On November 2, 2023, ADT Inc. (ADT, Financial), a leading brand in smart home and small business security, announced its financial results for the third quarter of 2023. The company reported a total revenue of $1.2 billion, with end-of-period recurring monthly revenue (RMR) up 3% to $350 million. The GAAP loss from continuing operations was $21 million, or $(0.02) per diluted share, up $148 million from the prior year quarter.
Company Performance and Financial Highlights
ADT's core security and smart home business delivered a strong third quarter with recurring monthly revenue topping $350 million and revenue payback at a record low of 2.0 years. The company also reported high customer retention with gross revenue attrition maintaining at 12.9%. However, the solar business continued to perform below expectations, leading to a substantial restructuring effort to drive more positive results.
ADT's Chairman, President, and CEO, Jim DeVries, commented on the company's performance, stating,
ADT’s core security and smart home business delivered a strong third quarter with recurring monthly revenue topping $350 million, revenue payback at a record low of 2.0 years and continued progress in product development. The solar business continued to perform below our expectations and we’ve undertaken a substantial restructuring in an effort to drive more positive results."
Financial Tables and Analysis
ADT's total CSB revenue for the third quarter was $1,180 million, up 6% versus the prior year. Monitoring and related services (M&S) revenue increased year-over-year primarily from higher average pricing. Security installation, product, and other increased year-over-year primarily from an increase in the volume of transactions under the customer-owned equipment ownership model and higher amortization of deferred subscriber acquisition revenue.
On the other hand, total Solar revenue for the third quarter was $58 million, down 68% versus the third quarter of last year. This performance was driven by lower installations and weaker sales performance. Solar Adjusted EBITDA was a $41 million loss for the third quarter.
Outlook for 2023
The company revised its financial guidance for 2023, primarily to account for the recent divestiture of the commercial business and updated operating performance. Despite weaker Solar underperformance, strong CSB performance has allowed ADT to maintain slightly narrowed guidance within the prior ranges after adjusting for the divestiture.
ADT Inc. (ADT, Financial) continues to focus on value creation, growing cash flow, and optimized capital allocation as it closes out 2023 in a position of strength.
Explore the complete 8-K earnings release (here) from ADT Inc for further details.
