Financial Data and Key Metrics Changes - ADT Inc. reported a record recurring monthly revenue balance of $360 million, up 2% year-over-year [7] - Total revenue grew by 7% compared to the prior year, reaching $1.3 billion [28] - Adjusted earnings per diluted share increased by 11% to $0.21 [9] - Adjusted free cash flow more than doubled year-over-year to $226 million [26] - Adjusted EBITDA for the first quarter was $661 million, an increase of 4% [30] Business Line Data and Key Metrics Changes - Monitoring and services revenue increased by 2%, driven by the record RMR balance [27] - Installation revenue was $184 million, up $57 million or 45%, attributed to the transition to the ADT Plus platform [28] - The average installation revenue per unit improved to approximately $1,500 due to customer interest in comprehensive systems [29] Market Data and Key Metrics Changes - Gross new customer additions totaled 72,000, contributing $10.6 million of new RMR [31] - Gross RMR additions fell 7% year-over-year, with a decline of 15,000 units compared to Q1 2024 [58][59] - The small business segment remained flat in attrition, indicating stability in that market [78] Company Strategy and Development Direction - The company focuses on delivering safety and peace of mind through unrivaled safety, innovative offerings, and premium customer service [11] - Continued investment in the product and experience ecosystem to develop differentiated customer offerings [12] - Expansion of the ADT Plus platform to a larger percentage of new customers and enhancement of capabilities for existing customers [12][15] - The partnership with State Farm is progressing, with gross ads increasing in Q1 2025 compared to the previous year [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite macroeconomic uncertainties [43] - The company reaffirmed full-year guidance, expecting adjusted free cash flow to be up 14% and adjusted earnings per share to be up 8% [36] - Management noted potential tariff impacts but believes they can manage net exposure within guidance ranges [53] Other Important Information - The company appointed Fawad Ahmad as Chief Operating and Customer Officer and Omar Khan as Chief Business Officer [22] - Customer satisfaction reached a three-year high, contributing to record customer retention [16] Q&A Session Summary Question: Assessment of the demand environment and housing market impact - Management noted that demand for personal safety increases during uncertain times, and the business model is resilient [43] Question: Metrics indicative of consumer strength - Slight uptick in slower payments observed, but overall positive trends in pricing and record attrition were highlighted [46] Question: Impact of tariffs and cost structure adjustments - Management is actively negotiating with partners and considering inventory management strategies to mitigate tariff impacts [50][51] Question: Dynamics driving gross RMR additions decline - The decline was attributed to tightened credit standards in DIY and health business segments [59][60] Question: Update on State Farm partnership and AI initiatives - The partnership is progressing well, with increased gross ads, and AI initiatives are improving customer care operations [71][72] Question: Pricing and inflation outlook - Management indicated that inflation impacts are primarily related to tariffs, but overall pricing strategies are being adjusted [94]

Financial Data and Key Metrics Changes - ADT Inc. reported a record recurring monthly revenue (RMR) balance of $360 million, up 2% year-over-year [7] - Total revenue increased by 7% compared to the prior year, reaching $1.3 billion [27] - Adjusted earnings per diluted share rose by 11% to $0.21 [9] - Adjusted free cash flow more than doubled year-over-year to $226 million [25] - Adjusted EBITDA for the first quarter was $661 million, an increase of 4% [30] Business Line Data and Key Metrics Changes - Monitoring and services revenue was up 2%, driven by the record RMR balance [27] - Installation revenue surged to $184 million, up 45% year-over-year, primarily due to the transition to the ADT Plus platform [27][28] - The average installation revenue per unit improved to approximately $1,500, reflecting customer interest in comprehensive systems [29] Market Data and Key Metrics Changes - Gross new customer additions totaled 72,000, contributing $10.6 million in new RMR [31] - Gross RMR additions fell 7% year-over-year, attributed to tightened credit standards in the DIY segment and a decline in the health business [58][59] - The small business segment remained flat year-over-year, with core pro install direct ads up 4% [60] Company Strategy and Development Direction - The company is focused on delivering safety and peace of mind through three strategic areas: unrivaled safety, innovative offerings, and premium customer service [11] - Continued investment in the product and experience ecosystem aims to enhance customer offerings and retention [12] - The ADT Plus platform is being expanded to a larger percentage of new customers, with a focus on optimizing subscriber economics [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite macroeconomic uncertainties [43] - The company reaffirmed its full-year guidance, expecting adjusted free cash flow to increase by 14% and adjusted earnings per share to rise by 8% [36] - Management acknowledged potential tariff impacts but believes they can manage net exposure within guidance ranges [37][53] Other Important Information - The company appointed Fawad Ahmad as Chief Operating and Customer Officer and Omar Khan as Chief Business Officer [22] - Customer satisfaction reached a three-year high, aided by improvements in agent satisfaction and customer experience metrics [16] Q&A Session Summary Question: Assessment of the demand environment and housing market impact - Management noted that demand for personal safety increases during uncertain times, and the business model is resilient [43] Question: Metrics indicative of consumer strength - Slight uptick in slower payments was observed, but overall positive trends include higher average pricing and record attrition [46] Question: Impact of tariffs and cost structure adjustments - Management is actively negotiating with partners and considering inventory management strategies to mitigate tariff impacts [50][51] Question: Dynamics driving gross RMR additions decline - The decline was primarily due to tightened credit standards in the DIY segment and a decrease in the health business [59] Question: Update on State Farm partnership and AI initiatives - The State Farm partnership is progressing well, with pilot programs underway and customer satisfaction remaining high [71] - AI initiatives have led to 90% of customer service chats being processed by AI agents, with plans to expand this capability [72] Question: Attrition improvement potential - Current attrition is at 12.6%, with management aiming for further reductions through new retention initiatives [90] Question: Inflation outlook and pricing strategies - Tariffs are a concern for material costs, but overall pricing strategies are being adjusted to account for inflation [95]

First Quarter 2025 Earnings Presentation April 24, 2025 Forward Looking Statements and Non-GAAP Measures ADT has made statements in this presentation that are forward-looking and therefore subject to risks and uncertainties, including those described below. All statements, other than statements of historical fact, included in this document are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the applicable rules and regulations of the ...

Core Insights - ADT Inc. reported strong financial results for Q1 2025, with record recurring monthly revenue and customer retention, indicating robust demand for its services [2][3] - The company is on track to meet its full-year 2025 guidance metrics, supported by solid growth in cash flow and earnings per share [3][15] Financial Performance - Total revenue increased by 7% to $1.3 billion, with monitoring and related services revenue growing by 2% to $1.083 billion and security installation revenue rising by 45% to $184 million [5][7] - GAAP income from continuing operations was $142 million, or $0.16 per diluted share, down from $164 million in the previous year [9][28] - Adjusted income from continuing operations rose to $186 million, or $0.21 per diluted share, up $15 million year-over-year [10][56] Cash Flow and Shareholder Returns - Net cash provided by operating activities was $467 million, up 28% year-over-year, while adjusted free cash flow increased by 105% to $226 million [11][44] - The company returned $445 million to shareholders through share repurchases and dividends, including $49 million in dividends and $397 million in share repurchases [14][18] Customer Metrics - The end-of-period recurring monthly revenue (RMR) was $360 million, up 2%, with a record gross customer revenue attrition rate of 12.6% [5][6] - Revenue payback period improved to 2.3 years, reflecting strong customer retention [6][7] Strategic Initiatives - ADT continued the rollout of its proprietary ADT+ platform, enhancing its smart home security offerings and increasing customer penetration [4][8] - The company launched the ADT+ Translator to facilitate the transition from legacy systems to the ADT+ platform, improving customer care through virtual assistance programs [8] Balance Sheet and Financing - In March, ADT issued a new $600 million first lien seven-year term loan facility, using proceeds to redeem $500 million of First Lien Notes due 2026 [13][30] - Total cash and cash equivalents as of March 31, 2025, were $4 million, with $40 million outstanding under the First Lien Revolving Credit Facility [12][30]

Core Viewpoint - ADT Inc. is set to release its first quarter 2025 financial results on April 24, 2025, before market opening, followed by a conference call for discussion and Q&A session [1]. Group 1: Financial Results Announcement - The financial results for Q1 2025 will be released before the market opens on April 24, 2025 [1]. - A conference call will be held at 10 a.m. ET on the same day to discuss the results [1]. Group 2: Participation Details - Participants can listen to a live webcast via the investor relations website, with a replay available within 24 hours [2]. - For those preferring a phone call, domestic participants can dial 1-800-715-9871, while international participants can call 1-646-307-1963, using access code 4948265 [3]. - An audio replay of the call will be available for one week, accessible through specific phone numbers and the same access code [3]. Group 3: Company Overview - ADT Inc. offers safe, smart, and sustainable solutions for individuals, homes, and small businesses, focusing on innovative offerings and premium customer experience [4]. - The company operates the largest networks of smart home security professionals in the U.S., empowering customers to protect what matters most [4].

