ADT (NYSE:ADT) used its fourth-quarter earnings call to emphasize a strategy-focused agenda, highlighting investments in product technology, customer service automation, and go-to-market efficiency as the company positions itself for what management described as the “next generation of smart home security.” Executives also discussed the recent acquisition of Origin AI and outlined a multi-year financial framework alongside a new share repurchase authorization.
Strategy update: combining human expertise with AI
Chairman, President, and CEO Jim DeVries said ADT delivered a “solid quarter” and that full-year 2025 performance landed within the guidance ranges shared earlier in the year. He spent most of his prepared remarks describing how ADT intends to reshape smart home security by blending the company’s professional monitoring and service capabilities with artificial intelligence.
DeVries outlined several 2026 investment priorities, including:
- Product technology: Continued expansion of the ADT+ platform, new features and use cases, and development of “ambient sensing” technology following the Origin AI acquisition.
- Service and AI: Further use of AI in call center operations and beyond, including transcription and analysis of customer interactions and efforts to proactively address customer needs.
- Customer acquisition efficiency: Refining channel strategy, expanding into e-commerce, and launching a new product line called ADT Blue aimed at value-conscious and DIY customers.
In recent product updates, DeVries cited the 2024 launch of Trusted Neighbor and said ADT recently introduced “Live Light,” a lighted outdoor ADT sign intended to help first responders visually identify an address during an emergency, as well as “My Safety,” which he described as on-the-go mobile security integrated with the ADT+ ecosystem. He also said ADT plans to expand the ADT+ app to additional channels, including transitioning a network of more than 100 third-party dealers to ADT+ in the third quarter.
Origin AI acquisition: “ambient intelligence” and privacy-first sensing
Chief Business Officer Omar Khan called the acquisition of Origin AI a “defining milestone” and said it is intended to integrate “ambient intelligence” into ADT’s platform as the “next layer of home intelligence.” Khan said ADT expects AI sensing to become an integrated offering for ADT+ customers over the next 12 to 18 months.
Khan said Origin’s technology uses existing Wi-Fi signals—without cameras or listening devices—and applies signal processing, algorithms, and AI models to detect and classify presence and movement. He described the capabilities as being able to distinguish “a human from a dog” and “a fall from a nap,” and even detect breathing patterns, positioning it as “privacy-first security” designed to reduce false alarms and “notification fatigue.”
According to Khan, ADT now owns what it believes is a leading Wi-Fi-based signal processing engine and related IP, backed by “over 200 global patents” and a team of “50” innovators. He also said ADT expects that over time some features could be enabled for portions of its installed base via software updates and “simple hardware like smart plugs.”
Khan said ADT plans to launch a pilot “this year,” with commercialization across the ADT+ platform and app beginning in 2027. He added that ADT’s consumer research shows high demand and willingness to pay for AI-verified presence, motion classification, and health-related features.
Alongside the acquisition, Khan said ADT signed a five-year agreement with Verisure with a minimum value of $30 million plus activation fees for Verisure to continue scaling Origin’s technology across its footprint.
Service automation and AI: virtual service, call routing, and sales support
DeVries said ADT is supplementing its workforce of more than 12,000 employees with AI to improve service and efficiency. He highlighted that ADT now resolves about 50% of service calls via remote diagnosis rather than dispatching a technician, which he said has improved customer feedback while reducing costs.
He also said ADT’s early AI efforts led to 23% of calls being routed through AI in 2025, with improving “containment” rates (calls handled without human engagement). DeVries added that ADT exited 2025 with all chats first routed through AI.
For 2026, DeVries said ADT plans to expand AI beyond call centers, focusing on deeper customer understanding by transcribing and analyzing a large share of customer interactions. He said ADT expects to use those insights to improve agent interactions, reduce the need for human involvement in some cases, and identify customer needs proactively.
Management also discussed using AI in selling and marketing. DeVries said ADT is working with “an AI partner, Sierra,” to begin leveraging AI within lead-to-sale processes and improve conversion, and referenced two-way SMS initiatives aimed at improving lead contact rates.
