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MEMPHIS - On Tuesday, Frontdoor , Inc. (NASDAQ:FTDR) reported second-quarter 2025 results that exceeded analyst expectations, driven by strong revenue growth and margin expansion.
The nation’s leading provider of home warranties saw its shares jump 4.96% in pre-market trading after the announcement.
The company reported adjusted earnings per share of $1.63, surpassing the analyst estimate of $1.45 by $0.18. Revenue climbed 14% to $617 million, beating the consensus estimate of $602.6 million and up from $542 million in the same quarter last year.
"Frontdoor continues to perform exceptionally well, and we delivered another quarter of outstanding financial performance," said Chairman and CEO Bill Cobb. "We organically grew Direct-to-Consumer member count 9%, we are successfully scaling non-warranty revenue and the 2-10 integration is ahead of schedule."
The company’s gross profit margin increased 130 basis points to a second-quarter record of 58%, while adjusted EBITDA rose 26% to $199 million. Net income grew 21% to $111 million compared to the prior-year period.
Revenue growth was driven by a 2% increase from price and a 12% increase from higher volume, primarily resulting from the 2-10 acquisition. The company’s home warranty count increased 7% YoY to 2.09 million.
Based on its strong performance, Frontdoor raised its full-year 2025 outlook, now expecting revenue between $2.055 billion and $2.075 billion, above the consensus estimate of $2.04 billion. The company also increased its adjusted EBITDA guidance to a range of $530 million to $550 million.
"With strong first half results combined with increasing confidence in the second half, we are raising our full-year outlook and returning record amounts of cash to shareholders through share repurchases," said CFO Jessica Ross.
Frontdoor has repurchased $150 million of shares year-to-date through July 2025 and increased its target for 2025 share repurchases to approximately $250 million.
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