(FTDR) 2024 Q1 法說會逐字稿

Yes, ladies and gentlemen, welcome to Frontdoor's First Quarter 2024 earnings call 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 of the call.

是的，女士們、先生們，歡迎參加 Frontdoor 2024 年第一季財報電話會議，該電話會議正在錄製並在網路上播出。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，他將介紹電話會議的其他發言人。

At this time, we'll begin today's call. Go ahead, Mr. Davis.

此時，我們將開始今天的通話。繼續吧，戴維斯先生。

Thank you, operator.

謝謝你，接線生。

Good morning, everyone, and thank you for joining Frontdoor's First Quarter 2024 earnings conference call. Joining me today are Frontdoor's Chairman and Chief Executive Officer, Bill Tom 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 dot Frontdoor home.com.

大家早安，謝謝您參加 Frontdoor 2024 年第一季財報電話會議。今天與我一起出席的有 Frontdoor 董事長兼執行長 Bill Tom 和 Frontdoor 財務長 Jessica Ross，他們將在今天的電話會議中使用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，該網站位於投資者網站 Frontdoor home.com。

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. Please refer to the Risk Factors section in 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 May second, 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.

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。這些風險因素在公司向 SEC 提交的文件中進行了詳細解釋。請參閱我們提交的文件中的風險因素部分，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 5 月 2 日作出，除非法律要求，否則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。

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.

我們也將參考某些非公認會計準則財務指標。在今天的電話會議中，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GAAP 財務指標與其最具可比性的GAAP 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。

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

我現在將把電話轉給比爾·科布徵求開場評論。

Phil?

菲爾？

Thank you very much, Matt Davis and hello again, everybody, Frontdoor and continues to operate extremely well, and we are off to a great start in 2024 as we delivered another quarter of record results.

非常感謝馬特戴維斯，大家好，Frontdoor 繼續運作得非常好，我們在 2024 年迎來了一個良好的開端，我們又創造了一個季度創紀錄的業績。

As you can see on slide 4, revenue grew 3% to $378 million. Gross margin increased 510 basis points to 51%. Adjusted EBITDA rose 33% to an all-time first quarter high of $71 million. And as a result of our strong first quarter financial performance, we are increasing our full year 2024 adjusted EBITDA outlook. So while we continue to exceed expectations on the margin side, our top priority remains growing our customer base. Let's be clear, right upfront. Demand for home warranties has been down due to some challenging market conditions, but we view this as a temporary cyclical issue. The main cause of lower demand has been real estate. As I've said before, we sell our products as part of the real estate process and as the number of existing homes has declined from $6 million in 2022 to just over $4 million homes today, we have had significantly fewer opportunities to sell our products. This was due in part to rising mortgage rates, which recently reached a one year high. At the same time, existing home inventory has been extremely tight. This is not only limited existing home sales, but it has also resisted in a significant power shift to the seller over the last several years. As a result our real estate channel sales are less than half of what they were five years ago. And this continues to impact our customer count, revenue growth, profitability and cash flows. And from everything that we see. This is true for the rest of the home warranty category. So while we are still optimistic that the real estate channel will eventually come back, we are waiting to see more tangible proof of the turnaround.

正如您在幻燈片 4 中看到的那樣，收入增長了 3%，達到 3.78 億美元。毛利率成長 510 個基點至 51%。調整後 EBITDA 成長 33%，達到第一季歷史最高水準 7,100 萬美元。由於我們第一季強勁的財務業績，我們提高了 2024 年全年調整後 EBITDA 的預期。因此，儘管我們在利潤方面繼續超出預期，但我們的首要任務仍然是擴大我們的客戶群。讓我們先說清楚。由於一些具有挑戰性的市場條件，房屋保固的需求有所下降，但我們認為這是一個暫時的周期性問題。需求下降的主要原因是房地產。正如我之前所說，我們將產品作為房地產流程的一部分進行銷售，隨著現有房屋數量從 2022 年的 600 萬美元下降到如今的 400 萬美元以上，我們銷售產品的機會明顯減少。部分原因是抵押貸款利率上升，最近達到一年高點。同時，現房庫存極為緊張。這不僅限制了現有房屋的銷售，而且還阻礙了過去幾年權力向賣方的重大轉移。結果我們的房地產通路銷售額還不到五年前的一半。這將繼續影響我們的客戶數量、收入成長、獲利能力和現金流。從我們所看到的一切來看。對於其他家庭保固類別也是如此。因此，儘管我們仍然樂觀地認為房地產管道最終會回歸，但我們正在等待看到更多切實的扭轉證據。

Now turning to the direct-to-consumer channel, where we have also seen lower demand. For those of you new to our story, how margins have historically been sold primarily through the real estate channel. It was only about 25 years ago when we started marketing and selling directly to homeowners. This was a powerful growth engine for us as we saw a strong correlation between marketing spend and our sales. However, about a year after COVID, and we began seeing a we began seeing a decline in consumer demand as the recent indicator of this Google searches for the short term, Home Warranty were down 7%. This past March, we have known that something needed to change and here's some of the things we learned from really digging into consumer research. First, consumers have a hard time understanding how margins they easily confuse it with homeowners insurance or other products Second, consumers want to feel like they've got someone in their corner. What really resonated with our focus groups is when we grounded them in the higher level benefits of a home warranty like peace of mind, freedom and happiness.

現在轉向直接面向消費者的管道，我們也發現該管道的需求有所下降。對於那些不熟悉我們故事的人來說，歷史上利潤主要是如何透過房地產管道出售的。大約 25 年前，我們開始直接向房主進行行銷和銷售。這對我們來說是一個強大的成長引擎，因為我們看到行銷支出和銷售額之間有強烈的相關性。然而，大約在新冠疫情發生一年後，我們開始看到消費者需求下降，因為Google短期搜尋的最新指標「家庭保固」下降了 7%。今年三月，我們知道有些事情需要改變，以下是我們從真正深入消費者研究中學到的一些東西。首先，消費者很難理解利潤如何容易與房屋保險或其他產品混淆。真正引起我們焦點小組共鳴的是，我們讓他們了解家庭保固的更高層次的好處，例如安心、自由和幸福。

Third, we have not done enough to stand out from our competition. The category has been defined by what we call a sea of sameness among providers, and we realize we needed to take action to break out from the competition.

第三，我們做得還不夠，無法在競爭中脫穎而出。這個類別的定義是供應商之間存在大量的雷同，我們意識到我們需要採取行動才能從競爭中脫穎而出。

Additionally, consumer behavior has been impacted by the larger macro environment as a result of rising inflation and higher costs. This has been echoed by several of the other companies as recently as this morning was mentioned, consumers are pulling back on spending. We view this as a temporary reset of consumer spending. As consumers have not been prioritizing the budget protection and convenience of home warranties. I will go into how we are addressing this shortly.

此外，由於通膨上升和成本上升，消費者行為受到更大宏觀環境的影響。正如今天早上所提到的，其他幾家公司也對此表示贊同，消費者正在縮減支出。我們認為這是消費者支出的暫時重置。由於消費者並未優先考慮預算保護和家庭保固的便利性。我將很快討論我們如何解決這個問題。

Now turning to renewals, which continues to be a bright spot for us.

現在轉向續約，這仍然是我們的一個亮點。

For the first quarter 2024, our retention rate grew to 76.3%. While this includes a lower mix of real estate customers. Retention continues to perform very well. Our team has done a great job of implementing a wide range of initiatives to improve retention, such as better engaging our consumers, specifically during the onboarding process, expanding dynamic pricing to minimize churn, continuing to improve the customer experience with a large part of that effort coming from increasing utilization of our preferred contractors. This is a dual benefit of lowering costs while delivering a better experience. And finally, we have increased the number of customers on AutoPay, which remained at a record 86% in the first quarter, which makes them much more likely to renew their home warranty. We know there is more we can do to improve our customer service and we are diligently working on those initiatives, but I am super proud of our team's accomplishments in this area.

