ADT (ADT) Q4 2025 earnings summary

Executive summary

• Achieved $5.1 billion in 2025 revenue, up 5% year-over-year, with all key metrics meeting or exceeding guidance and strong cash generation.

• Adjusted EBITDA grew 4% to $2.68 billion, and Adjusted EPS rose 19% to $0.89, reflecting strong operational performance.

• Adjusted Free Cash Flow increased 16% to $863 million, supporting enhanced shareholder returns and capital flexibility.

• Strategic focus on transforming smart home security through AI, proprietary platforms, and new product launches, including the acquisition of Origin AI for advanced ambient sensing.

• 2026 positioned as a transition year with flat revenue and EPS, prioritizing investments in technology, service, and customer acquisition efficiency.

Financial highlights

• Total revenue reached $5.1 billion in 2025, up from $4.9 billion in 2024, driven by higher installation sales and pricing.

• Adjusted EBITDA margin was 52.3% in 2025; Adjusted income from continuing operations was $750 million, or $0.89 per diluted share.

• Adjusted Free Cash Flow (including interest rate swaps) was $863 million, up from $744 million in 2024.

• Returned $791 million to shareholders via $604 million in share repurchases and $187 million in dividends.

• Monitoring and service margin held at ~85%, with customer retention at 87%.

Outlook and guidance

• 2026 revenue and Adjusted EPS expected to be flat versus 2025, with Adjusted Free Cash Flow targeted to grow ~20%.

• Multi-year framework targets 5% revenue CAGR, 10% Adjusted EPS CAGR, and >10% Adjusted Free Cash Flow CAGR, with net leverage ratio target of 2.5x or below.

• Strategic initiatives focus on expanding TAM, improving loyalty, and driving efficiency.

• Announced new three-year, $1.5 billion share repurchase authorization and maintained quarterly dividend.

• Aims for 1 million more subscribers by 2030, 11% attrition, and a two-year revenue payback.