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Frontdoor
🇺🇸 NASDAQ:FTDR
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Sep 30, 2022

Frontdoor Q3 2022 Earnings Report

Frontdoor's third-quarter performance in 2022 showed revenue growth, but net income and adjusted EBITDA decreased due to rising costs, however, full-year revenue and adjusted EBITDA guidance were raised.

Key Takeaways

Frontdoor reported a 3% increase in revenue to $484 million for Q3 2022. However, net income decreased by 63% to $28 million, and adjusted EBITDA decreased by 35% to $79 million. The company broadened cost reduction initiatives and reduced its workforce by 7%. Despite these challenges, Frontdoor raised its full-year 2022 revenue and adjusted EBITDA guidance.

Revenue increased by 3% to $484 million, driven by price and product mix changes.

Net income decreased 63% to $28 million, impacted by a Streem impairment charge and restructuring costs.

Adjusted EBITDA decreased 35% to $79 million due to higher contract claims costs.

Full-year revenue guidance increased to $1.65 billion to $1.66 billion, and adjusted EBITDA guidance increased to $185 million to $195 million.

Total Revenue
$484M
Previous year: $471M
+2.8%
EPS
$0.56
Previous year: $0.91
-38.5%
Home Service Plans
2.16M
Previous year: 2.23
+96860886.5%
Gross Profit
$210M
Previous year: $254M
-17.3%
Cash and Equivalents
$244M
Previous year: $309M
-21.0%
Free Cash Flow
-$25M
Previous year: $15M
-266.7%
Total Assets
$1.1B
Previous year: $1.16B
-5.7%

Frontdoor

Frontdoor

Frontdoor Revenue by Segment

Forward Guidance

Frontdoor expects revenue between $326 million and $336 million and adjusted EBITDA between $4 million and $14 million for Q4 2022. For the full year 2022, the company anticipates revenue between $1.65 billion and $1.66 billion and adjusted EBITDA between $185 million and $195 million.

Positive Outlook

  • Upper single-digit revenue growth in the renewal channel.
  • Upper single-digit revenue growth in the direct-to-consumer channel.
  • SG&A range updated to $515 million to $520 million, an approximately $45 million reduction from the original 2022 outlook.
  • Gross profit margin updated to approximately 41 percent, driven primarily by the continuation of high cost inflation that is partly offset by higher pricing and process improvement efforts.
  • Revenue growth is mostly driven by higher price and product mix.

Challenges Ahead

  • Approximately 30 percent revenue decline in the real estate channel.
  • Low-single digit revenue decline in the direct-to-consumer channel.
  • Adjusted EBITDA of $4 million to $14 million, a decline from the prior year period.
  • Revenue growth customer growth is expected to decline approximately 5 percent.
  • High cost inflation that is partly offset by higher pricing and process improvement efforts.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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