2024 年第一季度，我們的保留率成長至 76.3%。雖然這包括較少的房地產客戶組合。保留率繼續表現良好。我們的團隊在實施一系列旨在提高保留率的舉措方面做得非常出色，例如更好地吸引我們的消費者，特別是在入職過程中，擴大動態定價以最大限度地減少客戶流失，繼續改善客戶體驗，其中很大一部分是努力來自於提高我們首選承包商的使用率。這是降低成本同時提供更好體驗的雙重好處。最後，我們增加了 AutoPay 客戶數量，第一季保持在創紀錄的 86%，這使得他們更有可能續訂家庭保固。我們知道我們可以做更多的事情來改善我們的客戶服務，我們正在努力實施這些舉措，但我對我們團隊在這一領域的成就感到非常自豪。

We've also been very proud of our new H. vac sales program, which delivered over $50 million of revenue in 2023. As you would imagine, much of this came in the second and third quarter, and we are expecting a similar pattern this year as we head into our peak summer season. In fact, we recently enhanced the front door app so that all users can now buy a new H. vac system. We are also continuing to grow into alternative revenue streams by building out our technology capabilities for additional on-demand services. Our vision is to provide a consolidated ecosystem where customers have access to video chats with an expert which might then turn into purchasing a-la-carte repair and maintenance services for even new systems and appliances all through our app more to come here, but we know that the market opportunity is significant, and we will continue to work to find ways to monetize that demand.

我們也對新的H.vac 銷售計劃感到非常自豪，該計劃在2023 年實現了超過5000 萬美元的收入。會出現類似的模式今年我們即將進入夏季高峰期。事實上，我們最近增強了前門應用程序，以便所有用戶現在都可以購買新的 H.vac 系統。我們也透過建構額外的按需服務的技術能力，繼續發展替代收入來源。我們的願景是提供一個統一的生態系統，客戶可以與專家進行視訊聊天，然後可能會透過我們的應用程式為新系統和設備購買單點維修和維護服務，但我們我們知道市場機會巨大，我們將繼續努力尋找將這項需求貨幣化的方法。

Let's now turn to slide 6 and our opportunity fund. And as I said on our last call, there are about $5 million homes in the US that have a warranty. We believe that figure could be approximately three times higher if consumers better.

現在讓我們轉向投影片 6 和我們的機會基金。正如我在上次電話會議中所說，美國大約有 500 萬美元的房屋有保固。我們相信，如果消費者做得更好，這個數字可能會高出約三倍。

Understood the value of a home warranty, which brings us to the American Home Shield brand relaunch, which is a primary component of our strategy to increase demand. And I'm very excited that we successfully kicked off the relaunch in early April, we took a holistic approach to the relaunch, which has the following components at the highest level we wanted to break out from that sea of sameness in the home warranty category. And that starts with a new strategy that truly brings a refreshed and high energy look to our brand. We also wanted to connect to new and larger audiences. So we came up with an innovative ad campaign with a new voice and a new brand visual identity. We wanted to have a catchy recognizable tag line. And that's why we came up with don't worry be warranty. This tag line captures that feeling. We want homeowners to take away peace of mind, freedom and happiness. It's proactive and goes right at the main word that defines our services. We also needed a new logo so that consumers can better distinguish us from our competition. So we refreshed with brighter, bolder colors and a more modern look, we wanted to use comedy and a strong well-known personality to do something different to break through to consumers. That's why we are extremely excited about our new celebrity spokesperson for Argentina, starring Rachel dredge, which we believe will drive greater interest in our products. And finally, we wanted a comprehensive media campaign with new marketing partners, as shown on Slide 8.

了解家庭保固的價值，這使我們重新推出了 American Home Shield 品牌，這是我們增加需求策略的主要組成部分。我很高興我們在四月初成功啟動了重新啟動，我們採取了全面的重新啟動方法，其中具有以下最高級別的組件，我們希望從家庭保固類別的千篇一律中脫穎而出。這始於一項新策略，真正為我們的品牌帶來煥然一新、充滿活力的外觀。我們也希望與新的和更多的受眾建立聯繫。因此，我們想出了一個具有新聲音和新品牌視覺識別的創新廣告活動。我們想要一個引人注目的、可識別的口號。這就是為什麼我們想出了不用擔心保固的原因。這句標語抓住了這種感覺。我們希望屋主能帶走內心的平靜、自由和幸福。它是積極主動的，並且正好符合定義我們服務的關鍵字。我們還需要一個新標誌，以便消費者能夠更好地將我們與競爭對手區分開來。所以我們用更明亮、更大膽的色彩和更現代的外觀來煥然一新，我們想用喜劇和強烈的眾所周知的個性來做一些不同的事情來突破消費者。這就是為什麼我們對由 Rachel Dredge 主演的阿根廷新名人代言人感到非常興奮，我們相信這將引起人們對我們產品的更大興趣。最後，我們希望與新的行銷合作夥伴一起進行全面的媒體活動，如投影片 8 所示。

This is now a true omnichannel campaign that is highly visible. We are we develop great new partnerships that are better reflected our customer base for example, we launched a campaign on WrestleMania. We were also on CNN's coverage of the solar eclipse in a big way with our website traffic hitting new highs that day speaking at the website. I encourage all of you to visit a jet.com and hope you notice it not only has an updated look, but it also has a more intuitive interface and navigation tools that will improve conversion.

現在，這是一場真正的、高度可見的全通路行銷活動。我們正在開發偉大的新合作夥伴關係，更好地反映我們的客戶群，例如，我們在摔角狂熱上發起了一項活動。我們也大力報道了 CNN 對日食的報道，當天我們的網站流量創下了新高。我鼓勵大家造訪 jet.com，並希望您注意到它不僅具有更新的外觀，而且還具有更直覺的介面和導航工具，可以提高轉換率。

In summary, we are truly bringing a refreshed and high energy look to our brand. However, we know we have relaunched our brand in the face of a challenging macro environment for home warranties. But that is the point as the leader in our category is our job to turn demand around and we are optimistic this relaunch will improve the growth trajectory for home warranties for years to come. With this much change, it would be premature to talk results thus far. However, we are excited about what we are seeing in web traffic and in other areas and look forward to providing you more details on our next call.

總而言之，我們真正為我們的品牌帶來了煥然一新、充滿活力的外觀。然而，我們知道，面對家庭保固充滿挑戰的宏觀環境，我們已經重新推出了我們的品牌。但這就是重點，因為我們類別中的領導者是我們的工作，以扭轉需求，我們樂觀地認為，這次重新推出將改善未來幾年家庭保固的成長軌跡。有瞭如此大的變化，目前談論結果還為時過早。然而，我們對在網路流量和其他領域所看到的情況感到興奮，並期待在下次電話會議上為您提供更多詳細資訊。

Before I turn the call over to Jessica, I want to reiterate that we are off to a great start in 2024. And our first quarter performance continues to show that front door Inc. is operating extremely well.

在我把電話轉給傑西卡之前，我想重申，我們在 2024 年有了一個良好的開端。

Jessica, thanks Bill, and good morning, everyone. Before I get into the details, I wanted to first build on Bill's remarks with a few high-level thoughts about a quarter and outlook. First, we want to celebrate that we had another record quarter, which was primarily driven by better than expected margins as the team continues to drive operational excellence across the business through our margin expansion initiatives. Second, in response to our strong first quarter performance, I'm pleased to share that we are raising our full year outlook for gross margin and adjusted EBITDA.

潔西卡，謝謝比爾，大家早安。在詳細介紹之前，我想先以比爾的言論為基礎，對季度和前景提出一些高層想法。首先，我們要慶祝我們又一個創紀錄的季度，這主要是由好於預期的利潤率推動的，因為團隊繼續透過利潤擴張計劃推動整個業務的卓越營運。其次，為了回應我們第一季的強勁表現，我很高興地告訴大家，我們正在上調全年毛利率和調整後 EBITDA 的預期。

Now let's turn to Slide 9, where I'll review our first quarter 2024 financial summary. First quarter revenue increased 3% versus the prior year period to $378 million. Net income increased 56% to $34 million and adjusted EBITDA increased 33% to $71 million, which both represent records for first quarter performance.

現在讓我們轉向投影片 9，我將回顧我們 2024 年第一季的財務摘要。第一季營收較去年同期成長 3%，達到 3.78 億美元。淨利潤成長 56% 至 3,400 萬美元，調整後 EBITDA 成長 33% 至 7,100 萬美元，均創第一季業績記錄。

Now moving to Slide 10, where gross profit for the quarter increased 14% versus the prior year period to $195 million and gross margin improved 510 basis points to 51%. The gross profit improvement was primarily driven by higher realized price, a transition to higher service fees and continued process improvement initiatives and was partially offset by inflationary cost pressures.

現在轉到投影片 10，該季度的毛利較去年同期成長 14%，達到 1.95 億美元，毛利率提高 510 個基點，達到 51%。毛利的改善主要是由更高的實現價格、向更高的服務費過渡以及持續的流程改進舉措推動的，但部分被通膨成本壓力所抵消。

Let's now move to the adjusted EBITDA bridge on Slide 11, where I'll provide more context for the year-over-year improvement in first quarter adjusted EBITDA, starting at the top, we had $14 million of favorable revenue conversion, driven by an 11% increase in price over the prior year period. This was partially offset by an 8% decline in volume primarily driven by lower sales in our 1st year channels. This also includes a $6 million increase in other revenue due to higher on-demand home services, primarily from the new HVAC. program.

現在讓我們轉向幻燈片11 上的調整後EBITDA 橋樑，我將在其中提供有關第一季度調整後EBITDA 同比改善的更多背景信息，從頂部開始，我們獲得了1400 萬美元的有利收入轉化，這得益於價格較上年同期上漲 11%。這被銷量下降 8% 所部分抵消，這主要是由於第一年通路銷量下降所致。這還包括由於按需家庭服務（主要來自新的暖通空調）的增加而導致的其他收入增加 600 萬美元。程式.

Contract claims costs decreased $10 million, which was better than expected. This includes a transition to higher service fees that had two impacts. Third, higher service fees resulted in a lower number of service requests per customer as we typically see a temporary change in customer behavior until they become accustomed to the new fee amounts.

合約索賠費用減少了 1000 萬美元，好於預期。這包括向更高的服務費過渡，這會產生兩個影響。第三，較高的服務費導致每位客戶的服務請求數量減少，因為我們通常會看到客戶行為發生暫時變化，直到他們習慣新的費用金額。

Second, higher service fees also resulted in a lower net cost per service request, and these fees are a contra cost to claims expense on our income statement. Additionally, our contract claims costs improved over the prior year period in part due to our ongoing process improvement initiative. This includes improving our planning processes, moving more of our service requests to our preferred contractors. Our new high cost claims review program and leveraging our bulk purchasing power. These improvements were partially offset by ongoing inflation as well as a $5 million unfavorable change in claims cost development year over year.

其次，較高的服務費也導致每個服務請求的淨成本較低，這些費用是我們損益表中索賠費用的對照成本。此外，我們的合約索賠成本比前一年有所改善，部分原因是我們正在進行的流程改善措施。這包括改善我們的規劃流程，將更多的服務請求轉移給我們首選的承包商。我們新的高成本索賠審查計劃並利用我們的大量購買力。這些改善部分被持續的通貨膨脹以及索賠成本發展比去年同期 500 萬美元的不利變化所抵消。

Now moving to sales and marketing costs, which increased $7 million over the prior year period, primarily due to better pacing of our marketing investments to drive growth in our direct to consumer channel.

現在轉向銷售和行銷成本，該成本比去年同期增加了 700 萬美元，這主要是由於我們更好地調整行銷投資節奏，以推動直接面向消費者管道的成長。

And finally, general and administrative costs increased $3 million, primarily due to increased personnel costs to some of our bridge. All of this resulted in adjusted EBITDA increasing $18 million to $71 million. With these results, we exceeded the midpoint of our outlook by approximately $25 million. And I want to take a moment to provide some context here. First, remember, when we provided our outlook, we were working with the late February data and assumed normal weather from March, but then March came in much more favorable than anticipated which was the primary driver of lower incidence or about a $10 million favorable impact compared to our guide.

最後，一般和管理成本增加了 300 萬美元，主要是由於我們一些橋樑的人員成本增加。所有這些導致調整後 EBITDA 增加 1800 萬美元至 7100 萬美元。根據這些結果，我們超出了預期中位數約 2500 萬美元。我想花點時間在這裡提供一些背景資訊。首先，請記住，當我們提供展望時，我們使用的是2 月下旬的數據，並假設3 月份天氣正常，但隨後3 月份的情況比預期要有利得多，這是發病率降低的主要驅動因素或約1000 萬美元的有利影響與我們的指南相比。

As a result, our net cost per service request came in much lower than anticipated in the first quarter with a better than expected incidence rate, we were able to allocate more jobs to our preferred contractor network. We handled 84% of our service requests in the first quarter. Additionally, we continue to benefit from our process improvements and rigorous cost management by our contractor relations team. We also benefited from some favorable timing around our marketing.

因此，我們第一季每次服務請求的淨成本遠低於預期，發生率也優於預期，我們能夠向我們首選的承包商網路分配更多工作。第一季我們處理了 84% 的服務請求。此外，我們繼續受益於承包商關係團隊的流程改善和嚴格的成本管理。我們也受益於一些有利的行銷時機。

Let's now turn to slide 12 for a review of our statement of cash flow. Net cash provided from operating activities was $84 million for the three months ended March 31st as a result of our exceptionally strong earnings and was comprised of $51 million in earnings adjusted for non-cash charges and $34 million in cash provided from working capital that was primarily driven by seasonality. Net cash used for investing activities was $10 million and was primarily comprised of capital expenditures related to investments in technology. Net cash used for financing activities was $21 million and was comprised of $13 million of share repurchases as well as $4 million of scheduled debt payments. We ended the quarter with $378 million. This was comprised of $165 million of restricted cash and $213 million of unrestricted cash. We were also extremely pleased with our free cash flow conversion of $73 million for the three months ended March 31st. The majority of the increase over the prior year period was driven by higher earnings, and I believe this number speaks to the cash-generating power of our business.

