Shares of Frontdoor Inc. (NASDAQ: FTDR) surged 18.54% in pre-market trading on Thursday following the company's outstanding first-quarter 2025 financial results and an upward revision of its full-year outlook. The nation's leading provider of home warranties delivered a strong performance that exceeded analyst expectations across key metrics.

Here are the key highlights driving Frontdoor's stock surge:

1. Earnings Beat: Frontdoor reported adjusted earnings per share of $0.64, significantly outpacing the analyst consensus estimate of $0.38. This represents a 68.42% beat and a 45.45% increase from $0.44 per share in the same period last year.

2. Revenue Growth: First-quarter revenue rose 13% year-over-year to $426 million, surpassing analyst expectations of $416.39 million. The growth was driven by a 3% increase from pricing and a 10% increase from higher volume, primarily due to the 2-10 acquisition.

3. Improved Profitability: Gross profit margin expanded by 380 basis points to a first-quarter record of 55%. Adjusted EBITDA surged 41% to $100 million, reflecting the company's strong financial performance.

4. Customer Growth: The number of home warranties increased by 7% compared to the previous year, reaching 2.10 million. The customer retention rate also improved to 79.9% from 76.3% a year ago.

5. Raised 2025 Outlook: Frontdoor increased its full-year 2025 revenue guidance to a range of $2.03 billion to $2.05 billion, up from the previous forecast of $2.00 billion to $2.04 billion. The company also raised its Adjusted EBITDA outlook to $500 million to $520 million.

Chairman and Chief Executive Officer Bill Cobb commented on the results, stating, "We are off to a great start in 2025 and are pleased to increase our full-year outlook across the board. Our first-quarter results show that we are advancing our three strategic priorities by improving home warranty member count, scaling non-warranty services and integrating the 2-10 acquisition."

The company's strong financial position has enabled it to increase its target for 2025 share repurchases to at least $200 million, further boosting investor confidence.

Frontdoor's impressive performance and optimistic outlook have clearly resonated with investors, driving the significant pre-market stock price increase. As the company continues to execute its growth strategy and demonstrate improved profitability, it appears well-positioned for continued success in the home warranty market.