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Introduction & Market Context
ADT Corporation (NYSE:ADT) presented its third-quarter 2025 earnings results on November 4, 2025, highlighting continued growth in a challenging macroeconomic environment. The company, which maintains its position as the #1 brand in smart home security, reported solid financial performance while advancing its strategic initiatives in product innovation and operational efficiency.
As shown in the following slide highlighting ADT’s market leadership position, the company serves over 6 million subscribers with an average customer tenure of approximately 8 years, reinforcing its dominant position in the home security market:
The company operates in a growing market, with residential security spending projected to increase from $17 billion in 2024 to $23 billion by 2029, representing a compound annual growth rate of approximately 6%. ADT is also expanding into adjacent markets, including standalone cameras, smart home devices, small business security, and personal emergency response systems.
Quarterly Performance Highlights
ADT reported total revenue of $1.3 billion for Q3 2025, representing a 4% increase year-over-year. Adjusted EBITDA grew 3% to $676 million, while adjusted earnings per share rose 15% to $0.23. The company also generated $208 million in adjusted free cash flow, a substantial 32% increase from the prior year.
The following slide summarizes ADT’s key financial highlights for the third quarter:
Despite the overall positive financial performance, ADT faced some operational challenges. The company’s gross revenue attrition rate increased slightly to 13.0% from 12.8% in the prior year, which management attributed to higher non-payment cancellations. Additionally, gross RMR (recurring monthly revenue) additions declined 15% to $12.5 million, and gross unit additions fell 16% to 210,000 units compared to the same period last year.
A more detailed breakdown of ADT’s quarterly financial results shows the company’s revenue mix and profitability metrics:
The company’s end-of-period RMR reached $362 million, up 1% year-over-year, despite a 1% decrease in subscriber count to 6.3 million. This growth in RMR despite fewer subscribers reflects ADT’s success in increasing average pricing and improving its product mix.
Strategic Initiatives and Product Innovation
ADT continues to focus on innovation and differentiation to drive growth and customer loyalty. The company is leveraging its proprietary ADT+ platform to introduce new security and lifestyle-oriented solutions while enhancing its digital capabilities through AI and automation.
As illustrated in the following slide, ADT is pursuing multiple initiatives to accelerate differentiation and drive growth:
Key product innovations include the launch of the ADT+ Alarm Range Extender, the introduction of automation features, and the addition of five new Google Nest camera models to its product lineup. The company is also expanding its Trusted Neighbor and Touch Lock capabilities while growing its AI-enabled customer self-service tools.
The presentation highlighted that approximately 50% of service visits are now conducted virtually, and over 90% of customer interactions involve digital channels, demonstrating ADT’s progress in digital transformation.
Capital Allocation and Balance Sheet Strength
ADT has maintained a disciplined approach to capital allocation, focusing on investing in the business, strengthening the balance sheet, and returning capital to shareholders. The company’s net leverage ratio improved to 2.8x, down from 2.9x in the prior year.
The following slide illustrates how ADT’s strong cash flow supports its capital allocation strategy:
Since 2022, ADT has reduced its debt by $2 billion and extended $2.5 billion of maturities to 2032 and beyond, resulting in an effective cost of debt of approximately 4.3%. The company has also significantly increased shareholder returns, raising its quarterly dividend by 57% to $0.055 per share in January 2024 and repurchasing $846 million in shares since January 2024.
In the third quarter alone, ADT returned $157 million to shareholders through dividends and share repurchases, bringing the total capital returned to shareholders during 2024 and year-to-date 2025 to approximately $1.2 billion.
Forward-Looking Guidance
Based on its strong performance through the first three quarters of 2025, ADT updated its full-year guidance. The company now expects total revenue between $5.075 billion and $5.175 billion, representing approximately 5% growth at the midpoint compared to 2024.
The following slide details ADT’s updated 2025 guidance across key financial metrics:
ADT also raised the lower end of its adjusted EPS guidance to $0.85-$0.89, representing a 16% year-over-year increase at the midpoint. Adjusted EBITDA is projected to reach $2.665-$2.715 billion, while adjusted free cash flow is expected to be between $800-$900 million, a 14% increase at the midpoint compared to 2024.
The company’s value creation strategy focuses on leveraging its durable recurring revenue base, driving strong revenue growth, operating efficiently, and maintaining a solid capital structure to generate significant free cash flow and deliver shareholder returns.
ADT’s Q3 2025 presentation demonstrates the company’s resilience and strategic focus on innovation and operational efficiency, positioning it for continued growth despite macroeconomic challenges. With its strong brand, expanding product portfolio, and disciplined capital allocation, ADT remains well-positioned to capitalize on the growing smart home security market while delivering value to shareholders.
Full presentation:
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