Frontdoor, Inc. Q1 2025 Financial Results

Frontdoor, Inc., a leading provider of home warranties in the United States, has released its first-quarter 2025 financial results. The company reported significant growth across several key financial metrics, reflecting strong operational performance and strategic initiatives.

Financial Highlights

For the first quarter of 2025, Frontdoor reported a 13% increase in revenue, reaching $426 million compared to $378 million in the same period last year. The gross profit margin improved by 380 basis points to 55%, setting a new first-quarter record. Net income rose by 9% to $37 million, while diluted earnings per share (EPS) increased by 13% to $0.49. Adjusted EBITDA saw a substantial 41% increase, reaching $100 million.

Business and Operational Highlights

The company's revenue growth was driven by a 3% increase in pricing and a 10% increase in volume, primarily due to the acquisition of 2-10 Home Buyers Warranty. The direct-to-consumer ending member count increased by 15% to 310,000, which includes the 2-10 acquisition and 4% organic growth. Additionally, the company achieved a 7% increase in the number of home warranties, totaling 2.10 million.

Strategic Initiatives and Corporate Developments

Frontdoor repurchased $105 million of shares year-to-date through April 2025 and has increased its full-year share repurchase target to at least $200 million. The company also updated its full-year 2025 outlook, raising the revenue range to $2.03 billion to $2.05 billion and the Adjusted EBITDA range to $500 million to $520 million.

Management's Perspective

Chairman and CEO Bill Cobb expressed satisfaction with the company's strong start to 2025, highlighting the successful integration of the 2-10 acquisition and improvements in home warranty member count. CFO Jessica Ross emphasized the company's robust financial position, which allows for continued investment in growth and shareholder returns through share repurchases.

Future Outlook

For the second quarter of 2025, Frontdoor projects revenue of approximately $600 million to $605 million and Adjusted EBITDA of approximately $185 million to $190 million. The company also anticipates a 2-4% increase in realized price and a 7-8% increase in volume for the full year.

SEC Filing: Frontdoor, Inc. [ FTDR ] - 8-K - May. 01, 2025