Record-high customer retention and highest-ever recurring monthly revenue balance
18% revenue growth versus prior year with continued growth in subscribers
Affirming 2022 guidance metrics provided at Investor Day
FIRST QUARTER 2022 (variances on a year-over-year basis)
- Total revenue of $1.5 billion, up 18%
- End of period recurring monthly revenue (“RMR”) of $365 million, up 5%
- Total subscribers of 6.7 million, with sequential and year-over-year growth
- Record-high customer retention with gross customer revenue attrition at 12.9%
- Revenue payback of 2.3 years
- GAAP net income of $52 million, up $100 million, or $0.06 per share
- Adjusted EBITDA of $601 million, up $59 million or 11%
BOCA RATON, Fla., May 05, 2022 (GLOBE NEWSWIRE) -- ADT Inc. (NYSE: ADT), the most trusted brand in smart home and small business security, today reported results for the first quarter of 2022.
“The momentum we’ve built in our business is producing results, illustrated by strong improvements to our revenue and earnings, growth in subscribers, and record-high customer retention,” said ADT President and CEO Jim DeVries. “At our Investor Day earlier this year, we laid out a plan to meaningfully grow our revenue, earnings, and cash flows through 2025. With several of our achievements this quarter – from launching the Google Doorbell, to a strong start for ADT Solar, to expansion of our customer-friendly virtual service options – we are already showing progress against that plan as we lead the way in delivering safe, smart, and sustainable solutions.”
ADT continued to make progress on its transformation into an innovative, technology-focused growth company offering a complete suite of safe, smart, and sustainable solutions.
Foundation for Growth
- Continued growth of RMR – As of the end of the quarter, RMR totaled $365 million, representing a 5% increase over the prior year. Approximately 80% of CSB and Commercial revenue was generated from this durable recurring revenue.
- Record customer retention – With strong customer satisfaction, trailing 12-month gross customer revenue attrition was 12.9% at the end the first quarter. This performance reflects a 20-basis-point improvement both sequentially and year over year.
- Google Nest doorbell launch – As part of ADT’s partnership with Google, the Company is now selling, installing, and servicing the Google Doorbell as part of the ADT smart home offering. Since the launch in January, the Company has sold over 60,000 Nest Doorbells with key benefits including easy installation, intelligent alerts, reliable video security with 24/7 live view, and 30-day event-based recordings. Additionally, the Company has rolled out mesh Wi-Fi subsequent to the quarter and is targeting to launch the Google indoor and outdoor cameras by the end of the third quarter.
- Establishing next-generation security for Commercial customers – ADT Commercial showcased several innovations at the recent International Security Conference, ISC West, including the use of humanoid robotics in physical security applications and leveraging autonomous indoor drone technology as an additional layer of surveillance.
- Ford and ADT joint venture – During the first quarter, Ford and ADT announced a new joint venture called Canopy that will combine ADT’s professional security monitoring and Ford’s AI-driven video camera technology to help customers strengthen security of new and existing vehicles across automotive brands. The joint venture closed in April 2022, and both parties have made their initial funding payments.
- Continued rollout of ADT’s SMART monitoring solutions – ADT’s patented SMART (System Monitoring and Response Technology) monitoring helps prioritize response events, enhance response policies, and develop processes that allow ADT to send data to emergency response centers directly – all critically important when every second matters. The Company continues to partner with industry associations and various first responder agencies and expects to have this technology available in 1,000 locations by the end of the year.
- 3G replacement – Since 2019, ADT has replaced approximately 2.8 million radio systems to ensure continuity of service ahead of the 2022 network sunset dates. As of today, less than 3% of the original customer base is left to be converted and the Company expects the remaining net radio conversion costs to be immaterial.
- SoSecure new location-sharing features – ADT’s award-winning personal safety app, SoSecure, announced new location sharing features in April 2022. The new feature keeps users in touch with loved ones from virtually anywhere and provides users with discreet ways to call for help, including an SOS slider button, SMS chat, video or hands-free with a custom secret phrase, even from a locked screen.
- Virtual service visits – Virtual service is transforming how our digital and physical worlds meet, allowing customers to more quickly troubleshoot system issues. Customer response continues to be extremely positive – the program successfully executed over 200,000 virtual service visits in the quarter with approximately 80% truck roll avoidance success rate, generating high customer satisfaction scores at a lower cost to the Company.
- ADT Solar rebranding – In mid-April, the Company officially rebranded its solar segment as ADT Solar, bringing the ADT brand that consumers know and trust to the residential solar market.
2022 FINANCIAL OUTLOOK
The Company is affirming its financial guidance for 2022, with all metrics representing an improvement over 2021 performance.
Total Revenue: $6,200 - $6,400
Adjusted EBITDA: $2,335 - $2,435
Adjusted Free Cash Flow: $550 - $625
As previously announced, management will host a conference call at 10:00 a.m. ET today to discuss the Company’s first quarter of 2022 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 1-877-407-3982 (domestic) or 1-201-493-6780 (international) and requesting the ADT First Quarter 2022 Earnings Conference Call. An audio replay will be available for two weeks following the call and can be accessed by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and providing the passcode 13728785.
A slide presentation highlighting the Company’s results will also be available on the Investor Relations section of the Company’s website. From time to time, the Company 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.
About ADT Inc.
ADT provides safe, smart and sustainable solutions for people, homes and businesses. Through innovative offerings, unrivaled safety, and a premium customer experience, all delivered by the largest network 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 www.adt.com.
ADT has made statements in this press release and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. 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 are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to anticipated financial performance; management’s plans and objectives for future operations; our acquisition of Sunpro Solar, now ADT Solar, and its anticipated impact on our business and financial condition; market conditions; our 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 our innovative offerings; the successful commercialization of our joint venture with Ford; the successful conversion of customers who continue to utilize 3G services; and other matters. Forward-looking statements can be identified by various words such as “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and similar expressions. 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, risks and uncertainties related to the Company’s ability to successfully integrate and operate the ADT Solar business, the Company’s ability to commercialize its joint venture with Ford, the Company’s ability to successfully generate profitable revenue from new partnerships, the Company’s ability to successfully convert all remaining customers away from the use of a 3G platform, and risk factors that are described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission (“SEC”), including the sections entitled “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.Note: amounts may not sum due to rounding