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and develop or acquire and bring products and services, including enhancements, to market quickly and cost-effectively.
−Removed: Our ability to develop, alone or with third parties, or to acquire new products and services that are technologically innovative requires the investment of significant resources and can affect our competitive position.
−Removed: In addition, the dynamic nature of these changes requires that we simultaneously engage in significant technology developmental efforts across our operations, including platform development, sales, marketing, customer care, customer self-service, remote assistance, billing, and other substantive and administrative functions.
−Removed: Upgrading and implementing changes to any one of our systems presents challenges, including potential interruptions to system operations as changes are made, which could disrupt or reduce their efficiency in the short term and temporarily affect the quality of the products and services offered to customers.
+Added: Our ability to develop, alone or with third parties, or to acquire new products and services that are technologically innovative requires the investment of significant resources and can affect our competitive position or financial condition.
+Added: In addition, the dynamic nature of these changes requires that we simultaneously engage in significant technological development efforts across our operations, including platform development, sales, marketing, customer care, customer self-service, remote assistance, billing, and other substantive and administrative functions.
+Added: Upgrading and implementing changes to any one of our systems presents challenges, including potential interruptions to system operations as changes are made, which could disrupt or reduce their efficiency in the short term and temporarily affect the quality or availability of the products and services offered to customers.
Moreover, the age of our systems and architecture may present unique challenges that we have not previously encountered as we undertake these developmental efforts simultaneously across our operations.
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For example, in July 2020, we entered into the Google Commercial Agreement, pursuant to which Google agreed to supply us with certain Google Devices and Services for sale to our customers.
−Removed: We have agreed, with certain exceptions, to exclusively provide or sell those Google Devices and Services to our customers, although Google can sell the same or similar devices to our competitors who may more successfully commercialize products or services that are competitive to ours, thereby materially harming our business.
−Removed: Given this exclusivity arrangement with Google, if Google fails to perform or to provide Google Devices and Services that continually meet the demands of our customers, or fails to provide continued innovation and investment in their relevant product businesses, or if we fail to provide or sell the Google Devices and Services that Google provides, or if we fail to develop products and services with Google that our customers find desirable, all in a timely manner, or if Google were to begin offering security products or services competitive to our own, our business, financial condition, results of operations, and cash flows could be materially, adversely impacted.
−Removed: In addition, subject to customary termination rights related to breach and change of control, the Google Commercial Agreement has an initial term of seven years from the date that the Google Devices and Services are successfully integrated into our end-user security and automation platform.
+Added: We have agreed until November 2030, with certain exceptions and subject to customary termination rights related to breach and change of control, to exclusively provide or sell those Google Devices and Services to our DIFM customers, although Google can sell the same or similar devices to our competitors who may more successfully commercialize products or services that compete with ours, thereby materially harming our business.
+Added: Given this exclusivity arrangement with Google, if Google fails to perform or to provide Google Devices and Services that continually meet the demands of our DIFM customers, or fails to provide continued innovation, management, and investment in their relevant product businesses, or if we fail to provide or sell the Google Devices and Services that Google provides, or if we fail to develop products and services with Google that our customers find desirable, all in a timely manner, or if Google were to begin offering security products or services that compete with ours, our business, financial condition, results of operations, and cash flows could be materially, adversely impacted.
Product introductions and the timing of such integration are focused on customer experience and are mutually agreed upon.
−Removed: Until the launch of such integration, Google has the contractual right to require us, with certain exceptions, to exclusively offer those Google Devices and Services without such integration for all new professional installations and for existing customers who do not otherwise have ADT Pulse or ADT Control interactive services.
−Removed: In November 2020, we announced the ongoing development of our proprietary ADT-owned next-generation professional security and automation technology platform that we launched in 2023 as ADT+.
+Added: We launched our proprietary ADT-owned next-generation professional security and automation technology platform in 2023 as ADT+.
Our ADT+ platform is intended to provide customers with a seamless experience across security, life safety, automation, and analytics through a common application that integrates the user experience, the customer service experience, and back-end support.
−Removed: We may not achieve a successful
−Removed: ongoing rollout of the platform, and new platform features, in a timely manner, within budget, or in a manner that enables the commercialization of products and services that meet the continually evolving demands of our customers, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: Our systems, including the ADT+ platform, may contain defects, bugs, security vulnerabilities, performance degradation, or integration issues (including with third-party devices, operating systems, and cloud services) that could cause service interruptions, impaired functionality, or a negative customer experience, and we may not achieve a successful continued rollout of the ADT+ platform, and new platform features, in a timely manner, within budget, or in a manner that enables the commercialization of products and services that meet the continually evolving demands of our
+Added: customers, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: Additionally, our DIY offerings rely heavily on digital customer journeys and our ability to deliver a consistent and reliable end-to-end experience through our platforms, mobile applications, and distribution and fulfillment capabilities.
+Added: Any delays, defects, outages, or implementation challenges across these systems could negatively affect customer adoption and retention.
As we continue to commercialize products based upon our interactive platform, we have adjusted processes for reviewing and securing intellectual property rights.
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Regardless of the merits of these lawsuits and any steps we take to mitigate infringement risk, any allegations could cause us to incur significant costs to defend and resolve, and could harm our business and reputation, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: In September 2022, we entered into a strategic relationship with State Farm with the goal of expanding our customer base by developing integrated solutions for State Farm’s customers.
−Removed: As part of the strategic relationship, in October 2022, we entered into the State Farm Development Agreement, pursuant to which State Farm committed up to $300 million to fund product and technology innovation, customer growth, and marketing initiatives with us.
−Removed: Subject to the terms of the State Farm Development Agreement, we have agreed not to enter into any development, marketing, distribution, or other arrangement with certain competitors of State Farm and to refrain from developing, marketing, distributing, or making available to certain competitors of State Farm any products or services developed in connection with the State Farm Development Agreement.
−Removed: If we fail to successfully develop products and services that are utilized by State Farm’s customer base pursuant to the State Farm Development Agreement, or if such agreement is not extended past its initial term expiring on October 13, 2025, we may not achieve or realize the anticipated financial, strategic and other benefits of the strategic relationship with State Farm, and our growth prospects and our business, financial condition, results of operations, and cash flows could be materially adversely affected.
−Removed: Any new or enhanced products and services that we develop alone or pursuant to existing or new agreements with third parties may not satisfy customer preferences, and potential product failures may cause customers to reject our products and services.
+Added: Any new or enhanced products and services that we develop alone or pursuant to existing or new agreements with third parties may not satisfy customer preferences or our expectations, and potential product failures may cause customers to reject our products and services.
As a result, these products and services may not achieve market acceptance, and our brand image could suffer.
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The failure of our technology, products, or services to gain market acceptance, the potential for product defects, or the obsolescence of our products and services could significantly reduce our revenue, increase our operating costs, or otherwise materially adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: The home security and automation markets in which we sell our products and services are highly competitive, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products and services.
+Added: Further, our ability to realize the anticipated benefits of certain technology initiatives may depend on the successful completion and integration of potential acquisitions, which are subject to uncertainty and risk.
+Added: On February 20, 2026, we acquired Origin AI, a provider of AI-enabled presence detection and ambient sensing technology.
+Added: Origin AI’s technology uses artificial intelligence and radio frequency signals to detect and classify human presence and activity within the home without the use of cameras, audio, or wearable devices.
+Added: This technology is expected to enhance our ability to deliver improved alarm verification, reduce false alarms, and support new intelligent security and smart home use cases over time.
+Added: In connection with our acquisition of Origin AI, we face risks related to the integration, development, and commercialization of Origin AI’s technology.
+Added: Origin AI’s AI‑enabled presence detection and ambient sensing technology is relatively new and may require additional development, testing, and integration with our existing platforms and offerings.
+Added: We may experience challenges integrating Origin AI’s technology, personnel, and operations into our business, or may be unable to achieve the anticipated benefits of the acquisition within the expected timeframes or at all.
+Added: In addition, the successful commercialization of Origin AI’s technology depends on customer adoption, evolving regulatory and industry standards applicable to artificial intelligence and wireless technologies, and our ability to effectively incorporate these capabilities into our products and services.
+Added: Failure to successfully integrate or commercialize Origin AI’s technology could adversely affect our business, results of operations, and financial condition.
+Added: As we continue to develop our ADT+ platform and integrate our ambient sensing technologies, we face inherent risks associated with a “software-as-a-product” model.
+Added: Unforeseen software bugs, technical glitches, or latency in our cloud infrastructure could disrupt primary security and life-safety functions.
+Added: Such failures could lead to significant reputational harm, customer dissatisfaction, and potential liability if a system fails to perform as intended.
+Added: The home security and automation markets in which we sell our products and services are highly competitive, and many companies, including large technology companies and other service providers have significant resources and established customer bases, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products and services.
We experience significant competitive pressure in both the DIFM and DIY spaces.
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We also face competition in the DIY space from companies such as SimpliSafe, Wyze Home Monitoring, and Amazon Ring, which enable customers to self-monitor and control their environments without third-party involvement through the Internet, text messages, emails, or similar communications.
+Added: Our strategic expansion into traditional retail and e-commerce (“e-tail”) channels to grow our DIY market share introduces significant execution and margin risks.
+Added: Entry into these high-volume consumer channels requires us to compete directly with established global consumer electronics brands that may have greater scale or lower cost structures.
+Added: This shift may result in lower unit margins compared to our traditional professional installation model.
Some DIY providers may also offer professional monitoring with the purchase of their systems and equipment without a contractual commitment, or offer new Internet of Things (“IoT”) devices and services with automated features and capabilities, which may be appealing to customers and put us at a competitive disadvantage.
−Removed: In addition, certain DIY providers have a significantly broader customer base and product offering than us, allowing them to cross-subsidize their offerings through their other product offerings and cross-sell interactive and security solutions that are competitive with our offerings to customers who are loyal to the competitor’s brand.
+Added: In addition, certain
+Added: DIY providers have a significantly broader customer base and product offering than us, allowing them to cross-subsidize their offerings through their other product offerings and cross-sell interactive and security solutions that are competitive with our offerings to customers who are loyal to the competitor’s brand.
Continuing expansion in customers’ options to choose systems that they can in part or fully install could increase our attrition rates over time and the risk of accelerated amortization of customer contracts resulting from a declining customer base.
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(ii) may have access to greater capital and resources than us;
−Removed: and (iii) may spend significantly more on advertising, marketing, and
−Removed: promotional resources, as well as the acquisition of other companies with home automation solution offerings, any of which could have a material adverse effect on our ability to drive awareness and demand for our products and services.
+Added: and (iii) may spend significantly more on technology development, advertising, marketing, and promotional resources, as well as the acquisition of other companies with home automation solution offerings, any of which could have a material adverse effect on our ability to drive awareness and demand for our products and services.
We may also face competition for direct sales from our independent, third-party authorized dealers, who may offer installation in particular markets for considerably less than we do.
Additionally, one or more of our competitors either in the DIFM or DIY space could develop a significant technological advantage over us, allowing them to provide additional or better-quality service or lower prices, which could put us at a competitive disadvantage.
−Removed: Continued pricing pressure, technology improvements, competitor brand loyalty, and continuing shifts in customer preferences toward self-monitoring and DIY could adversely impact our customer base, revenue, and/or pricing structure and have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: Continued pricing pressure, technology developments or improvements, including the use of artificial intelligence, competitor brand loyalty, and continuing shifts in customer preferences toward self-monitoring and DIY could adversely impact our customer base, revenue, and/or pricing structure and have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Aggressive pricing strategies adopted by our competitors could cause us to lose market share, reduce our prices, and add significant pressure on our cost structure.
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If these incentives are reduced or eliminated, new homeowners who otherwise might not feel the need for monitored security services would have to be acquired through our standard sales and marketing processes, which could be at a higher cost of acquisition, and existing customers may choose to disconnect or not renew their service contracts, which could increase our attrition rates.
−Removed: In addition, as a result of our strategic relationship with State Farm, other insurance companies may offer rate reduction policies that favor our competitors’ customers or may otherwise modify their practices in detriment of our customers.
+Added: In addition, other insurance companies may offer rate reduction policies that favor our competitors’ customers or may otherwise modify their practices in detriment of our customers.
In each case, our growth prospects and our business, financial condition, results of operations, and cash flows could be materially adversely affected.
−Removed: The retirement of older telecommunications technology by telecommunications providers and limitations on our customers’ options of telecommunications services and equipment could materially adversely affect our business, increase customer attrition, and require significant capital expenditures.
