ADT Inc.

fourth quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Elizabeth Landers with ADT Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. We appreciate you joining today's call to discuss ADT's fourth quarter and full year 2024 results. Speaking on today's call will be ADT's Chairman, President, and CEO, Jim DeVries, and our Chief Financial Officer, Jeff Lekasar. Following the prepared remarks, we'll have time for 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. As a reminder, 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 these measures, can be found in our earnings presentation on the ADT Investor Relations website. And with that, I'm happy to turn the call over to Jim.

Good morning, everyone, and thank you for joining us today to discuss ADT's fourth quarter and full year results, as well as our strategic progress during 2024 and our outlook for 2025. Jeff will provide more detail later, but as we shared in our earnings release, ADT delivered very strong top and bottom line results for the fourth quarter and the full year 2024 consistent with our objectives. I especially want to highlight our record high recurring monthly revenue balance, our record customer retention, and our very strong cash generation. For the full year, our total revenue was $4.9 billion, up 5%. We generated adjusted net income from continuing operations of $685 million, or 75 cents per diluted share. an increase of 25%, our adjusted free cash flow, including interest rate swaps, was up 42% to $744 million. As a reminder, following the wind down of our solar operation in 2024, ADT is now completely focused on our core security and smart home business. This market is large and growing to what analysts project at $23 billion in consumer spending within four years. We're also excited at the incremental opportunity in the close adjacencies of standalone devices and aging in place within residential, as well as growing our footprint in small business. I'm pleased with our overall 2024 progress and momentum during a year in which we also celebrated our 150th anniversary. At our core, we remain centered on delivering safe, smart, and sustainable solutions to our customers. We'll continue to anchor our strategy in three areas, innovative offerings, unrivaled safety, and a premium, best-in-class customer service experience. A key component of our strategy has been investing in our product and experience ecosystem to create innovative offerings for our customers. To this end, during 2024, we accomplished a very significant milestone by launching our proprietary ADT Plus platform, which is now available across the entire country to a growing percentage of our new customers. Our platform provides refreshed hardware, a new user interface, and an enhanced overall user experience, along with offering installation flexibility and configurability, new use cases, and several other advantages for our customers. Our ADTplus app has also consistently received positive end user feedback averaging 4.8 stars across thousands of reviews in the Apple App Store and Google Play Store. Our ADT Plus platform is the foundation in which we will innovate and build unique experiences tailored to our customers' individual needs. The first example of this type of experience is Trusted Neighbor. which we launched in the third quarter of last year, enabling customers to grant trusted individuals secure access to their homes for everyday events, such as package delivery or more urgent issues like water leaks. We're also excited about the innovative ways our customers are able to grant secure access, such as with the ADT Plus app on a neighbor's phone, customized codes, or in combination with Google via Nest's familiar face feature. We are pleased with the initial results and customer feedback we are receiving on this new feature and the overall ADT Plus experience. We're also pleased that Trusted Neighbor was named Home Security Innovation of the Year at the 9th Annual Internet of Things Breakthrough Awards. underscoring ADT's commitment to advancing home security technology and reimagining how ADT connects and protects customers. While we're energized by the new capabilities and smart home features we're able to offer our customers, I want to underscore the heart of what we do is focused on delivering unrivaled safety, security, and trust to our 6.4 million customers every day. Accordingly, we're proud to be the first company to adopt and implement the Alarm Validation Scoring Standard, also known as AVS01, at the national level. This standard uses historical and real-time information to provide first responders with crucial details, including the severity of a threat that can help them quickly determine a well-informed plan of action. Additionally, ADT again earned the title of the most trusted home security system brand for the sixth consecutive year in a study based on consumer ratings conducted by LifeStory Research. We're also proud to have earned the Monitoring Association's Monitoring Center of the Year Award, recognizing ADT's significant contribution to the alarm industry and exceptional customer service. Another 2024 highlight was our continued improvements to enhance and deliver the best-in-class customer experience. We improved our overall customer satisfaction with significant improvements in various customer perception measurements, resulting from our continuous improvements in several areas, including virtual service, first call resolution, and customer onboarding processes. We were rewarded in kind with record level customer retention. And I'm proud that we were able to drive these improvements while also increasing ADT's operating efficiency. The resulting cost savings contributed to our strong financial results and enabled continued investment in our business. While many initiatives contributed to our progress, We are especially pleased with the progress we made with our virtual service and very early artificial intelligence efforts. For the full year, we successfully resolved more service calls utilizing cost-efficient remote alternatives rather than conducting in-person service visits, avoiding thousands of truck rolls and contributing to reductions in our field service costs. Additionally, we formally launched our partnership with Sierra, focused on call center artificial intelligence with an objective of resolving customer needs in a more efficient and expeditious process, especially by reducing the need for lengthy telephonic interactions. During 2024, we also continued to progress several go-to-market efficiency improvements which included the rollout of our new brand platform when every second counts. We made several enhancements in our go-to-market process concurrent with the launch of ADT+, such as more flexibility in product bundles, configurations, and pricing. And we continued to make steady progress with our dealer partners and in the new sales channels, such as State Farm, with whom we now have offers available in 17 states including solutions in select states focused on leak detection and self-setup or DIY alternatives. As we enter 2025, our primary objectives are to continue execution of our strategy and, importantly, optimize our newly developed and launched capabilities. This specifically includes further expansion of the ADT Plus platform to a large percentage of our new customers, availability across additional sales channels, and capabilities to enable existing customers to enjoy some of the features available to new customers. It also includes even stronger emphasis and focus on our core residential professional install customer additions, where we enjoyed particularly strong momentum exiting 2024 and entering 2025. Additionally, as we build our experience with our new offerings, we will optimize our sales process and go-to-market approaches, including refinement of the offer structure, bundling, pricing, and marketing messages to improve our appeal to more segments of customers and drive efficiency in our subscriber acquisition cost. We will also continue exploring and innovating ways to enhance our product offerings, which may include additional means with which customers can access their systems or grant access to others, such as via biometrics, new use cases oriented towards specific customer needs, such as aging in place, or surveillance of pets or enhance configurations to our consumer app based on early customer input and feedback. We're doing this while continuing to advance service and efficiency initiatives. These initiatives include continued progress on remote service diagnosis and issue remediation with broadened capabilities beyond our core security system to, for example, include resolution of customers' home Wi-Fi network issues. And as I mentioned earlier, we expect continued progress on our call center artificial intelligence initiative with an objective of exiting the year at a meaningfully reduced run rate of volume in our call centers. Jeff will share more about our 2025 financial outlook momentarily. but I want to underscore that we remain very intentional and disciplined in our capital allocation with continued commitment to generate free cash flow and shareholder returns. This commitment anchors our 2025 financial plans and, combined with our significant recent debt and leverage reduction, enabled the $500 million share repurchase authorization we announced this morning. We believe our stock is very attractively valued at recent prices, and our share repurchase plan enables us to return capital directly to our shareholders. Before I turn the call over to Jeff, I want to take just a moment to express my gratitude to our nearly 13,000 employees, our dealers, and our equity and business partners, State Farm and Google. I am very grateful for the contributions of all our stakeholders, and we are committed to generating positive outcomes, including, for the audience on this call, strong returns. I'm honored to lead this company into its 151st year. Thank you for your time today. I'll now turn the call over to Jeff, who will take you through our 2024 financial results in more detail and share our financial guidance for 2025.