Frontdoor, Inc.

Ladies and gentlemen, welcome to Front Door's first quarter 2026 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'll begin today's call. Please go ahead, Mr. Davis.

Thank you, Operator. Good morning, everyone, and thank you for joining Front Door's first quarter 2026 earnings conference call. Joining me today are Bill Cobb, Chairman and CEO, and Jason Bailey, Senior Vice President and CFO. The press release and slide presentation that will be used during today's call can be found on the investor relations section of Front Door's website, which is located at www.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, April 30th, and, except as required by law, the company undertakes no obligation to update any forward-looking statements, whether a result of new information, future events, or otherwise. We will also reference certain non-GAAP financial measures throughout today's call. We've 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. Coming into 2026, we laid out an ambitious plan. Grow the member base, deliver structurally higher margins, and maintain a disciplined capital allocation framework to create shareholder value. I'm happy to report that we are off to a fast start in 2026 and executing on each of these. Turning to slide five. Revenue grew 6% to $451 million. Gross profit margin remained strong at 55%. Net income grew 11% to $41 million. Adjusted EBITDA increased 3% to $104 million and we bought back $60 million worth of shares. Operationally, our member count trend continues to move in the right direction, with growth in our first-year channels accelerating to 3%. Combining this with our strong execution in the renewal channel, we now anticipate total member count will grow approximately 1% for the year. This would be a major milestone and would mark the first year of organic member count growth since 2020. Complementing our core business, our HVAC upgrade program continues to be a significant driver of growth and adds meaningful value for our home warranty members. Let's now turn to slide six to take a deeper look at channel performance. Starting with the direct-to-consumer channel, where ending member count grew 3% versus the prior year period, marking the sixth consecutive quarter of year-over-year member growth. proof that our strategy is working. Our approach to DTC is anchored in three key areas, strengthening brand leadership, growing demand, and improving conversion. First, strengthening brand leadership. We continue to benefit from strong brand awareness, which we further reinforced in March with the launch of our latest Warrantina campaign. Campaign results continue to be terrific. with improvements across key brand metrics, including unaided awareness up 6% to 28%, purchase consideration up five points to 35%, and likelihood to recommend up eight points to 63%. Second, we are growing demand through an optimized value proposition, a more refined targeting approach, and enhanced performance marketing. These efforts are allowing us to drive higher intent to purchase traffic while maintaining discipline around our marketing investments. In short, we are improving both the quality and quantity of demand entering the funnel. Additionally, we have started to see increased demand from the integration of 210 onto our platform with better SEO performance and an improved user experience. And third, we are improving conversions. We continue to refine our sales funnel through optimized marketing content for LLMs, AI tools to improve sales performance, and promotional pricing, all to drive stronger conversion. The beauty of our promotional pricing strategy is that we are able to deliver member count growth without compromising long-term renewal performance. Most importantly, the renewal rates for our promotional cohorts are consistently exceeding those of non-discounted member cohorts. Now, moving on to the first-year real estate channel. While existing home sales remain near 30-year lows, home inventory continues to rise. This improvement in inventory is creating a more favorable selling environment for home warranties. To capitalize on this, we've been deliberately investing at the local level and leveraging targeted promotions to position our brands for success. Here's a great metric. Our attach rate has improved now for eight consecutive months and was at nearly 6% of existing home sales in March. As a result, ending member count for first-year real estate grew 3%, the first time we have organically grown this channel in years. This is a very big deal. Now, turning to renewals, where our performance has been nothing short of amazing. Renewal rates remain near record highs, supported by a combination of factors. Continuous improvement in the end-to-end member experience and reduced cancellations, driven by engaging with members at the right time with the right message. Now, moving to non-warranty and other. we continued to scale during the quarter with revenue growth of 23% year-over-year to $41 million. HVAC upgrades remain the primary driver, and we continue to optimize how we run the program. By routing a greater share of HVAC claims to higher converting contractors, we have seen significant improvements in both quote rates and orders. Let me now turn to slide 7 to discuss our strategic priorities driving value creation. Last quarter, we were clear about the priorities that matter most for our business. First, member growth. Improving first-year acquisition trends combined with strong renewal rates gives us confidence that we expect to deliver approximately 1% member count growth this year. Second, we continue to scale non-warranty revenue in a disciplined manner. We have proven our ability to expand share of wallet while deepening engagement with our member base. Third, deliver structurally higher margins. Last quarter, we increased our long-term margin targets underpinned by dynamic pricing and cost discipline. This margin performance translates into strong cash generation, which brings us to our final priority, disciplined capital allocation to drive long-term value creation. Our capital allocation priorities remain unchanged. First, we invest to accelerate growth through organic initiatives and selective M&A. Second, we maintain a strong balance sheet and financial profile. And finally, we return excess cash to shareholders, and we are on track to complete our current share repurchase authorization by early 2027. Execution across all of these long-term goals is clearly reflected in our financial performance. With that, let me turn it over to Jason to walk through the financials and our outlook in more detail. Jason.

