What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-02-27 · 314 added, 266 removed, 281 unchanged (67% of the section changed)

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• Business and Basis of Presentation

• Factors Affecting Operating Results

• Key Performance Indicators

• Trends, Uncertainties, and Factors Affecting Operating Results

• Results of Operations

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• Accounting Pronouncements

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report.

The following section should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report.

This section is intended to (i) provide material information relevant to the assessment of our results of operations and cash flows;

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Included below are year-over-year comparisons between 2025 and 2024.

The classification of the Solar Business as a discontinued operation during 2024 did not materially change the reported disclosures in the 2023 Annual Report with regard to year-over-year comparisons between 2023 and 2022, except with regard to income tax benefit (expense), as such discussions generally included analysis specific to activities within the Solar segment.

For information on year-over-year comparisons between 2023 and 2022, refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2023 Annual Report, which was filed with the SEC on February 28, 2024.

The following discussion and analysis contains forward-looking statements about our business, operations, and financial performance based on current plans and estimates involving risks, uncertainties, and assumptions, which could differ materially from actual results.

For information on year-over-year comparisons between 2024 and 2023, refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 27, 2025 (the “2024 Annual Report”).

We are including the explanation of Adjusted Earnings per share (“EPS”) for 2024 as compared to 2023 below as we began presenting Adjusted EPS as a key performance indicator in the first quarter of 2025.

The following section contains forward-looking statements about our business, operations, and financial performance based on current plans and estimates involving risks, uncertainties, and assumptions, which could differ materially from actual results.

Factors that could cause such differences are discussed in the sections of this Annual Report titled Item 1A “Risk Factors” and “Cautionary Statements Regarding Forward-Looking Statements.”

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

As discussed below, on October 2, 2023, we completed the divestiture of our Commercial Business, and as of June 30, 2024, substantially all operations of the Solar Business had ceased.

Our vision is to:

• provide protection that is always on, always ready, powered by artificial intelligence and our expert team;

• enable real time and split-second response, with deeper information and context during emergencies and all the times in between;

• deliver a personalized experience that lives and evolves with the customer, tailored to lifestyles and life stages;

• offer solutions for everyone, across all U.S.

households, small businesses, and families through a variety of use cases—protection that follows people, not just properties.

As technology continues to get smarter and more capable, we are evolving toward a platform-centric software-as-a-product model.

Our efforts are increasingly centered on our proprietary ADT+ application, which is designed to serve as a foundational ecosystem for both professionally installed and self-installed solutions, integrating human expertise with ambient sensing capabilities.

All financial information presented in this section has been prepared in U.S.

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For a more detailed discussion of our business and basis of presentation, refer to Item 1 “Business” and Note 1 “Description of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in Item 15 “Exhibit and Financial Statement Schedules.”

FACTORS AFFECTING OPERATING RESULTS

The factors described herein could have a material adverse effect on our business, financial condition, results of operations, cash flows, and/or key performance indicators.

As of December 31, 2024, we served approximately 6.4 million security monitoring service subscribers.

Generally, a significant upfront investment is required to acquire new subscribers, that in turn provide ongoing and predictable recurring revenue generated from our monitoring services and other subscriber-based offerings.

Although the economics of an installation may vary depending on the customer type, acquisition channel, and product offering, we generally achieve revenue break-even in approximately two years.

Our results are impacted by the mix of transactions under a Company-owned equipment model versus a customer-owned equipment model (referred to as outright sales), as there are different accounting treatments applicable to each model, as well as the mix, price, and type of offerings sold (see Note 2 “Revenue and Receivables”).

The majority of professional installation transactions take place under a Company-owned model, however, beginning in the second quarter of 2024, a growing number of our direct channel new customer adds are outright sales in connection with the national launch of our new ADT+ platform.

As we continue to build our partnership with Google, introduce new or enhance current offerings, and refine our go-to-market approach, we expect to continue to see a shift toward an increasing proportion of outright sales transactions, which will impact results in future periods when those changes occur.

In addition, self set-up solutions typically earn lower contractual fees than our professional installation solutions as a result of differences in pricing, offer tactics, and level of services in each channel.

However, we believe self set-up customers will allow us to grow our subscriber base through access to the fast-growing DIY market.

KEY PERFORMANCE INDICATORS

We evaluate our results using certain key performance indicators, including the operating metrics end-of-period recurring monthly revenue (“RMR”) and gross customer revenue attrition, as well as GAAP total revenue and the non-GAAP measures Adjusted EPS and Adjusted EBITDA (“Adjusted EBITDA”), both from continuing operations.

Computations of our key performance indicators may not be comparable to other similarly titled measures reported by other companies.

Certain operating metrics are approximated, as there may be variations to reported results due to certain adjustments we might make in connection with the integration over several periods of acquired companies that calculated these metrics differently or periodic reassessments and refinements in the ordinary course of business, including changes due to system conversions or historical methodology differences in legacy systems.

RMR and gross customer revenue attrition, as discussed below, exclude the former Commercial Business during 2023.

The definition of these metrics has historically excluded activity related to the Solar Business and as such, these metrics were not impacted by the presentation of the Solar Business as a discontinued operation .

Adjusted EBITDA reflects our continuing operations for all periods presented.

Total Revenue

Management and the Board of Directors use total revenue, which is calculated in accordance with GAAP, to evaluate the performance of employees (including members of management) and the Company as a whole, as well as to allocate resources.

Refer to the section titled “Results of Operations—Revenue” for additional information.

RMR is generated by contractual recurring fees for monitoring and other recurring services provided to our customers, including contracts monitored but not owned.

We use RMR to evaluate our overall sales, installation, and retention performance.

Additionally, we believe the presentation of RMR is useful to investors because it measures the volume of revenue under contract at a given point in time, which is a useful measure for forecasting future revenue performance as the majority of our revenue comes from recurring sources.

Gross Customer Revenue Attrition

Gross customer revenue attrition is defined as RMR lost as a result of customer attrition, net of dealer charge-backs and reinstated customers, excluding contracts monitored but not owned and self-setup/DIY customers.

Customer sites are considered canceled when all services are terminated.

Dealer charge-backs represent customer cancellations charged back to the dealers because the customer canceled service during the charge-back period, which is generally thirteen months.

Gross customer revenue attrition is calculated on a trailing twelve-month basis, the numerator of which is the RMR lost during the period due to attrition, net of dealer charge-backs and reinstated customers, and the denominator of which is total annualized RMR based on an average of RMR under contract at the beginning of each month during the period, in each case, excluding contracts monitored but not owned and self set-up/DIY customers.

We use gross customer revenue attrition to evaluate our retention and customer satisfaction performance, as well as evaluate subscriber trends by vintage year.

Additionally, we believe the presentation of gross customer revenue attrition is useful to investors as it provides a means to evaluate drivers of customer attrition and the impact of retention initiatives.

Adjusted EPS (from continuing operations) is a non-GAAP measure.

Our definition of Adjusted EPS, a reconciliation of Adjusted EPS to diluted income (loss) from continuing operations per share (the most directly comparable GAAP measure), and additional information, including a description of the limitations relating to the use of Adjusted EPS, are provided under “Results of Operations—Non-GAAP Measures.”

Adjusted EBITDA

Adjusted EBITDA (from continuing operations) is a non-GAAP measure.

Our definition of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to income (loss) from continuing operations (the most comparable GAAP measure), and additional information, including a description of the limitations relating to the use of Adjusted EBITDA, are provided under “Results of Operations—Non-GAAP Measures.”

TRENDS, UNCERTAINTIES, AND FACTORS AFFECTING OPERATING RESULTS

The information described herein could have a material adverse effect on our business, financial condition, results of operations, cash flows, and/or key performance indicators.

As of December 31, 2025, we served approximately 6.1 million security monitoring service subscribers, which excludes customers from the divested Multifamily business.

Generally, a significant upfront investment is required to acquire new subscribers, that in turn provide ongoing and predictable RMR generated from our monitoring services and other subscriber-based offerings.

Although the economics of each installation may vary depending on the customer type, acquisition channel, and product and service offerings, we generally achieve revenue break-even in approximately two years.

The prices we are able to charge for our products and services are impacted by the type and complexity of the offerings that we provide, quality of our products and services;

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(vi) occurrence of significant life events such as the birth of a child or opening of a new business;

and (vii) availability of financial incentives provided by insurance carriers.

New customer additions and customer attrition have a direct impact on our financial results, including revenue, operating income, and cash flows.

A portion of our recurring customer base can be expected to cancel services each year as customers may choose to terminate or not to renew their contracts for a variety of reasons including, but not limited to, relocation, loss to competition, cost, or service issues.

Relocations are sensitive to changes in the residential housing market, and fewer relocations generally lead to improvements in gross customer revenue attrition but fewer new customer additions.

and (vii) advancements or changes in technology.

New subscriber additions and customer attrition have a direct impact on our financial results, including revenue, operating income, and cash flows.

A portion of our recurring subscriber base can be expected to cancel services each year for a variety of reasons including, but not limited to, relocation, loss to competition, cost, or service issues, or we may disconnect service due to non-payment.

For example, a 1% change in customer attrition typically has approximately a $40 million impact on recurring revenue on an annualized basis.

As of December 31, 2025, gross customer revenue attrition was 13.1%, as compared to 12.7% in the prior year, driven by higher non-payment and voluntary disconnects partially offset by fewer relocations.

Relocations are sensitive to changes in the residential housing market, and fewer relocations generally lead to improvements in customer attrition, but fewer subscriber additions.

Additionally, non-payment disconnects generally increase in a weaker macroeconomic environment.

Furthermore, as we focus our newest offerings on our ADT+ platform, we face a heightened risk of attrition among legacy subscribers using systems that are not currently compatible with that platform without significant hardware upgrades.

We may experience fluctuations in these or other trends in the future as changes in the general macroeconomic environment or housing market develop.

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This provides customers with more options for receiving certain services that best fit their lifestyles while reducing our costs and eliminating thousands of vehicle trips.

We may experience an increase in costs associated with factors, including but not limited to (i) offering a wider variety of products and services;

We also market to customers through retail and e-commerce channels, including our website, and we have been supplementing existing channels to meet consumers where they prefer to shop.

We believe adding additional sales channels will help drive subscriber growth.

Revenue and Offerings

The mix, price, offerings, sales and distribution channel, and equipment ownership of transactions impacts our results.

For example, our results are impacted by the mix of transactions accounted for under a Company-owned equipment model versus an outright sales equipment model (referred to as outright sales).

This is due to different accounting treatments applicable to each model, which are discussed in Note 2 “Revenue and Receivables.” Historically, the majority of professional installation transactions occurred under a Company-owned model.

However, since the second quarter of 2024, a growing percentage of our direct channel new subscriber adds are outright sales in connection with the national launch of our new ADT+ platform.

During 2025, we experienced an increase in both security installation, product, and other revenue and related costs due to the transition to our ADT+ platform, in which the equipment is sold outright to the customer.

Currently, approximately 25% of new direct subscribers are outright sales.

Beginning in early 2026, the Company expects to refine its go-to-market approach for certain non-ADT+ residential transactions and will transition such transactions to an outright sales model where equipment will be customer owned, which aligns with the equipment ownership model for ADT+ transactions.

Accordingly, we expect this to result in an increase in security installation, product, and other revenue and cost of revenue recognized in the statements of operations in subsequent periods.

The mix of professional installation solutions versus self set-up solutions may impact our results in future periods, as professional installation solutions typically have higher contractual fees than our self set-up solutions as a result of differences in pricing, offer tactics, and level of products and services.

As we refine our go-to-market approach and explore additional sales channels, we may experience an increase in the proportion of ADT self set-up customers, which are considered outright sales.

Although the DIY market typically has lower monthly recurring fees than our professional installations, we believe this approach will allow us to grow our subscriber base.

Changes in our recurring revenue base, including subscriber count, price changes, or changes in the mix of offerings as discussed above, may impact our operating results.

As of December 31, 2025, RMR was $359 million, consistent with the prior year, reflecting the sale of our Multifamily Business, offset by an increase in average prices.

Macroeconomic and Other Trends and Uncertainties

We may also experience an increase in other costs associated with factors such as (i) offering a wider variety of products and services;

(ii) providing a greater mix of interactive and smart home solutions;

(iii) replacing or upgrading certain system components due to technological advancements, cybersecurity upgrades, or otherwise;

(iv) supply chain disruptions;

(iii) replacing or upgrading certain system components due to technological advancements, cybersecurity upgrades, software or hardware end-of-life, or otherwise;

(iv) supply chain disruptions or other impacts such as tariffs or trade restrictions;

(v) inflationary pressures on costs such as materials, labor, and fuel;

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We aim to continuously evaluate and respond to changes in the above to drive efficiencies and meet customer demands.

We are currently monitoring, and will continue to monitor, macroeconomic trends and uncertainties such as the ongoing global memory chip shortage, key components of inflation, the status and effects of recently implemented or threatened tariffs and other trade restrictions, as well as potential changes to these tariffs or the imposition of reciprocal or other tariffs or trade restrictions by other countries.

Any of these may have negative consequences for our supply chain due to price increases from our vendors or suppliers, or supply chain delays.

At this time, we do not anticipate material negative impacts that cannot be mitigated through arrangements with our vendors and suppliers, price increases to our customers, or other actions, but there is no guarantee that we will be able to successfully mitigate the negative effects of any such macroeconomic trends and uncertainties.

We are also unable at this time to determine any future negative impacts from reduced consumer spending as a result of inflationary or other pressures or uncertainty that may result from the imposition of current or future tariffs or other trade restrictions.

As part of our response to changes or pressures in the current macroeconomic environment, we have been evaluating, and continue to evaluate, cost-saving opportunities such as reducing headcount or our physical facilities footprint when appropriate, and reducing non-essential spend.

While we have experienced some increase in costs as a result of inflation, we have, for the most part, been able to offset the rising costs through price increases to our customers, as well as cost-saving opportunities.

While we have experienced some increase in costs as a result of inflation, we have, for the most part, been able to offset the rising costs through cost-saving opportunities, as well as price increases to our customers.

In addition, hurricanes, wildfires, and other natural disasters impacting certain areas in which we operate may result in service, sales, and installation disruptions to certain of our customers.

As such, we evaluate the financial and business impacts these events have or may have in the future.

During 2024, we did not experience any material losses related to natural disasters.

However, we are currently evaluating any material impacts as a result of the California fires that started in January 2025.

Unless otherwise noted, our results of operations discussed below relate to continuing operations.

Refer to Note 4 “Divestitures” in the Notes to Consolidated Financial Statements in Item 15 “Exhibit and Financial Statement Schedules” for further information regarding the ADT Solar Exit and Commercial Divestiture .

ADT Solar Exit

In January 2024, after a strategic review of the business and continued macroeconomic and industry pressures, our Board of Directors approved a plan to fully exit the Solar Business.

A s of June 30, 2024, substantially all operations of the Solar Business had ceased.

The results of operations and financial position of the Solar Business are classified as discontinued operations in the Company’s Consolidated Statements of Operations and Consolidated Balance Sheets, respectively, for all periods presented.

Additionally, the cash flows and comprehensive income (loss) of the Solar Business have not been segregated and are included in the Consolidated Statements of Cash Flows and Consolidated Statements of Comprehensive Income (Loss), respectively.

During the year ended December 31, 2024, we incurred aggregate exit charges of $88 million , which have been recognized within income (loss) from discontinued operations, net of tax, related to (i) $33 million associated with the write-down and disposition of inventory and asset impairments, (ii) $29 million associated with the disposition of the existing installation pipeline, (iii) $13 million associated with employee separation costs, and (iv) $12 million associated with contract termination and other charges.

Additionally, during the year ended December 31, 2024, we paid approximately $22 million in connection with the ADT Solar Exit, primarily related to employee separation and other restructuring costs.

We do not expect the remaining estimated charges and cash expenditures to be material;

however, various factors including unknown or unforeseen costs may cause additional charges or cash expenditures to be incurred.

Commercial Divestiture

In October 2023, we divested the Commercial Business and received net proceeds of approximately $1,585 million.

We recognized a gain on the sale of approximately $630 million, which is reflected in income (loss) from discontinued operations, net of tax in 2023.

During 2024, we paid $21 million related to the settlement of post-closing adjustments.

As applicable, the results of the Commercial Business are reported as a discontinued operation for all periods presented.

Additionally, the cash flows and comprehensive income (loss) of the Commercial Business have not been segregated and are included in the Consolidated Statements of Cash Flows and Consolidated Statements of Comprehensive Income (Loss), respectively, for all periods presented.

During 2024, we recorded income associated with the Commercial TSA of $40 million, which is recognized in other income (expense).

We do not expect any material income under the Commercial TSA in future periods.

During 2023, we utilized a significant portion of our net operating losses (“NOLs”) to offset the gain generated from the sale of the Commercial Business.

In 2024, we utilized the remaining NOLs and anticipate becoming a federal cash taxpayer in 2025.

However, the amounts and timing of payments are uncertain.

We have not experienced any material losses related to natural disasters during the periods presented.

During 2023, we utilized a significant portion of our NOLs to offset the gain generated from the sale of the Commercial Business.

In 2024, we utilized the remaining NOLs and became a federal cash taxpayer in 2025.

Federal Tax Legislation

Certain changes to U.S.

federal tax law included in the Tax Cuts and Jobs Act of 2017 had a delayed effective date until 2022.

Under IRC Section 163(j), the limitation on net business interest expense deductions are no longer increased by deductions for depreciation, amortization, or depletion.

Under IRC Section 174, specified research and experimentation expenditures are now capitalized and amortized.

These items have resulted in increased taxable income and an acceleration of our net operating loss utilization.

The OBBBA was signed into law in July 2025.

It includes a broad range of tax reform provisions, some of which were favorable in 2025 to cash taxes.

We evaluated the impact of the OBBBA on future periods and expect that the impact on cash taxes will likely be neutral.

Potential for Future Valuation Allowance

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federal and state deferred tax assets.

In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all available

positive and negative evidence, including enacted legislation such as the updates described above, which impact our assessment of whether a valuation allowance is needed.

In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including enacted legislation such as the updates described above, which impact our assessment of whether a valuation allowance is needed.

We believe that our deferred tax asset for disallowed interest under IRC Section 163(j) will continue to grow from its current level.

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Any material change to our valuation allowance in subsequent periods could materially and adversely impact our operating results.

Other Updates

Google Partnership

During 2023, we launched and began the phased rollout of our proprietary ADT+ app for our self set-up line of DIY smart home security products, including integrated Google Nest offerings.

During 2024, we continued the phased rollout of our ADT+ platform across the country, making our next generation hardware and technology available to customers through our proprietary app.

During 2024 and 2023, we were reimbursed $30 million and $40 million, respectively, of the Google Success Funds primarily for certain joint marketing and customer acquisition expenses we incurred.

Other Tax Matters

As a result of Apollo selling shares of our Common Stock (as discussed in Note 16 “Related Party Transactions”) and our share repurchase program, an ownership change (as defined under Sections 382 and 383 of the Internal Revenue Code) occurred during the second quarter of 2025.

Generally, an ownership change occurs when the aggregate ownership of certain shareholders shifts, for federal income tax purposes, by more than 50 percentage points in total over a rolling three-year period.

An ownership change imposes annual limitations on a corporation’s ability to utilize its tax attributes to offset future U.S.

taxable income.

Our tax attributes that are subject to the limitations primarily consist of disallowed interest carryforwards.

However, the limitation as a result of the ownership change significantly exceeded the value of these attributes.

As such, we currently do not expect a material impact to our results from this ownership change.

Other Business Updates

Origin AI Acquisition

On February 20, 2026, ADT acquired Origin AI, a provider of AI‑enabled presence detection and ambient sensing technology.

Origin AI’s technology uses artificial intelligence and radio frequency signals to detect and classify human presence and activity within the home without the use of cameras, audio, or wearable devices.

This technology is expected to enhance our ability to deliver improved alarm verification, reduce false alarms, and support new intelligent security and smart home use cases over time.

The purchase price was $170 million in cash, subject to customary purchase price adjustments.

Origin AI is now an indirect wholly owned subsidiary of ADT.

ADT Solar Exit

Exit charges incurred and paid were not material in 2025.

We do not expect the remaining estimated charges and cash expenditures to be material;

however, various factors including unknown or unforeseen costs may cause additional charges or cash expenditures to be incurred.

Refer to Note 4 “Divestitures” in the Notes to Consolidated Financial Statements.

Google Update

We were reimbursed $30 million for each of the years 2025 and 2024 from the Google Success Funds primarily for certain joint marketing and customer acquisition expenses we incurred.

Refer to Note 13 “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

State Farm Partnership

Beginning in 2023, certain State Farm customers were able to receive ADT home security products and professional monitoring at a reduced cost as part of the partnership between ADT and State Farm.

In addition, through this program, ADT has access to certain State Farm customers, which provide opportunities to reach additional markets.

As of December 31, 2024, the State Farm partnership operated in 17 states in the U.S.

During 2024 and 2023, we used approximately $14 million and $11 million, respectively, of the Opportunity Fund for project initiatives and other costs.

State Farm Update

The State Farm Development Agreement expired on October 13, 2025.

On October 24, 2025, we repaid to State Farm approximately $78 million of the balance of the Opportunity Fund held by us.

State Farm has no obligation to fund the Opportunity Fund in the future.

In addition, we ended our State Farm partnership programs in existing states in connection with the expiration of the State Farm Development Agreement.

Refer to Note 10 “Equity” and Note 16 “Related Party Transactions” in the Notes to Consolidated Financial Statements.

KEY PERFORMANCE INDICATORS

Computations of our key performance indicators may not be comparable to other similarly titled measures reported by other companies.

RMR and gross customer revenue attrition, as discussed below, have been recast for prior periods to exclude the former Commercial Business.

Adjusted EBITDA reflects our continuing operations for all periods presented.

RMR is generated by contractual recurring fees for monitoring and other recurring services provided to our customers, including contracts monitored but not owned.

We use RMR to evaluate our overall sales, installation, and retention performance.

Gross Customer Revenue Attrition

Customer sites are considered canceled when all services are terminated.

Dealer charge-backs represent customer cancellations charged back to the dealers because the customer canceled service during the charge-back period, which is generally thirteen months.

We use gross customer revenue attrition to evaluate our retention and customer satisfaction performance, as well as evaluate subscriber trends by vintage year.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP measure.

RESULTS OF OPERATIONS

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Depreciation and intangible asset amortization 1,367,216 1,342,798 1,335,484 24,418 7,314

Merger, restructuring, integration, and other 24,124 38,959 9,937 (14,835) 29,022

Operating income (loss) 1,308,901 1,208,064 1,178,961 100,837 29,103

Interest expense, net

Loss on extinguishment of debt (4,802) (16,621) — 11,819 (16,621)

(459,266) (441,031) (569,915) (18,235) 128,884

Other income (expense) (15,823) 48,137 (4,663) (63,960) 52,800

Income (loss) from continuing operations before income taxes and equity in net earnings (losses) of equity method investee 815,170 604,383 404,458 210,787 199,925

Income (loss) from continuing operations before income taxes 833,812 815,170 604,383 18,642 210,787

Income tax benefit (expense) (233,294) (195,780) (160,585) (37,514) (35,195)

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Net income (loss) $ 595,951 $ 501,053 $ 463,009 $ 94,898 $ 38,044

Diluted income (loss) from continuing operations per share of Common Stock $ 0.68 $ 0.66 $ 0.47 $ 0.02 $ 0.19

Diluted weighted-average shares outstanding of Common Stock 841,176 908,700 919,149 (67,524) (10,449)

Key Performance Indicators:

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Gross customer revenue attrition (percentage) 13.1 % 12.7 % 12.9 % N/A N/A

Adjusted EPS (2)

$ 0.89 $ 0.75 $ 0.60 $ 0.14 $ 0.15

Adjusted EBITDA (2)

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(1) Refer to the “Key Performance Indicators” section for the definitions of these key performance indicators.

(2) Adjusted EBITDA is a non-GAAP measure.

Refer to the “Non-GAAP Measures” section for the definition of this term and reconciliation to the most comparable GAAP measure.

(2) Refer to the “Non-GAAP Measures” section for the definitions of these non-GAAP measures and reconciliations to the most comparable GAAP measures.

N/A—Not applicable.

Unless otherwise noted, our results of operations discussed below relate to continuing operations.

Monitoring and related services revenue (“M&S Revenue”) primarily comprises revenue generated from providing recurring monthly monitoring and other services, as well as revenue from time and materials billings.

Security installation, product, and other revenue comprises installation revenue from the sale and installation of our security systems sold under a customer-owned model, as well as the recognition of revenue that is deferred upon initiation of a monitoring contract in transactions occurring under a Company-owned model (amortization of deferred subscriber acquisition revenue).

Revenue, as compared to the prior period, primarily reflects:

Security installation, product, and other revenue comprises installation revenue from the sale and installation of our security systems sold under an outright sales model, as well as the recognition of revenue that is deferred upon initiation of a monitoring contract in transactions occurring under a Company-owned model (amortization of deferred subscriber acquisition revenue).

Revenue during 2025, as compared to the prior year period, primarily reflects:

• M&S Revenue :

higher recurring revenue of $108 million primarily driven by an increase in average prices.

• Security installation, product, and other :

(i) an increase in installation revenue of $87 million primarily driven by a higher mix of professionally installed systems at higher average prices in connection with the transition to our ADT+ platform, as well as (ii) an increase in the amortization of deferred subscriber acquisition revenue of $45 million associated with customers under a Company-owned model.

The increase in RMR, as compared to the prior period, was primarily driven by an increase in average prices on new and existing subscribers.

The decrease in gross customer revenue attrition, as compared to the prior period, was primarily driven by a decrease in voluntary and other disconnects, partially offset by higher non-payment disconnects.

(i) higher recurring revenue of $39 million primarily driven by an increase in average prices of $113 million, partially offset by a decrease in volume of $53 million, and (ii) higher revenue of $20 million attributable to time and materials billings resulting from increased volume.

• Security installation, product, and other revenue :

higher installation revenue of $157 million primarily driven by a higher mix of professionally installed systems under the outright sales model.

Cost of Revenue

Monitoring and related services costs (“M&S Costs”) primarily includes field service and call center costs incurred from providing recurring monthly monitoring and other services.

Security installation, product, and other costs primarily includes costs incurred from the installation of our security systems sold in outright sales transactions.

The increase in cost of revenue, as compared to the prior period, primarily reflects an increase in installation and product costs of $82 million primarily due to a higher volume of outright sales transactions as well as an increase in M&S Costs of $13 million primarily due to higher interactive fees and other customer service initiatives, partially offset by lower maintenance costs primarily as a result of the continued growth of our Remote Assistance Program.

Security installation, product, and other costs primarily includes costs incurred from the installation and sale of our security systems sold under the outright sales model.

Cost of revenue during 2025, as compared to the prior year period, primarily reflects:

higher M&S Costs of $25 million, primarily due to an increase in interactive fees.

• Security installation, product, and other costs :

higher installation and product costs of $111 million, primarily due to a higher mix of professionally installed outright sales transactions.

Selling, General, and Administrative Expenses (“SG&A”)

The increase in SG&A, as compared to the prior period, was primarily driven by:

• an increase in the allowance for credit losses of $55 million as a result of an increase in customer delinquencies,

• an increase in general and administrative costs of $43 million, which includes a current year charge and a prior year benefit related to legal settlements in an aggregate amount of approximately $37 million, and

• an increase in the amortization of deferred subscriber acquisition costs of $36 million, partially offset by

• a decrease in advertising costs of $26 million as a result of lower media spend.

The decrease in SG&A during 2025, as compared to the prior year period, was primarily driven by:

• a decrease in general and administrative costs of $66 million primarily as a result of lower internal and external labor costs and lower costs attributable to legal settlements, partially offset by

• an increase in the amortization of deferred subscriber acquisition costs of $28 million.

Depreciation and Intangible Asset Amortization (“D&A”)

D&A remained relatively flat, as compared to the prior period, and included an increase of $35 million in the amortization of customer contracts acquired under our authorized dealer program and from other third parties, partially offset by a decrease of $33 million in the amortization of customer relationship intangible assets primarily related to certain assets acquired as part of the ADT Acquisition that became fully amortized during the first quarter of 2023.

Merger, Restructuring, Integration, and Other

Merger, restructuring, integration, and other varies year over year and generally represents certain direct and incremental costs resulting from acquisitions, integration and optimization costs as a result of those acquisitions, costs related to restructuring efforts, as well as fair value remeasurements and impairment charges on certain strategic investments.

The decrease in merger, restructuring, integration, and other, as compared to the prior period, was primarily due to third-party strategic optimization costs incurred during the prior period.

The increase in D&A during 2025, as compared to the prior year period, primarily reflects an increase of $22 million in the amortization of customer contracts acquired under our authorized dealer program and from other third parties.

Interest Expense, net

During 2024, the decrease in interest expense, net, as compared to the prior year period, was primarily driven by lower interest expense of $114 million primarily related to lower principal amounts outstanding on our First Lien Term Loan B and the redemption of our First Lien Notes due 2024.

The increase in interest expense, net during 2025, as compared to the prior year period, primarily reflects an increase in the unrealized loss on interest rate swaps of $29 million partially offset by a decrease of $11 million on our long-term debt primarily related to reductions in interest rates.

Other Income (Expense)

During 2024, the increase in other income (expense) was primarily due to higher income from the Commercial TSA of $28 million, with the remainder of the change primarily due to the realized gain (loss) on interest rate swaps.

Other income (expense) during 2025, as compared to the prior year period, primarily reflects lower income from the Commercial transition services agreement (“TSA”) of $37 million and higher loss on extinguishment of debt of $14 million.

Income Tax Benefit (Expense)

Income tax expense during 2025 was $233 million, resulting in an effective tax rate for the period of 28.0%.

The effective tax rate primarily represents the federal statutory rate of 21.0%, state income taxes, net of federal benefits, of 5.4%, and unfavorable impacts from dispositions of 1.2% and permanently non-deductible items of 0.8%, partially offset by favorable impacts from a decrease in unrecognized tax benefits of 4.0%.

Income tax expense during 2023 was $161 million, resulting in an effective tax rate for the period of 26.6%.

The effective tax rate primarily represents the federal statutory rate of 21.0%, state income taxes, net of federal benefits, of 6.1%, and an unfavorable impact from permanently non-deductible items of 1.0%, partially offset by favorable impacts from a decrease in unrecognized tax benefits of 1.0% and dispositions of 0.9%.

The effective tax rate primarily represents the federal statutory rate of 21.0%, state income taxes, net of federal benefits, of 4.8%, permanently non-deductible items of 1.3%, and an increase in unrecognized tax benefits of 0.8%.

Income tax expense during 2024 was $196 million, resulting in an effective tax rate for the period of 24.0%.

The effective tax rate primarily represents the federal statutory rate of 21.0%, state income taxes, net of federal benefits, of 3.0%, and an unfavorable impact from permanently non-deductible items of 5.1%, partially offset by favorable impacts from federal credits of 2.9%, a decrease in unrecognized tax benefits of 2.3%, and legislative changes of 2.1%.

Refer to Note 9 “Income Taxes” for details on our effective tax rate.

The effective tax rate primarily represents the federal statutory rate of 21.0%, state income taxes, net of federal benefits, of 5.4%, and

unfavorable impacts from dispositions of 1.2% and permanently non-deductible items of 0.8%, partially offset by favorable impacts from a decrease in unrecognized tax benefits of 4.0%.

Refer to Note 9 “Income Taxes” in the Notes to Consolidated Financial Statements for details on our effective tax rate.

NON-GAAP MEASURES

To provide investors with additional information in connection with our results as determined in accordance with GAAP, we disclose Adjusted EBITDA as a non-GAAP measure.

This measure is not a financial measure calculated in accordance with GAAP, and it should not be considered as a substitute for net income, operating income, or any other measure calculated in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

To provide investors with additional information in connection with our results as determined in accordance with GAAP, we disclose the following non-GAAP measures.

These measures are not financial measures calculated in accordance with GAAP, and should not be considered as a substitute for net income, operating income, or their respective per share amounts as applicable, or any other measure calculated in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

We define Adjusted EPS as diluted income (loss) from continuing operations per share adjusted for the per share amounts related to (i) share-based compensation expense;

(ii) merger, restructuring, integration, and other items;

(iii) impairment charges;

(iv) unrealized (gains) or losses on interest rate swaps;

(v) other non-cash or non-routine adjustments not necessary to operate our business;

and (vi) the impact these items have on taxes.

The diluted weighted average shares outstanding used in Adjusted EPS is equal to diluted weighted average shares outstanding of Common Stock calculated in accordance with GAAP.

We believe Adjusted EPS is a benchmark used by analysts and investors in our industry to compare our performance against the performance of other companies, although this measure may not be directly comparable to similar measures reported by other companies.

We believe the presentation of Adjusted EPS is useful to investors as it provides additional information about how our management evaluates the business.

Beginning in 2025, management and the Board of Directors also use Adjusted EPS to evaluate the performance of employees (including members of management) and the Company as a whole, as well as to allocate resources.

There are material limitations to using Adjusted EPS as it does not include certain significant items, including the adjustments discussed above, which directly affect our diluted income (loss) from continuing operations per share (the most comparable GAAP measure).

These limitations are best addressed by considering the economic effects of the excluded items independently and by considering Adjusted EPS in conjunction with diluted income (loss) from continuing operations per share as calculated in accordance with GAAP.

The table below reconciles Adjusted EPS to diluted income (loss) from continuing operations per share of Common Stock:

Years Ended December 31, $ Change

2025 2024 2023 2025 vs.

2024 2024 vs.

Diluted income (loss) from continuing operations per share of Common Stock $ 0.68 $ 0.66 $ 0.47 $ 0.02 $ 0.19

Share-based compensation expense 0.06 0.05 0.04 0.01 0.01

Merger, restructuring, integration, and other (1)

0.02 0.03 0.04 (0.01) (0.01)

Goodwill impairment (2)

0.01 — — 0.01 —

Interest rate swaps, net (3)

0.08 0.05 0.07 0.03 (0.02)

Loss on extinguishment of debt 0.02 0.01 0.02 0.01 (0.01)

Other, net 0.04 0.01 (0.04) 0.03 0.05

Tax impact on adjustments (4)

(0.04) (0.07) (0.03) 0.03 (0.04)

Adjusted EPS (5)

$ 0.89 $ 0.75 $ 0.60 $ 0.14 $ 0.15

________________

(1) During 2025 and 2024, primarily relates to restructuring costs.

During 2023, primarily includes integration and third-party strategic optimization costs, as well as restructuring costs.

(2) Represents a goodwill impairment charge associated with the Multifamily Divestiture.

Refer to Note 6 “Goodwill and Other Intangible Assets” in the Notes to Consolidated Financial Statements.

(3) Represents unrealized gains or losses on interest rate swaps presented in interest expense, net and other income (expense).

(4) Represents the tax impact on adjustments using the federal and state blended statutory rate.

During the fourth quarter of 2024, also includes tax reserve releases of approximately $30 million associated with The ADT Security Company's separation from Tyco.

(5) Amounts may not sum in this table due to rounding.

The increase in Adjusted EPS in 2025, as compared to 2024, was primarily due to approximately:

• $0.11 per share due to higher revenue, net of the related costs,

• $0.07 per share due to lower general and administrative costs, and

• $0.07 per share due to a decrease in our diluted weighted average shares outstanding as a result of share repurchases, partially offset by

• $(0.05) per share of other income (expense) primarily due to lower Commercial TSA income,

• $(0.03) per share due to higher amortization of deferred subscriber acquisition costs, and

• $(0.03) per share due to higher depreciation and amortization expense.

The increase in Adjusted EPS in 2024, as compared to 2023, was primarily due to approximately:

• $0.17 per share due to higher revenue, net of the related costs,

• $0.12 per share related to higher interest,

• $0.05 per share of other income (expense) primarily due to higher Commercial TSA income,

• $0.03 per share due to lower advertising costs, and

• $0.01 per share due to a decrease in our diluted weighted average shares outstanding as a result of share repurchases, partially offset by

• $(0.08) per share due to higher income tax expense,

• $(0.06) per share due to increased allowance for credit losses,

• $(0.04) per share due to higher amortization of deferred subscriber acquisition costs, and

• $(0.04) per share due to higher general and administrative costs.

The factors listed above exclude amounts that are outside of our definition of Adjusted EPS.

Refer to the discussions above under “—Results of Operations” for further details.

Adjusted EBITDA

We believe Adjusted EBITDA is useful to investors to measure the operational strength and performance of our business.

We believe the presentation of Adjusted EBITDA is useful as it provides investors additional information about our operating profitability adjusted for certain non-cash items, non-routine items we do not expect to continue at the same level in the future, as well as other items not core to our operations.

Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against other peer companies using similar measures.

We define Adjusted EBITDA as income (loss) from continuing operations adjusted for (i) interest;

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(v) share-based compensation expense;

(vi) merger, restructuring, integration, and other;

(vii) losses on extinguishment of debt;

(viii) radio conversion costs, net;

(ix) adjustments related to acquisitions, such as contingent consideration and purchase accounting adjustments, or dispositions;

(x) impairment charges;

and (xi) other income/gain or expense/loss items such as changes in fair value of certain financial instruments or financing and consent fees.

(vi) merger, restructuring, integration, and other items;

(vii) impairment charges;

and (viii) other non-cash or non-routine adjustments not necessary to operate our business.

We believe Adjusted EBITDA is useful to investors to measure the operational strength and performance of our business.

There are material limitations to using Adjusted EBITDA.

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Income (loss) from continuing operations

$ 600,518 $ 619,390 $ 450,370 $ (18,872) $ 169,020

Interest expense, net 459,266 441,031 569,915 18,235 (128,884)

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13,145 24,124 38,959 (10,979) (14,835)

Unrealized (gain) loss on interest rate swaps (2)

Goodwill impairment (2)

12,023 — — 12,023 —

Change in fair value of other financial instruments (3)

Unrealized (gain) loss on interest rate swaps (3)

15,461 17,996 16,511 (2,535) 1,485

Loss on extinguishment of debt 18,850 4,802 16,621 14,048 (11,819)

Other, net (4)

11,910 5,091 (32,280) 6,819 37,371

Adjusted EBITDA (from continuing operations)

Adjusted EBITDA

$ 2,680,376 $ 2,578,195 $ 2,481,305 $ 102,181 $ 96,890

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During 2023, primarily includes integration and third-party strategic optimization costs, as well as restructuring costs.

(2) Represents a goodwill impairment charge associated with the Multifamily Divestiture.

Refer to Note 6 “Goodwill and Other Intangible Assets” in the Notes to Consolidated Financial Statements.

(3) Includes the unrealized gain or loss on interest rate swaps presented in other income (expense).

(3) During 2022, represents the change in fair value of the Forward Contract (refer to Note 10 “Equity”).

(4) During 2023, primarily represents the gain on sale of a business and other investment, partially offset by loss on extinguishment of debt.

(4) During 2023, primarily represents the gain on sale of a business and other investment.

The drivers listed below exclude amounts that are outside of our definition of Adjusted EBITDA.

Refer to the discussions above under “—Results of Operations” for further details.

The increase was primarily due to:

• higher M&S Revenue, net of the associated costs, of $108 million,

• higher other income of $43 million primarily due to higher income from the Commercial TSA, and

• lower advertising costs of $26 million, partially offset by

• higher provision for credit losses of $55 million and negative impacts from legal settlements of $37 million.

The increase in Adjusted EBITDA, as compared to the prior year period, was primarily due to:

• lower general and administrative expenses of $61 million,

• higher installation revenue, net of the associated costs and commissions, of $50 million, and

• higher M&S Revenue, net of the associated costs, of $36 million, partially offset by

• lower TSA income of $37 million.

LIQUIDITY AND CAPITAL RESOURCES

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Carrying amount of total debt outstanding $ 7,689,634

We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and the 2020 Receivables Facility, and the issuance of equity and/or debt securities as appropriate given market conditions.

Our future cash needs are expected to include cash for operating activities, working capital, capital expenditures, principal and interest payments on our debt, expected dividend payments to our stockholders, potential share repurchases under a share repurchase plan, and other business initiatives as they arise.

We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our credit facilities, and the issuance of equity and/or debt securities as appropriate given market conditions.

Our future cash needs are expected to include cash for operating activities, working capital, capital expenditures, principal and interest payments on our debt, income tax payments, capital expenditures, expected dividend payments to our stockholders, potential share repurchases, and other business initiatives as they arise.

Our principal liquidity requirements are to finance current operations, invest in acquiring and retaining customers, purchase property and equipment, service our debt, invest in our information technology infrastructure, and return money to shareholders through dividends and share repurchases.

Our liquidity requirements are primarily funded by our cash flows from operations.

Cash inflows primarily include cash received from customers related to monthly recurring revenue from providing monitoring and other services, as well as cash from the sale and installation of our security systems.

Cash outflows primarily relate to providing services to our customers, general and administrative costs, certain costs associated with acquiring new customers, interest payments, and taxes.

Cash inflows from operations primarily include cash received from customers related to monthly recurring revenue from providing monitoring and other services, as well as cash from the sale and installation of our security systems.

Cash outflows from operations primarily relate to providing services to our customers, general and administrative costs, certain costs associated with acquiring new customers, interest payments, and taxes.

We are a highly leveraged company with significant debt service requirements and have both fixed-rate and variable-rate debt.

We also entered into interest rate swaps to manage interest on our debt.

We may periodically seek to repay, redeem, repurchase, or refinance our indebtedness, or seek to retire or purchase our outstanding securities through cash purchases in the open market, privately negotiated transactions, a 10b5-1 repurchase plan, or otherwise, and any such transactions may involve material amounts.

Cash outflows for interest payments are not consistent between quarters, with larger outflows occurring in the first and third quarters, and may vary as a result of our variable rate debt.

We also entered into, and may continue to enter into, interest rate swaps to manage interest on our debt.

Further, cash outflows for interest payments are not consistent between quarters, with larger outflows occurring in the first and third quarters, and may vary as a result of our variable rate debt and interest rate swaps.

We may periodically seek to repay, redeem, repurchase, or refinance our indebtedness, or seek to repurchase and retire our outstanding securities through cash purchases in the open market, privately negotiated transactions, a 10b5-1 repurchase plan, or otherwise, and any such transactions may involve material amounts.

We are closely monitoring the impact of any inflationary pressures and changes in interest rates on our cash position.

However, we believe our cash position, borrowing capacity available under our First Lien Revolving Credit Facility and 2020 Receivables Facility, and cash provided by operating activities are, and will continue to be, adequate to meet our operational and business needs in the next twelve months, as well as our long-term liquidity needs.

In addition, in 2023, we entered into a Receivables Financing Agreement with Mizuho Bank, Ltd.

(the “Solar Receivables Financing Agreement”), which, among other things, provided for an uncommitted revolving loan facility in the aggregate principal amount of up to $300 million, which loans are secured by substantially all the assets of ADT Solar Finance LLC (“ADT Solar Finance”) (the “Solar Receivables Facility”).

The Solar Receivables Facility expired in August 2024 with no amounts borrowed.

Material Cash Requirements

Our cash requirements within the next twelve months primarily include current maturities and interest on our long-term debt and leases, accounts payable and other current liabilities, purchase commitments and other obligations entered into in the ordinary course of business, and dividends on our common stock.

As of December 31, 2025, our significant short-term and long-term cash requirements, excluding cash required for operations, under our various contractual obligations and commitments primarily included:

• Debt principal – As of December 31, 2024, our expected future debt principal payments, excluding finance leases, totaled approximately $7.8 billion, with $170 million due in 2025 primarily related to payments on our 2020 Receivables Facility and the required quarterly principal payments on our First Lien Term Loan B due 2030.

As of December 31, 2024, our next debt maturity will occur in April 2026 with respect to the remaining outstanding balance of $1.35 billion of our First Lien Notes due 2026.

On February 7, 2025, we issued a notice of partial redemption for $500 million of the First Lien Notes due 2026.

Refer to Note 7 “Debt” for further details of our debt and the timing of expected future principal payments.

• Debt principal – As of December 31, 2025, our expected future debt principal payments, excluding finance leases, totaled approximately $7.8 billion, with $288 million due in 2026 primarily related to payments on our 2020 Receivables Facility, our first lien notes due 2026 (the “First Lien Notes due 2026”), and required quarterly amortization payments.

As of December 31, 2025, our next debt maturity will occur in April 2026 with respect to the remaining outstanding balance of $75 million of our First Lien Notes due 2026.

We intend, and believe that we will have the ability through use of our ongoing sources of liquidity, to redeem these notes before or at maturity.

Refer to Note 7 “Debt” in the Notes to Consolidated Financial Statements for further details of our debt and the timing of expected future principal payments.

• Interest payments – Future interest payments on our fixed-rate debt are based on the contractual terms.

Future interest payments on our variable-rate debt and the effects of our interest rate swaps are based on SOFR, plus the applicable margin in effect as of December 31, 2025.

During 2024, we paid net cash interest of $372 million, including interest on interest rate swaps presented outside of operating activities.

As of December 31, 2024, our expected future interest payments related to our debt and interest rate swap contracts totaled approximately $1.6 billion, with approximately $354 million due in 2025.

Additionally, we expect to incur annual interest payments of approximately $310 - $325 million during each of the years 2026 - 2027 and approximately $195 - $240 million during each of the years 2028 and thereafter.

• Leases – As of December 31, 2024, our expected future operating and finance lease payments, including interest, totaled $192 million, with $54 million due in 2025.

Refer to Note 14 “Leases” for further details of our obligations and the timing of expected future payments.

• Purchase obligations – Our material cash requirements for purchases of goods or services entered into in the ordinary course of business, including purchase orders and contractual obligations, primarily consist of information technology services and equipment, including investments in our information technology infrastructure, direct materials, and telecommunication services.

During 2025, we paid net cash interest of $409 million, including interest on interest rate swaps and leases.

As of December 31, 2025, expected future interest payments totaled approximately $2.0 billion through 2042, with approximately $340 million due in 2026.

Additionally, we expect to incur annual interest payments of approximately $260 - $355 million during each of the years 2027 - 2030 and a total of approximately $380 million thereafter.

• Leases – As of December 31, 2025, our expected future operating and finance lease payments, including interest of $23 million, totaled $169 million, with $47 million due in 2026.

Refer to Note 14 “Leases” in the Notes to Consolidated Financial Statements for further details of our obligations and the timing of expected future payments.

• Purchase obligations – Our material cash requirements for purchases of goods or services entered into in the ordinary course of business, including purchase orders and contractual obligations, primarily consist of information technology services and equipment, including investments in our information technology infrastructure and telecommunication services, and direct materials.

Our future purchase obligations may be impacted by changes in our business or other internal or external factors.

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As of December 31, 2025, our contractual obligations entered into in the ordinary course of business, including agreements that are enforceable and legally binding and have a remaining term in excess of one year, totaled approximately $448 million, with approximately $273 million expected to be paid in 2026.

These amounts include a commitment with one of our vendors to purchase at least $172 million of security system equipment and components through December 2025.

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

In addition, as of December 31, 2025, we had outstanding purchase orders of approximately $136 million primarily related to direct materials and information technology and marketing services, which are expected to be materially satisfied in 2026.

Refer to Note 13 “Commitments and Contingencies” for the amounts and timing of such payments.

• Google agreements – The Google Commercial Agreement requires us and Google to each contribute $150 million toward certain joint commercial efforts.

Refer to Note 13 “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for the amounts and timing of such payments.

• Google Success Funds – The Google Commercial Agreement requires us and Google to each contribute $150 million toward certain joint commercial efforts.

Additionally, during 2022 we entered into the Google Commercial Agreement Amendment in which Google agreed to commit an additional $150 million.

While the timing of these contributions is still uncertain, we expect to contribute the majority of our $150 million commitment under the Google Commercial Agreement by the end of 2026.

During 2024 and 2023, $30 million and $40 million, respectively, of the Google Success Funds were reimbursed to the Company primarily for certain joint marketing expenses and customer acquisition costs incurred by the Company, substantially all of which was reflected as a reduction of advertising costs.

In addition, under the Google Cloud Agreement Addendum, the Company is obligated to make purchases from Google totaling $200 million over a seven-year period (through December 2030), with an aggregate of $35 million in the first two years, an aggregate of $65 million in the next two years after that, and an aggregate of $100 million in the last three years of the commitment.

As of December 31, 2024, we are on track to meet these commitments.

• State Farm Opportunity Fund – Pursuant to the State Farm Development Agreement, State Farm committed up to $300 million to fund product and technology innovation, customer growth, and marketing initiatives.

Upon the Closing of the State Farm Strategic Investment, we received $100 million of such commitment from State Farm, which is restricted until we use the funds for investment, as agreed upon with State Farm, in accordance with the State Farm Development Agreement.

During 2024 and 2023, payments made from the Opportunity Fund were $14 million and $11 million, respectively.

As of December 31, 2025, we have incurred life-to-date expenses of approximately $100 million related to the initiatives funded from the initial segment of the Google Success Funds and had received $90 million of reimbursement from the Google Success Funds, with the remaining $10 million reimbursed during January 2026.

• Google Cloud Agreement Addendum – Since December 2023, we are obligated to make purchases from Google totaling $200 million over a seven-year period (through December 2030), with an aggregate of $35 million in the first two years, an aggregate of $65 million in the next two years after that, and an aggregate of $100 million in the last three years of the commitment.

As of December 31, 2025, we continue to work to meet this commitment.

• Customer account purchases – Our indirect channel customers are generated mainly through our ADT Authorized Dealer Program.

As opportunities arise, we may engage in selective third-party account purchases, which typically involve the purchase of a set of customer accounts from other security service providers.

For example, we paid initial cash at closings of $81 million and $89 million for customer accounts from third parties during 2024 and 2023, respectively.

• Taxes – During 2025, we expect to become a federal cash taxpayer.

However, we are currently unable to determine the exact amount or timing of these payments.

For example, we paid initial cash at closings of $115 million for customer accounts from third parties during 2025.

• Taxes – While we have historically made cash tax payments to certain states, starting in the second quarter of 2025, we began making federal cash tax payments.

The specific payment amounts may fluctuate each quarter based on our financial results and tax positions taken.

In addition, we have $57 million of unrecognized tax benefits, excluding interest and penalties, related to various tax positions we have taken.

These liabilities may increase or decrease over time primarily as a result of tax examinations, and given the status of the examinations, we cannot reliably estimate the period of any cash settlement with the respective taxing authorities.

Refer to Note 9 “Income Taxes” for further details.

Refer to Note 9 “Income Taxes” in the Notes to Consolidated Financial Statements.

• Share Repurchases – On February 20, 2026, our Board of Directors authorized a three-year share repurchase plan (the “2026 Share Repurchase Plan”), pursuant to which we are authorized to repurchase, through April 30, 2029, up to a maximum aggregate amount of $1.5 billion of shares of our Common Stock.

As of the date of this 2025 Annual Report, we have not made any repurchases under the 2026 Share Repurchase Plan.

• Dividends – Stockholders are entitled to receive dividends when, as, and if declared by our Board of Directors out of funds legally available for that purpose.

On February 27, 2025, we announced a dividend of $0.055 per share to holders of Common Stock and Class B Common Stock of record on March 13, 2025, which will be distributed on or about April 3, 2025.

Refer to Note 10 “Equity” for further details on dividends declared and paid during 2024 and 2023.

• Share repurchases – In February 2025, our Board of Directors announced 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 Common Stock.

As of the date of this 2024 Annual Report, the Company has not made any repurchases under the 2025 Share Repurchase Plan.

On March 2, 2026, we announced a dividend of $0.055 per share to holders of Common Stock and Class B Common Stock of record on March 12, 2026, which will be distributed on or about April 2, 2026.

Refer to Note 10 “Equity” in the Notes to Consolidated Financial Statements for dividends declared and paid during the periods presented.

• Off-balance sheet arrangements – As of December 31, 2025, we had guarantees primarily related to standby letters of credit on our insurance programs totaling $48 million.

In February 2025, $21 million of our guarantees were relinquished.

We do not have any other arrangements giving rise to material obligations that are not reported in our consolidated balance sheets, as described in Item 303 of SEC Regulation S-K.

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Financing activities $ (861,914) $ (515,356) $ (2,143,849) $ (346,558) $ 1,628,493

The discussion below includes cash flows from both continuing operations and discontinued operations consistent with the presentation on the Statements of Cash Flows.

The discussion below includes cash flows from both continuing operations and discontinued operations consistent with the presentation on the Consolidated Statements of Cash Flows.

Cash Flows from Operating Activities

The increase in net cash provided by operating activities for 2024 compared to 2023 was primarily due to a decrease in cash interest of $149 million primarily related to reduced principal balances on our debt, the benefit of lower outflows in the current year related to our former Solar Business, and improved operating performance.

This increase was partially offset by the benefit received in the prior period associated with the results of the former Commercial Business as well as a current year outflow and prior year inflow related to legal settlements.

The remainder of the activity related to changes in assets and liabilities due to the volume and timing of other operating cash receipts and payments with respect to when the transactions are reflected in earnings.

Net cash provided by operating activities was flat for 2025 as compared to 2024, and primarily reflects an increase in cash tax payments, a higher proportion of outright sales transactions, and higher variable payroll-related payments.

These items were partially offset by improved operating performance, changes in assets and liabilities due to the volume and timing of other operating cash receipts and payments with respect to when the transactions are reflected in earnings, and the benefit of lower outflows in the current year related to our former Solar Business.

Refer to the discussions above under “—Results of Operations” for further details.

Cash Flows from Investing Activities

The change in net cash used in investing activities for 2024 compared to 2023 was primarily due to sales of businesses in the amount of $1,627 million, primarily related to the Commercial Divestiture in 2023.

In addition, subscriber system assets expenditures decreased by $107 million due to a lower volume of transactions including those under a Company-owned model.

The decrease in net cash used in investing activities for 2025 compared to 2024 was due to a decrease in subscriber system assets expenditures of $127 million primarily due to a higher proportion of outright sales in the current year.

In addition, in the fourth quarter of 2025, we received proceeds from our Multifamily Divestiture in the amount of $51 million.

Cash Flows from Financing Activities

The decrease in net cash used in financing activities for 2024 compared to 2023 was primarily due to:

• lower net repayments of $1,977 million primarily related to the partial redemptions in 2023 of our First Lien Term Loan B due 2026 and ADT Notes due 2024,

• share repurchases during 2024 of $241 million,

• a decrease in net proceeds under the 2020 Receivables Facility of $109 million primarily due to net repayments during 2024 as compared to net proceeds in 2023, and

• an increase in dividend payments of $54 million due to an increase in our quarterly dividend during 2024.

During 2024, both the proceeds and repayments of long-term borrowings on the Consolidated Statements of Cash Flows include the impact of $704 million from the refinancings of the First Lien Term Loan B due 2026.

During 2023, both the proceeds and repayments of long-term borrowings on the Consolidated Statements of Cash Flows include the impact of $230 million from the October refinancing of the First Lien Term Loan B due 2026.

The increase in net cash used in financing activities for 2025 compared to 2024 was primarily due to:

• higher share repurchases of $366 million and

• repayment of the Opportunity Fund in the amount of $78 million in connection with the expiration of the State Farm Development Agreement, partially offset by

• an increase in net borrowings on our 2020 Receivables Facility of $63 million due to timing of proceeds and the amendment in March 2025, and

• a decrease in net repayments on long-term debt of $57 million primarily due to scheduled quarterly amortization payments, as well as other repayments and borrowings, during the current period (as discussed below under the heading “Long-Term Debt”), compared to the repayment of the First Lien Notes due 2024 during the prior period.

Long-Term Debt

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Debt Description Issued Maturity Interest Rate Interest Payable Principal

First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR +2.00% Quarterly $ 1,984,090

First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR + 2.00%

Quarterly $ 1,764,249

First Lien Term Loan B-2 due 2032

3/7/2025 3/7/2032 Term SOFR + 1.75%

Quarterly 1,441,989

First Lien Term Loan A due 2030 10/28/2025 10/28/2030 Term SOFR + 1.50%

Quarterly 325,000

First Lien Notes due 2026 4/4/2019 4/15/2026 5.750% 3/15 and 9/15 75,000

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First Lien Notes due 2029 7/29/2021 8/1/2029 4.125% 2/1 and 8/1 1,000,000

Second Lien Notes due 2028 1/28/2020 1/15/2028 6.250% 1/15 and 7/15 1,300,000

First Lien Notes due 2033 10/15/2025 10/15/2033 5.875% 1/15 and 7/15 1,000,000

ADT Notes due 2032 5/2/2016 7/15/2032 4.875% 1/15 and 7/15 728,016

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Total $ 7,799,208

Refer to Note 7 “Debt” for further details of our debt agreements, including interest rates, covenants, and other descriptions of these agreements.

The following discussion relates to significant changes to our debt agreements and activity during 2025.

Refer to Note 7 “Debt” in the Notes to Consolidated Financial Statements for further details of our debt agreements, including interest rates, covenants, and other descriptions of these agreements.

First Lien Credit Agreement

Our first lien credit agreement dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”) consists of a term loan facility (the “First Lien Term Loan B due 2030,” and prior to October 2023, the “First Lien Term Loan B due 2026”) and a first lien revolving credit facility (the “First Lien Revolving Credit Facility”).

Below is a summary of key events related to the First Lien Credit Agreement since 2023:

• October 2023 - We redeemed approximately $1.3 billion of the First Lien Term Loan B due 2026 using net proceeds from the Commercial Divestiture.

• October 2023 - We amended and restated the First Lien Credit Agreement to refinance the remaining outstanding balance of the First Lien Term Loan B due 2026 with a new $1,375 million 7-year term First Lien Term Loan B due 2030.

• April 2024 - We amended and restated the First Lien Credit Agreement, which reduced the interest rate on the First Lien Term Loan B due 2030 from Term SOFR +2.50% to Term SOFR +2.25%.

• May 2024 - We amended and restated the First Lien Credit Agreement, which included the exchange of $143 million principal amount of loans under the Company’s Term Loan A Facility for its First Lien Term Loan B due 2030.

In addition, later that month, the Company further amended and restated the First Lien Credit Agreement, pursuant to which the Company incurred an additional $474 million of outstanding principal under the First Lien Term Loan B due 2030 with the proceeds used to pay off the remaining outstanding balance of the Company’s Term Loan A Facility.

• October 2024 - We amended and restated the First Lien Credit Agreement to extend the maturity date of the First Lien Revolving Credit Facility to October 2029, subject to a springing maturity of 91 days prior to the maturity date of certain long-term indebtedness if, as of such date, the outstanding principal amount of such indebtedness exceeds $350 million, and obtain an additional $225 million of First Lien Revolving Credit Facility commitments.

After giving effect to the amendment, the aggregate amount of commitments under the First Lien Revolving Credit Facility is $800 million.

Borrowings under the First Lien Revolving Credit Facility bear interest at a rate equal to either (a) Term SOFR with a floor of zero or (b) a base rate (“Base Rate”) determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States and (iii) the one-month adjusted term SOFR plus 1.00% per annum, in each case, plus an applicable margin of 2.00% per annum for Term SOFR loans and 1.00% per annum for Base Rate loans, subject to two step-downs based on certain specified net first lien leverage ratios.

In addition, the amendment reduced the commitment fee in respect of the First Lien Revolving Credit Facility to 0.30% per annum in respect of the unutilized commitments thereunder, subject to two step-downs based on certain specified net first lien leverage ratios.

• December 2024 - We amended and restated the First Lien Credit Agreement, which reduced the interest rate on the First Lien Term Loan B due 2030 from Term SOFR +2.25% to Term SOFR +2.00%.

Our first lien credit agreement dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”) provides for term loans (the “First Lien Term Loan B due 2030” and “First Lien Term Loan B-2 due 2032,” together, the “First Lien Term Loan Bs”) and a first lien revolving credit facility (the “First Lien Revolving Credit Facility”).

Below is a summary of key events related to the First Lien Credit Agreement in 2025:

• March 2025 - We amended and restated the First Lien Credit Agreement, which provided for the issuance of a new $600 million First Lien Term Loan B-2 due 2032, and received net proceeds of $597 million.

We used the net proceeds to redeem $500 million of the First Lien Notes due 2026.

The First Lien Term Loan B-2 due 2032 is subject to a springing maturity of 91 days prior to the maturity date of certain long-term indebtedness of Prime Security Services Borrower, LLC and its subsidiaries if, on such date, the aggregate principal amount of such indebtedness equals or exceeds $1 billion.

Loans under the First Lien Term Loan B-2 due 2032 are treated as a separate class from the existing loans under the First Lien Term Loan B due 2030.

• July 2025 - We amended and restated the First Lien Credit Agreement, which provided for the issuance of $550 million of incremental borrowings under the First Lien Term Loan B-2 due 2032, and received net proceeds of $545 million.

We used the net proceeds and cash on hand to redeem $550 million of the First Lien Notes due 2026.

• October 2025 - We amended and restated the First Lien Credit Agreement, which provided for the issuance of $300 million of incremental borrowings under the First Lien Term Loan B-2 due 2032, and received net proceeds of $297 million.

We used the proceeds to partially redeem the Second Lien Notes due 2028.

• October 2025 - We redeemed $200 million of the First Lien Term Loan B due 2030 using proceeds from the First Lien Term Loan A due 2030 (defined below).

In addition, during 2025, we borrowed and repaid $198 million under the First Lien Revolving Credit Facility.

We are required to make scheduled quarterly principal payments on the First Lien Term Loan B due 2030, with the remaining balance payable at maturity.

We may make voluntary prepayments on the First Lien Term Loan B due 2030 at any time prior to maturity at par.

We are required to make scheduled quarterly principal payments on the First Lien Term Loan Bs, with the remaining balances payable at maturity.

We may make voluntary prepayments on the First Lien Term Loan Bs at any time prior to maturity at par.

Additionally, based on certain specified net first lien leverage ratios, we may be required to make annual prepayments on the outstanding First Lien Term Loan B due 2030 with a percentage of our excess cash flow, as defined in the First Lien Credit Agreement, if our excess cash flow exceeds a certain specified threshold, which is 0% if our net first lien leverage ratio is less than or equal to 2.20 to 1.00.

As of December 31, 2025, we were not required to make any annual prepayments based on our excess cash flow.

In addition, we are required to pay a commitment fee between 0.20% and 0.30% (determined based on a net first lien leverage ratio) with respect to the unused commitments under the First Lien Revolving Credit Facility.

On February 7, 2025, the Company issued a notice of partial redemption for $500 million of the First Lien Notes due 2026, which will be redeemed on March 9, 2025.

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.

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.

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.

Term Loan A Facility

In March and June 2023, we borrowed aggregate principal amounts of $600 million and $50 million, respectively, of term loans under a senior secured term loan A facility (the “Term Loan A Facility”) and used the proceeds to redeem $650 million of the ADT Notes due 2023 (defined below).

In May 2024, we exchanged $143 million of loans under our Term Loan A Facility for our First Lien Term Loan B due 2030.

In addition, later that month, we redeemed the remaining outstanding principal balance of $474 million of our Term Loan A Facility, excluding accrued and unpaid interest, using proceeds under the First Lien Term Loan B due 2030, as discussed above.

As a result, the Term Loan A Facility has been terminated.

First Lien Notes due 2024

As of December 31, 2024, we had fully redeemed the 5.250% first-priority senior secured notes due 2024 (the “First Lien Notes due 2024”) as a result of the following transactions:

• May 2023 - We redeemed $150 million principal amount of the outstanding First Lien Notes due 2024 for a redemption price of $150 million, excluding accrued and unpaid interest, using cash on hand.

• December 2023 - We redeemed $500 million principal amount of the outstanding First Lien Notes due 2024 for a redemption price of $500 million, excluding accrued and unpaid interest, using remaining net proceeds from the Commercial Divestiture and cash on hand.

• April 2024 - We redeemed the remaining outstanding principal balance of $100 million of the First Lien Notes due 2024 for a redemption price of $100 million, excluding accrued and unpaid interest, using proceeds from the Company’s First Lien Revolving Credit Facility.

First Lien Notes due 2026

The 5.750% first-priority senior secured notes due 2026 (the “First Lien Notes due 2026”) are due at maturity, and may be redeemed, in whole or in part, at any time at a make-whole premium plus accrued and unpaid interest to, but excluding, the redemption date.

Additionally, upon the occurrence of specified change of control events, we must offer to repurchase the First Lien Notes due 2026 at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The indenture governing the First Lien Notes due 2026 also provides for customary events of default.

As discussed above, on February 7, 2025, the Company issued a notice of partial redemption for $500 million of the First Lien Notes due 2026, which will be redeemed on March 9, 2025.

First Lien Notes due 2027

The 3.375% first-priority senior secured notes due 2027 (the “First Lien Notes due 2027”) are due at maturity and may be redeemed at our option as follows:

• Prior to August 31, 2026, in whole at any time or in part from time to time, at a make-whole premium plus accrued and unpaid interest, if any, thereon to the redemption date.

• On or after August 31, 2026, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the First Lien Notes due 2027 redeemed plus accrued and unpaid interest, if any, thereon to the redemption date.

Additionally, upon the occurrence of specified change of control events, we must offer to repurchase the First Lien Notes due 2027 at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The indenture governing the First Lien Notes due 2027 also provides for customary events of default.

We may also be required to make a 1.00% prepayment premium on the First Lien Term Loan B-2 due 2032 in the event of certain specified refinancing events during the first six months after the most recent amendment.

As of December 31, 2025, we were not required to make such prepayments.

First Lien Term Loan A due 2030

In October 2025, we entered into a term loan credit agreement (together with subsequent amendments and restatements, the “Term Loan Credit Agreement”) for an aggregate principal amount of $325 million of term loans under a senior secured term loan A facility (the “First Lien Term Loan A due 2030”).

We used the proceeds for general corporate purposes and to redeem $200 million of the First Lien Term Loan B due 2030.

The First Lien Term Loan A due 2030 requires scheduled amortization payments, commencing on March 31, 2026, in annual amounts equal to (a) prior to March 31, 2028, 2.5% of its original principal amount and (b) on or after March 31, 2028, 5.0% of its original principal amount, payable quarterly, with the balance payable at maturity.

We may make voluntary prepayments of the First Lien Term Loan A due 2030 at any time prior to maturity at par.

The First Lien Term Loan A due 2030 bears interest at a rate equal to, at our option, either (a) a Term SOFR rate with a floor of zero or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States and (iii) the one-month adjusted term SOFR plus 1.00% per annum, in each case, plus an applicable margin of 1.50% per annum for Term SOFR loans and 0.50% per annum for Base Rate loans, subject to adjustments based on certain specified net first lien leverage ratios.

We have elected the Term SOFR alternative to apply to borrowings of the First Lien Term Loan A due 2030.

Additionally, the Term Loan Credit Agreement includes customary mandatory prepayment provisions, covenants and restrictions, including a financial maintenance covenant requiring us to comply as of the last day of each fiscal quarter, beginning with the fiscal quarter ending March 31, 2026, with a specified maximum consolidated net first lien leverage ratio.

First Lien Notes due 2026 Partial Redemptions

The First Lien Notes due 2026 are due at maturity, and may be redeemed, in whole or in part, at any time at a make-whole premium plus accrued and unpaid interest to, but excluding, the redemption date.

As discussed above, partial redemptions of the First Lien Notes due 2026 were as follows:

• March 2025 - We redeemed $500 million of the First Lien Notes due 2026, excluding accrued and unpaid interest, for a total redemption price of $506 million, which includes a make-whole payment, using proceeds from our March 2025 issuance of the First Lien Term Loan B-2 due 2032.

• July 2025 - We redeemed $550 million of the First Lien Notes due 2026, excluding accrued and unpaid interest, for a total redemption price of $554 million, which includes a make-whole payment, using proceeds from our July 2025 issuance of the First Lien Term Loan B-2 due 2032 and cash on hand.

• December 2025 - We redeemed $225 million of the First Lien Notes due 2026, excluding accrued and unpaid interest, for a total redemption price of $226 million, which includes a make-whole payment, using cash on hand.

We intend to redeem the remaining outstanding balance of $75 million of the First Lien Notes due 2026 on or before maturity.

First Lien Notes due 2033

The 4.125% first-priority senior secured notes due 2029 (the “First Lien Notes due 2029”) are due at maturity and may be redeemed at our option as follows:

• Prior to August 1, 2028, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the First Lien Notes due 2029 to be redeemed and (ii) the sum of the present values of the aggregate principal amount of the First Lien Notes due 2029 to be redeemed and the remaining scheduled interest payments due on any date after the redemption date, to and including August 1, 2028, discounted at an adjusted treasury rate plus 50 basis points, plus, in either case accrued and unpaid interest as of, but excluding, the redemption date.

• On or after August 1, 2028, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the First Lien Notes due 2029 to be redeemed and accrued and unpaid interest as of, but excluding, the redemption date.

Additionally, upon the occurrence of specified change of control events, we may be required to purchase the First Lien Notes due 2029 at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The indenture governing the First Lien Notes due 2029 also provides for customary events of default.

Second Lien Notes due 2028

The 6.250% second-priority senior secured notes due 2028 (the “Second Lien Notes due 2028”) are due at maturity and may be redeemed at our option, in whole at any time or in part from time to time, at a redemption price equal to 100% (after January 15, 2025) of the principal amount of the Second Lien Notes due 2028 redeemed and accrued and unpaid interest as of, but excluding, the redemption date.

Additionally, upon the occurrence of specified change of control events, we must offer to repurchase the Second Lien Notes due 2028 at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The indenture governing the Second Lien Notes due 2028 also provides for customary events of default.

During 2023, the Company redeemed the then outstanding ADT Notes due 2023.

The remaining outstanding ADT Notes due 2032 and ADT Notes due 2042 (collectively, the “ADT Notes”) are due at maturity, and may be redeemed, in whole at any time or in part from time to time, at a redemption price equal to the principal amount of the notes to be redeemed, plus a make-whole premium, plus accrued and unpaid interest as of, but excluding, the redemption date.

Additionally, upon the occurrence of specified change of control events, the Company must offer to repurchase the ADT Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The indentures governing the ADT Notes also provide for customary events of default.

Below is a summary of key events related to the ADT Notes due 2023 since 2023:

• March 2023 - The Company used the proceeds from the Closing Date Term Loan A Loans to redeem $600 million outstanding principal amount of the ADT Notes due 2023 for a total redemption price of $600 million, excluding any accrued and unpaid interest.

• June 2023 - The Company redeemed the remaining outstanding principal amount of $100 million for a total redemption price of $100 million using $50 million of proceeds from the Incremental Term Loan A Loans and the remaining from cash on hand.

In October 2025, we issued $1.0 billion aggregate principal amount of 5.875% first-priority senior secured notes due 2033 (the “First Lien Notes due 2033”).

The First Lien Notes due 2033 will mature on October 15, 2033, with semi-annual interest payment dates of January 15 and July 15 of each year, beginning January 15, 2026, and may be redeemed at our option as follows:

• Prior to October 15, 2032, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the First Lien Notes due 2033 to be redeemed and (ii) the sum of the present values of the aggregate principal amount of the First Lien Notes due 2033 to be redeemed and the remaining scheduled interest payments due on any date after the redemption date, to and including October 15, 2032, discounted at an adjusted treasury rate plus 50 basis points, plus, in either case accrued and unpaid interest as of, but excluding, the redemption date.

• On or after October 15, 2032, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the First Lien Notes due 2033 to be redeemed and accrued and unpaid interest as of, but excluding, the redemption date.

Second Lien Notes due 2028 Redemption

In October 2025, we redeemed the entire outstanding balance of $1.3 billion of the Second Lien Notes due 2028 using proceeds from the First Lien Notes due 2033, incremental borrowings under the First Lien Term Loan B-2 due 2032, and cash on hand.

2020 Receivables Facility

The 2020 Receivables Facility allows us to obtain financing by selling or contributing certain retail installment contract receivables to our wholly-owned consolidated bankruptcy-remote special purpose entity (“SPE”).

The SPE grants a security interest in those retail installment contract receivables as collateral for cash borrowings under the 2020 Receivables Facility.

The SPE borrower under the 2020 Receivables facility is a separate legal entity with its own creditors who will be entitled, prior to and upon the liquidation of the SPE, to be satisfied out of the SPE’s assets prior to any assets of the SPE becoming available to us (other than the SPE).

Accordingly, the assets of the SPE are not available to pay our creditors (other than the SPE), although collections from the transferred retail installment contract receivables in excess of amounts required to repay amounts then due and payable to the SPE’s creditors may be released to us and subsequently used by us (including to pay other creditors).

The SPE’s creditors under the 2020 Receivables Facility have legal recourse to the transferred retail installment contract receivables owned by the SPE, and to us for certain performance and operational obligations relating to the 2020 Receivables Facility, but do not have any recourse to us (other than the SPE) for the payment of principal and interest on the advances under the 2020 Receivables Facility.

Below is a summary of significant amendments to the 2020 Receivables Facility since 2023:

• March 2023 - Increased the borrowing capacity from $400 million to $500 million and extended the uncommitted revolving period from May 2023 to March 2024, among other things.

• March 2024 - The Company amended the agreement governing the 2020 Receivables Facility, pursuant to which the uncommitted revolving period was extended from March 2024 to April 2024.

• April 2024 - The Company further amended the agreement governing the 2020 Receivables Facility, pursuant to which, among other things, the borrowing capacity was increased from $500 million to $550 million and the uncommitted revolving period was extended from April 2024 to April 2025.

In addition, proceeds and repayments from the receivables facility include the impact of $32 million from the amendments described above.

Below is a summary of significant amendments to the 2020 Receivables Facility in 2025:

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

We service the transferred retail installment contract receivables and are responsible for ensuring related collections are remitted to a segregated account in the SPE’s name.

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The segregated account is considered restricted cash in our Consolidated Balance Sheets.

Proceeds and repayments under the 2020 Receivables Facility since 2023 were as follows:

Proceeds of $229 million and repayments of $257 million.

Proceeds of $282 million and repayments of $200 million.

During 2025, we borrowed $269 million and repaid $234 million under the 2020 Receivables Facility.

Debt Covenants

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Based on the results of the qualitative test, we concluded that it is more likely than not that the fair value of the Company’s reporting unit exceeds its carrying value and no impairment was recognized.

During the third quarter of 2025, we recorded a goodwill impairment charge of $12 million in connection with the Multifamily Divestiture, which is reflected in SG&A, and derecognized the remaining $6 million of goodwill upon completion of the divestiture on October 1, 2025.

Refer to Note 4 “Divestitures” in the Notes to Consolidated Financial Statements.

We also had previously recorded goodwill impairment charges associated with the Solar reporting unit, which are now presented in income (loss) from discontinued operations, net of tax.

In prior years’ quantitative impairment tests, we estimated the fair value of the reporting unit using the income approach, which discounts projected cash flows using market participant assumptions.

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As a result, there are inherent uncertainties related to these judgments and factors in applying them to the goodwill impairment tests.

The Company previously recorded goodwill impairment charges associated with the Solar reporting unit, which are now presented in income (loss) from discontinued operations, net of tax.

Indefinite-Lived Intangible Assets

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We recognize positions taken or expected to be taken in a tax return in the consolidated financial statements when it is more-likely-than-not that the position would be sustained upon examination by tax authorities.

A recognized tax position is then

measured at the largest amount of benefit with greater than 50% likelihood of being realized upon ultimate settlement.

A recognized tax position is then measured at the largest amount of benefit with greater than 50% likelihood of being realized upon ultimate settlement.

We record liabilities for positions that have been taken but do not meet the more-likely-than-not recognition threshold.

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however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a change to the estimated liabilities, along with impacts to the effective tax rate and cash tax.

Refer to Note 9 “Income Taxes” for details on our valuation allowances and unrecognized tax benefits.

Refer to Note 9 “Income Taxes” in the Notes to Consolidated Financial Statements for details on our valuation allowances and unrecognized tax benefits.

ACCOUNTING PRONOUNCEMENTS

Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in Item 15 for further discussion about recent accounting pronouncements.

Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis