ADT Inc (ADT) 2024 Q1 法說會逐字稿

Good morning. Thank you for attending the ADT First Quarter 2024 Earnings Conference Call. My name is Victoria, and I'll be your moderator today. (Operator Instructions) I would now like to pass the conference over to your host, Elizabeth Landers, Senior Director, Investor Relations. Thank you. You may proceed, Elizabeth.

早安.感謝您參加 ADT 2024 年第一季財報電話會議。我叫維多利亞，今天我將擔任你們的主持人。 （操作員指示）我現在想將會議轉交給東道主投資者關係高級總監伊麗莎白·蘭德斯 (Elizabeth Landers)。謝謝。你可以繼續了，伊莉莎白。

Thanks, operator, and good morning, everyone. We appreciate you joining today's call to discuss ADT's first quarter 2024 results. Speaking on today's call will be ADT's Chairman, President and CEO, Jim DeVries; and our Chief Financial Officer, Jeff Likosar. Following the prepared remarks, we'll take analyst questions. Earlier this morning, we issued a press release and slide presentation of our financial results. These materials are available on our website at investor.adt.com.

謝謝接線員，大家早安。我們感謝您參加今天的電話會議，討論 ADT 2024 年第一季的業績。 ADT 董事長、總裁兼執行長 Jim DeVries 將在今天的電話會議上發表講話；以及我們的財務長 Jeff Likosar。在準備好的評論之後，我們將回答分析師的問題。今天早些時候，我們發布了財務業績的新聞稿和幻燈片演示。這些資料可在我們的網站 Investor.adt.com 上取得。

Before we begin, I'd like to remind everyone that beginning in the third quarter of 2023, the Commercial business is reported as discontinued operation. Financials and metrics for current and historical periods discussed on this call will be for continuing operations, except for cash flows, which include amounts related to the Commercial business through the date of sale.

在開始之前，我想提醒大家，從 2023 年第三季開始，商業業務將被報告為已終止營運。本次電話會議討論的當前和歷史時期的財務和指標將針對持續經營業務，但現金流量除外，其中包括截至出售之日與商業業務相關的金額。

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.

今天的言論還包括代表我們對未來事件的信念或期望的前瞻性陳述。這些前瞻性陳述存在風險和不確定性，可能導致實際結果有重大差異。我們向 SEC 提交的文件中描述了一些可能導致差異的因素。

We 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 in our earnings presentation on the ADT Investor Relations website.

我們也在電話會議上討論了非公認會計準則財務指標。最直接可比較的 GAAP 指標以及這些指標的調整表可以在 ADT 投資者關係網站上的收益報告中找到。

And with that, I'm excited to turn the call over to Jim.

因此，我很高興將電話轉給吉姆。

Good morning and thank you to everyone for joining us today to discuss ADT's first quarter results release this morning. ADT had a very good start to the year financially with strong CSB performance driving top line growth, improved segment EBITDA and positive adjusted free cash flow, all of which Jeff will describe shortly.

早安，感謝大家今天加入我們討論 ADT 今天早上發布的第一季業績。 ADT 今年的財務開局非常好，CSB 的強勁業績推動了營收成長，部門 EBITDA 有所改善，調整後的自由現金流為正，所有這些 Jeff 都會很快描述。

First, I want to share a few comments about why I remain excited about the opportunities that lie ahead, the positioning of our company and what we believe to be a compelling investment thesis.

首先，我想分享一些關於為什麼我對未來的機會、我們公司的定位以及我們認為引人注目的投資論文仍然感到興奮的一些評論。

Our streamlined business model focusing on our consumer-oriented core security and smart home business serves a large and growing market, and ADT is the clear industry leader with a unique set of assets, including our trusted brand and national footprint and scale. We have a flywheel-like model where we are increasingly able to use the stable and predictable cash flows from our RMR base to service and reduce our debt obligations and return cash to our shareholders while also continuing to invest in growing the RMR base.

我們簡化的業務模式專注於以消費者為導向的核心安全和智慧家居業務，服務於龐大且不斷增長的市場，ADT 是明顯的行業領導者，擁有一系列獨特的資產，包括我們值得信賴的品牌以及全國足跡和規模。我們有一個類似飛輪的模式，我們越來越能夠利用來自 RMR 基礎的穩定且可預測的現金流來服務和減少我們的債務，並向股東返還現金，同時繼續投資於擴大 RMR 基礎。

That growth is further enhanced by our extraordinary combination of concierge-like professionals, blue-chip partners and expanded capabilities to further penetrate even more customer segments and U.S. households. And we've never felt more confident about our overall capital structure and the related flexibility to deliver on our commitments for all of our stakeholders.

我們將禮賓般的專業人士、藍籌合作夥伴以及進一步滲透到更多客戶群和美國家庭的能力擴展到非凡的組合，進一步促進了這種成長。我們對我們的整體資本結構和相關靈活性感到前所未有的信心，以兌現我們對所有利害關係人的承諾。

During 2024, our focus remains on methodically rolling out our new ecosystem of customer offerings and experiences as well as related back-office infrastructure. As you know, we launched our new ADT+ platform for professionally installed customers in select markets last December following the rollout of our ADT+ app to self-setup customers earlier last year. We are expanding to more geographies and customers throughout 2024 and are confident in the differentiated capabilities our new platform will enable in future years, especially as we develop additional use cases tailored to our customers' unique needs. We will plan to make the first of these available on our platform later this year.

2024 年，我們的重點仍然是有條不紊地推出新的客戶產品和體驗生態系統以及相關的後台基礎設施。如您所知，繼去年稍早向自行安裝客戶推出 ADT+ 應用程式後，我們於去年 12 月為特定市場的專業安裝客戶推出了新的 ADT+ 平台。我們將在 2024 年擴展到更多地區和客戶，並對我們的新平台在未來幾年實現的差異化功能充滿信心，特別是當我們根據客戶的獨特需求開發更多用例時。我們計劃今年稍後在我們的平台上推出其中的第一個。

ADT's new platform continues to leverage our Google Nest partnership, which has already enabled us to expand our offerings particularly around the fast-growing area of camera and video analytics. Our State Farm partnership also remains a catalyst for the business and illustrates our continued evolution and innovation. We continue to see month-on-month growth in our existing 13 states and remain on track to begin new pilots in four more states in the coming months. We remain optimistic in the growth opportunity with State Farm to drive significant benefit to our combined customers' need for proactive risk detection and prevention.

ADT 的新平台繼續利用我們與 Google Nest 的合作夥伴關係，這已經使我們能夠擴展我們的產品，特別是在快速成長的相機和影片分析領域。我們與 State Farm 的合作夥伴關係仍然是業務的催化劑，並體現了我們的持續發展和創新。我們繼續看到現有 13 個州的環比增長，並預計在未來幾個月內在另外 4 個州開始新的試點。我們對 State Farm 的成長機會保持樂觀，這將極大地滿足我們的綜合客戶對主動風險檢測和預防的需求。

We will further unlock the power of our ecosystem with the full scaling of our ADT+ platform, new hardware and refreshed IT infrastructure, including advancement on our digital journey to provide more personalized offerings with greater efficiency while providing best-in-class service.

我們將透過全面擴展 ADT+ 平台、新硬體和更新的 IT 基礎設施，進一步釋放生態系統的力量，包括推進我們的數位化進程，以更高的效率提供更個人化的產品，同時提供一流的服務。

In that vein, we have broadened our strong Google relationship beyond Nest hardware with a sharp focus on efficiency and customer experience, utilizing Google's AI technology platform to explore several opportunities across our business with early efforts focused on call center operations. Our virtual assistance program has already been a key driver of our efficiency, allowing us to better service our subscriber base while simultaneously lowering our costs by utilizing technology and video in place of more traditional in-person service visits. Customers increasingly value the convenience and speed of our virtual capabilities, which also contributes to reducing our carbon footprint.

本著這一精神，我們將與Google 的牢固關係拓展至Nest 硬體之外，重點關注效率和客戶體驗，利用Google 的AI 技術平台探索我們業務中的多個機會，並將早期工作重點放在呼叫中心營運上。我們的虛擬援助計劃已經成為我們效率的關鍵驅動力，使我們能夠更好地服務我們的用戶群，同時透過利用技術和視訊代替更傳統的面對面服務存取來降低成本。客戶越來越重視我們虛擬功能的便利性和速度，這也有助於減少我們的碳足跡。

While still early in our implementation, we anticipate significant call deflection using AI-led efficiencies and customer care. And we're looking more broadly across the organization at ways to leverage AI in areas such as churn propensity modeling to help us improve customer retention. Obviously, there's a lot more to come in this area.

雖然我們仍處於實施初期，但我們預計，透過人工智慧主導的效率和客戶服務，通話會發生顯著的偏轉。我們正在整個組織範圍內更廣泛地尋找在客戶流失傾向建模等領域利用人工智慧的方法，以幫助我們提高客戶保留率。顯然，這個領域還有很多事情要做。

As we announced in January, we've made the decision to exit our residential Solar operations, which is progressing as planned. We've ceased all sales and marketing activities, we're closing branches, selling inventory and installing what remains of our pipeline. The headcount in Solar continues to decline, and we expect to discontinue substantially all field operations as planned by the end of the second quarter.

正如我們在一月份宣布的那樣，我們已決定退出住宅太陽能業務，該業務正在按計劃進行。我們已經停止了所有銷售和行銷活動，我們正在關閉分支機構，出售庫存並安裝剩餘的管道。太陽能部門的員工人數持續減少，我們預計到第二季末將按計劃基本停止所有現場業務。

Finally, I have just a few brief comments regarding the secondary offering executed in March. Overall, we were pleased with the completion of Apollo's offering of approximately 75 million shares of common stock taking their ownership to below 50%. We view this as a positive for liquidity. And over a period of time, we expect the larger public float to attract even more high-quality investors to ADT. We concurrently repurchased 15 million shares of common stock using $93 million of our $350 million share repurchase authorization to further bolster our value proposition.

最後，我對三月進行的二次發行有一些簡短的評論。總體而言，我們對 Apollo 完成約 7,500 萬股普通股發行並將其所有權降至 50% 以下感到高興。我們認為這對流動性有利。在一段時間內，我們預計更大的公眾持股將吸引更多優質投資者加入ADT。我們同時使用 3.5 億美元股票回購授權中的 9,300 萬美元回購了 1,500 萬股普通股，以進一步增強我們的價值主張。

In closing, ADT's core focus remains on delivering safe, smart and sustainable solutions to our customers with an emphasis on innovative offerings, unrivaled safety and a premium service experience. Collectively, we expect these efforts will improve our efficiency and customer experience while also enabling better and faster insight to meet our customers' needs. The immediate priority for our team is to deliver on our commitments as we remain confident in our plan for 2024.

最後，ADT 的核心重點仍然是為客戶提供安全、智慧和永續的解決方案，重點是創新產品、無與倫比的安全性和優質服務體驗。總的來說，我們預期這些努力將提高我們的效率和客戶體驗，同時也能更好、更快地洞察以滿足客戶的需求。我們團隊的當務之急是兌現我們的承諾，因為我們對 2024 年的計畫仍然充滿信心。

I'd now like to turn the call over to Jeff Likosar. Jeff had been serving as our interim CFO since December, and he'll now officially return to the CFO seat. Jeff has been a great partner to me. And as many of you on the call this morning know, he's a tremendous executive leader for ADT. I'm thrilled to be working with Jeff in this capacity again.

我現在想把電話轉給 Jeff Likosar。 Jeff 自 12 月以來一直擔任我們的臨時 CFO，現在他將正式重返 CFO 席位。傑夫一直是我很棒的合作夥伴。正如今天早上參加電話會議的許多人都知道的那樣，他是 ADT 的一位出色的執行領導者。我很高興能再次以這一身份與傑夫合作。

With that, I'll turn the call over to Jeff.

這樣，我就把電話轉給傑夫。

Thanks, Jim, for the kind words, and thank you, everyone, for joining our call today. I'll take the next few minutes to share some additional comments on our first quarter financial performance and our outlook for the rest of 2024.

謝謝吉姆的客氣話，也謝謝大家今天加入我們的電話會議。我將在接下來的幾分鐘內就我們第一季的財務業績以及 2024 年剩餘時間的前景分享一些額外的評論。

A highlight is that total company first quarter adjusted net income was $151 million or $0.16 per share, well above last year's $0.11. Additionally, we delivered very strong adjusted free cash flow, including interest rate swaps which was almost $100 million ahead of last year.

一個亮點是，該公司第一季調整後淨利潤總額為 1.51 億美元，即每股 0.16 美元，遠高於去年的 0.11 美元。此外，我們還提供了非常強勁的調整後自由現金流，其中包括利率互換，比去年提前了近 1 億美元。

As a result of our decision to exit the Solar business, I'll focus mainly on our CSB segment, where revenue of approximately $1.2 billion grew 5%. Monitoring and services revenue was up 3%, driven by our $353 million RMR balance, which was also 3% higher year-over-year. We generated gross customer additions of 187,000 and $11.4 million of new RMR additions. This level was generally consistent with our approximately flat SAC. Importantly, we'll remain disciplined in subscriber acquisition spending, especially in a challenging macro environment, including fewer relocations.

由於我們決定退出太陽能業務，我將主要關注我們的 CSB 部門，該部門的收入約為 12 億美元，成長了 5%。監控和服務收入成長了 3%，這得益於我們 3.53 億美元的 RMR 餘額，也比去年同期成長了 3%。我們新增客戶總數為 187,000 名，新增 RMR 金額為 1,140 萬美元。這個水平與我們大致平坦的 SAC 基本一致。重要的是，我們將繼續嚴格控制用戶獲取支出，特別是在充滿挑戰的宏觀環境下，包括減少搬遷。

Installation revenue increased by 22%, driven by higher deferred revenue amortization and higher outright sales. As we've described previously, we expect continued outright sales growth as we more often transfer equipment ownership to our customers. Installation revenue per unit remained strong at nearly $1,400. The trend towards larger system sizes contributed to our efficient revenue payback of 2.1 years. Additionally, larger systems are correlated with strong customer retention, supporting our 13.1% attrition rate.

由於遞延收入攤銷和直接銷售增加，安裝收入增加了 22%。正如我們之前所描述的，隨著我們更頻繁地將設備所有權轉讓給客戶，我們預計直接銷售將持續成長。每台安裝收入保持強勁，接近 1,400 美元。系統規模不斷擴大的趨勢使我們的營收回報期達到了 2.1 年。此外，較大的系統與強大的客戶保留率相關，支援我們 13.1% 的流失率。

As a reminder, our attrition metric reflects the trailing 12 months rate of RMR cancellations on professionally installed systems. It does not include self-setup customers, or the attrition offset of customers relocating their service.

提醒一下，我們的流失指標反映了專業安裝的系統過去 12 個月的 RMR 取消率。它不包括自行設定的客戶，或客戶重新定位其服務的消耗抵消。

CSB adjusted EBITDA was $638 million in the quarter, an 8% increase versus last year. Our margin rate increased by approximately 200 basis points as we remain focused on cost and efficiency improvements. We continue to fund the investments in the ecosystem and infrastructure priorities Jim described. We also benefited modestly from the timing of advertising spending, some of which we deferred to coincide with our new platform rollout.

CSB 本季調整後 EBITDA 為 6.38 億美元，比去年成長 8%。由於我們繼續專注於成本和效率的改進，我們的利潤率增加了約 200 個基點。我們繼續為 Jim 所描述的生態系統和基礎設施優先事項的投資提供資金。我們也從廣告支出的時機中受益匪淺，其中一些廣告支出我們推遲了，以配合新平台的推出。

This CSB profitability was a significant contributor to the solid cash flow growth I mentioned earlier. Adjusted free cash flow, including interest rate swaps of $111 million compared to $16 million in the prior year quarter. Lower interest on reduced debt, payroll items and some favorable timing versus our plans all contributed to this performance. These benefits were partially offset by the sale of our Commercial business, which contributed positive cash flow last year.

CSB 的獲利能力是我之前提到的現金流穩健成長的重要貢獻者。調整後的自由現金流（包括利率掉期）為 1.11 億美元，去年同期為 1,600 萬美元。債務減少、薪資項目的利息降低以及與我們計劃相比的一些有利時機都促成了這一業績。這些收益被商業業務的出售部分抵消，該業務去年貢獻了正現金流。

During April, we repaid the remaining $100 million due on our 2024 notes, leaving us with no significant debt maturities until 2026. We also completed a repricing of our $1.4 billion term loan B, reducing the associated borrowing cost by 25 basis points. Our debt remains at 3.2x adjusted EBITDA.

4 月份，我們償還了2024 年票據中剩餘的1 億美元到期債務，因此我們在2026 年之前沒有重大債務到期。了25 個基點。我們的債務仍為調整後 EBITDA 的 3.2 倍。

Following the $93 million share repurchase Jim described, we have $257 million in remaining authorization. Due to interest rate swaps, substantially all our debt is fixed at a weighted average rate of 4.5%.

在吉姆描述的 9,300 萬美元股票回購之後，我們還有 2.57 億美元的剩餘授權。由於利率互換，我們幾乎所有債務的加權平均利率都固定為 4.5%。

We are very confident in our overall capital structure, cash generation capability, liquidity and resulting flexibility in capital allocation. As Jim mentioned, our Solar wind down is progressing as planned with all sales and new installation activity having ceased. Solar segment revenue was $20 million in the quarter with an adjusted EBITDA loss of $24 million. We expect total exit costs, which are not included in our adjusted EBITDA or cash metrics, to be within the ranges we provided in February. We incurred $75 million of these charges and $11 million of cash expenditures in the first quarter.

我們對我們的整體資本結構、現金產生能力、流動性以及資本配置的靈活性非常有信心。正如吉姆所提到的，我們的太陽能發電正在按計劃進行，所有銷售和新安裝活動都已停止。本季太陽能部門營收為 2,000 萬美元，調整後 EBITDA 虧損為 2,400 萬美元。我們預計總退出成本（不包括在調整後的 EBITDA 或現金指標中）將在我們 2 月提供的範圍內。第一季我們產生了 7500 萬美元的這些費用和 1100 萬美元的現金支出。

As we look to the rest of 2024, we are affirming the guidance we shared in February, which we anchored on strong cash flow growth. As a reminder, due to our Solar exit, revenue and adjusted EBITDA guidance for the full year is for our CSB segment. As mentioned earlier, we benefited in the first quarter from some timing items and expect the second quarter to reflect some offsets. In general, we expect our guided metrics to be relatively flat in the second quarter compared to the first quarter. A noteworthy exception is that we expect approximately $70 million lower cash interest in the second quarter versus the first. Overall, we are very pleased with our start to the year and our progress towards our 2024 and longer-term objectives.

展望 2024 年剩餘時間，我們重申 2 月分享的指引，該指引以強勁的現金流成長為基礎。提醒一下，由於我們退出 Solar，全年收入和調整後的 EBITDA 指導是針對我們的 CSB 部門的。如前所述，我們在第一季受益於一些時間項目，並預計第二季將反映出一些抵銷。總的來說，我們預計第二季的指導指標與第一季相比將相對持平。一個值得注意的例外是，我們預計第二季的現金利息將比第一季減少約 7,000 萬美元。總體而言，我們對今年的開局以及實現 2024 年及更長期目標的進展感到非常滿意。

Before turning to questions, I'd like to thank our customers, our employees, our dealers, suppliers, partners, communities and our investors. Our successes will not be possible without your contributions and support.

在開始提問之前，我要感謝我們的客戶、員工、經銷商、供應商、合作夥伴、社群和投資者。沒有您的貢獻和支持，我們就不可能成功。

Thank you, everyone, for joining the call today. Operator, please open the line to questions.

謝謝大家今天加入電話會議。接線員，請打開提問線。

(Operator Instructions) Our first question comes from the line of George Tong with Goldman Sachs.

