Adt Inc. · NYSE:ADT
Adt — Investor Day (March 2022)
135 slides from Adt's investor day presentation, Mar 1, 2022
Slide 1: Investor Day
Ly Investor Day March 1, 2022
Slide 2: ADT Investor Day 2022: Agenda
ADT Investor Day 2022: Agenda Topic Presenter Welcome and Overview of 4Q21 Results Jill Greer ADT’s Next Chapter: Safe. Smart. Sustainable. Jim DeVries Growing Our Consumer & Small Business Segment Consumer Growth Strategy and Optimized Go-To-Market Keith Holmes Google as the Universal Catalyst Mich
Slide 3: ADT Investor Day 2022: Today's Speakers
Jim DeVries Jill Greer Keith Holmes Michael Drory Raya Sevilla Leah Page President and Chief Senior Vice President Executive Vice Vice President, Senior Vice President Vice President, Executive Officer Finance, Investor Relations President and Chief Strategic Initiatives and Chief Technology Emergin
Slide 4: Welcome and Overview of 4Q21 Results
Welcome and Overview of Agenda 4Q21 Results Jill Greer, Senior Vice President Finance, • Welcome Investor Relations and Communications • 2021 performance vs. objectives 4
Slide 5: Forward-Looking Statements
Forward-Looking Statements ADT has made statements in this presentation that are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. These forward looking statements relat
Slide 6: We delivered our 2021 objectives
We delivered our 2021 objectives Gross RMR Additions Adjusted EBITDA Adjusted Free Cash Flow +16% $2.2B $450-$550M $465M Mid-teens $2.1-$2.2B Guidance 2021 Guidance 2021 Guidance 2021 Investing in the foundation for long-term growth while meeting our 2021 financial commitments Note: Guidance as of N
Slide 7: We are entering 2022 with strong momentum
We are entering 2022 with strong momentum 1 Solid 4Q and full year results – meeting our financial commitments to shareholders and taking momentum into 2022 2 Investing in the foundation for long-term growth – RMR growth, Sunpro acquisition, and development of our Google partnership 3 Transformation
Slide 8: ADT's Next Chapter: Safe. Smart. Sustainable.
ADT’s Next Chapter: Agenda Safe. Smart. Sustainable. • Path of transformation Jim DeVries, President and • Strengthened portfolio Chief Executive Officer • Attractive markets • Executing on clear strategy 8
Slide 9: We are excited to share our story with you today
We are excited to share our story with you today Leader We are the clear market leader, with a strong record of disciplined execution We deliver safe, smart, and sustainable solutions to empower people to protect Smart Solutions and connect what matters most We have built unique assets, including ou
Slide 10: We are the clear market leader
We are the clear market leader Market Leader Total Customers Field Force Excellence Adj. Free Cash Flow #1 Security Brand 6.6 Million 7,400 ~$1.7B Installation / Service Last 3 Years Professionals Combined Revenue by Customer Type Recurring Revenue in CSB and Commercial Consumer and Small Commercial
Slide 11: We have delivered significant improvements against our operating metrics
We have delivered significant improvements against our operating metrics We’ve strengthened our platform for growth, enabling our next chapter Customer Recurring Retention Satisfaction Monthly Revenue Revenue Payback Devices per Interactive Period Install Adoption 11
Slide 12: We have reshaped and strengthened our portfolio
We have reshaped and strengthened our portfolio Historical ADT Today: Diversified, Scaled, Poised for Accelerating Growth Footprint SECURITY “Own the Alarm” “Own the Ecosystem” Technology Third-Party Dependent Developing technology in-house; on path to double patent portfolio over next 3 years Partn
Slide 13: We are a mission-driven company
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 products, customers and communities technologies, and services we serve Empow
Slide 14: Our mission delivers superior results for all stakeholders
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, and sustainable business practices Data privacy and cyber security Product
Slide 15: Our markets are large and fast-growing
Our markets are large and fast-growing Positioned in Expanded, Market Growth and Key Drivers Fast Growing Addressable Markets CAGR % Key Drivers $150B (2020-2025) • Significant cross selling opportunity with launch 11% CAGR $23B Solar / Energy 13% of ADT Solar • Quick adoption by users driven by aff
Slide 16: We are positioned to benefit from secular tailwinds
We are positioned to benefit from secular tailwinds Smart Home Security De-Urbanization Solar Adoption Adoption Demand 61M 37M 3M 3M households households households households growing growing growing growing at 10-15% at 5-10% at 3-5% at 10-15% Source: Omdia, Parks Associates, Visa, Citi, ADT analy
Slide 17: We have a clear strategy to drive customer preference and long-term shareholder value
We have a clear strategy to drive customer preference and long-term shareholder value Strategic Differentiators Enablers Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Google Partnership Our Industry-Leading Businesses Consumer &
Slide 18: We expect meaningful improvement in CSB net subscriber acquisition costs
We expect meaningful improvement in CSB net subscriber acquisition costs ADT Today ADT Tomorrow Primarily “Do-it-for-Me” (DIFM) “DIFM”, “Do-it-Yourself”, “Do-it-with-Me” Field Sales and National Sales Center (NSC) eCommerce, Retail, Field Sales, NSC, Partners ~$1,000 installation fee per subscriber
