ADT Inc.

I would like to welcome everyone to the ADT Third Quarter 2024 Earnings Conference Call. I would now like to turn the call over to Elizabeth Landers, the Head of Investor Relations. Please, go ahead.

Thank you, Operator, and good morning, everyone. We appreciate you joining today's call to discuss ADT's Third Quarter 2024 results. Speaking on today's call will be ADT's Chairman, President, and CEO, Jim DeVries. and our Chief Financial Officer, Jeff Likasar. Wayne Thorson, Chief Business Officer, and Don Young, Chief Operating Officer, will also join us following the prepared remarks as we take analyst questions. Earlier this morning, we issued a press release and slide presentation summarizing our financial results. These materials are available on our website at investor.adt.com. Before we begin, I'd like to remind everyone that the former commercial and solar segments are reported as discontinued operations. Financials and metrics for current and historical periods discussed on this call will be for continuing operations, except for non-GAAP cash flow measures, which include amounts related to the commercial business through the date of sale and solar through the second quarter of 2024. Today's remarks also 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 a reconciliation to those measures, can be found on our earnings presentation at the Investor Relations website. And with that, I'll turn the call over to Jim.

Good morning, and thank you to everyone for joining us today to discuss ADT's third quarter results. I'm pleased to report that ADT is continuing to deliver on our 2024 objectives, and as we close out the year, we're well positioned to deliver the full year financial guidance we outlined in February. We ended the quarter with a record recurring monthly revenue balance of $359 million, up 2%, which benefited from strong attrition results at 12.8%. We continue to grow total revenue up 5% versus the prior year. While remaining focused on balancing profitability and investments for the future, adjusted EBITDA was up 6%. And we continue to deliver strong free cash flows. A highlight for the quarter is that our leverage ratio, net debt to adjusted EBITDA, is now at 2.9 times. In addition to year-over-year gross ad growth and our pro install residential business, I'll note that our results included a strategic customer portfolio acquisition for $81 million. This bulk account purchase is complementary to our existing customer footprint and was comprised of 49,000 subscribers. We believe that both deals such as this one are an ongoing and attractive option for capital allocation. Jeff will provide more details about our financials and full year outlook in a few moments, but I'd first like to share several comments about our business and strategic progress. As many of you know, we've been focused on investing in the product and experience ecosystem to create even more differentiated offerings and more reasons for customers to choose ADT and stay with ADT. As we've shared before, a key component of our future is the new and proprietary ADT Plus platform, which is now available across the country for a growing portion of our residential customers. The ADT Plus platform includes a new app, refreshed hardware, and several advantages, including enhanced installation flexibility and configurability. Importantly, it also offers additional and stronger integrations with smart home devices, such as Google's Nest ecosystem. We've built this platform as the foundation on which we will innovate and build unique experiences tailored to our customers' individual needs. The first of these experiences is Trusted Neighbor, which we officially launched in mid-August. Trusted Neighbor essentially allows customers to grant trusted individuals access to their homes for everyday events like package delivery or more urgent issues like water leaks. We're excited about the innovative and secure ways we're able to grant access, such as with ADT Plus app, on a neighbor's phone, codes, or in combination with Nest's familiar face feature. We're working with our partners at Yale to introduce a lock that grants access through biometrics, which will be available in the coming months. It's very early in the process, but we're pleased with virtually all aspects of the Trusted Neighbor launch. Everything from unit economics to our field response to customer satisfaction. There's reason for optimism. Importantly, this product introduction is just the first of many innovations we plan to develop and roll out over time. Additionally, as I've shared previously, we have expanded our Google relationship to include their CCAI platform and are currently exploring several opportunities across our business with early efforts focused on call center operations. We also remain focused on advancing our State Farm partnership, working closely with State Farm. We're currently focused on the self-setup alternative, or DIY, in Georgia, and we expect to expand this offering in Washington later this quarter. We're also launching an offering focused on leak detection in Maryland and Michigan in the coming weeks. We're pleased with the overall progress we've made developing new and innovative products and services for our customers and the foundation this provides for the future. Importantly, we'll use these learnings as we expand solutions for a national audience with a focus on protecting our customers and providing proactive risk detection and prevention. Additionally, we remain focused on our service delivery with a focus on both enhancing the customer experience and improving our operating efficiency. We continue to advance initiatives toward this end, including our ability to resolve more than half of service calls remotely, the expansion of our capabilities to diagnose and remediate customers' home network issues beyond their core security systems, and the streamlining of our customer interface processes. Before turning to Jeff, I also want to acknowledge and thank our team members and partners for their extraordinary efforts to maintain continuity of service and assist our customers during the recent storms that affected the southeast part of the country. It is during events such as these that our core belief, everyone deserves to feel safe, especially resonates. And I am especially proud of the dedication and hard work of our more than 13,000 employees to deliver on our commitments to customers. As we marked our 150th year in business this past August, I reflected on ADT's journey and accomplishments. I'm humbled to lead this historic company and very thankful for our employees, partners, communities, and investors who collectively help us achieve our mission of empowering people to connect and protect what matters most. And with that, I'll turn the call over to Jeff.