ADT’s second quarter results were met with a positive market response, reflecting the company’s ability to outpace Wall Street’s revenue and non-GAAP profit expectations. Management highlighted expansion in recurring monthly revenues, a strong contribution from a strategic bulk subscriber acquisition, and continued improvement in operational efficiency as central to the quarter’s outcome. CEO James DeVries cited record levels of customer satisfaction and the successful rollout of new features—such as Alarm Messenger and Trusted Neighbor—as important contributors. The integration of new technologies and a focus on core monitoring capabilities also helped reduce false alarms and support customer retention.
Is now the time to buy ADT? Find out in our full research report (it’s free).
ADT (ADT) Q2 CY2025 Highlights:
- Revenue: $1.29 billion vs analyst estimates of $1.28 billion (6.8% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.23 vs analyst estimates of $0.20 (15% beat)
- Adjusted EBITDA: $673.6 million vs analyst estimates of $673.6 million (52.3% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $5.13 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $0.85 at the midpoint, a 4.9% increase
- EBITDA guidance for the full year is $2.7 billion at the midpoint, in line with analyst expectations
- Operating Margin: 26.6%, up from 23.6% in the same quarter last year
- Customers: 6.4 million, in line with the same quarter last year
- Market Capitalization: $6.89 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.
Our Top 5 Analyst Questions ADT’s Q2 Earnings Call
- Keen Fai Tong (Goldman Sachs): asked about the economics of the bulk account purchase and ADT’s appetite for future acquisitions. CEO James DeVries explained the rigorous evaluation process, highlighting attrition protections and consistent returns with the dealer business.
- Peter Corwin Christiansen (Citi): questioned the opportunity to upgrade bulk-acquired customers to new systems and features. DeVries and CFO Jeff Likosar said upgrades are possible but not factored into initial underwriting, viewing them as upside.
- Christiansen (Citi): also inquired about customer uptake and financial impact of the Trusted Neighbor product. DeVries noted strong adoption, with installation revenues meaningfully above company averages.
- Ronan Kennedy (Barclays): asked about the impact of new sales channel initiatives and the shift toward technician-engineers. DeVries detailed how this approach streamlines sales and installations, improving both customer experience and revenue per installation.
- William Qi (RBC Capital Markets): sought insight on macroeconomic trends and customer payment behavior. DeVries acknowledged slightly higher non-payment cancellations but described the increase as modest, emphasizing the resilience of ADT’s recurring revenue model.
Catalysts in Upcoming Quarters
In upcoming quarters, our team will be monitoring (1) the pace of ADT+ platform adoption and its effect on installation revenue, (2) the outcome of the redesigned State Farm partnership and any incremental subscriber gains, and (3) further improvements in operational efficiency, particularly from AI-driven customer support. Execution on expanding the DIY and small business channels will also be a key area of focus.
ADT currently trades at $8.36, in line with $8.43 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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