Frontdoor, Inc. reported a financial performance for the year ended December 31, 2024, with total revenue of $1,843 million, a 4% increase from $1,780 million in 2023. The company achieved a net income of $235 million, up from $171 million the previous year, and an Adjusted EBITDA of $443 million, compared to $346 million in 2023. The growth in revenue was primarily driven by a 5% increase in renewal revenue, which accounted for 78% of total revenue, while revenue from new home warranty sales decreased due to challenging real estate market conditions.
The acquisition of 2-10 HBW on December 19, 2024, for $585 million significantly impacted Frontdoor's operations, adding approximately 19,000 builder partners and expanding its service offerings in new home structural warranties. This acquisition is expected to enhance Frontdoor's growth trajectory and operational synergies. The company also reported a total of 2.1 million active home warranties across its brands, reflecting a 6% increase from the previous year, largely attributed to the acquisition.
Operationally, Frontdoor's customer retention rate improved to 79.9% from 76.2% in 2023, indicating a positive trend in customer loyalty. The company managed approximately 4 million home warranty service requests annually through a network of about 17,000 contractors. However, the company faced challenges in its real estate and direct-to-consumer channels, with revenues declining by 16% and 14%, respectively, due to a decrease in home sales and competitive pricing pressures.
Looking ahead, Frontdoor aims to leverage its enhanced contractor network and technology platform to drive growth in both warranty and non-warranty services. The company plans to continue investing in marketing and customer education to increase awareness of its value proposition. Despite the positive outlook, Frontdoor remains cautious about macroeconomic conditions, including inflation and interest rates, which could impact consumer spending and demand for its services. The company is committed to maintaining its operational efficiency and exploring further acquisition opportunities in the fragmented home services market.
About Frontdoor, Inc.
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