ADT Inc.

Thank you for standing by and welcome to the ADT fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Thank you. I'd now like to turn the call over to Elizabeth Landers, Vice President, Investor Relations. You may begin.

Good morning, and thank you for joining us today to discuss ADT's fourth quarter and full year results. Speaking on today's call are Jim DeVries, ADT's Chairman, President, and CEO, Jeff Likasar, our CFO, and Omar Khan, our Chief Business Officer. We are structuring today's call a bit differently, with the majority of the call focused on our strategy and key priorities to position ADT for the future. Jim will start with a broad strategic update, focusing on how we're reshaping the future of smart home security. Omar will then describe more about our recent acquisition of Origin AI, and then Jeff will briefly describe our 2025 financial results as well as our long-range financial outlook and capital allocation priorities. After their prepared remarks, we'll open the call for analyst questions. This morning, we issued a press release and presentation summarizing our financial results. Both are available at investor.adt.com. We'll reference our non-GAAP financial measures today. Reconciliations to the most comparable GAAP measures are included in the earnings presentation on our website. Unless otherwise noted, all financials and metrics discussed reflect continuing operations. Non-GAAP cash flow measures include amounts related to our former solar business through 2Q 2024. Included in our remarks today are a number of forward-looking statements that fall within the safe harbor provided by the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that are laid out in the earnings presentation on our website and in our SEC filings. Actual results may differ materially. Please refer to our SEC filings for more details. And now I'm happy to turn the call over to Jim.

Thanks, Elizabeth, and good morning, everyone. I'm pleased to report that ADT again delivered a solid quarter and that our overall performance for 2025 was within the guidance ranges we shared at the beginning of the year and updated on our October call. Jeff will share more regarding 2025 financial results later on this call, and he'll also comment on our longer-range financial outlook and capital allocation priorities. I'll spend the next several minutes sharing our vision for ADT and how we're reshaping smart home security, emphasizing our strategic focus areas, key initiatives, and investment priorities and beyond. As you know, ADT is the most trusted brand in smart home security, and we have remained the leader in our space throughout our 150-year history. We have a national footprint, unmatched monitoring and service infrastructure, and longstanding relationships with millions of customers who rely on us every day. ADT's mission to protect and connect what matters most remains consistent and we are focused on providing peace of mind to our customers. As I've shared before, our overall strategy is anchored in three core differentiators, unrivaled safety, premium experience, and innovative offerings. We deliver best-in-class protection anchored by our professional monitoring and delivered with top-notch service. During my tenure as CEO, customer expectations, the state of technology, and the manner in which we fulfill our mission have evolved with increasing speed. Homes are more connected, technology is more intelligent, customer expectations regarding responsiveness, personalization, and convenience are higher than ever before. Security is no longer just about reacting to alarms. We see the future of smart home security different from the past, and ADT is leading the way to transform the delivery of and even the definition of smart home security. At the core of that strategy is a simple idea, combining ADT's human experience with intelligent technologies to deliver better outcomes for our customers and with better economics for the business. More specifically, we're building technology that, combined with our more than 12,000 professionals, will provide solutions to provide increased peace of mind for our customers. Our vision is to provide protection that is always available, powered by artificial intelligence, enable real time and split second response with deeper information and context during emergencies, deliver a personalized experience that lives and evolves with the customer tailored to lifestyles and life stages, and offer solutions for everyone across all U.S. households, small businesses, and families through a variety of use cases, protection that follows people, not just properties. We have made substantial progress in the foundation for this vision in recent years. These include the launch and expansion of our ADT Plus platform and features, the transition to virtual service, early accomplishments in AI, and consistent improvements in our go-to-market model. A key objective during 2026 is to invest in the acceleration and broadening of our progress. We're investing in product technology, both in ADT+, as well as in our new technology related to ambient sensing. We're investing in customer service and artificial intelligence, as well as our related IT infrastructure. And we're investing in customer acquisition efficiency, including marketing to new segments and refining our channel strategy. I'd like to share a little more detail on these key investments in 2026. First, Investments in product technology we have built a solid proprietary platform, which enables more rapid innovation and more explicit differentiation. Following the launch of trusted neighbor in late 2024, we continue to add more use cases and features. Just recently we launched live light. a lighted outdoor ADT sign enabling first responders to visually identify and verify an address during an emergency. We also launched MySafety, enabling on-the-go mobile security integrated with the ADT Plus ecosystem. We are expanding penetration of our ADT Plus app to more channels, including, most importantly, a third-party network of more than 100 dealers who will transition to ADT Plus in the third quarter. A topic which I'm very excited about is our recent acquisition of Origin AI, which, using advanced presence sensing technologies and intelligence, will enable use cases and features unique to ADT. Omar Khan, our Chief Business Officer, will share more detail about Origin AI shortly. The theme of our customer service initiatives is the power we can uniquely bring to our customer by supplementing our 12,000 employees with the power of artificial intelligence. We've made substantial progress in service and efficiency in recent years. A highlight is our virtual service initiatives under which we now handle approximately 50% of our service calls via remote diagnosis and resolution rather than utilizing a truck roll. This has led to meaningful customer service through improvements with positive feedback while also improving our cost efficiency. In addition, our initial artificial intelligence efforts in 2025 have led to 23% of our calls being routed through AI with steadily improving levels of containment, that is, handling the call without any human engagement. We exited 2025 with all of our chats first routed through AI. Importantly, we continue to benefit from highly trained employees available in situations where a human interaction is the best solution, both in the event of an emergency or when an onsite service visit is the best way to resolve a customer concern. During 2026, we are planning to advance our service-oriented artificial intelligence within our call center operation, and importantly, also invest in AI beyond our call centers. Our primary focus is to strengthen our understanding of customers, which we'll accomplish via transcription and analysis of a large percentage of customer interactions with our agents. We use these insights to improve our interactions, in some cases by prompting employee agents, and in other cases, reducing the need for human involvement. I'm especially excited by the opportunities here to proactively identify and resolve customer needs or desires rather than reactively after a customer reaches out to us. We anticipate this rich information will facilitate improvements in customer satisfaction, speed of issue resolution, and cost efficiency. Working with an outstanding AI partner, Sierra, We're also beginning to leverage artificial intelligence within our lead to sale processes, which we believe will bring higher levels of conversion. The third area in which we're making 2026 investments is improvements in new segments and acquisition efficiency. We already enjoy the benefits of a very strong and trusted brand and a variety of routes to market. During 2025, we shifted a majority of our sales transactions to a model that effectively combined sales with system design, configuration, and installation into a single role, most often accomplished in a single home visit. We also refreshed our advertising platform to our When Every Second Counts campaign, and we continue to benefit from our capabilities to selectively buy accounts in bulk and integrate them into ADT. Among our key priorities in 2026 is expansion into e-commerce channels and the launch of a new product line, which we're calling ADT Blue, to appeal specifically to more value conscious and DIY customers. This will include more marketing investment to target those customers more specifically than we have in the past. We believe our ADT Blue launch will help us acquire customers for both our DIY and DIFM solutions as we now appear in e-tail channels where many customers shop. In addition, we're refining our overall marketing approach with an objective of rationalizing our highest cost acquisition sources which includes affiliate marketing partners and in some cases our dealers. We expect this to have a near-term effect of reducing our organic new subscriber additions while strengthening longer-term economics for our overall go-to-market ecosystem. We'll also continue to evaluate bulk account purchase options and potentially full acquisition opportunities in our industry with Attractive Economics. Our intent and core objectives are threefold. The first is to drive more growth. This includes our core residential business, as well as DIY oriented or more price conscious consumers, along with small businesses and aging in place or health oriented customers. The second is to strengthen customer loyalty, improving our customer retention. And the third is to improve efficiency specifically in customer acquisition to fund growth. Overall, we are focused on delivering unparalleled and differentiated customer value propositions, capitalizing on large and fast-growing smart home and security markets. Our scale, our professional monitoring expertise, our employees, our advanced technologies, and our installed base give us advantages that are very difficult to replicate. Our 2026 initiatives and investments are designed to create the next generation of smart home security. We expect these initiatives to generate benefits, including growth in our core, expanded participation into adjacent TAMs, improved attrition, and greater efficiency. We have the team in place to execute this strategy. We are building on ADT's strengths while revolutionizing the manner in which we deliver smart home security. We're focused and disciplined and absolutely committed to creating long-term value for our customers and shareholders. Before Jeff shares more about our financial outlook and capital allocation plans, I'll turn the call to Omar, who will share more about why we're so excited about our acquisition of Origin AI. Omar?