Frontdoor(FTDR) - 2025 Q1 - Quarterly Results

Financial Performance - Revenue increased 13% to $426 million, driven by a 10% increase in volume primarily from the 2-10 acquisition and a 3% increase from price[5] - Gross profit margin increased 380 basis points to a record 55% in the first quarter[5] - Net income rose 9% to $37 million, with diluted earnings per share increasing 13% to $0.49[5] - Adjusted EBITDA increased 41% to $100 million compared to the prior year[5] - Revenue for Q1 2025 was $426 million, a 12.7% increase from $378 million in Q1 2024[37] - Gross profit increased to $235 million in Q1 2025, up from $195 million in Q1 2024, reflecting a gross margin improvement[37] - Net income for Q1 2025 was $37 million, compared to $34 million in Q1 2024, representing an 8.8% year-over-year growth[37] - Adjusted net income rose to $49 million in Q1 2025, up 40% from $35 million in Q1 2024[46] - Adjusted EBITDA increased to $100 million, compared to $71 million in the same quarter of the previous year, marking a 40.8% growth[48] Cash Flow and Liquidity - Cash flow from operating activities was $124 million for the three months ended March 31, 2025[13] - Free cash flow increased 60% to $117 million for the three months ended March 31, 2025[15] - Free Cash Flow is defined as net cash from operating activities less property additions, providing insight into liquidity[28] - Cash and cash equivalents increased to $506 million as of March 31, 2025, from $421 million at the end of 2024[40] - Cash and cash equivalents at the end of the period were $506 million, up from $378 million at the end of Q1 2024, reflecting a 33.9% increase[42] - Net cash provided from operating activities was $124 million, compared to $84 million in the same quarter of the previous year, a 47.6% increase[47] Member and Customer Metrics - Direct-to-consumer ending member count increased 15% to 310,000, including 4% organic growth[5] - The number of home warranties increased to 2.10 million, representing a 7% growth from 1.96 million in the previous year[50] - Customer retention rate improved to 79.9%, up from 76.3% year-over-year, indicating enhanced customer loyalty[50] Future Outlook - Full-year revenue outlook increased to a range of $2.03 billion to $2.05 billion[24] - Adjusted EBITDA range for the full year increased to $500 million to $520 million[24] Shareholder Actions - Share repurchases totaled $105 million year-to-date through April 2025, with a target increase to at least $200 million for the year[16] - The company repurchased $71 million in common stock during the quarter, compared to $13 million in the same period last year[42] Balance Sheet Highlights - Total assets as of March 31, 2025, were $2,121 million, a slight increase from $2,107 million as of December 31, 2024[40] - Current liabilities increased to $414 million as of March 31, 2025, compared to $369 million at the end of 2024[40] - The company recorded a deferred revenue of $61 million, an increase from $57 million in the previous year, indicating growth in future revenue streams[42] Risk Management - The company is focused on managing risks related to supply chain challenges, interest rates, and competition in the market[25]