ADT reports second-quarter results

BOCA RATON, Fla.—Smart home and small business security provider ADT released its second-quarter results today during an earnings call, with strong growth indicators and optimism for the third and fourth quarters.

The tone of the call was positive focusing on yearly gains and a positive look at financial outcomes for the rest of 2022.

“We delivered what I believe is our best quarter ever at ADT,” said ADT President and CEO Jim DeVries. A snapshot of the financials shows a revenue growth of 23 percent over the prior year and an adjusted net income of $50 million, or $0.06 per share. Total revenue in the second quarter was $1.6 billion, up 23 percent, with an end-of-period recurring monthly revenue (RMR) of $369 million, up 5 percent.

DeVries said that there had been “incredible strength and momentum in their Consumer and Small Business (CSB) business.” ADT noted in its financials that the company’s home automation market has grown 22 percent and its core home security market by 7 percent.

ADT’s partnership with Google was described as a catalyst to accelerate growth for the company so far in 2022. Earlier this week, ADT announced it would now sell, install and service the indoor Google Nest Cam, outdoor Nest Cam, Nest Cam with floodlight, Nest Wifi and Thermostats, plus Nest speakers and displays, building on the success of the Google Nest Doorbell integration in January of this year.

CFO and President of Corporate Development Jeff Likosar pointed to the strong customer retention ADT has seen throughout the quarter and credited it to the half-million virtual visits so far this year which has helped the company reduce its carbon footprint.

Talk in the earnings call was also dominated by the spectacular performance and predicted growth of the solar market for ADT. Total second-quarter solar revenue was $215 million, an increase of 50 percent in residential solar from the previous year period from Sunpro Solar (acquired by ADT in December 2021).

Between the rebranding to ADT Solar and uptick in conversions from existing customers to solar, ADT says the demand is off the charts. Expansion of the ITC (federal solar tax investment credit) under the proposed Inflation Reduction Act is being seen as a favorable indicator for the growing interest in solar conversion. 

“We couldn’t feel better about the top line.” DeVries said. The company is looking to partner with Lowe’s in Q4 for solar sales in Florida.

During investor Q&A many questions trended towards how continuing supply chain woes and labor shortage were affecting business. DeVries said despite some impact on solar labor issues were relatively minor and not material, and while supply chain backlog issues persist that they have had almost no cancels from their commercial side, this despite a wait list and inflation pressure.

In his closing remarks, DeVries said, “We continue to be optimistic about the year.”

For more information on ADT’s second-quarter results, visit investor.adt.com/.