ADT Reports Third Quarter 2026 Results
ADT Inc. (ADT) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 ADT Reports Third Quarter 2026 Results Strong financial results and cash generation Revenue up 4%; GAAP EPS up 18% and Adjusted EPS up 4% Year-to-date GAAP Operating Cash Flows up 16%, Adjusted Free Cash Flow (including swaps) up 46% Returned $748 million to sharehol
How this was made
The 30-second read
Why it matters
The deal sets a clear exit price, likely capping upside and prompting short‑term price convergence toward $10.
Market read
Primary driver is the acquisition announcement; earnings provide context but are secondary to the deal.
What to watch
Potential integration challenges and the impact of AI investments on future profitability.
ADT Reports Third Quarter 2026 Results Strong financial results and cash generation Revenue up 4%; GAAP EPS up 18% and Adjusted EPS up 4%
Third-quarter total revenue increased 4%, GAAP income from continuing operations increased 7%, GAAP diluted EPS increased 18%, and Adjusted Free Cash Flow (including interest rate swaps) increased 4%. The operating profile was mixed beneath those results: Monitoring and related services revenue declined 1%, Adjusted EBITDA declined 2%, and net cash provided by operating activities declined 8%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30, 2026GAAP | $1.35B | – | 4% |
| Total revenue, nine months ended September 30, 2026GAAP | $3.94B | – | 2% |
| Total cost of revenue, three months ended September 30, 2026GAAP | $293M | – | 17% |
| Total cost of revenue, nine months ended September 30, 2026GAAP | $799M | – | 8% |
| Selling, general, and administrative expenses, three months ended September 30, 2026GAAP | $400M | – | 4% |
| Selling, general, and administrative expenses, nine months ended September 30, 2026GAAP | $1.15B | – | 4% |
| Depreciation and intangible asset amortization, three months ended September 30, 2026GAAP | $345M | – | (1)% |
| Depreciation and intangible asset amortization, nine months ended September 30, 2026GAAP | $1.04B | – | 1% |
| Operating income (loss), three months ended September 30, 2026GAAP | $311M | – | (1)% |
| Operating income (loss), nine months ended September 30, 2026GAAP | $952M | – | (3)% |
| Interest expense, net, three months ended September 30, 2026GAAP | −$102M | – | (10)% |
| Interest expense, net, nine months ended September 30, 2026GAAP | −$302M | – | (13)% |
| Income (loss) from continuing operations before income taxes, three months ended September 30, 2026GAAP | $209M | – | 5% |
| Income (loss) from continuing operations before income taxes, nine months ended September 30, 2026GAAP | $653M | – | 5% |
| Income tax benefit (expense), three months ended September 30, 2026GAAP | −$57M | – | 3% |
| Income tax benefit (expense), nine months ended September 30, 2026GAAP | −$175M | – | 6% |
| Income (loss) from continuing operations, three months ended September 30, 2026GAAP | $153M | – | 7% |
| Income (loss) from continuing operations, nine months ended September 30, 2026GAAP | $477M | – | 5% |
| Net income (loss), three months ended September 30, 2026GAAP | $151M | – | 4% |
| Net income (loss), nine months ended September 30, 2026GAAP | $473M | – | 5% |
| Income (loss) from continuing operations per share - diluted, three months ended September 30, 2026GAAP | $ 0.20 | – | 18% |
| Income (loss) from continuing operations per share - diluted, nine months ended September 30, 2026GAAP | $ 0.59 | – | – |
| Net income (loss) per share - diluted, three months ended September 30, 2026GAAP | $ 0.19 | – | – |
| Net income (loss) per share - diluted, nine months ended September 30, 2026GAAP | $ 0.57 | – | – |
| Adjusted EBITDA from continuing operations, three months ended September 30, 2026non-GAAP | $665M | – | (2)% |
| Adjusted EBITDA Margin, three months ended September 30, 2026non-GAAP | 49 % | – | – |
| Adjusted income (loss) from continuing operations, three months ended September 30, 2026non-GAAP | $176M | – | (6)% |
| Adjusted EPS, three months ended September 30, 2026non-GAAP | $ 0.24 | – | 4% |
| Net cash provided by (used in) operating activities, three months ended September 30, 2026GAAP | $440M | – | (8)% |
| Net cash provided by (used in) operating activities, nine months ended September 30, 2026GAAP | $1.75B | – | – |
| Net cash provided by (used in) investing activities, three months ended September 30, 2026GAAP | −$233M | – | 22% |
| Net cash provided by (used in) investing activities, nine months ended September 30, 2026GAAP | −$900M | – | – |
| Net cash provided by (used in) financing activities, three months ended September 30, 2026GAAP | $19M | – | 112% |
| Net cash provided by (used in) financing activities, nine months ended September 30, 2026GAAP | −$699M | – | – |
| Free Cash Flow, three months ended September 30, 2026non-GAAP | 206 | – | – |
| Free Cash Flow, nine months ended September 30, 2026non-GAAP | 1,007 | – | – |
| Adjusted Free Cash Flow, three months ended September 30, 2026non-GAAP | $201M | – | – |
| Adjusted Free Cash Flow, nine months ended September 30, 2026non-GAAP | $996M | – | – |
| Adjusted Free Cash Flow (including interest rate swaps), three months ended September 30, 2026non-GAAP | $217M | – | 4% |
| Adjusted Free Cash Flow (including interest rate swaps), nine months ended September 30, 2026non-GAAP | $1.04B | – | – |
| Trailing twelve-month revenue paybackother | 2.3 years | – | —% |
| Trailing twelve-month gross customer revenue attritionother | 13.1 % | – | 10 bps |
| RMRother | $360M | – | (1)% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Monitoring and related services, three months ended September 30, 2026The decrease reflects lower sales volume including the revenue loss from the October 2025 divestiture of the multifamily business, partially offset by higher average prices. | $1.08B | – | (1)% |
| Security installation, product, and other, three months ended September 30, 2026The increase was primarily driven by higher security installation, product, and other revenue due to an increase in the mix of professionally installed systems under the outright sales model. | $265M | – | 32% |
| Monitoring and related services, nine months ended September 30, 2026No separate nine-month driver was reported. | $3.25B | – | (1)% |
| Security installation, product, and other, nine months ended September 30, 2026No separate nine-month driver was reported. | $693M | – | 19% |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- During the third quarter, the Company repurchased and retired 3 million shares of its common stock for an aggregate price of $23 million.
- Year to date, the Company has repurchased and retired 89 million shares of its common stock for an aggregate price of $617 million.
- The Company returned $64 million of capital to shareholders during the quarter, including $23 million of share repurchases and $41 million of dividend payments.
- Through the end of the third quarter, the Company has repurchased 89 million shares returning $748 million to shareholders through share repurchases and dividends.
- Repurchases of common stock, including excise tax, were $ (623) for the nine months ended September 30, 2026, compared with $ (607) for the nine months ended September 30, 2025.
- Dividends on common stock were $ (130) for the nine months ended September 30, 2026, compared with $ (142) for the nine months ended September 30, 2025.
What drove it
- Higher security installation, product, and other revenue was driven by an increase in the mix of professionally installed systems under the outright sales model.
- GAAP income from continuing operations benefited from higher revenue, net of related costs, and lower interest, including the impact of interest rate swaps.
- GAAP income from continuing operations was partially offset by higher selling, general, and administrative expenses, including the impact of the prior year goodwill impairment related to the divestiture of the multifamily business.
- Third-quarter operating cash flow reflected higher net subscriber acquisition spend related to outright sales transactions, higher general and administrative expenses, lower M&S margins, lower cash taxes, and favorable working capital timing.
- The Company continued initiatives involving ADT+, Origin AI-powered presence sensing, AI-enabled sales and service capabilities, ADT Blu distribution on Walmart.com, dealer-generated ADT+ additions, and ADT Partner Services.
Concerns
- Monitoring and related services revenue declined (1)% in the third quarter and (1)% in the nine-month period.
- Adjusted EBITDA from continuing operations declined (2)% and Adjusted EBITDA Margin was 49 % compared with 52 % in the prior-year quarter.
- Net cash provided by operating activities declined (8)% in the third quarter.
- Trailing twelve-month gross customer revenue attrition increased 10 bps to 13.1 %.
- The Company is not providing financial guidance and is withdrawing previously issued guidance in consideration of the pending acquisition by Thrive Holdings.
- The proposed acquisition is subject to customary closing conditions, including approval by stockholders and receipt of U.S. antitrust approval.
What to watch
- Completion of the acquisition by Thrive Holdings, which is expected to close in the first quarter of 2027, subject to customary closing conditions.
- The mix of professionally installed systems under the outright sales model and its effects on security installation revenue, subscriber acquisition spend, and M&S margins.
- Monitoring and related services revenue, RMR, gross customer revenue attrition, and revenue payback.
- Execution of ADT+ rollout, Origin AI-powered presence sensing commercialization planning for 2027 launch, AI-enabled customer experience capabilities, and expanded digital and retail distribution.
- Use of the $100 million of incremental borrowings under the First Lien Term Loan A due 2030, which may include repayment of a portion of the Company’s 2027 notes.
Balance sheet and cash flow
- Cash and cash equivalents were $ 228 as of September 30, 2026, compared with $ 81 as of December 31, 2025.
- No amounts were outstanding under the Company’s First Lien Revolving Credit Facility.
- Current maturities of long-term debt were $ 1,242 as of September 30, 2026, compared with $ 310 as of December 31, 2025.
- Long-term debt was $ 6,539 as of September 30, 2026, compared with $ 7,379 as of December 31, 2025.
- Total assets were $ 15,953 as of September 30, 2026, compared with $ 15,819 as of December 31, 2025.
- Total liabilities were $ 12,312 as of September 30, 2026, compared with $ 12,040 as of December 31, 2025.
- Total stockholders' equity was $ 3,640 as of September 30, 2026, compared with $ 3,779 as of December 31, 2025.
- In August, the Company secured $100 million of incremental borrowings under the First Lien Term Loan A due 2030.
- The Company completed a bulk purchase of approximately 8,000 customer accounts for $9 million cash.
Analysis
ADT reported third-quarter total revenue of $ 1,349, up 4% from $ 1,298. Growth was concentrated in Security installation, product, and other revenue, which increased 32% to $ 265 as the mix of professionally installed systems under the outright sales model increased. Monitoring and related services revenue declined (1)% to $ 1,084, reflecting lower sales volume and the revenue loss from the October 2025 divestiture of the multifamily business, partly offset by higher average prices. Core operating metrics were broadly stable: revenue payback was 2.3 years, gross customer revenue attrition was 13.1 %, and RMR was $ 360.
Profitability was mixed. Operating income was $ 311, down (1)%, while income from continuing operations increased 7% to $ 153 and diluted income from continuing operations per share increased 18% to $ 0.20. The company cited higher revenue net of related costs and lower interest, including the impact of interest rate swaps, as benefits to continuing-operations income. Adjusted EBITDA from continuing operations declined (2)% to $ 665, and Adjusted EBITDA Margin declined to 49 % from 52 %. Adjusted income from continuing operations declined (6)% to $ 176, although Adjusted EPS increased 4% to $ 0.24 because of a lower weighted-average diluted share count resulting from repurchases.
Cash generation remained substantial despite a lower quarterly operating cash flow result. Net cash provided by operating activities was $ 440, down (8)% from $ 480, while Adjusted Free Cash Flow including interest rate swaps increased 4% to $ 217. The operating-cash-flow decline reflected higher net subscriber acquisition spend associated with outright sales transactions, higher general and administrative expenses, and lower M&S margins, partially offset by lower cash taxes and favorable working capital timing. For the nine months, net cash provided by operating activities was $ 1,745 and Adjusted Free Cash Flow including interest rate swaps was $ 1,037.
Capital allocation included $23 million of third-quarter repurchases and $41 million of dividends, for $64 million returned during the quarter. Through the end of the third quarter, the company reported $748 million returned to shareholders through repurchases and dividends, including 89 million shares repurchased and retired for an aggregate price of $617 million. Cash and cash equivalents were $ 228 as of September 30, 2026, with no borrowings outstanding under the First Lien Revolving Credit Facility. The company also secured $100 million of incremental borrowings under the First Lien Term Loan A due 2030 in August.
The earnings release is framed by the pending all-cash acquisition by Thrive Holdings. Stockholders are to receive $10.00 per share in cash upon completion, and the transaction is expected to close in the first quarter of 2027 subject to customary closing conditions, including stockholder and U.S. antitrust approval. In consideration of the pending transaction, ADT is not providing financial guidance and is withdrawing previously issued guidance. The principal reported operating items to monitor pending the transaction are M&S revenue, attrition, RMR, the outright-sales mix, margins, and cash generation.
Management, verbatim
ADT delivered solid third quarter results, with revenue growth, strong year-to-date cash generation and stable core operating metrics, reflecting the durability of our business and the dedication of our more than 12,000 employees.
Jim DeVries, ADT Chairman, President and CEO
We are making meaningful progress in transforming ADT into a more intelligent and connected platform through investments in AI, next-generation sensing technologies, and expanded digital and retail distribution. As we look ahead to our next chapter, our focus remains on serving our customers and providing peace of mind.
Jim DeVries, ADT Chairman, President and CEO
Not in the filing
stated, not guessed- Third-quarter GAAP gross margin was not reported.
- Third-quarter non-GAAP gross margin was not reported.
- Third-quarter GAAP tax rate was not reported.
- Third-quarter non-GAAP tax rate was not reported.
- Prior-quarter comparisons for reported third-quarter metrics were not reported.
- Forward financial guidance was not provided; the Company is withdrawing previously issued guidance.
- A previous-release outlook was not provided, so no comparison of actual results with prior guidance is available.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
ADT reported modest revenue growth and strong cash generation, then announced a definitive acquisition agreement with Thrive Holdings.
Ticker impact
ADT disclosed its Q3 2026 earnings and announced a pending all‑cash acquisition by Thrive Holdings at $10 per share.
likely downward pressure as the stock aligns with the $10 per share acquisition price
Deal terms are definitive and the transaction will close in Q1 2027, creating a clear price target for traders.
Market effects
The security and smart‑home sector may see valuation adjustments as peers are re‑rated relative to ADT's acquisition premium.
U.S. market impact limited to ADT and related security‑service stocks.
Minimal global effect beyond the U.S. security services industry.
Counterpoint
If the acquisition faces antitrust delays, the stock could trade below $10, offering a short opportunity.
Key entities
- CompanyADT Inc.
Security and smart‑home solutions provider.
- AcquirerThrive Holdings
Private entity acquiring ADT in an all‑cash transaction.
