ADT (NYSE:ADT) reported third-quarter 2026 revenue growth and higher adjusted free cash flow while outlining its pending acquisition by Thrive Holdings, an all-cash deal expected to close in the first quarter of 2027.
The company said it will not provide financial guidance and has withdrawn its previously issued outlook because of the proposed transaction. ADT also declined to take analyst questions during its earnings call.
Thrive Holdings Deal Values ADT at $7.6 Billion
Chairman, President and Chief Executive Officer Jim DeVries said ADT entered into a definitive agreement on October 29 to be acquired by Thrive Holdings. Under the agreement, unanimously approved by ADT’s board, stockholders would receive $10 per share in cash upon completion of the transaction.
DeVries said the offer represents a 46% premium to ADT’s unaffected closing price on October 27 and a 52% premium to its 30-day volume-weighted average share price ending that date. The transaction values ADT at about $7.6 billion in equity value and $15.3 billion in enterprise value.
The transaction remains subject to customary closing conditions, including ADT stockholder approval and U.S. antitrust approval. Thrive expects to finance the acquisition through a combination of equity, debt and preferred equity.
The merger agreement includes a go-shop period through November 28. DeVries said ADT does not intend to disclose developments from that process unless it determines disclosure is appropriate or required.
“Until the transaction closes, ADT will continue to operate independently as a public company,” DeVries said. He added that the company remains focused on serving customers, supporting its dealers and partners, and executing its key initiatives.
DeVries said ADT’s data and privacy policies will remain unchanged and that no new data sharing will occur without customer permission.
Third-Quarter Revenue Rose 4%
Chief Financial Officer Jeff Likosar said total third-quarter revenue increased 4% year over year to $1.35 billion. Installation, product and other revenue rose 32% to $265 million, driven by a higher mix of professionally installed systems sold under ADT’s outright-sales model.
Monitoring and related services revenue declined 1% to $1.08 billion. Likosar said the decline included the impact of revenue lost following the October 2025 divestiture of ADT’s Multifamily business.
Ending recurring monthly revenue was $360 million, compared with $362 million a year earlier, with the lower figure also primarily reflecting the Multifamily divestiture.
Adjusted EBITDA declined 2% to $665 million. The company attributed the decrease to higher general and administrative expenses, including technology investments, partly offset by margins associated with higher installation revenue.
Adjusted earnings per share rose 4% to $0.24. Through the first nine months of 2026, ADT generated adjusted EPS of $0.71, up 6% from the prior-year period, benefiting from a lower diluted share count and lower interest expense, according to Likosar.
Cash Generation and Customer Metrics
Adjusted free cash flow, including interest-rate swaps, was $217 million in the quarter, up 4% from a year earlier. Year-to-date adjusted free cash flow exceeded $1 billion through the first three quarters, representing a 46% increase and surpassing the company’s full-year 2025 level.
Likosar cited lower cash taxes and interest costs, working-capital management and timing-related benefits as drivers of the year-to-date increase.
- Gross customer revenue attrition was 13.1%, compared with 13.0% a year earlier, as elevated nonpay cancellations were partly offset by fewer voluntary disconnects.
- Trailing 12-month revenue payback was 2.3 years, unchanged from the prior year.
- Gross recurring monthly revenue additions were $12.1 million on 195,000 gross unit additions.
- ADT completed a bulk account purchase of about 8,000 customer accounts for $9 million in cash.
Likosar said direct professional-install unit and recurring monthly revenue additions improved from the prior year, offsetting lower volume from dealers and bulk account purchases.
Capital Position and Product Initiatives
In August, ADT secured $100 million of incremental borrowings under its First Lien Term Loan A due 2030. The proceeds were designated for general corporate purposes, which may include repayment of a portion of the company’s 2027 notes.
ADT ended the quarter with $228 million of cash and cash equivalents and no borrowings under its revolving credit facility. Net leverage was 2.7 times adjusted EBITDA, compared with 2.8 times a year earlier.
The company returned $64 million to stockholders during the quarter, including $23 million in share repurchases and $41 million in dividends. Year to date, ADT returned $748 million through dividends and the repurchase of 89 million shares.
During the quarter, ADT introduced Unusual Activity Alerts in ADT+, advanced pilots of its Origin AI presence-sensing technology, expanded ADT Blu to Walmart.com, and launched ADT Partner Services. Through that service, the company plans to install and service select products for Apple Retail and its customers beginning later in November.
About ADT (NYSE:ADT)
ADT Inc is a security and smart-home services company that provides monitored protection and automation solutions for residential and commercial customers. Its offerings include professionally installed security systems, 24-hour alarm monitoring, video surveillance, fire and life-safety systems, access control, home automation and related emergency response services.
The company serves customers primarily in the United States, offering solutions designed to help protect homes, businesses and other facilities from burglary, fire and other risks.
