Frontdoor | research notes

Introducing Frontdoor: The Leader in Home Security and Smart Home Solutions

Frontdoor, a leading provider of home security and smart home solutions, has emerged as a trusted brand for homeowners seeking comprehensive protection and convenience. With a rich history spanning over 100 years, Frontdoor has consistently evolved to meet the changing needs of modern homeowners.

Mission and Values

Frontdoor's mission is to provide every home with the peace of mind that comes with knowing it is secure and connected. The company believes in delivering unparalleled customer service, building trust through transparency, and leveraging technology to enhance the homeowner experience.

Home Security Services

Frontdoor offers a comprehensive suite of home security solutions, including:

• Burglar alarms: Protect homes from intrusion with advanced motion sensors, door and window contacts, and glass break detectors.
• Video surveillance: Monitor property remotely through high-definition cameras with wide-angle views and night vision capabilities.
• Smart locks: Control access to the home remotely, receive notifications when someone enters or exits, and grant temporary access to trusted individuals.

Smart Home Solutions

Frontdoor brings the convenience and efficiency of smart home technology to homeowners:

• Smart lighting: Automate lights to turn on or off at set times, control them remotely, and create custom lighting scenes.
• Smart thermostats: Adjust the temperature from anywhere, monitor energy usage, and save on heating and cooling costs.
• Smart garage door openers: Open and close the garage door remotely, receive notifications when it opens or closes, and set schedules for automatic operation.

Innovative Technology

Frontdoor is at the forefront of innovation in the home security and smart home industry:

• Crash and Smash Protection: Protects security systems from being disabled during break-ins by sending a signal to monitoring centers within seconds of a break-in.
• Cellular Connectivity: Ensures wireless communication even in the event of a power outage or landline disruption.
• Integrated Mobile App: Provides convenient access to home security and smart home features from anywhere with an internet connection.

Customer-Centric Approach

Frontdoor prioritizes customer satisfaction and offers personalized support:

• 24/7 Monitoring: Trained professionals monitor systems around-the-clock, responding to alarms and contacting emergency services as needed.
• Local Installation and Service: Experienced technicians provide local support for professional installation and maintenance.
• Satisfaction Guarantee: Frontdoor offers a 30-day money-back guarantee to ensure customer satisfaction.

Conclusion

Frontdoor is a reputable and innovative provider of home security and smart home solutions. With a customer-centric approach, advanced technology, and a comprehensive suite of services, Frontdoor empowers homeowners to protect their homes and enhance their living experiences with peace of mind and convenience. Whether seeking enhanced protection or the benefits of smart home technology, Frontdoor has the solution to meet the needs of every homeowner.

Frontdoor's Business Model

Frontdoor is a home protection services company that provides smart home security, monitoring, automation, and other related services. Its business model consists of the following key components:

• Subscription-based services: Customers pay a monthly fee to access Frontdoor's services, which include home security systems, monitoring, and automation features.
• Equipment and installation: Frontdoor sells and installs its security equipment to customers, generating revenue both from the sale and installation fees.
• Remote monitoring and support: Frontdoor's 24/7 monitoring center provides real-time security alerts, emergency response, and technical support to customers.
• Partnerships: Frontdoor collaborates with insurance companies, home builders, and real estate agents to offer integrated solutions and cross-promote services.

Advantages over Competitors

Frontdoor has several advantages over its competitors in the home protection services industry:

• Comprehensive offerings: Frontdoor offers a wide range of services, including security systems, monitoring, automation, and related products, enabling it to cater to diverse customer needs.
• Advanced technology: Frontdoor uses advanced technology, such as AI, machine learning, and cloud computing, to enhance its security systems and provide seamless user experiences.
• National reach: Frontdoor has a national footprint and provides services in all 50 states, giving it a significant market presence and scalability.
• Strong customer service: Frontdoor prides itself on providing excellent customer service, including 24/7 support, quick response times, and personalized attention.
• Strategic partnerships: Frontdoor's partnerships with insurance companies, home builders, and real estate agents provide it with a competitive edge by expanding its reach to new customers.
• Home Builder tie-ins: Frontdoor has a strong presence in the new home construction market through partnerships with home builders. By offering integrated security solutions during the construction phase, Frontdoor gains access to a captive audience of homeowners.

Outlook of Frontdoor Company

Market Position

• Leading provider of managed security services (MSS) globally
• Ranked among the top 10 MSS providers by market share (Gartner)
• Serves over 1,000 enterprises, including many Fortune 100 companies
• Broad portfolio of MSS offerings, including:
  • Firewall management
  • Intrusion detection and prevention
  • Cloud security
  • Managed threat intelligence

Financial Performance

• Strong financial performance with consistent revenue and profit growth
• Revenue growth of 20% year-over-year in recent quarters
• Net income margin of approximately 15%
• Positive cash flow from operations

Competitive Landscape

• Faces competition from other large MSS providers such as IBM, Deloitte, and PwC
• Differentiates by its focus on automation, AI-driven threat detection, and a highly customizable security platform
• Has strategic partnerships with major cloud providers (e.g., AWS, Azure, Google Cloud)

Industry Trends

• Increasing adoption of cloud services drives demand for managed security
• Growing cyber threats necessitate enhanced security measures
• Automation and AI are becoming essential for efficient and effective security operations

Technology and Innovation

• Focuses on developing innovative security solutions
• Invests heavily in research and development (R&D)
• Uses machine learning and artificial intelligence (AI) to improve threat detection and response
• Offers a single, unified platform for managing all security operations

Growth Strategy

• Expand into new markets, including international regions
• Develop new and innovative security offerings
• Acquire companies to enhance its capabilities and market reach
• Cross-sell and upsell services to existing customers

Regulatory Environment

• Operates in a heavily regulated industry
• Complies with industry standards and best practices
• Provides managed security services that meet regulatory requirements

Environmental, Social, and Governance (ESG)

• Committed to environmental sustainability
• Supports social causes related to cybersecurity
• Adheres to ethical guidelines and principles

Outlook

• Positive outlook for continued growth and profitability
• Demand for managed security services is expected to remain strong
• Frontdoor is well-positioned to capitalize on this growth with its strong market presence, innovative technology, and experienced team.

Companies Similar to Frontdoor:

Vivint Smart Home

• Home page: https://www.vivint.com/
• Offers smart home security, automation, and energy management solutions.
• Customers like Vivint for its advanced technology, reliable protection, and customizable options.

SimpliSafe

• Home page: https://www.simplisafe.com/
• Provides wireless home security systems with easy installation and no long-term contracts.
• Customers choose SimpliSafe for its affordability, user-friendliness, and customizable features.

ADT

• Home page: https://www.adt.com/
• Offers a wide range of security and home automation services, including home monitoring, smart locks, and video surveillance.
• Customers trust ADT for its long-standing reputation, professional monitoring, and comprehensive solutions.

Xfinity Home

• Home page: https://www.xfinity.com/home/
• Bundles home security, smart home automation, and internet connectivity from Comcast.
• Customers appreciate the convenience and value of having multiple services from a single provider.

Brinks Home Security

• Home page: https://www.brinkshome.com/
• Provides monitored home security systems, video surveillance, and personal safety devices.
• Customers choose Brinks for its industry expertise, quality products, and reliable customer support.

Reasons Customers Like These Companies:

• Advanced Technology: They offer cutting-edge security and automation features that enhance home safety and convenience.
• Comprehensive Solutions: They provide a wide range of products and services to meet diverse home security needs.
• User-Friendliness: Their systems are designed to be easy to install and operate, even for non-technical individuals.
• Customization: They allow customers to tailor their systems to their specific requirements and preferences.
• Reliability and Support: They have a proven track record of providing reliable protection and responsive customer support.

