As part of this continued focus, ADT is also advancing its capital allocation strategy, including a cash dividend increase and authorisation of a new share repurchase programme.

“The decision to exit solar operations was made after careful deliberation, and we expect this strategic action to drive substantial operational and financial benefits to ADT,” said Jim DeVries, ADT Chairman, President and CEO. “We want to acknowledge and thank our employees, partners and customers as we work through this transition.”

Solar business update

Over the first nine months of 2023, ADT’s core business exhibited strong performance, while the solar business faced challenges, including operational difficulties and macroeconomic headwinds causing deterioration of conditions industrywide. As a result of these challenges, the solar segment generated an Adjusted EBITDA loss of $89 million during this period. Following the previously announced restructuring of its solar footprint and a detailed strategic review, ADT’s Board of Directors has approved the exit of this segment, which may include the transfer of components of the business to other parties.

The company expects to incur certain one-time exit charges and cash expenditures with potential offsets from asset sales or reduced tax expenses. As previously disclosed, as of Sept. 30, 2023, the goodwill balance for the solar reporting unit was zero. At this time, the company is still analysing the estimated net amount or range of amounts expected to be incurred in connection with this plan.

Strong cash-flowing core business propels capital allocation update

Supported by ADT’s confidence in the strong cash flow generation of its core business, the company also confirmed a dividend increase.  The company’s Board of Directors has declared a quarterly cash dividend of $0.055 per share, payable on April 4, 2024, to shareholders of record at the close of business on March 14, 2024. The quarterly dividend represents a 57% increase over the previous quarterly dividend.

In addition, ADT’s Board of Directors has authorized a $350 million share repurchase programme. As the company executes share repurchases, the board will periodically review the remaining authorization as part of its capital allocation strategy.