ADT Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS. ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share data) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 62,806 $ 96,212 Restricted cash and restricted cash equivalents 108,228 107,853 Accounts receivable, net of allowance for credit losses of $ 77,330 and $ 57,795 , respectively 400,437 393,511 Inventories, net 190,436 196,731 Prepaid expenses and other current assets 226,079 210,613 Total current assets 987,986 1,004,920 Property and equipment, net 240,810 247,183 Subscriber system assets, net 2,836,081 2,981,161 Intangible assets, net 4,867,486 4,854,099 Goodwill 4,885,574 4,903,899 Deferred subscriber acquisition costs, net 1,425,381 1,324,376 Other assets 737,875 735,319 Total assets $ 15,981,193 $ 16,050,957 Liabilities and stockholders' equity Current liabilities: Current maturities of long-term debt $ 521,725 $ 195,791 Accounts payable 166,884 153,537 Deferred revenue 247,483 247,785 Accrued expenses and other current liabilities 517,124 634,904 Current liabilities of discontinued operations 24,359 31,763 Total current liabilities 1,477,575 1,263,780 Long-term debt 7,284,108 7,511,282 Deferred subscriber acquisition revenue 2,087,721 2,067,608 Deferred tax liabilities 1,181,410 1,167,213 Other liabilities 281,991 224,384 Noncurrent liabilities of discontinued operations 9,604 15,889 Total liabilities 12,322,409 12,250,156 Commitments and contingencies (See Note 12) Stockholders' equity: Preferred stock—authorized 1,000,000 shares of $ 0.01 par value; zero issued and outstanding as of September 30, 2025 and December 31, 2024 — — Common stock—authorized 3,999,000,000 shares of $ 0.01 par value; issued and outstanding shares of 764,979,025 and 836,589,761 as of September 30, 2025 and December 31, 2024, respectively 7,650 8,366 Class B common stock—authorized 100,000,000 shares of $ 0.01 par value; issued and outstanding shares of 54,744,525 as of September 30, 2025 and December 31, 2024 547 547 Additional paid-in capital 6,666,054 7,117,098 Accumulated deficit ( 3,007,138 ) ( 3,318,174 ) Accumulated other comprehensive income (loss) ( 8,329 ) ( 7,036 ) Total stockholders' equity 3,658,784 3,800,801 Total liabilities and stockholders' equity $ 15,981,193 $ 16,050,957 See Notes to Condensed Consolidated Financial Statements 1 ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Monitoring and related services $ 1,097,561 $ 1,077,550 $ 3,270,906 $ 3,208,267 Security installation, product, and other 200,393 166,286 581,574 429,800 Total revenue 1,297,954 1,243,836 3,852,480 3,638,067 Cost of revenue (exclusive of depreciation and amortization shown separately below) : Monitoring and related services 161,788 154,744 481,566 460,649 Security installation, product, and other 88,922 67,362 259,452 151,996 Total cost of revenue 250,710 222,106 741,018 612,645 Selling, general, and administrative expenses 384,353 360,110 1,109,091 1,120,617 Depreciation and intangible asset amortization 347,818 335,270 1,026,069 1,002,131 Operating income (loss) 315,073 326,350 976,302 902,674 Interest expense, net ( 112,617 ) ( 161,830 ) ( 349,294 ) ( 358,980 ) Other income (expense) ( 3,835 ) 17,735 ( 7,896 ) 44,907 Income (loss) from continuing operations before income taxes 198,621 182,255 619,112 588,601 Income tax benefit (expense) ( 55,109 ) ( 50,235 ) ( 164,890 ) ( 166,505 ) Income (loss) from continuing operations 143,512 132,020 454,222 422,096 Income (loss) from discontinued operations, net of tax 1,620 ( 4,869 ) ( 3,665 ) ( 111,000 ) Net income (loss) $ 145,132 $ 127,151 $ 450,557 $ 311,096 Common Stock: Income (loss) from continuing operations per share - basic $ 0.18 $ 0.15 $ 0.54 $ 0.46 Income (loss) from continuing operations per share - diluted $ 0.17 $ 0.14 $ 0.51 $ 0.44 Net income (loss) per share - basic $ 0.18 $ 0.14 $ 0.54 $ 0.34 Net income (loss) per share - diluted $ 0.16 $ 0.13 $ 0.50 $ 0.32 Weighted-average shares outstanding - basic 764,742 850,462 783,310 851,539 Weighted-average shares outstanding - diluted 828,448 912,861 846,495 913,296 Class B Common Stock: Income (loss) from continuing operations per share - basic $ 0.18 $ 0.15 $ 0.54 $ 0.46 Income (loss) from continuing operations per share - diluted $ 0.17 $ 0.14 $ 0.51 $ 0.44 Net income (loss) per share - basic $ 0.18 $ 0.14 $ 0.54 $ 0.34 Net income (loss) per share - diluted $ 0.16 $ 0.13 $ 0.50 $ 0.32 Weighted-average shares outstanding - basic 54,745 54,745 54,745 54,745 Weighted-average shares outstanding - diluted 54,745 54,745 54,745 54,745 See Notes to Condensed Consolidated Financial Statements 2 ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income (loss) $ 145,132 $ 127,151 $ 450,557 $ 311,096 Other comprehensive income (loss), net of tax: Cash flow hedges and other ( 1,379 ) 1,430 ( 1,293 ) 4,665 Comprehensive income (loss) $ 143,753 $ 128,581 $ 449,264 $ 315,761 See Notes to Condensed Consolidated Financial Statements 3 ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands) Three Months Ended September 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 Beginning balance 777,957 54,745 $ 7,780 $ 547 $ 6,764,716 $ ( 3,106,714 ) $ ( 6,950 ) $ 3,659,379 Net income (loss) — — — — — 145,132 — 145,132 Other comprehensive income (loss), net of tax — — — — — — ( 1,379 ) ( 1,379 ) Dividends — — — — — ( 45,091 ) — ( 45,091 ) Share-based compensation expense — — — — 10,716 — — 10,716 Repurchases of common stock (including excise tax) ( 13,399 ) — ( 134 ) — ( 111,373 ) — — ( 111,507 ) Transactions related to employee share-based compensation plans and other 421 — 4 — 1,995 ( 465 ) — 1,534 Ending balance 764,979 54,745 $ 7,650 $ 547 $ 6,666,054 $ ( 3,007,138 ) $ ( 8,329 ) $ 3,658,784 Three Months Ended September 30, 2024 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 Beginning balance 857,053 54,745 $ 8,571 $ 547 $ 7,347,061 $ ( 3,535,042 ) $ ( 12,927 ) $ 3,808,210 Net income (loss) — — — — — 127,151 — 127,151 Other comprehensive income (loss), net of tax — — — — — — 1,430 1,430 Dividends — — — — — ( 50,157 ) — ( 50,157 ) Share-based compensation expense — — — — 9,942 — — 9,942 Transactions related to employee share-based compensation plans and other 197 — 2 — 1,238 ( 531 ) — 709 Ending balance 857,250 54,745 $ 8,573 $ 547 $ 7,358,241 $ ( 3,458,579 ) $ ( 11,497 ) $ 3,897,285 See Notes to Condensed Consolidated Financial Statements 4 ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands) Nine Months Ended September 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 Beginning balance 836,590 54,745 $ 8,366 $ 547 $ 7,117,098 $ ( 3,318,174 ) $ ( 7,036 ) $ 3,800,801 Net income (loss) — — — — — 450,557 — 450,557 Other comprehensive income (loss), net of tax — — — — — — ( 1,293 ) ( 1,293 ) Dividends — — — — — ( 138,172 ) — ( 138,172 ) Share-based compensation expense — — — — 42,886 — — 42,886 Repurchases of common stock (including excise tax) ( 78,200 ) — ( 782 ) — ( 505,342 ) — — ( 506,124 ) Transactions related to employee share-based compensation plans and other 6,589 — 66 — 11,412 ( 1,349 ) — 10,129 Ending balance 764,979 54,745 $ 7,650 $ 547 $ 6,666,054 $ ( 3,007,138 ) $ ( 8,329 ) $ 3,658,784 Nine Months Ended September 30, 2024 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 Beginning balance 867,432 54,745 $ 8,674 $ 547 $ 7,413,305 $ ( 3,617,718 ) $ ( 16,162 ) $ 3,788,646 Net income (loss) — — — — — 311,096 — 311,096 Other comprehensive income (loss), net of tax — — — — — — 4,665 4,665 Dividends — — — — — ( 150,375 ) — ( 150,375 ) Share-based compensation expense — — — — 39,329 — — 39,329 Repurchases of common stock (including excise tax) ( 15,000 ) — ( 150 ) — ( 93,969 ) — — ( 94,119 ) Transactions related to employee share-based compensation plans and other 4,818 — 49 — ( 424 ) ( 1,582 ) — ( 1,957 ) Ending balance 857,250 54,745 $ 8,573 $ 547 $ 7,358,241 $ ( 3,458,579 ) $ ( 11,497 ) $ 3,897,285 See Notes to Condensed Consolidated Financial Statements 5 ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income (loss) $ 450,557 $ 311,096 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangible asset amortization 1,026,087 1,004,003 Amortization of deferred subscriber acquisition costs 186,547 165,454 Amortization of deferred subscriber acquisition revenue ( 268,494 ) ( 257,538 ) Share-based compensation expense 42,886 39,329 Deferred income taxes 46,332 87,652 Provision for losses on receivables and inventory 155,700 146,204 Loss on extinguishment of debt 11,241 4,509 Goodwill, intangible, and other asset impairments 15,094 21,296 Unrealized (gain) loss on interest rate swap contracts 57,206 61,128 Other non-cash items, net 53,072 49,425 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Deferred subscriber acquisition costs ( 287,979 ) ( 271,029 ) Deferred subscriber acquisition revenue 173,416 196,355 Other, net ( 151,080 ) ( 132,661 ) Net cash provided by (used in) operating activities 1,510,585 1,425,223 Cash flows from investing activities: Dealer generated customer accounts and bulk account purchases ( 487,912 ) ( 473,560 ) Subscriber system asset expenditures ( 307,343 ) ( 406,521 ) Purchases of property and equipment ( 125,695 ) ( 130,114 ) Proceeds (payments) from divestiture of businesses — ( 21,000 ) Proceeds (payments) from interest rate swaps ( 2,030 ) ( 6,675 ) Other investing, net 1,995 3,506 Net cash provided by (used in) investing activities ( 920,985 ) ( 1,034,364 ) Cash flows from financing activities: Proceeds from long-term borrowings 1,339,500 970,521 Repayment of long-term borrowings, including call premiums ( 1,277,681 ) ( 1,087,658 ) Proceeds from receivables facility 206,910 189,861 Repayment of receivables facility ( 173,720 ) ( 202,747 ) Proceeds (payments) from interest rate swaps 51,228 72,249 Repurchases of common stock, including excise tax ( 606,767 ) ( 93,356 ) Dividends on common stock ( 141,800 ) ( 132,214 ) Payments on finance leases ( 20,576 ) ( 23,069 ) Other financing, net 275 ( 9,647 ) Net cash provided by (used in) financing activities ( 622,631 ) ( 316,060 ) Cash and cash equivalents and restricted cash and restricted cash equivalents: Net increase (decrease) ( 33,031 ) 74,799 Beginning balance 204,065 129,950 Ending balance $ 171,034 $ 204,749 See Notes to Condensed Consolidated Financial Statements 6 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Organization 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.”). As of September 30, 2025, certain entities managed by affiliates of Apollo Global Management, Inc. (“Apollo”) owned approximately 12.4 % 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. Basis of Presentation The condensed consolidated financial statements included herein: • have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”); • are comprised of the consolidated results of ADT Inc. and its wholly-owned subsidiaries for which all intercompany transactions have been eliminated; • are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented; and • 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 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 the 2024 Annual Report. Certain prior period amounts have been reclassified to conform with the current period presentation. 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 The preparation of these condensed consolidated financial statements in accordance with GAAP requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions. Segment Information The Company evaluates and reports information based on the manner in which our chief operating decision maker (“CODM”) evaluates performance and allocates resources. The CODM manages the business on a consolidated basis, and as such, the Company reports results in a single operating and reportable segment. Refer to Note 3 “Segment Information.” 7 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Discontinued Operations 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. 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 (“ASUs”) Recently Issued Targeted Improvements to the Accounting for Internal-Use Software - ASU 2025-06, Intangibles — Goodwill and Other (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , removes all references to prescriptive and sequential software development stages, requiring an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended, as well as other evaluation and disclosure updates. This guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in this ASU permit an entity to apply the new guidance using a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption, and a retrospective transition approach. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures. Disaggregation of Income Statement Expenses - ASU 2024-03 , Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): 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 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. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures. Improvements to Income Tax Disclosures - ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , focuses on improvements to income tax disclosures, primarily related to the rate reconciliation and income tax paid information. In addition, the update includes certain other amendments to improve the effectiveness of income tax disclosures. 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. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures and will include required disclosures in the Annual Report on Form 10-K for the year ended December 31, 2025. Disclosure Improvements - ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , represents changes to clarify or improve disclosure and presentation requirements of a variety of topics. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is monitoring the potential impact of this guidance on its financial statements and disclosures. 8 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Significant Accounting Policies Unless otherwise noted, the Company’s accounting policies, including those presented herein, do not materially differ from those disclosed in the 2024 Annual Report. Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents 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) September 30, 2025 December 31, 2024 Cash and cash equivalents $ 62,806 $ 96,212 Restricted cash and restricted cash equivalents (1) 108,228 107,853 Ending balance $ 171,034 $ 204,065 _______________ (1) Primarily includes the Opportunity Fund in connection with the State Farm Development Agreement (both as defined and discussed in Note 14 “Related Party Transactions”). Use of the funds must be agreed to by State Farm Fire & Casualty Company (“State Farm”) and the Company. Substantially all of the balance of the Opportunity Fund was subsequently repaid to State Farm on October 24, 2025 in connection with the expiration of this agreement. The remaining restricted cash and restricted cash equivalents relate to the Company’s uncommitted receivables securitization financing agreement (the “ 2020 Receivables Facility”) (refer to Note 6 “Debt”). Inventories, net Inventories, net includes finished goods and work-in-progress. Work-in-progress is not material. Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system, and which the Company may retrieve upon termination of the contract with the customer. Deferred subscriber acquisition costs represent selling expenses (primarily commissions) that are incremental to acquiring customers. Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition. 