Financial Analysis

COMMITMENTS AND CONTINGENCIES Contractual Obligations There have been no significant changes to the Companys contractual obligations as compared to December 31, 2025, except as discussed below: Google Commercial Agreement In July 2020, the Company and Google LLC (Google) entered into a Master Supply, Distribution, and Marketing Agreement (as amended, the Google Commercial Agreement), pursuant to which, among other things, each party agreed to contribute $150 million towards joint marketing, customer acquisition, training of the Companys employees, and product technology updates related to the Google Devices and Services. In August 2022, the Company and Google executed an amendment to the Google Commercial Agreement, pursuant to which Google agreed to commit an additional $150 million to fund growth, data and insights, product innovation and technology advancements, customer acquisition, and marketing, as mutually agreed by the Company and Google, (together with the initial amounts, the Google Success Funds). During the six months ended June 30, 2026, approximately $15 million of the Google Success Funds were approved for reimbursement to the Company, primarily for certain joint marketing and customer acquisition expenses incurred. Substantially all the reimbursement was recorded as a reduction to advertising expenses. Google Cloud Agreement Addendum In December 2023, the Company and Google entered into an addendum to the Companys existing agreement with Google for using Googl …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT The Companys debt is comprised of the following (in thousands) : Interest Payable Balance as of Description Issued Maturity Interest Rate (1) June 30, 2026 December 31, 2025 First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR +2.00% Quarterly $ 1,754,328 $ 1,764,249 First Lien Term Loan B-2 due 2032 3/7/2025 3/7/2032 Term SOFR +1.75% Quarterly 1,434,725 1,441,989 First Lien Revolving Credit Facility 3/16/2018 10/1/2029 Term SOFR +2.00% Quarterly First Lien Term Loan A due 2030 10/28/2025 10/28/2030 Term SOFR +1.50% Quarterly 420,313 325,000 First Lien Notes due 2026 4/4/2019 4/15/2026 5.750% 3/15 and 9/15 75,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375% 6/15 and 12/15 1,000,000 1,000,000 First Lien Notes due 2029 7/29/2021 8/1/2029 4.125% 2/1 and 8/1 1,000,000 1,000,000 First Lien Notes due 2033 10/15/2025 10/15/2033 5.875% 1/15 and 7/15 1,000,000 1,000,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875% 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875% 1/15 and 7/15 21,896 21,896 2020 Receivables Facility (2) 3/5/2020 2/20/2031 Various Monthly 416,008 443,058 Total debt principal, excluding finance leases 7,775,286 7,799,208 Finance lease liabilities (3) 58,411 47,765 Unamortized debt discount, net (28,481) (30,579) Unamortized deferred financing costs (19,964) (22,949) Unamortized purchase accounting fair value adjustment and other (97,665) (103,811) Total debt 7,687,587 7,689,634 Current maturities of long-term debt, net of …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Three Months Ended June 30, Six Months Ended June 30, ( in thousands ) 2026 2025 2026 2025 Sources of Revenue: Recurring monthly revenue $ 1,045,164 $ 1,056,527 $ 2,090,885 $ 2,109,326 Other related services 36,947 33,714 71,702 64,019 Monitoring and related services 1,082,111 1,090,241 2,162,587 2,173,345 Installation and other revenue $ 140,637 $ 107,176 $ 249,095 $ 202,692 Amortization of deferred subscriber acquisition revenue 89,537 89,618 179,132 178,489 Security installation, product, and other 230,174 196,794 428,227 381,181 Total revenue $ 1,312,285 $ 1,287,035 $ 2,590,814 $ 2,554,526

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SHARE-BASED COMPENSATION RSUs During the first quarter of 2026, the Company completed its annual long-term incentive plan equity awards (the 2026 Annual Grant) to employees by granting approximately 4 million RSUs under its 2018 Omnibus Incentive Plan, as amended (the 2018 Plan), with a grant date fair value of $6.74 per share, which is equal to the closing price per share of the Companys Common Stock on the date of grant. These RSUs are service-based awards with a three-year graded vesting period from the date of grant. Options During the first quarter of 2026, the Company granted approximately 9 million options to its executive officers under the 2018 Plan as part of the 2026 Annual Grant. These options are service-based awards with a three-year graded vesting period from the date of grant and have an exercise price of $6.74 per share, which is equal to the closing price per share of the Companys Common Stock on the date of grant, and a contractual term of ten years from the grant date. The weighted-average grant date fair value for the options granted during the period was $2.23 per share. The Company used a binomial lattice model to determine the grant date fair value for options granted and included the following assumptions: Expected exercise term 7 years Expected volatility (1) 41.9% Expected dividend yield (2) 3.3% Risk-free interest rate (3) 4.1% _________________ (1) Estimated using historical and implied stock price volatility of the Company. (2) Calculated by taki …

