Frontdoor Q3 2026: Heat Wave, Beat, and a New $1B Buyback

Frontdoor posted adjusted earnings per share of $1.81 for the third quarter of 2026, beating the $1.77 consensus estimate by about 2%. Revenue reached $655 million, up roughly 6% year over year and ahead of the $647.83 million analyst estimate. The growth was split evenly between higher realized pricing and increased volume.

CEO Bill Cobb described the period as "the hottest summer on record," and the heat showed up in the numbers both ways. Elevated HVAC service requests added roughly $9 million in unfavorable claims costs, yet the company still cleared expectations on both lines, partially offsetting that pressure through favorable claims development and lower general and administrative expenses.

The fastest-moving piece of the business was the non-warranty and other revenue category, which grew 32% in the quarter, driven primarily by the New HVAC upgrade program. The core renewals channel, which generated $479 million in revenue, grew 4%. Customer retention improved to 79.7% from 79.4% a year earlier, a signal that the member base is holding steady even as the company experiments with promotional pricing in the direct-to-consumer channel.

Management raised full-year 2026 revenue guidance to roughly $2.205 billion to $2.215 billion, representing approximately 6% growth over full-year 2025, and lifted its Adjusted EBITDA outlook to $590 million to $600 million. For Q4 2026, the company guided to revenue of $453 million to $463 million.

Free cash flow of $298 million through the first nine months of 2026 funded aggressive buybacks, and the board approved a fresh $1 billion, three-year repurchase authorization set to begin in November 2026, right as the prior $650 million program finishes nearly a year ahead of schedule. The lower diluted share count, 70.3 million versus 74.4 million a year ago, is already amplifying per-share earnings.