Frontdoor : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
FTDR
Published on 04/30/2026 at 06:40 pm EDT
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, the audited consolidated financial statements and related notes thereto included in our 2025 Form 10-K and with the information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K. The cautionary statements discussed in "Cautionary Statement Concerning Forward-Looking Statements" and elsewhere in this report should be read as applying to all forward-looking statements wherever they appear in this report. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this report, particularly in "Cautionary Statement Concerning Forward-Looking Statements" as well as the risk factors discussed in Part I, Item 1A. "Risk Factors" in our 2025 Form 10-K.
Overview
Frontdoor is the leading provider of home warranties and new home builder warranties in the United States, as measured by revenue, and operates primarily under the American Home Shield, HSA, OneGuard, Landmark and 2-10 HBW brands. Our customizable home warranties help customers protect and maintain their homes, typically their most valuable asset, from costly and unplanned breakdowns of essential home systems and appliances. Our home warranty customers usually subscribe to an annual service plan agreement that covers the repair or replacement for breakdowns that generally occur as a result of normal wear and tear of major components of 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. We also offer non-warranty home services, including our HVAC upgrade program and installation of Moen water shut-off devices, and select home maintenance offerings. Non-warranty services are primarily marketed to our existing warranty customer base, enabling incremental revenue opportunities beyond traditional warranty coverage. As of March 31, 2026, we had approximately 2.1 million active home warranties across all brands in the United States. We also offer new home builder warranty solutions, which deliver value to both builders and homeowners through a suite of builder warranty products and support services. We offer flexible builder-backed and insurance-backed warranty options covering workmanship, home distribution systems, and structural components. Additional add-on programs provide service request management for warranties and claims administration for structural warranties.
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."
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.
Key Factors and Trends Affecting Our Results of Operations
Macroeconomic Conditions
Current macroeconomic conditions, including inflation, high interest rates, the challenging real estate market, high fuel costs and ongoing global geopolitical issues, may affect existing home sales, consumer sentiment and spending, or labor availability. These conditions may reduce demand for our services, increase our costs or otherwise adversely impact our business. While these macroeconomic conditions generally impact the United States as a whole, we believe our nationwide presence mitigates the impact on us of unfavorable economic conditions in any particular region of the United States.
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:
The ultimate implications of the current macroeconomic conditions on our results of operations and overall financial performance remain uncertain. It remains difficult to predict the overall continuing impact these conditions will have on our business as they may reduce demand for our services, increase our costs or otherwise adversely impact our business.
Seasonality
Our business is subject to seasonal fluctuations, which drive variations in our revenue, net income and Adjusted EBITDA for interim periods. Seasonal fluctuations are primarily driven by a higher number of HVAC work orders with respect to our home warranty business in the summer months. In 2025, approximately 20 percent, 29 percent, 30 percent and 21 percent of our revenue, approximately 14 percent, 44 percent, 41 percent and one percent of our net income, and approximately 18 percent, 36 percent, 35 percent and 11 percent of our Adjusted EBITDA was recognized in the first, second, third and fourth quarters, respectively.
Effect of Weather Conditions
The demand for our services, particularly in our home warranty business, and our results of operations, are affected by weather conditions. Extreme temperatures, typically in the winter and summer months, can lead to an increase in home warranty service requests related to home systems, particularly HVAC systems, resulting in higher costs and lower profitability, while mild temperatures in the winter or summer months can lead to lower home systems claim frequency, resulting in lower costs and higher profitability. For example, favorable weather trends in 2025 as compared to 2024 resulted in a lower number of home warranty service requests per customer in the HVAC trade, which favorably impacted contract claims costs.
While weather variations as described above may affect our business, major weather events and other similar Acts of God, or natural disasters such as hurricanes, tornadoes, typhoons, wildfires or earthquakes, typically do not increase our obligations to provide service. Generally, repairs or replacements of major systems and appliances associated with such isolated events are addressed by homeowners' and other forms of insurance, as opposed to the home warranties that we offer.
