Q2 2021 Frontdoor Inc Earnings Call
Measures throughout today's call.
We have included definitions of these terms and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in our press release 8 of the appendix to the presentation in order to better assist you in understanding our financial performance.
I'll now turn the call over to Rex for opening comments.
Thanks.
Thanks, Matt and good afternoon, everyone. This month marks the 15th anniversary of our largest brand American home shield.
I want to take a moment to say thank you. So all of the team members, who built the business over the last 50 years and for the platform they provided us.
Today, our team looks forward to transform the company and the industry over the next 50 years. Since COVID-19 emerged early last year, we have navigated through unique and challenging market conditions and proven that we have of solid and resilient business model that offers homeowners protection peace of mind and convenience over.
Over this time, we have executed a number of strategic initiatives to drive growth and improve the customer and contract your experience.
These initiatives coupled with the lower than expected level of service requests drove solid second quarter financial results.
Now turning to slide 4 and our 2021 objectives.
Despite the market driven challenges in our real estate channel we are on pace to deliver the highest level of total company annual revenue growth, we have seen as a standalone company. This momentum should continue into the next year as we target double digit revenue growth in 2022 as a result of the investments in our direct to consumer channel executing customer retention initiatives.
And the continued scaling of our emerging businesses.
We are still aiming for double digit growth for this year there'll be somewhat dependent on the real estate inventory and our ability to grow other channels.
And our direct to consumer or DTC channel, our new product line of remains the big hit with customers as evidenced by higher than originally forecasted sales of our platinum product.
As a reminder, our new products were launched in the second quarter of this year and provide better coverage options to our customers.
Due to the success of the initial launch we're continuing to evaluate further additions to our offering and believe the demand for premium products remains very strong.
Additionally, we are continuously testing our dynamic pricing models to further optimize customer pricing.
As we expand our dynamic pricing initiatives, we will continue to seek the optimal balance between customer growth and gross margin.
Finally, our investment in DTC marketing and customer conversion optimization continues to pay dividends driving double digit revenue growth at the very attractive marketing efficiency.
The real estate is of Great channel for US we continue to see growth opportunities in our D to C channel that will better help us reach our long term growth objectives are.
Our second the second objective is the advanced automation initiatives across our business, we recently announced the hiring of Tony Baker. The served as senior Vice President Chief Digital officer to help accelerate progress on this front.
Telling you recently served as vice President and Chief Technology Officer for Amazon fashion and held multiple leadership roles. During the 7 year tenure with the Amazon Prime.
Prior to Amazon.
Leadership roles at Nike, the Mantech and the region's group.
He will be responsible for the strategy and execution of technology initiatives and investments across the organization will play a critical role in front doors continued digital transformation.
He will drive our digital first strategy, specifically aimed at improving our service delivery process through technology and data.
On prior calls I covered some of the specific automation initiatives, we are building on.
And appliance purchasing portal, adding our new contract of portal integrating our supply chain with key vendors and accelerating parts of ordering these.
These initiatives are performing well and we continue to ramp up adoption across our customer and contractor base.
That continues the opportunities as it relates to furthering our digital initiatives of drive both scale and customer experience.
Our third objective is to improve customer retention, which is currently at 75% on a rolling 12 month basis.
While we expect to see customer retention rates improve as global supply chain issues subside process improvements take hold and new customer growth accelerates our retention rates will continue to reflect the impact of the tight supply chain challenges experienced over the last year.
That impact is weighted on our customer experience and retention due to the difficulty of obtaining parts of the placement of units.
We're expecting that the global supply chain would've improved faster and Thats provided some tailwind to our renewal rates. While we are pleased with the meaningful improvement in availability of parts of the equipment over the last several months of.
Variability is still not of pre pandemic levels.
Our other customer retention initiatives include improving the customer experience of key service touch points, removing friction from the renewal process optimizing our dynamic pricing algorithms and engaging our customers outside of the service claims.
