Frontdoor has achieved significant operating leverage, with gross margins expanding from 45.9% in 2023Q4 to a peak of 57.7% in 2025Q2, suggesting effective management of claims costs.
| Sales/Revenue | 2.12B | 2.09B | 1.84B | 1.78B | 1.66B | 1.6B | 1.47B | 1.36B | 1.26B | 1.16B | 1.02B |
| Revenue Growth % | 12% | 13.56% | 3.54% | 7.1% | 3.75% | 8.68% | 7.99% | 8.51% | 8.73% | 13.43% | - |
| Cost of Goods Sold | 968M | 936M | 852M | 932M | 986M | 853M | 758M | 687M | 706M | 589M | 526M |
| COGS % of Revenue | - | 44.72% | 46.23% | 52.36% | 59.33% | 53.25% | 51.42% | 50.33% | 56.12% | 50.91% | 51.57% |
| Gross Profit | 1.15B | 1.16B | 991M | 848M | 676M | 749M | 716M | 678M | 552M | 568M | 494M |
| Gross Margin % | 54.3% | 55.28% | 53.77% | 47.64% | 40.67% | 46.75% | 48.58% | 49.67% | 43.88% | 49.09% | 48.43% |
| Gross Profit Growth % | - | 16.75% | 16.86% | 25.44% | -9.75% | 4.61% | 5.6% | 22.83% | -2.82% | 14.98% | - |
| Operating Expenses | 682M | 757M | 652M | 581M | 522M | 509M | 467M | 392M | 338M | 329M | 300M |
| OpEx % of Revenue | - | 36.17% | 35.38% | 32.64% | 31.41% | 31.77% | 31.68% | 28.72% | 26.87% | 28.44% | 29.41% |
| Selling, General & Admin | 509M | 668M | 612M | 581M | 522M | 509M | 0 | 0 | 338M | 312M | 286M |
| SG&A % of Revenue | - | 31.92% | 33.21% | 32.64% | 31.41% | 31.77% | - | - | 26.87% | 26.97% | 28.04% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 3M | 89M | 40M | 0 | 0 | 0 | 467M | 392M | 0 | -2M | -3M |
| Operating Income | 468M | 400M | 340M | 267M | 154M | 240M | 249M | 286M | 214M | 239M | 194M |
| Operating Margin % | 22.1% | 19.11% | 18.45% | 15% | 9.27% | 14.98% | 16.89% | 20.95% | 17.01% | 20.66% | 19.02% |
| Operating Income Growth % | - | 17.65% | 27.34% | 73.38% | -35.83% | -3.61% | -12.94% | 33.64% | -10.46% | 23.2% | - |
| EBITDA | 554M | 489M | 379M | 304M | 188M | 275M | 283M | 309M | 234M | 256M | 208M |
| EBITDA Margin % | 26.16% | 23.36% | 20.56% | 17.08% | 11.31% | 17.17% | 19.2% | 22.64% | 18.6% | 22.13% | 20.39% |
| EBITDA Growth % | 28.54% | 29.02% | 24.67% | 61.7% | -31.64% | -2.83% | -8.41% | 32.05% | -8.59% | 23.08% | - |
| D&A (Non-Cash Add-back) | 86M | 89M | 39M | 37M | 34M | 35M | 34M | 23M | 20M | 17M | 14M |
| EBIT | 414M | 417M | 349M | 274M | 119M | 197M | 215M | 262M | 190M | 221M | 196M |
| Net Interest Income | -58M | -57M | -28M | -31M | -22M | -28M | -46M | -53M | -19M | 4M | 2M |
| Interest Income | 21M | 22M | 20M | 16M | 4M | 1M | 2M | 6M | 4M | 3M | 2M |
| Interest Expense | 79M | 79M | 48M | 47M | 26M | 29M | 48M | 59M | 23M | 1M | 0 |
| Other Income/Expense | -127M | -62M | -31M | -40M | -61M | -72M | -100M | -82M | -47M | -19M | 1M |
| Pretax Income | 341M | 338M | 309M | 227M | 93M | 168M | 149M | 204M | 167M | 220M | 196M |
| Pretax Margin % | 16.1% | 16.15% | 16.77% | 12.75% | 5.6% | 10.49% | 10.11% | 14.95% | 13.28% | 19.01% | 19.22% |
| Income Tax | 83M | 84M | 74M | 56M | 22M | 39M | 37M | 51M | 42M | 60M | 71M |
| Effective Tax Rate % | 24.34% | 24.85% | 23.95% | 24.67% | 23.66% | 23.21% | 24.83% | 25% | 25.15% | 27.27% | 36.22% |
| Net Income | 260M | 255M | 235M | 171M | 71M | 128M | 112M | 153M | 125M | 160M | 124M |
| Net Margin % | 12.28% | 12.18% | 12.75% | 9.61% | 4.27% | 7.99% | 7.6% | 11.21% | 9.94% | 13.83% | 12.16% |
| Net Income Growth % | 9.24% | 8.51% | 37.43% | 140.85% | -44.53% | 14.29% | -26.8% | 22.4% | -21.88% | 29.03% | - |
| Net Income (Continuing) | 258M | 254M | 235M | 171M | 71M | 129M | 112M | 153M | 125M | 160M | 125M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 3.60 | 3.42 | 3.01 | 2.11 | 0.87 | 1.50 | 1.31 | 1.80 | 1.48 | 1.89 | 1.46 |
| EPS Growth % | 14.32% | 13.62% | 42.65% | 142.53% | -42% | 14.5% | -27.22% | 21.97% | -21.92% | 29.45% | - |
| EPS (Basic) | - | 3.48 | 3.05 | 2.12 | 0.87 | 1.50 | 1.31 | 1.81 | 1.48 | 1.89 | 1.47 |
| Diluted Shares Outstanding | 72.2M | 74.5M | 78M | 80.9M | 82M | 85.5M | 85.5M | 84.9M | 84.7M | 84.7M | 84.7M |
| Basic Shares Outstanding | 70.6M | 73.1M | 77M | 80.5M | 81.8M | 85.1M | 85.2M | 84.7M | 84.5M | 84.5M | 84.5M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
Seasonal Claims Cost Volatility
According to the provided quarterly income statements, Frontdoor has demonstrated consistent top-line expansion, with revenue reaching $617 million in both 2025Q3 and 2025Q2, marking a notable acceleration from the $366 million reported in 2023Q4 as the company successfully scales its core subscription-based home service plan model.
The revenue trajectory appears to be heavily influenced by seasonal demand cycles, with peak performance occurring in the second and third quarters. This pattern suggests that while the subscription model provides a stable baseline, the company remains sensitive to the timing of HVAC and appliance failures during warmer months.
As reported in financial statements, Frontdoor's gross margin profile has shown significant improvement, peaking at 57.7% in 2025Q2 compared to 45.9% in 2023Q4, which suggests that the company is successfully managing its claims cost ratio despite inflationary pressures on labor and replacement parts.
The expansion in gross margins indicates that management may be effectively leveraging its proprietary contractor network to control fulfillment costs. Investors should monitor whether this margin profile can be sustained during off-peak quarters, where fixed costs represent a larger portion of the revenue base.
Based on the company's reported figures, operating income has scaled impressively alongside revenue growth, reaching $162 million in 2025Q2, which implies that Frontdoor is achieving meaningful operating leverage by keeping SG&A growth below the rate of gross profit expansion during peak service demand periods.
The ability to maintain high operating margins during peak quarters suggests that the company's administrative and marketing infrastructure is well-positioned to support higher volumes. This efficiency appears to be a key driver of the company's ability to convert top-line growth into bottom-line profitability.
Data from recent filings indicates that net income volatility is largely a function of seasonal revenue recognition and claims timing, with net margins fluctuating from 0.5% in 2025Q4 to 18.0% in 2025Q2, highlighting the inherent cyclicality of the home warranty business model.
The presence of stock-based compensation, such as the $10 million recorded in 2026Q1, warrants further investigation to determine its impact on long-term EPS dilution. Analysts should focus on normalized earnings rather than quarterly snapshots to better assess the underlying profitability of the subscription book.
While recent performance appears strong, the historical data suggests that gross margins are susceptible to sharp contractions, as evidenced by the drop to 48.4% in 2024Q4, which may indicate that the company's pricing power is tested by unexpected spikes in claims frequency or severity.
Short-term margin compression risks remain a primary concern, particularly if inflationary pressures on HVAC components outpace the company's ability to adjust annual plan premiums. Investors should remain cautious about assuming that current peak-season margins represent a permanent structural shift in the business model.
Quick answers to the most common questions about buying FTDR stock.
For fiscal year 2025, Frontdoor, Inc. (FTDR) reported total revenue of $2.09B. This represents a 105.2% increase compared to $1.02B in 2016.
Frontdoor, Inc. (FTDR) is profitable, generating $255.0M in net income for the fiscal year ending 2025 with a net profit margin of 12.2%.
Frontdoor, Inc. (FTDR) reported an operating income of $400.0M, resulting in an operating profit margin of 19.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Frontdoor, Inc. (FTDR) generated $1.16B in gross profit for the year, representing a gross profit margin of 55.3%. This demonstrates the company's core pricing power and production efficiency.