(FTDR) 2023 Q3 法說會逐字稿

Ladies and gentlemen, welcome to Frontdoor's Third Quarter 2023 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.

女士們、先生們，歡迎參加 Frontdoor 的 2023 年第三季財報電話會議。今天的通話正在錄製並在網路上播放。今天的電話會議由投資者關係副總裁兼財務主管 Matt Davis 開始，他將介紹電話會議上的其他發言人。此時，我們將開始今天的通話。請繼續，戴維斯先生。

Thank you, operator. Good morning, everyone, and thank you for joining Frontdoor's Third Quarter 2020 Earnings Conference Call. Joining me today are frontdoor's Chairman and Chief Executive Officer, Bill Cobb, and Frontdoor's Chief Financial Officer, Jessica Ross. The press release and slide presentation that will be used during today's call can be found on the Investor Relations section of Frontdoor's website, which is located at investors.frontdoorhome.com. There is also additional information about our Frontdoor brand at frontdoor.com and in our new mobile app that you can download in the App Store and at Google Play. As stated on Slide 3 of the presentation, I'd like to remind you that this call and webcast may contain forward-looking statements. These statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the company's filings with the SEC.

謝謝你，接線生。大家早安，感謝您參加 Frontdoor 2020 年第三季財報電話會議。今天與我一起出席的有 Frontdoor 董事長兼執行長 Bill Cobb 和 Frontdoor 財務長 Jessica Ross。今天電話會議中將使用的新聞稿和幻燈片演示可以在 Frontdoor 網站的投資者關係部分找到，該網站位於 Investors.frontdoorhome.com。您還可以在 frontdoor.com 和我們的新行動應用程式中找到有關我們 Frontdoor 品牌的更多信息，您可以在 App Store 和 Google Play 中下載該應用程式。正如簡報投影片 3 所述，我想提醒您，本次電話會議和網路廣播可能包含前瞻性陳述。這些陳述受到各種風險和不確定性的影響，可能導致實際結果與今天討論的結果有重大差異。這些風險因素在該公司向美國證券交易委員會提交的文件中進行了詳細解釋。

Please refer to the Risk sections and our filings for a more detailed discussion of our forward-looking statements and the risks and uncertainties related to such statements. All forward-looking statements are made as of today, November 1, and except as required by law, the company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. We will also reference certain non-GAAP financial measures throughout today's call. We have included definitions of these terms and reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures in our press release and the appendix to the presentation in order to better assist you in understanding our financial performance. I will now turn the call over to Bill Cobb for opening comments. Bill?

請參閱風險部分和我們的文件，以更詳細地討論我們的前瞻性陳述以及與此類陳述相關的風險和不確定性。所有前瞻性陳述均截至今天 11 月 1 日，除法律要求外，本公司不承擔更新任何前瞻性陳述的義務，無論是由於新資訊、未來事件或其他原因。我們也將在今天的電話會議中提及某些非公認會計準則財務指標。我們在新聞稿和簡報的附錄中包含了這些術語的定義以及這些非公認會計準則財務指標與其最具可比性的公認會計準則財務指標的調節表，以便更好地幫助您了解我們的財務業績。我現在將把電話轉給比爾·科布徵求開場評論。帳單？

Thanks, Matt, and what a quarter? We crushed it. It was just over a year ago when Frontdoor was experiencing some of the lowest margins ever as a result of an extremely challenging macroeconomic environment. Our team responded to these challenges and took decisive action to improve the business. Fast forward a year, and we have had an exceptional turnaround in our financial performance. Third quarter revenue increased 8% to $524 million, and our gross margin has rebounded 760 basis points to 51%. This drove a $48 million increase in adjusted EBITDA to a record high for a quarter of $128 million. Given these results, we are raising our full year outlook for revenue, adjusted EBITDA and share repurchases for the second time this year. While things continue to fall our way, we have also done a lot of smart things to drive process improvements, which are contributing to better margins. Jessica will describe these in more detail shortly. The key message is we expect the benefit of these process improvement initiatives and cost trends to largely continue into next year. Now I want to highlight an important point.

謝謝，馬特，四分之一是多少？我們粉碎了它。就在一年多前，由於極具挑戰性的宏觀經濟環境，Frontdoor 的利潤率正處於歷史最低水準。我們的團隊應對這些挑戰並採取果斷行動來改善業務。時間快轉了一年，我們的財務表現出現了非凡的轉變。第三季營收成長 8%，達到 5.24 億美元，毛利率反彈 760 個基點，達到 51%。這使得調整後的 EBITDA 增加了 4,800 萬美元，達到單季 1.28 億美元的歷史新高。鑑於這些結果，我們今年第二次上調全年營收、調整後 EBITDA 和股票回購的預期。雖然事情繼續朝著我們的方向發展，但我們也做了很多明智的事情來推動流程改進，這有助於提高利潤。傑西卡很快就會更詳細地描述這些內容。關鍵訊息是，我們預計這些流程改善舉措和成本趨勢的好處將在很大程度上持續到明年。現在我想強調一個重要的觀點。

At our Investor Day in March, we laid out a target of $2 billion in revenue and at least $300 million in adjusted EBITDA for 2025. We have already surpassed our adjusted EBITDA target, and we are working extremely hard to close the gap on our revenue objectives between now and then. I believe Frontdoor is an extremely compelling investment. And while I don't normally comment on our share price, I want to call out our current valuation, which is at one of the lowest points in the last 5 years. This is truly an inflection point for Frontdoor. And while some of this is market driven, we are taking advantage of this opportunity to increase our 2023 share repurchase target to $125 million. Now turning to Slide 5. We want to clarify the difference between our 2 brands. Let me be clear right up front. The American Home Shield brand will continue to focus on selling home warranties, while the Frontdoor brand will now evolve to selling on-demand home services. You can think about American Home Shield as our 12-month home warranty contract and front door as our pay-as-you-go model. It is our current assessment that the home warranty category is both undifferentiated and a bit stale, and we strongly believe that we have an opportunity to create new license American Home Shield through a brand relaunch in 2024.

在 3 月的投資者日上，我們制定了 2025 年收入 20 億美元和調整後 EBITDA 至少 3 億美元的目標。我們已經超越了調整後 EBITDA 目標，並且正在極其努力地縮小收入差距從現在到那時的目標。我相信 Frontdoor 是一項極具吸引力的投資。雖然我通常不會評論我們的股價，但我想指出我們目前的估值，這是過去五年來的最低點之一。這確實是 Frontdoor 的一個轉捩點。雖然其中一些是市場驅動的，但我們正在利用這個機會將 2023 年股票回購目標提高到 1.25 億美元。現在轉向投影片 5。我們想要澄清我們的 2 個品牌之間的差異。讓我先說清楚。 American Home Shield 品牌將繼續專注於銷售家庭保修，而 Frontdoor 品牌現在將發展為銷售按需家庭服務。您可以將 American Home Shield 視為我們的 12 個月家庭保固合同，將 Front Door 視為我們的現收現付模式。我們目前的評估是，家庭保固類別既沒有差異化，又有點陳舊，我們堅信我們有機會透過 2024 年品牌重新推出來創建新的授權 American Home Shield。

We want to celebrate what our home warranty can offer. As our consumer research shows there are still millions of homeowners who are naturally inclined to buy our products because they want that financial protection and peace of mind for when home systems and appliances inevitably break. Now moving to Slide 6 and our direct-to-consumer channel. Let me be clear, we are keenly aware of the drop in our customer count as part of a larger category trend, but let me assure you that it is our top priority to turn that around. The current macroeconomic environment has resulted in a pullback in consumer demand for home warranties. In the near term and prior to our rebrand early next year, we will be tactical with our approach. We will continue to utilize our discounting strategy, which is evolving to maximize demand conversion. And in the fourth quarter, we are increasing the actual marketing spend behind our American Home Shield brands to drive brand awareness. In the long term, our strategy is grounded in relaunching the American Home Shield brand to unlock the full potential of home warranties. I strongly believe that the home warranty space continues to offer massive growth opportunities.

我們想要慶祝我們的家庭保固可以提供什麼。正如我們的消費者研究表明，仍有數百萬房主自然傾向於購買我們的產品，因為他們希望在家庭系統和電器不可避免地發生故障時獲得財務保護和安心。現在轉到幻燈片 6 和我們的直接面向消費者的頻道。讓我明確一點，我們敏銳地意識到客戶數量的下降是更大類別趨勢的一部分，但我向您保證，扭轉這一局面是我們的首要任務。目前的宏觀經濟環境導致消費者對房屋保固的需求下降。在短期內和明年初重塑品牌之前，我們將採取策略性的方法。我們將繼續利用我們的折扣策略，該策略不斷發展以最大限度地提高需求轉換。在第四季度，我們將增加 American Home Shield 品牌背後的實際行銷支出，以提高品牌知名度。從長遠來看，我們的策略立足於重新推出 American Home Shield 品牌，以釋放家庭保固的全部潛力。我堅信家庭保固領域將繼續提供巨大的成長機會。

I look forward to providing more specific details on how we plan to capture that demand at our next earnings call. But for now, I know that we will be supporting the brand relaunch with a new marketing campaign. Our goal is to bring some of that front door and marketing magic to American Home Shield. And from the early creative development that I've seen so far, I think we are well on our way to doing that. Now turning to Slide 7 and our real estate channel. The National Association of Realtors, or NAR, recently released housing market statistics for September and the market remains severely challenged. Existing home sales declined 22% through the first 9 months of the year and the full year expectations have declined to just under 4 million homes. As you can see from this chart, that is a substantial decline from the 6 million existing homes sold in 2021 as high mortgage rates and home prices have diminished consumer affordability. At the same time, inventory remains tight. NAR also reported properties remained on the market for just 21 days in September and that all cash sales increased to 29% of transactions, a segment that has generally not been conducive to buying a home warranty. This all adds up to an extremely challenging environment for our real estate channels.

我期待在下一次財報電話會議上提供更多關於我們計劃如何滿足這一需求的具體細節。但就目前而言，我知道我們將透過新的行銷活動來支持品牌的重新推出。我們的目標是為 American Home Shield 帶來一些前門和行銷魔力。從我迄今為止所看到的早期創意發展來看，我認為我們正在順利實現這一目標。現在轉向幻燈片 7 和我們的房地產頻道。全國房地產經紀人協會（NAR）最近發布了 9 月房地產市場統計數據，市場仍面臨嚴峻挑戰。今年前 9 個月，現房銷售下降 22%，全年預期已降至略低於 400 萬套。從這張圖表中可以看出，這比 2021 年售出的 600 萬套現房大幅下降，因為高抵押貸款利率和房價降低了消費者的承受能力。與此同時，庫存依然緊張。 NAR 還報告稱，9 月房產在市場上僅停留了 21 天，所有現金銷售增加到交易的 29%，這一領域通常不利於購買房屋保固。這一切都為我們的房地產通路帶來了極具挑戰性的環境。

Now turning to Slide 8 and the renewal channel. While demand in our DTC and real estate channels remain soft, we continue to be pleasantly surprised by the performance of our renewal channel where our rates remain strong. In the third quarter, our overall retention rate increased 90 basis points to 76.2%. This is especially impressive considering that we are implementing an 11% realized price increase this year. We are building on the impressive work that the renewals team has done, improved onboarding, increased engagement throughout the customer journey and elevating the service experience through greater deployment of our preferred contractors. In short, we continue to take the right actions to sustainably drive higher retention. Now let's turn to Slide 9 of the web deck, where I will go into more detail on the Frontdoor brand monetization strategy. We launched the Frontdoor brand earlier this year as a new growth engine to sell services to a fundamentally different segment of home owners. As I said at our Investor Day, we intentionally launched the brand quickly as a first mover advantage and to learn our way into a new market. What we have found is that the essence of the brand remains strong, which is comprised of app-based customer interactions and the video chat feature with one of our experts.

現在轉向幻燈片 8 和更新頻道。儘管我們的 DTC 和房地產通路的需求仍然疲軟，但我們的續約管道的表現仍然令我們感到驚喜，我們的費率仍然強勁。第三季度，我們的整體保留率增加了 90 個基點，達到 76.2%。考慮到我們今年實現的價格上漲了 11%，這一點尤其令人印象深刻。我們正在續訂團隊所做的令人印象深刻的工作的基礎上，改進入職流程，提高整個客戶旅程的參與度，並透過更多地部署我們的首選承包商來提升服務體驗。簡而言之，我們將繼續採取正確的行動，持續提高留存率。現在讓我們轉向網路平台的幻燈片 9，我將在其中詳細介紹 Frontdoor 品牌的獲利策略。我們在今年稍早推出了 Frontdoor 品牌，作為新的成長引擎，向完全不同的房主群體銷售服務。正如我在投資者日所說，我們有意迅速推出該品牌，作為先發優勢，並學習進入新市場的方法。我們發現，該品牌的本質仍然強大，包括基於應用程式的客戶互動以及與我們的專家進行的視訊聊天功能。

Just 6 months since the launch of Frontdoor, we have over 1.3 million downloads and account registrations have grown to 133,000. But I want to be transparent with you. We went to market with a new version of a home service plan, Frontdoor premium that did not sell the way we thought it would. So we have quickly made the decision to stop selling it. Our offering in the market today is a lower-priced product, only $25 per year with unlimited video chats for consumers to take advantage of the unique user experience with our experts. So that's today. Our strategy in the future is an on-demand offering. I believe this new focus based on our research and the success of our HVAC upgrade program will be a compelling proposition for a much larger group of homeowners who want an a la carte experience. Our value proposition for Frontdoor is based on 2 key components. The first is on-demand access to our network of experts that will allow homeowners to get repairs, maintenance services and upgrades. This is paired with a modern app-based interaction that is anchored by our video chat with a live expert. Membership also includes discounts to appliances and systems as well as how to content. We are still working on the exact products and timing for what the Frontdoor brand will offer in 2024, but we are largely coalescing around 3 main categories: on-demand repairs, main and services and upgrades for home systems and appliances.

Frontdoor 推出僅 6 個月，下載量就超過 130 萬，帳號註冊數已成長至 133,000 個。但我想對你開誠佈公。我們向市場推出了新版本的家庭服務計劃 Frontdoor premium，但銷售情況並不像我們想像的那樣。所以我們很快就做出了停止銷售的決定。我們目前在市場上提供的是價格較低的產品，每年僅需 25 美元，並提供無限的視訊聊天，讓消費者能夠與我們的專家一起享受獨特的用戶體驗。這就是今天。我們未來的策略是按需提供。我相信，基於我們的研究和 HVAC 升級計劃的成功的這一新重點對於更多想要點菜體驗的房主群體來說將是一個令人信服的主張。我們對 Frontdoor 的價值主張是基於兩個關鍵組成部分。第一個是按需存取我們的專家網絡，使房主能夠獲得維修、維護服務和升級。這與基於現代應用程式的交互相結合，該互動以我們與現場專家的視訊聊天為基礎。會員資格還包括設備和系統的折扣以及如何滿足。我們仍在研究 Frontdoor 品牌在 2024 年提供的確切產品和時間安排，但我們主要圍繞 3 個主要類別進行整合：按需維修、主要服務以及家庭系統和電器的升級。

Starting with repairs. On-demand repairs will address a real pain point for consumers when home appliances and systems inevitably break. We are currently building out the booking flow within the front door app, so the consumer and contractor will have a simple and seamless a la carte experience. Second, we will provide on-demand home maintenance for those who want to ensure their home continues to run well. This could be anything from filter replacements to tuning up your HVAC before the season changes. And finally, we will offer on-demand upgrade for when it makes more sense to replace a home system or clients rather than fix it. As validated by the great success we continue to see with our HVAC upgrade program, which was about $20 million of revenue in Q3, trending toward a total of $50 million for 2023. Our value proposition here is to partner with our contractors and share our bulk buying power to provide discounted pricing on new appliances and home systems. This is a win for our customers, contractors and for Frontdoor. We'll provide more details on the Frontdoor brand on our next earnings call, but I believe that we are on to something big to. We know we have great brand awareness, and we now have a clear strategy for monetizing that demand through a suite of paid services we plan on offering next year. In closing, I am thrilled with the turnaround in our financial results, which reinforces my belief in the power of this business and the actions we have been taking. We have demonstrated that we can quickly reestablish our margins through pricing and process improvement initiatives. We continue to take bold and decisive steps that will lay a strong foundation for future growth, and I am very optimistic about where we are heading. I will now turn the call over to Jessica to review our financial results. Jessica?

