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Mar 31, 2020
ADT Q1 2020 Earnings Report
ADT's financial results were strong despite COVID-19 disruptions, with revenue up 10% year-over-year and significant cash flow generation.
Key Takeaways
ADT reported a strong first quarter with a 10% increase in total revenue, driven by higher installation revenue and the Defenders Acquisition. However, the company experienced a net loss due to various factors including a settlement related to the Defenders Acquisition and non-cash charges. The company is updating the financial guidance for 2020.
Total revenue increased by 10% to $1,370 million.
Net loss was $300 million, compared to a net loss of $66 million in the prior year.
Free Cash Flow before special items increased to $173 million from $171 million.
Trailing twelve-month gross customer revenue attrition increased by 20 bps to 13.5%.
Forward Guidance
The Company is updating the following financial guidance for 2020:Total Revenue $5,000 - $5,300, Adjusted EBITDA $2,075 - $2,175, Free Cash Flow before special items $600 - $700.
Challenges Ahead
- Updated Financial Outlook assumes disruption to the Company’s operations, primarily new sales, during the second quarter due to stay at home restrictions and related COVID-19 impacts
- Moderately recessionary environment in the third and fourth quarters of 2020.
- The Company is continuing to integrate the January 2020 acquisition of Defenders
- Assessing the progress of a successful February 2020 national launch of a new consumer financing program.
- Both initiatives require further evaluation, decisions, and actions that may impact our 2020 operating results and financial presentation, as well as the accounting treatment of the above metrics.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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