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) September 30, 2025 December 31, 2024 Gross carrying amount $ 7,055,660 $ 6,878,490 Accumulated depreciation ( 4,219,579 ) ( 3,897,329 ) Subscriber system assets, net $ 2,836,081 $ 2,981,161 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 September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Depreciation of subscriber system assets $ 137,881 $ 139,704 $ 416,082 $ 417,313 Amortization of deferred subscriber acquisition costs $ 64,040 $ 56,119 $ 186,547 $ 165,454 9 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Accrued Expenses and Other Current Liabilities (in thousands) September 30, 2025 December 31, 2024 Accrued interest $ 77,464 $ 107,116 Payroll-related accruals 119,886 109,078 Opportunity Fund (see Note 14 “Related Party Transactions”) 81,643 84,516 Accrued dividends 44,973 48,918 Physically settled forward share repurchase liabilities (see Note 9 “Equity”) — 104,175 Other accrued liabilities 193,158 181,101 Accrued expenses and other current liabilities $ 517,124 $ 634,904 Fair Value of Financial Instruments The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables (“RICs”), accounts payable, debt, and derivatives. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts. Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents - Included in cash and cash equivalents and restricted cash and restricted cash equivalents, as applicable from time to time, are investments in money market mutual funds. 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 September 30, 2025 and December 31, 2024, investments in money market mutual funds were $ 50 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. The carrying amounts of debt outstanding, if any, under the Company’s first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and the 2020 Receivables Facility approximate their fair values as interest rates on these borrowings approximate current market rates. Refer to Note 6 “Debt.” September 30, 2025 December 31, 2024 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt instruments (1) (see Note 6 “Debt”) $ 7,752,327 $ 7,814,687 $ 7,637,631 $ 7,589,677 ________________ (1) Excludes finance leases. Derivative Financial Instruments - Derivative financial instruments are reported at fair value as either assets or liabilities that are primarily calculated using discounted cash flow models utilizing observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair values are classified as Level 2 fair value measurements. Refer to Note 7 “Derivative Financial Instruments” for the fair values of the Company’s derivative financial instruments. Retail Installment Contract Receivables - The fair values of the Company’s RICs are determined using a discounted cash flow model and are classified as Level 3 fair value measurements. Refer to Note 2 “Revenue and Receivables.” September 30, 2025 December 31, 2024 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Retail installment contract receivables, net $ 653,970 $ 507,400 $ 669,326 $ 495,259 10 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 2. REVENUE AND RECEIVABLES Revenue The Company generates revenue from contractual monthly recurring fees received for monitoring and related services, as well as the sale and installation of security systems. The Company’s revenue-generating contracts are entered into primarily through its main operating entity and wholly-owned subsidiary, ADT LLC. Disaggregated Revenue Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2025 2024 2025 2024 Sources of Revenue: Recurring monthly revenue $ 1,059,904 $ 1,045,152 $ 3,169,230 $ 3,122,223 Other related services 37,657 32,398 101,676 86,044 Monitoring and related services 1,097,561 1,077,550 3,270,906 3,208,267 Installation revenue $ 110,388 $ 78,306 $ 313,080 $ 172,262 Amortization of deferred subscriber acquisition revenue 90,005 87,980 268,494 257,538 Security installation, product, and other 200,393 166,286 581,574 429,800 Total revenue $ 1,297,954 $ 1,243,836 $ 3,852,480 $ 3,638,067 The Company allocates the transaction price to each performance obligation based on the relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics. Customer-Owned Transactions - In transactions involving security systems sold outright to the customer (referred to as outright sales ), the Company’s performance obligations generally include the sale and installation of the security system, which is primarily recognized at a point in time based upon the nature of the transaction and contractual terms, and any monitoring and related services, which are recognized when these services are provided to the customer. Company-Owned Transactions - In transactions in which the Company provides monitoring and related services but retains ownership of the security system, the Company’s performance obligations primarily include (i) monitoring and related services, which are recognized when these services are provided to the customer, and (ii) a material right associated with the one-time non-refundable fees in connection with the initiation of a monitoring contract which the customer will not be required to pay again upon a renewal of the contract (referred to as deferred subscriber acquisition revenue). Deferred subscriber acquisition revenue is amortized on a pooled basis over the estimated life of the customer relationship using an accelerated method consistent with the treatment of subscriber system assets and deferred subscriber acquisition costs. Remaining Performance Obligations As of September 30, 2025, the Company’s total remaining unsatisfied performance obligations relating to the provision of monitoring and related services are as follows (in thousands) : 0-12 Months 13-24 Months 25-36 Months Thereafter Total $ 1,901,357 $ 1,052,430 $ 498,703 $ 261,187 $ 3,713,677 Allowance for Credit Losses The Company evaluates its allowance for credit losses on accounts receivable in pools based on customer type. For each customer pool, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience, as adjusted for current and expected future conditions, if applicable. The allowance for credit losses is not material for the individual pools of customers. 11 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Nine Months Ended September 30, (in thousands) 2025 2024 Beginning balance $ 57,795 $ 46,850 Provision for credit losses 125,635 106,697 Write-offs, net of recoveries (1) ( 106,100 ) ( 89,552 ) Ending balance $ 77,330 $ 63,995 ________________ (1) Recoveries were not material for the periods presented. As such, write-offs are presented net of recoveries. Retail Installment Contract Receivables, Net The Company’s RICs allow qualifying residential customers to pay the fees due at installation over a 12-, 24-, 36-, or 60-month interest-free period. The financing component is not significant. Upon origination of a RIC, the Company utilizes external credit scores to assess customer credit quality and determine eligibility. Subsequent to origination, the Company monitors the delinquency status of the RICs as the key credit quality indicator. Delinquent billed RICs are not a material portion of the Company’s RICs. The allowance for credit losses relates to RICs from outright sales transactions and is not material. The following is a summary of unbilled retail installment contract receivables, net: (in thousands) September 30, 2025 December 31, 2024 Retail installment contract receivables, gross $ 686,489 $ 678,174 Allowance for credit losses ( 32,519 ) ( 8,848 ) Retail installment contract receivables, net $ 653,970 $ 669,326 Balance Sheet Classification: Accounts receivable, net $ 265,782 $ 260,224 Other assets 388,188 409,102 Retail installment contract receivables, net $ 653,970 $ 669,326 As of September 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 $ 593 million and $ 575 million, respectively. Refer to Note 6 “Debt” for further discussion regarding the 2020 Receivables Facility. Contract Assets Contract assets represent the Company’s right to consideration in exchange for goods or services transferred to the customer. The contract asset is reclassified to accounts receivable as additional services are performed and billed, which is when the Company’s right to the consideration becomes unconditional. The Company has the right to bill customers as services are provided over time, which generally occurs over the course of a 12-, 24-, 36-, or 60-month period as additional services are performed and billed. There is no significant financing component. Gross contract assets recognized were not material for the periods presented. 12 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands) September 30, 2025 December 31, 2024 Contract assets, gross $ 65,581 $ 46,031 Allowance for credit losses ( 6,462 ) ( 5,221 ) Contract assets, net $ 59,119 $ 40,810 Balance Sheet Classification: Prepaid expenses and other current assets $ 28,576 $ 19,164 Other assets 30,543 21,646 Contract assets, net $ 59,119 $ 40,810 3. SEGMENT INFORMATION The Company reports results in a single operating and reportable segment. The Company’s CODM is its Chairman, President, and Chief Executive Officer. The CODM evaluates performance and allocates resources on a consolidated basis using various measures primarily through reviews of operational performance packages, earnings releases, investor presentations, and the Company’s SEC filings, as well as through the approval of the Company’s annual budget and forecast. The Company’s reported segment profit measure is net income (loss) as this measure is most consistent with the amounts included in the Condensed Consolidated Statements of Operations. In addition, segment assets reviewed by the CODM are reported on the Company’s Condensed Consolidated Balance Sheets as total assets. The accounting policies of the Company’s reportable segment are the same as those of the Company. 13 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Total segment revenue $ 1,297,954 $ 1,243,836 $ 3,852,480 $ 3,638,067 Less significant segment expenses: Customer service costs (1) 108,831 101,272 324,315 307,305 Maintenance costs (1) 52,957 53,472 157,251 153,344 Security installation, product, and other costs 88,922 67,362 259,452 151,996 Selling costs, including commissions (2) 47,598 45,958 138,760 145,133 Amortization of deferred subscriber acquisition costs (2) 64,040 56,119 186,547 165,454 Advertising costs (2) 35,022 32,730 75,210 84,613 Provision for credit losses (2) 50,932 41,509 150,252 125,479 Other general and administrative costs (2) 152,255 173,780 482,178 539,118 Share-based compensation (2) 10,716 10,107 42,886 39,466 Depreciation and intangible asset amortization 347,818 335,270 1,026,069 1,002,131 Interest expense 114,681 163,718 355,725 366,854 Income tax expense (benefit) 55,109 50,235 164,890 166,505 Total significant segment expenses 1,128,881 1,131,532 3,363,535 3,247,398 Less other segment items (3) : Other items in SG&A (2) 23,790 ( 93 ) 33,258 21,354 Other, net 1,771 ( 19,623 ) 1,465 ( 52,781 ) Total other segment items 25,561 ( 19,716 ) 34,723 ( 31,427 ) Reconciliation of profit or loss: (Income) loss from discontinued operations, net of tax (4) ( 1,620 ) 4,869 3,665 111,000 Net income (loss) $ 145,132 $ 127,151 $ 450,557 $ 311,096 ________________ (1) Included in monitoring and related services cost of revenue in the Condensed Consolidated Statements of Operations. (2) Included in SG&A in the Condensed Consolidated Statements of Operations. (3) Other segment items generally include other income and expenses, interest income, as well as certain other items included in SG&A that are not considered significant segment expenses. Interest income is not material for the periods presented. (4) Represents activity related to the Commercial and Solar Businesses (as applicable during the periods), which are presented as discontinued operations. 4. DIVESTITURES 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. Exit charges incurred and paid were not material in 2025. During the nine months ended September 30, 2024, the Company paid approximately $ 21 million associated with the ADT Solar Exit primarily related to employee separation and other restructuring costs. 14 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) During the three months ended September 30, 2024, aggregate exit charges were not material. During the nine months ended September 30, 2024, the Company incurred aggregate exit charges of $ 88 million, which have been recognized within income (loss) from discontinued operations, net of tax related to (i) $ 34 million associated with the write-down and disposition of inventory and asset impairments, (ii) $ 29 million associated with the disposition of the then existing installation pipeline, (iii) $ 13 million associated with employee separation costs, and (iv) $ 11 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 nine months ended September 30, 2025 and September 30, 2024. Balance Sheet Information There were no material assets of discontinued operations as of September 30, 2025 and December 31, 2024. (in thousands) September 30, 2025 December 31, 2024 Current maturities of long-term debt $ — $ 22 Accounts payable 4,980 6,953 Accrued expenses and other current liabilities 19,379 24,788 Total current liabilities of discontinued operations 24,359 31,763 Long-term debt — 32 Other liabilities 9,604 15,857 Total liabilities of discontinued operations $ 33,963 $ 47,652 Statements of Operations Information Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Revenue $ — $ 65 $ — $ 21,360 Cost of revenue ( 1,283 ) 1,091 1,305 62,450 Selling, general, and administrative expenses ( 915 ) 3,919 3,042 93,837 Depreciation and intangible asset amortization — 55 18 1,872 Other (income) and expense items — 5 42 1,478 Income (loss) from discontinued operations before income taxes 2,198 ( 5,005 ) ( 4,407 ) ( 138,277 ) Income tax benefit (expense) ( 578 ) 475 1,162 35,851 Income (loss) from discontinued operations, net of tax $ 1,620 $ ( 4,530 ) $ ( 3,245 ) $ ( 102,426 ) Commercial Divestiture During the periods presented, activity reflected in discontinued operations, net of tax, relating to the Commercial Divestiture was not material. During the nine months ended September 30, 2024, the Company paid the purchaser of the Commercial Business $ 21 million related to the settlement of post-closing adjustments. In connection with the Commercial Divestiture, the Company entered into a Transition Services Agreement (the “Commercial TSA”). During the three and nine months ended September 30, 2025, Commercial TSA income was not material. During the three and nine months ended September 30, 2024, the Company recognized $ 14 million and $ 36 million, respectively, of Commercial TSA income, which is reflected in other income (expense) within continuing operations. 15 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Multifamily Divestiture On September 12, 2025, the Company entered into an Asset Purchase Agreement to sell substantially all of the assets and certain specified liabilities of its multifamily business (the “Multifamily Divestiture”). As a result, the disposal group was classified and reflected as held for sale in the Condensed Consolidated Balance Sheet as of September 30, 2025, including $ 58 million of other assets. The remaining balances were not material and are presented in prepaid expenses and other current assets, accrued expenses and other current liabilities, and other liabilities, as applicable. Additionally, in connection with the classification of the disposal group as held for sale, the Company recorded various impairment charges and other adjustments as of September 30, 2025, which were not material. Refer to Note 5 “Goodwill and Other Intangible Assets.” Subsequent event - On October 1, 2025, the Company completed the Multifamily Divestiture for a purchase price of approximately $ 56 million, subject to certain customary post-closing adjustments. 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill During the three months ended September 30, 2025, the Company recorded a goodwill impairment charge of $ 12 million in connection with the Multifamily Divestiture, which is reflected in SG&A, and reclassified the remaining $ 6 million of goodwill to held for sale. Refer to Note 4 “Divestitures.” Other Intangible Assets September 30, 2025 December 31, 2024 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Contracts and related customer relationships $ 6,643,866 $ ( 3,871,930 ) $ 2,771,936 $ 6,158,349 $ ( 3,464,926 ) $ 2,693,423 Dealer relationships 1,518,020 ( 756,641 ) 761,379 1,518,020 ( 697,324 ) 820,696 Other 199,973 ( 198,802 ) 1,171 209,773 ( 202,793 ) 6,980 Total definite-lived intangible assets 8,361,859 ( 4,827,373 ) 3,534,486 7,886,142 ( 4,365,043 ) 3,521,099 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 9,694,859 $ ( 4,827,373 ) $ 4,867,486 $ 9,219,142 $ ( 4,365,043 ) $ 4,854,099 The change in the net carrying amount of contracts and related customer relationships during the period was as follows: (in thousands) Balance as of December 31, 2024 $ 2,693,423 Customer contract additions, net of dealer charge-backs (1) 487,183 Amortization ( 408,670 ) Balance as of September 30, 2025 $ 2,771,936 ________________ (1) The weighted-average amortization period for customer contract additions was approximately 15 years. 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. 16 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) During the nine months ended September 30, 2025, the Company completed multiple bulk customer account purchases for an aggregate contractual purchase price of $ 132 million, subject to reductions based on customer retention, and paid total cash at the closings of $ 115 million. Definite-Lived Intangible Asset Amortization Expense Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Definite-lived intangible asset amortization expense $ 161,232 $ 151,817 $ 470,501 $ 453,359 6. DEBT The Company’s debt is comprised of the following (in thousands) : Description Issued Maturity Interest Rate (1) Interest Payable September 30, 2025 December 31, 2024 First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR + 2.00 % Quarterly $ 1,969,209 $ 1,984,090 First Lien Term Loan B-2 due 2032 3/7/2025 3/7/2032 Term SOFR + 1.75 % Quarterly 1,145,622 — First Lien Revolving Credit Facility 3/16/2018 10/1/2029 Term SOFR + 2.00 % Quarterly — — First Lien Notes due 2026 4/4/2019 4/15/2026 5.750 % 3/15 and 9/15 300,000 1,350,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375 % 6/15 and 12/15 1,000,000 1,000,000 First Lien Notes due 2029 7/29/2021 8/1/2029 4.125 % 2/1 and 8/1 1,000,000 1,000,000 Second Lien Notes due 2028 1/28/2020 1/15/2028 6.250 % 1/15 and 7/15 1,300,000 1,300,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875 % 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875 % 1/15 and 7/15 21,896 21,896 2020 Receivables Facility (2) 3/5/2020 8/20/2030 Various Monthly 441,090 407,901 Total debt principal, excluding finance leases 7,905,833 7,791,903 Finance lease liabilities (3) 53,506 69,442 Unamortized debt discount, net ( 21,007 ) ( 12,081 ) Unamortized deferred financing costs ( 25,696 ) ( 26,990 ) Unamortized purchase accounting fair value adjustment and other ( 106,803 ) ( 115,201 ) Total debt 7,805,833 7,707,073 Current maturities of long-term debt, net of unamortized debt discount ( 521,725 ) ( 195,791 ) Long-term debt $ 7,284,108 $ 7,511,282 _________________ (1) Interest rate as of September 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 + 0.85 %. (2) Maturity date for the 2020 Receivables Facility represents the final maturity date of current loans borrowed under the facility. (3) Refer to Note 13 “Leases” for additional information regarding the Company’s finance leases. As of September 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” as defined below, together, the “First Lien Term Loan Bs”) and the First Lien Revolving Credit Facility. 17 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) During the nine months ended September 30, 2025, the Company borrowed and repaid $ 198 million under the First Lien Revolving Credit Facility. As of September 30, 2025, the available borrowing capacity was $ 800 million. During the nine months ended September 30, 2024, the Company borrowed and repaid $ 325 million under the First Lien Revolving Credit Facility. Significant activity since December 31, 2024 is as follows: • March 2025 - The Company amended and restated the First Lien Credit Agreement, which provided for the issuance of a new $ 600 million first lien seven-year term loan (the “First Lien Term Loan B-2 due 2032”) (subject to a springing maturity of 91 days prior to the maturity date of certain long-term indebtedness of Prime Security Services Borrower, LLC and its subsidiaries if, on such date, the aggregate principal amount of such indebtedness equals or exceeds $ 1 billion), and received net proceeds of $ 597 million. Loans under the First Lien Term Loan B-2 due 2032 are treated as a separate class from the existing loans under the First Lien Term Loan B due 2030. The First Lien Term Loan B-2 due 2032 requires scheduled quarterly amortization payments, which commenced on June 30, 2025, equal to 0.25 % of the original principal amount of the First Lien Term Loan B-2 due 2032, with the remaining balance payable at maturity. 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 the most recent amendment. Additionally, the Company used the net proceeds to redeem $ 500 million of the First Lien Notes due 2026. • July 2025 - The Company amended and restated the First Lien Credit Agreement, which provided for the issuance of $ 550 million of incremental borrowings under the First Lien Term Loan B-2 due 2032, and received net proceeds of $ 545 million. These incremental borrowings have the same terms as existing loans under the First Lien Term Loan B-2 due 2032. Additionally, the Company used the net proceeds and cash on hand to redeem $ 550 million of the First Lien Notes due 2026. Debt issuance costs incurred as a result of the transactions above were not material during the period. 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 Events - In October 2025, the Company amended and restated the First Lien Credit Agreement, which provided for the issuance of $ 300 million of incremental borrowings under the First Lien Term Loan B-2 due 2032. The Company used the proceeds to partially redeem the Second Lien Notes due 2028. Also in October 2025, the Company partially redeemed $ 200 million of the First Lien Term Loan B due 2030 with proceeds from the Term Loan A due 2030. Term Loan A due 2030 Subsequent event - In October 2025, the Company entered into a term loan credit agreement for an aggregate principal amount of $ 325 million of term loans under a senior secured term loan A facility (the “Term Loan A due 2030”). The Company used a portion of the proceeds to redeem $ 200 million of the First Lien Term Loan B due 2030 and intends to use the remaining proceeds for additional debt redemption. First Lien Notes due 2033 Subsequent event - In October 2025, the Company issued $ 1 billion aggregate principal amount of 5.875 % first-priority senior secured notes due 2033 (the “First Lien Notes due 2033”). The Company used the proceeds to redeem the majority of the Second Lien Notes due 2028. 18 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) First Lien Notes due 2026 Partial Redemptions Significant activity since December 31, 2024 is as follows: • March 2025 - The Company redeemed $ 500 million of the First Lien Notes due 2026, excluding accrued and unpaid interest, for a total redemption price of $ 506 million, which includes a make-whole payment, using proceeds from the Company’s March 2025 issuance of the First Lien Term Loan B-2 due 2032. • July 2025 - The Company redeemed $ 550 million of the First Lien Notes due 2026, excluding accrued and unpaid interest, for a total redemption price of $ 554 million, which includes a make-whole payment, using proceeds from the Company’s July 2025 issuance of the First Lien Term Loan B-2 due 2032 and cash on hand. Loss on extinguishment of debt was not material during the period. Second Lien Notes due 2028 Redemption Subsequent event - In October, 2025, the Company redeemed the Second Lien Notes due 2028, using proceeds from the First Lien Notes due 2033, incremental borrowings under the First Lien Term Loan B-2 due 2032, and cash on hand. 2020 Receivables Facility Under the 2020 Receivables Facility, the Company obtains financing by selling or contributing certain RICs to the Company’s wholly-owned consolidated bankruptcy-remote special purpose entity (the “SPE”), which then grants a security interest in those RICs as collateral for cash borrowings. Significant activity since December 31, 2024 is as follows: • 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. As of September 30, 2025, the Company had an uncommitted available borrowing capacity under the 2020 Receivables Facility of approximately $ 109 million. Variable Interest Entity The SPE meets the definition of a variable interest entity for which the Company is the primary beneficiary as it has the power to direct the SPE’s activities and the obligation to absorb losses or the right to receive benefits of the SPE. As such, the Company consolidates the SPE’s assets, liabilities, and financial results of operations. 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. 7. DERIVATIVE FINANCIAL INSTRUMENTS The Company's derivative financial instruments primarily consist of interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. SOFR is the applicable benchmark for all of the Company's interest rate swap contracts. All interest rate swap contracts are reported at fair value in the Condensed Consolidated Balance Sheets. For interest rate swap contracts that are: • Not designated as cash flow hedges: Unrealized gains and losses are recognized in interest expense, net, and other income (expense) depending on the nature of the underlying that the swaps are economically hedging. • Designated as cash flow hedges: Unrealized gains and losses are recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. 19 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) For interest rate swap contracts that have been de-designated as cash flow hedges and for which forecasted cash flows are: • Probable or reasonably possible of occurring: Unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. • Probable of not occurring: Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. The cash flows associated with certain of the Company’s interest rate swap contracts that were entered into with the intention of offsetting the economic overhedged position of a portion of the Company’s existing interest rate swaps are reflected as cash flows from investing activities. The cash flows associated with certain of the Company’s interest rate swap contracts that included an other-than-insignificant financing element at inception are reflected as cash flows from financing activities. The cash flows associated with certain of the Company’s interest rate swap contracts that are designated as cash flow hedges are reflected as cash flows from operating activities. The Company’s derivative instruments were entered into with the objective of reducing the variability in future expected interest payments on a portion of the Company’s First Lien Term Loan Bs or their replacement. Derivative instruments designated as cash flow hedges were highly effective at inception and are expected to continue to be highly effective. The Company’s interest rate swaps consist of the following (notional amounts in thousands) : Execution Maturity Designation September 30, 2025 December 31, 2024 October 2019 September 2026 Not designated $ 2,800,000 $ 2,800,000 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 June 2025 March 2032 Cash flow hedge 550,000 — July 2025 March 2032 Cash flow hedge 500,000 — July 2025 March 2032 Not designated 100,000 — September 2025 October 2030 Cash flow hedge 200,000 $ — Total notional amount $ 5,150,000 $ 3,800,000 Subsequent event - During October 2025, the Company entered into derivative instruments with a notional amount of $ 1.7 billion with the objective of reducing the variability in future expected interest payments on a portion of the Company’s term loans under its First Lien Credit Agreement or their replacement. Balance Sheet Classification (in thousands) September 30, 2025 December 31, 2024 Prepaid expenses and other current assets $ 54,426 $ 56,164 Other assets 1,250 54,102 Accrued expenses and other current liabilities — ( 1,466 ) Other liabilities ( 11,058 ) ( 208 ) Fair value of interest rate swaps - net asset (liability) $ 44,618 $ 108,592 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 periods presented. 20 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 September 30, Nine Months Ended September 30, Classification (in thousands) 2025 2024 2025 2024 Interest expense, net $ ( 11,481 ) $ ( 58,051 ) $ ( 45,512 ) $ ( 46,429 ) Other income (expense) $ ( 3,849 ) $ ( 4,821 ) $ ( 11,694 ) $ ( 14,699 ) 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 September 30, Nine Months Ended September 30, Changes in AOCI (in thousands) 2025 2024 2025 2024 Interest expense, net $ ( 1,822 ) $ 1,943 $ ( 1,627 ) $ 6,057 Income tax (benefit) expense $ 439 $ ( 471 ) $ 391 $ ( 1,464 ) As of September 30, 2025 and December 31, 2024, AOCI, net of tax, related to previously designated cash flow hedges was not material. 8. INCOME TAXES Unrecognized Tax Benefits The Company’s unrecognized tax benefits relate to tax years that remain subject to audit by the taxing authorities in the U.S. federal, state and local, and foreign jurisdictions. During the nine months ended September 30, 2025, the Company recorded an increase to its unrecognized tax benefits of $ 11 million related to prior year tax positions. 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. Effective Tax Rate The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate. The discussion below is based on the continuing operations of the Company. The Company’s income tax expense for the three months ended September 30, 2025 was $ 55 million, resulting in an effective tax rate for the period of 27.7 %. The effective tax rate primarily represents the federal statutory rate of 21.0 %, a state tax rate, net of federal benefits, of 5.2 %, and an unfavorable impact from a non-deductible goodwill impairment charge of 1.5 %. The Company’s income tax expense for the three months ended September 30, 2024 was $ 50 million, resulting in an effective tax rate for the period of 27.6 %. The effective tax rate primarily represents the federal statutory tax rate of 21.0 % and a state tax rate, net of federal benefits, of 6.2 %. The Company’s income tax expense for the nine months ended September 30, 2025 was $ 165 million, resulting in an effective tax rate for the period of 26.6 %. 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 %. The Company’s income tax expense for the nine months ended September 30, 2024 was $ 167 million, resulting in an effective tax rate for the period of 28.3 %. The effective tax rate primarily represents the federal statutory tax rate of 21.0 %, a state tax rate, net of federal benefits, of 5.8 %, and an unfavorable impact from dispositions of 1.6 %. 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, some of which may be favorable in 2025 to cash taxes. The Company is currently evaluating the impact of the OBBBA on future periods. 21 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 9. EQUITY Common Stock and Class B Common Stock The Company has two classes of common stock, which comprises Common Stock and Class B Common Stock. Share Issuances During the three and nine months ended September 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 2024 Share Repurchase Plan In January 2024, the Company's Board of Directors announced a share repurchase plan (the “2024 Share Repurchase Plan”), pursuant to which the Company was authorized to repurchase, through January 29, 2025, up to a maximum aggregate amount of $ 350 million of shares of the Company's Common Stock. In March 2024, the Company repurchased, and subsequently retired, 15 million shares of its Common Stock under the 2024 Share Repurchase Plan for $ 93 million (or $ 6.22 per share) in connection with a secondary offering of the Company’s Common Stock by Apollo. Refer to Note 14 “Related Party Transactions” for further information. 