Core Insights - ADT Inc. reported a strong financial performance for the second quarter of 2025, with total revenue increasing by 7% year-over-year to $1.287 billion, driven by record recurring monthly revenue and robust cash flow generation [2][5][7]. Financial Performance - Total revenue for the second quarter was $1,287 million, up 7% from $1,205 million in the prior year [7]. - Monitoring and related services revenue grew by 2% to $1,090 million, while security installation and product revenue surged by 44% to $197 million [7]. - GAAP income from continuing operations was $168 million, or $0.19 per diluted share, reflecting a 33% increase from the previous year [8][27]. - Adjusted income from continuing operations rose to $191 million, or $0.23 per diluted share, up 23% year-over-year [8][27]. Cash Flow and Shareholder Returns - Year-to-date GAAP Operating Cash Flow increased by 11%, while Adjusted Free Cash Flow (including swaps) surged by 38% [1][10]. - The company returned $589 million to shareholders through share repurchases and dividends year-to-date, with $143 million returned in the second quarter alone [1][12]. - During the second quarter, ADT repurchased 12 million shares for $96 million, with a total of 65 million shares repurchased under its $500 million share repurchase plan [6][12]. Strategic Developments - ADT closed a strategic bulk purchase of approximately 50,000 customer accounts for $89 million, which is expected to yield attractive returns and enhance economies of scale [6]. - The company launched the Yale Assure Touch smart lock, integrating it with the ADT+ platform to enhance security features [6]. Customer Metrics - The end-of-period recurring monthly revenue (RMR) increased by 2% to $363 million, equating to an annualized figure of $4.4 billion [6]. - Customer retention remained solid, with a gross revenue attrition rate of 12.8% and a revenue payback period of 2.3 years [6][7]. Financial Outlook - ADT reiterated its 2025 financial guidance for Total Revenue, Adjusted EBITDA, and Adjusted Free Cash Flow, while updating the range for Adjusted EPS due to a lower share count from repurchases [13][14].

Core Viewpoint - ADT Inc. is set to release its second quarter 2025 financial results on July 24, 2025, before market opening, followed by a conference call for discussion and Q&A [1]. Group 1: Financial Results Announcement - The financial results will be released before the market opens on July 24, 2025 [1]. - A conference call will take place at 10 a.m. ET on the same day to discuss the results [1]. Group 2: Accessing the Conference Call - Participants can listen to a live webcast via the investor relations website, with a replay available within 24 hours [2]. - The live call can also be accessed by dialing specific numbers for domestic and international participants, with an access code provided [3]. - An audio replay of the call will be available for one week following the event [3]. Group 3: Company Overview - ADT provides safe, smart, and sustainable solutions for individuals, homes, and small businesses [4]. - The company emphasizes innovative offerings, safety, and a premium customer experience through its extensive network of smart home security professionals in the U.S. [4].

Core Viewpoint - ADT Inc. is enhancing its community engagement through a $100,000 donation to support All Things Made New, a nonprofit focused on mentoring and life skills for youth in the Dallas area [1][2]. Group 1: Partnership and Initiatives - The partnership is part of ADT's Safe Places program, which will establish two ADT Safe Places Drop-In Centers in Irving, aimed at providing supportive environments for youth aged 10 to 18 [2][4]. - The centers will offer various services including tutoring, trauma-informed care, mentoring, nutritional support, and access to technology outside of school hours [2][4]. Group 2: Community Impact - ADT's Executive Vice President emphasized that safety extends beyond technology to include trust and care, highlighting the importance of creating supportive spaces for young people [3]. - The donation also includes funding for a co-branded 10-passenger van to facilitate transportation for youth to programming, along with the installation of smart security systems at the new centers [3]. Group 3: Organizational Background - ADT is recognized for providing safe and smart solutions for homes and small businesses, leveraging a large network of smart home security professionals in the U.S. [5]. - All Things Made New, founded in 2012, focuses on mentoring and life skills programming for teens and young adults, aiming to help them become positive contributors to their communities [6].

