Revenue Increased 4% to $1.84
Billion;
Gross Profit Margin Increased 410 Basis
Points to 54%;
Net Income and Adjusted EBITDA Increased 37%
and 28%, respectively;
Utilized $160 Million to Repurchase ~4
Million Shares in 2024;
Completed Acquisition of 2-10 Home Buyers
Warranty and $1.47 Billion Credit Facility
Frontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of
home warranties, today announced fourth-quarter and full-year 2024
results.
Financial Results
Three Months Ended December
31,
Year Ended December
31,
(In millions except as noted)
2024
2023
Change
2024
2023
Change
Revenue
$
383
$
366
5
%
$
1,843
$
1,780
4
%
Gross Profit
186
177
5
%
991
885
12
%
Net Income
9
9
(0
)%
235
171
37
%
Diluted Earnings per Share
0.11
0.11
2
%
3.01
2.12
42
%
Adjusted Net Income(1)
21
16
29
%
261
186
40
%
Adjusted Diluted Earnings per Share(1)
0.27
0.20
32
%
3.35
2.30
45
%
Adjusted EBITDA(1)
49
45
10
%
443
346
28
%
Home Warranties (number in millions)
2.12
2.00
6
%
2.12
2.00
6
%
Fourth-Quarter 2024 Summary
- Revenue increased 5% to $383 million
- Gross profit margin increased to 49% and Net Income was flat
at $9 million
- Adjusted EBITDA(1) increased 10% to $49 million
- Completed the 2-10 acquisition and the $1.47 billion credit
facility on December 19, 2024
Full-Year 2024 Summary
- Revenue increased 4% to $1.84 billion
- Gross profit margin expanded 410 basis points to a record
54%
- Net Income increased 37% to $235 million and Diluted
Earnings Per Share increased 42% to $3.01
- Adjusted EBITDA(1) increased 28% to $443 million
- Net cash provided from operating activities of $270 million;
Repurchased $160 million of shares
Full-Year 2025 Outlook
- Revenue range of $2.0 billion to $2.04 billion
- Gross profit margin range of 51.5% to 53%
- Adjusted EBITDA(2) range of $450 million to $475
million
“2024 was truly an exceptional year for Frontdoor as we
delivered record financial results, our operations performed better
than ever and we completed the acquisition of 2-10,” said Chairman
and Chief Executive Officer Bill Cobb. “This year, we are taking
decisive actions to drive long-term growth in home warranty
membership, expanding non-warranty services and optimizing the 2-10
integration. These actions will further differentiate us and create
long-term shareholder value."
“I am extremely pleased with our record 2024 financial
performance, which was driven by higher realized price, lower
incidence rates and continued process improvement initiatives,”
said Chief Financial Officer Jessica Ross. “Looking ahead, our
outlook is strong and reflects the addition of 2-10, normal price
increases and mid-single digit cost inflation. Our margins remain
well above historical averages and we remain committed to deploying
capital to repurchase shares.”
Fourth-Quarter 2024 Results
Revenue by Customer
Channel
Three Months Ended December
31,
(In millions)
2024
2023
Change
Renewals
$
296
$
285
4
%
Real estate (First-Year)
26
26
(3
)%
Direct-to-consumer (First-Year)
31
37
(16
)%
Other
30
18
67
%
Total
$
383
$
366
5
%
Fourth-quarter 2024 revenue increased 5% to $383 million, which
was comprised of a 4% increase in realized price and 1% increase in
volume. This includes $6 million of post-acquisition revenue from
2-10.
- Renewal revenue increased 4% due to improved price realization
that was partially offset by lower volume;
- Real estate revenue decreased 3% due to lower volume as a
result of the challenging real estate market that was partially
offset by improved price realization;
- Direct-to-consumer revenue decreased 16%, primarily due to
lower price to drive higher unit sales; and
- Other revenue increased $12 million due to higher non-warranty
services, primarily HVAC upgrades.
Fourth-quarter 2024 net income was $9 million, or diluted
earnings per share of $0.11.
Period-over-Period Adjusted
EBITDA Bridge
(In millions)
Three Months Ended December 31, 2023
$
45
Impact of change in revenue
13
Contract claims costs
(4
)
Sales and marketing costs
(5
)
Three Months Ended December 31, 2024
$
49
Fourth-quarter 2024 Adjusted EBITDA(1) of $49 million increased
10% versus the prior year period, and includes:
- $13 million from higher revenue conversion(3), including the
impact of the 2-10 acquisition.
- $4 million of higher contract claims costs(4), primarily from
normal cost inflation that was partially offset by higher trade
service fees; and
- $5 million of higher sales and marketing costs, primarily
driven by intentional marketing investments to drive
direct-to-consumer sales growth.
Full-Year 2024 Results
Revenue by Customer
Channel
Year Ended December
31,
(In millions)
2024
2023
Change
Renewals
$
1,437
$
1,367
5
%
Real estate (First-Year)
125
141
(12
)%
Direct-to-consumer (First-Year)
166
194
(14
)%
Other
116
77
50
%
Total
$
1,843
1,780
4
%
Full-year 2024 revenue increased 4% to $1.84 billion, which was
comprised of a 6% increase from higher realized price that was
partially offset by a 3% decline from lower volume.
- Renewal revenue increased 5% due to improved price realization
that was partly offset by lower volume;
- Real estate revenue decreased 12% due to lower volume as a
result of the challenging real estate market that was partially
offset by higher realized price;
- Direct-to-consumer revenue decreased 14% primarily due to lower
volume as a result of the challenging macroeconomic environment, as
well as lower price from promotional strategies to drive higher
unit sales; and
- Other revenue increased $38 million due to higher non-warranty
home services, primarily new HVAC sales.
Full-year 2024 net income increased 37% to $235 million; diluted
earnings per share increased 42% to $3.01.
Period-over-Period Adjusted
EBITDA Bridge
(In millions)
Year Ended December 31, 2023
$
346
Impact of change in revenue
60
Contract claims costs
44
Sales and marketing costs
(8
)
Customer service costs
1
General and administrative costs
(7
)
Interest and net investment income
3
Other
2
Year Ended December 31, 2024
$
443
Full-year 2024 Adjusted EBITDA(1) of $443 million was $96
million higher than the prior year, and includes:
- $60 million from higher revenue conversion(3), as price
increases were partly offset by lower volume;
- $44 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 reflects:
- A lower number of service requests per customer, including an
$8 million impact from favorable weather;
- Relatively flat cost per service request, with normal inflation
offset by higher trade service fees and continued process
improvements; and
- Lower cost development, comprised of favorable cost development
of $5 million this year, compared to $11 million of favorable cost
development in 2023.
- $8 million of higher sales and marketing costs primarily
related to investments in the direct-to-consumer channel; offset,
in part, by a reduction of costs driven by sales optimization
efforts;
- $7 million of higher G&A costs primarily due to increased
personnel costs; and
- $3 million of higher interest income.
Cash Flow
Year Ended December
31,
2024
2023
Net cash provided from (used for):
Operating activities
$
270
$
202
Investing activities
(622
)
(32
)
Financing activities
447
(137
)
Cash increase during the period
$
96
$
34
Net cash provided from operating activities was $270 million for
the 12 months ended December 31, 2024 and was comprised of $312
million in earnings adjusted for non-cash charges, partially offset
by $6 million in payments for restructuring charges and $36 million
in cash used for working capital.
Net cash used for investing activities was $622 million for the
12 months ended December 31, 2024 and was primarily comprised of
the acquisition of 2-10 Home Buyers Warranty and capital
expenditures related to technology projects.
Net cash provided from financing activities was $447 million for
the 12 months ended December 31, 2024 and was primarily comprised
of $1,216 million in new debt related to the 2-10 Home Buyers
Warranty acquisition and the refinancing of our credit facility.
This was partially offset by $616 million in debt payments and debt
issuance costs, as well as $161 million (including taxes and fees)
to repurchase approximately 4 million shares.
Free Cash Flow(1) was $231 million for the 12 months ended
December 31, 2024.
