Continued strong financial results with record recurring monthly revenue and customer retention

GAAP operating cash flows up 28%, Adjusted Free Cash Flow including interest rate swaps up 105%

Returned $445 million to shareholders through share repurchases and dividends

On track to achieve full year 2025 guidance metrics

BOCA RATON, Fla., April 24, 2025 (GLOBE NEWSWIRE) -- ADT Inc. (NYSE:ADT) today reported results for the first quarter of 2025. Financial highlights for the first quarter are below with variances on a year-over-year basis unless otherwise noted. Results of the former commercial and solar segments are presented as discontinued operations, except for cash flow measures.

Total revenue increased by 7% to $1.3 billion and end-of-period recurring monthly revenue (RMR) increased 2% to $360 million
Record customer retention with gross revenue attrition of 12.6%; revenue payback at 2.3 years
GAAP income from continuing operations of $142 million, or $0.16 per diluted share, down $21 million
Adjusted income from continuing operations of $186 million, or $0.21 per diluted share, up $15 million
Net cash provided by operating activities of $467 million, up $103 million; Adjusted Free Cash Flow (including interest rate swaps) of $226 million, up $116 million

"ADT is off to a very solid start in 2025, demonstrating the resilience of our business model, with continued strong cash flow generation and operating profitability. During the quarter, we again delivered a record recurring monthly revenue balance and customer retention, a testament to the strong demand for ADT's innovative offerings and premium customer experience," said ADT Chairman, President and CEO, Jim DeVries. "ADT is well positioned to achieve full year 2025 guidance with solid growth in cash flow and earnings per share, while investing in expanded capabilities to grow and serve our customer base and returning capital to shareholders."

Business Highlights

Foundation for Growth

Strong RMR balance – End-of-period RMR balance was $360 million, up 2%, or $4.3 billion on an annualized basis.
Maintained strong customer retention and revenue payback – Trailing 12-month gross customer revenue attrition was a record 12.6% and revenue payback ended the first quarter of 2025 at 2.3 years.

Unlocking Shareholder Value

Share repurchases – In February, the Company's Board of Directors announced a $500 million share repurchase plan. During the quarter, the Company repurchased and retired 53 million shares of its common stock for an aggregate price of $397 million under the Company's authorized plans. This included 20 million shares of common stock repurchased concurrent with a secondary offering of 80.5 million shares (including the underwriters' over-allotment option) previously held by Apollo and its affiliates.
Balance sheet fortification – In March, the Company issued a new $600 million first lien seven-year term loan facility and used the proceeds to partially redeem $500 million of the First Lien Notes due 2026, as well as for other general corporate purposes.

Innovative Offerings, Unrivaled Safety and Premium Experience

Re-defining Smart Security – ADT continued the rollout of its new proprietary ADT+ platform, a next-generation smart home security offering that integrates professional monitoring with Google Nest devices, continuing to increase customer penetration as a percentage of new adds.
ADT+ Translator – The Company launched the ADT+ Translator which converts signals from legacy sensors into a format that ADT+ can process. This provides a faster, lower-cost transition from older equipment designed to function seamlessly with the ADT+ platform.
Improving customer care – The ADT Remote Assistance program continues to handle more than 50% of service requests virtually generating high customer satisfaction at a lower cost while eliminating thousands of vehicle trips. The customer care operations team is also using Sierra virtual agents to efficiently improve the customer service experiences for both customers and agents.
Strengthened executive leadership – Announced two strategic additions to its executive leadership team with appointments of Fawad Ahmad as Chief Operating and Customer Officer and Omar Khan as Chief Business Officer.
Renewed Miami Marlins partnership – ADT renewed and extended its partnership with the Miami Marlins through 2029. A priority for the upcoming season is to celebrate the small businesses that are the lifeblood of the Miami community and ensure they are protected.

Results of Operations ⁽¹⁾⁽²⁾

(in millions, except revenue payback, attrition, and per share data)	Three Months Ended March 31,
		2025			2024		$ Change			% Change
	GAAP
Monitoring and related services	$	1,083		$	1,063		$	20		2	%
Security installation, product, and other		184			127			57		45	%
Total revenue	$	1,267		$	1,190		$	78		7	%

Income (loss) from continuing operations	$	142		$	164		$	(21	)	(13)%
Income (loss) from continuing operations per share - diluted	$	0.16		$	0.17		$	(0.01	)	(6)%

Net cash provided by (used in):
Operating activities	$	467		$	364		$	103		28	%
Investing activities	$	(258	)	$	(300	)	$	42		(14)%
Financing activities	$	(321	)	$	(75	)	$	(246	)	N/M

	Non-GAAP Measures
Adjusted EBITDA from continuing operations	$	661		$	638		$	23		4	%
Adjusted income (loss) from continuing operations	$	186		$	171		$	15		9	%
Adjusted EPS	$	0.21		$	0.19		$	0.02		11	%
Adjusted Free Cash Flow (including interest rate swaps)	$	226		$	111		$	116		105	%

	Other Measures
Trailing twelve-month revenue payback		2.3 years			2.1 years			0.2 years		10	%
Trailing twelve-month gross customer revenue attrition		12.6	%		13.1	%		(50) bps		N/A
RMR	$	360		$	353		$	6		2	%

Total revenue was $1,267 million for the for the first quarter, up 7%. Monitoring and related services (M&S) revenue growth was primarily driven by an increase in average prices, partially offset by lower volume. Security installation, product, and other revenue increased primarily due to a higher mix of professionally installed systems under the outright sales model at higher average prices in connection with the transition to the ADT+ platform.

Income from continuing operations for the first quarter was $142 million, or $0.16 per diluted share, down $21 million. This was primarily attributable to an unrealized loss on interest rate swaps compared to a gain in the prior year, partially offset by continued growth in revenues and associated margins.

Adjusted income from continuing operations for the first quarter was $186 million, or $0.21 per diluted share, up $15 million. This was primarily driven by the continued growth in revenues and associated margins noted above.

Balance Sheet and Cash Flow

Net cash provided by operating activities during the first quarter was $467 million, up $103 million and Adjusted Free Cash Flow (including interest rate swaps) was $226 million up $116 million. These measures benefited from lower cash usage due to the exit of the solar business, timing of payments and receipts, and improved operating performance.

Total cash and cash equivalents as of March 31, 2025 were $4 million with $40 million outstanding under the Company's First Lien Revolving Credit Facility.

In March, the Company issued a new $600 million first lien seven-year term loan facility and used the proceeds to partially redeem $500 million of the First Lien Notes due 2026, as well as for other general corporate purposes. In March the Company also amended the agreement governing the 2020 Receivables Facility to extend the uncommitted revolving period to March 2026, reduce the interest rate on outstanding borrowings, and increase the advance rate on pledged collateral.

Capital returns during the first quarter totaled $445 million and included $49 million of dividends and 53 million shares repurchased for $397 million.

2025 Financial Outlook

The Company is reiterating its financial guidance for 2025.

(in millions, except per share data)
Total Revenue		$5,025 - $5,225
Adjusted EBITDA		$2,650 - $2,750
Adjusted EPS		$0.77 - $0.85
Adjusted Free Cash Flow (including interest rate swaps)		$800 - $900
The Company is not providing forward-looking guidance for U.S. GAAP financial measures other than Total Revenue or a quantitative reconciliation to the most directly comparable GAAP measure for its non-GAAP financial guidance shown above because the GAAP measures cannot be reliably estimated and the reconciliations cannot be performed without unreasonable effort due to their dependence on future uncertainties and adjusting items that the Company cannot reasonably predict at this time but which may be material. Please see "Non-GAAP Measures" for additional information.

Total Revenue, Adjusted EBITDA, and Adjusted EPS reflect continuing operations only. Adjusted Free Cash Flow excludes all remaining cash flows attributable to the discontinued solar business.

Dividend Declaration

Effective April 24, 2025, the Company's Board of Directors declared a cash dividend of $0.055 per share to holders of the Company's common stock and Class B common stock of record as of June 12, 2025. This dividend will be paid on July 8, 2025.

____________________

(1)		All variances are year-over-year unless otherwise noted. The Company may sometimes present various non-GAAP and other operating measures. Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow (including interest rate swaps), Adjusted Income (Loss), Adjusted Diluted Income (Loss) per share (or, Adjusted EPS), Net Debt, and Net Leverage Ratio are non-GAAP measures. Refer to the "Non-GAAP Measures" section for the definitions of the terms and reconciliations to the most comparable GAAP measures for those measures included herein. Operating metrics such as Gross Customer Revenue Attrition, Unit Count, RMR, Gross RMR Additions, and Revenue Payback are approximated as there may be variations to reported results in each period due to certain adjustments the Company might make in connection with the integration over several periods of acquired companies that calculated these metrics differently, or otherwise, including periodic reassessments and refinements in the ordinary course of business. These refinements, for example, may include changes due to systems conversion or historical methodology differences in legacy systems. Results of the former commercial and solar businesses are presented as discontinued operations. Except for cash flow measures, and unless otherwise noted, amounts herein reflect the results of the Company's continuing operations only.
(2)		Amounts may not sum due to rounding.

Conference Call

As previously announced, management will host a conference call at 10 a.m. ET today to discuss the Company's first quarter 2025 results and lead a question-and-answer session. Participants may listen to a live webcast through the investor relations website at investor.adt.com. A replay of the webcast will be available on the website within 24 hours of the live event.

Alternatively, participants may listen to the live call by dialing 1-800-715-9871 (domestic) or 1-646-307-1963 (international), and providing the access code 4948265. An audio replay will be available for one week following the call, and can be accessed by dialing 1-800-770-2030 (domestic) or 1-609-800-9909 (international), and providing the access code 4948265.

A slide presentation highlighting the Company's results will also be available on the Investor Relations section of the Company's website. From time to time, the Company may use its website as a channel of distribution of material Company information. Financial and other material information regarding the Company is routinely posted on and accessible at investor.adt.com.

About ADT Inc.

ADT provides safe, smart and sustainable solutions for people, homes and small businesses. Through innovative offerings, unrivaled safety and a premium customer experience, all delivered by the largest networks of smart home security professionals in the U.S., we empower people to protect and connect to what matters most. For more information, visit www.adt.com.

Investor Relations:	Media Relations:
investorrelations@adt.com Tel: 888-238-8525	media@adt.com

Forward-Looking Statements

ADT has made statements in this press release that are forward-looking and therefore subject to risks and uncertainties, including those described below. All statements, other than statements of historical fact, included in this document are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC") and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to, among other things, the timing of the Company's dividend payment; the Company's expected future financial results, including the Company's financial outlook and/or guidance, which includes Total Revenue, Adjusted EBITDA, Adjusted Diluted Income (Loss) per Share ("Adjusted EPS") and Adjusted Free Cash Flow (including interest rate swaps); the Company's partnerships and the expected benefits of the Company's products and services; the expectations, plans and objectives of management; any stated or implied outcomes with regard to the foregoing; and other matters. Without limiting the generality of the preceding sentences, any time we use the words "ongoing," "expects," "intends," "will," "anticipates," "believes," "confident," "possible," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "potential," "outlook," "goals," "objectives," "targets," "planned," "projects," and, in each case, their negative or other various or comparable terminology, and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These forward-looking statements are based on management's current beliefs and assumptions and on information currently available to management. We caution that these statements are subject to risks and uncertainties, many of which are outside of the Company's control and could cause future events or results to be materially different from those stated or implied in this press release, including, among others, factors relating to risks and uncertainties regarding the benefits and any difficulties with respect to the effect of the Company's divestiture of its commercial business (the "Commercial Divestiture") and the Company's exit from its residential solar business (the "ADT Solar Exit"), including that the costs of the ADT Solar Exit may exceed the Company's best estimates; the Company's ability to maintain and grow the Company's existing customer base and to integrate strategic bulk purchases of customer accounts; activity in repurchasing shares of ADT's common stock under the Company's current share repurchase plan; dividend rates or yields for any future quarter; the Company's ongoing assessments of the impacts of cybersecurity attacks; the Company's expectations regarding its ability to effectively implement counter measures intended to safeguard the Company's information technology assets and operations; the impact of cybersecurity incidents on the Company's relationships with customers, employees and regulators; the Company's ability to coordinate effectively with its third party business partners to address any cybersecurity incidents; legal, reputational and financial risks resulting from any cybersecurity incidents; and that any future, or still undetected, cybersecurity related incident, whether an attack, disruption, intrusion, denial of service, theft or other breach could result in unauthorized access to, or disclosure of, data, resulting in claims, costs and reputational harm that could negatively affect actual results of operations or financial condition; any material changes to the valuation allowances the Company takes with respect to its deferred tax assets; any changes in regulations or laws, economic and financial conditions, including labor and tax law changes or any impacts on the global economy or consumer discretionary spending due to tariffs or otherwise, changes to privacy requirements, changes to telemarketing, email marketing and similar consumer protection laws, interest volatility, and trade tariffs and restrictions applicable to the products we sell; the Company's ability to effectively implement its strategic partnerships with State Farm or Google, including, commercializing products or utilizing any of the amounts invested in the Company or provided by State Farm for research and development or other purposes; and risks that are described in the Company's most recently filed Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in those reports, and in the Company's other filings with the SEC. Any forward-looking statement made in this press release speaks only as of the date on which it is made. ADT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise unless required by law.

ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited)

	Three Months Ended March 31,
		2025			2024		$ Change			% Change
Revenue:
Monitoring and related services	$	1,083		$	1,063		$	20		2%
Security installation, product, and other		184			127			57		45%
Total revenue		1,267			1,190			78		7%
Cost of revenue (exclusive of depreciation and amortization shown separately below):
Monitoring and related services		158			155			3		2%
Security installation, product, and other		82			40			43		108%
Total cost of revenue		240			194			46		24%
Selling, general, and administrative expenses		369			370			(2	)	—%
Depreciation and intangible asset amortization		340			333			7		2%
Operating income (loss)		319			292			27		9%
Interest expense, net		(121	)		(87	)		(33	)	(38)%
Other income (expense)		(5	)		16			(20	)	N/M
Income (loss) from continuing operations before income taxes		194			220			(27	)	(12)%
Income tax benefit (expense)		(51	)		(56	)		5		10%
Income (loss) from continuing operations		142			164			(21	)	(13)%
Income (loss) from discontinued operations, net of tax		(2	)		(72	)		70		97%
Net income (loss)	$	140		$	92		$	49		53%

Common Stock:
Income (loss) from continuing operations per share - basic	$	0.17		$	0.18
Income (loss) from continuing operations per share - diluted	$	0.16		$	0.17

Net income (loss) per share - basic	$	0.16		$	0.10
Net income (loss) per share - diluted	$	0.15		$	0.09

Weighted-average shares outstanding - basic		808			856
Weighted-average shares outstanding - diluted		871			918

Class B Common Stock:
Income (loss) from continuing operations per share - basic	$	0.17		$	0.18
Income (loss) from continuing operations per share - diluted	$	0.16		$	0.17

Net income (loss) per share - basic	$	0.16		$	0.10
Net income (loss) per share - diluted	$	0.15		$	0.09

Weighted-average shares outstanding - basic		55			55
Weighted-average shares outstanding - diluted		55			55
Note: amounts may not sum due to rounding

ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited)

	March 31, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	4	$	96
Restricted cash and restricted cash equivalents		87		108
Accounts receivable, net		395		394
Inventories, net		189		197
Prepaid expenses and other current assets		182		211
Total current assets		858		1,005
Property and equipment, net		242		247
Subscriber system assets, net		2,949		2,981
Intangible assets, net		4,806		4,854
Goodwill		4,904		4,904
Deferred subscriber acquisition costs, net		1,357		1,324
Other assets		714		735
Total assets	$	15,830	$	16,051

Liabilities and stockholders' equity
Current liabilities:
Current maturities of long-term debt	$	207	$	196
Accounts payable		133		154
Deferred revenue		253		248
Accrued expenses and other current liabilities		494		635
Current liabilities of discontinued operations		31		32
Total current liabilities		1,117		1,264
Long-term debt		7,613		7,511
Deferred subscriber acquisition revenue		2,079		2,068
Deferred tax liabilities		1,170		1,167
Other liabilities		220		224
Noncurrent liabilities of discontinued operations		14		16
Total liabilities		12,213		12,250