Thanks, Bill. Good morning, everyone. Let's start on slide nine, where I will quickly cover some of the financial highlights for the quarter. We are off to an excellent start in 2026. Our first quarter results reflect focused execution and consistency across the business. Versus the prior year period, revenue grew 6% to $451 million. Gross margins remain strong at 55%. Adjusted EBITDA increased 3% to $104 million. And lastly, adjusted diluted EPS grew 14% to 73 cents per share, reflecting strong earnings growth and the positive impact of our share repurchase program. Now, let's turn to slide 10 for a deeper look at our revenue performance. As I just highlighted, total revenue grew 6% to $451 million. This was driven by approximately 5% from higher realized price and 1% from higher volume, primarily due to the HVAC upgrade program. From a channel perspective, compared to the prior year period, renewal revenue grew 6% driven by higher price. First year real estate revenue increased by 3% as higher volume was partially offset by slightly lower pricing. First year direct-to-consumer revenue decreased 5%, driven by our promotional pricing strategy aimed at increasing member count growth. This lower pricing reflects a higher mix of discounted first-year members from the past 12 months of new member acquisition, which was partially offset by higher volume as we added more new members. Lastly, non-warranty and other revenue increased 23%, due to both higher price and volume driven by our HVAC upgrade program. Now moving down the P&L to gross profit and gross margin on slide 11. Gross profit increased 5% versus the prior year period to $248 million, while gross profit margin held strong at 55%. For the first quarter, our gross profit margin reflects higher price realization of 5% or $19 million, disciplined cost management leading to low single-digit cost inflation, slightly higher incidents or service requests per member, which includes approximately $1 million from unfavorable weather in the quarter. This gross profit margin also reflects the ongoing expected revenue mix shift as non-warranty and other revenue continue to scale within the portfolio. Turning to slide 12 to review our net income and adjusted EBITDA. For the first quarter, net income grew 11% to $41 million versus the prior year period. Adjusted EBITDA grew 3% to $104 million. As planned, SG&A increased during the quarter to capitalize on the strong momentum from 2025 in the direct-to-consumer channel. Adjusted EBITDA margin remains strong at 23%, reflecting disciplined cost management and solid operational execution, despite the higher levels of marketing investments. Let's now turn to slide 13 to discuss our free cash flow and capital deployment. Our recurring revenue and capital light business model continued to generate excellent free cash flow of $114 million in the quarter. As a reminder, we expect to convert adjusted EBITDA to free cash flow at a rate of over 60% in 2026. In the quarter, we returned $60 million to shareholders through share repurchases. We ended the quarter with a strong liquidity position of $698 million and a low net leverage ratio. More broadly, this financial strength supports the capital allocation strategy Bill outlined earlier providing the capacity to invest in long-term growth, maintaining balance sheet strength, and returning excess cash to shareholders. When stepping back, Q1 was another proof point of what our business model is built to do. We continue to deliver strong earnings, generate significant free cash flow, and return substantial capital to shareholders while accelerating growth investments. Let's now turn to our second quarter outlook on slide 14. For the second quarter of 2026, we expect revenue to be in the range of $635 million to $650 million. This outlook reflects a low single digit increase in renewal revenue, a mid single digit increase in first year real estate revenue, a low single digit decrease in first year direct to consumer revenue, and a mid-20% increase in non-warranty and other revenue. We expect adjusted EBITDA to be in the range of $198 million to $208 million. This reflects higher gross profit from revenue conversion, low single-digit inflation, continued revenue makeshift to non-warranty, and our strategic decision to increase sales and marketing spend with the strong momentum we are seeing in the first-year channels. Turning to our full year 2026 outlook on slide 15. We are reaffirming our full year 2026 outlook with key assumptions remaining essentially unchanged as detailed in our earnings release and shown on the slide. As a reminder, and for those of you that are new to our story, I want to take a moment to discuss how seasonality impacts our financial results. With our first quarter results and second quarter guide, we anticipate that 53 to 54% of our full year 2026 adjusted EBITDA will be generated in the first half of the year. This is similar to the split in 2025. This is a normal part of our business and the reason why I encourage our investors to focus on our full year performance and guidance as the true measure of how we are delivering results. While the geopolitical environment has become more complex, our execution across the business combined with multiple levers we can deploy to offset inflation, give us confidence in our ability to deliver on our expected revenue and adjusted EBITDA growth for the year. With that, back to you, Bill.

