ADT Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS. ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share data) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 3,875 $ 80,817 Restricted cash and restricted cash equivalents 24,162 27,723 Accounts receivable, net of allowance for credit losses of $ 73,556 and $ 63,841 , respectively 373,035 384,909 Inventories, net 183,658 201,778 Prepaid expenses and other current assets 179,630 250,325 Total current assets 764,360 945,552 Property and equipment, net 283,653 243,398 Subscriber system assets, net 2,695,659 2,790,879 Intangible assets, net 4,806,674 4,817,996 Goodwill 4,991,601 4,885,574 Deferred subscriber acquisition costs, net 1,508,923 1,451,841 Other assets 688,186 683,271 Total assets $ 15,739,056 $ 15,818,511 Liabilities and stockholders' equity Current liabilities: Current maturities of long-term debt $ 240,524 $ 310,204 Accounts payable 191,624 106,980 Deferred revenue 245,144 243,724 Accrued expenses and other current liabilities 430,698 352,040 Total current liabilities 1,107,990 1,012,948 Long-term debt 7,447,063 7,379,430 Deferred subscriber acquisition revenue 2,061,789 2,083,580 Deferred tax liabilities 1,298,254 1,267,329 Other liabilities 346,520 296,614 Total liabilities 12,261,616 12,039,901 Commitments and contingencies (See Note 12) Stockholders' equity: Preferred stock—authorized 1,000,000 shares of $ 0.01 par value; zero issued and outstanding as of 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 678,861,460 and 765,201,157 as of June 30, 2026 and December 31, 2025, respectively 6,789 7,652 Class B common stock—authorized 100,000,000 shares of $ 0.01 par value; issued and outstanding shares of 54,744,525 as of June 30, 2026 and December 31, 2025 547 547 Additional paid-in capital 6,104,965 6,679,222 Accumulated deficit ( 2,667,945 ) ( 2,907,255 ) Accumulated other comprehensive income (loss) 33,084 ( 1,556 ) Total stockholders' equity 3,477,440 3,778,610 Total liabilities and stockholders' equity $ 15,739,056 $ 15,818,511 See Notes to Condensed Consolidated Financial Statements 1 Table of Contents ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Monitoring and related services $ 1,082,111 $ 1,090,241 $ 2,162,587 $ 2,173,345 Security installation, product, and other 230,174 196,794 428,227 381,181 Total revenue 1,312,285 1,287,035 2,590,814 2,554,526 Cost of revenue (exclusive of depreciation and amortization shown separately below) : Monitoring and related services 156,471 161,928 312,161 319,778 Security installation, product, and other 107,078 88,258 194,243 170,530 Total cost of revenue 263,549 250,186 506,404 490,308 Selling, general, and administrative expenses 385,907 356,138 750,676 724,738 Depreciation and intangible asset amortization 346,938 338,734 692,424 678,251 Operating income (loss) 315,891 341,977 641,310 661,229 Interest expense, net ( 102,266 ) ( 115,798 ) ( 200,647 ) ( 236,677 ) Other income (expense) 2,259 803 2,685 ( 4,061 ) Income (loss) from continuing operations before income taxes 215,884 226,982 443,348 420,491 Income tax benefit (expense) ( 60,817 ) ( 58,749 ) ( 118,930 ) ( 109,781 ) Income (loss) from continuing operations 155,067 168,233 324,418 310,710 Income (loss) from discontinued operations, net of tax ( 1,217 ) ( 3,054 ) ( 2,194 ) ( 5,285 ) Net income (loss) $ 153,850 $ 165,179 $ 322,224 $ 305,425 Common Stock: Income (loss) from continuing operations per share - basic $ 0.20 $ 0.20 $ 0.41 $ 0.37 Income (loss) from continuing operations per share - diluted $ 0.19 $ 0.19 $ 0.39 $ 0.35 Net income (loss) per share - basic $ 0.20 $ 0.20 $ 0.41 $ 0.36 Net income (loss) per share - diluted $ 0.19 $ 0.18 $ 0.38 $ 0.34 Weighted-average shares outstanding - basic 706,307 777,635 732,864 792,748 Weighted-average shares outstanding - diluted 765,384 839,951 793,536 855,559 Class B Common Stock: Income (loss) from continuing operations per share - basic $ 0.20 $ 0.20 $ 0.41 $ 0.37 Income (loss) from continuing operations per share - diluted $ 0.19 $ 0.19 $ 0.39 $ 0.35 Net income (loss) per share - basic $ 0.20 $ 0.20 $ 0.41 $ 0.36 Net income (loss) per share - diluted $ 0.19 $ 0.18 $ 0.38 $ 0.34 Weighted-average shares outstanding - basic 54,745 54,745 54,745 54,745 Weighted-average shares outstanding - diluted 54,745 54,745 54,745 54,745 See Notes to Condensed Consolidated Financial Statements 2 Table of Contents ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (in thousands) 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 Other comprehensive income (loss), net of tax: Cash flow hedges and other 20,281 ( 1,258 ) 34,643 86 Comprehensive income (loss) $ 174,131 $ 163,921 $ 356,867 $ 305,511 See Notes to Condensed Consolidated Financial Statements 3 Table of Contents ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands) 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 Beginning balance 750,259 54,745 $ 7,503 $ 547 $ 6,563,279 $ ( 2,784,340 ) $ 12,803 $ 3,799,792 Net income (loss) — — — — — 153,850 — 153,850 Other comprehensive income (loss), net of tax — — — — — — 20,281 20,281 Dividends — — — — — ( 40,585 ) — ( 40,585 ) Share-based compensation expense — — — — 18,480 — 18,480 Repurchases of common stock (including excise tax) ( 68,108 ) — ( 681 ) — ( 477,640 ) — — ( 478,321 ) Transactions related to employee share-based compensation plans and other ( 3,290 ) — ( 33 ) — 846 3,130 — 3,943 Ending balance 678,861 54,745 $ 6,789 $ 547 $ 6,104,965 $ ( 2,667,945 ) $ 33,084 $ 3,477,440 Three Months Ended June 30, 2025 Number of Common Shares Number of Class B Common Shares Common Stock Class B Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Beginning balance 788,153 54,745 $ 7,882 $ 547 $ 6,840,189 $ ( 3,225,634 ) $ ( 5,692 ) $ 3,617,292 Net income (loss) — — — — — 165,179 — 165,179 Other comprehensive income (loss), net of tax — — — — — — ( 1,258 ) ( 1,258 ) Dividends — — — — — ( 45,895 ) — ( 45,895 ) Share-based compensation expense — — — — 11,649 — — 11,649 Repurchases of common stock (including excise tax) ( 11,833 ) — ( 118 ) — ( 89,593 ) — — ( 89,711 ) Transactions related to employee share-based compensation plans and other 1,637 — 16 — 2,471 ( 364 ) — 2,123 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 4 Table of Contents ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands) Six 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 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 Number of Common Shares Number of Class B Common Shares Common Stock Class B Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Beginning balance 836,590 54,745 $ 8,366 $ 547 $ 7,117,098 $ ( 3,318,174 ) $ ( 7,036 ) $ 3,800,801 Net income (loss) — — — — — 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 5 Table of Contents ADT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income (loss) $ 322,224 $ 305,425 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangible asset amortization 692,424 678,269 Amortization of deferred subscriber acquisition costs 136,609 122,507 Amortization of deferred subscriber acquisition revenue ( 179,132 ) ( 178,489 ) Share-based compensation expense 32,214 32,170 Deferred income taxes 17,845 2,488 Provision for losses on receivables and inventory 117,826 100,882 Loss on extinguishment of debt — 6,443 Goodwill, intangible, and other asset impairments — 1,504 Unrealized (gain) loss on interest rate swap contracts 17,159 41,876 Other non-cash items, net 33,190 38,607 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Deferred subscriber acquisition costs ( 193,857 ) ( 188,690 ) Deferred subscriber acquisition revenue 98,272 115,365 Other, net 209,680 ( 47,832 ) Net cash provided by (used in) operating activities 1,304,454 1,030,525 Cash flows from investing activities: Dealer generated customer accounts and bulk account purchases ( 239,008 ) ( 330,997 ) Subscriber system asset expenditures ( 169,637 ) ( 209,188 ) Purchases of property and equipment ( 95,162 ) ( 83,052 ) Acquisition of businesses, net of cash acquired ( 163,739 ) — Proceeds (payments) from interest rate swaps 1,079 ( 1,378 ) Other investing, net ( 394 ) 2,056 Net cash provided by (used in) investing activities ( 666,861 ) ( 622,559 ) Cash flows from financing activities: Proceeds from long-term borrowings 249,700 730,000 Repayment of long-term borrowings, including call premiums ( 246,872 ) ( 650,489 ) Proceeds from receivables facility 103,256 146,623 Repayment of receivables facility ( 130,416 ) ( 114,752 ) Proceeds (payments) from interest rate swaps 24,386 34,163 Repurchases of common stock, including excise tax ( 600,009 ) ( 495,111 ) Dividends on common stock ( 89,908 ) ( 95,998 ) Payments on finance leases ( 15,282 ) ( 14,456 ) Other financing, net ( 12,951 ) 431 Net cash provided by (used in) financing activities ( 718,096 ) ( 459,589 ) Cash and cash equivalents and restricted cash and restricted cash equivalents: Net increase (decrease) ( 80,503 ) ( 51,623 ) Beginning balance 108,540 204,065 Ending balance $ 28,037 $ 152,442 See Notes to Condensed Consolidated Financial Statements 6 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Organization ADT Inc., together with its wholly-owned subsidiaries (collectively, “ADT” or the “Company”), is a leading provider of security, interactive, and smart home solutions serving consumer and small business customers in the United States (“U.S.”). Basis of Presentation The condensed consolidated financial statements included herein: • have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”); • are comprised of the consolidated results of ADT Inc. and its wholly-owned subsidiaries for which all intercompany transactions have been eliminated; • are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented; and • should not be taken as indicative of results that may be expected for future interim periods or the full year. The Condensed Consolidated Balance Sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”). Certain information and footnote disclosures required in the annual consolidated financial statements have been omitted as appropriate. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the 2025 Annual Report. Certain prior period amounts have been reclassified to conform with the current period presentation. Use of Estimates The preparation of these condensed consolidated financial statements in accordance with GAAP requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions. Segment Information The Company evaluates and reports information based on the manner in which the chief operating decision maker (the “CODM”) evaluates performance and allocates resources. The CODM manages the business on a consolidated basis, and as such, the Company reports results in a single operating and reportable segment. Refer to Note 3 “Segment Information.” Discontinued Operations The Company’s exit in 2024 from the residential solar business (the “Solar Business”) (the “ADT Solar Exit”) and the sale in 2023 of its commercial business (the “Commercial Business”) (the “Commercial Divestiture”) represented strategic shifts that had major effects on the Company’s operations and financial results. As applicable, the results of operations and financial position of these businesses are classified as discontinued operations 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 . 7 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Accounting Standards Updates (“ASUs”) Recently Adopted Measurement of Credit Losses for Accounts Receivable and Contract Assets - ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, provides entities a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets, permitting the use of current conditions as of the balance sheet date when developing related forecasts and assumptions. The Company adopted this guidance, effective January 1, 2026, on a prospective basis and will apply the practical expedient where applicable. The adoption did not have a material impact on the Company’s consolidated financial statements or disclosures. Recently Issued Interim Reporting - ASU 2025-11, Narrow-Scope Improvements (Topic 270): Interim Reporting is intended to improve navigability of the required interim disclosures and clarify when the guidance is applicable. The amendments also include additional guidance on what disclosures should be provided in interim reporting periods. The amendment adds to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of this guidance on its disclosures. Targeted Improvements to the Accounting for Internal-Use Software - ASU 2025-06, Intangibles — Goodwill and Other (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , removes all references to prescriptive and sequential software development stages, requiring an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended, as well as other evaluation and disclosure updates. This guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in this ASU permit an entity to apply the new guidance using a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption, and a retrospective transition approach. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures. Disaggregation of Income Statement Expenses - ASU 2024-03 , Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requires additional disclosure in the footnotes at each interim and annual reporting period about specific types of expenses included in the expense captions presented on the face of the statement of operations as well as additional disclosures that also include information related to selling expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements and disclosures. Disclosure Improvements - ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , represents changes to clarify or improve disclosure and presentation requirements of a variety of topics. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is monitoring the potential impact of this guidance on its financial statements and disclosures. 8 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Significant Accounting Policies Unless otherwise noted, the Company’s accounting policies, including those presented herein, do not materially differ from those disclosed in the 2025 Annual Report. Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents The following table reconciles the amounts below reported in the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows: (in thousands) June 30, 2026 December 31, 2025 Cash and cash equivalents $ 3,875 $ 80,817 Restricted cash and restricted cash equivalents (1) 24,162 27,723 Ending balance $ 28,037 $ 108,540 _______________ (1) Restricted cash and restricted cash equivalents relate to the Company’s uncommitted receivables securitization financing agreement (the “ 2020 Receivables Facility”) (refer to Note 6 “Debt”). Supplementary Cash Flow Information 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 Inventories, net includes finished goods and work-in-progress. Work-in-progress is not material. Prepaid Expenses and Other Current Assets (in thousands) June 30, 2026 December 31, 2025 Prepaid expenses $ 42,329 $ 52,992 Contract assets (see Note 2 “Revenue and Receivables”) 27,851 28,758 Fair value of interest rate swaps (see Note 7 “Derivative Financial Instruments”) 32,131 38,264 Tax receivables 26,759 73,201 Other current assets 50,560 57,110 Prepaid expenses and other current assets $ 179,630 $ 250,325 Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system, and which the Company may retrieve upon termination of the contract with the customer. Deferred subscriber acquisition costs represent selling expenses (primarily commissions) that are incremental to acquiring customers. Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition. The Company depreciates and amortizes these pooled costs using an accelerated method over the estimated life of the customer relationship, which is 15 years. Subscriber system assets are reflected in the Condensed Consolidated Balance Sheets as follows: (in thousands) June 30, 2026 December 31, 2025 Gross carrying amount $ 7,258,025 $ 7,145,662 Accumulated depreciation ( 4,562,366 ) ( 4,354,783 ) Subscriber system assets, net $ 2,695,659 $ 2,790,879 9 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Depreciation of subscriber system assets $ 133,053 $ 138,827 $ 267,167 $ 278,201 Amortization of deferred subscriber acquisition costs $ 69,164 $ 62,149 $ 136,609 $ 122,507 Accrued Expenses and Other Current Liabilities (in thousands) June 30, 2026 December 31, 2025 Accrued interest $ 78,156 $ 56,523 Payroll-related accruals 85,835 59,045 Accrued dividends 40,585 44,992 Other accrued liabilities 226,122 191,480 Accrued expenses and other current liabilities $ 430,698 $ 352,040 Fair Value of Financial Instruments The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables (“RICs”), accounts payable, debt, and derivatives. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts. Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents - Included in cash and cash equivalents and restricted cash and restricted cash equivalents, as applicable from time to time, are investments in money market mutual funds. These investments are generally classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities. As of 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. The carrying amounts of debt outstanding, if any, under the Company’s first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and the 2020 Receivables Facility approximate their fair values as interest rates on these borrowings approximate current market rates. Refer to Note 6 “Debt.” June 30, 2026 December 31, 2025 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt instruments (1) (see Note 6 “Debt”) $ 7,629,176 $ 7,629,075 $ 7,641,869 $ 7,746,284 ________________ (1) Excludes finance leases. Derivative Financial Instruments - Derivative financial instruments are reflected in the Condensed Consolidated Balance Sheets as either assets or liabilities at their fair values, which are primarily calculated using discounted cash flow models utilizing observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair values are classified as Level 2 fair value measurements. Refer to Note 7 “Derivative Financial Instruments” for the fair values of the Company’s derivative financial instruments. 10 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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.” June 30, 2026 December 31, 2025 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Retail installment contract receivables, net $ 615,993 $ 509,865 $ 651,811 $ 513,325 2. REVENUE AND RECEIVABLES Revenue The Company primarily generates revenue from contractual monthly recurring fees received for monitoring and related services, as well as the sale and installation of security systems. The Company’s revenue-generating contracts are entered into primarily through its main operating entity and wholly-owned subsidiary, ADT LLC. Disaggregated Revenue Three Months Ended June 30, Six Months Ended June 30, ( in thousands ) 2026 2025 2026 2025 Sources of Revenue: Recurring monthly revenue $ 1,045,164 $ 1,056,527 $ 2,090,885 $ 2,109,326 Other related services 36,947 33,714 71,702 64,019 Monitoring and related services 1,082,111 1,090,241 2,162,587 2,173,345 Installation and other revenue $ 140,637 $ 107,176 $ 249,095 $ 202,692 Amortization of deferred subscriber acquisition revenue 89,537 89,618 179,132 178,489 Security installation, product, and other 230,174 196,794 428,227 381,181 Total revenue $ 1,312,285 $ 1,287,035 $ 2,590,814 $ 2,554,526 The Company allocates the transaction price to each performance obligation based on the relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics. Customer-Owned Transactions - In transactions involving security systems sold outright to the customer (referred to as outright sales ), the Company’s performance obligations generally include the sale and installation of the security system, which is primarily recognized at a point in time based upon the nature of the transaction and contractual terms, and any monitoring and related services, which are recognized when these services are provided to the customer. Company-Owned Transactions - In transactions in which the Company provides monitoring and related services but retains ownership of the security system, the Company’s performance obligations primarily include (i) monitoring and related services, which are recognized when these services are provided to the customer, and (ii) a material right associated with the one-time non-refundable fees in connection with the initiation of a monitoring contract which the customer will not be required to pay again upon a renewal of the contract (referred to as deferred subscriber acquisition revenue). Deferred subscriber acquisition revenue is amortized on a pooled basis over the estimated life of the customer relationship using an accelerated method consistent with the treatment of subscriber system assets and deferred subscriber acquisition costs. 