Q2 2022 Frontdoor Inc Earnings Call
Real estate experience, Jeff is bringing new ideas on how to improve our go to market real estate sales efforts.
Additionally, Raj Mehta has transitioned to lead home service plan product and pricing across all of our brands.
Raj brings a wealth of home service plan experience given his leadership roles in marketing strategy and product development add from door American home shield and servicemaster over the last 13 years.
By realigning. These teams we expect to increase focus on the customer develop a more consistent sales methodology and improve accountability throughout the sales funnel as part of this effort, we are evaluating changes to our overall marketing and branding strategy.
We are also looking at our products, which should be transparent simple easy to understand and use.
While still early days, we have already identified opportunities to execute better and drive more sales over time.
In the near term our revenue growth will be primarily impacted by the challenges we are facing in selling home service plans and our real estate channel.
The record low days on market continued to support a strong seller's market, which in turn makes it difficult for us to attach our home service plan as part of a real estate transaction.
This trend appeared to continue through June based on the most recent data from the National Association of Realtors existing home sales declined 14% year over year.
Inventory data was mixed as the supply of homes increased to three months from two five months yet the days on market declined again to just 14 days.
And all cash offers increased from 23% to 25%.
However, we believe that the real estate market has already entered a period of transition.
Mortgage rates have increased to five 5% and we are hearing commentary from our real estate brokerage partners that the market dynamics are quickly shifting as multiple offers are diminishing and inspections are becoming the norm once again.
Let me be clear, we believe that the sales decline in our real estate channel is not permanent and we are optimistic that improvements in these leading indicators will result in a more favorable market environment to sell home service plans as the real estate market normalizes.
Regardless of market conditions, I believe that we can do a better job of executing in our real estate channel.
<unk> is working to change our sales culture and increase accountability.
We are prioritizing leads in our strongest markets and aggressively deploying our field sales team to improve conversion.
These changes are expected to improve our overall capture rate in all market conditions.
In conclusion, there is a high level of energy across the company as we are moving quickly to make improvement to the front door and I am confident that we will turn things around <unk>.
I have already made changes to our leadership team we are aggressively addressing the challenging economic environment, we are taking steps to improve execution and substantially reduce costs and we're reimagining the industry that we found it.
Longer term our opportunity to profitably grow the business has not changed we remain extremely confident in the underlying fundamentals for the following reasons.
First <unk>.
Demand for home repair and maintenance services continues to grow and is supported by changing demographics and recent home nesting trends.
There is tremendous demand for digital transformation in the home services space.
Third there is massive potential to deepen front doors market penetration as we improve our branding and finally, there is significant opportunity to grow through our on demand offering.
I will now turn the call over to Brian to review our financial results.
Thanks, Bill and good morning, everyone. Please turn to slide eight and I'll review, our second quarter 2022 financial results.
Second quarter, 2022 revenue increased 5% versus the prior year period to $487 million as a result of higher pricing and a mix shift to higher priced products in our home service plan business.
Which more than offset a slight decline in customer volume.
Looking at our home service plan channels second quarter revenue derived from customer renewals increased 10% versus the prior year period due to growth in the number of renewed home service plans and improved price realization.
First year real estate revenue decreased 26% versus the prior year period, reflecting a continued decline in the number of home service plans in this channel offset in part by improved price realization.
The decline in the number of home service plans in this channel was due to the ongoing challenges presented by the sellers market driven in part by extremely low home inventory levels across the U S.
First year direct to consumer or DTC revenue increased 15% versus the prior year period due to improved price realization and a mix shift to higher priced products as the volume was relatively flat.
Second quarter revenue reporting our other channel increased $5 million over the prior year period, primarily driven by pro connect growth.
Gross profit declined 13% in the second quarter versus the prior year period to $211 million and our gross profit margin was 43%.
I'll speak to the inflationary cost pressures that unfavorably impacted gross profit in a moment.
Moving down the income statement I would point out that as part of our efforts to better match, our office space footprint to our current needs and also to reduce operating expense.
We're entering into a sublease for our downtown Memphis headquarters.
Our plans hardwood with smaller less expensive space.
Which is more centrally located for our Memphis based employee population.
While this action resulted in a noncash impairment charge of $11 million in the second quarter related to our headquarters facility operating lease right of use asset and lease hold improvements the cash flow and adjusted EBITDA impacts over the remainder of our lease term are expected to be positive.
Net income decreased $7 million in the second quarter of 2000 $22 million to $33 million.
Adjusted net income decreased $22 million over the prior year period to $44 million.
Adjusted EBITDA was $77 million in the second quarter were $37 million lower than the prior year period.
Let's move to the table on slide nine.
Provide context for the year over year decline in second quarter adjusted EBITDA.
Starting at the top we had $23 million of favorable revenue conversion in the second quarter of 2022 versus the prior year period.
Contract claims costs increased $53 million in the second quarter versus the prior year period, primarily driven by an acceleration of inflationary cost pressures, including rising contractor related expenses and higher parts and equipment costs.
Second quarter claims costs were also unfavorably impacted by approximately $4 million from the extremely hot weather across the country primarily in May.
Additionally contract claims costs for the second quarter of 2022 include a $7 million unfavorable adjustment related the adverse cost development of prior period claims.
Sales and marketing costs increased $6 million in the second quarter versus the prior year period, primarily related to increased investments in the DTC channel and broken neck.
And finally general and administrative costs increased $1 million in the second quarter, primarily due to increased professional fees.
I'll now go into more detail on the significant claims cost inflation, we're experiencing as a result of the challenging macroeconomic environment.
FX on the business and our ongoing cost mitigation strategies.
Over the 12 months ended June 2020 to the consumer price index increased nine 1% not only the largest 12 month increase in over 40 years, but also included an acceleration over the last two months of the second quarter.
Furthermore, we are seeing cost inflation in home services rising even faster.
For example in June our contractors were faced with fuel costs, they were up over 60% versus one year ago.
We also saw the producer price index for heating and air conditioning equipment, and appliances up over 20% and 15% respectively.
It is one of the most challenging environments, we have ever faced and it continues to evolve as issues such as the war in the Ukraine and its impact on fuel prices and rolling Covid Lockdowns in China impacting the global supply chain.
However, we are seeing some green shoots as certain commodity prices are now declining.
For example, cold rolled steel a critical component in the manufacturer of water heaters and HVAC equipment declined 20% in June versus the prior year period.
Additionally, as I mentioned last quarter.
While we have great pricing visibility and.
And an ability to influence our own direct purchases of parts of equipment. We don't have that same level of real time visibility into our contractor costs.
Our contractors, who for the most part or small business owners generally pass along their higher cost to us and as they can take months to complete their building process, our ability to identify and manage accelerating contractor costs in the near term is limited.
I believe it would be helpful to provide more context as to how the current environment impacts <unk> operations.
The challenging macroeconomic environment, including higher parts and equipment costs and contractor related inflation resulted in our second quarter year over year cost per service request, increasing about 23%.
Which was much higher than the mid to high teens increase we experienced in the first quarter.
We believe the main drivers of this inflation of our first <unk>.
Rapid acceleration of the contractor related costs, including higher fuel costs operating costs and labor rates.
It also includes a substantial increase in contractor supplied parts and equipment costs.
Second our product mix now includes broader coverage offerings, such as our new platinum product.
Which has both a higher price point and a higher service cost and third although still within our projected ranges, we are paying higher prices for parts and equipment, we directly source.
As we've mentioned in the past implementing additional price increases as a lever we can pull to help cover higher inflation and we've already taken two price increases earlier this year.
We will continue to look for opportunities to increase price, while minimizing the impact to our customer count.
We are currently working on launching an update to our dynamic pricing model.
And we will take that opportunity to implement a third round of price increases for certain products in the second half of the year.
As a result, we are now targeting a 12% to 13% overall price increase in 2022.
However, it's worth noting that with our annual service plan structure.
Rice increases take time to be realized and while we started the process earlier. This year. They will provide more revenue and gross profit benefit in 2023.
I also wanted to remind you that our price testing continues to show that our customers are mostly priced in elastic and we expect to be able to continue to increase our price over time to cover inflationary pressures.
Beyond price our top priority is working to improve visibility into our contractor cost trends and then to mitigate the impact of the inflation on our margins.
Let me explain some of our initiatives in more detail.
We are continuing to improve our processes.
These actions primarily focused on how we engage and utilize our contractors, including increasing the percent of total jobs assigned to our preferred contractors.
We're also expanding our recruiting efforts to increase our contractor count and create more competition for contractor selection in key markets.
Our contract relations team is also improving our end to end operating processes in an effort to further mitigate cost increases.
One example is they now require a review of all servers with cost estimates over a certain dollar limit from non preferred contractors to manage our cost exposure.
Second we are continuing to maximize our strategic sourcing efforts by broadening the front of our parts and equipment sourcing network and supplying lower cost materials to our contractors and they could have purchased on their own.
Another example is offering our contractors direct buy programs for water heaters and HVAC equipment that we purchased at much lower prices.
The added benefit of this program, that's digital and reduces the number of inbound phone calls from contractors.
And third we are undertaking a comprehensive review of our SG&A expenses and have already identified a number of cost reduction opportunities that will result in over $30 million of improvement to our original full year 2022 SG&A guidance.
Please now turn to slide 10 for a review of our cash flow and cash position.
Net cash provided from operating activities was $94 million for the six months ended June 32022, and was comprised of $68 million in earnings adjusted for noncash charges and $26 million of cash provided from working capital.
Net cash used for investing activities was $19 million.
Was primarily comprised of technology related capital expenditures.
Net cash used for planning financing activities was $69 million.
Primarily driven by $59 million used for share repurchases.
Since launching the $400 million share repurchase program last September we have repurchased $162 million worth of shares or 40% of the total program.
I should note that we continue to prioritize share repurchases and our capital allocation strategy and remain committed to returning cash to our valued shareholders. However, like many other companies the amount of additional share repurchases, if any will depend on the macroeconomic environment and how our.
Business performs throughout the rest of 2022.
Free cash flow calculated as net cash provided from operating activities minus property additions was $75 million for the six months ended June 32022.
Compared to $104 million for the prior year.
We ended the second quarter of 2022 with $269 million in cash.
Restricted net assets totaled $159 million.
And unrestricted cash totaled $109 million.
Our unrestricted cash combined with $248 million.
Of available capacity under our revolving credit facility provides us with a solid available liquidity position of $357 million.
I'll now conclude my prepared remarks, with our current thoughts regarding the financial outlook for the third quarter and updated full year 2022 provided on slide 11.
We expect our third quarter 2022 revenue to be within a range of $470 million to $480 million, which reflects an increase in direct to consumer and renewal channel revenue versus the prior year period, partly offset by approximately 30% decline in real estate channel revenue.
Third quarter adjusted EBITDA is expected to range between $65 million and $75 million, which is below the prior year period, and driven by the accelerating inflationary cost trends the.
The impact of the July heat wave on HVAC claims and the challenging real estate environment.
Turning to our updated full year 2022 outlook revenue is projected to be within a range of $1 63 billion to $1 65 billion.
The full year revenue growth assumptions include upper single digit revenue growth and the D to C and renewal channels and a nearly 30% decrease in the real estate channel driven by historically challenged challenging sellers' market and extremely low levels of home inventory.
On a consolidated basis, our core home service plan business revenue growth is now expected to be in the low single digits.
Customer count is expected to decline by approximately 5% in 2022.
Primarily driven by the weakness in first year real estate sales.
Additionally reductions in pro connect marketing investment in the back half of the year will lower the full year revenue target to $30 million to $35 million.
Our full year 2022 gross profit margin is projected to be between 41% and 42% as a result of the challenging macroeconomic conditions, including the acceleration of inflationary cost pressures, which is partly offset by higher pricing and process improvement efforts.
This projection assumes that inflation.
It will be 20% on a cost per service request basis, and the actual number of service requests will be slightly down versus prior year.
We're now targeting full year 2022, SG&A to range between $525 million and $535 million, including a stock compensation expense target of approximately 28 million to $30 million decrease from our original 2022 guidance primarily relates to.
The SG&A expense reduction actions I mentioned earlier.
Based on these updated inputs full year 2022, adjusted EBITDA is expected to range between $170 million and $190 million.
With that I'll now turn the call back over to Bill for closing comments before Matt opens the question and answer session Bill. Thanks.
Thanks, Brian a couple of final thoughts. This management team is not pleased with where we are with this outlook. Our board has directed me to make the changes necessary as quickly as possible. As a result, we are working with a high level of intensity to do everything we can to improve our results for the rest of 2022.
<unk>.
And put ourselves on the right footing heading into next year.
With that I'll now turn the call back over to Matt to open the question and answer session Matt.
Thanks, Bill as a reminder, during the question and answer session. We encourage you to ask any questions that you might have but please note that our guidance is limited to the outlook we provided.
Operator, let's open the line for questions.
Thank you if you would like to ask a question. Please press star.
By one penny.
Now if you change your mind, Please press star followed by team.
