Thank you, operator. Good afternoon, everyone, and thank you for joining Frontdoor’s Second Quarter 2020 Earnings Conference Call. Joining me today are Frontdoor’s Chief Executive Officer, Rex Tibbens; and Frontdoor’s Chief Financial Officer, Brian Turcotte. The press release and slide presentation that will be used during today’s call can be found on the Investor Relations section of Frontdoor’s website, which is located at investors.frontdoorhome.com. As stated on Slide 3 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 risks are explained in detail in the company’s filings with the SEC. Please refer to the Risk Factors section in our filings for a more detailed discussion of our forward-looking statements and the risks and uncertainties related to such statements. All forward-looking statements are made as of today, August 5, and except as required by law, the company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. We will also reference certain non-GAAP financial measures throughout today’s call. We have included definitions of these terms and reconciliations of these non-GAAP financial measures to the 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. Finally, like most of you, we continue to work remotely. Please bear with us as we do our best to manage through any audio issues that might occur. I’ll now turn the call over to Rex for opening comments. Rex?

Thanks, Matt, and good afternoon, everyone. I’d like to start by expressing my appreciation to all of our associates and contractors for their hard work and dedication as we manage through a challenging external environment. I also want to thank those on the front lines of the COVID-19 pandemic, especially essential workers and those in the healthcare field. I continue to be amazed by the remarkable acts of kindness and professionalism that they and countless local heroes have shown over the last several months. It has inspired us to support organizations in the communities where we operate, such as donating to the food banks that are assisting those in need and sourcing PPE for our contractors. Now let’s turn to Slide 4, our current business focus. As you know, we have been on a transformational journey here at Frontdoor, transforming the business from a technical, operational, and cultural perspective. This pandemic has been a true test of what is working and where we need to increase focus. During the great financial crisis of 2008 and 2009, we grew top-line revenue by 4% and 2%, respectively. That said, I am confident that we will still grow our company’s top line by roughly 7% this year, a true testimony to the resiliency of our business model and our people. While COVID-19 has presented issues for many companies, it has also opened up opportunities. Given where we are in our evolution and being a transformational company with a strong financial position, we are being opportunistic in our investment strategy. One of the main areas we have focused on is leveraging favorable advertising rates due to other companies pulling back on their marketing budgets. Since May, we’ve seen an improvement in the efficiency of our broadcast marketing compared to 2019. Given that improvement and to offset a decline in our real estate channel, we feel it’s important to ramp up our marketing spend until such time the efficiencies return to more normalized levels. In the second quarter, for example, our marketing efficiency was at roughly a 2:1 ratio. This means that for every point increase in the cost of acquiring a customer, or CAC, we achieved a two-point increase in unit sales. We anticipate a similar level of performance in the third quarter. Not only are the unit economics favorable, but we have also increased our unaided brand awareness by over 35% in a single quarter. We believe this increased brand awareness will have a long-term halo effect on both our direct-to-consumer and real estate channels going into next year. While this investment impacts our near-term financial results, it’ll provide a long-term tailwind for our direct-to-consumer channel in terms of revenue growth and positively impact overall customer retention. Second, I am pleased to report that customer retention remained stable at 75% in the second quarter on a trailing 12-month basis. It actually increased slightly versus the prior year period but still rounds to the same number. As a reminder, customer retention decreased around 200 basis points during the global financial crisis in 2008. I credit the overall value proposition of our home service plans, the focus of our associates, investments in technology and improvements in training and processes for keeping our retention stable in today’s uncertain macroeconomic environment. We’re also making investments to grow our emerging businesses. This includes Candu, our on-demand offering and the expansion of our Streem technology platform. Last quarter, we announced Candu expanded geographically and extended its trade offering to include heating and air conditioning, plumbing, and electrical. Additionally, in the second quarter, we acquired a business that we expect will further accelerate the development of our on-demand business. We consider this to be a small acqui-hire transaction that will allow us to leverage their intellectual capital, marketing expertise, and core technology know-how across our on-demand business. We are excited to bring this new talent and expertise on board. This also expands our geographic presence for on-demand home services into new markets, albeit in extremely small scale as the vast majority of these new cities offer limited trades. The acquisition allows our team to learn faster and implement best practices from each business as we move forward. We are obsessed with constantly improving our customer experience. This acquisition will help us on this journey, also lowering our cost of customer acquisition and expanding our trade offerings and geographic reach. We have been actively developing new partnerships for our Streem technology. We plan to monetize Streem through a Software-as-a-Service business model. Given the importance of ensuring the safe delivery of essential home services and other pandemic-related concerns, we have decided to extend our free Streem trial to our key partners. This is consistent with our long-term mindset as this helps deepen our relationship with those partners. Over time, we will look to develop and evolve these arrangements into a mutually beneficial financial and operating model. We are also beginning to integrate Streem into our core home service plan business operations. This was one of the original value propositions that really piqued my interest in this technology, as we can improve customer service while reducing costs. At this point, we expect to have our customer care associates actively using Streem with a portion of our customers and contractors by the end of the year. On a combined basis, we do not expect Candu and Streem to have a material revenue impact this year as we continue to develop the operations and expand our presence. These are emerging businesses that we continue to believe will have tremendous future potential. Now moving to our next focus area, improving the customer experience. Since May, customer service levels have been unfavorably impacted by increased demand for service and reduced capacity from our call center partners. Specifically, we had an external call center partner that has seen a large decline in their available workforce as a result of travel restrictions from the pandemic. We have also seen a challenging environment for hiring for our call centers. Although these are currently virtual roles, a lot of job candidates are waiting to see the impact that COVID-19 has on the economy and the next government stimulus program. We are working to increase our service capacity, and we expect service levels to improve in the third quarter. At the same time, we are engaged in a range of additional service improvements, including advancing our call center training, investing in people, improving contractor responsiveness as well as reducing cycle time. A key part of cycle time is our supply chain, where we continue to make improvements with sourcing parts and negotiating new agreements with manufacturers to leverage our purchasing power. While several of our vendors are being impacted by COVID-19, we are relatively insulated from a single supplier disruption through our multi-vendor diversification strategy. At Frontdoor, we are obsessed with solving customers’ problems. I am passionate about improving the customer experience. The last few months have only strengthened my resolve to advance our self-service capabilities and deploy technology solutions to speed the customer resolution process. We are on a journey, and I am committed to transforming the service experience by investing in technology and business processes that will set the standard across the home services industry. Now turning to Slide 5. Frontdoor delivered solid second quarter financial results with the second highest gross margin recorded. These results were in spite of increased service requests. We began to experience an increase in service request activity in May that continued throughout June, attributable to customers sheltering at home in response to COVID-19 in March and April. The increase was concentrated in appliances and plumbing and is consistent with industry-wide trends. While we are seeing these higher demand trends continue into July, we’re evaluating if the increase could be service requests being pulled forward for future periods. For example, we normally see a rise in our appliance volume during the holidays. The good news for our business is that we are seeing strong demand for our services, which supports our long-term customer value proposition and overall customer retention. Additionally, our first year real estate sales continue to be impacted by COVID-19. While the decline in second quarter existing home sales was better than anticipated, the real estate space continues to face macro headwinds and tight inventory levels, which have constrained transaction volume. Second quarter seasonally adjusted existing home sales from the National Association of Realtors showed an 18% decline versus the prior year. The recent forecast is for a significant improvement off these low levels for the balance of the year. In this environment, we continue to strengthen our realty partnerships so that when the existing home sale market improves, we will be in an even stronger position. In conclusion, we are successfully managing through this challenging external environment from a position of strength and a focus on the long term. We have a powerful and resilient business model. We are in a strong financial position, and we are making investments today that will accelerate the trajectory of our revenue growth in the years ahead. I’ll now turn the call over to Brian who will cover our financial results in more detail. Brian?

Thank you, Rex, and good afternoon, everyone. Let’s now turn to Slide 6, and I’ll review our second quarter financial results. Revenue increased 8% versus the prior year period to $417 million, driven by approximately four points of both higher price and increased volume. If we look at our home service plan channels, revenue derived from customer renewals was up 10% versus the prior year period due to growth in the number of renewed home service plans, driven in part by customer retention improvement initiatives and improved price realization. First year, direct-to-consumer revenue was up 7% versus the prior year period, reflecting growth in the number of first-year direct-to-consumer home service plans, mostly driven by increased investments in marketing as well as improved price realization. And first year real estate revenue was down 1% versus the prior year period, reflecting a decline in the number of first-year real estate home service plans, due in part to the adverse impact of COVID-19 on existing home sales, partially offset by improved price realization. I would like to remind everyone that macro factors take about 12 months to cycle through our reported results, which blunts the positive or negative impact of our first year real estate sales in any quarter. As a result, our reported revenue will somewhat lag any macroeconomic trends. Gross profit increased 6% in the second quarter versus the prior year period to $218 million, and gross profit margin was 52%. Net income was $49 million, a 19% decline versus the prior year period while adjusted net income was $56 million, a 9% decline versus the prior year period. Adjusted EBITDA was $100 million in the second quarter. At the midpoint of our guidance range, this was a 5% decline versus the prior year period. We estimate that COVID-19 negatively impacted our adjusted EBITDA by approximately $13 million in the second quarter, primarily related to additional claims costs and incremental marketing investments, which I’ll cover in more detail as I now walk you through the second quarter adjusted EBITDA bridge on Slide 7. Starting at the top, we had $25 million of favorable revenue conversion in the second quarter of 2020 versus the prior year period, including $16 million from higher price and $9 million from increased volume. Excluding the impact of the change from higher revenue, contract claims costs increased $13 million in the second quarter of 2020 versus the prior year period. This increase in claims cost was mostly due to a significantly higher number of service requests, primarily in the appliance and plumbing trades, as well as normal inflation. The total cost increase was partially offset by a favorable weather impact of approximately $1 million, as well as process improvement benefits. We estimate that $6 million to $8 million of the higher claims costs are related to higher usage from customers sheltering at home. As Rex mentioned, we believe that some portion of this increase in service claims is just timing of requests that were pulled forward from future periods; however, it’s too soon to quantify. Sales and marketing costs increased $14 million in the second quarter versus the prior year period. This increase was primarily due to an investment of approximately $12 million in our direct-to-consumer channel, about half or $6 million was directed toward opportunistic marketing investments to increase our direct-to-consumer customer count growth at attractive acquisition costs, while our real estate channel is under pressure from COVID-19. This is efficient spend for us and helped mitigate the impact of the pressure we’ve seen in the real estate channel at attractive customer acquisition costs. As a reminder, customers acquired in the direct-to-consumer channel renew after the first year at a rate that is over 2.5 times better than those customers acquired in the real estate channel and accordingly, have a higher lifetime value. The $2 million increase in service costs was primarily driven by investments to enhance the customer experience and increase retention. As Rex mentioned earlier, we believe this investment has helped maintain customer retention steady at 75% through the second quarter. Please now turn to Slide 8 for a review of our cash and cash flow position. Net cash provided from operating activities for the six months ended June 30, 2020, was relatively flat versus the prior year period at $140 million as the change in working capital and adjusted EBITDA were similar to the prior year period. Net cash used for investing activities was $19 million, an increase of $7 million versus the prior year period. This was primarily due to an increase in capital expenditures to support investments in technology and a small business acquisition to expand the Candu on-demand platform. Net cash used for financing activities was $4 million, the same as the prior year period, primarily comprised of required debt payments. Free cash flow, which we calculate as net cash provided from operating activities minus property additions, was $122 million for the six months ended June 30, 2020. This $8 million decrease from the prior year period was primarily due to an increase in capital expenditures. Cash and marketable securities totaled $548 million at the end of the second quarter, a $64 million increase compared to March 31, 2020. Of that total, restricted net assets required to meet state regulatory reserve requirements totaled $176 million, while the remaining $372 million are considered to be unrestricted. Our adjusted EBITDA conversion of free cash flow rate is typically higher in the first half of the year because of the timing related to cash payments, specifically, cash paid for service requests and cash taxes. This year is no exception, as evidenced by our second quarter and June year-to-date rates being a robust 70% and 83%, respectively. We anticipate our full year 2020 adjusted EBITDA free cash flow conversion rate to be around 50%. Our available liquidity at the end of the second quarter was $622 million, which includes the aforementioned $372 million of unrestricted cash plus an available undrawn revolving credit facility of $250 million. I’ll now conclude my prepared remarks with some comments regarding our financial outlook. Based on our preliminary July results and current forecast for August and September, we expect our third quarter 2020 revenue to range between $430 million and $440 million, which is an increase of 6% to 8% versus the prior year period. We also expect adjusted EBITDA to range between $90 million and $100 million compared to $106 million in the prior year period. This outlook assumes a continuation of the second quarter trends into the third quarter, including an estimated decline in first-year real estate revenue of approximately 7% versus the prior year period, which will be more than offset by direct-to-consumer and renewal channel revenue growth; continued higher appliance and plumbing service requests as a result of our customers sheltering at home with an estimated impact of $8 million to $10 million of higher claims cost; and additional investments totaling $17 million in sales and marketing expense in the third quarter versus the prior year period to accelerate our long-term revenue growth, about half of which is COVID-19-related incremental marketing spend to opportunistically add more customers in our direct-to-consumer channel, while the real estate channel remains pressured. The additional marketing investments and the projected increase in service requests are the primary drivers of our third quarter adjusted EBITDA range being lower than the prior year period. In regard to our full year 2020 outlook, we are projecting revenue to range between $1.45 billion and $1.47 billion, or an increase of 6% to 8% versus the prior year period. We will continue to withhold full year adjusted EBITDA guidance due to the uncertain impact of COVID-19 on the overall economy and on various parts of our business. Specifically, we are still evaluating the potential impact of increased service requests on our fourth quarter results. In closing, while we remain as optimistic as ever about the long-term prospects of the business, our near-term results are being impacted by COVID-19. In the second quarter, we estimate that COVID-19 negatively impacted our adjusted EBITDA by approximately $13 million related to the additional service requests and incremental marketing investments I previously mentioned. Likewise, we project that our third quarter outlook is being negatively impacted by approximately $18 million due primarily to those same factors. In the meantime, even with these challenges, we continue to generate meaningful revenue growth, attractive margins, and strong cash flows. Our retention is holding steady, and we have a substantial and growing liquidity position that allows us to take advantage of market opportunities. We are making productive and efficient investments for the long-term health of the business. And we will emerge even stronger for it when the overall macro environment improves.

Thanks, Brian. As a reminder, during the question-and-answer session, we encourage you to ask any questions that you may have, but please note that guidance is limited to the outlook we provided in our press release. Operator, let’s open the line for questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Ralph Schackart from William Blair. Please go ahead.

Good evening. Two questions, if I could. Rex, I know you talked about the increased customer service requests due to COVID in appliance and plumbing and how it continued into July. Just curious how you’ll be able to discern how much of this is just pull-forward of maintenance or breaking appliances or servicing issues versus extra stress that’s being put on the appliances because people are sheltering in place. And if it’s the latter, any sense of how long sort of the duration of this could continue to drag or do you think you’re going to see the bulk effects over the next quarter or two? And then just to bolt-on a question on the marketing spend and efficiencies you’re seeing. Can you maybe just give a sense about where you’re seeing the efficiencies between off-line and online channels? I know TV has been one for you, but just give a sense of sort of the payback period you’re seeing? And then how much of that is direct response versus brand? Sorry for all the questions. Thanks.

Thanks, Ralph. In terms of whether this is COVID-related or how long this will last rather, we do think that there’s an opportunity that a lot of this is kind of pull-forward and that we do see over the holidays an increase in claims for appliances as well. And we think that these folks are at home more than before, which is why we are seeing a rise. During our last conference call, we didn’t really see that much change. And then as it kept dragging out longer, that’s when we started to see the change. So in terms of timing, we’re not sure. That’s why we’re still kind of closely monitoring it. I will say that with the increase in claims, we still have one of our highest gross margins in company history, so we’re still able to manage the costs. We’re closely watching it. But we’re hopeful it’s pull-forward; however, we still need some time to truly assess that. In terms of the marketing spend, certainly, we’ve gone much deeper with direct-to-consumer marketing. We, as I said in my remarks, have a very strong 2:1 CAC ratio; for every point we go up in CAC, we’re seeing a two-point increase in unit sales. So this is primarily in broadcast. That’s where we’ve seen the strong increase in our unaided awareness as well. And so given the favorability of rates, we felt it was the right time to continue to lean into marketing. We would have certainly exceeded EBITDA if we hadn’t decided to increase our marketing, but we’re playing the long game. So that’s why we’re very much focused in that space. So all the marketing is around broadcast and digital.

