What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-05 compared with 2025-05-01 · 97 added, 74 removed, 471 unchanged (27% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Cost of services rendered

6 unchanged sentences

Provision for income taxes

Other Comprehensive (Loss) Income, Net of Income Taxes:

Unrealized (loss) gain on derivative instruments, net of income taxes

Total Other Comprehensive (Loss) Income, Net of Income Taxes

Other Comprehensive Loss, Net of Income Taxes:

Unrealized loss on derivative instruments, net of income taxes

Total Other Comprehensive Loss, Net of Income Taxes

Comprehensive Income

10 unchanged sentences

Prepaid expenses and other current assets

Contract assets

Total Current Assets

4 unchanged sentences

Long-term marketable securities

Deferred policy acquisition costs

Deferred reinsurance

23 unchanged sentences

2,000,000,000 shares authorized;

87,838,356 shares issued and 74,278,048 shares outstanding as of March 31, 2025 and 87,434,468 shares issued and 75,314,243 shares outstanding as of December 31, 2024

88,086,073 shares issued and 73,111,103 shares outstanding as of June 30, 2025 and 87,434,468 shares issued and 75,314,243 shares outstanding as of December 31, 2024

Additional paid-in capital

Retained earnings

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Less treasury stock, at cost;

13,560,308 shares as of March 31, 2025 and 12,120,225 shares as of December 31, 2024

14,974,970 shares as of June 30, 2025 and 12,120,225 shares as of December 31, 2024

Total Shareholders' Equity

5 unchanged sentences

Three Months Ended

Six Months Ended

Common Stock:

4 unchanged sentences

Stock-based compensation expense

Exercise of stock options

Issuance of common stock related to ESPP

Taxes paid related to net share settlement of equity awards

5 unchanged sentences

Balance at beginning of period

Other comprehensive (loss) income, net of tax

Other comprehensive loss, net of tax

Balance at end of period

8 unchanged sentences

(In millions)

Three Months Ended

Six Months Ended

Cash and Cash Equivalents at Beginning of Period

8 unchanged sentences

Deferred reinsurance

Deferred policy acquisition costs

Deferred customer acquisition costs

2 unchanged sentences

Accrued liabilities

Unpaid losses and loss adjustment reserves

Deferred insurance premiums

3 unchanged sentences

Purchases of property and equipment

Business acquisitions, net of cash acquired

Purchases of available-for-sale securities

17 unchanged sentences

We also offer non-warranty home services via our website and app to our home warranty customers directly and others through partnerships and our subscription-based Frontdoor app.

As of March 31, 2025 , we had approximately 2.1 million active home warranties across all brands in the United States.

As of June 30, 2025 , we had approximately 2.1 million active home warranties across all brands in the United States.

Significant Accounting Policies

Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in our 2024 Form 10-K.

There have been no material changes to our significant accounting policies during the three months ended March 31, 2025.

There have been no material changes to our significant accounting policies during the six months ended June 30, 2025.

Basis of Presentation

19 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

2 unchanged sentences

(1) First-year revenue only.

(2) For the three and six months ended June 30, 2025, includes $ 56 million and $ 97 million as a result of the 2-10 HBW Acquisition on December 19, 2024.

Our home warranty contracts have one primary performance obligation, which is to provide for the repair or replacement of essential home systems and appliances, as applicable per the contract.

19 unchanged sentences

We capitalize the incremental costs of obtaining a contract with a customer and recognize the related expense using the input method in proportion to the costs expected to be incurred in performing services under the contract, over the expected customer relationship period.

Deferred customer acquisition costs were $ 11 million as of March 31, 2025 and December 31, 2024.

Amortization of deferred customer acquisition costs was $ 2 million and $ 3 million for the three months ended March 31, 2025 and 2024, respectively.

There were no impairment losses related to these capitalized costs during the three months ended March 31, 2025 and 2024.

Deferred customer acquisition costs were $ 12 million and $ 11 million as of June 30, 2025 and December 31, 2024, respectively.

Amortization of deferred customer acquisition costs was $ 3 million and $ 4 million for the three months ended June 30, 2025 and 2024, respectively, and $ 6 million and $ 7 million for the six months ended June 30, 2025 and 2024 , respectively.

There were no impairment losses related to these capitalized costs during the six months ended June 30, 2025 and 2024.

Deferred Policy Acquisition Costs

1 unchanged sentence

We anticipate that all deferred policy acquisition costs will be recoverable.

Deferred policy acquisition costs were less than $ 1 million as of March 31, 2025 and December 31, 2024.

Amortization of deferred policy acquisition costs was less than $ 1 million for the three months ended March 31, 2025.

There was no amortization of deferred policy acquisition costs for the three months ended March 31, 2024.

Deferred policy acquisition costs were $ 1 million and less than $ 1 million as of June 30, 2025 and December 31, 2024, respectively.

Amortization of deferred policy acquisition costs were less than $ 1 million for each of the three and six months ended June 30, 2025 .

There was no amortization of deferred policy acquisition costs for the three and six months ended June 30, 2024.

Receivables, Less Allowance

6 unchanged sentences

These timing differences are created when the recognition of revenue in proportion to the costs expected to be incurred in performing the services under the contract are accelerated as compared to the recognition of revenue on a straight-line basis over the contract period.

There were no contract assets as of March 31, 2025.

Contract assets were $ 11 million as of June 30, 2025 .

There were no contract assets as of December 31, 2024.

Our contract liabilities consist of deferred revenue which is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable.

Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts.

A summary of the changes in deferred revenue, including the long-term portion for the three months ended March 31, 2025 is as follows:

A summary of the changes in deferred revenue, including the long-term portion, for the six months ended June 30, 2025 is as follows:

(In millions)

2 unchanged sentences

Recognition of deferred revenue

Balance as of March 31, 2025

There was approximately $ 58 million of revenue recognized during the three months ended March 31, 2025 that was included in the deferred revenue balance as of December 31, 2024.

Balance as of June 30, 2025

There was approximately $ 110 million of revenue recognized during the six months ended June 30, 2025 that was included in the deferred revenue balance as of December 31, 2024.

Unearned Insurance Premium

7 unchanged sentences

We perform our annual assessment for impairment on October 1 of every year.

The balance of goodwill was $ 964 million and $ 967 million as of March 31, 2025 and December 31, 2024, respectively.

There were no goodwill impairment charges during the three months ended March 31, 2025 and 2024.

The $ 3 million reduction in goodwill during the three months ended March 31, 2025 was driven by the finalization of the 2-10 HBW Acquisition purchase price.

The balance of goodwill was $ 972 million and $ 967 million as of June 30, 2025 and December 31, 2024, respectively.

There were no goodwill impairment charges during the six months ended June 30, 2025 and 2024.

The increase in goodwill during the six months ended June 30, 2025 was driven by updates to purchase accounting allocations, offset, in part, by the finalization of the 2-10 HBW Acquisition purchase price.

The following table provides a summary of the components of our intangible assets:

As of March 31, 2025

As of June 30, 2025

As of December 31, 2024

6 unchanged sentences

(1) Not subject to amortization.

Amortization expense was $ 13 million and $ 1 million for the three months ended March 31, 2025 and 2024 , respectively.

There were no intangible asset impairment charges during the three months ended March 31, 2025 and 2024.

Amortization expense was $ 12 million and $ 1 million for the three months ended June 30, 2025 and 2024, respectively, and $ 25 million and $ 1 million for the six months ended June 30, 2025 and 2024 , respectively.

There were no intangible asset impairment charges during the six months ended June 30, 2025 and 2024.

We have operating leases for our corporate headquarters located in Memphis, Tennessee, a collaboration center located in Scottsdale, Arizona and a technology collaboration center in Pune, India.

4 unchanged sentences

Weighted-average discount rate

We recognized operating lease expense of less than $ 1 million for each of the three months ended March 31, 2025 and 2024.

We recognized operating lease expense of less than $ 1 million for each of the three months ended June 30, 2025 and 2024 and $ 1 million for each of the six months ended June 30, 2025 and 2024.

These expenses are included in selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

5 unchanged sentences

Supplemental cash flow information related to our operating leases is as follows:

Three Months Ended

Six Months Ended

(In millions)

2 unchanged sentences

(1) Amount is presented net of cash provided from sublease income.

The following table presents the maturities of our operating lease liabilities as of March 31, 2025:

In conjunction with the operating leases of our corporate headquarters located in Memphis, Tennessee, and our collaboration center located in Scottsdale, Arizona, we recognized $ 2 million in tenant improvement allowances as of June 30, 2024, which is a non-cash investing activity.

The following table presents the maturities of our operating lease liabilities as of June 30, 2025:

(In millions)

4 unchanged sentences

(1) Amount is presented net of future sublease income totaling $ 1 million, which relates to the remainder of the year ending December 31, 2025 and the year ending December 31, 2026.

On July 4, 2025, the One Big Beautiful Bill Act (the “Bill”) was enacted in the U.S.

The Bill includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its impact on our consolidated financial statements.

We are subject to taxation in the United States, various states and foreign jurisdictions.

Substantially all of our income before income taxes for the three months ended March 31, 2025 and 2024 was generated in the United States.

Substantially all of our income before income taxes for the six months ended June 30, 2025 and 2024 was generated in the United States.

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items.

As a result, our estimated tax rate is adjusted each quarter.

The effective tax rate on income before income taxes was 22.3 percent and 24.4 percent for the three months ended March 31, 2025 and 2024, respectively.

The decrease in the effective tax rate was primarily due to share-based compensation.

The effective tax rate on income before income taxes was 24.3 percent and 25.8 percent for the three months ended June 30, 2025 and 2024 , respectively, and 23.8 percent and 25.4 percent for the six months ended June 30, 2025 and 2024, respectively.

The decrease in the effective tax rate for the three and six months ended June 30, 2025 was primarily due to changes in share-based compensation and acquisition-related transaction costs.

O n December 19, 2024 , we completed the acquisition of all of the issued and outstanding common stock of 2-10 HBW pursuant to a purchase agreement dated June 3, 2024 for aggregate cash consideration of $ 585 million, subject to certain customary adjustments based on, among other things, the amount of cash, debt, transaction expenses, working capital and regulatory capital in the business of 2-10 HBW as of the closing of the transaction.

1 unchanged sentence

2-10 HBW is also a provider of home warranties.

Total consideration as of March 31, 2025, is as follows:

Total consideration as of June 30, 2025, is as follows:

(In millions)

26 unchanged sentences

Total consideration paid

As of March 31, 2025, the purchase price allocation for this acquisition has not been finalized.

As of June 30, 2025, the purchase price allocation for this acquisition has not been finalized.

In particular, we are still evaluating the fair value of certain intangible assets.

As we finalize the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period in 2025.

The $ 3 million reduction in goodwill during the three months ended March 31, 2025 was driven by the finalization of the 2-10 HBW Acquisition purchase price.

In conjunction with the 2-10 HBW Acquisition, we recognized acquisition-related costs of $ 2 million during the three months ended March 31, 2025 .

These charges represent direct third-party costs, including legal, accounting and financial advisory fees and are included in selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

There were no acquisition-related costs during the three months ended March 31, 2024.

Unaudited pro forma revenue for the three months ended March 31, 2024 as if the 2-10 HBW Acquisition occurred as of January 1, 2024 was $ 419 million.

During the six months ended June 30, 2024, we made measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date.

These adjustments included updates to purchase accounting allocations and a $ 3 million reduction in the 2-10 HBW Acquisition purchase price.

The impact of these adjustments was a $ 5 million increase in goodwill, an $ 11 million decrease in intangible assets, and a $ 2 million decrease in deferred tax liabilities, net.

In conjunction with the 2-10 HBW Acquisition, we recognized acquisition-related costs of $ 2 million and $ 6 million during the three months ended June 30, 2025 and 2024 , respectively, and $ 4 million and $ 6 million during the six months ended June 30, 2025 and 2024, respectively.

These charges represent direct third-party costs, including legal, accounting and financial advisory fees, as well as post-acquisition systems integration costs, and are included in selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

Unaudited pro forma revenue for the three and six months ended June 30, 2024 as if the 2-10 HBW Acquisition occurred as of January 1, 2024 was $ 598 million and $ 1,017 million, respectively.

Commitments and Contingencies

20 unchanged sentences

Stock-Based Compensation

We recognized stock-based compensation expense of $ 8 million ($ 5 million, net of tax) and $ 7 million ($ 6 million, net of tax) for the three months ended March 31, 2025 and 2024, respectively.

We recognized stock-based compensation expense of $ 9 million ($ 7 million, net of tax) and $ 8 million ($ 6 million, net of tax) for the three months ended June 30, 2025 and 2024, respectively, and $ 17 million ($ 12 million, net of tax) and $ 15 million ($ 12 million, net of tax) for the six months ended June 30, 2025 and 2024, respectively.

These charges are included in selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

A summary of awards granted under the Omnibus Plan during the three months ended March 31, 2025 is as follows:

A summary of awards granted under the Omnibus Plan during the six months ended June 30, 2025 is as follows:

Stock options

3 unchanged sentences

The ultimate number of performance shares that may be earned depends on the achievement of this performance condition .

As of March 31, 2025, there was $ 69 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, performance options, restricted stock units (“RSUs”) and performance shares.

As of June 30, 2025, there was $ 61 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, performance options, restricted stock units (“RSUs”) and performance shares.

These costs are expected to be recognized over a weighted-average period of 2.45 years.

7 unchanged sentences

Total long-term debt

(1) Term Loan A is presented net of unamortized debt issuance costs of $ 6 million as of March 31, 2025 and December 31, 2024.

(2) Term Loan B is presented net of unamortized debt issuance costs of $ 10 million as of March 31, 2025 and December 31, 2024, and unamortized discount of $ 2 million as of March 31, 2025 and December 31, 2024.

As of March 31, 2025 , we had $ 2 million of letters of credit outstanding under the Revolving Credit Facility, and the available borrowing capacity under the Revolving Credit Facility was $ 248 million.

As of March 31, 2025, we were in compliance with the covenants under the Credit Agreement.

(1) Term Loan A is presented net of unamortized debt issuance costs of $ 6 million as of June 30, 2025 and December 31, 2024.

(2) Term Loan B is presented net of unamortized debt issuance costs of $ 10 million as of June 30, 2025 and December 31, 2024 and unamortized discount of $ 2 million as of June 30, 2025 and December 31, 2024.

As of June 30, 2025 , we had $ 2 million of letters of credit outstanding under the Revolving Credit Facility, and the available borrowing capacity under the Revolving Credit Facility was $ 248 million.

As of June 30, 2025, we were in compliance with the covenants under the Credit Agreement.

Scheduled Debt Payments

The following table presents future scheduled debt payments as of March 31, 2025:

The following table presents future scheduled debt payments as of June 30, 2025:

(In millions)

10 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

7 unchanged sentences

Supplemental information relating to our accompanying condensed consolidated statements of cash flows is as follows:

Three Months Ended

Six Months Ended

(In millions)

5 unchanged sentences

Cash, money market funds and certificates of deposits with maturities of three months or less when purchased are included in Cash and cash equivalents on the accompanying condensed consolidated statements of financial position.

As of March 31, 2025 and December 31, 2024, the amortized cost of our short- and long-term investments was less than $ 1 million and $ 53 million, respectively, and the estimated fair value of these investments was less than $ 1 million and $ 53 million, respectively.

As of December 31, 2024, short- and long-term marketable securities primarily consisted of certificates of deposit, corporate bonds, mortgage-backed securities and U.S.

government obligations and are classified as available-for-sale securities.

There were no unrealized losses which had been in a loss position for more than one year as of March 31, 2025.

As of June 30, 2025 and December 31, 2024, the amortized cost of our short- and long-term investments was less than $ 1 million and $ 53 million, respectively, and the estimated fair value of these investments was less than $ 1 million and $ 53 million, respectively.

As of June 30, 2025 , short- and long-term marketable securities primarily consisted of certificates of deposit.

There were no unrealized losses which had been in a loss position for more than one year as of June 30, 2025.

Gains and losses on sales of investments, as determined on a specific identification basis, are included in investment income in the period they are realized.

We periodically review our portfolio of investments to determine whether there has been an other-than-temporary decline in the value of the investments from factors such as deterioration in the financial condition of the issuer or the market(s) in which the issuer competes.

During the three months ended March 31, 2025, there were $ 48 million in proceeds from sales of securities, $ 12 million in maturities and less than $ 1 million in gross realized gains and less than $ 1 million in gross realized losses resulting from sales of available-for-sale securities.

During the three months ended March 31, 2024, there were no proceeds, maturities, gross realized gains and gross realized losses resulting from sales of available-for-sale securities.

There were no impairment charges due to other than temporary declines in the value of certain investments for the three months ended March 31, 2025, and 2024.

During the three months ended June 30, 2025 , there were less than $ 1 million each in proceeds from sales of securities, maturities, gross realized gains and gross realized losses resulting from sales of available-for-sale securities.

During the six months ended June 30, 2025 , there were $ 48 million in proceeds from sales of securities, $ 12 million in maturities and less than $ 1 million each in gross realized gains and gross realized losses resulting from sales of available-for-sale securities.

During the three months and six months ended June 30, 2024 , there were no proceeds, maturities, gross realized gains and gross realized losses resulting from sales of available-for-sale securities.

There were no impairment charges due to other-than-temporary declines in the value of certain investments for the six months ended June 30, 2025 and 2024 .

Comprehensive Income (Loss)

3 unchanged sentences

Balance at December 31, 2024

Other comprehensive income before reclassifications:

Other comprehensive loss before reclassifications:

Pre-tax amount

3 unchanged sentences

Total other comprehensive loss

Balance at March 31, 2025

Balance at June 30, 2025

(1) Amounts are net of income taxes.

1 unchanged sentence

A summary of reclassifications out of AOCI is as follows:

Three Months Ended

Six Months Ended

(In millions)

Gain (loss) on interest rate swap contracts (1)

Gain on interest rate swap contracts (1)

Impact of income taxes (2)

Total reclassifications during the period

(1) Included in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income.

(2) Included in provision for income taxes in the accompanying consolidated statements of operations and comprehensive income.

Derivative Financial Instruments

9 unchanged sentences

See Note 14 to the accompanying condensed consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in AOCI and for the amounts reclassified out of AOCI and into earnings during the periods presented.

As the underlying forecasted transactions occur during the next 12 months, we estimate the unrealized hedging loss in AOCI expected to be recognized in earnings is less than $ 1 million, net of tax, as of March 31, 2025.

As the underlying forecasted transactions occur during the next 12 months, we estimate the unrealized hedging loss in AOCI expected to be recognized in earnings is $ 3 million, net of tax, as of June 30, 2025.

The amounts ultimately reclassified into earnings during the next 12 months will be determined based on the actual interest rates in effect at the time the positions are settled, and as a result, they could differ materially from our estimate noted above.

7 unchanged sentences

The period-end carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these financial instruments.

The period-end carrying amounts of short- and long-term marketable securities also approximate fair value and primarily consists of available-for-sale debt securities.

The period-end carrying amounts of short- and long-term marketable securities also approximate fair value and primarily consisted of available-for-sale debt securities.

Unrealized gains and losses are reported net of tax as a component of AOCI in the accompanying condensed consolidated statements of financial position.

Any unrealized losses where the decline in value is other than temporary are reported in interest and net investment income in the accompanying condensed consolidated statements of operations and comprehensive income.

There were no other than temporary declines in value for the periods ended March 31, 2024 and December 31, 2024.

As of March 31, 2025 and December 31, 2024, the carrying amounts of our total debt were $ 1,193 million and $ 1,199 million, respectively, and the estimated fair values were $ 1,210 million and $ 1,211 million, respectively.

There were no other-than-temporary declines in value for the periods ended June 30, 2025 and December 31, 2024.

As of June 30, 2025 and December 31, 2024, the carrying amounts of our total debt were $ 1,186 million and $ 1,199 million, respectively, and the estimated fair values were $ 1,204 million and $ 1,211 million, respectively.

The fair value of our debt was estimated based on available market prices for the same or similar instruments that are considered significant other observable inputs (Level 2) within the fair value hierarchy and was based on information available to us as of the respective period-end dates.

2 unchanged sentences

The expected future settlements are determined by comparing the contract interest rates to the expected forward interest rate as of each settlement date and applying the difference between these two rates to the notional amounts of debt in the interest rate swap contracts.

We did not change our valuation techniques for measuring the fair value of any financial assets and liabilities during the three months ended March 31, 2025 .

We did not change our valuation techniques for measuring the fair value of any financial assets and liabilities during the six months ended June 30, 2025 .

Transfers between hierarchy levels, if any, are recognized at the end of the reporting period.

There were no transfers between hierarchy levels during the three months ended March 31, 2025.

There were no transfers between hierarchy levels during the six months ended June 30, 2025.

The carrying amount and estimated fair value of our financial instruments that are recorded at fair value on a recurring basis for the periods presented are as follows:

1 unchanged sentence

(In millions)

As of March 31, 2025:

As of June 30, 2025:

Other accrued liabilities

8 unchanged sentences

On July 26, 2024, our Board of Directors approved a new share repurchase authorization of up to $ 650 million of our common stock over the three-year period from September 4, 2024 through September 4, 2027.

Purchases under this repurchase program may be made from time to time by the company in the open market at prevailing market prices (including through a Rule 10b5-1 Plan), in privately negotiated transactions, or through any combination of these methods, through September 4, 2027.

Purchases under this repurchase program may be made from time to time by the company in the open market at prevailing market prices (including through Rule 10b5-1 Plans), in privately negotiated transactions, or through any combination of these methods, through September 4, 2027.

The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of the company’s stock, general market and economic conditions, the company’s liquidity requirements, applicable legal requirements and other business considerations.

The repurchase program does not obligate us to acquire any number of shares in any specific period or at all and may be suspended or discontinued at any time at our discretion.

As of March 31, 2025 , we repurchased a total of 2,149,160 outstanding shares at an aggregate cost of $ 111 million under this program, which is included in treasury stock on the accompanying condensed consolidated statements of financial position.

As of June 30, 2025, we repurchased a total of 3,563,822 outstanding shares at an aggregate cost of $ 175 million under this program, which is included in treasury stock on the accompanying condensed consolidated statements of financial position.

On September 3, 2024, our previous repurchase authorization of up to $ 400 million expired.

2 unchanged sentences

Three Months Ended

Six Months Ended

(In millions, except per share data)

2 unchanged sentences

Cost of shares purchased (1)

(1) The average price paid per share and the cost of shares purchased are calculated on a trade date basis and exclude associated commissions and taxes of $ 1 million and less than $ 1 million for the three months ended March 31, 2025 and 2024, respectively.

Earnings Per Share

4 unchanged sentences

Three Months Ended

Six Months Ended

(In millions, except per share data)

6 unchanged sentences

Diluted earnings per share

(1) RSUs of 9,400 shares and 62,674 shares for the three months ended March 31, 2025 and 2024, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

(2) Stock options to purchase 102,520 shares and 1,072,170 shares for the three months ended March 31, 2025 and 2024, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

(3) Performance options to purchase 591,420 shares for the three months ended March 31, 2024 were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

There were no anti-dilutive performance options for the year ended March 31, 2025.

(1) RSUs of 1,304 shares and 3,093 shares for the three months ended June 30, 2025 and 2024, respectively, and 389,970 shares and 428,235 shares for the six months ended June 30, 2025 and 2024 , respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

(2) Stock options to purchase 770,881 shares and 1,504,925 shares for the three months ended June 30, 2025 and 2024, respectively, and 438,547 shares and 1,299,171 shares for the six months ended June 30, 2025 and 2024 , respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

(3) Performance options to purchase 274,282 shares for each of the three and six months ended June 30, 2024 were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

There were no anti-dilutive shares of performance options for the three and six months ended June 30, 2025 .

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

16 unchanged sentences

• our dependence on our first-year direct-to-consumer and real estate acquisition channels and our renewal channel;

• changes in the source and intensity of competition in our market;

• changes in the source and intensity of competition in our market, including risks related to the development, deployment and use of artificial intelligence in our business and industry;

• our ability to attract, retain and maintain positive relations with third-party contractors and vendors;

35 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements