On February 27, 2025, Frontdoor Inc (FTDR, Financial) released its 8-K filing, showcasing a remarkable financial performance for the fiscal year 2024. The company, a leading provider of home service plans in the United States, reported a 4% increase in revenue to $1.84 billion, surpassing the estimated annual revenue of $1.82807 billion. Frontdoor Inc owns several home service brands, including American Home Shield, HSA, OneGuard, and Landmark, which help customers maintain their homes and protect against unexpected breakdowns of essential systems and appliances.
Performance and Challenges
Frontdoor Inc's revenue for the fourth quarter of 2024 increased by 5% to $383 million, exceeding the quarterly estimate of $367.91 million. This growth was driven by a 4% increase in realized prices and a 1% increase in volume, including $6 million from the acquisition of 2-10 Home Buyers Warranty. However, the company faced challenges in the real estate and direct-to-consumer channels, with revenues declining by 3% and 16%, respectively, due to lower volumes and strategic pricing adjustments.
Financial Achievements
The company's gross profit margin expanded by 410 basis points to a record 54%, reflecting improved operational efficiencies. Net income surged by 37% to $235 million, while diluted earnings per share rose by 42% to $3.01, surpassing the estimated annual EPS of $2.93. These achievements underscore Frontdoor's ability to enhance profitability through strategic initiatives and cost management.
Key Financial Metrics
Frontdoor Inc's adjusted EBITDA for 2024 increased by 28% to $443 million, highlighting the company's strong operational performance. The company also repurchased approximately 4 million shares for $160 million, demonstrating a commitment to returning value to shareholders. The acquisition of 2-10 Home Buyers Warranty and a $1.47 billion credit facility further strengthened Frontdoor's market position and financial flexibility.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Revenue | $1.84 billion | $1.78 billion | 4% |
| Gross Profit Margin | 54% | 49.9% | 410 basis points |
| Net Income | $235 million | $171 million | 37% |
| Diluted EPS | $3.01 | $2.12 | 42% |
| Adjusted EBITDA | $443 million | $346 million | 28% |
Analysis and Outlook
Frontdoor Inc's robust financial performance in 2024 reflects its strategic focus on price realization and operational efficiencies. The company's ability to navigate challenges in the real estate market and direct-to-consumer channels demonstrates resilience and adaptability. Looking ahead, Frontdoor projects revenue growth of approximately 10% for 2025, driven by the integration of 2-10 Home Buyers Warranty and strategic initiatives to expand non-warranty services.
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.
Frontdoor Inc's strategic acquisitions and focus on enhancing shareholder value position the company for continued growth in the home service industry. As the company expands its service offerings and optimizes its operations, it remains well-positioned to capitalize on market opportunities and deliver long-term value to its stakeholders.
Explore the complete 8-K earnings release (here) from Frontdoor Inc for further details.