從維修開始。當家用電器和系統不可避免地出現故障時，按需維修將解決消費者的真正痛點。我們目前正在前門應用程式中建立預訂流程，以便消費者和承包商將獲得簡單、無縫的點菜體驗。其次，我們將為那些希望確保其房屋繼續良好運作的人提供按需房屋維護。這可以是任何事情，從更換過濾器到在季節變化之前調整暖通空調。最後，當更換家庭系統或客戶端比修復它更有意義時，我們將提供按需升級。正如我們繼續看到HVAC 升級計劃所取得的巨大成功所證實的那樣，該計劃在第三季度的收入約為2000 萬美元，到2023 年總收入將達到5000 萬美元。我們的價值主張是與承包商合作並分享我們大部分的收入購買力為新電器和家庭系統提供折扣價格。這對我們的客戶、承包商和 Frontdoor 來說都是一場勝利。我們將在下次財報電話會議上提供有關 Frontdoor 品牌的更多詳細信息，但我相信我們正在做一些大事。我們知道我們擁有很高的品牌知名度，現在我們有一個明確的策略，透過我們計劃明年提供的一套付費服務來將這種需求貨幣化。最後，我對我們財務表現的改善感到非常興奮，這增強了我對這項業務的力量以及我們一直在採取的行動的信心。我們已經證明，我們可以透過定價和流程改善措施快速重建利潤。我們繼續採取大膽而果斷的步驟，為未來的成長奠定堅實的基礎，我對我們的發展方向非常樂觀。我現在將把電話轉給傑西卡，以審查我們的財務表現。傑西卡？

Thanks, Phil, and good morning, everyone. As Bill just mentioned, we are extremely pleased with our strong third quarter financial performance. Our prior pricing actions continue to flow through, inflation is moderating, and we are seeing a greater financial benefit from our comprehensive cost management efforts. Now turning to Slide 10, where third quarter revenue increased 8% versus the prior year period to $524 million. This was driven by a 10% increase in price, which more than offset a 2% decline in volumes. Looking at revenue in more detail on Slide 11. Third quarter revenue from our renewal channel increased 14% as a result of our prior pricing actions flowing through. Real estate revenue decreased 23% and direct-to-consumer revenue decreased 16% as a result of lower volume. Other revenue increased $11 million, driven by our growing on-demand home services business, primarily our HVAC upgrade program. Now let's turn to Slide 12. Gross profit for the quarter increased $57 million to $268 million, and our gross margin increased 760 basis points to 51%. This improvement was driven by higher realized price, continued process improvement initiatives, favorable cost development, a transition to higher service fees and a lower number of service requests per customer that was partly offset by inflationary cost pressure.

謝謝菲爾，大家早安。正如比爾剛才所提到的，我們對第三季強勁的財務表現感到非常滿意。我們先前的定價行動持續進行，通貨膨脹正在緩和，我們看到我們全面的成本管理工作帶來了更大的財務效益。現在轉向投影片 10，其中第三季營收較上年同期成長 8%，達到 5.24 億美元。這是由於價格上漲 10%，抵消了銷量下降 2% 的影響。請參閱投影片 11 以更詳細地查看收入。由於我們先前的定價行動，我們續訂管道的第三季營收成長了 14%。由於銷售量下降，房地產收入下降 23%，直接面向消費者的收入下降 16%。由於我們不斷成長的按需家庭服務業務（主要是我們的 HVAC 升級計劃），其他收入增加了 1,100 萬美元。現在讓我們轉向投影片 12。該季度的毛利增加了 5,700 萬美元，達到 2.68 億美元，毛利率增加了 760 個基點，達到 51%。這項改善是由更高的實現價格、持續的流程改善措施、有利的成本開發、向更高的服務費過渡以及每個客戶的服務請求數量減少所推動的，而通貨膨脹的成本壓力部分抵消了這一點。

On Slide 13, you'll see that our higher gross margin largely flowed through to net income, which increased $43 million to $71 million, and adjusted EBITDA improved $48 million to an all-time high of $128 million. Let's now move to the table on Slide 14, and I'll provide more context for the year-over-year improvement in third quarter adjusted EBITDA. Starting at the top, we had $37 million of favorable revenue conversion, primarily driven by our pricing initiatives, partly offset by the decline from lower volume. Contract bank costs decreased $22 million compared to the third quarter of 2022. Our team has been working hard to advance a host of process improvement initiatives in response to the macroeconomic challenges we experienced throughout last year. I am very pleased to report that we are seeing increased traction from these initiatives, which led to a greater financial impact on our third quarter results. The improvement in our contract paying costs versus the prior year period was primarily driven by 4 factors. First, we saw a greater financial impact from our collective process improvement initiatives, specifically better cost management across our contractor network. Two examples include a new high-cost claims review process implemented last year that worked extremely well during our peak summer season, and our continued efforts to increase our percent of preferred contractor deployment, specifically in our appliance and plumbing trades that drove meaningful cost improvement.

在幻燈片13 上，您會看到我們更高的毛利率主要轉化為淨利潤，淨利潤增加了4300 萬美元，達到7100 萬美元，調整後的EBITDA 增加了4800 萬美元，達到1.28 億美元的歷史新高。現在讓我們轉到投影片 14 上的表格，我將提供有關第三季調整後 EBITDA 同比改善的更多背景資訊。從頂部開始，我們獲得了 3700 萬美元的有利收入轉化，這主要是由我們的定價舉措推動的，但部分被銷售下降帶來的下降所抵消。與 2022 年第三季相比，合約銀行成本減少了 2,200 萬美元。我們的團隊一直在努力推進一系列流程改進舉措，以應對我們去年經歷的宏觀經濟挑戰。我很高興地報告，我們看到這些舉措的吸引力越來越大，這對我們第三季的業績產生了更大的財務影響。與去年同期相比，我們的合約支付成本有所改善，主要由四個因素推動。首先，我們看到集體流程改善措施產生了更大的財務影響，特別是整個承包商網路更好的成本管理。兩個例子包括去年實施的新的高成本索賠審查流程，該流程在我們的夏季旺季期間效果非常好，以及我們不斷努力增加首選承包商部署的百分比，特別是在我們的電器和管道行業，這推動了有意義的成本改善。

Second, we had favorable claims cost development of $9 million in the third quarter compared to a $2 million favorable adjustment in the third quarter of 2022. As a reminder, last year, we had a large favorable development in the fourth quarter that included $18 million related to the prior third quarter same cost. Third, we have been transitioning to higher service fees, which benefits our gross margin. And finally, we had a slightly lower number of service requests per customer in the third quarter, primarily in the appliance and plumbing trades. These benefits helped to more than offset ongoing inflationary cost pressures. After removing the positive impact of claims cost development, we saw inflation of about 4% in the third quarter versus the prior year period, well below what we have seen over the past year. Now getting back to the table on Slide 14 and our sales and marketing costs, which increased $10 million over the prior year period due to higher marketing spend for the Frontdoor brand. General and administrative costs increased $4 million, primarily due to increased personnel costs. And interest and net investment income increased $4 million as a result of rising interest rates on cash deposits.

其次，我們第三季的有利索賠成本發展為900 萬美元，而2022 年第三季的有利調整為200 萬美元。提醒一下，去年，我們在第四季度取得了巨大的有利進展，其中包括1800萬美元與前第三季的成本相同。第三，我們一直在轉向更高的服務費，這有利於我們的毛利率。最後，第三季每位客戶的服務請求數量略有減少，主要是在電器和管道行業。這些好處不僅抵消了持續的通膨成本壓力。在消除索賠成本發展的正面影響後，我們看到第三季的通膨率與去年同期相比約為 4%，遠低於去年的水平。現在回到投影片 14 的表格以及我們的銷售和行銷成本，由於 Frontdoor 品牌的行銷支出增加，我們的銷售和行銷成本比前一年增加了 1000 萬美元。一般和行政費用增加了 400 萬美元，主要是因為人員費用增加。由於現金存款利率上升，利息和淨投資收入增加了 400 萬美元。

Before we leave this slide, I would like to take a moment to go into more detail on why we beat our third quarter adjusted EBITDA outlook by approximately $45 million. Bill and I have consistently said that we have taken a more conservative posture in our guidance given that we are still emerging from an extremely high inflationary environment. That being said, we have been pleasantly surprised by the traction we are seeing from our cost reduction initiatives implemented over the past year. We are also seeing unexpected favorability in our renewals, weather and cost inflation compared to our expectations. For example, our third quarter outlook incorporated a much larger impact from hot weather, which did not play out the way we thought it would. Now let me provide more color as to why our actual results were favorable to our outlook, which is mainly from 3 areas. The largest driver of our beat was $30 million from lower claims cost, which includes $9 million of favorable claims cost development. The remaining portion is a result of the (inaudible) impact of our process improvement initiatives. Our has been working very hard cross-functionally to improve business operations over the past year, and I am extremely pleased to see the manifestation of this work that really holds in the third and fourth quarter.

在結束這張投影片之前，我想花點時間更詳細地解釋為什麼我們比第三季調整後 EBITDA 預期高出約 4500 萬美元。比爾和我一直表示，鑑於我們仍在擺脫極高的通膨環境，我們在指導中採取了更保守的立場。話雖如此，我們對過去一年實施的成本削減措施所帶來的吸引力感到驚訝。與我們的預期相比，我們還看到續約、天氣和成本通膨方面出乎意料的有利。例如，我們的第三季展望納入了炎熱天氣的更大影響，但其結果並沒有像我們想像的那樣。現在讓我提供更多資訊來解釋為什麼我們的實際結果對我們的前景有利，這主要來自三個方面。我們的勝利的最大推動力是索賠成本降低的 3,000 萬美元，其中包括 900 萬美元的優惠索賠成本開發。其餘部分則是我們流程改善計畫（聽不清楚）影響的結果。在過去的一年裡，我們一直在跨職能部門努力改善業務運營，我非常高興看到這項工作在第三和第四季度真正發揮作用。

Second, we have about 5 to 10 miles from higher-than-expected revenue conversion, primarily through beta renewal. Third, our Stinger favorable across several areas, which was due to timing. Let's now turn to Slide 15 for a review of our statement of cash flow. Net cash provided from operating activities was $139 million for the 9 months ended September 30. Net cash used for investing activities was $23 million for the first 9 months of the year and was primarily comprised of capital expenditures related to investments in technology. Net cash used for financing activities was $88 million through September and was comprised of share repurchases and scheduled debt payments. On Slide 16, you will see that our free cash flow was $116 million for the 9 months ended September 30. We ended the third quarter with $320 million in cash. This was comprised of $152 million of restricted net assets and unrestricted cash of $167 million. Keep in mind that this is after returning $75 million year-to-date to our valued investors through share repurchases. Before I get to our outlook, I'd like to take a moment to touch on our capital allocation strategy. We remain focused on growth, and we will continue to prioritize investments to expand revenue, both organic and through M&A.

其次，我們距離高於預期的收入轉換還有大約 5 到 10 英里，主要是透過 Beta 續約實現的。第三，我們的 Stinger 在多個領域都表現良好，這是由於時機的原因。現在讓我們轉向投影片 15 來回顧我們的現金流量表。截至 9 月 30 日的 9 個月，經營活動提供的現金淨額為 1.39 億美元。今年前 9 個月，用於投資活動的淨現金為 2,300 萬美元，主要包括與技術投資相關的資本支出。截至 9 月份，用於融資活動的淨現金為 8,800 萬美元，包括股票回購和預定債務支付。在幻燈片 16 上，您將看到截至 9 月 30 日的 9 個月我們的自由現金流為 1.16 億美元。第三季末我們的現金為 3.2 億美元。其中包括 1.52 億美元的限制性淨資產和 1.67 億美元的非限制性現金。請記住，這是在今年迄今透過股票回購向我們尊貴的投資者返還 7,500 萬美元之後的結果。在闡述我們的前景之前，我想花點時間談談我們的資本配置策略。我們仍然專注於成長，並將繼續優先投資以擴大收入，包括有機收入和併購收入。

Our second objective is to ensure we have a solid financial profile, which includes maintaining appropriate levels of liquidity to run the business and a prudent long-term debt structure. We currently have very modest levels of debt, and we have an extremely strong net leverage ratio of 1.3x as of September 30. And finally, our third objective is to return cash to shareholders. Let me be clear, absent any acquisition, we will continue to return substantially all of our excess cash to shareholders. This business is performing very well, and we are pleased to be stepping up our full year share repurchase target to $125 million, which amounts to buying back approximately 5% of our outstanding shares in 2023. Now turning to Slide 18 and our fourth quarter and full year 2023 outlook. We expect our fourth quarter revenue to be between $350 million and $360 million, which reflects renewal revenue up 12%, real estate revenue down 20%, DTC revenue down 16% and other revenue up $4 million to $16 million. Fourth quarter adjusted EBITDA is expected to range between $20 million and $30 million. This is in line with the fourth quarter of 2022, which included $25 million in favorable claims cost development. Now when comparing to the third quarter, it is important to note that our fourth quarter outlook also takes into account a significant impact from seasonality relating to our revenue and cost.

我們的第二個目標是確保我們擁有穩健的財務狀況，其中包括維持業務營運所需的適當流動性水準和審慎的長期債務結構。我們目前的債務水準非常溫和，截至 9 月 30 日，我們的淨槓桿率為 1.3 倍。最後，我們的第三個目標是將現金回饋給股東。讓我明確一點，如果沒有任何收購，我們將繼續將大部分多餘現金回饋給股東。這項業務表現非常好，我們很高興將全年股票回購目標提高到 1.25 億美元，相當於在 2023 年回購我們流通股的約 5%。現在轉向幻燈片 18 和我們的第四季和2023 年全年展望。我們預計第四季的營收將在 3.5 億至 3.6 億美元之間，其中續訂收入成長 12%，房地產收入下降 20%，DTC 營收下降 16%，其他營收成長 400 萬至 1,600 萬美元。第四季調整後 EBITDA 預計在 2,000 萬美元至 3,000 萬美元之間。這與 2022 年第四季的情況一致，其中包括 2500 萬美元的有利索賠成本開發。現在，與第三季相比，值得注意的是，我們第四季的展望也考慮了季節性對我們收入和成本的重大影響。

Specifically, we expect a lower contribution from our HVAC upgrade program as well as a lower benefit relating to our cost reduction initiatives as the fourth quarter typically has a lower number of service requests. Now turning to our full year outlook, where we are increasing our 2022 revenue range to $1.765 billion to $1.775 billion or an approximately 7% increase over 2022. This revenue range anticipates a nearly 15% increase in the renewal channel, a mid-20% decline in the real estate channel and a low double-digit decline in the DTC channel. It also assumes other revenue will increase to approximately $70 million as a result of growing on-demand services. We continue to expect approximately 11% growth from higher price, which will more than offset a 4% decline from lower volumes. We also expect our number of home service plans to decline in the mid- to upper single digits in 2023. As a result, we continue to target ending the year with approximately 2 million home service plans. This includes about 460,000 first-year customers across the BTC and real estate channels. We are increasing our full year gross profit margin outlook to be between 48% and 49.5%. This also assumes that inflation will be around 4% to 5% on a net cost per service request basis, and the number of customer service requests will decline 10% to approximately $4 million.

具體來說，我們預計暖通空調升級計畫的貢獻將會降低，與我們的成本削減計畫相關的收益也會降低，因為第四季度的服務請求數量通常較少。現在轉向我們的全年展望，我們將2022 年的收入範圍提高到17.65 億美元至17.75 億美元，比2022 年增長約7%。這一收入範圍預計續約管道將增長近15%，中間增長20 %房地產通路下降，DTC 通路下降兩位數。它還假設由於按需服務的成長，其他收入將增加到約 7000 萬美元。我們繼續預計價格上漲帶來約 11% 的成長，這將足以抵消銷售下降帶來的 4% 的下降。我們也預計到 2023 年，我們的家庭服務計畫數量將下降至個位數中上。因此，我們繼續目標是到年底擁有約 200 萬個家庭服務計畫。其中包括 BTC 和房地產通路的約 46 萬名第一年客戶。我們將全年毛利率預期提高至 48% 至 49.5%。這也假設每個服務請求的淨成本上漲約 4% 至 5%，且客戶服務請求的數量將下降 10% 至約 400 萬美元。

Our full year SG&A target is between $580 million and $590 million and includes $40 million of working marketing spend related to the Frontdoor brand. This also includes a further increase in our marketing investment for the American Home Shield brand, which is now slightly higher than 2022. Based on these updated inputs, we are raising our full year adjusted EBITDA range by $55 million to be between $320 million and $330 million. To put that in perspective, this is about a 50% increase over our 2022 results. Our full year outlook also includes $16 million of interest income and reflects stock compensation expense of approximately $28 million. And finally, we expect our full year capital expenditures to be approximately $35 million and the annual effective tax rate to be approximately 25%. Per our normal practice, we will provide a more detailed 2024 outlook on our next earnings call. But before I close, I wanted to discuss a few major themes heading into next year. On the revenue front, we are still determining where we want to take price. However, we are targeting a more modest level of realized price in 2024 as we are mostly focused on increasing our customer count and because inflation expectations have moderated.

我們的全年 SG&A 目標為 5.8 億至 5.9 億美元，其中包括與 Frontdoor 品牌相關的 4,000 萬美元工作行銷支出。這也包括進一步增加我們對American Home Shield 品牌的行銷投資，目前該投資略高於2022 年。根據這些更新的投入，我們將全年調整後EBITDA 範圍提高5,500 萬美元，達到3.2 億美元至330 美元之間百萬。從長遠來看，這比我們 2022 年的業績成長了約 50%。我們的全年展望還包括 1,600 萬美元的利息收入，並反映了約 2,800 萬美元的股票補償費用。最後，我們預計全年資本支出約為 3,500 萬美元，年度有效稅率約為 25%。按照我們的慣例，我們將在下一次財報電話會議上提供更詳細的 2024 年展望。但在結束之前，我想討論明年的幾個主要主題。在收入方面，我們仍在確定我們想要的價格。然而，我們的目標是 2024 年實現更溫和的價格水平，因為我們主要專注於增加客戶數量，而且通膨預期已經放緩。

Additionally, we will continue to be smart about how we implement our pricing strategy, using our dynamic pricing model to minimize customer churn. Even without more price increases, the momentum from our prior pricing actions will result in a low to mid-single-digit realized price increase next year. Our customer count will obviously depend on the relaunch of American Home Shield and how successful our on-demand strategy plays out for the Frontdoor brand. So stay tuned for more details here. Turning to gross margin. We have come off some massive swings, down over 600 basis points in 2022 and now projected to be up 600 basis points in 2023. Our gross margins are starting to stabilize, and we are really at an inflection point for this business. With that in mind, we don't expect to see that level of volatility again in 2024. While there are some factors in 2023 that will likely not repeat next year, such as our larger realized price increase and favorable weather trends, we have other levers that are working to protect margin as we head into 2024. These include the benefit of higher service fees, the continued impact of our process improvement initiatives and similar levels of cost inflation. I will point out that our gross margins going forward are also subject to our product mix, meaning how much revenue will be derived from the new front door brands and our on-demand products.

此外，我們將繼續明智地實施我們的定價策略，使用我們的動態定價模式來最大限度地減少客戶流失。即使沒有更多的價格上漲，我們先前的定價行動的勢頭也將導致明年實現低至中個位數的價格上漲。我們的客戶數量顯然將取決於 American Home Shield 的重新推出以及我們的按需策略對 Frontdoor 品牌的成功程度。因此，請繼續關注此處以了解更多詳細資訊。轉向毛利率。我們已經擺脫了一些巨大的波動，2022 年下降了 600 多個基點，現在預計 2023 年將上升 600 個基點。我們的毛利率開始穩定，我們確實正處於這項業務的拐點。考慮到這一點，我們預計2024 年不會再次出現這種波動水平。雖然2023 年的一些因素可能不會在明年再次出現，例如我們實現的價格漲幅更大和有利的天氣趨勢，但我們還有其他因素進入 2024 年，我們將採取多種措施來保護利潤。其中包括更高服務費的好處、我們流程改進舉措的持續影響以及類似水平的成本通膨。我要指出的是，我們未來的毛利率也取決於我們的產品組合，這意味著有多少收入將從新的前門品牌和我們的按需產品中獲得。

Finally, our SG&A levels depend on where our total marketing budget ends versus this year. We are still working through exact numbers, but we expect that it will be more of a mix shift between brands than a more dramatic increase or decrease in our total spend. I hope that is helpful context and again, we are currently finalizing our strategic plan, and we'll share more details with you next quarter. In conclusion, we delivered extremely strong third quarter financial results. We continue to work hard on building a strong foundation for the future, and we remain very excited about where this business is heading as we look forward to 2024. I will now turn it over back over to Matt.

最後，我們的 SG&A 水平取決於我們的總行銷預算與今年相比的結束情況。我們仍在計算確切的數字，但我們預計這將更多是品牌之間的混合轉變，而不是我們總支出的大幅增加或減少。我希望這是一個有幫助的背景，我們目前正在敲定我們的戰略計劃，我們將在下個季度與您分享更多細節。總之，我們取得了極為強勁的第三季財務業績。我們將繼續努力為未來打下堅實的基礎，展望 2024 年，我們對這項業務的發展方向仍然感到非常興奮。我現在將把它轉回給 Matt。

Thanks, Jessica. I would just like to point out that we're experiencing a bit of a delay on our phone call. So please bear with us during the Q&A process as there might be a bit of delay between questions and answers. Operator, let's now open up the line for questions.

謝謝，傑西卡。我只想指出，我們的電話通話有點延遲。因此，請在問答過程中耐心等待，因為問題和答案之間可能會有一些延遲。接線員，現在讓我們開放提問線路。

[Operator's Instructions)

[操作者須知]

Our first question today comes from the line of Mark Hughes from Truist.

我們今天的第一個問題來自 Truist 的 Mark Hughes。

I think last quarter, you talked about shifting a little bit of marketing spend, I think it was $20 million between the direct-to-consumer channel. Did that flow through in the quarter? Or is there a lag perhaps on the likely impact on new business?

我想上個季度，您談到了轉移一點行銷支出，我認為直接面向消費者的管道之間有 2000 萬美元的支出。這個季度有沒有流過？或對新業務的可能影響是否有滯後？

Yes, Mark, thanks for the question. There is a lag by the time we got that into market, and we have also upped our spend to Q4. So overall, our spend on American Home Shield, which as we -- earlier in the year, we thought would be down versus last year is actually going to be up. So we're trying to fuel some growth as we head into the relaunch early next year. But as I said in the script, we're going to be very tactical right now. We're still going to continue to use discounting. We are trying to put some more marketing spend behind what we call the good bad campaign. But all roads are going to lead to the relaunch next year with a new marketing campaign, a new look. And really, we've got to get back to selling the virtues, if you will, of a home warranty, and that's what we plan to do.

是的，馬克，謝謝你的提問。我們將其推向市場的時間存在滯後，而且我們也將支出增加到了第四季度。因此，總體而言，我們在美國家庭盾的支出，今年早些時候，我們認為與去年相比會有所下降，但實際上會增加。因此，在明年初重新啟動時，我們正在努力推動一些成長。但正如我在劇本中所說，我們現在將採取非常戰術的策略。我們仍將繼續使用折扣。我們正試圖在我們所謂的「好壞」活動中投入更多的行銷支出。但所有的道路都將通往明年的重新啟動，新的行銷活動、新的面貌。事實上，如果你願意的話，我們必須重新開始推銷家庭保固的優點，而這就是我們計劃要做的。

Our next question today comes from the line of Sergio Segura from KeyBanc.

今天我們的下一個問題來自 KeyBanc 的 Sergio Segura。

Congratulations on the very strong quarter. Two questions. So 2023 was largely driven by price. Wondering how we should think about the mix of planned growth versus pricing growth going forward? It sounds like it should be more balanced into the future? And then on gross margins, congratulations on the beat despite a historically hot summer, can you talk about work you guys done to mitigate the impact of weather? And I guess, should we expect less volatility tied to weather on gross margin going forward?

祝賀這個非常強勁的季度。兩個問題。因此，2023 年主要是由價格驅動的。想知道我們應該如何考慮計劃成長與未來定價成長的組合？聽起來未來應該要更平衡？然後在毛利率方面，儘管經歷了歷史上炎熱的夏季，但祝賀您取得了成功，您能談談您為減輕天氣影響所做的工作嗎？我想，我們是否應該預期未來毛利率與天氣相關的波動會減少？

First of all, congratulations to you on your promotion. So great to hear from you. I'll take the first question, and then we'll give the second one to Jessica, I'll take the pricing question. The answer is yes, you are correct. It will be more balanced. When we look back at our pricing strategy, in 2022, we're probably a little late. And with the $100 million in cost increases we had last year, we had to price aggressively. Inflation has moderated, as you saw. So that is coming down. It's flowing through. So we will have a more balanced approach. We have not nailed down, as Jessica said, our exact pricing strategy for 2024 as of yet. We're still working on that. But it will not be clearly at the levels that we have this year. So we'll have more to say on that in the Q4 earnings. So gross margin, I'll turn it over to Jessica.