現在讓我們轉向投影片 12 來回顧我們的現金流量表。截至3 月31 日的三個月，由於我們的盈利異常強勁，經營活動提供的淨現金為8,400 萬美元，其中包括根據非現金費用調整後的5,100 萬美元盈利和主要由營運資本提供的3,400 萬美元現金。用於投資活動的淨現金為 1000 萬美元，主要包括與技術投資相關的資本支出。用於融資活動的淨現金為 2,100 萬美元，其中包括 1,300 萬美元的股票回購以及 400 萬美元的預定債務支付。本季結束時，我們的營收為 3.78 億美元。其中包括 1.65 億美元的限制性現金和 2.13 億美元的非限制性現金。我們也對截至 3 月 31 日的三個月自由現金流轉換為 7,300 萬美元感到非常滿意。上年同期的大部分成長是由收益增加所推動的，我相信這個數字說明了我們業務的現金產生能力。

Now turning to Slide 13, where I'll provide an update on our current capital structure. We continue to have an extremely strong financial position and a consistent capital allocation framework. Our number one priority remains to focus on growth, and we continue to prioritize investments that expand units as well as grow revenue and adjusted EBITDA, both organically and through opportunistic M&A.

現在轉向投影片 13，我將在其中提供有關我們當前資本結構的最新資訊。我們繼續擁有極其強勁的財務狀況和一致的資本配置框架。我們的首要任務仍然是專注於成長，我們繼續優先考慮透過有機方式和機會性併購擴大部門、增加收入和調整後 EBITDA 的投資。

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 a very modest level of debt, and we have a low net leverage ratio of 1.1 times.

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。目前我們的債務水準非常適中，淨槓桿率也較低，僅 1.1 倍。

And finally, our third objective is to return cash to shareholders. Through the end of April, we repurchased $33 million worth of shares, which brings our total to $314 million since we initiated our share repurchase program in 2021.

最後，我們的第三個目標是將現金回饋給股東。截至 4 月底，我們回購了價值 3,300 萬美元的股票，這使得自 2021 年啟動股票回購計畫以來的股票回購總額達到 3.14 億美元。

Let me conclude this section by saying that I recognize that our unrestricted cash of over 200 million is above our targeted range of between $100 million to $150 million required to run the business. The higher cash balance was driven by our better results, coupled with timing and seasonality. This in turn drove our net leverage ratio down to 1.1 times, which is below our targeted net leverage ratio of around 2times to 2.5 times. We are coming off of some very volatile earnings, and it was not that long ago that our net leverage ratio was closer to three times, I want to ensure that investors know, we do not plan on keeping our unrestricted cash or leverage ratio at the current level. We have a significant amount of financial flexibility and we will continue to follow the capital allocation strategy. I just walk through when making decisions about utilizing our which is focused on growth and share repurchase.

在結束本節時，我要說的是，我認識到我們超過 2 億美元的不受限制的現金超出了我們經營業務所需的 1 億至 1.5 億美元的目標範圍。較高的現金餘額是由我們更好的業績以及時間和季節性因素推動的。這反過來又導致我們的淨槓桿率降至 1.1 倍，低於我們約 2 倍至 2.5 倍的目標淨槓桿率。我們正在擺脫一些非常不穩定的收益，不久前我們的淨槓桿率接近三倍，我想確保投資者知道，我們不打算將不受限制的現金或槓桿率保持在當前水平。我們擁有很大的財務靈活性，我們將繼續遵循資本配置策略。我只是在做出關於利用我們的專注於成長和股票回購的決定時才經歷過。

And now turning to slide 14, where I will walk through our second quarter and full year 2024 outlook. We expect our second quarter revenue to be between $530 times and $540 million, which reflects a mid single-digit increase in our renewal channel, a decline in our real estate channel of approximately 15% to 20% and roughly 15% decline in our DTC channel, which reflects an expected improvement from our first quarter results and a $10 million increase in other revenue to $34 million. Second quarter adjusted EBITDA is expected to range between $130 million and $140 million, a 12% increase over the prior year period.

現在轉到投影片 14，我將在其中介紹我們的第二季和 2024 年全年展望。我們預計第二季的營收將在530 倍至5.4 億美元之間，這反映出我們的續約管道出現中位數個位數成長，我們的房地產通路下降約15% 至20%，以及我們的DTC 下降約15%管道，這反映出我們第一季業績的預期改善以及其他收入增加 1,000 萬美元至 3,400 萬美元。第二季調整後 EBITDA 預計在 1.3 億美元至 1.4 億美元之間，比去年同期成長 12%。

Now turning to our full year 2024 outlook, starting with revenue, where we are maintaining our range of $1.81 billion to $1.84 billion. This assumes a mid single digit increase in the renewals channel, a 10% decline in the DTC channel and a 15% to 20% decline in the real estate channel.

現在轉向我們對 2024 年全年的展望，從收入開始，我們維持 18.1 億美元至 18.4 億美元的區間。假設續約管道出現中位數個位數成長，DTC 通路下降 10%，房地產通路下降 15% 至 20%。

As a reminder, there is a timing difference between the time of sale occurs and reported revenue, which we recognize over 12 months. It also assumes other revenue will increase approximately 30% to a $100 million, primarily driven by higher on-demand revenue mainly sales from our new HVAC. program. We continue to expect a mid single digit increase in realized price, which will be offset by a mid single digit decline in realized volume from lower member count.

提醒一下，銷售發生時間與報告收入之間存在時間差異，我們確認差異超過 12 個月。它還假設其他收入將成長約 30%，達到 1 億美元，這主要是由於按需收入（主要是我們新 HVAC 的銷售）的增加所推動的。程式.我們繼續預期實現價格將出現中個位數的成長，這將被會員數量減少導致的實現交易量中個位數的下降所抵消。

As a reminder, our 2023 home warranty count was down 6%, and we expect this to decline 1% to 3% in 2024 to approximately $1.95 million. We are raising our full year gross profit margin outlook to be approximately 50% as we continue to stabilize margins in our core business. This outlook assumes normal weather as we enter into our peak season. When our system is typically more strict, we are saying that inflation will be in the low to mid-single digits on a net cost per service request basis and the number of service requests will decline 5% to approximately $3.7 million. We are maintaining our full year SG&A range to be between $580 million and $595 million as our 2024 plan includes a previously announced transition of marketing investments from the Frontdoor brand to the American Home Shield brand to support the relaunch. As Bill mentioned earlier, we are very excited about the brand relaunch as we anticipate it will play a critical role in increasing demand and growing revenue for the long term. Based on these updated inputs, we are increasing our full year adjusted EBITDA range to be between $360 million and $370 million. Our full-year outlook also includes $13 million of interest income and this led to stock compensation expense of approximately $30 million and finally, we expect our full year capital expenditures to range between $35 million and $45 million and the annual effective tax rate to be approximately 25%.

提醒一下，我們 2023 年的家庭保固數量下降了 6%，我們預計 2024 年這一數字將下降 1% 至 3%，至約 195 萬美元。隨著我們繼續穩定核心業務的利潤率，我們將全年毛利率預期提高至 50% 左右。此展望假設我們進入旺季時天氣正常。當我們的系統通常更加嚴格時，我們會說，以每次服務請求的淨成本為基礎，通貨膨脹將處於低至中個位數，服務請求的數量將下降 5%，至約 370 萬美元。我們將全年 SG&A 範圍維持在 5.8 億美元至 5.95 億美元之間，因為我們的 2024 年計劃包括先前宣布的營銷投資從 Frontdoor 品牌過渡到 American Home Shield 品牌以支持重新推出。正如比爾之前提到的，我們對品牌的重新推出感到非常興奮，因為我們預計它將在長期增加需求和增加收入方面發揮關鍵作用。根據這些更新的信息，我們將全年調整後 EBITDA 範圍擴大到 3.6 億美元至 3.7 億美元之間。我們的全年展望還包括 1300 萬美元的利息收入，這導致股票補償費用約為 3000 萬美元，最後，我們預計全年資本支出將在 3500 萬美元至 4500 萬美元之間，年度有效稅率約為25%。

In conclusion, we are very pleased with our first quarter financial results. We continue to deliver better than expected adjusted EBITDA as a result of the rigorous work the team has done to execute on our margin expansion initiatives, and we remain committed to finding new and innovative ways to continuously improve our business.

總之，我們對第一季的財務表現非常滿意。由於團隊在執行利潤擴張計劃方面所做的嚴格工作，我們繼續提供好於預期的調整後 EBITDA，並且我們仍然致力於尋找新的創新方法來不斷改進我們的業務。

I will now turn the call back over to Bill for a few closing remarks before we open up the line for questions.

現在，在我們開始提問之前，我將把電話轉回給比爾，讓他做一些結束語。

Bill Berkshire to go to one final note before we go to your questions, you've heard me on the last call, talk about how we think our stock is undervalued. I still firmly believe that our first quarter performance demonstrates the demonstrates the exceptionally strong earnings and earnings power of our platform. We generate a lot of cash that we will use to grow or to buy back stock. And finally, I am confident that we are on the right path to increasing the growth trajectory of our customer base. There are so many upsides to this category in our company that we have decided to hold another Investor Day to share our vision and strategy with investors and analysts. The date we have chosen is November seventh in New York City. I think it will be well worth your time to attend and we will share more information as we get closer to November. Operator, let's now please open up. We'll go to the line for questions.

比爾·伯克希爾（Bill Berkshire）在我們回答您的問題之前請先講最後一點，您在上次電話會議上聽到了我的聲音，談論我們如何認為我們的股票被低估。我仍然堅信，我們第一季的業績證明了我們平台異常強勁的獲利能力和獲利能力。我們產生大量現金，用於種植或回購股票。最後，我相信我們正走在增加客戶群成長軌跡的正確道路上。我們公司的這一類別有很多優勢，因此我們決定再次舉辦投資者日，與投資者和分析師分享我們的願景和策略。我們選擇的日期是 11 月 7 日，地點是紐約。我認為這非常值得您花時間參加，隨著 11 月的臨近，我們將分享更多資訊。接線員，現在請開放。我們將去排隊提問。

Of course, if you would like to ask a question, please press star followed by one on your telephone. If you would like to remove your question, please press star followed by two on the pad. To ask a question, please is your line is unmuted likely we are he Please limit yourself to one question and one. Our first question goes to Jeff Schmitt of William Blair. Please go ahead. Your line is open.

當然，如果您想提問，請在電話上按星號，然後再按一個。如果您想刪除問題，請按記事本上的星號，然後再按兩個。要提問，請確保您的線路未靜音，很可能我們是他。我們的第一個問題是問威廉布萊爾的傑夫施密特。請繼續。您的線路已開通。

Hi, good morning. Unit volume continued decline in the mid-single digits. Do you think it's going to take a better just kind of a real estate environment, lower inflation kind of better macro for to improve or could you potentially cut prices just given our strong gross margins are now? I mean, seems maybe you shot overshot a little bit pricing.

早安.單位銷售量繼續以中個位數下降。您認為需要更好的房地產環境、更低的通膨、更好的宏觀環境才能改善，還是考慮到我們現在強勁的毛利率，您是否可能會降價？我的意思是，看來你的定價有點過高了。

Yes, I think, Jeff, on embedded let me answer your question because I think you've hit on the right point here is real estate services, no doubt about it. We have been increasing our level of discounting for DTC. one, how much of that. And that is something that that is underway. And hopefully we're going to realize the benefits of that with the guide that we put together, obviously we think things are going to improve. We have not seen real estate improved to date, but everything everyone I talk to in the real estate industry says this current turn, it's going to turn it's going to turn show. I think based on the guide we put together for the rest of the year, we do have confidence that real estate will start to lessen the decline and the turnaround and DTC. as we relaunch the brand well, it will start to be felt over the coming quarters.

是的，我認為，傑夫，關於嵌入式，讓我回答你的問題，因為我認為你擊中了正確的觀點，那就是房地產服務，毫無疑問。我們一直在提高 DTC 的折扣水準。一，有多少。這就是正在進行的事情。希望我們能夠透過我們編寫的指南認識到這樣做的好處，顯然我們認為事情會有所改善。到目前為止，我們還沒有看到房地產業有所改善，但與我在房地產行業交談過的每個人都說，當前的轉變，它將會發生轉變，它將發生轉變。我認為，根據我們為今年剩餘時間制定的指南，我們確實有信心房地產將開始減少下滑、扭虧為盈和 DTC。隨著我們重新推出該品牌，我們將在未來幾季開始感受到這一點。

Okay.

好的。

And then yes. I guess on your on your 24 guide, so you have revenue growth of 2% to 3%. You have DTC revenues declining 10% unit growth down one to three. So obviously, they both had a kind of a tougher first quarter. So do you have either those kind of turning growth turning positive by by year end or maybe not quite that far. What's the kind of trend there?

然後是的。我猜想在你的 24 小時指南上，你的收入成長了 2% 到 3%。 DTC 收入下降了 10%，單位成長率下降了一到三倍。很明顯，他們的第一節都比較艱難。那麼，到年底，這種增長是否會轉為正值，或者可能不會那麼遠。那裡有什麼樣的趨勢？

I think trended wise, it continues to get better. I'm not ready to commit to when when we turn positive, but but that clearly, the math would indicate that we're going to start to improve quarter by quarter. And certainly as we head into 25, I think we feel pretty good about where we're going to be.

我認為從趨勢來看，它會繼續變得更好。我還沒有準備好承諾何時我們會變得積極，但很明顯，數學表明我們將開始逐季度改善。當然，當我們進入 25 週年時，我認為我們對自己的目標感到非常滿意。

Okay, great. Thank you.

好的，太好了。謝謝。

Thanks, Jeff.

謝謝，傑夫。

And your next question is from Cory Carpenter of JPMorgan. Cory, please go ahead.

你的下一個問題來自摩根大通的科里·卡彭特。科里，請繼續。

Your line is open.

您的線路已開通。

If you announce the front door averaged the $2 million download mark a few days ago. And could you just address what's what's driving the engagement given you did shift some marketing away from that towards American Home Shield? And so is that mostly organic demand in beer? And where are you with some of your conversion optimization efforts there?

如果你宣布前門幾天前的平均下載量為 200 萬美元。鑑於您確實將一些行銷活動從美國家庭盾轉向了美國家庭盾，您能否談談推動參與度的因素是什麼？那麼這主要是啤酒的有機需求嗎？您的轉換優化工作進度如何？

Thank you.

謝謝。

Yes. So we've been pleased that I think the front door proposition has taken hold. So I think despite the shift of money, the download pieces continue to grow as have as you have people people signing up the goal here has always been to get get more customers and we now view front door as a holistic business. We run everything through the front door model for both our in-person services, our new RIHVAC. upgrades, we have the unlimited product out there now. We just in the last week enable the any basic user in the app to be able to get there, get it and they track upgrade. So it's kind of the way we've evolved from the front door model is to really make this the centerpiece of our on-demand services. So that's so it's really not about the conversion per se from the from the app. It's more about how do we continue to grow users and how do we grow engagement with them for the variety of services that we offer.

是的。因此，我們很高興我認為前門提案已得到實施。因此，我認為，儘管資金轉移，但下載量仍在繼續增長，因為人們在這裡註冊的目標一直是獲得更多客戶，我們現在將前門視為整體業務。我們的面對面服務和新的 RIHVAC 都透過前門模式運行一切。升級，我們現在有無限的產品。就在上週，我們使應用程式中的任何基本用戶都能夠到達那裡，獲取它並追蹤升級。因此，我們從前門模型演變而來的方式就是真正使其成為我們按需服務的核心。所以這實際上與應用程式的轉換本身無關。更重要的是我們如何持續增加用戶，以及如何透過我們提供的各種服務增加與他們的互動。

Thank you.

謝謝。

And just a quick follow-up maybe for Jessica. The 11% price increase in 1Q, I know you expected it to be higher relative to the mid-single digit percent guide for the full year. But how do you take another round of pricing? Was that above expectations or could you just talk about how you expect pricing and increasing the growth of the year?

也許對傑西卡來說只是一個快速的跟進。第一季價格上漲 11%，我知道您預計該價格相對於全年中個位數百分比的指導值會更高。但如何進行另一輪定價呢？這超出了預期嗎？

Yes.

是的。

Now if you remember where we space is still coming off of those pricing actions that we took in 2022, which again, does take 12 to 18 months to flow through the peak of that was Q4 and Q1. And so this is really the hit of the peak and you're going to see that decline over the years.

現在，如果您還記得我們在 2022 年採取的定價行動，我們的空間仍然在哪裡，同樣，確實需要 12 到 18 個月才能度過第四季度和第一季的高峰。因此，這確實是巔峰時期的表現，而多年來你會看到這種下降。

Again, those 2022 pricing actions are just tapering off and throughout the year.

同樣，2022 年的定價行動在全年中都會逐漸減少。

Thank you.

謝謝。

Thanks.

謝謝。

Sorry.

對不起。

Thanks, Brian.

謝謝，布萊恩。

Thank you. The next question goes to Ian Zaffino of Oppenheimer. Please go ahead. Your line is open.

謝謝。下一個問題將詢問奧本海默的伊恩·扎菲諾 (Ian Zaffino)。請繼續。您的線路已開通。

I agree on that. Thank you very much. And I guess two questions. I mean, first, first one would be on just the DTC. business. When you think about ARM, maybe adjusting prices here on what type of magnitude do you think you need to adjust prices and to kind of restore growth in that business. And I know you have like a lot of R&D going on to so that probably mitigates the need to maybe adjust prices. But you know, as best analysts and we look at this, what should we kind of expect and how do we think about that? And then just could just on inflation. Can you maybe give us a breakdown between maybe labor parts by trade or something on those lines?

我同意這一點。非常感謝。我猜有兩個問題。我的意思是，首先，第一個將僅在 DTC 上。商業。當您考慮 ARM 時，可能會根據您認為需要調整價格的幅度以及恢復該業務的成長來調整價格。我知道你們正在進行大量的研發工作，這可能會減輕調整價格的需求。但你知道，作為最好的分析師，我們會看待這個問題，我們應該期待什麼以及我們如何看待這一點？然後就可以只考慮通貨膨脹。您能否給我們按貿易或類似情況劃分的勞動力零件之間的細目分類？

Thank you.

謝謝。

Yes, I'll take the first one and then just a big as far as DTC. and pricing, we are doing a blend of discounting as well as you know, all the all the elements of the of the brand relaunch that we've talked about. We think we're starting to connect on some of the discounting work that we've done based on the guide. We do feel good about where DTC. is headed in our it's come through a tough trough here. The whole industry is down in overall home warranties. We've talked about real estate before, but I think the array of options. I think we've we needed to break out from what we keep calling the sea of sameness. I think we're doing that with the relaunch elements. And so I feel good about where we're headed, not only on those elements, but also the pricing actions we've decided to take. So I'll turn it over to Jessica for the inflation piece at NBC.

是的，我會選擇第一個，然後選擇一個大的直到 DTC。和定價，我們正在混合折扣，正如你所知，我們已經討論過的品牌重新推出的所有元素。我們認為我們已經開始將我們根據指南所做的一些折扣工作聯繫起來。我們確實對 DTC 感到滿意。正在我們這裡度過一個艱難的低潮。整個行業的整體房屋保固都在下降。我們之前討論過房地產，但我認為有很多選擇。我認為我們需要擺脫我們一直所說的千篇一律的海洋。我認為我們正在透過重新啟動元素來做到這一點。因此，我對我們的發展方向感到滿意，不僅在這些要素上，而且在我們決定採取的定價行動上。所以我會把它交給傑西卡，讓她在 NBC 報道通貨膨脹。

And remember, as we communicate Frontdoor inflation, it is on a net cost per service request basis.

請記住，當我們傳達 Frontdoor 通貨膨脹時，它是以每個服務請求的淨成本為基礎的。

And so we don't communicate that individually. But rather that includes everything from uncontracted related cost, parts and equipment, impact of regulatory changes, processed food improvement initiatives and the impact of our trade service fees. So what I will say is that for Q1 inflation really came in relatively flat, which was a bit lower. I think it's continuing to moderate, which is why we adjusted our guide for the full year to be from, I think previously, we communicated mid to low and now we're at more of a low to mid.

所以我們不會單獨傳達這一點。相反，這包括從未簽訂合約的相關成本、零件和設備、監管變化的影響、加工食品改進舉措以及我們的貿易服務費的影響等一切內容。所以我要說的是，第一季的通膨確實相對平穩，而且略低。我認為它正在繼續溫和，這就是為什麼我們將全年指南調整為從中低到低，現在我們處於中低水平。

Okay.

好的。

Thank you very much.

非常感謝。

Let me just clarify Tim's comment so we've continued to see some improvements there and hopefully that's helpful.

讓我澄清一下蒂姆的評論，以便我們繼續看到一些改進，希望這對您有所幫助。

Yes. Thank you very much.

是的。非常感謝。

Thanks again.

再次感謝。

Sergio Secura of KeyBank. Sanjay, please go ahead, your line is and Thank you.

KeyBank 的 Sergio Secura。 Sanjay，請繼續，您的線路是，謝謝。

Good morning and thanks for taking the questions. First, Bill, hoping you could just talk about the American Shield brand relaunch so far, just what you're seeing? I know it's early, but just what you're seeing your expectations for how this will increased demand for the service over the course of the year. And if you think on Keno, ultimately, just kind of the macroeconomic environment that you guys have been speaking to is going to no impact on the trajectory of the customer growth for this year?

早上好，感謝您提出問題。首先，比爾，希望您能談談到目前為止美國盾品牌的重新推出，您所看到的是什麼？我知道現在還為時過早，但這正是您所看到的，您對這將如何增加全年服務需求的期望。如果你想想基諾，最終，你們一直在談論的宏觀經濟環境不會對今年的顧客成長軌跡產生影響？

Okay. I'm obviously it's too early to tell to give specific results. We'll talk about that in the Q2 call. I do think what's happened and that's very encouraging is all the elements of the relaunch of come together and fit together really well. I think, again, all the things I went through in the call, I think the new logo looks great. I think our media plan has been terrific. I think the advertising has been great website. We're really pleased with what's been going on there. So the elements are in place for us to really start to kick start out of the sea of sameness that we've talked about. I think the other piece is that we believe real estate is going to get better but you know, there's not much we can do about the macro on that, but we're not sitting back and just waiting for NOG. I hope real estate gets better and we are working very hard as you've seen with all the work we've done on our renewals business. I'm really, as I said in the call, I'm super proud of the efforts. The team has done there from our marketing efforts, our pricing team, our contractor relations team, our service ops team, everybody, has really pulled together to really drive these are our customers and we want to continue to keep them as part of our company and then supplemented by the initiative really from a standing start where our new HVAC. program has really taken off as another vector in our overall revenue stream. So while we are going through this trough, if new user counts being tough, we are not sitting idly by and hoping for the best we are working across all elements, trying to come up with new initiatives and new way of thinking. And as you can see by our chart, overall, 24 guide. We know we're coming through a tough piece in Q. two Q. one Q. two is going to get a little better, but I think it's going to be continuing that phase. But at the second half, I think we're getting we have improved numbers and leading into 2025.

