Adt Inc. · NYSE:ADT
Adt — Q1 2023 Earnings Presentation
35 slides from Adt's earnings presentation, May 2, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 Earnings Presentation May 2, 2023
Slide 2: Forward Looking Statements and Non-GAAP Measures
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations 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
Slide 3: Table of Contents
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Table of Contents 1. Company Overview Page 4 2. 1Q 2023 Page 12 3. Additional Financial Information Page 22 4. Non-GAAP Reconciliations Page 31 3
Slide 4: Company Overview
Company Overview
Slide 5: Recent Highlights: 1Q 2023
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Recent Highlights: 1Q 2023 1 Record CSB performance driven by higher revenue and enhanced cost discipline 2 Commercial continues to be a bright spot and source of value 3 Google accelerating momentum; rollout of professional
Slide 6: ADT: Safe, Smart, and Sustainable Solutions for Customers
Overview 1Q 2023 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 businesses. Through innovative offerings, unrivaled safety, and a premium customer experience,
Slide 7: Our Mission Delivers Superior Results For All Stakeholders
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Our Mission Delivers Superior Results For All Stakeholders ESG Pillars Our commitment to respect the environment, promote Customer and community health and safety social responsibility, and lead with responsible governance Sa
Slide 8: ADT is a Safe Haven Against Macro Volatility with Record Performance
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations ADT is a “Safe Haven” Against Macro Volatility with Record Performance Across Key Business Drivers Gross Customer Revenue Attrition Ending Recurring Monthly Revenue (RMR) $ in millions +10% in 2+ Years 350 bps+ improvement +8
Slide 9: ADT Generates Attractive Returns Across Each Segment
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations ADT Generates Attractive Returns Across Each Segment Consumer & Small Business Commercial Solar Key Unit Economics: Key Unit Economics: Key Unit Economics: $52+ recurring monthly revenue $130+ recurring monthly revenue ~20K a
Slide 10: Our Core CSB Business is Durable and Resilient
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Our Core CSB Business is Durable and Resilient… • Large existing subscriber base generates $4.5B+ in annual recurring revenue Durable Recurring 1 • Retention at record high, driving 8-year average subscriber life Revenue Base
Slide 11: With Improving Economics Delivering Returns in Excess of 20%
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations …with Improving Economics Delivering Returns in Excess of 20% Revenue Payback Core Customer Value and 2.5x 2.3x Customer Lifetime Value / Net SAC Multiple 2.0x <2.0x Core Customer Value CLV / Net SAC Multiple 3.8x 3.2x 2.8x 2
Slide 12: 1Q 2023
1Q 2023
Slide 13: 1Q 2023: Highlights
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations 1Q 2023: Highlights +4% $0.12 $625M Revenue Growth Adjusted EPS Adjusted EBITDA vs. prior year with CSB up 7% and Adjusted Net Income of $102M, up 4% vs. prior year & Commercial up 15% up $109M vs. prior year 12.5% 2.0 years
Slide 14: Key Financial and Operating Metrics
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Key Financial and Operating Metrics For the three months ended March 31, March 31, Key Highlights Y/Y Change ($ in millions) 2023 2022 M&S Revenue $1,173 $1,121 $52 5% • M&S Revenue / End of Period RMR: Growth in recurring re
Slide 15: Google Partnership Building Momentum into 2023
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Google Partnership Building Momentum into 2023 • National rollout of Google Nest doorbell, Wifi, indoor/outdoor cameras and thermostats in 2022 – Doorbell attachment rate in 1Q’23 of ~50%, helping drive ~$1,450 in installatio
Slide 16: State Farm Strategic Partnership Update
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations State Farm Strategic Partnership Update • Launched integrated offer in Indiana, Illinois, and Pennsylvania – provides State Farm homeowners with an innovative solution to detect and mitigate losses related to water, fire, and
Slide 17: 2023 Guidance Demonstrating Continued Progress Towards 2025 Goals
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations 2023 Guidance Demonstrating Continued Progress Towards 2025 Goals Total Revenue Adjusted EBITDA Adjusted EPS $6.4B $6.60-6.85B $2.525-2.625B $5.3B $2.447B $2.213B $0.30-0.40 $0.24 ($0.25) 2021 2022 2023 2021 2022 2023 2021 20
Slide 18: Segment Financials and Key Metrics: Consumer and Small Business
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations CONSUMER AND SMALL BUSINESS Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions 1Q'23 Y/Y Change +7% $1,063 $1,132 $70 $104 Ending Subscriber Count 6.4M 0% $993 $1,029 Interactive Customers as a % of T
Slide 19: Segment Financials and Key Metrics: Commercial
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations COMMERCIAL Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions 1Q'23 Y/Y Change +15% $335 $290 Ending Subscriber Count 260K (1%) $190 $162 End of Period RMR $34M 6% $128 $145 1Q’22 1Q’23 Monitoring and
Slide 20: Segment Financials and Key Metrics: Solar
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations SOLAR Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions 1Q'23 Y/Y Change (25%) Solar Installations 3.5K (37%) $192 $145 Revenue per Installation ~$41K 3% 1Q’22 1Q’23 Solar Installation, Product, and
Slide 21: Capital Structure Overview
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Capital Structure Overview Highlights Capital Structure $ in Millions 12/31/22 3/31/23 • Redeemed $600 million of the $700 million ADT Notes due 2023 in March Actual Actual using $600 million draw from Term Loan A Revolver -
Slide 22: Additional Financial Information & Non-GAAP Reconciliations
Additional Financial Information & Non-GAAP Reconciliations
Slide 23: Adjusted Free Cash Flow Bridge
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Adjusted Free Cash Flow Bridge For the three months ended ($ in millions) March 31, 2023 March 31, 2022 Y/Y Change Adjusted EBITDA $625 $601 $24 Net Expensed SAC $67 $90 ($24) Net SAC ($310) ($425) $116 Cash Taxes ($2) ($0) (
Slide 24: Net SAC Calculation
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Net SAC Calculation For the three months ended March 31, 2023 ($ in millions) Capitalized Non-capitalized Total Selling, Advertising, and Commissions $87 $120 $207 Security Installation, Product, and Other Cost - $169 $169 Ca
Slide 25: Selected Statement of Operations Components
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Selected Statement of Operations Components For the three months ended March 31, 2023 For the three months ended March 31, 2022 ($ in millions) Total Cos t of SG&A Total Cos t of SG&A (1) (1) Revenue Revenue and Other D&A Tot
Slide 26: Additional Historical Quarterly Data
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Additional Historical Quarterly Data For the Three Months Ended ($ in millions) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Operating and Financial Measures Monitoring & Related Services R
Slide 27: Income Statement
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Income Statement (in millions, except per share data) Three Months Ended March 31, Revenue: 2023 2022 $ Change % Change Monitoring and related services $ 1,173 $ 1,121 $ 52 5% Security installation, product, and other 294 231
Slide 28: Balance Sheet
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Balance Sheet March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 186 $ 257 Restricted cash and restricted cash equivalents 117 116 Accounts receivable, net 598 597 Inventories, net 327 329 Wor
Slide 29: Cash Flow Statement
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Cash Flow Statement Three Months Ended March 31, 2023 2022 Cash flows from operating activities: Net income (loss) $ (90) $ 52 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Slide 30: Segment Information
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations Segment Information (in millions) Three Months Ended Twelve Months Ended March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 March 31, 2023 December 31, 2022 Total revenue - CSB Monitoring and rel
Slide 31: Non-GAAP Measures
Overview 1Q 2023 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 principles generally accepte
Slide 32: GAAP to Non-GAAP Reconciliations: Adjusted EBITDA
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Adjusted EBITDA, Adjusted EBITDA Margin and Reconciliation to GAAP Net Income or Loss We believe the presentation of Adjusted EBITDA provides useful information to investors about our operatin
Slide 33: GAAP to Non-GAAP Reconciliations: Free Cash Flow
Overview 1Q 2023 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, and Reconciliation to GAAP Net Cash Flows from Operating Activities We define Free Cash Flow as
Slide 34: GAAP to Non-GAAP Reconciliations: Adjusted Net Income and EPS
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Adjusted Net Income (Loss), Adjusted Diluted Net Income (Loss) per Share (or, Adjusted EPS), and Reconciliations to GAAP Net Income (Loss) and GAAP Diluted Net Income (Loss) per Share We defin
Slide 35: GAAP to Non-GAAP Reconciliations: Leverage Ratios
Overview 1Q 2023 Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Leverage Ratios and Reconciliation to GAAP Debt to Net Income (Loss) Leverage Ratio Net Leverage Ratio is calculated as the ratio of net debt to last twelve months (“LTM”) Adjusted EBITDA. Net