ADT's Q2 2025: Key Contradictions Unveiled on Relocation Impact, Bulk Purchases, and Partnerships

Impact of relocation on business, bulk account purchase strategy and appetite, state farm partnership performance and strategy, partnership with Google, impact of hurricanes on guidance are the key contradictions discussed in ADT Inc.'s latest 2025Q2 earnings call.



Financial Performance and Cash Generation:
- ADT ended the second quarter with a record recurring monthly revenue balance of $363 million, up 2% year-over-year, and total revenue rose by 7%.
- The strong financial results were driven by robust cash flow, with adjusted free cash flow, including interest rate swaps, increasing by 38% through the first half, enabling the company to return $589 million to shareholders through share repurchases and dividends.

Customer Retention and Attrition:
- ADT's customer retention remained solid with attrition at 12.8%, down 0.1 point from the previous year's second quarter.
- The improvement in customer retention is attributed to enhanced customer satisfaction metrics, agent satisfaction, and continuous improvement in areas such as virtual service, first call resolution, customer onboarding, and agent training.

Strategic Acquisitions and Growth:
- ADT completed a strategic customer portfolio acquisition of approximately 50,000 subscribers for $89 million in the second quarter.
- This acquisition is part of the company's strategy to grow subscribers through bulk purchases, with a strong pipeline of potential deals and a focus on high-density accounts and quality equipment.

AI Integration and Customer Service:
- ADT's AI efforts have expanded, with 90% of customer service chats processed by AI agents, and nearly half of these chats resolved without the need for a live agent interaction.
- The integration of AI has improved customer service experiences and overall efficiency, contributing to a 22% year-to-date increase in adjusted earnings per share.