Slide 1: First Quarter 2024 Earnings Presentation
F i rst Q u a r te r 2 0 2 4 Ea r n i n g s P re s e ntat i o n April 25, 2024
Slide 2: Forward Looking Statements and Non-GAAP Measures
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
Slide 3: Table of Contents
Table of Contents 1. Company Overview Page 4 2. Financial Results & Outlook Page 12 3. Additional Financial Information Page 18 4. Non-GAAP Reconciliations Page 25 3
Slide 4: Company Overview
Company Overview
Slide 5: ADT: Safe, Smart and Sustainable Solutions for Customers
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations ADT: Safe, Smart and Sustainable Solutions for Customers ADT provides safe, smart and sustainable solutions for people, homes and small businesses. Through innovative offerings, unrivaled safety an
Slide 6: Recent Initiatives and Accomplishments Have Strengthened Performance and Positioning
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Recent Initiatives and Accomplishments Have Strengthened Performance and Positioning for the Future ADT’s Recent Evolution… …Has Driven Substantial Quantitative Improvements ✓ Video and automation
Slide 7: Investment Thesis for ADT Is Strong
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Investment Thesis for ADT Is Strong Large, growing, and highly resilient market underpinned by secular tailwinds with 1 opportunity to meaningfully increase share 2 #1 brand in security combined wi
Slide 8: Large, Growing, Highly Resilient Market and #1 Brand in Security
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Large, Growing, Highly Resilient Market and #1 Brand in Security Increasing Domestic Security Demand Growing Consumer Spend Amongst New and Existing Homeowners on Home Security ADT - Most Trusted C
Slide 9: Stable Recurring Revenue Base with Compelling Unit Economics
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Stable Recurring Revenue Base with Compelling Unit Economics • Large existing subscriber base generates ~$4.2B in annualized recurring monthly revenue Durable Recurring • Demand for home security a
Slide 10: Accelerating Differentiation as #1 Smart Home and Security Provider
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Accelerating Differentiation as #1 Smart Home and Security Provider Interrelated Initiatives to Grow TAM, Share of Wallet, and Efficiency Recent Highlights • ADT+ proprietary platform Use Cases • A
Slide 11: Driving Increased Shareholder Value With Disciplined Capital Allocation Framework
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Driving Increased Shareholder Value With Disciplined and Balanced Capital Allocation Framework • Capital-efficient subscriber acquisition through innovative and customer-centric Fund Growth and off
Slide 12: Financial Results & Outlook
Financial Results & Outlook
Slide 13: 1Q 2024: Highlights for Continuing Operations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations 1Q 2024: Highlights for Continuing Operations +5% $638M CSB Revenue Growth CSB Adjusted EBITDA vs. prior year up 8% vs. prior year $0.16 2.1 years Adjusted EPS Revenue Payback up 48% vs. prior year
Slide 14: Key Financial Metrics
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Key Financial Metrics For the three months ended Key Highlights 1Q'24 1Q'23 Y/Y Change ($ in millions) CSB Segment • Growth in recurring revenue with continued CSB Total Revenue $1,190 $1,132 $57 5
Slide 15: Segment Financials and Key Metrics
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations CONSUMER AND SMALL BUSINESS Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions 1Q'24 Y/Y Change +5% $1,132 $1,190 Ending Subscriber Count 6.4M 0% $104 $127 Interactive Cust
Slide 16: Capital Structure with Balanced Maturity Profile
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Capital Structure with Balanced Maturity Profile • Ended quarter with Net Leverage Ratio of 3.2x, down 0.6x versus prior year; targeting net leverage ratio 3.0x or lower • In April: ‒ Repaid remain
Slide 17: 2024 Guidance
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations 2024 Guidance 2023 2024 Midpoint Key Drivers ($ in millio ns, except per share data) Actual Guidance Year-over-year • Durable and growing RMR base CSB Total Revenue $4,653 $4,800 - $5,000 5% • Cust
Slide 18: Additional Financial Information & Non-GAAP Reconciliations
Additional Financial Information & Non-GAAP Reconciliations
Slide 19: Net Subscriber Acquisition Cost Calculation
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Net Subscriber Acquisition Cost Calculation For the three months ended For the twelve months ended Mar. 31, 2024 Mar. 31, 2024 ($ in millions) Capitalized Non-capitalized Total Total Selling, Adver
Slide 20: Additional Historical Data
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Additional Historical Data For the Three Months Ended ($ in millions) March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Financial Measures Monitoring and related serv
Slide 21: Historical Adjusted Free Cash Flow Detail
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Historical Adjusted Free Cash Flow Detail For the Three Months Ended ($ in millions) March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Adjusted Free Cash Flow (includ
Slide 22: Statements of Operations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Statements of Operations (in millions, except per share data) Three Months Ended March 31, Revenue: 2024 2023 $ Change % Change Monitoring and related services $ 1,063 $ 1,029 $ 34 3% Security inst
Slide 23: Balance Sheets
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Balance Sheets March 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 4 $ 15 Restricted cash and restricted cash equivalents 115 115 Accounts receivable, net 387 390 In
Slide 24: Statements of Cash Flows
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Statements of Cash Flows Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net income (loss) $ 92 $ (119) Adjustments to reconcile net income (loss) to net cash provided
Slide 25: Non-GAAP Measures
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Non-GAAP Measures ADT sometimes uses information (“non-GAAP financial measures”) that is derived from the consolidated financial statements, but that is not presented in accordance with accounting
Slide 26: GAAP to Non-GAAP Reconciliations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Free Cash Flow, Adjusted Free Cash Flow, Adjusted Free Cash Flow including interest rate swaps The Company defines Free Cash Flow as cash flows from operating activ
Slide 27: GAAP to Non-GAAP Reconciliations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Adjusted EBITDA from Continuing Operations ("Adjusted EBITDA") and Adjusted EBITDA Margin from Continuing Operations ("Adjusted EBITDA Margin") The Company believes
Slide 28: GAAP to Non-GAAP Reconciliations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Historical Adjusted EBITDA (as reported) The Company believes the presentation of historical Adjusted EBITDA provides useful information to investors about the Comp
Slide 29: GAAP to Non-GAAP Reconciliations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Adjusted Income (Loss) from Continuing Operations ("Adjusted Income (Loss)") and Adjusted Diluted Income (Loss) per Share (or, Adjusted EPS) The Company defines Adj
Slide 30: GAAP to Non-GAAP Reconciliations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Leverage Ratios Net Leverage Ratio, Net Leverage Ratio prior to subscriber acquisition, and Net Leverage Ratio are calculated as the ratio of net debt or net debt t
Slide 31: GAAP to Non-GAAP Reconciliations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Historical Leverage Ratios (As previously reported) Net Leverage Ratio (as reported) is calculated as the ratio of net debt to last twelve months (“LTM”) Historical