ADT Q2 2023 Earnings Report
Key Takeaways
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.
ADT
ADT
ADT Revenue by Segment
Forward Guidance
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.
Positive Outlook
- Adjusted EBITDA: $2,525 - $2,625 million
- Adjusted EPS: $0.30 - $0.40
- Adjusted Free Cash Flow (including interest rate swaps): $600 - $700 million
- Adjusted Free Cash Flow: $525 - $625 million
Challenges Ahead
- Total Revenue: $6,300 - $6,500 million (previous $6,600 - $6,850 million)
- Solar outlook from low installation volume
- Solar efficiency headwinds
- Commercial business is expected to be reported as discontinued operations beginning in the third quarter of 2023
- Full year Commercial results are included in guidance, pending the close of the transaction.