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MEMPHIS - On Wednesday, Frontdoor, Inc. (NASDAQ:FTDR), the nation’s leading provider of home warranties, reported third-quarter earnings that exceeded analyst expectations, with revenue growing 14% YoY to $618 million compared to the consensus estimate of $608.14 million. The company also delivered adjusted earnings per share of $1.58, surpassing analyst expectations of $1.46.
Revenue growth was driven by a 3% increase from pricing and a 12% increase from higher volume, primarily attributed to the 2-10 acquisition. Gross profit margin improved 60 basis points to 57%, while adjusted EBITDA increased 18% to $195 million compared to the same period last year.
" Frontdoor is on pace for another year of record financial performance," said Chairman and CEO Bill Cobb. "Our results are driven by contributions from the 2-10 acquisition and our continuous improvement in execution across the business. Real estate member count increased sequentially for the first time in five years, and our non-warranty business continues to demonstrate robust momentum."
The company reported 2.11 million home warranties as of September 30, representing an 8% increase compared to the previous year. Customer retention rate improved to 79.4% on a rolling 12-month basis, up from 77.7% a year ago.
In response to the strong performance, Frontdoor raised its full-year 2025 outlook, now expecting revenue between $2.075 billion and $2.085 billion, above the consensus estimate of $2.07 billion. The company also increased its adjusted EBITDA guidance to between $545 million and $550 million.
CFO Jessica Ross noted, "We delivered exceptional financial performance in the third-quarter with double digit increases in revenue and Adjusted EBITDA. Gross profit margin grew 60 basis points to 57%, which includes the benefit of higher price, a lower number of service requests per member and low-to-mid-single digit inflation."
The company has repurchased $215 million of shares year-to-date through October 2025, putting it on track to repurchase up to 6% of its outstanding shares this year.
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