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 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]

ADT, Inc. (NYSE:ADT) Q4 2024 Earnings Conference Call February 27, 2025 10:00 AM ET Company Participants Elizabeth Landers - ADT Investor Relations Jim DeVries - Chairman, President and Chief Executive Officer Jeffrey Likosar - Chief Financial Officer Conference Call Participants Ronan Kennedy - Barclays Bank David Paige - RBC Capital Markets Peter Christiansen - Citigroup Rebecca Thank you for staying by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcom ...