FTDR Frontdoor Inc

Exhibit 99.1

Frontdoor Announces Full-Year 2023 Revenue Increased 7% to $1.78 Billion;

Gross Profit Margin Rebounded 700 bps to 50% in 2023;

Record Net Income of $171 Million and Adjusted EBITDA⁽¹⁾ of $346 Million;

$120 Million Utilized to Repurchase 3.6 Million Shares;

Targeting Higher Revenue and Adjusted EBITDA⁽¹⁾ in 2024

MEMPHIS, TENN. — February 28, 2024 — Frontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of home warranties, today announced fourth-quarter and full-year 2023 results.

Fourth-Quarter 2023 Summary

Full-Year 2023 Summary

Full-Year 2024 Outlook

“Frontdoor delivered record financial performance in 2023,” said Chairman and Chief Executive Officer Bill Cobb. “This is an exceptional turnaround from when I started 21 months ago, and I would like to thank our associates and contractors for their hard work in achieving these results. In 2024, our top priority is to grow revenue and reignite customer growth as we relaunch the American Home Shield brand and expand our on-demand service offerings. Looking beyond 2024, I am extremely optimistic about Frontdoor’s future as we have several initiatives to drive growth, our margins have stabilized, and we are building a strong foundation that will benefit all of our stakeholders for years to come.”

“We took decisive actions to improve execution and combat a challenging macroeconomic environment, which resulted in gross margins rebounding to the highest levels in nearly 10 years,” said Chief Financial Officer Jessica Ross. “We have a strong and resilient core business, and our 2024 outlook reflects modest revenue growth, normalized margins and continued investments to drive unit growth. We are confident in the fundamentals of our home warranty business, and we are in the process of executing our growth strategy from a position of strength.”

Fourth-Quarter 2023 Results

Fourth-quarter 2023 revenue increased 8% to $366 million, which was comprised of a 15% increase from price that was partially offset by a 7% decline from lower volume.

Fourth-quarter 2023 net income was $9 million, or diluted earnings per share of $0.11.

Fourth-quarter 2023 Adjusted EBITDA⁽¹⁾ of $45 million increased 35% versus the prior year period, and includes:

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Full-Year 2023 Results

Full-year 2023 revenue increased 7% to $1.78 billion, which was comprised of an 11% increase from price that was partially offset by a 4% decline from lower volume.

Full-year 2023 net income increased 141% to $171 million; diluted earnings per share increased 144% to $2.12.

Full-year 2023 Adjusted EBITDA⁽¹⁾ of $346 million was $132 million higher than the prior year, and includes:

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Cash Flow

Net cash provided from operating activities was $202 million for the 12 months ended December 31, 2023 and was comprised of $242 million in earnings adjusted for non-cash charges, partially offset by $7 million in payments for restructuring charges and $33 million in cash used for working capital.

Net cash used for investing activities was $32 million for the 12 months ended December 31, 2023 and was primarily comprised of capital expenditures related to technology projects.

Net cash used for financing activities was $137 million for the 12 months ended December 31, 2023 and was primarily comprised of $121 million (including taxes and fees) to repurchase 3.6 million shares, or 4% of outstanding shares, and scheduled debt payments.

Free Cash Flow⁽¹⁾ was $170 million for the 12 months ended December 31, 2023.

Cash as of December 31, 2023 was $325 million and was comprised of $157 million of restricted net assets and $168 million of Unrestricted Cash.

First-Quarter 2024 Outlook

Full-Year 2024 Outlook

2024 Share Repurchase Outlook

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Fourth-Quarter and Full-Year 2023 Earnings Conference Call

Frontdoor has scheduled a conference call today, February 28, 2023, at 7:30 a.m. Central time (8:30 a.m. Eastern time). During the call, Bill Cobb, Chairman and Chief Executive Officer, and Jessica Ross, Chief Financial Officer, will discuss the company’s operational performance and financial results for fourth-quarter and full-year 2023 and respond to questions from the investment community. To participate on the conference call, interested parties should call 1-833-470-1428 (or international participants, 1-929-526-1599) and enter conference ID 840618. Additionally, the conference call will be available via webcast which will include a slide presentation highlighting the company’s results. To participate via webcast and view the slide presentation, visit Frontdoor’s investor relations home page. The call will be available for replay for approximately 60 days. To access the replay of this call, please call 1-866-813-9403 and enter conference ID 708921 (international participants: +44-204-525-0658, conference ID 708921).

About Frontdoor, Inc.

Frontdoor is reimagining how homeowners maintain and repair their most valuable asset – their home. We bring over 50 years of experience in providing our members with comprehensive options to protect their homes from costly and unexpected breakdowns through our extensive network of pre-qualified professional contractors. American Home Shield, the category leader in home service plans with approximately two million members, gives homeowners budget protection and convenience, covering up to 23 essential home systems and appliances. Frontdoor is a cutting edge, one-stop app for home repair and maintenance. Enabled by our Streem technology, the app empowers homeowners by connecting them in real time through video chat with pre-qualified experts to diagnose and solve their problems. The Frontdoor app also offers homeowners a range of other benefits including DIY tips, discounts and more. For more information about American Home Shield and Frontdoor, please visit frontdoorhome.com.

