and gentlemen, welcome to Frontdoor's first quarter 2025 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. He will introduce the other speakers on the call. At this time, we will begin today's call. Please go ahead, Mr. Davis. Thank you, Operator. Good morning, everyone, and thank you for joining Frontdoor's first quarter 2025 earnings conference call. Joining me today are Frontdoor's Chairman and CEO, Bill Cobb, and Frontdoor's CFO, 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. As stated on slide three 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 factor 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 1st, 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? Thanks, Matt Davis, and good morning, everyone. Frontdoor continues to operate extremely well, and the first quarter was another example of outstanding financial and operational performance. In short, we are off to a terrific start in 2025. As you can see, revenue increased 13% to $426 million. Net income grew 9% to $37 million. Adjusted EBITDA grew 41% to $100 million. Very importantly, our member count grew 7% to 2.1 million members. Finally, our use of preferred contractors has grown to 85% of services performed during the quarter. What makes this even more impressive is that it is being done against a still challenging macroeconomic environment: the down real estate market, high interest rates, the specter of trade wars, and the resulting decline in consumer confidence. Despite all of these challenges and more, Frontdoor continues to outperform and by a lot. We are not satisfied, not by a long shot, and our number one strategic priority remains growing our member base. Number two, we are focused on growing and scaling revenue from our non-warranty business. Number three, we are optimizing the integration of 2-10 Home Buyers Warranty, which, by the way, remains on track. Let's get into the business details, starting with the DTC channel on slide 6. This continues to be a positive story that began in the middle of last year. As you can see, we ended the first quarter up 15% versus prior year to 310,000 DTC members. This is primarily due to 2-10, but our success here is also due to organic growth of 4%. Since the end of the second quarter of last year, we've now had three consecutive quarters of organic DTC unit growth. Now, the key takeaway for DTC in the first quarter: our actions are working to drive organic unit growth. Demand is up, conversion is up, and as a result, our DTC member count is up. Let that sink in for a moment, especially when, again, you consider the macroeconomic headwinds. It's not a stretch to say we are breathing new life into this category. Our success is attributable to several factors. First, the marketing campaign and relaunch of the American Home Shield brand are working. We are targeting audiences better, especially millennials. Our digital advertising is more effective, particularly in the midpoint of the marketing funnel when homeowners are seriously considering a purchase. We are deploying our media assets in the areas where we have the best potential ROI. We are able to do this because our data is better. We more deeply understand the segments of home buyers, and our marketing approach is more targeted. Also, our discounting strategy continues to be a strong and proven lever for driving units. While reported DTC revenue is down 9% for the quarter due to our promotional pricing strategy, our focus is on driving organic unit growth. For Q1, we're pleased that number was 4%. We accept this revenue trade-off due to new member growth being our number one strategic priority and our subsequent ability to renew members at a high rate. Here's the key takeaway. The result of first quarter DTC performance is that we now expect our annual DTC member count to be up from last year. Now, let's take a look at the real estate channel. As you know, this channel continues to be a headwind for our business, although there are some signs of improving conditions. According to the latest information from the National Association of Realtors, or NAR, for March 2025, existing home sales slipped 5.9% to a seasonally adjusted annual rate of $4.02 million. The median sales price for existing homes climbed to $403,700. That's the 21st consecutive month of price increases. The 30-year mortgage rate averaged nearly 7% as of April 17th. The inventory of unsold existing homes jumped 8.1% to 1.33 million homes, or the equivalent of four months of supply. While growing inventory is a positive sign, the combination of high home prices and elevated mortgage rates continues to keep consumers out of the market. As a result, our first-year organic real estate member count is down 6% in the first quarter compared to the same period last year. Now, turning to slide eight and retention. For the first quarter of 2025, retention was at 79.9%, which includes 2-10. While this does include a lower mix of real estate members, retention continues to perform well due to better engaging members during onboarding and throughout