ADT (ADT) Q1 2025 earnings summary

Executive summary

• Total revenue grew 7% year-over-year to $1.3 billion, with recurring monthly revenue (RMR) up 2% to $360 million and record customer retention, as gross attrition improved to 12.6%.

• Adjusted EPS rose 11% to $0.21, and Adjusted EBITDA increased 4% to $661 million; Adjusted Free Cash Flow (including interest rate swaps) more than doubled to $226 million.

• Net income from continuing operations was $142 million, with GAAP EPS of $0.16, impacted by higher interest expense and unrealized losses on interest rate swaps.

• $445 million was returned to shareholders through share repurchases and dividends in Q1, with 53 million shares repurchased for $397 million.

• Completed exit from the Solar business and commercial segment, focusing on core security and smart home operations.

Financial highlights

• Monitoring and related services revenue reached $1,083 million, up 2% year-over-year; security installation and product revenue rose 45% to $184 million, driven by outright sales and the ADT+ platform.

• Adjusted EBITDA margin remained strong at 52%.

• Net cash from operating activities increased 28% to $467 million, and Adjusted Free Cash Flow (including interest rate swaps) up 105% to $226 million.

• Net debt stood at $7.6–$7.8 billion, with leverage at 2.9x adjusted EBITDA and a 4.5% average interest rate.

• Gross RMR and unit additions declined year-over-year, but installation revenue per unit reached approximately $1,500.

Outlook and guidance

• Full-year 2025 guidance reiterated: total revenue $5,025–$5,225 million, Adjusted EBITDA $2,650–$2,750 million, Adjusted EPS $0.77–$0.85, Adjusted Free Cash Flow (including interest rate swaps) $800–$900 million.

• Monitoring and services revenue expected to rise ~2%, with installation revenue contributing more due to outright sales.

• Dividend of $0.055 per share declared, payable July 8, 2025.

• Q2 revenue expected to be slightly higher than Q1, with adjusted free cash flow similar and adjusted EBITDA/EPS similar or slightly lower due to timing and tariffs.

• Guidance reflects a durable and growing RMR base, higher outright sales mix, and continued efficiency and cost controls.