Q2 2026 ADT Inc Earnings Call Transcript
Key Points
- Adjusted free cash flow surged 48% year-over-year to $406 million, driven by working capital management and tax planning.
- Direct DIFM residential subscriber additions grew high single digits, and SMB additions rose mid-single digits, showing organic strength.
- AI initiatives reduced human-agent customer contacts by nearly 20% and service tickets similarly, while improving customer satisfaction.
- ADT Blue, a new low-cost DIY security solution, launched successfully with strong customer uptake, including a majority choosing the fully monitored package.
- Company raised full-year 2026 outlook for revenue, adjusted EPS, and free cash flow, reflecting solid first-half performance.
- Gross RMR additions fell 17% year-over-year, and gross unit additions declined 22%, partly due to fewer bulk purchases and dealer channel softness.
- Attrition remained flat at 13.1%, with modest pressure from non-payment cancellations, though voluntary cancels improved.
- Dealer channel and affiliate channel volumes declined as the company intentionally dialed back expensive acquisition channels.
- Higher cash taxes and interest expenses are expected in 2027, creating potential headwinds for free cash flow.
- Installation revenue growth was driven by a shift to outright equipment sales, which may not be sustainable long-term as the transition completes.
Hello, everyone. Thank you for joining us, and welcome to the ADT second-quarter 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. (Operator Instructions)
I will now hand the conference over to Elizabeth Landers, Vice President of Investor Relations. Please go ahead.
Good morning, and thank you for joining us today to discuss ADT's second-quarter 2026 results. Speaking on today's call are Jim DeVries, our Chairman, President and Chief Executive Officer; and Jeff Likosar, our Chief Financial Officer.
Following their prepared remarks, we'll be joined by Omar Khan, our Chief Business Officer, and will open the call for analyst questions. Earlier today, we issued a press release and an earnings presentation summarizing our results.
Both are available on the Investor Relations section of our website. During today's call, we'll reference certain non-GAAP financial measures. Reconciliation to the
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