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Frontdoor
🇺🇸 NASDAQ:FTDR
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Sep 30, 2021

Frontdoor Q3 2021 Earnings Report

Frontdoor's Q3 2021 earnings were released, showcasing a 7% revenue increase to $471 million and a net income of $76 million.

Key Takeaways

Frontdoor reported a 7% increase in revenue to $471 million for Q3 2021, driven by growth in renewal and direct-to-consumer channels, offsetting challenges in the real estate channel. The company achieved a gross profit margin of 54% and net income of $76 million, with adjusted EBITDA reaching a record $122 million. A $400 million share repurchase program was launched, with $25 million repurchased in September.

Revenue increased by 7% to $471 million, driven by growth in renewal and direct-to-consumer channels.

Gross profit margin reached 54%, a 500 basis point increase year-over-year, due to lower service requests and process improvements.

Net income increased by 56% to $76 million compared to the prior year period.

Adjusted EBITDA reached a record $122 million, a 34% increase over the prior year period.

Total Revenue
$471M
Previous year: $440M
+7.0%
EPS
$0.91
Previous year: $0.59
+54.2%
Home Service Plans
2.23
Gross Profit
$254M
Previous year: $215M
+18.1%
Cash and Equivalents
$309M
Previous year: $551M
-43.9%
Free Cash Flow
$15M
Previous year: $6M
+150.0%
Total Assets
$1.16B
Previous year: $1.41B
-17.5%

Frontdoor

Frontdoor

Frontdoor Revenue by Segment

Forward Guidance

Frontdoor provided an updated full-year 2021 outlook, including a revenue range of $1.59 billion to $1.60 billion and an adjusted EBITDA range of $310 million to $315 million. For the fourth quarter of 2021, the company expects a revenue range of $330 million to $340 million and an adjusted EBITDA range of $40 million to $45 million.

Positive Outlook

  • Revenue range updated to $1.59 billion to $1.60 billion for full year 2021
  • Gross margin updated to approximately 50 percent for full year 2021
  • Adjusted EBITDA range updated to $310 million to $315 million for full year 2021
  • Fourth-quarter 2021 revenue expected to be in the range of $330 million to $340 million
  • Fourth-quarter 2021 Adjusted EBITDA expected to be in the range of $40 million to $45 million

Challenges Ahead

  • Challenging market conditions in the real estate channel are expected to continue.
  • Parts availability challenges resulted in higher replacement rates.
  • Unfavorable cost trends across all trades due to industry-wide parts and equipment availability challenges.
  • Higher inflation impacting costs.
  • Customer retention declined from 75 percent in the second quarter of 2021 to 74 percent.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

View Frontdoor