ADT Inc. (ADT) Business Profile

What it does

ADT provides security, monitoring and smart home services to households and small businesses in the United States. Its systems can detect intrusions, smoke, fire, carbon monoxide, leaks and other hazards. They also include cameras, video surveillance and controls for connected devices such as lights, thermostats and garage doors.

Customers can choose professional installation or install a system themselves. Through the ADT+ app, they can arm or disarm a system remotely, receive alerts and view video. ADT also offers personal emergency response services, including fall detection and protection while customers are away from home.

For monitored systems, an alarm sends a signal to ADT personnel, who can relay information to the customer, emergency contacts or first responders, depending on the customer’s contract and preferences. ADT operated six monitoring centers across the U.S. as of December 31, 2025, providing professional monitoring around the clock. Operations can be transferred between centers if one is disrupted.

ADT is developing its app as a common platform for professionally installed and self-installed systems. It acquired Origin AI in February 2026 to add technology that uses radio signals and artificial intelligence to detect activity in a home without cameras, audio or wearable devices.

ADT was founded on 1874-08-14 and is headquartered in Boca Raton. James D. DeVries is its president and chief executive officer.

How it makes money

ADT reports one operating segment. It earns recurring fees for monitoring and other services, as well as revenue from installing and selling equipment and providing related services. Its recurring monthly revenue measure covers contractual fees for monitoring and other recurring services, including some contracts ADT monitors but does not own.

Revenue for its reportable segment was $5.1 billion in FY2025, and total revenue was $1.3 billion in Q1 2026.

Recurring monthly revenue was $4.2 billion in FY2025, or 82.2% of revenue. Installation revenue was $416.1 million in FY2025. ADT generally bills monitoring services monthly or quarterly in advance, and more than 80% of residential customers pay through automated methods. Monitoring and maintenance contracts typically run for two, three or five years, with automatic renewals unless canceled; ADT also offers month-to-month contracts in some circumstances.

Acquiring a subscriber generally requires an upfront investment in labor, commissions, equipment and overhead. ADT recovers those costs through installation fees and recurring payments, and generally reaches revenue break-even in approximately two years. Qualifying customers may pay upfront fees in installments over the contract term. If a customer cancels before the initial term ends, ADT has a contractual right to a termination payment based on a designated percentage of remaining monthly payments.

Equipment ownership affects when revenue and costs are recognized. Historically, most professional installations used equipment owned by ADT, but ADT+ equipment is sold outright to the customer. ADT expects to move certain other residential transactions to customer ownership, increasing installation, product and other revenue and associated costs recognized in subsequent periods.

Customers and how it sells

ADT serves residential and small business customers in the U.S.; revenue from customers outside the U.S. is not material. Its market includes owners and renters of single-family homes and apartments, as well as small business owners. As of December 31, 2025, ADT had approximately 6.1 million security monitoring subscribers.

Customers may purchase security services when they move, experience a life event or have safety concerns. Some insurance carriers offer lower premiums for an installed system or require one as a condition of coverage. ADT offers both professional and self-installation options, and the vast majority of new residential customers choose automation and smart home solutions.

ADT sells directly through call centers, field representatives, its website and other retail and e-commerce channels. Its indirect channel relies mainly on independent dealers that sell and install equipment and ADT-branded services. As of December 31, 2025, its network included approximately 140 authorized dealers across the U.S. Dealers must offer qualified monitored accounts they generate exclusively to ADT, although ADT is not required to purchase them.

ADT added 161,000 gross new subscribers in Q1 2026. It reported that dealer additions were softer than a year earlier and that it had tightened credit standards.

Suppliers and costs

ADT buys equipment and components from a limited number of suppliers and distributors. It uses dual sourcing where possible and holds inventory at supplier and distribution partner locations, regional centers, field offices and technicians’ vehicles. It also depends on information technology and telecommunications providers for system functionality and monitoring.

The company’s subscriber acquisition costs include equipment, installation labor, commissions and overhead. It also pays authorized dealers for the customer accounts it purchases. If an account is canceled during the dealer charge-back period, generally thirteen months, the dealer must refund the purchase price.

Ongoing cash costs include providing customer services, general and administrative expenses, interest and taxes. ADT employs installation and service technicians and uses subcontractors when appropriate. Its remote assistance program lets technicians troubleshoot some issues by video, reducing the need for service visits.

ADT has integrated some Google devices into its offerings and committed to purchasing $200 million of Google Cloud Platform services over seven years through December 2030. ADT also reported that renegotiated supplier contracts changed its economics in the DIY market.

Competitive position

The U.S. residential and small business security market is fragmented and includes national, regional and local providers as well as newer entrants. ADT identifies SimpliSafe, Comcast’s Xfinity Home Security, Vivint and Brinks Home Security among its residential professional-installation competitors. In self-installation, it names Amazon’s Ring, SimpliSafe, Roku, Arlo and Wyze. Vivint, Ring and SimpliSafe also compete for small business customers.

Customers can also choose individual devices or home automation systems rather than a full security system. Some self-monitored alternatives do not require a monthly automation fee. ADT also faces providers developing home-awareness and presence-detection technology, sometimes bundled with connectivity or smart home services.

Our reading: ADT’s brand and nationwide monitoring and service network provide a meaningful competitive advantage because customers must trust a provider to respond to alarms and maintain equipment. Its redundant monitoring centers and installed subscriber base support that service model.

Our reading: ADT+ and its technology partnerships can help connect services and devices, but their protection against competitors is less certain: technology can also lower entry barriers, and customers have alternatives that do not require professional monitoring. ADT owns patents and trademarks and has added ambient-sensing intellectual property through Origin AI.

Growth opportunities

ADT is expanding its app-led platform, self-installation options and sales channels. In Q1 2026, approximately 30% of new customer additions included ADT+. ADT expects its third-party dealers to begin transitioning to the platform in summer 2026 and expects more than two thirds of new subscribers to be on the platform as dealers adopt it.

ADT Blue is intended to reach more price-conscious and DIY-oriented customers through e-commerce, including with lower-cost cameras. ADT plans to sell it through its own website and additional online retail channels. The company also expects that some DIY customers may eventually move to professionally installed services.

The Origin AI acquisition adds ambient-sensing technology that ADT expects to use for alarm verification and other home security and smart home applications. ADT completed the design of a smart plug intended to integrate the technology into its core offerings; it plans manufacturing, pilots and further integration work.

ADT is also extending services beyond the home. MySafety connects customers using the ADT+ app to the monitoring network while they are on the go. The company reported 35,000 customer activations.

ADT continues to consider bulk purchases of customer accounts and acquisitions, while also investing in customer service and acquisition technology. It did not complete a bulk account purchase in Q1 2026 because it could not reach acceptable terms.

Structural risks

• Customer retention: ADT relies on customers remaining for long periods to recover acquisition costs and generate recurring revenue. As of December 31, 2025, gross customer revenue attrition was 13.1%, up from 12.7% in the prior year. Legacy customers may need substantial hardware upgrades to use ADT+.
• Technology and competition: ADT must keep pace with technological change through development, partnerships and acquisitions, and introduce offerings that customers accept at acceptable margins. DIY and self-monitored alternatives can compete with its fee-based services.
• Debt: ADT had $7.8 billion face value of outstanding indebtedness, excluding finance leases, as of December 31, 2025. Debt service and covenants limit flexibility, while higher interest rates can increase variable-rate and refinancing costs.
• Privacy and regulation: Failures to comply with changing privacy, data security and other requirements could lead to penalties, liability and reputational harm. Local false-alarm rules can also restrict or change emergency responses.
• Economic and supply conditions: The housing market and discretionary income affect customer additions and cancellations. Supply disruptions, tariffs and higher materials, labor or fuel costs can increase expenses or delay equipment.
• Pending acquisition: It was reported on 1 November 2026 that Thrive Holdings agreed to acquire ADT. It was reported on 29 October 2026 that the deal requires shareholder approval and U.S. antitrust clearance.

Bottom line

Our reading

ADT is a subscription-led security provider that invests upfront to acquire customers and depends on retaining them to recover those costs (item1, item7). Its monitoring network and service footprint support the offering, while DIY alternatives and changing technology challenge its ability to differentiate (item1). The main financial exposure is the combination of customer attrition and substantial debt, alongside the execution required to expand its platform and channels (item1a, item7, call_prepared).