ADT Inc.

What they do

ADT sells, installs, and monitors security and smart home systems for roughly 6.1 million security monitoring service subscribers as of December 31, 2025. It serves customers through nationwide sales and service offices, monitoring and support centers, and a network of installation and service professionals. Revenue is primarily contractual recurring fees for monitoring and related services, supplemented by installation and equipment sales. The company reports one operating and reportable segment, with former Solar and Commercial results in discontinued operations.

Revenue drivers

• Recurring monitoring and services — Contractual recurring fees for monitoring and other recurring services, including contracts monitored but not owned; end-of-period RMR was $360 million in the second quarter of 2026, and recurring sources are the majority of revenue.
• Security and smart home equipment and installation — Sales and installation of professionally installed security, interactive, and smart home systems, tied to customer additions and bulk account purchases (about 10,000 accounts for $18 million cash in Q2 2026).
• Self-installed / DIY offerings — ADT Blu, launched in 2026, combines self-installation with the ADT+ platform and optional professional monitoring, expanding reach through new channels such as Amazon; DIY customers are excluded from the gross attrition metric.
• ADT+ platform ecosystem — Proprietary application intended as the foundational ecosystem for both professionally installed and self-installed solutions, integrating human expertise with ambient sensing; positioned as the platform for future intelligent security and smart home use cases.

Recent performance

Second quarter 2026 total revenue rose 2% to $1.3 billion, with GAAP income from continuing operations of $155 million, or $0.19 per diluted share, down $13 million year over year. Adjusted income from continuing operations was $180 million, or $0.23 per diluted share, down $12 million. Net cash provided by operating activities was $666 million, up $102 million, and Adjusted Free Cash Flow including interest rate swaps was $406 million, up $133 million. End-of-period RMR was $360 million, gross revenue attrition was 13.1%, and revenue payback was 2.3 years. The company returned $684 million to shareholders through share repurchases and dividends in the first half of 2026, including repurchasing 68 million shares for $478 million in Q2, after which Apollo no longer owns common stock.

Strategy

ADT is shifting toward a platform-centric model built on the proprietary ADT+ application for integrated home intelligence. On February 20, 2026, it acquired Origin Wireless, Inc. (Origin AI) for $170 million in cash, adding AI-enabled presence detection and ambient sensing that uses radio frequency signals without cameras or wearables. It is scaling AI-powered customer service, including AI-driven call routing and virtual AI agents, and reported initial manufacturing of a Wi-Fi sensing smart plug device. The company continues its Google partnership under the Google Commercial Agreement, with an initial term expiring November 15, 2030 and $150 million committed by each party upon milestone achievement. Capital allocation prioritizes cash generation, share repurchases, dividends, and maintaining a healthy balance sheet.

Risks

• Rapid technological change — ADT's growth depends on keeping pace with rapid technological and industry changes through third-party partnerships, internal development, and acquisitions to obtain products that achieve market acceptance at acceptable margins.
• Customer attrition — Gross revenue attrition was 13.1% in Q2 2026, and management described a dynamic and competitive environment while remaining focused on improving attrition trends.
• Discontinued operations and reduced diversification — The Commercial Divestiture and ADT Solar Exit leave the business less diversified and carry risks including possible diversion of management attention from core operations and solar exit costs that may exceed estimates.
• Platform and technology migration execution — ADT faces risks in expanding its next-generation platform, migrating information technology infrastructure such as customer relationship management and enterprise resource planning systems to the cloud, and converting customers using outdated technology.

Outlook

Management raised its full year 2026 financial outlook based on year-to-date performance. The company says it is well positioned to build on progress through the second half of the year and deliver on the 2026 outlook while creating long-term shareholder value. Priorities include expanding ADT+ capabilities and reach, progressing development and integration of proprietary ambient sensing technology, launching ADT Blu to broaden channel reach, and improving attrition trends.