Frontdoor, Inc 10-Q for FY2026 Q3

Frontdoor, Inc. (FTDR)

10-Q 2026-11-05 For: 2026-09-30

Added on November 05, 2026

About this 10-Q

Frontdoor, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).

Headline figures

Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $655M; up 6.0% from $618M a year earlier
Net income: $116M; up 9.4% from net income of $106M a year earlier
Diluted EPS: $1.65; up 16.2% from $1.42 a year earlier

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Delaware		82-3871179
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)



Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
Common stock, par value $0.01 per share	FTDR	The Nasdaq Stock Market LLC



Large accelerated filer 	Accelerated filer 	Non-accelerated filer 	Smaller reporting company 
			Emerging growth company 



Term / Abbreviation	Definition
2025 Form 10-K	Frontdoor, Inc. Annual Report on Form 10-K for the year ended December 31, 2025
2-10 HBW	2-10 Holdco, Inc. and its subsidiaries
2-10 HBW Acquisition	Acquisition by Frontdoor, Inc. of all of the issued and outstanding common stock of 2-10 HBW completed on December 19, 2024
AOCI	Accumulated other comprehensive income or loss
ASC	FASB Accounting Standards Codification
ASU	FASB Accounting Standards Update
Credit Agreement	The agreements governing the Credit Facilities
Credit Facilities	The Term Loan Facilities together with the Revolving Credit Facility
Exchange Act	The Securities Exchange Act of 1934, as amended
FASB	U.S. Financial Accounting Standards Board
home warranty	A home service contract, sometimes called a residential service contract, home warranty or home protection contract, provides for the repair and/or replacement of certain home systems and appliances for breakdowns that occur primarily as a result of normal wear and tear
HVAC	Heating, ventilation and air conditioning
IRS	Internal Revenue Service
NASDAQ	Nasdaq Global Select Market
new home builder warranty	A written warranty, or a collection of warranties, a builder provides to a new home buyer to define the standards for certain workmanship, distribution systems (e.g., electrical, piping or venting), and/or structural elements in a new home, and which may be backed by insurance and/or surety coverage
Omnibus Plan	Frontdoor, Inc. 2018 Omnibus Incentive Plan
Revolving Credit Facility	$250 million revolving credit facility
SEC	The U.S. Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
SOFR	Secured Overnight Financing Rate
Term Loan A	$418 million term loan A facility
Term Loan B	$800 million term loan B facility
Term Loan Facilities	The Term Loan A together with the Term Loan B
U.S. or United States	United States of America
U.S. GAAP	Accounting principles generally accepted in the United States of America




	Page
	No.
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations and Comprehensive Income	3
Condensed Consolidated Statements of Financial Position	4
Condensed Consolidated Statements of Changes in Equity	5
Condensed Consolidated Statements of Cash Flows	6
Notes to the Condensed Consolidated Financial Statements	7
Cautionary Statement Concerning Forward-Looking Statements	19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	33
Item 4. Controls and Procedures	33
Part II. Other Information	33
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5. Other Information	34
Item 6. Exhibits	35
Signature	36


	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Revenue	$	655		$	618		$	1,752		$	1,660
Cost of services rendered		293			264			763			716
Gross Profit		362			353			988			944
Selling and administrative expenses		174			174			512			498
Depreciation and amortization expense		20			22			61			66
Restructuring charges		1			1			3			1
Interest expense		19			20			57			59
Interest and net investment income		(6	)		(6	)		(16	)		(16	)
Income before Income Taxes		154			142			372			336
Provision for income taxes		38			37			89			83
Net Income	$	116		$	106		$	283		$	253

Other Comprehensive Income (Loss), Net of Income Taxes:
Unrealized gain (loss) on derivative instruments, net of income taxes		11			(1	)		19			(13	)
Total Other Comprehensive Income (Loss), Net of Income Taxes		11			(1	)		19			(13	)
Comprehensive Income	$	127		$	105		$	302		$	240

Earnings per Share:
Basic	$	1.69		$	1.45		$	4.06		$	3.44
Diluted	$	1.65		$	1.42		$	3.97		$	3.38

Weighted-average Common Shares Outstanding:
Basic		68.7			72.8			69.7			73.6
Diluted		70.3			74.4			71.1			75.0


	As of
	September 30,			December 31,
	2026			2025
Assets:
Current Assets:
Cash and cash equivalents	$	581		$	566
Receivables, less allowance of $4 and $4, respectively		13			10
Prepaid expenses and other current assets		45			44
Contract assets		85			—
Assets held for sale		—			4
Total Current Assets		724			624
Other Assets:
Property and equipment, net		53			57
Goodwill		963			959
Intangible assets, net		362			398
Operating lease right-of-use assets		6			7
Deferred reinsurance		67			66
Deferred customer acquisition costs		15			14
Other assets		33			17
Total Assets	$	2,223		$	2,142
Liabilities and Shareholders' Equity:
Current Liabilities:
Accounts payable	$	102		$	89
Accrued liabilities:
Payroll and related expenses		30			47
Home warranty claims		76			69
Income taxes payable		42			26
Other		34			34
Deferred revenue		101			107
Current portion of long-term debt		29			29
Total Current Liabilities		414			402
Long-Term Debt		1,125			1,144
Other Long-Term Liabilities:
Deferred tax liabilities, net		81			53
Operating lease liabilities		16			18
Unearned insurance premium		238			236
Long-term deferred revenue		16			19
Other long-term liabilities		18			27
Total Other Long-Term Liabilities		369			354
Commitments and Contingencies (Note 7)
Shareholders' Equity:
Common stock, $0.01 par value; 2,000,000,000 shares authorized; 89,330,812 shares issued and 68,082,707 shares outstanding as of September 30, 2026 and 88,480,560 shares issued and 70,958,215 shares outstanding as of December 31, 2025		1			1
Additional paid-in capital		228			195
Retained earnings		1,068			785
Accumulated other comprehensive income (loss)		7			(12	)
Less treasury stock, at cost; 21,248,105 shares as of September 30, 2026 and 17,522,345 shares as of December 31, 2025		(988	)		(727	)
Total Shareholders' Equity		315			242
Total Liabilities and Shareholders' Equity	$	2,223		$	2,142


(In millions)
Balance as of December 31, 2025	$	126
Deferral of revenue		208
Recognition of deferred revenue		(218	)
Balance as of September 30, 2026	$	117


	As of September 30, 2026							As of December 31, 2025
			Accumulated							Accumulated
(In millions)	Gross		Amortization			Net		Gross		Amortization			Net
Trade names(1)	$	141	$	—		$	141	$	141	$	—		$	141
Value of business acquired		148		(49	)		99		148		(30	)		118
Customer relationships(2)		133		(27	)		106		321		(213	)		108
Other(3)		31		(15	)		16		67		(35	)		32
Total	$	453	$	(91	)	$	362	$	676	$	(278	)	$	398


(In millions)
2026 (remainder)(1)		1
2027(1)		3
2028(1)		2
2029(1)		2
2030		3
Thereafter		10
Total future lease payments(1)		20
Less imputed interest		(5	)
Total operating lease liabilities(1)	$	15


(In millions)
2026 (remainder)	$	7
2027		29
2028		29
2029		342
2030		8
Thereafter		752
Total future scheduled debt payments		1,167
Less unamortized debt issuance costs		(12	)
Less unamortized discount		(1	)
Total debt	$	1,154


		Unrealized Gains (Losses) on Derivative Instruments, Net				Gains (Losses) on Foreign Currency Transactions, Net				Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2025	$		(12	)	$		—		$		(12	)
Other comprehensive income before reclassifications			18				(1	)			17
Amounts reclassified from AOCI (1)			2				—				2
Balance at September 30, 2026	$		8		$		(1	)	$		7


				Estimated Fair Value Measurements
				Quoted		Significant
				Prices		Other			Significant
				in Active		Observable			Unobservable
	Carrying			Markets		Inputs			Inputs
(In millions)	Value			(Level 1)		(Level 2)			(Level 3)
As of September 30, 2026:
Interest rate swap (Prepaid expenses and other current assets )	$		1	$	—	$		1	$	—
Interest rate swap (Other assets)			9		—			9		—
Total assets	$	10		$	—	$	10		$	—
Term Loan A			377		—			381		—
Term Loan B			777		—			790		—
Total liabilities	$		1,154	$	—	$		1,171	$	—

As of December 31, 2025:
Interest rate swap (Other accrued liabilities )	$		4	$	—	$		4	$	—
Interest rate swap (Other long-term liabilities)			13		—			13		—
Term Loan A			392		—			397		—
Term Loan B			781		—			796		—
Total liabilities	$		1,190	$	—	$		1,210	$	—


	As of
	September 30,
(In millions)	2026			2025
Number of home warranties		2.14			2.11
Growth in number of home warranties(1)		1	%		8	%
Customer retention rate		79.7	%		79.4	%


											% of Revenue
	Three Months Ended						Increase				Three Months Ended
	September 30,						(Decrease)				September 30,
(In millions)	2026			2025			%				2026				2025
Revenue	$	655		$	618			6		%		100		%		100		%
Cost of services rendered		293			264			11				45				43
Gross Profit		362			353			3				55				57
Selling and administrative expenses		174			174			—				27				28
Depreciation and amortization expense		20			22			(8	)			3				4
Restructuring charges		1			1			(31	)			—				—
Interest expense		19			20			(4	)			3				3
Interest and net investment income		(6	)		(6	)		(3	)			(1	)			(1	)
Income before Income Taxes		154			142			8				23				23
Provision for income taxes		38			37			3				6				6
Net Income	$	116		$	106			10		%		18		%		17		%


	Three Months Ended
	September 30,				Increase (Decrease)
(In millions)	2026		2025		$		%
Renewals	$	479	$	461	$	18		4		%
Real estate(1)		44		43		1		3
Direct-to-consumer(1)		54		54		—		(1	)
Non-warranty and other		78		59		19		32
Total	$	655	$	618	$	38		6		%


(In millions)
Three Months Ended September 30, 2025	$	264
Impact of change in revenue		21
Contract claims costs		7
Other		1
Three Months Ended September 30, 2026	$	293


(In millions)
Nine Months Ended September 30, 2025	$	716
Impact of change in revenue		40
Contract claims costs		6
Other		1
Nine Months Ended September 30, 2026	$	763


(In millions)
Three Months Ended September 30, 2025	$	174
Sales and marketing costs		4
Customer service costs		1
Stock-based compensation expense		1
Other general and administrative costs		(6	)
Three Months Ended September 30, 2026	$	174


(In millions)	Net Income			Adjusted EBITDA
Three Months Ended September 30, 2025	$	106		$	195
Impact of change in revenue		17			17
Contract claims costs		(7	)		(7	)
Sales and marketing costs		(4	)		(4	)
Customer service costs		(1	)		(1	)
Stock-based compensation expense		(1	)		—
Other general and administrative costs		6			6
Depreciation and amortization expense		2			—
Interest expense		1			—
Provision for income taxes		(1	)		—
Other		(1	)		(1	)
Three Months Ended September 30, 2026	$	116		$	205


Period	Total number of shares purchased		Average price paid per share(1)		Total number of shares purchased as part of publicly announced plans or programs		Maximum dollar value of shares that may yet be purchased under the plans or programs (in millions)
Jul. 1, 2026 through Jul. 31, 2026		400,596	$	74.89		400,596	$	148
Aug. 1, 2026 through Aug. 31, 2026		406,839		86.03		406,839		113
Sep. 1, 2026 through Sep. 30, 2026		548,021		78.46		548,021		70
Total		1,355,456	$	79.68		1,355,456	$	70


Exhibit Number		Description
3.1		Restated Certificate of Incorporation of Frontdoor, Inc. (incorporated by reference to Exhibit 3.1 to Frontdoor’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021).
3.2		Amended and Restated Bylaws of Frontdoor, Inc. (incorporated by reference to Exhibit 3.2 to Frontdoor’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023).
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Chief Executive Officer pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Chief Financial Officer pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104*		Cover page formatted as Inline XBRL and included in Exhibit 101.


	FRONTDOOR, INC.

Date: November 5, 2026	By:	/s/ Jason L. Bailey
		Name:	Jason L. Bailey
		Title:	Senior Vice President and Chief Financial Officer (principal financial officer)


		/s/ William C. Cobb
		Name: William C. Cobb
		Title: Chief Executive Officer


	/s/Jason L. Bailey
	Name: Jason L. Bailey
	Title: Senior Vice President and Chief Financial Officer


	/s/William C. Cobb
	Name: William C. Cobb
	Title: Chief Executive Officer