Greetings, and welcome to the Frontdoor, Inc. Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode, and a question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Matt Davis, Vice President of Investor Relations and Treasurer. Sir, the floor is yours. Thank you, Operator. Good morning, everyone, and thank you for joining Frontdoor's Second 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 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, August 5, 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 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 perform exceptionally well, and we've delivered another quarter of very strong financial results. This is the latest chapter in a continuing line of superior financial and operational performance. Our second quarter highlights include revenue increased 14% year-over-year to $617 million. Excellent operational execution contributed to a second quarter gross margin of 58%, a 130 basis point improvement over a prior year. Net income grew 21% to $111 million. Adjusted EBITDA grew 26% to $199 million. Additionally, we grew first-year DTC organic home warranties by 9%. We saw continued strong non-warranty revenue driven by the new HVAC upgrade program. The synergies from the 2-10 acquisition are ahead of schedule, and we used strong cash flows to repurchase $150 million worth of shares year to date through July 31. Altogether, when we combine results from the first and second quarters, Frontdoor has had an amazing first half of the year. Now for a quick refresh on our three strategic priorities that are driving value for our shareholders. First, grow and retain home warranty members. That's job number one. Number two, scale revenue from our non-warranty business. This is well underway, and we are now raising our outlook for new HVAC revenue for a second time this year. Number three, optimize the integration of 2-10 Home Buyers Warranty, which, as I mentioned, is ahead of schedule, and I'll address that in more detail shortly. Now, to provide some very important context, I'd like to take a step back and look at the impact the macro environment has had on home warranties. As shown here in 2020, Frontdoor had 460,000 first-year real estate home warranties. The challenge of a strong seller's market driven by low inventories, 2 million fewer existing home sales, and record high home prices and mortgage rates combined to result in a 63% decline in our real estate units over the last five years. Today, the real estate market remains challenging. According to the latest information from the National Association of Realtors, or NAR, in June 2025, existing home sales slipped 2.7% month -over -month to a seasonally adjusted annual rate of 3.93 million, among the lowest in 30 years. There is some reason for optimism. NAR also said the inventory of unsold existing homes in June rose 18% year-over-year to 1.53 million homes, or the equivalent of 4.7 months of supply. That's up from three and a half months in January of 2025. With inventory increasing, it appears that a transition to a buyer's market is underway, which will be welcome news for our home warranty attach rates. Now, moving to the direct-to-consumer channel, in spite of the pressure real estate has put on our overall ending home warranty count, the DTC channel is performing well. In the second quarter, the number of home warranties grew organically by 9% versus the prior year. This is now four consecutive quarters, a full year of organic home warranty growth. Our success in DTC is due to several factors. Number one, we continue to refine and optimize our marketing campaign and media strategy, leading to record high brand awareness. We are targeting current and new audiences better. We are more effective in our digital advertising, particularly when homeowners are seriously considering a purchase. Finally, our discounting strategy continues to be a proven and highly effective way to fuel member growth. Moving on, we continue to be pleased with our retention rate, even with significant price increases and the continuing macroeconomic challenges. Through the second quarter, retention stood at 78.3%, near an all-time high. While this does include a lower mix of real estate members, retention is strong because we are creating a better member experience along with continued process improvements. Now, regarding the member experience, we are continuing with the heavy use of our preferred contractors, who currently perform 84% of our member jobs. We are also using technology to enhance the member experience. To date, AHS app downloads are growing to 14% of members since we launched it in October, and usage of the video chat with an expert feature launched in February has proven to be a big hit with our members. Under process improvements, we continue to focus on early engagement with new members. Additionally, we are taking a more aggressive approach to reducing the number of cancellations through proactive engagement and selected incentives with members who are on the fence, resulting in an improvement in our members' save rate. Finally, and very important, members on autopay remain at a very strong 84%. Let's bring this all together. On slide 10, this shows our total home warranties across