Slide 1: Second-Quarter 2025 Earnings Webcast
Second-Quarter 2025 Earnings Webcast August 5th, 2025
Slide 2: Today's Presenters
Today’s Presenters Bill Cobb Jessica Ross Matt Davis Chairman & Senior Vice President & Vice President, Chief Executive Officer Chief Financial Officer Investor Relations and Treasurer 2
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: Q2 2025 Highlights
Q2 2025 Highlights ($ millions) Q2 2025 Q2 2025 Highlights Revenue Gross Profit Margin o Organic direct-to-consumer home $617 58% warranties grew +9% +14% +130 bps vs. prior year period vs. prior year period o Continued strong non-warranty revenue Q2 2025 Q2 2025 o 2-10 synergies ahead of schedule N
Slide 5: Driving Value Creation Through Our Strategic Priorities
Driving Value Creation Through Our Strategic Priorities Grow and Retain Scale Optimize the Home Warranty Non-Warranty Integration Members Revenue of 2-10 5
Slide 6: A Look Back: Challenging Macro Drove The Decline in Number of Home Warranties
A Look Back: Challenging Macro Drove The Decline in Number of Home Warranties 1 First Year Real Estate Home Warranties (in thousands) o Home warranties in the real estate -63% 460 channel have declined since 2020 370 o Strong seller’s market, driven by record low inventories 250 o Existing home sale
Slide 7: Today: Transitioning to Buyer's Market
Today: Transitioning to Buyer’s Market Market remains challenged… but rising inventory fuels cautious optimism Existing-Home Sales Supply of Unsold Inventory (SAAR*, in millions) (months) 4.26 4.7 4.6 4.4 4.08 4.03 4.03 4.0 4.01 3.93 3.5 3.5 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jan-25 Feb-25 Ma
Slide 8: Positive DTC Channel Trends
Positive DTC Channel Trends First Year Direct-to-Consumer Highlights Home Warranties (in thousands) o In spite of macroeconomic challenges, DTC is performing well 290 o Q2 home warranty growth of +9% 280 versus prior year period 270 o Multiple factors have contributed to this success: o Optimized ca
Slide 9: Strong Customer Retention: Nearly 80%
Strong Customer Retention: Nearly 80% Even With Double-Digit Price Increases and Macro Pressure Enhancing Member Experience Retention Rate * o Increasing preferred contractor deployment 78.5% 78.3% o Integrating technology advancements into 76.2% the experience o 14% of member base have downloaded a
Slide 10: Total Number of Home Warranties Stabilizing
Total Number of Home Warranties Stabilizing 2,500 (in thousands) 2,250 2,210 2,000 2,130 2,000 1,940 1,920 1,500 -1% -2% 1,000 -3% -4% 500 -6% 0 2020 2021 2022 2023 2024 * 6/30/2025 * After years of macro headwinds related to real estate and inflation, our efforts to change the trajectory of home wa
Slide 11: New HVAC Program Unlocking Growth
New HVAC Program Unlocking Growth Only a Small Number of AHS HVAC Upgrade Revenue Members have Completed an (in millions $) HVAC Upgrade to Date $120 Massive Opportunity to Increase $87 Penetration < 2% 2024 2025F Total AHS Member Program Usage as of 6/30/2025 11
Slide 12: New HVAC Program Success Factors
New HVAC Program Success Factors New Consumer Doubled Financing Option Contractor Driving Growth Participation Process includes contractor Offering 12 months interest free onboarding, training and marketing Result: Quotes to members increased Financing usage up +75% YTD in 2025 40% in 1H 2025 12
Slide 13: 2-10 Integration Ahead of Schedule
2-10 Integration Ahead of Schedule • Complementary home warranty business 2-10 is a Great 3 • Diversifies FTDR revenue Strategic Fit with FTDR • Significant cost synergies and cross selling opportunities • Delivering improved cost synergies in back office, sales & We Have Accelerated marketing and s
Slide 14: What about AI at Frontdoor?