Thinking of customer engagement, we recently launched a new module in our customer portal that provides our customers access to discounted maintenance services as well of tips on how to maintain their homes.
We're very pleased with the engagement so far with this new feature and expected to translate into future retention gains.
Our final objective for 2021 expand and scale, our broking businesses of <unk> the.
The expansion of these businesses will diversify our portfolio accelerate future of total company revenue growth.
<unk> remains on track to meet 2021 revenue target of $20 million as we continued to expand into new trades, such as plumbing and electrical across the 35 cities in which <unk> operates.
Additionally, we added maintenance services under the <unk> banner, including HVAC Tune-ups, we feel our members are looking for more maintenance services not covered under their plan and plan to expand the services in the coming months.
<unk> launched in late 2020, and since that time, we've learned that the Standalone revenue generation model is working well of the market today, but there's more opportunity to cross sell to existing and prospective home service plan of customers as well as increased contracted utilization.
Although we although we're still relatively new in the <unk> launch we are pleased with our current progress and expect substantial growth from this business going forward as we gain economies of scale.
With regard to stream, we rent the utilization across our core operations as long as monetizing our investments by adding new software as a service or SaaS enterprise customers we.
We continue to target a multipronged usage approach is both contractors and employees in our call centers to initiate the stream call and drive adoption.
We continue to drive further contractor utilization of stream and seeing the extremely positive customer response as they provide immediate feedback and generally experienced shorter time the service request of resolution.
The value stream also has the real environmental impact it will look for ways to solve customer problems without rolling a truck, which reduces the total carbon footprint related to completing the service request.
Now turning to slide 5 we will discuss the real estate channel in more detail, let's start with the macro data, where we've seen the existing home sales market continued tight this year.
According to the latest June data from the National Association of Realtors or not we've seen the time on market dropped to a record low of 17 days.
The average price for a single family home has increased 24% over the last year to approximately 370 thousands of dollars and inventory levels are at near record low of $2.6 months.
But the market trend is becoming more extreme where we're seeing increased challenges trying to sell of home service plan as part of the real estate transaction.
In terms of resulted in relatively flat home service plan unit growth in our real estate channel despite strong existing home sales growth.
This trend.
The challenge for the entire home service line industry, regardless of this may cause some short term turbulence.
Leveraging our business model on the following the ways.
The first in our DTC channel, we launched the new marketing campaign focused on homebuyers were also increasing our overall investment in the DTC channel versus our original plan by approximately $5 million to help mitigate the decline of real estate.
The advantage of this approach is the DTC customers renew the rate of approximately 3 times higher than that of first year real estate customers, which provide a tailwind for our renewal of channel heading into 2022.
I'd like to remind everyone that we won't see the full benefit of these actions until next year as we recognize revenue on a monthly basis.
Second we launched the campaign targeting both real estate agents and homebuyers in order to drive better awareness of our home service plan value proposition.
It is more important than ever to help homebuyers understand the advantages of having a home service plan and this tight real estate market and help them navigate the current landscape.
Many of homebuyers are waiting inspections of contingencies when they purchase of home we feel these customers now more than ever they need our services.
Third we are aggressively expanding our partnership opportunities we see this as another growth area for us as we expand into new channels.
For example, our partnership with Mr. Cooper of the mortgage finance space going well as we grow off of a very small base.
More to come as we solidified partnerships to further grow and diversify our business.
It's important to remember that these actions are addressing what we view as the short term challenge on the real estate market and our overall growth strategy does not solely rely on rapidly growing our real estate channel.
In closing despite the short term challenges front door continues to perform well.
Targeting our largest annual revenue growth as a standalone company, our second quarter gross margins exceeded our expectations and we are delivering solid adjusted EBITDA, while investing more of the business.
Looking forward, we continue to target sustainable double digit revenue growth as we execute our strategies to expand our value proposition and as our new initiatives gain traction in 2022 and beyond.
I remain excited about the trajectory of our company and driving the next chapter of our digital transformation.
I'll now turn the call over to Bryan Bryan.
Thanks, Rich and good afternoon, everyone, let's now turn to slide 6 on will review, our second quarter 2021 financial results.
Revenue increased 11% versus the prior year period of $462 million driven.
Driven by approximately 6 percentage points of volume growth and 4 points of higher pricing.
Similar to last quarter I would point out of the volume component includes strong year over year growth from both <unk> and stream on from the small business.
Looking at our home service plan channels.
Revenue derived from customer renewals up 9% versus the prior year period due to improved price realization and growth in the number of renewed home service plans.
First year real estate revenue was up 4% versus the prior year period.
Primarily due to improved price realizations.
I'll speak more about our real estate channel and the outlook.
First year direct to consumer or DTC revenue was up 12% versus the prior year period.
Primarily due to the increase in marketing investments that drove growth in the number of home service plans.
Revenue reported in our other channel increased $10 million over the prior year period.
Primarily due to continued growth of pro connect and screen.
Gross profit increased 11% in the second quarter versus the prior year period to $242 million and our gross profit margin was 52% slightly higher than the prior year period.
Net income was $40 million, which includes a $30 million debt.
Extinguishment charge related to our recent refinancing.
Adjusted net income increased $9 million from the prior year period to $65 million.
The primary differences between net income and adjusted net income is the tax effect of add back of the debt extinguishment charge.
Adjusted EBITDA was $114 million in the second quarter of 2021 versus $100 million from the prior year period.
This was above the top end of our guidance range due to lower than anticipated level of service a question on the quarter and the.
The execution of the cost management initiatives.
Let's move to the table on slide 7 kind of walk through the adjusted EBITDA Bridge from the second quarter 2020, the second quarter 2021, sorry.
Starting at the top we have $31 million of favorable revenue conversion from the second quarter versus the prior year period.
As a reminder, revenue conversion is calculated using the estimated gross margin impact of both new home service plan revenue and price changes.
Contract claims costs increased $6 million in the second quarter versus the prior year period, when excluding the impact of the change from higher revenue.
The increase over the prior year period was primarily driven by unfavorable cost trends and the appliance plumbing and HVAC trades due to industry wide parts and equipment availability challenges on inflation.
Partly offset by a lower number of service requests across all trades.
Additionally, I'm pleased to report that the pandemic driven higher service request trends from 2020 are moderating slightly faster than we originally planned specifically on our appliance and plumbing trades.
While we are still on batch of 2019 levels. We do expect this favorable trend to continue in the back half of the year.
I'd also like to point out that HVAC service requests were favorable compared with our initial estimates.
Which was the primary driver of claims costs being lower than expected in the second quarter of 2021.
This favorability may be a surprise to some so I'll provide a little more color.
Despite cooling degree days being 7% higher across the entire U S. Weather did not have a meaningful impact on our level of HVAC service requests from the second quarter of 2001 versus the second quarter of 2020.
As a reminder, cooling degree days on a metric commonly used to measure of energy needed to cool the building.
And is calculated as the degree of difference between the daily mean temperature from 65 degrees Fahrenheit.
The second quarter is of Great example of how our service request levels don't always have a linear relationship the national weather trends as the warmer weather in the west was largely offset by cooler weather in the south where.
So we have a higher customer concentration.
The sales and marketing costs increased $4 million in the second quarter versus the prior year and primarily included investments to drive growth of the DTC Channel Broken Act and screen.
Customer service costs increased $3 million in the second quarter versus the prior year due to investments in customer retention initiatives and customer growth.
And finally.
General and administrative costs increased $3 million in the second quarter versus the prior year due to higher personnel costs and investments in technology.
Please now turn the slide 8 for.
The review of our cash flow and cash position of before we get into the cash flow details I want to highlight the efforts of our treasury on legal teams in regards of our recently completed debt refinancing.