11 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Remaining Performance Obligations 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) : 0-12 Months 13-24 Months 25-36 Months Thereafter Total $ 1,920,910 $ 1,057,830 $ 509,460 $ 200,314 $ 3,688,514 Allowance for Credit Losses The Company evaluates its allowance for credit losses on accounts receivable in pools based on customer type. For each customer pool, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience. The allowance for credit losses is not material for the individual pools of customers. Six Months Ended June 30, (in thousands) 2026 2025 Beginning balance $ 63,841 $ 57,795 Provision for credit losses 98,572 76,974 Write-offs, net of recoveries (1) ( 88,857 ) ( 67,929 ) Ending balance $ 73,556 $ 66,840 ________________ (1) Recoveries were not material for the periods presented. As such, write-offs are presented net of recoveries. Retail Installment Contract Receivables, Net The Company’s RICs allow qualifying residential customers to pay the fees due at installation over a 12-, 24-, 36-, or 60-month interest-free period. The financing component is not significant. Upon origination of a RIC, the Company utilizes external credit scores to assess customer credit quality and determine eligibility. Subsequent to origination, the Company monitors the delinquency status of the RICs as the key credit quality indicator. The allowance for credit losses relates to RICs from outright sales transactions. The following is a summary of unbilled retail installment contract receivables, net: (in thousands) June 30, 2026 December 31, 2025 Retail installment contract receivables, gross $ 677,895 $ 689,023 Allowance for credit losses ( 61,902 ) ( 37,212 ) Retail installment contract receivables, net $ 615,993 $ 651,811 Balance Sheet Classification: Accounts receivable, net $ 262,844 $ 268,552 Other assets 353,149 383,259 Retail installment contract receivables, net $ 615,993 $ 651,811 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. 12 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Credit Quality Upon origination of a RIC, the Company assigns an internal credit grade derived from external credit data obtained from a nationally recognized credit reporting provider to evaluate customer credit quality and establish contract eligibility. Subsequent to origination, the Company monitors the delinquency status of the RICs as the key credit quality indicator. Delinquent billed RICs are not a material portion of the Company’s RICs. The following tables present credit quality information related to the Company’s RICs, including short-term receivables related to three-month payment plans, as of the periods presented: Loan Origination Year (in thousands) 2026 2025 2024 2023 2022 All preceding years Credit Quality Indicator: High $ 104,083 $ 163,871 $ 93,883 $ 54,008 $ 28,381 $ 2,139 Medium 60,531 66,944 31,345 13,797 6,220 492 Low 14,739 21,112 10,172 4,357 1,684 137 Total RICs as of June 30, 2026 $ 179,353 $ 251,927 $ 135,400 $ 72,162 $ 36,285 $ 2,768 Current year gross write-offs $ 319 $ 23,108 $ 9,481 $ 4,052 $ 1,698 $ 441 Loan Origination Year (in thousands) 2025 2024 2023 2022 2021 All preceding years Credit Quality Indicator: High $ 201,419 $ 122,031 $ 78,706 $ 45,519 $ 9,234 $ 1 Medium 97,692 43,839 21,801 10,286 2,277 7 Low 31,684 14,341 6,664 2,870 652 — Total RICs as of December 31, 2025 $ 330,795 $ 180,211 $ 107,171 $ 58,675 $ 12,163 $ 8 Contract Assets Contract assets represent the Company’s right to consideration in exchange for goods or services transferred to the customer. The contract asset is reclassified to accounts receivable as additional services are performed and billed, which is when the Company’s right to the consideration becomes unconditional. The Company has the right to bill customers as services are provided over time, which generally occurs over the course of a 12-, 24-, 36-, or 60-month period as additional services are performed and billed. There is no significant financing component. (in thousands) June 30, 2026 December 31, 2025 Contract assets, gross $ 76,014 $ 69,506 Allowance for credit losses ( 8,239 ) ( 6,591 ) Contract assets, net $ 67,775 $ 62,915 Balance Sheet Classification: Prepaid expenses and other current assets $ 27,851 $ 28,758 Other assets 39,924 34,157 Contract assets, net $ 67,775 $ 62,915 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. 13 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Contract Liabilities The Company’s primary contract liabilities are deferred subscriber acquisition revenue and deferred revenue as presented on the balance sheet. Contract liabilities primarily represent amounts billed or collected in advance of the Company’s fulfillment of performance obligations under customer contracts. Contract liabilities also include consideration received in advance for products or services that have not yet been transferred to the customer, including deferred revenue associated with the allocation of the transaction price to future performance obligations. 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 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. 3. SEGMENT INFORMATION The Company reports results in a single operating and reportable segment. The Company’s CODM is its Chairman, President, and Chief Executive Officer. The CODM evaluates performance and allocates resources on a consolidated basis using various measures primarily through reviews of operational performance packages, earnings releases, investor presentations, and the Company’s SEC filings, as well as through the approval of the Company’s annual budget and forecast. The Company’s reported segment profit measure is net income (loss) as this measure is most consistent with the amounts included in the Condensed Consolidated Statements of Operations. In addition, segment assets reviewed by the CODM are reported on the Company’s Condensed Consolidated Balance Sheets as total assets. The accounting policies of the Company’s reportable segment are the same as those of the Company. 14 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following presents a reconciliation to the Company’s net income (loss) as reported in the Condensed Consolidated Statements of Operations and includes segment revenues, significant segment expenses that are regularly provided to or easily computed from information regularly provided to the CODM, other segment expenses, and adjustments to reconcile to net income (loss). Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Total segment revenue $ 1,312,285 $ 1,287,035 $ 2,590,814 $ 2,554,526 Less significant segment expenses: Customer service costs (1) 108,234 109,094 214,505 215,484 Maintenance costs (1) 48,237 52,834 97,656 104,294 Security installation, product, and other costs 107,078 88,258 194,243 170,530 Selling costs, including commissions (2) 47,185 45,038 92,083 91,162 Amortization of deferred subscriber acquisition costs (2) 69,164 62,149 136,609 122,507 Advertising costs (2) 26,681 21,674 48,416 40,188 Provision for credit losses (2) 53,149 48,841 122,134 99,320 Other general and administrative costs (2) 165,599 162,384 306,143 329,923 Share-based compensation (2) 18,588 11,649 32,214 32,170 Depreciation and intangible asset amortization 346,938 338,734 692,424 678,251 Interest expense 103,153 117,874 203,875 241,044 Income tax expense (benefit) 60,817 58,749 118,930 109,781 Total significant segment expenses 1,154,823 1,117,278 2,259,232 2,234,654 Less other segment items (3) : Other items in SG&A (2) 5,541 4,403 13,077 9,468 Other, net ( 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 ________________ (1) Included in monitoring and related services cost of revenue in the Condensed Consolidated Statements of Operations. (2) Included in SG&A in the Condensed Consolidated Statements of Operations. (3) Other segment items generally include other income and expenses, interest income, as well as certain other items included in SG&A that are not considered significant segment expenses. Interest income is not material for the periods presented. (4) Represents activity related to the Commercial and Solar Businesses (as applicable during the periods), which are presented as discontinued operations. 4. ACQUISITIONS AND DIVESTITURES From time to time, the Company may pursue business acquisitions that either strategically fit with the Company’s existing core business or expand the Company’s products and services in new and attractive adjacent markets. The Company accounts for business acquisitions under the acquisition method of accounting. The assets acquired and liabilities assumed in connection with business acquisitions are recorded at the date of acquisition at their estimated fair values, with any excess of the purchase price over the estimated fair values of the net assets acquired recorded as goodwill. Significant judgment is required in estimating the fair value of assets acquired and liabilities assumed and in assigning useful lives to certain definite-lived intangible and tangible assets. Accordingly, the Company may engage third-party valuation specialists to assist in these determinations. The fair value estimates are based on available information as of the acquisition date and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain. 15 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The condensed consolidated financial statements reflect the results of an acquired business starting from the effective date of the acquisition. Origin AI Acquisition On February 20, 2026, the Company acquired a 100 % equity ownership interest in Origin Wireless, Inc. (“Origin AI”), a provider of patented AI‑enabled presence detection and ambient sensing technology (the “Origin AI Acquisition”). By utilizing artificial intelligence and proprietary algorithms to analyze ubiquitous radio frequency signals, this newly acquired technology detects and classifies human presence and activity within the home or other premises without the use of cameras, audio, or wearable devices. This technology is expected to enhance the Company’s ability to improve alarm verification, reduce false alarms, and support new intelligent security and smart home use cases over time. Total consideration transferred in connection with the Origin AI Acquisition was $ 164 million, paid in cash. The Company recognized $ 61 million of technology intangible assets and $ 2 million of customer relationships, which are amortized on a straight-line basis over 7 years and 5 years, respectively. The fair value of these intangible assets was estimated using the excess earnings method. The excess earnings method is an income approach that estimates the amount of residual (or excess) cash flows generated by an asset, which are reduced by certain contributory asset charges that represent the charges for the use of the asset. The Company also recognized $ 106 million of goodwill, which is not deductible for tax purposes, and allocated the goodwill to the consolidated operating and reporting unit. The goodwill recognized as a result of the Origin AI Acquisition reflects the strategic value of Origin’s technology and its anticipated integration into the Company’s existing and future product offerings. Refer to Note 5 “Goodwill and Other Intangible Assets.” Other assets acquired and liabilities assumed were not material. The purchase price allocation reflects preliminary fair value estimates which may be subject to changes during the measurement period. Acquisition costs were not material. Subsequent to the close of the Origin AI Acquisition, the Company issued share-based compensation awards as a material inducement for certain key employees of Origin AI to remain employed with the Company following the Origin AI Acquisition (the “Origin AI Retention Awards”). Refer to Note 10 “Share-Based Compensation” for additional information. 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill 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. 16 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Other Intangible Assets June 30, 2026 December 31, 2025 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Contracts and related customer relationships $ 6,997,953 $ ( 4,289,094 ) $ 2,708,859 $ 6,754,810 $ ( 4,012,248 ) $ 2,742,562 Dealer relationships 1,518,020 ( 815,958 ) 702,062 1,518,020 ( 776,413 ) 741,607 Other (1) 265,903 ( 203,150 ) 62,753 199,973 ( 199,146 ) 827 Total definite-lived intangible assets 8,781,876 ( 5,308,202 ) 3,473,674 8,472,803 ( 4,987,807 ) 3,484,996 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 10,114,876 $ ( 5,308,202 ) $ 4,806,674 $ 9,805,803 $ ( 4,987,807 ) $ 4,817,996 ________________ (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: (in thousands) Balance as of December 31, 2025 $ 2,742,562 Customer contract additions, net of dealer charge-backs (1) 241,143 Origin AI Acquisition customer relationships 2,000 Amortization ( 276,846 ) Balance as of June 30, 2026 $ 2,708,859 ________________ (1) The weighted-average amortization period for customer contract additions was approximately 15 years. Payments for customer contract additions under the Company’s authorized dealer program and from other third parties are reflected as dealer generated customer accounts and bulk account purchases on the Condensed Consolidated Statements of Cash Flows. 