Continued strong operating cash generation
Solid revenue growth, up 3% versus prior year period
Improved leverage and over $150 million debt reduction in the quarter
Affirming full-year 2024 guidance metrics
ADT, the most trusted brand in smart home and small business security, today reported financial results for the second quarter of 2024.
Financial highlights for the second quarter are listed below with variances on a year-over-year basis unless otherwise noted. Results of the former commercial and solar segments are presented as discontinued operations, except for cash flow measures.
Second quarter 2024
- Total revenue increased by 3% to $1.2 billion and end-of-period recurring monthly revenue (RMR) increased 2% to $355 million ($4.3 billion on an annualized basis)
- Strong customer retention with gross revenue attrition of 12.9% and revenue payback at 2.2 years
- GAAP income from continuing operations of $126 million, or $0.13 per diluted share, down $54 million
- Adjusted income from continuing operations of $156 million, or $0.17 per diluted share, up $3 million
- Adjusted EBITDA from continuing operations of $629 million, down $12 million
“ADT delivered a solid first half with continued revenue growth momentum, as well as strong operating profitability and cash flow generation. With our streamlined focus on the consumer and small business markets, we continue to expand and improve our innovative offerings, unrivaled safety and premium experience for security and smart home customers,” said Jim DeVries, ADT Chairman, President and CEO. “Our success is powered by our employees’ dedication to the proposition that every second counts. We are well positioned to achieve our 2024 commitments with continued focus on driving significant cash flow while continuing to invest in our future and simultaneously returning capital to our shareholders.”
Business highlights
- ADT+ platform for professional installation: ADT continued its phased rollout of the ADT+ platform across the country in the second quarter. Customers can now take advantage of next-generation hardware and technology through a proprietary app, which is designed to be the conduit for future innovations such as Trusted Neighbor.
- ADT’s Trusted Neighbor: ADT announced its new Trusted Neighbor offering in partnership with Google and Yale. ADT’s Trusted Neighbor lets customers grant secure, temporary access to their homes based on schedules or events, such as a package delivery or water leak, through the ADT+ app. The offering is expected to become available for select new customers in the third quarter of 2024.
- Implementing AI in operations: In addition to its strong Google Nest partnership, ADT is leveraging Google Cloud’s AI technology platform to enhance efficiency in its business and enhance the customer experience. Early efforts focus on implementing AI in customer care operations and customer retention programs.
- Alarm Scoring live nationwide: ADT’s Alarm Scoring program rolled out nationwide in the second quarter. With this innovative method of classifying alarms, first responders receive the most precise and crucial alarm data to prioritize dispatch.
- Monitoring Center of the Year: ADT won The Monitoring Association’s Monitoring Center of the Year award, recognizing ADT’s significant contribution to the alarm industry, including demonstration of exceptional customer service.
- When Every Second Counts: ADT introduced its new brand promise: When Every Second Counts. ADT launched new advertisements on social media platforms, major television networks, streaming services and in theaters, as well as placements in the summer Olympic Games.
- Mental Health America certification: Mental Health America awarded ADT a Platinum-level Bell Seal certification, the highest level of certification, for its commitment to improving employee mental health.
- ADT Multifamily Partnership: ADT Multifamily announced a partnership with RPM Living, a leading multifamily property management company overseeing more than 200,000 units. ADT Multifamily is the preferred automation vendor for RPM living.
2024 financial outlook
ADT is reiterating its 2024 financial guidance for Total Revenue, Adjusted EBITDA, and Adjusted Free Cash Flow while updating the range for Adjusted EPS to reflect the presentation of the solar business as a discontinued operation.
(in millions)
CSB Total Revenue $4,800 - $5,000
CSB Adjusted EBITDA $2,525 - $2,625
Adjusted EPS $0.65 - $0.75
Adjusted Free Cash Flow $700 - $800
Read the complete earnings report with financial results and complete tables with footnotes.
Conference call
As previously announced, management will host a conference call at 10 a.m. ET today to discuss the ADT’s second quarter 2024 results and lead a question-and-answer session. Participants may listen to a live webcast through the investor relations website at investor.adt.com. A replay of the webcast will be available on the website within 24 hours of the live event.
Alternatively, participants may listen to the live call by dialing 1-800-715-9871 (domestic) or 1-646-307-1963 (international), and providing the access code 4948265. An audio replay will be available for two weeks following the call, and can be accessed by dialing 1-800-770-2030 (domestic) or 1-609-800-9909 (international), and providing the access code 4948265.
A slide presentation highlighting ADT’s results will also be available on the Investor Relations section of the Company’s website. From time to time, ADT may use its website as a channel of distribution of material company information. Financial and other material information regarding the company is routinely posted on and accessible at investor.adt.com.
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About ADT
ADT provides safe, smart and sustainable solutions for people, homes and small businesses. Through innovative offerings, unrivaled safety and a premium customer experience, all delivered by the largest networks of smart home security professionals in the U.S., we empower people to protect and connect to what matters most. For more information, visit adt.com.
Forward-looking statements
ADT has made statements in this press release 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 Securities and Exchange Commission (the “SEC”) and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to, among other things, the divestiture of the commercial business which was completed in October 2023 (the “Commercial Divestiture”); the Company’s exit of the residential solar business and the expected costs and benefits of such exit (the “ADT Solar Exit”); the repurchase of shares of the Company’s common stock under the authorized share repurchase program; the Company’s ability to reduce debt or improve leverage ratios, or to achieve or maintain its long-term leverage goals; the integration of strategic bulk purchases of customer accounts; the Company’s outlook and/or guidance, which includes total revenue, Adjusted EBITDA, Adjusted Diluted Income (Loss) per Share (“Adjusted EPS”) and Adjusted Free Cash Flow (including interest rate swaps); any stated or implied outcomes with regards to the foregoing; and other matters. Without limiting the generality of the preceding sentences, any time we use the words “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and, in each case, their negative or other various or comparable terminology, and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. We caution that these statements are subject to risks and uncertainties, many of which are outside of our control and could cause future events or results to be materially different from those stated or implied in this press release, including, among others, factors relating to uncertainties as to any difficulties with respect to the effect of the Commercial Divestiture and ADT Solar Exit on our ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners; risks related to the Commercial Divestiture and ADT Solar Exit, including ADT’s business becoming less diversified and the possible diversion of management’s attention from ADT’s core CSB business operations; uncertainties as to our ability and the amount of time necessary to realize the expected benefits of the Commercial Divestiture and ADT Solar Exit, including the risk that the ADT Solar Exit may not be completed in a timely manner, or that the costs of the ADT Solar Exit may exceed our best estimates; our ability to maintain and grow our existing customer base and to integrate strategic bulk purchases of customer accounts; activity in repurchasing shares of ADT’s common stock under the authorized share repurchase program; dividend rates or yields for any future quarter; and risks that are described in the Company’s Annual Report and its Quarterly Reports on Form 10-Q, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in those reports, and in our other filings with the SEC. Any forward-looking statement made in this press release speaks only as of the date on which it is made. ADT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.