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Sep 30, 2024
Frontdoor Q1 2025 Earnings Report
Frontdoor reported outstanding financial results in the first quarter of 2025, with significant increases in revenue, gross profit margin, net income, and Adjusted EBITDA.
Key Takeaways
Frontdoor, Inc. announced strong first-quarter 2025 results, with revenue increasing 13% to $426 million and Adjusted EBITDA increasing 41% to $100 million. The company also reported a 9% increase in net income to $37 million and a 13% increase in diluted EPS to $0.49. These results led to an increased full-year outlook for revenue, Adjusted EBITDA, and share repurchases.
Revenue increased 13% to $426 million, driven by a 3% increase from price and a 10% increase from higher volume, primarily due to the 2-10 acquisition.
Gross profit margin increased 380 basis points to a first-quarter record of 55%.
Net Income increased 9% to $37 million and Diluted Earnings Per Share increased 13% to $0.49.
Adjusted EBITDA increased 41% to $100 million, and the company repurchased $105 million of shares year-to-date through April 2025.
Frontdoor
Frontdoor
Frontdoor Revenue by Segment
Revenue by Segment
Renewals Revenue
CapyFin.comReal Estate (First-Year) Revenue
CapyFin.comDirect-to-Consumer (First-Year) Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
Frontdoor increased its full-year 2025 outlook for revenue, gross profit margin, and Adjusted EBITDA, reflecting strong first-quarter performance and confidence in continued growth.
Positive Outlook
- Increasing full-year revenue range to $2.03 billion to $2.05 billion.
- Increasing gross profit margin range to 54% to 55%.
- Increasing Adjusted EBITDA range to $500 million to $520 million.
- Increasing target for 2025 share repurchases to at least $200 million.
- Second-quarter 2025 revenue outlook of approximately $600 million to $605 million.
Challenges Ahead
- Home warranty member count is projected to decline 1-3% in 2025.
- SG&A is expected to increase to an updated range of $650 million to $670 million, reflecting a $10 million increase in marketing investments.
- Capital expenditures remain approximately $35 million to $45 million.
- Annual effective tax rate remains approximately 25%.
- No specific negative forward guidance points were highlighted beyond expected operational costs and member count decline.
Revenue & Expenses
Visualization of income flow from segment revenue to net income