Total stockholders' equity		3,617		3,801
Total liabilities and stockholders' equity	$	15,830	$	16,051
Note: amounts may not sum due to rounding

ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited)

	Three Months Ended March 31,
		2025			2024
Cash flows from operating activities:
Net income (loss)	$	140		$	92
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and intangible asset amortization		340			334
Amortization of deferred subscriber acquisition costs		60			55
Amortization of deferred subscriber acquisition revenue		(89	)		(83	)
Share-based compensation expense		21			8
Deferred income taxes		3			11
Provision for losses on receivables and inventory		53			61
Loss on extinguishment of debt		6			—
Intangible and other asset impairments		—			20
Unrealized (gain) loss on interest rate swap contracts		25			(10	)
Other non-cash items, net		19			21
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Deferred subscriber acquisition costs		(93	)		(89	)
Deferred subscriber acquisition revenue		58			66
Other, net		(76	)		(121	)
Net cash provided by (used in) operating activities		467			364

Cash flows from investing activities:
Dealer generated customer accounts and bulk account purchases		(107	)		(118	)
Subscriber system asset expenditures		(105	)		(141	)
Purchases of property and equipment		(45	)		(41	)
Proceeds (payments) from interest rate swaps		(1	)		(2	)
Other investing, net		—			1
Net cash provided by (used in) investing activities		(258	)		(300	)

Cash flows from financing activities:
Proceeds from long-term borrowings		637			95
Repayment of long-term borrowings, including call premiums		(511	)		(57	)
Proceeds from receivables facility		65			66
Repayment of receivables facility		(76	)		(58	)
Proceeds (payments) from interest rate swaps		17			24
Repurchases of common stock		(397	)		(93	)
Dividends on common stock		(49	)		(32	)
Payments on finance leases		(7	)		(7	)
Other financing, net		—			(12	)
Net cash provided by (used in) financing activities		(321	)		(75	)

Cash and cash equivalents and restricted cash and restricted cash equivalents:
Net increase (decrease)		(113	)		(11	)
Beginning balance		204			130
Ending balance	$	91		$	119
Note: amounts may not sum due to rounding

ADT sometimes uses information ("non-GAAP financial measures") that is derived from the consolidated financial statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Under SEC rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

The following information includes definitions of the Company's non-GAAP financial measures used in this release, reasons management believes these measures are useful to investors regarding the Company's financial condition and results of operations, additional purposes, if any, for which management uses the non-GAAP financial measures, and limitations to using these non-GAAP financial measures, as well as reconciliations of these non-GAAP financial measures to the most comparable GAAP measures. Each non-GAAP financial measure is presented following the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. The limitations of non-GAAP financial measures are best addressed by considering these measures in conjunction with the appropriate GAAP measures. In addition, computations of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.

With regard to the Company's financial guidance for 2025, the Company is not providing a quantitative reconciliation for forward-looking Adjusted EBITDA to GAAP income (loss) from continuing operations, Adjusted EPS to GAAP diluted income (loss) per share from continuing operations, or Adjusted Free Cash Flow (including interest rate swaps) to GAAP net cash provided by operating activities, which are the most directly comparable respective GAAP measures. These GAAP measures cannot be reliably predicted or estimated without unreasonable effort due to their dependence on future uncertainties, such as the adjustment of items used in the following reconciliations. Additionally, information not currently available to the Company about other adjusting items could have a potentially unpredictable and potentially significant impact on future GAAP financial results.

Unless otherwise noted, non-GAAP measures herein reflect the results of the Company's continuing operations. Through the second quarter of 2024, Free Cash Flow, Adjusted Free Cash Flow, and Adjusted Free Cash Flow (including interest rate swaps) reflect the results of both continuing and discontinued operations. Beginning in the third quarter of 2024, all remaining cash flows attributable to activities of the solar business have been excluded from these measures as the business was substantially wound down.

Free Cash Flow, Adjusted Free Cash Flow, and Adjusted Free Cash Flow including interest rate swaps

The Company defines Free Cash Flow as cash flows from operating activities less cash outlays related to capital expenditures. The Company defines capital expenditures to include accounts purchased through the Company's network of authorized dealers or third parties outside of the Company's authorized dealer network, subscriber system asset expenditures, and purchases of property and equipment. These items are subtracted from cash flows from operating activities because they represent long-term investments that are required for normal business activities.

