What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-07-24 compared with 2025-04-24 · 209 added, 136 removed, 687 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current assets:

30 unchanged sentences

Preferred stock—authorized 1,000,000 shares of $ 0.01 par value;

zero issued and outstanding as of March 31, 2025 and December 31, 2024

zero issued and outstanding as of June 30, 2025 and December 31, 2024

Common stock—authorized 3,999,000,000 shares of $ 0.01 par value;

issued and outstanding shares of 788,152,561 and 836,589,761 as of March 31, 2025 and December 31, 2024, respectively

issued and outstanding shares of 777,957,176 and 836,589,761 as of June 30, 2025 and December 31, 2024, respectively

Class B common stock—authorized 100,000,000 shares of $ 0.01 par value;

issued and outstanding shares of 54,744,525 as of March 31, 2025 and December 31, 2024

issued and outstanding shares of 54,744,525 as of June 30, 2025 and December 31, 2024

Additional paid-in capital 6,764,716 7,117,098

7 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Monitoring and related services $ 1,090,241 $ 1,068,065 $ 2,173,345 $ 2,130,717

33 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income (loss) $ 165,179 $ 92,394 $ 305,425 $ 183,945

1 unchanged sentence

Cash flow hedges and other

( 1,258 ) 1,527 86 3,235

Comprehensive income (loss) $ 163,921 $ 93,921 $ 305,511 $ 187,180

3 unchanged sentences

(in thousands)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Number of Common Shares Number of Class B Common Shares Common Stock Class B Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

6 unchanged sentences

Transactions related to employee share-based compensation plans and other 1,637 — 16 — 2,471 ( 364 ) — 2,123

4,531 — 46 — 6,946 ( 520 ) — 6,472

Ending balance 777,957 54,745 $ 7,780 $ 547 $ 6,764,716 $ ( 3,106,714 ) $ ( 6,950 ) $ 3,659,379

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

4 unchanged sentences

Share-based compensation expense — — — — 21,416 — — 21,416

Transactions related to employee share-based compensation plans and other 1,424 — 15 — 7,750 ( 525 ) — 7,240

Ending balance 857,053 54,745 $ 8,571 $ 547 $ 7,347,061 $ ( 3,535,042 ) $ ( 12,927 ) $ 3,808,210

See Notes to Condensed Consolidated Financial Statements

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Six Months Ended June 30, 2025

Beginning balance 836,590 54,745 $ 8,366 $ 547 $ 7,117,098 $ ( 3,318,174 ) $ ( 7,036 ) $ 3,800,801

Net income (loss) — — — — — 305,425 — 305,425

Other comprehensive income (loss), net of tax — — — — — — 86 86

Dividends — — — — — ( 93,081 ) — ( 93,081 )

Share-based compensation expense — — — — 32,170 — — 32,170

Repurchases of common stock (including excise tax) ( 64,801 ) — ( 648 ) — ( 393,969 ) — — ( 394,617 )

Transactions related to employee share-based compensation plans and other 6,168 — 62 — 9,417 ( 884 ) — 8,595

3,197 — 32 — ( 9,412 ) ( 526 ) — ( 9,906 )

Ending balance 777,957 54,745 $ 7,780 $ 547 $ 6,764,716 $ ( 3,106,714 ) $ ( 6,950 ) $ 3,659,379

Six Months Ended June 30, 2024

Beginning balance 867,432 54,745 $ 8,674 $ 547 $ 7,413,305 $ ( 3,617,718 ) $ ( 16,162 ) $ 3,788,646

Net income (loss) — — — — — 183,945 — 183,945

Other comprehensive income (loss), net of tax — — — — — — 3,235 3,235

Dividends — — — — — ( 100,218 ) — ( 100,218 )

Share-based compensation expense — — — — 29,387 — — 29,387

Repurchases of common stock (including excise tax) ( 15,000 ) — ( 150 ) — ( 93,969 ) — — ( 94,119 )

Transactions related to employee share-based compensation plans and other 4,621 — 47 — ( 1,662 ) ( 1,051 ) — ( 2,666 )

Ending balance 857,053 54,745 $ 8,571 $ 547 $ 7,347,061 $ ( 3,535,042 ) $ ( 12,927 ) $ 3,808,210

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

30 unchanged sentences

Proceeds (payments) from interest rate swaps 34,163 48,005

Repurchases of common stock ( 396,564 ) ( 93,356 )

Repurchases of common stock, including excise tax ( 495,111 ) ( 93,356 )

Dividends on common stock ( 95,998 ) ( 82,172 )

12 unchanged sentences

ADT Inc., together with its wholly-owned subsidiaries (collectively, “ADT” or the “Company”), provides security, interactive, and smart home solutions to consumer and small business customers in the United States (“U.S.”).

During the first quarter of 2024, the Company ceased to be a “controlled company” under the New York Stock Exchange (the “NYSE”) rules following a registered secondary offering of the Company’s common stock (“Common Stock”) by certain entities managed by affiliates of Apollo Global Management, Inc.

Following subsequent registered secondary offerings by Apollo, as of March 31, 2025, Apollo owned approximately 33 % of the Company’s outstanding Common Stock, including shares of Class B common stock (“Class B Common Stock”) (on an as-converted basis).

As of June 30, 2025, certain entities managed by affiliates of Apollo Global Management, Inc.

(“Apollo”) owned approximately 22 % of the Company’s outstanding Common Stock, including shares of Class B common stock (“Class B Common Stock”) (on an as-converted basis).

Refer to Note 14 “Related Party Transactions” for further information.

7 unchanged sentences

• should not be taken as indicative of results that may be expected for future interim periods or the full year.

The Condensed Consolidated Balance Sheet as of December 31, 2024 included herein was derived from the audited consolidated financial statements as of that date.

The Condensed Consolidated Balance Sheet as of December 31, 2024 included herein was derived from the audited consolidated financial statements as of that date included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).

Certain information and footnote disclosures required in the annual consolidated financial statements have been omitted as appropriate.

For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).

Certain prior period amounts have been reclassified to conform with the current period presentation.

Amounts previously disclosed under the caption merger, restructuring, integration, and other are now presented within selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations as they are no longer material for the periods presented.

Beginning in the first quarter of 2025, amounts previously disclosed under the caption merger, restructuring, integration, and other are presented within selling, general, and administrative expenses (“SG&A”) in the Condensed Consolidated Statements of Operations as they are no longer material for the periods presented.

Use of Estimates

10 unchanged sentences

The Company’s exit in 2024 from the residential solar business (the “Solar Business”) (the “ADT Solar Exit”) and the sale in 2023 of its commercial business (the “Commercial Business”) (the “Commercial Divestiture”) represented strategic shifts that had major effects on the Company’s operations and financial results.

Accordingly, the results of operations and financial position of these businesses are classified as discontinued operations.

The Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Comprehensive Income (Loss) present both continuing and discontinued operations.

As applicable, the results of operations and financial position of these businesses are classified as discontinued operations in the Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets, respectively.

The Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Comprehensive Income (Loss) present both continuing and discontinued operations, as applicable.

Refer to Note 4 “Divestitures.”

Unless otherwise noted, the following Notes to Condensed Consolidated Financial Statements refer to the Company’s continuing operations only.

Accounting Standards Updates (“ASU”)

Accounting Standards Updates (“ASUs”)

Recently Issued

1 unchanged sentence

Disaggregation of Income Statement Expenses, requires additional disclosure in the footnotes at each interim and annual reporting period about specific types of expenses included in the expense captions presented on the face of the statement of operations as well as additional disclosures that also include information related to selling expenses.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The requirements will be applied prospectively with the option for retrospective application.

4 unchanged sentences

In addition, the update includes certain other amendments to improve the effectiveness of income tax disclosures.

The guidance is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, with retrospective application also a permitted option.

The guidance is effective for annual reporting periods beginning after December 15, 2024, and should be applied prospectively, with retrospective application also a permitted option.

Early adoption is permitted.

10 unchanged sentences

The following table reconciles the amounts below reported in the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Cash and cash equivalents $ 45,195 $ 96,212

14 unchanged sentences

The Company depreciates and amortizes these pooled costs using an accelerated method over the estimated life of the customer relationship, which is 15 years.

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Gross carrying amount $ 7,051,746 $ 6,878,490

1 unchanged sentence

Subscriber system assets, net $ 2,914,895 $ 2,981,161

Depreciation of subscriber system assets and amortization of deferred subscriber acquisition costs are reflected in depreciation and intangible asset amortization and selling, general, and administrative expenses (“SG&A”), respectively, as follows:

Three Months Ended March 31,

Depreciation of subscriber system assets and amortization of deferred subscriber acquisition costs are reflected in depreciation and intangible asset amortization and SG&A, respectively, as follows:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

Accrued Expenses and Other Current Liabilities

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Accrued interest $ 100,804 $ 107,116

14 unchanged sentences

These investments are generally classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities.

As of March 31, 2025 and December 31, 2024, investments in money market mutual funds were $ 17 million and $ 90 million, respectively.

As of June 30, 2025 and December 31, 2024, investments in money market mutual funds were $ 16 million and $ 90 million, respectively.

Long-Term Debt Instruments - The fair values of the Company’s long-term debt instruments are determined using broker-quoted market prices, which represent quoted prices for similar assets or liabilities as well as other observable market data, and are classified as Level 2 fair value measurements.

1 unchanged sentence

Refer to Note 6 “Debt.”

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands) Carrying

9 unchanged sentences

Refer to Note 2 “Revenue and Receivables.”

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands) Carrying

7 unchanged sentences

Disaggregated Revenue

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

( in thousands )

2025 2024 2025 2024

Sources of Revenue:

16 unchanged sentences

Remaining Performance Obligations

As of March 31, 2025, the Company’s total remaining unsatisfied performance obligation relating to the provision of monitoring and related services is as follows (in thousands) :

As of June 30, 2025, the Company’s total remaining unsatisfied performance obligations relating to the provision of monitoring and related services are as follows (in thousands) :

$ 1,880,624 $ 1,041,664 $ 486,956 $ 256,900 $ 3,666,144

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

14 unchanged sentences

The allowance for credit losses relates to RICs from outright sales transactions and is not material.

(in thousands) March 31, 2025 December 31, 2024

The following is a summary of unbilled retail installment contract receivables, net:

(in thousands) June 30, 2025 December 31, 2024

Retail installment contract receivables, gross $ 688,151 $ 678,174

5 unchanged sentences

Retail installment contract receivables, net $ 658,308 $ 669,326

As of March 31, 2025 and December 31, 2024, RICs, net, for which the Company grants a security interest as collateral for borrowings under the 2020 Receivables Facility were $ 590 million and $ 575 million, respectively.

As of June 30, 2025 and December 31, 2024, RICs, net, for which the Company grants a security interest as collateral for borrowings under the 2020 Receivables Facility were $ 594 million and $ 575 million, respectively.

Refer to Note 6 “Debt” for further discussion regarding the 2020 Receivables Facility.

5 unchanged sentences

Gross contract assets recognized were not material for the periods presented.

(in thousands) March 31, 2025 December 31, 2024

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands) June 30, 2025 December 31, 2024

Contract assets, gross $ 58,390 $ 46,031

5 unchanged sentences

Contract assets, net $ 52,567 $ 40,810

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

5 unchanged sentences

The accounting policies of the Company’s reportable segment are the same as those of the Company.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following presents a reconciliation to the Company’s net income (loss) as reported in the Condensed Consolidated Statements of Operations and includes segment revenues, significant segment expenses that are regularly provided to or easily computed from information regularly provided to the CODM, other segment expenses, and adjustments to reconcile to net income (loss).

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

19 unchanged sentences

Share-based compensation (2)

11,649 21,284 32,170 29,359

Depreciation and intangible asset amortization

9 unchanged sentences

4,403 5,744 9,468 21,447

( 2,879 ) ( 13,387 ) ( 306 ) ( 33,158 )

Total other segment items

2 unchanged sentences

(Income) loss from discontinued operations, net of tax (4)

3,054 33,791 5,285 106,131

Net income (loss) $ 165,179 $ 92,394 $ 305,425 $ 183,945

5 unchanged sentences

(4) Represents activity related to the Commercial and Solar Businesses (as applicable during the periods), which are presented as discontinued operations.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ADT Solar Exit

As discussed in Note 1 “Description of Business and Summary of Significant Accounting Policies,” the Solar Business is presented as a discontinued operation in the Company’s Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets for all periods presented.

During the three months ended March 31, 2025, exit charges incurred and paid were not material.

During the three months ended March 31, 2024, the Company incurred aggregate exit charges of $ 75 million, which have been recognized within income (loss) from discontinued operations, net of tax related to (i) $ 35 million, associated with the write-down and disposition of inventory and asset impairments, (ii) $ 19 million, associated with the disposition of the existing installation pipeline, (iii) $ 11 million, associated with employee separation costs, and (iv) $ 10 million, associated with contract termination and other charges.

During the three months ended March 31, 2024, the Company paid approximately $ 11 million associated with the ADT Solar Exit primarily related to employee separation and other restructuring costs.

Exit charges incurred and paid were not material in 2025.

During the six months ended June 30, 2024, the Company paid approximately $ 18 million associated with the ADT Solar Exit primarily related to employee separation and other restructuring costs.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three and six months ended June 30, 2024, respectively, the Company incurred aggregate exit charges of $ 13 million and $ 89 million, which have been recognized within income (loss) from discontinued operations, net of tax related to (i) $ 1 million and $ 36 million, associated with the write-down and disposition of inventory and asset impairments, (ii) $ 10 million and $ 29 million, associated with the disposition of the existing installation pipeline, (iii) $ 1 million and $ 12 million, associated with employee separation costs, and (iv) $ 2 million and $ 12 million, associated with contract termination and other charges.

The following reconciliations represent the major classes of line items of the Solar Business presented within discontinued operations.

Cash flows related to discontinued operations were not significant during the three months ended March 31, 2025 and March 31, 2024.

Cash flows related to discontinued operations were not significant during the six months ended June 30, 2025 and June 30, 2024.

Balance Sheet Information

There were no material assets of discontinued operations as of March 31, 2025 and December 31, 2024.

(in thousands) March 31, 2025 December 31, 2024

There were no material assets of discontinued operations as of June 30, 2025 and December 31, 2024.

(in thousands) June 30, 2025 December 31, 2024

Current maturities of long-term debt $ — $ 22

6 unchanged sentences

Total liabilities of discontinued operations $ 41,253 $ 47,652

$ 44,993 $ 47,652

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Statements of Operations Information

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

Cost of revenue

835 19,837 2,588 61,359

Selling, general, and administrative expenses 2,716 16,499 3,957 89,918

1 unchanged sentence

Other (income) and expense items

— ( 8 ) 42 1,473

Income (loss) from discontinued operations before income taxes ( 3,551 ) ( 35,138 ) ( 6,605 ) ( 133,272 )

2 unchanged sentences

Commercial Divestiture

During the three months ended March 31, 2025 and March 31, 2024, activity presented in discontinued operations relating to the Commercial Divestiture was not material.

During the periods presented, activity reflected in discontinued operations, net of tax, relating to the Commercial Divestiture was not material.

In connection with the Commercial Divestiture, the Company entered into a Transition Services Agreement (the “Commercial TSA”).

During the three months ended March 31, 2025, Commercial TSA income was not material.

During the three months ended March 31, 2024, the Company recognized $ 12 million of Commercial TSA income, which is reflected in other income (expense) within continuing operations.

During the three and six months ended June 30, 2025, Commercial TSA income was not material.

During the three and six months ended June 30, 2024, the Company recognized $ 11 million and $ 22 million, respectively, of Commercial TSA income, which is reflected in other income (expense) within continuing operations.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GOODWILL AND OTHER INTANGIBLE ASSETS

1 unchanged sentence

Other Intangible Assets

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands) Gross Carrying

12 unchanged sentences

Intangible assets $ 9,550,149 $ ( 4,674,312 ) $ 4,875,837 $ 9,219,142 $ ( 4,365,043 ) $ 4,854,099

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The change in the net carrying amount of contracts and related customer relationships during the period was as follows:

3 unchanged sentences

Amortization ( 268,048 )

Balance as of March 31, 2025 $ 2,666,260

Balance as of June 30, 2025 $ 2,756,382

________________

1 unchanged sentence

Payments for customer contract additions under the Company’s authorized dealer program and from other third parties are reflected as dealer generated customer accounts and bulk account purchases on the Condensed Consolidated Statements of Cash Flows.

During the three months ended June 30, 2025, the Company completed a bulk customer account purchase for a contractual purchase price of $ 101 million, subject to reduction based on customer retention, and paid initial cash at closing of $ 89 million.

Definite-Lived Intangible Asset Amortization Expense

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Description Issued Maturity Interest Rate (1)

Interest Payable March 31, 2025 December 31, 2024

Interest Payable June 30, 2025 December 31, 2024

First Lien Term Loan B due 2030

23 unchanged sentences

_________________

(1) Interest rate as of March 31, 2025.

(1) Interest rate as of June 30, 2025.

Interest on the 2020 Receivables Facility is primarily based on the Secured Overnight Financing Rate (“SOFR”) + 0.95 % and Lender Cost of Funds (“COF”) + 0.85 %.

1 unchanged sentence

(3) Refer to Note 13 “Leases” for additional information regarding the Company’s finance leases.

As of March 31, 2025, the Company was in compliance with all financial covenant and other maintenance tests for all of its debt obligations.

As of June 30, 2025, the Company was in compliance with all financial covenant and other maintenance tests for all of its debt obligations.

First Lien Credit Agreement

The Company’s first lien credit agreement, dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”), consists of term loans (the “First Lien Term Loan B due 2030” and “First Lien Term Loan B-2 due 2032”) and the First Lien Revolving Credit Facility.

During the three months ended March 31, 2025, the Company borrowed $ 40 million under the First Lien Revolving Credit Facility;

and as of March 31, 2025, the available borrowing capacity was $ 760 million.

During the three months ended March 31, 2024, the Company borrowed $ 95 million and repaid $ 45 million under the First Lien Revolving Credit Facility.

During the six months ended June 30, 2025, the Company borrowed and repaid $ 133 million under the First Lien Revolving Credit Facility.

As of June 30, 2025, the available borrowing capacity was $ 800 million.

During the six months ended June 30, 2024, the Company borrowed and repaid $ 260 million under the First Lien Revolving Credit Facility.

AND SUBSIDIARIES

6 unchanged sentences

The Company may make voluntary prepayments on the First Lien Term Loan B-2 due 2032 at any time prior to maturity at par, however, such prepayment will be subject to a 1.00 % prepayment premium in the event of certain specified refinancing events during the first six months after March 7, 2025.

• June 2025 - Certain lenders provided commitments to fund an additional $ 550 million of term loans as part of the First Lien Term Loan B-2 due 2032.

The closing of this transaction, which remains subject to market and other customary conditions, is expected to occur on or around July 25, 2025.

Additionally, during June 2025, the Company issued a notice of partial redemption for $ 550 million of the First Lien Notes due 2026, which will be redeemed on July 27, 2025.

The Company intends to use proceeds from the First Lien Term Loan B-2 due 2032 for the partial redemption of the First Lien Notes due 2026.

Other than as described above, the term loans under the amended and restated First Lien Credit Agreement continue to have the same terms as provided under the existing First Lien Credit Agreement, and the parties to the amended and restated First Lien Credit Agreement continue to have the same obligations set forth in the existing First Lien Credit Agreement.

Subsequent event - As of April 24, 2025, there were no amounts outstanding under the First Lien Revolving Credit Facility.

First Lien Notes due 2026 Partial Redemption

2 unchanged sentences

Loss on extinguishment of debt was not material.

• June 2025 - As noted above, the Company issued a notice of partial redemption for $ 550 million of the First Lien Notes due 2026, which will be redeemed on July 27, 2025.

2020 Receivables Facility

2 unchanged sentences

• March 2025 - The Company amended the agreement governing the 2020 Receivables Facility to extend the uncommitted revolving period to March 2026, reduce the interest rate on outstanding borrowings, and increase the advance rate on pledged collateral.

Additionally, during the first quarter of 2025, the Company voluntarily prepaid $ 23 million of the remaining balance.

As of March 31, 2025, the Company had an uncommitted available borrowing capacity under the 2020 Receivables Facility of approximately $ 154 million.

As of June 30, 2025, the Company had an uncommitted available borrowing capacity under the 2020 Receivables Facility of approximately $ 110 million.

Variable Interest Entity

2 unchanged sentences

The SPE’s assets and liabilities primarily consist of a portion of the Company’s unbilled RICs, net, as discussed in Note 2 “Revenue and Receivables,” and borrowings under the 2020 Receivables Facility, as presented above.

The impact to the Condensed Consolidated Statements of Operations from the 2020 Receivables Facility was primarily due to the allowance for credit losses and interest expense.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The impact to the Condensed Consolidated Statements of Operations from the 2020 Receivables Facility was primarily due to the allowance for credit losses and interest expense.

DERIVATIVE FINANCIAL INSTRUMENTS

1 unchanged sentence

SOFR is the applicable benchmark for all of the Company's interest rate swap contracts.

All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value.

All interest rate swap contracts are reported at fair value in the Condensed Consolidated Balance Sheets.

For interest rate swap contracts that are:

10 unchanged sentences

The cash flows associated with interest rate swap contracts that included an other-than-insignificant financing element at inception are reflected as cash flows from financing activities.

The Company’s interest rate swaps as of March 31, 2025 and December 31, 2024, consisted of the following:

Execution Maturity Designation Notional Amount

(in thousands)

The Company’s interest rate swaps consist of the following (notional amounts in thousands) :

Execution Maturity Designation June 30, 2025 December 31, 2024

October 2019 September 2026 Not designated $ 2,800,000 $ 2,800,000

March 2028 Not designated 100,000

March 2028 Not designated 200,000

December 2023

September 2026 Not designated 700,000

March 2023 March 2028 Not designated 100,000 100,000

April 2023 March 2028 Not designated 200,000 200,000

December 2023 September 2026 Not designated 700,000 700,000

Cash flow hedge

Total notional amount $ 4,350,000 $ 3,800,000

During June 2025, the Company entered into derivative instruments with the objective of reducing the variability in future expected interest payments on a portion of the Company’s First Lien Term Loan B-2 due 2032.

The Company designated these instruments as qualifying cash flow hedges.

The instruments were highly effective at the inception of the hedge relationship and are expected to continue to be highly effective.

Subsequent event - During July 2025, the Company entered into derivative instruments with a notional amount of $ 600 million with the objective of reducing the variability in future expected interest payments on a portion of the Company’s First Lien Term Loan B-2 due 2032.

The Company designated $ 500 million of these instruments as qualifying cash flow hedges.

The instruments were highly effective at the inception of the hedge relationship and are expected to continue to be highly effective.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheet Classification (in thousands)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Prepaid expenses and other current assets $ 47,752 $ 56,164

3 unchanged sentences

Fair value of interest rate swaps - net asset (liability) $ 63,425 $ 108,592

Three Months Ended March 31,

Unrealized Gains (Losses) Classification (in thousands)

Unrealized gains (losses) on the Company’s derivatives classified as cash flow hedges that were recognized in accumulated other comprehensive income (loss) were not material during the second quarter of 2025.

Unrealized gains (losses) on the Company’s derivatives not classified as cash flow hedges that were recognized in the Statements of Operations were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Classification (in thousands)

2025 2024 2025 2024

Interest expense, net $ ( 13,022 ) $ ( 5,125 ) $ ( 34,031 ) $ 11,622

Other income (expense) $ ( 3,813 ) $ ( 3,277 ) $ ( 7,845 ) $ ( 9,878 )

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Cash Flow Hedges Reclassifications out of AOCI (in thousands)

The following table includes reclassifications related to previously designated cash flow hedges and unrealized gains (losses) on interest rate swaps designated as cash flow hedges:

Three Months Ended June 30, Six Months Ended June 30,

Changes in AOCI (in thousands)

2025 2024 2025 2024

Interest expense, net $ ( 1,591 ) $ 1,985 $ 195 $ 4,114

Income tax (benefit) expense $ 384 $ ( 481 ) $ ( 48 ) $ ( 993 )

As of March 31, 2025 and December 31, 2024, AOCI, net of tax, related to previously designated cash flow hedges was not material.

As of June 30, 2025 and December 31, 2024, AOCI, net of tax, related to previously designated cash flow hedges was not material.

Unrecognized Tax Benefits

1 unchanged sentence

federal, state and local, and foreign jurisdictions.

During the three months ended March 31, 2025, the Company did not have a material change to its unrecognized tax benefits from those disclosed in the 2024 Annual Report.

During the six months ended June 30, 2025, the Company did not have a material change to its unrecognized tax benefits from those disclosed in the 2024 Annual Report.

Based on the current tax statutes and current status of its income tax audits, the Company does not expect unrecognized tax benefits to change significantly in the next twelve months.

2 unchanged sentences

The discussion below is based on the continuing operations of the Company.

The Company’s income tax expense for the three months ended March 31, 2025 was $ 51 million, resulting in an effective tax rate for the period of 26.4 %.

The Company’s income tax expense for the three months ended June 30, 2025 was $ 59 million, resulting in an effective tax rate for the period of 25.9 %.

The effective tax rate primarily represents the federal statutory rate of 21.0 %, and a state tax rate, net of federal benefits, of 4.9 %.

The Company’s income tax expense for the three months ended March 31, 2024 was $ 56 million, resulting in an effective tax rate for the period of 25.6 %.

The effective tax rate primarily represents the federal statutory tax rate of 21.0 %, and a state tax rate, net of federal benefits, of 5.4 %, partially offset by a favorable impact from a decrease in unrecognized tax benefits of 1.2 %.

The Company’s income tax expense for the three months ended June 30, 2024 was $ 60 million, resulting in an effective tax rate for the period of 32.2 %.

The effective tax rate primarily represents the federal statutory tax rate of 21.0 %, and a state tax rate, net of federal benefits, of 5.9 %, and an unfavorable impact from dispositions of 5.0 %.

The Company’s income tax expense for the six months ended June 30, 2025 was $ 110 million, resulting in an effective tax rate for the period of 26.1 %.

The effective tax rate primarily represents the federal statutory rate of 21.0 %, and a state tax rate, net of federal benefits, of 5.2 %.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s income tax expense for the six months ended June 30, 2024 was $ 116 million, resulting in an effective tax rate for the period of 28.6 %.

The effective tax rate primarily represents the federal statutory tax rate of 21.0 %, and a state tax rate, net of federal benefits, of 5.6 %, and an unfavorable impact from dispositions of 2.3 %.

Other Tax Matters

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes a broad range of tax reform provisions.

The Company is currently evaluating the impact of the OBBBA on its financial results.

Common Stock and Class B Common Stock

1 unchanged sentence

Share Issuances

During the three months ended March 31, 2025, shares issued resulted from the vesting of restricted stock units (“RSUs”) and stock option exercises related to fully vested share-based compensation awards as presented on the Condensed Consolidated Statements of Stockholders’ Equity.

During the three and six months ended June 30, 2025, shares issued resulted from the vesting of restricted stock units (“RSUs”) and stock option exercises related to fully vested share-based compensation awards as presented on the Condensed Consolidated Statements of Stockholders’ Equity.

Share Repurchases

3 unchanged sentences

Refer to Note 14 “Related Party Transactions” for further information.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In addition, the Company entered into an agreement in December 2024 to repurchase 15 million shares of Common Stock from a non-affiliate individual at a price per share of $ 6.95 for a total of $ 104 million under the 2024 Share Repurchase Plan.

The transaction settled in January 2025, and the Company retired the shares.

The 2024 Share Repurchase Plan expired in January 2025 with $ 5 million authorized repurchases remaining.

The 2024 Share Repurchase Plan expired in January 2025 with $ 5 million in authorized repurchases remaining.

2025 Share Repurchase Plan

5 unchanged sentences

Additionally, in March 2025, the Company repurchased, and subsequently retired, an additional 18 million shares in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act in multiple transactions for $ 140 million (or $ 7.79 per share).

As of March 31, 2025, the Company recorded a liability and reduction to additional paid-in capital of $ 9 million for the repurchase of an additional 1 million shares, which settled in April 2025.

This transaction is also considered a non-cash financing activity during the three months ended March 31, 2025.

As of March 31, 2025, the Company had $ 208 million remaining under the 2025 Share Repurchase Plan.

Subsequent event - In April 2025, the Company repurchased, and subsequently retired, an additional 6 million shares (excluding the shares noted above) in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act in multiple transactions for a total of $ 52 million (or $ 8.04 per share).

As a result, the Company has $ 148 million remaining under the 2025 Share Repurchase Plan.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended June 30, 2025, the Company repurchased, and subsequently retired, 12 million shares in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act under the 2025 Share Repurchase Plan in multiple transactions for a total of $ 96 million (or $ 8.14 per share).

As of June 30, 2025, the Company had $ 112 million remaining under the 2025 Share Repurchase Plan.

Subsequent event - During July 2025, the Company repurchased, and subsequently retired, 2 million shares in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act under the 2025 Share Repurchase Plan in multiple transactions for a total of $ 16 million (or $ 8.45 per share).

As of July 22, 2025, the Company had approximately $ 96 million remaining under the 2025 Share Repurchase Plan.

(in thousands, except per share data)

1 unchanged sentence

Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

2/27/2025 3/13/2025 4/3/2025 $ 0.055 $ 44,175 $ 0.055 $ 3,011

Three Months Ended March 31, 2024

4/24/2025 6/12/2025 7/8/2025 0.055 42,884 0.055 3,011

Subsequent Event - On April 24, 2025, the Company announced a dividend of $ 0.055 per share to holders of Common Stock and Class B Common Stock of record on June 12, 2025, which will be paid on July 8, 2025.

Total $ 0.110 $ 87,059 $ 0.110 $ 6,022

Six Months Ended June 30, 2024

1/24/2024 3/14/2024 4/4/2024 $ 0.055 $ 47,059 $ 0.055 $ 3,011

4/25/2024 6/13/2024 7/9/2024 0.055 47,137 0.055 3,011

Total $ 0.110 $ 94,196 $ 0.110 $ 6,022

Subsequent Event - On July 24, 2025, the Company announced a dividend of $ 0.055 per share to holders of Common Stock and Class B Common Stock of record on September 11, 2025, which will be paid on October 2, 2025.

Accumulated Other Comprehensive Income (Loss)

During the three months ended March 31, 2025, there were no material reclassifications out of AOCI.

Refer to Note 7 “Derivative Financial Instruments” for AOCI reclassifications associated with previously designated cash flow hedges.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three and six months ended June 30, 2025, there were no material reclassifications out of AOCI.

Refer to Note 7 “Derivative Financial Instruments.”

SHARE-BASED COMPENSATION

4 unchanged sentences

The weighted-average grant date fair value for the options granted during the period was $ 2.65 .

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company used a binomial lattice model to determine the grant date fair value for options granted and included the following assumptions:

14 unchanged sentences

Potential shares of Common Stock include (i) incremental shares related to the vesting or exercise of share-based compensation awards, warrants, and other options to purchase additional shares of the Company’s Common Stock calculated using the treasury stock method and (ii) incremental shares of Common Stock issuable upon the conversion of Class B Common Stock.

Additionally, the basic and diluted earnings per share computations for Common Stock excludes approximately 4 million and 9 million unvested shares for the current and prior periods, respectively, as their vesting is contingent upon achievement of certain performance requirements.

Additionally, the basic and diluted earnings per share computations for Common Stock for the periods presented exclude unvested shares of approximately 4 million and 7 million, respectively, as their vesting is contingent upon achievement of certain performance requirements.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

in thousands, except per share amounts

2025 2024 2025 2024

Allocation of income (loss) from continuing operations - basic $ 157,164 $ 118,589 $ 290,597 $ 272,664

15 unchanged sentences

_________________

(1) During the three months ended March 31, 2025 and March 31, 2024, 19 million and 17 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive.

(1) During the three and six months ended June 30, 2025, 23 million and 21 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive.

During the three and six months ended June 30, 2024, 22 million and 19 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Class B Common Stock

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

in thousands, except per share amounts

2025 2024 2025 2024

Allocation of income (loss) from continuing operations - basic

19 unchanged sentences

(1) There were no potential shares of Class B Common Stock during the periods presented.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

Google Commercial Agreement

In July 2020, the Company and Google entered into a Master Supply, Distribution, and Marketing Agreement (as amended, the “Google Commercial Agreement”), which, among other things, specifies that each party shall contribute $ 150 million toward joint marketing, customer acquisition, training of the Company’s employees, and product technology updates related to the Google Devices and Services.

In July 2020, the Company and Google LLC (“Google”) entered into a Master Supply, Distribution, and Marketing Agreement (as amended, the “Google Commercial Agreement”), which, among other things, specifies that each party shall contribute $ 150 million toward joint marketing, customer acquisition, training of the Company’s employees, and product technology updates related to the Google Devices and Services.

In August 2022, the Company and Google executed an amendment to the Google Commercial Agreement, pursuant to which Google has agreed to commit an additional $ 150 million to fund growth, data and insights, product innovation and technology advancements, customer acquisition, and marketing, as mutually agreed by the Company and Google, (together with the initial amounts, the “Google Success Funds”).

During the three months ended March 31, 2025, $ 7.5 million of the Google Success Funds were reimbursed to the Company primarily for certain joint marketing and customer acquisition expenses incurred by the Company, substantially all of which was recorded as a reduction to advertising expenses.

During the six months ended June 30, 2025, $ 15 million of the Google Success Funds were reimbursed to the Company primarily for certain joint marketing and customer acquisition expenses incurred by the Company, substantially all of which was recorded as a reduction to advertising expenses.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Google Cloud Agreement Addendum

1 unchanged sentence

The Company may elect to cancel the commitment in return for a cancellation fee of 30 % of the total remaining commitment amount and loss of any discounts, remaining credits, or other incentives provided under the Google Cloud Agreement Addendum.

As of March 31, 2025, the Company continues to work to meet this commitment.

As of June 30, 2025, the Company continues to work to meet this commitment.

Other Commitments

As of March 31, 2025 and December 31, 2024, the Company was party to an agreement with one of its vendors to purchase at least $ 370 million of security system equipment and components through December 2025.

The Company is party to an agreement with one of its vendors to purchase at least $ 370 million of security system equipment and components through December 2025.

This commitment is also satisfied through purchases made by the Company’s dealer network.

As of December 31, 2024, the remaining amount under this commitment was $ 172 million.

During the three months ended March 31, 2025, purchases toward this commitment were approximately $ 46 million.

During the six months ended June 30, 2025, purchases toward this commitment were approximately $ 91 million.

In the normal course of business, the Company is liable for contract completion and product performance.

As of March 31, 2025 and December 31, 2024, the Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $ 53 million and $ 74 million, respectively.

As of June 30, 2025 and December 31, 2024, the Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $ 50 million and $ 74 million, respectively.

The Company does not believe such obligations will materially affect its financial position, results of operations, or cash flows.

2 unchanged sentences

The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings.

In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

documents, testimony, and information in connection with various aspects of its activities.

In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities.

There have been no material changes to the disclosures in the Company’s 2024 Annual Report.

4 unchanged sentences

The Company has not accrued for any losses for which the likelihood of loss cannot be assessed, is less than probable, or the range of possible loss cannot be estimated.

As of March 31, 2025 and December 31, 2024, the Company’s accrual for ongoing claims and lawsuits within the scope of an insurance program, including certain amounts related to discontinued operations, totaled $ 88 million and $ 94 million, respectively.

As of June 30, 2025 and December 31, 2024, the Company’s accrual for ongoing claims and lawsuits within the scope of an insurance program, including certain amounts related to discontinued operations, totaled $ 90 million and $ 94 million, respectively.

The Company’s accrual related to ongoing claims and lawsuits not within the scope of an insurance program is not material.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company as Lessee

2 unchanged sentences

(in thousands)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Presentation and Classification:

10 unchanged sentences

_________________

(1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $ 72 million and $ 66 million as of March 31, 2025 and December 31, 2024, respectively.

Three Months Ended March 31,

(1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $ 78 million and $ 66 million as of June 30, 2025 and December 31, 2024, respectively.

Three Months Ended June 30, Six Months Ended June 30,

( in thousands )

2025 2024 2025 2024

Operating lease cost $ 6,837 $ 6,709 $ 13,154 $ 13,578

4 unchanged sentences

Total lease cost $ 23,394 $ 22,622 $ 45,919 $ 41,818

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Lease Liabilities Arising from Obtaining Right-of-Use Assets (1)

Three Months Ended March 31,

Six Months Ended June 30,

( in thousands )

5 unchanged sentences

The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component.

1 unchanged sentence

RELATED PARTY TRANSACTIONS

The Company’s related party transactions primarily relate to products and services received from, or monitoring and related services provided to, other entities affiliated with Apollo, and, from time to time, certain transactions between the Company and Apollo and State Farm.

There were no notable related party transactions during the periods presented other than as described below.

Offering and Share Repurchase

March 2025 Offering and Share Repurchase

On March 3, 2025, the Company and certain entities managed by affiliates of Apollo Global Management, Inc.

(the “Selling Stockholders”) entered into an underwriting agreement (the “March 2025 Underwriting Agreement”) with Barclays Capital Inc.

and Citigroup Capital Markets Inc., as representatives of the underwriters named therein, including Apollo Global Securities, LLC, an affiliate of Apollo (collectively, the “March 2025 Underwriters”), in connection with the offer and sale by the Selling Stockholders of 70 million shares of the Company’s Common Stock (the “March 2025 Offering”), and, at the option of the March 2025 Underwriters, up to an additional 10.5 million shares of Common Stock (the “March 2025 Underwriters’ Option”).

and Citigroup Capital Markets Inc., as representatives of the underwriters named therein, including Apollo Global Securities, LLC, an affiliate of Apollo (collectively, the “March 2025 Underwriters”), in connection with the offer and sale by the Selling Stockholders of 70 million shares of the Company’s Common Stock (plus an additional 10.5 million shares at the option of the March 2025 Underwriters) (the “March 2025 Offering”).

As part of the March 2025 Offering, the Company repurchased, and subsequently retired, 20 million shares of its Common Stock under its 2025 Share Repurchase Plan from the March 2025 Underwriters (the “March 2025 Share Repurchase”) for an aggregate purchase price of $ 152 million (or approximately $ 7.62 per share), which was the same per share price paid by the March 2025 Underwriters to the Selling Stockholders.

2 unchanged sentences

On March 7, 2025, the March 2025 Underwriters exercised the March 2025 Underwriters’ Option in full, which subsequently closed on March 11, 2025.

During the three months ended March 31, 2024, the Selling Stockholders sold 65 million shares of the Company’s Common Stock (plus an additional 9.75 million shares at the option of the underwriters) (the “March 2024 Offering”).

June 2025 Apollo Sale

On June 4, 2025, the Selling Stockholders sold an aggregate of 45 million shares of the Company’s Common Stock in the open market at a price of $ 8.27 per share (the “June 2025 Apollo Sale”).

Immediately following the June 2025 Apollo Sale, Apollo owned less than 25 % of the Company’s outstanding Common Stock and, as a result, the Company’s Amended and Restated Management Investor Rights Agreement (the “MIRA”) terminated.

The consent rights described in Section 4.1 of the Amended and Restated Stockholders Agreement also terminated following the June 2025 Apollo Sale.

Additionally, the margin loan as defined and discussed in the 2024 Annual Report was paid off in full following the June 2025 Apollo Sale.

March 2024 Offering and Share Repurchase

During the six months ended June 30, 2024, the Selling Stockholders sold 65 million shares of the Company’s Common Stock (plus an additional 9.75 million shares at the option of the underwriters) (the “March 2024 Offering”).

In connection with the March 2024 Offering, the Company repurchased, and subsequently retired, 15 million shares of its Common Stock under the 2024 Share Repurchase Plan for an aggregate purchase price of $ 93 million (or approximately $ 6.22 per share).

2 unchanged sentences

In addition, the Company did not pay any underwriting fees, including on behalf of the Selling Stockholders or otherwise.

Other Transactions with Apollo

During the six months ended June 30, 2025 and 2024, other fees incurred to Apollo were not material.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2025 and 2024, other fees incurred to Apollo were not material.

State Farm owns more than 10 % of the Company’s issued and outstanding common stock, and as a result, is a related party.

In October 2022, the Company, ADT LLC (an indirect wholly owned subsidiary of the Company), and State Farm entered into a development agreement (the “State Farm Development Agreement”) in connection with State Farm’s strategic investment in ADT.

Pursuant to the State Farm Development Agreement, State Farm committed up to $ 300 million to fund certain initiatives as agreed to between the Company and State Farm related to the partnership (the “Opportunity Fund”), of which the Company has received $ 100 million.

Amounts held by the Company in the Opportunity Fund are restricted until the Company uses the funds, as agreed upon with State Farm, in accordance with the State Farm Development Agreement.

As of March 31, 2025 and December 31, 2024, the balance in the portion of the Opportunity Fund held by the Company was $ 83 million and $ 85 million, respectively, which is presented in restricted cash and restricted cash equivalents and accrued expenses and other current liabilities.

During the three months ended March 31, 2025 and 2024, the Company made payments from the Opportunity Fund of $ 2 million and $ 3 million, respectively.

The State Farm Development Agreement will expire on October 13, 2025, unless both parties agree to renew.

Upon expiration of the State Farm Development Agreement, the balance of the Opportunity Fund held by the Company must be returned to State Farm and State Farm will no longer have any obligation to fund the Opportunity Fund in the future.

As of June 30, 2025 and December 31, 2024, the balance in the portion of the Opportunity Fund held by the Company was $ 82 million and $ 85 million, respectively, which is presented in restricted cash and restricted cash equivalents and accrued expenses and other current liabilities.

During the six months ended June 30, 2025 and 2024, the Company made payments from the Opportunity Fund of $ 4 million and $ 7 million, respectively.

Interest earned on the Opportunity Fund was not material.

Fleet Management Agreement

During the second quarter of 2025, the Company entered into an agreement with a vendor affiliated with Apollo for fleet management and related services through 2030.

The impact to the Company was not material during the second quarter of 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements