ADT Posts Strong Q2 Results for ADT Pulse, Grows Customer Base

ADT Pulse home automation subscriber base reaches 1.2 million total customers or 19% of ADT’s total customer base.

All the goals for ADT Pulse home automation appear to be coming to fruition for security giant ADT (NYSE: ADT) as the company reports higher average revenue per client and lower attrition for its Q2 2015.

Overall ADT Pulse now has 1.2 million subscribers, which represents 19 percent of ADT’s total account base. ADT closed the quarter with 6.7 million customer accounts, a 4.7 percent increase over last year. Also, the take rate for Pulse in the quarter among new customers was 56 percent.

But it’s not just new customers taking Pulse. ADT reports double the rate of upgrade units from a traditional alarm system to a Pulse system among its existing client base. Pulse sales are even more impressive from ADT’s direct sales channel compared to the dealer program.

RELATED: ADT’s Q1 Earnings Report Beats Analysts’ Predictions

In all, its residential direct channel sold 73 percent of new customers a Pulse security system. ADT added over 130,000 Pulse customers in the quarter and upgraded almost 32,000 existing customers to Pulse, including many current 2G customers in-line for conversion to 3G.

Meanwhile, the company’s account attrition rate fell to 12.5 percent from 13.7 percent year over year. That is the lowest rate ADT has experienced since the Tyco spinoff back in 2012. Additionally, the company earned an average of $48.18 more per customer in the quarter, an increase of $2.10 per client, or 4.6 percent better than last year.

The stickiness of the ADT Pulse system that combines security with lighting and thermostat control is cited as the main contributor for reducing attrition and increasing revenue per customer.

Naren Gursahaney, ADT’s CEO, says, “Pulse take rates were 56 percent during the quarter and continue to be an important driver of our results, driving higher revenue per user and delivering what we believe is a better customer experience.”

Overall, ADT reported revenue of $890 million in Q2 with net income of $68 million for the quarter. Of the total revenue, $829 million of it was recurring monthly revenue (RMR), an increase of 7.2 percent.

About the Author

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Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at jason.knott@emeraldexpo.com

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