ADT Inc. (ADT) Business

ITEM 1. BUSINESS.

TABLE OF CONTENTS

•Company Overview

•Key Business Developments

•Segment and Geographic Information

•Products and Services

•Our Market

•Competition

•Resources Material to our Business

•Seasonality

•Government Regulation and Other Regulatory Matters

•Human Capital and Workplace Initiatives

•Available Information

COMPANY OVERVIEW

Our Business

ADT Inc., together with its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our,” “us,” and “ADT”), is a leading provider of security, interactive, and smart home solutions serving residential and small business customers in the United States (“U.S.”).

Our mission is to empower people to protect and connect what matters most through innovative offerings, unrivaled safety, and a premium experience because we believe that everyone deserves to feel safe.

We are strategically evolving toward a platform-centric model focused on integrated home intelligence. Our efforts are increasingly centered on our proprietary ADT+ application, which is designed to serve as a foundational ecosystem for both professionally installed and self-installed solutions, integrating human expertise with ambient sensing capabilities.

We primarily conduct business under the ADT brand, which we believe is a key competitive advantage for us and a contributor to our success due to the importance customers place on reputation and trust when purchasing home security products and services. The strength of our brand, which first became associated with home security services in 1874, is based upon a long-standing record of delivering high-quality, reliable products and services; expertise in system sales, installation, and monitoring; and superior customer care, all driven by our industry-leading experience and knowledge.

As of December 31, 2025, we had approximately 6.1 million security monitoring service subscribers. We serve our customers through our nationwide sales and service offices (“SSOs”), monitoring and support centers, and large network of installation and service professionals.

Formation and Organization

ADT Inc. was incorporated in the State of Delaware in May 2015 as a holding company with no assets or liabilities. In July 2015, we acquired Protection One, Inc. and ASG Intermediate Holding Corp. (collectively, the “Formation Transactions”), which were instrumental in the commencement of our operations. In May 2016, we acquired The ADT Security Corporation (formerly named The ADT Corporation) (“The ADT Corporation”) (the “ADT Acquisition”), which significantly increased our market share in the security systems industry, making us one of the largest monitored security companies in the U.S.

In January 2018, we completed an initial public offering (“IPO”), and our common stock, par value $0.01 per share (“Common Stock”), began trading on the New York Stock Exchange (the “NYSE”) under the symbol “ADT.”

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As of December 31, 2025, our three largest shareholders were State Farm Fire & Casualty Company (”State Farm”), owning approximately 16%, Apollo Global Management, Inc. (“Apollo”), owning approximately 12%, and The Vanguard Group, owning approximately 8% of our outstanding Common Stock, inclusive of the Class B common stock, par value $0.01 per share (“Class B Common Stock”) (on an as-converted basis), owned exclusively by Google LLC (“Google”), and unvested shares of Common Stock.

KEY BUSINESS DEVELOPMENTS

Origin AI Acquisition

On February 20, 2026, ADT acquired Origin Wireless, Inc. (“Origin AI”), a provider of AI-enabled presence detection and ambient sensing technology (the “Origin AI Acquisition”). Origin AI’s technology uses artificial intelligence and radio frequency signals to detect and classify human presence and activity within the home without the use of cameras, audio, or wearable devices. This technology is expected to enhance our ability to deliver improved alarm verification, reduce false alarms, and support new intelligent security and smart home use cases over time.

The purchase price for the Origin AI Acquisition was $170 million in cash, subject to customary purchase price adjustments. Following the acquisition, Origin AI became an indirect wholly owned subsidiary of ADT.

We believe the acquisition of Origin AI supports our strategy to further differentiate our security and smart home offerings over time.

Google Update

On July 31, 2020, we entered into a Master Supply, Distribution, and Marketing Agreement with Google (as amended, the “Google Commercial Agreement”) with an initial term expiring on November 15, 2030. As part of our partnership with Google, each company agreed to contribute $150 million upon the achievement of certain milestones toward the joint marketing of devices and services; acquisition of customers; training of ADT employees for the sale, installation, customer service, and maintenance of the product and service offerings; and updates to technology for products included in such offerings. In August 2022, pursuant to an amendment to the Google Commercial Agreement, Google agreed to commit an additional $150 million (together with the initial amounts, the “Google Success Funds”) to fund growth, data and insights, product innovation, technology advancements, customer acquisition, and marketing, as mutually agreed by the Company and Google. The Google Commercial Agreement provided that each of the $150 million tranches of the Google Success Funds would be triggered in three equal tranches, respectively, subject to the attainment of certain milestones. From inception through December 31, 2025, the Company had incurred expenses of approximately $100 million related to the initiatives funded from the initial tranche of the Google Success Funds, and had received $90 million of reimbursement from the Google Success Funds with the remaining $10 million reimbursed during January 2026.

In January 2024, we again amended the Google Commercial Agreement to, among other things, remove exclusivity for DIY products and services, limit exclusivity for do-it-for-me (“DIFM”) products and services, and restructure the commitment from the Google Success Funds to pay a portion of the remaining amount due to ADT as a quarterly marketing reimbursement (with the balance to be used towards unlocking certain opportunities).

