The largest home warranty company in the country has stopped shrinking.
Frontdoor, the parent of American Home Shield, reported second-quarter results on August 6, 2026, with the earnings call transcript published August 13. Total members reached about 2.11 million, up 1%, the first organic growth since 2021. Revenue rose 5% to $645 million, net income rose 13% to $125 million, and gross margin hit a record 59%.
What drove it
- Direct-to-consumer members up 5%, the seventh straight quarter of growth in the channel where homeowners buy the plan themselves rather than through a real estate closing.
- Real estate channel up 7%, a turnaround after years of decline tied to the housing slowdown.
- Retention at 79.6%, helped by 85% of members on autopay.
- The HVAC upgrade program, which sells replacement systems to members rather than repairing old ones, produced $128 million in 2025 and is now guided to $165 to $175 million for 2026, with only about 3% of members having used it.
Frontdoor raised full-year guidance to revenue of $2.19 to $2.21 billion and adjusted EBITDA of $585 to $600 million, and expects to buy back about $330 million of stock this year. It works with 17,000 contractors, 4,000 of them “preferred” contractors handling 84% of jobs, and plans to take an appliance-sales pilot national in the fourth quarter.
Why it matters to a homeowner comparing plans
Two things stand out. The first is margin: a 59% gross margin means that for every dollar of premium, 41 cents goes to repairs and the rest to overhead and profit. That is not unusual for the category, but it is the number to hold in mind when a plan costs $60 a month.
The second is the shift toward selling replacements and appliances. The HVAC program is profitable because it converts a repair claim into a discounted sale of a new system. For a homeowner with a 15-year-old unit that can be a good deal. It also means the claim conversation increasingly ends with an offer to buy something, and it pays to know the plan’s cash-out and replacement terms before that call.
Our best home warranty companies ranking compares American Home Shield with Choice, Liberty Home Guard and the rest on coverage caps, service fees, workmanship guarantees and complaint records.