Slide 1: Second Quarter 2022 Earnings Presentation
Second Quarter 2022 Earnings Presentation August 4, 2022
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures ADT has made statements in this presentation and in other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties, including under the heading — “2022 Financial Outl
Slide 3: Company Overview
Company Overview
Slide 4: We are a Mission-Driven Company
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations We are a Mission-Driven Company Our mission has expanded beyond the traditional definition of security Safe Smart Sustainable We protect We deliver innovative, We make life better for the what matters most customer-focused pr
Slide 5: Our Mission Delivers Superior Results For All Stakeholders
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Our Mission Delivers Superior Results For All Stakeholders Our commitment to respect the environment, promote social responsibility, and lead with responsible governance is fundamental to who we are and guides our safe, smart
Slide 6: Well-Positioned For Strong Cash Generation and Profitability
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Well-Positioned For Strong Cash Generation and Profitability Consumer & Small Commercial Solar Business (CSB) ✓ Poised to become a $48B market by ✓ Market leading position with the ✓ Home automation market growing 2025 with a
Slide 7: 2Q 2022
2Q 2022
Slide 8: 2Q 2022: Highlights
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations 2Q 2022: Highlights Strong customer satisfaction, record-high customer retention and recurring monthly revenue balance, and continued growth in subscribers Revenue growth of 23% versus prior year and adjusted net income of $5
Slide 9: Key Financial and Operating Metrics
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Key Financial and Operating Metrics For the three months ended June 30, June 30, Key Highlights Y/Y Change ($ in millions) 2022 2021 M&S Revenue $1,146 $1,084 $62 6% • M&S Revenue: Larger recurring revenue base from increase
Slide 10: Google Partnership Building Momentum in 2022
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Google Partnership Building Momentum in 2022 • National rollout of Google Nest indoor/outdoor cameras and thermostats on Aug. 2, following successful launches of doorbell and Wi-Fi earlier in 2022 – Positive early results fro
Slide 11: Financial Outlook
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Financial Outlook Total Adjusted Adjusted Revenue EBITDA Free Cash Flow $10B+ $1B $3B+ $6.2-6.4B $2,335-2,435M $550-625M $5.3B $465M $2,213M 2021 2022 2025 2021 2022 2025 2021 2022 2025 Guidance Goal Guidance Goal Guidance Go
Slide 12: Key Financial and Operating Metrics
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations TOTA L CO M PA NY Key Financial and Operating Metrics Gross RMR Additions Total Company Statistics $ in Millions Total +7% $14.5 $15.5 2Q'22 Y/Y Change Ending Subscriber Count 6.7M 2% 2Q'21 2Q'22 M&S Revenue $1,146M 6% Instal
Slide 13: Segment Financials and Key Metrics: Consumer and Small Business
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations CONSUMER AND SMALL BUSINESS Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions Total +6% $1,023 $1,088 $57 $77 2Q'22 Y/Y Change +5% $965 $1,011 Ending Subscriber Count 6.5M 2% 2Q'21 2Q'22 Interactive
Slide 14: Segment Financials and Key Metrics: Commercial
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations COMMERCIAL Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions Total +6% $282 $297 $163 $163 2Q'22 Y/Y Change $118 $134 Ending Subscriber Count 260K 1% 2Q'21 2Q'22 Monitoring & Service Installation & O
Slide 15: Segment Financials and Key Metrics: Solar
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations SOLAR Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions Total +57% 2Q'22 Y/Y Change $215 $137 Solar Installations 5.6K 50% 2Q'21 2Q'22 Installation & Other Revenue per Installation ~$39K 4% Financing
Slide 16: Capital Structure Overview
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Capital Structure Overview Recent Highlights Capital Structure $ in Millions 12/31/21 6/30/22 Actual Actual • Paid 2Q dividend of $0.035 per share in July, returning $32 Revolver 25 80 million to shareholders First Lien Term
Slide 17: Additional Financial Information
Additional Financial Information
Slide 18: Adjusted Free Cash Flow
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Adjusted Free Cash Flow For the three months ended For the six months ended ($ in millions) June 30, 2022 June 30, 2021 Y/Y Change June 30, 2022 June 30, 2021 Y/Y Change Adjusted EBITDA $597 $542 $55 $1,198 $1,084 $114 Net Ex
Slide 19: Net SAC Calculation
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Net SAC Calculation For the three months ended For the six months ended June 30, 2022 June 30, 2022 ($ in millions) Capitalized Non-capitalized Total Capitalized Non-capitalized Total Selling, Advertising & Commissions $103 $
Slide 20: Additional Historical Quarterly Data
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Additional Historical Quarterly Data ($ in millions) For the Three Months Ended June 30, March 31, Decem ber 31, Septem ber 30, June 30, 2022 2022 2021 2021 2021 Operating and Financial Measures Monitoring and Service Revenue
Slide 21: Selected Statement of Operations Components
Overview 2Q 2022 Additional Financial Information Non-GAAP Reconciliations Selected Statement of Operations Components For the three months ended June 30, 2022 For the three months ended June 30, 2021 ($ in millions) Total Cost of SG&A Total Cost of SG&A (1) Revenue Revenue and Other(1) D&A Total Re
Slide 22: Income Statement
Income Statement Three Months Ended June 30, Six Months Ended June 30, (in millions, except per share data) 2022 2021 $ Change % Change 2022 2021 $ Change % Change Monitoring and related services $ 1,146 $ 1,084 $ 62 6% $ 2,267 $ 2,146 $ 121 6% Installation, product, and other 455 221 234 106 % 879
Slide 23: Balance Sheet
Balance Sheet June 30, 2022 December 31, 2021 Assets Current assets: Cash and cash equivalents $ 44 $ 24 Accounts receivable, net 528 442 Inventories, net 314 277 Work-in-progress 83 71 Prepaid expenses and other current assets 215 178 Total current assets 1,184 993 Property and equipment, net 369 3
Slide 24: Cash Flow Statement
Cash Flow Statement Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Cash flows from operating activities: Net income (loss) $ 92 $ (126) $ 143 $ (174) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangi
Slide 25: Segment Information
Segment Information (in millions) Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 June 30, 2022 June 30, 2021 Total revenue Monitoring and related services $ 1,146 $ 1,121 $ 1,103 $ 1,098 $ 1,084 $ 2,267 $ 2,146 Installation, produc
Slide 26: Non-GAAP Measures
Non-GAAP Measures We sometimes use information (“non-GAAP financial measures”) that is derived from the condensed consolidated financial statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Under SEC rules, non-GAAP financial measure
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted EBITDA, Adjusted EBITDA prior to subscriber acquisition, and Adjusted EBITDA Margin: We believe the presentation of Adjusted EBITDA provides useful information to investors about our operating profitability adjusted for certain non-cash items, non-routine it
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Free Cash Flow and Adjusted Free Cash Flow: We believe the presentations of Free Cash Flow and Adjusted Free Cash Flow are appropriate to provide investors with useful information about our ability to repay debt, make other investments, and pay dividends. In addition
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Net Income (Loss) and Adjusted Diluted Net Income (Loss) per share: We define Adjusted Net Income (Loss) as net income (loss) adjusted for (i) merger, restructuring, integration, and other; (ii) losses on extinguishment of debt; (iii) radio conversion costs
Slide 30: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Debt to Net Income (Loss) Leverage Ratio and Reconciliation to Net Leverage Ratio: Net Leverage Ratio is calculated as the ratio of net debt to last twelve months ("LTM") Adjusted EBITDA. Net Leverage Ratio prior to subscriber acquisition is calculated as the ratio o