ADT (ADT) Q2 2025 Earnings Call July 24, 2025 10:00 AM ET Company ParticipantsElizabeth Landers - VP & Head - IRJames DeVries - Chairman, President & CEOJeff Likosar - CFO & President - Corporate Development & TransformationPeter Christiansen - DirectorRonan Kennedy - Vice PresidentWilliam Chiu - Head, Credit - Large Commercial BankingConference Call ParticipantsGeorge Tong - Senior Research Analyst - Equity Research & Business ServicesYehuda Silverman - Equity Research AnalystOperatorHello, and thank you f ...

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]

Continued strong financial results, cash generation, and leverage reduction Revenue up 7% versus prior year period, with record-high recurring monthly revenue Year-to-date GAAP Operating Cash Flow up 11%; Adjusted Free Cash Flow (including swaps) up 38% Returned $589 million to shareholders year to date through share repurchases and dividends On track to achieve full year 2025 guidance metrics BOCA RATON, Fla., July 24, 2025 (GLOBE NEWSWIRE) -- ADT Inc. (NYSE: ADT) today reported results for the second quar ...

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 Insights - Arlo Technologies, Inc. has surpassed $300 million in annual recurring revenue (ARR) in less than six years, marking a significant financial milestone for the company [1][2] - The growth is attributed to Arlo's AI-powered smart security platform and subscription services, which have led to a strong customer base of over 11 million registered households and more than 5 million paid subscribers [2][3] - Arlo's commitment to innovation and operational excellence has positioned it as a leader in the smart home security industry, with plans to host the opening bell at the NYSE on July 9, 2025, in celebration of this achievement [2][3] Financial Performance - Arlo has achieved over $300 million in ARR, driven by subscription services [1][2] - The company has a robust install base of more than 11 million registered households and over 5 million paid subscribers, indicating strong market penetration [2] Product and Technology - Arlo's smart security platform includes a comprehensive suite of features such as video surveillance, contact sensor-based monitoring, and AI-verified WiFi intrusion detection, all enhanced by Arlo Intelligence [3] - The platform's advanced AI capabilities allow for efficient processing of video, audio, and environmental events, enabling timely alerts and responses to potential emergencies [3] Customer Experience - Arlo emphasizes a customer-centric approach, which has resulted in class-leading customer retention rates [2] - The company aims to make smart security accessible to everyone, reflecting its mission to enhance user safety and security [3] Company Overview - Arlo Technologies is recognized as an industry leader in smart home security solutions, leveraging AI and cloud services to provide a seamless user experience [5] - The company is committed to user privacy and data protection, implementing industry standards to safeguard personal information [6]

©2025 – ALL RIGHTS RESERVED SAFE HARBOR DISCLOSURE This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words "anticipate," "expect," "believe," "will," "may," "should," "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represen ...

Core Insights - Arlo Technologies has achieved significant growth, surpassing 5 million paid subscribers for its AI-powered subscription service, positioning itself as a leader in the global SaaS market [1][2] - The company has experienced over ten-fold growth in paid subscribers over the last five years, generating more than $275 million in Annual Recurring Revenue (ARR) [2][3] - Arlo's customer retention is exceptional, with an average customer lifespan exceeding 7 years and a monthly churn rate that is among the best in the consumer subscription sector [2][3] Company Performance - Arlo's subscription service metrics are described as world-class, showcasing the company's operational excellence and innovative approach [3] - The Arlo SaaS platform, built over a decade, features Arlo Intelligence, a sophisticated AI engine that enhances user experience by providing advanced security features [3][5] - The platform processes various events to deliver specific alerts and system triggers, improving response times to emergencies while minimizing irrelevant notifications [3] Product and Service Offerings - Arlo offers a range of smart home security products, including wire-free cameras, video doorbells, and security systems, all integrated with its subscription service, Arlo Secure [5] - The company emphasizes user privacy and data protection, implementing industry standards to safeguard personal information [6]

Core Insights - Arlo Technologies, Inc. has launched Arlo Secure 6, an advanced home security subscription service that incorporates AI technology to enhance user experience and decision-making in security matters [1][2]. Product Features - Arlo Secure 6 introduces new AI-powered features including fire detection, advanced audio detection, detailed video event descriptions, and powerful video search capabilities, providing users with deeper insights into events captured by Arlo devices [1][3]. - The service expands on existing features such as Person Recognition and Vehicle Recognition, adding capabilities like Event Captions and Advanced Video Detection [3][6]. User Experience - The new features aim to deliver a smarter, more personalized security experience, allowing users to respond quickly to potential emergencies with real-time notifications and insights [2][5]. - A 30-day trial of Arlo Secure is included with the purchase of select Arlo products, after which premium features require a paid subscription [3]. Company Overview - Arlo Technologies is recognized as a leader in smart home security, focusing on AI and cloud-based solutions to provide seamless security experiences [5][8]. - The company emphasizes user privacy and data protection, implementing industry standards to safeguard personal information [8].

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]