Frontdoor, Inc. (FTDR) Bundle
A Brief History of Frontdoor
Company Overview
Frontdoor, Inc. is a leading provider of home warranties in the United States, primarily operating under the American Home Shield brand. As of September 30, 2024, the company had approximately two million active home warranties across all brands in the U.S.
Financial Performance
For the three months ended September 30, 2024, Frontdoor reported:
| Metric | 2024 | 2023 |
|---|---|---|
| Revenue | $540 million | $524 million |
| Net Income | $100 million | $71 million |
| Adjusted EBITDA | $165 million | $128 million |
For the nine months ended September 30, 2024, the figures were:
| Metric | 2024 | 2023 |
|---|---|---|
| Revenue | $1,461 million | $1,414 million |
| Net Income | $226 million | $163 million |
| Adjusted EBITDA | $394 million | $302 million |
Acquisition Activity
On June 3, 2024, Frontdoor entered into a Purchase Agreement to acquire 2-10 HBW for an aggregate cash consideration of $585 million. The transaction is expected to close in the fourth quarter of 2024, subject to regulatory approval. As of September 30, 2024, acquisition-related costs recognized were $9 million for the nine months ended September 30, 2024.
Cash Flow Analysis
For the nine months ended September 30, 2024, cash flow from operating activities was reported as:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Cash Provided from Operating Activities | $212 million | $139 million |
| Net Cash Used for Investing Activities | ($31 million) | ($23 million) |
| Net Cash Used for Financing Activities | ($131 million) | ($88 million) |
Stock Repurchase Program
In 2024, Frontdoor's Board of Directors approved a new share repurchase authorization of up to $650 million, effective September 4, 2024. In the three months ended September 30, 2024, the company repurchased 1,475,797 shares at an average price of $41.33 per share.
Debt and Liquidity Position
As of September 30, 2024, Frontdoor reported cash and cash equivalents of $375 million, an increase from $325 million on December 31, 2023. The company had total long-term debt of $565 million, down from $577 million.
Operational Metrics
The following table summarizes key operational metrics as of September 30, 2024:
| Metric | 2024 | 2023 |
|---|---|---|
| Number of Home Warranties | 1.95 million | 2.04 million |
| Customer Retention Rate | 77.7% | 76.2% |
Conclusion on Financial Health
Frontdoor's financial health as of 2024 indicates a robust revenue growth, effective cost management, and a strategic acquisition enhancing its market position. The company's liquidity remains strong, supporting ongoing operations and future investments.
A Who Owns Frontdoor, Inc. (FTDR)
Major Shareholders
As of September 30, 2024, the following table outlines the major shareholders of Frontdoor, Inc. (FTDR) along with their respective ownership percentages:
| Shareholder | Ownership (%) |
|---|---|
| BlackRock, Inc. | 10.2 |
| The Vanguard Group, Inc. | 9.5 |
| State Street Corporation | 8.1 |
| Wellington Management Group LLP | 6.7 |
| Invesco Ltd. | 5.3 |
| Other Institutional Investors | 60.2 |
Insider Ownership
In addition to institutional ownership, insider ownership is also significant. The following table provides details on key insiders and their ownership stakes as of September 30, 2024:
| Insider Name | Title | Ownership (%) |
|---|---|---|
| Bill Cobb | CEO | 1.2 |
| David McCarty | CFO | 0.8 |
| Patricia H. McGinnis | Director | 0.5 |
| Other Insiders | Various | 0.7 |
Stock Performance
As of September 30, 2024, Frontdoor, Inc. reported a stock price of $36.00. The following table summarizes the stock performance metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $36.00 |
| 52-Week High | $45.99 |
| 52-Week Low | $30.07 |
| Market Capitalization | $2.73 billion |
Acquisition Activity
On June 3, 2024, Frontdoor, Inc. announced the acquisition of 2-10 HBW for $585 million, which is expected to close in Q4 2024, pending regulatory approval.
Financial Overview
For the three months ended September 30, 2024, Frontdoor reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $540 million | $524 million |
| Net Income | $100 million | $71 million |
| Adjusted EBITDA | $165 million | $128 million |
For the nine months ended September 30, 2024, the financial performance was as follows:
| Metric | YTD 2024 | YTD 2023 |
|---|---|---|
| Revenue | $1,461 million | $1,414 million |
| Net Income | $226 million | $163 million |
| Adjusted EBITDA | $394 million | $302 million |
Debt and Liquidity Position
As of September 30, 2024, Frontdoor reported total debt of $582 million and cash and cash equivalents of $375 million.
Frontdoor, Inc. (FTDR) Mission Statement
Frontdoor, Inc. is the leading provider of home warranties in the United States, primarily operating under the American Home Shield brand. The company focuses on offering customizable home warranties that protect homeowners from unexpected breakdowns of essential home systems and appliances. As of September 30, 2024, Frontdoor had approximately two million active home warranties across all brands in the United States.
Financial Performance Overview
For the three months ended September 30, 2024, Frontdoor reported:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $540 million | $524 million |
| Net Income | $100 million | $71 million |
| Adjusted EBITDA | $165 million | $128 million |
For the nine months ended September 30, 2024, the figures were as follows:
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Revenue | $1,461 million | $1,414 million |
| Net Income | $226 million | $163 million |
| Adjusted EBITDA | $394 million | $302 million |
Customer Retention and Revenue Sources
For the nine months ended September 30, 2024, revenue sources were distributed as follows:
| Source | Percentage of Revenue |
|---|---|
| Existing Customer Renewals | 78% |
| New Home Warranty Sales (Real Estate Transactions) | 7% |
| Direct-to-Consumer Sales | 9% |
| Other Revenue Channels | 6% |
Acquisition Activity
On June 3, 2024, Frontdoor entered into a Purchase Agreement to acquire 2-10 HBW for an aggregate cash consideration of $585 million. This acquisition is expected to close in the fourth quarter of 2024, subject to regulatory approval and other customary conditions. The acquisition is supported by a fully committed bridge facility under the existing Credit Agreement.
Operating Expenses
For the three months ended September 30, 2024, the selling and administrative expenses were:
| Expense Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Sales and Marketing Costs | $80 million | $81 million |
| Customer Service Costs | $27 million | $27 million |
| General and Administrative Costs | $48 million | $44 million |
| Total | $154 million | $152 million |
For the nine months ended September 30, 2024, the total selling and administrative expenses were:
| Expense Type | 9M 2024 | 9M 2023 |
|---|---|---|
| Sales and Marketing Costs | $231 million | $228 million |
| Customer Service Costs | $79 million | $80 million |
| General and Administrative Costs | $147 million | $131 million |
| Total | $456 million | $439 million |
Cash Flow and Financial Position
For the nine months ended September 30, 2024, cash flow metrics include:
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided from Operating Activities | $212 million | $139 million |
| Property Additions | ($31 million) | ($23 million) |
| Free Cash Flow | $181 million | $116 million |
As of September 30, 2024, Frontdoor's cash and cash equivalents totaled $375 million, compared to $325 million as of December 31, 2023.
How Frontdoor, Inc. (FTDR) Works
Business Model
Frontdoor, Inc. operates primarily under the American Home Shield brand, providing home warranty services to protect homeowners from unexpected breakdowns of essential home systems and appliances. The company offers customizable home warranties that cover over 20 systems and appliances, including electrical, plumbing, HVAC systems, and more. Customers typically subscribe to an annual service plan agreement.
As of September 30, 2024, Frontdoor had approximately 2 million active home warranties across its brands in the United States.
Financial Performance
For the three months ended September 30, 2024, Frontdoor reported:
- Revenue: $540 million
- Net Income: $100 million
- Adjusted EBITDA: $165 million
For the same period in 2023, the figures were:
- Revenue: $524 million
- Net Income: $71 million
- Adjusted EBITDA: $128 million
For the nine months ended September 30, 2024:
- Revenue: $1,461 million
- Net Income: $226 million
- Adjusted EBITDA: $394 million
In comparison, for the nine months ended September 30, 2023:
- Revenue: $1,414 million
- Net Income: $163 million
- Adjusted EBITDA: $302 million
The increase in revenue for the three months ended September 30, 2024, reflects a 3% growth compared to the same period in 2023.
Revenue Sources
In the nine months ended September 30, 2024, the sources of revenue were as follows:
| Source | Percentage of Revenue |
|---|---|
| Renewals | 78% |
| Real estate transactions | 7% |
| Direct-to-consumer sales | 9% |
| Other revenue channels | 6% |
In comparison, for the nine months ended September 30, 2023, the revenue distribution was:
| Source | Percentage of Revenue |
|---|---|
| Renewals | 77% |
| Real estate transactions | 8% |
| Direct-to-consumer sales | 11% |
| Other revenue channels | 4% |
The shift in revenue sources indicates that Frontdoor is increasingly relying on renewals for its revenue generation.
Cost Structure
For the three months ended September 30, 2024, Frontdoor reported:
- Cost of Services Rendered: $235 million
- Gross Profit: $306 million
In comparison, for the three months ended September 30, 2023:
- Cost of Services Rendered: $256 million
- Gross Profit: $268 million
For the nine months ended September 30, 2024:
- Cost of Services Rendered: $655 million
- Gross Profit: $806 million
In comparison, for the nine months ended September 30, 2023:
- Cost of Services Rendered: $706 million
- Gross Profit: $708 million
The improvement in gross profit margins can be attributed to reduced cost of services rendered, which decreased by 8% in Q3 2024 compared to Q3 2023.
Customer Metrics
As of September 30, 2024, the following metrics were reported:
| Metric | 2024 | 2023 |
|---|---|---|
| Number of Home Warranties (in millions) | 1.95 | 2.04 |
| Reduction in Number of Home Warranties | (4%) | (6%) |
| Customer Retention Rate | 77.7% | 76.2% |
The decrease in the number of home warranties is primarily attributed to a challenging real estate market.
Liquidity and Capital Resources
As of September 30, 2024, Frontdoor reported:
- Cash and Cash Equivalents: $375 million
- Current Liabilities: $341 million
- Long-Term Debt: $565 million
The company also reported a Free Cash Flow of $181 million for the nine months ended September 30, 2024.
Acquisition Activity
On June 3, 2024, Frontdoor announced the acquisition of 2-10 HBW for an aggregate cash consideration of $585 million. This acquisition is expected to close in the fourth quarter of 2024, subject to regulatory approvals.
How Frontdoor, Inc. (FTDR) Makes Money
Revenue Streams
Frontdoor, Inc. generates revenue primarily through home warranty contracts. The main sources of revenue include:
- Renewals: $1,141 million for the nine months ended September 30, 2024, representing 78% of total revenue.
- Real Estate Transactions: $99 million for the nine months ended September 30, 2024, accounting for 7% of total revenue.
- Direct-to-Consumer Sales: $135 million for the nine months ended September 30, 2024, contributing 9% to total revenue.
- Other Revenue Channels: $86 million for the nine months ended September 30, 2024, which includes on-demand home services and ancillary services.
| Revenue Source | Amount (in millions) | Percentage of Total Revenue |
|---|---|---|
| Renewals | $1,141 | 78% |
| Real Estate Transactions | $99 | 7% |
| Direct-to-Consumer Sales | $135 | 9% |
| Other Revenue Channels | $86 | 6% |
Financial Performance
As of September 30, 2024, Frontdoor reported:
- Total Revenue: $1,461 million for the nine months ended September 30, 2024, a 3% increase from $1,414 million in the same period of 2023.
- Net Income: $226 million for the nine months ended September 30, 2024, compared to $163 million in 2023, reflecting a 39% increase.
- Adjusted EBITDA: $394 million for the nine months ended September 30, 2024, up from $302 million in 2023.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Total Revenue | $1,461 million | $1,414 million | 3% |
| Net Income | $226 million | $163 million | 39% |
| Adjusted EBITDA | $394 million | $302 million | 30% |
Operating Costs
The cost of services rendered for Frontdoor was:
- Cost of Services Rendered: $655 million for the nine months ended September 30, 2024, down from $706 million in 2023.
- Gross Profit: $806 million for the nine months ended September 30, 2024, compared to $708 million in 2023, indicating a gross profit margin increase from 50% to 55%.
| Operating Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Cost of Services Rendered | $655 million | $706 million |
| Gross Profit | $806 million | $708 million |
| Gross Profit Margin | 55% | 50% |
Customer Metrics
As of September 30, 2024, Frontdoor's customer metrics include:
- Number of Home Warranties: Approximately 1.95 million, down from 2.04 million in 2023.
- Customer Retention Rate: 77.7%, an increase from 76.2% in 2023.
| Customer Metric | 2024 | 2023 |
|---|---|---|
| Number of Home Warranties (millions) | 1.95 | 2.04 |
| Customer Retention Rate | 77.7% | 76.2% |
Recent Acquisitions
On June 3, 2024, Frontdoor announced plans to acquire 2-10 HBW for $585 million, expected to close in Q4 2024. This acquisition is anticipated to enhance Frontdoor's market position in home warranty services.
Cash Flow and Investments
For the nine months ended September 30, 2024:
- Net Cash Provided from Operating Activities: $212 million.
- Capital Expenditures: $31 million.
- Free Cash Flow: $181 million.
| Cash Flow Metric | 2024 |
|---|---|
| Net Cash Provided from Operating Activities | $212 million |
| Capital Expenditures | $31 million |
| Free Cash Flow | $181 million |
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Resources:
- Frontdoor, Inc. (FTDR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Frontdoor, Inc. (FTDR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Frontdoor, Inc. (FTDR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.