Frontdoor, Inc. (NASDAQ: FTDR)

Frontdoor, Inc. is a leading provider of home warranties and new home builder warranties in the United States, operating under several well-known brands including American Home Shield, HSA, OneGuard, Landmark, and 2-10 HBW. The company specializes in offering customizable home warranty plans that protect homeowners from costly and unplanned breakdowns of essential home systems and appliances. Frontdoor's services extend beyond traditional warranties, encompassing non-warranty services such as HVAC upgrades, smart water shut-off installations, and home maintenance offerings. The company's business model is built on a nationwide network of approximately 17,000 qualified independent professional contractor firms, which handle around 3.8 million home warranty service requests annually.

Frontdoor generates revenue primarily through the sale of annual home warranty service plans, which cover the repair or replacement of major home systems and appliances due to normal wear and tear. The company's customer base consists mainly of homeowners who subscribe to these plans for financial protection against unplanned and expensive home repairs. Additionally, Frontdoor offers new home builder warranty solutions, which provide value to both builders and homeowners through a suite of builder warranty products and support services. The company's revenue streams are further diversified through non-warranty services, including the New HVAC upgrade program and the Moen smart water shut-off value partnership program.

• Home Warranty Segment: This segment is the core of Frontdoor's business, offering customizable home warranty plans under brands like American Home Shield, HSA, OneGuard, and Landmark. These plans cover up to 29 home systems and appliances, including electrical, plumbing, HVAC systems, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as optional coverages for pools, spas, and pumps. The segment caters to homeowners seeking peace of mind and protection from unexpected repair costs.

• New Home Builder Warranty Segment: Acquired through the purchase of 2-10 HBW, this segment provides flexible builder-backed and insurance-backed warranty options covering workmanship, home distribution systems, and structural components. It serves new home builders and homeowners, offering service request management and full claims administration support. This segment caters to the new home construction market, with a significant presence in the U.S.

• Non-Warranty Services Segment: This segment includes the New HVAC upgrade program, installation of Moen smart water shut-off devices, and select home maintenance offerings. These services are marketed to existing warranty customers and potential new customers, providing incremental revenue opportunities beyond traditional warranty coverage.

Frontdoor holds a dominant position in the U.S. home warranty category, with a reputation built on the strength of its brands, customer and contractor value proposition, and service quality. The company's leadership is further enhanced by the acquisition of 2-10 HBW, a leading provider of new home builder warranties. Frontdoor's competitive advantages include a high-value service offering that provides financial protection and convenience, a unique and compelling independent contractor network, and a technology-enabled platform that drives efficiency and quality of service. The company's diverse, recurring, and stable revenue channels, along with its multi-channel sales and marketing approach, support its strong market position.

Frontdoor's customer base is broad and diverse, primarily consisting of homeowners who are owners of single-family residences. As of December 31, 2025, the company had approximately 2.1 million active home warranties and around 19,000 builder customers. The company's services are not reliant on any single customer, and its nationwide presence limits the impact of poor regional economic conditions. Frontdoor's customer acquisition channels include the real estate channel and the direct-to-consumer (DTC) channel, with a significant portion of revenue generated through existing customer renewals. The company's customer retention rate is a testament to the value its services provide, with 76 percent of its 2025 revenue generated through existing customer renewals.