Slide 1: Q2 2021 Earnings Presentation
Q2 2021 Earnings Presentation August 4, 2021
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures ADT has made statements in this presentation and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of historical f
Slide 3: Q2 2021: Strong Quarter, Progressing Against 2021 Objectives
Q2 2021: Strong Quarter, Progressing Against 2021 Objectives Strong Gross RMR additions – Q2 increase of 28% represents fourth consecutive quarter of double-digit growth in the U.S. End of period RMR up 4% year over year – ~80% of total revenue from recurring sources Continued strong customer satisf
Slide 4: The ADT Value Proposition: An Ecosystem Supporting Growth
The ADT Value Proposition: An Ecosystem Supporting Growth ADT Smart Initiatives Technology & Innovation Distribution Partnerships TAM Expansion #1 Smart Home Security Provider (1) 3.5 Million+ Interactive Customers Smart Home Adoption Increased Demand Greater Household De-urbanization for Security F
Slide 5: Strength Across Key Financial and Operating Metrics
Strength Across Key Financial and Operating Metrics For the three months ended Jun 30, Jun 30, Key Highlights ($ in Millions) Y/Y Change 2021 2020 M&S Revenue $1,084 $1,041 $42 4% ▪ M&S revenue: Increase in average pricing + net unit additions resulting in higher RMR Total Revenue $1,304 $1,331 ($27
Slide 6: Consumer & Small Business Segment Growing M&S Revenue
Consumer & Small Business Segment Growing M&S Revenue Revenue Adjusted EBITDA $ in Millions $ in Millions Includes the non- cash impact from ownership model change $1,102 $551 $1,023 $510 $166 $57 $936 $965 Q2'20 Q2'21 Q2'20 Q2'21 Monitoring & Service Installation & Other M&S growth offset by lower
Slide 7: Commercial Segment Seeing Rapid Growth from Expansion Efforts
Commercial Segment Seeing Rapid Growth from Expansion Efforts Revenue Adjusted EBITDA $ in Millions $ in Millions $32 $282 $229 $163 $124 $12 $105 $118 Q2'20 Q2'21 Q2'20 Q2'21 Monitoring & Service Installation & Other Continuing Commercial rebound with significant runway ahead 7
Slide 8: Continued Subscriber Additions Translating into Higher RMR
Continued Subscriber Additions Translating into Higher RMR Gross RMR Additions End of Period RMR $ in Millions $ in Millions $352 $14.5 $339 $11.4 Q2'20 Q2'21 Q2'20 Q2'21 Fourth consecutive quarter of double-digit growth in Gross RMR Additions in the U.S. 8
Slide 9: Capital Structure Well Positioned to Support Growth
Capital Structure Well Positioned to Support Growth Capital $MM Structure(1) Recent Highlights $MM 12/31/20 6/30/21 Actual Actual Revolver - - ▪ Refinanced $1B of 2022 first lien Notes, extending First Lien Term Loan 2,779 2,772 maturity to 2029 First Lien Notes 5,550 5,550 Receivables Facility 76 1
Slide 10: Durable Model & Recurring Revenue Base Generate Significant Cash Flow
Durable Model & Recurring Revenue Base Generate Significant Cash Flow Flexible Capital Deployment Invest In Efficient Selectively Pursue Optimize Capital Return Capital To Organic Growth Accretive Acquisitions Structure/Debt Level Shareholders Reduced annual cash interest expense by $100+ million si
Slide 11: Appendix
Appendix
Slide 12: Snapshot of Business by Customer Type and Unit Count
Snapshot of Business by Customer Type and Unit Count Market Profile (LTM 6/30/21) Consumer and Small Business Unit Count (2) Consumer and Commercial Total Small Business Units in Millions Q2’21 Q2’20 Y/Y % Q1’21 Q/Q % Unit Count ~6,350K ~250K ~6,600K End of Period RMR $318M $30M $348M Interactive 3.
Slide 13: Adjusted Free Cash Flow
Adjusted Free Cash Flow For the three months ended For the six months ended June 30, June 30, June 30, June 30, ($ in Millions) Y/Y Change Y/Y Change 2021 2020 2021 2020 Adjusted EBITDA $542 $563 ($21) $1,084 $1,103 ($19) Capitalized SAC (341) (160) (181) (693) (320) (373) Net Proceeds from Consumer
Slide 14: U.S. Gross RMR Additions by Quarter
U.S. Gross RMR Additions by Quarter $ in Millions $16.0 $14.5 $14.5 $13.9 $12.9 $12.8 $13.2 $12.1 $12.1 $11.4 Q1’19 Q1’20 Q1’21 Q2’19 Q2’20 Q2’21 Q3’19 Q3’20 Q4’19 Q4’20 Qtr1'19 Qtr1'20 Qtr1'21 Qtr2'19 Qtr2'20 Qtr2'21 Qtr3'19 Qtr3'20 Qtr4'19 Qtr4'20 YoY % Change: 7% 25% (11%) 28% 10% 15% 14
Slide 15: Installation Revenue and Adjusted EBITDA
Installation Revenue and Adjusted EBITDA Installation & Other Revenue ($M) Consumer and Period Y/Y Change Commercial Y/Y Change Total Y/Y Change Small Business Q2'21 $57 ($109) $163 $40 $221 ($69) Q1'21 87 (86) 155 4 242 (82) Q4'20 105 49 155 (28) 261 21 Q3'20 120 70 133 (24) 253 46 Q2'20 166 122 12
Slide 16: Additional Historical Quarterly Data
Additional Historical Quarterly Data For the Three Months Ended (in millions) June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020 Key Performance Indicators Monitoring and Service Revenue $1,084 $1,063 $1,054 $1,046 $1,041 Total Revenue $1,304 $1,305 $1,315 $1,299 $1,331
Slide 17: Selected Statement of Operations Components
Selected Statement of Operations Components GAAP Line Items GAAP Line Items For the three months ended June 30, 2021 For the three months ended June 30, 2020 Total Cost of Total Cost of ($ in millions) Revenue Revenue SG&A D&A Total Revenue Revenue SG&A D&A Total Monitoring & Service Revenue 1,073 -
Slide 18: Statements of Operations
Statements of Operations Three Months Ended Six Months Ended (in millions, except per share data) June 30, June 30, June 30, June 30, 2021 2020 2021 2020 Monitoring and related services $ 1,084 $ 1,041 $ 2,146 $ 2,087 Installation and other 221 290 463 614 Total revenue 1,304 1,331 2,609 2,701 Cost
Slide 19: Segment Information
Segment Information Three Months Ended Six Months Ended (in millions) June 30, March 31, December 31, September 30, June 30, June 30, June 30, Total revenue 2021 2021 2020 2020 2020 2021 2020 Monitoring and related services $ 1,084 $ 1,063 $ 1,054 $ 1,046 $ 1,041 $ 2,146 $ 2,087 Installation and oth
Slide 20: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Loss Before Special Items and Diluted Net Loss Per Share Before Special Items: Three Months Ended Six Months Ended (in millions, except per share data) June 30, June 30, June 30, June 30, 2021 2020 2021 2020 Net loss $ (126) $ (107) $ (174) $ (407) Merger, restru
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin: Three Months Ended Six Months Ended Twelve Months Ended (in millions) June 30, March 31, December 31, September 30, June 30, June 30, June 30, June 30, December 31, 2021 2021 2020 2020 2020 2021 2020 2021 2020 Net loss $ (1
Slide 22: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Free Cash Flow and Adjusted Free Cash Flow: Three Months Ended Six Months Ended (in millions) June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2021 2021 2020 2020 2020 2021 2020 Net cash provided by operating activities $ 426 $ 359 $ 373 $ 364
Slide 23: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Debt to Net Income Ratio: (in millions) June 30, December 31, 2021 2020 Total debt (book value) $ 9,562 $ 9,493 LTM net loss $ (399) $ (632) Debt to net loss ratio (24.0x) (15.0x) Net Leverage Ratio: (in millions) June 30, December 31, 2021 2020 First lien term loan
Slide 24: Non-GAAP Measures
Non-GAAP Measures To provide investors with additional information in connection with our results, as determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we disclose Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, Adjusted Free Cash Flow, Ne