Cash and cash equivalents and short- and long-term marketable
securities as of December 31, 2024 was $474 million and was
comprised of $184 million of restricted net assets and $291 million
of Unrestricted Cash and marketable securities.
First-Quarter 2025 Outlook
- Revenue of $410 million to $420 million, which includes the
addition of 2-10 HBW. Key assumptions:
- High single digit increase in renewals channel revenue;
- Low single digit decline in direct-to-consumer channel revenue
driven by lower price to drive higher unit sales;
- High single digit increase in real estate channel revenue;
and
- Approximately $15 million increase in other revenue, primarily
due to the addition of 2-10 new home structural warranties.
- Adjusted EBITDA(2) of $70 million to $80 million, similar to
the prior-year period.
Full-Year 2025 Outlook
- Revenue to grow approximately 10% to $2.0 billion to $2.04
billion, which includes the addition of 2-10. Key assumptions:
- A 2-4% increase in realized price;
- A 6-8% increase in volume driven by the addition of 2-10,
partially offset by a decline in organic volume;
- High-single digit increase in renewals channel revenue;
- Mid-single digit increase in direct-to-consumer channel
revenue;
- Approximately 10% increase in real estate channel revenue;
- Other revenue of $155 million to $165 million, a ~$45 million
increase. This is primarily driven by the addition of new home
structural warranty, an increase in new HVAC sales and growth in
our Moen partnership; and
- Home warranty member count to decline 2-4% in 2025.
- Gross profit margin of 51.5% to 53%, reflecting lower realized
price and lapping trade service fees. It also assumes mid-single
digit inflation, an increase in the number of service requests per
member and normal weather.
- SG&A of $640 million to $660 million, which is slightly
higher than the prior year due to the addition of 2-10 and normal
cost inflation.
- Adjusted EBITDA(2) of $450 million to $475 million.
- Capital expenditures of approximately $35 million to $45
million.
- Annual effective tax rate of approximately 25%.
2025 Investor Day
Frontdoor will host its 2025 Investor Day today, February 27,
2025, at 8:00 a.m. Central time (9:00 a.m. Eastern time). During
the webcast, Frontdoor, Inc. Chairman & CEO Bill Cobb and his
executive leadership team will provide an in-depth discussion of
the company’s vision, strategy, innovative new service offering,
and the 2024 financial results and 2025 financial outlook, followed
by a Q&A session. Participants can register for the webcast by
clicking https://www.webcaster4.com/Webcast/Page/3067/52024. Once
completed, each participant will receive access details via email.
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 view a replay of the webcast, visit the company’s
https://www.webcaster4.com/Webcast/Page/3067/52024.
About Frontdoor, Inc.
Frontdoor is the industry leader in home warranties and new home
structural warranties, and a leading provider of on-demand home
repair and maintenance services. As the parent company of two
leading brands – American Home Shield and 2-10 Home Buyers Warranty
– totaling more than two million members – we bring over 50 years
of experience in the home warranty category, a cultivated national
network of independent service contractors, and a reputation for
delivering quality service and product innovation. American Home
Shield, the leader in home warranties, gives homeowners peace of
mind, budget protection and convenience, covering up to 29 home
systems and appliances from costly and unexpected breakdowns. 2-10
Home Buyers Warranty is the leader in new home structural
warranties, providing home builders with coverage for structural
failures. These two brands, together with Frontdoor’s cutting-edge
on-demand services, provide an unbeatable combination that meets
the full suite of homeowner repair and maintenance needs. For more
information about Frontdoor, Inc., 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.
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: changes in macroeconomic conditions, including inflation,
tariffs and global supply chain challenges and changing interest
rates, especially as they may affect existing or new home sales,
consumer confidence, labor availability or our costs; our ability
to successfully implement our business strategies; the ability of
our marketing efforts to be successful and cost-effective; our
dependence on our first-year direct-to-consumer and real estate
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; changes in U.S. tariffs or import/export
regulations; 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; compliance with, or violation of,
laws and regulations, including consumer protection laws, or
lawsuits or other claims by third parties, increasing our legal and
regulatory expenses; weather, including adverse conditions, Acts of
God and seasonality, along with related regulations; our ability to
underwrite risks accurately and to charge adequate prices to
builder members, as well as our ability to effectively re-insure a
large portion of those risks; the availability of reinsurance to
manage a substantial portion of our potential loss exposure for our
new home structural warranty business; evolving corporate
governance and disclosure regulations and expectations; our ability
to protect our intellectual property and other material proprietary
rights; negative reputational and financial impacts resulting from
acquisitions or strategic transactions; a 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 the United States by us or our business process outsource
providers; risks related to our acquisition of 2-10 Home Buyers
Warranty (the “2-10 HBW Acquisition”), including the risk that the
2-10 HBW Acquisition may not achieve its intended results; any
liabilities, losses, or other exposures for which we do not have
adequate insurance coverage, indemnification, or other protection;
increase in our indebtedness as a result of financing the 2-10 HBW
Acquisition; a return on investment in our common stock is
dependent on appreciation in the price; inclusion in our
certificate of incorporation a forum selection clause that could
discourage an acquisition of our company or litigation against us
and our directors and officers; the effects of our significant
indebtedness, our ability to incur additional debt and the
limitations contained in the agreements governing such
indebtedness; increases in interest rates increasing the cost of
servicing our indebtedness and counterparty credit risk due to
instruments designed to minimize exposure to market risks;
increased borrowing costs due to lowering or withdrawal of the
credit ratings, outlook or watch assigned to us or our credit
facilities; and our ability to generate the significant amount of
cash needed to fund our operations and service our debt
obligations. We caution you that forward-looking statements are not
guarantees of future performance or outcomes and that actual
performance and outcomes, including, without limitation, our actual
results of operations, financial condition and liquidity, and the
development of new markets or market segments in which we operate,
may differ materially from those made in or suggested by the
forward-looking statements contained in this news release. For a
discussion of other important factors that could cause Frontdoor’s
results to differ materially from those expressed in, or implied
by, the forward-looking statements included in this document, refer
to the risks and uncertainties detailed from time to time in
Frontdoor’s periodic reports filed with the SEC, including the
disclosure contained in Item 1A. Risk Factors in our 2024 Annual
Report on Form 10-K filed with the SEC, as such factors may be
updated from time to time in Frontdoor’s periodic filings with the
SEC. Except as required by law, Frontdoor does not undertake any
obligation to update or revise the forward-looking statements to
reflect new information or events or circumstances that occur after
the date of this news release or to reflect the occurrence of
unanticipated events or otherwise. Readers are advised to review
Frontdoor’s filings with the SEC, which are available from the
SEC’s EDGAR database at sec.gov, and via Frontdoor’s website at
frontdoorhome.com.
Non-GAAP Financial Measures
To supplement Frontdoor’s results presented in accordance with
accounting principles generally accepted in the United States
(“U.S. GAAP”), Frontdoor has disclosed the non-GAAP financial
measures of Adjusted EBITDA, Free Cash Flow, Adjusted Net Income,
Adjusted Diluted Earnings Per Share, and Unrestricted Cash.
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 U.S.
GAAP and does not purport to be an alternative to net cash provided
from operating activities or any other performance or liquidity
measures derived in accordance with U.S. GAAP. Free Cash Flow is
useful as a supplemental measure of our liquidity. Management uses
Free Cash Flow to facilitate company-to-company cash flow
comparisons, which may vary from company-to-company for reasons
unrelated to operating performance.
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 2024 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 U.S. GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly entitled measures reported by other companies.
© 2025 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®, 2-10
HBW®, and related logos and designs. 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
first-quarter and full-year 2025 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.
Consolidated Statements of
Operations and Comprehensive Income (Unaudited)
(In millions, except per share
data)
Year Ended December
31,
2024
2023
2022
Revenue
$
1,843
$
1,780
$
1,662
Cost of services rendered
852
895
952
Gross Profit
991
885
710
Selling and administrative expenses
612
581
521
Depreciation and amortization expense
39
37
34
Goodwill and intangibles impairment
—
—
14
Restructuring charges
8
16
20
Interest expense
40
40
31
Interest and net investment income
(20
)
(16
)
(4
)
Loss on extinguishment of debt
3
—
—
Income before Income Taxes
309
229
93
Provision for income taxes
74
57
22
Net Income
235
171
$
71
Other Comprehensive (Loss) Income, Net
of Income Taxes:
Unrealized (loss) gain on derivative
instruments, net of income taxes
(6
)
(3
)
27
Total Other Comprehensive (Loss)
Income, Net of Income Taxes
(6
)
(3
)
27
Comprehensive Income
229
169
$
98
Earnings per Share:
Basic
$
3.05
$
2.13
$
0.87
Diluted
$
3.01
$
2.12
$
0.87
Weighted-average Common Shares
Outstanding:
Basic
77.0
80.5
81.8
Diluted
78.0
80.9
82.0
Frontdoor, Inc.
Consolidated Statements of
Financial Position (Unaudited)
(In millions, except share
data)
As of December 31,
2024
2023
Assets:
Current Assets:
Cash and cash equivalents
$
421
$
325
Marketable securities
15
—
Receivables, less allowance of $4 and $5,
respectively
10
6
Prepaid expenses and other current
assets
42
32
Total Current Assets
488
363
Other Assets:
Property and equipment, net
73
60
Goodwill
967
503
Intangible assets, net
448
143
Operating lease right-of-use assets
8
3
Long-term marketable securities
38
—
Deferred reinsurance
65
—
Reinsurance recoverables
9
—
Deferred customer acquisition costs
11
12
Other assets
2
5
Total Assets
$
2,107
$
1,089
Liabilities and Shareholders'
Equity:
Current Liabilities:
Accounts payable
$
71
$
76
Accrued liabilities:
Payroll and related expenses
44
38
Home warranty claims
74
76
Other
28
22
Deferred revenue
123
102
Current portion of long-term debt
29
17
Total Current Liabilities
369
331
Long-Term Debt
1,170
577
Other Long-Term Liabilities:
Deferred tax liabilities, net
49
25
Operating lease liabilities
20
16
Unearned insurance premium
233
—
Unpaid losses and loss adjustment
reserves
12
—
Long-term deferred revenue
12
—
Other long-term liabilities
4
5
Total Other Long-Term Liabilities
329
46
Commitments and Contingencies
Shareholders' Equity:
Common stock, $0.01 par value;
2,000,000,000 shares authorized; 87,434,468 shares issued and
75,314,243 shares outstanding as of December 31, 2024 and
86,553,387 shares issued and 78,378,511 shares outstanding as of
December 31, 2023
1
1
Additional paid-in capital
152
117
Retained earnings
530
296
Accumulated other comprehensive (loss)
income
—
6
Less treasury stock, at cost; 12,120,225
shares as of December 31, 2024 and 8,174,876 shares as of December
31, 2023
(444
)
(283
)
Total Shareholders' Equity
239
136
Total Liabilities and Shareholders'
Equity
$
2,107
$
1,089
Frontdoor, Inc.
Consolidated Statements of
Cash Flows (Unaudited)
(In millions)
Year Ended December
31,
2024
2023
2022
Cash and Cash Equivalents at Beginning
of Period
$
325
$
292
$
262
Cash Flows from Operating
Activities:
Net Income
235
171
71
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization expense
39
37
34
Deferred income tax benefit
—
(13
)
(10
)
Stock-based compensation expense
26
26
22
Goodwill and intangibles impairment
—
—
14
Restructuring charges
8
16
20
Payments for restructuring charges
(6
)
(7
)
(5
)
Loss on extinguishment of debt
3
—
—
Other
1
6
1
Changes in working capital:
Receivables
1
—
2
Prepaid expenses and other current
assets
(2
)
(1
)
(3
)
Accounts payable
(7
)
(4
)
15
Deferred revenue
(9
)
(19
)
(35
)
Accrued liabilities
(11
)
(7
)
10
Current income taxes
(8
)
(1
)
6
Net Cash Provided from Operating
Activities
270
202
142
Cash Flows from Investing
Activities:
Purchases of property and equipment
(39
)
(32
)
(40
)
Business acquisitions, net of cash
acquired
(583
)
—
—
Other investing activities
—
—
4
Net Cash Used for Investing
Activities
(622
)
(32
)
(35
)
Cash Flows from Financing
Activities:
Borrowings of debt, net of discount
1,216
—
—
Repayments of debt
(598
)
(17
)
(17
)
Debt issuance costs paid
(18
)
—
—
Repurchases of common stock
(161
)
(121
)
(59
)
Other financing activities
9
1
(2
)
Net Cash Provided from (Used for)
Financing Activities
447
(137
)
(77
)
Cash Increase During the Period
96
34
29
Cash and Cash Equivalents at End of
Period
$
421
$
325
$
292
Reconciliations of Non-GAAP Financial
Measures
The following table presents
reconciliations of net income to Adjusted Net Income.
Three Months Ended December
31,
Year Ended December
31,
(In millions, except per share
amounts)
2024
2023
2024
2023
Net Income
$
9
$
9
$
235
$
171
Amortization expense
2
1
4
4
Acquisitions-related Costs
8
—
17
0
Loss on extinguishment of debt
3
—
3
0
Restructuring Charges
3
9
8
16
Tax Impact of Adjustments
(4
)
(2
)
(6
)
(5
)
Adjusted Net Income
$
21
16
261
186
Adjusted Earnings per Share:
Basic
$
0.28
$
0.21
$
3.39
$
2.31
Diluted
$
0.27
$
0.20
$
3.35
$
2.30
Weighted-average Common Shares
outstanding:
Basic
75.7
79.1
77.0
80.5
Diluted
77.5
79.7
78.0
80.9
The following table presents reconciliations of net cash
provided from operating activities to Free Cash Flow.
Three Months Ended December
31,
Year Ended December
31,
(In millions, except per share
amounts)
2024
2023
2024
2023
Net Cash Provided from Operating
Activities
$
59
$
63
$
270
$
202
Property Additions
(8
)
(9
)
(39
)
(32
)
Free Cash Flow
$
51
$
54
$
231
$
170
The following table presents reconciliations of net income to
Adjusted EBITDA.
Three Months Ended December
31,
Year Ended December
31,
(In millions)
2024
2023
2024
2023
Net Income
$
9
$
9
$
235
$
171
Depreciation and amortization expense
11
9
39
37
Restructuring charges
3
9
8
16
Acquisition-related costs
8
—
17
—
Provision for income taxes
(2
)
3
74
57
Non-cash stock-based compensation
expense
6
5
26
26
Interest expense
11
10
40
40
Loss on extinguishment of debt
3
—
3
—
Adjusted EBITDA
$
49
$
45
$
443
$
346
Key Business Metrics
As of December 31,
2024
2023
Number of home warranties (in
millions)(1)
2.12
2.00
Renewals
1.60
1.53
First-Year Direct-To-Consumer
0.31
0.27
First-Year Real Estate
0.21
0.19
Increase in number of home
warranties(2)
6
%
(6
)
%
Customer retention rate(2)
79.9
%
76.2
%
(1)
Number of home warranties includes the
addition of 0.17 million 2-10 home warranties, comprised of 0.11
million renewals, 0.03 million first-year direct-to-consumer and
0.03 million first-year real estate.
(2)
Customer retention rate is presented on a
rolling 12-month basis in order to avoid seasonal anomalies. As of
December 31, 2024, excluding the 2-10 home warranties acquired on
December 19, 2024, the reduction in home warranties was three
percent, and the customer retention rate was 78.5 percent.
Source: Frontdoor, Inc. FTDR-Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250227842711/en/
For further information, contact:
Investor Relations: Matt Davis 901.701.5199
ir@frontdoorhome.com
Media: Tom Collins 901.701.5198
mediacenter@frontdoorhome.com
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