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GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill During the six months ended June 30, 2026, the Company recognized goodwill of $106 million in connection with the Origin AI Acquisition. Refer to Note 4 Acquisitions and Divestitures. There were no material measurement period adjustments to purchase price allocations during the six months ended June 30, 2026. Other Intangible Assets June 30, 2026 December 31, 2025 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Contracts and related customer relationships $ 6,997,953 $ (4,289,094) $ 2,708,859 $ 6,754,810 $ (4,012,248) $ 2,742,562 Dealer relationships 1,518,020 (815,958) 702,062 1,518,020 (776,413) 741,607 Other (1) 265,903 (203,150) 62,753 199,973 (199,146) 827 Total definite-lived intangible assets 8,781,876 (5,308,202) 3,473,674 8,472,803 (4,987,807) 3,484,996 Indefinite-lived intangible assets: Trade name 1,333,000 1,333,000 1,333,000 1,333,000 Intangible assets $ 10,114,876 $ (5,308,202) $ 4,806,674 $ 9,805,803 $ (4,987,807) $ 4,817,996 ________________ (1) The balance as of June 30, 2026 includes the technology intangible related to the Origin AI Acquisition. The change in the net carrying amount of contracts and related customer relationships during the period was as follows: (in thousands) Balance as of December 31, 2025 $ 2,742,562 Customer contract additions, net of dealer charge-backs (1) …

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INCOME TAXES Effective Tax Rate The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate. The discussion below is based on the continuing operations of the Company. The Companys income tax expense for the three months ended June 30, 2026 was $61 million, resulting in an effective tax rate for the period of 28.2%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, a state tax rate, net of federal benefits, of 5.0%, and non-deductible items of 1.4%. The Companys income tax expense for the three months ended June 30, 2025 was $59 million, resulting in an effective tax rate for the period of 25.9%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, and a state tax rate, net of federal benefits, of 4.9%. The Companys income tax expense for the six months ended June 30, 2026 was $119 million, resulting in an effective tax rate for the period of 26.8%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, and a state tax rate, net of federal benefits, of 5.0%. The Companys income tax expense for the six months ended June 30, 2025 was $110 million, resulting in an effective tax rate for the period of 26.1%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, and a sta …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity and wholly-owned subsidiary, ADT LLC. Right-of-Use Assets and Lease Liabilities (in thousands) June 30, 2026 December 31, 2025 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 85 $ 92 Operating Non-current Other assets 81,669 83,910 Finance Non-current Property and equipment, net (1) 52,732 41,317 Total right-of-use assets $ 134,486 $ 125,319 Operating Current Accrued expenses and other current liabilities $ 19,812 $ 16,841 Finance Current Current maturities of long-term debt 28,340 22,674 Operating Non-current Other liabilities 77,306 81,290 Finance Non-current Long-term debt 30,071 25,091 Total lease liabilities $ 155,529 $ 145,896 _________________ (1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $93 million and $87 million as of June 30, 2026 and December 31, 2025, respectively. Lease Cost Three Months Ended June 30, Six Months Ended June 30, ( in thousands ) 2026 2025 2026 2025 Operating lease cost $ 6,473 $ 6,837 $ 12,772 $ 13,154 Finance lease cost: Amortization of right-of-use assets 6,324 5,485 12,044 10,852 Interest on lease liabilities 748 834 1,396 1,764 Variable lease costs 12,287 10,238 21,525 20,149 Total lease cost $ 25,832 $ 23,394 $ 47,737 $ 45,919 Lease Liabilities Arising from Obtaining Right-of-Use A …

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Accounting Standards Updates (ASUs) Recently Adopted Measurement of Credit Losses for Accounts Receivable and Contract Assets - ASU 2025-05, Financial InstrumentsCredit 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. The Company adopted this guidance, effective January 1, 2026, on a prospective basis and will apply the practical expedient where applicable. The adoption did not have a material impact on the Companys consolidated financial statements or disclosures. Recently Issued 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 guidanc …

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RELATED PARTY TRANSACTIONS The Companys related party transactions primarily relate to products and services received from, or monitoring and related services provided to, other entities affiliated with Apollo, and, from time to time, certain transactions with Apollo. There were no notable related party transactions during the periods presented other than as described below. Apollo May 2026 Offering and Share Repurchase In May 2026, certain entities managed by Apollo (the Selling Stockholders) sold their remaining approximately 102 million shares of the Companys common stock (the May 2026 Offering). Immediately following the May 2026 Offering, as of May 5, 2026 (the May Offering Closing Date), Apollo no longer owns any shares of the Companys common stock and has ceased to be a related party. In addition, effective as of the May Offering Closing Date, the Companys Amended and Restated Stockholders Agreement, dated December 14, 2018, (the Stockholders Agreement) between the Company, Prime Security Services TopCo Parent, L.P., and the Co-Investors (as defined therein), terminated, and Apollos designees to the Companys Board of Directors resigned. In connection with the May 2026 Offering, the Company repurchased, and subsequently retired, 29 million shares of its Common Stock under the 2026 Share Repurchase Plan for an aggregate purchase price of $211 million (or approximately $7.25 per share). The underwriters did not receive any underwriting fees for the shares repurchased by t …

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REVENUE AND RECEIVABLES Revenue The Company primarily generates revenue from contractual monthly recurring fees received for monitoring and related services, as well as the sale and installation of security systems. The Companys revenue-generating contracts are entered into primarily through its main operating entity and wholly-owned subsidiary, ADT LLC. Disaggregated Revenue Three Months Ended June 30, Six Months Ended June 30, ( in thousands ) 2026 2025 2026 2025 Sources of Revenue: Recurring monthly revenue $ 1,045,164 $ 1,056,527 $ 2,090,885 $ 2,109,326 Other related services 36,947 33,714 71,702 64,019 Monitoring and related services 1,082,111 1,090,241 2,162,587 2,173,345 Installation and other revenue $ 140,637 $ 107,176 $ 249,095 $ 202,692 Amortization of deferred subscriber acquisition revenue 89,537 89,618 179,132 178,489 Security installation, product, and other 230,174 196,794 428,227 381,181 Total revenue $ 1,312,285 $ 1,287,035 $ 2,590,814 $ 2,554,526 The Company allocates the transaction price to each performance obligation based on the relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics. Customer-Owned Transactions - In transactions involving security systems sold outright to the customer (referred to as outright sales ), the Companys performance obligations generally include the sale and installation of the security system, which is primarily recognized at a point in tim …

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SEGMENT INFORMATION The Company reports results in a single operating and reportable segment. The Companys CODM is its Chairman, President, and Chief Executive Officer. The CODM evaluates performance and allocates resources on a consolidated basis using various measures primarily through reviews of operational performance packages, earnings releases, investor presentations, and the Companys SEC filings, as well as through the approval of the Companys annual budget and forecast. The Companys reported segment profit measure is net income (loss) as this measure is most consistent with the amounts included in the Condensed Consolidated Statements of Operations. In addition, segment assets reviewed by the CODM are reported on the Companys Condensed Consolidated Balance Sheets as total assets. The accounting policies of the Companys reportable segment are the same as those of the Company. The following presents a reconciliation to the Companys net income (loss) as reported in the Condensed Consolidated Statements of Operations and includes segment revenues, significant segment expenses that are regularly provided to or easily computed from information regularly provided to the CODM, other segment expenses, and adjustments to reconcile to net income (loss). Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Total segment revenue $ 1,312,285 $ 1,287,035 $ 2,590,814 $ 2,554,526 Less significant segment expenses: Customer service costs (1) 108,234 …

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EQUITY Common Stock and Class B Common Stock The Company has two classes of common stock, which comprises common stock (Common Stock) and Class B common stock (Class B Common Stock). Share Issuances During the periods presented, shares issued resulted from the vesting of restricted stock units (RSUs) and stock option exercises related to fully vested share-based compensation awards as presented on the Condensed Consolidated Statements of Stockholders Equity. Share Repurchases The Companys share repurchase plans discussed below allow the Company to purchase Common Stock, from time to time, in one or more open market or privately negotiated transactions, including pursuant to Rule 10b5-1 or Rule 10b-18 of the Exchange Act, or pursuant to one or more accelerated share repurchase agreements, subject to certain requirements and other factors. The Company is not obligated to repurchase any of its shares of Common Stock, and the timing and amount of any repurchases depends on legal requirements, market conditions, stock price, the availability of the safe harbor provided by Rule 10b-18 under the Exchange Act, alternative uses of capital, and other factors. 2026 Share Repurchase Plan In February 2026, the Company's Board of Directors (the Board of Directors) approved a three-year share repurchase plan (the 2026 Share Repurchase Plan), pursuant to which the Company is authorized to repurchase, through April 30, 2029, up to a maximum aggregate amount of $1.5 billion of shares of the Co …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing