What changed in this filing

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Item 1. Financial Statements

2026-07-30 compared with 2026-04-30 · 193 added, 110 removed, 766 unchanged (28% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Current assets:

28 unchanged sentences

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

zero issued and outstanding as of March 31, 2026 and December 31, 2025

zero issued and outstanding as of June 30, 2026 and December 31, 2025

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

issued and outstanding shares of 750,259,236 and 765,201,157 as of March 31, 2026 and December 31, 2025, respectively

issued and outstanding shares of 678,861,460 and 765,201,157 as of June 30, 2026 and December 31, 2025, respectively

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

issued and outstanding shares of 54,744,525 as of March 31, 2026 and December 31, 2025

issued and outstanding shares of 54,744,525 as of June 30, 2026 and December 31, 2025

Additional paid-in capital 6,104,965 6,679,222

7 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31,

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

2026 2025 2026 2025

Monitoring and related services $ 1,082,111 $ 1,090,241 $ 2,162,587 $ 2,173,345

34 unchanged sentences

(in thousands)

Three Months Ended March 31,

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

2026 2025 2026 2025

Net income (loss) $ 153,850 $ 165,179 $ 322,224 $ 305,425

1 unchanged sentence

Cash flow hedges and other

20,281 ( 1,258 ) 34,643 86

Comprehensive income (loss) $ 174,131 $ 163,921 $ 356,867 $ 305,511

3 unchanged sentences

(in thousands)

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

7 unchanged sentences

Ending balance 678,861 54,745 $ 6,789 $ 547 $ 6,104,965 $ ( 2,667,945 ) $ 33,084 $ 3,477,440

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

9 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Six Months Ended June 30, 2026

Beginning balance 765,201 54,745 $ 7,652 $ 547 $ 6,679,222 $ ( 2,907,255 ) $ ( 1,556 ) $ 3,778,610

Net income (loss) — — — — — 322,224 — 322,224

Other comprehensive income (loss), net of tax — — — — — — 34,643 34,643

Dividends — — — — — ( 85,607 ) — ( 85,607 )

Share-based compensation expense — — — — 32,056 — 32,056

Repurchases of common stock (including excise tax) ( 85,758 ) — ( 858 ) — ( 600,719 ) — — ( 601,577 )

Transactions related to employee share-based compensation plans and other ( 582 ) — ( 5 ) — ( 5,594 ) 2,693 ( 3 ) ( 2,909 )

Ending balance 678,861 54,745 $ 6,789 $ 547 $ 6,104,965 $ ( 2,667,945 ) $ 33,084 $ 3,477,440

Six Months Ended June 30, 2025

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

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

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

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

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

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

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

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

See Notes to Condensed Consolidated Financial Statements

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

8 unchanged sentences

Loss on extinguishment of debt — 6,443

Goodwill, intangible, and other asset impairments

Unrealized (gain) loss on interest rate swap contracts 17,159 41,876

11 unchanged sentences

Proceeds (payments) from interest rate swaps

1,079 ( 1,378 )

Other investing, net ( 394 ) 2,056

46 unchanged sentences

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

As applicable, the results of operations and financial position of these businesses are classified as discontinued operations and is not material.

As applicable, the results of operations and financial position of these businesses are classified as discontinued operations and are not material.

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

37 unchanged sentences

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

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Cash and cash equivalents $ 3,875 $ 80,817

5 unchanged sentences

Supplementary Cash Flow Information

During the three months ended March 31, 2026, the Company capitalized approximately $ 42 million of contract costs incurred in connection with a long-term software agreement, which were unpaid as of March 31, 2026.

These amounts are considered non-cash investing activities for the three months ended March 31, 2026.

During the six months ended June 30, 2026, the Company had non-cash investing activities of $ 38 million related to contract costs incurred in connection with a long-term software agreement.

Inventories, net

2 unchanged sentences

Prepaid Expenses and Other Current Assets

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Prepaid expenses

9 unchanged sentences

Deferred subscriber acquisition costs represent selling expenses (primarily commissions) that are incremental to acquiring customers.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition.

1 unchanged sentence

Subscriber system assets are reflected in the Condensed Consolidated Balance Sheets as follows:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Gross carrying amount $ 7,258,025 $ 7,145,662

1 unchanged sentence

Subscriber system assets, net $ 2,695,659 $ 2,790,879

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended March 31,

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

(in thousands) 2026 2025 2026 2025

3 unchanged sentences

Accrued Expenses and Other Current Liabilities

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Accrued interest $ 78,156 $ 56,523

8 unchanged sentences

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

As of March 31, 2026 and December 31, 2025, investments in money market mutual funds were $ 56 million and $ 1 million, respectively.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2026 and December 31, 2025, investments in money market mutual funds were not material.

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

1 unchanged sentence

Refer to Note 6 “Debt.”

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(in thousands) Carrying

7 unchanged sentences

Refer to Note 7 “Derivative Financial Instruments” for the fair values of the Company’s derivative financial instruments.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Retail Installment Contract Receivables - The fair values of the Company’s RICs are determined using a discounted cash flow model and are classified as Level 3 fair value measurements.

Refer to Note 2 “Revenue and Receivables.”

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(in thousands) Carrying

5 unchanged sentences

Disaggregated Revenue

Three Months Ended March 31,

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

( in thousands )

2026 2025 2026 2025

Sources of Revenue:

12 unchanged sentences

The Company allocates the transaction price to each performance obligation based on the relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Customer-Owned Transactions - In transactions involving security systems sold outright to the customer (referred to as outright sales ), the Company’s performance obligations generally include the sale and installation of the security system, which is primarily recognized at a point in time based upon the nature of the transaction and contractual terms, and any monitoring and related services, which are recognized when these services are provided to the customer.

1 unchanged sentence

Deferred subscriber acquisition revenue is amortized on a pooled basis over the estimated life of the customer relationship using an accelerated method consistent with the treatment of subscriber system assets and deferred subscriber acquisition costs.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Remaining Performance Obligations

As of March 31, 2026, the Company’s total remaining unsatisfied performance obligations relating to the provision of monitoring and related services are as follows (in thousands) :

As of June 30, 2026, the Company’s total remaining unsatisfied performance obligations relating to the provision of monitoring and related services are as follows (in thousands) :

$ 1,920,910 $ 1,057,830 $ 509,460 $ 200,314 $ 3,688,514

3 unchanged sentences

The allowance for credit losses is not material for the individual pools of customers.

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2026 2025

13 unchanged sentences

The allowance for credit losses relates to RICs from outright sales transactions.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Retail installment contract receivables, gross $ 677,895 $ 689,023

5 unchanged sentences

Retail installment contract receivables, net $ 615,993 $ 651,811

As of March 31, 2026 and December 31, 2025, RICs, net, for which the Company grants a security interest as collateral for borrowings under the 2020 Receivables Facility were $ 575 million and $ 593 million, respectively.

As of June 30, 2026 and December 31, 2025, RICs, net, for which the Company grants a security interest as collateral for borrowings under the 2020 Receivables Facility were $ 561 million and $ 593 million, respectively.

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

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Quality

10 unchanged sentences

Low 14,739 21,112 10,172 4,357 1,684 137

Total RICs as of March 31, 2026

Total RICs as of June 30, 2026

$ 179,353 $ 251,927 $ 135,400 $ 72,162 $ 36,285 $ 2,768

11 unchanged sentences

The contract asset is reclassified to accounts receivable as additional services are performed and billed, which is when the Company’s right to the consideration becomes unconditional.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company has the right to bill customers as services are provided over time, which generally occurs over the course of a 12-, 24-, 36-, or 60-month period as additional services are performed and billed.

There is no significant financing component.

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Contract assets, gross $ 76,014 $ 69,506

5 unchanged sentences

Contract assets, net $ 67,775 $ 62,915

Changes in contract assets for the three months ended March 31, 2026 and March 31, 2025 were not material.

Changes in contract assets for the three and six months ended June 30, 2026 and June 30, 2025 were not material.

Increases in contract assets arise from revenue recognized in excess of contractual billings under outright sales transactions.

Decreases primarily reflect the reclassification to accounts receivable as the Company’s right to consideration becomes unconditional and, to a lesser extent, contract asset write‑offs and impairment.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Liabilities

3 unchanged sentences

Contract liabilities are recognized as revenue when the related performance obligations are satisfied, which typically occurs over the term of the customer’s service agreement or upon completion of installation or product delivery.

For the three months ended March 31, 2026, customer contract liabilities remained relatively flat.

Revenue recognized from the amounts included in the beginning contract liability balance totaled approximately $ 290 million and $ 278 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Additional contract liabilities recognized for the three months ended March 31, 2026 and March 31, 2025 were approximately $ 263 million and $ 276 million, respectively.

For the six months ended June 30, 2026 and June 30, 2025, customer contract liabilities decreased by approximately $ 19 million and increased by approximately $ 29 million, respectively.

Revenue recognized from the amounts included in the beginning contract liability balance totaled approximately $ 378 million and $ 366 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

Additional contract liabilities recognized for the six months ended June 30, 2026 and June 30, 2025 were approximately $ 341 million and $ 374 million, respectively.

Other changes in the contract liabilities were not material.

9 unchanged sentences

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

Three Months Ended March 31,

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

(in thousands) 2026 2025 2026 2025

31 unchanged sentences

5,541 4,403 13,077 9,468

( 3,146 ) ( 2,879 ) ( 5,913 ) ( 306 )

Total other segment items

2,395 1,524 7,164 9,162

Reconciliation of profit or loss:

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

1,217 3,054 2,194 5,285

Net income (loss) $ 153,850 $ 165,179 $ 322,224 $ 305,425

33 unchanged sentences

GOODWILL AND OTHER INTANGIBLE ASSETS

During the three months ended March 31, 2026, the Company recognized goodwill of $ 114 million in connection with the Origin AI Acquisition.

During the six months ended June 30, 2026, the Company recognized goodwill of $ 106 million in connection with the Origin AI Acquisition.

Refer to Note 4 “Acquisitions and Divestitures.”

There were no material measurement period adjustments to purchase price allocations during the six months ended June 30, 2026.

AND SUBSIDIARIES

1 unchanged sentence

Other Intangible Assets

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(in thousands) Gross Carrying

14 unchanged sentences

________________

(1) March 31, 2026 includes the technology intangible related to the Origin AI Acquisition.

(1) The balance as of June 30, 2026 includes the technology intangible related to the Origin AI Acquisition.

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

4 unchanged sentences

Amortization ( 276,846 )

Balance as of March 31, 2026 $ 2,709,356

Balance as of June 30, 2026 $ 2,708,859

________________

1 unchanged sentence

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

During the six months ended June 30, 2026, the Company completed a bulk customer account purchase for a contractual purchase price of $ 22 million, subject to reductions based on customer retention, and paid initial cash at closing of $ 18 million.

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

Definite-Lived Intangible Asset Amortization Expense

Three Months Ended March 31,

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

(in thousands) 2026 2025 2026 2025

5 unchanged sentences

Description Issued Maturity Interest Rate (1)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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

30 unchanged sentences

_________________

(1) Interest rate as of March 31, 2026.

(1) Interest rate as of June 30, 2026.

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

1 unchanged sentence

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

As of March 31, 2026, the Company was in compliance with all financial covenant and other maintenance tests for all of its debt obligations.

As of June 30, 2026, the Company was in compliance with all financial covenant and other maintenance tests for all of its debt obligations.

First Lien Credit Agreement

1 unchanged sentence

First Lien Revolving Credit Facility

During the three months ended March 31, 2026, the Company did not make any borrowings or repayments under the First Lien Revolving Credit Facility.

As of March 31, 2026, the available borrowing capacity was $ 800 million.

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

During the six months ended June 30, 2026, the Company borrowed and repaid $ 150 million under the First Lien Revolving Credit Facility.

As of June 30, 2026, the available borrowing capacity was $ 800 million.

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

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

First Lien Notes due 2026 Redemption

Subsequent event - In April 2026, the Company redeemed the remaining outstanding balance of the First Lien Notes due 2026 at maturity for a redemption price of $ 75 million using cash on hand.

Term Loan A Credit Agreement

Significant activity since December 31, 2025 is as follows:

• May 2026 - The Company amended and restated its term loan A credit agreement (the “Term Loan A Credit Agreement”), which provided for the issuance of $ 100 million of incremental borrowings under a first lien term loan A due 2030 (the “Term Loan A due 2030”).

These incremental borrowings have the same terms as existing loans under the Term Loan A due 2030.

Debt issuance costs were not material.

The Company used the net proceeds for general corporate purposes, including share repurchases.

First Lien Notes due 2026

Significant activity since December 31, 2025 is as follows:

• April 2026 - The Company redeemed the remaining outstanding balance of the First Lien Notes due 2026 at maturity for a redemption price of $ 75 million using cash on hand.

2020 Receivables Facility

2 unchanged sentences

• March 2026 - The Company amended the agreement governing the 2020 Receivables Facility to extend the uncommitted revolving period to April 2026.

• Subsequent event - In April 2026, the Company amended the agreement governing the 2020 Receivables Facility to extend the uncommitted revolving period to April 2027, among other things.

As of March 31, 2026, the Company had an uncommitted available borrowing capacity under the 2020 Receivables Facility of approximately $ 117 million.

• April 2026 - The Company amended the agreement governing the 2020 Receivables Facility to extend the uncommitted revolving period to April 2027, and to make certain amendments to advance rates, hedge rates, and other related provisions.

As of June 30, 2026, the Company had an uncommitted available borrowing capacity under the 2020 Receivables Facility of up to $ 134 million, subject to a borrowing base determined by eligible receivables, the relevant advance rates, and applicable reserves as defined in the agreement.

Variable Interest Entity

8 unchanged sentences

Derivative instruments designated as cash flow hedges were highly effective at inception and are expected to continue to be highly effective.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For interest rate swap contracts that are:

8 unchanged sentences

Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cash flows associated with the Company’s derivatives are reflected as follows:

6 unchanged sentences

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

Execution Maturity Designation March 31, 2026 December 31, 2025

Execution Maturity Designation June 30, 2026 December 31, 2025

October 2019 (1)(2)

33 unchanged sentences

(4) These forward-starting swaps were entered into to hedge the interest rate variability on the Company’s First Lien Term Loan B due 2030 or its direct replacement with the swap settlement periods commencing in September 2026.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheet Classification (in thousands)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Prepaid expenses and other current assets $ 32,131 $ 38,264

3 unchanged sentences

Fair value of interest rate swaps - net asset (liability) $ 63,210 $ 37,755

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

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended March 31,

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

Classification (in thousands)

2026 2025 2026 2025

Interest expense, net $ ( 5,743 ) $ ( 13,022 ) $ ( 9,588 ) $ ( 34,031 )

Other income (expense) $ ( 3,862 ) $ ( 3,813 ) $ ( 7,571 ) $ ( 7,845 )

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

Three Months Ended March 31,

The following table reflects unrealized gains (losses) on interest rate swaps designated as cash flow hedges, as well as reclassifications related to previously designated cash flow hedges, which are not material:

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

Changes in AOCI (in thousands)

2026 2025 2026 2025

Pre-tax current period change

1 unchanged sentence

Income tax (benefit) expense $ ( 6,435 ) $ 384 $ ( 10,992 ) $ ( 48 )

As of March 31, 2026 and December 31, 2025, AOCI, net of tax, related to previously designated cash flow hedges was not material.

As of June 30, 2026 and December 31, 2025, AOCI, net of tax, related to previously designated cash flow hedges was not material.

Effective Tax Rate

1 unchanged sentence

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

The Company’s income tax expense for the three months ended March 31, 2026 was $ 58 million, resulting in an effective tax rate for the period of 25.5 %.

The Company’s income tax expense for the three months ended June 30, 2026 was $ 61 million, resulting in an effective tax rate for the period of 28.2 %.

The effective tax rate primarily represents the federal statutory tax rate of 21.0 %, a state tax rate, net of federal benefits, of 5.0 %, and non-deductible items of 1.4 %.

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

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

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

The Company’s income tax expense for the six months ended June 30, 2026 was $ 119 million, resulting in an effective tax rate for the period of 26.8 %.

The effective tax rate primarily represents the federal statutory tax rate of 21.0 %, and a state tax rate, net of federal benefits, of 5.0 %.

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

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

Common Stock and Class B Common Stock

The Company has two classes of common stock, which comprises common stock (“Common Stock”) and Class B common stock (“Class B Common Stock”).

Share Issuances

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

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Share Issuances

Share Repurchases

2 unchanged sentences

2026 Share Repurchase Plan

In February 2026, the Company's Board of Directors approved a three-year share repurchase plan (the “2026 Share Repurchase Plan”), pursuant to which the Company is authorized to repurchase, through April 30, 2029, up to a maximum aggregate amount of $ 1.5 billion of shares of the Company's Common Stock.

During the first quarter of 2026, the Company repurchased, and subsequently retired, 18 million shares in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act under the 2026 Share Repurchase Plan in multiple transactions for a total of $ 116 million (or $ 6.57 per share).

As of March 31, 2026, the Company had $ 1.4 billion remaining under the 2026 Share Repurchase Plan.

Subsequent event - In April 2026, the Company repurchased, and subsequently retired, 17 million shares of its Common Stock in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act under the 2026 Share Repurchase Plan in multiple transactions for a total of $ 114 million (or $ 6.92 per share).

After these repurchases, the Company had $ 1.3 billion remaining under the 2026 Share Repurchase Plan.

In February 2026, the Company's Board of Directors (the “Board of Directors”) approved a three-year share repurchase plan (the “2026 Share Repurchase Plan”), pursuant to which the Company is authorized to repurchase, through April 30, 2029, up to a maximum aggregate amount of $ 1.5 billion of shares of the Company's Common Stock.

During the first quarter of 2026, the Company repurchased, and subsequently retired, 18 million shares in the open market pursuant to Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act under the 2026 Share Repurchase Plan in multiple transactions for a total of $ 116 million (or $ 6.57 per share).

During the second quarter of 2026, the Company repurchased, and subsequently retired, 39 million shares of its Common Stock under the 2026 Share Repurchase Plan in the open market pursuant to Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act in multiple transactions for a total of $ 267 million (or $ 6.85 per share).

Additionally, during the second quarter of 2026, the Company repurchased, and subsequently retired, 29 million shares of its Common Stock under the 2026 Share Repurchase Plan for $ 211 million (or $ 7.25 per share) in connection with a secondary offering of the Company’s Common Stock by Apollo Global Management, Inc.

(“Apollo”) in May 2026.

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

As of June 30, 2026, the Company had $ 906 million remaining under the 2026 Share Repurchase Plan.

Subsequent event - Through July 23, 2026, the Company repurchased, and subsequently retired, 3 million shares of its Common Stock in the open market pursuant to Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act under the 2026 Share Repurchase Plan in multiple transactions for a total of $ 21 million (or $ 6.81 per share).

After these repurchases, the Company had $ 885 million remaining under the 2026 Share Repurchase Plan.

2025 Share Repurchase Plan

In February 2025, the Company's Board of Directors announced a share repurchase plan (the “2025 Share Repurchase Plan”), pursuant to which the Company was authorized to repurchase, through April 30, 2026, up to a maximum aggregate amount of $ 500 million of shares of the Company's Common Stock.

In February 2025, the Board of Directors announced a share repurchase plan (the “2025 Share Repurchase Plan”), pursuant to which the Company was authorized to repurchase, through April 30, 2026, up to a maximum aggregate amount of $ 500 million of shares of the Company's Common Stock.

The Company exhausted the 2025 Share Repurchase Plan in July 2025.

During the first quarter of 2025, the Company repurchased, and subsequently retired, 20 million shares of its Common Stock under the 2025 Share Repurchase Plan for $ 152 million (or $ 7.62 per share) in connection with a secondary offering of the Company’s Common Stock by Apollo Global Management, Inc.

(“Apollo”) in March 2025.

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

Additionally, during the first quarter of 2025, the Company repurchased, and subsequently retired, 20 million shares of its Common Stock under the 2025 Share Repurchase Plan for $ 152 million (or $ 7.62 per share) in connection with a secondary offering of the Company’s Common Stock by Apollo in March 2025.

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

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

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

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data)

1 unchanged sentence

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

During the Three Months Ended March 31, 2026

During the Six Months Ended June 30, 2026

3/2/2026 3/12/2026 4/2/2026 $ 0.055 $ 42,011 $ 0.055 $ 3,011

During the Three Months Ended March 31, 2025

4/30/2026 6/11/2026 7/7/2026 0.055 37,574 0.055 3,011

Subsequent Event - On April 30, 2026, the Company announced a dividend of $ 0.055 per share to holders of Common Stock and Class B Common Stock of record on June 11, 2026, which will be paid on July 7, 2026.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total $ 0.110 $ 79,585 $ 0.110 $ 6,022

During the Six Months Ended June 30, 2025

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

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

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

Subsequent Event - On July 30, 2026, the Company announced a dividend of $ 0.055 per share to holders of Common Stock and Class B Common Stock of record on September 10, 2026, which will be paid on October 1, 2026.

Accumulated Other Comprehensive Income (Loss)

During the three months ended March 31, 2026, there were no material reclassifications out of AOCI.

During the periods presented, there were no material reclassifications out of AOCI.

Refer to Note 7 “Derivative Financial Instruments.”

15 unchanged sentences

Treasury yield curve.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Origin AI Retention Awards

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The Company applies the two-class method for computing and presenting earnings per share for each class of common stock, which allocates current period income (losses) to each class of common stock and participating securities based on dividends declared and participation rights in the remaining undistributed earnings or losses.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basic earnings per share is computed by dividing the income (losses) allocated to each class of common stock by the related weighted-average number of shares outstanding during the period.

1 unchanged sentence

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

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

Three Months Ended March 31,

Additionally, the basic and diluted earnings per share computations for Common Stock for the prior periods presented excluded unvested shares of approximately 4 million as their vesting was contingent upon achievement of certain performance requirements, which were not achieved.

These awards were cancelled during the second quarter of 2026.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

in thousands, except per share amounts

2026 2025 2026 2025

Allocation of income (loss) from continuing operations - basic $ 143,821 $ 157,164 $ 301,783 $ 290,597

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Income (loss) from discontinued operations, net of tax, per share - basic

$ — $ — $ — $ ( 0.01 )

Income (loss) from discontinued operations, net of tax, per share - diluted

$ — $ — $ — $ ( 0.01 )

(1) During the three months ended March 31, 2026 and March 31, 2025, 28 million and 19 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive.

_________________

(1) During the three and six months ended June 30, 2026, 34 million and 30 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive.

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

AND SUBSIDIARIES

1 unchanged sentence

Class B Common Stock

Three Months Ended March 31,

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

in thousands, except per share amounts

2026 2025 2026 2025

Allocation of income (loss) from continuing operations - basic

14 unchanged sentences

Income (loss) from discontinued operations, net of tax, per share - basic

$ — $ — $ — $ ( 0.01 )

Income (loss) from discontinued operations, net of tax, per share - diluted

$ — $ — $ — $ ( 0.01 )

________________

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

5 unchanged sentences

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

During the three months ended March 31, 2026, approximately $ 7.5 million of the Google Success Funds were approved for reimbursement to the Company, primarily for certain joint marketing and customer acquisition expenses incurred.

During the six months ended June 30, 2026, approximately $ 15 million of the Google Success Funds were approved for reimbursement to the Company, primarily for certain joint marketing and customer acquisition expenses incurred.

Substantially all the reimbursement was recorded as a reduction to advertising expenses.

2 unchanged sentences

Google Cloud Agreement Addendum

In December 2023, the Company and Google entered into an addendum to the Company’s existing agreement with Google for using Google cloud services (the “Google Cloud Agreement Addendum”), pursuant to which Google has agreed to provide certain credits, discounts, and other incentives for use of the Google Cloud Platform to the Company, and the Company has committed to purchasing $ 200 million of Google Cloud Platform services over seven years (through December 2030), with $ 35 million in the first two years , $ 65 million in the next two years after that, and $ 100 million in the last three years of the commitment.

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

As of March 31, 2026, the Company continues to work to meet this commitment.

In December 2023, the Company and Google entered into an addendum to the Company’s existing agreement with Google for using Google cloud services (the “Google Cloud Agreement Addendum”), pursuant to which Google has agreed to provide certain credits, discounts, and other incentives for use of the Google Cloud Platform to the Company, and the Company committed to purchasing $ 200 million of Google Cloud Platform services over seven years (through December 2030), with $ 35 million in the first two years , $ 65 million in the next two years after that, and $ 100 million in the last three years of the commitment.

In May 2026, the Company entered into an amendment to the Google Cloud Agreement Addendum, which replaced the Company’s initial purchase commitment.

Under the amended terms, the Company has committed to purchase $ 235 million of Google Cloud Platform services over a five-year period ending in May 2031, with annual minimum spend commitments that allow for flexibility in the amount spent in any given period.

As of June 30, 2026, spend under the amended agreement was not material.

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

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

As of March 31, 2026 and December 31, 2025, the Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $ 48 million for both periods, respectively.

As of June 30, 2026 and December 31, 2025, the Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $ 47 million and $ 48 million, respectively.

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

9 unchanged sentences

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

As of March 31, 2026 and December 31, 2025, the Company’s accrual for ongoing claims and lawsuits within the scope of an insurance program, including certain amounts related to discontinued operations, totaled $ 90 million and $ 86 million, respectively.

As of June 30, 2026 and December 31, 2025, the Company’s accrual for ongoing claims and lawsuits within the scope of an insurance program, including certain amounts related to discontinued operations, totaled $ 91 million and $ 86 million, respectively.

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

5 unchanged sentences

(in thousands)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Presentation and Classification:

10 unchanged sentences

_________________

(1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $ 90 million and $ 87 million as of March 31, 2026 and December 31, 2025, respectively.

Three Months Ended March 31,

(1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $ 93 million and $ 87 million as of June 30, 2026 and December 31, 2025, respectively.

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

( in thousands )

2026 2025 2026 2025

Operating lease cost $ 6,473 $ 6,837 $ 12,772 $ 13,154

5 unchanged sentences

Lease Liabilities Arising from Obtaining Right-of-Use Assets

Three Months Ended March 31,

Six Months Ended June 30,

( in thousands )

1 unchanged sentence

Finance leases $ 26,469 $ 1,444

_________________

(1) Includes both continuing and discontinued operations, as applicable.

Company as Lessor

2 unchanged sentences

The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY TRANSACTIONS

1 unchanged sentence

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

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May 2026 Offering and Share Repurchase

In May 2026, certain entities managed by Apollo (the “Selling Stockholders”) sold their remaining approximately 102 million shares of the Company’s common stock (the “May 2026 Offering”).

Immediately following the May 2026 Offering, as of May 5, 2026 (the “May Offering Closing Date”), Apollo no longer owns any shares of the Company’s common stock and has ceased to be a related party.

In addition, effective as of the May Offering Closing Date, the Company’s Amended and Restated Stockholders Agreement, dated December 14, 2018, (the “Stockholders Agreement”) between the Company, Prime Security Services TopCo Parent, L.P., and the Co-Investors (as defined therein), terminated, and Apollo’s designees to the Company’s Board of Directors resigned.

In connection with the May 2026 Offering, the Company repurchased, and subsequently retired, 29 million shares of its Common Stock under the 2026 Share Repurchase Plan for an aggregate purchase price of $ 211 million (or approximately $ 7.25 per share).

The underwriters did not receive any underwriting fees for the shares repurchased by the Company.

All shares sold in connection with the May 2026 Offering were sold by the Selling Stockholders.

The Company did not receive any proceeds from the May 2026 Offering.

March 2025 Offering and Share Repurchase

During the first quarter of 2025, certain entities managed by affiliates of Apollo sold 80.5 million shares (including shares sold pursuant to the underwriters overallotment option) of the Company’s Common Stock (the “March 2025 Offering”).

In March 2025, the Selling Stockholders sold 80.5 million shares (including shares sold pursuant to the underwriters overallotment option) of the Company’s Common Stock (the “March 2025 Offering”).

In connection with the March 2025 Offering, the Company repurchased, and subsequently retired, 20 million shares of its Common Stock under the 2025 Share Repurchase Plan for an aggregate purchase price of $ 152 million (or approximately $ 7.62 per share).

June 2025 Apollo Sale

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

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

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

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

Other Transactions with Apollo

During the three months ended March 31, 2026 and 2025, other fees incurred to Apollo were not material.

During the six months ended June 30, 2026 and 2025, other fees incurred to Apollo were not material.

Fleet Management Agreement

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

During the three months ended March 31, 2026, the Company incurred fees to the vendor of approximately $ 3 million (inclusive of pass-through costs).

As a result of the May 2026 Offering, this vendor is no longer a related party.

Through the date of the May 2026 Offering Closing Date, the Company incurred fees to the vendor of approximately $ 13 million (inclusive of pass-through costs).

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

Subsequent event - On July 2, 2026, the Company filed a prospectus supplement registering all of the approximately 133 million shares of the Company's common stock (the “State Farm Shares”) held by State Farm Fire & Casualty Company (“State Farm”).

The Company will not receive any proceeds in the event of any sale of the State Farm Shares.

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

What changed 10-Q

Item 1. Financial Statements