ADT has reported its results for the third quarter of 2022. Like Q2, ADT has continued to reap rewards from its Google Nest partnership.
The company reports total revenue of $1.6 billion, up 22% or 8% excluding its solar business, and end-of-period recurring monthly revenue (RMR) of $372 million, up 4%.
ADT saw record high customer retention with gross customer revenue attrition at 12.6% and record revenue payback of 2.1 years, reflecting an 80 basis point improvement in attrition versus the prior year period.
GAAP net loss was $122 million, or a loss of $(0.13) per diluted share, down $13 million. Adjusted net income in Q3 was $83 million, or $0.10 per diluted share, up $137 million, while it saw an adjusted EBITDA of $620 million, up $66 million or 12%.
“ADT’s strong third quarter results demonstrate our continued momentum — setting records in customer retention, RMR balance and revenue payback,” says ADT president and CEO, Jim DeVries. “Our performance to date validates our progress on key initiatives, outlined earlier this year during our investor day, to meaningfully grow revenue, earnings and cash flows, as well as reduce debt. Additionally, we were tremendously excited to announce our partnership with State Farm. A collaboration with such a marquee organization will serve as a significant future growth catalyst for ADT and we look forward to continued positive momentum in 2023.”
The end-of-period RMR balance was $372 million, representing a 4% increase over the prior year period. Approximately 80% of total consumer and small business (CSB) and commercial revenue was generated from this durable recurring revenue, according to the company.
Business Alliances Fosters ADT’s Growth
In September, ADT announced a partnership with State Farm to “revolutionize homeownership through innovation in the detection and mitigation of property losses.” In addition to its $1.2 billion equity investment, State Farm committed up to $300 million to fund product
and technology innovation, customer growth and marketing activities in connection with the partnership.
As part of ADT’s partnership with Google, the company nationally sells, installs and services a full suite of Google Nest products, including doorbells, cameras and thermostats. During the third quarter of 2022, the attachment rate for the Google doorbell was 51%, helping drive a 22% increase in residential installation revenue per unit as compared to the prior year period.
In August, ADT began selling and installing indoor and outdoor Google Nest cameras and is currently realizing a greater than 30% increase in cameras per home, according to the company.
As a result of the State Farm partnership, Google also committed an incremental $150 million, subject to the achievement of certain milestones, raising Google’s total success fund commitment with ADT to $300 million. It is said the incremental funds will advance opportunities to expand access for more customers to smart home innovation and technologies via new sales programs, and other related activities.
In addition to virtual service, ADT now provides a virtual installation option it says offers more flexibility, convenience and choice to customers. The Virtual Assistance program is generating high customer satisfaction at a lower cost to ADT while also lowering the its carbon footprint by eliminating thousands of vehicle trips each day, according to the company.
It adds that the program is a meaningful contributor to the adjusted EBITDA margin expansion in its CSB segment.
This article is reposted from Security Sales magazine
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