Frontdoor, Inc. (NASDAQ:FTDR) reported second-quarter 2025 results on Tuesday that surpassed analyst expectations, driven by robust revenue growth and margin improvement. The home warranty provider’s shares rose 4.96% in pre-market trading following the announcement.
The company posted adjusted earnings per share of $1.63, exceeding the consensus estimate of $1.45 by $0.18. Revenue climbed 14% to $617 million, beating the forecast 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.”
Gross profit margin expanded by 130 basis points to a Q2 record of 58%, while adjusted EBITDA rose 26% to $199 million. Net income increased 21% to $111 million compared to the prior year.
Revenue growth was fueled by a 2% increase from pricing and a 12% rise from higher volume, largely attributed to the 2-10 acquisition. Home warranty policies in force grew 7% year-over-year to 2.09 million.
In response to strong results, Frontdoor raised its full-year 2025 revenue guidance to a range of $2.055 billion to $2.075 billion, above the consensus of $2.04 billion. Adjusted EBITDA guidance was also increased to between $530 million and $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.
Year-to-date through July 2025, Frontdoor has repurchased $150 million in shares and increased its full-year repurchase target to approximately $250 million.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.