ADT Inc. (ADT, Financial) kicked off 2025 with a robust first-quarter performance, reporting a revenue increase to $1.27 billion, up from $1.19 billion in the same period last year. This growth underscores the company's resilient business model, characterized by solid operating profitability and cash flow generation.
The company achieved a record in recurring monthly revenue and customer retention, reflecting the strong demand for ADT's innovative security solutions and premium customer service. ADT's leadership emphasized the firm's strategic positioning to meet its full-year guidance targets for 2025, with expectations of continued growth in cash flow and earnings per share.
Looking ahead, ADT is committed to investing in the expansion of its capabilities to better serve its customers while also focusing on returning capital to shareholders. This strategic approach aims to bolster the company's market position and drive sustainable growth over the coming year.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for ADT Inc (ADT, Financial) is $9.10 with a high estimate of $9.50 and a low estimate of $9.00. The average target implies an upside of 15.04% from the current price of $7.91. More detailed estimate data can be found on the ADT Inc (ADT) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, ADT Inc's (ADT, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for ADT Inc (ADT, Financial) in one year is $7.88, suggesting a downside of 0.38% from the current price of $7.91. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the ADT Inc (ADT) Summary page.
ADT Key Business Developments
Release Date: February 27, 2025
- Total Revenue: $4.9 billion for the full year, up 5%.
- Adjusted Net Income: $685 million, or $0.75 per diluted share, an increase of 25%.
- Adjusted Free Cash Flow: $744 million, up 42%.
- Fourth Quarter Revenue: $1.3 billion.
- Gross Customer Additions: 836,000 for the full year.
- New Recurring Monthly Revenue (RMR) Additions: $49.7 million for the full year.
- Installation Revenue: $605 million for the year, up 28%.
- Outright Sales Revenue: Up 50% for the year.
- Gross Revenue Attrition: 12.7%.
- Adjusted EBITDA: $2.6 billion for the year, up 4%.
- Net Debt: 2.9 times adjusted EBITDA.
- Ending Net Debt: $7.4 billion, down approximately $200 million from 2023.
- Weighted Average Interest Rate: Approximately 4.5%.
- Quarterly Dividend Distribution: $182 million during 2024, a 41% increase over 2023.
- Share Repurchase: 51 million shares retired for $345 million, including $104 million in January 2025.
- 2025 Revenue Guidance: $5.025 billion to $5.225 billion, an increase of 5% at the midpoint.
- 2025 Adjusted Free Cash Flow Guidance: $800 million to $900 million.
- 2025 Adjusted Earnings Per Share Guidance: $0.77 to $0.85, an increase of 8% at the midpoint.
- 2025 Adjusted EBITDA Guidance: $2.65 billion to $2.75 billion, up 5% at the midpoint.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ADT Inc (ADT, Financial) reported a strong financial performance for 2024, with total revenue reaching $4.9 billion, a 5% increase from the previous year.
- The company achieved a record high recurring monthly revenue balance and record customer retention, contributing to strong cash generation.
- ADT Inc (ADT) launched its proprietary ADT-plus platform nationwide, receiving positive feedback with an average rating of 4.8 stars on app stores.
- The company successfully reduced its leverage to below 3.0 times adjusted EBITDA, enhancing its capital structure and financial flexibility.
- ADT Inc (ADT) announced a $500 million share repurchase authorization, reflecting confidence in its stock valuation and commitment to shareholder returns.
Negative Points
- The company faced higher nonpayment cancellations, which partially offset improvements in customer retention.
- ADT Inc (ADT) is transitioning to become a cash taxpayer, which may pressure cash flow despite expected growth.
- The rollout of the ADT-plus platform involves a shift in subscriber acquisition costs to the P&L, impacting EBITDA growth.
- The company is exposed to potential tariff impacts, which could pressure its business, although it remains within guidance ranges.
- ADT Inc (ADT) did not conduct any bulk account purchases in Q4 2024, which may affect growth opportunities compared to previous years.
