Frontdoor Announces Record Third-Quarter 2024 Results
Frontdoor (NASDAQ: FTDR) reported strong Q3 2024 results with revenue increasing 3% to $540 million. Net income rose 40% to $100 million, while adjusted EBITDA grew 29% to $165 million. The company's gross profit margin improved 550 basis points to 57%. Frontdoor completed its $400 million share repurchase program and established a new $650 million authorization. The company raised its full-year 2024 outlook, projecting revenue of approximately $1.830 billion and adjusted EBITDA of $430 million. The 2-10 acquisition remains on track to close in Q4 2024.
Frontdoor (NASDAQ: FTDR) ha riportato risultati solidi per il terzo trimestre del 2024, con un incremento del fatturato del 3% a 540 milioni di dollari. L'utile netto è aumentato del 40% a 100 milioni di dollari, mentre l'EBITDA rettificato è cresciuto del 29% a 165 milioni di dollari. Il margine di profitto lordo dell'azienda è migliorato di 550 punti base, raggiungendo il 57%. Frontdoor ha completato il suo programma di riacquisto di azioni da 400 milioni di dollari e ha stabilito una nuova autorizzazione di 650 milioni di dollari. L'azienda ha rivisto al rialzo le previsioni per l'intero anno 2024, prevedendo un fatturato di circa 1,830 miliardi di dollari e un EBITDA rettificato di 430 milioni di dollari. L'acquisizione 2-10 è ancora in programma di chiudere nel quarto trimestre del 2024.
Frontdoor (NASDAQ: FTDR) reportó resultados sólidos para el tercer trimestre de 2024, con un aumento del 3% en los ingresos, alcanzando 540 millones de dólares. La ganancia neta subió un 40% a 100 millones de dólares, mientras que el EBITDA ajustado creció un 29% a 165 millones de dólares. El margen de beneficio bruto de la empresa mejoró en 550 puntos base hasta el 57%. Frontdoor completó su programa de recompra de acciones de 400 millones de dólares y estableció una nueva autorización de 650 millones de dólares. La empresa aumentó su perspectiva para todo el año 2024, proyectando ingresos de aproximadamente 1,830 mil millones de dólares y un EBITDA ajustado de 430 millones de dólares. La adquisición 2-10 sigue en camino de cerrarse en el cuarto trimestre de 2024.
프론트도어 (NASDAQ: FTDR)는 2024년 3분기 실적을 발표하며 매출이 3% 증가하여 5억 4천만 달러에 달했다고 보고했습니다. 순이익은 40% 증가하여 1억 달러에 도달했고, 조정된 EBITDA는 29% 증가하여 1억 6천 5백만 달러에 이르렀습니다. 회사의 총 이익률은 550 베이시스 포인트 상승하여 57%로 개선되었습니다. 프론트도어는 4억 달러 규모의 자사주 매입 프로그램을 완료하고 새로운 6억 5천만 달러의 승인을 설정했습니다. 이 회사는 2024년 전체 실적 전망을 상향 조정하여 약 18억 3천만 달러의 수익과 4억 3천만 달러의 조정 EBITDA를 예상하고 있습니다. 2-10 인수는 2024년 4분기 마감을 유지하고 있습니다.
Frontdoor (NASDAQ: FTDR) a annoncé de solides résultats pour le troisième trimestre 2024, avec une augmentation du chiffre d'affaires de 3%, atteignant 540 millions de dollars. Le bénéfice net a augmenté de 40% pour atteindre 100 millions de dollars, tandis que l'EBITDA ajusté a crû de 29% pour atteindre 165 millions de dollars. La marge brute de profit de l'entreprise s'est améliorée de 550 points de base pour atteindre 57%. Frontdoor a terminé son programme de rachat d'actions de 400 millions de dollars et a établi une nouvelle autorisation de 650 millions de dollars. La société a relevé ses prévisions pour l'année 2024, projetant un chiffre d'affaires d'environ 1,830 milliard de dollars et un EBITDA ajusté de 430 millions de dollars. L'acquisition 2-10 reste sur la bonne voie pour être finalisée au quatrième trimestre 2024.
Frontdoor (NASDAQ: FTDR) berichtete über starke Ergebnisse im dritten Quartal 2024 mit einem Umsatzanstieg von 3% auf 540 Millionen Dollar. Der Nettogewinn stieg um 40% auf 100 Millionen Dollar, während das bereinigte EBITDA um 29% auf 165 Millionen Dollar wuchs. Die Bruttogewinnmarge des Unternehmens verbesserte sich um 550 Basispunkte auf 57%. Frontdoor hat sein 400 Millionen Dollar großes Aktienrückkaufprogramm abgeschlossen und eine neue Genehmigung über 650 Millionen Dollar erteilt. Das Unternehmen hob seine Prognose für das Gesamtjahr 2024 an und erwartet Umsätze von etwa 1,830 Milliarden Dollar und ein bereinigtes EBITDA von 430 Millionen Dollar. Die 2-10 Akquisition ist weiterhin auf Kurs, um im 4. Quartal 2024 abgeschlossen zu werden.
- Revenue increased 3% to $540 million
- Net income grew 40% to $100 million
- Gross profit margin improved 550 basis points to 57%
- Adjusted EBITDA increased 29% to $165 million
- Record operating cash flow of $212 million
- New $650 million share repurchase authorization
- Raised full-year 2024 guidance
- Home warranties declined 4% to 1.95 million
- Real estate and direct-to-consumer revenue both decreased 10%
- Expected 15% decline in direct-to-consumer and real estate channel revenue for full year
Insights
Outstanding Q3 results showcase Frontdoor's operational excellence with
Key positives include:
- Record free cash flow of
$181M - New
$650M share repurchase program - Increased FY2024 guidance with Adjusted EBITDA now at
$430M
The real estate market slowdown is impacting new warranty sales, with both real estate and direct-to-consumer channels down
- Renewal revenue up
4% through improved pricing - Other revenue surged
41% driven by HVAC sales - First-year Direct-to-Consumer warranties grew
3% sequentially
Revenue Increased
Net Income Increased
Repurchased
Launched New American Home Shield App in October;
2-10 Acquisition Remains on Track to Close in the Fourth Quarter of 2024
Financial Results |
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Three Months Ended |
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September 30, |
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(In millions except as noted) |
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2024 |
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2023 |
|
|
Change |
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|||
Revenue |
|
$ |
540 |
|
|
$ |
524 |
|
|
|
3 |
% |
Gross Profit |
|
|
306 |
|
|
|
268 |
|
|
|
14 |
% |
Net Income |
|
|
100 |
|
|
|
71 |
|
|
|
40 |
% |
Diluted Earnings per Share |
|
|
1.30 |
|
|
|
0.89 |
|
|
|
47 |
% |
Adjusted Net Income(1) |
|
|
106 |
|
|
|
76 |
|
|
|
40 |
% |
Adjusted Diluted Earnings per Share(1) |
|
|
1.38 |
|
|
|
0.94 |
|
|
|
46 |
% |
Adjusted EBITDA(1) |
|
|
165 |
|
|
|
128 |
|
|
|
29 |
% |
Home Warranties (number in millions) |
|
|
1.95 |
|
|
|
2.04 |
|
|
|
(4 |
)% |
Third-Quarter 2024 Summary
-
Revenue increased
3% to and was comprised of a$540 million 4% increase from price that was partly offset by a1% decline from lower volume -
The number of first year Direct-to-Consumer home warranties grew
3% over Q2 2024 to 271k -
Gross profit margin increased 550 basis points to
57% primarily as a result of higher realized price, a lower number of service requests per customer, a transition to higher service fees and continued process improvement initiatives -
Net Income and Diluted Earnings Per Share increased
40% to and$100 million 47% to , respectively$1.30 -
Adjusted EBITDA(1) increased
29% to$165 million -
Frontdoor completed its prior
share repurchase authorization, which included$400 million of share repurchases year-to-date through August$119 million -
Established new 3-year,
share repurchase authorization on September 4, 2024$650 million
Updated Full-Year 2024 Outlook
-
Increasing revenue outlook from a midpoint of
to approximately$1.82 5$1.83 0 billion -
Increasing gross profit margin outlook from slightly above
51% to approximately53% -
Increasing Adjusted EBITDA(2) outlook from a midpoint of
to approximately$390 $430 million
“We have dramatically improved our operations over the last two years and are on pace for a record year of financial performance," said Chairman and Chief Executive Officer Bill Cobb. “Our top priority is to accelerate our long-term growth trajectory. We are driving this objective by taking aggressive actions to increase new home warranty sales and remain on track to complete the 2-10 acquisition in the fourth quarter. Additionally, I am super excited that we have just launched the new AHS app to enhance our member user experience."