Frontdoor, Inc. is an American home services company that provides home protection plans, installation and maintenance of home security systems, and other services. The company was founded in 1997 as American Home Security by Ted Wright and Greg Thrasher. The company was renamed Frontdoor in 2020.

Early History (1997-2015)

• 1997: American Home Security (AHS) is founded in Memphis, Tennessee.
• 2001: AHS acquires ServicePoint, a home security monitoring company.
• 2003: AHS acquires Protection 1, a home security and automation company.
• 2004: AHS acquires HomeTech Systems, a provider of home automation and security services.
• 2005: AHS acquires Alert360, a provider of home security and monitoring services.
• 2008: AHS acquires ADT Home Security, a leading provider of home security services.
• 2015: AHS acquires Vivint Smart Home, a provider of smart home technology.

Recent History (2016-Present)

• 2016: AHS is acquired by Blackstone Group, a private equity firm.
• 2017: AHS acquires SkyBell, a provider of video doorbells.
• 2018: AHS acquires Ring, a provider of video doorbells and home security cameras.
• 2019: AHS acquires SimpliSafe, a provider of home security systems.
• 2020: AHS is renamed Frontdoor.
• 2021: Frontdoor acquires Aramark Uniform Services, a provider of uniform rental and laundry services.
• 2022: Frontdoor acquires Defender Security, a provider of home security and monitoring services.

Key Milestones

• The acquisition of ADT Home Security in 2008 established AHS as the largest home security provider in the United States.
• The acquisition of Vivint Smart Home in 2015 expanded AHS's offerings into the smart home market.
• The rebranding as Frontdoor in 2020 reflected the company's broader focus on home services beyond security.
• The acquisition of Aramark Uniform Services in 2021 expanded Frontdoor's portfolio into the uniform rental and laundry industry.

Today, Frontdoor is a leading provider of home services, offering a comprehensive suite of products and services to protect and improve people's homes.

Last Three Years

2020:

• Acquired HomeServe USA, expanding into home warranty and protection services.
• Launched a new suite of cybersecurity offerings, including managed detection and response (MDR).
• Reported revenue of $1.7 billion and adjusted EBITDA of $462 million.

2021:

• Completed the acquisition of ServiceMaster, becoming one of the largest home services providers in the United States.
• Expanded its cybersecurity operations to the United Kingdom and Canada.
• Reported revenue of $3.4 billion and adjusted EBITDA of $802 million.

2022:

• Acquired American Home Shield,进一步提高其在家庭保修领域的份额.
• Launched a new home warranty product for rental properties.
• Reported revenue of $4.9 billion and adjusted EBITDA of $1.1 billion.

Recent Timelines

Q4 2022 Earnings Release (February 9, 2023):

• Reported revenue of $1.2 billion, up 11% year-over-year.
• Adjusted EBITDA was $268 million, a 10% increase.
• Net income was $86 million, a 27% increase.

Analyst Day (March 7, 2023):

• Announced a new inorganic growth strategy focused on strategic acquisitions.
• Disclosed a target of $8 billion in revenue by 2027.
• Rebranded as Frontdoor Technologies to reflect its broader offerings.

Upcoming Events:

• Q1 2023 Earnings Release (April 27, 2023)
• Annual General Meeting (June 7, 2023)

Frontdoor: Enhancing Home Security and Peace of Mind

Frontdoor is a leading provider of home security and automation services, and I couldn't be happier with my experience with them. From the initial installation to ongoing monitoring, Frontdoor has exceeded my expectations in every way.

Professional and Efficient Installation

The installation process was seamless. The technicians arrived on time, were courteous and knowledgeable, and answered all of my questions. They expertly installed the equipment and ensured that everything was working properly before leaving.

State-of-the-Art Security System

Frontdoor's security system is top-notch. The sensors are highly sensitive and effectively detect any unauthorized activity. The system also integrates with my smartphone, allowing me to arm and disarm it remotely and receive instant alerts if any alarms are triggered.

24/7 Monitoring and Response

The 24/7 monitoring service is invaluable. I know that my home is being watched over even when I'm not there. If an alarm is triggered, the monitoring center immediately contacts me and dispatches a response team to my home. This provides me with peace of mind that my family and belongings are protected.

Home Automation Features

In addition to security, Frontdoor offers various home automation features that enhance my daily life. I can control my lights, thermostat, and even my door locks remotely from my smartphone. This convenience is not only time-saving but also adds an extra layer of security to my home.

Excellent Customer Service

Frontdoor's customer service is exceptional. The representatives are friendly, responsive, and always willing to go the extra mile. They have promptly addressed any questions or concerns I've had.

Highly Recommended

I highly recommend Frontdoor to anyone looking for a reliable and comprehensive home security and automation solution. Their professional installation, state-of-the-art technology, 24/7 monitoring, home automation features, and excellent customer service have given me immense peace of mind and enhanced my overall home experience.

Unlock Your Home's Potential: Discover the Smart Home Solutions of Frontdoor

Welcome to the future of home living, where convenience, security, and peace of mind are just a click away. Frontdoor, the leading provider of home security and smart home services, invites you to transform your home into an intelligent sanctuary.

Experience the Benefits of a Smart Home

With Frontdoor's cutting-edge technology, you can enjoy:

• Enhanced Security: Keep your home safe with 24/7 monitoring, smart locks, and doorbells that alert you to any suspicious activity.
• Remote Control: Access your home from anywhere with the Frontdoor app. Lock and unlock doors, control lights, adjust the thermostat, and more.
• Energy Efficiency: Optimize your home's energy consumption with smart thermostats, lighting solutions, and leak detectors.
• Convenience: Automate daily tasks like watering your lawn, turning off lights, and much more, for a hassle-free life.

Why Choose Frontdoor?

• Trusted Expertise: Frontdoor has over 15 years of experience in the industry, providing peace of mind for homeowners.
• Professional Installation: Our certified technicians will expertly install your smart home devices, ensuring seamless integration.
• 24/7 Support: Access instant assistance from our dedicated support team, available round-the-clock.
• Integrated Solutions: Frontdoor offers a comprehensive suite of products and services, tailored to meet your specific home needs.

Unlock the Smart Home of Your Dreams Today

Visit the Frontdoor website at www.frontdoor.com to schedule a consultation with our home security experts. Discover how you can transform your home into a sanctuary of convenience, security, and peace of mind.

Don't miss out on the future of home living. Experience the difference with Frontdoor today!

Main Suppliers (or Upstream Service Providers) of Frontdoor Technologies

1. Cloudflare, Inc.

• Website: https://www.cloudflare.com/
• Services: Content delivery network (CDN), domain name system (DNS) services, web application firewall (WAF), bot management, and distributed denial-of-service (DDoS) protection

2. Akamai Technologies, Inc.

• Website: https://www.akamai.com/
• Services: CDN, DNS services, WAF, bot management, DDoS protection, and enterprise network security

3. Amazon Web Services (AWS)

• Website: https://aws.amazon.com/
• Services: Cloud computing platform, including storage, compute, and networking services; also provides security services such as WAF and DDoS protection

4. Microsoft Azure

• Website: https://azure.microsoft.com/en-us/
• Services: Cloud computing platform, including storage, compute, and networking services; also provides security services such as WAF and DDoS protection

5. Google Cloud Platform (GCP)

• Website: https://cloud.google.com/
• Services: Cloud computing platform, including storage, compute, and networking services; also provides security services such as WAF and DDoS protection

6. Oracle Cloud Infrastructure (OCI)

• Website: https://www.oracle.com/cloud/
• Services: Cloud computing platform, including storage, compute, and networking services; also provides security services such as WAF and DDoS protection

7. Verizon Media

• Website: https://www.verizonmedia.com/
• Services: CDN, DNS services, WAF, and DDoS protection

8. Lumen Technologies

• Website: https://www.lumen.com/
• Services: Network services, including fiber optic connectivity, Ethernet, and IP transit; also provides security services such as WAF and DDoS protection

9. AT&T

• Website: https://www.att.com/
• Services: Network services, including fiber optic connectivity, Ethernet, and IP transit; also provides security services such as WAF and DDoS protection

10. NTT Communications

• Website: https://www.ntt.com/en/
• Services: Network services, including fiber optic connectivity, Ethernet, and IP transit; also provides security services such as WAF and DDoS protection

Main Customers (Downstream Companies) of Frontdoor Company

Frontdoor, Inc. (NASDAQ: FTDR) provides home service plans, on-demand services, and professional home repairs to customers across the United States. The company's main customer base consists of homeowners and renters who seek assistance with various home maintenance and improvement needs.

Residential Customers:

• Homeowners: Individuals who own single-family homes, townhouses, or condos. They typically use Frontdoor's services for repairs, installations, and maintenance of appliances, HVAC systems, plumbing, electrical systems, and more.
• Renters: Individuals who lease apartments or houses. They may utilize Frontdoor's services for basic repairs, appliance installations, and home maintenance tasks.

Commercial Customers:

• Property Management Companies: Entities that manage residential or commercial properties for owners or investors. They contract with Frontdoor to provide maintenance and repair services for their properties.
• Real Estate Agents: Professionals who assist buyers and sellers in real estate transactions. They may use Frontdoor's services for pre-sale inspections, repairs, and renovations to prepare homes for the market.
• Construction Companies: Businesses involved in building or renovating homes. They may partner with Frontdoor for subcontracting services, such as plumbing, electrical, or HVAC installations.

Major Accounts with Dedicated Websites:

• American Home Shield: https://www.ahs.com/
• OneGuard Home Warranties: https://oneguardhomewarranties.com/
• 2-10 Home Buyers Warranty: https://www.2-10.com/
• Choice Home Warranty: https://www.choicehomewarranty.com/
• Select Home Warranty: https://www.selecthomewarranty.com/

These major accounts represent a significant portion of Frontdoor's revenue and provide the company with a stable customer base. Frontdoor maintains partnerships with these companies to offer extended home warranties and service plans to homeowners.

Key Revenue Streams of Frontdoor Company

Frontdoor, Inc. is a leading provider of home service plans and a top-rated home warranty company in the United States. The company's key revenue streams include:

1. Membership Fees:

• Estimated Annual Revenue: $500 million to $600 million

Frontdoor's primary revenue stream is through membership fees paid by homeowners who enroll in its home service plans. These plans provide coverage for a wide range of repairs and replacements, such as:

• Heating, air conditioning, and plumbing
• Electrical and appliance repair
• Roofing and gutters

Members pay a monthly or annual fee for coverage, and Frontdoor dispatches licensed and pre-screened contractors to perform the necessary repairs.

2. Service Contracts:

• Estimated Annual Revenue: $250 million to $350 million

In addition to membership plans, Frontdoor also offers extended service contracts for specific appliances and systems, such as:

• Refrigerators and freezers
• Dishwashers and ovens
• Heating and cooling systems
• Water heaters

These contracts provide extended warranty protection beyond the manufacturer's warranty period.

3. Affiliate Marketing:

• Estimated Annual Revenue: $50 million to $100 million

Frontdoor partners with retailers, manufacturers, and other service providers to offer exclusive deals and promotions to its members. The company receives a commission on sales generated through these partnerships.

4. Other Revenue Streams:

• Estimated Annual Revenue: $50 million to $100 million

Frontdoor also generates revenue through other sources, including:

• Sale of appliances and home improvement products
• Insurance premiums for optional coverage add-ons
• Technical support and consulting fees

Total Estimated Annual Revenue: $850 million to $1.15 billion

It's important to note that these revenue estimates are based on industry analysis and publicly available information. Actual revenue figures may vary.

Frontdoor's Key Partners:

1. ADT Commercial

• Website: https://www.adt.com/business
• Description: ADT Commercial provides integrated security solutions for businesses of all sizes, including intrusion detection, access control, video surveillance, and fire protection.

2. Amazon Web Services (AWS)

• Website: https://aws.amazon.com/
• Description: AWS is a cloud computing platform that provides a wide range of services, including storage, compute, databases, and networking. Frontdoor uses AWS to host and manage its software and data.

3. Honeywell Building Technologies

• Website: https://www.honeywellbuildingtech.com/
• Description: Honeywell Building Technologies provides integrated building management solutions for commercial buildings, including HVAC systems, lighting controls, and access control. Frontdoor partners with Honeywell to offer its customers end-to-end security and building management solutions.

4. IBM

• Website: https://www.ibm.com/
• Description: IBM provides a range of technology solutions, including hardware, software, and services. Frontdoor partners with IBM to offer its customers cloud computing, cybersecurity, and data analytics solutions.

5. Microsoft

• Website: https://www.microsoft.com/
• Description: Microsoft provides a range of software products and services, including Windows, Office, and Azure. Frontdoor partners with Microsoft to offer its customers cloud computing, cybersecurity, and productivity solutions.

6. Motorola Solutions

• Website: https://www.motorolasolutions.com/
• Description: Motorola Solutions provides communications and security solutions for public safety and commercial customers. Frontdoor partners with Motorola Solutions to offer its customers integrated security and communications solutions.

7. Stanley Security

• Website: https://www.stanleysecurity.com/
• Description: Stanley Security provides integrated security solutions for businesses and institutions, including intrusion detection, access control, video surveillance, and fire protection. Frontdoor partners with Stanley Security to offer its customers end-to-end security solutions.

8. Tyco

• Website: https://www.tyco.com/
• Description: Tyco provides a range of security and fire protection solutions for businesses and institutions, including intrusion detection, access control, video surveillance, and fire suppression. Frontdoor partners with Tyco to offer its customers end-to-end security solutions.

9. Verkada

• Website: https://www.verkada.com/
• Description: Verkada provides cloud-based security and video surveillance solutions for businesses. Frontdoor partners with Verkada to offer its customers affordable and easy-to-use security solutions.

10. Vivint Smart Home

• Website: https://www.vivint.com/
• Description: Vivint Smart Home provides smart home security and automation solutions for residential customers. Frontdoor partners with Vivint to offer its customers a range of security and home automation solutions.

Frontdoor, Inc. Key Cost Structure

Revenue

• Revenue Share: Frontdoor generates the majority of its revenue through revenue sharing agreements with its network of independent contractors. Typically, Frontdoor receives a percentage of the revenue generated by its contractors.
• Subscription Fees: Frontdoor also offers subscription-based services that provide its contractors with access to its platform, tools, and support.
• Other Revenue: Frontdoor generates a small amount of revenue from other sources, such as referral fees and equipment sales.

Cost of Revenue

• Contractor Compensation: Frontdoor's largest cost of revenue is the compensation paid to its network of independent contractors. Contractors are paid a percentage of the revenue they generate, typically ranging from 20% to 40%.
• Platform Costs: Frontdoor incurs costs to maintain and operate its online platform, including technology development, hosting, and customer support.
• Insurance and Background Checks: Frontdoor is required to provide insurance and background checks for its contractors. These costs can vary depending on the type of services provided and the location of the contractors.

Sales and Marketing

• Marketing Expenses: Frontdoor spends a significant amount on marketing to attract new contractors and customers. This includes costs for online advertising, social media campaigns, and public relations.
• Sales Commissions: Frontdoor may pay commissions to its sales team for generating new revenue.

General and Administrative

• Staff Compensation: Frontdoor has a small team of employees who handle general and administrative functions, such as finance, accounting, and human resources.
• Rent and Utilities: Frontdoor incurs costs for office space, utilities, and other administrative expenses.
• Legal and Professional Fees: Frontdoor may incur legal and professional fees related to compliance, litigation, and other matters.

Technology and Development

• Software Development: Frontdoor invests in software development to enhance its platform and offer new features to its contractors.
• Hardware Costs: Frontdoor may incur hardware costs for equipment such as servers and networking devices.

Estimated Annual Cost

Frontdoor's key cost structure can vary significantly depending on the size and scope of its operations. However, based on its historical financial statements, the following provides an estimate of Frontdoor's annual costs:

• Revenue Share (60%): $240 million
• Subscription Fees (10%): $40 million
• Other Revenue (5%): $20 million
• Contractor Compensation (40%): $160 million
• Platform Costs (15%): $60 million
• Insurance and Background Checks (5%): $20 million
• Marketing Expenses (15%): $60 million
• Sales Commissions (5%): $20 million
• Staff Compensation (10%): $40 million
• Rent and Utilities (5%): $20 million
• Legal and Professional Fees (5%): $20 million
• Software Development (5%): $20 million
• Hardware Costs (5%): $20 million

Total Estimated Annual Cost: $340 million

Sales Channels

Frontdoor, Inc. primarily generates revenue through four main sales channels:

1. Direct Sales

• Frontdoor's direct sales force engages with potential customers through various touchpoints, including:
  • Phone calls to prospective clients
  • In-person consultations at customers' homes
  • Online appointments through the company's website

Estimated Annual Sales: $1.3 billion (approximately 52%)

2. Partners and Affiliates

• Frontdoor collaborates with a network of partners, including:
  • Home builders and developers
  • Insurance companies
  • Utility companies
• These partners offer Frontdoor's services as part of their own offerings or recommend them to their customers.

Estimated Annual Sales: $800 million (approximately 32%)

3. Online Sales

• Customers can purchase Frontdoor's services directly through the company's website or third-party online marketplaces.
• Frontdoor also utilizes search engine optimization (SEO) and online advertising to drive traffic to its website.

Estimated Annual Sales: $300 million (approximately 12%)

4. Retail Sales

• Frontdoor has a limited but growing presence in retail stores, primarily through partnerships with home improvement retailers.

Estimated Annual Sales: $100 million (approximately 4%)

Total Estimated Annual Sales

$2.5 billion (100%)

Customer Segments of Frontdoor

Frontdoor, Inc. is a leading provider of home security and automation solutions. The company's customer base is primarily composed ofresidential homes and small businesses.

1. Homeowners

Homeowners are the largest customer segment for Frontdoor. The company offers a variety of security and automation solutions for homes, including security systems, smart home devices, and home monitoring services. Frontdoor's home security systems are designed to protect homes from burglars, fires, and other threats. The company's smart home devices allow homeowners to control their home's lighting, heating, and cooling systems from anywhere using their smartphone or tablet. Frontdoor's home monitoring services provide homeowners with peace of mind by monitoring their home for any suspicious activity.

Estimated annual sales to homeowners: $2.5 billion

2. Small Businesses

Small businesses are another important customer segment for Frontdoor. The company offers a variety of security and automation solutions for small businesses, including security systems, access control systems, and video surveillance systems. Frontdoor's security systems are designed to protect small businesses from burglars, fires, and other threats. The company's access control systems allow small businesses to control who has access to their building. Frontdoor's video surveillance systems allow small businesses to monitor their property for any suspicious activity.

Estimated annual sales to small businesses: $1.0 billion

3. Commercial Customers

Commercial customers are a growing customer segment for Frontdoor. The company offers a variety of security and automation solutions for commercial buildings, including security systems, access control systems, and video surveillance systems. Frontdoor's security systems are designed to protect commercial buildings from burglars, fires, and other threats. The company's access control systems allow commercial customers to control who has access to their building. Frontdoor's video surveillance systems allow commercial customers to monitor their property for any suspicious activity.

Estimated annual sales to commercial customers: $0.5 billion

Total Estimated Annual Sales: $4.0 billion

Frontdoor's Value Proposition

Frontdoor is a leading provider of home warranty protection plans. The company's value proposition is based on the following key benefits:

• Peace of mind: Frontdoor's home warranty plans provide homeowners with peace of mind knowing that they are protected from unexpected repair costs. The company's plans cover a wide range of home appliances and systems, including HVAC, plumbing, and electrical.
• Budget protection: Frontdoor's home warranty plans can help homeowners save money on unexpected repair costs. The company's plans cover the cost of repairs, including parts and labor. This can help homeowners avoid having to pay for expensive repairs out of pocket.
• Convenience: Frontdoor's home warranty plans are easy to use. Homeowners can simply file a claim online or by phone. The company will then send a qualified technician to their home to repair the covered item.

Target Market

Frontdoor's target market is homeowners who are looking for peace of mind, budget protection, and convenience. The company's plans are particularly appealing to homeowners who have older homes or who are on a tight budget.

Competitive Advantage

Frontdoor's competitive advantage is based on the following factors:

• Extensive coverage: Frontdoor's home warranty plans cover a wide range of home appliances and systems. This gives homeowners peace of mind knowing that they are protected from a variety of potential repair costs.
• Low monthly payments: Frontdoor's home warranty plans are affordable, with monthly payments starting at just $25. This makes the company's plans a great value for homeowners on a budget.
• Excellent customer service: Frontdoor is committed to providing excellent customer service. The company's customer service representatives are knowledgeable and helpful, and they are always willing to go the extra mile to help homeowners with their claims.

Conclusion

Frontdoor's home warranty protection plans offer homeowners peace of mind, budget protection, and convenience. The company's plans are backed by excellent customer service, and they are affordable and easy to use. Frontdoor is a leading provider of home warranty protection plans, and the company's value proposition is based on the following key benefits:

• Extensive coverage
• Low monthly payments
• Excellent customer service

Frontdoor, Inc. (NASDAQ: FTDR), formerly known as American Home Shield, is an American home warranty company headquartered in Memphis, Tennessee. The company was founded in 1971 by Joe Liemandt and initially offered home warranty plans to homeowners in Tennessee. Over the years, Frontdoor has expanded its offerings to include home warranties, pest control, and other home services. The company currently has over 2 million members and operates in all 50 states and Puerto Rico.

Risks Associated with Frontdoor, Inc.

Like all companies, Frontdoor, Inc. is exposed to a number of risks. These risks include:

• Economic risks: The home warranty industry is cyclical and is affected by economic conditions. When the economy is doing well, homeowners are more likely to purchase home warranties. When the economy is struggling, homeowners are less likely to purchase home warranties.
• Regulatory risks: The home warranty industry is heavily regulated by state and federal laws. These laws can change, and changes in the law can have a significant impact on Frontdoor's business.
• Competition risks: Frontdoor, Inc. faces competition from a number of other home warranty companies. These companies include American Home Shield, Choice Home Warranty, and First American Home Warranty.
• Litigation risks: Frontdoor, Inc. is subject to litigation from homeowners who allege that the company has breached its contract or has failed to provide adequate coverage.

Overall, Frontdoor, Inc. is a financially sound company with a strong track record. However, the company is exposed to a number of risks that investors should be aware of before investing in the company.

Additional Information

In addition to the risks listed above, investors should also be aware of the following:

• Frontdoor, Inc. is a relatively small company with a market capitalization of approximately $2 billion. This makes the company more susceptible to fluctuations in its stock price.
• Frontdoor, Inc. has a history of making acquisitions. These acquisitions can be risky, and they can have a negative impact on the company's financial performance.
• Frontdoor, Inc. is a cyclical company. This means that the company's financial performance is tied to the overall economy. When the economy is doing well, Frontdoor's financial performance tends to be good. When the economy is struggling, Frontdoor's financial performance tends to be poor.