Frontdoor, Inc. · NASDAQ:FTDR
Frontdoor — Q2 2019 Earnings Presentation
16 slides from Frontdoor's earnings presentation, Aug 7, 2019
Slide 1: Second-Quarter 2019 Earnings Webcast
Second-Quarter 2019 Earnings Webcast August 7, 2019 1
Slide 2: 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 amende d, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements
Slide 3: Agenda
Rex Tibbens Brian Turcotte Matt Davis President & Chief Senior Vice President & Chief VP, Investor Relations and Executive Officer Financial Officer Treasurer Agenda • Q2 2019 Summary • Q2 2019 Financials • Business Update • FY 2019 Outlook • 2019 Strategic Objectives 3
Slide 4: Q2 2019 Summary
Q2 2019 Summary Revenue increased 9% to $388 million Gross Profit Margin increased 800 bps to 53% Adjusted EBITDA increased 44% to $105 million Home Service Plans increased 4% Customer Retention Rate of 75% Technology and process changes driving results Opened technology center in Denver, CO Launche
Slide 5: Business Update
Business Update • Made operational improvements to support increased lead volume • Continued to invest in marketing spend to drive top Direct-to-Consumer line growth • Expanded brokerage relationships with the addition of HomeServices of America, Inc. Real Estate • Implemented new technology and dat
Slide 6: 2019 Strategic Objectives
2019 Strategic Objectives Customer Experience Enhancing the Customer Experience Optimizing Pricing / Pricing Launching Dynamic Pricing Business Processes/ Managing to the Inputs Cost Containment of the Business Building a Fast-Moving Culture / People Enabling Frontline Employees Technology Advancing
Slide 7: Financial Summary
Financial Summary Three Months Ended June 30, $ millions, except per share amounts 2019 2018 Change Revenue 388 355 9 % Gross Profit 205 159 29 % Net Income 60 45 34 % Diluted Earnings per Share 0.71 0.53 34 % Adjusted Net Income (1) 62 53 18 % Adjusted Diluted Earnings per Share (1) 0.73 0.62 17 %
Slide 8: Adjusted EBITDA Bridge
Adjusted EBITDA Bridge $ millions 24 1 $105 23 (7) (1) (7) $73 Q2 '18 Revenue (1) Contract Sales & Customer Spin-off Other Q2 '19 Conversion Claims Marketing Service Dis-synergies Note: Revenue and expense items are year-over-year increases/(decreases); amounts presented in table may not sum due to
Slide 9: Cash Flow and Cash Position
Cash Flow and Cash Position Six Months Ended June 30, $ millions 2019 2018 Net cash provided from (used for): Operating Activities $ 140 $ 122 Investing Activities (12) (16) Financing Activities (4) (74) Cash increase during the period $ 124 $ 32 Note: Amounts presented in table may not sum due to r
Slide 10: Updated Full-Year 2019 Outlook
Updated Full-Year 2019 Outlook 2019 Outlook Low High Revenue (billions) $ 1.36 $ 1.38 Gross Profit Margin ~49% Adjusted EBITDA (millions)(1) $ 290 $ 300 Capital Expenditures (millions)* $ 30 $ 40 Annual Effective Tax Rate* ~25% *Remained the same from last earnings release. (1) A reconciliation of t
Slide 11: Q&A
Q&A For more information please visit our website: www.frontdoorhome.com 11
Slide 12: Appendix
Appendix 12
Slide 13: Consolidated and Combined Results
Consolidated and Combined Results $ millions, except per share amounts Three Months Ended June 30, 2019 2018 Better / (Worse) Revenue $ 388 $ 355 $ 33 YoY Growth 9% Gross Profit 205 159 46 % of revenue 52.9% 44.9% 8 pts Selling and administrative expenses 104 87 (17) % of revenue 26.9% 24.6% (2.3) p
Slide 14: Consolidated and Combined Results
Consolidated and Combined Results $ millions, except per share amounts Six Months Ended June 30, 2019 2018 Better / (Worse) Revenue $ 658 $ 602 $ 57 YoY Growth 9% Gross Profit 333 272 61 % of revenue 50.6% 45.2% 5.3 pts Selling and administrative expenses 193 169 (24) % of revenue 29.3% 28.0% (1.3)
Slide 15: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation $ millions Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net Income $ 60 $ 45 $ 73 $ 58 Depreciation and amortization expense 6 5 12 9 Restructuring charges — — — 3 Spin-off charges — 8 1 15 Provision for income taxes 20 15 25
Slide 16: Net Income to Adjusted Net Income Reconciliations
Net Income to Adjusted Net Income Reconciliations $ millions, except per share amounts Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net Income $ 60 $ 45 $ 73 $ 58 Amortization expense 1 2 3 4 Restructuring charges — — — 3 Spin-off charges — 8 1 15 Affiliate royalty expen