首先，恭喜您獲得晉升。很高興收到你的來信。我將回答第一個問題，然後我們將第二個問題交給傑西卡，我將回答定價問題。答案是肯定的，你是對的。會更加平衡。當我們回顧 2022 年的定價策略時，我們可能有點晚了。由於去年我們的成本增加了 1 億美元，我們不得不大幅定價。正如您所看到的，通貨膨脹已經放緩。所以這正在下降。它正在流過。因此，我們將採取更平衡的方法。正如 Jessica 所說，我們尚未確定 2024 年的確切定價策略。我們仍在努力。但顯然不會達到今年的水準。因此，我們將在第四季度的收益中對此進行更多討論。那麼毛利率，我會把它交給潔西卡。

Yes, just in terms of margins, we talked a lot last quarter about things falling our way, and margins really being driven by a lot of that weather favorability that we saw. I think as we're thinking about this quarter, we're really just super excited that this is the business just performing to get better. Bill came in a year ago and really focused the team on execution, our teams across the board have been focused on process improvements. And it's not just been one silver bullet. I mean it's been everything, every function. And what we really saw this quarter is the manifestation of in our results. And if we talked about various things like the high-cost names review that was implemented last year, but it was really during this peak season that we really saw that come to life, and we saw the benefits of that. And so as we think about going forward, we're seeing these external factors normalize -- but we're also seeing kind of the results of the hard work that our business has been doing, really manifesting and coming to life, and we expect that to continue in our margins as we look to Q4 and beyond.

是的，就利潤率而言，我們上個季度談論了很多關於我們遇到的事情，而利潤率確實是由我們看到的許多天氣有利因素驅動的。我認為，當我們考慮本季時，我們真的非常興奮，因為這是一項正在變得更好的業務。比爾一年前加入，真正讓團隊專注執行，我們整個團隊都專注於流程改善。這不只是一顆靈丹妙藥。我的意思是它涵蓋了一切、每項功能。本季我們真正看到的是我們業績的體現。如果我們談論各種事情，例如去年實施的高成本名稱審查，但實際上是在這個旺季期間，我們真正看到了它的實現，我們看到了它的好處。因此，當我們思考未來時，我們看到這些外部因素正在正常化，但我們也看到了我們的業務一直在努力工作的結果，真正體現並實現了，我們期望展望第四季度及以後，我們的利潤率將繼續保持這一水平。

Thank you. The next question today comes from the line of Brian Fitzgerald from Wells Fargo.

謝謝。今天的下一個問題來自富國銀行的布萊恩‧費茲傑拉 (Brian Fitzgerald)。

A couple of quick questions. A follow-up on the price increases. Can you talk about the phasing? Is that a steady tailwind as we meter through 24? Does it Crescendo at some point? And then the second question was just on the debt ratio. I think Jessica, you mentioned 1.3x. Do you have a bogey or a target you'd like to keep that at?

幾個簡單的問題。價格上漲的後續行動。能談談階段性嗎？當我們經過 24 公尺時，這是一個穩定的順風嗎？它會在某個時刻漸強嗎？第二個問題是關於負債比率。我想傑西卡，你提到了 1.3 倍。你有想要維持的柏忌或目標嗎？

I can take both just on pricing. As you know, it takes about 12 to 18 months for our pricing actions to flow through. And we took some really aggressive pricing actions in 2022. Even with those, we're expecting about single mid-single-digit price increase flowing into 2024 from those actions. So as we're thinking about next year, it is really us being focused on unit growth versus leveraging any additional significant pricing increases. But again, we are finalizing our strategic plan, and we'll come back to you with more on that on 2024. From a debt leverage ratio perspective, we really try to keep that between 1 and 2x. So we're feeling really good about where we're sitting right now, but it's something we continue to keep our eyes on.

我可以僅在定價上兩者兼得。如您所知，我們的定價行動大約需要 12 至 18 個月才能完成。我們在 2022 年採取了一些非常激進的定價行動。即便如此，我們預計這些行動將在 2024 年帶來中位數的價格上漲。因此，當我們考慮明年時，我們實際上專注於銷售成長，而不是利用任何額外的大幅價格上漲。但我們正在敲定我們的策略計劃，我們將在 2024 年向您提供更多相關資訊。從債務槓桿率的角度來看，我們確實努力將其保持在 1 到 2 倍之間。因此，我們對現在所處的位置感覺非常好，但這是我們繼續關注的事情。

The next question today comes from the line of Ian Zaffino from Oppenheimer.

今天的下一個問題來自奧本海默的伊恩·扎菲諾 (Ian Zaffino)。

I'd love to hear a little bit more about AHS and kind of the marketing or the relaunch you plan to do. I know there was basically seeing a lot more ads on AHS in particular. So what's going to change as you go into next year and relaunched the brand. And then just if I could squeeze in one more on the Frontdoor side. How are you thinking about either breakeven points or losses or profitability of that? And what I mean by that is you're adjusting prices, you kind of dropped the premium model. You're now working on that roughly $2 a month plan. What do you actually need there as far as profitability or breakeven, et cetera.

我很想了解更多有關 AHS 的資訊以及您計劃進行的營銷或重新啟動的情況。我知道基本上在 AHS 上看到了更多的廣告。那麼，當你進入明年並重新推出品牌時，會發生什麼變化。如果我能在前門一側再擠進一個就好了。您如何看待損益平衡點、損失或獲利能力？我的意思是你正在調整價格，你放棄了高端型號。您現在正在執行每月約 2 美元的計劃。就獲利能力或損益平衡點而言，您實際上需要什麼？

Let me take both of those, and then Jessica may add something on the front of our piece. Let's start with AHS. I think that we've talked about the category softness. And I think that some of the sticker shock from the price increases that all of us had to take around this area have hurt the overall demand, plus real estate is just, as we said, in a severe decline. And real estate will work itself out. So that will be part of the comeback whenever that occurs. We keep thinking the bottom this year, but it keeps dipping. The other piece is, a new message, and I said in the script, we want to, if you will, celebrate home warranty. So I don't think we, as a brand, have done a good job of really getting back to the essence of why home warranty, the financial protection, the peace of mind that it brings -- I don't think we've done a good enough job there. And so our marketing team is working on remessaging -- at the same time, as I said, we're running -- we like the good bad approach. I think it's a fresh new approach.

讓我把這兩個都拿走，然後傑西卡可能會在我們作品的前面添加一些東西。讓我們從 AHS 開始。我認為我們已經討論了品類的柔軟度。我認為，我們所有人都必須在這一領域承受的價格上漲所帶來的一些價格衝擊損害了整體需求，而且正如我們所說，房地產正在嚴重下滑。房地產將會自行解決。因此，無論何時發生，這都將是捲土重來的一部分。我們一直在思考今年的底部，但它一直在下降。另一條是一條新訊息，我在劇本中說，如果你願意的話，我們想慶祝家庭保固。因此，我認為，作為一個品牌，我們並沒有很好地真正回到家庭保固、財務保護以及它所帶來的安心的本質上——我認為我們還沒有做到這一點。那裡做得足夠好。因此，我們的行銷團隊正在致力於重新傳遞訊息——同時，正如我所說，我們正在運作——我們喜歡好的壞的方法。我認為這是一種全新的方法。

So I think it's going to be a better focus on marketing, a more impactful marketing approach, coupled with people rediscovering the category and pricing slowing down, if you will. On the front door piece, I think what I've been happy about, we talked about the consumer response, et cetera. I'm disappointed, and that's on me that the premium piece that we tried to come in with a second home service plan. We've got a good home service plan on American Home Shield. We really want to zero in on this larger segment, the 42 million people that we talked about at Investor Day 42 million households, rather. The whole on-demand piece, you heard us reference pay as you go or a la carte -- we think that there's really a market for people who don't want to get locked into a contract, they want to a paper or a pair or upgrade their system on a onetime basis. And that's really what we're going to zero in on.

因此，我認為這將是一個更好的關注行銷，一個更有影響力的行銷方法，加上人們重新發現這個類別和定價放緩，如果你願意的話。在前門部分，我認為我感到高興的是，我們討論了消費者的反應等等。我很失望，這就是我們試圖透過第二個家庭服務計劃提供的優質產品。我們在美國家庭盾上有一個很好的家庭服務計劃。我們確實希望將這個更大的細分市場歸零，即我們在投資者日談論的 4,200 萬家庭，而不是 4,200 萬家庭。整個點播作品，你聽到我們參考即付即付或點菜——我們認為對於那些不想被合約束縛的人來說，確實有一個市場，他們想要一張紙或一雙紙或一次性升級他們的系統。這確實是我們要歸零的事。

So for now, we're really trying to engage with not making money at $25 with unlimited chats, but we think it's a good lead into the brand. It's certainly the unique user experience with our experts. We are really proud of and we think it's going to enhance the brand long term. So still working on the specifics of the -- as we bring the booking app in the booking engine into the app and the like. So we've got -- we're very excited about the strategy. But as Jessica said, we've got to bring the execution level to the same level that we've had across the company.

