ADT Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>ADT Inc. has filed its 2023 annual report (10-K) detailing its financial performance and business operations.</b>

AI Summary

ADT Inc. (ADT) filed a Annual Report (10-K) with the SEC on February 28, 2024. ADT Inc. filed its 2023 Form 10-K on February 28, 2024, reporting on the fiscal year ending December 31, 2023. The filing covers the company's financial performance and business operations for the fiscal year 2023. ADT Inc. is classified under SIC code 7381 for Detective, Guard & Armored Car Services. The company's principal business address is 1501 Yamato Road, Boca Raton, FL 33431. ADT Inc. was formerly known as Prime Security Services Parent, Inc. before a name change on April 5, 2017.

Why It Matters

For investors and stakeholders tracking ADT Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of ADT's financial health, operational strategies, and risk factors for the fiscal year 2023, crucial for investors and stakeholders to assess the company's current standing and future prospects. Understanding the details within this filing is essential for evaluating ADT's market position in the security services industry, its revenue streams, and its overall financial stability.

Risk Assessment

Risk Level: medium — ADT Inc. shows moderate risk based on this filing. The company operates in the security services industry, which is subject to evolving technologies, competitive pressures, and regulatory changes, potentially impacting its financial performance and market share.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess ADT's performance and strategic direction for the upcoming fiscal year.

Revenue Breakdown

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-28 — Filing Date (As of date)
• 151 — Public Document Count (Total number of documents in the filing)
• 001-38352 — SEC File Number (Company's SEC file number)

Key Players & Entities

• ADT Inc. (company) — Filer name
• 7381 (other) — Standard Industrial Classification code
• 1501 Yamato Road (other) — Business address street
• Boca Raton (other) — Business address city
• FL (other) — Business address state
• 33431 (other) — Business address zip
• Prime Security Services Parent, Inc. (company) — Former company name
• 20170405 (date) — Date of name change from Prime Security Services Parent, Inc.

FAQ

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period end date
• 2024-02-28: Filing Date — Date the 10-K was filed

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share ADT New York Stock Exchange

Filing Documents

• adt-20231231.htm (10-K) — 3423KB
• investorrightsagreement1.htm (EX-10.46) — 6KB
• investorrightsagreement2.htm (EX-10.47) — 6KB
• waynethorsen-offerletter.htm (EX-10.54) — 12KB
• a10-k2023exhibit21q423rf.htm (EX-21) — 8KB
• a10-k2023exhibit23q423rf.htm (EX-23) — 2KB
• a10-k2023exhibit31x1q423rf.htm (EX-31.1) — 9KB
• a10-k2023exhibit31x2q423rf.htm (EX-31.2) — 8KB
• a10-k2023exhibit32x1q423rf.htm (EX-32.1) — 6KB
• a10-k2023exhibit32x2q423rf.htm (EX-32.2) — 6KB
• adtincincentivecompensat.htm (EX-97.1) — 12KB
• adt-20231231_g1.jpg (GRAPHIC) — 30KB
• adt-20231231_g2.jpg (GRAPHIC) — 33KB
• adtincincentivecompensat001.jpg (GRAPHIC) — 1033KB
• investorrightsagreement1001.jpg (GRAPHIC) — 553KB
• investorrightsagreement2001.jpg (GRAPHIC) — 464KB
• waynethorsen-offerletter001.jpg (GRAPHIC) — 792KB
• 0001703056-24-000020.txt (&nbsp;) — 22663KB
• adt-20231231.xsd (EX-101.SCH) — 108KB
• adt-20231231_cal.xml (EX-101.CAL) — 181KB
• adt-20231231_def.xml (EX-101.DEF) — 732KB
• adt-20231231_lab.xml (EX-101.LAB) — 1324KB
• adt-20231231_pre.xml (EX-101.PRE) — 1034KB
• adt-20231231_htm.xml (XML) — 3356KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 18 Item 1B. Unresolved Staff Comments 46 I tem 1C. Cybersecurity 47 Item 2.

Properties

Properties 47 Item 3.

Legal Proceedings

Legal Proceedings 48 Item 4. Mine Safety Disclosures 48 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 49 Item 6. Reserved 50 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 71 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 72 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 72 Item 9A.

Controls and Procedures

Controls and Procedures 72 Item 9B. Other Information 73 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 73 Part III Item 10. Directors, Executive Officers and Corporate Governance 74 Item 11.

Executive Compensation

Executive Compensation 74 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 74 Item 13. Certain Relationships and Related Transactions and Director Independence 75 Item 14. Principal Accountant Fees and Services 75 Part IV Item 15. Exhibit and Financial Statement Schedules 76 Item 16. Form 10-K Summary 82

Signatures

Signatures 83 CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K ("Annual Report") contains certain information and disclosures 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 SEC and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to, among other things, the Company's planned exit of the residential solar business (the "ADT Solar Exit") and the expected costs and benefits of such exit; the repurchase of shares of the Company's common stock under the authorized share repurchase program; the Company's ability to reduce debt or improve leverage ratios, or to achieve or maintain its longterm leverage goals; the integration of the December 2023 strategic bulk purchase of customer accounts; the commercial transaction between ADT and GTCR LLC ("GTCR") (the "Commercial Divestiture"); the expected timetable for realizing expected benefits of the Commercial Divestiture; the strategic investment by and long term partnership with State Farm Fire & Casualty Company ("State Farm"); anticipated financial performance, management's plans and objectives for future operations; the successful development, commercialization, and timing of new or joint products; the expected timing of product commercialization with State Farm or any changes thereto, including the ADT home security program for State Farm; business prospects; outcomes of regulatory proceedings; market conditions; our ability to deploy our business continuity and disaster plans and procedures to successfully respond to catastrophic events; our strategic partnership and ongoing relationship with Google LLC ("G

BUSINESS

ITEM 1. BUSINESS. TABLE OF CONTENTS Company Overview Key Business Developments Segment and Geographic Information Products and Services Our Markets Competition Resources Material to our Business Seasonality Government Regulation and Other Regulatory Matters Human Capital and ESG Available Information COMPANY OVERVIEW Our Business ADT Inc., together with its wholly-owned subsidiaries (collectively, the "Company", "we", "our", "us", and "ADT"), is a leading provider of security, interactive, and smart home solutions serving residential and small business customers in the United States ("U.S."). As discussed below, on October 2, 2023, we completed the divestiture of our Commercial Business, which provided security and other solutions to commercial customers; and in January 2024, we announced our exit from the residential solar business, which provided residential solar and energy storage solutions since the acquisition of ADT Solar in 2021. Our mission is to empower people to protect and connect what matters most with safe, smart, and sustainable solutions, delivered through innovative offerings, unrivaled safety, and a premium experience because we believe that everyone deserves to feel safe. We primarily conduct business under the ADT brand, which we believe is a key competitive advantage for us and a contributor to our success due to the importance customers place on reputation and trust when purchasing our products and services. The strength of our brand is based upon a long-standing record of delivering high-quality, reliable products and services; expertise in system sales, installation, and monitoring; and superior customer care, all driven by our industry-leading experience and knowledge. As of December 31, 2023, we had approximately 6.4 million security monitoring service subscribers. We serve our customers through our nationwide sales and service offices, monitoring and support centers, and large network of installation and service profess