ADT Inc. (NYSE:ADT) Q4 2022 Earnings Call Transcript

And on the solar business, while there are a couple of headwinds related to inflation costs and interest rates the Inflation Reduction Act as well as higher utility expenses tend to bolster that business as well. So lots of pros and cons, when I step back when we think about our guide in the form of macro, I call it generally neutral, given the markets that we play in. On a sequential basis and kind of how 2023 looks, the only thing to kind of keep in mind is, I think Solar is a little more back-end loaded generally based on, how we’re improving that business. I think the timing of our free cash flow as I mentioned in the prepared remarks, Q1 tends to be a little low for us and it kind of accretes throughout the year. So I think 2022 is a good example of how our primary free cash flow generally comes in through the year.

So I think about the free cash flow along all those lines of our 2022 patterns.

Unidentified Analyst: That’s very helpful. Thank you. Appreciate it. And then, may I just confirm, you had referred to streamlining the cost structure and CSB and reference initiatives in Commercial and Solar last year. Could you just recap what those were for Commercial and Solar in the prior year and what you expect them to be for CSB and the potential impact?

Don Young: Sure. Last year, kind of put it in two categories. One was its some labor force rightsizing. And the second piece was, pricing. And we were pretty aggressive in both areas. So we’ve had the opportunity in our consumer business that the trends have been pretty solid as you can see from the metrics we put out last year and have guided to in 2023. So I would think of this more as pruning around the edges, by sharpening our cost buckets for the consumer business, getting a little bit sharper in our pricing but also rightsizing some of the pieces of the workforce. So I think a bit more as pruning versus the more aggressive actions we took in the Commercial and Solar business.

Unidentified Analyst: Got it. Thank you. Appreciate it.

Operator: And at this time, there are no further questions. I will now turn the call over to the company’s CEO, Jim DeVries, for any closing remarks.

James DeVries: Great. Thank you, operator and thanks everyone for taking the time to join us today. As you heard ADT is effectively growing our business. We’re driving innovation building brand loyalty and improving our capital efficiency. We’ve got great momentum in the business with catalysts for growth in State Farm and our Google partnerships. We’re looking forward to a strong 2023. I’d like to extend my appreciation to our ADT employees and dealer partners for an outstanding quarter and outstanding year. Our results are a direct reflection of your collective efforts. Thanks again everyone, for joining the call. And have a great day.

Operator: This does conclude today’s conference call. We thank you for your participation. You may now disconnect.