ADT NYSE: ADT executives highlighted strong first-quarter cash generation, ongoing platform development around ADT+, and increased investment in new customer acquisition channels—particularly a coming push into DIY and e-commerce—during the company’s first quarter 2026 earnings call.
First-quarter results: cash flow surge, modest revenue growth
Chairman, President and CEO Jim DeVries said the company delivered “a strong start to the year,” pointing to adjusted free cash flow (including swaps) of $414 million and adjusted earnings per diluted share of $0.23, up 10% year over year. DeVries said durable recurring monthly revenue (RMR) was $359 million, flat versus the prior year, while gross revenue attrition was 13.1% and the revenue payback period was 2.3 years.
Chief Financial Officer Jeff Likosar said adjusted free cash flow rose $187 million, or more than 80%, versus last year, driven primarily by “lower cash interest, the timing of some payroll-related disbursements and other working capital items, and our overall profitability.”
Likosar reported adjusted EBITDA of $674 million, up 2% year over year, and total revenue of $1.3 billion, up 1%. Monitoring and services revenue was “relatively flat,” he said, with an ending RMR balance of $359 million. Installation revenue totaled $198 million, up 7%, which Likosar attributed to “a higher mix of outright equipment sales related to our transition to the ADT+ platform.”
The company added 161,000 gross new subscribers with $10.1 million of RMR, which Likosar said came with “lower cash SAC,” while emphasizing ADT’s focus on subscriber economics and balancing acquisition spending with other uses of cash.
Likosar also noted that first-quarter results included “a favorable legal settlement loss recovery, partially offset by an increase in our allowance for credit losses.” He later explained that as ADT shifts to more outright equipment sales, the company records revenue earlier and must record a corresponding bad debt provision under accounting rules.
Capital allocation: share repurchases and leverage targets
Likosar said ADT ended the quarter with access to liquidity that included an $800 million revolving credit facility and $119 million of cash, after funding the Origin acquisition and returning $161 million to shareholders. He pointed to the company’s $1.5 billion three-year repurchase program authorized earlier in the year.
During the first quarter, ADT repurchased about 18 million shares for $116 million. Likosar said the company also “deployed additional capital towards share repurchases in April,” bringing year-to-date repurchases to about 35 million shares for $230 million. “We do not believe our current stock price reflects the intrinsic value of our business,” he said.
On the balance sheet, Likosar said ADT’s weighted average maturity is about five years and its cost of debt is around 4.3%. He said leverage stands at 2.7x adjusted EBITDA, with net debt of $7.3 billion. ADT repaid the remaining $75 million of its 2026 notes at maturity, and its next maturity is in August of next year, he added.
ADT+ platform expansion, new features, and Origin AI integration
DeVries framed 2026 as a year of accelerated progress with investments in three areas: “product technology, service excellence, and customer acquisition.” He said the company’s proprietary ADT+ platform continues to gain traction, combining professional monitoring with smart home devices such as Google Nest and Yale products.
In the first quarter, DeVries said about 30% of new customer additions included ADT+. He added that ADT expects to expand ADT+ to more channels, including the third-party dealer network, which will begin transitioning to ADT+ this summer. Dealers represented “more than a third” of total gross additions last year, DeVries said, and as they adopt ADT+, the company expects “more than two-thirds of new subscribers will be on our proprietary platform.”
DeVries also highlighted two new ADT+ innovations introduced in the quarter:
- Live Light, which he described as “the industry’s first illuminated wireless yard sign” that connects to ADT+ and lights up during an alarm event.
- MySafety, a personal mobile safety service in the ADT+ app that extends monitoring protection to customers while they are away from home; DeVries said it already has 35,000 customer activations.
On Origin AI, which ADT acquired in February, DeVries said the technology adds AI-driven ambient intelligence to the ADT+ platform using a “privacy first, Wi-Fi based sensing technology” designed to provide awareness “without cameras or wearables.” He said ADT completed the design of a smart plug in the first quarter to enable integration into core offerings, with priorities over the next two quarters including initial manufacturing and pilots, integration work for security and “aging in place” use cases, and integration into a third-party router.
AI-driven service and operational efficiency
DeVries said ADT is deploying AI-powered virtual agents in chat and voice interactions, with “all chat interactions and approximately half of our phone calls” initially routed through AI as of the first quarter. He said containment is improving, meaning more issues are resolved without human intervention, and said these initiatives are beginning to “structurally lower” the cost base while improving responsiveness.
During Q&A, DeVries provided additional metrics on AI progress, saying chat containment was 45% in the first quarter and reached 60% by the end of April, while call containment was 16% in the first quarter and rose to 25% by the end of April. He also said ADT plans to implement AI-driven call routing “in a couple of weeks,” along with churn propensity modeling.
Likosar said ADT has not provided a specific target for AI savings, but described the opportunity as “in the millions, many millions, even tens of millions” when factoring in reductions in truck rolls. Chief Business Officer Omar Khan added that within product engineering, “over half of our committed software code is being written by AI,” which he said has increased velocity and capacity while keeping engineering headcount flat. Khan also said ADT plans to roll out Gemini AI features within ADT+ and expects Origin AI features to begin rolling out “within ADT+, as well as other standalone solutions, in the next year or so.”
Customer acquisition shifts: DIY launch, channel optimization, and bulk purchases
DeVries said ADT is expanding into e-commerce with the launch of Blue by ADT, a new product line aimed at “more value conscious and DIY-oriented customers,” including lower cost cameras. Blue by ADT will debut on ADT’s website in late May and expand to additional e-tail channels, “including Amazon over the summer,” he said.
In response to analyst questions about why ADT is leaning into DIY now, Khan said ADT has built a “hardware and software customer experience that’s purpose-built from the ground up for DIY customers,” and called DIY a “significant TAM opportunity.” He added that ADT intends to differentiate over time with additional products and new AI features, including integrating Origin AI sensing technology into the DIY offering.
DeVries also said the company had previously been limited by “contractual obligations” with suppliers, but after renegotiations “the economics are different for us today and give us a little more elbow room in competing in this marketplace.” While acknowledging “profitability in DIY versus DIFM,” DeVries said ADT believes it can earn a good return and expects most DIY subscribers to be incremental, with an opportunity to convert some DIY customers to professionally installed subscribers over time.
On broader go-to-market efficiency, DeVries said ADT has reduced third-party affiliate lead fees by $100 per installation and is working on efficiency changes to its dealer model, noting those changes could temporarily impact subscriber additions but are aimed at long-term efficiency. Likosar also told analysts ADT sees a meaningful opportunity to reduce subscriber acquisition costs over the next several years through more efficient channels, including e-tail, and by reducing reliance on high-cost lead sources. He referenced the company’s longer-range target of getting revenue payback to “2x or lower.”
On bulk account purchases, DeVries said ADT did not complete a bulk purchase in the first quarter because it “was unable to reach terms.” He said ADT is seeking returns “generally consistent with our dealer business,” and “if we can’t get those returns, we won’t pursue the deal,” adding that the company is “almost always engaged with sellers.”
When asked about organic subscriber additions, DeVries said he would have liked to see stronger additions and cited several factors affecting results, including a softer dealer performance relative to last year, the prior sale of the multifamily business, the absence of State Farm adds, tightened credit standards, and reduced reliance on high-cost channels. DeVries said some of the decline was intentional, estimating “something more than half” of the miss versus last year was intentional due to changes like credit tightening and dialing down high-cost affiliates.
On attrition and credit, DeVries said gross revenue attrition was flat at 13.1% but noted “modest pressure from non-pay cancellations,” which were “just a touch higher than last year.” He said relocation cancels were flat and voluntary cancels were “meaningfully better” than last year. Likosar said ADT continually evaluates credit policies to optimize subscriber economics, balancing impacts on additions and installation revenue against credit losses.
For 2026, Likosar reiterated the company’s outlook for adjusted free cash flow growth of about 20%, with revenue and adjusted EPS “approximately flat” versus last year, reflecting disciplined SAC, investments for future periods, and expected tariffs. For the second quarter, Likosar said ADT expects revenue and EPS to be “slightly lower than the first quarter” due primarily to higher advertising spending for the Blue by ADT launch and other initiative investments, and expects adjusted free cash flow to be $100 million to $150 million lower sequentially due to seasonal SAC spending, working capital timing, and tax payments. Later in the Q&A, Likosar clarified that ADT does not expect revenue to be down sequentially.
In closing remarks, DeVries said ADT delivered “a solid quarter,” and that the company remains confident in its 2026 plans and the longer-term impact of its investments.
About ADT NYSE: 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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