（操作員指令）我們的第一個問題來自高盛的George Tong。

You're continuing to roll out the ADT+ platform, which is great to see. Can you talk about what kind of financial benefits you anticipate to roll out? Is it more going to be ARPU? Is it going to be unit? Is it going to be retention? Just some idea around financial impact and traction that you've seen so far with the rollout.

你們正在繼續推出 ADT+ 平台，這真是令人高興。您能談談您預計將推出什麼樣的經濟效益嗎？ ARPU 更重要嗎？會是單位嗎？會不會保留？只是到目前為止您所看到的有關財務影響和吸引力的一些想法。

Thanks, George, for the question. We're super excited about ADT+. The initial rollout for ADT+ is really at parity with what we've been installing on both the hardware and software side to date. What we're most excited about with the platform is the features that will be available in subsequent rollouts.

謝謝喬治提出這個問題。我們對 ADT+ 感到非常興奮。 ADT+ 的最初推出確實與我們迄今為止在硬體和軟體方面安裝的內容相當。我們對該平台最感興趣的是後續推出中將提供的功能。

Any of the upside that we have in 2024 is fairly limited. We're rolled out in a couple of markets now. We're going to be expanding nationally in the coming months. But the lift for us -- the upside for us that we see in the ADT+ platform is really most evident in 2025.

2024 年我們的任何上行空間都相當有限。我們現在已在幾個市場推出。未來幾個月我們將在全國擴張。但對我們來說，ADT+ 平台帶來的好處在 2025 年確實最為明顯。

George, it's Jeff. I'd add to your question, it's somewhat all of the above. The rollout of the platform will coincide with some of the other changes that we've described with respect to offer structure, different ways that customers may choose to purchase, more of a shift towards a more efficient acquisition channels.

喬治，是傑夫。我想補充一下你的問題，這在某種程度上是以上所有內容。該平台的推出將與我們在報價結構、客戶可能選擇購買的不同方式、更多地轉向更有效的獲取管道方面描述的其他一些變化同時進行。

So over time, we would expect it to make our offerings more attractive to customers that would lead to more customers, better economics, lower SAC, more efficiency serving those customers. But to Jim's point, I would think of it for now as the foundation that enables all of those things.

因此，隨著時間的推移，我們希望它能讓我們的產品對客戶更具吸引力，從而帶來更多的客戶、更好的經濟效益、更低的 SAC、更高的服務效率。但就吉姆的觀點而言，我現在將其視為實現所有這些事情的基礎。

Got it. That's helpful context. And then with the State Farm partnership, you're continuing to push forward with penetration of the 13 states and additional rollouts in four states. Can you provide some additional details on selling progress with the states that you're currently in? How much scale that partnership is in terms of revenue generation and what the client feedback has been like?

知道了。這是有用的背景。然後，透過與 State Farm 的合作，您將繼續推進對 13 個州的滲透，並在 4 個州進行更多推廣。您能否提供有關您目前所在州的銷售進度的更多詳細資訊？這種合作關係在創造收入方面的規模有多大以及客戶的回饋如何？

Yes, absolutely. So the launch, as you know, George, was March of '23. We did 6,000 sales in 2023. In Q1 of '24, we're just under 5,000 sales. Customer satisfaction continues to be incredibly high. I think for the quarter, we were at 96% customer SAT. Every month continues to be better than the month prior. 2/3 of our installs include an upsell, which is pretty consistent with our expectations.

是的，一點沒錯。喬治，如你所知，發佈時間是 23 年 3 月。 2023 年，我們的銷量為 6,000 輛。客戶滿意度仍然非常高。我認為本季我們的客戶 SAT 使用率為 96%。每個月都比上個月好。我們 2/3 的安裝包括追加銷售，這與我們的預期非常一致。

And then in terms of upcoming things on the radar screen, we're going to be testing a DIY offering in two states, and that will be in June. And then we're exploring a water detection-led pilot, essentially marketed to State Farm customers who have had water claims in the past.

然後就雷達螢幕上即將推出的事情而言，我們將在 6 月在兩個州測試 DIY 產品。然後，我們正在探索以水檢測為主導的試點，主要針對過去提出過水索賠的 State Farm 客戶。

So net, companies continue to be aligned on the vision. Things are going well. We would always like to see things go a little bit faster. But we liked our results in Q1. They were consistent with our internal budget. And we'll look forward to further penetration in the 13 existing states and watching our DIY pilot closely at the end of the quarter.

因此，公司繼續在願景上保持一致。事情進展順利。我們總是希望看到事情進展得更快一點。但我們喜歡第一季的結果。它們與我們的內部預算一致。我們將期待在現有的 13 個州進一步滲透，並在本季末密切關注我們的 DIY 試點。

The next question comes from the line of Ashish Sabadra with RBC.

下一個問題來自 Ashish Sabadra 與 RBC 的對話。

This is David Paige on for Ashish. First, Jeff, congratulations on the official CFO title role. It's great to see. Looking forward to working with you. In terms of, I guess, other corporate actions or rightsizing the portfolio, are you guys done now? Or is there anything that's left that needs to be done or anything that's attractive to add in terms of an M&A standpoint or just more color in that regard?

我是阿什什的大衛·佩奇。首先，傑夫，恭喜您獲得正式的財務長頭銜。很高興看到。期待和你一起工作。我想，就其他公司行動或調整投資組合而言，你們現在完成了嗎？或者還有什麼需要做的事情，或者從併購的角度來看有什麼有吸引力的東西需要添加，或者只是在這方面有更多的色彩？

Yes. Maybe a couple of comments, and Jeff jump in to add. Thanks for the question, David. The -- I would say, from an M&A perspective, we'll continue to look at bulk acquisition opportunities. They're fairly plentiful for us. And those are -- I don't know if we'd officially call that M&A, but it'd be an area where we have an opportunity to deploy capital that yields really attractive returns. If we do any pure M&A, it would be in our core business.

是的。也許有一些評論，傑夫會跳出來補充。謝謝你的提問，大衛。我想說，從併購的角度來看，我們將繼續尋找批量收購機會。它們對我們來說相當充足。這些是——我不知道我們是否會正式稱之為併購，但這將是我們有機會部署資本並產生真正有吸引力的回報的領域。如果我們進行任何純粹的併購，那將是我們的核心業務。

And in terms of any future divestiture, with Commercial sold and Solar in wind-down mode, I don't see anything material for us that we would be divesting going forward.

就未來的任何剝離而言，隨著商業業務的出售和太陽能業務的逐步結束，我認為我們未來不會剝離任何實質內容。

One thing I would add that's maybe a little bit more general than your specific question, but just -- we feel so good about all the progress we made on our capital structure having reduced debt over the past year or so, getting our leverage down to where it rounds to 3 instead of rounding to 4, progress with our cash generation. And all that results in just more flexibility for us. So we'll certainly look at things opportunistically.

我要補充的一件事可能比你的具體問題更籠統一點，但只是- 我們對我們在資本結構方面取得的所有進展感到非常滿意，在過去一年左右的時間裡減少了債務，將我們的槓桿率降至如果四捨五入到 3 而不是四捨五入到 4，我們的現金產生就會取得進展。所有這些都為我們帶來了更大的靈活性。所以我們肯定會機會主義地看待事情。

To Jim's point, no specific thing to talk about today, but balancing organic growth, longer-term investments in the company, return of capital to shareholders and we'll make adjustments as we go and as we come across opportunities. But I just would emphasize the flexibility we now have.

就吉姆的觀點而言，今天沒有具體的事情可談，但平衡有機成長、公司的長期投資、股東資本回報，我們將在前進過程和遇到機會時做出調整。但我只是想強調我們現在擁有的彈性。

Our next question comes from the line of Manav Patnaik with Barclays.

我們的下一個問題來自巴克萊銀行的馬納夫·帕特奈克 (Manav Patnaik)。

This is Ronan Kennedy on for Manav. I think you had referred to the macro as challenged. Could you just give us some further insight as to what you're seeing, especially given the news release this morning, I think lower GDP or lowest GDP in almost 2 years, inflation higher than expected. So how you would characterize the macro, and more specifically, the customer -- the strength of the customer as you see it, the ADT customer? And perhaps on resiliency, are there any trends you're seeing in delinquency, 31 days past due, et cetera, please?

我是馬納夫的羅南肯尼迪。我認為您曾提到宏觀經濟受到了挑戰。您能否就您所看到的情況向我們提供一些進一步的見解，特別是考慮到今天早上發布的新聞，我認為 GDP 較低或近兩年來最低，通膨高於預期。那麼，您將如何描述宏觀，更具體地說，客戶的特徵—您所看到的客戶的實力，即 ADT 客戶？也許在彈性方面，您在拖欠、逾期 31 天等方面是否有看到任何趨勢？

Yes. Thanks for the question. I'll make a couple of comments. I think Jeff has some things to share as well. I think most of the challenge in the macro environment, we're in a position to manage. We've managed inflationary pressure from a wages benefit supply chain perspective. Labor is in great shape. We're at a 5-year low for employee turnover.

是的。謝謝你的提問。我將發表幾點評論。我認為傑夫也有一些東西可以分享。我認為宏觀環境中的大部分挑戰，我們都有能力應付。我們從薪資福利供應鏈的角度來管理通膨壓力。勞動狀況良好。我們的員工流動率處於五年來的最低點。

One area that presents some challenges for us, some headwinds, from a gross adds perspective is fewer relocations. And that's very real and puts pressure on gross adds. Of course, that's a positive on the retention front. But I think relocation is probably the most pronounced at least from my perspective, in terms of macro impact on the business.

從總增加的角度來看，給我們帶來一些挑戰和阻力的一個領域是搬遷減少。這是非常真實的，並且給總增加帶來了壓力。當然，這對留住人才來說是正面的。但我認為，就對業務的宏觀影響而言，至少從我的角度來看，搬遷可能是最明顯的。

Yes. And I would add in that context, it's not materially different from what we expected entering the year. Our full year guidance, we noted we expected our SAC spending to be approximately flat, and that goes with an environment where we're not deploying as much SAC because of some of those challenging conditions.

是的。我想補充一點，在這種情況下，這與我們今年的預期沒有太大不同。在我們的全年指引中，我們指出，我們預計 SAC 支出將大致持平，這與我們由於某些具有挑戰性的條件而沒有部署那麼多 SAC 的環境相一致。

I'd emphasize that we will remain disciplined in deploying SAC in places and across opportunities in different channels and methods of acquiring customers that generate strong economic returns, and that will continue to be our focus. And we're always seeking to balance all of our objectives, but we're specifically focused on generating cash as we laid out in our original guidance and as we did in the first quarter.

我要強調的是，我們將繼續遵守紀律，在不同的地方、不同的機會和機會中部署 SAC，以不同的管道和方法獲取客戶，從而產生豐厚的經濟回報，這將繼續成為我們的重點。我們一直在尋求平衡我們的所有目標，但我們特別專注於產生現金，正如我們在最初的指導下所闡述的那樣以及我們在第一季所做的那樣。

Got it. And then can I just confirm how the service -- or service discontinuations of the 31 past days are trending?

知道了。然後我可以確認過去 31 天的服務或服務中斷的趨勢如何嗎？

Yes. So the -- I'll give you a broader picture, Ronan, of attrition overall. So we ticked up from 12.9 at year-end to 13.1, March quarter end. We expect April will end at 13. So coming down just a bit. Year-over-year, we're a little worse for nonpay in April, essentially flat for relocation and much, much better on voluntary and lost competition. So from a nonpay perspective and from a past due perspective, we're roughly flat to where we've been.

是的。因此，羅南，我將向您提供更廣泛的整體損耗。因此，我們從年底的 12.9 上升到 3 月季度末的 13.1。我們預計 4 月將於 13 日結束。與去年同期相比，四月份的無薪情況稍差一些，搬遷情況基本上持平，而自願和失去競爭的情況則好得多。因此，從非付費角度和逾期角度來看，我們與之前的水平大致相當。

Appreciate it. And if I may, could I ask one more just on the Google and the comments of the utilization of the Google tech platform. I know you have virtual assistance, and I think also the system monitoring and response tech, the smart assessment of alarms. Can you kind of contextualize in terms of the impact of the timing from the additional opportunities, whether it is that call center operations, the call deflection to more of the advanced churn and propensity modeling, that type of thing, timing and impact, please?

欣賞它。如果可以的話，我能否再問一個關於谷歌以及谷歌技術平台使用的評論。我知道你們有虛擬協助，我認為還有系統監控和回應技術、警報的智慧評估。您能否從額外機會的時間影響方面來了解一下，無論是呼叫中心運營、呼叫偏轉到更多高級客戶流失和傾向模型，諸如此類的事情、時間和影響？

Yes. So yes, super excited about -- we've essentially expanded our partnership with Google beyond the Nest hardware and into working with Google Cloud and couldn't be excited -- couldn't be more excited about it.

是的。所以，是的，我們非常興奮——我們基本上已經將與Google的合作夥伴關係擴展到了 Nest 硬體之外，並擴展到與Google雲端的合作，對此感到非常興奮。

The first two areas, as you mentioned, will be in customer care, deploying AI to drive call deflection. We may see some impact for that late this year. I think most of it starts to become a reality in 2025.

正如您所提到的，前兩個領域將是客戶服務，部署人工智慧來推動呼叫轉移。今年晚些時候我們可能會看到一些影響。我認為大部分將在 2025 年開始成為現實。

And on propensity modeling, churn modeling, I'd generally say the same thing. We're in the early days of putting the plan together. Both of them, I think, have meaningful upside for us. But if there's an impact, Ronan, it will be late this year with the real fruits delivered next year.

關於傾向建模、流失建模，我通常會說同樣的事情。我們正處於製定計劃的早期階段。我認為，它們都對我們有有意義的好處。但如果有影響的話，羅南，那會在今年晚些時候，明年才會帶來真正的成果。

(Operator Instructions) Our next question comes from the line of Peter Christiansen with Citi.

（操作員說明）我們的下一個問題來自花旗銀行的 Peter Christiansen。

Jeff, welcome back to the CFO seat. Great to have you back.

傑夫，歡迎回到財務長的位置。很高興你回來了。

Thank you.

謝謝。

Jeff, I'm just curious, as it relates to the State Farm partnership, in the states that you have rolled out, how would you compare, I guess, those market size, growth-wise, versus the rest of your active markets? I'm just trying to get a sense of after you've had some good success in testing and get product fit right and sales motions, does that -- when you go to newer states, those learnings, are you able to adapt to those pretty quickly in some of your larger markets and accelerate cross-sells even faster? Just curious how you're thinking about that.