DTC, real estate, and renewal. What's most encouraging is that we have stabilized the trajectory of total home warranties. We have clawed our way back from the nadir of 2023. After years of macro headwinds related to real estate and inflation, our efforts are working. Through organic DTC growth, the acquisition of 2-10, continued strong renewals, and the eventual return of the real estate market, we are now well positioned to grow overall home warranties. Let's now talk about our second strategic priority, the scaling non-warranty revenue. Jessica will discuss our results in the broader non-warranty part of the business, but I'm going to focus now on the new HVAC upgrade program. To refresh, this program benefits our members who want to take advantage of our scale purchasing power to proactively replace their HVAC, upgrading to a system that is new, more efficient, and compliant with the latest government standards. In short, this program continues to perform exceptionally well with huge upsides. We expect revenue to come in this year nearly 40% higher than last year, and we are raising our full-year outlook for this program to $120 million. We have many reasons to believe this program has much more runway. Penetration is currently less than 2% of our membership, so we know there is more opportunity here. In addition to the new HVAC upgrade program being great for our members, we have done a number of things to enhance its appeal. First, we introduced a new financing option, which includes an interest-free loan for the first 12 months. In the emerging non-warranty space, giving our members the flexibility to finance large purchases without breaking their budget is leading to greater demand. As such, usage of financing is up 75% in 2025. Next, contractors are also very excited about the new HVAC upgrade program. We've more than doubled their participation in 2023, and with the onboarding, training, and marketing materials we provide, contractors have helped us raise the number of quotes to members by over 40% in the first half of the year. Our third strategic priority is optimizing the integration of 2-10. As a reminder, 2-10 was a great acquisition and strategic fit because it adds a complementary home warranty business. It diversifies our revenue stream through 2-10's new home structural warranty business, and it provides significant cost synergies and cost-selling opportunities. On the synergies front, we've reduced costs faster and better than we originally estimated, with additional synergies in back office, sales and marketing, and service. In our estimate, we expected to derive about $10 million in synergies this year, but we now expect that to be closer to $15 million. When factoring in all of the expected synergies, the adjusted purchase price EBITDA multiple is now below 7x, underscoring the strength of this acquisition. In short, 2-10 was a great deal for us. Finally, before I turn it over to Jessica, I want to touch on what Frontdoor is doing to leverage artificial intelligence to enhance the member experience and increase operational efficiency. I'll keep this high level for competitive reasons, but we are partnering with best-in-class AI providers to progress our initiatives across the marketing, sales, and operations functions. In marketing, AI is helping us to enhance campaign performance through more accurate predictive modeling, delivery of more relevant and accurate search results, and smarter audience targeting. In sales, we are using AI to provide real-time coaching to agents during consumer customer engagements, as well as streamlining lead qualification and conversion. On the operations front, we're using AI to standardize and accelerate member support calls and to enhance the accuracy and timeliness of authorizations. Again, this is high level, but the key takeaway is that we are already seeing positive results using AI. On that high note, I'll now turn the call over to Jessica. Thanks, Bill, and good morning, everyone. In the second quarter, Frontdoor continued to deliver outstanding financial results, underpinned by favorable external factors and focused execution across the business. This drove another exceptional quarter for gross profit margin, adjusted EBITDA, and cash flows, which all helped to further improve our financial position. Let's get into the details on slide 60. As you can see, our second quarter results built on the strong momentum we established in the first quarter. Second quarter revenue grew 14%, net income increased 21%, and adjusted EBITDA rose 26%. For the first half of 2025, our revenues grew 13% to over $1 billion. Net income increased 17% to $148 million, and adjusted EBITDA grew 31% to $300 million. Now, let's unpack the drivers for the second quarter, starting with revenue on slide 17. Our second quarter revenue grew 14% year-over-year, $617 million. This was driven by a 2% increase in price and 12% growth in volume, which is primarily attributable to the 2-10 acquisition. From a channel perspective, renewal revenue increased 9% due to the benefit of the 2-10 acquisition, as well as higher price realization. Our dynamic pricing model continues to work well, allowing us to actively increase price while maintaining strong renewal