Free cash flow efficiency has improved significantly, with margins expanding to 46.1% in 2026Q1 as capital expenditures dropped to 3.8% of revenue from 16.7% in 2023Q4.
| Cash from Operations | 2.06B | 1.89B | 1.88B | 1.66B | 1.89B | 1.65B | 1.37B | 1.87B | 1.79B | 1.59B | 617.52M | 36.31M |
| Operating CF Margin % | - | 36.75% | 38.48% | 35.63% | 36.53% | 31.09% | 25.72% | 36.54% | 39.02% | 36.89% | 20.93% | 6.61% |
| Operating CF Growth % | 14.66% | 0.01% | 13.7% | -12.2% | 14.42% | 20.7% | -27.02% | 4.75% | 12.31% | 157.8% | 1600.7% | - |
| Net Income | 623.31M | 601M | 501.05M | 463.01M | 173M | -341M | -632M | -424M | -609M | 343M | -536.59M | -72.84M |
| Depreciation & Amortization | 1.44B | 1.37B | 1.34B | 1.39B | 1.69B | 1.92B | 1.91B | 1.99B | 1.93B | 1.86B | 1.23B | 125.2M |
| Stock-Based Compensation | 49M | 55M | 48.61M | 51.14M | 66.57M | 61.24M | 96.01M | 86M | 135M | 11M | 4.63M | 3.04M |
| Deferred Taxes | 144.67M | 142M | 139.58M | 125.23M | 31M | -139M | -173M | -118M | -27M | -777M | -272.51M | -29.53M |
| Other Non-Cash Items | 116.92M | 270M | 142.98M | 72.92M | 73.43M | 39.76M | 415.99M | 377M | 426M | 110M | 191.34M | 35.87M |
| Working Capital Changes | -318.03M | -550M | -292.03M | -443.25M | -150M | 114M | -254M | -37M | -68M | 42M | -2.31M | -25.42M |
| Change in Receivables | 0 | 0 | -146.13M | -107.46M | -178.26M | -50.21M | -84.05M | -94.45M | -60.69M | -60M | -34.22M | -9.24M |
| Change in Inventory | 0 | 0 | 25.07M | 24.73M | -67.39M | -84.02M | -60.8M | -14.71M | -2.6M | 5M | -8.8M | -5.85M |
| Change in Payables | 0 | 0 | -109.33M | -111.53M | 8.66M | 98.12M | 65.32M | 19.32M | 9.01M | -31M | -9.1M | -2.42M |
| Cash from Investing | -1.27B | -1.12B | -1.3B | 242.49M | -1.53B | -1.7B | -1.14B | -978M | -1.74B | -1.4B | -9.38B | -2.1B |
| Capital Expenditures | -268.96M | -572M | -163.81M | -806.89M | -912M | -863M | -575M | -701M | -703M | -714M | -547.09M | -64.67M |
| CapEx % of Revenue | 5.23% | 11.15% | 3.34% | 17.34% | 17.65% | 16.26% | 10.82% | 13.68% | 15.34% | 16.55% | 18.55% | 11.77% |
| Acquisitions | -221.09M | -545M | 0 | 1.02B | 14M | -162M | -227M | 387M | -353M | -64M | -8.5B | -2B |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -775.71M | -1M | -1.13B | 28.67M | -635M | -671M | -335M | -664M | -682M | -624M | -336.23M | -39.49M |
| Cash from Financing | -730.16M | -862M | -515.36M | -2.14B | -15M | -128.45M | -70M | -1.21B | 193M | -143M | 8.83B | 2.07B |
| Debt Issued (Net) | -196.96M | -90M | -174.26M | -2.06B | 55.76M | 67.74M | -368.52M | -442.17M | -1.13B | 619.13M | 4.65B | 1.36B |
| Equity Issued (Net) | -193.26M | -607M | -240.56M | 0 | -20M | 0 | 447.81M | -149.87M | 553.25M | 0 | 658.55M | 754.89M |
| Dividends Paid | -183M | -187M | -182.27M | -128.59M | -127.13M | -116.35M | -109.33M | -564.77M | -79.44M | -750M | 0 | 0 |
| Share Repurchases | -326.32M | -607M | -240.56M | 0 | -1.2B | 0 | -4K | -149.87M | 0 | 0 | 0 | 0 |
| Other Financing | -156.94M | 22M | 81.73M | 41.83M | 76.36M | -79.84M | -39.96M | -57.19M | 849.06M | -12.13M | 3.52B | -40.38M |
| Net Change in Cash | 17.78M | -95.06M | 74.11M | -243.63M | 341M | -175M | 159M | -318M | 240M | 47M | 60.13M | 4.46M |
| Free Cash Flow | 1.79B | 1.31B | 1.72B | 850.84M | 976M | 787M | 792M | 1.17B | 1.08B | 878M | 70.43M | -28.36M |
| FCF Margin % | 34.78% | 25.6% | 35.14% | 18.29% | 18.88% | 14.83% | 14.9% | 22.87% | 23.68% | 20.35% | 2.39% | -5.16% |
| FCF Growth % | 24.43% | -23.71% | 102.28% | -12.82% | 24.02% | -0.63% | -32.42% | 8.02% | 23.58% | 1146.63% | 348.36% | - |
| FCF per Share | 2.04 | 1.47 | 1.79 | 0.87 | 1.01 | 0.95 | 1.02 | 1.57 | 1.45 | 1.17 | 0.10 | -0.04 |
| FCF Conversion (FCF/Net Income) | 2.87x | 3.16x | 3.76x | -9.93x | 14.23x | -4.84x | -2.16x | -4.42x | -2.94x | 4.65x | -1.15x | -0.50x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 688.12M | 661.25M | 430.69M | 68.99M |
| Taxes Paid | 0 | 0 | 0 | 0 | 22.65M | 1.88M | 25.8M | 0 | 6.35M | 19.43M | 5.45M | 49K |
Subscriber Acquisition Cost Volatility
As reported in recent financial filings, ADT consistently generates operating cash flow significantly higher than net income, with the OCF/NI ratio frequently exceeding 3.0x, which suggests that non-cash amortization of subscriber acquisition costs remains the primary driver of the reported gap between accounting and cash reality.
The persistent divergence between net income and operating cash flow indicates that GAAP earnings are heavily suppressed by the amortization of intangible subscriber assets. Investors should interpret this as a sign that the company's underlying cash-generating capacity is substantially more robust than the bottom-line profit figures suggest.
Based on the provided quarterly data, ADT's free cash flow margin has demonstrated a clear upward trend, reaching 46.1% in 2026Q1 compared to 15.3% in 2024Q1, which appears to reflect the successful divestiture of capital-intensive business units and a more disciplined approach to subscriber acquisition spending.
The improvement in FCF margins suggests that management is successfully transitioning toward a more capital-light operating model. This trend warrants further investigation to determine if the margin expansion is sustainable or if it relies on a temporary reduction in growth-related investments.
According to historical cash flow statements, ADT has significantly reduced its capital intensity, with CapEx as a percentage of revenue dropping from 16.7% in 2023Q4 to 3.8% in 2026Q1, signaling a strategic pivot away from heavy hardware-driven expansion toward a more efficient maintenance-focused investment cycle.
The sharp decline in capital expenditure suggests that the company is no longer aggressively funding the same level of hardware-heavy customer acquisition as in previous periods. This shift appears to be a deliberate effort to preserve cash flow, though it may limit the company's ability to capture new market share.
As indicated by recent cash flow statements, ADT has utilized its improved free cash flow to fund both consistent dividend payments and opportunistic share repurchases, with $116 million allocated to buybacks in 2026Q1 alone, reflecting a shift toward returning capital to shareholders following recent portfolio simplification efforts.
The prioritization of share repurchases and dividends suggests that management views the current valuation as attractive and believes the business can self-fund its operations. However, investors should monitor whether this capital return strategy remains sustainable if subscriber acquisition costs begin to rise again.
Quick answers to the most common questions about buying ADT stock.
ADT Inc. (ADT) generated $1.89B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
ADT Inc. (ADT) generated $1.31B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
ADT Inc. (ADT) spent $572.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, ADT Inc. (ADT) returned $187.0M to shareholders via cash dividends and spent $607.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.