Strong 2024 momentum anchored by cash flow growth Solid CSB revenue growth, up 5%, and segment Adjusted EBITDA, up 8% Streamlined focus on innovation and growth in core consumer markets Returned capital to shareholders through increased dividend and share repurchase BOCA RATON, Fla., April 25, 2024 (GLOBE NEWSWIRE) -- ADT Inc. (NYSE:ADT), the most trusted brand in smart home and small business security, today reported results for the first quarter of 2024. Financial highlights for the first quarter are listed below. Except for cash flow measures, prior period amounts have been recast to exclude ADT's former commercial business, consistent with continuing operations GAAP presentation following the sale of the commercial business. Variances are on a year-over-year basis unless otherwise noted. First Quarter 2024 Total revenue of $1.2 billion with end-of-period recurring monthly revenue (RMR) up 3% to $353 million ($4.2 billion on an annualized basis) Consumer and Small Business (CSB) revenue of $1.2 billion, up 5% and segment Adjusted EBITDA of $638 million, up 8% Strong customer retention with gross revenue attrition of 13.1% GAAP income from continuing operations of $92 million, or $0.10 per diluted share, up $218 million Adjusted income from continuing operations of $151 million, or $0.16 per diluted share, up $56 million "We are off to a strong start in 2024 with continued momentum in CSB segment revenue and Adjusted EBITDA as well as cash flow growth. During the quarter, we continued rolling out our new professionally installed ADT+ platform, positioning us to expand nationally in the coming months. We are excited about this new platform, related innovative use cases, and more diverse and flexible offerings for our customer base," said ADT Chairman, President, and CEO, Jim DeVries. "Additionally, we continue to execute on our value creation and capital allocation strategy. We remain focused on driving significant cash flow while continuing to invest in growing and serving our customer base and returning capital to shareholders." BUSINESS HIGHLIGHTS Foundation for Growth Strong RMR balance – End-of-period RMR balance was $353 million ($4.2 billion on an annualized basis), a 3% increase. More than 85% of CSB revenue was generated from this durable recurring revenue. Maintained strong customer retention and revenue payback – Trailing 12-month gross customer revenue attrition was 13.1% and revenue payback ended the first quarter of 2024 at 2.1 years. Solid CSB performance – CSB segment Adjusted EBITDA margin was 54%, up approximately 200 basis points, driven by strong execution and operational efficiencies. Unlocking Shareholder Value Share repurchase – In March 2024, the Company repurchased 15 million shares of its common stock as part of its existing $350 million share repurchase authorization. This repurchase was concurrent with a secondary offering of 74.75 million shares (including the underwriters' over-allotment option) of the Company's common stock held by certain existing shareholders. Following this transaction, ADT ceased to be a "controlled company" under NYSE rules. Balance sheet fortification – On April 15, 2024, the Company redeemed the remaining $100 million of its First Lien Senior Secured Notes due 2024. Term Loan B repricing – On April 15, 2024, the Company completed a repricing of the $1.4 billion Term Loan B reducing borrowing costs by 25 basis points. Solar business exit – As previously announced in January 2024, the Company is exiting the residential solar business and is in the process of winding down its solar operations. The Company discontinued all sales and marketing activities during the first quarter and expects to discontinue substantially all field operations by the end of the second quarter. Innovative Offerings, Unrivaled Safety and Premium Experience ADT+ platform for professional installation – The Company continued the phased rollout of the ADT+ platform, with planned geographic expansion throughout the year. With this rollout, customers will have next generation hardware and technology through a proprietary app which the Company believes will become the conduit for future innovative use cases and differentiation. ADT Home Security Program for State Farm – ADT's program for State Farm customers is currently available in 13 states with expansion to four additional states later this year. Improved e-commerce capabilities – ADT enhanced its e-commerce shopping experience on ADT.com such that customers can more easily shop for individual products, configure system packages and complete purchases. Progress on our ESG Journey ADT Safe Places Program partners – ADT's corporate social responsibility program, ADT Safe Places, is positively impacting communities throughout the country with purposeful non-profit partnerships. In the first quarter, the ADT Safe Places program made $100,000 donations to new non-profit partners, Blacks in Green and Chicago CRED. ADT also donated $10,000 to the Red Cross to support recovery work in Baltimore following the collapse of the Francis Scott Key Bridge. 2024 FINANCIAL OUTLOOK The Company is reiterating its financial guidance for 2024. (in millions, except per share data)     CSB Total Revenue   $4,800 - $5,000 CSB Adjusted EBITDA   $2,525 - $2,625 Adjusted EPS   $0.60 - $0.70 Adjusted Free Cash Flow (including interest rate swaps)   $700 - $800 The Company is not providing forward-looking guidance for U.S. GAAP financial measures other than CSB Total Revenue or CSB Adjusted EBITDA (our segment profit measure) or a quantitative reconciliation to the most directly comparable GAAP measures for its non-GAAP financial guidance shown above because the GAAP measures cannot be reliably estimated and the reconciliations cannot be performed without unreasonable effort due to their dependence on future uncertainties and adjusting items that the Company cannot reasonably predict at this time but which may be material. Please see "Non-GAAP Measures" for additional information. The above measurements do not include restructuring or similar expenditures associated with winding down and exiting the solar business. TOTAL COMPANY RESULTS (1)(2)   (in millions, except revenue payback, attrition, and per share data)   Three Months Ended March 31,     2024       2023     GAAP Net cash provided by (used in):         Operating activities   $ 364     $ 307   Investing activities   $ (300 )   $ (336 ) Financing activities   $ (75 )   $ (41 ) Income (loss) from continuing operations   $ 92     $ (127 ) Income (loss) from continuing operations per share - basic   $ 0.10     $ (0.14 ) Income (loss) from continuing operations per share - diluted   $ 0.10     $ (0.14 )     Non-GAAP Measures Adjusted Free Cash Flow   $ 89     $ —   Adjusted Free Cash Flow (including interest rate swaps)   $ 111     $ 16   Adjusted Income (Loss) from Continuing Operations   $ 151     $ 95   Adjusted Diluted Income (Loss) per share from Continuing Operations   $ 0.16     $ 0.11       Other Measures Trailing twelve-month revenue payback   2.1 years   2.1 years Trailing twelve-month gross customer revenue attrition     13.1 %     12.9 % End of period RMR   $ 353     $ 344   SEGMENT RESULTS (2) CSB     Three Months Ended March 31, (in millions, except Adjusted EBITDA Margin)     2024       2023     $ Change   % Change Monitoring and related services   $ 1,063     $ 1,029     $ 34     3 % Security installation, product, and other     127       104       23     22 % Total CSB revenue   $ 1,190     $ 1,132     $ 57     5 %                   Adjusted EBITDA   $ 638     $ 590     $ 48     8 % Adjusted EBITDA Margin (as a % of Total CSB Revenue)     54 %     52 %                                   Total CSB revenue was $1,190 million for the first quarter, up 5%. Monitoring and related services (M&S) revenue growth was driven by increased RMR balance. Security installation, product, and other revenue increased primarily from higher amortization of deferred subscriber acquisition revenue, along with a greater volume of transactions and higher installation revenue per unit under the customer-owned equipment ownership model. CSB Adjusted EBITDA increased 8% to $638 million in the first quarter. These improvements were driven by continued recurring revenue growth and cost structure improvements. Solar Total Solar revenue for the first quarter was $20 million with an Adjusted EBITDA loss of $24 million as a result of the Company's decision to exit the residential solar business. During the first quarter, the Company also incurred charges associated with winding down and exiting the solar business of $75 million and cash expenditures of $11 million which have been excluded from the segment Adjusted EBITDA, Adjusted EPS, and Adjusted Free Cash Flow (including interest rate swaps). The Company expects to incur additional charges of up to $35 million and additional cash expenditures of approximately $40 million to $60 million. BALANCE SHEET, CASH, AND LIQUIDITY       Three Months Ended March 31, (in millions)     2024       2023     $ Change   % Change Net cash provided by (used in) operating activities   $ 364     $ 307     $ 57     19 % Adjusted Free Cash Flow   $ 89     $ —     $ 89     N/M Adjusted Free Cash Flow (including interest rate swaps)   $ 111     $ 16     $ 95     N/M                               Net cash provided by operating activities during the first quarter was $364 million, up $57 million or 19%, and Adjusted Free Cash Flow (including the benefit of interest rate swaps) increased by $95 million versus the prior year period. During the first quarter, improved CSB operating profitability, lower payroll-related payments, and lower cash interest resulting from debt reduction, were partially offset by results of the commercial business included in the prior year. During the quarter, the Company spent $300 million in net cash subscriber acquisition costs and invested $54 million in capital and software expenditures. The Company returned $32 million to shareholders in dividends during the first quarter of 2024. Additionally, the Company paid approximately $93 million to repurchase and retire 15 million shares of common stock (at a price of $6.22 per share). As of March 31, 2024, approximately $257 million remains available for future repurchases under the Share Repurchase Plan. The Company ended the first quarter with $4 million of cash and a $50 million drawn revolving credit balance. On April 15, 2024, the Company redeemed the remaining $100 million of its First Lien Senior Secured Notes due 2024 and completed a repricing of the $1.4 billion Term Loan B reducing borrowing costs by 25 basis points. There are no other significant debt maturities until 2026. DIVIDEND DECLARATION Effective April 25, 2024, the Company's Board of Directors declared a cash dividend of $0.055 per share to holders of the Company's common stock and Class B common stock of record as of June 13, 2024. This dividend will be paid on July 9, 2024. _____________________ (1 ) All variances are year-over-year unless otherwise noted. Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow (including interest rate swaps), Adjusted Income (Loss), Adjusted Diluted Income (Loss) per share (or, Adjusted EPS), Net Debt, and Net Leverage Ratio are non-GAAP measures. Refer to the "Non-GAAP Measures" section for the definitions of these terms and reconciliations to the most comparable GAAP measures. The operating metrics such as Gross Customer Revenue Attrition, Unit Count, RMR, Gross RMR Additions, and Revenue Payback are approximated as there may be variations to reported results in each period due to certain adjustments the Company might make in connection with the integration over several periods of acquired companies that calculated these metrics differently, or otherwise, including periodic reassessments and refinements in the ordinary course of business. These refinements, for example, may include changes due to systems conversion or historical methodology differences in legacy systems. Results of the commercial business are presented as discontinued operations. Except for cash flow measures, and unless otherwise noted, amounts herein have been recast to reflect the results of the Company's continuing operations. (2 ) Amounts may not sum due to rounding.       