ADT's Strategic Shifts Pay Off As Q4 EPS Beat Expectations: Details

ADT Inc. ADT reported fourth-quarter fiscal 2023 sales decline of 7.2% year-on-year to $1.22 billion, missing the consensus of $1.44 billion.

Adjusted EPS was $0.25, beating the consensus of $0.04. The end-of-period recurring monthly revenue (RMR) of $353 million rose 4% YoY.

Trailing 12-month gross customer revenue attrition was 12.9%, a 10-basis-point improvement versus the prior year period.

Total Consumer and Small Business revenue was $1.2 billion for the quarter, up 5% versus the prior year.

In January, ADT announced it will be exiting its residential solar business following the previously announced footprint restructuring and detailed strategic review.

During the fiscal the company reduced debt by $2.1 billion, improved borrowing costs by ~35 basis points, and extended debt maturities.

Adjusted EBITDA from continuing operations in the quarter was $599 million, up 1% Y/Y.

The net cash provided by operating activities during the quarter was $412 million (-27% Y/Y. ADT returned $32 million to shareholders in dividends during the quarter and $129 million for the fiscal.

2024 Outlook: ADT expects CSB segment revenue of 4.8 billion-$5.0 billion. The company expects adjusted EPS of $0.60 – $0.70, against consensus of $0.50.

The company sees Adjusted FCF, including interest rate swaps, of $700 million – $800 million.

Price Action: ADT shares traded higher by 7.5% at $7.02 on the last check Wednesday.