Frontdoor(US:FTDR)2026-02-26 12:05Financial Performance - Total revenue for 2025 increased 14% to $2.09 billion, with organic revenue growth of 3.7%[1][12] - Net income rose 9% to $255 million, with diluted earnings per share increasing 14% to $3.42[1][4] - Adjusted EBITDA increased 25% to $553 million for the year[1][4] - Revenue for the year ended December 31, 2025, was $2,093 million, an increase of 13.6% from $1,843 million in 2024[40] - Net income for 2025 was $255 million, compared to $235 million in 2024, representing an increase of 8.5%[40] - Adjusted EBITDA for the year ended December 31, 2025, reached $553 million, a rise of 25% from $443 million in 2024[49] Profitability Metrics - Gross profit margin expanded by 150 basis points to 55%[1][4] - Gross profit for 2025 was $1,157 million, up from $991 million in 2024, reflecting a gross margin improvement[40] - Free cash flow for the year ended December 31, 2025, was $390 million, compared to $231 million in 2024, indicating a significant increase of 69%[48] Cash Flow and Liquidity - Net cash provided from operating activities increased 54% to $416 million for the year[1][17] - Cash provided from operating activities increased to $416 million in 2025, up from $270 million in 2024, representing a growth of 54%[44] - Cash and cash equivalents increased to $566 million in 2025 from $421 million in 2024, enhancing liquidity position[41] - Cash and cash equivalents at the end of the period increased to $566 million in 2025, up from $421 million in 2024[44] Shareholder Actions - The company repurchased $280 million of shares in 2025, representing 7% of total shares[1][3] - The company repurchased $283 million worth of common stock in 2025, compared to $161 million in 2024, marking a 76% increase[44] Future Projections - For 2026, revenue is projected to be between $2.155 billion and $2.195 billion, reflecting a 3% to 5% increase over 2025[1][22] - The company aims for a long-term adjusted EBITDA margin outlook in the mid-20% range[1][3] - Home warranty member count is expected to turn positive in 2026, driven by a projected 5% increase in first-year home warranty members[1][22] - Non-warranty and other revenue is anticipated to be between $220 million and $240 million in 2026[1][22] Debt Management - Long-term debt decreased to $1,144 million in 2025 from $1,170 million in 2024, indicating improved debt management[41] Customer Metrics - The number of home warranties as of December 31, 2025, was 2.11 million, slightly down from 2.12 million in 2024, reflecting a 0% change[51] - Customer retention rate decreased to 79.2% in 2025 from 79.9% in 2024[51] Acquisition Impact - The acquisition of 2-10 Home Buyers Warranty is expected to enhance market position, though risks remain regarding its integration[29] Depreciation and Amortization - The company reported a depreciation and amortization expense of $89 million for the year ended December 31, 2025, compared to $39 million in 2024[44] Loss on Debt Extinguishment - The company experienced a loss on extinguishment of debt of $3 million in 2024, with no such loss reported in 2025[44]