Adt Inc. · NYSE:ADT
Adt — Q3 2023 Earnings Presentation
33 slides from Adt's earnings presentation, Nov 2, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Third Quarter 2023 Earnings Presentation November 2, 2023
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. 3Q 2023 & Outlook Page 11 3. Additional Financial Information Page 18 4. Non-GAAP Reconciliations Page 27 3
Slide 4: Company Overview
Company Overview
Slide 5: ADT: Safe, Smart, and Sustainable Solutions for Customers
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations ADT: Safe, Smart, and Sustainable Solutions for Customers ADT provides safe, smart and sustainable solutions for people, REVENUE BY SEGMENT1 homes and small businesses. Through innovative offerings, unrivale
Slide 6: Investment Thesis for ADT Remains Strong with an Attractive Financial Profile
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Investment Thesis for ADT Remains Strong with an Attractive Financial Profile Large and expanding addressable market with Medium-term Target Framework 1 opportunities to meaningfully increase share In-line w
Slide 7: Our Core CSB Business is Durable and Resilient
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Our Core CSB Business is Durable and Resilient • Large existing subscriber base generates ~$4.2B in annual recurring revenue Durable Recurring 1 • Retention remains near record high, driving ~8-year average
Slide 8: Large And Expanding Addressable Market With Opportunities to Meaningfully Increase Share
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Large And Expanding Addressable Market With Opportunities to Meaningfully Increase Share Focused Business, Well Positioned Market Growth and Key Drivers to Gain Share in High-Growth Markets U.S. Market Sizin
Slide 9: Blue-chip Partnerships Support Innovation and Customer Experience
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Blue-chip Partnerships Support Innovation and Customer Experience, Accelerating Our Evolution as the #1 Smart Home Solutions Provider • Google products have increased the number of smart home devices, correl
Slide 10: Significantly Improved Capital Structure with Balanced Maturity Profile
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Significantly Improved Capital Structure with Balanced Maturity Profile • Accelerated debt paydown with ~$2B expected in 2023; $200M in 2Q’23, ~$1.3B following divestiture, and $500M by year-end • Well-ladde
Slide 11: 3Q 2023 & Outlook
3Q 2023 & Outlook
Slide 12: Strategic Highlights
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Strategic Highlights 1 Completed the divestiture of our commercial business on October 2nd for $1.6B Improved balance sheet using sale proceeds to pay down debt and extending maturity for 2 remaining ~$1.4B
Slide 13: 3Q 2023: Highlights for Continuing Operations
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations 3Q 2023: Highlights for Continuing Operations +3% $623M M&S Revenue Growth CSB Adjusted EBITDA vs. prior year up 6% vs. prior year $0.08 12.9% Adjusted EPS Gross Revenue Attrition Adjusted Net Income of $69M
Slide 14: Key Financial and Operating Metrics
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Key Financial and Operating Metrics For the three months ended Sept. 30, Sept. 30, Y/Y Change Key Highlights ($ in millions) 2023 2022 M&S Revenue $1,053 $1,022 $32 3% CSB: Continued top-line growth, enhance
Slide 15: Segment Financials and Key Metrics: Consumer and Small Business
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations CONSUMER AND SMALL BUSINESS Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions +6% 3Q'23 Y/Y Change $1,111 $1,180 $89 $126 Ending Subscriber Count 6.4M 0% $1,022 $1,053 Interactive C
Slide 16: Segment Financials and Key Metrics: Solar
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations SOLAR Segment Financials and Key Metrics Portfolio optimization to restructure solar business Revenue $ in Millions • Rationalization of footprint to focus on top performing (68%) branches and streamlined co
Slide 17: 2023 Guidance Update
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations 2023 Guidance Update • Updated guidance reflects the divestiture of our commercial business • Strong CSB performance partially offsetting recent solar underperformance Prior 2023 Commercial Operating Updated
Slide 18: Additional Financial Information & Non-GAAP Reconciliations
Additional Financial Information & Non-GAAP Reconciliations
Slide 19: Adjusted Free Cash Flow Bridge
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Adjusted Free Cash Flow Bridge (1) For the three months ended For the nine months ended ($ in millions) Sept. 30, 2023 Sept. 30, 2022 Y/Y Change Sept. 30, 2023 Sept. 30, 2022 Y/Y Change Historical Adjusted E
Slide 20: Net Subscriber Acquisition Cost Calculation
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Net Subscriber Acquisition Cost Calculation For the three months ended For the nine months ended Sept. 30, 2023 Sept. 30, 2023 ($ in millions) Capitalized Non-capitalized Total Capitalized Non-capitalized To
Slide 21: Selected Statement of Operations Components
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Selected Statement of Operations Components For the three months ended September 30, 2023 For the three months ended September 30, 2022 ($ in millions) Total Cost of SG&A Total Cost of SG&A Revenue Revenue a
Slide 22: Additional Historical Quarterly Data
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Additional Historical Quarterly Data For the Three Months Ended ($ in millions) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Operating and Financial Measures Monitorin
Slide 23: Income Statement
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Income Statement (in millions, except per share data) Three Months Ended September 30, Nine Months Ended September 30, Revenue: 2023 2022 $ Change % Change 2023 2022 $ Change % Change Monitoring and related
Slide 24: Balance Sheet
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Balance Sheet September 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 239 $ 257 Restricted cash and restricted cash equivalents 117 116 Accounts receivable, net 384 335 Invent
Slide 25: Cash Flow Statement
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Cash Flow Statement Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (86) $ (161) $ (113) $ (18) Adjustments to r
Slide 26: Segment Information
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations Segment Information Three Months Ended Nine Months Ended Twelve Months Ended (in millions) September 30, December 31, September 30, September 30, September 30, September 30, December 31, June 30, 2023 March
Slide 27: Non-GAAP Measures
Company Overview 3Q 2023 & 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 principles
Slide 28: GAAP to Non-GAAP Reconciliations
Company Overview 3Q 2023 & 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") We believe the presentation of
Slide 29: GAAP to Non-GAAP Reconciliations
Company Overview 3Q 2023 & Outlook Additional Financial Information Non-GAAP Reconciliations GAAP to Non-GAAP Reconciliations Historical Adjusted EBITDA (as reported) We believe the presentation of historical Adjusted EBITDA provides useful information to investors about our operating profitability
Slide 30: GAAP to Non-GAAP Reconciliations
Company Overview 3Q 2023 & 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 We define Free Cash Flow as cash flows from operating activities less cash outl
Slide 31: GAAP to Non-GAAP Reconciliations
Company Overview 3Q 2023 & 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) We define Adjusted Income (Loss)
Slide 32: GAAP to Non-GAAP Reconciliations
Company Overview 3Q 2023 & 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 (“LTM”) Adjust
Slide 33: GAAP to Non-GAAP Reconciliations
Company Overview 3Q 2023 & 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 Adjusted