Frontdoor, Inc. · NASDAQ:FTDR
Frontdoor — Q1 2024 Earnings Presentation
21 slides from Frontdoor's earnings presentation, May 2, 2024
Slide 1: First-Quarter 2024 Earnings Webcast
First-Quarter 2024 Earnings Webcast May 2, 2024
Slide 2: Today's Speakers
Today’s Speakers Bill Cobb Jessica Ross Matt Davis Chairman & Senior Vice President & Vice President Chief Executive Officer Chief Financial Officer Investor Relations & Treasurer
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements
Slide 4: Strong Q1 2024 Financial Performance
Strong Q1 2024 Financial Performance Revenue increased 3% to $378M Gross margin expanded 510 bps to 51% Adjusted EBITDA(1) rose 33% to $71M Increasing full-year gross profit margin and Adjusted EBITDA outlook (1) See the Appendix accompanying this presentation for a reconciliation of Adjusted EBITDA
Slide 5: Channel Performance Remains Mixed
Channel Performance Remains Mixed Real • Lower home sales, tight inventory & seller’s market Estate • Temporary reset in category demand Direct-to-Consumer • Retention rates continue to perform well Renewals • New HVAC sales remain strong Other 5
Slide 6: Long-Term Opportunity Remains Strong
Long-Term Opportunity Remains Strong Sizable Category Growth Potential Relevant Value Proposition 130M U.S. 1 Financial protection Households Opportunity 2 Convenience to grow 86M U.S. Homeowners above 4% 3 Peace of mind penetration ~5M Home Warranties Sources: Households and Homeowners: U.S. Census
Slide 7: Relaunched American Home Shield Brand in April
Relaunched American Home Shield Brand in April • Top priority is to grow our customer base • The brand relaunch is a major component of this strategy and includes: • Break-through ad campaign • Catchy, recognizable tagline “Don’t Worry. Be Warranty.” • New logo with brighter, bolder colors and more
Slide 8: Omni-Channel Campaign with New Marketing Partners
Omni-Channel Campaign with New Marketing Partners 8
Slide 9: First Quarter 2024 Financial Summary
First Quarter 2024 Financial Summary ($ millions) Revenue Net Income Adjusted EBITDA(1) +3% +56% +33% 378 34 71 54 367 22 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 (1) See the Appendix accompanying this presentation for a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the nearest U.
Slide 10: First Quarter 2024 Gross Profit Improved 14%
First Quarter 2024 Gross Profit Improved 14% ($ millions) Gross Profit +14% 195 Gross Profit Margin 170 +510bps to 51% Q1 2023 Q1 2024 Note: All comparisons versus the prior year period (Q1 2023) 10
Slide 11: First Quarter 2024 Adjusted EBITDA
First Quarter 2024 Adjusted EBITDA ($ millions) Three Months Ended March 31, 2023 $54 Impact of change in revenue(2) 14 Contract claims costs(3) 10 Q1 Adjusted Sales and marketing costs (7) General and administrative costs (3) EBITDA(1) Customer service costs 1 +33% Interest and net investment incom
Slide 12: First Quarter 2024 Free Cash Flow
First Quarter 2024 Free Cash Flow ($ millions) Three Months Ended March 31, Restricted Unrestricted Cash Cash Net cash provided from 2024 2023 $165M $213M (used for): Operating Activities 84 60 Investing Activities (10) (8) Free Cash Flow(1) Financing Activities (21) (7) Cash increase/(decrease) dur
Slide 13: Strong Capital Structure Provides Financial Flexibility
Strong Capital Structure Provides Financial Flexibility • #1: Growth through organic and M&A opportunities $425M • #2: Maintain a strong financial profile 1.8x Net Debt / $383M EBITDA • #3: Return excess cash to shareholders through share 1.1x repurchases Net Debt / EBITDA Q1 2023 Q1 2024 (1) Net De
Slide 14: Q2 2024 and FY 2024 Outlook
Q2 2024 and FY 2024 Outlook Q2 2024 Outlook Q2 2023 Results Low High Revenue ($ millions) 523 530 540 Adjusted EBITDA ($ millions) (1)(2) 121 130 140 FY 2023 Results FY 2024 Outlook Revenue ($ billions) 1.78 1.81 1.84 Gross Profit Margin (%) 50 50 SG&A ($ millions) 581 580 595 Adjusted EBITDA ($ mil
Slide 15: Investor Day | November 7, 2024, New York
Investor Day | November 7, 2024, New York 15
Slide 16: Appendix
Frontdoor Appendix
Slide 17: Q1 2024 Consolidated Results
Three Months Ended Q1 2024 $ millions, except per share amounts 2024 March 31, 2023 Better /(Worse) Consolidated Revenue YOY Growth $ 378 $ 367 $ 11 3% Results Gross Profit % of revenue Selling and administrative expenses 195 51.5% 135 170 46.4% 125 25 510 pts (11) Note: See elsewhere in this Append
Slide 18: Net Income to Adjusted EBITDA Reconciliations
Net Income to Adjusted EBITDA Reconciliations Three Months Ended March 31, ($ millions) 2024 2023 Net Income $ 34 $ 22 Depreciation and amortization expense 9 9 Restructuring charges — 1 Provision for income taxes 11 7 Non-cash stock-based compensation expense 7 5 Interest expense 10 10 Adjusted EBI
Slide 19: Net Income to Adjusted EBITDA Reconciliations (Cont.)
Net Income to Adjusted EBITDA Reconciliations (Cont.) Three Months Ended Year Ended June 30, December 31, ($ millions) 2023 2023 Net Income $ 70 $ 171 Depreciation and amortization expense 9 37 Goodwill and intangibles impairment — — Restructuring charges — 16 Provision for income taxes 23 57 Non-ca
Slide 20: Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations
Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations Three Months Ended March 31, ($ millions) 2024 2023 Net Cash Provided from Operating Activities $ 84 $ 60 Property additions (10) (8) Free Cash Flow $ 73 $ 52 Note: Amounts presented in the above tables may not sum due to
Slide 21: Net Debt and TTM Adjusted EBITDA Reconciliation
Net Debt and TTM Adjusted EBITDA Reconciliation Three Months Ended March 31, (in millions) 2024 2023 Term Loan A $ 224 $ 237 Term Loan B 370 373 Total Debt - Face Value (A) 594 611 Discounts and issuance costs (4) (6) Total Debt - Book Value 589 605 LCs Outstanding (B) 2 2 Available cash (C) 213 187