Security technology and services company ADT (NYSE: ADT) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 6.8% year on year to $1.29 billion. The company expects the full year’s revenue to be around $5.13 billion, close to analysts’ estimates. Its non-GAAP profit of $0.23 per share was 15% above analysts’ consensus estimates.
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ADT (ADT) Q2 CY2025 Highlights:
- Revenue: $1.29 billion vs analyst estimates of $1.28 billion (6.8% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.23 vs analyst estimates of $0.20 (15% beat)
- Adjusted EBITDA: $674 million vs analyst estimates of $673.6 million (52.4% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $5.13 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $0.85 at the midpoint, a 4.9% increase
- EBITDA guidance for the full year is $2.7 billion at the midpoint, in line with analyst expectations
- Operating Margin: 26.6%, up from 23.6% in the same quarter last year
- Free Cash Flow Margin: 40.9%, up from 19% in the same quarter last year
- Market Capitalization: $7.00 billion
“ADT delivered another strong quarter, highlighted by record recurring monthly revenue, robust cash flow generation, and strong earnings per share growth. These results reflect the resilience of our business and effective execution of our strategy,” said ADT Chairman, President and CEO, Jim DeVries.
Company Overview
Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE: ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, ADT struggled to consistently increase demand as its $5.06 billion of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and suggests it’s a lower quality business.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Just like its five-year trend, ADT’s revenue over the last two years was flat, suggesting it is in a slump. 
This quarter, ADT reported year-on-year revenue growth of 6.8%, and its $1.29 billion of revenue exceeded Wall Street’s estimates by 0.9%.
Looking ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.
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Operating Margin
ADT’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 25.3% over the last two years. This profitability was elite for a consumer discretionary business thanks to its efficient cost structure and economies of scale.
This quarter, ADT generated an operating margin profit margin of 26.6%, up 3 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
ADT’s EPS grew at an astounding 46.1% compounded annual growth rate over the last five years, higher than its flat revenue. This tells us management responded to softer demand by adapting its cost structure.
In Q2, ADT reported EPS at $0.23, up from $0.17 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects ADT’s full-year EPS of $0.84 to grow 4.1%.
Key Takeaways from ADT’s Q2 Results
It was encouraging to see ADT beat analysts’ EPS expectations this quarter. We were also happy it raised its full-year EPS guidance. Zooming out, we think this was a decent quarter. The stock traded up 2% to $8.60 immediately following the results.
So should you invest in ADT right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
