The raised FCF guidance (+30% vs prior +20%) and aggressive buyback ($478M in Q2, $906M remaining) signal management's confidence in cash generation, but the 8% decline in GAAP operating income, rising attrition (13.1% vs 12.8%), and near-zero cash balance ($4M) create a mixed picture. Monitor whether the FCF growth trajectory can sustain the buyback pace without straining the balance sheet — the $100M Term Loan A draw in May suggests some liquidity management. The Apollo exit removes a large overhang but also a potential catalyst for further block sales.
Price Chart
Executive Summary
ADT reported Q2 2026 results with total revenue up 2% YoY to $1.312B, GAAP EPS flat at $0.19, and adjusted EPS flat at $0.23. The company raised its full-year 2026 outlook, now projecting Adjusted Free Cash Flow growth of ~30% (from ~20% previously), revenue growth of ~2%, and Adjusted EPS growth of ~2%. Strong cash generation drove $523M in shareholder returns during the quarter, including $478M in share repurchases. However, GAAP income from continuing operations declined 8% YoY to $155M, and adjusted EBITDA slipped slightly to $671M from $674M, reflecting higher SG&A costs and a 30bps increase in attrition to 13.1%.
Key Financial Metrics
Key Facts
- Total revenue increased 2% YoY to $1.312B, driven by higher installation/product revenue (+17%) partially offset by a 1% decline in monitoring revenue.
- GAAP EPS flat at $0.19; Adjusted EPS flat at $0.23; GAAP income from continuing operations fell 8% to $155M.
- Full-year 2026 outlook raised: Adjusted Free Cash Flow growth now ~30% (from ~20%), revenue growth ~2%, Adjusted EPS growth ~2%.
- Operating cash flow rose 18% to $666M; Adjusted Free Cash Flow (incl. swaps) up 48% to $406M.
- Returned $523M to shareholders in Q2 ($478M buybacks, $45M dividends); $906M remaining on buyback authorization.
- Apollo exited its entire stake via a secondary offering of 102M shares; ADT repurchased 29M of those shares.
- Gross customer revenue attrition worsened to 13.1% from 12.8% a year ago; RMR declined 1% to $360M.
- Cash and cash equivalents fell to $4M from $81M at year-end 2025; $100M incremental Term Loan A borrowed in May.
Financial Impact
Raised FY2026 outlook implies ~$100M incremental Adjusted FCF vs prior guidance; $478M share repurchases in Q2 reduced diluted share count by ~9% YoY.
Risk Factors
- Rising customer attrition (13.1% vs 12.8% YoY) could pressure RMR and long-term revenue growth.
- Cash balance of $4M is extremely thin; reliance on revolver and incremental debt for liquidity.
- Aggressive buyback ($478M in Q2) reduces share count but also consumes cash that could buffer against macro headwinds.
- SG&A expenses rose 8% YoY, outpacing revenue growth and compressing operating margins.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001703056-26-000097 |
| Document: adt-20260730.htm | 0001703056-26-000097 |
| Document: 0001703056-26-000097-index-headers.html | 0001703056-26-000097 |
| Document: 0001703056-26-000097-index.html | 0001703056-26-000097 |
| Document: 0001703056-26-000097.txt | 0001703056-26-000097 |
| 8-K Data (Synthetic) | 0001703056-26-000097 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 23, 2026 3d ago | Institutional Cluster | $6.90 $6.88 | ▼ −0.29% | ▼ −1.00% | $6.88 (−0.29%) |
Oct 20, 2026 6d ago | Press Release | $6.79 $6.80 | ▲ +0.15% | ▼ −0.38% | $6.88 (+1.33%) |
Oct 8, 2026 18d ago | SC 13G/A | $6.50 $6.43 | ▼ −1.08% | ▼ −1.68% | $6.88 (+5.85%) |
Jul 30, 2026 12w ago | 8-K | $7.51 $7.64 | ▲ +1.73% | ▲ +1.03% | $6.88 (−8.39%) |
Jul 30, 2026 12w ago | Press Release | $7.51 $7.64 | ▲ +1.73% | ▲ +1.03% | $6.88 (−8.39%) |
Jul 21, 2026 13w ago | Institutional Cluster | $6.89 $6.90 | ▼ −0.15% | ▼ −0.26% | $6.88 (+0.15%) |
Jul 16, 2026 14w ago | Press Release | $7.06 $7.00 | ▼ −0.85% | ▲ +0.14% | $6.88 (−2.55%) |
May 28, 2026 21w ago | 8-K | $6.71 $6.74 | ▲ +0.45% | ▲ +0.19% | $6.88 (+2.53%) |
May 18, 2026 23w ago | Insider Cluster | $6.87 $6.98 | ▲ +1.60% | ▲ +0.56% | $6.88 (+0.15%) |
May 8, 2026 24w ago | DEFA14A | $6.79 $6.79 | · 0.00% | ▲ +0.14% | $6.88 (+1.33%) |
US Market Status
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