+Added: The retirement of older technologies, development of new technologies incompatible with our existing offerings, and limitations on our customers’ options of telecommunications and broadband services and equipment could materially adversely affect our business, increase customer attrition, and require significant capital expenditures.
Certain elements of our operating model have historically relied on our customers’ continued selection and use of traditional copper wireline telecommunications service to transmit alarm signals to our monitoring centers.
There is a growing trend for customers to switch to the exclusive use of cellular or IP-based technology in their homes and businesses, as telecommunication providers discontinue their copper wireline services in favor of IP-based technology.
−Removed: Many of our customers’ security systems rely on technology that is not operable with newer cellular or IP-based networks, and as such, will not transmit alarm signals on these networks.
−Removed: The discontinuation of copper landline services, older cellular technologies, and other services by telecommunications providers, as well as the switch by customers to the exclusive use of cellular or IP-based technology, may require system upgrades to alternative, and potentially more expensive, alarm systems to function and transmit alarm signals properly, which could increase our customer revenue attrition.
+Added: Some of our customers’ security systems rely on technology that is not operable with newer cellular or IP-based networks, and as such, will not transmit alarm signals on these networks.
+Added: The discontinuation of copper landline services, older cellular technologies, and other services by
+Added: telecommunications providers, as well as the switch by customers to the exclusive use of cellular or IP-based technology, may require system upgrades to alternative, and potentially more expensive, alarm systems to function and transmit alarm signals properly, which could increase our customer revenue attrition.
Additionally, any telecommunications technology upgrades or implementations could also result in significant additional costs and divert management and other resource attention away from customer service and sales efforts for new customers.
In the future, we may not be able to successfully implement new telecommunications technologies or adapt existing telecommunications technologies to changing market demands.
−Removed: If we are unable to adapt in a timely manner to changing telecommunications technologies, market conditions or customer preferences, our business, financial condition, results of operations, and cash flows could be materially adversely affected.
−Removed: In February 2022, a major provider of 3G cellular networks began to retire its network and a major provider of Code-Division Multiple Access (“CDMA”) began to do so in December 2022.
+Added: For example, between 2022 and 2023, major U.S.
+Added: 3G cellular networks were retired, resulting in a loss of signal to legacy systems that relied on 3G communications.
Of our customers impacted by these retirements, we transitioned, or provided our customers with the means to transition, all but a relatively small number of customer accounts.
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We have also become aware that one or more telecom carriers are beginning the process to retire their time-division multiplexing (“TDM”) nodes that service toll-free numbers, which could require us to further upgrade certain of our customer equipment.
+Added: Furthermore, a majority of our existing subscriber base uses legacy systems, such as ADT Pulse or non-interactive legacy burglar alarm systems, and associated hardware that are nearing or have reached the end of their supported lifecycles.
+Added: Our ability to continue supporting these systems is subject to significant risk, particularly where we depend on third-party providers for software or hardware support, system updates, and bug fixes.
+Added: Should these third parties designate systems as “end-of-life” or otherwise cease support, we could be forced to assume substantial costs to maintain these systems independently or accelerate their retirement.
+Added: Additionally, as legacy hardware becomes obsolete, it may become susceptible to unpatchable security vulnerabilities or suffer from a lack of available replacement parts.
+Added: These legacy systems are also incompatible with our ADT+ platform and features, including our planned ambient intelligence development through our acquisition of Origin AI.
+Added: Migrating these subscribers to the ADT+ platform would require significant capital investment or customer-funded hardware upgrades.
+Added: These customers may be at higher risk of attrition as they become more susceptible to competitors offering additional features and newer hardware at lower entry prices.
+Added: If we are unable to adapt in a timely and cost-effective manner to technological obsolescence and changing technologies or customer preferences, our business, financial condition, results of operations, and cash flows could be materially adversely affected.
In addition, we use broadband Internet access service to support our product offerings, such as video monitoring and surveillance, and as a communications option for alarm monitoring and other services.
−Removed: Video monitoring and surveillance services use significantly more bandwidth than non-video Internet activity.
−Removed: As utilization rates and penetration of these services increase, the need for increased network capacity may necessitate incurring additional capital or operational expenditures to avoid service disruptions and enable a seamless video experience for our customers.
−Removed: Further, if our customers decide to transition from traditional broadband Internet access services to fixed mobile Internet access services, they may encounter data limits which could negatively impact their use of video monitoring and surveillance, any of which could materially adversely impact our business, financial condition, results of operations, and cash flows.
+Added: Broadband connectivity is also a current requirement for our proprietary Wi-Fi sensing and ambient intelligence capabilities acquired through Origin AI.
+Added: While these features are not yet commercially deployed to our ADT+ platform, our ability to successfully enable and maintain future ambient sensing functionalities, including human presence detection and activity classification, may depend on the continued availability of high-speed, reliable broadband service.
+Added: Video monitoring and surveillance services, and Wi-Fi sensing, use and require significant bandwidth.
+Added: As use rates and penetration of these services increase, the need for increased network capacity may necessitate additional steps or costs (such as upgrading broadband equipment or service tiers) for our customers, or additional capital or operational expenditures for us, to enable a seamless experience for our customers and avoid service disruptions.
+Added: Further, if our customers continue to transition from traditional broadband Internet access services to fixed mobile Internet access services, they may encounter data limits which could negatively impact their use of video monitoring and surveillance, or future Wi-Fi sensing services, any of which could materially adversely impact our business, financial condition, results of operations, and cash flows.
Police and fire departments could refuse to respond to calls from monitored security service companies, which could damage consumer trust and confidence in our solutions and may damage our ability to attract and retain customers.
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We offer video verification or the option to receive a response from private guard companies in certain jurisdictions, which increases the cost of some security systems and may increase the cost to customers.
−Removed: If additional police and fire departments refuse to respond or are prohibited from responding to calls from monitored security service companies unless certain conditions, such as those mentioned above, are met, consumer trust and confidence in our solutions may be damaged and our ability to attract and retain customers could be negatively impacted, and our business, financial condition, results of operations, and cash flows could be materially adversely affected.
+Added: If additional police and fire departments refuse to respond or are prohibited from responding to calls from monitored security service
+Added: companies unless certain conditions, such as those mentioned above, are met, consumer trust and confidence in our solutions may be damaged and our ability to attract and retain customers could be negatively impacted, and our business, financial condition, results of operations, and cash flows could be materially adversely affected.
Our reputation as a service provider of high-quality security offerings may be materially adversely affected by product defects or shortfalls in customer service.
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Customers generally judge our performance through their interactions with staff at our monitoring and customer care centers, dealers, and field installation and service technicians, as well as their day-to-day interactions with our products and mobile applications.
+Added: These interactions may also generate reviews and social media posts, including negative ones, that draw additional attention to our customer service.
Any failure to meet customers’ expectations in such customer service areas could harm our reputation or customer relationships and cause an increase in attrition rates or make it difficult to obtain new customers or otherwise have a material adverse effect on our business, financial condition, results of operations, and cash flows.
In addition, we have attempted to control the operating costs of certain of our customer care operations using lower cost labor in certain foreign countries that may be subject to relatively higher degrees of political and social instability and may lack the infrastructure to withstand political unrest or natural disasters.
−Removed: The occurrence of natural disasters, pandemics, political or economic instability, or other activities in such countries could result in the sudden and continued closure of operations that in turn could cause disruptions in our operations and a failure to maintain our existing level and quality of customer care.
+Added: The occurrence of natural disasters, pandemics, political or economic instability, or other activities in such countries has resulted in and, in the future could result in, the sudden and continued closure of operations that in turn have caused and, in the future could cause, disruptions in our operations and a failure to maintain our existing level and quality of customer care.
The practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States.
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Despite our precautions, we cannot provide assurance that those procedures are sufficient to protect against unauthorized third-party use of our brand names.
−Removed: In recent years, various third parties have used our brand names to engage in fraudulent activities, including unauthorized telemarketing conducted in our names to induce our existing customers to switch to competing monitoring service providers, lead generation activities for competitors, and obtaining personally identifiable or personal financial information.
−Removed: Third parties sometimes use our names and trademarks, or other confusingly similar variations thereof, in other contexts that may impact our brands.
+Added: Various third parties have used, and may continue to use, our brand names to engage in fraudulent activities, including unauthorized telemarketing conducted in our names to induce our existing customers to switch to competing monitoring service providers, lead generation activities for competitors, and obtaining personally identifiable or personal financial information.
+Added: Third parties sometimes use our names and trademarks, or other confusingly similar variations thereof, in other unauthorized contexts that may impact our brands.
We may not be successful in detecting, investigating, preventing, or prosecuting all unauthorized third-party use of our brand names.
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These factors could materially adversely affect our reputation, business, financial condition, results of operations, and cash flows.
−Removed: Third parties hold rights to certain of our key brand names outside of the U.S., which could prevent us from being able to adequately protect our brands or expand into other markets.
+Added: Third parties hold rights to certain of our key brand names, which could prevent us from being able to adequately protect our brands or expand into other markets.
Our success depends in part on our continued ability to use trademarks to capitalize on our brands’ name recognition and to further develop our brands in the U.S., as well as in other international markets should we choose to expand and grow our business outside of the U.S.
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Virgin Islands) and Canada, and we may not challenge Tyco’s rights in such trademarks outside the U.S.
−Removed: Additionally, under the Tyco Trademark Agreement, we and Tyco each has the right to propose new secondary source indicators (e.g., “Pulse”) to become designated source indicators of such party.
+Added: Additionally, under the Tyco Trademark Agreement, we and Tyco each have the right to propose new secondary source indicators (e.g., “Pulse”) to become designated source indicators of such party.
To qualify as a designated source indicator, certain specified criteria must be met, including that the indicator has not been used as a material indicator by the non-proposing party or its affiliates over the previous seven years.
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In connection with our sale of ADT Canada, we also entered into a patent and trademark license agreement with TELUS granting them (i) the use of our patents in Canada for a period of seven years and (ii) the exclusive rights to use our trademarks in Canada for a period of five years followed by non-exclusive use of our trademarks for an additional two years.
−Removed: Any violation by TELUS of our agreements with them, or their misuse of our intellectual property or behavior by TELUS in a manner that incorrectly reflects poorly on us because of TELUS’s use of our intellectual property could damage our brand and reputation and have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: In addition, in October 2023, we completed the sale of our Commercial Business, and among other things, entered into a covenant agreement not to assert a claim against GTCR for infringement of the Company's patents as of the Commercial Divestiture for products and services that were used in the Commercial Business prior to the Commercial Divestiture, and provided GTCR with a paid-up, irrevocable, non-assignable (with limited exceptions) license to continue to use certain software and other Company intellectual property in the same manner.
+Added: Any violation by TELUS or GTCR of our agreements with them, or their misuse of our intellectual property or behavior by TELUS or GTCR in a manner that reflects poorly on us because of their use of our intellectual property could damage our brand and reputation and have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Risks Related to Our Operations
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Accordingly, our long-term profitability is dependent on long customer tenure.
−Removed: This requires that we minimize our rate of customer disconnects, or attrition, which can increase as a result of factors such as customer relocations, problems with our product or service quality, customer service challenges, increased interoperability of smart home devices now or in the future, customer non-pay, unfavorable general economic conditions, and the preference for lower pricing of competitors’ products and services over ours.
+Added: This requires that we minimize our rate of customer disconnects, or attrition, which can increase as a result of factors such as customer relocations, problems with our product or service quality, customer service challenges, increased interoperability of smart home devices now or in the future, customer non-payment, unfavorable general economic conditions, and the preference for lower pricing of competitors’ products and services over ours.
If attrition rates were to rise significantly, we may be required to accelerate the depreciation and amortization expense for, or to impair, certain of our assets, including with respect to subscriber and customer relationships, which would cause a material adverse effect on our financial condition and results of operations.
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We routinely implement modifications and upgrades to our existing information technology systems to keep up with changing technology and business demands.
−Removed: Aiming to provide a seamless customer experience, we are also integrating systems from our various acquisitions, making changes to legacy systems, replacing legacy systems with successor systems with new functionality, and implementing new systems.
−Removed: We are also implementing modifications to various technology platforms and systems related to the Commercial Divestiture, including as part of the transition services related to the Commercial Divestiture.
+Added: Aiming to provide a seamless customer
+Added: experience, we are also integrating systems from our various bulk account acquisitions, making changes to legacy systems, replacing legacy systems with successor systems with new functionality, and implementing new systems.
