Frontdoor, Inc. reported a solid performance for the third quarter and the nine months ended September 30, 2024, with notable increases in revenue, gross profit, and net income compared to the same periods in 2023. For Q3 2024, revenue reached $540 million, a 3% increase from $524 million in Q3 2023. For the nine months, total revenue was $1,461 million, up from $1,414 million, also reflecting a 3% growth. The company attributed this growth primarily to renewal revenue, which rose to $422 million in Q3 2024 from $406 million in Q3 2023, and to $1,141 million for the nine months, compared to $1,083 million in the prior year.
Gross profit for Q3 2024 was $306 million, a 14% increase from $268 million in Q3 2023, while for the nine months, gross profit totaled $806 million, up from $708 million. Net income for Q3 2024 was $100 million, compared to $71 million in Q3 2023, marking a 40% increase. For the nine months, net income rose to $226 million from $163 million, also a 39% increase. Earnings per share (EPS) for Q3 2024 were $1.32 (basic) and $1.30 (diluted), compared to $0.89 for both measures in Q3 2023.
The company’s cash and cash equivalents increased to $375 million as of September 30, 2024, up from $325 million at the end of 2023. Total assets also grew to $1,217 million from $1,089 million, while total shareholders' equity rose significantly to $261 million from $136 million, driven by net income and offset by common stock repurchases.
Strategically, Frontdoor announced the acquisition of 2-10 Home Buyers Warranty (2-10 HBW) on June 3, 2024, for $585 million, expected to close in Q4 2024 pending regulatory approval. This acquisition aims to enhance service offerings and accelerate growth. The company also initiated a new share repurchase program of up to $650 million, effective from September 4, 2024, although no shares had been repurchased under this program as of the reporting date.
Despite these positive developments, Frontdoor faced challenges due to adverse real estate market conditions, including high interest rates and low home inventory, which constrained demand for home warranties. The company also experienced inflationary pressures affecting labor, parts, and equipment costs. The customer retention rate improved to 77.7% as of September 30, 2024, from 76.2% a year earlier, although the number of active home warranties declined due to market conditions.
About Frontdoor, Inc.
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