We expect this transaction as well as the $100 million debt repayment completed in February to reduce ongoing annual cash interest expense by approximately $30 million versus 2020 based on the recent range for interest rates.
We also lowered our gross debt by approximately $350 million.
Turning to cash flow net cash provided from operating activities was $119 million, a $21 million decrease versus the prior year period as unfavorable changes in working capital were partially offset by higher earnings adjusted for noncash charges.
Net cash used for investing activities was $15 million, a $4 million decrease versus the prior year period, primarily due to a decrease in capital expenditures.
Net cash used for financing activities was $378 million.
Compared to $4 million in the prior year period and was almost entirely due to reduction in gross debt.
Free cash flow calculated as net cash provided from operating to these minus property additions was $104 million from the 6 months ended June 32021.
Per to $122 million from the prior year period.
We ended the second quarter of 2021 with $323 million on total cash which include restricted net assets of $173 million in unrestricted cash of $150 million.
Our unrestricted cash combined with $248 million.
Of available capacity under our revolving credit facility.
Provides us with the solid available liquidity position of $398 million.
In addition to our solid liquidity position front door continues to have an extremely strong financial position.
You recall, we launched as a public company in October 2018.
On the 4 times net leverage.
We couldnt be more pleased by how far we've come in almost 3 years as our net leverage has improved to 1.8 times.
Also we continue to generate robust free cash flow and we are targeting a full year 2021, adjusted EBITDA conversion to free cash flow of just under 55%.
As I reiterated last quarter are.
Our first priority for capital allocation remains responsibly investing in the business to drive the gross levels, we're now demonstrating.
However, given the sizeable amount of excess cash we expect to generate again this year.
We continue to search for acquisition opportunities in both the home services industry and digital space.
I'll now conclude my prepared comments with our third quarter and full year 2021 financial outlook on slide 9.
We expect our third quarter revenue to range between $470 million and $480 million and adjusted EBITDA to range between $95 million and $105 million.
The third quarter outlook compared to the prior year period includes the following assumptions for.
The revenue uplift.
The single digit growth from the D to C and renewal channels, along with the slight decrease versus prior year and our real estate channel.
Should note that the new revenue initiatives that rich detailed earlier are expected to have a larger impact over the next several quarters.
The claims cost.
<unk> of favorable service of course levels, specifically as it relates to improvement in pandemic trends in our appliance and plumbing trades offset by ongoing inflation and cost pressure.
The SG&A of $13 million.
The Murphy of investments to support our growth objectives.
This includes the approximately $5 million of incremental DTC spend from the third quarter that Rex mentioned to help offset lower real estate revenue.
And we will continue to make additional investments in people and technology to support our growth.
Turning to the full year.
Our updated revenue target range of $1.6 billion to $1.6 2 billion.
The change primarily reflects the current challenge posed by the impact of the extremely tight existing home sales market on our real estate channel.
Despite this challenge the range implies approximately 9% to 10% total revenue growth versus 2020.
Our largest annual growth rate as a standalone company.
This comprised of the contributions from both price and volume in our home service plan business as well as pro connect in screen growth.
On gross profit margin target is in the 48% to 49% range as we expect the benefit of lower than anticipated service request levels and cost management efforts to effectively offset lower real estate revenues and the higher inflation impact on claims costs.
SG&A is expected to range from $525 million, the $535 million or just under 33% of revenue.
As a reminder, 1 of the half of the increase versus prior year is comprised of higher sales and marketing investments to drive revenue growth.
It also includes investments in service and retention of initiatives.
I'll also note for those of you who try to bridge from SG&A to our adjusted EBITDA guidance that we expect noncash stock based compensation to.
The increase approximately $10 million in 2021 versus prior year.
Additionally, our 2021 SG&A projection includes approximately $30 million of combined expense for protein at the screen as we invest to ramp their size and scale heading into 2022.
Our adjusted EBITDA outlook range remains between $280 million and $300 million.
Which is consistent with the prior annual guidance, despite exceeding our second quarter expectations.