Financial results, 2026 outlook, and capital return plans
CFO Jeff Likosar reported that ADT’s 2025 adjusted free cash flow (including interest rate swaps) increased 16% year over year. He said ADT returned nearly $800 million to shareholders in 2025, including roughly $600 million in share repurchases and $187 million in dividends.
For 2025, Likosar reported:
- Revenue: $5.1 billion, up 5%
- Adjusted EBITDA: $2.68 billion, up 4%
- Adjusted EPS: $0.89, up 19%
- Attrition: 13.1%, which he said was behind ADT’s record level earlier in 2025 due mainly to elevated non-paid disconnects
Likosar also noted that ADT divested its multifamily business in October, representing about $2.6 million in recurring monthly revenue (RMR) from roughly 200,000 subscribers. Including that disposition, he said ADT’s 2025 ending RMR balance was approximately flat versus 2024.
On leverage and refinancing, Likosar said ADT reduced leverage to 2.7x adjusted EBITDA through debt transactions in 2025, including refinancing of 2028 notes and all but $75 million of April 2026 notes.
Looking ahead, management introduced targets and guidance points for 2026 and beyond. Likosar said ADT is targeting:
- 1 million more subscribers by 2030
- 11% attrition
- A two-year revenue payback supported by broader channel presence and reduced reliance on high-cost acquisition methods
ADT also shared a multi-year framework targeting 5% compounded annual revenue growth, 10% compounded annual EPS growth, and adjusted free cash flow growth in excess of 10%.
For 2026 specifically, Likosar said ADT expects revenue and EPS to be approximately flat versus 2025, while targeting 20% growth in cash generation. He said ADT plans to invest about $50 million in 2026 across product technology, service, and go-to-market initiatives. He also cited an “uncertain tariff environment,” with guidance including about $45 million in additional subscriber acquisition costs from tariffs, and noted that guidance does not include purchase accounting effects from the Origin acquisition.
On capital return, Likosar announced a new three-year, $1.5 billion share repurchase authorization and said ADT is maintaining its quarterly dividend of five and a half cents per share. He added that the company anticipates allocating more capital to M&A than in recent years, spanning both technology/capability development and footprint or account acquisitions, while continuing to target leverage reduction toward 2.5x adjusted EBITDA.
Q&A: 2026 as a transition year and channel changes
During the question-and-answer session, executives addressed why ADT’s 2026 guidance calls for flat revenue and EPS. DeVries said entering 2026 with RMR roughly flat is a headwind given recurring revenue is about 85% of total revenue, and he cited about one point of headwind from the multifamily sale. He also said contemplated changes in dealer and affiliate partnerships could create short-term disruption, though he expressed optimism about longer-term benefits from investments such as ambient sensing, e-commerce, and expansion into new total addressable markets.
Likosar said margin and efficiency actions are largely offset by investment costs and the tariff headwind. He also pointed to offsets within EPS such as net share repurchases, alongside higher amortization and somewhat higher interest expense.
Executives described DIY as an area of increased focus, with DeVries saying year-to-date DIY was up nearly 23% and that 2026 will include a “meaningfully EBIT negative” DIY investment as ADT expands into retail and e-commerce and introduces ADT Blue. He emphasized that a key strategic challenge is converting DIY customers to professionally installed solutions over time.
Management also discussed balancing “buy versus license” decisions in technology, with Khan saying owning Origin’s technology and IP is important because ADT plans to integrate it broadly across the ADT+ platform and wanted to control the technology’s trajectory and future innovation.
About ADT (NYSE:ADT)
ADT Inc is a leading provider of security and automation solutions for residential and commercial customers. The company offers a comprehensive suite of products and services, including intrusion detection systems, video surveillance, fire and carbon monoxide monitoring, and integrated smart home automation platforms. Through professional installation, continuous monitoring, and a network of 24/7 monitoring centers, ADT helps customers protect their properties, assets and loved ones.
Founded in 1874 as the American District Telegraph Company, ADT has evolved from one of the first telegraph-based alarm services into a modern security technology enterprise.
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