Financial Data and Key Metrics Changes - ADT reported a record recurring monthly revenue balance of €363 million, up 2% year over year [6] - Total revenue increased by 7% to $1.3 billion [17] - Adjusted earnings per diluted share rose by 35% to $0.23 [7] - Adjusted free cash flow for the first half reached $500 million, up 38% [7][16] - Customer retention remained solid with attrition at 12.8%, down 10 basis points from last year [7][48] Business Line Data and Key Metrics Changes - Monitoring and services revenue increased by 2%, driven by the record RMR balance [17] - Installation revenue rose to $197 million, up $60 million, attributed to the shift towards the ADT plus platform [17] - New subscriber additions totaled 242,000, contributing $14.3 million in new RMR [18] Market Data and Key Metrics Changes - The Nest Aware subscriber base surpassed 1 million customers, indicating strong collaboration with Google [12] - The State Farm partnership generated slightly more than 30,000 subscribers, with plans for a new approach targeting prospective movers [12][13] Company Strategy and Development Direction - ADT's strategic focus areas include optimizing and completing the rollout of new capabilities and offerings [8] - The company aims to enhance customer experience through innovative offerings like the Trusted Neighbor program and the ADT plus platform [11][12] - Continued investment in core monitoring capabilities and new technologies to reduce false alarms and improve service efficiency [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 objectives despite macroeconomic uncertainties [20][58] - The company noted a modest increase in non-payment cancellations but remains optimistic about long-term attrition improvements [50][55] - Management reaffirmed full-year guidance for total revenue, adjusted EBITDA, and adjusted free cash flow, while increasing adjusted EPS guidance [20][58] Other Important Information - ADT completed a strategic customer portfolio acquisition of approximately 50,000 subscribers for $89 million [7] - The company returned $589 million to shareholders year-to-date through share repurchases and dividends [7][19] Q&A Session Summary Question: Bulk account purchase details - The bulk account purchase of 50,000 accounts was economically attractive due to high density and good credit scores, with a strong pipeline for future acquisitions [24][25] Question: Update on State Farm partnership - The partnership has generated around 33,000 subscribers, with a new focus on prospective movers to improve traction [27][28] Question: Incremental value from bulk purchases - The company has a well-established playbook for converting bulk customers, focusing on high-density accounts and quality equipment [32][34] Question: Feedback on Trusted Neighbor product - Initial feedback has been positive, with Trusted Neighbor representing over 10% of installations and higher average installation revenue [37][38] Question: Sales process and optimization initiatives - The company is focusing on a new sales process involving tech engineers to improve installation revenue and customer experience [43][44] Question: Drivers of attrition - Attrition was influenced by modestly higher non-payment cancellations and lower relocation losses, with overall performance remaining stable [47][50] Question: Macro environment impact - The business model is resilient, with management monitoring non-payment trends and tariff pressures closely [55][56] Question: Subscriber growth and market share strategies - The company is optimistic about its core DIFM business and is making changes to compete more effectively in the DIY space [63][64]

Financial Performance - Total revenue for Q2 2025 was $1287 million, up 7% year-over-year[64, 66] - Adjusted EBITDA for Q2 2025 was $674 million, a 7% increase year-over-year[64, 66] - Adjusted EPS for Q2 2025 increased by 35% to $023[64, 66] - Adjusted Free Cash Flow (including interest rate swaps) for Q2 2025 was $274 million, up 9% year-over-year[64, 66] - The company returned $143 million to shareholders through share repurchases and dividends in Q2 2025[68] Key Metrics - End of period RMR including wholesale increased by 2% to $363 million[75] - Gross RMR additions increased by 14% to $143 million[75] - Revenue payback period lengthened slightly to 23 years[64, 75] - Gross customer revenue attrition improved by 10 bps to 128%[28, 75] 2025 Guidance - The company reiterated its 2025 guidance, with total revenue expected to be between $5025 billion and $5225 billion, representing a 5% increase[81] - Adjusted EBITDA is projected to be between $2650 billion and $2750 billion, also a 5% increase[81] - Adjusted Free Cash Flow (including interest rate swaps) is expected to be between $800 million and $900 million, a 14% increase[81]

Core Insights - ADT reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and showing an increase from $0.17 per share a year ago, resulting in an earnings surprise of +21.05% [1] - The company achieved revenues of $1.29 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.11% and up from $1.21 billion year-over-year [2] - ADT shares have increased approximately 22% since the beginning of the year, outperforming the S&P 500's gain of 8.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $1.28 billion, and for the current fiscal year, it is $0.82 on revenues of $5.11 billion [7] - The estimate revisions trend for ADT was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Security and Safety Services industry, to which ADT belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - SoundThinking (SSTI), another company in the same industry, is expected to report a quarterly loss of $0.09 per share, reflecting a year-over-year decline of -28.6% [9]

[ADT Second Quarter 2025 Results](index=1&type=section&id=ADT%20Reports%20Second%20Quarter%202025%20Results) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) ADT reported strong Q2 2025 results with 7% revenue growth to $1.3 billion, record RMR, and robust cash generation, staying on track for full-year guidance Q2 2025 Financial Highlights | Financial Metric | Q2 2025 Value ($) | Change (YoY) (%) | | :--- | :--- | :--- | | Total Revenue | $1.3 billion | +7 | | End-of-period RMR | $363 million | +2 | | GAAP Income from Continuing Operations | $168 million | +$42 million | | GAAP EPS from Continuing Operations | $0.19 | +$0.06 | | Adjusted Income from Continuing Operations | $191 million | +$35 million | | Adjusted EPS from Continuing Operations | $0.23 | +$0.06 | | Net Cash from Operating Activities | $564 million | +$1 million | | Adjusted Free Cash Flow (incl. swaps) | $274 million | +$23 million | - The company has returned **$589 million** to shareholders year-to-date through a combination of share repurchases and dividends[2](index=2&type=chunk) - CEO Jim DeVries attributed the strong performance to the resilience of the business, effective strategy execution, and increasing adoption of the ADT+ platform[3](index=3&type=chunk) [Business Highlights](index=2&type=section&id=Business%20Highlights) ADT strengthened its market position in Q2 2025 through strategic account acquisitions, strong customer retention, shareholder value initiatives, and innovative product and service enhancements - **Foundation for Growth** - End-of-period RMR increased **2%** to **$363 million** - Maintained gross customer revenue attrition at **12.8%** with a **2.3-year** revenue payback - Closed a strategic bulk purchase of **~50,000** customer accounts for **$89 million** in cash[5](index=5&type=chunk) - **Unlocking Shareholder Value** - Repurchased **12 million shares** for **$96 million** in Q2 - Secured commitments for a new **$550 million** First Lien Term Loan to redeem notes due in 2026[5](index=5&type=chunk) - **Innovative Offerings & Experience** - Launched the new Yale Assure Touch smart lock integrated with ADT+ - Surpassed **1 million subscribers** for the Nest Aware service, highlighting the strength of the Google partnership - The ADT Remote Assistance program handles over **50%** of service requests virtually - Implemented AI-powered virtual agents in customer care chat and voice interactions[5](index=5&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) Q2 2025 saw total revenue grow 7% to $1.287 billion, driven by installation revenue, with GAAP income up 33% to $168 million and Adjusted Free Cash Flow increasing 9% to $274 million Q2 2025 Financial Performance Overview | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,287 | $1,205 | 7 | | - M&S Revenue | $1,090 | $1,068 | 2 | | - Installation & Other | $197 | $136 | 44 | | Income from Cont. Ops. | $168 | $126 | 33 | | Adjusted EBITDA | $674 | $629 | 7 | | Adjusted Free Cash Flow (incl. swaps) | $274 | $251 | 9 | - The increase in Security installation, product, and other revenue was primarily due to a higher mix of professionally installed systems under the outright sales model and higher average prices associated with the ADT+ platform transition[6](index=6&type=chunk) - The rise in income from continuing operations was mainly attributable to revenue growth and the non-recurrence of a legal settlement charge from the prior year[7](index=7&type=chunk) - Capital returns to shareholders in Q2 totaled **$143 million**, comprising **$96 million** in share repurchases and **$47 million** in dividends[10](index=10&type=chunk) [2025 Financial Outlook & Dividends](index=4&type=section&id=2025%20Financial%20Outlook%20%26%20Dividends) ADT reiterated its full-year 2025 guidance for revenue, Adjusted EBITDA, and Adjusted Free Cash Flow, updated Adjusted EPS to $0.81-$0.89, and declared a $0.055 per share quarterly dividend Full-Year 2025 Financial Guidance | Metric | 2025 Guidance Range | | :--- | :--- | | Total Revenue | $5,025M - $5,225M | | Adjusted EBITDA | $2,650M - $2,750M | | Adjusted EPS | $0.81 - $0.89 | | Adjusted Free Cash Flow (incl. swaps) | $800M - $900M | - The Board of Directors declared a cash dividend of **$0.055 per share**, payable on October 2, 2025, to shareholders of record as of September 11, 2025[13](index=13&type=chunk) [Detailed Financial Statements](index=7&type=section&id=Detailed%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenue grew 7% to $1,287 million, with a 9% decrease in SG&A leading to a 20% increase in operating income and a 33% rise in net income from continuing operations to $168 million Condensed Consolidated Statements of Operations | (in millions) | Q2 2025 ($M) | Q2 2024 ($M) | % Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,287 | $1,205 | 7 | | Total Cost of Revenue | $250 | $196 | 27 | | SG&A Expenses | $356 | $390 | (9) | | Operating Income | $342 | $284 | 20 | | Income from Cont. Ops. | $168 | $126 | 33 | | Net Income | $165 | $92 | 79 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $15.97 billion, total liabilities increased to $12.31 billion due to higher current debt maturities, and stockholders' equity decreased to $3.66 billion Condensed Consolidated Balance Sheets | (in millions) | June 30, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | $940 | $1,005 | | Total Assets | $15,972 | $16,051 | | **Liabilities & Equity** | | | | Total Current Liabilities | $2,052 | $1,264 | | Long-term Debt | $6,751 | $7,511 | | Total Liabilities | $12,313 | $12,250 | | Total Stockholders' Equity | $3,659 | $3,801 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities increased to $1.03 billion, while financing activities used $460 million, primarily due to common stock repurchases Condensed Consolidated Statements of Cash Flows | (in millions) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :--- | :--- | :--- | | Net cash from operating activities | $1,031 | $927 | | Net cash used in investing activities | $(623) | $(633) | | Net cash used in financing activities | $(460) | $(275) | | Net (decrease) in cash | $(52) | $19 | [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Q2 2025 Adjusted Free Cash Flow (including interest rate swaps) increased 9% to $274 million, reconciled from $564 million in net cash from operating activities, primarily adjusted for $328 million in capital expenditures Reconciliation of Free Cash Flow | (in millions) | Q2 2025 ($M) | Q2 2024 ($M) | | :--- | :--- | :--- | | Net cash provided by operating activities | $564 | $563 | | Free Cash Flow | $198 | $231 | | Adjusted Free Cash Flow | $257 | $229 | | Adjusted Free Cash Flow (incl. swaps) | $274 | $251 | [Reconciliation of Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA from continuing operations increased 7% to $674 million, reconciled from GAAP income of $168 million, with a stable Adjusted EBITDA margin of 52% Reconciliation of Adjusted EBITDA | (in millions) | Q2 2025 ($M) | Q2 2024 ($M) | | :--- | :--- | :--- | | Income from continuing operations | $168 | $126 | | Interest expense, net | $116 | $110 | | Depreciation and intangible asset amortization | $339 | $334 | | Adjusted EBITDA from continuing operations | $674 | $629 | | Adjusted EBITDA Margin (%) | 52 | 52 | [Reconciliation of Adjusted EPS](index=13&type=section&id=Reconciliation%20of%20Adjusted%20EPS) Q2 2025 Adjusted EPS from continuing operations increased to $0.23, reconciled from GAAP diluted EPS of $0.19, primarily adjusted for interest rate swaps and share-based compensation Reconciliation of Adjusted EPS | (per share data) | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Diluted income from cont. ops. per share | $0.19 | $0.13 | | Adjustments (net) | $0.04 | $0.04 | | Adjusted EPS | $0.23 | $0.17 | [Leverage Ratios](index=14&type=section&id=Leverage%20Ratios) As of June 30, 2025, ADT's net leverage ratio improved to 2.8x, calculated based on net debt of $7.48 billion and LTM Adjusted EBITDA of $2.65 billion Leverage Ratios | (in millions, except ratio) | June 30, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | Total Debt (Face Value) | $7,968 | $7,861 | | Less: Cash & Cash Equivalents | $(45) | $(96) | | Less: Receivables Facility | $(440) | $(408) | | **Net Debt** | **$7,483** | **$7,357** | | LTM Adjusted EBITDA | $2,646 | $2,578 | | **Net Leverage Ratio (x)** | **2.8** | **2.9** |

Core Insights - ADT Inc. reported a strong financial performance for the second quarter of 2025, with total revenue increasing by 7% year-over-year to $1.287 billion, driven by record recurring monthly revenue and robust cash flow generation [2][5][7]. Financial Performance - Total revenue for the second quarter was $1,287 million, up 7% from $1,205 million in the prior year [7]. - Monitoring and related services revenue grew by 2% to $1,090 million, while security installation and product revenue surged by 44% to $197 million [7]. - GAAP income from continuing operations was $168 million, or $0.19 per diluted share, reflecting a 33% increase from the previous year [8][27]. - Adjusted income from continuing operations rose to $191 million, or $0.23 per diluted share, up 23% year-over-year [8][27]. Cash Flow and Shareholder Returns - Year-to-date GAAP Operating Cash Flow increased by 11%, while Adjusted Free Cash Flow (including swaps) surged by 38% [1][10]. - The company returned $589 million to shareholders through share repurchases and dividends year-to-date, with $143 million returned in the second quarter alone [1][12]. - During the second quarter, ADT repurchased 12 million shares for $96 million, with a total of 65 million shares repurchased under its $500 million share repurchase plan [6][12]. Strategic Developments - ADT closed a strategic bulk purchase of approximately 50,000 customer accounts for $89 million, which is expected to yield attractive returns and enhance economies of scale [6]. - The company launched the Yale Assure Touch smart lock, integrating it with the ADT+ platform to enhance security features [6]. Customer Metrics - The end-of-period recurring monthly revenue (RMR) increased by 2% to $363 million, equating to an annualized figure of $4.4 billion [6]. - Customer retention remained solid, with a gross revenue attrition rate of 12.8% and a revenue payback period of 2.3 years [6][7]. Financial Outlook - ADT reiterated its 2025 financial guidance for Total Revenue, Adjusted EBITDA, and Adjusted Free Cash Flow, while updating the range for Adjusted EPS due to a lower share count from repurchases [13][14].

Core Viewpoint - ADT Inc. is set to release its second quarter 2025 financial results on July 24, 2025, before market opening, followed by a conference call for discussion and Q&A [1]. Group 1: Financial Results Announcement - The financial results will be released before the market opens on July 24, 2025 [1]. - A conference call will take place at 10 a.m. ET on the same day to discuss the results [1]. Group 2: Accessing the Conference Call - Participants can listen to a live webcast via the investor relations website, with a replay available within 24 hours [2]. - The live call can also be accessed by dialing specific numbers for domestic and international participants, with an access code provided [3]. - An audio replay of the call will be available for one week following the event [3]. Group 3: Company Overview - ADT provides safe, smart, and sustainable solutions for individuals, homes, and small businesses [4]. - The company emphasizes innovative offerings, safety, and a premium customer experience through its extensive network of smart home security professionals in the U.S. [4].

Core Viewpoint - ADT Inc. is enhancing its community engagement through a $100,000 donation to support All Things Made New, a nonprofit focused on mentoring and life skills for youth in the Dallas area [1][2]. Group 1: Partnership and Initiatives - The partnership is part of ADT's Safe Places program, which will establish two ADT Safe Places Drop-In Centers in Irving, aimed at providing supportive environments for youth aged 10 to 18 [2][4]. - The centers will offer various services including tutoring, trauma-informed care, mentoring, nutritional support, and access to technology outside of school hours [2][4]. Group 2: Community Impact - ADT's Executive Vice President emphasized that safety extends beyond technology to include trust and care, highlighting the importance of creating supportive spaces for young people [3]. - The donation also includes funding for a co-branded 10-passenger van to facilitate transportation for youth to programming, along with the installation of smart security systems at the new centers [3]. Group 3: Organizational Background - ADT is recognized for providing safe and smart solutions for homes and small businesses, leveraging a large network of smart home security professionals in the U.S. [5]. - All Things Made New, founded in 2012, focuses on mentoring and life skills programming for teens and young adults, aiming to help them become positive contributors to their communities [6].

Group 1 - ADT Inc. (ADT) is a smart home solutions provider with a Zacks Consensus Estimate for its current year earnings revised 1.2% downward over the last 60 days [1] - DoubleDown Interactive Co., Ltd. (DDI) is a digital gaming company with a Zacks Consensus Estimate for its current year earnings revised 6.3% downward over the last 60 days [1] - M/I Homes, Inc. (MHO) is a residential home-builder with a Zacks Consensus Estimate for its current year earnings revised 7.8% downward over the last 60 days [2]

Core Insights - ADT Inc. has launched the Yale Assure Lock 2 Touch with Z-Wave, integrating fingerprint control and the Z-Wave User Credential Command Class for enhanced smart home security [1][3][5] - The ADT+ app has been updated to include Home | Away functionality, utilizing geofencing to automate security settings based on user presence [2][8] Product Features - The Yale Assure Lock 2 Touch offers multiple unlocking methods, including biometric fingerprint recognition, keypad entry, physical key access, and virtual key control through the ADT+ app [4][5] - The lock allows users to arm and disarm their security system directly from the lock, creating a streamlined security experience [4][6] Strategic Collaboration - The partnership between ADT, Yale, and the Z-Wave Alliance aims to set a new standard for smart home security, combining convenience and protection [3][6] - The introduction of the User Credential Command Class represents a significant advancement in interoperability across the smart home industry [6][7] User Experience Enhancements - The Trusted Neighbor program allows designated individuals to access the home using their fingerprint, enhancing convenience for families [7] - The ADT+ app update includes a redesigned interface for easier navigation and access to frequently used features [9][10] Availability and Pricing - The Yale Assure Lock 2 Touch is priced at $279.99 and is available for purchase at ADT.com, with options for self-setup or professional installation [10]

Group 1 - The article discusses the positive outlook for ADT Inc. (NYSE: ADT) based on improving fundamentals and the successful performance of the ADT+ platform, with expectations for EPS growth as guided [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance the investment process [1] Group 2 - There are no disclosed positions in any of the companies mentioned, indicating a neutral stance on potential conflicts of interest [2] - The article is presented as an individual opinion without compensation, reinforcing the independence of the analysis [2]