ADT reports increases in RMR, subscribers in Q4

BOCA RATON, Fla.—ADT reported results for the fourth quarter and full year 2020, highlighted by U.S. Recurring Monthly Revenue (RMR) additions up 15 percent, as well as continued growth for its net subscribers for both Q4 and full year.

“ADT once again delivered strong financial and operating results during the fourth quarter. We maintained our record low revenue payback, while growing our RMR additions by double digits and increasing our net subscribers,” ADT’s President and CEO Jim DeVries said in the earnings announcement. “This performance caps a year of delivering solid financial results while ensuring we continued to prioritize the well-being of our employees and customers.”

DeVries noted that during 2020, ADT “took a number of steps to improve the long-term competitive positions of ADT and set the stage for accelerating our vision and disciplined growth strategy in 2021 and the future,” he said. “We enjoyed strong momentum in our core residential business and are excited to welcome Dish Network and Ackerman Security. ADT’s market leading brand and long-term partnership with Google provide a compelling combination for future subscriber growth in the rapidly expanding smart home and security market. Finally, we continued to strengthen our commercial capabilities in 2020, during a challenging year, and are well positioned to return to growth in 2021.”

For 2020, total revenue was $5,315 million, compared to $5,126 million a year ago. Monitoring and related services revenue (M&S revenue) was down $121 million or 2.8 percent, reflecting the sale of ADT Canada in November 2019, offset partially by an increase in U.S. RMR, ADT said. Installation and other revenue increased $310 million or 37.9 percent, primarily as a result of higher installation revenue from outright sales to residential customers primarily due to the Defenders acquisition and a temporary change in the equipment ownership model for residential transactions, partially offset by lower installation revenue from commercial customers as a result of the COVID-19 pandemic, ADT noted.

Additional highlights for 2020 financials:

• Total revenue of $5,315 million, compared to $5,126 million, a net loss of $632 million, compared to $424 million
• Adjusted EBITDA of $2,199 million, compared to $2,483 million
• Net cash provided by operating activities of $1,367 million, compared to $1,873 million
• Net cash used in investing activities of $1,137 million, compared to $978 million
• Net cash used in financing activities of $70 million, compared to $1,214 million
• Adjusted Free Cash Flow of $675 million, up from $590 million
• Trailing twelve-month revenue payback at a record low 2.2 years
• Trailing twelve-month gross customer revenue attrition of 13.1%, decreased 30 bps from a year ago

With ADT’s growth momentum in the second half of 2020, it expects “demand catalysts to continue in 2021 and is targeting full year Recurring Monthly Revenue additions to grow in the mid-teens,” the company said. “This growth will require increased spending on subscriber acquisition costs and other technology investments.”