In September 2020, we issued and sold 54,744,525 shares of Class B Common Stock to Google in a private placement pursuant to a securities purchase agreement, dated July 31, 2020. In connection with that issuance of Class B Common Stock to Google, the Company and Google entered into an investor rights agreement (the “Google Investor Rights Agreement”), pursuant to which Google agreed to be bound by customary transfer restrictions and drag-along rights, and be afforded customary registration rights with respect to shares of Class B Common Stock held directly by Google. Under the terms of the Google Investor Rights Agreement, which was amended for the second time in December 2023, Google was prohibited, subject to certain exceptions, from transferring any shares of Class B Common Stock or any shares of Common Stock issuable upon conversion of the Class B Common Stock until June 2025. Refer to Note 10 “Equity” in the Notes to Consolidated Financial Statements.

Additionally, in December 2023, the Company and Google entered into an addendum to the Company’s existing agreement for using Google cloud services (the “Google Cloud Agreement Addendum”), pursuant to which Google has agreed to provide certain credits, discounts, and other incentives for use of the Google Cloud Platform to the Company, and the Company has committed to purchasing $200 million of Google Cloud Platform services over seven years (through December 2030) (the “Google Cloud Commitment”). Refer to Note 13 “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

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State Farm Update

In October 2022, we entered into a development agreement with State Farm (the “State Farm Development Agreement”), pursuant to which State Farm committed up to $300 million to fund product and technology innovation, customer growth, and marketing initiatives. We initially received $100 million of such commitment from State Farm, which was restricted to use for investment, as agreed upon with State Farm, in accordance with the State Farm Development Agreement (the “Opportunity Fund”). The State Farm Development Agreement expired on October 13, 2025. On October 24, 2025, we repaid to State Farm substantially all of the balance of the Opportunity Fund held by us. State Farm has no obligation to fund the Opportunity Fund in the future. In addition, we ended our State Farm partnership programs in existing states in connection with the expiration of the State Farm Development Agreement.

Pursuant to an investor rights agreement with State Farm (the “State Farm Investor Rights Agreement”), dated as of October 13, 2022, State Farm agreed to be bound by customary transfer and standstill restrictions and drag-along rights, and be afforded customary registration rights with respect to shares of our Common Stock owned by State Farm. State Farm’s contractual lock-up period restricting the transfer of the shares of Common Stock owned by State Farm terminated on October 13, 2025.

Refer to Note 16 “Related Party Transactions” in the Notes to Consolidated Financial Statements.

SEGMENT AND GEOGRAPHIC INFORMATION

We evaluate and report our segment information based on the manner in which our Chief Executive Officer (“CEO”), who is our chief operating decision maker (“CODM”), evaluates performance and allocates resources. Our CODM manages the business on a consolidated basis, and as such, we report results in a single operating and reportable segment.

For further information, refer to Note 3 “Segment Information” in the Notes to Consolidated Financial Statements.

Revenue generated by customers outside of the U.S. is not material.

PRODUCTS AND SERVICES

Security and Automation Offerings

Our core security offerings include burglar and life safety alarms, smart security cameras, smart home automation systems, and video surveillance systems (referred to collectively as security systems, solutions, or offerings). Our security offerings are designed to detect intrusion; control access; sense movement, smoke, fire, carbon monoxide, leaks, temperature, and other environmental conditions and hazards; and address personal medical emergencies such as injuries or unanticipated falls. We offer our customers routine maintenance and the installation of upgraded or additional equipment, which provide additional value to the customer and generate incremental recurring monthly revenue. Additionally, our personal emergency response system products and services utilize our security monitoring infrastructure to provide customers with solutions that help to sustain independent living, detect when a fall occurs, and provide protection while on the go with geolocation capability.

Our proprietary ADT+ app is a comprehensive interactive technology platform designed to provide customers with a seamless experience through a common application across security, life safety, automation, and analytics, and integrate the user experience, customer service experience, and back-end support. We began a phased rollout of our ADT+ app along with a new interactive and hardware lineup during the fourth quarter of 2023. During 2024 and 2025, we continued the phased rollout across the country. As part of our partnership with Google, we have also integrated certain Google devices into our offerings.

Our Trusted NeighborTM offering allows customers to verify a trusted individual and grant that individual secure, temporary access to their home through homeowner-authorized credentials, including assigned Yale lock PIN codes, biometric (fingerprint) authentication on supported devices, and the ADT+ application.

The vast majority of new residential customers choose our automation and smart home solutions, which provide customers the ability to remotely monitor and manage their spaces through our smart phone applications, customized web portal, or touchscreen panels in their homes.

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Our automation and smart home solutions allow customers to:

•remotely arm and disarm their security systems;

•receive programmed event notifications from their security systems;

•record and view real-time video;

•program their systems to react to defined events;

•integrate their systems with various third-party connected devices such as cameras, lights, thermostats, appliances, and garage doors; and

•automate custom schedules for these connected devices.

We offer both professionally installed and DIY security and smart home solutions, and we are increasingly focused on expanding and enhancing our DIY offerings as part of our growth strategy. Our DIY solutions are designed to provide customers with flexible installation, monitoring, and pricing options and to reach customer segments that may not be served by traditional professionally installed offerings. We believe our DIY offerings represent a significant opportunity to drive subscriber growth, expand our addressable market, and support increased digital engagement over time, including through expanded distribution channels and partnerships.

Additionally, we believe that consumer demand is increasingly shifting toward solutions that provide continuous, intelligent awareness of activity within the home. Advances in artificial intelligence and ambient sensing are enabling new forms of detection and insight that can enhance security, reduce false alarms, and support adjacent use cases such as aging‑in‑place and wellness monitoring. We expect these trends to influence our product roadmap and investment priorities in future periods.

Generally, a significant upfront investment is required to acquire new subscribers related to installation costs (such as labor, commissions, equipment, and overhead), which we recover through upfront fees charged at the time of installation and recurring monthly revenue generated in future years. While the economics of an installation can vary depending on the customer acquisition channel and offering, we generally achieve revenue break-even in approximately two years. Our ability to increase our average prices for individual customers depends on a number of factors, including the type and complexity of service, the quality of our service, the introduction of additional features and offerings that increase the value to the customer, and the competitive environments in which we operate.

At the time of initial equipment installation, our customers typically contract for both monitoring and maintenance services, which are generally governed by multi-year contracts. If a customer cancels or is otherwise in default under a monitoring contract prior to the end of the initial contract term, we have the right under the contract to receive a termination payment from the customer in an amount equal to a designated percentage of all remaining monthly payments.

The standard contract terms are two, three, or five years, with automatic renewals for successive 30-day periods for residential security customers and annual periods for small business customers, unless canceled by either party. We may also offer month-to-month contracts depending on the circumstance.

Qualifying customers can pay any upfront fees over the course of the contract (referred to as retail installment contracts). A security interest is granted in the retail installment contract receivables as collateral for cash borrowings under our uncommitted receivables securitization financing agreement (the “2020 Receivables Facility”). Customers are also generally obligated to make monthly payments for monitoring services for the remainder of the initial contract term. Monitoring services are typically billed monthly or quarterly in advance, and more than 80% of our residential customers pay us these fees through automated payment methods, with new residential customers generally opting for these payment methods.

Monitoring Centers

As of December 31, 2025, we operated six monitoring centers located throughout the U.S. that provide 24/7 year-round professional monitoring services to our customers, including our monitoring centers that also provide outsourced monitoring services for other security companies. Our monitoring centers are fully redundant, which means all monitoring operations can be transferred to another monitoring center in case of an event affecting the functionality of one of our centers such as weather-related incidents, natural disasters, or other interruptions in telephone or computer service. In addition, our monitoring centers are listed by Underwriters Laboratories (“UL”). Many jurisdictions have laws requiring that security systems for certain buildings be monitored by UL-listed centers, and in some instances, a UL listing is required by insurers of certain customers as a condition of insurance coverage. In addition, we are in compliance with UL work from home standards for the portion of our monitoring center professionals who work remotely.

Upon the occurrence of certain initiating events, our monitored security systems send event-specific signals to our monitoring personnel who then relay appropriate information, based on the customer’s contract and preferences, to first responders and the customer or others on the customer’s emergency contact list. We continue to focus on our alarm verification technologies and

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partner with industry associations and various first responder agencies to help prioritize response events, enhance response policies, and develop processes that allow us to send data to emergency response centers directly. Additionally, our System Monitoring and Response Technology (“SMART”) monitoring solution aims to result in faster and higher-quality alarm responses and is intended to reduce false alarms and customer care calls. Our SMART monitoring differentiates our offerings by delivering alarms to connected and participating 9-1-1 centers faster than traditional voice handling speeds. Additionally, our alarm scoring program, which offers a uniform and reliable approach for categorizing alarm severity levels, enhances the accuracy of assessing potential threats to life or property and gives first responders precise and crucial alarm data for improved emergency responses.

Field and Call Center Operations

Our field and call center operations comprise a nationwide network of SSOs, call centers, and support facilities. We staff our SSOs with qualified field solution advisors and installation and service technicians, and we utilize third-party subcontract labor when appropriate. We provide ongoing training to our field and call center employees, as well as our authorized dealers, and we continually measure and monitor customer satisfaction-oriented metrics across each customer touch point. Our objective is to provide a differentiated service experience by resolving customer issues remotely whenever possible and scheduling installation and service visits at times convenient for the customer.

Our innovative remote assistance program (the “Remote Assistance Program”) delivers a scalable, cost-efficient means of servicing our customers through live video streaming with our skilled technicians to troubleshoot and resolve service issues as well as remote programming and installation support for new DIY systems, add-ons, and resale reactivations. We are also exploring and implementing AI tools that are aimed to improve and automate certain processes for our call center agents and customers. Additionally, our ADT WiFi Fix app allows remote customer service agents to diagnose and address WiFi issues impacting customers’ ADT equipment or other devices. These offerings provide customers with more options for receiving services that best fit their lifestyles while reducing the cost for us to provide these services and lowering our carbon footprint through the reduction of truck rolls.