Slide 19: Our commercial business provides a complementary growth platform
Our commercial business provides a complementary growth platform 300,000+ Customer sites 5,000+ Commercial employees We are one of the largest full-service commercial security Marquee Fortune 1000 providers in the U.S. 160+ customers Strong, growing and capital-light 19
Slide 20: We strengthened our portfolio and growth profile with the acquisition of Sunpro
We strengthened our portfolio and growth profile with the acquisition of Sunpro Vertical Integration National Footprint Proven Growth Rapidly moving up the rankings vs Current Footprint competition 2022 planned expansion Solar is a logical extension of the ADT ecosystem Note: Ranking by Solar Power
Slide 21: Sunpro acquisition unlocks integrated home experience
We strengthened our portfolio and growth profile with the acquisition of Sunpro – unlocks integrated home experience Total Solar Market Solar Accelerates Cross-Selling – A Powerful Driver Rapidly Expanding Revenue Growth – Integrated Home Experience $23.4B Security $10B+ 13% ~15% CAGR CAGR ~35% CAGR
Slide 22: We are at an inflection point in our growth
We are at an inflection point in our growth A Fundamentally Transformed Business Best-in-class model Key 2025 • Smart home business has best-in-class unit economics and compelling 2021 Metrics Goals incremental subscriber returns Google – game changer $5.9B $10B+ Revenue • Google partnership a growt
Slide 23: We are safe, smart, and sustainable
IN SUMMARY We are safe, smart, and sustainable Proven market leader, with strong track record Unparalleled customer value proposition and capabilities Additional growth fueled by capital-light businesses A clear strategic roadmap to achieve our goals 23
Slide 24: Consumer Growth Strategy and Optimized Go-To-Market
Consumer Growth Strategy and Agenda Optimized Go-To-Market • Market opportunity Keith Holmes, Executive Vice President and • Four point strategy Chief Revenue Officer • Future financial goals 24
Slide 25: We are the market leader, winning in core markets and adjacencies
We are the market leader, winning in core markets and adjacencies 2021 2025 Goal Aspiration 6.4M 7M+ #1 CSB Customers CSB Customers Smart Home Provider 25%+ of HHs Unlocking all US HHs 50M 80M 130M+ Core Home Life Safety | Automation | ADT HH TAM By 2025 Security HHs Auto | Health HHs Win in core an
Slide 26: We have expanded our addressable market and customer opportunity
We have expanded our addressable market, broadened our capabilities, and increased our customer opportunity Total Available Market (TAM) Household Opportunity Large and expanding Potential to address ~all US HHs $90B 130M $25B 40M 2021 2025 Estimate 2021 2025 Estimate Core Home Security Adjacencies
Slide 27: We are executing a winning four-point formula
We are executing a winning four-point formula to reach new customers and grow our share of wallet 1 2 Tactical Go-To- Enhanced Customer Market Execution Flexibility 3 4 Expanded Strong Channels Partnerships 27
Slide 28: Our foundation is best-in-class, with the broadest customer reach
Our foundation is best-in-class, with the broadest customer reach in the industry 700 2,900 200 Phone Field Dealer Solutions Advisors Solutions Advisors Partners Note: Refers to ADT phone and field sales employees prior to the Sunpro acquisition. 28
Slide 29: 1. We are improving our already strong go-to-market execution
1. We are improving our already strong go-to-market execution Marketing Effectiveness Sales Conversion Pricing Optimization • Data analytics • Recruiting / training • Channel optimization • Messaging customization • Performance management • Solution selling • Placement • Channel optimization • Disco
Slide 30: 2. We are enhancing consumer purchasing flexibility
2. We are enhancing consumer purchasing flexibility Bundled Offers Pricing Simplicity Contract Flexibility • Use-case driven positioning • Linked to bundled offers • No contract alternatives • Customized for individual • Disaggregated alternatives • Outright sales to customer customer needs • Increa
Slide 31: 3. We are expanding our channel reach
3. We are expanding our channel reach Retail E-commerce Omnichannel • Direct in-store and online • Self-service without sales • Combining attributes of sales via retailers interaction multiple channels • Affinity marketing • System configuration • Start Anywhere Finish • Enhanced brand awareness • U
Slide 32: 4. We are broadening our national-scale partnerships
4. We are broadening our national-scale partnerships Insurance Building & Construction Other • Expand reach and purchase • Low SAC, simplified service • Unique partnerships only moments activation available with ADT’s brand • Low SAC • Further expand natural and scale • Safety and peace-of-mind use
Slide 33: We are the leader in small business security
We are the leader in small business security #1 in smart 90 rate % close business security 10% of overall CSB business Opportunity to scale 33
Slide 34: Go-to-market strategy expected to drive meaningful growth
Combined with our strategic differentiators, we expect our go-to-market strategy to drive meaningful growth CSB RMR CSB RMR Additions CSB Total Revenue ~$70M $5.5-6.0B ~$425M $55M $328M $300M $4.1B $46M $3.9B 2017 2021 2025 Goal 2017 2021 2025 Goal 2017 2021 2025 Goal Execution + consumer flexibilit