因此，目前，我們確實在努力解決不以 25 美元的價格透過無限聊天賺錢的問題，但我們認為這是進入該品牌的一個很好的機會。這當然是我們專家的獨特使用者體驗。我們對此感到非常自豪，我們認為這將長期提升我們的品牌。因此，我們仍在研究具體細節，因為我們將預訂引擎中的預訂應用程式引入應用程式等。所以我們對這個策略感到非常興奮。但正如傑西卡所說，我們必須將執行水準提高到整個公司的同一水平。

And I'm glad you asked both questions, AHS and Frontdoor because as we think about growing this business and long-term profitability, it really is about both brands. We are very pleased and thrilled with how our margins have rebounded so quickly. And we're really excited about -- especially like a lot of that has been our core. But as we're thinking about the future and really growing this business, it's going to be about being innovative, it's going to be launching new products and offerings and going after more customers, which is really about front door. I think the margin profile of that product is going to be very different, I think, from a home and on-demand services perspective. And so if we're thinking about that longer-term profitability mix, -- it's really, again, like I said earlier, are going to depend on what that is coming from Frontdoor. But we're excited about both. We're excited about where our margins are right now and what that's going to look like going forward.

我很高興您問了 AHS 和 Frontdoor 這兩個問題，因為當我們考慮發展這項業務和長期盈利能力時，這確實與這兩個品牌有關。我們的利潤如此迅速地反彈，我們感到非常高興和興奮。我們真的很興奮——尤其是其中很多都是我們的核心。但當我們思考未來並真正發展這項業務時，這將是創新，將推出新產品和服務並吸引更多客戶，這實際上是關於前門的。我認為，從家庭和按需服務的角度來看，該產品的利潤狀況將會非常不同。因此，如果我們考慮長期盈利能力組合，那麼就像我之前所說的那樣，這確實將取決於 Frontdoor 的表現。但我們對兩者都感到興奮。我們對目前的利潤率以及未來的利潤率感到興奮。

The next question today from Cory Carpenter from JPMorgan.

今天的下一個問題來自摩根大通的科里·卡彭特。

This is Danny Pfeiffer on for Cory Carpenter, I just have 2 quick ones. On the claims cost inflation, can you maybe unpack that 4% in 3Q and talk about what components are being stickiest there? And then the second one, on the success in on-demand services outside of HVAC, are there any other categories or services to call out you're seeing success in most excited for from a revenue opportunity perspective.

這是科里·卡彭特 (Cory Carpenter) 的丹尼·法伊弗 (Danny Pfeiffer)，我只有 2 個快速的。關於索賠成本通膨，您能否解開第三季的 4% 並討論哪些組成部分最具有黏性？然後第二個問題是，關於暖通空調以外的按需服務的成功，從收入機會的角度來看，是否有任何其他類別或服務可以讓您看到最興奮的成功。

So just from a claims cost perspective, yes, we have been forecasting right 9% compared to the 4% that we're seeing this quarter. I think a couple of things I just want to -- a concept that I just want to put out there. One, there's a lot of concepts in this business that operate on a delayed fees, right? We talk about our pricing actions claim cost development and some of that is what you've seen this year just in terms of how we've seen inflation or deflation manifest into our results. We've talked also about in terms of as you think about Frontdoor cost inflation really it being comprised of 3 buckets. The contractor-related parts and equipment and additionally, some of the impact that we're seeing on regulatory changes. I think right now, what we're seeing from inflation is it's really comprised or heavily driven by 2 buckets, the contractor related costs in the parts and equipment. And that's probably equally balanced between the 2 of those, which are really trending closer to CPI right now at this 4%.

因此，僅從索賠成本的角度來看，我們的預測是正確的 9%，而本季的預測為 4%。我想有幾件事我只想──一個我只想在那裡提出的概念。第一，這個行業有很多概念都是按延遲收費運作的，對吧？我們談論我們的定價行動索賠成本發展，其中一些是您今年所看到的，只是我們如何看到通貨膨脹或通貨緊縮體現在我們的結果中。我們還討論了 Frontdoor 成本通膨，它實際上由 3 個部分組成。與承包商相關的零件和設備，以及我們看到的一些監管變化的影響。我認為現在，我們從通貨膨脹中看到的是，它實際上由兩個部分組成或很大程度上驅動，即與承包商相關的零件和設備成本。這兩者之間可能是同等平衡的，目前這兩者確實更接近 CPI，為 4%。

Yes. With regard to other services to your question, Danny, so let me unpack this. So the engine for us right now is upgrades, specifically HVAC upgrades. We have a long way to go on that. That is just touching the service. We are thrilled at what our contractor relations team, our contractors have done the marketing team in terms of reaching out to our customers in terms of getting an HVAC upgrade. And I won't go into right now. We'll talk about this more in Q4. The changes that the EPA is bringing in that it's going to basically force so much consumers to have to upgrade their system, but I won't get into that now. We will talk about that in Q4. But upgrades on the engine. We do think that there is opportunity -- real opportunity in appliance and water heater. We're getting the model down on HVAC and then moving to probably those 2 areas, whether we can get into pools and other things. But the 2 to think about behind HVAC or appliances and water heaters. Then there are repair fees. We've been doing appliance repairs in about 15 markets, and we're working through the model and how that whole piece works.

是的。關於您問題的其他服務，丹尼，讓我來解開這個問題。因此，我們現在的動力是升級，特別是暖通空調升級。在這方面我們還有很長的路要走。這只是觸及服務。我們對我們的承包商關係團隊、我們的承包商行銷團隊在與客戶進行暖通空調升級方面所做的工作感到非常興奮。我現在不會進入。我們將在第四季度詳細討論這一點。 EPA 帶來的變化基本上將迫使如此多的消費者必須升級他們的系統，但我現在不會討論這個。我們將在第四季度討論這一點。但在引擎上進行了升級。我們確實認為家電和熱水器領域存在著機會——真正的機會。我們正在將模型放在 HVAC 上，然後可能會轉向這兩個區域，無論我們是否可以進入游泳池和其他區域。但 2 要考慮 HVAC 或電器和熱水器背後的問題。然後就是修理費。我們一直在大約 15 個市場進行電器維修，我們正在研究模型以及整個部分的工作原理。

That is showing good traction. We will expand the number of markets. We're still working through what that is. But repair will be not only in the shorter term and expansion of markets. But as we get a booking engine into the app where people can call for repair as they put it on a la carte basis. That, we think, will be an additional good driver. I think there'll be a, let me call it, a nice little business on maintenance. We actually have a good business right now doing tune ups around HVAC I think we're still working -- we have other maintenance services. I think we've got to sort through how we position those to customers and make those available. But I think that is a part of it. That's a natural part. So I'm excited from an on-demand basis that we can look at these 3 areas and have real opportunity and all. It's pretty much a greenfield for us.

這顯示出良好的牽引力。我們將擴大市場數量。我們仍在努力解決這個問題。但修復不僅是短期內的，也是市場擴張的問題。但當我們在應用程式中添加預訂引擎時，人們可以在點菜的基礎上致電維修。我們認為，這將是一個額外的好驅動程式。我想會有一個，讓我稱之為，一個不錯的維護小生意。事實上，我們現在在暖通空調方面的調整生意很好，我認為我們仍在工作——我們還有其他維護服務。我認為我們必須弄清楚如何向客戶定位這些內容並使其可用。但我認為這是其中的一部分。這是很自然的一部分。因此，我對按需基礎感到興奮，因為我們可以專注於這三個領域並擁有真正的機會等等。這對我們來說幾乎是一片綠地。

The next question today comes from the line of Eric Sheridan from Goldman Sachs.

今天的下一個問題來自高盛的艾瑞克謝裡丹。

Maybe 2, if I could. First, on marketing longer term. You've obviously leaned into marketing intensity in the last 12-plus months and seeing good returns on that. How should we be thinking about marketing levels and marketing ROI that you want to sort of think about for the medium to long term as sort of a cost input to drive the type of growth you want to establish as a baseline for the business. That would be number one. And then number two, I'm curious just to go a little bit deeper in the idea that you could be in the more individual service request business over the long term and how you think about the market opportunity there and what investments would be key to capitalize on that potential shift?