好的。我顯然現在給出具體結果還為時過早。我們將在第二季的電話會議中討論這一點。我確實認為所發生的事情非常令人鼓舞，因為重新啟動的所有元素都很好地結合在一起。我再次認為，我在通話中經歷的所有事情，我認為新標誌看起來很棒。我認為我們的媒體計劃非常棒。我認為廣告是很棒的網站。我們對那裡發生的事情感到非常滿意。因此，我們已經具備了真正開始擺脫我們所討論的千篇一律的海洋的要素。我認為另一件事是，我們相信房地產會變得更好，但你知道，我們在宏觀方面無能為力，但我們不會袖手旁觀，只是等待 NOG。我希望房地產市場變得更好，我們正在非常努力地工作，正如您所看到的，我們在續簽業務方面所做的所有工作。正如我在電話中所說，我真的對這些努力感到非常自豪。團隊透過我們的行銷工作、我們的定價團隊、我們的承包商關係團隊、我們的服務營運團隊，每個人都真正齊心協力，真正推動這些是我們的客戶，我們希望繼續讓他們成為我們公司的一部分然後輔以主動行動，真正從我們的新暖通空調開始。該計劃確實已成為我們整體收入流中的另一個載體。因此，當我們正在經歷這個低谷時，如果新用戶認為很難，我們不會袖手旁觀，希望我們在所有方面都能做到最好，試圖提出新的舉措和新的思維方式。正如您從我們的圖表中看到的，總體而言，24 指南。我們知道我們正在經歷第二季的艱難時期，第一季第二季會好一點，但我認為這將繼續這個階段。但在下半年，我認為我們的數字有所改善，並將進入 2025 年。

Great.

偉大的。

Thanks, Bill.

謝謝，比爾。

And then maybe a follow up suggested I know you guys had very strong performance on margin side and raised your outlook for the year. I guess how should we think about that upside flowing down to profitability and increasing the pace of buybacks versus opportunities to invest even more behind growth initiatives to accelerate revenue growth now bank said, yes, I think it's a great question.

然後也許後續行動表明我知道你們在保證金方面表現非常強勁，並提高了你們今年的前景。我想我們應該如何看待獲利能力和加快回購步伐的好處，以及在成長計劃背後進行更多投資以加速收入成長的機會，現在銀行說，是的，我認為這是一個很好的問題。

And I think as I said in my remarks, we recognize that we are sitting at a very low leverage ratio and know have a pretty strong unrestricted cash balance. And it's not our intention to sit here for the long term. I think where we really want to be is it a longer-term target of about 2 to 2.5 and two times on our leverage ratio and you know, really focused on the $100 million to $150 million that we used to run the business. So we are very focused on sticking to our capital allocation strategy, which is really focused on growth and whether that be organically through or through opportunistic M&A.

我認為正如我在演講中所說，我們認識到我們的槓桿率非常低，並且擁有相當強大的不受限制的現金餘額。我們無意長期坐在這裡。我認為我們真正想要的長期目標是大約 2 到 2.5 倍的槓桿率，你知道，我們真正關注的是我們用來經營業務的 1 億到 1.5 億美元。因此，我們非常注重堅持我們的資本配置策略，該策略真正注重成長，無論是透過有機成長還是透過機會主義併購。

And absent that, excess cash is to buy back shares.

如果沒有這一點，多餘的現金將用於回購股票。

So we've consistently been doing that since we launched the program and there was a little bit of timing and seasonality here for Q1, but is it is our concern. It's our intention to continue to do that.

因此，自從我們啟動該計劃以來，我們一直在這樣做，第一季有一點時間和季節性，但這是我們關心的問題。我們打算繼續這樣做。

Great.

偉大的。

Thank you.

謝謝。

Thank you. And as a reminder, if you would like to ask a question, please press star followed by one on your telephone and our next question goes to Mark Hughes of Truist. Mark, please go ahead your line.

謝謝。提醒一下，如果您想提問，請在電話上按星號，然後按一個，我們的下一個問題將由 Truist 的 Mark Hughes 提出。馬克，請繼續排隊。

Yes, yes, thank you. Good morning. Mark, in thinking about the opportunistic a morning, the opportunistic M&A, would that typically be bringing new capabilities perhaps? Or is that are those deals normally they get that policyholder base and so it's more of a, call it, financial transaction. How do you look at that?

是的，是的，謝謝。早安.馬克，在思考機會主義的早晨，機會主義的併購，通常會帶來新的能力嗎？或者說，這些交易通常是他們獲得保單持有人基礎的，所以這更像是一種金融交易。你怎麼看？

Yes, I think, Mark, I think we tried to look at it in a holistic manner. So we have a BD group that takes a look at a variety of opportunities that can run the gamut of what you are, which you're exactly talking about?

是的，我認為，馬克，我認為我們試圖以整體的方式來看待它。所以我們有一個 BD 小組來尋找各種機會，這些機會可以滿足您的所有需求，您到底在談論什麼？

We don't have a stated policy of what we are specifically looking for because as an industry leader I think we have the opportunity to look to look broadly at opportunities that may enhance the value of our company. So that's really the approach we're taking right now.

我們沒有明確的政策來說明我們具體尋找什麼，因為身為產業領導者，我認為我們有機會廣泛尋找可能提高我們公司價值的機會。這就是我們現在正在採取的方法。

And you've touched on the other revenue HVAC opportunity. Could you maybe flesh that out what gives you confidence or visibility that that should continue to expand?

您還談到了 HVAC 領域的其他收入機會。您能否具體說明是什麼讓您有信心或能看到這一點應該繼續擴大？

I think perhaps in the past past pointed out that there's some penetration of that program with with some of your contractors, but there or more to do, do I have that right? How do you as you think about that growth?

我想也許過去曾指出，該計劃與您的一些承包商有一定程度的滲透，但還有更多工作要做，我這樣說對嗎？您如何看待這種成長？

We have a kind of. Yes, yes, no, or 0.8. And we have a couple of tailwinds here. First of all, there is the environmental change or regulatory change around refrigerant, which is going to render some of the refrigerant I know for older equipment obsolete. So people are going to have to upgrade their equipment. So that's a that's a macro that's going to help us. Second is our relations with our contractor team in the sense of and there is great enthusiasm with our HR contractors engaged in this program and it's really simple economics for them. They'd much rather do a lot of 5,000 installed and come and go grow a truck for a couple of hundred dollars repair so we have great enthusiasm from contractors. And then finally, the consumer reset receptivity to this and the value proposition with our ability to interact with our contractors to buy well with the OEMs. And then and then obviously our marketing abilities really when it adds up to a terrific business proposition for us. So that's why we're pretty pretty pumped up about this area.

我們有一種。是，是，否，或 0.8。我們在這裡有一些順風車。首先，環境變化或冷媒監管變化，這將使我所知道的一些用於舊設備的冷媒變得過時。因此，人們必須升級他們的設備。這就是一個對我們有幫助的宏。其次是我們與承包商團隊的關係，我們的人力資源承包商對參與該計劃充滿熱情，這對他們來說非常簡單。他們更願意安裝 5,000 輛卡車，然後來來去去製造一輛卡車，維修費用為數百美元，因此承包商對我們充滿熱情。最後，消費者透過我們與承包商互動的能力來重置對此的接受度和價值主張，以便與原始設備製造商一起購買。顯然，當我們的行銷能力為我們帶來了絕佳的商業主張時，它確實發揮了作用。這就是為什麼我們對這個領域感到非常興奮。

And one thing that I would add is I think the contractor relations team has really been out there and doing a roadshow also expanding and the adoption with the contractors and I continue to be really excited about that. So I think it's both and the consumer what we're anticipating from a consumer perspective, but we are doing everything we can here on the ground to make sure that the program is scaling.