Group 1 - ADT Inc. (ADT) is a smart home solutions provider with a Zacks Consensus Estimate for its current year earnings revised 1.2% downward over the last 60 days [1] - DoubleDown Interactive Co., Ltd. (DDI) is a digital gaming company with a Zacks Consensus Estimate for its current year earnings revised 6.3% downward over the last 60 days [1] - M/I Homes, Inc. (MHO) is a residential home-builder with a Zacks Consensus Estimate for its current year earnings revised 7.8% downward over the last 60 days [2]

Core Insights - ADT Inc. has launched the Yale Assure Lock 2 Touch with Z-Wave, integrating fingerprint control and the Z-Wave User Credential Command Class for enhanced smart home security [1][3][5] - The ADT+ app has been updated to include Home | Away functionality, utilizing geofencing to automate security settings based on user presence [2][8] Product Features - The Yale Assure Lock 2 Touch offers multiple unlocking methods, including biometric fingerprint recognition, keypad entry, physical key access, and virtual key control through the ADT+ app [4][5] - The lock allows users to arm and disarm their security system directly from the lock, creating a streamlined security experience [4][6] Strategic Collaboration - The partnership between ADT, Yale, and the Z-Wave Alliance aims to set a new standard for smart home security, combining convenience and protection [3][6] - The introduction of the User Credential Command Class represents a significant advancement in interoperability across the smart home industry [6][7] User Experience Enhancements - The Trusted Neighbor program allows designated individuals to access the home using their fingerprint, enhancing convenience for families [7] - The ADT+ app update includes a redesigned interface for easier navigation and access to frequently used features [9][10] Availability and Pricing - The Yale Assure Lock 2 Touch is priced at $279.99 and is available for purchase at ADT.com, with options for self-setup or professional installation [10]

Group 1 - The article discusses the positive outlook for ADT Inc. (NYSE: ADT) based on improving fundamentals and the successful performance of the ADT+ platform, with expectations for EPS growth as guided [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance the investment process [1] Group 2 - There are no disclosed positions in any of the companies mentioned, indicating a neutral stance on potential conflicts of interest [2] - The article is presented as an individual opinion without compensation, reinforcing the independence of the analysis [2]

Financial Performance - Total revenue for the three months ended March 31, 2025, was $1,267,491,000, an increase of $77,819,000 compared to $1,189,672,000 in the same period of 2024 [198]. - Recurring Monthly Revenue (RMR) increased to $359,534,000, up $6,260,000 from $353,274,000 in the prior year [198]. - Adjusted EPS for the three months ended March 31, 2025, was $0.21, an increase of $0.02 compared to $0.19 in the same period of 2024 [198]. - Adjusted EBITDA rose to $660,801,000, reflecting an increase of $23,110,000 from $637,691,000 in the prior year [198]. - Monitoring and related services revenue increased by $20,452,000 to $1,083,104,000, driven by higher average prices despite lower volume [198]. - Security installation, product, and other revenue surged by $57,367,000 to $184,387,000, primarily due to a higher mix of professionally installed systems under the outright sales model [198]. Customer Metrics - As of March 31, 2025, the company served approximately 6.4 million security monitoring service subscribers, with revenue break-even achieved in approximately two years for new subscribers [180]. - Gross customer revenue attrition decreased to 12.6% from 13.1% in the prior year, indicating improved customer retention [198]. Debt and Financing - Cash and cash equivalents as of March 31, 2025, totaled $3.7 million, with total debt outstanding amounting to $7.8 billion [221]. - The company has a remaining borrowing capacity of $760 million under its First Lien Revolving Credit Facility as of March 31, 2025 [221]. - The company redeemed $500 million of the First Lien Notes due 2026 in March 2025, resulting in a total redemption price of $506 million [240]. - As of March 31, 2025, approximately 38% of the total carrying amount of the company's debt was subject to variable interest rates [259]. - The company was in compliance with all financial covenants and maintenance tests for its debt obligations as of March 31, 2025 [246]. - The company intends to redeem its notes before maturity through ongoing sources of liquidity or refinancing [241]. - The company amended the 2020 Receivables Facility to extend the uncommitted revolving period to March 2026 and reduce the interest rate on outstanding borrowings [242]. Shareholder Returns - The 2025 Share Repurchase Plan allows for the repurchase of up to $500 million of Common Stock, with approximately $208 million remaining as of March 31, 2025 [230][233]. - In March 2025, the company repurchased 20 million shares for approximately $152 million, and an additional 18 million shares for $140 million [232]. - A dividend of $0.055 per share was announced on April 24, 2025, to be paid on July 8, 2025 [237]. Taxation - The effective tax rate for the period was 26.4%, with an income tax expense of $51,032,000 [205]. - Income tax expense for the three months ended March 31, 2024, was $56 million, resulting in an effective tax rate of 25.6% [206]. - The company expects to begin making federal cash tax payments in the second quarter of 2025, with estimated payments fluctuating based on financial results [236]. Cash Flow - The net cash provided by operating activities for the three months ended March 31, 2025, was $466,626, an increase of $102,824 compared to $363,802 in the same period of 2024 [248]. - The company experienced a decrease in cash used in investing activities by $41,811 compared to the prior year period, primarily due to lower expenditures on subscriber system assets [250][252]. - The company reported an increase in net cash used in financing activities by $246,260 compared to the prior period, largely due to increased share repurchases [248][252]. Strategic Initiatives - The company continues to work towards a commitment of $200 million in aggregate purchases under the Google Cloud Agreement Addendum [235]. - In March 2025, the company amended and restated the First Lien Credit Agreement, issuing a new $600 million first lien seven-year term loan facility due in 2032 [238]. - As of March 31, 2025, the company had an outstanding balance of $396 million under the 2020 Receivables Facility after a voluntary prepayment of $23 million during Q1 2025 [242][245].

Financial Data and Key Metrics Changes - ADT Inc. reported a record recurring monthly revenue balance of $360 million, up 2% year-over-year [7] - Total revenue grew by 7% compared to the prior year, reaching $1.3 billion [28] - Adjusted earnings per diluted share increased by 11% to $0.21 [9] - Adjusted free cash flow more than doubled year-over-year to $226 million [26] - Adjusted EBITDA for the first quarter was $661 million, an increase of 4% [30] Business Line Data and Key Metrics Changes - Monitoring and services revenue increased by 2%, driven by the record RMR balance [27] - Installation revenue was $184 million, up $57 million or 45%, attributed to the transition to the ADT Plus platform [28] - The average installation revenue per unit improved to approximately $1,500 due to customer interest in comprehensive systems [29] Market Data and Key Metrics Changes - Gross new customer additions totaled 72,000, contributing $10.6 million of new RMR [31] - Gross RMR additions fell 7% year-over-year, with a decline of 15,000 units compared to Q1 2024 [58][59] - The small business segment remained flat in attrition, indicating stability in that market [78] Company Strategy and Development Direction - The company focuses on delivering safety and peace of mind through unrivaled safety, innovative offerings, and premium customer service [11] - Continued investment in the product and experience ecosystem to develop differentiated customer offerings [12] - Expansion of the ADT Plus platform to a larger percentage of new customers and enhancement of capabilities for existing customers [12][15] - The partnership with State Farm is progressing, with gross ads increasing in Q1 2025 compared to the previous year [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite macroeconomic uncertainties [43] - The company reaffirmed full-year guidance, expecting adjusted free cash flow to be up 14% and adjusted earnings per share to be up 8% [36] - Management noted potential tariff impacts but believes they can manage net exposure within guidance ranges [53] Other Important Information - The company appointed Fawad Ahmad as Chief Operating and Customer Officer and Omar Khan as Chief Business Officer [22] - Customer satisfaction reached a three-year high, contributing to record customer retention [16] Q&A Session Summary Question: Assessment of the demand environment and housing market impact - Management noted that demand for personal safety increases during uncertain times, and the business model is resilient [43] Question: Metrics indicative of consumer strength - Slight uptick in slower payments observed, but overall positive trends in pricing and record attrition were highlighted [46] Question: Impact of tariffs and cost structure adjustments - Management is actively negotiating with partners and considering inventory management strategies to mitigate tariff impacts [50][51] Question: Dynamics driving gross RMR additions decline - The decline was attributed to tightened credit standards in DIY and health business segments [59][60] Question: Update on State Farm partnership and AI initiatives - The partnership is progressing well, with increased gross ads, and AI initiatives are improving customer care operations [71][72] Question: Pricing and inflation outlook - Management indicated that inflation impacts are primarily related to tariffs, but overall pricing strategies are being adjusted [94]