The dynamic nature of these and other changes we are undertaking require that we simultaneously engage in significant technology development efforts across our operations, including platform development, sales, marketing, customer care, customer self-service, remote assistance, billing, and other substantive and administrative functions.
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As we increase our reliance on cloud infrastructure, our products and services will become increasingly reliant on continued access to, and the continued stability, reliability, and flexibility of third-party cloud services.
−Removed: We have limited control over third-party cloud operations and facilities on which we plan to host our technology infrastructure.
−Removed: Any changes in third-party service levels or any disruptions or delays from errors, defects, cyber attacks, security breaches, computer viruses, DDoS attacks, bad acts, or performance problems resulting from our increased reliance on cloud infrastructure could harm our reputation, damage our small business customers’ businesses, and harm our business.
+Added: We have limited control over third-party cloud operations and facilities that currently host our technology infrastructure and will likely have limited control over those that we may use in the future.
+Added: Any changes in third-party service levels or any disruptions or delays from errors, defects, cyber attacks, security breaches, computer viruses, DDoS attacks, bad acts, performance problems, or other disruptions resulting from our increased reliance on cloud infrastructure could harm our reputation, damage our small business customers’ businesses, and harm our business.
Our third-party cloud providers are also vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, war, public health crises, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events.
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or misplaced data or data loss that could materially adversely impact our reputation, business, financial condition, results of operations, and cash flows.
−Removed: Despite our security measures, we and third parties whose systems are interconnected with ours have been the target of and/or subject to a number of these methods of cyber attacks, including the Cybersecurity Incidents, and we will likely continue to be the target of and/or subject to such attacks in the future.
−Removed: These cyber attacks have previously resulted, and may in the future
−Removed: result, in certain impacts to us or interconnected third-parties, including disrupted operations, system instability, theft of our confidential or proprietary or other information, increased cybersecurity protection, consulting and legal costs, litigation, and reputational damage.
+Added: Despite our security measures, we and third parties whose systems are interconnected with ours have been the target of and/or subject to a number of these methods of cyber attacks, and we will likely continue to be the target of and/or subject to such attacks in the future.
+Added: These cyber attacks have previously resulted, and may in the future result, in certain impacts to us or interconnected third-parties, including disrupted operations, system instability, theft of our confidential or proprietary or other information, increased cybersecurity protection, consulting and legal costs, litigation, and reputational damage.
These cyber attacks have previously exposed, and may in the future expose, us to an increased risk of future cyber attacks and threats, including through an increase in more sophisticated and targeted cyber attacks from various methods, including phishing, malware, and ransomware, among other methods.
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While we maintain insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may not be sufficient to cover all losses or all types of claims that have arisen or may arise, and in the future may not be available at reasonable costs or at all.
−Removed: In addition, following the Commercial Divestiture, certain of our information systems and our information security protocols remain interdependent on those of our divested Commercial Business, including dependence for a transitional period on its information systems for billing and alarm monitoring for a small portion of our clients’ accounts.
+Added: In addition, following the Commercial Divestiture, certain of our information systems and our information security protocols remained interdependent on those of our divested Commercial Business, including dependence for a transitional period on its information systems for billing and alarm monitoring for a small portion of our clients’ accounts, which exposed us to increased risks related to cyber attacks.
Moreover, certain employees of our former Commercial Business have had and will have access to our financial and other internal systems for a period of time which has exposed and will continue to expose us to increased risks related to information theft and unauthorized system access.
−Removed: For more information on the continuing services relationship between ADT and our former Commercial Business, see “ We may not achieve some or all of the strategic and financial benefits that we expect to achieve from the Commercial Divestiture or the ADT Solar Exit which could have a material adverse effect on our financial condition and results of operations.”
−Removed: This interconnection with our former Commercial Business was exploited by an unauthorized actor in the October Incident and exposes us to increased risks related to cyber attacks.
+Added: For more information on the continuing services relationship between ADT and our former Commercial Business, see “ ADT is a less diversified business following the Commercial Divestiture, the ADT Solar Exit, and the sale of our multifamily business, which may adversely affect ADT’s results of operations and financial condition.
+Added: This interconnection with our former Commercial Business has in the past exposed us to increased risks related to cyber attacks.
Cyber attacks and threats at our former Commercial Business have in the past led, and may in the future lead, to cyber attacks and threats to our systems and assets.
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Third parties, including our partners and vendors, could also be a source of cybersecurity risk to us, or cause disruptions to our normal operations, in the event of a failure of their own products, components, networks, security systems, and infrastructure.
−Removed: For example, in 2021, one of our vendors, the Ultimate Kronos Group (“Kronos”), which is a workforce management and human capital management cloud provider, experienced a ransomware attack that resulted in Kronos temporarily decommissioning the functionality of certain of its cloud software, requiring us to find alternative methods to properly pay our employees and to monitor the status of the work in progress of certain of our projects in a timely manner.
In addition, some of the products we sell and provide services for are categorized as IoT and may become targets for cybercriminals and other actors, including for actors attempting to gain unauthorized access.
−Removed: The significant increase in the number of our employees working from home further exposes us to security risks.
−Removed: Although we take steps to secure confidential, proprietary, or other information that is provided to or accessible by third parties working on our behalf, we cannot be certain that advances in criminal capabilities, new discoveries in the field of cryptography, or other developments will not compromise or breach the technology protecting the networks that access our products and services.
+Added: The significant number of our employees working from home further exposes us to security risks.
+Added: Although we take steps to secure confidential, proprietary, or other information that is provided to or accessible by third parties working on our behalf, we cannot be certain that advances in criminal capabilities (including the use of artificial intelligence), new discoveries in the field of cryptography, or other developments will not compromise or breach the technology protecting the networks that access our products and services or third-party networks or systems that host or store our data.
A significant actual or perceived (whether or not valid) theft, loss, fraudulent use or misuse of customer, employee, or other personally identifiable or other sensitive data, whether by us, our partners and vendors, or other third parties, or as a result of employee error or malfeasance or otherwise, non-compliance with applicable industry standards or our contractual or other legal obligations regarding such data, or a violation of our privacy and information security policies with respect to such data, could result in significant remediation costs, administrative fines, litigation or other claims by third parties, or regulatory actions against us.
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Increasingly, our products and services are accessed through the Internet, and a significant number of service calls happen virtually, and cyber attacks and/or threats in connection with the delivery of our services via the Internet may affect us and could be detrimental to our reputation, business, financial condition, results of operations, and cash flows.
−Removed: There can be no assurance that our continued investments in new and emerging technology and other solutions to protect our network and information systems will prevent any of the risks
−Removed: described herein.
+Added: There can be no assurance that our continued investments in new and emerging technology and other solutions to protect our network and information systems will prevent any of the risks described herein.
In addition, any delay in making such investments due to conflicting budget priorities or otherwise could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
There can be no assurance that our insurance will be sufficient to protect against all our losses from any future disruptions or cyber attacks on our systems or other events as described herein.
−Removed: Uncertainty in the development, deployment, and use of AI in our products and services, as well as our business more broadly, could adversely affect our business and reputation.
−Removed: We use AI-enabled or AI-integrated systems and tools, including generative AI, to service our customers and drive efficiencies within our workforce.
−Removed: As with many new and emerging technologies, AI presents numerous risks and challenges that could adversely affect its further development, adoption, or use, and therefore our business.
−Removed: The development, deployment, and use of generative AI technology remains in early stages and ineffective or inadequate AI development or application practices by us or third parties could result in unintended consequences.
−Removed: For example, models, including large language models, underlying AI solutions that we use may be flawed or may be based on biased, insufficient, or poor-quality datasets.
−Removed: In addition, any latency, disruption, or failure in our AI systems or data infrastructure could result in delays or errors in our offerings or operational activities.
−Removed: Developing, testing, and deploying resource-intensive AI solutions may require additional investment and increase our costs.
+Added: Uncertainty in the development, deployment, and use of AI, including generative AI, in our products and services and across our operations could adversely affect our business, financial condition, results of operations, and reputation.
+Added: We increasingly use AI‑enabled tools and systems to support customer interactions, product functionality, monitoring capabilities, and internal operations, and to drive efficiencies within our workforce.
+Added: AI technologies are complex and rapidly evolving, and their use may involve risks relating to, among other things, accuracy, reliability, bias, cybersecurity vulnerabilities, data privacy, intellectual property, and regulatory compliance.
+Added: AI systems may produce unintended or incorrect outputs, fail to perform as expected, or be misused by employees, customers, or third parties.
+Added: In addition, any latency, disruption, or failure in our AI systems or data infrastructure could result in data loss, delays, or errors in our offerings or operational activities.
+Added: Developing, testing, and deploying resource-intensive AI solutions may require significant investment and could increase our costs.
+Added: We can provide no assurance that our development or use of, or our investments in, AI-enabled or AI-integrated systems and tools will enhance these systems and tools or be beneficial to our business.
+Added: In addition, evolving legal and regulatory frameworks governing AI, as well as heightened public and investor scrutiny of AI use, may require us to modify our practices, incur additional compliance costs, or limit certain applications of AI.
+Added: Any failure or perceived failure to responsibly develop, deploy, or govern AI‑enabled solutions could result in, among other things, legal liability, regulatory action, reputational harm, or reduced customer trust, any of which could materially adversely affect our business.
There also may be real or perceived social harm, unfairness, or other impacts to human rights, privacy, employment, or other social issues or outcomes that undermine public confidence in the use and deployment of AI.
−Removed: In addition, third parties may deploy AI solutions in a manner that reduces customer demand for our products and services.
+Added: In addition, competitors may more effectively use AI to better serve customers, develop new or enhanced products or services, or improve internal processes, or third parties may otherwise deploy AI solutions in a manner that reduces customer demand for our products and services.
+Added: Use of AI by our employees could also cause loss or theft of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity.
Any of the foregoing may result in decreased demand for our products or material harm to our business, results of operations, brand, or reputation.
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Compliance with new or changing laws, regulations or industry standards related to AI may impose significant operational costs and may limit our ability to apply AI technologies in certain use cases.
−Removed: Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm.
+Added: Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory scrutiny or action, or brand and reputational harm.
We depend on third-party providers and suppliers for components of our security and automation systems, third-party software licenses for our products and services, and third-party providers to transmit signals to our monitoring facilities and provide other services to our customers.
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Certain key suppliers may experience difficulties in obtaining necessary components, which may impact our ability to meet customer demands and complete critical initiatives.
−Removed: In addition, our suppliers are susceptible to disruptions from fire, natural disasters, weather-related incidents, and the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), as well as health epidemics and pandemics, transmission interruptions, extended power outages, human or other error, and malicious acts, including cyber attacks, terrorism, war, sabotage, and government actions, or other concerns impacting their local workforce or operations, all of which are beyond our and their control.
+Added: For instance, we are currently monitoring and responding to the global memory chip shortage, which may increase our equipment costs and could lead to future fulfillment delays or the requirement to re-engineer hardware components on short notice to accommodate available alternative parts.
+Added: In addition, our suppliers are susceptible to disruptions from fire, natural disasters, weather-related incidents, and the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), as well as health epidemics and pandemics, transmission interruptions, extended power outages, human or other error, information systems and network-related events, such as technology failures, malicious acts, including cyber attacks, terrorism, war, sabotage, and government actions, or other concerns impacting their local workforce or operations, all of which are beyond our and their control.
While we actively monitor supplier operations, require compliance with business continuity and disaster recovery plans, maintain alternative sourcing options where feasible, carry a surplus of finished goods in inventory, exercise limited control over our raw material suppliers through demand forecasting and supply planning processes, and have contract terms that require transparency in sourcing, quality assurance commitments, and escalation protocols, there is no assurance that these practices will be effective and supplier disruptions, including any financial or other difficulties our providers may face, may have a material adverse effect on our business.
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We have occasionally experienced such product service events.
−Removed: There can be no assurance that any such future product service events will not be more extensive or more costly, material to us, and/or require the outlay of cash while we
−Removed: pursue cost recovery from manufacturers and suppliers, and there can be no assurance that we will be successful in pursuing recoveries from those third parties.
+Added: There can be no assurance that any such future product service events will not be more extensive or more costly, material to us, and/or require the outlay of cash while we pursue cost recovery from manufacturers and suppliers, and there can be no assurance that we will be successful in pursuing recoveries from those third parties.
