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Jun 30, 2024
Frontdoor Q2 2024 Earnings Report
Frontdoor's Q2 2024 performance was marked by revenue growth, improved profitability, and strategic advancements.
Key Takeaways
Frontdoor reported a 4% increase in revenue to $542 million, driven by price increases, which were partially offset by lower volume. Gross profit margin reached a record high of 56%, and net income increased by 32% to $92 million. The company is focused on driving home warranty sales, expanding its on-demand business, and closing the 2-10 acquisition.
Revenue increased by 4% to $542 million, driven by a 7% increase from price, partly offset by a 3% decline from lower volume.
Gross profit margin increased by 470 basis points to a record 56%, due to higher realized price, a transition to higher service fees, and process improvement initiatives.
Net income increased by 32% to $92 million, and diluted earnings per share increased by 38% to $1.18.
Adjusted EBITDA increased by 31% to $158 million.
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 provided the following outlook for Q3 2024 and updated full-year 2024:
Positive Outlook
- Maintaining expectations for revenue to grow approximately 3% to $1.81 billion to $1.84 billion.
- A mid-single digit increase in renewals channel revenue.
- An approximately 40% increase in other revenue, which is primarily driven by the new HVAC program.
- Increasing gross profit margin to slightly above 51%.
- Increasing Adjusted EBITDA to $385 million to $395 million.
Challenges Ahead
- Revenue of $530 million to $545 million, a 3% increase over the prior-year period.
- Adjusted EBITDA of $130 million to $140 million, a 6% increase over the prior-year period.
- An approximately 15% decline in both direct-to-consumer and real estate channel revenue.
- The number of home warranties is expected to decline within a range of 3% to 5%.
- Increasing SG&A to $605 million to $615 million, which includes approximately $10 million to drive organic growth and customer retention initiatives.
Revenue & Expenses
Visualization of income flow from segment revenue to net income