ADT(US:ADT)2025-11-04 21:02Subscriber and Revenue Metrics - As of September 30, 2025, the company served approximately 6.3 million security monitoring service subscribers, with a gross customer revenue attrition rate of 13.0%, up from 12.8% the previous year[213][215] - The recurring monthly revenue (RMR) was $362 million, an increase from $359 million in the prior year, driven by higher average prices[218] - A 1% change in customer attrition typically impacts recurring revenue by approximately $40 million on an annualized basis[214] - Approximately 25% of new direct subscribers are now outright sales, reflecting a shift towards the ADT+ platform launched in Q2 2024[217] - The company expects outright sales to continue increasing as it rolls out the ADT+ platform and enhances partnerships with Google[217] - The company has experienced an increase in security installation, product, and other revenue due to the transition to the ADT+ platform[217] Financial Performance - Total revenue for the three months ended September 30, 2025, was $1,297,954,000, an increase of $54,118,000 (4.4%) compared to $1,243,836,000 in the same period of 2024[226] - Monitoring and related services revenue increased by $20,011,000 (1.9%) to $1,097,561,000, while security installation and product revenue rose by $34,107,000 (20.5%) to $200,393,000 for the same period[226] - Net income for the three months ended September 30, 2025, was $145,132,000, an increase of $17,981,000 (14.1%) compared to $127,151,000 in 2024[226] - Adjusted EPS for the three months ended September 30, 2025, was $0.23, up $0.03 (15.0%) from $0.20 in the prior year[242] - Adjusted EBITDA for the three months ended September 30, 2025, was $675,646,000, an increase of $16,955,000 (2.6%) from $658,691,000 in 2024[242] - Adjusted EBITDA for the three months ended September 30, 2025, was $675,646,000, an increase of $16,955,000 compared to the same period in 2024; for the nine months, it was $2,010,071,000, up $84,402,000 year-over-year[249] - Income from continuing operations for the three months ended September 30, 2025, was $143,512,000, an increase of $11,492,000 from 2024; for the nine months, it was $454,222,000, up $32,126,000[249] Cost and Expenses - Total cost of revenue for the three months ended September 30, 2025, was $250,710,000, an increase of $28,604,000 (12.9%) from $222,106,000 in 2024[226] - Selling, general, and administrative expenses for the three months ended September 30, 2025, were $384,353,000, an increase of $24,243,000 (6.7%) compared to $360,110,000 in 2024[226] - The company reported an operating income of $315,073,000 for the three months ended September 30, 2025, a decrease of $11,277,000 (3.5%) from $326,350,000 in 2024[226] Cash Flow and Debt Management - Cash and cash equivalents as of September 30, 2025, totaled $62,806,000, with restricted cash amounting to $108,228,000[252] - Total debt outstanding, including finance leases, was $7,805,833,000 as of September 30, 2025[252] - The company redeemed $500 million of the First Lien Notes due 2026 in March 2025, and $550 million in July 2025, using proceeds from the First Lien Term Loan B-2 due 2032 and cash on hand[279][280] - The company intends to redeem its First Lien Notes due 2026 before or at maturity, with the next debt maturity occurring in April 2026[257] - The company amended and restated the First Lien Credit Agreement in March 2025, issuing $600 million of the First Lien Term Loan B-2 due 2032[273] - The company issued $1 billion aggregate principal amount of First Lien Notes due 2033 in October 2025, using the net proceeds to redeem the majority of the Second Lien Notes due 2028[278] - As of September 30, 2025, the outstanding balance of the 2020 Receivables Facility was $441 million after amending the agreement to extend the uncommitted revolving period to March 2026[283] - The company intends to redeem the remaining outstanding balance of the First Lien Notes due 2026 before maturity through ongoing sources of liquidity or refinancing[281] - As of September 30, 2025, the company was in compliance with all financial covenants and other maintenance tests for its debt obligations[284] - Approximately 45% of the total carrying amount of the company's debt was subject to variable interest rates as of September 30, 2025, excluding the impact of interest rate swaps[298] Shareholder Returns - The company repurchased 20 million shares of Common Stock for approximately $152 million under the 2025 Share Repurchase Plan[263] - The company reported higher share repurchases of $513 million during the current period, compared to net repayments of $117 million during the prior period[291] - The company announced a dividend of $0.055 per share to be paid on January 8, 2026[270] Economic and Operational Outlook - The company is monitoring macroeconomic trends, including inflation and potential tariffs, which may impact supply chain costs[221] - Cost-saving opportunities are being evaluated to mitigate rising costs, including leveraging technology and reducing non-essential spending[222] - The company did not experience material losses related to natural disasters during the nine months ended September 30, 2025[223] - An ownership change occurred in Q2 2025 due to share sales, but it is not expected to materially impact the company's results[224] - The effective tax rate for the three months ended September 30, 2025, was 27.7%, compared to 27.6% in the same period of 2024[232][233]