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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.
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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