Tariff and Import/Export Regulations
Changes in U.S. tariff and import/export regulations have impacted and may continue to impact the costs of parts, appliances and home systems. Import duties or restrictions on components and raw materials that are imposed, or the perception that they could occur, may materially and adversely affect our business by increasing our costs. For example, rising costs due to blanket tariffs on imported steel and aluminum, or blanket tariffs on goods from countries that are key suppliers of replacement parts for appliances and home systems, have increased and may continue to increase the costs of our parts, appliances and home systems. Recently, the United States has proposed, and in some cases has imposed, significant increases to tariffs on goods imported into the U.S., including from countries where we have sourced replacement parts for appliances and home systems covered by our home warranties. We cannot predict how or what tariffs will be imposed or what retaliatory measures other countries may take in response to tariffs proposed or imposed by the U.S. There is uncertainty as to further actions that may be taken by the U.S. with respect to U.S. trade policy, including with respect to the proposed tariffs. Further tariffs or countermeasures may increase our costs, decrease our margins or reduce the competitiveness of our products and services.
Competition
We compete in the U.S. home warranty category and the broader U.S. home services industry. The home warranty category is highly competitive. While we have a broad range of competitors in each locality and region, we are one of the few companies that provide home warranties nationwide. The broader U.S. home services industry is also highly competitive. We compete against businesses providing non-warranty home services directly and those offering leads to contractors seeking to provide non-warranty home services. The principal methods of competition, and by which we differentiate ourselves from our competitors, are quality and speed of service, contract offerings, brand awareness and reputation, customer satisfaction, pricing and promotions, contractor network and referrals. We believe our nationwide network of qualified professional contractor firms, in combination with our large base of contracted customers, differentiate us from other platforms in the home services industry.
Our new home builder warranty business similarly faces competition from other providers of new home builder warranties and builders that self-insure.
Acquisition Activity
We anticipate that the highly fragmented nature of the home services industry will continue to create strategic opportunities for acquisitions. Historically, we have used acquisitions to grow our customer base in high-growth geographies, and we intend to continue to do so. Most recently, we acquired 2-10 HBW, which provides us opportunities for a new sales channel and a more diversified business portfolio as well as more home warranty customers and increased revenue. We have also used acquisitions to enhance our technological capabilities and geographic presence. We may also explore opportunities to make strategic acquisitions that will expand our service offering in the broader home services industry, such as new home builder warranties acquired as part of 2-10 HBW.
Non-GAAP Financial Measures
To supplement our results presented in accordance with U.S. GAAP, we have disclosed non-GAAP financial measures that exclude or adjust certain items. We present within this "Management's Discussion and Analysis of Financial Condition and Results of Operations" section the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow. See "Results of Operations - Adjusted EBITDA" for a reconciliation of net income to Adjusted EBITDA and "Liquidity and Capital Resources - Free Cash Flow" for a reconciliation of net cash provided from operating activities to Free Cash Flow, as well as "Key Business Metrics" for further discussion of Adjusted EBITDA and Free Cash Flow. Management uses Adjusted EBITDA and Adjusted EBITDA margin to facilitate operating performance comparisons from period to period, and Adjusted EBITDA is also a component of our incentive compensation program. We believe these non-GAAP financial measures provide investors, analysts and other interested parties useful information to evaluate our business performance as they facilitate company-to-company operating performance comparisons. Management believes 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. While we believe these non-GAAP financial measures are useful in evaluating our business, they should be considered as supplemental in nature and are 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, limiting their usefulness as comparative measures.
Key Business Metrics
We focus on a variety of indicators and key operating and financial metrics to monitor the financial condition and performance of the continuing operations of our business. These metrics include:
Revenue. The majority of our revenue is generated from home warranty contracts entered into with our customers. Home warranty contracts are typically one year in duration. We recognize revenue at the agreed upon contractual amount over time using the input method in proportion to the costs expected to be incurred in performing services under the contracts. Our revenue is primarily a function of the volume and pricing of the services provided to our customers, as well as the mix of services provided. Our revenue volume is impacted by home warranty sales and customer retention. We also generate revenue through our non-warranty and other revenue channel, which primarily includes revenue from non-warranty home services, including the HVAC upgrade and Moen programs, home maintenance services and new home builder warranties. We derive substantially all of our revenue from customers in the United States.
Operating Expenses. In addition to changes in our revenue, our operating results are affected by, among other things, the level of our operating expenses. Our operating expenses primarily include contract claims costs and expenses associated with sales and marketing, customer service and general corporate overhead. A number of our operating expenses are subject to inflationary pressures, such as: salaries and wages, employee benefits and healthcare; contractor costs; parts, appliances and home systems costs; tariffs; insurance premiums; and various regulatory compliance costs.
Gross Profit and Gross Profit Margin. The presentation of gross profit and gross profit margin provides measures of performance which are primarily a function of the revenue drivers discussed above and contract claims costs drivers, primarily contractor costs and parts, appliances and home systems costs. Gross profit is computed by deducting cost of services rendered from revenue. Gross profit margin is computed as gross profit as a percentage of revenue.
Net Income and Earnings Per Share. Net income represents earnings after giving effect to all expenses, other income and expense items, and income taxes. Earnings per share represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period and is used to measure profitability on a per-share basis. The dilutive effect, if any, of non-qualified stock options, performance options, RSUs, performance shares and deferred shared equivalents are reflected in diluted earnings per share by applying the treasury stock method.
Adjusted EBITDA and Adjusted EBITDA Margin. We evaluate our operating and financial performance primarily based on Adjusted EBITDA, which is a financial measure not calculated in accordance with U.S. GAAP. We define Adjusted EBITDA as net income before: depreciation and amortization expense; goodwill and intangibles impairment; restructuring charges; acquisition and integration costs; provision for income taxes; non-cash stock-based compensation expense; interest expense; loss on extinguishment of debt; and other non-operating expenses. We define "Adjusted EBITDA margin" as Adjusted EBITDA divided by revenue. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful for investors, analysts and other interested parties as they facilitate 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 and acquisition initiatives and equity-based, long-term incentive plans.
Net Cash Provided from Operating Activities and Free Cash Flow. We focus on measures designed to monitor cash flow, including net cash provided from operating activities and Free Cash Flow. Free Cash Flow is a financial measure that is not calculated in accordance with U.S. GAAP and represents net cash provided from operating activities less property additions.
Number of Home Warranties and Customer Retention Rate. We report on our number of home warranties and customer retention rate as measurements of our operating performance. Customer retention rate is presented on a rolling 12-month basis in order to avoid seasonal anomalies. The number of home warranties is representative of our recurring home warranty customer base and is measured as the number of customers with active contracts as of the respective period-end date. Our customer retention rate is calculated as the ratio of the number of home warranties to the sum of the number of beginning home warranties and the number of new home warranties and acquired accounts during the respective period.
Critical Accounting Policies and Estimates
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.
Results of Operations
% of Revenue
Three Months Ended
Increase
Three Months Ended
March 31,
(Decrease)
March 31,
(In millions)
2026
2025
%
2026
2025
Revenue
$
451
$
426
6
%
100
%
100
%
Cost of services rendered
203
191
7
45
45
Gross Profit
248
235
5
55
55
Selling and administrative expenses
162
151
7
36
35
Depreciation and amortization expense
20
23
(11
)
5
5
Restructuring charges
1
1
(8
)
-
-
Interest expense
19
19
(3
)
4
5
Interest and net investment income
(5
)
(6
)
(17
)
(1
)
(1
)
Income before Income Taxes
51
48
7
11
11
Provision for income taxes
10
11
(7
)
2
2
Net Income
$
41
$
37
11
%
9
%
9
%
Revenue
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:
Three Months Ended
March 31,
Increase (Decrease)
(In millions)
2026
2025
$
%
Renewals
$
352
$
333
$
18
6
%
Real estate(1)
28
27
1
3
Direct-to-consumer(1)
31
32
(2
)
(5
)
Non-warranty and other
41
33
8
23
Total
$
451
$
426
$
25
6
%
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.
The following table provides a summary of the number of home warranties, growth in number of home warranties and customer retention rate:
As of
March 31,
(In millions)
2026
2025
Number of home warranties
2.10
2.10
Growth in number of home warranties(1)
-
%
7
%
Customer retention rate
79.3
%
79.9
%
Cost of Services Rendered
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:
(In millions)
Three Months Ended March 31, 2025
$
191
Impact of change in revenue
7
Contract claims costs
6
Three Months Ended March 31, 2026
$
203
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.
Selling and Administrative Expenses
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:
Three Months Ended
March 31,
(In millions)
2026
2025
Sales and marketing costs
$
71
$
65
Customer service costs
30
28
General and administrative costs
61
58
Total
$
162
$
151
The following table provides a summary of the changes in selling and administrative expenses:
(In millions)
Three Months Ended March 31, 2025
$
151
Sales and marketing costs
6
Customer service costs
2
Stock-based compensation expense
3
Other general and administrative costs
1
Three Months Ended March 31, 2026
$
162
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.
Depreciation and Amortization Expense
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.
Interest Expense
Interest expense was $19 million for the three months ended March 31, 2026 and 2025.
Interest and Net Investment Income
Interest and net investment income was $5 million and $6 million for the three months ended March 31, 2026 and 2025, respectively.
Provision for Income Taxes
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.
Net Income
Net income was $41 million and $37 million for the three months ended March 31, 2026 and 2025, respectively.
Adjusted EBITDA
Adjusted EBITDA was $104 million and $100 million for the three months ended March 31, 2026 and 2025.
Summary of Changes in Net Income and Adjusted EBITDA
The following table provides a summary of the changes in net income and Adjusted EBITDA:
(In millions)
Net Income
Adjusted EBITDA
Three Months Ended March 31, 2025
$
37
$
100
Impact of change in revenue
19
19
Contract claims costs
(6
)
(6
)
Sales and marketing costs
(6
)
(6
)
Customer service costs
(2
)
(2
)
Stock-based compensation expense
(3
)
-
Other general and administrative costs
(1
)
(1
)
Depreciation and amortization expense
2
-
Interest expense
1
-
Interest and net investment income
(1
)
(1
)
Provision for income taxes
1
-
Three Months Ended March 31, 2026
$
41
$
104
For more information on changes in net income or Adjusted EBITDA, see discussion of individual line items above.
Reconciliation of Net Income to Adjusted EBITDA
A reconciliation of Net Income to Adjusted EBITDA is as follows:
Three Months Ended
March 31,
(In millions)
2026
2025
Net Income
$
41
$
37
Depreciation and amortization expense
20
23
Restructuring charges(1)
1
1
Acquisition and integration costs(1)
2
2
Provision for income taxes
10
11
Non-cash stock-based compensation expense(2)
10
8
Interest expense
19
19
Adjusted EBITDA
$
104
$
100
Liquidity and Capital Resources
Liquidity
Frontdoor is a holding company that derives its operating cash flow from its operating subsidiaries. Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries and borrowing availability under our Revolving Credit Facility. We have accessed the debt capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities. We believe we have ample liquidity under the Revolving Credit Facility and are generating substantial Free Cash Flow, which together support both organic operations and other capital allocation priorities as they arise. We believe that our liquidity sources are sufficient to satisfy our anticipated operating and debt service requirements over the next twelve months and thereafter for the foreseeable future.
A substantial portion of our liquidity needs are due to debt service requirements on our indebtedness. The Credit Agreement contains covenants that limit or restrict our ability, including the ability of certain of our subsidiaries, to incur additional indebtedness, repurchase debt, incur liens, sell assets, make certain payments (including dividends) and enter into transactions with affiliates. As of March 31, 2026, we were in compliance with the covenants under the Credit Agreement. We do not believe current macroeconomic conditions will affect our ongoing ability to meet our debt covenants.
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.
We closely monitor the performance of our investment portfolio, primarily consisting of cash deposits. We regularly review applicable statutory reserve requirements to which our regulated entities may be subject and any changes to such requirements. These reviews may result in identifying current reserve levels above or below minimum statutory reserve requirements, in which case we may adjust our reserves. The reviews may also identify opportunities to satisfy certain regulatory reserve requirements through alternate financial vehicles.
We have a diversified investment strategy for our cash investments and give priority to the major financial institutions that serve as lenders under the Credit Agreement. Generally, our cash deposits may be redeemed on demand and are maintained with major financial institutions with solid credit ratings, although our holdings exceed insured limits in substantially all of our accounts.
We may, from time to time, issue new debt, repurchase or otherwise retire or extend our debt and/or take other steps to reduce our debt or otherwise improve our financial position, gross and net leverage, results of operations or cash flows. These actions may include new debt issuance, open market debt repurchases, negotiated repurchases, other retirements of outstanding debt and/or opportunistic refinancing of debt. The amount of debt that may be issued, repurchased or otherwise retired or refinanced, if any, and the price of such issuances, repurchases, retirements or refinancings will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants and other considerations.
Share Repurchase Program
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.
Limitations on Distributions and Dividends by Subsidiaries
We depend on our subsidiaries to distribute funds to us so that we may pay obligations and expenses, including satisfying obligations with respect to indebtedness. The ability of our subsidiaries to make distributions and dividends to us depends on their operating results, cash requirements, financial condition and general business conditions, as well as restrictions under the laws of our subsidiaries' jurisdictions.
Our subsidiaries are permitted under the terms of the Credit Agreement and other indebtedness to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to us.
Furthermore, there are regulatory restrictions on certain of our subsidiaries to transfer funds to us. The payments of ordinary and extraordinary dividends by certain of our subsidiaries (through which we conduct our business) are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain subsidiaries to maintain funded reserves, minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can pay to us. None of our subsidiaries are obligated to make funds available to us through the payment of dividends.
Cash Flows
Cash flows from operating, investing and financing activities, as reflected in the condensed consolidated statements of cash flows included in Part I, Item 1 of this Quarterly Report on Form 10-Q are summarized in the following table:
Three Months Ended
March 31,
(In millions)
2026
2025
Net cash provided from (used for):
Operating activities
$
119
$
124
Investing activities
(7
)
47
Financing activities
(75
)
(85
)
Cash increase during the period
$
37
$
85
Operating Activities
Net cash provided from operating activities was $119 million and $124 million for the three months ended March 31, 2026 and 2025, respectively.
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.
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.
Investing Activities
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.
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.
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.
Financing Activities
Net cash used for financing activities was $75 million and $85 million for the three months ended March 31, 2026 and 2025, respectively.
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.
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.
Free Cash Flow
The following table reconciles net cash provided from operating activities, which we consider to be the most directly comparable U.S. GAAP measure, to Free Cash Flow using data derived from the condensed consolidated statements of cash flows in Part 1, Item 1 of this Quarterly Report on Form 10-Q:
Three Months Ended
March 31,
(In millions)
2026
2025
Net cash provided from operating activities
$
119
$
124
Property additions
(6
)
(7
)
Free Cash Flow
$
114
$
117
Contractual Obligations
Our 2025 Form 10-K includes disclosures of our contractual obligations and commitments as of December 31, 2025. We continue to make the contractually required payments associated with these commitments. There are no significant additions to our obligations and commitments since those reported in the 2025 Form 10-K.
Disclaimer
Frontdoor Inc. published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2026 at 22:31 UTC.