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Frontdoor Stock Soars 16.76% on Strong Q1 Earnings

Mover TrackerThursday, May 1, 2025 9:13 am ET

1min read

On May 1, 2025, Frontdoor's stock surged by 16.76% in pre-market trading, reflecting a strong start to the fiscal year with significant growth in revenue and earnings.

Frontdoor Inc, a leading provider of home service plans in the United States, reported a 13% increase in revenue to $426 million, surpassing analyst estimates. The company's diluted earnings per share (EPS) rose to $0.49, exceeding the estimated EPS of $0.34. This growth was driven by a 10% rise in volume, largely attributed to the acquisition of 2-10 Home Buyers Warranty.

The company's gross profit margin improved by 380 basis points to 55%, a record for the first quarter. However, challenges such as increased customer service costs and higher general and administrative expenses due to the acquisition were noted. Despite these expenses, the company's net income rose to $37 million, with a diluted EPS of $0.49.

Frontdoor Inc's financial achievements are significant in the personal services industry, where maintaining a strong customer base and managing operational costs are crucial. The company's net income increased by 9% to $37 million, and adjusted EBITDA rose by 41% to $100 million. These metrics underscore the company's ability to leverage acquisitions and strategic initiatives to enhance profitability.

The company has increased its full-year revenue outlook to a range of $2.03 billion to $2.05 billion, with an adjusted EBITDA range of $500 million to $520 million. This optimistic outlook is supported by strategic priorities such as improving home warranty member count and scaling non-warranty services.

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