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    Frontdoor Delivers Outstanding Financial Results in First-Quarter 2025

    5/1/25 7:30:00 AM ET
    $FTDR
    Diversified Commercial Services
    Finance
    Get the next $FTDR alert in real time by email

    Revenue Increased 13% to $426 Million;

    Gross Profit Margin Increased 380 Basis Points to 55%;

    Net Income Increased 9% to $37 Million;

    Adjusted EBITDA(1) Increased 41% to $100 Million;

    Repurchased $105 Million of Shares YTD Through April 2025;

    Increasing Full Year Revenue, Adjusted EBITDA and Share Repurchase Outlook

    Frontdoor, Inc. (NASDAQ:FTDR), the nation's leading provider of home warranties, today announced its first-quarter 2025 results.

    Financial Results

     

     

     

    Three Months Ended

     

     

     

    March 31,

     

    (In millions except as noted)

     

    2025

     

     

    2024

     

     

    Change

     

    Revenue

     

    $

    426

     

     

    $

    378

     

     

     

    13

    %

    Gross Profit

     

     

    235

     

     

     

    195

     

     

     

    21

    %

    Net Income

     

     

    37

     

     

     

    34

     

     

     

    9

    %

    Diluted Earnings per Share

     

     

    0.49

     

     

     

    0.43

     

     

     

    13

    %

    Adjusted Net Income(1)

     

     

    49

     

     

     

    35

     

     

     

    41

    %

    Adjusted Diluted Earnings per Share(1)

     

     

    0.64

     

     

     

    0.44

     

     

     

    46

    %

    Adjusted EBITDA(1)

     

     

    100

     

     

     

    71

     

     

     

    41

    %

    Home Warranties (number in millions)

     

     

    2.10

     

     

     

    1.96

     

     

     

    7

    %

    First-Quarter 2025 Summary

    • Revenue increased 13% to $426 million and was comprised of a 3% increase from price and a 10% increase from higher volume primarily driven by the 2-10 acquisition
    • Direct-to-consumer ending member count increased 15% to 310,000 versus the prior year period, and includes the addition of the 2-10 acquisition and 4% organic growth
    • Gross profit margin increased 380 basis points to a first-quarter record of 55%
    • Net Income and Diluted Earnings Per Share increased 9% to $37 million and 13% to $0.49, respectively
    • Adjusted EBITDA(1) increased 41% to $100 million
    • Share repurchases totaled $105 million YTD through April 2025

    Updated Full-Year 2025 Outlook

    • Increasing revenue range to $2.03 billion to $2.05 billion
    • Increasing gross profit margin range to 54% to 55%
    • Increasing Adjusted EBITDA(2) range to $500 million to $520 million

    "We are off to a great start in 2025 and are pleased to increase our full-year outlook across the board," said Chairman and Chief Executive Officer Bill Cobb. "Our first-quarter results show that we are advancing our three strategic priorities by improving home warranty member count, scaling non-warranty services and integrating the 2-10 acquisition. I believe Frontdoor's valuation will improve as we continue to deliver this strong financial and operational performance."

    "Frontdoor delivered outstanding first quarter financial results," said Chief Financial Officer Jessica Ross. "Our strong financial position enables us to navigate through uncertain economic times, invest for growth and continue to return excess cash to shareholders through share repurchases."

    First-Quarter 2025 Results

    Revenue by Customer Channel

     

     

     

    Three Months Ended

     

     

     

    March 31,

     

    (In millions)

     

    2025

     

     

    2024

     

     

    Change

     

    Renewals

     

    $

    333

     

     

    $

    298

     

     

     

    12

    %

    Real estate (First-Year)

     

     

    27

     

     

     

    27

     

     

     

    —

     

    Direct-to-consumer (First-Year)

     

     

    32

     

     

     

    36

     

     

     

    (9

    )%

    Other

     

     

    33

     

     

     

    17

     

     

     

    95

    %

    Total

     

    $

    426

     

     

    $

    378

     

     

     

    13

    %

    Revenue increased 13% to $426 million and was comprised of a 10% increase from higher volume, primarily driven by the 2-10 acquisition, and a 3% increase from price.

    • Renewal revenue increased 12% due to improved price realization and an increase in overall volume;
    • Real estate revenue was flat year-over-year;
    • Direct-to-consumer revenue decreased 9%, primarily due to promotional pricing to drive higher unit sales;
    • Other revenue increased $16 million due to the addition of New Home Structural Warranty revenue and growth of the New HVAC and Moen programs.

    Period-over-Period Net Income and Adjusted EBITDA(1) Bridge

    (In millions)

     

    Net Income

     

     

     

    Adjusted EBITDA

     

    Three Months Ended March 31, 2024

     

    $

     

    34

     

     

     

    $

     

    71

     

    Impact of change in revenue

     

     

     

    32

     

     

     

     

     

    32

     

    Contract claims costs

     

     

     

    8

     

     

     

     

     

    8

     

    Customer service costs

     

     

     

    (4

    )

     

     

     

     

    (4

    )

    Stock-based compensation expense

     

     

     

    (1

    )

     

     

     

     

    —

     

    Acquisition-related costs

     

     

     

    (2

    )

     

     

     

     

    —

     

    Other general and administrative costs

     

     

     

    (10

    )

     

     

     

     

    (10

    )

    Depreciation and amortization expense

     

     

     

    (14

    )

     

     

     

     

    —

     

    Interest expense

     

     

     

    (10

    )

     

     

     

     

    —

     

    Interest and net investment income

     

     

     

    2

     

     

     

     

     

    2

     

    Other

     

     

     

    1

     

     

     

     

     

    1

     

    Three Months Ended March 31, 2025

     

    $

     

    37

     

     

     

    $

     

    100

     

    First-quarter 2025 Net Income increased 9% to $37 million. The table above shows the change versus the prior-year period, and includes:

    • $32 million from higher revenue conversion(3);
    • $8 million of lower contract claims costs(4), excluding the impact of claims costs related to the change in revenue. The decrease in contract claims costs primarily reflects:
      • Favorable claims cost development of $7 million, compared to a $1 million favorable claims cost development in the first quarter of 2024;
      • Favorable cost trends and continued process improvement initiatives offset normal cost inflation across our contractor network, replacement parts and equipment;
      • A higher number of customer service requests per customer, primarily in the HVAC trade driven by unfavorable weather, partially offset by lower incidence in other trades;
    • $4 million of higher customer service costs, primarily due to the 2-10 acquisition;
    • $10 million of higher general and administrative costs, primarily due to the 2-10 acquisition;
    • $14 million of higher depreciation and amortization expense, primarily due to the 2-10 acquisition; and
    • $10 million of higher interest expense, primarily due to higher debt balances related to the 2-10 acquisition.

    First-quarter 2025 Adjusted EBITDA(1) increased 41% to $100 million versus the prior-year period, for the reasons discussed above.

    Cash Flow

     

     

    Three Months Ended

     

     

     

    March 31,

     

    (In millions)

     

    2025

     

     

    2024

     

    Net cash provided from (used for):

     

     

     

     

     

     

     

     

    Operating activities

     

    $

     

    124

     

     

    $

     

    84

     

    Investing activities

     

     

     

    47

     

     

     

     

    (10

    )

    Financing activities

     

     

     

    (85

    )

     

     

     

    (21

    )

    Cash increase during the period

     

    $

     

    85

     

     

    $

     

    53

     

    Net cash provided from operating activities was $124 million for the three months ended March 31, 2025 and was primarily comprised of $68 million in earnings adjusted for non-cash charges and $61 million of cash provided from working capital and long-term insurance related accounts, partially offset by $4 million in payments for restructuring charges.

    Net cash provided from investing activities was $47 million for the three months ended March 31, 2025 and was primarily comprised of the disposal of available-for-sale securities, partially offset by capital expenditures related to technology projects.

    Net cash used for financing activities was $85 million for the three months ended March 31, 2025 and was primarily comprised of $70 million of share repurchases (excluding taxes and fees) and $7 million of scheduled debt payments.

    Free Cash Flow(1) increased 60% to $117 million for the three months ended March 31, 2025.

    Cash as of March 31, 2025 was $506 million and was comprised of $185 million of restricted net assets and $322 million of Unrestricted Cash.

    Capital Allocation Update

    • Increasing target for 2025 share repurchases to at least $200 million.

    Second-Quarter 2025 Outlook

    • Revenue of approximately $600 million to $605 million.
    • Adjusted EBITDA(2) of approximately $185 million to $190 million.

    Updated Full-Year 2025 Outlook

    • Increasing revenue range to $2.03 billion to $2.05 billion. Key assumptions:
      • 2-4% increase in realized price;
      • 7-8% increase in volume driven by:
        • High-single digit increase in renewals channel revenue;
        • Low-to-mid single digit increase in direct-to-consumer channel revenue;
        • High-single-digit increase in real estate channel revenue;
      • Other revenue of $165 million to $175 million, an approximately $55 million increase versus the prior year period. This is primarily driven by the addition of New Home Structural Warranty revenue, and increases in our New HVAC and Moen programs; and
      • Home warranty member count to decline 1-3% in 2025.
    • Increasing gross profit margin range to 54% to 55%.
    • Increasing SG&A to an updated range of $650 million to $670 million, reflecting a $10 million increase in marketing investments to drive member growth.
    • Increasing Adjusted EBITDA(2) range to $500 million to $520 million.
    • Capital expenditures remain approximately $35 million to $45 million.
    • Annual effective tax rate remains approximately 25%.

    First-Quarter 2025 Earnings Conference Call

    Frontdoor has scheduled a conference call today, May 1, 2025, at 7:30 a.m. Central time (8:30 a.m. Eastern time). During the call, Bill Cobb, Chairman and Chief Executive Officer, and Jessica Ross, Chief Financial Officer, will discuss the company's operational performance and financial results for first-quarter 2025 and respond to questions from the investment community. Participants can register for the conference call by clicking https://www.webcaster4.com/Webcast/Page/3067/52314. Once completed, each participant will receive access details via email. Additionally, the conference call will be available via webcast which will include a slide presentation highlighting the company's results. To participate via webcast and view the presentation, visit https://investors.frontdoorhome.com.

    The call will be available for replay for approximately 60 days. To access the replay of this call, please call 877-481-4010 and enter conference passcode 52314 (international participants: 919-882-2331, conference passcode 52314). To view a replay of the webcast, visit the company's https://investors.frontdoorhome.com.

    About Frontdoor, Inc.

    Frontdoor is the industry leader in home warranties and new home structural warranties, and a leading provider of on-demand home repair and maintenance services. As the parent company of two leading brands – American Home Shield and 2-10 Home Buyers Warranty – totaling more than two million members – we bring over 50 years of experience in the home warranty category, a cultivated national network of independent service contractors, and a reputation for delivering quality service and product innovation. American Home Shield, the leader in home warranties, gives homeowners peace of mind, budget protection and convenience, covering up to 29 home systems and appliances from costly and unexpected breakdowns. 2-10 Home Buyers Warranty is the leader in new home structural warranties, providing home builders with coverage for structural failures. These two brands, together with Frontdoor's cutting-edge non-warranty services, provide an unbeatable combination that meets the full suite of homeowner repair and maintenance needs. For more information about Frontdoor, Inc., please visit frontdoorhome.com.

    Forward-Looking Statements

    This news release 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 about Frontdoor's plans, strategies and prospects. Forward-looking statements can be identified by the use of forward-looking terms such as "believe," "expect," "estimate," "could," "should," "intend," "may," "plan," "seek," "anticipate," "project," "will," "shall," "would," "aim," or other comparable terms. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Such risks and uncertainties include, but are not limited to: changes in macroeconomic conditions, including inflation, tariffs and global supply chain challenges and changing interest rates, especially as they may affect existing or new home sales, consumer confidence, labor availability or our costs; our ability to successfully implement our business strategies; the ability of our marketing efforts to be successful and cost-effective; 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; our ability to attract, retain and maintain positive relations with third-party contractors and vendors; increases in parts, appliance and home system prices, and other operating costs; changes in U.S. tariffs or import/export regulations; our ability to attract and retain qualified key employees and labor availability in our customer service operations; our dependence on third-party vendors, including business process outsourcers, and third-party component suppliers; cybersecurity breaches, disruptions or failures in our technology systems; our ability to protect the security of personal information about our customers; compliance with, or violation of, laws and regulations, including consumer protection laws, or lawsuits or other claims by third parties, increasing our legal and regulatory expenses; weather, including adverse conditions, Acts of God and seasonality, along with related regulations; our ability to underwrite risks accurately and to charge adequate prices to builder members, as well as our ability to effectively re-insure a large portion of those risks; the availability of reinsurance to manage a substantial portion of our potential loss exposure for our new home structural warranty business; evolving corporate governance and disclosure regulations and expectations; our ability to protect our intellectual property and other material proprietary rights; negative reputational and financial impacts resulting from acquisitions or strategic transactions; a requirement to recognize impairment charges; third-party use of our trademarks as search engine keywords to direct our potential customers to their own websites; inappropriate use of social media by us or other parties to harm our reputation; special risks applicable to operations outside the United States by us or our business process outsource providers; risks related to our acquisition of 2-10 Home Buyers Warranty (the "2-10 HBW Acquisition"), including the risk that the 2-10 HBW Acquisition may not achieve its intended results; any liabilities, losses, or other exposures for which we do not have adequate insurance coverage, indemnification, or other protection; increase in our indebtedness as a result of financing the 2-10 HBW Acquisition; a return on investment in our common stock is dependent on appreciation in the price; inclusion in our certificate of incorporation a forum selection clause that could discourage an acquisition of our company or litigation against us and our directors and officers; the effects of our significant indebtedness, our ability to incur additional debt and the limitations contained in the agreements governing such indebtedness; increases in interest rates increasing the cost of servicing our indebtedness and counterparty credit risk due to instruments designed to minimize exposure to market risks; increased borrowing costs due to lowering or withdrawal of the credit ratings, outlook or watch assigned to us or our credit facilities; and our ability to generate the significant amount of cash needed to fund our operations and service our debt obligations. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of new markets or market segments in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this news release. For a discussion of other important factors that could cause Frontdoor's results to differ materially from those expressed in, or implied by, the forward-looking statements included in this document, refer to the risks and uncertainties detailed from time to time in Frontdoor's periodic reports filed with the SEC, including the disclosure contained in Item 1A. Risk Factors in our 2024 Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in Frontdoor's periodic filings with the SEC. Except as required by law, Frontdoor does not undertake any obligation to update or revise the forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review Frontdoor's filings with the SEC, which are available from the SEC's EDGAR database at sec.gov, and via Frontdoor's website at frontdoorhome.com.

    Non-GAAP Financial Measures

    To supplement Frontdoor's results presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), Frontdoor has disclosed the non-GAAP financial measures of Adjusted EBITDA, Free Cash Flow, Adjusted Net Income, Adjusted Diluted Earnings Per Share, and Unrestricted Cash.

    We define "Adjusted EBITDA" as net income before depreciation and amortization expense; goodwill and intangibles impairment; restructuring charges; acquisition-related costs; provision for income taxes; non-cash stock-based compensation expense; interest expense; loss on extinguishment of debt; and other non-operating expenses. We believe Adjusted EBITDA is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by variations in capital structures, taxation, the age and book depreciation of facilities and equipment, restructuring and acquisition initiatives and equity-based, long-term incentive plans.

    We define "Free Cash Flow" as net cash provided from operating activities less property additions. Free Cash Flow is not a measurement of our financial performance or liquidity under U.S. GAAP and does not purport to be an alternative to net cash provided from operating activities or any other performance or liquidity measures derived in accordance with U.S. GAAP. Free Cash Flow is useful as a supplemental measure of our liquidity. Management uses Free Cash Flow to facilitate company-to-company cash flow comparisons, which may vary from company-to-company for reasons unrelated to operating performance.

    We define "Adjusted Net Income" as net income before: amortization expense; restructuring charges; loss on extinguishment of debt; other non-operating expenses; and the tax impact of the aforementioned adjustments. We believe Adjusted Net Income is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by items listed in this definition.

    We define "Adjusted Diluted Earnings per Share" as Adjusted Net Income divided by the weighted-average diluted common shares outstanding.

    We define "Unrestricted Cash" as cash not subject to third-party restrictions. For additional information related to our third-party restrictions, see "Liquidity and Capital Resources — Liquidity" under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K filed with the SEC.

    See the schedules attached hereto for additional information and reconciliations of such non-GAAP financial measures. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors' evaluation of Frontdoor's business performance and are useful for period-over-period comparisons of the performance of Frontdoor's business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies.

    © 2025 Frontdoor, Inc. All rights reserved. The following terms, which may be used in this press release, are trademarks of Frontdoor, Inc. and its subsidiaries: Frontdoor®, American Home Shield®, HSA™, OneGuard®, Landmark Home Warranty®, Streem®, 2-10 HBW®, and related logos and designs. All other trademarks used herein are the property of their respective owners.

    (1)

    See "Reconciliations of Non-GAAP Financial Measures" accompanying this release for a reconciliation of Adjusted EBITDA, Free Cash Flow, Adjusted Net Income and Adjusted Diluted Earnings per Share, each a non-GAAP measure, to the nearest GAAP measure. See "Non-GAAP Financial Measures" included in this release for descriptions of calculations of these measures. Amounts presented in the reconciliations and other tables presented herein may not sum due to rounding.

    (2)

    A reconciliation of the forward-looking second-quarter and full year 2025 Adjusted EBITDA outlook to net income cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results.

    (3)

    Revenue conversion includes the impact of the change in the number of home warranties as well as the impact of year-over-year price changes. The impact of the change in the number of home warranties considers the associated revenue on those plans less an estimate of contract claims costs based on margin experience in the prior year period.

    (4)

    Contract claims costs includes the impact of changes in service request incidence, inflation and other drivers associated with the number of home warranties in the prior year period. The impact on contract claims costs resulting from year-over-year changes in the number of home warranties is included in revenue conversion above.

    Frontdoor, Inc.

    Consolidated Statements of Operations and Comprehensive Income (Unaudited)

    (In millions, except per share data)

     

     

     

    Three Months Ended

     

     

     

    March 31,

     

     

     

    2025

     

     

    2024

     

    Revenue

     

    $

     

    426

     

     

    $

     

    378

     

    Cost of services rendered

     

     

     

    191

     

     

     

     

    184

     

    Gross Profit

     

     

     

    235

     

     

     

     

    195

     

    Selling and administrative expenses

     

     

     

    151

     

     

     

     

    135

     

    Depreciation and amortization expense

     

     

     

    23

     

     

     

     

    9

     

    Restructuring charges

     

     

     

    1

     

     

     

     

    —

     

    Interest expense

     

     

     

    19

     

     

     

     

    10

     

    Interest and net investment income

     

     

     

    (6

    )

     

     

     

    (5

    )

    Income before Income Taxes

     

     

     

    48

     

     

     

     

    45

     

    Provision for income taxes

     

     

     

    11

     

     

     

     

    11

     

    Net Income

     

    $

     

    37

     

     

    $

     

    34

     

     

     

     

     

     

     

     

     

     

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

     

     

     

     

     

     

     

     

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

     

     

     

    (7

    )

     

     

     

    2

     

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

     

     

     

    (7

    )

     

     

     

    2

     

    Comprehensive Income

     

    $

     

    30

     

     

    $

     

    35

     

     

     

     

     

     

     

     

     

     

    Earnings per Share:

    ​

    ​

     

     

    ​

    ​

     

     

    Basic

    ​

    $

     

    0.50

     

     

    $

     

    0.43

     

    Diluted

    ​

    $

     

    0.49

     

     

    $

     

    0.43

     

     

     

     

     

     

     

     

     

     

    Weighted-average Common Shares Outstanding:

     

     

     

     

     

     

     

     

    Basic

     

     

     

    74.7

     

     

     

     

    78.3

     

    Diluted

     

     

     

    76.3

     

     

     

     

    79.0

     

    Frontdoor, Inc.

    Condensed Consolidated Statements of Financial Position (Unaudited)

    (In millions, except share data)

     

     

     

    As of

     

     

     

    March 31,

     

     

    December 31,

     

     

     

    2025

     

     

    2024

     

    Assets:

     

     

     

     

     

     

     

     

    Current Assets:

     

     

     

     

     

     

     

     

    Cash and cash equivalents

     

    $

     

    506

     

     

    $

     

    421

     

    Marketable securities

     

     

     

    —

     

     

     

     

    15

     

    Receivables, less allowance of $4 and $4, respectively

     

     

     

    11

     

     

     

     

    10

     

    Prepaid expenses and other current assets

     

     

     

    36

     

     

     

     

    42

     

    Total Current Assets

     

     

     

    554

     

     

     

     

    488

     

    Other Assets:

     

     

     

     

     

     

     

     

    Property and equipment, net

     

     

     

    70

     

     

     

     

    73

     

    Goodwill

     

     

     

    964

     

     

     

     

    967

     

    Intangible assets, net

     

     

     

    435

     

     

     

     

    448

     

    Operating lease right-of-use assets

     

     

     

    7

     

     

     

     

    8

     

    Long-term marketable securities

     

     

     

    —

     

     

     

     

    38

     

    Deferred reinsurance

     

     

     

    67

     

     

     

     

    65

     

    Reinsurance recoverables

     

     

     

    9

     

     

     

     

    9

     

    Deferred customer acquisition costs

     

     

     

    11

     

     

     

     

    11

     

    Other assets

     

     

     

    4

     

     

     

     

    2

     

    Total Assets

     

    $

     

    2,121

     

     

    $

     

    2,107

     

    Liabilities and Shareholders' Equity:

     

     

     

     

     

     

     

     

    Current Liabilities:

     

     

     

     

     

     

     

     

    Accounts payable

     

    $

     

    76

     

     

    $

     

    71

     

    Accrued liabilities:

     

     

     

     

     

     

     

     

    Payroll and related expenses

     

     

     

    29

     

     

     

     

    44

     

    Home warranty claims

     

     

     

    63

     

     

     

     

    74

     

    Other

     

     

     

    40

     

     

     

     

    28

     

    Deferred revenue

     

     

     

    177

     

     

     

     

    123

     

    Current portion of long-term debt

     

     

     

    29

     

     

     

     

    29

     

    Total Current Liabilities

     

     

     

    414

     

     

     

     

    369

     

    Long-Term Debt

     

     

     

    1,164

     

     

     

     

    1,170

     

    Other Long-Term Liabilities:

     

     

     

     

     

     

     

     

    Deferred tax liabilities, net

     

     

     

    45

     

     

     

     

    49

     

    Operating lease liabilities

     

     

     

    20

     

     

     

     

    20

     

    Unearned insurance premium

     

     

     

    234

     

     

     

     

    233

     

    Unpaid losses and loss adjustment reserves

     

     

     

    12

     

     

     

     

    12

     

    Long-term deferred revenue

     

     

     

    19

     

     

     

     

    12

     

    Other long-term liabilities

     

     

     

    15

     

     

     

     

    4

     

    Total Other Long-Term Liabilities

     

     

     

    345

     

     

     

     

    329

     

    Commitments and Contingencies

     

     

     

     

     

     

     

     

    Shareholders' Equity:

     

     

     

     

     

     

     

     

    Common stock, $0.01 par value; 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

     

     

     

    1

     

     

     

     

    1

     

    Additional paid-in capital

     

     

     

    153

     

     

     

     

    152

     

    Retained earnings

     

     

     

    567

     

     

     

     

    530

     

    Accumulated other comprehensive (loss) income

     

     

     

    (8

    )

     

     

     

    —

     

    Less treasury stock, at cost; 13,560,308 shares as of March 31, 2025 and 12,120,225 shares as of December 31, 2024

     

     

     

    (515

    )

     

     

     

    (444

    )

    Total Shareholders' Equity

     

     

     

    198

     

     

     

     

    239

     

    Total Liabilities and Shareholders' Equity

     

    $

     

    2,121

     

     

    $

     

    2,107

     

    Frontdoor, Inc.

    Consolidated Statements of Cash Flows (Unaudited)

    (In millions)

     

     

     

    Three Months Ended

     

     

     

    March 31,

     

     

     

    2025

     

     

    2024

     

    Cash and Cash Equivalents at Beginning of Period

     

    $

     

    421

     

     

    $

     

    325

     

    Cash Flows from Operating Activities:

     

     

     

     

     

     

     

     

    Net Income

     

     

     

    37

     

     

     

     

    34

     

    Adjustments to reconcile net income to net cash provided from operating activities:

     

     

     

     

     

     

     

     

    Depreciation and amortization expense

     

     

     

    23

     

     

     

     

    9

     

    Deferred income tax benefit

     

     

     

    (1

    )

     

     

     

    —

     

    Stock-based compensation expense

     

     

     

    8

     

     

     

     

    7

     

    Restructuring charges

     

     

     

    1

     

     

     

     

    —

     

    Payments for restructuring charges

     

     

     

    (4

    )

     

     

     

    (1

    )

    Other

     

     

     

    1

     

     

     

     

    1

     

    Changes in:

     

     

     

     

     

     

     

     

    Receivables

     

     

     

    1

     

     

     

     

    1

     

    Prepaid expenses and other current assets

     

     

     

    3

     

     

     

     

    2

     

    Deferred reinsurance

     

     

     

    (1

    )

     

     

     

    —

     

    Deferred customer acquisition costs

     

     

     

    (1

    )

     

     

     

    —

     

    Accounts payable

     

     

     

    5

     

     

     

     

    (7

    )

    Deferred revenue

     

     

     

    61

     

     

     

     

    57

     

    Accrued liabilities

     

     

     

    (21

    )

     

     

     

    (31

    )

    Deferred insurance premiums

     

     

     

    2

     

     

     

     

    —

     

    Current income taxes

     

     

     

    11

     

     

     

     

    11

     

    Net Cash Provided from Operating Activities

     

     

     

    124

     

     

     

     

    84

     

    Cash Flows from Investing Activities:

     

     

     

     

     

     

     

     

    Purchases of property and equipment

     

     

     

    (7

    )

     

     

     

    (10

    )

    Purchases of available-for-sale securities

     

     

     

    (6

    )

     

     

     

    —

     

    Sales and maturities of available-for-sale securities

     

     

     

    60

     

     

     

     

    —

     

    Net Cash Provided from (Used for) Investing Activities

     

     

     

    47

     

     

     

     

    (10

    )

    Cash Flows from Financing Activities:

     

     

     

     

     

     

     

     

    Repayments of debt

     

     

     

    (7

    )

     

     

     

    (4

    )

    Repurchases of common stock

     

     

     

    (71

    )

     

     

     

    (13

    )

    Other financing activities

     

     

     

    (7

    )

     

     

     

    (4

    )

    Net Cash Used for Financing Activities

     

     

     

    (85

    )

     

     

     

    (21

    )

    Cash Increase During the Period

     

     

     

    85

     

     

     

     

    53

     

    Cash and Cash Equivalents at End of Period

     

    $

     

    506

     

     

    $

     

    378

     

    Reconciliations of Non-GAAP Financial Measures

     

    The following table presents reconciliations of Net Income to Adjusted Net Income.

     

     

    Three Months Ended

     

     

     

    March 31,

     

    (In millions, except per share amounts)

     

    2025

     

     

    2024

     

    Net Income

     

    $

    37

     

     

    $

    34

     

    Amortization expense

     

     

    13

     

     

     

    1

     

    Acquisitions-related Costs

     

     

    2

     

     

     

    —

     

    Restructuring Charges

     

     

    1

     

     

     

    0

     

    Tax Impact of Adjustments

     

     

    (3

    )

     

     

    (0

    )

    Adjusted Net Income

     

    $

    49

     

     

    $

    35

     

    Adjusted Earnings per Share:

     

     

     

     

     

     

    Basic

     

    $

    0.66

     

     

    $

    0.44

     

    Diluted

     

    $

    0.64

     

     

    $

    0.44

     

    Weighted-average Common Shares outstanding:

     

     

     

     

     

     

    Basic

     

     

    74.7

     

     

     

    78.3

     

    Diluted

     

     

    76.3

     

     

     

    79.0

     

    The following table presents reconciliations of net cash provided from operating activities to Free Cash Flow.

     

     

     

    Three Months Ended

     

     

     

    March 31,

     

    (In millions)

     

    2025

     

     

    2024

     

    Net cash provided from operating activities

     

    $

     

    124

     

     

    $

     

    84

     

    Property additions

     

     

     

    (7

    )

     

     

     

    (10

    )

    Free Cash Flow

     

    $

     

    117

     

     

    $

     

    73

     

    The following table presents reconciliations of Net Income to Adjusted EBITDA.

     

     

     

     

     

     

    Three Months Ended

     

     

     

    March 31,

     

    (In millions)

     

    2025

     

     

    2024

     

    Net Income

     

    $

     

    37

     

     

    $

     

    34

     

    Depreciation and amortization expense

     

     

     

    23

     

     

     

     

    9

     

    Restructuring charges

     

     

     

    1

     

     

     

     

    —

     

    Acquistion-related costs

     

     

     

    2

     

     

     

     

    —

     

    Provision for income taxes

     

     

     

    11

     

     

     

     

    11

     

    Non-cash stock-based compensation expense

     

     

     

    8

     

     

     

     

    7

     

    Interest expense

     

     

     

    19

     

     

     

     

    10

     

    Adjusted EBITDA

     

    $

     

    100

     

     

    $

     

    71

     

    Key Business Metrics

     

     

     

     

     

     

     

    As of March 31,

     

     

     

     

    2025

     

     

    2024

     

     

    Number of home warranties (in millions)

     

     

    2.10

     

     

     

    1.96

     

     

    Renewals

     

     

    1.58

     

     

     

    1.51

     

     

    First-Year Direct-To-Consumer

     

     

    0.31

     

     

     

    0.27

     

     

    First-Year Real Estate

     

     

    0.21

     

     

     

    0.19

     

     

    Increase (Reduction) in number of home warranties(1)

     

     

    7

     

    %

     

    (6

    )

    %

    Customer retention rate(1)

     

     

    79.9

     

    %

     

    76.3

     

    %

    (1)

    Customer retention rate is presented on a rolling 12-month basis in order to avoid seasonal anomalies. As of March 31, 2025, excluding the 2-10 home warranties acquired on December 19, 2024, the reduction in home warranties was two percent, and the customer retention rate was 78.5 percent.

    Source: Frontdoor, Inc.

    FTDR-Financial

    View source version on businesswire.com: https://www.businesswire.com/news/home/20250501413340/en/

    For further information, contact:

    Investor Relations:

    Matt Davis

    901.701.5199

    [email protected]

    Media:

    Tom Collins

    901.701.5198

    [email protected] 

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