Key Highlights

  • Management expects 2026 adjusted free cash flow to grow about 30%.
  • ADT repurchased 68 million shares in the second quarter.
  • Second-quarter revenue was $1,312 million, up 2%.
  • ADT launched ADT Blu, a self-installed system with wider retail reach.

ADT Inc. (NYSE:ADT), the US security and smart-home company, used its second-quarter 2026 report to emphasise cash generation and capital returns. Management raised its 2026 outlook, with adjusted free cash flow now expected to grow about 30%, and the company repurchased 68 million shares in the quarter, including 29 million tied to a secondary offering by Apollo, which no longer owns ADT shares. The investment case rests on cash flow, subscriber retention and the pace of buybacks.

Latest Company Context

Q2 revenue was $1,312 million, up 2%. GAAP income from continuing operations was $155 million ($0.19 per diluted share), down $13 million, while adjusted income from continuing operations was $180 million ($0.23 per share), down $12 million. Part of the per-share comparison reflected a smaller share count. Adjusted EBITDA was $671 million versus $674 million, roughly flat, with a 51% margin compared with 52%.

Net cash from operating activities was $666 million, up $102 million, and adjusted free cash flow was $406 million, up $133 million, helped by lower cash taxes, working-capital discipline and lower subscriber acquisition spending. Recurring monthly revenue ended the quarter at $360 million, gross revenue attrition was 13.1% and revenue payback was 2.3 years.

Key Business Drivers

Capital returns are the headline driver. In Q2 ADT spent $478 million on buybacks and $45 million on dividends, returning $523 million, and $684 million in the first half, with 86 million shares repurchased year to date. Remaining authorisation was $906 million at June 30. A quarterly dividend of $0.055 per share is payable October 1 to holders of record on September 10.

Operationally, the company launched ADT Blu, a self-installed system with wider reach including Amazon, is scaling AI-powered customer service, and is working with Google as a strategic partner. Its filings also reference the Origin AI acquisition and the exits from its Commercial and Solar businesses. The 2026 outlook, as stated in the release, is growth rates only: roughly 30% in adjusted free cash flow, about 2% in revenue and about 2% in adjusted EPS. These are management expectations. Cash on hand was only $4 million with the revolver undrawn, and the company added $100 million of incremental Term Loan A borrowings in May, so buybacks are partly supported by debt capacity.

What Investors Should Watch

Investors may watch the third-quarter results for confirmation that free cash flow is tracking toward the roughly 30% growth outlook, and for any change to buyback pace now that Apollo's secondary-offering-linked repurchase is complete. The next dividend payment on October 1 is a scheduled event.

Other items include attrition (13.1% this quarter), recurring monthly revenue growth, take-up of ADT Blu and the Google partnership, and early results from AI-driven cost initiatives. Leverage deserves attention too: the release names a net leverage target. Higher interest costs or slower subscriber additions could weigh on results.

Buybacks Now Lean on Cash Flow and Debt Capacity

ADT is pairing flat adjusted EBITDA and low single-digit revenue growth with strong cash flow and substantial buybacks. Attrition trends, financing costs and the durability of free cash flow gains driven partly by lower taxes and acquisition spending will shape how long that mix holds.