Continued strong financial results, cash generation and leverage reduction
Revenue up 5% versus prior year period
GAAP income from continuing operations up 7%; Adjusted EBITDA up 6%
Record-high recurring monthly revenue; solid customer retention
On track to achieve full-year 2024 guidance metrics
ADT, the most trusted brand in smart home and small business security, today reported financial results for the third quarter of 2024.
Financial highlights for the third 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.
Third quarter 2024
- Total revenue increased by 5% to $1.2 billion and end-of-period recurring monthly revenue (RMR) increased 2% to $359 million ($4.3 billion on an annualized basis)
- Strong customer retention with gross revenue attrition of 12.8% and revenue payback at 2.2 years
- GAAP income from continuing operations of $132 million, or $0.14 per diluted share, up $9 million
- Adjusted income from continuing operations of $183 million, or $0.20 per diluted share, up $39 million
- Adjusted EBITDA from continuing operations of $659 million, up $35 million
- Year-to-date net cash provided by operating activities of $1.4 billion up 14%; Adjusted Free Cash Flow (including interest rate swaps) of $520 million up 28%
“ADT delivered solid third quarter performance resulting in a record-high recurring monthly revenue balance, healthy customer retention, strong operating profitability, and cash generation. Our successful performance reflects the dedication of our employees to serve the needs of our customers,” said Jim DeVries, ADT Chairman, President and CEO. “With our proprietary ADT+ platform, and the recent launch of our Trusted Neighbor features, we continue to empower our customers with the safety, convenience and peace of mind they expect from ADT. Closing out the year, we are well positioned to achieve our 2024 commitments, including significant cash flow growth while continuing to invest in our future and return more capital to our shareholders.”
Business highlights
- Trusted NeighborTM launch: ADT’s Trusted Neighbor offering is now available for customers across the US. This new offering allows customers to grant secure, temporary access to their homes through the ADT+ app, enhancing security and convenience. Select customers can use the Auto-Unlock feature to automatically verify a trusted individual, enabled by deep integration of the ADT+ app, Google Nest Doorbell’s Familiar Faces technology, and Yale locks.
- ADT Remote Assistance: The ADT Remote Assistance program continues to generate high customer satisfaction at a lower cost while also eliminating thousands of vehicle trips each day. In the third quarter 2024, more than 50% of ADT service requests were virtual.
- ADT Home Security Program for State Farm: In October, ADT expanded its Home Security Program for State Farm, introducing a new solution in Maryland and Michigan that detects water leaks in common household areas. Building on learnings and customer feedback from earlier pilot launches, ADT continues to develop tailored packages focused on proactive risk detection and strong customer protection.
- Strategic bulk account purchase: ADT closed on a strategic bulk purchase of approximately 49,000 customer accounts, acquired from the same party as the December 2023 transaction, for $81 million cash with attractive projected returns. This portfolio of customers is concentrated in a few key geographies, all of which align with existing platforms, enabling strong economies of scale upon integration.
- ADT+ app scores high rating: The ADT+ app has received consistently high ratings, averaging 4.7 stars across thousands of reviews in the Apple App Store and Google Play store, making it the highest-rated app in the home security and smart home category.
- ADT’s 150th birthday: In August, ADT proudly celebrated its 150th birthday, a significant milestone marking the company’s 150 years of innovating to keep customers safe. Employees celebrated by ringing the opening bell at the New York Stock Exchange and volunteering with The Birthday Project, a nonprofit organization that hosts birthday celebrations for unhoused youth.
- Hurricane relief donations: In October, the ADT Safe Places program donated to local and national organizations such as the American Red Cross, Team Rubicon and a North Carolina food bank to support relief and recovery efforts in areas affected by recent hurricanes.
- ADT recognized as top workplace for people with disabilities: Newsweek named ADT one of America’s Greatest Workplaces for People with Disabilities. This accolade highlights ADT’s commitment to inclusivity with robust accommodations, comprehensive benefits, accessible work environments and meaningful career advancement opportunities for employees with disabilities.
2024 financial outlook
Based on performance through the end of the third quarter, the company is tightening its 2024 financial guidance within prior guidance ranges.
Updated Guidance (in millions)
CSB Total Revenue $4,850 - $4,950
CSB Adjusted EBITDA $2,550 - $2,600
Adjusted EPS $0.70 - $0.75
Adjusted Free Cash Flow $725 - $775
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 third 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 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.
Media Contacts
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.