傑夫，我只是很好奇，因為它與 State Farm 合作夥伴關係有關，在您已經推出的州中，我想您如何將這些市場規模（成長方面）與您的其他活躍市場進行比較？我只是想了解一下，在您在測試方面取得了一些良好的成功並獲得了正確的產品配合和銷售動議之後，當您前往較新的州時，您是否能夠適應這些經驗教訓？的市場中相當快速地發展並更快地加速交叉銷售？只是好奇你怎麼想的。

Yes. Absolutely, Pete. And thanks for the question. The -- so we made the decision. We're in 13 states already. And in those 13 states, that represents about 40% -- I think, 41% of State Farm policies in force, so it's a massive TAM. And rather than expand to additional states what we, together with State Farm decided was, given the size of the TAM, let's get better in these 13 states and execute on our learnings, continue to grow and as we fine-tune the go-to-market, then begin expanding to states beyond the 13.

是的。當然，皮特。謝謝你的提問。 - 所以我們做了決定。我們已經在 13 個州了。在這 13 個州中，這大約佔 State Farm 現行政策的 40%——我想是 41%，所以這是一個巨大的 TAM。考慮到 TAM 的規模，我們與 State Farm 共同決定，不要擴展到其他州，而是在這 13 個州做得更好，並執行我們的學習成果，繼續成長，同時微調首選方案-市場，然後開始擴及13 個州以外的州。

The single exception to that, that I mentioned earlier was in Georgia. The single exception was in Georgia and Washington, where we're going to be testing DIY in the June time frame.

我之前提到的唯一例外是在喬治亞州。唯一的例外是在喬治亞州和華盛頓州，我們將在 6 月的時間範圍內測試 DIY。

That's helpful. And then Jeff, I'm just curious with the rising cost of capital, the higher for longer, what have you, in terms of the rate of returns you're seeing and some of the portfolios, particularly some of the ones that you've added on in recent quarters, how are you thinking about those returns? And coincidentally, pricing in general, do you think you have room there to enhance those portfolio returns over time?

這很有幫助。然後傑夫，我只是好奇資本成本的上升，資本成本越高，時間越長，你有什麼，就你所看到的回報率和一些投資組合而言，特別是你的一些投資組合最近幾個季度，您如何看待這些回報？巧合的是，從整體定價來看，您認為隨著時間的推移，您是否有空間提高這些投資組合的回報？

Yes. Generally, maybe I'll step back and just remind, Jim speaks of flywheel model, our overall objective is to deploy capital, generate strong returns. Our single biggest use of capital is subscriber acquisition spending, and we can generate those returns by reducing the amount of SAC required, by increasing the size and really the profitability of the RMR that comes with the customer, so your point about price, and then importantly, extending the duration of the customer life. And we're always working to optimize all of those things and your recent cohorts of customers are performing well.

是的。一般來說，也許我會退一步提醒一下，吉姆談到飛輪模型，我們的總體目標是部署資本，產生豐厚的回報。我們最大的資本用途是訂戶獲取支出，我們可以透過減少所需的 SAC 數量、增加客戶附帶的 RMR 的規模和真正的盈利能力來產生這些回報，所以你的觀點是價格，然後重要的是，延長客戶的生命週期。我們一直在努力優化所有這些事情，並且您最近的客戶群表現良好。

I noted, for example, the dynamics of larger system sizes, more upfront investment, having the benefit both of reducing the upfront SAC cost, but also some correlation with the customer retention characteristics. So we feel really good about the progress. And then the new platform and ecosystem that we've talked about rolling out, we believe we'll make that continue to be the case. And importantly, with more efficiency upfront to be able to acquire customers with less cash out of pocket. So we feel really good about our ability to generate returns in this environment assisted by all the new platform work we have coming.

例如，我注意到更大的系統規模、更多的前期投資的動態，不僅有利於降低前期 SAC 成本，而且還與客戶保留特徵有一定的相關性。所以我們對進展感到非常滿意。然後我們談到推出的新平台和生態系統，我們相信我們會讓這種情況繼續下去。重要的是，透過提高前期效率，能夠用更少的現金來獲取客戶。因此，在我們即將推出的所有新平台工作的幫助下，我們對在這種環境中產生回報的能力感到非常滿意。

There are no additional questions waiting at this time. I would now like to pass the conference back to Jim DeVries, CEO, for closing remarks.

目前沒有其他問題等待。現在我想將會議交回執行長吉姆·德弗里斯 (Jim DeVries) 致閉幕詞。

Thank you, Victoria, and thanks, everyone, for taking the time to join us today. As you heard, ADT delivered solid results in our core CSB business, we continue to invest for the future, our capital structure continues to be strengthened, we've got good momentum in the business and we're looking forward to a strong 2024.

謝謝你，維多利亞，也謝謝大家今天抽出時間來加入我們。正如您所聽到的，ADT 在我們的核心 CSB 業務中取得了堅實的業績，我們繼續為未來投資，我們的資本結構繼續得到加強，我們的業務勢頭良好，我們期待 2024 年的強勁表現。

I'd like to extend my appreciation to our employees, ADT employees, and dealer partners. Our results are a direct reflection of their efforts. So thanks again, everyone, and have a great day.

我謹向我們的員工、ADT 員工和經銷商合作夥伴表示感謝。我們的成果是他們努力的直接反映。再次感謝大家，祝您有美好的一天。

That concludes today's call. Thank you for your participation and enjoy the rest of your day.

今天的電話會議到此結束。感謝您的參與，祝您有個愉快的一天。