Frontdoor Lifts 2026 Outlook and Adds $1 Billion Buyback

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter revenue rose 6% to $655 million as the home-warranty provider raised full-year revenue to $2.205 billion to $2.215 billion.

Frontdoor, Inc. (FTDR), the nation’s leading provider of home warranties and new home builder warranties, reported third-quarter 2026 revenue of $655 million, up 6% from a year earlier, and raised its full-year 2026 outlook.

The company now expects full-year revenue of $2.205 billion to $2.215 billion, approximately a 6% increase over 2025, and Adjusted EBITDA of $590 million to $600 million. Both ends of the revenue outlook increased from the $2.19 billion to $2.21 billion range issued after the second quarter, while the Adjusted EBITDA lower bound rose from $585 million to $590 million and its upper bound stayed at $600 million.

Net income rose 10% to $116 million, or $1.65 a share, from $106 million, or $1.42 a share, a year earlier. Adjusted EBITDA increased 5% to $205 million. Gross profit margin was 55%.

Revenue was comprised of 3% from higher realized price and 3% from higher volume. Renewal revenue increased 4% to $479 million, driven by higher realized price. Real estate first-year revenue increased 3% to $44 million, due to higher volume. Direct-to-consumer first-year revenue declined 1% to $54 million, due to lower realized price from promotional pricing that was partially offset by higher volume from growth in new home warranty members. Other revenue increased 32% to $78 million, primarily due to the New HVAC upgrade program.

The number of home warranties grew 1% to 2.14 million. Customer retention was 79.7%.

The company said third-quarter net income and Adjusted EBITDA included $17 million from higher revenue conversion. Contract claims costs increased $7 million, excluding the impact of claims costs related to the change in revenue, reflecting a higher number of service requests per member, primarily due to approximately $9 million of unfavorable weather in the HVAC trade, and normal cost inflation across the contractor network, replacement parts and equipment, largely offset by process improvement initiatives. Favorable claims cost development was $6 million. Other general and administrative costs were $6 million lower due to lower personnel costs. Sales and marketing costs were $4 million higher, primarily due to increased marketing investments to drive direct-to-consumer channel growth.

For the nine months ended September 30, 2026, net cash provided from operating activities was $318 million and free cash flow was $298 million. Cash as of September 30 was $581 million, including $430 million of unrestricted cash.

Frontdoor completed $259 million of share repurchases through September, up over 30% year-to-date. The company said it expects to complete the existing three-year, $650 million authorization in November 2026, nearly one year ahead of schedule. On October 30, 2026, the board approved a new three-year, $1 billion share repurchase authorization beginning in November.

Fourth-quarter 2026 outlook is revenue of $453 million to $463 million and Adjusted EBITDA of $62 million to $72 million. Full-year assumptions include a realized price increase of approximately 4%, a volume increase of approximately 2%, an approximately 5% increase in renewal channel revenue, a low-single-digit decrease in direct-to-consumer channel revenue, a low-single-digit increase in real estate channel revenue, and $235 million to $240 million in non-warranty and other revenue. The company expects the number of home warranties to increase approximately 1% in 2026, gross profit margin of approximately 55%, SG&A of $685 million to $695 million, Adjusted EBITDA margin of approximately 27%, capital expenditures of approximately $30 million, and an annual effective tax rate of approximately 24%.