What about AI at Frontdoor? Marketing Sales Operations o Predictive Modeling to o Real-time coaching during o Accelerated and improve campaign customer engagements standardized member performance support calls o AI-driven agents to o Search Optimization to streamline lead qualification o Improved ac
Slide 15: Second Quarter Financial Results
Second Quarter Financial Results 15
Slide 16: Strong First Half Financial Results
Strong First Half Financial Results ($ millions) Q2 2025 Q2 2025 Q2 2025 Revenue Net Income Adj EBITDA* $617 $111 $199 +14% +21% +26% vs. prior year period vs. prior year period vs. prior year period 1H 2025 1H 2025 1H 2025 Revenue Net Income Adj EBITDA* $1,043 $148 $300 +13% +17% +31% vs. prior yea
Slide 17: Q2 2025 Revenue
Q2 2025 Revenue ($ millions) +14% o Price +2%, volume +12% $617 o Renewals grew 9% due to the addition of 2-10 and higher price $542 o Real estate increased 21% due to the addition of 2-10 o DTC grew 12% as higher volumes were partially offset by lower price o Other revenue grew 63% due to the new H
Slide 18: Q2 2025 Gross Profit
Q2 2025 Gross Profit ($ millions) +16% 360 $356 o Gross profit margins of 58%, up 340 130bps 320 300 58% o Low single-digit net cost inflation $306 gross profit margin across our contractor network, 280 replacement parts and equipment 260 56% 240 gross profit o Lower service requests per margin cust
Slide 19: Strengthening Our Operational Muscle
Strengthening Our Operational Muscle Preferred Dynamic Contractor Flexing Contractor Pricing Assignments Scale Usage Sophisticated Using data and tech Maximizing jobs Leveraging supplier pricing model that to match jobs with assigned to preferred relationships to balances revenue, the right contract
Slide 20: Q2 2025 Net Income & Adjusted EBITDA
Q2 2025 Net Income & Adjusted EBITDA* ($ millions) Net Income Adjusted EBITDA* +26% $199 +21% $111 32% $158 Adj EBITDA* margin 29% $92 Adj EBTIDA* margin Q2 2024 Q2 2025 Q2 2024 Q2 2025 * This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures" in this presentat
Slide 21: Q2 2025 Earnings Per Share
Q2 2025 Earnings Per Share Adjusted Earnings per Share Earnings per Share* +28% +26% $1.63 $1.48 $1.27 $1.18 Q2 2024 Q2 2025 Q2 2024 Q2 2025 Note: All references to earnings per share are presented on a diluted basis * This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financ
Slide 22: Strong Cash Flow and Cash Position
Strong Cash Flow and Cash Position ($ millions) Six Months Ended June 30, Total Cash Net cash provided from (used for): 2025 2024 $562M Operating Activities 251 187 Investing Activities 42 (22) Restricted Unrestricted Financing Activities (153) (71) Cash Cash Cash increase during the period 141 93 $
Slide 23: Significant Increase in Free Cash Flow
Significant Increase in Free Cash Flow* +44% o Strong performance driving record free cash flow $237 o On average, we have historically converted over 50% of Adjusted $164 EBITDA into Free Cash Flow on an annualized basis o The result: we have a strong financial position with an improving net levera
Slide 24: Raising 2025 Share Repurchase Target
Raising 2025 Share Repurchase Target Share Repurchases o Repurchased $150M of shares YTD ($ millions) through July 2025 ~$250 $160 o Increasing 2025 share repurchase target from $200M+ to ~$250M $120 $150 $350M Rate Swap $59 3.03% $218M o Targeting four consecutive years of +225 bps TLA increasing s
Slide 25: Q3 2025 and FY 2025 Outlook
Q3 2025 and FY 2025 Outlook Prior Revised Q3 2025 FY 2024 FY 2025 FY 2025 Metric Outlook Actual Outlook Outlook Revenue $605 - $615 million $1.8 billion $2.03 - $2.05 billion $2.055 - $2.075 billion Gross Profit Margin -- 54% 54% - 55% 55% - 56% SG&A -- $612 million $650 - $670 million $660 - $670 m
Slide 26: Frontdoor Is…
Frontdoor Is… Operating Another record quarter of exceptional financial Better Than Ever and operational performance Living Our Make life easier for every homeowner Purpose Delivering Think like a homeowner, act like a Pro On Our and help like a friend Mission 26
Slide 27: Questions?
Questions? 27
Slide 28: Appendix
Appendix '®@ frontdoor 28
Slide 29: Q2 2025 Consolidated Results
Q2 2025 Consolidated Results *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 29
Slide 30: YTD 2025 Consolidated Results
YTD 2025 Consolidated Results *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 30
Slide 31: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 31
Slide 32: Net Income to Adjusted Net Income Reconciliation
Net Income to Adjusted Net Income Reconciliation *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 32
Slide 33: Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations
Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial mea