Hey, Josh Your question. Please ensure your line is on mute.
Our first question comes from Ian Zaffino.
From Oppenheimer. Your line is now 18. Please go ahead.
Okay.
Great Okay.
Thanks for taking my question.
Well I wanted to ask you a few things now that you're in the CEO .
You mentioned broken that really not performing the way.
It should be.
What exactly is going wrong, there and why does it continue to lose money as it is it basically a scaling thing.
Altra wrong with the product.
Maybe help us understand.
You identified the issues there.
Thank you just wanted to get it back on track and then I have a follow up thanks.
Yes, I think I think we have.
Starting at the beginning I think we have a branding issue.
<unk> broken out Brian that might not have been the best term Intuit has a pro connectors.
Pretty generic.
Item and we haven't really.
<unk> behind beyond building that brand and explain really what it is about second I think we expanded too quickly we expanded to too many cities and too many trades as opposed to building up.
Our process and the way it happens we kind of spread are spread out I think 35 cities or so we had all of our major trade and.
In hindsight, we probably should have been focused on.
Clients trade and limited number of markets.
Third I think the way, we engage with contractors and their value proposition was was not enticing to contractors. So I think we had some trouble getting contractors and I think they're a little confused by the proposition. So that's why as I said in the script. There is a whole overhaul that we're looking at.
In terms of how we go to market, but let me let me try to step back then.
Can follow up if I didn't fully answer your question.
The home service plan, which is primarily a repair and replace model.
What we want to do with our with our on demand offering is have a repair and maintenance offering. So that we are focused on areas that you don't have to access our business our brand.
Because you don't have a yearlong subscription we think that in tandem a subscription model.
Contracts, plus an ability to engage with us on a one off Ala carte whatever you want to call it basis around repair and maintenance is really an ideal blending of our overall business model. So I think like I said earlier. This is important to keep our focus on on demand we have.
Got a restage the pro connect business and.
In the interim we're continuing to support it, albeit at lower levels. So we will continue to see revenue coming out of out of this year and there's been some good work done by the current team.
Funnel improvements and interacting with our customers and our contractors so.
It's going to be important as we go forward, but it just hasnt been executed the way, we probably should have.
Okay. Thank you that's helpful and then on the real estate side I know you laid out a bunch of the headwinds youre seeing sort of macro.
You have seen maybe a share shift inside that market.
Maybe you're not holding share like you.
Sure.
Two I think thats the case.
What do you plan to do about it how do you plan to address that.
And then just sneak in one other question maybe for Bryan is third.
Third quarter has been very hot so far.
What are you assuming as far as headwinds from the weather and increased service calls thanks.
Yes, Julian let me address the real estate piece because well.
Well.
I won't comment specifically on whether we have loss sharing let's put it. This way we have to gain share our performance in real estate is not to the level notwithstanding.
A challenging market and <unk>, our new Chief sales officer is all over this she has brought in a new sales culture. She has brought in accountability and she is doing things that are blocking and tackling. She has got now got.
Everybody has a weekly field sales plan as are we.
Weekly training module every week.
The field agents have to go into she is completely focused on real estate and not trying to chase a bunch of other opportunities, which maybe we could get to later on right now we need to fix real estate and Jeff is all over that she has so much energy and she has really brought a.
And.
Dynamism, if you will I think that's a word.
To our to our sales process, so I couldnt be more thrilled with our hiring and.
I believe she is she is sort of a no excuses person and she believes they're going to be five to 6 million homes sold this year and we need to get our fair share of that.
Brian I'll turn it over to you for the thanks, Bill and good morning, Ian.
Regarding the third quarter in HVAC claims we've had the benefit of seeing July and it was a hot July but we've built that into our forecast and also maybe a little more hot weather in August and we start to trail off towards the end of the third quarter, obviously with HVAC claims. So I think we've built that into our guidance, but we're not sitting path.
Watching the weather as I mentioned in my prepared remarks, we're improving our processes to lower our cost and we're trying to move to the mid range mid <unk> for our preferred contractors.
We're expanding our recruiting for contractors.
We're improving the end to end processes as I mentioned in the call and also on the sourcing side trying to lower our costs.
Through maximizing our sourcing efforts and purchasing lower cost materials and our contractors could purchase so we're watching the weather or trying to reduce our costs and things. We can control is that helpful.
Yes. This is great. Thank you. So much you guys have a great day.
Thank you Sue.
Thank you. Our next question comes from the EC Squatty from today.
Please go ahead. Your line is now open.
Hi, Good morning, guys, Nick Krona on for Youssef.
Can you just talk a little bit about the pace of price increases I think you said you've come through two already this year with another to go.
And any impact you're seeing on customer churn.
And then secondly, just fixed stream is that still on track to Q $10 million to $15 million. This year I know you called out from connect going down. Thanks.
So let me, let me take a price increase piece and Brian Please augment.
Whatever comments I think as.
As Brian said, we have taken two price increases we're planning on a third we're targeting it will by the time of the year ends we will look taken approximately a 12% to 13% increase in price.
Any churn or declines have been as expected as we've said all along we are generally in elastic we don't take that for granted so we're done.
Doing everything to market and provide.
Value to our customers, but given this.
Incredible inflation and contractor costs were somewhat forced into taking pricing beyond what we might normally have expected.
As you as you noted we will have a <unk>.
Decline in customers this year, but that is primarily due to the real estate.
Channel.
So I feel pretty good about how we're controlling and managing and staging the pricing actions that we're taking but I'll turn the rest over to you Brian .
No I think you've covered it well bill I would say only thing I'd say, Nick is that 12% to 13% price increase if you look at it on annualized basis on a revenue base.
That increase more than covers the Cogs increase.
We're going to have this year.
And although we're not going to see at all this year as I described in my comments you will see the benefits next year, but that just shows the power of pricing with our model.
Got it and then streams that is that on pace to do $10 million to $15 million.
Yes stream is not going to track that way again as Bill described we're going to view that as a technology play for US we love the business, but it's more of a technology play supporting our core home service plan business. So we're investing less money into that business to find customers.
Enterprise customers, so that volume that revenue with much lower this year than that as you built that in the guidance and Thats in our revenue Guide. We gave you. That's included that's included in guidance yes.
Understood. Thanks, guys, it will be less than $10 million.
Our next question comes from Justin.
From Keybanc. Your line is now open. Please go ahead.
Great. Thank you very much that perhaps its a big picture one around the home service plan opportunity.
It's a product that's been in market for quite some time now how do you think about just the attractiveness of that opportunity where you are in market share penetration.
The incremental investments all of ours are really equal real home service plan.
Adoption more meaningfully thank you.
Yes, Justin it's one I ponder every day, if you will.
Part of the reason, we're doing the customer segmentation study, which we havent done for a few years.
To state the obvious.
It's change and certainly with the home being so much more a centerpiece of.
Of your complete like we've got to understand.
Those dynamics.
Are the research the tracking work we do.
There is still a need for repair home maintenance.
Placement of major system, and so I think the core.
Markets.
The addressable market and we talk a lot about 500 million $500 billion total addressable market I'm trying to get to a real total addressable market for us, we're not going to get into the renovation business.
But I do think that between.
The on demand area in home service plans, we're going to have a sufficiently large.
Business.
Try to attack so I think the opportunity is still there.
Do believe we have to modernize our approach I think theres. Some steps we have to take on that on the product and the offering.
We took some steps this year with our platinum product, which expanded services.
We're able to get additional pricing.
Opportunities there, but we also ran into more service cost and we launched that in a year, where we had we had all these issues that Brian talked about with contractor costs. So I think there is some some rebalance.
Rebalancing, we need to do.
But I think overall.
The market is still there as for investment diving through all of that right. Now I think we can still have a very healthy financial model.
As we go forward I think we just have to figure out what's the best way to go to market with that in terms of our marketing our sales effort and that's really what we're where we're grinding out right now.
Okay.
Operators and other call.
And the next question comes from Eric Sheridan from Goldman Sachs. Please go ahead. Your line is now open.
Thanks for taking the questions.
Taking a step back I know we talked to.
What about the short term on the call, but bill you're you're new to the role you have now in the organization. It's been a couple of months. Since you took on that role could you give us a little bit of your perspective of what you've seen from inside the company and how you think about your agenda versus maybe what in prior periods. The company was focused on and how you think about it.
<unk> didn't change inside the organization, maybe Thats question, one and then two just coming back to the real estate.
Again zooming out.
Understood blocking and tackling of renewed focus around gaining share can you give us a little bit sense of like how the market share dynamic changes like what should we be thinking of a term.
The ramp of putting investments behind wanting to change the dynamic in real estate and actually seen it come through in the results and how much of that is in your control as a result of investments versus <unk>.
Out of your control just because of the broader real estate environment. Thanks for the Brexit event.
Okay.
And if I didn't get all of that.
Come back at you, but in terms of my perspective relative to where we were at the highest level. The strategy has not changed we still believe.
That there is a lot of vitality in home service plans and we still believe that there is an opportunity for us notwithstanding we may not have executed, particularly well to date and the on demand piece. So that is the highest level.
Is is unchanged what has changed is.
The increased emphasis put on home service plans I think previously we're really trying to build.
Stream off the platform.
Separate business, if you will in <unk> and I think I've come to believe that we need to be more centered almost call. It one business and use the assets that we that we have with stream using the learning that we have with pro connect us.
The ability for us to evolve the home service plan piece to really build a better offering is as we as we go forward that is what.
A couple of minutes ago is what we are grinding on so.
I think.
The company generally.
The broad population is really excited about the direction, we're going in there's a lot of people who have used the term around the company, let's reinvent the category, we invented and Thats a little bit of a mantra that we're using internally.
As we as we really are questioning all elements of that and I think we can have a very exciting modern offering.
We continue to make steps on our digital transformation. It reminds me a little bit of when I walked in the H&R block and block made their major strategic error.
15 years before I got there in 2011, when they didn't engage within the.
And the.
Digital area. They said, it's going to cannibalize our business they listen to the franchisees and we didn't really have a very good digital offering by the time I left there we had a product that in some reviews with superior Turbotax same situation here, we've been talking about a digital transformation I'm really really impressed with Tony <unk>.
<unk> the people he has brought in with him in terms of the way. He is relentlessly focusing on that so I think we've got a lot of things lined up here I have got some new members of the management team.
I'm fired up about in terms of marketing and sales and then Raj who is working on product product and pricing is just.
His experience his disc and valuable so we're pretty jazzed about our opportunity as we go forward notwithstanding.
No one is happy with where we are in 2022.
As far as real estate goes.
I think what what Jess and I have talked about is.
We've got a <unk>.
Stop.
Worrying about where the market's going as Jeff pointed out when she presented to our board last week, we're still going to have five or 6 million homes sold next year, that's what our focus needs to be we need to be in the game.
With regard to all of those all of those sales we have just re upped our partnership with anywhere former Realogy. We've got a partnership with HSN I was with just last week on a sales call with another partner that we're trying to trying to build the trusted partner relationship with so we are.
Trying to go at a high level with with major real estate houses and yet and also do it.
Grind it out.
Real estate agent by real estate agents, so as I said, a little bit earlier, so a lot of blocking and tackling we got to make sure that we have cover.
Coverage, we got to make sure. We have plans we are going to make sure we have targets and thats really the spirit of Texas brought forward.
Thanks for all the color.
Thank you.
As another reminder, if you would like to ask a question. Please press star followed by one.
Poplar.
Our next question comes from Brian Fitzgerald from Wells Fargo. Please go ahead Brian .
Thank you we wanted to ask about the dynamics, you're seeing maybe more in general in repair and extensions in the maintenance may be into home improvement over time with the macro headwinds rising are you seeing any shifts in consumer behavior resonating through dynamics.
Getting more frugal, maybe more tolerance for fixing versus replacing anything you can tell there.
It's a great question, Brian I think I would describe it right now is swirling winds I think a lot of people have.
With the downturn.
And the stock market with <unk>.
Really some uncertainty generally with the way inflation has impacted people at the grocery stores and restaurants and all the other areas.
I think we have a full picture of this right now because.
The pace has been and has been brisk I think generally these things normalize my experiences we're going through the shock we're going to get through it people are going to still want to buy a new home people are still want to want to renovate their home people are still going to need to maintain their home repair systems et cetera, that's trying to keep track.
Thinking about the broad perspective for this company is actually quite strong we have to execute better there is no doubt about that but I think that.
We still see things.
While there is some shocks to the system, we still see things that.
Point to a positive future and we'll get through this stage, both as a company and I think in general as an economy.
And then we'll go from there.
Yes.
Thanks Bill.
Thank you Brian .
That concludes our Q&A session for today.
I will now hand back.
The management team for closing remarks.
Thank you for participating this morning on our Q2 earnings call. We look forward to speaking with you going forward. Thank you.
Okay.
Ladies and gentlemen, thank you again for joining Inc. Second quarter 2020, Q1 earnings call today's call is now concluded.
Okay.
Yeah.
Okay.