Home warranty company Frontdoor (NASDAQ: FTDR) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 13.1% year on year to $433 million. On the other hand, next quarter’s revenue guidance of $442.5 million was less impressive, coming in 2% below analysts’ estimates. Its non-GAAP profit of $0.23 per share was 74.1% above analysts’ consensus estimates.

Is now the time to buy Frontdoor? Find out by accessing our full research report, it’s free.

Company Overview

Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ: FTDR) is a provider of home warranty and service plans.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Frontdoor’s 7.3% annualized revenue growth over the last five years was weak. This fell short of our benchmark for the consumer discretionary sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Frontdoor’s annualized revenue growth of 8.5% over the last two years is above its five-year trend, which is encouraging.

This quarter, Frontdoor reported year-on-year revenue growth of 13.1%, and its $433 million of revenue exceeded Wall Street’s estimates by 2.7%. Company management is currently guiding for a 3.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 5.3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report.

Operating Margin

Frontdoor’s operating margin has risen over the last 12 months and averaged 18.8% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business.

This quarter, Frontdoor generated an operating margin profit margin of 6.2%, up 2.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Frontdoor’s EPS grew at a weak 21.5% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 7.3% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

In Q4, Frontdoor reported adjusted EPS of $0.23, in line with the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Frontdoor’s full-year EPS of $4.08 to grow 10.2%.

Key Takeaways from Frontdoor’s Q4 Results

It was good to see Frontdoor beat analysts’ EPS expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance slightly missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this print was mixed. The stock remained flat at $56.30 immediately following the results.

So should you invest in Frontdoor right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).