Thank you, Jason. Our first quarter results reflect a continuation of the strong execution you've come to expect from Front Door. I'd like to highlight three things as we wrap up. First, our member count is now growing. The team is doing great work and we're seeing that translate into measurable progress. And as a result, we now expect our total member count to increase approximately 1% for 2026, a major milestone for our business. Second, we are continuing to deliver strong margins in line with our long-term targets. The operating model we've been strengthening over the past several years is allowing us to deliver consistent results. And finally, Our business model is doing what it was designed to do, generate a lot of cash, and return that to shareholders through share repurchases. We love the position we're in, and we remain focused on executing with discipline as the year progresses. Operator, please open the line for questions.

Thank you, Bill. At this time, we are conducting our 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. And for anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Mark Hughes of Truist Securities. Mark, your line is live.

Yeah, thank you. Good morning. Hey, Mark. Bill or Jason, good morning. Did you talk about the real estate channel? Seems like you're having good success there. I wonder if you might touch on the attachment rates. You said they've been improving in recent months. Was it 8% in March? Where did they bottom out at? Where historically have they... gotten up to in a stronger market?

Yeah, if you recall many years ago, and I'm talking six, seven years ago, attach rates in the industry were around 30%. That has fallen through COVID and the real estate sluggishness into the mid-teens. What has happened is we have steadily seen improvements in our attach rate, which is a measure of our warranties divided by existing home sales. So in March, we hit 6% on that measure. And I think it reflects some really good work by our real estate team, some work we're doing on shifting our focus away from large MSAs to focusing really on the local real estate agent. We have added some promotional pricing there. It's not at the level of 50% off, but it enables us to have, you know, basically get the attention of real estate agents And we've seen, we've spent a lot of time talking about the improvements we've made for our members with the app, our experts, et cetera. So it's a combination of factors, and we're steadily moving up. And like I said, I watch that measure very closely, the attach rate in our team, you know, with eight consecutive quarters of improvement. That's a lot of what we think is driving the better performance.

Yeah. Yeah. And will the strategy be on renewal? You'll move that up pretty expeditiously like you've been doing in the direct-to-consumer channel?

Yeah, it continues to be around 30%. It's a big initiative for our teams to try to, you know, we tick up into the 31 level, but we've been kind of stuck at 30%. But if we can unlock that, that would be great. It used to be in the mid-20s, so we have made a lot of progress here. And as you saw in our 10K, our renewal rates improved by 200 basis points in 2025. So I think that the combination of efforts, which is why we feel so good about where the renewal book's coming, and if we can continue to grow the first-year channels The renewal book is catching up, and that's why we're now at 1% ending member account growth, what we're forecasting for 26.

And then one more, if I can. You talked about the 210 that you're integrating onto the platform. You're seeing some momentum as a result of that. Could you expand on that point?

Yeah, we now run it as one, and this was always the plan. We thought that the synergies we could start to drive in revenue. So we run HSA, AHS, and now 210. All of our DTC actions, all of our real estate transactions, all of our renewal transactions are all on one platform. This gives our teams an ability to do specific initiatives You know, so for example, now 210 can do 50% off on the DTC channel. Now we can do the same kind of tactics that we've used to help drive the renewal channel. So that's why it makes it a lot easier for us to execute 210 as being part of the platform.

Yeah, I'd add Bill, too. I guess the other good examples would be our dynamic pricing tools can be applied, our contractor algorithms. It's just great.

Yeah, so we now have one integrated contractor relations team, one integrated customer support team, et cetera. I appreciate that. Thank you. Okay, thanks, Mark.

Thank you very much. And our next question is coming from Eric Sheridan of Goldman Sachs. Eric, your line is live.

Thanks so much for taking the question and thanks for all the details in the report. We're going to go a little bit deeper in how you continue to get message around scaling marketing investments around your brands, around driving customer acknowledgement of the product set and customer adoption. of products broadly. And how are you thinking also about applying marketing to the balance you want to strike between the warranty business and the non-warranty business over the long term in terms of the messaging you want to put in front of consumers? Thanks so much.

Yeah, our primary focus is on the warranty business because the non-warranty business is primarily at this point a B2B2C business where we work very closely with our contractors. But there's a halo effect on the brands that come from talking about American Home Shield and what that does for our members. So the way we operate is we talk about our marketing funnel. It starts at the top with our broad advertising message. We use the warranty as our main message. But that's a portion of our marketing investment because there are all the elements of search marketing, direct mail, social media. There's a variety of tactics that we use in our overall marketing. Then what we do with non-warranty is that's really we're marketing to our members directly. So with a 2.1 million member base, we found that it's very efficient for us. That's why we call it relatively CAC-free marketing. When we talk about non-warranty. And we have such a good relationship with our contractors. They're very excited about this additional piece of business that they can put in new equipment. And frankly, it has a downstream effect of less truck rolls because the equipment is so new. So we think it's a virtuous cycle of working together. Like I said, the primary focus is on American Home Shield, but we have a number of techniques that we're using, including some of the AI tools I referenced in my remarks. And it's really come together. The marketing team's done a terrific job. Thank you. Thanks, Eric.

Okay, thank you very much. And our next question is coming from Jeff Schmidt of William Blair. Jeff, your line is live.

Hi, good morning. So the new promotional strategy in real estate seems to be off to a good start. Are you seeing competitors respond to that? Are some starting to do the same thing, or do you anticipate that happening?

We haven't gotten much intelligence that others have done that. Now, we believe that they probably are taking a look at that. But, you know, right now we're trying to – we're very focused on the local real estate agent, so that's where our focus is. But we haven't picked up a lot of noise around others trying to do that.

Yeah, I think I'd add to, you know, our focus there in that strategy is more, as Bill said in his remarks, about engagement. And so I think in addition to the promotional pricing, you know, we can drive engagement by highlighting the app, our experts. and kind of our overall improvements to customer experience. And so I think this is just another tool in our kit that allows our field sales team to really succeed.

Yeah, I think that's right, Jason, because I think what we try to think about is we need to keep bringing the agent new news, whether that happens to be during a promotional pricing period or the other elements that we've added to our arsenal.

Okay. And then... So there was 5% of realized pricing in the quarter. That was better than we had expected. Did you push through another round of pricing increases in December and at what level, or was that more from your dynamic pricing?

I think it's no incremental pricing since our last update. I think it's just the effectiveness of our dynamic pricing tools. We're pretty much in line with where we were expecting or where we are expecting the year to land.

Yeah, I think, Jeff, when we talk dynamic pricing, what we're really saying is we're We're constantly looking at, you know, frankly, increasing our prices. But, you know, some members get a price decrease, and that's the advantage of dynamic pricing. We're really priced to the person. So it really was a continuation of what we're trying to do with our 112th at a time recognized revenue base. we're able to, you know, while there's a disadvantage that it takes 12 months for it to be fully realized, there's an advantage that we can act very quickly and enact pricing changes. And that's really what we've done. But I think we're pleased with that effort. I think it also ties back to the strong renewal rates we've had, which also enables us to show, you know, a nice increase in pricing.

Yeah, I think there's probably a little bit of timing in there in the compare to Q1 versus Q2. Q1 of the prior year, we're still targeting that kind of low 2% to 3% full-year realized price impact.

Great. Thank you. Thanks, Jeff.

Thank you very much. And our next question is coming from Ian Zoffino of Oppenheimer. Ian, your line is live.

Hey, good morning. This is Isaac Salazan on for Ian. Thanks for taking the question. Hey, Isaac. Hey, good morning. So the question would just be on the customer retention for the quarter. It looks like that was just down slightly compared to last year. Not sure if that's a timing thing, but maybe you could just touch on that piece of it, maybe in relation to the renewal channel specifically, and then kind of your expectations for retention as you move through the year.

Yeah, thank you. It's down slightly in Q1. That's just timing of 210 rolling into the book. I think we mentioned at acquisition their retention rates were lower than ours now that they're fully in our book. I'd say that's just a minor impact in the quarter. By year end, we expect retention to be relatively flat. The other thing I'd kind of point to is, you know, our renewal rates continue to be strong. I think Bill mentioned earlier we were up almost 200 basis points year over year. at the end of 25, and now with 210 on our platform, that's one of the upsides we see just as we put our tools and techniques on the base. We'll see that their rates come up to ours.

Yeah, so Jason's right. It's a mixed issue, but AHS retention rates continue to be very strong.

Okay, understood. And then just as a follow-up, as far as the gross margin outlook for the year, could you guys reaffirm that? Maybe if you could just touch on the cost side, whether it be parts or equipment or labor, maybe just how things have trended in the first quarter, and then the confidence you have in that as you move through the year to reach that margin target.

Yeah, we're at, I'd say, low single-digit inflation in Q1. Our contractor relations team has done a great job working with our contractor network. We feel good about our outlook for the year. I would obviously say Bill and I are monitoring macro conditions daily and working with the team, so we're pretty confident that we'll be right in line with our guide. The outlook is Pricing flowing through, similar incidence rates to prior year, and then low single-digit inflation for the full year. Pretty normal weather is our expectation. And then we've obviously considered the mix of non-warranty as it grows all in that guide.

Okay, great. Thanks so much.

Thank you very much. And our next question is coming from Sergio Segura of KeyBank Capital Markets. Sergio, your line is live.

Hey, Sergio. Hey, Bill. Good morning. Thanks for taking the questions. First question I just had was on the four-year outlook. So do you maintain that? You know, I guess last year you had a pretty steady cadence of beating and raising. So you beat this quarter in one Q. So maybe just walk us through why you chose to keep the annual outlook and change despite the stronger than expected performance.

Yeah, Sergio, you know, I'd say Q1 is just a little bit of timing on the beat. We are very confident in how we're operating. Since we just gave the guidance and obviously watching all the macro news, We felt really good about reaffirming where we are. We think the team, both top line and bottom line, are operating very, very well. So that's just kind of how we ended up on a reaffirming where we are.

Yeah, it's a little bit of an anomaly because we report Q4 so late. You know, it's like two months into the year, and then we come right back only a month into the Q2 to report Q1. So, you know, but giving the guidance 60 days ago, and we felt like we, yes, we did beat. You know, it wasn't a large beat, but we were very proud of it. And so we felt like, well, let's stay with it. Let's reaffirm guidance at this point. And then we'll see. We'll take another look at mid-year.

Got it. Understood. And then the second one I had, which is somewhat related, has to do with, That's the geopolitical tensions we're seeing in the macro uncertainty that you mentioned. Any comments you can provide on how the higher and volatile oil prices might be impacting your input costs and how much of a swing factor that could be to margins for this year?

Yeah, you know, like I said a minute ago, Bill and I monitor this really probably almost hour to hour, day to day, Sergio. But the team is operating very, very well. You know, in Q1, we were really successful. We haven't seen a huge impact from fuel cost. It's definitely an input for our contractors. But, you know, remember, we manage cost overall and a total cost per job. And the levers, as we think about, there's probably four or five key tools we use to kind of manage that cost base. One, I'd start with, we're always thinking about our mix of preferred contractors and how much business we have with them and trying to optimize that mix. Two, Bill and I continue to remain laser focused on SG&A and how we control costs there and what levers we have. Three, we are in a great position with our supply chain and being able to manage among multiple vendors and suppliers as we think about where we want to put our volume. And then the last two would be probably the more normal things you think of, but that's how we manage our trade service fees, and how we manage dynamic pricing if we need to go to that level. So I think we've got a lot of tools in our toolkit to help us manage through this as we think about kind of the big macro picture right now.

Great. Thanks for taking the questions. Thanks, Sergio.

Thank you very much. Our next question is coming from Corey Carpenter of J.P. Morgan. Corey, your line is live.

Hey, good morning. I wanted, Bill, to go back to a comment you made in the prepared remarks. I think you said renewal rates for the promotional cohorts are exceeding those for the non-promotional cohorts. Could you expand a bit on that? Obviously, that's a bit counterintuitive. And then does that make you want to lean more, perhaps, even into that discounting strategy?

Yeah, it is counterintuitive, Corey. And we talk about this all the time. And I press the team multiple times. Are these numbers right? I think it has to do with consumer behavior beyond just home warranties. This is a tactic that a lot of consumer services companies are using where you really discount your first year, and then there's almost an expectation among consumers that, you know, I got a great deal in the first year. I'm going to have to absorb an increase in pricing. As we've said over, we believe or we've proven, we've been at this for about three years now, So we've been able to see that we're able to climb back up to the, if you will, normalized pricing level within 18 to 24 months. So we test this all the time, but I think what has happened is that it just proves out that people, and it has to do with, What kind of service they get? Do they have the right contractors? You know, a lot of factors. The moment of truth is really the most important piece there. So I know it's counterintuitive, but we've been testing this and proving it out continuously. To your point about would this indicate that we would do more, I think that's something we pulse. You know, we stay very close to this every month in terms of how we want to pull the trigger on promotions We are now moving into early days of dynamic discounting so that it isn't just the broad brush. We'll continue to do broad brush promotions like 50% off. But we're encouraged about what's potentially going to happen with dynamic discounting. So I think we're very active in this field. Like I said, we've been at it for about three years. And we feel good about it. And obviously, the important point is to make sure that those renewal rates continue to stay high.

Okay. And I wanted to ask one more question on macro. I know you touched on kind of the cost side question earlier, but I wanted to ask it more on the demand side. And there's been a lot of potential for higher inflation and more stress on the lower end consumer. Are you seeing any change at all in consumer behavior? And maybe if you could just remind us of what your kind of mix of consumers demographically looks like. Thank you.

Yeah. So let me take it. So the mix of consumers is about 50% below $100,000, 50% above that. The piece that we have not seen a real impact on demand is because with the budget protection that our core value proposition brings, I think it actually plays to our advantage. It may hurt us a little bit in the real estate sector with the the real estate market continuing to be sluggish. But I think the core value proposition, which we try to hit home very hard, and we try to do this on a targeted basis. We talked in the past about targeting more millennials, targeting our Hispanic markets. So I think that has worked to our advantage. So to date, we haven't seen a softness in consumer demand. You can see that from some of our numbers. And I think that speaks to the value proposition of a home warranty. Thank you.

Thanks, Corey. Thank you very much. And our next question is coming from Mike Rendos of Benchmark. Mike, your line is live.

Hey, guys. Thanks for taking the question. Can you talk a little bit about your relationship with Skyslope, how that works, and how much business is coming through them?

Yeah, Jason's been very close to that relationship, so I'm going to let him take that, and I may add something.

But go ahead, Jason. Yeah, Mike, we have an ongoing relationship with them, and the announcement you saw was an expansion of that relationship. I think we were originally in four or five states, and now we're expanding to over 40 states. The easiest way to describe it is think of SkySlope as a platform that that makes things easier for real estate agents. And then for us, the way that translates is it's we're, we're in that workflow. So it's easier to attach a home warranty. Uh, you know, we're pleased with the relationship and, you know, again, it's just another tool for our field sales team to be successful and kind of build on the momentum they already have.

Okay. And just as a followup, is that an exclusive situation that you have there? And also, uh, As far as the growth in the real estate channel, where are you seeing the most growth on a regional basis, and how many competitors do you see in some of those markets?

Yeah, I'll take that in two parts. The SkySloat relationship is not exclusive, but we're really comfortable with our position there and how well we work together. And then on a regional basis, we're seeing success.

I think it's pretty consistent with our overall business, what we call the smile states. And our biggest markets are Texas and California, Georgia, et cetera. I think as far as competitors go, in the real estate part of the DTC, we have a larger share, a smaller share, about a third in real estate because we have many more competitors. But from a geographic perspective, it's pretty consistent with the way our overall business plays out. Okay, thank you. Thank you.

Thank you very much. Well, we appear to have reached the end of our question and answer session, and indeed the end of the conference call. It does conclude today's conference, and you may disconnect your phone lines at this time. We thank you for your participation.

Thanks, Jenny.

Thank you so much.