我要補充的一件事是，我認為承包商關係團隊確實在那裡進行了路演，並擴大了承包商的採用範圍，我仍然對此感到非常興奮。因此，我認為從消費者的角度來看，這既是我們的預期，也是消費者的預期，但我們正在盡一切努力確保該計劃的規模化。

And then I just to go to the claims development or reserve development on. I think it was the million dollars tailwind this quarter. Is there anything structurally that you can talk about there? I think the maybe in the past when inflation improved due, you ended up kind of coming in better than expected in your earlier accruals ended up being too high. But yes, broadly speaking, is there where do we stand on that?

然後我就去索賠開發或準備金開發。我認為這是本季百萬美元的順風車。結構上有什麼可以談的嗎？我認為，也許在過去，當通貨膨脹有所改善時，您的收入最終會好於預期，而您的早期應計項目最終會變得過高。但是，是的，從廣義上講，我們對此有何立場？

No, I think it's a great point.

不，我認為這是一個很好的觀點。

It's actually something that I've been reflecting on. I think when that first quarter that I came in, so Q4 2022 and delivered results, we had an adjusted EBITDA beat of about $24 million. And I think we had about $25 million of claim costs for home at that quarter. And you know, coming down to that one, I think as we've gotten off the volatility of that inflation, it's really stabilized that narrowed. So that same quarter we had about 15% or that year a front door inflation in tailing down to flat. I think that really aligns with why you're seeing the tightening up of that claims cost development.

這其實是我一直在反思的事情。我認為，當我進入的第一季（即 2022 年第四季）並交付業績時，我們的調整後 EBITDA 約為 2,400 萬美元。我認為該季度我們的房屋索賠費用約為 2500 萬美元。你知道，歸根結底，我認為隨著我們擺脫了通貨膨脹的波動，它確實穩定下來並縮小了。因此，同一季度我們的通膨率約為 15%，即當年的前門通膨率已降至持平。我認為這確實符合您看到索賠成本開發收緊的原因。

And again, remember that routing.

再次，記住路由。

Oh, no, there.

哦，不，在那裡。

Thank you.

謝謝。

Okay. I was appointed there, Dan?

好的。我被任命在那裡，丹？

Paul, I was just going to say I think there's inflationary pressures.

保羅，我只是想說我認為有通膨壓力。

I just want to reiterate the work that the team is doing in terms of driving process improvements across the board that are also tightening up our costs. So I think there's, you know, again getting to everything firing on all cylinders. It's just a holistic profit working together.

我只想重申團隊在全面推動流程改善所做的工作，這也收緊了我們的成本。所以我認為，你知道，一切都會再次全力以赴。這只是共同努力的整體利潤。

Great. Appreciate that detail. Thank you.

偉大的。欣賞這個細節。謝謝。

Thank you. The next question goes to Brian Fitzgerald of Wells Fargo. Fine, please go ahead, your line is open.

謝謝。下一個問題是向富國銀行的布萊恩·菲茨傑拉德提出的。好的，請繼續，您的線路已開通。

Thanks.

謝謝。

A couple of follow-ups. On when you guys think of the strengths and weaknesses of the brand historically talking about some marketing campaign across regions and demographics, how are you thinking about the opportunities to maybe address regional or demographic opportunities, some that may have been underserved in the past? And then I have one follow-up.

一些後續行動。當你們想到該品牌歷史上談論一些跨地區和人口統計的營銷活動的優勢和劣勢時，您如何考慮可能解決區域或人口統計機會的機會，其中一些機會在過去可能沒有得到充分服務？然後我有一個後續行動。

Yes, I think you know, the core of this is, you know, with any 50 year old brand, you got to revitalize it and you you know. And but I think brands are extremely resilient. So I think that we've had a really good look at trying to revitalize, you know, a brand have a fire alarm in our building that has retention freeze.

是的，我想你知道，核心是，你知道，對於任何 50 年的老品牌，你必須振興它，你知道。但我認為品牌具有極強的彈性。所以我認為我們已經很好地考慮瞭如何振興，你知道，一個品牌在我們的大樓裡有一個火災警報器，但保留凍結了。

I really will answer your questions on anyway. I'll keep going go. We'll go find out what's going on here, but of course, perfect timing anyway. And to your point about targeting, I think that there is and Kathy Collins and the marketing group have done a lot of work around new demographics. The Latino market is one that we're particularly interested in as they become a larger part of homeownership or overall, we have a have a Spanish-language website now, and that's just some of the elements. That's just one example of ways we are trying to get more specific on our on our targeting efforts, but it's the right point to bring up. I think from a regional perspective, we still think there is a lot of opportunity and beyond that, the sun valued and kind of the smile states where we have traditionally been very strong. So that is something that we are also trying to drive is greater penetration into some more northern markets by them. But that is part of the opportunity set that we think we're going to we're going to help to grow into.

無論如何我真的會回答你的問題。我會繼續走下去。我們會去看看這裡發生了什麼，但當然，無論如何，時機都是完美的。至於你關於目標定位的觀點，我認為凱西柯林斯和行銷團隊已經圍繞著新的人口統計做了很多工作。拉丁裔市場是我們特別感興趣的市場，因為他們成為房屋所有權的很大一部分，或者總體而言，我們現在有一個西班牙語網站，這只是其中的一些要素。這只是我們試圖更具體地說明我們的目標工作的方式之一，但這是提出的正確觀點。我認為從區域角度來看，我們仍然認為有很多機會，除此之外，陽光和微笑表明我們傳統上非常強大。因此，我們也在努力推動他們更大程度地滲透到一些更北方的市場。但這是我們認為我們將幫助成長的機會集的一部分。

Thanks, Bill, and then the other question we had was some around the gross margin benefits from the service fee change. Could you give us some color on your expectations for how long that tailwind potential persists.

謝謝，比爾，然後我們遇到的另一個問題是關於服務費變化帶來的毛利率收益。您能否告訴我們您對這種順風潛力持續多久的期望？

One thing I would say, and I'll let Jeff answer the specific terms of the trade service fee increase was really an outcome of contractor costs and increased labor costs and fuel and insurance and all those elements. We raised the trade service fee really in response to staying current with where contractor costs were.

我要說的一件事是，我會讓傑夫回答貿易服務費增加的具體條款，這實際上是承包商成本、勞動力成本、燃料和保險以及所有這些因素增加的結果。我們提高了交易服務費實際上是為了與承包商成本保持同步。

Now as far as it has, how it flows through the P&L again now --

就目前而言，它現在如何再次流經損益表——

I mean, again, these are behavior shifts and so they debate you now can take time that we've anticipated and this in our plans throughout 2024.

我的意思是，這些都是行為轉變，所以他們爭論你現在可以花我們預期的時間，這在我們整個 2024 年的計畫中。

Great.

偉大的。

Thanks, Bill.

謝謝，比爾。

Thanks, Jessica.

謝謝，傑西卡。

Thank you. We have no further questions.

謝謝。我們沒有其他問題了。

Ladies and gentlemen, thank you again for joining Frontdoor's First Quarter 2024 earnings call.

女士們、先生們，再次感謝您參加 Frontdoor 的 2024 年第一季財報電話會議。

Today's call is now concluded.

今天的電話會議現已結束。