the member journey. This includes an expanded calling program that is reducing the number of cancellations. We are also continuing to enhance our member service, especially through increased use of our preferred contractors. Finally, 84% of our members are on monthly autopay. Product differentiation is another reason for our retention success. No one in this industry innovates better than Frontdoor. The release of the AHS app last October and the launch in late February of a true industry differentiator, video chat with an expert, are just the latest examples of our innovation in giving members what they want. These innovations are a plus for retentions. Members love a better and faster experience, and they've responded very well to the app and video chat. Since the launch in late October, the AHS app has been downloaded almost 200,000 times, and members have submitted 80,000 service requests. Video chat with an expert is also a hit. Here's an interesting tidbit. About 17% of the AHS video chats so far have resulted in the expert being able to resolve the problem right over the phone, or the expert gave the member the information they needed to fix it themselves. That is a great member experience, not to mention saving us and our members time and money by not having to send a contractor out to the home. Moving to slide 10, non-warranty and other revenue. This continues to be a growing part of Frontdoor. We are very proud of our new HVAC program. Demand for it is growing, and the number of contractors who want to participate is also growing. As such, we are increasing our revenue outlook for 2025 to $105 million. To refresh, this program benefits our members who want to take advantage of our scaled pricing to replace their HVAC, upgrading to a system that is new, more efficient, and compliant with the latest refrigerant standards. Moving to the Moen partnership. As a reminder, we partnered with Moen, starting in California, to provide homeowners access to our plumbing contractors to install a smart water shutoff valve to prevent potential flooding. In late March, we expanded this partnership, and we are now in 21 states, with more states expected later this year. Another great addition to other revenue is the new home structural warranty business that came with the 2-10 acquisition. As we've dug into this business, we've been very pleased with the relationship our team has with new home builders. We expect the new home structural warranty business to generate $44 million in revenue in 2025. On that high note, I'll summarize our first quarter by simply saying Frontdoor's performance continues to be truly outstanding, both from a financial and operational standpoint. This is a continuation of the tremendous winning streak we've been on now for 12 quarters in a row. With that, I'll now turn the call over to Jessica for the specifics of our financial performance. Jessica? Thanks, Bill, and good morning, everyone. Before I get into the details, there are three items I want to highlight. First, Frontdoor delivered another outstanding quarter as we exceeded expectations for both revenue and adjusted EBITDA. Second, we are expecting to generate a record amount of cash this year, and we have a strong financial position that allows us to invest for growth and return excess cash to shareholders. Third, we are raising our full-year outlook for revenue by $20 million and adjusted EBITDA by nearly $50 million. Now, let's get into the numbers on slide 12, where you can see revenue increased 13% versus the prior year period to $426 million. This was comprised of 2% organic growth and 11% from the 2-10 acquisition. Net income increased 9% to $37 million, and adjusted EBITDA increased 41% to $100 million. Turning to slide 13 and our earnings per share. Earnings per share increased 13% to $0.49 per share on a GAAP basis. Adjusted earnings per share increased 46% to $0.64 per share. This is slightly above the increase in adjusted net income due to the impact of our share repurchase program. Last year, we repurchased approximately 4 million shares, or about 5% of our total share count. We remain confident in our ability to drive sustained EPS growth over time, supported by strong operational execution and elevated buyback activity. Turning to slide 14, you will see gross profit increased 21% versus the prior year period to $235 million, and gross profit margin improved 380 basis points to a first quarter record of 55%. Continuing on the topic of margins, let's turn to slide 15. I wanted to take a moment to dig into how Frontdoor proactively addresses cost inflation, including the potential impact of tariffs. Frontdoor's current margin enhancement efforts were bolstered from the learnings coming out of the pandemic. Since then, we've established a heightened focus on tracking current events, economic indicators, and monitoring cost trends across the business. As a result, we believe we have much better visibility on our cost drivers. At the same time we are evaluating these drivers, we are also constantly focused on leveraging our scale to manage inflation. We work very hard to keep our costs down internally before passing along higher costs to our members. First, we continuously discuss cost and equipment availability with our manufacturing partners. Our supply chain team does an excellent job keeping costs down while ensuring we have the parts and equipment to service our members. Especially in these fluid times, they are focused on leveraging our purchasing power to find new sources of supply to manage prices. Second, our contractor relations team is dedicated to improving cost per service requests and strengthening service levels across our contractor network. They continuously work to increase the percentage of our jobs that go to our preferred contractors, and at the same time work to manage each individual contractor to the best cost and service profile in their geography to optimize results. The next step in our process is to leverage our dynamic pricing capability, which is always balancing member count and gross margin. We are actively optimizing price across our renewal base, and we customize our pricing strategy to serve each individual member's needs. In 2025, we forecast that we will net to an average overall price increase of about 4%, and we have the ability to amend that trajectory later this year if needed, depending on where inflation lands. Additionally, we have the ability to raise our trade service fee. While this is a less frequently used lever, it does help us manage margins and share higher costs with our members. In summary, we are confident in our strategy to manage cost inflation, and we have multiple levers that we are prepared to pull to protect our margins in this dynamic environment. Now, let's turn to the first quarter adjusted EBITDA bridge on slide 18. First, we had $32 million of favorable revenue conversion driven by a 3% increase from price and a 10% increase from volume, primarily from the acquisition of 2-10. Second, we had an $8 million decline in contract claims costs. The largest driver of the improvement was favorable claims cost development of $7 million, compared to only $1 million in favorable claims cost development in the first quarter of 2024. We also experienced favorable cost trends, which included the benefits of continued process improvements that more than offset normal inflation. As a result, our cost inflation in the first quarter was essentially flat on a net basis. This was offset by a slightly higher number of service requests per customer. This quarter, we had a $5 million unfavorable weather impact in the HVAC trade, which was offset by a $4 million benefit from lower incidents across our other trades. Moving down to customer service costs and G&A, which increased $4 million and $10 million respectively. Both increased primarily due to the addition of 2-10. In summary, adjusted EBITDA increased to $100 million, which exceeded the midpoint of our outlook by $25 million. Now, let me take a moment to unpack the beat, which is obviously different than the comparison to prior year. In short, it was a great quarter, with more than half of the beat driven by better than expected contract claims costs, with the remainder driven by better than expected revenue conversion. Let's now turn to slide 19 and our statement of cash flows. Net cash provided from operating activities was a record $124 million for the first quarter due to exceptionally strong earnings, primarily comprised of $68 million in earnings adjusted for non-cash charges and $61 million of cash provided from working capital and long-term insurance-related accounts. Net cash provided from investing activities was $47 million and was primarily comprised of the disposal of marketable securities partially offset by capital expenditures related to technology projects. Net cash used for financing activities was $85 million and was primarily comprised of $70 million of share repurchases, as well as $7 million of scheduled debt payments. Free cash flow increased 60% to a record $117 million for the first quarter of 2025. Our free cash flow yield is currently at 9%, which is an outstanding value indicator for our share price. We ended the quarter with a total of $506 million in cash. This was comprised of $185 million of restricted cash and $322 million of unrestricted cash. We remained focused on using excess cash to buy back shares. In fact, our $322 million of unrestricted cash is after returning $70 million to shareholders in the first three months of the year. While the U.S. economy faces growing uncertainty, we are confident we are well positioned to weather any storm as a result of our strong financial position, as shown on slide 20. Frontdoor has ample liquidity to run the business, with $570 million available to us. Our net leverage ratio is about 1.9 times based on Frontdoor's reported financial results. We continue to be in a strong financial position, and our net leverage ratio is below our long-term target of 2-2.5 times. As part of the 2-10 acquisition, we completed our debt financing in December of last year, and as a result, our next debt maturity is nearly five years away. We have a capital-like business model with capital expenditures at less than 2% of our total revenues. Finally, our strong cash flows and balance sheet provide us with significant flexibility when it comes to capital allocation. That is a great transition to slide 21 and our commitment to share repurchases. We have returned over $100 million in cash to shareholders, repurchasing over 2 million shares in the first four months of the year. Given our strong cash flows, we are now increasing our 2025 share repurchase target to at least $200 million. We are very aware of our current share price and multiple, and we are deploying a substantial amount of cash into repurchasing shares this year as we believe our share price remains significantly below our intrinsic value. This would mark the fourth consecutive year of increasing share repurchases and puts us well on the way to achieving our $650 million authorization within the three-year timeframe. Now, turning to slide 22 and our second quarter and full-year outlook. For second quarter revenue, we expect a high single-digit increase in our renewals channel, a roughly 15% increase in our real estate channel, a 10% increase in our DTC channel, and a $10-$15 million increase in other revenue. Taken together, we anticipate second quarter revenue to be between $600 million and $605 million. We also expect adjusted EBITDA to come in between $185 million and $190 million. Let's now move to our full-year outlook, starting with revenue. We are increasing our revenue outlook to be between $2.03 billion and $2.05 billion. Our revenue guide includes a 2%-4% increase in realized price, as well as a 7%-8% increase in realized volume. This nets to a $20 million increase from our prior guide, which is split between warranty and other revenue. We assume a high single-digit increase in the renewals channel, a low to mid-single-digit increase in the DTC channel, a high single-digit increase in the real estate channel, and $165 million -$175 million in other revenue. Other revenue now includes $105 million from HVAC sales, $15 million from Moen, approximately $44 million in new home structural warranty revenue, and slightly under $10 million of other non-warranty services such as HVAC tune-ups. From a member count perspective, we are raising our outlook. We now expect the number of home warranties to decline 1-3% versus the prior 2%-4% due to the improvements we are seeing in our renewal rates. Moving on to gross profit, where we are raising our full-year margin outlook to be between 54% and 55%. This is over a 200 basis point increase versus our prior outlook, which incorporates our favorable first quarter financial results and the continued strong performance of the business. Our margin guide also assumes mid-single-digit cost inflation, which is comprised of low single-digit normal cost inflation and the remainder from tariff and macroeconomic uncertainty. An unfavorable weather impact of approximately $15 million compared to the prior year, as we expect to return to normal weather patterns, specifically as we head into our peak summer season. An increase in customer incidence rate as we have lapped the prior increases in trade service fees. Now, let's turn to our full-year SG&A outlook, which we are increasing to $650 million -$670 million. This is a $10 million increase from our prior outlook as we are increasing our marketing investments to drive member growth. Based on all of these inputs, we are increasing our full-year adjusted EBITDA guide to be between $500 million -$520 million. Our full-year outlook also includes $15 million of interest income, $8 million from 2-10 integration costs, and reflects stock compensation expense of approximately $31 million. Finally, our full-year expectations for capital expenditures and the effective tax rate remain unchanged. With that, I will now turn it back to Bill before opening it up to Q&A. Thanks, Jessica. I want to close with some quick final thoughts before we take your questions. Let's start with valuation. At our high point in early 2021, Frontdoor was valued at about 18 x adjusted EBITDA. Now, I understand that the valuation of many companies has been reduced due to the recent market volatility, but we now sit at a multiple of 8 on our current midpoint guide of $510 million in adjusted EBITDA. That's more than 50% below our high point. The math here is screaming that Frontdoor is undervalued. We are clearly not an 8 times multiple company with the great results we continue to post. Here's why I feel confident in my assertion that we are undervalued. Number one, as I said, Frontdoor has delivered. As you saw from our results, we continue to operate extremely well from both the financial and operational perspectives. Again, this makes 12 consecutive quarters that we've beaten consensus. Number two, we are extremely well positioned. To reiterate, we've raised guidance nearly across the board: full-year revenue and warranty and non-warranty, member count, gross profit margin, share repurchases, and importantly, we are raising our adjusted EBITDA guidance by nearly $50 million. Do not forget, we generate an amazing amount of free cash flow. In short, we have a very strong financial position. Number three, we are ready for tomorrow. We now have three months of hard data on 2025. We feel very good about Q2, and we are well prepared. While no business is recession-proof, we have weathered tough times before. For example, we learned a lot during COVID. These learnings are serving us well as we navigate the macroeconomic uncertainty that continues to persist. The point is, we know how to work through these issues. We have planned accordingly, and we are executing. These are the reasons why we continue to be successful and why I believe we will remain so for the foreseeable future. With that, we are now ready to take your questions. Operator, please open the line. Thank you very much. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press Star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press Star 2 if you would like to remove your question from the queue. For any participants using speaker equipment, it may be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you very much. Our first question is coming from Mark Hughes of Truist Securities. Mark, your line is live. Yeah, thank you very much. Congratulations on the quarter. Bill, what about tariffs? Any impact on, say, HVAC equipment or anything else that's important for your home warranty business? Yeah, as we said, we've had virtually no inflation in Q1, and actually, HVAC contributed to that in a big way. It was actually down. Now, having said that, we do see a couple of suppliers who are raising their prices. We then move our supply around. I think that, as Jessica laid out in the guidance, I think we've covered it really well, but we're staying nimble on this and staying very close to our contractors, etc. Who knows where tariffs are going, but we think we've built sufficient conservatism in the second half that we think we have amply covered the tariff issue. Understood. How about the latest thinking on the new refrigerants, the impact perhaps on repairs if you have to do a more thorough repair based on the new refrigerant? On the other hand, maybe you sell more units in the on-demand business. How are you thinking about that? Yeah, a couple of things, Mark. We're working through the old equipment right now. There's still some available. We've done a good job of securing that equipment, so we continue to generate that. We're also obviously onto the new equipment with the better standards that we referred to in the script. At this point, it has been a benefit to us. With the new equipment, we may have to replace whole systems, but so far, we've worked through that. We do feel really good about where we're at right now. We have raised our guidance for the year, but we're managing this very closely. It's a year where we're in transition, but I really give our contractor relations team and our supply chain team and the marketing team and everybody, they've done a really nice job of managing through this. One final, if I might, the reserve gains in the quarter, how much of that was your home warranty as opposed to the 2-10? Could you repeat that? Favorable development. Oh, in terms of favorable development? Is that what you said for the first? It was about $7 million. We didn't break that out between 2-10 and the remainder of the company. Would you like to break that out now? Frontdoor mostly. Yeah. Very good. Thank you. Thanks, Mark. Thanks, Mark. Thank you very much. Okay. Our next question is coming from Jeff Schmitt of William Blair. Jeff, your line is live. Hi, good morning. On the number of service requests, they're higher in the quarter due to unfavorable weather. I guess when you back that out, what was the trend? Do you still expect them to normalize to $4 million for the year, or is it just a little too early to tell? Yeah, Jeff, I would say the number of incidents increase was really driven by 2-10 and the addition of 2-10. We're still anticipating, as I said at investor day, about $4 million for the year. You remember, Jeff, we had dipped below $4 million, but then as we've added 2-10, it's back up. Right. Okay. That makes sense. Unit growth in the direct channel continues to be good. How often did you run promotions during the quarter, and how sustainable do you think that is? I mean, can you continue to run promotions at this level, or do you think you're going to have to sort of spread them out? Interestingly, this year, we've taken a little bit different approach to our promotional pricing. We had been running month-long events last year, primarily. We changed our strategy this year where we're pulsing events, shorter duration, and I think it's been successful. We actually feel good about continuing on with the pulsing strategy that we have now. We think we can sustain this. As I said in my remarks, we're going to accept a revenue offset because our number one priority is to drive member count, and that's driven by the way we are running our renewal book, where we continue to have high retention. This is going to pay out, and we think it's paying out now. We're covering up some of the revenue shortfall with other revenue and the strength with renewal. The whole thing is the whole mix is working well together, I feel. We're going to continue this for the foreseeable future. Okay. Thank you. Thanks, Jeff. Thank you very much. Your next question is coming from Sergio Segura of KeyBanc. Sergio, your line is live. Hey, Sergio. Morning, Sergio. Hey, Bill. Hey, Jessica. Good morning. Thanks for taking the question. I have a few. I guess the first one is just on the outperformance you guys saw in the quarter. It looks like that was primarily driven by renewals revenue above the outlook you provided last quarter. Curious if you could provide any color on what drove the outperformance relative to your expectations. Was that more price or volume-driven? I think a couple of things. It was probably more of the non-warranty. It was split between non-warranty and warranties and renewals, as you said. On the non-warranty side, that's a split between HVAC and Moen. Renewals, again, that was really just stronger renewals, which is continued strength in how we're improving the member experience. Mostly from a volume perspective there. On the margin side, more than half of the beat was really due to contract claims costs, with the remainder driven by revenue conversion dropping down. As I just said, we had about $7 million in favorable development. We also had better-than-expected costs. As Bill said, we had normal inflation, but when you offset that with process improvements and trade service fees, we landed about flat. Then also better-than-expected incidence rate, which was driven by some weather and favorability across all the other trades. Sergio, I think one of the key points here is we're building a portfolio now, which enables us, if you think about what I just said about DTC pricing. We're accepting a revenue shortfall because our other revenue is performing so well, our renewal revenue is performing so well. The mix is coming together in a really nice way that we can balance our top line and then deliver outstanding results on the bottom line. Got it. That's helpful. Thanks. I guess the second question I had was in response to Mark's question. Bill, I think you said that some suppliers are raising prices and you're moving around where you're purchasing some parts. I just, when I take a step back, thinking historically when suppliers do this, I guess when do other suppliers respond to that, or just either competitors raising prices or just rising input costs in the past? Is there any reason to think that this would be different this time around given the current macroeconomic environment? Yeah. Let me take it first and Jessica, if you want to add anything. Let me break it down, Sergio, that we're looking at water heaters, we're looking at HVAC equipment, we're looking at appliances, and then there's a whole parts component. We have not seen inflation in parts to date. We get a lot of our parts from China, so we're waiting to see what impact that will have. We've built in what we think is enough in the second half in the guide to account for that. With regard to the other areas, suppliers are kind of eyeing each other as they go forward and as we work with them. Some of the contracts we already have locked in through dates in 2025. I think on balance, we feel good about the way our supply chain team has been able to manage that through. We will see where it nets out. As Jessica pointed out, with our pricing and the way we're monitoring all this, we think we've got things covered. Knowing that, like with every company that's facing the uncertainty that's existing today, we have to be nimble in our responses. Yeah. I would just add, as I said in my prepared remarks, this is not new behavior for us now coming out of the pandemic. We've really built a strength, I'd say, in our supply chain team. These relationships that we've built historically are what really are putting us in a good position to be able to leverage our purchasing power and make sure that we are protecting supply and pricing heading into these times. Got it. Thank you. Very helpful on the thoughts. Thanks, Sergio. Thank you, Sergio. Thank you very much. Our next question is coming from Danny Pfeiffer of JP Morgan. Danny, your line is live. Hey Danny. Hey, Bill. Hey, how's it going? Thanks for the questions. For the first, Jessica, in your prepared remarks, I think you guided to 10% growth in DTC and 2Q. Can you maybe just parse out what drives that implied sequential growth in the quarter? And then I have a follow-up. I mean, I think as Bill said, we are going, I'd say, going hard, actively using the discounting strategy, which has been working. That momentum is flowing through, and we're expecting to see that goodness in Q2. Gotcha. On the second, can you maybe expand on what gives you the confidence to raise the 2025 gross margin guide this early in the year and whether you're assuming the current tariff rates implemented today remain, especially on China? Thanks. Yeah. No, I mean, essentially what we're doing is we're taking the goodness we saw in Q1 and flowing that through to the full year. We talked about we had flat inflation, and as you can tell by our Q2 guide, we're expecting that goodness to flow through to Q2 as well. However, with the uncertainty on the tariffs, we've guided to mid-single-digit inflation for the full year. That really implies if we've got low on the front half, mid to high on the back half. What I said was we would probably have low single-digit inflation absent tariffs. You add a couple of points on there. We've said publicly 1% translates to about $10 million in cost. You can anticipate about $20 million-$30 million in the back half, again, which is essentially the impact of the tariff uncertainty. We also added, Danny, about $15 million of normalized weather. We've had weather favorability the last couple of years. We can't just count on that every year. Plus, as Jessica pointed out in her remarks, the amount of incidents we feel will go up to more normalized levels. It is circa $50 million or so that we've built into the guide, and it still nets out to a gross margin guidance between 54%-55%. This is a 200 basis points increase. We're feeling really good about the balance of taking the performance on the front half, but that we're in a position that we can put some caution in there and still feel good about our margin raise. Feel great about it. That's super helpful. Thanks. Thanks, Danny. Thank you very much. Your next question is coming from Ian Zaffino of Oppenheimer. Ian, your line is live. Hey, Ian. Hi, Ian. Hey, good morning. This is actually Isaac Saulson on for Ian. Thanks for taking all the questions. Yeah, congrats on the strong quarter. Hi. Thanks a lot. My first question is on the real estate side. Guidance calls for the high single-digit increase this year. I believe you mentioned you expect 15% growth in the second quarter. Maybe help us understand what drives that growth, given how existing home sales have trended through the start of the year. Do you assume a rebound, or is promotional activity in the AHS relaunch helping drive some of that growth? Thanks. Okay. I think it's the addition of 2-10, which has a very strong real estate portfolio. That's, I think, contributing greatly. We did have improved unit performance, but it was down 6% versus last year, we were down close to 10%. The combination of the addition of 2-10 and slightly improved performance in real estate, in organic real estate, leads to that. I think it all nets out too, but the answer to your question is more specifically primarily 2-10. Okay. Understood. Just to follow up on the retention rate, it's super strong this quarter, around 80%. I think you went through a couple of the main drivers of that. I think part of it is the makeshift. Maybe help us understand how you expect that to trend through the year. Anything else you could highlight on some of the drivers of retention? Thanks. Yeah. This is a grinding initiative for the entire company. We have a lot of people lined up against this because this is the backbone of our company. We pointed out in this time that we've introduced this expanded calling program that has reduced the number of people who cancel, which counts as a saved unit. We've got the preferred contractor, which is our contract relations team, the increase in preferred contractors as they've done a nice job on that. The marketing folks are working really hard on staying close to our members through the journey. It's a series of initiatives that, excuse me, we take in order to drive that number. We think that will sustain. I'm not going to project any specific numbers because we're just learning the 2-10 part of the business now. They have strong retention also, which is one of the things we were attracted to in that asset as we pursued it. It's all coming together quite nicely, but this is something we work at day after day after day. Okay. Understood. Thank you very much. The other thing I would point out, Isaac, is this addition, and I talked about it, video chat with an expert. This is really sparking some interest. We did a nice job with one of our Warrantina ads introducing video chat with an expert. I gave you some of the stats earlier about how we are helping people to fix it themselves, which is a downstream benefit for us from a cost perspective. We have a lot of interest from our members on video chat. It's a great user experience. I think that is another thing that is contributing to our retention. All of these things are coming together to net to that retention number. Okay. Very helpful. Thank you. Thanks, Isaac. We have reached the end of our question and answer session, and indeed the end of the conference. You may now disconnect your lines at this time and have a wonderful day. We thank you for your participation.