Slide 35: We have a strong foundation with ample growth opportunity
IN SUMMARY We have a strong foundation with ample growth opportunity New appeal with cutting edge smart home products Comprehensive solutions to better meet customers’ needs Meeting customers where they want to shop with the right product for them Tremendous potential for continued growth – track to
Slide 36: Google as the Universal Catalyst
Google as the Universal Catalyst Agenda • The partnership Michael Drory, Vice President, • Universal catalyst – accelerating our Strategic Initiatives six growth pillars • Initial success – Google doorbell 36
Slide 37: Our deep partnership with Google is expected to drive long-term value creation
AT A G L A NC E Our deep partnership with Google is expected to drive long-term value creation ‘Iron sharpening’ – joint offers; co-branded, co-distributed solutions – ADT’s #1 brand, trusted security, professional installation and monitoring service – Google’s award-winning Nest hardware and analyt
Slide 38: Google partnership benefits each strategic differentiator and enabler
Our partnership with Google benefits each of our strategic differentiators and enablers Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Improved customer economics + reduced attrition + TAM expansion 38
Slide 39: Google partnership accelerates our innovative offerings
Our Google partnership enhances and accelerates our innovative offerings Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Leading hardware – Google Nest camera, thermostat, Wi-Fi, display, and voice devices configured alongside ADT
Slide 40: Google partnership strengthens our unrivaled safety
Our Google partnership strengthens our already unrivaled safety Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Nest video + ADT analytics power new capabilities – proprietary solution to reduce false alarms and improve response ef
Slide 41: Google partnership elevates our premium experience
Our Google partnership elevates our premium experience Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Frontline access to new tools – ADT agents armed with Google customer service tools for increased visibility & ability to resolv
Slide 42: Google partnership enhances our trusted brand
Our Google partnership complements and enhances our trusted brand Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Complementary assets expand brand effectiveness • #1 in trust & security + #1 in technology Co-marketing brand expres
Slide 43: Google partnership further optimizes go-to-market capabilities
Our Google partnership further optimizes our go-to-market capabilities Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Digital accelerant – opportunity to introduce ADT cross-sell / upsell buy flows into Google properties to create
Slide 44: Google partnership increases efficiency and operational excellence
Our Google partnership increases efficiency and operational excellence Innovative Unrivaled Premium Trusted Optimized Operational Offerings Safety Experience Brand Go-to-Market Excellence Subscriber acquisition cost offset via expanded in-home revenue opportunities • Now: leading hardware that is ea
Slide 45: We are building momentum in 2022
We are building momentum in 2022 Innovative Google Nest doorbell replaces Partnership momentum & scale on display: Offerings ADT solution Average doorbells Unrivaled Google Nest AI-powered use cases – 6-7K Safety friendly faces, package detection, etc. sold per week Premium Capability building; Goog
Slide 46: Google as the universal catalyst
IN SUMMARY Google as the universal catalyst A long term, value creation partnership Six key pillars are expected to accelerate ADT growth and performance Google Nest doorbell launch success Exciting growth opportunities ahead 46
Slide 47: Innovative Offerings
Innovative Offerings Agenda Raya Sevilla, Senior Vice President and Chief • Broad range of offerings Technology Officer • ADT+ enables the future Leah Page, Vice President, Emerging • Expanding security beyond the home Business & Mobile 47
Slide 48: We have a broad range of offerings to serve customers throughout their life
We have a broad range of offerings to serve customers throughout their life Mobile Security Point Solutions and Professionally-Installed Smart Aging Do-It-Yourself Systems For people Renters, apartment living, Concierge smart home Solutions for aging on-the-go tech comfortable Security seniors 48
Slide 49: Redefining our offerings and experiences with ADT+
We are redefining the breadth and seamlessness of our customer offerings and experiences with ADT+ New interactive New mobile New ADT+ platform experience hardware • ADT built interactive platform using the latest technologies in cloud computing and machine learning • ADT designed intuitive product
Slide 50: ADT+ continually delivers improved value to customers
ADT+ continually delivers improved value to customers to make their lives easier and safer Anticipatory Helpful Linked Learning behaviors, Continuously adding Becoming linked to our becoming anticipatory, and new value, beyond hardware sense of safety, comfort and reducing friction in daily life lif
Slide 51: ADT+ focuses on what matters most to our customers
ADT+ focuses on what matters most to our customers • Simple and instinctive product experience • Contextual & proactive automations • Incident prevention (home assurance) • Smart home support 51
Slide 52: Our future product roadmap is accelerated by Google
Our future product roadmap is accelerated by Google Past (2021) Present (2022) Future (2023 and Beyond) Hardware Interactive Platform Control Control Services Monitoring Monitoring 52
Slide 53: Our customer experiences and offerings are diverse, broad, and unique
Our customer experiences and offerings are diverse, broad, and unique 1 min ago Your mother arrived at home safely this morning. 53
Slide 54: Expanding security beyond the home
We have begun to expand security beyond the home, and plan to integrate with our core consumer offerings Mobile Security provides protection wherever you are Safety that meets you where you are ADT in a partner’s native experience SoSecure Mobile App • Provide safety & security to people • An ADT mo
Slide 55: Canopy, a JV with Ford Motor Company
We recently launched Canopy, a JV with Ford Motor Company, to integrate our offerings into automobiles ADT + Ford Partnership introduces Canopy • ADT and Ford come together to co-invest in a JV, Canopy • Combination of our professional security monitoring and Ford’s AI-driven camera technology • Ans
Slide 56: Expanding our TAM through use cases such as Smart Aging
We continue to expand our TAM through additional customer use cases such as Smart Aging Smart Aging that targets a more youthful Senior • Extraordinary market conditions are pushing the need for Seniors to age in place • Creation of unique solutions with new form factors using our ADT platform and A
Slide 57: Innovative offerings
IN SUMMARY Innovative offerings Integrated software experiences Aligned incentives with Google Enabling our future with ADT+ Grow and expand subscription services with new offerings and bundles 57 57
Slide 58: Unrivaled Safety
Unrivaled Safety Agenda Don Young, Executive Vice President and • Our differentiated capabilities Chief Operating Officer • Extending our lead 58
Slide 59: Unrivaled safety and peace of mind for 147 years
We have delivered unrivaled safety and peace of mind for 147 years Unrivaled Safety Is the Bedrock of Our Company and Our Mission 147 Years of 9 UL-listed 6.6 million protected perfecting safety monitoring centers customers Highly trained Multiple agents redundancies 59
Slide 60: We protect lives, families, businesses, livelihoods, property, pets, and data
We protect lives, families, businesses, livelihoods, property, pets, and data “Knowing people are there, whether I take them up on it or not, is huge”. Katie, ADT Customer 60
Slide 61: Safety commitment and innovations benefit multiple stakeholders
Our commitment to safety and related innovations benefit multiple stakeholders Customers Communities ADT • Enabling faster emergency • Fewer false alarms and 911 calls • Improved customer preference response • Reduced vehicle responses (and • Improved customer retention • More control of data cost a
Slide 62: Unrivaled leader in delivering safety and peace of mind
We are the unrivaled leader in delivering safety and peace of mind – a key differentiator Best-in-class Innovative More Data Better Event Unrivaled Technical Customer Sources + Analysis + + = Customer Safety Infrastructure Interfaces SMART ADT Next Generation Public Safety Monitoring ML/AI Q3-22 911
Slide 63: Strengthening and innovating our unrivaled safety experience
We are strengthening and innovating our unrivaled safety experience Standard Industry Processes Are Slow, Error ADT’s Processes Deliver Increasingly Prone and Sometimes Unreliable Differentiated Speed and Fidelity • 10-digit calls to lowest-priority 911 center lines • Algorithm-driven event assessme
Slide 64: Steadfast in protecting customer data and privacy
We are steadfast in protecting customer data and privacy Customer Choice Secure Storage Protected Distribution Customer ADT Data Patented consent store Lockbox proprietary process 64
Slide 65: Our commitment to safety will continue to define the industry
IN SUMMARY Our commitment to safety will continue to define the industry Lower the cost of professional monitoring Increase the speed, accuracy, and reliability of our emergency response to customer alarms Drive differentiation and customer loyalty 65
Slide 66: Premium Experience
Premium Experience Agenda • Value we provide today Jamie Haenggi, Executive Vice President • Four key changes to further and Chief Customer Officer enhance value 66
Slide 67: We protect and serve millions of customers every single day
We protect and serve millions of customers every single day 391M 245M 52M 7M motion sensors systems door signals video clips triggered disarmed 1.3M 63K 10K 4K thermostat alarms homes virtual service changes handled visited visits 67
Slide 68: Our premium customer experience is unparalleled
Our premium customer experience is unparalleled A premium customer experience… Delivers significant value Maximize customer value …is …is …is flexible personalized proactive Improve retention Unlock revenue Reduce support cost profile …is intuitive …is memorable 68
Slide 69: Resolutely focused on the customer experience
We are resolutely focused on the customer experience Extensive journey map Four key changes to drive and research improved experience Consider/ Search Come Back Purchase 1 2 Install/ Cancel Onboard Choice in Advancing our install/service in-home experience Move Interact/ Use Engage Service 3 4 Expan
Slide 70: 1. Reinvented service calls to improve the customer experience
1. We have reinvented service calls to improve the customer experience to drive loyalty and efficiency Virtual service Unlocks value Customers accepting virtual tech appointments per day 4,000 Create high value, positive interaction Delivering the highest customer satisfaction on service 80+ Reduce
Slide 71: 1. Unparalleled customer choice in installation
1. We have created unparalleled customer choice in installation Professional Do it yourself Do it with me installation (DIY) (DIWM) Est. 1874 Est. 2020 Coming 2022 Each option covers full range of services from installation to onboarding to troubleshooting 71
Slide 72: 2. Our employees are a strategic advantage
2. Our employees are a strategic advantage, delivering concierge-like service unique to ADT Nobody will be more knowledgeable about the helpful home than an ADT team member 72
Slide 73: 3. Our next generation ADT platform
3. Our next generation ADT platform will further enhance the customer experience A focus on what matters most to our customers Creating an ADT+ app that combines security, smart home, e-commerce, account management, and self-support Integration with more services they value Security & Smart Home Veh
Slide 74: 4. Our incredible customer experience drives loyalty
4. Our incredible customer experience drives loyalty SAFe agile Customer Digital 360 view process centric first + action Customer is Tech direct thrilled with ships product value-add Tech promotes and schedules experience unused feature Do It With Me Virtual service to customer + installation Issue
Slide 75: Premium experience builds strong customer loyalty
IN SUMMARY Premium experience builds strong customer loyalty Designing with a customer central focus to bring more options to serve a wider market Delivering a digital-first experience on our own platform Our people are a strategic advantage Premium experience drives preference and loyalty 75
Slide 76: Trusted Brand
Trusted Brand Agenda DeLu Jackson, Senior Vice President and • The power of the brand Chief Marketing Officer • Expanding our position 76
Slide 77: ADT is an iconic brand
ADT is an iconic brand 77
Slide 78: The ADT brand stands for trust
The ADT brand stands for trust, and is the most recognized in our space The importance of trust 68 % 6X Say it is more important today US consumers are 6x more than in the past to be able to likely to purchase a brand trust the brands they buy or use that they trust ADT metrics 98% #1 69% 2X ~8 YEAR
Slide 79: We have expanded our brand promise beyond security
We have expanded our brand promise beyond our legacy of security O U R N O R T H S TA R We believe everyone deserves to feel safe YOUR: Self Family A DT P R O I N STA L L Pets ADT SOLAR Health Belongings Vehicle ADT SELF SETUP A D T H E A LT H Home Apartment Environment ADT BUSINESS SOSECURE Organiz
Slide 80: We will increase demand through improved familiarity
We will increase demand through improved familiarity Precision Marketing For Consumer Data-Driven Insights Closing the Familiarity Gap Efficiency and Effectiveness Growing HH Penetration ADT’s Familiarity of Doorbells will Double to Match Monitoring Doorbell Familiarity Monitoring Familiarity Throug
Slide 81: Google partnership further strengthens the ADT brand
Our Google partnership further strengthens the ADT brand Amidst a monumental shift in people’s relationships with smart home, security and connectivity the timing is perfect for ADT to define the future of protection and connection Enhanced customer Smart home and Next-generation Differentiated and
Slide 82: Research validates stronger consumer preference
Research and early results validate stronger consumer preference due to the complementary attributes of our brands Expected increase Ability to Business in consideration grow the market transformation 82
Slide 83: Trusted brand is foundation for growth
IN SUMMARY Trusted brand is foundation for growth Strong brand foundation Symbol of unrivaled safety Expansion of brand beyond protection Broader and more diverse brand appeal 83
Slide 84: Driving Cost and Capital Efficiency
Driving Cost and Capital Efficiency Agenda Consumer and Small Business (CSB) Ken Porpora, • Our differentiated model Executive Vice President, Finance • Significant improvements planned 84
Slide 85: Our differentiated business model produces growth with attractive returns
Our differentiated business model produces growth with attractive returns Acquire Delight Generate new subscribers with attractive our subscribers with efficient best-in-class returns on invested economics at scale delivery model and seamless capital for our shareholders experience ~1M+ ~$330M ~$2,5
Slide 86: Higher customer satisfaction with greater operating leverage
We are generating higher customer satisfaction while producing greater operating leverage Virtual Service Smart Monitoring Customer Care Virtual Service % of Total Tickets Agent Handled Calls / Subscriber Labor Cost / Subscriber ~4,000 ~15% ~25% bps 2021 2025 Goal 2021 2025 Goal 2021 2025 Goal Today
Slide 87: We have shifted the paradigm to virtual service
We have shifted the paradigm to virtual service The Opportunity What We Are Doing What It Means Subscribers 6M+ Created technically Total service tickets skilled Virtual Service will be satisfied team enabling live video virtually at reduced cost 40%+ Annual in-person streaming with our service cust
Slide 88: Growing installation revenues and improving efficiencies
We are growing our installation revenues and improving installation efficiencies to reduce our subscriber acquisition cost System Size Financing Install Efficiencies Average Devices / Subscriber New Subscriber Pay in Full % Labor Productivity ~2,000 +5-10 bps ~15-20% 2021 2025 Goal 2021 2025 Goal 20
Slide 89: Shifting our mix to lower cost channels
We are shifting our mix to lower cost channels to reduce subscriber acquisition costs eCommerce & Retail DIY Expansion Cross Sales & Partners Selling Costs / New Subscriber DIY Mix as % of Total Sales Leads Generated ~1,500 25-40% bps 20-30% 2021 2025 Goal 2021 2025 Goal 2021 2025 Goal Today: Nomina
Slide 90: Meaningful improvement in net subscriber acquisition costs
We expect meaningful improvement in net subscriber acquisition costs per new subscriber ADT Today ADT Tomorrow Primarily “Do-it-for-Me” (DIFM) “DIFM”, “Do-it-Yourself”, “Do-it-with-Me” Field Sales and National Sales Center (NSC) eCommerce, Retail, Field Sales, NSC, Partners ~$1,000 installation fee
Slide 91: We are improving the lifetime value of our subscribers
We are improving the lifetime value of our subscribers “Core Customer Value” is improving… …and evolving to “Customer Lifetime Value” ~$3,500 ~$2,500 ~$2,000 Canopy Mobile Core Core 2017 2021 2025 Goal Aging Multi Family Core Customer Value per subscriber improvement of ~$1,000 by 2025 Note: Core Cu
Slide 92: Our improvements create a flywheel effect
Our improvements create a flywheel effect, with growth and efficiency improvements funding more growth 8 – Best-in-class returns on invested 1 – Acquire new subscribers through capital for our shareholders SAC–efficient channels 7 – Higher customer lifetime value Improved Core Customer Value per 2 –
Slide 93: Driving CSB cost and capital efficiency
IN SUMMARY Driving CSB cost and capital efficiency Our differentiated business model produces scalable growth with very attractive returns Current initiatives are expected to improve operating leverage, retention, and acquisition efficiency Higher sustained cash generation 93
Slide 94: ADT Commercial: A Unique Growth Opportunity
ADT Commercial: A Unique Agenda Growth Opportunity Dan Bresingham, Executive Vice President, • Strong track record ADT Commercial • Exciting growth opportunities 94
Slide 95: Our commercial business is strong and growing
Our commercial business is strong and growing Our Focus 2021 Key Metrics 100% focused on commercial with Ending RMR $31M dedicated commercial / national account monitoring centers Attrition 9% Security, fire, life safety, and risk consulting Revenue Payback 1.4x Security veterans with decades of exp
Slide 96: Strong track record in a large and growing market
We have a strong track record in a large and growing market Large, Growing Market: $48B by 2025 ADT Commercial: Strong Historic Growth Revenue $ in Billions Growing need for full-service security and fire/life safety providers 12% $1.6+ CAGR High barriers to entry due to technical skills required 28
Slide 97: Our commercial business model is proven and differentiated
Our commercial business model is proven and differentiated Our People Are The Difference Strong Value Proposition ~2,200 ADT technicians Full suite of services Empowered local leadership Same day service Centralized support Installation quality Industry leaders bring specific client Dedicated call c
Slide 98: We offer a wide range of security solutions at the highest quality
We offer a wide range of security solutions at the highest quality Securing Critical COVID-19 A Holistic Approach to Pharmaceutical Distribution Centers Systems Design in Healthcare • Facilities of various sizes up to • Developed a security operations 1,000,000 SF center (SOC) for a 540,000 SF • “Op
Slide 99: Strong foundation and growing momentum
We have a strong foundation and growing momentum Continued Sales Backlog Momentum Sustained RMR Growth $ in Millions $ in Millions $2.1 $31 $1.9 11% $315 10% $1.1 9% $28 $27 $240 $222 2019 2020 2021 2019 2020 2021 Install Backlog RMR Backlog Ending RMR Attrition Good visibility of future growth New
Slide 100: Growing organically, complemented by tuck-in M&A
We grow organically with innovative offerings and our premium customer experience, complemented by tuck-in M&A Physical Security Disruption Tuck in M&A Electronic Article • Strategic partnerships Vertical Market Surveillance • Disrupting $50 billion • Strong track record of guard industry Expansion
Slide 101: We focus on efficiency to drive improved margins
We focus on efficiency to drive improved margins Key Initiatives Virtual truck rolls ADT Smart Monitoring enhancements Margin Increasing profitability of improvement well-established customer base Continued system enhancements 101
Slide 102: Strong, growing commercial business with exciting growth opportunities
IN SUMMARY Strong, growing commercial business with exciting growth opportunities Total Commercial Revenue ($B) Excellent reputation among our premier customer base $1.6+ $1.1 Strong track record of exceptional customer service will fuel market share gains Proven growth strategy in expanding markets
Slide 103: ADT Solar: Powering Sustainable Growth
ADT Solar: Agenda Powering Sustainable Growth • Differentiated market position Marc Jones, Executive Vice President, • Key growth drivers leveraging ADT strengths ADT Solar 103
Slide 104: The residential solar market is rapidly growing
The residential solar market is rapidly growing Key Drivers Solar Total Market Size $ in Billions $22.7 $23.4 1 Protection $19.4 $21.5 • Interest and demand for renewable $16.9 energy to protect from rising energy ~13% $12.5 CAGR prices, grid resiliency 2 Affordability • Affordability through financ
Slide 105: Diverse footprint and a model suitable for growth in any state
We have a diverse footprint, and a model suitable for future growth in virtually any state Tax credits and incentives are helpful but not necessary ADT Solar footprint ADT Solar top performing markets • Texas • Florida • Georgia • Arkansas • North Carolina • Missouri • Virginia • Iowa • New Mexico •
Slide 106: Our approach to the market is unique
Our approach to the market is unique Industry U.S. Solar Market Lease ADT Solar versus Purchase Peer Employee based sales organization Some Yes 90% 80% Employee based installers No Yes 70% 60% Simple balance sheet Yes Yes 50% Dependent on tax equity, 40% incentives or net metering Yes No 30% Integra
Slide 107: Premium customer experience with an integrated approach across the value chain
We deliver a premium customer experience and optimize our margins with an integrated approach across the value chain Design, Permitting, Ongoing Support Sales & Marketing Installation & Financing & Monitoring • Dedicated and specialized • Full in-house design and • Completed in-house • Industry lead
Slide 108: Our acquisition of Sunpro drives value for shareholders
Our acquisition of Sunpro drives value for shareholders The Business Today – Select Four Key Drivers Combined Solar Metrics 2021 Combined 1 Reduced acquisition costs Solar Revenue $645M 2 New channel growth Revenue CAGR 2017 – 2021 125% 3 Low SAC security acquisition 2021 Installations 17K 12% lower
Slide 109: 1. Our powerful brand will help reduce customer acquisition costs
1. Our powerful brand will help reduce customer acquisition costs Halo impact of ADT brand Pilot programs showing success Sunpro Campaign Conversion • No brand leader Rates vs. ADT Pilots • Trust, Reliability and Experience seen as attributed in consumer decision • Increased close rates since close
Slide 110: 2. Expanding distribution channels to drive growth
2. We are expanding distribution channels to drive growth Several ADT dealers have entered New channels with existing partners the solar space 2021 Dealer Monthly Solar Volume Home Builders Insurance Retail Dealers Dealer A Dealer B Dealer C Dealer D 110
Slide 111: 3. Building cross-selling opportunities
3. We are building cross-selling opportunities to generate low SAC security sales Current sales model includes Integrated selling approach cross selling • Battery attachment rate approaching 20% Solar Roofing Energy Security • Roofing needs addressed though ~8% roofing sales tied to solar • Energy e
Slide 112: 4. Our buying power and infrastructure will drive savings
4. Our buying power and infrastructure will drive savings Strong Multi-Sourced ADT Purchasing Vendor Relationships Power ADT Facilities and Distribution Centers 112 112
Slide 113: We have a clear plan to drive growth
We have a clear plan to drive growth Leveraging the ADT brand is expected to drive growth and cost efficiencies Q1 Q2 Q3 Q4 2023 Rebrand Sunpro to ADT Solar Market Expansion New Channel: Dealer New Channel: Retail New Channel: Partners Expansion of ADT Cross Marketing Bundling of ADT Solar + Securit
Slide 114: Solar: Powering Sustainable Growth
IN SUMMARY Solar: Powering Sustainable Growth Logical extension of our ecosystem, Combined Solar enhancing the integrated home experience Revenue ($B) $2.0-2.5 Proven growth strategy in the fast-growing market for residential solar $0.6 Rebrand to ADT Solar gives ADT immediate top-tier brand presenc
Slide 115: Compelling Long-Term Outlook
Compelling Long-Term Outlook Agenda • Performance highlights Jeff Likosar, Chief Financial Officer and • Strong cash flow and capital resources President, Corporate Development • Future outlook 115
Slide 116: We delivered strong 2021 financial results
We delivered strong 2021 financial results while positioning our business for the future Strengthened Foundation Solid Financial Performance for Future Growth RMR Adds 15.8% ✓ ADT+ Total Revenue $5,307M ✓+ 3G LTE Adj. EBITDA $2,213M ✓+ Adj. Free Cash Flow $465M ✓ Refinancing 116
Slide 117: Solid foundation for high-return growth
Our success and progress in recent years have established a solid foundation for high-return growth More Efficient Long-Tenured Improved Capital Strong Cash Acquisition Customers Efficiency Generation 2.7yrs 87% 84% 2.3yrs SAC AFCF Pre-IPO 2021 Pre-IPO 2021 2017 2021 RMR $48M $61M adds: Note: Pre-IP
Slide 118: Our strong capital structure enables growth investment
Our strong capital structure enables growth investment Stronger Position Net Debt Ratios Actions in recent years have improved quality of debt portfolio 4.4X • ~5% weighted average cost of debt 3.7X • >$100M cash interest reduction in past 3 years • Weighted average maturity ~5 years 2.3X Business w
Slide 119: Balanced and disciplined in allocating capital
We are balanced and disciplined in allocating capital Category Allocation Waterfall Capital to Allocate Adjusted FCF prior to subscriber acquisition 2021: $2B+ Attrition SAC spend to maintain RMR base Replacement 1 point attrition = ~$100M Organic SAC investment to grow RMR base Growth Higher level
Slide 120: Clear strategy and allocation waterfall
We have a clear strategy to drive customer preference and long-term shareholder value Strategic Differentiators Category Enablers Allocation Waterfall Capital to Allocate Adjusted FCF prior to SAC investment 2021: $2B+ Attrition SAC spend to maintain RMR base Replacement 1 point attrition = ~$100M I
Slide 121: Goal of double-digit revenue growth over the next 4 years
Our goal is to generate double-digit revenue growth over the next 4 years ~15% CAGR $0.5-0.7B $10B+ $1.5-2.0B $1.5-2.0B Commercial Combined $5.9B Solar Solar Revenue Consumer and Small Business (incl. Google impact) 2021 2025 Goal Combined Revenue Note: Combined Revenue equals ADT Total Revenue (GAA
Slide 122: Our financial profile will shift as we grow
Our financial profile will shift as we grow, focused on strong economic returns Business 2021 Future Segment/Profile Consumer and ~70% of combined Implications from Small Business revenue Changing Mix Growing • Higher EBITDA margin Improved cash • Capital required to generation generate RMR Faster o
Slide 123: We expect strong cash generation and profitability
We expect strong cash generation and profitability Adjusted Free Cash Flow prior to subscriber acquisition Adjusted EBITDA Earnings Per Share $3B+ ~$3B $0.50+ $2B+ $2.2B 2021 2025 Goal 2021 2025 Goal 2021 2025 Goal AFCF SAC CSB Commercial Solar -$0.41 GAAP profitability entering 2023 Note: 2025 goal
Slide 124: Our goal is $1 billion of net debt reduction by 2025
Our goal is $1 billion of net debt reduction by 2025 Adjusted Free Cash Flow Net Debt 2022-2025 Goal Year-end 2025 Goal $3 Billion ~$8.7 Billion Cumulative 30% $1B+ Higher vs. 2018-2021 Lower vs. YE21 Note: 2025 goals do not represent actual guidance or projections; Net debt excludes the receivables
Slide 125: Fundamentally transformed profile, positioned for asymmetric upside
We have fundamentally transformed our profile, and are well positioned for asymmetric upside ADT Financial Profile Characteristics Pre-IPO 2021 2025 Significant and stable cash generation • $4B+ recurring revenue base Revenue ~$4B ~$6B $10B+ • $1.7B adjusted FCF past 3 years Combined • Recession res
Slide 126: We are well-positioned for growth in 2022
We are well-positioned for growth in 2022 Total Revenue Adjusted EBITDA Adjusted Free Cash Flow $6.2-6.4B $2,335-2,435M $550-625M $5.3B $2,213M $465M 2021 2022 Guidance 2021 2022 Guidance 2021 2022 Guidance 126
Slide 127: Our long-term outlook is compelling
IN SUMMARY Our long-term outlook is compelling We have an established foundation for high-return growth Our growth plan drives strong improvements to cash generation and profitability Achieving our plan is the path to creating long-term shareholder value Taking a balanced and disciplined approach to
Slide 128: Wrap-up and Closing
Wrap-up and Closing Jim DeVries, President and Chief Executive Officer 128
Slide 129: The investment case for ADT is strong
The investment case for ADT is strong 1 Large and expanding addressable market with opportunities to meaningfully increase share 2 Growing business with industry-leading scale positioned to benefit from secular tailwinds 3 Large solar opportunity still in nascent state 4 Compelling unit economics th
Slide 130: We are positioned for success
We are positioned for success Mission Strategy Plan Safe. Smart. Sustainable. Innovative offerings, unrivaled Top-line growth and solid safety, and premium experience free cash generation Delivered by the 25,000 best professionals in the industry 130
Slide 131: 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 132: Segment and Other Information
Segment and Other Information Total Revenue by Segment: (in millions) Twelve months ended December 31, December 31, December 31, December 31, December 31, December 31, 2021 2020 2019 2018 2017 2016 CSB $ 4,146 $ 4,325 $ 4,080 $ 3,998 $ 3,896 $ 2,623 Commercial 1,114 990 1,046 583 420 326 Solar 47 -
Slide 133: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA prior to subscriber acquisition: (in millions) Twelve Months Ended December 31, 2021 Net loss $ (341) Interest expense, net 458 Income tax benefit (130) Depreciation and intangible asset amortization 1,915 Amortization of deferred
Slide 134: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Free Cash Flow, Adjusted Free Cash Flow, and Adjusted Free Cash Flow prior to subscriber acquisition: (in millions) Twelve Months Ended December 31, December 31, December 31, December 31, December 31, 2021 2020 2019 2018 2017 Net cash provided by operating activities
Slide 135: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Debt to Net Income Ratio: (in millions) December 31, 2021 Total debt (book value) $ 9,693 LTM net loss $ (341) Debt to net loss ratio (28.4x) Net Leverage Ratios: (in millions) December 31, 2021 Revolver $ 25 First lien term loan 2,758 First lien notes 5,550 Receivab