Financial Performance - Total revenue for 2024 was $4.9 billion, a 5% increase year-over-year[53] - Adjusted EBITDA for 2024 reached $2.6 billion, up 4% compared to the previous year[53] - Adjusted EPS for 2024 increased by 25% to $0.75[53] - Adjusted Free Cash Flow (including interest rate swaps) for 2024 was $744 million, a 42% increase year-over-year[53] Key Metrics - Annualized recurring monthly revenue (RMR) is approximately $4.3 billion[19] - The company has 6.4 million subscribers[11] - Gross revenue attrition improved by 20 basis points to 12.7%[58] - Revenue payback period improved to 2.2 years, a decrease of 0.3 years[27] Capital Allocation and Debt - Net leverage ratio decreased to 2.9x, down 0.2x from the prior year[53] - Share repurchases of $345 million since January 2024[46] - A new share repurchase plan of $500 million was announced in February 2025[46] 2025 Guidance - The company projects total revenue between $5.025 billion and $5.225 billion for 2025, representing approximately 5% growth[34, 69] - Adjusted EBITDA is expected to be between $2.65 billion and $2.75 billion in 2025, also around 5% growth[34, 69] - Adjusted EPS is projected to be between $0.77 and $0.85 for 2025, an increase of approximately 8%[69] - Adjusted Free Cash Flow (including interest rate swaps) is expected to be between $800 million and $900 million, indicating a 14% increase[34, 69]

Financial Data and Key Metrics Changes - For the full year 2024, total revenue was $4.9 billion, up 5% from the previous year [9] - Adjusted net income from continuing operations was $685 million, or $0.75 per diluted share, an increase of 25% [9] - Adjusted free cash flow increased by 42% to $744 million [9][27] - Adjusted EBITDA from continuing operations was $653 million for the quarter and $2.6 billion for the year, an increase of 4% [32] Business Line Data and Key Metrics Changes - Monitoring and services revenue grew 3% for the year, driven by a record recurring monthly revenue (RMR) balance [28] - Installation revenue for the year was $605 million, up 28% [28] - Outright sales revenue increased by 50% for the year and more than doubled in the fourth quarter compared to the prior year [29] Market Data and Key Metrics Changes - The market for security and smart home solutions is projected to grow to $23 billion in consumer spending within four years [10] - Gross revenue attrition was a record 12.7%, reflecting superior customer service and retention improvements [32] Company Strategy and Development Direction - The company is focused on three strategic areas: innovative offerings, unrivaled safety, and premium customer service [11] - The launch of the ADT Plus platform is a significant milestone, providing enhanced user experience and installation flexibility [12] - The company aims to optimize its sales process and go-to-market strategies, including refining offer structures and pricing [21][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's plans for 2025, emphasizing strong cash generation and shareholder returns [23][45] - The company is committed to generating free cash flow and has authorized a $500 million share repurchase plan [23][38] - Management noted that the health of the U.S. residential market and consumer relocations significantly influence business performance [82] Other Important Information - The company has reduced its net debt to $7.4 billion, down approximately $200 million from 2023 [34] - The company received several awards, including the Monitoring Association Monitoring Center of the Year Award and recognition as the Most Trusted Home System Brand [15][16] Q&A Session Summary Question: Does ADT plan on acquiring more bulk accounts in 2025? - Management indicated that they executed bulk deals for about 49,000 accounts in 2024 and are exploring opportunities with a few parties, including the previous seller [50] Question: Can you elaborate on the State Farm partnership? - The partnership has expanded to 17 states, with total sales through State Farm in 2024 reaching 18,000, up from 5,500 in 2023 [59] Question: What progress has been made on optimizing the sales process? - Management highlighted the launch of a new offer structure and ongoing adjustments to optimize sales outcomes [66] Question: What is the status of AI initiatives in customer service? - The company is leveraging AI in customer service, with 50% of customer service chats processed by AI agents, expected to reach 90% by the end of Q1 [72] Question: What are the opportunities in the small to medium-sized business market? - The SMB segment represents a significant portion of the customer base, and the company plans to renew efforts in this area in 2025 [78] Question: How should we think about subscriber asset spending? - Management indicated that cash flow is unaffected by non-cash items, and they expect continued progress in subscriber acquisition cost efficiency [92] Question: Will there be a more aggressive upgrade of existing customers to the new platform? - Management confirmed that standardizing the service platform is beneficial, and they are working on cost-effective solutions for upgrades [94]

Financial Data and Key Metrics Changes - Total revenue for the full year was $4.9 billion, up 5% from the previous year [9][28] - Adjusted net income from continuing operations was $685 million, or $0.75 per diluted share, an increase of 25% [9][27] - Adjusted free cash flow for the full year was $744 million, reflecting a 42% increase [9][27] - Adjusted EBITDA from continuing operations was $653 million for the fourth quarter and $2.6 billion for the year, an increase of 4% [32] Business Line Data and Key Metrics Changes - Monitoring and services revenue grew 3% for the year, driven by a record recurring monthly revenue (RMR) balance [28] - Installation revenue for the year was $605 million, up 28%, with outright sales revenue increasing by 50% [29][30] - Gross revenue attrition was a record 12.7%, reflecting improved customer service and retention [32] Market Data and Key Metrics Changes - The market for security and smart home solutions is projected to grow to $23 billion in consumer spending within four years [10] - The company has expanded its partnership with State Farm, now offering solutions in 17 states, which contributed to significant sales growth [59] Company Strategy and Development Direction - The company is focused on three strategic areas: innovative offerings, unrivaled safety, and premium customer service [11] - The launch of the ADT Plus platform is a significant milestone, providing enhanced user experience and installation flexibility [12][13] - The company aims to optimize its sales process and refine its offer structure to improve customer appeal and efficiency in subscriber acquisition costs [121] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's plans for 2025, emphasizing continued execution of strategy and optimization of new capabilities [20][23] - The company expects strong growth in adjusted free cash flow, targeting a range of $800 to $900 million in 2025 [39] - Management highlighted the importance of customer retention and operational efficiency as key drivers of future performance [17][18] Other Important Information - The company has reduced its net debt to $7.4 billion, down approximately $200 million from 2023, with a net debt to adjusted EBITDA ratio of 2.9 times [33] - A $500 million share repurchase authorization was announced, reflecting confidence in the stock's valuation [23][38] Q&A Session Summary Question: Plans for acquiring more bulk accounts in 2025 - The company executed bulk deals for about 49,000 accounts in 2024 and is exploring opportunities with several parties, including the previous bulk seller [50] Question: Update on the State Farm partnership and Q4 sales - Sales through State Farm in 2024 totaled 18,000, up from 5,500 in 2023, with ongoing efforts to expand into more states [59] Question: Progress on optimizing the sales process and offer structure - The company launched a new offer structure with the ADT Plus platform and is refining its approach to better meet customer needs [66] Question: Updates on virtual service and AI initiatives - Over three million customers have been served through virtual service, with significant customer satisfaction improvements [70] - AI is being integrated into customer service, with plans to increase AI agent involvement in chats and voice calls [73] Question: Opportunities in small to medium-sized businesses - The SMB segment represents a significant portion of the customer base, and the company plans to renew efforts in this area [78] Question: General health of the US residential market and aging in place opportunities - The company noted that relocations impact customer retention and new ads, with aging in place being a potential growth area [82][84] Question: Subscriber asset spending and tariffs impact - The company is focused on SAC efficiency and expects continued cash flow growth despite potential tariff pressures [92][97] Question: Upgrading existing customers to the new platform - The company is optimistic about upgrading existing customers to the new platform, aiming for cost-effective solutions [95]

Core Insights - ADT Inc. reported strong financial performance for 2024, with GAAP EPS increasing by 40% and adjusted EPS rising by 25% [1][4][6] - The company achieved record recurring monthly revenue and customer retention, with a gross revenue attrition rate of 12.7% [1][6] - ADT plans to maintain momentum into 2025, supported by a new $500 million share repurchase plan [1][4] Financial Performance - Total revenue for 2024 increased by 8% to $1.3 billion, with end-of-period recurring monthly revenue rising by 2% to $359 million [6][12] - GAAP income from continuing operations for the fourth quarter was $197 million, or $0.21 per diluted share, up from $107 million in the previous year [6][13] - Adjusted income from continuing operations for the full year was $685 million, or $0.75 per diluted share, reflecting a 25% increase [14] Cash Flow and Shareholder Returns - Net cash provided by operating activities for the full year was $1.885 billion, up 14% year-over-year [16] - Adjusted Free Cash Flow, including interest rate swaps, increased by 42% to $744 million [6][12] - The company returned $423 million to shareholders through dividends and share repurchases in 2024 [18][19] Business Highlights - ADT launched its proprietary ADT+ platform, enhancing customer offerings and integrating with Google Nest devices [7][11] - The ADT Remote Assistance program achieved high customer satisfaction, with over 50% of service requests being virtual in Q4 2024 [7] - ADT's Trusted Neighbor service was recognized as "Home Security Innovation of the Year" at the IoT Breakthrough Awards [11] 2025 Financial Outlook - The company provided guidance for 2025, projecting total revenue between $5.025 billion and $5.225 billion, with adjusted EBITDA expected to be between $2.650 billion and $2.750 billion [22][23] - Adjusted EPS is forecasted to be in the range of $0.77 to $0.85, and adjusted free cash flow is expected to be between $800 million and $900 million [23][24]