ADT reports fourth quarter and full-year 2021 results

BOCA RATON, Fla.—ADT Inc., the most trusted brand in smart home and small business security, has reported results for the fourth quarter and full year 2021.

FOURTH QUARTER 2021 (variances on a year-over-year basis)

• Total revenue of $1.4 billion, up 5 percent
• End-of-period RMR (recurring monthly revenue) of $359 million, up 5 percent
• Sequential and year-over-year net subscriber growth; total subscribers of 6.6 million
• Customer retention with gross customer revenue attrition at 13.1 percent and revenue payback of 2.3 years
• GAAP net loss of $58 million, or $(0.07) per share and adjusted net loss of $25 million, or adjusted diluted net loss $(0.03) per share
• Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $574 million

FULL YEAR 2021 (variances on a year-over-year basis)

• Total revenue of $5.3 billion
• Gross RMR additions grew 16 percent
• GAAP net loss of $341 million, or $(0.41) per share and adjusted net loss of $191 million, or adjusted diluted net loss $(0.25) per share
• Adjusted EBITDA of $2.2 billion
• Results met or exceeded full-year guidance, with total revenue and adjusted EBITDA above the high end of ranges provided

“Our fourth quarter caps off a strong year for ADT as we further set the foundation for long-term growth – increasing our subscriber and recurring revenue base, achieving important milestones in our Google partnership, growing our Commercial business, and entering the fast-growing residential solar market with the acquisition of Sunpro and launch of ADT Solar,” said ADT President and CEO Jim DeVries said. “I want to thank our dedicated ADT employees and dealers for their unrelenting focus on our customers which produced these excellent results.”

DeVries continued, “We have great momentum in the business and a solid plan in place which positions us well to drive growth, not only for 2022, but for years to come. With a focus on innovative offerings, unrivaled safety, and a premium customer experience, ADT is the market leader in providing safe, smart, and sustainable solutions for our customers.”

BUSINESS HIGHLIGHTS

ADT continued to make progress on its transformation into an innovative, technology-focused growth company offering a complete suite of safe, smart, and sustainable solutions.

Foundation for Growth

• Continued growth of RMR – During the fourth quarter, gross RMR additions increased 7 percent year over year to $14.9 million, and the Company achieved 16 percent RMR additions growth for the full year. As of the end of the quarter, RMR totaled $359 million, representing a 5 percent increase over the prior year. Approximately 80 percent of the Company’s total 2021 revenues came from this durable recurring revenue.

• Entry to residential solar market – The Company completed the acquisition of Sunpro Solar on Dec. 8, 2021, and introduced ADT Solar, which will provide customers with rooftop solar and energy storage solutions to increase energy independence and help save money on energy expenses.
• Expanding footprint in commercial – In October 2021, ADT Commercial purchased premier fire, life safety and security systems provider, Edwards Electronic Systems, Inc. The acquisition further deepens ADT Commercial’s integration capabilities and fire and life safety expertise to serve mid-market, national, and large-scale commercial customers in the Carolinas region.
• Solid customer retention – With strong customer satisfaction, trailing 12-month gross customer revenue attrition was 13.1 percent in the fourth quarter. This reflects a 30-basis-point improvement on a sequential basis.

Innovative Offerings

• Google Nest Doorbell launch – In the next step of ADT’s ongoing Google partnership, the Company launched the Google Nest Doorbell in January 2022 and is now selling, installing, and servicing the Nest Doorbell as part of the ADT smart home offering. Key benefits include easy installation, intelligent alerts, reliable video security with 24/7 live view, and 30-day event-based recordings. This evolution builds on the Company’s commitment to become a truly connected and protected smart home solution.
• Ford and ADT joint venture – In January 2022, Ford and ADT announced a new joint venture called Canopy that will combine ADT’s professional security monitoring and Ford’s AI-driven video camera technology to help customers strengthen security of new and existing vehicles across automotive brands. Offerings will integrate the Safe by ADT platform to provide professional monitoring and help businesses protect valuable work equipment in their vehicles and help individual owners strengthen security inside and outside their vehicles.
• SoSecure Time Magazine award – ADT’s personal safety app, SoSecure by ADT, has been recognized as one of TIME’s Best Inventions of 2021, as part of the publication’s highlighting of innovations that are changing how we live. SoSecure is a comprehensive mobile safety app that allows customers to call for help in many ways – by sliding a button, SMS chat, video or hands-free with a secret code word.

Unrivaled Safety

• Continued rollout of ADT’s SMART monitoring solutions – With patented technology, ADT is delivering alarm signal data and information directly into local 911 platforms, allowing for faster response, better data accuracy and reduced strain on local resources – all critically important when every second matters.
• 3G replacement – Since 2019, ADT has replaced approximately 2.8 million radios through its radio conversion program to ensure continuity of service ahead of the 2022 3G sunset dates. As of today, less than 4 percent of the original customer base is left to be converted and the Company does not expect the remaining radio conversion costs to be material.

Premium Experience

• Virtual service visits – As part of expanding customer choice with service, ADT launched virtual service visits in July 2021. Virtual service is transforming how our digital and physical worlds meet, allowing customers to more quickly troubleshoot system issues. Customer response has been extremely positive – the program has quickly scaled to approximately one-third of total volume visits per day and is generating high customer satisfaction scores at a lower cost to the Company.

2022 FINANCIAL OUTLOOK 

ADT is providing the following financial guidance for 2022, with all metrics representing an improvement over 2021 performance:

(in millions)

Total Revenue                                    $6,200-$6,400

Adjusted EBITDA                               $2,335-$2,435

Adjusted Free Cash Flow                   $550-$625