Frontdoor beats third quarter estimates on revenue growth

On Thursday, Frontdoor, Inc. (NASDAQ:FTDR) announced its third quarter financial results, which surpassed expectations. Adjusted earnings per share (EPS) of $1.81 exceeded the consensus estimate of $1.77 by $0.04. The home warranty provider's shares remained flat in after-hours trading. Revenue for the quarter was $655 million, outpacing the $647.73 million consensus and marking a 6% increase from $618 million in the same period last year. Revenue growth was fueled by a 3% rise in realized pricing and 3% increase in volume.

Renewal revenue, which constitutes the primary portion of sales at $479 million, grew 4% year-over-year (YoY). The "Other" revenue category expanded by 32%, mainly attributable to the company's New HVAC upgrade program. Frontdoor CEO Bill Cobb expressed pride in the team's performance, stating, "I am proud of how our team produced strong third-quarter results while providing exceptional service for our members during the hottest summer on record."

The company's net income increased by 10% to $116 million, and adjusted EBITDA rose by 5% to $205 million. Operating cash flow reached $318 million, and free cash flow generated $298 million during the nine-month period.

In the current fiscal year, Frontdoor issued revenue guidance of $2.205 billion to $2.215 billion, with the midpoint ($2.21 billion) slightly surpassing the analyst consensus of $2.2 billion. The company anticipates adjusted EBITDA of $590 million to $600 million and projects a 6% revenue growth over 2025. The board of directors approved a new $1 billion share repurchase authorization, effective November 2026, following the completion of the current $650 million authorization in November.