ADT Inc.

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. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. 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 we'll 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 most comparable GAAP measures are included in the earnings presentation on our website. Our remarks today also include forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act. These statements are subject to risks and uncertainties that are described in the earnings presentation and in our SEC filings. Actual results may differ materially. Please refer to our SEC filings for more details. And with that, I'm happy to turn the call over to Jim.

Thanks Elizabeth. Good morning everyone and thank you for joining us today. I'll focus my remarks this morning mainly on the key highlights in the second quarter and our continued progress on the strategic priorities we shared earlier this year. Then I'll turn the call over to Jeff to walk through our financial results and outlook in more detail. Let me start with a few key takeaways from the quarter. We delivered a solid second quarter with continued strength in cash flow and disciplined execution across the business. Cash generation was again a highlight with adjusted free cash flow, including interest rate swaps, up nearly 50% versus last year. Through the first half of the year, our strong cash generation has supported significant returns to shareholders totaling $684 million. During the second quarter, Apollo sold its remaining holdings in a secondary offering and following the closing of that offering is now no longer an ADT shareholder. ADT repurchased 29 million shares in connection with that secondary offering, reflecting our conviction in the value of our business and our disciplined approach to capital allocation. Total second quarter revenue grew 2% to $1.3 billion and our end of period recurring monthly revenue was $360 million. Adjusted earnings per diluted share was 23 cents, flat to last year. Based on our first half financial performance, we are modestly raising our full year outlook, which Jeff will describe in more detail later on our call. Turning to our operational metrics. Trailing 12-month attrition remains at approximately 13%. Subscriber and recurring revenue trends remain consistent with the first quarter, with softness in our dealer channel and relatively stronger performance in direct. Also during the quarter, we completed a bulk purchase of approximately 10,000 accounts. By comparison, last year's second quarter included a bulk purchase of approximately 50,000 accounts. As we've shared previously, the pipeline for quality bulks can be episodic and we'll continue to evaluate bulk and other acquisition opportunities with a focus on attractive economics. We're operating well in a dynamic and competitive environment, and our priority remains on generating strong economic returns while improving core metrics. This includes balancing growth, retention, and cash generation in a way that drives long-term value creation. We remain focused on the strategy we laid out earlier this year. We believe ADT is well positioned as the leader in smart home security with a differentiated model built on our trusted brand, professional monitoring, and integrated technology platform. We continue to invest in three priority areas during 2026, product technology, service excellence, and customer acquisition efficiency improvement. Let me briefly walk through how we're executing against our key initiatives. First, on product technology. We continue to expand the capabilities of our ADT Plus ecosystem and advance our roadmap to include more intelligent, connected solutions. As part of that evolution, we broaden our reach this quarter with the launch of ADT Blue, A lower cost, self-installed security solution that pairs the convenience of do-it-yourself setup with the flexibility of the ADT Plus platform and professional monitoring. While it is very early, we are pleased with the customer receptiveness and reviews. Separately, our third-party dealer network, which has historically represented more than a third of our gross additions, is beginning to transition to the ADT Plus platform. We expect to migrate dealers onto our proprietary ecosystem in phases over the next year. Through the first half of this year, approximately 30% of our new customer additions were on ADT Plus. We are also making progress on our path to commercialization of a new presence sensing offering based on the technology we acquired earlier this year. We advanced manufacturing and integration of a Wi-Fi based smart plug that will bring privacy preserving presence sensing into the ADT Plus platform for security and aging in place use cases. We expect customer pilots to begin this fall ahead of a planned launch in early 2027. Next on our initiatives is service excellence, where we remain focused on improving both customer experience and operating efficiency. We are seeing good momentum from our AI initiatives. During the quarter, we combined AI-driven call routing with our virtual AI agents to improve first call resolution and reduce transfers. As a result, we handled nearly 20% fewer customer contacts through human agents and reduced service tickets by a similar amount, all while achieving improved customer satisfaction. Our deployment of these technologies is generating both a better customer experience and more efficient service model, including cost savings. Looking ahead, we will be expanding AI across the enterprise. In the third quarter, we will begin transcribing and analyzing our sales and service calls, enabling customers to engage with our virtual agents through SMS and rolling out AI-enabled fleet safety technology across our technician fleet. These efforts are designed to improve responsiveness, increase containment, and ultimately drive better outcomes for both our customers and our business, including customer retention and sales conversion. We believe we're still in the early stages of this opportunity and that these initiatives will be a meaningful contributor to both growth and margin expansion. Importantly, ADT employees continue to handle situations where human expertise matters most, such as during emergencies or when an on-site, highly trained service technician is the best way to resolve a customer issue. In the third area, customer acquisition efficiency, a key objective this year is migration to lower cost sales tactics and channels. A highlight in our quarter that I already mentioned was our ADT Blue launch, which is now available through phone and online channels, including Amazon. This offering broadens ADT's reach to more value-conscious and DIY-oriented customers, a market segment we have not historically targeted. Over time, it also gives us a path to convert a subset of these customers to our professionally monitored solutions. During the second half of the year, we will scale our presence on Amazon and build ADT Blue momentum through additional advertising. We expect volumes to begin to grow in the third and fourth quarters. Beyond ADT Blue, we're continuing to drive efficiency across our go-to-market activities, including rationalizing spend and our highest cost channels. As we've said, some of these changes may temporarily affect subscriber additions, but are designed to improve our long-term returns. We're working to improve the economics and our most costly channels as we optimize long-term economics. Through these changes, our direct DIFM sales engine continues to perform well with residential ads up in the high single digits and SMB up mid-single digits for the quarter. Across all of these key initiatives, our focus is consistent, driving better customer engagement, improving efficiency, and ultimately supporting more sustainable growth. In closing, Our financial performance demonstrates the resilience of our model with strong cash generation, disciplined cost management, and consistent capital allocation. I want to thank our employees, partners, and customers for their dedication and their contributions through the first half of the year. I'm excited about the opportunities ahead. With that, I'll turn the call over to Jeff.