ADT sales increased in the fourth quarter as the company’s Pulse product suite marked its millionth customer, according to earnings released Wednesday.
More than 70 per cent of new customers are choosing the Pulse security and home automation offering, according to ADT. The company added 280,000 new customers over Q4 and while its primary focus continues to be on the integrated monitored security arena, ADT CEO Naren Gursahaney said ADT recognizes “the incredible opportunity developing” in the unmonitored, do-it-yourself (DIY) product segment he says is largely unpenetrated by traditional security solutions.
“We’re looking at that DIY market and seeing if there is an opportunity. I think we’re excited by what we do see,” said Gursahaney. “We’ve still got some more work to do to understand the value of a professionally monitored solution in there to make a smart home truly a smart and safe home and that’s the opportunity we see and we will be talking more about that as we move forward.”
For fiscal 2014, revenue was $US3.4 billion, an increase of 3 per cent over 2013, the company said. Much of that was recurring revenue from ongoing sales of its security services, up 3.7 per cent compared to last year. For the fourth quarter, ADT reported revenue of $883 million, an increase of 4.4 per cent over a year ago. Profits fell to $82 million from $96 million for the same quarter in 2013.
For the fiscal year, ADT (NYSE: ADT) reported net income of $304 million or $1.66 per share compared with $421 million or $1.88 per share during the same period last year. Despite higher revenues, earnings for fiscal 2014 declined year over year primarily due to high operating expenses.
Adjusted earnings for fiscal 2014 were $369 million or $2.02 per share compared with $413 million or $1.84 per share in fiscal 2013. Adjusted earnings for the reported fiscal year beat the Zacks Consensus Estimate of $1.97.
“We delivered a strong finish to the year driving another quarter of improved results, in line with our most recent guidance in creating good momentum to drive profitable growth in the year ahead,” ADT CEO Naren Gursahaney said during an earnings call with analysts.
The company closed the quarter with 6.7 million customer accounts, a 3.6 per cent increase over last year, including accounts from Reliance Protectron, a Canadian acquisition completed this year.
Recurring monthly revenue (RMR), which made up 93 per cent of total revenue in the quarter, was $819 million, up 5.4 per cent compared to the same period last year. The improved RMR growth in the fourth quarter was primarily driven by an increase in ADT’s organic average revenue per customer, which rose 3.7 per cent over last year to $42.32, and the consolidation of Reliance Protectron for eleven weeks in the quarter.