Forward-Looking Statements

This news release 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 about Frontdoor’s plans, strategies and prospects. Forward-looking statements can be identified by the use of forward-looking terms such as “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project,” “will,” “shall,” “would,” “aim,” or other comparable terms. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Such risks and uncertainties include, but are not limited to: changes in macroeconomic conditions, including inflation and global supply chain and political challenges, especially as they may affect existing home sales, interest rates, consumer confidence or labor availability; the success of our business strategies; the ability of our marketing efforts to be successful or cost-effective; our dependence on our real estate and direct-to-consumer customer acquisition channels and our renewals channel; changes in the source and intensity of competition in our market; our ability to attract, retain and maintain positive relations with third-party contractors and vendors; increases in parts, appliance and home system prices, and other operating costs; our ability to attract and retain qualified key employees and labor availability in our customer service operations; our dependence on third-party vendors, including business process outsourcers, and third-party component suppliers; cybersecurity breaches, disruptions or failures in our technology systems; our ability to protect the security of personal information about our customers; evolving corporate governance and disclosure regulations and expectations related to environmental, social and governance matters; lawsuits, enforcement actions and other claims by third parties or governmental authorities; increases in tariffs or changes to import/export regulations; physical effects of climate change, adverse weather conditions and Acts of God, along with the increased focus on sustainability; our ability to protect our intellectual property and other material proprietary rights; negative reputational and financial impacts resulting from acquisitions or strategic transactions; requirement to recognize impairment charges; third-party use of our trademarks as search engine keywords to direct our potential customers to their own websites; inappropriate use of social media by us or other parties to harm our reputation; special risks applicable to operations outside the United States by us or our business process outsource providers; dependence on appreciation in our stock price for a return on investment in our common stock; restrictions in our certificate of incorporation related to an acquisition of us or to our lawsuits against us or our directors or officers; the effects of our significant indebtedness; increases in interest rates increasing the cost of servicing our indebtedness; increased borrowing costs due to lowering or withdrawal of the credit ratings, outlook or watch assigned to us, our debt securities or our credit facilities; and our ability to generate significant cash needed to fund our operations and service our debt. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of new markets or market segments in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this news release. For a discussion of other important factors that could cause Frontdoor’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this document, refer to the risks and uncertainties detailed from time to time in Frontdoor’s periodic reports filed with the SEC, including the disclosure contained in Item 1A. Risk Factors in our 2022 Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in Frontdoor’s periodic filings with the SEC. Except as required by law, Frontdoor does not undertake any obligation to update or revise the forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review Frontdoor’s filings with the SEC, which are available from the SEC’s EDGAR database at sec.gov, and via Frontdoor’s website at frontdoorhome.com.

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Non-GAAP Financial Measures

To supplement Frontdoor’s results presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), Frontdoor has disclosed the non-GAAP financial measures of Adjusted EBITDA, Free Cash Flow, Adjusted Net Income, Adjusted Diluted Earnings Per Share, and Unrestricted Cash.

We define “Adjusted EBITDA” as net income before depreciation and amortization expense; goodwill and intangibles impairment; restructuring charges; provision for income taxes; non-cash stock-based compensation expense; interest expense; loss on extinguishment of debt; and other non-operating expenses. We believe Adjusted EBITDA is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by variations in capital structures, taxation, the age and book depreciation of facilities and equipment, restructuring initiatives, and equity-based, long-term incentive plans, and it is a component of our incentive compensation program.

We define “Free Cash Flow” as net cash provided from operating activities less property additions. Free Cash Flow is not a measurement of our financial performance or liquidity under U.S. GAAP and does not purport to be an alternative to net cash provided from operating activities or any other performance or liquidity measures derived in accordance with U.S. GAAP. Free Cash Flow is useful as a supplemental measure of our liquidity. Management uses Free Cash Flow to facilitate company-to-company cash flow comparisons, which may vary from company-to-company for reasons unrelated to operating performance.

We define “Adjusted Net Income” as net income before: amortization expense; restructuring charges; loss on extinguishment of debt; other non-operating expenses; and the tax impact of the aforementioned adjustments. We believe Adjusted Net Income is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by items listed in this definition.

We define “Adjusted Diluted Earnings per Share” as Adjusted Net Income divided by the weighted-average diluted common shares outstanding.

We define “Unrestricted Cash” as cash not subject to third-party restrictions. For additional information related to our third-party restrictions, see “Liquidity and Capital Resources — Liquidity” under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K filed with the SEC.

See the schedules attached hereto for additional information and reconciliations of such non-GAAP financial measures. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors’ evaluation of Frontdoor’s business performance and are useful for period-over-period comparisons of the performance of Frontdoor’s business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies.

© 2024 Frontdoor, Inc. All rights reserved. The following terms, which may be used in this press release, are trademarks of Frontdoor, Inc. and its subsidiaries: Frontdoor^®, American Home Shield^®, HSA^™, OneGuard^®, Landmark Home Warranty^®, Streem^®, the Streem logo and the Frontdoor logo. All other trademarks used herein are the property of their respective owners.

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Frontdoor, Inc.

Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In millions, except per share data)

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Frontdoor, Inc.

Consolidated Statements of Financial Position (Unaudited)

(In millions, except share data)

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Frontdoor, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In millions)

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Reconciliations of Non-GAAP Financial Measures

The following table presents reconciliations of net income to Adjusted Net Income.

The following table presents reconciliations of net cash provided from operating activities to Free Cash Flow.

The following table presents reconciliations of net income to Adjusted EBITDA.

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Key Business Metrics

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