Revenue: As of FY2026 Q1, the actual value is USD 451 M, beating the estimate of USD 442.27 M.

EPS: As of FY2026 Q1, the actual value is USD 0.57.

EBIT: As of FY2026 Q1, the actual value is USD 79 M.

Operational Metrics

Frontdoor, Inc. reported a net income of $41 million for the first quarter of 2026, an 11% increase compared to the prior year period. Adjusted Net Income grew by 8% to $53 million for the same period. Gross profit margin remained unchanged at 55%. Adjusted EBITDA increased by 3% to $104 million. Selling and administrative expenses were $162 million, and cost of services rendered was $203 million. Depreciation and amortization expense was $20 million, and interest expense was $19 million. Restructuring charges amounted to $1 million.

Key factors influencing the period-over-period change in Net Income and Adjusted EBITDA included a $19 million increase from higher revenue conversion, partially offset by a $6 million increase in contract claims costs, a $6 million increase in sales and marketing costs, and a $2 million increase in customer service costs. Contract claims costs were impacted by low-single digit cost inflation, a higher number of service requests per member (including $1 million from unfavorable weather), and favorable claims cost development of $6 million. Sales and marketing costs increased primarily due to higher marketing investments aimed at driving direct-to-consumer channel growth.

Segment Revenue

Total revenue for the first quarter of 2026 was $451 million, marking a 6% increase, driven by a 5% increase from higher realized price and a 1% increase from higher volume. Renewals revenue increased by 6% to $352 million, primarily due to higher price realization. Real estate (First-Year) revenue increased by 3% to $28 million, driven by higher volume, partially offset by lower price. Direct-to-consumer (First-Year) revenue decreased by -5% to $31 million, attributed to lower price from promotional pricing strategies to boost new home warranty member growth, partially offset by higher volume. Other revenue increased by 23% to $41 million, mainly due to the growth of the HVAC upgrade program.

Cash Flow

Net cash provided from operating activities was $119 million for the three months ended March 31, 2026. Net cash used for investing activities was - $7 million, primarily due to capital expenditures related to technology projects. Net cash used for financing activities was - $75 million, mainly comprising $60 million in share repurchases and $7 million in scheduled debt payments. Free Cash Flow was $114 million. Cash and cash equivalents at the end of the period totaled $603 million, consisting of $154 million in restricted net assets and $448 million in Unrestricted Cash.

Unique Metrics

The number of home warranties remained unchanged at 2.10 million as of March 31, 2026, compared to the prior year. However, growth in the number of home warranties in the first-year channels accelerated to 3%. The customer retention rate was 79.3%.

Outlook / Guidance

Frontdoor, Inc. reaffirmed its full-year 2026 outlook, projecting revenue between $2.155 billion and $2.195 billion and Adjusted EBITDA between $565 million and $580 million, with an Adjusted EBITDA margin of approximately 26%. The company anticipates a total home warranty member count increase of approximately 1%, driven by a 5% increase in first-year home warranty member count. Gross profit margin is expected to be between 54% and 55%, with capital expenditures projected at $30 million to $35 million.