ADT (NYSE: ADT) executives outlined the company’s pending acquisition by Thrive Holdings during its Nov. 3 third-quarter earnings call, while reporting 4% revenue growth and continued progress on security products and service initiatives.

Under the agreement announced Oct. 29, ADT stockholders will receive $10 per share in cash. The transaction values ADT at approximately $7.6 billion in equity value and $15.3 billion in enterprise value.

Closing is expected in the first quarter of 2027, subject to customary conditions, including ADT stockholder approval and U.S. antitrust approval.

Executives delivered prepared remarks only and took no analyst questions because of the pending transaction. ADT also withdrew previously issued financial guidance and did not provide new guidance.

Jim DeVries, ADT’s chairman, president and CEO, said the acquisition would bring together the company’s security experience, nationwide service network and customer relationships with Thrive Holdings’ long-term capital and engineering capabilities.

“Until the transaction closes, ADT will continue to operate independently as a public company,” DeVries said.

Acquisition terms and customer privacy

ADT’s board unanimously approved the agreement. The $10-per-share purchase price represents a 46% premium to the company’s unaffected closing share price Oct. 27 and a 52% premium to its 30-day volume-weighted average share price ending on that date, DeVries said.

Thrive expects to finance the acquisition through a combination of equity, debt and preferred equity. The merger agreement includes a go-shop period running through Nov. 28.

DeVries said ADT does not intend to disclose developments related to that process unless management determines disclosure is appropriate or otherwise required.

He also addressed customer data protections under the proposed ownership change.

“Importantly for our customers, ADT’s data and privacy policies will remain unchanged, and no new data sharing will occur without customer permission,” he said.

ADT+ and service initiatives advance

DeVries also outlined continued work on ADT’s security offerings and distribution channels.

During the quarter, the company introduced Unusual Activity Alerts in ADT+, advanced pilots of its Origin AI presence sensing technology and expanded ADT Blu to walmart.com.

ADT also launched ADT Partner Services, through which it will install and service select products for Apple Retail and its customers beginning later in November.

DeVries described those developments as progress across ADT’s three core differentiators: safety, customer experience and innovative offerings.

Installation sales drive revenue growth

ADT reported total third-quarter revenue of $1.35 billion, up 4% from a year earlier.

Installation, product and other revenue increased 32% to $265 million. Jeff Likosar, chief financial officer, attributed the increase to a higher mix of professionally installed systems under ADT’s outright sales model.

Monitoring and related services revenue declined 1% to $1.08 billion, including the loss of revenue associated with the October 2025 divestiture of ADT’s Multifamily business.

Ending recurring monthly revenue (RMR) was $360 million, compared with $362 million a year earlier. Likosar said that decline also primarily reflected the divestiture.

Direct professional installation unit additions and RMR additions improved year over year, while volume from dealers and bulk account purchases declined, Likosar said.

Overall, ADT recorded 195,000 gross unit additions and $12.1 million in gross RMR additions. The company also completed a bulk purchase of approximately 8,000 customer accounts for $9 million in cash during the quarter.

Gross customer revenue attrition was 13.1%, compared with 13% a year earlier. Elevated cancellations for nonpayment were partially offset by fewer voluntary disconnects. Trailing 12-month revenue payback remained unchanged at 2.3 years.

Cash generation rises as tech investment continues

Adjusted free cash flow, including interest rate swaps, increased 4% to $217 million for the quarter.

Through the first three quarters, ADT generated more than $1 billion in adjusted free cash flow, including interest rate swaps, up 46% and exceeding the prior year’s full-year level. Likosar attributed the improvement to lower cash taxes and interest, working capital management and some favorable timing.

“Our consistent performance, while we continue to invest in our business, underscores the strength of our cash generation capabilities, which remain a highlight of our results,” he said.

Adjusted EBITDA declined 2% to $665 million, reflecting higher general and administrative costs, including technology investments, partially offset by margin from higher installation revenue.

Adjusted earnings per share increased 4% to $0.24. Year-to-date adjusted earnings per share reached $0.71, up 6%, benefiting from a lower diluted share count and lower interest expense.

DeVries emphasized that ADT’s operating priorities remain in place as the acquisition moves toward closing.

“Importantly, with this transaction, ADT’s focus has not changed,” he said. “We remain committed to serving our customers, supporting our dealers and partners, and executing our key initiatives.”

(Editor’s note: This article was produced with the assistance of generative AI using Alarm.com’s publicly available earnings call transcript as source material. The content was reviewed, edited and verified by the SecurityInfoWatch editorial team to ensure accuracy, context and adherence to our editorial standards.)