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 in authorized repurchases remaining. 2025 Share Repurchase Plan In February 2025, the Company's Board of Directors announced a new share repurchase plan (the “2025 Share Repurchase Plan”), pursuant to which the Company was authorized to repurchase, through April 30, 2026, up to a maximum aggregate amount of $ 500 million of shares of the Company's Common Stock. The 2025 Share Repurchase Plan allowed the Company to purchase Common Stock, from time to time, in one or more open market or privately negotiated transactions, including pursuant to Rule 10b5-1 or Rule 10b-18 of the Exchange Act, or pursuant to one or more accelerated share repurchase agreements, subject to certain requirements and other factors. The Company was not obligated to repurchase any of its shares of Common Stock, and the timing and amount of any repurchases depended on legal requirements, market conditions, stock price, the availability of the safe harbor provided by Rule 10b-18 under the Exchange Act, alternative uses of capital, and other factors. In March 2025, the Company repurchased, and subsequently retired, 20 million shares of its Common Stock under the 2025 Share Repurchase Plan for $ 152 million (or $ 7.62 per share) in connection with a secondary offering of the Company’s Common Stock by Apollo. Refer to Note 14 “Related Party Transactions” for further information. 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). Throughout the second quarter of 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). In July 2025, the Company repurchased, and subsequently retired, 11 million shares of its Common Stock under the 2025 Share Repurchase Plan for $ 93 million (or $ 8.31 per share) in connection with a secondary offering of the Company’s Common Stock by Apollo. The Company also repurchased, and subsequently retired, an additional 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 $ 19 million (or $ 8.45 per share). 22 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) As of September 30, 2025, the Company had no authorized amounts remaining under the 2025 Share Repurchase Plan. Dividends (in thousands, except per share data) Common Stock Class B Common Stock Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate During the Nine Months Ended September 30, 2025 2/27/2025 3/13/2025 4/3/2025 $ 0.055 $ 44,175 $ 0.055 $ 3,011 4/24/2025 6/12/2025 7/8/2025 0.055 42,884 0.055 3,011 7/24/2025 9/11/2025 10/2/2025 0.055 42,080 0.055 3,011 Total $ 0.165 $ 129,139 $ 0.165 $ 9,033 During the Nine Months Ended September 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 8/1/2024 9/13/2024 10/4/2024 0.055 47,146 0.055 3,011 Total $ 0.165 $ 141,342 $ 0.165 $ 9,033 Subsequent Event - On November 4, 2025, the Company announced a dividend of $ 0.055 per share to holders of Common Stock and Class B Common Stock of record on December 11, 2025, which will be paid on January 8, 2026. Accumulated Other Comprehensive Income (Loss) During the three and nine months ended September 30, 2025, there were no material reclassifications out of AOCI. Refer to Note 7 “Derivative Financial Instruments.” 10. SHARE-BASED COMPENSATION RSUs During the first quarter of 2025, the Company completed its annual long-term incentive plan equity award (the “2025 Annual Grant”) to employees and granted approximately 3.4 million RSUs under its 2018 Omnibus Incentive Plan, as amended (the “2018 Plan”), with a grant date fair value of $ 7.59 , which is equal to the closing price per share of the Company’s Common Stock on the date of grant. These RSUs are service-based awards with a three-year graded vesting period from the date of grant. Options During the first quarter of 2025, the Company granted approximately 8.3 million options under the 2018 Plan as part of the 2025 Annual Grant. These options are service-based awards with a three-year graded vesting period from the date of grant and have an exercise price of $ 7.59 , which is equal to the closing price per share of the Company’s Common Stock on the date of grant, and a contractual term of ten years from the grant date. The weighted-average grant date fair value for the options granted during the period was $ 2.65 . The Company used a binomial lattice model to determine the grant date fair value for options granted and included the following assumptions: Expected exercise term (years) 6 - 7 Expected volatility (1) 41.7 % Expected dividend yield (2) 2.9 % Risk-free interest rate (3) 4.2 % _________________ (1) Estimated using historical and implied stock price volatility of the Company. (2) Calculated by taking the annual dividend run-rate and dividing by the stock price at date of grant. (3) Based on the U.S. Treasury yield curve. 23 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Other During the first quarter of 2025, the Company modified certain share-based compensation awards and recorded additional share-based compensation expense of $ 11 million associated with these modifications. 11. EARNINGS PER SHARE The Company applies the two-class method for computing and presenting earnings per share for each class of common stock, which allocates current period income (losses) to each class of common stock and participating securities based on dividends declared and participation rights in the remaining undistributed earnings or losses. Basic earnings per share is computed by dividing the income (losses) allocated to each class of common stock by the related weighted-average number of shares outstanding during the period. Diluted earnings per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock and excludes potentially dilutive securities whose effect would have been anti-dilutive. Common Stock 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 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. Three Months Ended September 30, Nine Months Ended September 30, in thousands, except per share amounts 2025 2024 2025 2024 Allocation of income (loss) from continuing operations - basic $ 133,912 $ 124,078 $ 424,496 $ 396,740 Dilutive effect 3,486 3,327 10,484 10,068 Allocation of income (loss) from continuing operations - diluted $ 137,398 $ 127,405 $ 434,980 $ 406,808 Allocation of income (loss) from discontinued operations, net of tax - basic $ 1,512 $ ( 4,576 ) $ ( 3,426 ) $ ( 104,340 ) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ 1,512 $ ( 4,576 ) $ ( 3,426 ) $ ( 104,340 ) Weighted-average shares outstanding - basic 764,742 850,462 783,310 851,539 Dilutive effect (1) 63,706 62,399 63,185 61,757 Weighted-average shares outstanding - diluted 828,448 912,861 846,495 913,296 Income (loss) from continuing operations per share - basic $ 0.18 $ 0.15 $ 0.54 $ 0.46 Income (loss) from continuing operations per share - diluted $ 0.17 $ 0.14 $ 0.51 $ 0.44 Income (loss) from discontinued operations, net of tax, per share - basic $ — $ ( 0.01 ) $ — $ ( 0.12 ) Income (loss) from discontinued operations, net of tax, per share - diluted $ — $ ( 0.01 ) $ — $ ( 0.11 ) _________________ (1) During the three and nine months ended September 30, 2025, 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 nine months ended September 30, 2024, 21 million shares and 20 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. 24 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Class B Common Stock Three Months Ended September 30, Nine Months Ended September 30, in thousands, except per share amounts 2025 2024 2025 2024 Allocation of income (loss) from continuing operations - basic $ 9,600 $ 7,942 $ 29,726 $ 25,356 Dilutive effect ( 475 ) ( 316 ) ( 1,451 ) ( 1,035 ) Allocation of income (loss) from continuing operations - diluted $ 9,125 $ 7,626 $ 28,275 $ 24,321 Allocation of income (loss) from discontinued operations, net of tax - basic $ 108 $ ( 293 ) $ ( 239 ) $ ( 6,660 ) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ 108 $ ( 293 ) $ ( 239 ) $ ( 6,660 ) Weighted-average shares outstanding - basic 54,745 54,745 54,745 54,745 Dilutive effect (1) — — — — Weighted-average shares outstanding - diluted 54,745 54,745 54,745 54,745 Income (loss) from continuing operations per share - basic $ 0.18 $ 0.15 $ 0.54 $ 0.46 Income (loss) from continuing operations per share - diluted $ 0.17 $ 0.14 $ 0.51 $ 0.44 Income (loss) from discontinued operations, net of tax, per share - basic $ — $ ( 0.01 ) $ — $ ( 0.12 ) Income (loss) from discontinued operations, net of tax, per share - diluted $ — $ ( 0.01 ) $ — $ ( 0.11 ) ________________ (1) There were no potential shares of Class B Common Stock during the periods presented. 12. COMMITMENTS AND CONTINGENCIES Contractual Obligations There have been no significant changes to the Company’s contractual obligations as compared to December 31, 2024, except as discussed below: Google Commercial Agreement 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 nine months ended September 30, 2025, $ 20 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. 25 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Google Cloud Agreement Addendum In December 2023, the Company and Google entered into an addendum to the Company’s existing agreement with Google 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), with $ 35 million in the first two years , $ 65 million in the next two years after that, and $ 100 million in the last three years of the commitment. 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 September 30, 2025, the Company continues to work to meet this commitment. Other Commitments 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 nine months ended September 30, 2025, purchases toward this commitment were approximately $ 140 million. Guarantees In the normal course of business, the Company is liable for contract completion and product performance. As of September 30, 2025 and December 31, 2024, the Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $ 48 million and $ 74 million, respectively. The Company does not believe such obligations will materially affect its financial position, results of operations, or cash flows. Legal Proceedings The Company is subject to various claims and lawsuits in the ordinary course of business, which include among other things commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, claims related to alleged alarm system failures, claims that the Company infringed on the intellectual property of others, and consumer and employment class actions. 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 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. The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables or other indemnifications from third-parties when recovery has been determined to be probable. 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 September 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. 26 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 13. LEASES Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity and wholly-owned subsidiary, ADT LLC. Right-of-Use Assets and Lease Liabilities (in thousands) September 30, 2025 December 31, 2024 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 93 $ 80 Operating Non-current Other assets 84,159 80,768 Finance Non-current Property and equipment, net (1) 45,547 61,827 Total right-of-use assets $ 129,799 $ 142,675 Operating Current Accrued expenses and other current liabilities $ 16,979 $ 18,811 Finance Current Current maturities of long-term debt 23,036 25,593 Operating Non-current Other liabilities 81,545 77,884 Finance Non-current Long-term debt 30,470 43,849 Total lease liabilities $ 152,030 $ 166,137 _________________ (1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $ 83 million and $ 66 million as of September 30, 2025 and December 31, 2024, respectively. Lease Cost Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2025 2024 2025 2024 Operating lease cost $ 5,391 $ 7,365 $ 18,545 $ 20,943 Finance lease cost: Amortization of right-of-use assets 5,602 6,095 16,454 16,203 Interest on lease liabilities 815 1,109 2,579 3,514 Variable lease costs 9,682 8,701 29,831 24,428 Total lease cost $ 21,490 $ 23,270 $ 67,409 $ 65,088 Lease Liabilities Arising from Obtaining Right-of-Use Assets (1) Nine Months Ended September 30, ( in thousands ) 2025 2024 Operating leases $ 18,344 $ 14,200 Finance leases $ 9,525 $ 33,283 _________________ (1) Includes both continuing and discontinued operations, as applicable. Company as Lessor 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. 27 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net. 14. 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 with Apollo or State Farm. There were no notable related party transactions during the periods presented other than as described below. Apollo 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 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 (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. The repurchase is reflected as a reduction to additional paid-in-capital and as a financing cash outflow. The March 2025 Offering and the March 2025 Share Repurchase closed on March 4, 2025. On March 7, 2025, the March 2025 Underwriters exercised the March 2025 Underwriters’ Option in full, which subsequently closed on March 11, 2025. June 2025 Apollo Sale During the second quarter of 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 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. July 2025 Offering and Share Repurchase During the third quarter of 2025, the Selling Stockholders sold 71 million shares of the Company’s Common Stock (plus an additional 10.65 million shares at the option of the underwriters) (the “July 2025 Offering”). In connection with the July 2025 Offering, the Company repurchased, and subsequently retired, 11 million shares of its Common Stock under the 2025 Share Repurchase Plan for an aggregate purchase price of $ 93 million (or approximately $ 8.31 per share). March 2024 Offering and Share Repurchase During the first quarter of 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). The shares in the above offerings were sold by the Selling Stockholders; and the Company did not receive any of the proceeds from the sale of shares by the Selling Stockholders. In addition, the Company did not pay any underwriting fees, including on behalf of the Selling Stockholders or otherwise. 28 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Other Transactions with Apollo During the nine months ended September 30, 2025 and 2024, other fees incurred to Apollo were not material. State Farm 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 received $ 100 million during 2022. 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 September 30, 2025 and December 31, 2024, the balance of 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 the corresponding liability is presented in accrued expenses and other current liabilities. During the nine months ended September 30, 2025 and 2024, the Company made payments from the Opportunity Fund of $ 6 million and $ 10 million, respectively. Interest earned on the Opportunity Fund was not material. Subsequent event - The State Farm Development Agreement expired on October 13, 2025. On October 24, 2025, the Company repaid to State Farm substantially all of the balance of the Opportunity Fund held by the Company. State Farm has no obligation to fund the Opportunity Fund in the future. In addition, the Company ended its State Farm partnership programs in existing states in connection with the expiration of the State Farm Development Agreement. 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 periods presented. 29 Table of Contents