Frontdoor Inc (FTDR), a leading provider of home services, reported stellar third-quarter 2024 results and raised its full-year guidance, driving its stock price up over 8% on Friday.
For the quarter ended September 30, Frontdoor posted record revenue of $540 million, up 3% year-over-year, fueled by a 4% increase in pricing. This surpassed analysts' expectations of $541.9 million. The company's adjusted earnings per share came in at a record $1.38, significantly beating estimates of $1.05, driven by higher revenue and reduced contract claims costs.
Frontdoor's net income surged 40% to $100 million, while adjusted EBITDA jumped 29% to $165 million. The company's gross profit margin expanded an impressive 550 basis points to 57%, primarily due to higher realized prices, a lower number of service requests per customer, a transition to higher service fees, and continued process improvement initiatives.
The strong performance led Frontdoor to raise its full-year 2024 revenue outlook from a midpoint of $1.825 billion to approximately $1.830 billion. The company also increased its gross profit margin guidance from slightly above 51% to approximately 53% and its adjusted EBITDA outlook from a midpoint of $390 million to approximately $430 million.
Frontdoor's Chairman and CEO, Bill Cobb, highlighted the company's dramatic operational improvements over the past two years, resulting in record financial performance. He emphasized that the company's top priority is to accelerate its long-term growth trajectory, driven by aggressive actions to increase new home warranty sales and the acquisition of 2-10 Home Buyers Warranty, expected to close in the fourth quarter.
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