ADT (NYSE:ADT) has witnessed a remarkable surge in its stock value on Thursday and has approached a new 9-month pinnacle. This upsurge comes on the heels of the company’s recent decision to divest its underperforming solar business, signifying a strategic realignment towards bolstering its security and smart home divisions.

As part of this shift, ADT is reconfiguring its capital allocation strategy, including an escalation in its cash dividend and the initiation of a fresh share buyback program. These developments have catalyzed a 12% surge in share value on Thursday.

“The decision to withdraw from solar operations was meticulously evaluated, with the anticipation of substantial operational and financial benefits for ADT,” commented CEO Jim DeVries.

The impact of the solar business’s underperformance was keenly felt in the Q3 results, with revenue plummeting by 68% compared to the same period last year, contributing to a 25% decline in overall revenue. At that juncture, ADT had outlined plans for “decisive action” to streamline the business by downsizing the number of branches from 38 to 16, thereby eliminating over $80M in annualized costs.

The dismal showing of the solar business compelled the company to revise its FY23 revenue projections, bringing it down to the range of $4.95B to $5.15B from the earlier forecast of $6.3B to $6.5B. In a bid to offset the costs incurred from the discontinuation of the solar business, the board has greenlit the sale of its assets to external parties.

The upcoming report on Q4 results is scheduled for February 28.