Financial Data and Key Metrics Changes - ADT Inc. reported a record recurring monthly revenue (RMR) balance of $360 million, up 2% year-over-year [7] - Total revenue increased by 7% compared to the prior year, reaching $1.3 billion [27] - Adjusted earnings per diluted share rose by 11% to $0.21 [9] - Adjusted free cash flow more than doubled year-over-year to $226 million [25] - Adjusted EBITDA for the first quarter was $661 million, an increase of 4% [30] Business Line Data and Key Metrics Changes - Monitoring and services revenue was up 2%, driven by the record RMR balance [27] - Installation revenue surged to $184 million, up 45% year-over-year, primarily due to the transition to the ADT Plus platform [27][28] - The average installation revenue per unit improved to approximately $1,500, reflecting customer interest in comprehensive systems [29] Market Data and Key Metrics Changes - Gross new customer additions totaled 72,000, contributing $10.6 million in new RMR [31] - Gross RMR additions fell 7% year-over-year, attributed to tightened credit standards in the DIY segment and a decline in the health business [58][59] - The small business segment remained flat year-over-year, with core pro install direct ads up 4% [60] Company Strategy and Development Direction - The company is focused on delivering safety and peace of mind through three strategic areas: unrivaled safety, innovative offerings, and premium customer service [11] - Continued investment in the product and experience ecosystem aims to enhance customer offerings and retention [12] - The ADT Plus platform is being expanded to a larger percentage of new customers, with a focus on optimizing subscriber economics [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite macroeconomic uncertainties [43] - The company reaffirmed its full-year guidance, expecting adjusted free cash flow to increase by 14% and adjusted earnings per share to rise by 8% [36] - Management acknowledged potential tariff impacts but believes they can manage net exposure within guidance ranges [37][53] Other Important Information - The company appointed Fawad Ahmad as Chief Operating and Customer Officer and Omar Khan as Chief Business Officer [22] - Customer satisfaction reached a three-year high, aided by improvements in agent satisfaction and customer experience metrics [16] Q&A Session Summary Question: Assessment of the demand environment and housing market impact - Management noted that demand for personal safety increases during uncertain times, and the business model is resilient [43] Question: Metrics indicative of consumer strength - Slight uptick in slower payments was observed, but overall positive trends include higher average pricing and record attrition [46] Question: Impact of tariffs and cost structure adjustments - Management is actively negotiating with partners and considering inventory management strategies to mitigate tariff impacts [50][51] Question: Dynamics driving gross RMR additions decline - The decline was primarily due to tightened credit standards in the DIY segment and a decrease in the health business [59] Question: Update on State Farm partnership and AI initiatives - The State Farm partnership is progressing well, with pilot programs underway and customer satisfaction remaining high [71] - AI initiatives have led to 90% of customer service chats being processed by AI agents, with plans to expand this capability [72] Question: Attrition improvement potential - Current attrition is at 12.6%, with management aiming for further reductions through new retention initiatives [90] Question: Inflation outlook and pricing strategies - Tariffs are a concern for material costs, but overall pricing strategies are being adjusted to account for inflation [95]

First Quarter 2025 Earnings Presentation April 24, 2025 Forward Looking Statements and Non-GAAP Measures ADT has made statements in this presentation 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 ...