Q2 2024 Frontdoor Inc Earnings Call Transcript
Key Points
- Frontdoor Inc (FTDR) reported a record quarter for financial performance with revenue growing 4% to $542 million.
- Gross margin expanded by 470 basis points to a record 56%, and adjusted EBITDA grew 31% to $158 million.
- Free cash flow more than doubled to $91 million, and the company repurchased 2.5 million shares year-to-date through July.
- The on-demand business is performing exceptionally well, with the new HVAC program on track to surpass last year's $50 million revenue.
- Customer retention reached an all-time high of 76.6%, with improvements in customer service and increased use of preferred contractors.
- Macroeconomic headwinds are impacting home warranty sales, leading to a slight lowering of the outlook for member count.
- The real estate market remains a significant drag on the business, with existing home sales projected to decline further.
- The company faces challenges in the home warranty category, with a 3% decline in volume despite a 7% increase in price.
- Gross profit margin is expected to be lower in the second half of the year due to various factors, including increased service requests.
- The full-year outlook for home warranties is expected to decline by 3%, reflecting ongoing challenges in the market.
Ladies and gentlemen, welcome to Frontdoor's second-quarter 2024 earnings call. Todayâs call is being recorded and broadcast on the Internet. Beginning today's call is Matt Davis, Vice President of Investor Relations and Treasurer, and he will introduce the other speakers on the call. At this time, we'll begin today's call. Please go ahead, Mr. Davis.
Thank you, operator. Good morning, everyone, and thank you for joining Frontdoor's second-quarter 2024 earnings conference call. Joining me today are Frontdoor's Chairman and Chief Executive Officer, Bill Cobb; and Frontdoor's Chief Financial Officer, Jessica Ross.
The press release and slide presentation that will be used during today's call can be found on the Investor Relations section of Frontdoor's website, which is located at investors.frontdoorhome.com. There is also additional detail about Frontdoor, about our brand at frontdoor.com and on our new mobile App that you can download in the App Store and at Google Play.
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