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 June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Definite-lived intangible asset amortization expense $ 160,342 $ 154,593 $ 320,395 $ 309,269 17 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 6. DEBT The Company’s debt is comprised of the following (in thousands) : Interest Payable Balance as of Description Issued Maturity Interest Rate (1) June 30, 2026 December 31, 2025 First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR + 2.00 % Quarterly $ 1,754,328 $ 1,764,249 First Lien Term Loan B-2 due 2032 3/7/2025 3/7/2032 Term SOFR + 1.75 % Quarterly 1,434,725 1,441,989 First Lien Revolving Credit Facility 3/16/2018 10/1/2029 Term SOFR + 2.00 % Quarterly — — First Lien Term Loan A due 2030 10/28/2025 10/28/2030 Term SOFR + 1.50 % Quarterly 420,313 325,000 First Lien Notes due 2026 4/4/2019 4/15/2026 5.750 % 3/15 and 9/15 — 75,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375 % 6/15 and 12/15 1,000,000 1,000,000 First Lien Notes due 2029 7/29/2021 8/1/2029 4.125 % 2/1 and 8/1 1,000,000 1,000,000 First Lien Notes due 2033 10/15/2025 10/15/2033 5.875 % 1/15 and 7/15 1,000,000 1,000,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875 % 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875 % 1/15 and 7/15 21,896 21,896 2020 Receivables Facility (2) 3/5/2020 2/20/2031 Various Monthly 416,008 443,058 Total debt principal, excluding finance leases 7,775,286 7,799,208 Finance lease liabilities (3) 58,411 47,765 Unamortized debt discount, net ( 28,481 ) ( 30,579 ) Unamortized deferred financing costs ( 19,964 ) ( 22,949 ) Unamortized purchase accounting fair value adjustment and other ( 97,665 ) ( 103,811 ) Total debt 7,687,587 7,689,634 Current maturities of long-term debt, net of unamortized debt discount ( 240,524 ) ( 310,204 ) Long-term debt $ 7,447,063 $ 7,379,430 _________________ (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 %. (2) Maturity date for the 2020 Receivables Facility represents the final maturity date of current loans borrowed under the facility. (3) Refer to Note 13 “Leases” for additional information regarding the Company’s finance leases. As of 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 The Company’s first lien credit agreement, dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”), consists of term loans (the “First Lien Term Loan B due 2030” and the “First Lien Term Loan B-2 due 2032,” together, the “First Lien Term Loan Bs”) and the First Lien Revolving Credit Facility. 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. 18 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 Under the 2020 Receivables Facility, the Company obtains financing by selling or contributing certain RICs to the Company’s wholly-owned consolidated bankruptcy-remote special purpose entity (the “SPE”), which then grants a security interest in those RICs as collateral for cash borrowings. Significant activity since December 31, 2025 is as follows: • March 2026 - The Company amended the agreement governing the 2020 Receivables Facility to extend the uncommitted revolving period to April 2026. • 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 The SPE meets the definition of a variable interest entity for which the Company is the primary beneficiary as it has the power to direct the SPE’s activities and the obligation to absorb losses or the right to receive benefits of the SPE. As such, the Company consolidates the SPE’s assets, liabilities, and financial results of operations. The SPE’s assets and liabilities primarily consist of a portion of the Company’s unbilled RICs, net, as discussed in Note 2 “Revenue and Receivables,” and borrowings under the 2020 Receivables Facility, as presented above. The impact to the Condensed Consolidated Statements of Operations from the 2020 Receivables Facility was primarily due to the allowance for credit losses and interest expense. 7. DERIVATIVE FINANCIAL INSTRUMENTS The Company's derivative financial instruments primarily consist of interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. SOFR is the applicable benchmark for all of the Company's interest rate swap contracts. All interest rate swap contracts are reported at fair value in the Condensed Consolidated Balance Sheets. Derivative instruments designated as cash flow hedges were highly effective at inception and are expected to continue to be highly effective. 19 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) For interest rate swap contracts that are: • Not designated as cash flow hedges: Unrealized gains and losses are recognized in interest expense, net, or other income (expense) depending on the nature of the underlying. • Designated as cash flow hedges: Unrealized gains and losses are recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. For interest rate swap contracts that have been de-designated as cash flow hedges and for which forecasted cash flows are: • Probable or reasonably possible of occurring: Unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. • Probable of not occurring: Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. Cash flows associated with the Company’s derivatives are reflected as follows: • Operating activities: Includes cash flows associated with the Company’s interest rate swap contracts that are designated as cash flow hedges. • Investing activities: Includes cash flows associated with the Company’s interest rate swap contracts that were entered into with the intention of offsetting the economic overhedged position of a portion of the Company’s existing interest rate swaps. • Financing activities: Includes cash flows associated with the Company’s interest rate swap contracts that included an other-than-insignificant financing element at inception. The Company’s interest rate swaps consist of the following (notional amounts in thousands) : Execution Maturity Designation June 30, 2026 December 31, 2025 October 2019 (1)(2) September 2026 Not designated $ 2,800,000 $ 2,800,000 March 2023 March 2028 Not designated 100,000 100,000 April 2023 March 2028 Not designated 200,000 200,000 December 2023 (2) September 2026 Not designated 700,000 700,000 June 2025 (3) March 2032 Cash flow hedge 550,000 550,000 July 2025 (3) March 2032 Cash flow hedge 500,000 500,000 July 2025 March 2032 Not designated 100,000 100,000 September 2025 (4) October 2030 Cash flow hedge 200,000 200,000 October 2025 (3) December 2030 Cash flow hedge 100,000 100,000 October 2025 (3) March 2032 Cash flow hedge 200,000 200,000 October 2025 (4) December 2027 Cash flow hedge 1,400,000 1,400,000 Total notional amount $ 6,850,000 $ 6,850,000 ___________________ (1) These swaps contain an other-than-insignificant financing element due to their off-market terms at inception. Prior to March 2020, these swaps were designated as cash flow hedges. (2) The December 2023 swaps were entered into to offset the excess notional interest rate swaps as a result of the partial redemption of the then outstanding First Lien Term Loan B due 2026 in connection with the Commercial Divestiture. The changes in fair value associated with these swaps and a portion of the October 2019 swaps are reflected in other income (expense). (3) These swaps were entered into to hedge the interest rate variability on the Company’s First Lien Term Loan B-2 due 2032 or its direct replacement. (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. 20 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Balance Sheet Classification (in thousands) June 30, 2026 December 31, 2025 Prepaid expenses and other current assets $ 32,131 $ 38,264 Other assets 31,079 3,722 Accrued expenses and other current liabilities — ( 1,044 ) Other liabilities — ( 3,187 ) Fair value of interest rate swaps - net asset (liability) $ 63,210 $ 37,755 Unrealized gains (losses) on the Company’s derivatives not classified as cash flow hedges that were recognized in the Statements of Operations were as follows: Three Months Ended June 30, Six Months Ended June 30, Classification (in thousands) 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 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 $ 26,710 $ ( 1,591 ) $ 45,629 $ 195 Income tax (benefit) expense $ ( 6,435 ) $ 384 $ ( 10,992 ) $ ( 48 ) As of June 30, 2026 and December 31, 2025, AOCI, net of tax, related to previously designated cash flow hedges was not material. 8. INCOME TAXES Effective Tax Rate The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate. The discussion below is based on the continuing operations of the Company. The Company’s income tax expense for the three months ended 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 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 %. 9. EQUITY 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”). 21 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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. Share Repurchases The Company’s share repurchase plans discussed below allow the Company to purchase Common Stock, from time to time, in one or more open market or privately negotiated transactions, including pursuant to Rule 10b5-1 or Rule 10b-18 of the Exchange Act, or pursuant to one or more accelerated share repurchase agreements, subject to certain requirements and other factors. The Company is not obligated to repurchase any of its shares of Common Stock, and the timing and amount of any repurchases depends on legal requirements, market conditions, stock price, the availability of the safe harbor provided by Rule 10b-18 under the Exchange Act, alternative uses of capital, and other factors. 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 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, 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. 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). 22 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Dividends (in thousands, except per share data) Common Stock Class B Common Stock Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate During the Six Months Ended June 30, 2026 3/2/2026 3/12/2026 4/2/2026 $ 0.055 $ 42,011 $ 0.055 $ 3,011 4/30/2026 6/11/2026 7/7/2026 0.055 37,574 0.055 3,011 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 periods presented, there were no material reclassifications out of AOCI. Refer to Note 7 “Derivative Financial Instruments.” 10. SHARE-BASED COMPENSATION RSUs During the first quarter of 2026, the Company completed its annual long-term incentive plan equity awards (the “2026 Annual Grant”) to employees by granting approximately 4 million RSUs under its 2018 Omnibus Incentive Plan, as amended (the “2018 Plan”), with a grant date fair value of $ 6.74 per share, which is equal to the closing price per share of the Company’s Common Stock on the date of grant. These RSUs are service-based awards with a three-year graded vesting period from the date of grant. Options During the first quarter of 2026, the Company granted approximately 9 million options to its executive officers under the 2018 Plan as part of the 2026 Annual Grant. These options are service-based awards with a three-year graded vesting period from the date of grant and have an exercise price of $ 6.74 per share, which is equal to the closing price per share of the Company’s Common Stock on the date of grant, and a contractual term of ten years from the grant date. The weighted-average grant date fair value for the options granted during the period was $ 2.23 per share. The Company used a binomial lattice model to determine the grant date fair value for options granted and included the following assumptions: Expected exercise term 7 years Expected volatility (1) 41.9 % Expected dividend yield (2) 3.3 % Risk-free interest rate (3) 4.1 % _________________ (1) Estimated using historical and implied stock price volatility of the Company. (2) Calculated by taking the annual dividend run-rate and dividing by the stock price at date of grant. (3) Based on the U.S. Treasury yield curve. 23 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Origin AI Retention Awards The Company registered on Form S-8 approximately 8 million shares of Common Stock issuable upon vesting and settlement of the Origin AI Retention Awards (as discussed in Note 4 “Acquisitions and Divestitures”), including dividend equivalent units (“DEUs”), which are subject to the same vesting and forfeiture conditions as the underlying awards. These awards include approximately 3 million service-based awards with a three-year graded vesting period from the date of grant and approximately 5 million awards subject to both service requirements and performance conditions tied to the completion of certain milestones, and have a grant date fair value of $ 7.91 per share. Other During the first quarter of 2025, the Company modified certain share-based compensation awards and recorded additional share-based compensation expense of $ 11 million associated with these modifications. 11. EARNINGS PER SHARE The Company applies the two-class method for computing and presenting earnings per share for each class of common stock, which allocates current period income (losses) to each class of common stock and participating securities based on dividends declared and participation rights in the remaining undistributed earnings or losses. Basic earnings per share is computed by dividing the income (losses) allocated to each class of common stock by the related weighted-average number of shares outstanding during the period. Diluted earnings per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock and excludes potentially dilutive securities whose effect would have been anti-dilutive. Common Stock Potential shares of Common Stock include (i) incremental shares related to the vesting or exercise of share-based compensation awards, warrants, and other options to purchase additional shares of the Company’s Common Stock calculated using the treasury stock method and (ii) incremental shares of Common Stock issuable upon the conversion of Class B Common Stock. Additionally, the basic and diluted earnings per share computations for Common Stock for the 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. 24 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 Dilutive effect 3,604 3,572 7,210 6,994 Allocation of income (loss) from continuing operations - diluted $ 147,425 $ 160,736 $ 308,993 $ 297,591 Allocation of income (loss) from discontinued operations, net of tax - basic $ ( 1,129 ) $ ( 2,853 ) $ ( 2,042 ) $ ( 4,944 ) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ ( 1,129 ) $ ( 2,853 ) $ ( 2,042 ) $ ( 4,944 ) Weighted-average shares outstanding - basic 706,307 777,635 732,864 792,748 Dilutive effect (1) 59,077 62,316 60,672 62,811 Weighted-average shares outstanding - diluted 765,384 839,951 793,536 855,559 Income (loss) from continuing operations per share - basic $ 0.20 $ 0.20 $ 0.41 $ 0.37 Income (loss) from continuing operations per share - diluted $ 0.19 $ 0.19 $ 0.39 $ 0.35 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 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. 25 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Class B Common Stock 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 $ 11,246 $ 11,069 $ 22,635 $ 20,113 Dilutive effect ( 593 ) ( 561 ) ( 1,188 ) ( 972 ) Allocation of income (loss) from continuing operations - diluted $ 10,653 $ 10,508 $ 21,447 $ 19,141 Allocation of income (loss) from discontinued operations, net of tax - basic $ ( 88 ) $ ( 201 ) $ ( 152 ) $ ( 341 ) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ ( 88 ) $ ( 201 ) $ ( 152 ) $ ( 341 ) Weighted-average shares outstanding - basic 54,745 54,745 54,745 54,745 Dilutive effect (1) — — — — Weighted-average shares outstanding - diluted 54,745 54,745 54,745 54,745 Income (loss) from continuing operations per share - basic $ 0.20 $ 0.20 $ 0.41 $ 0.37 Income (loss) from continuing operations per share - diluted $ 0.19 $ 0.19 $ 0.39 $ 0.35 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. 12. COMMITMENTS AND CONTINGENCIES Contractual Obligations There have been no significant changes to the Company’s contractual obligations as compared to December 31, 2025, except as discussed below: Google Commercial Agreement In July 2020, the Company and Google LLC (“Google”) entered into a Master Supply, Distribution, and Marketing Agreement (as amended, the “Google Commercial Agreement”), pursuant to which, among other things, each party agreed to contribute $ 150 million towards joint marketing, customer acquisition, training of the Company’s employees, and product technology updates related to the Google Devices and Services. In August 2022, the Company and Google executed an amendment to the Google Commercial Agreement, pursuant to which Google 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 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. 26 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Google Cloud Agreement Addendum In December 2023, the Company and Google entered into an addendum to the Company’s existing agreement with Google for using Google cloud services (the “Google Cloud Agreement Addendum”), pursuant to which Google has agreed to provide certain credits, discounts, and other incentives for use of the Google Cloud Platform to the Company, and the Company 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. Guarantees In the normal course of business, the Company is liable for contract completion and product performance. 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. Legal Proceedings The Company is subject to various claims and lawsuits in the ordinary course of business, which include among other things commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, claims related to alleged alarm system failures, claims that the Company infringed on the intellectual property of others, and consumer and employment class actions. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities. There have been no material changes to the disclosures in the Company’s 2025 Annual Report. The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables or other indemnifications from third-parties when recovery has been determined to be probable. The Company has not accrued for any losses for which the likelihood of loss cannot be assessed, is less than probable, or the range of possible loss cannot be estimated. As of 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. 13. LEASES Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity and wholly-owned subsidiary, ADT LLC. 27 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Right-of-Use Assets and Lease Liabilities (in thousands) June 30, 2026 December 31, 2025 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 85 $ 92 Operating Non-current Other assets 81,669 83,910 Finance Non-current Property and equipment, net (1) 52,732 41,317 Total right-of-use assets $ 134,486 $ 125,319 Operating Current Accrued expenses and other current liabilities $ 19,812 $ 16,841 Finance Current Current maturities of long-term debt 28,340 22,674 Operating Non-current Other liabilities 77,306 81,290 Finance Non-current Long-term debt 30,071 25,091 Total lease liabilities $ 155,529 $ 145,896 _________________ (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. Lease Cost 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 Finance lease cost: Amortization of right-of-use assets 6,324 5,485 12,044 10,852 Interest on lease liabilities 748 834 1,396 1,764 Variable lease costs 12,287 10,238 21,525 20,149 Total lease cost $ 25,832 $ 23,394 $ 47,737 $ 45,919 Lease Liabilities Arising from Obtaining Right-of-Use Assets Six Months Ended June 30, ( in thousands ) 2026 2025 Operating leases $ 7,458 $ 12,519 Finance leases $ 26,469 $ 1,444 Company as Lessor The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net. 14. RELATED PARTY TRANSACTIONS The Company’s related party transactions primarily relate to products and services received from, or monitoring and related services provided to, other entities affiliated with Apollo, and, from time to time, certain transactions with Apollo. There were no notable related party transactions during the periods presented other than as described below. 28 Table of Contents ADT INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Apollo 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 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 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. 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. State Farm 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. 29 Table of Contents