Conference Call As previously announced, management will host a conference call at 10 a.m. ET today to discuss the Company's first quarter 2024 results and lead a question-and-answer session. Participants may listen to a live webcast through the investor relations website at investor.adt.com. A replay of the webcast will be available on the website within 24 hours of the live event. Alternatively, participants may listen to the live call by dialing 1-833-470-1428 (domestic) or 1-404-975-4839 (international), and providing the access code 271635. An audio replay will be available for two weeks following the call, and can be accessed by dialing 1-866-813-9403 (domestic) or 1-929-458-6194 (international), and providing the access code 213414. A slide presentation highlighting the Company's results will also be available on the Investor Relations section of the Company's website. From time to time, the Company may use its website as a channel of distribution of material Company information. Financial and other material information regarding the Company is routinely posted on and accessible at investor.adt.com. About ADT Inc. ADT provides safe, smart and sustainable solutions for people, homes and small businesses. Through innovative offerings, unrivaled safety and a premium customer experience, all delivered by the largest networks of smart home security professionals in the U.S., we empower people to protect and connect to what matters most. For more information, visit www.adt.com. Investor Relations: Media Relations: 888-238-8525     Forward-Looking Statements ADT has made statements in this press release 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 be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC") and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to, among other things, the Company's exit of the residential solar business and the expected costs and benefits of such exit (the "ADT Solar Exit"); the repurchase of shares of the Company's common stock under the authorized share repurchase program; the Company's ability to reduce debt or improve leverage ratios, or to achieve or maintain its long-term leverage goals; the integration of the December 2023 strategic bulk purchase of customer accounts; the Company's outlook and/or guidance, which includes total revenue and Adjusted EBITDA for the Consumer and Small Business ("CSB") segment and Adjusted Diluted Income (Loss) per Share ("Adjusted EPS") and Adjusted Free Cash Flow (including interest rate swaps) for total company; any stated or implied outcomes with regards to the foregoing; and other matters. Without limiting the generality of the preceding sentences, any time we use the words "expects," "intends," "will," "anticipates," "believes," "confident," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "goals," "objectives," "targets," "planned," "projects," and, in each case, their negative or other various or comparable terminology, and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These forward-looking statements are based on management's current beliefs and assumptions and on information currently available to management. We caution that these statements are subject to risks and uncertainties, many of which are outside of our control and could cause future events or results to be materially different from those stated or implied in this press release, including, among others, factors relating to uncertainties as to any difficulties with respect to the effect of the Commercial Divestiture and ADT Solar Exit on our ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners; risks related to the Commercial Divestiture and ADT Solar Exit, including ADT's business becoming less diversified and the possible diversion of management's attention from ADT's core CSB business operations; uncertainties as to our ability and the amount of time necessary to realize the expected benefits of the Commercial Divestiture and ADT Solar Exit, including the risk that the ADT Solar Exit may not be completed in a timely manner or at all; our ability to maintain and grow our existing customer base and to integrate the December 2023 strategic bulk purchase of customer accounts; activity in repurchasing shares of ADT's common stock under the authorized share repurchase program; dividend rates or yields for any future quarter; and risks that are described in the Company's Annual Report and its Quarterly Reports on Form 10-Q, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in those reports, and in our other filings with the SEC. Any forward-looking statement made in this press release speaks only as of the date on which it is made. ADT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.     Three Months Ended March 31,       2024       2023     $ Change   % Change Revenue:                 Monitoring and related services   $ 1,063     $ 1,029     $ 34     3% Security installation, product, and other     127       104       23     22% Solar installation, product, and other     20       145       (125 )   (86)% Total revenue     1,209       1,277       (68 )   (5)% Cost of revenue (exclusive of depreciation and amortization shown separately below):                 Monitoring and related services     155       162       (7 )   (4)% Security installation, product, and other     40       30       10     33% Solar installation, product, and other     42       98       (57 )   (58)% Total cost of revenue     236       290       (54 )   (19)% Selling, general, and administrative expenses     398       393       5