Slide 1: Second-Quarter 2022 Earnings Webcast
Second-Quarter 2022 Earnings Webcast August 4, 2022
Slide 2: Today's Speakers
Today’s Speakers Bill Cobb Brian Turcotte Matt Davis Chairman & Senior Vice President & Vice President Chief Executive Officer Chief Financial Officer Investor Relations & Treasurer 2
Slide 3: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements
Slide 4: Short-Term Challenges, Long-Term Opportunities
Short-Term Long-Term Challenges Opportunities • Historically challenging • Demand for home services macroeconomic environment continues to grow o Rapid increase in contractor- • Industry in early stages of related costs digital transformation o Record low home inventory • Leader in home service plan
Slide 5: Moving Quickly to Improve Execution
Moving Quickly to Improve Execution Core Rebuilding core home service plan business Organization Reorganized go-to-market structure COGS Working to address rapid increase in inflation SG&A Undertaking comprehensive SG&A review 5
Slide 6: Comprehensive Operating Review
Comprehensive Operating Review Simplify Business Reinventing Digital- how we interact first with customers, mentality contractors and Focus on the partners Customer & Brand 6
Slide 7: Reorganized Go-to-Market Structure
Reorganized Go-to-Market Structure Chief Marketing Chief Sales SVP & GM of Officer Officer Product Chief Sales Officer Jes Fields Kathy Collins Jes Fields Raj Midha Increased focus, improved consistency and accountability across sales funnel 7
Slide 8: Q2 2022 Financial Summary
Q2 2022 Financial Summary Net Adjusted Revenue Income EBITDA(1) $487M $33M $77M (1) See the Appendix accompanying this presentation for a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the nearest U.S. GAAP measure. See “Reconciliations of Non-GAAP Financial Measures” included in this pre
Slide 9: Q2 2022 Adjusted EBITDA Bridge
Q2 2022 Adjusted EBITDA(1) Bridge In millions Three Months Ended June 30, 2021 $114 Impact of change in revenue(2) 23 Contract claims costs(3) (53) Sales and marketing costs (6) General and administrative costs (1) Three Months Ended June 30, 2022 $77 Note: Revenue and expense items are year-over-ye
Slide 10: Q2 2022 Cash Flow
Q2 2022 Cash Flow In millions Six Months Ended Free Cash Available June 30, Flow(1) Liquidity(2) Net cash provided from 2022 2021 (used for): $75M $357M Operating Activities $94 $119 Investing Activities (19) (15) Amount of Shares Repurchased (3) Financing Activities (69) (378) Cash increase (decrea
Slide 11: Q3 2022 and FY 2022 Outlook
Q3 2022 and FY 2022 Outlook Q3 2022 Outlook Q3 2021 Results Low High Revenue ($ millions) 471 470 480 Adjusted EBITDA ($ millions) (1)(2) 122 65 75 FY 2021 Results FY 2022 Outlook Revenue ($ billions) 1.602 1.63 1.65 Gross Profit Margin (%) 49 41 42 SG&A ($ millions) 511 525 535 Adjusted EBITDA ($ m
Slide 12: Q&A
Q&A For more information please visit our website: frontdoorhome.com
Slide 13: Appendix
APPENDIX
Slide 14: Q2 2022 Consolidated Results
Q2 2022 $ millions, except per share amounts Three Months Ended June 30, 2022 2021 Better / (Worse) Consolidated Revenue YoY Growth $ 487 $ 462 $ 25 5% Results Gross Profit % of revenue 211 43.3% 242 52.3% (31) (8.9) pts Note: See elsewhere in this Appendix for a reconciliation of Adjusted Selling a
Slide 15: YTD 2022 Consolidated Results
YTD 2022 $ millions, except per share amounts Six Months Ended June 30, 2022 2021 Better / (Worse) Consolidated Revenue YoY Growth $ 838 $ 791 $ 47 6% Results Gross Profit % of revenue 355 42.3% 390 49.2% (35) (6.9) pts Note: See elsewhere in this Appendix for a reconciliation of Adjusted Selling an
Slide 16: Net Income to Adjusted EBITDA Reconciliations
Net Income to Adjusted EBITDA Reconciliations In millions Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Income $ 33 $ 40 $ 35 $ 45 Depreciation and amortization expense 8 9 17 19 Restructuring charges 12 1 12 2 Provision for income taxes 10 14 12 15 Non-cash stock-bas
Slide 17: Net Income to Adjusted EBITDA Reconciliations (Cont.)
Net Income to Adjusted EBITDA Reconciliations (Cont.) In millions Three Months Ended Year Ended September 30, December 31, 2021 2021 Net Income $ 76 $ 128 Depreciation and amortization expense 8 35 Restructuring charges — 3 Provision for income taxes 25 39 Non-cash stock-based compensation expense 5
Slide 18: Net Cash from Operating Activities to Free Cash Flow Reconciliations
Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations $ millions Three Months Ended Six Months Ended June, 30 June, 30 2022 2021 2022 2021 Net Cash Provided from Operating Activities $ 47 $ 67 $ 94 $ 119 Property Additions (11) (8) (19) (15) Free Cash Flow $ 36 $ 59 $ 75 $ 10