Our customer care agents provide support 24 hours a day on a year-round basis to ensure service requests are handled promptly and professionally. During 2025, we enhanced our technical support processes to resolve customer issues earlier in the interaction by equipping our inbound troubleshooting agents with additional capabilities, eliminating the need for customers to wait to receive a scheduled outbound call. To measure performance, we introduced a ‘remote resolution’ metric, which tracks issue resolution by both inbound and outbound agents. We are now able to generally resolve over 90% of customer technical issues remotely. We continue to offer customers additional choices in managing their services through customer-facing self-service tools via interactive voice response systems and the Internet. In addition, we use a network of external vendors, both domestic and outside of the U.S., to supplement our internal call center resources as needed.

In addition, we use AI virtual agents in our call centers to resolve certain customer issues before being transferred to a live agent. We expect that, over time, this initiative will enhance the efficiency and effectiveness of our call centers.

Our support facilities also provide administrative assistance to our local service offices and customer care centers, which includes scheduling and ordering, drop-shipping, and physically distributing system components for installations.

Sales and Distribution Channels

We utilize a complementary mix of direct and indirect sales and distribution channels:

•Direct Channel

Our direct channel customers are generated by direct response and other marketing efforts, general brand awareness, customer referrals, door-to-door activities, and lead generation partners, and are supported by our internal sales force located in our national sales call centers as well as our nationwide network of field SSOs. In many scenarios, we close the sale of a basic system over the phone and allow our field representatives to augment the system at the time of installation. In other cases, field solution advisors work directly with the customer to select an ideal system. Driven by consumer preferences, we also market to customers through retail and e-commerce channels, including our website, and we have been supplementing existing channels to meet consumers where they prefer to shop.

Our field solution advisors typically undergo an in-depth screening process prior to hire, complete comprehensive centralized training prior to conducting customer sales presentations, and participate in ongoing training in support of new offerings. We generally utilize a highly structured sales approach, which includes a structured model sales call, daily monitoring of sales activity and effectiveness metrics, and regular coaching by our sales management teams.

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•Indirect Channel

Our indirect channel customers are generated mainly through our network of agreements with third-party independent dealers who sell and install equipment and ADT Authorized Dealer-branded monitoring, interactive, and other services to residential end users (the “ADT Authorized Dealer Program”). As opportunities arise, we have in the past and may in the future bulk purchase a set of customer accounts from other third-party security service providers.

As of December 31, 2025, our network consisted of approximately 140 authorized dealers operating across the U.S. Our authorized dealers are contractually obligated to offer exclusively to us all qualified monitored accounts they generate, but we are not obligated to accept these accounts. We pay our authorized dealers for the acquisition of any qualified monitored accounts (referred to as dealer generated customer accounts) we purchase from them. Dealer generated customer account contracts typically have an initial term of three years with automatic renewals for successive 30-day periods, unless canceled by either party. If a purchased account is canceled during the charge-back period, which is generally thirteen months, the dealer is required to refund our payment of the purchase price for the canceled account. In certain instances in which we reject an account, we generally still indirectly provide monitoring services for that account through a monitoring services agreement with the authorized dealer.

Authorized dealers are required to adhere to the same high-quality standards for sales and installation as our own SSOs, and we monitor each authorized dealer’s financial stability, business practices, and sales and installation methods.

Marketing Strategy

We focus on driving revenue by increasing consumer awareness and preference, improving consumer purchasing flexibility, and optimizing our go-to-market approach. To support the growth of our customer base, improve brand awareness, and drive greater market penetration, we consider new customer channels and lead generation methods, explore opportunities to provide branded solutions, and form strategic partnerships and alliances with various third parties.

We strive to optimize our marketing spend through a lead modeling process, whereby we dynamically allocate spend based on lead flow and measured marketing channel effectiveness. We market our offerings through national television, radio, and direct mail advertisements, as well as through Internet advertising, which includes national search engine marketing, email, online video, local search, and social media. We also have several affinity partnerships with organizations that promote our services to their customer bases, and we market through social media influencers and celebrity spokespersons representing the ADT brand. In addition, our other strategic partnerships and alliances include dealers, home builders, property management firms, homeowners’ associations, financial institutions, retailers, first responders, and software service providers.

We leverage AI across marketing and communications functions— from brand governance and AI-powered sales agents to AI-driven content creation and ad platform optimization— to enhance efficiency, personalization, and performance at scale.

OUR MARKET

The residential and small business security and automation market primarily consists of owners and renters of single-family homes or apartments and small business owners. The market is generally characterized by a large and homogeneous customer base with less complex system installations. Many residential and small business customers purchase monitored security and automation services as a result of moving to a new location; a perceived or actual increase in crime or life safety concerns; significant events such as the birth of a child or the opening of a new business; or incentives provided by insurance carriers that may offer lower insurance premium rates if a security system is installed or may require that a system be installed as a condition of coverage.

We also seek opportunities to leverage our brand name, experience in security and smart home solutions, and high degree of trust among our customer base to pursue new customers in complementary markets such as personal on-the-go security and safety. We have seen increased interest in smart home offerings and other mobile technology applications, which we believe is attributable to a variety of factors, including advancements in technology, younger generations of consumers, and shifts to de-urbanization. We believe our strategic initiatives will help us satisfy consumer demands in light of these macro-level dynamics and position us for sustainable growth for years to come.

