ADT (NYSE:ADT) Announces Earnings Results, Beats Expectations By $0.01 EPS

Key Points

• ADT beat quarterly earnings expectations, reporting $0.23 in EPS versus the $0.22 consensus estimate. Revenue rose about 2% year over year, though underlying profitability and recurring monthly revenue declined.
• Cash generation and shareholder returns strengthened: adjusted free cash flow increased 48% to $406 million, while ADT returned $684 million through buybacks and dividends in the first half of the year.
• Management modestly raised its 2026 outlook, targeting roughly 2% revenue and adjusted EPS growth and 30% adjusted free-cash-flow growth. However, weaker subscriber momentum and expected higher taxes and interest expense in 2027 remain risks.

ADT (NYSE:ADT - Get Free Report) announced its earnings results on Thursday. The security and automation business reported $0.23 EPS for the quarter, topping the consensus estimate of $0.22 by $0.01, FiscalAI reports. ADT had a net margin of 12.12% and a return on equity of 19.23%. The firm had revenue of $2.62 billion for the quarter, compared to the consensus estimate of $1.29 billion. During the same period last year, the company posted $0.23 EPS. The business's quarterly revenue was up 1.9% on a year-over-year basis. ADT updated its FY 2026 guidance to 0.910-0.910 EPS.

Here are the key takeaways from ADT's conference call:

• Adjusted free cash flow rose 48% year over year to $406 million in Q2 and 64% year to date to $820 million, supporting $684 million in shareholder returns during the first half.
• ADT modestly raised its 2026 outlook, now expecting approximately 2% revenue growth, 2% adjusted EPS growth, and roughly 30% adjusted free cash flow growth.
• Subscriber momentum remained pressured, with softness in the dealer channel, reduced affiliate spending, and only 10,000 bulk accounts purchased versus 50,000 in the prior-year quarter; attrition held at 13.1%.
• New growth and efficiency initiatives are progressing, including the early launch of lower-cost ADT Blu, migration of dealers to the ADT+ platform, and AI tools that reduced human-agent contacts and service tickets by nearly 20% while improving customer satisfaction.
• Management expects higher cash taxes and interest expense in 2027, potentially creating $50 million–$100 million of headwind from each item as tax benefits diminish and favorable interest-rate swaps expire.

ADT Stock Up 1.7%

Shares of ADT stock traded up $0.12 on Thursday, reaching $7.53. 10,899,951 shares of the company were exchanged, compared to its average volume of 10,465,947. The company has a market capitalization of $5.52 billion, a price-to-earnings ratio of 10.76 and a beta of 1.01. The company has a current ratio of 0.84, a quick ratio of 0.67 and a debt-to-equity ratio of 1.94. ADT has a one year low of $6.24 and a one year high of $8.94. The company has a 50-day moving average of $6.78 and a 200 day moving average of $7.11.

ADT News Roundup

Here are the key news stories impacting ADT this week:

• Positive Sentiment: Adjusted EPS beat estimates: ADT reported adjusted earnings of $0.23 per share versus the $0.22 consensus estimate, while revenue reached $1.312 billion, up 2% year over year. ADT Tops Q2 Earnings and Revenue Estimates
• Positive Sentiment: Cash flow improved sharply: Operating cash flow rose 18% to $666 million, and adjusted free cash flow including interest-rate swaps increased 48% to $406 million. The stronger cash generation supports debt management, investment and capital returns. ADT Reports Second Quarter 2026 Results
• Positive Sentiment: Shareholder returns remained substantial: ADT returned $684 million through buybacks and dividends during the first half, including $478 million of repurchases in the quarter. The board also declared a quarterly dividend of $0.055 per share, payable October 1.
• Positive Sentiment: Full-year outlook was raised: Management now expects approximately 30% growth in 2026 adjusted free cash flow, alongside roughly 2% growth in revenue and adjusted EPS. New initiatives including ADT Blu, the ADT+ platform, AI-powered customer service and presence-sensing technology could support longer-term growth.
• Neutral Sentiment: Management completed a $18 million bulk purchase of approximately 10,000 customer accounts and said Apollo no longer owns ADT shares following a secondary offering.
• Negative Sentiment: Underlying profitability and customer metrics were softer: GAAP income from continuing operations fell 8% to $155 million, adjusted income declined 6% to $180 million, recurring monthly revenue decreased 1% to $360 million, and gross customer attrition rose to 13.1% from 12.8%.

Wall Street Analysts Forecast Growth

Several equities research analysts have recently issued reports on the stock. UBS Group set a $7.50 price objective on shares of ADT in a research report on Friday, May 1st. Weiss Ratings reaffirmed a "hold (c)" rating on shares of ADT in a research note on Wednesday, July 15th. Two equities research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the stock has a consensus rating of "Hold" and a consensus target price of $8.08.

Insider Activity

In other news, EVP Fawad Ahmad purchased 7,500 shares of the business's stock in a transaction on Tuesday, May 12th. The stock was purchased at an average price of $6.75 per share, for a total transaction of $50,625.00. Following the completion of the purchase, the executive vice president directly owned 302,334 shares in the company, valued at $2,040,754.50. The trade was a 2.54% increase in their position. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Daniel Joseph Houston acquired 36,450 shares of the firm's stock in a transaction dated Friday, May 8th. The stock was purchased at an average cost of $6.87 per share, with a total value of $250,411.50. Following the transaction, the director owned 74,812 shares in the company, valued at approximately $513,958.44. This trade represents a 95.02% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders acquired a total of 54,855 shares of company stock valued at $376,172 over the last three months. Corporate insiders own 3.00% of the company's stock.

Institutional Investors Weigh In On ADT

Several hedge funds have recently bought and sold shares of ADT. NewEdge Advisors LLC increased its position in ADT by 503.0% during the first quarter. NewEdge Advisors LLC now owns 13,279 shares of the security and automation business's stock worth $108,000 after buying an additional 11,077 shares during the last quarter. Caxton Associates LLP bought a new position in shares of ADT during the 1st quarter worth approximately $296,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its stake in shares of ADT by 29.4% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 1,154,250 shares of the security and automation business's stock worth $9,396,000 after acquiring an additional 262,480 shares during the period. Focus Partners Wealth increased its holdings in shares of ADT by 75.9% during the 1st quarter. Focus Partners Wealth now owns 54,363 shares of the security and automation business's stock worth $442,000 after acquiring an additional 23,463 shares during the last quarter. Finally, Sivia Capital Partners LLC acquired a new position in shares of ADT during the 2nd quarter worth approximately $93,000. 87.22% of the stock is currently owned by institutional investors and hedge funds.

About ADT

ADT Inc is a leading provider of security and automation solutions for residential and commercial customers. The company offers a comprehensive suite of products and services, including intrusion detection systems, video surveillance, fire and carbon monoxide monitoring, and integrated smart home automation platforms. Through professional installation, continuous monitoring, and a network of 24/7 monitoring centers, ADT helps customers protect their properties, assets and loved ones.

Founded in 1874 as the American District Telegraph Company, ADT has evolved from one of the first telegraph-based alarm services into a modern security technology enterprise.

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