The Company defines Adjusted Free Cash Flow as Free Cash Flow adjusted for net cash flows related to (i) net proceeds or payments from the Company's consumer receivables facility; (ii) restructuring and integration payments; (iii) integration-related capital expenditures; and (iv) transaction costs and other payments or receipts that may mask operating results or business trends. Adjusted Free Cash Flow including interest rate swaps reflects Adjusted Free Cash Flow plus net cash settlements on interest rate swaps presented outside of net cash provided by (used in) operating activities.

The Company believes the presentations of these non-GAAP measures are appropriate to provide investors with useful information about the Company's ability to repay debt, pay dividends, repurchase shares, and make other investments. The Company believes the presentation of Adjusted Free Cash Flow is also a useful measure of the cash flow attributable to normal business activities, inclusive of the net cash flows associated with the acquisition of subscribers, as well as the Company's ability to repay debt, pay dividends, repurchase shares, and make other investments. Further, Adjusted Free Cash Flow including interest rate swaps is a useful measure of Adjusted Free Cash Flow inclusive of all cash interest.

There are material limitations to using these non-GAAP measures. These non-GAAP measures adjust for cash items that are ultimately within management's discretion to direct, and therefore, may imply that there is less or more cash available than the most comparable GAAP measure. These non-GAAP measures are not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted.

The non-GAAP measures in the table below include cash flows associated with both continuing and discontinued operations, as applicable during the periods presented, consistent with the GAAP presentation on the Statement of Cash Flows.

	Three Months Ended March 31,
(in millions)		2025			2024
Net cash provided by (used in):
Operating activities	$	467		$	364
Investing activities	$	(258	)	$	(300	)
Financing activities	$	(321	)	$	(75	)

Net cash provided by (used in) operating activities	$	467		$	364
Dealer generated customer accounts and bulk account purchases		(107	)		(118	)
Subscriber system asset expenditures		(105	)		(141	)
Purchases of property and equipment		(45	)		(41	)
Free Cash Flow		209			65
Net proceeds (payments) from receivables facility		(12	)		8
Restructuring and integration payments⁽¹⁾		5			13
Other, net⁽²⁾		7			2
Adjusted Free Cash Flow	$	210		$	89
Interest rate swaps presented outside operating activities⁽³⁾		16			22
Adjusted Free Cash Flow (including interest rate swaps)	$	226		$	111
Note: amounts may not sum due to rounding
____________________
(1) During 2024, primarily includes costs related to the ADT Solar Exit.
(2) During 2025, primarily includes net payments related to the former Solar business.
(3) Includes net settlements related to interest rate swaps presented outside of net cash provided by (used in) operating activities.

Adjusted EBITDA from Continuing Operations ("Adjusted EBITDA") and Adjusted EBITDA Margin from Continuing Operations ("Adjusted EBITDA Margin")

The Company defines Adjusted EBITDA as income (loss) from continuing operations adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based compensation expense; (vi) merger, restructuring, integration, and other items; (vii) impairment charges; and (viii) other non-cash or non-routine adjustments not necessary to operate our business.

The Company believes Adjusted EBITDA is useful to investors to measure the operational strength and performance of its business. The Company believes the presentation of Adjusted EBITDA is useful as it provides investors additional information about operating profitability adjusted for certain non-cash items, non-routine items the Company does not expect to continue at the same level in the future, as well as other items not core to its operations. Further, the Company believes Adjusted EBITDA provides a meaningful measure of operating profitability because the Company uses it for evaluating business performance, making budgeting decisions, and comparing company performance against other peer companies using similar measures.

There are material limitations to using Adjusted EBITDA as it does not include certain significant items which directly affect income (loss) from continuing operations (the most comparable GAAP measure).

The discussion above is also applicable to Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percentage of total revenue.

	Three Months Ended March 31,
(in millions)		2025			2024
Income (loss) from continuing operations	$	142		$	164
Interest expense, net		121			87
Income tax expense (benefit)		51			56
Depreciation and intangible asset amortization		340			333
Amortization of deferred subscriber acquisition costs		60			55
Amortization of deferred subscriber acquisition revenue		(89	)		(83	)
Share-based compensation expense		21			8
Merger, restructuring, integration and other		4			12
Unrealized gain (loss) on interest rate swaps⁽¹⁾		4			7
Loss on extinguishment of debt		6			—
Other, net		1			(1	)
Adjusted EBITDA from continuing operations	$	661		$	638

Income (loss) from continuing operations to total revenue ratio		11	%		14	%
Adjusted EBITDA Margin (as percentage of Total Revenue)		52	%		54	%
Note: amounts may not sum due to rounding
____________________
(1) Includes the unrealized gain or loss on interest rate swaps presented in other income (expense).

Adjusted Income (Loss) from Continuing Operations ("Adjusted Income (Loss)") and Adjusted Diluted Income (Loss) per Share from Continuing Operations ("Adjusted Diluted Income (Loss) per Share" or "Adjusted EPS")

The Company defines Adjusted Income (Loss) as income (loss) from continuing operations adjusted for (i) share-based compensation expense; (ii) merger, restructuring, integration, and other items; (iii) impairment charges; (iv) unrealized (gains) or losses on interest rate swaps; (v) other non-cash or non-routine adjustments not necessary to operate our business; and (vi) the impact these items have on taxes.

The Company defines Adjusted EPS as diluted income (loss) from continuing operations per share adjusted for the per share amounts related to (i) share-based compensation expense; (ii) merger, restructuring, integration, and other items; (iii) impairment charges; (iv) unrealized (gains) or losses on interest rate swaps; (v) other non-cash or non-routine adjustments not necessary to operate our business; and (vi) the impact these items have on taxes.

Adjusted EPS equals Adjusted Income (Loss) divided by diluted weighted-average shares outstanding of common stock as calculated in accordance with GAAP. When the control number for the GAAP calculation is negative, diluted weighted-average shares outstanding of common stock does not include the assumed conversion of Class B common stock and other potential shares, such as share-based compensation awards, to shares of common stock.

The Company believes Adjusted Income (Loss) and Adjusted EPS are benchmarks used by analysts and investors who follow the industry for comparison of our performance with other companies in the industry, although these measures may not be directly comparable to similar measures reported by other companies. The Company believes the presentation of Adjusted EPS is useful to investors as it provides additional information about how our management evaluates the business. Beginning in 2025, management and the Board also use Adjusted EPS to evaluate the performance of employees (including members of management) and the Company as a whole, as well as to allocate resources.

There are material limitations to using these measures, as they do not reflect certain significant items which directly affect income (loss) from continuing operations and related per share amounts (the most comparable GAAP measures).

	Three Months Ended March 31,
(in millions, except per share data)		2025			2024
Income (loss) from continuing operations	$	142		$	164
Share-based compensation expense		21			8
Merger, restructuring, integration, and other		4			12
Interest rate swaps, net⁽¹⁾		25			(10	)
Loss on extinguishment of debt		6			—
Other, net		1			(1	)
Tax adjustments⁽²⁾		(13	)		(2	)
Adjusted Income (Loss) from continuing operations	$	186		$	171

Diluted weighted-average shares outstanding of Common Stock⁽³⁾:		871			918

Diluted income (loss) from continuing operations per share of Common Stock	$	0.16		$	0.17
Share-based compensation expense		0.02			0.01
Merger, restructuring, integration, and other		—			0.01
Interest rate swaps, net⁽¹⁾		0.03			(0.01	)
Loss on extinguishment of debt		0.01			—
Other, net		—			—
Tax adjustments⁽²⁾		(0.01	)		—
Adjusted EPS	$	0.21		$	0.19
Note: amounts may not sum due to rounding.
____________________
(1) Primarily includes unrealized (gains) or losses on interest rate swaps presented in interest expense, net and other income (expense).
(2) Represents the tax impact on adjustments, using the federal and state blended statutory rate.
(3) Refer to the Company's Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K for further discussion regarding the computation of diluted weighted-average shares outstanding of Common Stock.

ADT Reports First Quarter 2025 Results