ADT Inc.

Good morning. My name is David and I'll be your conference operator today. At this time, I'd like to welcome everyone to the ADT first quarter 2023 earnings conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one once again. Elizabeth Landers, Senior Director of Investor Relations, you may begin your conference.

Thanks, Operator, and good morning, everyone. We appreciate you joining ADT's first quarter 2023 earnings call. Speaking on today's call will be ADT's President and CEO, Jim DeVries, and our EVP and CFO, Ken Papora. Following the prepared remarks, we'll take analyst questions. Also joining us for Q&A are Don Young, EVP and Chief Operating Officer, and Jill Greer, SVP of Finance, Investor Relations, and Communications. Earlier this morning, we issued a press release and slide presentation of our financial results. These materials are available on our website at investor.adt.com. Before we start, I do need to mention that today's remarks include forward-looking statements that represent our beliefs or expectations about future events. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of the factors that may cause differences are described in our SEC filings. We will also discuss non-GAAP financial measures on the call. The most directly comparable GAAP measures, along with the reconciliation to those measures, are available on the ADT Investor Relations website. And with that, I'll turn the call over to Jim.

Thanks, Elizabeth. Good morning, and thank you to everyone for joining us today. This morning, ADT released our first quarter earnings. I'm pleased to share that we had a solid start to the year with growth in revenue, adjusted EBITDA, adjusted free cash flow, and adjusted EPS, each growing nicely year over year, while concurrently our net leverage ratio continued to decline. Our total top line grew 4%, with commercial delivering very strong growth at 15%, and we ended the quarter with a record recurring monthly revenue balance of $378 million. Our revenue payback now stands at a record low of two years, down from 2.3 a year ago, with gross attrition remaining at a record 12.5%. These factors are driving better capital efficiency and drove a year-over-year increase in adjusted free cash flow, including interest rate swaps, of over $70 million versus Q1 last year. This improvement is consistent with our goal of growing this cash flow metric by 20% for a second consecutive year. Looking forward, the resiliency of our business is evident. There are many favorable factors that have ADT well positioned to meet our 2023 guidance. The market is showing strong spending and supply chain pressure is easing, boosting our commercial segment to outperform our expectations and capture market share. While commercial revenue grew 15%, our installation backlog remained steady at approximately $420 million, demonstrating the enormous strength of recent sales and reinforcing a strong pipeline for continued revenue growth. Equally impressive within commercial was our profitability. EBITDA margins exceeded 12% for the quarter. Second, overall customer retention rates are stellar and ending RMR continues to grow at a healthy rate. As a reminder, when homeowner relocations are down near the levels experienced recently, there's an inverse relationship between existing customer retention and new customer ads. Worth mentioning, we're benefiting in retention from both the macro move trends and the continuous innovations to improve the customer experience. Third, in partnership with State Farm, we've just launched our initial offering in three states with plans to expand to six more states before the end of the year. Next, our Google partnership is helping improve our product offering and increasing our installation revenue per unit, which is up $150 over the prior quarter and $300 over the prior year period. We continue to see high attachment rates on Nest doorbells and cameras compared to our previous offering, and customers are buying more devices, increasing the average device per system by more than 20% year over year. In February, we launched ADT self-setup. the first system to integrate our internally developed ADT Plus app with Google's Nest products. The launch of these products led to over a 30% increase in DIY sales this quarter versus the first quarter of 2022. We're driving more awareness of our integrated product offerings with our new No Worries marketing campaign, which is being partially funded by Google Success Funds. We anticipate receiving the first $50 million of success funds this year and are working collectively to unlock the next $50 million tranche. Most of this fund will be spent in various forms of marketing to accelerate subscriber growth. We expect our Google partnership to accelerate even more when we introduce an integrated pro install solution later this year. Finally, We're advancing our CSB cost reduction efforts by streamlining our organization, right-sizing our real estate portfolio, and placing greater focus on our key priorities. We expect to generate meaningful cost savings through these efforts and believe our efforts will lead to increased speed and efficiency. There are many positive outcomes in our business, but we're also cognizant of and monitoring the external environment we're operating in. For example, in our CSB segment, consumer economic pressures are resulting in somewhat higher non-pays in our attrition. The solar business has experienced some continued pressure as well. At an overall industry level, higher interest rates are pressuring growth as financing for residential solar has become more expensive and more sensitive which is offsetting some growth potential from the Inflation Reduction Act. Additionally, we still have work ahead of us integrating ADT Solar. This quarter's decline in revenue is not the performance we expect, and we're executing a number of strategic actions to improve operations, customer experience, and financial results. These actions include scaling our cross-selling, launching a new dealer program, and implementing and streamlining the business to improve costs and efficiency. In light of these actions and our efforts to strengthen our foundation for growth, we anticipate meaningful improvement in ADT solar performance by the end of the year. In closing, we remain focused on achieving progress among all our segments and advancing toward our 2025 goals. We believe ADT has a recession resilient business model and we have plans to manage the challenges presented in our solar business and across the broader macro environment. We have encouraging momentum in our CSB and commercial businesses and great partners in Google and State Farm. ADT's impressive results reflect the dedication and determination of our 20,000 plus employees and dealer partners. I want to thank them for all they do to take care of our customers every day. I'll now turn the call to our CFO, Ken Papora, who will take you through our results in more detail. Ken?