offerings as the on-demand our millions of as past you That the like warranty years. accomplished well untapped benefit over HVAC could home I'd a homeowners from said, X like

we DTC earlier, have I be as and We customer to annual and growth, campaign on relaunch These mentioned now last with our working. our American are Shield in And focused the seeing the of on customer line efforts year. we're expect Home brand. count momentum positive

acquisition X-XX M&A growth, We've also of to track the proceeding on explored and close in is accelerate to strategic QX. our

We have our margins. enhanced

We've our And customer continue at record third with a our committed through share repurchase We share shareholders to repurchases. with we return growing new to our And finally, sales excess partnerships continue Moen high quarter, buybacks. we setting authorization, continuing cash share with million drive and to expanded well doing the remain very It's to HVAC $XXX others. as well to on-demand XX.X%. as business. retention rates

in we So these you note, facts a look lot quarter reason amazing believe Investor good are we of and term. long to has a our to the Frontdoor I said We've see, for for all what XX financial of I results Thanks performance and absolutely in Thank hope that the On accomplished. you, again. forward February New of Day. would you another York do. done on can been giving seeing you

we and Thank you. conference, you this participation. and your may Ladies you and disconnect thank for gentlemen, this today's time, concludes at