ADT Inc., together with its wholly-owned subsidiaries (collectively, “ADT” or the “Company”), is a leading provider of security, interactive, and smart home solutions serving consumer and small business customers in the United States (“U.S.”). The Company primarily conducts business under the ADT brand name.

The Company’s common stock, par value of $0.01 per share (“Common Stock”), trades on the New York Stock Exchange under the symbol “ADT” since its initial public offering (“IPO”) in January 2018.

ADT Inc. was incorporated in the State of Delaware in May 2015 as a holding company with no assets or liabilities. In July 2015, the Company acquired Protection One, Inc. and ASG Intermediate Holding Corp. (collectively, the “Formation Transactions”), which were instrumental in the commencement of the Company’s operations. In May 2016, the Company acquired The ADT Security Corporation (formerly named The ADT Corporation) (“The ADT Corporation”) (the “ADT Acquisition”). On October 2, 2023, the Company divested its Commercial Business (as defined and discussed below); and as of June 30, 2024, substantially all operations of the Solar Business (as defined and discussed below) had ceased.

Prior to March 11, 2024, the Company was majority-owned by Prime Security Services TopCo (ML), L.P., which is majority-owned by Prime Security Services TopCo Parent, L.P. (“Ultimate Parent”). Ultimate Parent is majority-owned by Apollo Investment Fund VIII, L.P. and its related funds that are directly or indirectly managed by affiliates of Apollo Global Management, Inc. (together with its subsidiaries and affiliates, “Apollo”). Following a registered secondary offering of the Company’s Common Stock by certain Apollo affiliates (and the Company’s concurrent repurchase from the underwriters of 15 million shares of Common Stock that were the subject of the offering), including the exercise of the underwriters’ overallotment option, the Company ceased to be a “controlled company” under the New York Stock Exchange (the “NYSE”) rules.

Refer to Note 16 “Related Party Transactions” for more information regarding Apollo’s registered secondary offerings of the Company’s Common Stock (collectively, the “Offerings”).

On February 20, 2026, ADT acquired Origin AI , a provider of AI‑enabled presence detection and ambient sensing technology (the “Origin AI Acquisition”). Origin AI’s technology uses artificial intelligence and radio frequency signals to detect and classify human presence and activity within the home without the use of cameras, audio, or wearable devices. This technology is expected to enhance our ability to deliver improved alarm verification, reduce false alarms, and support new intelligent security and smart home use cases over time. The purchase price for the Origin AI Acquisition was $170 million in cash, subject to customary purchase price adjustments. Origin AI is now an indirect wholly owned subsidiary of ADT.

The Company will account for the Origin AI Acquisition under the acquisition method of accounting and is currently evaluating the fair values of assets acquired and liabilities assumed.

The consolidated financial statements have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The financial statements included herein are comprised of the consolidated results of ADT Inc. and its wholly-owned subsidiaries for which all intercompany transactions have been eliminated. The Company used the equity method of accounting to account for an investment in which it had the ability to exercise significant influence but did not control. This investment was disposed of during 2023.

Certain prior period amounts have been reclassified to conform with the current period presentation. Beginning in the first quarter of 2025, amounts previously disclosed under the caption merger, restructuring, integration, and other are presented within selling, general, and administrative expenses (“SG&A”) in the Consolidated Statements of Operations as they are no longer material for the periods presented.

The preparation of these consolidated financial statements in accordance with GAAP requires the Company to select accounting policies and make estimates that affect amounts reported in the consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions.

The Company evaluates and reports information based on the manner in which the chief operating decision maker (“CODM”) evaluates performance and allocates resources. The CODM manages the business on a consolidated basis, and as such, the Company reports results in a single operating and reportable segment.

The Company’s exit in 2024 from the residential solar business (the “Solar Business”) (the “ADT Solar Exit”) and the sale in 2023 of its commercial business (the “Commercial Business”) (the “Commercial Divestiture”) represented strategic shifts that had major effects on the Company’s operations and financial results. As applicable, the results of operations and financial position of these businesses are classified as discontinued operations in the Company’s Consolidated Statements of Operations and the Company’s Consolidated Balance Sheet, respectively. The Consolidated Statements of Cash Flows and Consolidated Statements of Comprehensive Income (Loss) present both continuing and discontinued operations, as applicable.

Improvements to Income Tax Disclosures - ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, focuses on improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. In addition, the update includes certain other amendments to improve the effectiveness of income tax disclosures.

The Company adopted this guidance prospectively, effective January 1, 2025. The adoption of the new guidance did not have a material impact on its consolidated financial statements. Refer to Note 9 “Income Taxes” for expanded disclosures related to effective tax rate and income taxes paid.

Derivatives and Hedging (Topic 815) - ASU 2025-09, Hedge Accounting Improvements: Derivatives and Hedging, which provides targeted updates intended to simplify and improve the application of the hedge accounting.

This guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods with early adoption permitted. The Company early adopted this guidance upon issuance in the fourth quarter of 2025. The adoption did not currently impact the Company’s consolidated financial statements or related disclosures. Refer to Note 7 “Debt” and Note 8 “Derivative Financial Instruments.”

Interim Reporting - ASU 2025-11, Narrow-Scope Improvements (Topic 270): Interim Reporting is intended to improve navigability of the required interim disclosures and clarify when the guidance is applicable. The amendments also include additional guidance on what disclosures should be provided in interim reporting periods. The amendment adds to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of this guidance on its disclosures.

Targeted Improvements to the Accounting for Internal-Use Software - ASU 2025-06, Intangibles — Goodwill and Other (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, removes all references to prescriptive and sequential software development stages, requiring an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended, as well as other evaluation and disclosure updates.

This guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period.

The amendments in this ASU permit an entity to apply the new guidance using a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption, and a retrospective transition approach. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures.

Measurement of Credit Losses for Accounts Receivable and Contract Assets - ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, provides entities a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets, permitting the use of current conditions as of the balance sheet date when developing related forecasts and assumptions.

This guidance will be adopted effective January 1, 2026, and will be applied prospectively. The adoption of the new guidance is not expected to have a material impact on its consolidated financial statements.

Disaggregation of Income Statement Expenses - ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requires additional disclosure in the footnotes at each interim and annual reporting period about specific types of expenses included in the expense captions presented on the face of the statement of operations as well as additional disclosures that also include information related to selling expenses.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures.

Disclosure Improvements - ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, represents changes to clarify or improve disclosure and presentation requirements of a variety of topics.

The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is monitoring the potential impact of this guidance on its financial statements and disclosures.

All highly liquid investments with original maturities of three months or less from the time of purchase are considered to be cash equivalents. Restricted cash and restricted cash equivalents are restricted for a specific purpose and cannot be included in the general cash and cash equivalents account.

The following table reconciles the amounts below reported in the Consolidated Balance Sheets to the total of the same such amounts shown in the Consolidated Statements of Cash Flows:


	Years Ended December 31,
(in thousands)	2025		2024		2023
Cash and cash equivalents	$	80,817	$	96,212	$	14,621
Restricted cash and restricted cash equivalents(1)	27,723		107,853		115,329
Ending balance	$	108,540	$	204,065	$	129,950

(1)For 2024 and 2023, restricted cash and restricted cash equivalents primarily included funds received from State Farm Fire & Casualty Company (“State Farm”) (the “Opportunity Fund”), net of payments and inclusive of interest earned, in connection with the State Farm Development Agreement (as defined and discussed in Note 10 “Equity” and Note 16 “Related Party Transactions”). Use of the funds was restricted and agreed to by State Farm and the Company in accordance with the State Farm Development Agreement. In October 2025, the Company repaid to State Farm $78 million of the Opportunity Fund in connection with the expiration of the State Farm Development Agreement.

The remaining amount of restricted cash relates to the Company’s uncommitted receivables securitization financing agreement (the “2020 Receivables Facility”) (refer to Note 7 “Debt”).

The following table summarizes supplementary cash flow information and material non-cash investing and financing transactions, excluding leases (refer to Note 14 “Leases”):


	Years Ended December 31,
(in thousands)	2025		2024		2023
Interest paid, net of interest income received(1)	$	409,415	$	372,036	$	522,775
Payments (refunds) on income taxes, net(2)	$	142,168	$	21,700	$	60,296
Forward share repurchase contract(3)	$	—	$	104,175	$	—

(3)In December 2024, the Company entered into an agreement with a non-affiliate individual to repurchase 15 million shares of Common Stock at a price per share of $6.95, which settled in January 2025 (refer to Note 10 “Equity”). The Company recorded a liability and a reduction to additional paid-in capital as of December 31, 2024.

During 2024, proceeds and repayments of long-term borrowings on the Consolidated Statements of Cash Flows include the impact of $704 million from amendments to the Company’s First Lien Credit Agreement (as defined and discussed in Note 7 “Debt”) and $32 million from amendments to the 2020 Receivables Facility.

During 2023, proceeds and repayments of long-term borrowings on the Consolidated Statements of Cash Flows include the impact of $230 million from the refinancing of the First Lien Term Loan B due 2026 with the First Lien Term Loan B due 2030 (as defined and discussed in Note 7 “Debt”).


	December 31,
(in thousands)	2025		2024
Prepaid expenses	$	52,992	$	53,036
Contract assets (see Note 2 “Revenue and Receivables”)	28,758		19,164
Fair value of interest rate swaps (see Note 8 “Derivative Financial Instruments”)	38,264		56,164
Tax receivables	73,201		15,962
Other current assets	57,110		66,287
Prepaid expenses and other current assets	$	250,325	$	210,613

Finished goods are primarily comprised of components and parts for the Company’s security systems. The Company records inventory at the lower of cost and net realizable value. Finished goods are presented net of an obsolescence reserve.

Work-in-progress is primarily comprised of certain costs incurred for installations of security system equipment sold outright to customers that have not been completed as of the balance sheet date. Work-in-progress is not material.

Property and equipment, net, is recorded at historical cost less accumulated depreciation, which is calculated using the straight-line method over the estimated useful lives of the related assets. Depreciation expense is reflected in depreciation and intangible asset amortization. Repairs and maintenance expenditures are expensed when incurred.


Buildings and related improvements			Up to 40 years
Leasehold improvements			Lesser of remaining term of the lease or economic useful life
Capitalized software			3 to 10 years
Machinery, equipment, and other			Up to 10 years


	December 31,
(in thousands)	2025		2024
Land	$	9,181	$	9,773
Buildings and leasehold improvements	99,992		97,263
Capitalized software(1)	454,209		574,644
Machinery, equipment, and other(2)	123,961		162,631
Construction in progress	31,734		22,106
Finance leases	128,032		127,956
Accumulated depreciation	(603,711)		(747,190)
Property and equipment, net	$	243,398	$	247,183

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Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system, which the Company may retrieve upon termination of the contract with the customer. Subscriber system assets are reflected in the Consolidated Balance Sheets as follows:


	December 31,
(in thousands)	2025		2024
Gross carrying amount	$	7,145,662	$	6,878,490
Accumulated depreciation	(4,354,783)		(3,897,329)
Subscriber system assets, net	$	2,790,879	$	2,981,161

The Company records subscriber system assets and deferred subscriber acquisition costs in the Consolidated Balance Sheets as these assets represent probable future economic benefits for the Company through the generation of future monitoring and related services revenue.

Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition and the Company depreciates and amortizes these pooled costs using an accelerated method over the estimated life of the customer relationship, which is 15 years. In order to align the depreciation and amortization of these pooled costs to the pattern in which their economic benefits are consumed, the accelerated method utilizes an average declining balance rate of approximately 250% and converts to straight-line methodology when the resulting charge is greater than that from the accelerated method, resulting in an average charge of approximately 55% of the pool within the first five years, 25% within the second five years, and 20% within the final five years.

Depreciation of subscriber system assets and amortization of deferred subscriber acquisition costs are reflected in depreciation and intangible asset amortization and SG&A, respectively, as follows:


	Years Ended December 31,
(in thousands)	2025		2024		2023
Depreciation of subscriber system assets	$	549,957	$	557,226	$	545,041
Amortization of deferred subscriber acquisition costs	$	252,553	$	224,647	$	188,222

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. The Company groups assets at the lowest level for which cash flows are separately identifiable. Recoverability is measured by a comparison of the carrying amount of the asset group to its expected future undiscounted cash flows. If the expected future undiscounted cash flows of the asset group are less than its carrying amount, an impairment loss is recognized based on the amount by which the carrying amount exceeds the fair value less costs to sell. The calculation of the fair value less costs to sell of an asset group is based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.


	December 31,
(in thousands)	2025		2024
Accrued interest	$	56,523	$	107,116
Payroll-related accruals	59,045		109,078
Opportunity Fund (see Note 10 “Equity”)	240		84,516
Accrued dividends	44,992		48,918
Forward share repurchase contract liability (see Note 10 “Equity”)	—		104,175
Other accrued liabilities	175,923		181,101
Accrued expenses and other current liabilities	$	336,723	$	634,904

Included in advertising costs are certain joint marketing costs and reimbursements associated with the Google Success Funds (as defined and discussed in Note 13 “Commitments and Contingencies”).

The majority of the Company’s cash and cash equivalents and restricted cash and restricted cash equivalents are held at major financial institutions. There is a concentration of credit risk related to certain account balances in excess of the Federal Deposit Insurance Corporation insurance limit of $250,000 per account. The Company regularly monitors the financial stability of these financial institutions and believes there is no exposure to any significant credit risk for its cash and cash equivalents and restricted cash and restricted cash equivalents. Concentration of credit risk associated with the majority of the Company’s receivables from customers is limited due to the significant size of the customer base.

The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables (“RICs”), accounts payable, debt, and derivatives. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts.

Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents - Included in cash and cash equivalents and restricted cash and restricted cash equivalents, as applicable from time to time, are investments in money market mutual funds. These investments are generally classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities.

Retail Installment Contract Receivables, net - The fair values of the Company’s RICs are determined using a discounted cash flow model and are classified as Level 3 fair value measurements. Refer to Note 2 “Revenue and Receivables.”


	December 31,
	2025				2024
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Retail installment contract receivables, net	$	651,811	$	513,325	$	669,326	$	495,259

Long-Term Debt Instruments - The fair values of the Company’s long-term debt instruments are determined using broker-quoted market prices, which represent quoted prices for similar assets or liabilities as well as other observable market data, and are classified as Level 2 fair value measurements. The carrying amounts of debt outstanding, if any, under the Company’s first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and the 2020 Receivables Facility approximate their fair values, as interest rates on these borrowings approximate current market rates. Refer to Note 7 “Debt.”


	December 31,
	2025				2024
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt instruments(1) (see Note 7 “Debt”)	$	7,641,869	$	7,746,284	$	7,637,631	$	7,589,677

________________

Derivative Financial Instruments - Derivative financial instruments are reflected in the Consolidated Balance Sheet as either assets or liabilities at fair value that are primarily calculated using discounted cash flow models utilizing observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair values are classified as Level 2 fair value measurements.