This is due to the impact of the screen growth from the real estate channel incremental DTC marketing investments.
The claims cost inflation.
Largely offset by the continued benefit of lower service request levels and our cost control efforts.
With that I'll now turn the call back over to Matt to open the question and answer session Matt.
Thanks, Brian as a reminder, during the question and answer session. We encourage you to ask any questions that you may have the please note the guidance is limited to the outlook we provided.
Operator, let's open the line for questions.
We will now begin the question and answer session to ask the question you May Press Star then 1 on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble the roster.
Our first question comes from you.
Youssef Squali from Truest. Please go ahead.
Hi, This is net cronin on for Youssef. Thanks for taking my questions 2 if I can.
I know, it's still early but can you speak to the contribution margin differential between pro connect in your traditional warranty business and whether 1 should be higher than the other at scale and then secondly, what needs to happen to get the real estate segment to grow double digits in the second half of 'twenty on I know you called out that you still expect the segment to grow 9% to 10% in the year.
Thanks.
Yes, Hi Tech.
So for the.
In terms of the contribution margins still I think early early days.
<unk> to invest in the business so think of it depends on the on the training right. So so I think that.
Overall of our time.
The contribution margin.
Get closer to.
Our home service plan margins, but I think it's really dependent on the on the trade show.
Things like carpet cleaning for example, it may not be as it is.
As profitable as other areas. We also view it as an opportunity to increase our engagement with customers. So while we may.
Do the job for slightly lower margins when we look at it from a long term value perspective.
It's actually more advantageous for us to tell.
Those jobs from an engagement perspective.
In terms of your second question.
No.
We certainly can't control of the real estate market, but as I outlined in my prepared remarks, we're doing a couple of things to really.
2.
Drive.
Revenue of those areas.
Certainly as we invested more in direct to consumer.
That will help secondly.
We're actually targeting real estate buyers the said before in prepared remarks the.
On a lot of auto customers are our homebuyers are buying homes without inspections of our contingency. So I think that's a.
A great a great population to the market market towards and the.
We continue to focus on partnerships.
Within the real estate space or adjacent to the real estate space such as Mr. Cooper.
All of that said, we're not totally dependent on on real estate for our growth.
Going forward, so we're still at Barnwell.
The largest annual revenue growth for the year.
Even despite a pretty tight inventory from from a real estate perspective.
Understood. Thanks.
The next question comes from Cory Carpenter from J P. Morgan. Please go ahead.
Hey, it's Brian on for Corey just wondering if you could expand on that on some of the drivers of the lower service request volume of coding and then also are you back to more normalized pre COVID-19 levels of service. Your question how does your guidance by the.
Service request volume in the back half of this year. Thanks.
Finally, I'll take that are you on the kit.
I'm happy to Rex, saying, Hey, Brian how are you.
As I mentioned in my prepared remarks HVAC on the.
Second quarter was lower than we expected.
Despite the.
The cooling degree days and also the.
<unk> demick related trades of appliance and plumbing.
Our mitigating.
Faster than we thought so that's all good news for us and that's a big part of why our instances in our service requests were lower in the second quarter and looking forward. Yes, we are assuming that's continuing as far as the pandemic trades.
The continued to abate as we go to the back half of the year and we still have some weeks left for the peak season as far as <unk> and we'll see how that plays out.
So far it's been working out pretty well for us.
Perfect. Thanks.
The next question comes from Ian Zaffino from Oppenheimer. Please go ahead.
Hi.
A couple of questions as far as.
How do you think about pricing on recovery.
Are you.
Assuming the ongoing inflation and an increase of inflation.
Not just on your cost, but also how you kind of go to market taking price.
Are you in kind of in the position right now given all of the inflation and maybe preemptively take price and that'd be the first question and then on the acquisition of funding that you mentioned that how you're thinking of acquisitions versus buybacks what size acquisition would be in the sweet spot.