Okay, great. Thanks, Rex.

The next question comes from Michael Ng from Goldman Sachs. Please go ahead.

Hey, good afternoon. Thanks for the question. First, just on the quantification of the COVID-19 impact on EBITDA for this quarter and next. I was wondering if you might be able to shed a little bit more light on the service request increase. How much did service requests increase year-over-year or quarter-over-quarter? And would you expect service requests to normalize when stay-at-home measures are lifted at some point in the future? And then I have a follow-up.

Brian, you want to take that?

Yes. I can take that one if you like. That’s a great question, Michael. When we spoke with you, as Rex mentioned, I think it was May 6 – was our Q1 earnings call, we hadn’t really seen any change in incidents in appliance or plumbing. But following that week, we began to dig into the service request a little bit. We saw them ramping up from the incident rates, incidences being like low single digits up to that point, and then they popped up a bit. And so what we did was we dug into the cohorts a little bit to see if we can find anything – our customer cohorts were out of balance. That was normal; we had no process unchanged. So we began to think it was customers sheltering and increasing uses of appliances and systems. Sure enough, we dug into the appliances by item level, we saw that the appliances you would use by sheltering at home are the ones that really jumped the most—ovens, ranges, microwaves, washing machines, dishwashers, refrigerators. Those that wouldn’t change that much, like washers and dryers, didn’t change. So we were pretty convinced that it was just more use than normal when people weren’t sheltering at home. We triangulated with some industry data we were getting from contractors and vendors who were saying they saw the same rise in the same appliances. So that’s when we thought, yes, that’s why we think this is sheltering at home. And hopefully, much of it’s pull-forward. Does that help?

Yes, that is very helpful. Thank you, Brian. And my second question, could you just talk a little bit about the marketing investments that you guys are making? You mentioned that half of those are opportunistic. Is that simply just a mix issue as direct-to-consumer becomes a larger part of the pie? Or are these opportunistic marketing investments spend that has yet to translate into revenue growth or retention and will pay off at some point in the future?

I’ll take that one, Michael. It’s all future revenue, right? So as we invest more in marketing last quarter and this quarter, we recognize revenue one-twelfth at a time. So the impact that we’ll see from a revenue perspective will be muted this year, but we’ll see it more next year. So you take the marketing expense in the quarter, and you’ll see the revenue line grow as the customer pays every month. In terms of why we’re doing this, as I mentioned before, as rates are favorable, we don’t expect to see this forever. So it’s a great opportunity to kind of lean into broadcast and digital when we’re getting that kind of strong 2:1 customer acquisition cost ratio. We think this is a time to really invest in the business.

Great. Thank you, Rex.

The next question comes from Youssef Squali from Truist. Please go ahead.

Great. Thank you very much. Two questions for me, please. Rex, as you think about rolling out of Candu kind of in a broader manner, I was wondering if you could share with us just some of the early learnings that you had so far, particularly around pricing, unit economics, and profitability. And do you feel that you have a good handle enough on it to start aggressively pushing it maybe even as early as later this year or early next year? And second, maybe, Brian, you talked about real estate assumptions. I’m not sure I kind of got this correctly, but you mentioned negative 7%. Was that for the third quarter growth that you had shared? And maybe if you can just speak to what kind of turnaround you’re seeing in that metric because I think in Q2, you were a negative 1. I’m just not sure whether you’re assuming a deterioration in Q3 or an improvement. Sorry. I might have missed that.

So, I guess I’ll take the first one and let Brian address the real estate question. In terms of Candu, our strategy has always been kind of build the product last year, really start to scale it this year, and really scale and optimize in 2021. We’re still very much on track to do that. We had planned to spend $15 million to $20 million on Candu this year. We’re still on track to do that. In terms of the unit economics, our hypothesis has always been that in this business, one of the more expensive aspects is supply. We already have a pretty good supply position. So it really comes down to marketing. We’ve been very focused on making sure that we feel good about our customer acquisition costs. I think with our recent acquisition, we’ll learn even more. But I think we’re definitely on track as it relates to on-demand. The real other thing we really need to focus on this year is expanding the trade. So right now, we’re primarily appliance repair, but as we move into electrical plumbing, things I mentioned in my remarks, that really gives you an opportunity to touch a customer multiple times. So we really need that in order to lower our customer acquisition cost and really prove out the profitability of the business. So that’s what we’re focused on this year. This isn’t going to change our plans for this year, but certainly, it will inform our decisions for scaling in 2021. Brian, do you want to take the real estate question?

Sure. And sorry if I confused you a bit there, Youssef. Yes, we were down 1% in Q2, and the forecast that we gave is minus 7% for Q3. It’s a couple of things that come together there. In Q2, we had some of the volume decline—better to say a lot of the volume decline offset by favorable price flowing through. In Q3, we’re not going to have as much price flowing through to offset the volume decline as I think we’re at the end of some of the price increases from a year ago. So at the tail end of those, we’re not getting as much favorable flow-through of price that we had in Q2. And also, what you got in Q3 going on, in Q2, you had if you think about it, you had three months of the April impact, you had two months of the May impact and one month of the June impact of the lower units. Well, when you get to Q3, you’re going to have all three months of each of those previous Q2 months plus your Q3 impact of lower units. So it’s building, and that’s why we think it’s going to be minus 7%. However, NAR, their data, if you follow the National Association of Realtors, they have a more favorable outlook for Q3. I think they’re down only 2% or 3%, which we thought would be lower than that. So maybe that 7% isn’t as bad if the home—the existing home resale market comes back stronger. But right now, that’s our forecast is minus 7%.

Okay, thank you. Thank you both for the clarification. Great.

The next question comes from Cory Carpenter from JPMorgan. Please go ahead.

Great. Thanks for the questions. Just back on the higher claims. Rex, curious, if they do linger for the next few quarters, I’m curious if you could talk about some of the levers you had to pull as an offset, whether it be a potential price increase or better renewal rates on the other side as these higher engaged customers are renewing. And then maybe secondly, on Candu. Just any more color you could provide on the acquisition you made this quarter and how you plan to integrate that?

Sure, Corey. So for the levers, we—one of the great things that we have in our pocket is dynamic pricing. So from a pricing perspective, when it comes to renewals and then later in Q4 as we roll out direct-to-consumer or first-year direct-to-consumer, we are able to continue to tweak the model so that we had a good understanding of what our underlying costs are. So from a pricing perspective, I’m less worried about that. From a cost perspective, we have a sourcing team or the supply management team under Brian. They’ve done a great job of continuing to grow our network, whether that’s replacement or parts. And so we’re not— we don’t feel the impact as much in terms of our multi-vendor strategy so that we’re able to trade off volume for cost. So we’re going to continue to pull that lever as well. And the team’s done a great job of continuing to make sure that we’re using as many preferred contractors as possible. Even with the increased demand, our percentage of preferred has held in the 80s. So this is a true testimony to the team in driving the cost discipline there as well. So between those things, I’m confident we’ll be able to have enough levers to pull to continue moving forward as a business. And then can you remind me of your second question?

Yes. Just the acquisition with Candu and just more color on that and how you plan to integrate it into your offering.

Sure. So we acquired some assets from Porch, a small acquisition and the team of seven years of experience that will only help accelerate our great team. We’re planning on thoughtfully bringing those two teams together. Again, it’s a small team, so I think it won’t be too disruptive from an integration perspective. But what we do get is even more knowledge on the team—a team that has worked over the last several years on their marketing CAC. So we get to bring—pull forward all that intellectual capital so that we can propel the business even faster. It’s been a great acquisition, and we’re excited about the future, especially for 2021. However, it’s still early days. I mean, we’re only a month or two into the acquisition. So we still need to integrate and pull the team together.

Next question is from Brian Fitzgerald from Wells Fargo. Please go ahead.

I want to ask on real estate. There maybe is a viewpoint that COVID is driving a lot of housing turnover from urban to suburban and rural, younger buyers getting into the market, specifically in older housing stock. And just wondering how you’re thinking about that opportunity around housing turnover? And how you might be able to capitalize on that shift in demographics from urban areas to suburban areas?

Well, certainly, existing home sales is our bread and butter. So if that trend does hold, that’ll be a tailwind for our business. We do think that our business model is not only resilient through the pandemic, but also as the demographics start to change for the type of home buyers, we think we’re well positioned, especially in the millennial space. So as folks move more from urban to suburban, that will definitely create a tailwind for us. It’s too early to tell how much of a tailwind that would create. But one of the things to also think about when it comes to real estate, it’s also inventory. So we’re closely watching incredible rates right now, but the inventory’s a little tight. So that’s been a factor that we’re looking at.

Got it. Thanks, Rex.

Next question comes from Ian Zaffino from Oppenheimer. Please go ahead.

Hi, great. Thank you very much. I hopped on a little bit late, so forgive me if this was asked already. But as far as pricing and your modeling, what changes have you been doing or that you anticipate doing as we move more towards work from home, with people not necessarily going to work, staying at home? We saw a little bit of that now, but that seemed like it was temporary. But if this is actually longer-term, how do you move to address that? Thanks.

Hey, Ian, great to hear from you. This kind of also fits square in our dynamic pricing wheelhouse. We were able to—we’ve talked about in the past, not only look at dynamic pricing from a geography perspective, but in the future, we’ll be able to get even deeper as it relates to usage. So as we begin to pinpoint people who are maybe using their home service plan more, we’ll be able to reflect that in the renewal price. I think an interesting thing to note is that unlike insurance, where you hope that you don’t ever have to use it, as customers need to use their home service plan, that only helps with retention. So we also think that should bode well from a retention perspective. But in terms of just costs, yes. I mentioned some levers before, but one of the larger ones is dynamic pricing. We still think that we have a lot of room left with dynamic pricing. The team continues to refine it. In Q4, we’ll launch direct-to-consumer for first-year direct-to-consumer customers. As you know, we have them for renewals now. We think that’s going to be a great way to monitor what happens in the 'new normal' of work-from-home.

All right. Thanks for the color. I certainly appreciate it.

Next question comes from Matt Gaudioso from Compass Point. Please go ahead.

Hey, good afternoon, guys. Just a two-parter on Streem. You mentioned that you guys are integrating that more in the core business in the back half of the year. Can you talk a little bit more about kind of the investments associated to get that fully integrated and operational? And then just on the partnership with real estate agents, can you provide any feedback on how that’s going and whether you see that continuing just in terms of virtual touring post-COVID?

Sure. For realty partners, what Streem really allows them to do is one of the best use cases is ahead of the sale; you can set up the Streem with a potential client, and you had the opportunity to annotate and identify areas that may—you mutually agree that may need to change, such as decor or rearranging furniture, that type of thing. So they’re able to have those kinds of conversations virtually. They’re also able to do virtual tours. And so it’s been very well received by our realty partners. In terms of where do they go post-COVID, still, I think it’s TBD. Our strategy is to get the realtors used to using it and get them to integrate it as part of their business. Then it should be a lot stickier than trying to introduce it in a non-virtual world, if you will. In terms of how Streem integrates into our business, it’s just a matter of deploying our technical resources to ensure that Streem is integrated into our call center systems. That way, we’re allowed or just affords us the opportunity to send a Streem request to the customer, be able to capture the video and the notes so that we can then submit it to contractors. Of course, we need all the reporting behind that. So it’s not insignificant work, but work that we had planned for the back half of this year.

Great. Thanks.

There are no more questions in the queue. This concludes our question-and-answer session. I would like to turn the conference back over to Rex Tibbens for any closing remarks. The conference is now concluded...

Sorry. Lost audio there for a second. Thank you, operator, and thank you to all of our investors and analysts who participated on today’s call. Frontdoor is playing the long game when responding to COVID-19. We’re leveraging favorable marketing rates and efficiencies and expanding and deepening our partnerships to improve our growth rate. In fact, many of our stockholders have asked us to take these very actions over the last few years. It’s critical to understand that these investments and an increase in service requests impacts our near-term results, but will improve our long-term financial profile. We have a resilient business model and a strong financial position, and we will emerge even stronger after this crisis passes. I want to thank our team again for their amazing resiliency and flexibility in this environment. I also hope that all of you continue to stay safe during this unprecedented time. Thank you again for your continued interest in Frontdoor.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.