Our goal is to maximize customer lifetime value by (i) evaluating our pricing and product offerings in relation to our competition; (ii) managing costs and service strategies to provide enhanced value; (iii) upgrading existing customers to our interactive services, internet protocol (“IP”) video solutions, or other upgraded solutions where desirable; and (iv) achieving long customer tenure.

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COMPETITION

Our approach to competition is to emphasize the quality and reputation of our offerings and industry-leading brand, our superior customer service, unique product and service offerings, our network of customer support and monitoring centers, commitment to consumer privacy, and knowledge of customer needs. Success in acquiring new customers depends on a variety of factors such as brand and reputation, market visibility, the ability to identify and sell to prospective customers, offering capabilities, and the quality and prices of our products and services. We are focused on extending our leadership position in the traditional residential and small business security and smart home markets. In addition, we continue to add new features and functionalities to further differentiate our offerings and support a pricing premium. We believe a combination of technology advancements along with a growing customer interest in lifestyle and business productivity solutions will support increasing market penetration.

Traditional residential and small business security markets in the U.S. remain highly competitive and fragmented, with several major companies; many smaller national, local, and regional companies; and an increasing number of new entrants, which is primarily the result of relatively low barriers to entry and the availability of other companies providing outsourced monitoring services. Technology trends and innovation provide new opportunities while also lowering the barriers to entry for automation, interactive, and smart home solutions. As a result, new business models and competitors have and may continue to emerge, including existing companies with large customer bases that may enter the security and automation markets or market similar products and services to our customers. Additionally, we may face additional competition in the DIY space as we work to grow our market share.

We believe our principal competitors are:

•Residential (Pro-installation): SimpliSafe Home Security Systems, Xfinity Home Security (a division of Comcast Corporation), Vivint Smart Home, Inc (a subsidiary of NRG), Brinks Home Security (operating brand of Monitronics International, Inc.)

•Residential (Self-installation): Ring Smart Security System by Amazon, SimpliSafe Home Security Systems, Roku Inc., Arlo Technologies, Inc., Wyze Home Monitoring

•Small Business: Vivint Smart Home, Inc (a subsidiary of NRG), Ring Smart Security System by Amazon, SimpliSafe Home Security Systems

We also compete with point solutions (products with one intended application) and home automation-only systems. In some cases, customers believe that these offerings replace the need for full-scale security systems. Further, third-party installation companies often partner with device providers to offer professional installation alternatives for these point solutions and other DIY systems.

We also face increasing competition from technology companies, telecommunications providers, and smart home platform providers that offer or are developing ambient sensing, presence detection, and related home awareness capabilities. Some of these offerings use wireless signals, network‑based technologies, or other sensing methods to detect activity within the home and may be bundled with broadband, connectivity, or smart home services. While these solutions may differ from our current or future offerings in functionality, integration, and use cases, they may nonetheless compete for customer attention, adoption, and engagement, and could impact demand for certain security and smart home services over time.

In addition, some self-monitored solutions do not require a monthly fee for home automation services, which allows for no-cost alternatives to the professionally monitored, fee-based solutions that we provide. Although self-monitored solutions do not replace the need for professionally monitored solutions, as more features and functionality are built into these self-monitored solutions, the demand for some customers to opt for more expensive, professionally monitored options could be reduced.

We continuously monitor developments in our competitive landscape and assess new market participants, offerings, technologies, and business models to evaluate potential impacts on our operations and strategic positioning.

We believe we are well positioned to compete with traditional and new competitors due to our focus on safety, security, and convenience; our differentiated technology offerings, including our ADT+ platform and Origin AI technologies; our nationwide team of sales consultants; our solid reputation for and expertise in providing reliable security and monitoring services through our in-house network of redundant monitoring centers; our reliable product solutions; our highly skilled installation and service organization; our strategic partnerships; and our commitment to delivering high-quality customer service.

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RESOURCES MATERIAL TO OUR BUSINESS

Materials and Inventory

We purchase equipment and product components from a limited number of suppliers and distributors. To minimize the risk of a disruption from any single supplier, we utilize dual sourcing methods whenever possible. Inventory is held at supplier and distribution partner locations, as well as internal regional distribution centers, at levels we believe are sufficient to meet our current and anticipated needs. We also stock inventory of certain equipment and components at our field offices and in technicians’ vehicles. Third-party distributors generally keep a minimum stocking level of certain key items to have coverage for certain situations such as supply chain disruptions. In addition, we rely on various information technology and telecommunications service providers as part of the functionality and monitoring of our systems.

We continuously monitor global supply chain disruptions, and we do not currently anticipate any major interruptions in our supply chain in the near term, although we continue to monitor the ongoing global memory chip shortage.

Intellectual Property

Patents, trademarks, copyrights, and other proprietary rights are important to our business, and we continuously refine our intellectual property strategy to maintain and improve our competitive position. Where possible and appropriate, we seek to register or patent new intellectual property to protect our ongoing technological innovations and strengthen our brand, and we protect these rights by taking appropriate action against infringements or misappropriations of our intellectual property by others. We review third-party intellectual property rights to help avoid infringement and to identify strategic opportunities. We typically enter into confidentiality agreements to further protect our intellectual property. Patents extend for limited periods of time in the various countries where patent protection is obtained. Trademark rights may potentially extend for longer periods of time and are typically dependent upon the use of the trademarks.

We own a portfolio of patents that relate to a variety of monitored security and automation technologies utilized in our business, including security panels and sensors, video and information management solutions, and our SMART monitoring solution that aims to reduce false alarms and improve response effectiveness. We also own a portfolio of trademarks, including ADT, ADT Pulse, and ADT+. In addition, we are a licensee of intellectual property, including from our third-party suppliers and technology partners.

In February 2026, ADT expanded its intellectual property portfolio through the Origin AI Acquisition. The Origin AI Acquisition added a significant portfolio of patents and patent applications primarily related to AI‑enabled presence detection, ambient sensing, and related analytics technologies to our intellectual property portfolio.

Certain trademarks associated with the ADT brand that we own within the U.S. and Canada are owned outside of the U.S. and Canada by Johnson Controls International PLC (“Johnson Controls”) (as successor to Tyco International Ltd., “Tyco”) pursuant to a trademark agreement entered into between the ADT Corporation and Tyco (the “Tyco Trademark Agreement”). In certain instances, such trademarks are licensed in certain territories outside the U.S. and Canada by Johnson Controls to certain third parties. Pursuant to the Tyco Trademark Agreement entered into between The ADT Corporation and Tyco in connection with the separation of The ADT Corporation from Tyco in 2012, we are generally prohibited from registering, attempting to register, or using the ADT brand outside the U.S. and its territories and Canada. As a result, if we choose to sell products or services or otherwise do business outside the U.S. and Canada, we do not have the right to use the ADT brand to promote our products and services.

In connection with the sale of our Canadian operations in 2019, we entered into a non-competition and non-solicitation agreement with TELUS Corporation (“TELUS”) pursuant to which we will not have any operations in Canada, subject to limited exceptions, for a period of seven years from the date of sale. Additionally, we entered into a patent and trademark license agreement with TELUS granting (i) the use of our patents in Canada for a period of seven years, and (ii) exclusive use of our trademarks in Canada for a period of five years and non-exclusive use for an additional two years thereafter.

In connection with the Commercial Divestiture, we agreed to a covenant not to assert a claim against the Commercial Business for infringement of the Company's patents as of the Commercial Divestiture for products and services that were used in the Commercial Business prior to the Commercial Divestiture, and have provided the Commercial Business with a paid-up, irrevocable, non-assignable (with limited exceptions) license to continue to use certain software and other Company intellectual property in the same manner.

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SEASONALITY

Our residential security and home automation business has historically experienced a certain level of seasonality primarily as a result of fluctuations in the housing market. Since more household moves typically take place during the second and third calendar quarters of each year, our disconnect rate, new customer additions and installation volume, sales and installation revenue, and related cash subscriber acquisition costs are historically higher in these quarters than in the first and fourth calendar quarters. However, other factors such as the level of marketing expense, relevant promotional offers, and timing of third-party account purchases can impact these trends. Further, we may see increased servicing costs or reductions in revenue related to more alarm signals, customer service requests, and customer credits as a result of inclement weather-related incidents.

GOVERNMENT REGULATION AND OTHER REGULATORY MATTERS

Our operations are subject to numerous federal, state, and local laws and regulations related to occupational licensing, building codes, tax, and permitting, as well as consumer protection and privacy, labor and employment, and environmental protection. Changes in laws and regulations can positively and negatively affect our operations and impact the manner in which we conduct our business.

Licensing and Permitting

Most states in which we operate have employee and business licensing laws directed specifically toward sales, installation, and monitoring of security devices. Our business is also subject to requirements, codes, and standards imposed by local government jurisdictions and standards organizations. We maintain the relevant and necessary licenses related to the sale, installation, and monitoring of security systems and related services in the jurisdictions in which we operate.

Additionally, we rely extensively on telecommunications service providers, which are regulated in the U.S. by the Federal Communications Commission (“FCC”), to communicate signals as part of the functionality and monitoring of security systems.

Our security business is subject to various state and local measures aimed at reducing false alarms. Such measures include requiring permits for individual alarm systems, revoking such permits following a specified number of false alarms, imposing fines on customers or alarm monitoring companies for false alarms, limiting the number of times police will respond to alarms at a particular location after a specified number of false alarms, requiring additional verification of an alarm signal before the police respond, or providing no response to residential system alarms.

Consumer Protection and Privacy

Our advertising and sales practices are regulated by the U.S. Federal Trade Commission (“FTC”) and state and consumer protection laws, which include restrictions on the manner in which we promote the sale of our products and services and require us to make certain disclosures regarding recurring charges and cancellation rights. Further, consumer protection laws require us to provide most of our new customers with rescission rights of 3-days or more for new contracts for the purchase of our products and services.

Our collection and use of personal information and communications with current and potential customers are regulated by federal and state laws, which include restrictions on the use of telemarketing, auto-dialing technology, email marketing, and text communications; restrictions on the sale, sharing, and use of personal information; as well as requirements for the protection thereof and actions to be taken in the event of a breach of personal information.