And maybe where it was 1 of the leverage thanks.
Sure I'll take this is <unk> I'll take the first 1 and then I'll hand over to Brian in terms of pricing I think.
The net of pricing point of the.
The key assets of the company and when you think about we have the ability to continually look at.
Testing price from a from a geography perspective from a risk perspective, and we've been doing that really since last year. So.
I think we always price in the core inflation, if we see things change we have the ability to to.
To move on pricing pretty pretty quickly.
On the pricing also confirms that really customers are primarily in elastic as it relates to the price.
And so we're.
Or have the ability to really.
Used gross margin as the the lever for <unk>.
Growth and for profitability. So between those 2 things, where we feel like we're pretty well positioned thanks to turn on the.
Dynamic pricing.
Ryan you want to talk about the leverage or sorry on leverage but.
Overall the capital.
Capital allocation strategy sure.
Sure. Thanks rich.
Hey, Dan how are you.
As I mentioned, we're still acquisitive, we're going to invest in our business responsibly first and foremost of grow it even faster than we are now hopefully.
And but we are acquisitive in the areas of home services on the digital space as I mentioned, but things assets of price each day, so we're looking long and hard.
And on Rex and I are both in violent agreement that we don't want to overpay for anything.
Stewards of Investor capital, So we're going to be very careful when we look at things and so we're still looking the good news is although we lowered our cash by $213 million quarter to quarter through our debt repayments. We still are of a $150 million of cash and we'll rebuild that pretty quickly this year with our conversion.
From EBITDA to free cash flow. So you know.
And if we look at something of scale, we can obviously lever up as needed as well. So that's sort of our stack ranking right now of how are we going to use our cash if that's helpful.
Perfect. Thank you.
The next question comes from Matthew Gaudioso from Compass point. Please go ahead.
Hey, Good afternoon, guys just the question on customer service on.
I know the investments there take a little bit of times of.
Flow of Peru in the form of the retention rate I was just wondering how you can.
Wondering if you could share any color on how those investments are going on whether you feel like they are having an impact and then can you remind me of the sensitivity of.
Each percentage point of retention rate need for the top line. Thanks.
Sure sort of high attracts.
In terms of.
We've always been on a really of digital journey for a number of years now really trying to leverage both data and technology to really that's the.
The change the customer experience, but if all of the overall and Thats 1 of the reasons we.
We acquired stream. So we think that as we continue to make investments that allow us to.
Touch customers sooner.
Allow us to change the overall cycle time as it relates to fixing their issue on those those investments will.
Pay off from the retention respect overtime.
Right right now.
As the supply chain gets better then that we expect that to be.
Certainly better for us from a retention perspective.
But.
It definitely takes takes time.
So there's still let's say, where this is the journey that will be on per.
For a while at the customer's expectations continue to change.
Ryan you will talk about the.
The point of retention story.
Sure Thanks Rich yeah.
1 percentage points worth about $15 million to $20 million of incremental revenue on an annualized basis and that will always depend on in the year impact on the timing of when we actually get that benefit, but it's about 15% to $20 million.
Great. Thanks.
The next question comes from Michael <unk> from Goldman Sachs. Please go ahead.
Great. Thanks for the question I just have 2 first I was wondering if you could just give us a more detailed update around pro connect.
Of your pacing in terms of.
The number and type of jobs youre offering on that and the market expansion there. Thanks.
Sure Michael So.
We launched into the 35 cities primarily in appliances.
As we move.
Out towards the.
End of the year, we're adding both plumbing and electrical and then really found a bright spot in maintenance services as well.
So our growth strategy is not only the target other customers, but also target.
The $2.2 million customers, we have today.
We're on track for our.
The meeting to our recognition of limit of $20 million.
On both from the expansion of trades in the spot markets as well as adding incremental maintenance services, we think there's a real opportunity as we move into 2022 as well.
Great. Thank you and I just wanted to follow up on some of the earlier questions around.
