ADT (ADT) investor relations material

Executive summary

• Q1 2026 revenue reached $1.3 billion, up 1% year-over-year, with robust cash generation and a resilient recurring revenue base supported by $4.3 billion annualized RMR.

• Adjusted free cash flow was $414 million, up 83% year-over-year, and adjusted EPS rose 10% to $0.23; GAAP EPS increased 25% to $0.20.

• Strategic investments included the $164 million acquisition of Origin AI, enhancing AI-driven smart home and privacy features, and the launch of new ADT+ platform features.

• $161 million was returned to shareholders in Q1 2026 through dividends and share repurchases, with a $1.5 billion repurchase program authorized.

• The company remains on track to achieve its full-year 2026 financial outlook, focusing on innovation, customer acquisition, and operational efficiency.

Financial highlights

• Total revenue for Q1 2026 was $1.28–$1.3 billion, up 1% year-over-year; adjusted EBITDA was $674 million, up 2%, with a margin of 52.7%.

• Monitoring and related services revenue was $1.08 billion, nearly flat; installation and product revenue rose 7% to $198 million.

• GAAP income from continuing operations was $169 million, with diluted EPS of $0.20.

• Adjusted free cash flow (including swaps) was $414 million, up 83% year-over-year.

• Gross revenue attrition increased to 13.1%; recurring monthly revenue (RMR) was $359 million.

Outlook and guidance

• 2026 outlook targets flat total revenue and adjusted EPS, with adjusted free cash flow expected to grow ~20%.

• Q2 guidance anticipates slightly lower revenue and EPS sequentially due to higher advertising and initiative investments; adjusted free cash flow expected to be $100–$150 million lower sequentially.

• Multi-year framework aims for ~5% revenue growth, ~10% adjusted EPS growth, and 20%+ adjusted FCF growth.

• No material revenue or cost impact expected from the Origin AI acquisition in 2026.

• Ongoing cost-saving initiatives are expected to offset inflationary pressures.