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Sep 30, 2023
Frontdoor Q3 2023 Earnings Report
Frontdoor's Q3 2023 performance was marked by revenue growth, margin expansion and increased profitability.
Key Takeaways
Frontdoor reported an 8% increase in revenue to $524 million for Q3 2023. Gross profit margin expanded by 760 bps to 51%, and net income more than doubled to $71 million. Adjusted EBITDA increased by 61% to $128 million. The company is raising its full-year 2023 outlook for revenue, Adjusted EBITDA, and share repurchases.
Revenue increased by 8% to $524 million, driven by price increases.
Gross profit margin expanded significantly to 51% due to pricing, process improvements and favorable cost development.
Net income more than doubled, reaching $71 million.
Adjusted EBITDA increased by 61% to $128 million.
Revenue by Segment
Forward Guidance
Frontdoor is raising its full-year 2023 revenue outlook to $1.765 billion to $1.775 billion and Adjusted EBITDA outlook to $320 million to $330 million. The company expects fourth-quarter revenue of $350 million to $360 million and Adjusted EBITDA of approximately $20 million to $30 million.
Positive Outlook
- Raised revenue outlook to $1.765B to $1.775B
- Renewals channel revenue growth of nearly 15%
- Increased gross profit margin to 48.0% to 49.5%
- Increased Adjusted EBITDA outlook to $320M to $330M
- Narrowed capital expenditures to approximately $35M
Challenges Ahead
- Direct-to-Consumer channel revenue decline in the low double-digit range
- Real Estate channel revenue decline in the mid-20% range
- Number of home service plans is expected to decline in the mid-to-upper single digits.
- Revenue of $350 million to $360 million for Q4
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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