US home security company ADT has decided to exit its residential solar business.
The company said in a statement that the decision to exit the residential solar business was made “after careful deliberation,” adding that the solar business had faced challenges, including operational difficulties and macroeconomic headwinds causing deterioration of conditions industrywide.
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After quitting the residential solar business, ADT will focus on its core security and smart home business. ADT said this decision will drive substantial operational and financial benefits to the company.
Meanwhile, the company also announced its financial updates for the first nine months of 2023, incurring adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of US$89 million, mainly due to the residential solar business.
The company will announce its financial results for the fourth quarter and full year of 2023 on 28 February, offering more details and updates on its business.
In its Q3 financial result announcement, the company said it had recorded a loss from continuing operations of US$21 million, up US$148 million including US$88 million negative impact from solar segment goodwill impairment.
Jim DeVries, CEO and president of ADT, said that the company’s solar business had continued to perform below expectations and the company had undertaken restructuring measures “in an effort to drive more positive results”. ADT decided to streamline the solar business by focusing on the top performing markets and rationalising the overheads and infrastructure of the business accordingly.
The company also reduced its branches from 38 to 16 across the US, as the remaining branches represented about 70% of solar revenue in Q3 2023.
ADT Solar entered the US residential market in late 2021 with the acquisition of Sunpro Solar. The transaction is worth US$160 million in cash plus approximately 77.8 million shares of ADT common stock, meaning a total enterprise value of roughly US$825 million.
After the acquisition, PV Tech Premium talked to the company about its growth strategy as the current president of ADT Solar Jamie Haenggi, previously chief customer officer, said ADT Solar had planned to address increasing costs, network issues, brownouts and outages through the provision of residential solar via its acquisition of Sunpro.