ADT reports third quarter 2023 financial results

Significant balance sheet improvement driven by divestiture of commercial business

8 min read

ADT’s third quarter financial results.

Record-high CSB recurring monthly revenue balance driven by strong retention

Improved capital efficiency with record revenue payback of 2.0 years

Continued innovation in core smart home security markets and rationalization of solar footprint

ADT, the most trusted brand in smart home and small business security, today reported financial results for the third quarter of 2023.

Financial highlights for the third quarter of 2023 are listed below. Except for cash flow measures, prior period amounts have been recast to exclude the commercial business, consistent with continuing operations GAAP presentation following the sale of the commercial business. Variances are on a year-over-year basis unless otherwise noted.

  • Total revenue of $1.2 billion with end-of-period recurring monthly revenue (RMR) up 3% to $350 million
  • High customer retention with gross revenue attrition maintaining 12.9%
  • Record revenue payback of 2.0 years
  • GAAP loss from continuing operations of $21 million, or $(0.02) per diluted share, up $148 million, which includes $88 million negative impact from solar segment goodwill impairment in the current quarter, compared to $201 million in the prior year quarter
  • Adjusted income from continuing operations of $69 million, or $0.08 per diluted share, down $3 million
  • Adjusted EBITDA from continuing operations of $583 million, flat compared to prior year with CSB Adjusted EBITDA of $623 million, up 6%
Jim DeVries
Jim DeVries

“ADT’s core security and smart home business delivered a strong third quarter with recurring monthly revenue topping $350 million, revenue payback at a record low of 2.0 years and continued progress in product development. The solar business continued to perform below our expectations and we’ve undertaken a substantial restructuring in an effort to drive more positive results,” said Jim DeVries, ADT Chairman, President and CEO. “In October, ADT closed on the previously announced divestiture of the commercial business with all net proceeds allocated to debt reduction. Additionally, following this transaction and a credit rating upgrade, ADT refinanced approximately $1.4 billion of debt, extending the maturity from 2026 to 2030 and reducing borrowing costs. Closing out 2023, ADT is in a position of strength, focused on continued value creation, growing cash flow, and optimized capital allocation.”

Business highlights

Foundation for growth
  • Continued growth of RMR: The end-of-period RMR balance was a record at $350 million, representing a 3% increase over the prior year period. Over 85% of total Consumer and Small Business (CSB) revenue was generated from this durable recurring revenue.
  • Maintained near-record customer retention and improved revenue payback: With strong customer satisfaction, trailing 12-month gross customer revenue attrition was 12.9%, flat versus the prior year period, and revenue payback ended the third quarter of 2023 at a record 2.0 years, reflecting a 0.2 year improvement versus the prior year.
Unlocking shareholder value
  • Completed sale of commercial business: On Oct. 2, 2023, the company completed the previously announced divestiture of its commercial business for a purchase price of approximately $1.6 billion.
  • Balance sheet fortification: Following the close of the third quarter, ADT significantly reduced leverage, improved borrowing costs and extended debt maturities. Additionally, improvements in both the balance sheet and operations of the business were recognized in a corporate rating upgrade by Moody’s.
    • Significant debt reduction: Net proceeds from the commercial divestiture and cash on hand used or committed to significantly reduce the company’s leverage by approximately $2.0 billion in 2023.
    • Successful refinancing: ADT refinanced approximately $1.4 billion of debt, extending the maturity from 2026 to 2030 and reducing borrowing costs by approximately 35 basis points.
    • Credit rating upgrade: Moody’s upgraded ADT’s corporate credit rating to ‘Ba3’ from ‘B1’ with a stable rating outlook in recognition of the company’s debt reduction and improving operating metrics for the core residential business.
  • Solar restructuring: The company is taking immediate and decisive action to streamline the solar business by focusing on the top-performing markets and rationalizing the overhead and infrastructure of the business accordingly.
Innovative offerings
  • ADT Home Security Program for State Farm expands: ADT’s program for State Farm customers continues to ramp up and is currently available in 13 states. In those states, State Farm homeowners can participate in the program to receive ADT home security products and professional monitoring at a reduced cost.
  • ADT+ professional installation: The company expects to begin a phased rollout of the ADT+ app to pro-install customers in the fourth quarter. With this rollout, our customers will have next generation hardware and technology through the ADT+ app, which will be the conduit for future innovation and premium differentiation.
Unrivaled safety
  • Alarm Scoring pilot activated: ADT activated its Alarm Scoring pilot program in five U.S. cities. This innovative system offers a uniform and reliable approach for categorizing alarm severity levels. Alarm scoring enhances the accuracy of assessing potential life or property threats and gives first responders the most precise and crucial alarm data for improved emergency responses.
Premium experience
  • Virtual Assistance Wifi Fix: In addition to the ADT Virtual Assistance program, the company rolled out the ADT Wifi Fix app. The tool allows virtual customer service agents to diagnose and address any Wifi issues impacting customers’ ADT equipment or other devices.
Progress on our ESG Journey
  • Supporting Fight Blight Bmore: ADT made a $100,000 donation to charity partner Fight Blight Bmore, a nonprofit focused on creating safe, smart and sustainable spaces in West Baltimore to combat blight.
  • ADT and Miami Marlins Youth Academy: As part of our existing partnership, ADT and the Miami Marlins teamed up to host the first Marlins Rookies program, a safe place for South Florida youth to stay active while developing social and emotional competencies.

Click to watch Ken Porpora and Elizabeth Landers discuss ADT’s third quarter earnings report.

2023 financial outlook

ADT is revising its financial guidance for 2023, primarily to account for the recent divestiture of the commercial business, which is now reported as discontinued operations, and updated operating performance. Strong CSB performance is mostly offsetting weaker solar underperformance, which has allowed ADT to maintain slightly narrowed guidance within the prior ranges after adjusting for the divestiture.

Total Revenue, Adjusted EBITDA, and Adjusted EPS reflect only the company's continuing operations. Adjusted Free Cash Flow (including interest rate swaps) and Adjusted Free Cash Flow include amounts related to the commercial business through the date of sale, consistent with the presentation on the GAAP Statement of Cash Flows.

(in millions)

Total Revenue

Adjusted EBITDA

Adjusted Free Cash Flow 

Prior guidance




Updated guidance




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 ADT’s third quarter 2023 financial results and lead a question-and-answer session. Participants may listen to a live webcast through the investor relations website at 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 1-833-470-1428 (domestic) or 1-646-904-5544 (international), and providing the access code 664545. An audio replay will be available for two weeks following the call, and can be accessed by dialing 1-866-813-9403 (domestic) or 1-929-458-6194 (international), and providing the access code 471093.

A slide presentation highlighting ADT’s financial results will also be available on the Investor Relations 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 ADT is routinely posted on and accessible at

Media Contacts

Investor Relationsinvestorrelations@adt.com888-238-8525

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 one of the largest networks of smart home security and rooftop solar professionals in the U.S., we empower people to protect and connect to what matters most. For more information, visit

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, planned ADT Solar restructuring activities; the commercial transaction between ADT and GTCR, the expected timetable for realizing expected benefits and synergies of the commercial transaction; the strategic investment by and long term partnership with State Farm; anticipated financial performance, including the Company’s ability to achieve its stated guidance metrics and its progress toward its medium-term targets; management’s plans and objectives for future operations; the successful development, commercialization, and timing of new or joint products; the expected timing of product commercialization with State Farm or any changes thereto, including the ADT home security program for State Farm; the Company’s acquisition of ADT Solar and its anticipated impact on the Company’s business and financial condition, including the subsequent announcement of planned ADT Solar restructuring activities; business prospects; outcomes of regulatory proceedings; market conditions; the Company’s ability to successfully respond to the challenges posed by the COVID-19 Pandemic; the Company’s strategic partnership and ongoing relationship with Google; the expected timing of product commercialization with Google or any changes thereto; the successful internal development, commercialization, and timing of the Company’s next generation platform and innovative offerings; the successful conversion of customers who continue to utilize outdated technology; the current and future market size for existing, new, or joint products; any stated or implied outcomes with regards to the foregoing; and other matters. Without limiting the generality of the preceding sentences, any time the Company uses 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, the Company intends 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. ADT cautions that these statements are subject to risks and uncertainties, many of which are outside of ADT’s control, and could cause future events or results to be materially different from those stated or implied in this document, including among others, factors relating to uncertainties as to any difficulties with respect to planned ADT Solar restructuring activities, including expenses associated with the separation of certain Solar branches and personnel; the effect of the commercial transaction and of the announcement of the planned ADT Solar restructuring activities on ADT’s ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners; risks related to the commercial transaction and planned ADT Solar restructuring activities and the possible diversion of management’s attention from ADT’s core CSB business operations; uncertainties as to ADT’s ability and the amount of time necessary to realize the expected benefits of the commercial transaction and planned ADT solar restructuring activities; the achievement of potential benefits of the equity investment by and long-term partnership with State Farm, including as a result of restrictions on, or required prior regulatory approval of, various actions by regulated insurers; risks and uncertainties related to ADT's ability to successfully generate profitable revenue from new and existing partnerships; ADT's ability to successfully commercialize any joint products with State Farm or with Google; the Company's ability to successfully utilize the incremental funding committed by State Farm or Google; continued risks and uncertainties related to the Company’s ability to successfully integrate and operate the ADT Solar business, including the planned ADT Solar restructuring activities risks related to the various financing arrangements, including third party owned arrangements, that the Company facilitates for some ADT Solar customers; the Company’s ability to continuously and successfully commercialize innovative offerings; the Company’s ability to successfully implement an Environmental, Social, and Governance program across the Company; risks related to the restatement of our consolidated financial statements included in our amended Annual Report on Form 10-K/A for the year ended December 31, 2022 (the “Amended Annual Report”) and in our amended quarterly report on Form 10-Q/A for the quarter ended March 31, 2023; any litigation or investigation related to such restatements; the Company’s ability to maintain effective internal control over financial reporting (“ICFR”) and disclosure controls and procedures (“DCPs”) including its ability to remediate any existing material weakness in ICFR and the timing of any such remediation, as well as ability to reestablish effective DCPs at a reasonable assurance level; and risks that are described in the Company’s Amended Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the SEC, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. 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.