+Added: Although our supplier agreements often include indemnification provisions, such indemnification may be limited in scope or amount, subject to exclusions or conditions, disputed by the supplier, or otherwise unavailable, including due to supplier financial distress or insolvency.
If a previously installed component were found to be defective, we might not be able to recover the costs associated with its repair or replacement across our installed customer base, and these costs, or the diversion of technical personnel to address the defect could materially adversely affect our business, financial condition, results of operations, and cash flows.
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We also rely on third-party software for key automation features in certain of our offerings and on the interoperation of that software with our own, such as our mobile applications and related platforms.
−Removed: We could experience service disruptions if customer usage patterns for such integrated or combined offerings exceed, or are otherwise outside of, system design parameters and we or our third-party provider is unable to make corrections.
+Added: In the event a third-party provider experiences any disruption in their IT systems, we could experience service disruptions.
+Added: We could also experience service disruptions if customer usage patterns for such integrated or combined offerings exceed, or are otherwise outside of, system design parameters and we or our third-party provider is unable to make corrections.
Such disruptions in the provision of services could result in our inability to meet customer demand, damage our reputation and customer relationships, and materially and adversely affect our business.
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and to respond to emerging industry standards, customer preferences, and other technological changes.
+Added: In addition, certain of our current and future offerings incorporate advanced analytics, artificial intelligence, and sensing‑based technologies, which may increase our dependence on third‑party software, data, and infrastructure and heighten the risk that defects, performance limitations, security vulnerabilities, or regulatory constraints affecting such technologies could disrupt services or impair customer experience.
Further, these third-party technology licenses may not always be available to us on commercially reasonable terms, or at all.
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Any of these factors could materially adversely affect our business, financial condition, results of operations, and cash flows.
+Added: Furthermore, certain components of our security and smart home offerings, including certain sensors and connected devices, rely on wireless communication protocols and radio-frequency spectrum set aside by the FCC for unlicenced use (including protocols such as Z-Wave and other sub‑1 GHz technologies that operate in unlicensed bands).
+Added: This lower 900MHz band of spectrum is shared with many other devices and is subject to interference, congestion, and changes in technical rules or usage rights.
+Added: Regulatory proceedings could alter spectrum allocations, power limits, or other operating conditions in ways that increase the risk of harmful interference to low-power devices.
+Added: If wireless interference, spectrum reconfiguration, or related regulatory changes reduce signal reliability or device performance, customers may experience degraded functionality, missed or delayed signals, or service interruptions.
+Added: Any such issues could require us to redesign or re-certify products, modify device firmware or network configurations, accelerate replacement of installed equipment, increase service and support costs, and/or incur material capital expenditures.
+Added: These events could also increase customer dissatisfaction and attrition, expose us to contractual disputes, or litigation, which could materially adversely affect our business, financial condition, results of operations, and cash flows.
We also rely on various third-party telecommunications providers and signal processing centers to transmit and communicate signals to our monitoring facilities and work from home environments in a timely and consistent manner.
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A disruption in our ability to provide security monitoring services or otherwise provide ongoing customer care to our customers could have a material adverse effect on our business.
−Removed: A disruption could occur for many reasons, including fire, natural disasters, including hurricanes, weather-related incidents, and the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), health epidemics or pandemics, transmission interruption, extended power
−Removed: outages, human or other error, malicious acts, including cyber attacks, provider preferences regarding the signals that get transmitted, government actions, war, terrorism, sabotage, or other conflicts, or as a result of disruptions to internal and external networks or third party transmission lines.
−Removed: Monitoring and customer care also have in the past been and could in the future be disrupted by information systems and network-related events or cyber attacks, such as computer hacking, computer viruses, phishing, malware, ransomware, worms, or other malicious software, distributed denial of service attacks, malicious social engineering, or other destructive or disruptive activities that could also cause damage to our properties, equipment, and data, as well as our efforts to respond to, contain, and remediate such events, attacks, and activities.
+Added: A disruption could occur for many reasons, including fire, natural disasters, including hurricanes, weather-related incidents, and the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), health epidemics or pandemics, transmission interruption, extended power outages, human or other error, information systems and network-related events, such as technology failures, malicious acts, including cyber attacks, provider preferences regarding the signals that get transmitted, government actions, war, terrorism, sabotage, or other conflicts, or as a result of disruptions to internal and external networks or third party transmission lines.
+Added: Monitoring and customer care also have in the past been and could in the future be disrupted by information systems and network-related events, such as technology failures, or cyber attacks, such as computer hacking, computer viruses, phishing, malware, ransomware, worms, or other malicious software, distributed denial of service attacks, malicious social engineering, or other destructive or disruptive activities that could also cause damage to our properties, equipment, and data, as well as our
+Added: efforts to respond to, contain, and remediate such events, attacks, and activities.
A failure of our redundant back-up procedures or a disruption affecting multiple monitoring facilities or work from home environments could disrupt our ability to provide security monitoring or customer care services to our customers.
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The closure of any site or any widespread absence of the employees remaining in any such site could result in a material disruption to our business.
−Removed: Because the majority of employees who staff these operations currently conduct their jobs from home, our work from home environment could subject us to the failure of the communications networks serving our employees which we no longer control and who may not have sufficient back up capabilities.
+Added: Because many employees who staff these operations currently conduct their jobs from home, we are dependent on third-party communications networks and home-based infrastructure that we do not control.
+Added: Disruptions or outages in these networks, or insufficient backup capabilities could impair our operations, and adversely affect our business, financial condition, and results of operations.
In addition, this work from home environment results in more home access points that are susceptible to cyber attacks, such as computer hacking, computer viruses, phishing, malware, ransomware, worms or other malicious software or malicious activities.
In addition, our monitoring centers are listed by UL and must meet certain requirements to maintain that listing.
−Removed: UL has adopted a temporary standard that enables our operators to work from home while remaining within the listing requirements and we must ensure that each such home environment continues to meet all such requirements as well as the UL permanent requirements, which have been established by UL.
+Added: UL has adopted a temporary standard that enables our operators to work from home while remaining within the listing requirements and we must ensure that each such home environment continues to meet all such requirements as well as the UL permanent requirements.
Our employees who work from home may also experience a decrease in the quality of job performance, whether immediate or over time.
Any such impact with respect to our employees who are working from home could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: Our independent, third-party authorized dealers may not be able to mitigate certain risks such as information technology and data security breaches, product liability, errors and omissions, and compliance with applicable laws and regulations.
+Added: Our independent, third-party authorized dealers may not be able to mitigate certain risks such as information technology and data security breaches, product liability, errors and omissions, and compliance with applicable laws and regulations, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We generate a portion of our new customers through our authorized dealer network.
−Removed: We rely on independent, third-party authorized dealers to implement mitigation plans for certain risks they may experience, including, information technology breaches, data security breaches, product liability, errors and omissions, and compliance with applicable laws and regulations.
+Added: We rely on independent, third-party authorized dealers to implement mitigation plans for certain risks they may experience, including, information systems and network-related events, such as technology failures, cyber attacks, product liability, errors and omissions, and compliance with applicable laws and regulations.
In addition, our dealers rely on other third parties to submit orders and transmit data and may themselves be subject to many of these same risks.
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Any interruption or permanent disruption in the generation of customer accounts or services provided by our authorized dealers could materially adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: We may pursue business opportunities that diverge from our current business model, or invest in new businesses, services, and technologies outside the traditional security, interactive and smart home services markets, any of which may materially adversely affect our business results or financial condition.
+Added: We may pursue business opportunities that diverge from our current business model, or invest in new businesses, services, and technologies outside the traditional security, interactive and smart home services markets, any of which may fail to meet our expectations and materially adversely affect our business results or financial condition.
We have and will continue to pursue and invest in new business opportunities that may diverge from our current business model and practices, including expanding our products or service offerings, investing in new and unproven technologies, adding customer acquisition channels, and forming new alliances with companies to market our services.
We can provide no assurance that any such business opportunities or investments will perform as expected.
−Removed: Among other negative effects, our pursuit of such business opportunities could cause our cost of investment in new customers to grow at a faster rate than our recurring revenue and fees collected at the time of installation.
+Added: Among other negative effects, our pursuit of such
+Added: business opportunities could cause our cost of investment in new customers to grow at a faster rate than our recurring revenue and fees collected at the time of installation.
In addition, any new business partner may not agree to the terms and conditions or limitations on liability that we typically impose upon third parties.
Acquisitions in recent years have also significantly expanded our risk profile.
−Removed: For example, in December 2021 we acquired the Solar Business although our core business was not then extended to the residential solar market.
−Removed: In September 2022, we announced a strategic relationship with State Farm and our intention to develop products and services to satisfy certain needs of State Farm’s property and casualty customers which represents a significant entry point into the insurance industry.
+Added: For example, in September 2022, we announced a strategic relationship with State Farm and our intention to develop products and services to satisfy certain needs of State Farm’s property and casualty customers which represented a significant entry point into the insurance industry.
Additionally, any new alliances or customer acquisition channels could require large investments of capital to develop such business, or have higher cost structures than our current arrangements, which could reduce operating margins and require more working capital.
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In such cases, we may decide to revise our strategic plans and adjust our operating footprint to optimize our operations, or exit certain businesses or product lines entirely.
−Removed: For example, after recording a series of losses with respect to our acquisition of the Solar Business, we announced in November 2023 a series of steps to rationalize the Solar Business , and in January 2024, we made a determination to exit the Solar Business entirely.
−Removed: As of June 30, 2024, substantially all operations of the Solar Business had ceased.
+Added: For example, in 2024, we decided to exit the Solar Business and in October 2025 the State Farm Development Agreement expired, and we ended our State Farm partnership programs in existing states.
Any of these factors could materially adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: We continue to integrate our acquisitions, as well as to separate certain shared services following the Commercial Divestiture, which may divert management’s attention from our ongoing operations.
−Removed: We may not achieve all of the anticipated benefits, synergies, or cost savings from our acquisitions or the Commercial Divestiture.
−Removed: Our historical acquisitions, including bulk acquisitions of customer accounts, require the integration of separate companies or accounts that have previously operated independently or separately.
−Removed: The continued integration of operations, including billing and service platforms for recently purchased customer accounts, information technology networks and systems, products, and personnel from our acquisitions, as well as the separation of certain shared services following the Commercial Divestiture, will continue to require the attention of our management and place demands on other internal resources.
−Removed: In addition, the overall continued integration of our acquired businesses, including bulk acquisitions of customer accounts, may be disruptive to our business as a whole and result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer relationships.
−Removed: The diversion of management’s attention, and any difficulties encountered in the transition, integration, and divestiture processes, could materially adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: Further, we continue to integrate the financial reporting systems and processes of various companies we have acquired.
−Removed: Successfully implementing our business plan and complying with the SOX Act and other regulations requires us to be able to prepare timely and accurate consolidated financial statements.
−Removed: Any delay in this implementation of, or disruption in, the transition to new or enhanced systems, procedures, or controls, including internal controls and disclosure controls and procedures, may cause us to present restatements or cause our operations to suffer, and we may be unable to conclude that our internal controls over financial reporting are effective and to obtain an unqualified report on internal controls from our independent registered public accounting firm.
−Removed: Any of these difficulties in combining operations or accounts, or continuing to separate certain shared services following the Commercial Divestiture, could result in increased costs, decreases in the amount of expected revenues, and further diversion of management’s time and energy, which could materially adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: In 2024, we decided to fully exit the residential Solar Business and such exit is subject to uncertainties and risks that may materially adversely affect our financial condition and results of operations.
−Removed: On January 24, 2024, we announced that the Company had made a determination to fully exit the residential s olar business , which included the transfer of certain assets to other parties as well as the retention of certain contractual obligations.
−Removed: We substantially completed the ADT Solar Exit during the second quarter of 2024.
−Removed: In connection with the ADT Solar Exit, we incurred severance and other exit costs.
−Removed: The ADT Solar Exit may disrupt our relationships with customers, suppliers and other third parties, which could make our brand less attractive to consumers and business partners.
−Removed: The ADT Solar Exit, including related exit charges, the impact of the related workforce reduction, and any potential legal claims by impacted employees, customers, suppliers, or lenders, could have a material adverse effect on our business, operating results and financial condition.
+Added: ADT is a less diversified business following the Commercial Divestiture, the ADT Solar Exit, and the sale of our multifamily business, which may adversely affect ADT’s results of operations and financial condition.
+Added: Prior to the Commercial Divestiture, ADT had three business segments, CSB, Commercial, and Solar.
+Added: The Commercial Divestiture and ADT Solar Exit resulted in ADT being a smaller, less diversified company more focused on consumers, potentially making ADT more vulnerable to changing market, regulatory, and economic conditions following the Commercial Divestiture and the ADT Solar Exit, particularly those affecting consumers and small businesses.
+Added: Additionally, on October 1, 2025, we completed the sale of our multifamily business (the “Multifamily Divestiture”).
+Added: Collectively, these actions leave us entirely dependent on our consumer and small business markets, and any trends or uncertainties affecting such markets will directly affect ADT’s results of operations and financial condition in the future.
+Added: Macroeconomic headwinds or changes in consumer preferences could have a greater impact on our business following the Commercial Divestiture, the ADT Solar Exit, and the Multifamily Divestiture which could have a material adverse effect on our business, financial condition, and results of operations, and we may not achieve some or all of the strategic and financial benefits that we expect to achieve from the Commercial Divestiture, the ADT Solar Exit, or the Multifamily Divestiture.
The ADT Solar Exit may also involve continued financial involvement while being reported in discontinued operations, such as by causing us to continue to incur expenses to maintain services for completed installations and to complete those installations which have not yet been completed, or through continuing guarantees, indemnities or other financial obligations, such as minimum solar panel performance guarantees, and a requirement by lenders that we repay outstanding loan amounts for jobs that have not achieved permission to operate in a timely manner or that we are otherwise required to repurchase pursuant to existing loan agreements.
The incurrence of any such cost or action could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: We may not achieve some or all of the strategic and financial benefits that we expect to achieve from the Commercial Divestiture or the ADT Solar Exit which could have a material adverse effect on our financial condition and results of operations.
−Removed: Although we believe the Commercial Divestiture and the ADT Solar Exit will place us in a better position to prioritize investments in our core business where we intend to drive profitable, capital-efficient revenue growth for the long-term, there can be no assurance that we will achieve such benefits, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: The anticipated benefits are based on several assumptions, some of which may prove incorrect, and could be affected by factors beyond our control, including, without limitation, general economic conditions, increased operating costs, regulatory developments, and other risks described in these risk factors.
−Removed: In connection with the Commercial Divestiture, we entered into the Commercial TSA, pursuant to which the Company and the Commercial Business will provide certain transitional services relating to ongoing support and other administrative functions to each other for a transitional period of up to 24 months after the closing of the Commercial Divestiture.
−Removed: We rely on the Commercial Business to satisfy its obligations under the Commercial TSA.
−Removed: If the Commercial Business is unable to satisfy its obligations under the Commercial TSA, or if the transition of services covered by the Commercial TSA takes longer to complete than expected, it could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: In addition, we may not be able to eliminate certain costs after the completion of the transition period covered by the Commercial TSA.
−Removed: If we are unable to eliminate some of these costs or effectively work with our supplies to reduce the costs associated with fewer employees or customers, it could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: ADT is a less diversified business following the Commercial Divestiture and the ADT Solar Exit, which may adversely affect ADT’s results of operations and financial condition.
−Removed: Prior to the Commercial Divestiture, ADT had three business segments, CSB, Commercial, and Solar.
−Removed: The Commercial Divestiture resulted in ADT being a smaller, less diversified company more focused on consumers, potentially making ADT more vulnerable to changing market, regulatory, and economic conditions following the Commercial Divestiture and the ADT Solar Exit, particularly those affecting consumers and small businesses.
−Removed: We are now entirely dependent on our consumer and small business markets, and any trends or uncertainties affecting such markets will directly affect ADT’s results of operations and financial condition in the future.
−Removed: Macroeconomic headwinds or changes in consumer preferences could have a greater impact on our business following the Commercial Divestiture and the ADT Solar Exit which could have a material adverse effect on our business, financial condition, and results of operations.
Our customer generation strategies through third parties, including our authorized dealer and affinity marketing programs, and our use of celebrities and social media influencers, and the competitive market for customer accounts may expose us to risk and affect our future profitability.
−Removed: An element of our business strategy is the generation of new customer accounts through third parties, including our authorized dealers, and future operating results depend in large part on our ability to continue to manage this business generation strategy
+Added: An element of our business strategy is the generation of new customer accounts through third parties, including our authorized dealers, and future operating results depend in large part on our ability to continue to manage this business generation strategy effectively.
We currently generate accounts through hundreds of independent third parties, including authorized dealers, and a significant portion of our accounts originate from a smaller number of such third parties.
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If our dealers engage in practices that are not in compliance with all applicable laws and regulations, we may be deemed in breach of such laws and regulations, which may result in regulatory proceedings and potential penalties that could materially adversely impact our business, financial condition, results of operations, and cash flows.
−Removed: In addition, unauthorized activities in connection with sales efforts by employees, independent contractors, and other agents of our dealers, including calling consumers in violation of the Telephone Consumer Protection Act, predatory door-to-door sales tactics, and fraudulent misrepresentations, could subject us to governmental investigations and class action lawsuits for, among others, false advertising and deceptive trade practice damage claims, against which we will be required to defend.
−Removed: Such defense efforts are costly and time-consuming, and there can be no assurance that such defense efforts will be successful, all of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: In addition, unauthorized activities in connection with sales efforts by employees, independent contractors, and other agents of our dealers, including calling consumers in violation of the Telephone Consumer Protection Act, predatory door-to-door sales tactics, and fraudulent misrepresentations, could subject us to governmental investigations and class action lawsuits for, among others, false advertising and deceptive trade practice damage claims.
+Added: defense efforts are costly and time-consuming, and there can be no assurance that such defense efforts will be successful, all of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
The successful promotion of our brands also depends on the effectiveness of our marketing efforts and on our ability to offer member discounts and special offers for our products and services to our partners.
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The purchase price we pay for customer accounts is affected by the recurring revenue historically generated by such accounts, as well as several other factors, including the level of competition, our prior experience with accounts purchased in bulk from specific sellers, the geographic location of the accounts, the number of accounts purchased, the customers’ credit scores, and the type of security or automation equipment or platform used by the customers.
−Removed: In purchasing accounts, we have relied on
−Removed: management’s knowledge of the industry, due diligence procedures, and representations and warranties of bulk account sellers.
+Added: In purchasing accounts, we have relied on management’s knowledge of the industry, due diligence procedures, and representations and warranties of bulk account sellers.
We can provide no assurance that in all instances the representations and warranties made by bulk account sellers are true and complete or, if the representations and warranties are inaccurate, that we will be able to recover damages from bulk account sellers in an amount sufficient to fully compensate us for any resulting losses.
−Removed: In addition, we may need to incorporate and maintain specialized equipment and knowledge in order to service customer accounts purchased, or pay to upgrade such customers to ADT equipment.
+Added: In addition, we may need to incorporate and maintain specialized equipment and knowledge in order to service customer accounts purchased from competitors, or pay to upgrade such customers to ADT equipment.
If any of these risks materialize, our business, financial condition, results of operations, and cash flows could be materially adversely affected.
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Our ability to recruit and retain sufficient talent for these positions is based on our reputation as a successful business with a culture of fairly hiring, training, and promoting qualified employees.
−Removed: However, our success could be impacted adversely by the competitive labor environment and require us to incur wages and benefits in excess of our planned expenditure.
+Added: However, our success could be impacted adversely by the competitive labor environment and require us to incur wages and benefits in excess of our planned
Labor shortages in recent years made talent recruitment particularly challenging and competitive.
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Competition for senior management talent having security and home automation industry experience has increased.
−Removed: Factors that impact our ability to attract and retain senior management include compensation and benefits and our successful reputation as a top provider in these industries.
+Added: Factors that impact our ability to attract and retain senior management include compensation and benefits and our reputation as a top provider in these industries.
Our success partly depends on the ability of our Chairman, President, and CEO, Mr.
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As of December 31, 2025, 800 of our employees at various sites, or approximately 7% of our total workforce, were represented by unions and covered by collective bargaining agreements.
−Removed: We are currently a party to approximately 17 collective bargaining agreements.
−Removed: About one-third of these agreements are up for renewal in any given year.
+Added: We are currently a party to approximately 17 collective bargaining agreements, a portion of which may be up for renewal in any given year.
Additionally, and especially in light of recent actions taken by the National Labor Relations Board, we could be subject to further attempts to organize some or all of our non-management employee base.
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If we fail to maintain effective internal control over financial reporting at a reasonable assurance level, we may not be able to accurately report our financial results, which could have a material adverse effect on our operations, investor confidence in our business and the trading prices of our securities.
−Removed: We identified a material weakness in our internal control over financial reporting as of December 31, 2022 and may identify additional material weaknesses in internal control over financial reporting in the future.
−Removed: A material weakness is a deficiency, or
−Removed: a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: While we believe we have now remediated the material weakness previously reported in our Amended 2022 Annual Report, we cannot assure you that additional material weaknesses in internal control over financial reporting will not occur in the future.
+Added: We have in the past identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in internal control over financial reporting in the future.
+Added: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
+Added: While we believe we have now remediated the prior material weakness, we cannot assure you that additional material weaknesses in internal control over financial reporting will not occur in the future.
The remediation of any such material weaknesses could require us to incur significant expenses.
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The confidential data and information collected in the normal course of our business, as well as portions of the significant volume of third-party data that we or our partners collect and retain, is subject to certain laws and regulations.
−Removed: Our ability to analyze this data to provide the customer with an improved user experience is a valuable component of our services, but we cannot provide assurance that the data we require will be available from these sources in the future or that the cost of such data will not increase.
+Added: Our ability to analyze this data to provide our customers with an improved user experience is a valuable component of our services, but we cannot provide assurance that the data we require will be available from these sources in the future or that the cost of such data will not increase.
If the data that we require is not available to us on commercially reasonable terms or at all, we may not be able to provide certain parts of our current or planned products and services, and our business, financial condition, results of operations, and cash flows could be materially adversely affected.
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These privacy and data security laws, regulations, and standards, as well as contractual requirements, could increase our cost of doing business, and failure to comply with these laws, regulations, standards, and contractual requirements could result in government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity.
−Removed: In the event of a breach of personal information that we hold or that is held by third parties on our behalf, we may be subject to governmental fines, individual and class action claims, remediation expenses, and/or harm to our reputation.
−Removed: In 2020, we disclosed that a Company technician had secured unauthorized personal access to certain customers’ in-home security systems, resulting in individual and class action legal claims against us.
+Added: In the event of a breach of personal information that we hold or that is held by third parties on our behalf, we have been in the past, and may be in the future, subject to actual and/or potential governmental fines, individual and class action claims, remediation expenses, and/or harm to our reputation.
We could incur significant legal costs in defending existing or new claims or in the ultimate resolution of such claims, and we may suffer reputational harm and damage to our brand as a result of such claims or any related publicity.
−Removed: Further, if we fail to comply with applicable privacy and security laws, regulations, policies, and standards;
+Added: Further, if we fail to comply with applicable privacy and data security laws, regulations, policies, and standards;
properly protect the integrity and security of our facilities and systems and the data located within them;
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or should we fail to prevent future rogue actors from undertaking actions similar to those described above, our reputation and our business, financial condition, results of operations, and cash flows could be materially adversely affected.
−Removed: Examples of certain requirements we face include those with respect to the Health Insurance Portability Act, the California Consumer Privacy Act, the California Privacy Rights Act, the Colorado Privacy Act, the Virginia Consumer Data Protection Act, and the European Union’s General Data Protection Regulation.
+Added: Examples of certain requirements we face include those with respect to the Health Insurance Portability and Accountability Act, the California Consumer Privacy Act (as amended by the California Privacy Rights Act), the Colorado Privacy Act, the Virginia Consumer Data Protection Act, and the European Union’s General Data Protection Regulation.
These laws and regulations are examples of our need to comply with costly and complex requirements at state, federal, and international levels.
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Adverse events affecting the use of our trademarks could also negatively impact our brands.
+Added: The Origin AI Acquisition significantly expanded our patent portfolio, which may increase our exposure to intellectual property‑related risks.
+Added: As our patent portfolio grows, we may face increased costs to maintain and enforce our intellectual property rights and may be subject to claims of infringement or other disputes, which could be costly and divert management resources.
In addition, if we expand our business outside of the U.S.
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These companies typically have little or no business or operations, and there are few effective deterrents available to prevent such companies from filing patent infringement lawsuits against us.
−Removed: Our exposure to intellectual property infringement claims may increase as we continue to expand and develop our proprietary ADT+ platform, as we modify and expand our offerings under our partnership with State Farm, or otherwise modify and expand our existing intellectual property in the future.
+Added: Our exposure to intellectual property infringement claims may increase as we continue to expand and develop our proprietary ADT+ platform, as we integrate AI into the business, or otherwise modify and expand our existing intellectual property in the future.
In addition, we rely on licenses and other arrangements with third parties covering intellectual property related to many of the products and services that we market.
Notwithstanding these arrangements, we could be at risk for infringement claims from third parties.
+Added: In managing these risks, we often depend on contractual indemnification from our third-party hardware manufacturers or software providers.
+Added: We face risks if these suppliers refuse to satisfy their indemnification obligations.
+Added: We have encountered situations where key providers have contested their duty to indemnify us for costs related to intellectual property litigation or product defects.
For example, in 2022 ADT was sued by a party alleging that the cellular antennas in various products purchased and used by ADT infringed their patents.
−Removed: The suit was settled in July of 2024, and ADT is currently in litigation with the supplier of the majority of those products regarding their obligation to indemnify ADT.
+Added: The suit was settled in July of 2024, and ADT is currently in arbitration with the supplier of the majority of those products regarding their obligation to indemnify ADT.
+Added: If we are unable to enforce these protections with our suppliers, we could be forced to incur substantial, non-reimbursable legal and remediation expenses.
Additionally, our patent agreement with Tyco, which generally includes a covenant by Tyco not to bring an action against us alleging that the manufacture, use, or sale of any products or services in existence as of the date of our separation from Tyco infringes any patents owned or controlled by Tyco and used by us on or prior to such date, does not protect us from infringement claims for future product or service expansions.
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The litigation process is costly and subject to inherent uncertainties, and we may not prevail in litigation matters regardless of the merits of our position.
−Removed: Intellectual property lawsuits or claims may become extremely disruptive if the plaintiffs succeed in blocking the trade of our products and services and may have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: Intellectual property lawsuits or claims, even those without merit, may become extremely disruptive if the plaintiffs succeed in blocking the trade of our products and services and may have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We may be subject to class actions and other lawsuits which may harm our business and results of operations.
−Removed: We have been and we may continue to be subject to class action litigation involving alleged violations of privacy, consumer protection laws, employment laws, common law claims or other matters.
+Added: We have been and we may continue to be subject to class action litigation involving alleged violations of privacy, consumer protection laws, employment laws, common law or other claims.
In addition, we have previously been subject to securities class actions relating to our IPO, and we may in the future be subject to additional securities litigation that may be lengthy and may result in substantial costs and a diversion of management’s attention and resources.
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In addition, we are currently and may in the future become subject to legal proceedings and commercial or contractual disputes other than class actions.
−Removed: These are typically claims that arise in the normal course of business including, without limitation, commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, and claims that we infringed on the intellectual property of others.
+Added: These are typically claims that arise in the normal course of business including, without limitation, commercial general liability claims, automobile liability claims, contractual disputes, workers’ compensation claims, labor law and employment claims, and claims that we infringed on the intellectual property of others.
There is a possibility that such claims may have a material adverse effect on our business, financial condition, results of operations, and cash flows that is greater than we anticipate and/or negatively affect our reputation.
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Telemarketing and email marketing activities are subject to an increasing amount of regulation in the U.S.
−Removed: Regulations have been issued by the FTC and the FCC that place restrictions on unsolicited telephone calls to residential and wireless telephone customers, whether direct dial or by means of automatic telephone dialing systems, prerecorded, or artificial voice messages and telephone fax machines, and require us to maintain a “do not call” list and to train our personnel to comply with these restrictions.
+Added: Regulations have been issued by the FTC and the FCC that place restrictions on unsolicited telephone calls to residential and wireless telephone customers, whether direct dial or by means of automatic telephone dialing systems, prerecorded, or artificial voice messages and telephone fax machines, and require us to maintain a “do not call” list and to train our personnel to
+Added: comply with these restrictions.
The FTC regulates sales practices generally and email marketing and telemarketing specifically, including through their consent decree on ADT that regulates our use of social media influencers and celebrities, and has broad authority to prohibit a variety of advertising or marketing practices that may constitute “unfair or deceptive acts or practices.” Most of the statutes and regulations in the U.S.
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If environmental laws or regulations are either changed or adopted and impose significant operational restrictions and compliance requirements upon our business or products, our business, financial condition, results of operations, and cash flows could be materially adversely affected.
−Removed: Federal laws restricting or banning imports of equipment or supplies from specific companies or regions of the world may limit our ability to meet customer demands or to increase prices.
+Added: Federal laws imposing tariffs on imports, or restricting or banning imports of equipment or supplies from specific companies or regions of the world altogether may limit our ability to meet customer demands or to increase prices.
In certain jurisdictions, we are required to obtain licenses or permits to comply with standards governing employee selection and training and to meet certain standards in the conduct of our business.
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We must also comply with numerous federal, state, and local laws and regulations that govern matters relating to our interactions with residential customers, including those pertaining to privacy and data security, consumer financial and credit transactions, home improvement contracts, warranties, and door-to-door solicitation.
−Removed: These laws and regulations are dynamic and subject to potentially differing interpretations, and various federal, state, and local legislative and regulatory bodies may initiate investigations, expand current laws or regulations, or enact new laws and regulations, regarding these matters.
+Added: These laws and regulations are dynamic
+Added: and subject to potentially differing interpretations, and various federal, state, and local legislative and regulatory bodies may initiate investigations, expand current laws or regulations, or enact new laws and regulations, regarding these matters.
As we expand our product and service offerings and enter into new jurisdictions, we may be subject to more expansive regulation and oversight.
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Also, if we continue to expand our sales to government entities, we may be subject to additional contracting regulations, disclosure obligations, and various civil and criminal penalties, among other things, in a significant manner that we are not subject to today.
−Removed: The FTC and certain states have consumer protection laws and regulations governing the manner in which providers of consumer services must manage customer subscriptions, autorenewals, and negative option billing arrangements.
−Removed: In October of 2024, the FTC adopted a final “Click-to-Cancel rule intended to consolidate and significantly expand certain federal consumer protections through new rules concerning certain “negative option offers,” whereby a consumer’s silence or failure to take affirmative action to reject a good or service or to cancel a subscription is interpreted as acceptance or continuing acceptance of an offer.
−Removed: Several states have followed suit and have enacted or have proposed to enact similar regulations concerning autorenewals, cancellation rights and negative option arrangements.
ADT sells its services to consumers on a subscription basis.
−Removed: The FTC’s “Click-to-Cancel rule, which becomes effective in May 2025 (other than the prohibition on misrepresentations, which took effect in January 2025), and certain proposed state regulations concerning subscription services may require ADT to provide additional notices to consumers regarding the end of fixed term contract commitments, limit ADT’s ability to market discounted or free trials to new customers and, in some cases, require ADT to seek additional customer consents to provide services past the end of minimum contract term commitments, each of which may have a material adverse effect on ADT’s ability to attract and retain customers.
+Added: Providers of consumer services are subject to federal and state consumer protection laws and regulations governing the manner in which providers of consumer services must manage customer subscriptions, autorenewals, and negative option billing arrangements.
+Added: In October of 2024, the FTC adopted a “Click-to-Cancel rule intended to consolidate and significantly expand certain federal consumer protections through new rules concerning certain “negative option offers,” whereby a consumer’s silence or failure to take affirmative action to reject a good or service or to cancel a subscription is interpreted as acceptance or continuing acceptance of an offer.
+Added: Several states followed suit and have enacted or have proposed to enact similar regulations concerning autorenewals, cancellation rights and negative option arrangements.
+Added: Although a federal court of appeals blocked the FTC’s “Click-to-Cancel” in July, similar federal rules and existing and future state regulations concerning subscription services may require ADT to provide additional notices to consumers regarding the end of fixed term contract commitments, limit ADT’s ability to market discounted or free trials to new customers and, in some cases, require ADT to seek additional customer consents to provide services past the end of minimum contract term commitments, each of which may have a material adverse effect on ADT’s ability to attract and retain customers.
Changes in these laws or regulations or their interpretation could dramatically affect how we do business, acquire customers, and manage and use information we collect from and about current and prospective customers and the costs associated therewith.
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Some of these providers also offer products and services that directly compete with our own offerings, which could potentially give them a competitive advantage.
−Removed: In March 2015, the FCC released net neutrality rules prohibiting broadband ISPs from blocking, throttling, or engaging in “paid prioritization” of content or services.
−Removed: However, these rules were repealed in 2017.
−Removed: As of April 2024, the FCC reinstated net neutrality regulations, effectively reversing the 2017 repeal, once again classifying broadband as a telecommunications service under Title II of the Federal Communications Act of 1934, as amended.
−Removed: However, in June 2024, the U.S.
−Removed: Supreme Court overruled the doctrine known as Chevron Deference, which previously required courts to defer to an agency’s reasonable interpretation of law when the law was ambiguous.
−Removed: As a result, on January 2, 2025, the U.S.
−Removed: Court of Appeals for the Sixth Circuit struck down the FCC’s previously adopted Safeguarding and Securing the Open Internet rule (“SSOI”), ruling that the FCC incorrectly classified ISPs as telecommunications service providers, rather than non-common carrier providers of information services, and therefore exceeded its authority in imposing the net neutrality regulations.
Absent net neutrality or open Internet rules, Internet providers, some with competing security businesses, could block or throttle ADT signals in a way that impacts our business and could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
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The state of the law regarding independent contractor status varies from state to state and is subject to change based on court decisions, legislation, and regulation.
−Removed: For example, in January 2024, the U.S.
−Removed: Department of Labor (“DOL”) issued a new rule that revises the DOL’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act (“FLSA”).
−Removed: Previously, the law provided five factors to guide the inquiry into a worker’s status as an employee or independent contractor, with two of these factors carrying greater weight in the analysis.
−Removed: The new rule, effective in March 2024, implements a non-exhaustive multi-factor economic reality test where no one factor or subset of factors would be necessarily dispositive and the weight of each factor would depend on the facts and circumstances of the particular case.
−Removed: Also, although the National Labor Relations Board (“NLRB”) has abandoned, due to legal challenges, its attempt to overrule its 2019 independent contractor standard focused on whether workers have “entrepreneurial opportunity,” a recent NLRB decision in September 2024 appears to signal an intent to reverse its current position that independent contractor misclassification is not itself a violation of the National Labor Relations Act (“NLRA”).
+Added: In January 2024, the U.S.
+Added: Department of Labor (“DOL”) issued a final rule revising the DOL’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act (“FLSA”), effective March 2024, and adopting a non-exhaustive multi-factor economic reality test where no one factor or subset of factors would be necessarily dispositive and the weight of each factor would depend on the facts and circumstances of the particular case.
+Added: That rule is being challenged in federal court.
+Added: In May 2025, the DOL issued a Field Assistance Bulletin instructing Wage and Hour Division investigators not apply the 2024 final rule in agency investigations and instead analyze employment status under the framework outlined in Fact Sheet #13 (issued in 2008) and Opinion Letter FLSA2019-6.
+Added: Despite the DOL pausing enforcement of the 2024 final rule, the rule remains relevant for purposes of private FLSA litigation.
+Added: Also, although the National Labor Relations Board (“NLRB”) abandoned, due to legal challenges, its attempt to overrule its 2019 independent contractor standard focused on whether workers have “entrepreneurial opportunity,” an NLRB decision in September 2024 appeared to signal an intent to reverse its current position that independent contractor misclassification is not itself a violation of the National Labor Relations Act (“NLRA”).
Under the new legal framework, it may be more likely for our independent contractors or our subcontractors to be classified as our employees, resulting in such individuals becoming entitled to the reimbursement of certain expenses, to the benefit of wage-and-hour laws, and to the protections under the NLRA including the right to organize for union representation.
−Removed: If such classification was made, we could also be liable for employment and withholding tax and benefits for such individuals, and liable to such individuals for violations of other laws protecting employees.
+Added: If such classification was made, we could also be liable for employment and withholding taxes and benefits for such individuals, and liable to such individuals for violations of other laws protecting employees.
Any such determination could result in a material reduction of the number of subcontractors we can use for our business or significantly increase our costs to serve our customers, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
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Tariffs imposed on imports from China or Mexico, including enhanced U.S.
−Removed: tariffs recently imposed and/or threatened to be imposed on goods from China), where certain components included in our end-user equipment are manufactured, and any counter-measures taken in response to such new tariffs, may harm our business and results of operations.
−Removed: For example, in 2018 and 2019, the U.S.
+Added: tariffs imposed and/or threatened to be imposed on goods from China, where certain components included in our end-user equipment are manufactured, and any counter-measures taken in response to such new tariffs, may harm our business and results of operations.
+Added: During fiscal year 2025, new tariffs were imposed in the U.S.
+Added: for imports from a broad range of countries and materials.
+Added: Several countries also implemented or proposed retaliatory tariffs on imports from the U.S., as well as other barriers to trade.
+Added: In February 2026, the U.S.
+Added: Supreme Court ruled that the President lacks authority under the International Emergency Economic Powers Act to impose tariffs, invalidating certain tariffs that had been imposed pursuant to that statute.
+Added: As a result, certain tariffs imposed during fiscal year 2025 are no longer being collected.
+Added: However, the ruling does not limit the ability of the U.S.
+Added: government to impose tariffs under other statutory authorities.
+Added: In response to the ruling, President Trump has announced new tariffs, including a global tariff of 10% imposed pursuant to a separate executive order and trade authority.
+Added: In addition, Congress or the executive branch may impose additional tariffs, modify existing tariffs, or adopt other trade restrictions, and foreign governments may implement retaliatory measures.
+Added: These developments have increased uncertainty regarding the scope, duration, and impact of U.S.
+Added: trade policy, and any such actions could materially adversely affect our business, financial condition, results of operations, and cash flows.
+Added: In the past, the U.S.
federal government imposed tariffs on certain alarm equipment components manufactured in China, and on other categories of electronic equipment manufactured in China that we install in our customers’ premises, such as batteries and thermostats.
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federal government’s 2018 National Defense Authorization Act imposed a ban on the use of certain surveillance, telecommunications, and other equipment manufactured by certain of our suppliers based in China, to help protect critical infrastructure and other sites deemed to be sensitive for national security purposes in the U.S.
−Removed: federal government ban implemented in August 2019, and the ban on use of certain covered equipment by federal contractors implemented in August 2020, has required us to find new sources of end-user products, which has resulted in higher costs and disruption to our business.
+Added: This federal government ban implemented in August 2019, and the ban on use of certain covered equipment by federal contractors implemented in August 2020, has required us to find new sources of end-user products, which has resulted in higher costs and disruption to our business.
It is also possible new or additional tariffs will be imposed on imports of equipment that we install in end-user premises, or that our business will be impacted by retaliatory trade measures taken by China, Mexico, or other countries, causing us to raise our prices or make changes to our business, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: During the 2024 presidential campaign, President Trump threatened to impose, and since taking office, has begun imposing, significant tariffs on goods imported from China, Canada, Mexico and other countries.
−Removed: Given the uncertainty regarding the scope and duration of these trade actions by the U.S.
−Removed: and any retaliatory trade actions taken by such other countries, we cannot predict whether, or to what extent, tariffs and other trade restrictions may be imposed on or otherwise become applicable to our product offerings or supply chain, and the impact of these trade actions on our business remains uncertain.
In addition, in November 2021, President Biden signed the Secure Equipment Act into effect, and in November 2022, the FCC adopted rules stating that they will no longer review or give licenses to the equipment that makes use of radio frequencies manufactured by companies believed to pose a national security threat, including Huawei, ZTE, Dahua, and Hikvision.
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Risks Related to Macroeconomic and Related Factors
−Removed: General economic conditions can affect our business, and we are susceptible to changes in the business economy, in the housing market, and in business and consumer discretionary income, which may inhibit our ability to grow our customer base and impact our results of operations.
+Added: General economic conditions can affect our business, and we are susceptible to changes in the business economy, in the housing market, and in business and consumer discretionary income, which may inhibit our ability to grow our customer base and impact our financial condition, results of operations, and cash flows.
Demand for our products and services is affected by the general economy, the business environment, and the turnover in the housing market, among other things.
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When our customers’ discretionary income is reduced (such as by higher housing, energy, interest, operating or other costs, or where the actual or perceived wealth of customers has decreased as a result of circumstances such as lower real estate values, increased foreclosure rates, inflation, increased tax rates, or other economic disruptions), we could experience increased attrition rates and reduced customer demand.
−Removed: Where levels of business activity decline, the small business customers could experience increased attrition rates and reduced demand for our offerings.
+Added: Where levels of business activity decline, our small business customers may cancel at higher rates and reduce offering demand.
No assurance can be given that we will be able to continue acquiring quality customers or that we will not experience higher attrition rates.
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In addition, where we have committed to provide financing internally, as interest rates rise, our cost of capital also gets more expensive and we may not be able to pass on such increased costs to our customers.
−Removed: Any increase in those fees or costs will have an adverse impact on our ability to offer attractive pricing to customers, which could negatively impact our sales and profitability, or increase the cost to us upon the sale of our aggregated customer
+Added: Any increase in those fees or costs will have an adverse impact on our ability to offer attractive pricing to customers, which could negatively impact our sales and profitability, or increase the cost to us upon the sale of our aggregated customer loans.
Any such outcome could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
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Therefore, we are dependent on our customers’ ability and willingness to pay amounts due under alarm monitoring or other service contracts in a timely manner.
−Removed: Although customers are contractually obligated to pay amounts due under an alarm monitoring or other service contract and are generally contractually obligated to pay cancellation fees if they prematurely cancel the contract during its initial term (typically between two and five years), customers’ payment obligations are unsecured, which could impair our ability to collect any unpaid amounts from our customers.
+Added: Although customers are contractually obligated to pay amounts due under an alarm monitoring or other service contract and are generally contractually obligated to pay cancellation fees if they prematurely cancel the contract during its initial term (typically between two and five years), customers’ payment
+Added: obligations are unsecured, which could impair our ability to collect any unpaid amounts from our customers.
To the extent customer payment defaults under alarm monitoring and other service contracts are greater than anticipated, our business, financial condition, results of operations, and cash flows could be materially adversely affected.
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Any such result could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: We also placed a substantial reliance on third-party lenders in order to access loan products for our customers in our solar segment.
In addition, any disruption in our relationship with a third-party lender could have an adverse impact on certain customer relationships or result in liability to us.
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We are subject to the risk that dealers will breach these obligations.
−Removed: Although we generally withhold specified amounts from the acquisition cost paid to dealers for alarm monitoring contracts (“holdback”), which may be used to satisfy or offset these and other applicable dealer obligations under the alarm monitoring contract acquisition agreements, there can be no guarantee that these amounts will be sufficient to satisfy
−Removed: or offset the full extent of the default by a dealer of its obligations under its agreement.
+Added: Although we generally withhold specified amounts from the acquisition cost paid to dealers for alarm monitoring contracts (“holdback”), which may be used to satisfy or offset these and other applicable dealer obligations under the alarm monitoring contract acquisition agreements, there can be no guarantee that these amounts will be sufficient to satisfy or offset the full extent of the default by a dealer of its obligations under its agreement.
If the holdback proves insufficient to cover dealer obligations, we are also subject to the credit risk that the dealers may not have sufficient funds to compensate us or that any such dealer will otherwise breach its obligation to compensate us for a terminating alarm monitoring contract.
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Changes in current or future laws or regulations, the imposition of new or changed tax laws or regulations, or new related interpretations by taxing authorities in the jurisdictions in which we file could materially adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: Our future consolidated federal and state income tax liability may be significantly reduced by tax attributes such as tax credits, tax net operating loss (“NOL”), and disallowed interest carryforwards available to us under the applicable tax codes.
−Removed: Our ability to fully utilize these tax attributes, however, may be limited for various reasons, including whether projected future taxable income becomes insufficient to recognize the full benefit of our tax attributes prior to their expirations.
−Removed: If a corporation experiences an “ownership change,” Sections 382 and 383 of the Internal Revenue Code (“IRC”) provide annual limitations with respect to the ability of a corporation to utilize its tax attributes against future U.S.
+Added: In the past we have been, and in the future we may be, able to reduce our future consolidated federal and state income tax liability through use of tax attributes such as tax credits, tax net operating loss (“NOL”), and disallowed interest carryforwards available to us under the applicable tax codes.
+Added: However, our ability to fully utilize these tax attributes, if any, may be limited for various reasons, including whether projected future taxable income becomes insufficient to recognize the full benefit of any tax attributes prior to their expirations.
+Added: Following the Company’s “ownership change,” in the second quarter of 2025, Sections 382 and 383 of the Internal Revenue Code (“IRC”) imposed annual limitations with respect to our ability to utilize certain tax attributes against future U.S.
taxable income.
−Removed: In general, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of the corporation by more than 50 percentage points over a three-year testing period.
Because our ability to fully utilize our tax attributes is subject to the limitations under Section 382 of the IRC, it is also possible that future changes in the direct or indirect ownership in our equity might result in additional ownership changes that may trigger the imposition of additional limitations under Section 382 of the IRC with respect to these tax attributes.
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• an increase in interest rates, as experienced recently or as we may experience in the future, could significantly increase the cost of our variable rate debt and make any refinancing of our current fixed rate debt significantly more costly.
−Removed: Although we have interest rate swap contracts that hedge certain of our interest rate exposure on variable rate debt, the majority of which mature in 2026, those hedges are themselves subject to counterparty risks and may prove to be insufficient.
−Removed: Moreover, any unhedged variable rate debt maturing beyond 2026 and any refinancing of current fixed rate debt exposes us to changes in market rates;
+Added: Although we have interest rate swap contracts that hedge certain of our interest rate exposure on variable rate debt, the majority of which mature by 2028, those hedges are themselves subject to counterparty risks and may prove to be insufficient.
+Added: Moreover, any unhedged variable rate debt and any refinancing of current fixed rate debt exposes us to changes in market rates;
• any downgrade to our credit rating may increase our cost of borrowings and any refinancing could be on terms or with conditions that limit our ability to successfully conduct business in the future;
• any inability to service or refinance our debt or acceleration of debt due could result in default which could result in all of our outstanding debt becoming due and payable, an inability to access our revolving credit facility, foreclosure against our assets, and bankruptcy or liquidation.
−Removed: In 2023, we used the net proceeds of the Commercial Divestiture and cash on hand to reduce our debt by approximately $2 billion.
−Removed: However, we can provide no assurance that our business will generate sufficient cash flow from operations to service or repay our debt, or that we will have the ability to issue new debt, draw on our revolving credit facility or find other alternative sources of funds to satisfy our obligations.
+Added: We can provide no assurance that our business will generate sufficient cash flow from operations to service or repay our debt, or that we will have the ability to issue new debt, draw on our revolving credit facility or find other alternative sources of funds to satisfy our obligations.
Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, could result in a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: On February 7, 2025, we issued an irrevocable notice of partial redemption for $500 million of the First Lien Notes due 2026, which will be redeemed on March 9, 2025.
−Removed: Prior to the issuance of such notice, certain lenders provided commitments that they will fund a new $600 million first lien seven-year term loan facility.
−Removed: The closing of this new facility, which remains subject to market and other customary conditions, is expected to occur on or around March 7, 2025.
−Removed: The Company intends to use proceeds of this new facility for the partial redemption of the First Lien Notes due 2026 among other general corporate purposes.
Our debt agreements contain restrictions that limit our flexibility and limit the manner in which we conduct our business and finance future operations or capital needs, which could have a material adverse effect on our business and financial condition.
13 unchanged sentences
We have pledged a significant portion of our assets as collateral under our debt agreements.
−Removed: If any of the holders of our indebtedness accelerate the repayment of such indebtedness upon an event of default, there can be no assurance that we will have sufficient assets to repay our indebtedness.
+Added: If any of the holders of our indebtedness accelerate the repayment of such indebtedness upon an event of default, there can be no assurance that we will have sufficient assets to repay our indebtedness, which if not cured or waived, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
A failure to comply with the covenants under our debt agreements or any future indebtedness could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
11 unchanged sentences
Among others, the following factors could affect our stock price:
−Removed: • our business performance and prospects, including the success of our strategic relationship with State Farm and our partnership with Google;
−Removed: • sales of our Common Stock, or the perception that such sales may occur, by us or by our stockholders, including Apollo (which has already and may continue to sell shares in registered offerings pursuant to demand registration requests), State Farm, or Google;
+Added: • our business performance and prospects, including the success of our partnership with Google;
+Added: • sales of our Common Stock, or the perception that such sales may occur, by us or by our stockholders, including Apollo (which has in the past and may continue to sell shares in registered offerings pursuant to demand registration requests), State Farm, or Google;
• quarterly variations in the rates of growth of our operating and financial indicators, such as net income (loss) per share, net income (loss) and total revenue;
• any failure to achieve near or long term goals we have publicly disclosed for our operating and financial performance;
−Removed: • the realization of any risks described under this “Risk Factors” section, or other risks that may materialize in the future.
+Added: • the realization of any risks described under this Item 1A.
+Added: “Risk Factors” section, or other risks that may materialize in the future.
The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
2 unchanged sentences
Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources, and have a material adverse effect on our business, financial condition, results of operations, and cash flows.
−Removed: Apollo continues to exert significant influence over us, and its interests may conflict with our interests and the interests of other stockholders, and could negatively impact our ability to enter into corporate transactions.
−Removed: While we are no longer a “controlled company,” Apollo continues to be able to exert significant influence over us and as of December 31, 2024, had the right to, among other things, nominate 50% of our directors pursuant to the Amended and Restated Stockholders Agreement, dated December 14, 2018, (the “Stockholders Agreement”) between the Company and Ultimate Parent and the Co-Investors (as defined therein).
+Added: Apollo continues to have rights under the Stockholders Agreement, and its interests may conflict with our interests and the interests of other stockholders, and could negatively impact our ability to enter into corporate transactions.
+Added: While we are no longer a “controlled company,” Apollo continues to have rights pursuant to the Stockholders Agreement and as of December 31, 2025, had the right to, among other things, nominate 20% of our total number of directors.
The interests of Apollo and its affiliates, including funds affiliated with Apollo, could conflict with or differ from our interests or the interests of our other stockholders.
−Removed: For example, the concentration
−Removed: of ownership held by funds affiliated with Apollo could (i) delay, defer, or prevent a change in control of our company, (ii) impede a merger, takeover, or other business combination which may otherwise be favorable for us or that another stockholder may otherwise view favorably or (iii) cause us to enter into transactions or agreements that are not in the best interests of all stockholders.
−Removed: Additionally, Apollo and its affiliates are in the business of making investments in companies and may, from time to time, acquire and hold interests in or provide advice to businesses that compete directly or indirectly with us, or are suppliers or customers of ours.
+Added: Apollo and its affiliates are in the business of making investments in companies and may, from time to time, acquire and hold interests in or provide advice to businesses that compete directly or indirectly with us, or are suppliers or customers of ours.
Apollo and its affiliates may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.
Any such investment may increase the potential for the conflicts of interest discussed in this risk factor.
−Removed: So long as funds affiliated with Apollo continue to directly or indirectly own a significant amount of our equity, even if such amount is less than 50%, Apollo and its affiliates will continue to be able to substantially influence or effectively control our ability to enter into corporate transactions.
−Removed: In addition, we are party to the Stockholders Agreement with Ultimate Parent and the Co-Investors.
−Removed: The Stockholders Agreement specifies that we will not take certain significant actions without the prior consent of Ultimate Parent, including, among other things, hiring or terminating any executive officer of our company, designating any new executive officer of our company, entering into certain merger, consolidation or other “change of control” transactions or changing the size of our Board of Directors.
−Removed: The Stockholders Agreement also specifies that Ultimate Parent has the right to nominate individuals for election to our Board of Directors and that we are, to the fullest extent permitted by applicable law, required to nominate and recommend that each such individual be elected as a director, and the right to designate a member to each committee of our Board of Directors.
−Removed: Relatedly, our amended and restated Bylaws (the “Bylaws”) provide that Ultimate Parent has the right, subject to certain conditions, to have its representatives appointed to serve on committees of our Board of Directors.
−Removed: If we fail to establish and achieve the objectives of our sustainability program, or if we fail to report on such sustainability matters, consistent with investor, customer, employee, or other stakeholder expectations, and in compliance with legal and regulatory requirements, we may not be viewed as an attractive investment, service provider, workplace, or business, which could have a negative effect on our company.
−Removed: Investors are placing a greater emphasis on non-financial factors, including sustainability matters, when evaluating investment opportunities.
−Removed: We have published an annual corporate ESG Report (the “ESG Report”), including a Sustainable Accounting Standards Board (“SASB”) Index report, each year since 2022.
−Removed: Additionally, since 2022 we have completed the annual Corporate Questionnaire provided by the Carbon Disclosure Project, a non-profit organization focused on sustainability reporting.
−Removed: In our ESG Report and other disclosures, including in various filings with the SEC, we detail our sustainability progress.
−Removed: Sustainability initiatives and goals may be difficult and expensive to implement and may not be advanced at a sufficient pace.
+Added: If we fail to establish and achieve the objectives of our sustainability program, or if we fail to report on such sustainability matters, consistent with investor, customer, employee, or other stakeholder expectations, and in compliance with changing legal and regulatory requirements, we may not be viewed as an attractive investment, service provider, workplace, or business, which could have a negative effect on the Company.
+Added: Some investors place significant emphasis on non-financial factors, including sustainability matters, when evaluating investment opportunities.
+Added: From time to time we undertake sustainability initiatives and set related goals.
+Added: These initiatives and goals may be difficult and expensive to implement and may not be advanced at a sufficient pace.
If we are unable to provide sufficient and accurate disclosures about our sustainability practices, or if we fail to establish and achieve the objectives of our sustainability program, which could include targets or commitments, consistent with investor, customer, employee, or other stakeholder expectations, we may not be viewed as an attractive investment, service provider, workplace, or business and we may be exposed to potential liability or litigation, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
3 unchanged sentences
Our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium on their shares.
−Removed: Provisions of our amended and restated certificate of incorporation (as amended, our “Certificate of Incorporation”) and Bylaws may make it more difficult for, or prevent a third-party from, acquiring control of us without the approval of our Board of Directors.
+Added: Provisions of our amended and restated certificate of incorporation (as amended, our “Certificate of Incorporation”) and our amended and restated bylaws (the “Bylaws”) may make it more difficult for, or prevent a third-party from, acquiring control of us without the approval of our Board of Directors.
These provisions include:
−Removed: • providing that our Board of Directors will be divided into three classes, with each class of directors serving staggered three-year terms;
−Removed: • providing for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if less than 50.1% of our outstanding Common Stock is beneficially owned by funds affiliated with Apollo;
+Added: • providing for a transition from a classified board to a declassified board, such that, until the annual shareholders meeting in 2028, not all members of our Board of Directors are elected at one time;
+Added: • providing for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, for so long as less than 50.1% of our outstanding Common Stock is beneficially owned by funds affiliated with Apollo;
• empowering only the Board of Directors to fill any vacancy on our Board of Directors (other than in respect of a director designated by Apollo or other investors in our indirect parent entities), whether such vacancy occurs as a result of an increase in the number of directors or otherwise;
• authorizing the issuance of “blank check” preferred stock with all terms established by the Board of Directors in its sole discretion without any need for action by stockholders, which could delay or prevent a change in control of the Company;
−Removed: • prohibiting stockholders from acting by written consent if less than 50.1% of our outstanding Common Stock is beneficially owned by funds affiliated with Apollo;
−Removed: • to the extent permitted by law, prohibiting stockholders from calling a special meeting of stockholders if less than 50.1% of our outstanding Common Stock is beneficially owned by funds affiliated with Apollo;
+Added: • prohibiting stockholders from acting by written consent for so long as less than 50.1% of our outstanding Common Stock is beneficially owned by funds affiliated with Apollo;
+Added: • to the extent permitted by law, prohibiting stockholders from calling a special meeting of stockholders unless holders of at least 25% of our outstanding Common Stock request one in compliance with procedural and informational requirements set forth in our Certificate of Incorporation;
• establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings.
−Removed: Additionally, Section 203 of the Delaware General Corporation Law (“DGCL”) prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, unless the business combination is approved in accordance with the statute.
−Removed: An interested stockholder includes a person, individually or together with any other interested stockholder, who within the last three years has owned 15% or more of our outstanding voting stock, or who is our affiliate or associate and owned 15% or more of our outstanding voting stock at any time within the three years immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder.
−Removed: Our Certificate of Incorporation includes a provision that, with limited exceptions, restricts us from engaging in any business combination with an interested stockholder for three years following the date that person becomes an interested stockholder.
+Added: Additionally, Article XIII, Section 13.02 of our Certificate of Incorporation, with limited exceptions, restricts us from engaging in any business combination with an interested stockholder, at any point in time we have common stock registered under Section 12(b) or 12(g) under the Exchange Act, for three years following the date that person becomes an interested stockholder.
Such restrictions do not apply to any business combination between Apollo or their direct and indirect transferees (as these terms are defined in our Certificate of Incorporation) and any affiliate thereof, on the one hand, and us, on the other.
1 unchanged sentence
Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Chancery Court of the State of Delaware shall be, to the fullest extent permitted by law, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf;
−Removed: (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or stockholders;
+Added: (b) any action asserting a claim of breach of a fiduciary duty owed by
+Added: any of our directors, officers, or stockholders;
(c) any action asserting a claim arising pursuant to any provision of the DGCL or of our Certificate of Incorporation or our Bylaws;
6 unchanged sentences
Our Certificate of Incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities, which could have a material adverse effect if attractive corporate opportunities are allocated by Apollo to itself or its portfolio companies, funds, or other affiliates instead of to us.
−Removed: Under the Stockholders Agreement, funds affiliated with or managed by Apollo received certain rights, including the right to nominate a specified percentage of the directors to serve on our Board of Directors (the “Apollo Designees”) based on the percentage of our outstanding Common Stock beneficially owned by Apollo.
+Added: Under the Stockholders Agreement, funds affiliated with or managed by Apollo have certain information rights and the right to nominate a specified percentage of the directors to serve on our Board of Directors (the “Apollo Designees”) based on the percentage of our outstanding Common Stock beneficially owned by Apollo.
Under our Certificate of Incorporation, none of Apollo nor any of its portfolio companies, funds, or other affiliates, or any of its officers, directors, agents, stockholders, members, or partners have any duty to refrain from engaging, directly or indirectly, in the same business activities, similar business activities, or lines of business in which we operate.
1 unchanged sentence
As of the date of this Annual Report, this provision of our Certificate of Incorporation relates only to the Apollo Designees.
−Removed: There are currently fifteen directors of our Company, six of whom are Apollo Designees.
−Removed: These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of
−Removed: operations, cash flows, or prospects if attractive corporate opportunities are allocated by Apollo to itself or its respective portfolio companies, funds, or other affiliates instead of to us.
+Added: There are currently twelve directors of our Company, three of whom are Apollo Designees.
+Added: These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations, cash flows, or prospects if attractive corporate opportunities are allocated by Apollo to itself or its respective portfolio companies, funds, or other affiliates instead of to us.
We may issue preferred securities, the terms of which could adversely affect the voting power or value of our Common Stock.
5 unchanged sentences
Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred securities could affect the residual value of our Common Stock.
−Removed: We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder value.
−Removed: Share repurchases and dividend payments, including recent changes in the amount of our dividend, could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
−Removed: On February 20, 2025, our Board of Directors authorized a share repurchase plan (the “2025 Share Repurchase Plan”), pursuant to which the Company is authorized to repurchase, through April 30, 2026, up to a maximum aggregate amount of $500 million of shares of the Company's Common Stock.
+Added: We cannot guarantee that our share repurchase plan will be fully consummated or that it will enhance long-term shareholder value.
+Added: Share repurchases and dividend payments, including changes in the amount of our dividend, could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
+Added: On February 20, 2026, our Board of Directors authorized a three-year share repurchase plan (the “2026 Share Repurchase Plan”), pursuant to which the Company is authorized to repurchase, through April 30, 2029, up to a maximum aggregate amount of $1.5 billion of shares of the Company's Common Stock.
We cannot guarantee that the 2026 Share Repurchase Plan will be fully consummated.
1 unchanged sentence
The Company is not obligated to repurchase any of its shares of Common Stock, and the timing and amount of any repurchases will depend on legal requirements, market conditions, stock price, the availability of certain safe harbors provided under the Exchange Act, alternative uses of capital, and other factors.
−Removed: Further, our share repurchases could affect our share trading prices, increase their volatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease in the trading price of our stock.
+Added: Further, our share repurchases could
+Added: affect our share trading prices, increase their volatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease in the trading price of our stock.
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.