ADT (ADT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $1.24 billion, up 5% year-over-year, with record recurring monthly revenue of $359 million and strong customer retention.

• Adjusted EBITDA for Q3 was $659 million, up 6% year-over-year, and adjusted EPS was $0.20, up 25%; net income was $127 million, compared to a net loss in Q3 2023.

• Net leverage ratio improved to 2.9x, below the 3x target, with significant debt reduction and improved capital structure.

• Strategic focus on core residential business, innovation, and customer experience, with discontinued commercial and solar segments.

• Company remains on track to achieve tightened full-year 2024 guidance, reflecting continued operational strength.

Financial highlights

• Monitoring and related services revenue was $1.08 billion, up 2% year-over-year; security installation and product revenue rose 32% to $166 million.

• Adjusted EBITDA margin was 53% for Q3; adjusted free cash flow was $158 million for the quarter and $520 million year-to-date.

• Adjusted net income for Q3 was $183 million, or $0.20 per share; year-to-date EPS of $0.56, up 33%.

• Net debt reduced by $1.9 billion year-over-year to $7.4 billion; total debt at quarter-end was $7.88 billion.

• Cash and cash equivalents at quarter-end were $95 million, with $575 million available under the revolving credit facility.

Outlook and guidance

• 2024 guidance tightened: total revenue expected at $4.85–$4.95 billion, adjusted EBITDA at $2.55–$2.6 billion, adjusted EPS at $0.70–$0.75, and adjusted free cash flow at $725–$775 million.

• EPS midpoint increased, trending toward the higher end of the original range.

• Q4 expected to reflect normal seasonal and timing dynamics; hurricane and solar exit impacts not expected to be material.

• Company anticipates becoming a federal cash taxpayer in 2025 as net operating losses are utilized.

• Guidance reflects focus on core business after solar and commercial exits.