如果可以的話，也許是 2 個。首先，關於長期行銷。在過去的 12 個多月裡，您顯然已經加強了行銷力度，並看到了良好的回報。我們應該如何考慮您想要從中長期考慮的行銷水平和行銷投資回報率，作為推動您想要建立的業務基準成長類型的成本投入。那將是第一。第二，我很好奇，想更深入地了解一下，從長遠來看，您可以從事更個性化的服務請求業務，以及您如何看待那裡的市場機會以及哪些投資將是關鍵利用這種潛在的轉變？

In terms of the marketing investment, -- we have -- as Jessica pointed out earlier, we have 2 growth engines here. Next year, we will be spending the vast majority of our marketing money on American Home Shield. We're still working through the exact mix. We'll spend less on front door. But it is important to keep the vitality of the frontdoor brand. Because to answer your second question, in terms of on-demand, the catalyst for that is going to be customers -- non AHS customers thinking that Frontdoor is the place to go for repairs, maintenance and upgrades. So the key is to continue to build the brand and make it synonymous with this a la carte offering. That's going to take us a while, but we have to maintain a level of pressure for next year. So that in terms of a return will probably be a negative return next year, but it will be part of our overall fit within our overall equation in terms of our SG&A expense, et cetera. So that's front door, and that's how we think we can get to the on-demand piece.

在行銷投資方面，正如傑西卡之前指出的，我們有兩個成長引擎。明年，我們將把大部分行銷資金花在美國家庭盾上。我們仍在研究精確的組合。我們會在前門花更少的錢。但保持前門品牌的活力很重要。因為要回答你的第二個問題，就按需而言，催化劑將是客戶——非 AHS 客戶認為 Frontdoor 是進行維修、維護和升級的地方。因此，關鍵是繼續打造品牌，並使其成為單點服務的代名詞。這將需要我們一段時間，但我們必須為明年保持一定程度的壓力。因此，就回報而言，明年可能會出現負回報，但這將是我們在 SG&A 費用等方面的整體方程式的一部分。這就是前門，這就是我們認為我們可以獲得點播內容的方式。

The other thing is the TAM on that market is much bigger than just the home warranty market. And that's what makes us excited. We have seen with this real estate situation that people are staying in their homes longer Well, systems are going to continue to break. And so we do think that there is a big opportunity for people who don't want to get locked into a contract to use the on-demand piece. Now as far as AHS investment, -- that will be in a more traditional sense of the spending we have for the returns we want to generate. So that will be -- I won't get into specifics of what we're looking for in terms of cap or anything else. But that will be -- that's an existing business. It's a business we want to invest in. We did not spend at the levels we probably should have this year, but we're going to correct that next year. And I think with a fresh new message and really driving home the benefits of the home warranty. I'm excited that our DTC 1 business will start to turn around, we'll see on real estate, and I'm really pleased with how renewals continue to be so resilient.

另一件事是該市場上的 TAM 比家庭保固市場大得多。這就是讓我們興奮的原因。我們已經看到，在這種房地產情況下，人們在家裡的時間越來越長，系統將繼續崩潰。因此，我們確實認為，對於那些不想受合約限制的人來說，有一個很大的機會可以使用按需服務。現在就 AHS 投資而言，這將是更傳統意義上的支出，也就是我們為獲得想要產生的回報而進行的支出。因此，我不會詳細介紹我們在上限或其他方面尋求的內容。但這將是——這是一項現有業務。這是我們想要投資的業務。我們今年的支出沒有達到我們應該達到的水平，但我們明年將糾正這個問題。我認為，透過一個全新的訊息，真正讓人們了解家庭保固的好處。我很高興我們的 DTC 1 業務將開始好轉，我們將在房地產領域看到這一點，而且我對續約如何繼續如此有彈性感到非常高興。

[Operator's Instructions)

[操作者須知]

The next question is a follow-up question from Mark Hughes from Truist.

下一個問題是來自 Truist 的 Mark Hughes 的後續問題。

Is there a particular seasonality to the on-demand? Is that a kind of Q2, Q3 along with HVAC? Or should we think about that being more steady through the year?

點播有特定的季節性嗎？這是 Q2、Q3 和 HVAC 的一種嗎？或者我們應該考慮這一年會更穩定嗎？

I think that's an intriguing question. I don't think we know -- we don't have a great answer for you now. Other than, I think, generally, home services follow a seasonal pattern, which is spring cleaning spring, I get our house in order over the summer, stuff breaks, especially in the HVAC area. So I do think the seasonality would be consistent, but I can tell you that we've got a great empirical study on this. But I think my sense is this may be a little better as a year-round business, but if it just follows the pattern of our service requests, the seasonality would be the same.

我認為這是一個有趣的問題。我想我們不知道——我們現在沒有一個很好的答案給你。除此之外，我認為，一般來說，家庭服務遵循季節性模式，即春季大掃除，我在夏天把我們的房子整理好，東西休息，特別是在暖通空調領域。所以我確實認為季節性是一致的，但我可以告訴你，我們對此進行了很好的實證研究。但我認為我的感覺是，作為全年業務，這可能會好一點，但如果它只是遵循我們的服務請求模式，季節性將是相同的。

And then on the real estate channel, I hear what you're saying about higher interest rates impacting activity there. Some indication perhaps at least year-over-year, some of the purchase activity could be steady or even moving up possibly. How much do you need kind of more days on market to put pressure on the sellers? Or if you could just theoretically, if the existing home sales flattened out or turned positive. How much of a help would that be?

然後在房地產頻道上，我聽到您所說的利率上升會影響那裡的活動。有跡象表明，至少與去年同期相比，部分購買活動可能會保持穩定，甚至可能上升。您需要多長時間的上市時間才能對賣家施加壓力？或者，如果您理論上可以，如果現有房屋銷售趨於平緩或轉為正值。這會有多大幫助？

Yes. The Daysonmarket is a big deal, only 21 days on market because with that level of inventory that drive demand is high against a limited number of homes. So the seller doesn't feel -- it doesn't feel it's necessary to attach a home warranty. I think what -- ideally, it's more like 4 to 6 months' worth of inventory that probably is more ideal for us. But we're not sitting still. This fields and the real estate team are really starting to turn their attention to try to engage by our agents more, not just the seller agents to get that direct-to-consumer piece. We also have a big team we're lined up against trying to drive increased real estate renewals -- so there are various ways we can go at this -- the whole -- the overall real estate business while we're working through this macroeconomic effect of the industry continuing to have this severe decline. And again, the real estate business is resilient. It's going to come back. We continue to hold our share within the amount of home warranties that are done through the real estate channel. But having said that, we're working across a lot of different dimensions to try to drive unit.

是的。 Daysonmarket 是一件大事，上市時間只有 21 天，因為相對於數量有限的房屋來說，推動需求的庫存水準很高。所以賣家不覺得——不覺得有必要附上房屋保固單。我認為，理想情況下，4 到 6 個月的庫存對我們來說可能更理想。但我們並沒有坐以待斃。這個領域和房地產團隊確實開始將注意力轉向我們的代理商，而不僅僅是賣方代理商，以嘗試更多地參與其中，以獲得直接面向消費者的產品。我們還有一個龐大的團隊，我們正在努力推動增加房地產更新——因此，在我們應對這一宏觀經濟形勢的同時，我們可以採取多種方式來解決整個房地產業務。行業效應持續嚴重下滑。再次，房地產業務具有彈性。它會回來的。我們繼續在透過房地產管道完成的房屋保固金額中佔有份額。但話雖如此，我們正在跨越許多不同的維度來嘗試驅動裝置。

Understood. And then just, did you give specific numbers for sizing the weather impact on EBITDA or the preferred contractor utilization?

明白了。然後，您是否給了具體數字來衡量天氣對 EBITDA 或首選承包商利用率的影響？

No, we definitely favored on Q3 compared to prior quarters this year. We talked about last quarter, there're been about the decline in the cooling degree days and that being significantly lower. This year, it was about 3% up compared to last year. So last quarter, Q3. So that should give you some flavor into that place, definitely less of an impact in Q3 than what we saw in the first half of the year.

不，與今年前幾季相比，我們絕對看好第三季。我們談到上個季度，降溫天數有所下降，而且明顯降低。今年比去年增長了約3%。所以上個季度，第三季。因此，這應該會讓您對這個地方產生一些興趣，第三季的影響絕對小於我們在今年上半年看到的影響。

And then the preferred contractor utilization?

那麼首選承包商的使用率是多少？

So Mark, that's about 83% this year. And again, a 1% change in percent of preferred dates about $5 million in gross profit.

馬克，今年這個比例約為 83%。同樣，首選日期百分比變化 1%，毛利約為 500 萬美元。

Ladies and gentlemen, thank you again for joining Frontdoor's Third Quarter 202 Earnings Call. Today's call is now concluded.

女士們、先生們，再次感謝你們參加 Frontdoor 的第三季 202 財報電話會議。今天的電話會議現已結束。