The strong gross margins in the quarter and the payroll service request levels.
And when you say that was more of a function of.
Of of weather normalization of the service requests out of the reopening continues I'm just trying to get a better sense of the.
Staying ability of that.
And also are you seeing increase.
Levels of customer satisfaction.
The volume Normalizes then.
Do you expect any benefits from that as it relates sort of attention. Thank you.
So I'll take I'll take the back half of it and passed over to Brian So from a customer service and retention perspective.
Yes.
Outside of any supply chain issues.
We've worked very hard the team to focus on on.
On the poultry.
Both the retention as well as the cycle time and it really.
The kind of focusing on.
Kind of kind of speed if you will.
And on behalf of customers certainly as the.
The supply chain improves and we're able to.
To get the parts and replacements that we need to to.
To help customers that will that will continue to have a retention of benefit for us.
As it relates to kind of weather vs.
The process improvement that type of thing, Brian you want to take that 1.
Sure.
Yes, I wouldn't say weather was the benefit but I don't think of as punitive like it could have been in Q2 with the HVAC service requests, but I think the exciting thing was just the the mitigation of some of the pandemic related server true.
<unk>, Michael again, like plumbing and appliance that they're trailing off of the incident rates are going lower we're not back to 2019 levels.
I think I stated that in my prepared remarks, but they're getting better. So I don't see why that would change going forward I think people. Despite the delta variant of I think people are still exiting the home maybe the wearing masks, but I don't see as much pressure on our home systems going forward just my opinion.
Does that help 1 of the thing out of ahead.
Sorry, 1 of the thing that I'd add is that yes.
We focus a lot on preferred contractors.
I'm pretty proud of the team.
You have a pretty high rate of.
The dispatching with our preferred contractors as part of which are always help us from the from a cost perspective.
Great. Thanks, very much for the thoughts Rex and Brian much appreciate it.
Thank you. Thank you.
The next question comes from Robert <unk> from Wells Fargo Securities. Please go ahead.
Great. Good afternoon, and thanks for taking the questions a couple of more on the real estate channel, we know you're focusing on the customer and partner education, but I'm wondering if you could maybe talk also the share opportunity.
1 of the agents have the ability of the biggest day of their customer to 1 of multiple plan on providers or any thoughts on on how you can make sure the top of mind on the channel and then the second 1 final 1 on real estate, given the sort of a seller's market dynamic that youre seeing we imagine a greater share of planned volumes, our buyer pays or agent pace versus cash.
On the pace.
Just wondering if you could maybe help us think through how that could potentially impact our retention rates beneficiary of pinpoint in the near feature of any color on the.
On the mix of buyer versus agent in some of the Pes and differences of the attention maybe how that plays out over the next.
A few quarters from prior years. Thank you.
Sure so so.
We're still very much engaged with our.
Our brokerage partnerships, where it all 10 of the top 10 brokerage.
The firms, we continue to market aggressively too.
<unk>, a real sort of a partner so that we can make sure they have.
Yes. They are educated on the on the kind of what.
The our plans and the performance of those plants.
We're also focusing as I mentioned during my prepared remarks.
It really of a direct to consumer marketing effort focused on home buyers.
So.
Again, the folks who.
It may of.
<unk> the inspections or.
The other contingencies, we are have the ability now to.
Directly pocket too a lot of the new homebuyers so.
Pretty pretty excited that this may create a certainly a new a new channel for us but.
In terms of the real estate channel continue to target the value proposition campaign per for both brokers and and homebuyers were expanding partnerships.
As well.
From a from a retention perspective keep in mind that.
The direct to consumer customers retain of about 3 to 1 to real estate. So.
We think that are the real opportunity as we continue to lean into direct consumer missile.
Also pay future dividends as it relates to Raj to retention.
Yes.
Ladies and gentlemen, thank you for thank you again for joining the <unk> second quarter 2021 earnings call. Today's call is now concluded.
Thank you everyone.
Okay.
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