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Introduction & Market Context
ADT Corporation (NYSE:ADT), the leading provider of smart home security solutions, reported solid second-quarter 2025 results on July 24, showcasing consistent growth across key financial metrics. The company, which has been in business for 150 years, continues to leverage its strong brand recognition and nationwide footprint to expand its market presence in the growing residential security sector.
According to the presentation, ADT maintains its position as the #1 security system brand with twice as many users as its closest competitor, based on Parks Associates data from March 2025. The company serves over 6 million subscribers with an average customer tenure of approximately 8 years, demonstrating strong customer loyalty in a competitive market.
The residential security market is projected to grow from $17 billion in 2024 to $23 billion by 2029, representing a compound annual growth rate of approximately 6%. This favorable market environment provides ADT with significant opportunities to expand its business and introduce new products and services.
As shown in the following slide highlighting ADT’s market position and key strengths:
Quarterly Performance Highlights
ADT delivered strong financial results for the second quarter of 2025, with total revenue reaching $1.3 billion, a 7% increase compared to the same period last year. Adjusted EBITDA also grew by 7% to $674 million, maintaining a robust margin of 52.3%. The company’s adjusted earnings per share showed particularly impressive growth, rising 35% year-over-year to $0.23.
The following slide summarizes ADT’s key Q2 2025 highlights:
The revenue growth was driven by both monitoring services and installation revenue. Monitoring and related services revenue increased to $1.09 billion, while security installation, product, and other revenue grew significantly to $197 million. This balanced growth demonstrates ADT’s success in both expanding its recurring revenue base and increasing upfront sales.
The company’s detailed quarterly financials show the breakdown of revenue sources and profitability metrics:
ADT’s operational metrics also showed positive trends in the second quarter. The company maintained its subscriber count at 6.4 million while increasing its recurring monthly revenue (RMR) to $363 million, up 2% year-over-year. Gross RMR additions and gross unit additions both increased by 14%, reflecting strong new customer acquisition. Meanwhile, gross revenue attrition improved slightly to 12.8%, down 10 basis points from the previous year.
The following slide details these operational metrics:
Strategic Initiatives
ADT continues to innovate with its proprietary ADT+ platform, which strengthens its smart home security offerings. Recent product launches include Trusted Neighbor, which allows designated individuals access to homes when needed, and Touch Lock, which introduces biometric access control. The company has also expanded ADT+ with cellular-only setup, removing Wi-Fi dependency, and rolled out Home | Away automation features.
The company is leveraging artificial intelligence to enhance customer service efficiency, with virtual agents now handling 90% of customer service chats. Virtual service calls now represent approximately 50% of total service interactions, improving both cost efficiency and customer experience.
These innovations are part of ADT’s strategy to differentiate itself in the market and drive growth, profitability, and customer loyalty. The company’s focus on use cases and features, offer structure, routes to market, and digitization and AI is designed to strengthen its competitive position and expand its market share.
Capital Allocation & Balance Sheet
ADT maintains a disciplined and balanced capital allocation framework, focusing on investing in the business, strengthening the balance sheet, and returning capital to shareholders. In the second quarter of 2025, the company returned $143 million to shareholders through share repurchases and dividends.
Since January 2024, ADT has repurchased $733 million worth of shares and increased its quarterly dividend by 57% to $0.055 per share. The company has also reduced its net leverage ratio to 2.8x, down from 3.0x a year ago, and has decreased its debt by $2 billion since 2022.
The following slide illustrates ADT’s strong cash flow and how it supports the company’s capital allocation strategy:
ADT’s capital structure shows a balanced debt maturity profile, with a weighted average interest rate of approximately 4.4%. The company recently upsized its 2032 Term Loan B by $550 million and is redeeming $550 million of 5.75% 2026 Notes with the proceeds. Management expects to have the capacity to repay the remaining $300 million 2026 Notes with cash generation before maturity.
The following slide details ADT’s capital structure and debt maturity profile:
Forward-Looking Statements
ADT reiterated its full-year 2025 guidance, with adjusted EPS updated to reflect share repurchases. The company expects total revenue of $5,025-$5,225 million, representing 5% year-over-year growth, and adjusted EBITDA of $2,650-$2,750 million, also a 5% increase from 2024.
Adjusted EPS is projected to be $0.81-$0.89, reflecting 13% growth, while adjusted free cash flow (including interest rate swaps) is expected to reach $800-$900 million, a 14% increase from the previous year.
The following slide outlines ADT’s 2025 guidance:
The company’s long-term financial trends show consistent growth in total revenue, adjusted EBITDA, and adjusted free cash flow from 2022 to 2025, with compound annual growth rates of approximately 5% for revenue and EBITDA, and 16% for adjusted free cash flow.
As shown in the following chart of ADT’s financial growth trajectory:
ADT’s investment thesis remains strong, supported by its leading brand position, stable recurring revenue base, and disciplined capital allocation framework. The company continues to innovate with its proprietary ADT+ platform and expand its offerings in the growing smart home security market, positioning itself for sustainable long-term growth.
Full presentation:
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