rates. Real estate revenue increased 21%, primarily due to the 2-10 acquisition. Direct-to-consumer revenue grew 12%, supported by both organic volume growth and the addition of 2-10. Higher volumes were partially offset by lower price realization due to our targeted discounting strategy to drive new member growth. Finally, other revenue grew 63% versus the prior year period, driven by continued success in our new HVAC and Moen programs, as well as the addition of 2-10's new home structural business. Let's now move down the P&L to gross profit on slide 18. Gross profit increased 16% versus the prior year to $356 million. This increase was driven by a 130 basis point increase in gross profit margin to 58%. During the second quarter, we experienced low single-digit cost inflation on a net cost-per-service request basis. We also experienced a lower number of service requests per member, primarily from favorable weather in the HVAC trade. This resulted in a benefit of $5 million in the second quarter compared to the prior year period. Now, moving to slide 19, we are strengthening our operational muscle and advancing a culture of continuous process improvements to drive greater efficiency across the organization. Our sharp focus on process improvements includes leveraging dynamic pricing to increase price in a smart way while maintaining strong member retention rates, using data and technology to streamline service request assignments, improving our ability to match jobs with the right contractor the first time. We are maximizing utilization of preferred contractors with 84% of jobs assigned to them in the second quarter. Finally, we are flexing our scale and purchasing power with our suppliers' contractors, enabling an overall better cost structure. Now, let's turn to the second quarter net income and adjusted EBITDA on slide 20. For the second quarter, net income grew 21% to $111 million and adjusted EBITDA grew 26% to $199 million. Adjusted EBITDA margin improved to 32% in the second quarter, which is up about 300 basis points and one of the highest we have ever seen. This growth was mainly driven by $51 million of favorable revenue conversion, primarily from the 2-10 acquisition and higher price. Sales and marketing costs were also favorable for the quarter, primarily due to timing. We expect to allocate more marketing dollars in the third and fourth quarter to help drive member count growth. Contract claims costs were $1 million higher during the second quarter, which we discussed earlier. Customer service costs and G&A increased $2 million and $9 million, respectively, primarily due to the addition of 2-10. Now, moving to slide 21. On a fully diluted basis, earnings per share grew 26% to $1.48 per share, and adjusted earnings per share grew 28% to $1.63 per share. Now, turning to slide 22 and our statement of cash flows. Starting on the left, net cash provided from operating activities was $251 million for the first half due to exceptionally strong earnings and positive working capital. Net cash provided from investing activities was $42 million and was primarily comprised of sales of marketable securities, partially offset by capital expenditures related to technology projects. Net cash used for financing activities was $153 million and was primarily comprised of $134 million of share repurchases, as well as $14 million of scheduled debt payments. We ended the second quarter with a total cash balance of $562 million. This was comprised of $185 million of restricted cash and $377 million of unrestricted cash. Strong cash generation remains a cornerstone of our investment thesis on slide 23. In the first half of the year, strong operating performance resulted in free cash flow of $237 million, a 44% increase versus the prior year period. Let me repeat that. Free cash flow of $237 million. Not bad. Our strong cash generation provides us ample liquidity, and when combined with our higher earnings, has resulted in an improved net leverage ratio, which is trending towards 1.5 x. This strong financial position enables flexibility across the three key pillars of our capital allocation strategy. As we transition to slide 24, you will see that we are focused on returning excess cash to shareholders through share repurchases. This year, we have returned approximately $150 million in cash to shareholders, repurchasing over 3.1 million shares through July 31, which represents over 4% of shares outstanding. Given our strong first half results, cash flows, and share repurchases to date, we are increasing our full-year share repurchase target again to approximately $250 million, which will mark our fourth consecutive year of increasing share repurchases. Now, turning to slide 25 and our third quarter and full-year outlook. For the third quarter revenue, we expect a high single-digit increase in our renewal channel, a low double-digit increase in our real estate and DTC channels, and a $20 million- $25 million increase in other revenue versus the prior year period. Taken together, we anticipate third quarter revenue to grow 13% to be between $605 million and $615 million. We expect third quarter adjusted EBITDA to grow 12% to be between $180 million and $190 million. This outlook includes the hot weather we've seen in July, a slight increase in claims costs, and higher SG&A spend due to timing and the addition of 2-10. Now, let me take a moment to address our second half adjusted EBITDA outlook, which is $60 million lower than our first half results, primarily due to two items. First, nearly half of the difference is driven by our regular seasonal adjustment practice, which is designed to better align revenue in relation to claims costs throughout the year. Second, SG&A is expected to increase nearly $20 million in the second half of the year, primarily to drive member growth. Now, moving to full year, starting with revenue, where I'm excited to report that we are increasing our outlook by $25 million to be between $2.055 billion and $2.075 billion. The increase is primarily driven by strong performance in our renewal channel and our new HVAC upgrade program. We expect volume to be at nearly 10% and realized price to increase 2% - 4% for the year. Our revenue expectation by channel assumes a nearly 10% increase in the renewal channel, a low single-digit increase in the B2C channel as we continue to leverage discounting to drive member growth, a high single-digit increase in the real estate channel, and other revenues range between $180 million and $190 million, driven by $120 million from our new HVAC upgrade program, up from $87 million in 2024, $15 million from Moen, $44 million from the 2-10 new home structural warranty business, and about $10 million from other non-warranty services. Our member count expectations for the year remain unchanged, and we expect the number of home warranties to decline 1% - 3%. Moving on to gross profit margin, we are raising our full-year outlook to be between 55% and 56%. This is a 100 basis point increase over our prior outlook as the macro environment related to inflation, tariffs, customer incident rates, and supply chain continue to come in more favorable than originally expected. Additionally, our internal actions to drive revenue conversion and process improvements are helping to expand margins. Our margin guide incorporates a flow-through of favorable first half results combined with low single-digit cost inflation in the second half of the year, as we expect a slight increase in costs versus the first half of the year and a modest increase in the number of service requests per member. Now, moving down the P&L, we are narrowing our SG&A outlook to be between $660 million and $670 million. Our full-year adjusted EBITDA outlook also includes $18 million of interest income, $9 million of 2-10 integration costs, and reflects stock-based compensation expense of approximately $33 million. Based on all of these inputs, we are increasing our full-year adjusted EBITDA guide to be between $530 million- $550 million. Finally, our full-year effective tax rate is now expected to be 24%, and our capital expenditure outlook is now approximately $35 million. With that, I will now hand it back to Bill for some final comments. I want to close with a couple of important final points. First, as Jessica just showed you, Frontdoor continues to deliver. The second quarter was another round of very strong financial and operational performance. As such, we are raising our full-year revenue and adjusted EBITDA outlook for the second five-year period. None of this would be possible without the dedication of our 2,000+ company associates and valued partners. Every day, they are living our company purpose to make life easier for every homeowner. Our company mission is to think like an owner, act like a pro, help like a friend. Our internal associate engagement surveys show our team is super engaged with scores well above industry benchmarks. This team's efforts have put Frontdoor in its strongest financial position in our history. They have built Frontdoor into the stock-to-own in the home services sector. Thank you, and we are now ready to take your questions. Operator, please open up the line for questions. Thank you. At this time, we will conduct our question -and -answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, and you may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question is coming from Jeff Schmitt with William Blair. Your line is live. Hi, good morning, everyone. What drove the increase in 2-10 cost synergies from $10 million to $15 million for 2025? Obviously, a pretty large jump. Are you still expecting run rate synergies of $30 million by 2028, which includes revenues? What drove it from the $10 million to $15 million is we're just getting better at it as we learn the business, and we've done some things on the back end, really across all functions, to where we found efficiencies to drive it to $15 million. Yes, at this point, we're consistent with what we said in Investor Day that over time, I believe it's through 2028, Matt, that it'll be $30 million +. Okay, great. Growth of the upgrade program continues to be really strong. Is your guidance all for HVAC, or does that include water heaters, and any update on that and potential timing of adding those? Yeah, it's all HVAC. We're not ready yet to do the other groups, but we're working on it. We're certainly working on that. Right now it's all HVAC. We do have some tests we're running and really nothing to report just yet, but we still think the opportunity remains quite large. Okay, thank you. Thanks, Jeff. Thanks, Jeff. Thank you. Our next question is coming from Sergio Segura with KeyBanc Capital Markets. Your line is live. Great, good morning. Thanks for taking the questions. First, I guess on the real estate revenue, it looked like that came in pretty strongly ahead of your prior guidance. I know you talked about 2-10 giving that a boost during your last call and called that out as driving some strength this quarter. Just curious if you can dive into what came in better than expected for the real estate channel this quarter. I would just again point to our seasonal adjustment, as I called out in my prior remarks. Remember, our regular practice is really to shift some of that revenue from Q1 and Q4 into the main part of the middle part of the year, which is where we get more of that activity. What I would say, Sergio, operationally, is we have done a really good job with our real estate sales team integrating 2-10. We have a dedicated 2-10 real estate sales team there. They're quite good. They're a great combination with our AHS team. I think operationally, the other advantage we have is that we've really hit the ground running. We haven't had a lot of growing pains, and you know we're in high season right now, and they're all working very hard. Got it. That's helpful, thanks. On the gross margin guide, are you still baking in the $50 million in headwinds for the back half of the year? It doesn't seem like you're seeing the impacts of those yet. Just curious if that's still the right number. Go ahead, Jessica. Yep. Sorry, there's a delay here, Sergio. I mean, the math I was just coming at, and we're not alone in that. Much better than we anticipated, both from our guide at the beginning of the year and where we stood at Q1. As you know, our previous guide, they've been, I think we were saying, kind of mid to high single digits in the back half. We're projecting low single digits now based on what we've seen in the business to date and just what we're projecting for the back half. Again, much better than we anticipated previously. When looking at our business, it's always best to look at the full year because of some of the seasonal fluctuations that we do around our regular accounting practice. I would certainly look to the full year, and that's what I think Jessica tried to lay out about it. Okay, thanks both. Thanks, Sergio. Thanks, Sergio. Thank you. Our next question is coming from Mark Hughes with Truist. Your line is live. Thank you very much. Good morning. Hey, Mark. Did you comment on how 2-10 is doing in its own sales process, kind of selling their new home structural warranty? What kind of momentum are you seeing there? Yeah, we've been really pleased with the efforts there. You know, we operate, and I'll defer to Jessica on the rubric on this, but we really operate the business. How many structural warranties can we sell per year? That's what the team focuses on. Similar to what I just said about real estate, the transition has gone very well. We are hitting our numbers, and we're quite pleased with how that business has come along. It's a nice little jewel to add to certainly the home warranty business, which is our scale play. Yeah, and then just on that rubric, to Bill's point, this is a very predictable business, and we're able to really focus on operations in the current year. From a revenue recognition perspective, that is over a much longer period of 10 - 14 years. What we bought is coming in exactly how we expected, but we're continuing to drive new revenue, new business, and that's landing very well. Mark, the other thing I'd say, we're still learning. We have a new group of new home builders, and we've been used to dealing with contractors, and now we have builders, but we do see opportunity in the future and various ways of interacting with the builders beyond the obvious way of trying to work with them on structural home warranties. That part of the business is going quite well. Yeah, interesting. Bill, you'd mentioned rising inventories should be good for attach rates. Have you started to see any of that yet? Here's what I would say. Obviously, I can't talk about the third quarter, what's happened so far in July and early August, but I think we're starting to see, and you heard this from some of the other real estate companies, that the market with the inventory increase, that things seem to be moving in the right direction. We certainly believe that is certainly something that will help real estate attach rates for home warranties. I think the indications are, we've been playing at this for the 3+ years I've been here, and it always looks like this time there's some real data to support that the market could be moving in the right direction, certainly for us, to make it a more balanced market, which is ultimately what's best for us. Understood. One more, if I might. Jessica, within 2-10, any claims development on their reserves? Nothing that we're seeing. Pretty straightforward. Thank you very much. Thanks, Mark. Thank you. As we have no further questions on the lines at this time, this will conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.