ADT Inc. · Q2 2023 earnings

Briefing

Reported record high recurring monthly revenue balance and maintained record high customer retention. Improved capital efficiency with record revenue payback of 1.9 years. Achieved positive net income with strong Adjusted EBITDA and operating cash flows. Announced agreement to divest commercial business for $1.6 billion unlocking significant shareholder value; net proceeds to be used for debt reduction.

ADT's second quarter results showed resilience with a record high recurring monthly revenue balance and customer retention. The company reported a total revenue of $1.6 billion and a GAAP net income of $92 million. They also announced an agreement to divest their commercial business for $1.6 billion.

• Total revenue of $1.6 billion with end-of-period recurring monthly revenue (RMR) up 4% or $382 million.
• High customer retention with gross revenue attrition maintaining record low of 12.5%.
• Record revenue payback of 1.9 years.
• GAAP net income of $92 million, or $0.10 per diluted share.

Headline financials

Revenue & EPS history

The Company is revising its financial guidance for 2023. Total revenue is now projected to be lower than prior guidance due to the Solar outlook from low installation volume and efficiency headwinds, partially offset by CSB and Commercial performance. The Company is maintaining previously issued guidance on Adjusted EBITDA, Adjusted EPS, Adjusted Free Cash Flow (including interest rate swaps), and Adjusted Free Cash Flow as we expect M&S revenue and improved operating margins within CSB and Commercial to largely offset the profitability and cash flow impact of Solar underperformance.