We use credit scoring to qualify our residential customers for certain offers and financing options. The use of credit reporting and scoring and offering financing options to our residential customers is subject to federal and state laws, including the federal Fair Credit Reporting Act, which limit the use of consumer credit reports, prohibit discrimination against protected classes when offering or granting credit, and require certain disclosures to customers in the event that we take an adverse action based on a consumer credit report.

We provide some residential customers the option to pay up-front charges in installments and certain other customers the option of using third-party financing arrangements, all of which are subject to federal and state laws regulating consumer finance. These laws require certain mandatory consumer disclosures and, in some cases, limit our ability to impose certain fees and charges. In addition, some jurisdictions require us to register or obtain licenses in order to make installment contract or third-party financing options available to our customers. While these offerings are currently only for certain residential customers, we may in the future have similar offerings for our small business customers.

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Labor and Employment

Our operations are subject to regulation under the U.S. Occupational Safety and Health Act (“OSHA”) and equivalent state laws. Failure to comply with applicable OSHA regulations or other federal, state, and local laws and regulations, even if no work-related serious injury or death occurs, may result in civil or criminal enforcement and substantial penalties, significant capital expenditures, or suspension, or limitation of operations.

Additionally, in certain jurisdictions, we must obtain licenses or permits to comply with standards governing employee selection, training, and business conduct.

Environmental Protection

We continue to monitor emerging developments regarding environmental protection laws. At this time, we do not believe that federal, state, and local laws and regulations relating to the discharge of materials into the environment, or otherwise relating to the protection of the environment, or any existing or pending climate change legislation, regulation, or international treaties or accords are reasonably likely to have a material adverse effect on our business.

We are, or may become, subject to various climate disclosure regimes regulating the disclosure of greenhouse gas emissions, climate-related risks and opportunities and related information, such as California’s Climate Corporate Data Accountability Act (also known as “SB 253”) and Climate Related Financial Risk Act (also known as “SB 261”). The interpretation, timing, requirements and enforcement of such climate disclosure regime remains uncertain, and compliance may require the investment of significant resources, increase our costs, disrupt our business operations and pose reputational and other risks.

For additional information, see Part I, Item 1A, “Risk Factors” – “If we fail to establish and achieve the objectives of our sustainability program, or if we fail to report on such sustainability matters, consistent with investor, customer, employee, or other stakeholder expectations, and in compliance with changing legal and regulatory requirements, we may not be viewed as an attractive investment, service provider, workplace, or business, which could have a negative effect on the Company.”

Artificial Intelligence

The recent rapid development and use of AI, including generative AI, has resulted in increased scrutiny by state and federal governments in the U.S. We are closely monitoring laws regulating the development and deployment of AI and similar technologies at the state and federal level and assessing their potential impact on our current, planned, and potential use of AI in our business. At this time, we do not believe that federal, state, and local laws and regulations relating to the use of AI have a material adverse effect on our business. However, developments in AI technology and laws and regulations affecting how we propose to use AI may limit or restrict our ability to use such technology.

We have implemented AI solutions for various customer interactions to improve service quality and response times and continue to explore opportunities to improve customer interactions with the use of AI. We are also exploring how we can use AI in our product and service offerings to expand our capabilities and drive efficiencies.

HUMAN CAPITAL AND WORKPLACE INITIATIVES

Human Capital Management

As of December 31, 2025, we employed approximately 12,200 people, including approximately 1,600 direct field solution advisors; 3,100 installation and service technicians; 4,000 customer care professionals; and 700 phone sales representatives.

Approximately 7% of our employees are covered by collective bargaining agreements; and we believe our relations with our employees and labor unions have generally been positive.

Culture and Talent Strategy

We are committed to building a culture where every team member feels valued and empowered to collaborate, contribute to our shared success, and achieve their own career goals. Our guiding principles, represented by the acronym BLUE (Bold, Lead, Unite, and Elevate), encourage us to work together with purpose and passion.

Our ability to attract, retain, and develop a strong, dedicated, and diverse workforce is critical to our success. This depends on hiring and retaining top talent across the organization, particularly within senior management, technology, product development teams, and customer-facing roles. Employees receive frequent performance coaching and feedback to help them stay focused on key business priorities and growth opportunities.

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Our compensation programs are designed to reward and differentiate high performance through merit pay, as well as annual and long-term incentive plans, subject to team member eligibility. We offer our employees competitive compensation, benefits, and health and wellness programs, as well as training, networking, development resources, coaching, and performance feedback. In addition, our long-term equity compensation plans are intended to align management interests with those of our stockholders and to encourage the creation of long-term value.

We gather feedback and sentiment throughout the employee experience. Our annual sentiment survey, which was completed by approximately three-fourths of employees, showed favorable improvements in 13 of 14 categories. Our annual leadership talent management review evaluates both performance and potential and includes succession planning for all Executive Leadership Team (“ELT”) positions.

Inclusivity and Belonging

We are committed to fostering a culture of inclusivity and belonging and to continuously enhancing the effectiveness of our practices in order to drive innovation and growth. We define diversity broadly to encompass a wide range of backgrounds, experiences, perspectives, abilities, values, and expertise, among others. We integrate diversity and inclusion into every stage of the talent lifecycle, from recruitment and hiring through learning, development, advancement, and retention, with the goal of attracting and supporting individuals with varied backgrounds and experiences. We value the diversity and experiences of our employees and are committed to fostering an inclusive environment that provides equal opportunities to all throughout our talent management processes.

Our Inclusive Diversity and Belonging Operating Team (the “IDB Team”) and its ten Business Employee Resource Groups (“BERGs”) are central to advancing our inclusivity initiatives. The IDB Team is a diverse group of business leaders from across the organization, including executive and senior management, dedicated to continuously improving our inclusivity practices and effectiveness. Our commitment to inclusion is embedded in our cultural markers, reinforcing our goal of creating a collaborative and supportive environment for all of our employees.

BERGs provide employees opportunities for collaboration through learning, networking, volunteer projects, and mentoring, and are central to the engagement, development, and retention of our employees. Our BERGs also participate in various business initiatives. Executives and officers across the Company actively support BERG programs by leveraging their time, networks, and resources. As part of the ADT Safe Places program, each BERG receives a modest budget to donate to nonprofit organizations aligned with its mission and corporate social responsibility goals.

Employee Well-being, Health, and Safety

We devote significant resources to employees’ wellness, health, and safety. Our annual ADT Balance program offers employees biometric screenings, fitness challenges, webinars, group coaching, and various self-guided resources. We support our employees’ health and productivity through discounts on medical plan contributions for completing an annual preventative exam and an online health assessment, as well as cash incentives on other well-being activities. We also support our employees through financial well-being programs with personalized guidance from professionals with tax preparation, identity protection, and mortgage referral programs.

Our Environmental, Health, and Safety (“EHS”) vision is to create a culture in which safe behaviors are practiced on every task, every day, aiming for zero incidents, promoting employee wellness, and reducing our environmental impact. To achieve this vision, we embed our core values—people, prevention, and accountability—into all aspects of our business. We prioritize compliance with all applicable EHS requirements and believe that all occupational injuries and illnesses, as well as environmental incidents, are generally preventable. For example, our fleet safety initiatives include installing and maintaining collision warning and auto-braking technologies on our vehicles, as well as the use of in‑vehicle camera systems designed to promote safe driving practices. Our EHS management system sets expectations for compliance, accountability, sustainability, and continuous improvement. It supports a safety-focused culture that enables our employees to minimize risk; understand and follow safety rules; and identify, avoid, and correct unsafe actions, behaviors, or situations.

Corporate Governance

We prioritize strong corporate governance as the foundation for financial integrity and superior performance. Our Board of Directors oversees our strategic direction and governance and approves the operating values reflected in our Code of Conduct (the “Code”).

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We are committed to ensuring that all ADT employees uphold our core values of trust, collaboration, service, and innovation. This commitment is reflected in our Code, which defines our responsibilities to customers, investors, communities, and one another. The Code outlines employee expectations and helps foster a culture of integrity. We adhere to the governance requirements established by federal and state law, the SEC, and the NYSE; and we strive to establish appropriate risk management methods and control procedures to adequately manage and monitor major risks.

Additional information about our corporate responsibility priorities and approach and related reports are available on our website. The contents of our website and these reports are referenced for general information only and are not incorporated into this Annual Report.

Social Responsibility

ADT’s Corporate Social Responsibility (CSR) strategy is designed to align with our mission of helping protect and connect what matters most. Through our flagship program, ADT Safe Places, we focus on supporting high-impact, mission-aligned organizations that advance community safety and resilience. Our approach combines financial contributions, employee volunteerism, and in-kind donations of smart security systems to create measurable impact.

Environmental Impact

We are dedicated to reducing our environmental impact by fostering a culture of environmental stewardship and continuously working to reduce our carbon footprint. We also assess environmental risk on our operations as one aspect of our enterprise risk management review process and plan to continue to do so on an ongoing basis. We have implemented our ADT Environmental Absolutes framework, which represents our focus on complying with applicable environmental requirements, addressing proper disposal of waste streams, and promoting recycling of materials. We employ waste recycling and diversion programs and continue to monitor waste levels and reduce unnecessary trash hauls. We also continually explore methods to reduce greenhouse gases from our motor vehicle fleet, including through the purchase of newer vehicle models having greater fuel efficiency, the use of hybrid vehicles, and our Remote Assistance Program that reduces truck rolls. In addition, we have focused on efficiency improvements in lighting, air handling, and data operations as well as through the utilization of renewable energy while continuing to rationalize our real estate portfolio.

AVAILABLE INFORMATION

Availability of SEC Reports

Our website is located at https://www.adt.com. Our investor relations website is located at https://investor.adt.com. We make available free of charge on our investor relations website under “Financials” our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, reports filed pursuant to Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”), other SEC filings, and any amendments to those reports that are filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file or furnish such materials to the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding our filings at http://www.sec.gov.

Use of Website to Provide Information

From time to time, we have used, and expect in the future to use, our website as a means of disclosing material information to the public in a broad, non-exclusionary manner, including for purposes of the SEC’s Regulation Fair Disclosure (“Reg FD”). Financial and other material information regarding the Company is routinely posted on our website and accessible at https://investor.adt.com. In order to receive notifications regarding new postings to our website, investors are encouraged to enroll on our website to receive automatic email alerts. None of the information on our website is incorporated into this Annual Report.