Frontdoor, Inc.

Previous wording

For the three months ended March 31, 2026 and 2025, we generated revenue, net income and Adjusted EBITDA of $451 million, $41 million and $104 million, respectively, and $426 million, $37 million and $100 million, respectively. For a reconciliation of net income to Adjusted EBITDA, see “Results of Operations - Adjusted EBITDA.”

Current wording

For the three months ended June 30, 2026 and 2025, we generated revenue, net income and Adjusted EBITDA of $645 million, $125 million and $220 million, respectively, and $617 million, $111 million and $199 million, respectively. For the six months ended June 30, 2026 and 2025, we generated revenue, net income, and Adjusted EBITDA of $1,096 million, $167 million, $324 million, respectively, and $1,043 million, $148 million and $300 million, respectively. For a reconciliation of net income to Adjusted EBITDA, see “Results of Operations - Adjusted EBITDA.”

Previous wording

For the three months ended March 31, 2026, our total operating revenue included 78 percent of revenue derived from existing customer renewals, six percent from new home warranty sales made in conjunction with existing home real estate transactions, seven percent derived from direct-to-consumer sales, and nine percent derived from the non-warranty and other revenue channels. For the three months ended March 31, 2025, our total operating revenue included 78 percent of revenue derived from existing customer renewals, six percent derived from new home warranty sales made in conjunction with existing home real estate transactions, eight percent derived from direct-to-consumer sales, and eight percent was derived from non-warranty and other revenue channels.

Current wording

For the six months ended June 30, 2026, our total operating revenue included 76 percent of revenue derived from existing customer renewals, seven percent from home warranty sales made in conjunction with existing home real estate transactions, eight percent derived from direct-to-consumer sales, and ten percent derived from the non-warranty and other revenue channels. For the six months ended June 30, 2025, our total operating revenue included 76 percent of revenue derived from existing customer renewals, seven percent derived from new home warranty sales made in conjunction with existing home real estate transactions, eight percent derived from direct-to-consumer sales, and nine percent was derived from non-warranty and other revenue channels.

Previous wording

Our financial condition and results of operations for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 continued to be adversely impacted by the following:

Current wording

Our financial condition and results of operations for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 continued to be adversely impacted by the following:

Previous wording

Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. There have been no material changes to our critical accounting policies during the three months ended March 31, 2026.

Current wording

Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. There have been no material changes to our critical accounting policies during the six months ended June 30, 2026.

Previous wording

We reported revenue of $451 million and $426 million for the three months ended March 31, 2026 and 2025, respectively. The following tables provide a summary of our revenue by major customer acquisition channel for our home warranties and other revenue:

Current wording

We reported revenue of $645 million and $617 million for the three months ended June 30, 2026 and 2025, respectively, and $1,096 million and $1,043 million for the six months ended June 30, 2026 and 2025, respectively. The following tables provide a summary of our revenue by major customer acquisition channel for our home warranties and other revenue:

Previous wording

Revenue increased 6 percent for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in renewal revenue reflects improved price realization resulting from our prior pricing actions. The decrease in direct-to-consumer revenue reflects lower price realization resulting from our discounting efforts, offset, in part, by an increase in the number of direct-to-consumer home warranties. The increase in real estate revenue reflects an increase in the number of first-year real estate home warranties, offset, in part, by lower price realization. The increase in non-warranty and other revenue was primarily driven by growth in our HVAC upgrade program.

Current wording

Revenue increased 5 percent for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase in renewal revenue reflects improved price realization resulting from our prior pricing actions. The decrease in direct-to-consumer revenue reflects lower price realization resulting from our discounting efforts, offset, in part, by an increase in the number of direct-to-consumer home warranties. The increase in real estate revenue reflects an increase in the number of first-year real estate home warranties, offset, in part, by lower price realization. The increase in non-warranty and other revenue was primarily driven by growth in our HVAC upgrade program.

Previous wording

As of March 31, 2025, excluding the 2-10 HBW home warranties acquired on December 19, 2024, the reduction in home warranties was one percent.

Current wording

As of June 30, 2025, excluding the 2-10 HBW home warranties acquired on December 19, 2024, the reduction in home warranties was two percent.

Previous wording

We reported cost of services rendered of $203 million and $191 million for the three months ended March 31, 2026 and 2025, respectively. The following table provides a summary of the changes in cost of services rendered:

Current wording

We reported cost of services rendered of $267 million and $261 million for the three months ended June 30, 2026 and 2025, respectively, and $470 million and $452 million for the six months ended June 30, 2026 and 2025. The following tables provide a summary of the changes in cost of services rendered:

Previous wording

The increase in cost of services rendered is due to the impact of change in revenue, primarily driven by the increase in non-warranty revenue. The increase in contract claims costs primarily reflects inflationary cost pressures and a higher number of service requests per customer, driven by an unfavorable weather impact of $1 million. Additionally, contract claims costs reflects a $6 million favorable adjustment in the first quarter of 2026 related to the development of prior period claims, compared to a $7 million favorable adjustment in the first quarter of 2025.

Current wording

The increase in cost of services rendered is due to the impact of change in revenue, primarily driven by the increase in non-warranty revenue. The increase in contract claims costs primarily reflects inflationary cost pressures, offset, in part, by a lower number of service requests per customer, driven by a favorable weather impact of $5 million. Additionally, contract claims costs reflects a $7 million favorable adjustment in each of the first six months of 2026 and 2025 related to the development of prior period claims.

Previous wording

We reported selling and administrative expenses of $162 million and $151 million for the three months ended March 31, 2026 and 2025, respectively. The following table provides a summary of the components of selling and administrative expenses:

Current wording

We reported selling and administrative expenses of $176 million and $172 million for the three months ended June 30, 2026 and 2025, respectively, and $338 million and $323 million for the six months ended June 30, 2026 and 2025, respectively. The following table provides a summary of the components of selling and administrative expenses:

Previous wording

The following table provides a summary of the changes in selling and administrative expenses:

Current wording

The following tables provide a summary of the changes in selling and administrative expenses:

Previous wording

Sales and marketing costs increased due to due to our investment in marketing associated with our direct-to-consumer channel. Customer service costs increased primarily due to personnel costs.

Current wording

Sales and marketing costs increased due to our investment in marketing associated with our direct-to-consumer channel. Customer service costs increased primarily due to personnel costs. Other general and administrative costs decreased due to lower professional fees, offset, in part, by increased personnel costs.

Previous wording

Interest expense was $19 million for the three months ended March 31, 2026 and 2025.

Current wording

Interest expense was $19 million and $20 million for the three months ended June 30, 2026 and 2025, respectively, and $38 million and $39 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Depreciation expense was $8 million and $10 million for the three months ended March 31, 2026 and 2025, respectively. Amortization expense was $12 million and $13 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Interest and net investment income was $5 million and $4 million for the three months ended June 30, 2026 and 2025, respectively, and $11 million and $10 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

The effective tax rate on income before income taxes was 19.3 percent and 22.3 percent for the three months ended March 31, 2026 and 2025, respectively. The decrease in the effective tax rate for the three months ended March 31, 2026 was primarily due to share-based compensation, offset in part by state income taxes.

Current wording

The effective tax rate on income before income taxes was 24.7 percent and 24.3 percent for the three months ended June 30, 2026 and 2025, respectively, and 23.5 percent and 23.8 percent for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Cash and cash equivalents totaled $603 million and $566 million as of March 31, 2026 and December 31, 2025, respectively. Our cash and cash equivalents include balances associated with regulatory requirements in our business. As of March 31, 2026 and December 31, 2025, the total assets subject to these third-party restrictions were $156 million and $151 million, respectively. As of March 31, 2026, the available borrowing capacity under the Revolving Credit Facility was $250 million. We currently believe that cash generated from operations, our cash on hand and available borrowing capacity under the Revolving Credit Facility as of March 31, 2026 will provide us with sufficient liquidity to meet our obligations in the short- and long-term.

Current wording

Cash and cash equivalents totaled $627 million and $566 million as of June 30, 2026 and December 31, 2025, respectively. Our cash and cash equivalents include balances associated with regulatory requirements in our business. As of June 30, 2026 and December 31, 2025, the total assets subject to these third-party restrictions were $157 million and $151 million, respectively. As of June 30, 2026, the available borrowing capacity under the Revolving Credit Facility was $250 million. We currently believe that cash generated from operations, our cash on hand and available borrowing capacity under the Revolving Credit Facility as of June 30, 2026 will provide us with sufficient liquidity to meet our obligations in the short- and long-term.

Previous wording

On July 26, 2024, our Board of Directors approved a new share repurchase authorization of up to $650 million of our common stock over the three-year period from September 4, 2024 through September 4, 2027. Purchases under this repurchase program may be made from time to time by the company in the open market at prevailing market prices (including through Rule 10b5-1 Plans), in privately negotiated transactions, or through any combination of these methods, through September 4, 2027. The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of the company’s stock, general market and economic conditions, the company’s liquidity requirements, applicable legal requirements and other business considerations. The repurchase program does not obligate us to acquire any number of shares in any specific period or at all and may be suspended or discontinued at any time at our discretion. We repurchased a total of 7,070,122 outstanding shares for the three months ended March 31, 2026 at an aggregate cost of $381 million under this program, which is included in treasury stock on the condensed consolidated statements of financial position included in Part I, Item 1 of this Quarterly Report on Form 10-Q. As of March 31, 2026, we had $269 million remaining available for future repurchases under this program. We expect to fund future share repurchases from net cash provided from operating activities.

Current wording

On July 26, 2024, our Board of Directors approved a new share repurchase authorization of up to $650 million of our common stock over the three-year period from September 4, 2024 through September 4, 2027. Purchases under this repurchase program may be made from time to time by the company in the open market at prevailing market prices (including through Rule 10b5-1 Plans), in privately negotiated transactions, or through any combination of these methods, through September 4, 2027. The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of the company’s stock, general market and economic conditions, the company’s liquidity requirements, applicable legal requirements and other business considerations. The repurchase program does not obligate us to acquire any number of shares in any specific period or at all and may be suspended or discontinued at any time at our discretion. As of June 30, 2026 we repurchased a total of 8,481,501 outstanding shares at an aggregate cost of $472 million under this program, which is included in treasury stock on the condensed consolidated statements of financial position included in Part I, Item 1 of this Quarterly Report on Form 10-Q. As of June 30, 2026, we had $178 million remaining available for future repurchases under this program. We expect to fund future share repurchases from net cash provided from operating activities.

Previous wording

Net cash provided from operating activities for the three months ended March 31, 2025 comprised $67 million in earnings adjusted for non-cash charges and $57 million in cash provided from working capital. Cash provided from working capital was primarily driven by seasonality, offset, in part, by payments of accrued bonuses.

Current wording

Net cash provided from operating activities for the six months ended June 30, 2026 comprised $223 million in earnings adjusted for non-cash charges, and $22 million in cash provided from working capital. Cash provided from working capital was primarily driven by seasonality, offset, in part, by payments of accrued bonuses.

Previous wording

Net cash provided from operating activities for the three months ended March 31, 2026 comprised $69 million in earnings adjusted for non-cash charges, offset, in part, by $50 million in cash used primarily for working capital. Cash provided from working capital was primarily driven by seasonality, offset, in part, by payments of accrued bonuses.

Current wording

Net cash provided from operating activities for the six months ended June 30, 2025 comprised $207 million in earnings adjusted for non-cash charges and $44 million in cash provided from working capital and long-term insurance-related accounts. Cash provided from working capital was primarily driven by seasonality, offset, in part, by payments of accrued bonuses and a decline in the number of first-year real estate home warranties, which are typically paid for upfront at the time of closing on the home sale.

Previous wording

Net cash used for investing activities was $7 million for the three months ended March 31, 2026 as compared to net cash provided from investing activities of $47 million for the three months ended March 31, 2025.

Current wording

Net cash used for investing activities was $14 million for the six months ended June 30, 2026 as compared to net cash provided from investing activities of $42 million for the six months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, cash used for purchases of short-term investments was $2 million. Capital expenditures were $6 million for three months ended March 31, 2026 and included recurring capital needs and technology projects. We have no additional material capital commitments at this time.

Current wording

For the six months ended June 30, 2026, cash used for purchases of short-term investments was $2 million, and capital expenditures were $12 million for six months ended June 30, 2026 and included recurring capital needs and technology projects. We have no additional material capital commitments at this time.

Previous wording

For the three months ended March 31, 2025, cash provided from sales and maturities of available-for-sale securities was $60 million, and purchases of available-for-sale securities was $6 million. Capital expenditures were $7 million for three months ended March 31, 2025, and included recurring capital needs and technology projects.

Current wording

For the six months ended June 30, 2025, cash provided from sales and maturities of available-for-sale securities was $60 million, purchases of available-for-sale securities was $6 million, and there was $3 million in cash provided from the finalization of the 2-10 HBW Acquisition purchase price. Capital expenditures were $14 million for six months ended June 30, 2025 and included recurring capital needs and technology projects.

Previous wording

Net cash used for financing activities was $75 million and $85 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Net cash used for financing activities was $169 million and $153 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

For the three months ended March 31, 2025, we made scheduled principal payments of debt of $7 million and purchased outstanding shares of our common stock at an aggregate cost of $71 million. Repurchases of common stock included associated commissions and taxes of $1 million.

Current wording

For the six months ended June 30, 2026, we made scheduled principal payments of debt of $14 million and purchased outstanding shares of our common stock at an aggregate cost of $152 million. Repurchases of common stock included associated commissions and taxes of $2 million.

Previous wording

For the three months ended March 31, 2026, we made scheduled principal payments of debt of $7 million and purchased outstanding shares of our common stock at an aggregate cost of $61 million. Repurchases of common stock included associated commissions and taxes of $1 million.

Current wording

For the six months ended June 30, 2025, we made scheduled principal payments of debt of $14 million and purchased outstanding shares of our common stock at an aggregate cost of $135 million. Repurchases of common stock included associated commissions and taxes of $1 million.