Slide 1: Fourth Quarter and Full Year 2023 Earnings Presentation
Fo u r t h Q u a r te r a n d F u l l Ye a r 2 0 2 3 Ea r n i n g s P re s e ntat i o n February 28, 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 11 3. Additional Financial Information Page 19 4. Non-GAAP Reconciliations Page 29 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: Well Positioned to Capture Growing Consumer Demand and Spend
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Well Positioned to Capture Growing Consumer Demand and Spend Increasing Security Demand Growing Consumer Spend ADT - Most Trusted Choice U.S. Households1 U.S. Security Market2 Clear market leader,
Slide 7: Business is Durable, Resilient, and Flexible
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Business is Durable, Resilient, and Flexible • Large existing subscriber base generates ~$4.2B in annualized recurring monthly revenue Durable Recurring • Demand for home security and personal safe
Slide 8: Blue-chip Partnerships Support Innovation and Customer Experience
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Blue-chip Partnerships Support Innovation and Customer Experience, Accelerating Evolution as the #1 Smart Home Solutions Provider • Google products have increased the number of smart home devices,
Slide 9: Driving Increased Shareholder Value With Disciplined and Balanced 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 10: Investment Thesis for ADT Remains Strong
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Investment Thesis for ADT Remains Strong Large, growing, and highly resilient market underpinned by secular tailwinds with 1 opportunity to meaningfully increase share 2 #1 brand in security combin
Slide 11: Financial Results & Outlook
Financial Results & Outlook
Slide 12: Recent Progress
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Recent Progress Completed commercial divestiture and commenced solar exit; streamlined business will 1 focus on innovation and growth in core consumer security and smart home markets Strong perform
Slide 13: FY 2023: Highlights for Continuing Operations
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations FY 2023: Highlights for Continuing Operations +3% $2.5B M&S Revenue Growth CSB Adjusted EBITDA vs. prior year up 8% vs. prior year $0.51 2.1 years Adjusted EPS Revenue Payback Adjusted Net Income o
Slide 14: Key Financial Metrics
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Key Financial Metrics CSB For the three months ended For the twelve months ended • Continued growth in recurring Dec. 31, Dec. 31, Y/Y Change Dec. 31, Dec. 31, Y/Y Change ($ in millions) 2023 2022
Slide 15: Consumer and Small Business 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 4Q'23 Y/Y Change +5% $1,117 $1,172 Ending Subscriber Count 6.4M 0% $93 $119 Interactive Custo
Slide 16: Solar Segment Financials and Key Metrics
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations SOLAR Segment Financials and Key Metrics Revenue Exiting Residential Solar Business $ in Millions -75% • Following restructuring in 4Q’23 and a detailed strategic $200 review, the Company announced
Slide 17: Significantly Improved Capital Structure with Balanced Maturity Profile
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Significantly Improved Capital Structure with Balanced Maturity Profile • In 2023, repaid $2.1B in debt and improved Net Leverage Ratio by 0.7x • Credit rating upgrades from both S&P (BB-) and Mood
Slide 18: 2024 Guidance
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations 2024 Guidance 2023 2024 Midpoint Key Drivers $ in millions, Actual Guidance Year-over-year except per share data • Durable and growing RMR base CSB Segment • Customer service and retention focus To
Slide 19: Additional Financial Information & Non-GAAP Reconciliations
Additional Financial Information & Non-GAAP Reconciliations
Slide 20: Adjusted Free Cash Flow Bridge
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Adjusted Free Cash Flow Bridge (1) For the three months ended For the twelve months ended ($ in millions) Dec. 31, 2023 Dec. 31, 2022 Y/Y Change Dec. 31, 2023 Dec. 31, 2022 Y/Y Change Historical Ad
Slide 21: 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 Dec. 31, 2023 Dec. 31, 2023 ($ in millions) Capitalized Non-capitalized Total Capitalized Non-capi
Slide 22: Selected Statement of Operations Components
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Selected Statement of Operations Components For the three months ended December 31, 2023 For the three months ended December 31, 2022 ($ in millions) Total Cost of SG&A Total Cost of SG&A (1) (1) (
Slide 23: Additional Historical Data
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Additional Historical Data For the Three Months Ended For the Twelve Months Ended ($ in millions) Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 March 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Operating and
Slide 24: Capital Structure Overview
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Capital Structure Overview ($ in millions) 12/31/2022 12/31/2023 Revolver - - First Lien Term Loans 2,730 2,001 First Lien Notes 5,550 4,200 Finance Leases and Other 97 88 Total First Lien Debt $8,
Slide 25: 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 December 31, Twelve Months Ended December 31, Revenue: 2023 2022 $ Change % Change 2023 2022 $ Change % Change Monit
Slide 26: Balance Sheets
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Balance Sheets December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 15 $ 257 Restricted cash and restricted cash equivalents 115 116 Accounts receivable, net 390 3
Slide 27: Statements of Cash Flows
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Statements of Cash Flows Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ 576 $ 151 $ 463 $ 133 Adjustm
Slide 28: Segment Information
Company Overview Financial Results & Outlook Additional Financial Information Non-GAAP Reconciliations Segment Information (in millions) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Tota
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 and Net Leverage Ratio (as adjusted) are calculated as the ratio of net debt or net debt (as adjusted) to last twelve months (“LT
Slide 35: 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