The Top 5 Analyst Questions From ADT's Q1 Earnings Call
ADT started 2025 with results that aligned with market expectations, driven by ongoing investments in its ADT Plus platform and improved operational efficiency. Management cited record recurring monthly revenue and historically low customer attrition as key factors supporting stability. CEO Jim DeVries pointed to the company's 'continued strong demand for innovative offerings and premium customer experience' as contributors to the quarter's performance, alongside a notable increase in installation revenue from outright equipment sales.
Is now the time to buy ADT? Find out in our full research report (it's free).
Revenue: $1.27 billion vs analyst estimates of $1.24 billion (6.5% year-on-year growth, 2% beat)
Adjusted EPS: $0.21 vs analyst estimates of $0.20 (6.8% beat)
Adjusted EBITDA: $660.8 million vs analyst estimates of $687.3 million (52.1% margin, 3.9% miss)
The company reconfirmed its revenue guidance for the full year of $5.13 billion at the midpoint
Management reiterated its full-year Adjusted EPS guidance of $0.81 at the midpoint
EBITDA guidance for the full year is $2.7 billion at the midpoint, in line with analyst expectations
Operating Margin: 25.2%, in line with the same quarter last year
Customers: 6.4 million, in line with the same quarter last year
Market Capitalization: $6.75 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Ronan Kennedy (Barclays) asked about the demand environment and macroeconomic uncertainty. CEO Jim DeVries emphasized ADT's resilience in downturns, noting that demand for safety can rise in uncertain times, and retention benefits when relocations slow.
George Tong (Goldman Sachs) inquired about the 7% decline in gross recurring monthly revenue additions. DeVries attributed this to tightened credit standards in DIY and health segments, but highlighted growth in the core professional install business.
David Page (RBC Capital Markets) sought updates on the State Farm partnership and AI initiatives. DeVries shared that State Farm pilots are progressing and that 90% of customer chats are now handled by AI, with voice AI set for expansion.
Peter Christiansen (Citigroup) probed trends in the small business channel and the mix between monitoring and installation revenue. DeVries said small business performance was stable with flat attrition, while Likosar explained that installation revenue growth reflects outright sales via the ADT Plus platform.
Yehuda Silverman (Morgan Stanley) questioned the sustainability of improvements in attrition. DeVries outlined ongoing retention initiatives and set a long-term goal to reduce attrition further, noting improvements are generally linear but can fluctuate.
Going forward, the StockStory team will be monitoring (1) the pace of adoption and monetization of the ADT Plus platform and related product enhancements, (2) measurable cost savings and customer experience improvements from scaling AI-driven customer service, and (3) the effectiveness of tariff mitigation strategies and their impact on margins. The trajectory of customer retention and new partnership channels, such as State Farm, will also be important to watch.
ADT currently trades at $8.11, up from $7.92 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it's free).
The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
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