Adt (541) Q2 2026 Earnings Report

The call presented a largely positive picture driven by very strong free cash flow generation, disciplined capital allocation (notably large share repurchases), product innovation (ADT Plus, ADT Blue, presence sensing) and measurable AI-driven service efficiencies. These positives were balanced by softer gross additions (largely due to fewer bulk purchases and dealer/affiliate softness), a slight decline in monitoring revenue, and the caution that some cash benefits were timing-related and that higher cash taxes and interest are expected in 2027. Management raised 2026 guidance modestly and reiterated focus on margin and retention improvements as dealer migration and AI initiatives scale.

ADT said it is modestly raising its full‑year 2026 outlook and now expects total revenue to grow ~2%, adjusted EPS to grow ~2%, and adjusted free cash flow to rise ~30% (driven by tax planning and working‑capital management); Q2 adjusted FCF was $406M (up 48% YoY) and YTD FCF $820M (up 64% YoY). In Q2 the company reported revenue of $1.3B (up 2%), installation revenue $230M (up 17%), adjusted EBITDA $671M, adjusted income $180M ($0.23/diluted share), ending RMR $360M, 190k gross adds generating $11.9M RMR, net cash SAC $345M (down 7%), trailing‑12‑month attrition ~13% (13.1%) and revenue payback ~2.3 years. Management expects Q4 income to be somewhat higher than Q3 with Q3/Q4 revenue and cash broadly similar, warned of higher cash taxes and cash interest in 2027 (citing ~$50–$100M potential headwinds from swaps/refinancing), and reiterated a strong balance sheet: net debt ≈$7.4B, leverage 2.8x adjusted EBITDA (weighted average cost ~4.3%), $800M undrawn revolver, and ~$885M remaining under a $1.5B repurchase authorization.