"Frontdoor’s financial position has never been stronger," said Chief Financial Officer Jessica Ross. “We delivered another exceptional Net Income and Adjusted EBITDA beat, increased our full-year outlook, generated a record amount of cash and remain focused on share repurchases. We are making the right investments in the business to drive future growth and we look forward to sharing more details at our investor day on February 27, 2025."
Third-Quarter 2024 Results
Revenue by Customer Channel |
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Three Months Ended |
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|||||||||
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September 30, |
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(In millions) |
|
2024 |
|
|
2023 |
|
|
Change |
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|||
Renewals |
|
$ |
422 |
|
|
$ |
406 |
|
|
|
4 |
% |
Real estate (First-Year) |
|
|
36 |
|
|
|
40 |
|
|
|
(10 |
)% |
Direct-to-consumer (First-Year) |
|
|
49 |
|
|
|
54 |
|
|
|
(10 |
)% |
Other |
|
|
34 |
|
|
|
24 |
|
|
|
41 |
% |
Total |
|
$ |
540 |
|
|
$ |
524 |
|
|
|
3 |
% |
Third-quarter 2024 revenue increased
-
Renewal revenue increased
4% due to improved price realization that was partially offset by lower volume; -
Real estate revenue and direct-to-consumer revenue both decreased
10% , primarily due to a cyclical decline in home warranty sales as a result of the challenging real estate market and the impact of inflation on consumer sentiment; -
Other revenue increased
41% due to higher on-demand home services, primarily new HVAC sales.
Third-quarter 2024 net income increased
Period-over-Period Adjusted EBITDA(1) Bridge
(In millions) |
|
|
|
|
|
Three Months Ended September 30, 2023 |
|
$ |
|
128 |
|
Impact of change in revenue |
|
|
|
17 |
|
Contract claims costs |
|
|
|
21 |
|
Sales and marketing costs |
|
|
|
1 |
|
General and administrative costs |
|
|
|
(3 |
) |
Interest and net investment income |
|
|
|
1 |
|
Other |
|
|
|
1 |
|
Three Months Ended September 30, 2024 |
|
$ |
|
165 |
|
Third-quarter 2024 Adjusted EBITDA(1) of
-
from higher revenue conversion(3), as price increases were partly offset by lower volume;$17 million -
of lower contract claims costs(4), excluding the impact of claims costs related to the change in revenue. The decrease in contract claims costs primarily reflects:$21 million -
A lower number of customer service requests per customer primarily driven by
of favorable weather;$14 million - A transition to higher service fees;
- Continued process improvement initiatives;
-
Favorable claims cost development of
, compared to a$3 million favorable claims cost development in the third quarter of 2023; partially offset by$9 million - Normal inflation across our contractor network, replacement parts and equipment.
-
A lower number of customer service requests per customer primarily driven by
-
of higher G&A costs primarily due to increased professional fees and personnel costs.$3 million
Cash Flow
|
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Nine Months Ended |
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|
|
September 30, |
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(In millions) |
|
2024 |
|
|
2023 |
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||||
Net cash provided from (used for): |
|
|
|
|
|
|
|
|
||
Operating activities |
|
$ |
|
212 |
|
|
$ |
|
139 |
|
Investing activities |
|
|
|
(31 |
) |
|
|
|
(23 |
) |
Financing activities |
|
|
|
(131 |
) |
|
|
|
(88 |
) |
Cash increase during the period |
|
$ |
|
50 |
|
|
$ |
|
28 |
|
Net cash provided from operating activities was a record
Net cash used for investing activities was
Net cash used for financing activities was
Free Cash Flow(1) increased
Cash as of September 30, 2024 was
Capital Allocation Update
-
In August, the company completed its previous 3-year,
share repurchase authorization. This included$400 million to repurchase 3.2 million shares year-to-date through August.$119 million -
Frontdoor is now operating under a new 3-year,
share repurchase authorization that began September 4, 2024, a$650 million 63% increase over the prior authorization.
Fourth-Quarter 2024 Outlook
-
Revenue of approximately
.$367 million -
Adjusted EBITDA(2) of approximately
.$36 million
Updated Full-Year 2024 Outlook
-
Increasing revenue from a midpoint of
to approximately$1.82 5 . Key assumptions:$1.83 0 billion- A mid-single digit increase in renewals channel revenue.
-
An approximately
15% decline in both direct-to-consumer and real estate channel revenue. -
An approximately
40% increase in other revenue, which is primarily driven by the new HVAC program. -
The number of home warranties is expected to decline approximately
4% .
-
Increasing gross profit margin from slightly above
51% to approximately53% . -
Decreasing SG&A to approximately
. This includes an estimated$605 million of acquisition-related costs related to closing the 2-10 acquisition, which is excluded from Adjusted EBITDA.$15 million -
Increasing Adjusted EBITDA(2) from a midpoint of
to approximately$390 .$430 million -
Capital expenditures of approximately
.$40 million -
Annual effective tax rate of approximately
25% .
Third-Quarter 2024 Earnings Conference Call
Frontdoor has scheduled a conference call today, November 4, 2024, at 7:30 a.m. Central time (8:30 a.m. Eastern time). During the call, Bill Cobb, Chairman and Chief Executive Officer, and Jessica Ross, Chief Financial Officer, will discuss the company’s operational performance and financial results for third-quarter 2024 and respond to questions from the investment community. Participants can register for the conference call by clicking https://www.webcaster4.com/Webcast/Page/3067/51429. Once completed, each participant will receive access details via email. Additionally, the conference call will be available via webcast which will include a slide presentation highlighting the company’s results. To participate via webcast and view the presentation, visit https://investors.frontdoorhome.com.
The call will be available for replay for approximately 60 days. To access the replay of this call, please call 877-481-4010 and enter conference passcode 51429 (international participants: 919-882-2331, conference passcode 51429). To view a replay of the webcast, visit the company’s https://investors.frontdoorhome.com.
About Frontdoor, Inc.
Frontdoor is reimagining how homeowners maintain and repair their most valuable asset – their home. As the parent company of two leading brands, we bring over 50 years of experience in providing our members with comprehensive options to protect their homes from costly and unexpected breakdowns through our extensive network of pre-qualified professional contractors. American Home Shield, the category leader in home warranties with approximately two million members, gives homeowners budget protection and convenience, covering up to 23 essential home systems and appliances. Frontdoor is a cutting edge, one-stop app for home repair and maintenance. The app empowers homeowners by connecting them in real time through video chat with pre-qualified experts to diagnose and solve their problems. The Frontdoor app also offers homeowners a range of other benefits including DIY tips, discounts and more. For more information about American Home Shield and Frontdoor, please visit frontdoorhome.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements about Frontdoor’s plans, strategies and prospects as well as statements with respect to the proposed acquisition of 2-10 Home Buyers Warranty (the “Acquisition”), the Acquisition’s effect on our business and timing of such effects, and the expected timing of closing. Forward-looking statements can be identified by the use of forward-looking terms such as “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project,” “will,” “shall,” “would,” “aim,” or other comparable terms. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Such risks and uncertainties include, but are not limited to: risks related to the proposed Acquisition, including risks that we may not complete the Acquisition or that the Acquisition may not achieve its intended results; changes in macroeconomic conditions, including inflation and global supply chain challenges, especially as they may affect existing home sales, interest rates, consumer confidence or labor availability; the success of our business strategies; the ability of our marketing efforts to be successful or cost-effective; our dependence on our real estate and direct-to-consumer customer acquisition channels and our renewal channel; changes in the source and intensity of competition in our market; our ability to attract, retain and maintain positive relations with third-party contractors and vendors; increases in parts, appliance and home system prices, and other operating costs; our ability to attract and retain qualified key employees and labor availability in our customer service operations; our dependence on third-party vendors, including business process outsourcers, and third-party component suppliers; cybersecurity breaches, disruptions or failures in our technology systems; our ability to protect the security of personal information about our customers; lawsuits, enforcement actions and other claims by third parties or governmental authorities; evolving corporate governance and disclosure regulations and expectations related to environmental, social and governance matters; physical effects of climate change, including adverse weather conditions and Acts of God, along with the increased focus on sustainability; increases in tariffs or changes to import/export regulations; our ability to protect our intellectual property and other material proprietary rights; negative reputational and financial impacts resulting from acquisitions or strategic transactions; requirement to recognize impairment charges; third-party use of our trademarks as search engine keywords to direct our potential customers to their own websites; inappropriate use of social media by us or other parties to harm our reputation; special risks applicable to operations outside
Non-GAAP Financial Measures
To supplement Frontdoor’s results presented in accordance with accounting principles generally accepted in
We define "Adjusted EBITDA" as net income before depreciation and amortization expense; goodwill and intangibles impairment; restructuring charges; acquisition-related costs; provision for income taxes; non-cash stock-based compensation expense; interest expense; loss on extinguishment of debt; and other non-operating expenses. We believe Adjusted EBITDA is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by variations in capital structures, taxation, the age and book depreciation of facilities and equipment, restructuring and acquisition initiatives and equity-based, long-term incentive plans.
We define “Free Cash Flow” as net cash provided from operating activities less property additions. Free Cash Flow is not a measurement of our financial performance or liquidity under
We define “Adjusted Net Income” as net income before: amortization expense; restructuring charges; loss on extinguishment of debt; other non-operating expenses; and the tax impact of the aforementioned adjustments. We believe Adjusted Net Income is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by items listed in this definition.
We define “Adjusted Diluted Earnings per Share” as Adjusted Net Income divided by the weighted-average diluted common shares outstanding.
We define “Unrestricted Cash” as cash not subject to third-party restrictions. For additional information related to our third-party restrictions, see “Liquidity and Capital Resources — Liquidity” under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K filed with the SEC.
See the schedules attached hereto for additional information and reconciliations of such non-GAAP financial measures. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors’ evaluation of Frontdoor’s business performance and are useful for period-over-period comparisons of the performance of Frontdoor’s business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with
© 2024 Frontdoor, Inc. All rights reserved. The following terms, which may be used in this press release, are trademarks of Frontdoor, Inc. and its subsidiaries: Frontdoor®, American Home Shield®, HSA™, OneGuard®, Landmark Home Warranty®, Streem®, the Streem logo and the Frontdoor logo. All other trademarks used herein are the property of their respective owners.
(1) |
See “Reconciliations of Non-GAAP Financial Measures” accompanying this release for a reconciliation of Adjusted EBITDA, Free Cash Flow, Adjusted Net Income and Adjusted Diluted Earnings per Share, each a non-GAAP measure, to the nearest GAAP measure. See “Non-GAAP Financial Measures” included in this release for descriptions of calculations of these measures. Amounts presented in the reconciliations and other tables presented herein may not sum due to rounding. |
|
(2) |
A reconciliation of the forward-looking fourth-quarter and full-year 2024 Adjusted EBITDA outlook to net income cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results. |
|
(3) |
Revenue conversion includes the impact of the change in the number of home warranties as well as the impact of year-over-year price changes. The impact of the change in the number of home warranties considers the associated revenue on those plans less an estimate of contract claims costs based on margin experience in the prior year period. |
|
(4) |
Contract claims costs includes the impact of changes in service request incidence, inflation and other drivers associated with the number of home warranties in the prior year period. The impact on contract claims costs resulting from year-over-year changes in the number of home warranties is included in revenue conversion above. |
Frontdoor, Inc. |
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Consolidated Statements of Operations and Comprehensive Income (Unaudited) |
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(In millions, except per share data) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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|
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2024 |
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2023 |
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|
2024 |
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|
2023 |
|
||||||||
Revenue |
|
$ |
|
540 |
|
|
$ |
|
524 |
|
|
$ |
|
1,461 |
|
|
$ |
|
1,414 |
|
Cost of services rendered |
|
|
|
235 |
|
|
|
|
256 |
|
|
|
|
655 |
|
|
|
|
706 |
|
Gross Profit |
|
|
|
306 |
|
|
|
|
268 |
|
|
|
|
806 |
|
|
|
|
708 |
|
Selling and administrative expenses |
|
|
|
154 |
|
|
|
|
152 |
|
|
|
|
456 |
|
|
|
|
439 |
|
Depreciation and amortization expense |
|
|
|
10 |
|
|
|
|
9 |
|
|
|
|
28 |
|
|
|
|
28 |
|
Restructuring charges |
|
|
|
3 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
6 |
|
Interest expense |
|
|
|
10 |
|
|
|
|
10 |
|
|
|
|
29 |
|
|
|
|
30 |
|
Interest and net investment income |
|
|
|
(5 |
) |
|
|
|
(4 |
) |
|
|
|
(15 |
) |
|
|
|
(12 |
) |
Income before Income Taxes |
|
|
|
134 |
|
|
|
|
96 |
|
|
|
|
303 |
|
|
|
|
217 |
|
Provision for income taxes |
|
|
|
34 |
|
|
|
|
24 |
|
|
|
|
77 |
|
|
|
|
54 |
|
Net Income |
|
$ |
|
100 |
|
|
$ |
|
71 |
|
|
$ |
|
226 |
|
|
$ |
|
163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Other Comprehensive (Loss) Income, Net of Income Taxes: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Unrealized (loss) gain on derivative instruments, net of income taxes |
|
|
|
(4 |
) |
|
|
|
— |
|
|
|
|
(3 |
) |
|
|
|
2 |
|
Total Other Comprehensive (Loss) Income, Net of Income Taxes |
|
|
|
(4 |
) |
|
|
|
— |
|
|
|
|
(3 |
) |
|
|
|
2 |
|
Comprehensive Income |
|
$ |
|
97 |
|
|
$ |
|
72 |
|
|
$ |
|
223 |
|
|
$ |
|
164 |
|
|
|
|
|
|
|
|
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|
||||
Earnings per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
1.32 |
|
|
$ |
|
0.89 |
|
|
$ |
|
2.92 |
|
|
$ |
|
2.01 |
|
Diluted |
|
$ |
|
1.30 |
|
|
$ |
|
0.89 |
|
|
$ |
|
2.90 |
|
|
$ |
|
2.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
|
76.2 |
|
|
|
|
80.1 |
|
|
|
|
77.4 |
|
|
|
|
81.0 |
|
Diluted |
|
|
|
77.1 |
|
|
|
|
80.6 |
|
|
|
|
78.0 |
|
|
|
|
81.3 |
|
Frontdoor, Inc. |
||||||||||
Condensed Consolidated Statements of Financial Position (Unaudited) |
||||||||||
(In millions, except share data) |
||||||||||
|
|
As of |
|
|||||||
|
|
September 30, |
|
|
December 31, |
|
||||
|
|
2024 |
|
|
2023 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
375 |
|
|
$ |
|
325 |
|
Receivables, less allowance of |
|
|
|
6 |
|
|
|
|
6 |
|
Prepaid expenses and other current assets |
|
|
|
28 |
|
|
|
|
32 |
|
Contract assets |
|
|
|
75 |
|
|
|
|
— |
|
Total Current Assets |
|
|
|
484 |
|
|
|
|
363 |
|
Other Assets: |
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
68 |
|
|
|
|
60 |
|
Goodwill |
|
|
|
503 |
|
|
|
|
503 |
|
Intangible assets, net |
|
|
|
141 |
|
|
|
|
143 |
|
Operating lease right-of-use assets |
|
|
|
8 |
|
|
|
|
3 |
|
Deferred customer acquisition costs |
|
|
|
10 |
|
|
|
|
12 |
|
Other assets |
|
|
|
3 |
|
|
|
|
5 |
|
Total Assets |
|
$ |
|
1,217 |
|
|
$ |
|
1,089 |
|
Liabilities and Shareholders' Equity: |
|
|
|
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
91 |
|
|
$ |
|
76 |
|
Accrued liabilities: |
|
|
|
|
|
|
|
|
||
Payroll and related expenses |
|
|
|
29 |
|
|
|
|
38 |
|
Home warranty claims |
|
|
|
73 |
|
|
|
|
76 |
|
Other |
|
|
|
42 |
|
|
|
|
22 |
|
Deferred revenue |
|
|
|
89 |
|
|
|
|
102 |
|
Current portion of long-term debt |
|
|
|
17 |
|
|
|
|
17 |
|
Total Current Liabilities |
|
|
|
341 |
|
|
|
|
331 |
|
Long-Term Debt |
|
|
|
565 |
|
|
|
|
577 |
|
Other Long-Term Liabilities: |
|
|
|
|
|
|
|
|
||
Deferred tax liabilities, net |
|
|
|
24 |
|
|
|
|
25 |
|
Operating lease liabilities |
|
|
|
21 |
|
|
|
|
16 |
|
Other long-term liabilities |
|
|
|
6 |
|
|
|
|
5 |
|
Total Other Long-Term Liabilities |
|
|
|
50 |
|
|
|
|
46 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
||
Shareholders' Equity: |
|
|
|
|
|
|
|
|
||
Common stock, |
|
|
|
1 |
|
|
|
|
1 |
|
Additional paid-in capital |
|
|
|
139 |
|
|
|
|
117 |
|
Retained earnings |
|
|
|
522 |
|
|
|
|
296 |
|
Accumulated other comprehensive income |
|
|
|
2 |
|
|
|
|
6 |
|
Less treasury stock, at cost; 11,411,148 shares as of September 30, 2024 and 8,174,876 shares as of December 31, 2023 |
|
|
|
(403 |
) |
|
|
|
(283 |
) |
Total Shareholders' Equity |
|
|
|
261 |
|
|
|
|
136 |
|
Total Liabilities and Shareholders' Equity |
|
$ |
|
1,217 |
|
|
$ |
|
1,089 |
|
Frontdoor, Inc. |
||||||||||
Consolidated Statements of Cash Flows (Unaudited) |
||||||||||
(In millions) |
||||||||||
|
|
Nine Months Ended |
|
|||||||
|
|
September 30, |
|
|||||||
|
|
2024 |
|
|
2023 |
|
||||
Cash and Cash Equivalents at Beginning of Period |
|
$ |
|
325 |
|
|
$ |
|
292 |
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
||
Net Income |
|
|
|
226 |
|
|
|
|
163 |
|
Adjustments to reconcile net income to net cash provided from operating activities: |
|
|
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
28 |
|
|
|
|
28 |
|
Deferred income tax benefit |
|
|
|
— |
|
|
|
|
(12 |
) |
Stock-based compensation expense |
|
|
|
20 |
|
|
|
|
21 |
|
Restructuring charges |
|
|
|
5 |
|
|
|
|
6 |
|
Payments for restructuring charges |
|
|
|
(3 |
) |
|
|
|
(3 |
) |
Other |
|
|
|
2 |
|
|
|
|
5 |
|
Changes in working capital: |
|
|
|
|
|
|
|
|
||
Receivables |
|
|
|
— |
|
|
|
|
(1 |
) |
Prepaid expenses and other current assets |
|
|
|
(74 |
) |
|
|
|
(70 |
) |
Accounts payable |
|
|
|
14 |
|
|
|
|
7 |
|
Deferred revenue |
|
|
|
(12 |
) |
|
|
|
(22 |
) |
Accrued liabilities |
|
|
|
(11 |
) |
|
|
|
(2 |
) |
Current income taxes |
|
|
|
18 |
|
|
|
|
22 |
|
Net Cash Provided from Operating Activities |
|
|
|
212 |
|
|
|
|
139 |
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
|
(31 |
) |
|
|
|
(23 |
) |
Net Cash Used for Investing Activities |
|
|
|
(31 |
) |
|
|
|
(23 |
) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
||
Repayments of debt |
|
|
|
(13 |
) |
|
|
|
(13 |
) |
Repurchase of common stock |
|
|
|
(120 |
) |
|
|
|
(76 |
) |
Other financing activities |
|
|
|
2 |
|
|
|
|
— |
|
Net Cash Used for Financing Activities |
|
|
|
(131 |
) |
|
|
|
(88 |
) |
Cash Increase During the Period |
|
|
|
50 |
|
|
|
|
28 |
|
Cash and Cash Equivalents at End of Period |
|
$ |
|
375 |
|
|
$ |
|
320 |
|
Reconciliations of Non-GAAP Financial Measures |
||||||||||||||||
The following table presents reconciliations of Net Income to Adjusted Net Income. |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
(In millions, except per share amounts) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net Income |
|
$ |
100 |
|
|
$ |
71 |
|
|
$ |
226 |
|
|
$ |
163 |
|
Amortization expense |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
3 |
|
Acquisitions-related Costs |
|
|
3 |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
Restructuring Charges |
|
|
3 |
|
|
|
5 |
|
|
|
5 |
|
|
|
6 |
|
Tax Impact of Adjustments |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
Adjusted Net Income |
|
$ |
106 |
|
|
$ |
76 |
|
|
$ |
240 |
|
|
$ |
170 |
|
Adjusted Earnings per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
1.39 |
|
|
$ |
0.95 |
|
|
$ |
3.11 |
|
|
$ |
2.10 |
|
Diluted |
|
$ |
1.38 |
|
|
$ |
0.94 |
|
|
$ |
3.08 |
|
|
$ |
2.09 |
|
Weighted-average Common Shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
76.2 |
|
|
|
80.1 |
|
|
|
77.4 |
|
|
|
81.0 |
|
Diluted |
|
|
77.1 |
|
|
|
80.6 |
|
|
|
78.0 |
|
|
|
81.3 |
|
The following table presents reconciliations of net cash provided from operating activities to Free Cash Flow.
|
|
Nine Months Ended |
|
|||||||
|
|
September 30, |
|
|||||||
(In millions) |
|
2024 |
|
|
2023 |
|
||||
Net cash provided from operating activities |
|
$ |
|
212 |
|
|
$ |
|
139 |
|
Property additions |
|
|
|
(31 |
) |
|
|
|
(23 |
) |
Free Cash Flow |
|
$ |
|
181 |
|
|
$ |
|
116 |
|
The following table presents reconciliations of net income to Adjusted EBITDA.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||||||
(In millions) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||||
Net Income |
|
$ |
|
100 |
|
|
$ |
|
71 |
|
|
$ |
|
226 |
|
|
$ |
|
163 |
|
Depreciation and amortization expense |
|
|
|
10 |
|
|
|
|
9 |
|
|
|
|
28 |
|
|
|
|
28 |
|
Restructuring charges |
|
|
|
3 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
6 |
|
Acquisition-related costs |
|
|
|
3 |
|
|
|
|
— |
|
|
|
|
9 |
|
|
|
|
— |
|
Provision for income taxes |
|
|
|
34 |
|
|
|
|
24 |
|
|
|
|
77 |
|
|
|
|
54 |
|
Non-cash stock-based compensation expense |
|
|
|
6 |
|
|
|
|
8 |
|
|
|
|
20 |
|
|
|
|
21 |
|
Interest expense |
|
|
|
10 |
|
|
|
|
10 |
|
|
|
|
29 |
|
|
|
|
30 |
|
Adjusted EBITDA |
|
$ |
|
165 |
|
|
$ |
|
128 |
|
|
$ |
|
394 |
|
|
$ |
|
302 |
|
Key Business Metrics |
|||||||||
|
|
As of September 30, |
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
||
Number of home warranties (in millions) |
|
|
1.95 |
|
|
|
2.04 |
|
|
Renewals |
|
|
1.50 |
|
|
|
1.55 |
|
|
First-Year Direct-To-Consumer |
|
|
0.27 |
|
|
|
0.28 |
|
|
First-Year Real Estate |
|
|
0.18 |
|
|
|
0.20 |
|
|
Reduction in number of home warranties |
|
|
(4 |
) |
% |
|
(6 |
) |
% |
Customer retention rate(1) |
|
|
77.7 |
|
% |
|
76.2 |
|
% |
(1) |
Customer retention rate is presented on a rolling 12-month basis in order to avoid seasonal anomalies. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241104789637/en/
Investor Relations:
Matt Davis
901.701.5199
ir@frontdoorhome.com
Media:
Tom Collins
901.701.5198
mediacenter@frontdoorhome.com
Source: Frontdoor, Inc.
FAQ
What was Frontdoor's (FTDR) revenue in Q3 2024?
How much did Frontdoor (FTDR) spend on share repurchases in 2024?
What is Frontdoor's (FTDR) updated revenue guidance for 2024?