Operator: Hello, everyone. Thank you for joining us, and welcome to the ADT Second Quarter 26 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. To withdraw your question, press 1 again. I will now hand the conference over to Elizabeth Landers, Vice President of Investor Relations. Please go ahead.

Elizabeth Landers: Good morning, and thank you for joining us today to discuss ADT's second quarter 26 results. Speaking on today's call are Jim DeVries, our Chairman, President and Chief Executive Officer and Jeffrey Likosar, our Chief Financial Officer. Following their prepared remarks, we will be joined by Omar Sharif Khan, our Chief Business Officer, and we 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 will reference certain non-GAAP financial measures. Reconciliation to the most comparable GAAP measures are included in the earnings presentation on our Web site. Unless otherwise noted, all financials and metrics discussed reflect continuing operations. 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 am happy to turn the call over to Jim DeVries.

James David DeVries: Thanks, Elizabeth. Good morning, everyone, and thank you for joining us today. I will focus my remarks this morning mainly on the key highlights in the second quarter and our continued progress on the strategic priorities shared earlier this year. Then I will turn the call over to Jeffrey Likosar 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. In the first half of the year, our strong cash generation has supported significant returns to shareholders $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 $0.23, flat to last year. Based on our first half financial performance, we are modestly raising our full year outlook which Jeffrey 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 10 thousand accounts. By comparison, last year's second quarter included a bulk purchase of 50 thousand accounts. As we have shared previously, the pipeline for quality bulks can be episodic, and we will continue to evaluate bulk and other acquisition opportunities with a focus on attractive economics. We are 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 with a differentiated model built on our trusted brand, professional monitoring and integrated technology platform. We continue to invest in 3 priority areas during 2026, product technology, service excellence, and customer acquisition efficiency improvement. Let me briefly walk through how we are 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 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 WiFi-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 27. 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 handle 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 are 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 tax 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 this 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 are continuing to drive efficiency across our go-to-market activities, including rationalizing spend and our highest cost channels. As we have said, some of these changes may temporarily affect subscriber additions, but are designed to improve our long term returns. We are working to improve the economics in 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 wanna thank our employees, partners, and customers for their dedication and their contributions through the first half of the year. I am excited about the opportunities ahead. With that, I will turn the call over to Jeffrey.

Jeffrey Likosar: Thanks, Jim, and good morning, everyone. I will start by adding some detail on our second quarter results and then share an update on our outlook for the remainder of the year. As Jim noted, we again delivered solid financial performance with very strong cash generation as a continued highlight. Adjusted free cash flow, including interest rate swaps, $406 million, up $133 million or 48% compared to last year. On a year-to-date basis, we have $820 million up more than $300 million or 64%. Versus the prior year. This result was driven primarily by working capital timing, lower cash taxes and interest, and lower subscriber acquisition spending. Our cash flow was also stronger than we expected entering the quarter due to the benefits of some tax planning progress and working capital management as we repurchase shares including in Apollo's secondary offering. On the top line, we delivered total revenue of $1.3 billion up 2%. Monitoring and services revenue was down 1% with an ending recurring monthly revenue balance of $360 million reflecting the revenue loss from the multifamily business we divested last October. Installation revenue $230 million up 17% due to a higher mix of outright equipment sales. Adjusted EBITDA for the quarter $671 million and adjusted income from continuing operations $180 million or $0.23 per diluted share. On a year-to-date basis, our adjusted EPS is $0.47, up $0.03 Beyond the effect of revenue and gross margins, our earnings reflect ongoing efficiency actions and cost controls some offsetting investment in growth initiatives and increased amortization including from our Origin acquisition. On a per share basis, we also benefited from lower share count due to the repurchases enabled by our cash generation and efficient capital structure. We added 190 thousand gross new subscribers in the quarter with $11.9 million of RMR. As Jim mentioned, we had fewer bulk account purchases than last year, along with softness in our dealer channel, which we partially offset with growth in direct subscriber and RMR additions. Net cash SAC was $345 million down 7% driven primarily by fewer bulk purchases partially offset by the timing of consumer financing flows. Attrition was 13.1% flat to last quarter, with revenue payback also holding at 2.3 years. Now turning to capital allocation. A core attribute of our business is consistently strong cash generation, and we continue to deploy that capital in a disciplined manner to drive returns. Through the first half, we directly $684 million to shareholders including $594 million to repurchase and retire 86 million shares and $90 million of dividends. Through this week, we have repurchased approximately 89 million shares, and we have $885 million remaining under our $1.5 billion 3-year repurchase authorization. Our overall capital structure and liquidity position remains strong with $800 million revolving credit facility undrawn. In May, we secured an $100 million of borrowings under our 30 term loan A. While we used these proceeds to fund repurchases, we expect this incremental debt to ultimately support our August 2027 Notes refinancing. We ended the quarter with net debt of approximately $7.4 billion with leverage of 2.8x adjusted EBITDA at a weighted average cost of approximately 4.3%. We remain very comfortable with our capital structure and our overall capital allocation priorities are unchanged. We will invest in the business where returns are compelling both organically and through periodic acquisitions, we will return capital directly to shareholders and we will maintain a healthy balance sheet and an objective of further reducing leverage targeting 2.5x. Turning to our expectations for the rest of the year, we are modestly raising our full year 2026 outlook based on our year-to-date performance and share repurchases and expected progress in the second half. We now expect total revenue to grow approximately 2% mainly reflecting installation revenue trends. We expect adjusted EPS to also grow 2% with the improvement a result of the timing of share repurchases. And we expect adjusted free cash flow to grow approximately 30% with the improvement driven primarily by tax planning and working capital management. While we are very pleased with our full year 2026 cash generation, we do expect higher cash taxes and cash interest in 2027. As Jim outlined, our primary focus during the second half is execution of our investments in growth initiatives and improvement in our new subscriber additions and retention. Within the second half, we expect fourth quarter income to be somewhat higher than the third quarter due to the timing of some of these investments, seasonal dynamics, and other items. We expect revenue and cash to be similar in the third and fourth quarters. Our full year outlook and our performance through the first half reflect the resilience of our model and our disciplined execution while we also continue to invest in our business for the long term. I am very excited by the advancement in our technologies and capabilities and the new ways we will be able to serve our customers to deliver peace of mind with innovative offerings, unrivaled safety, and a premium experience. Thank you again for joining us and for your continued support. Operator, please open the call for questions.

Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of George Tong with Goldman Sachs. Your line is now open. Please go ahead.

George Tong: Hi, thanks. Good morning. Gross RMR additions fell 17% year over year in gross unit additions declined 22%, which you attributed largely to fewer dealer in bulk account purchases. How much of the current pressure reflects intentional changes to your acquisition strategy versus underlying end market demand? And what does the path back to gross additions growth look like?

James David DeVries: Good morning, George. it is Jim. I will share a little bit of overall context on gross ads and ask Jeffrey if he has anything to contribute on this question as well. You are correct. On the biggest difference between this quarter and 2 of last year being related to unit bulks. We completed 10 thousand-unit bulk this quarter, 50 thousand bulk in Q2 of last year. And when comparing quarter to last year, absent the difference in bulk, we had 10 thousand fewer ads this quarter. That was attributable really to 2 things, The first is we talked about in earlier quarters, dialing back our reliance on expensive channels like affiliate channels. And so we have seen some decline in affiliate, and then we have had some softness in our dealer channel as well. 1 dealer actually in particular, but between affiliates and dealer and the bulk that makes up more than the gross ad shortfall versus Q2 of last year. Worth mentioning our core DIFM business, direct organic business is up high single digits year-over-year to date. SMB is up organically about 4% over last year. And so we feel good about the organic muscle it is gonna take us a little bit of time to replace the volume from affiliate and some of the softness in dealer, but the underlying engine we feel excellent about. 1 last thing and I will give it to Jeffrey. We are also worth mentioning the per unit economics remain really strong for us. Installation revenue per unit, net SAC is really solid.

Jeffrey Likosar: Yes. So I would add just a couple comments. So we always want more ads but, you know, focused on the strong economics is Jim described. We feel really good about our overall quarter. And even the ads was generally consistent with our expectations and very excited about the growth initiatives that start to contribute later this year. And into next year and even more pleased that we were able to raise our guidance across each of the 3 measurements revenue and earnings per share and especially really strong cash and our cash outlook for the rest of the year.

George Tong: that is very helpful. And then as a follow-up, as you think about improving retention rates and service costs and customer economics, those attributes are basically central elements of the ADT plus thesis should help with all those things. And with the dealer rollout beginning in the second half of this year, when would you expect ADT Plus platform adoption to become large enough to produce measurable improvements in attrition service costs, and customer lifetime value.

James David DeVries: Omar, you wanna take that Hi, George.

Omar Sharif Khan: Yeah. So we began at the beginning of this month rolling out ADT plus to dealers. We have launched our Western Region. We are in the process of actually launching our Eastern Region. The initial feedback, George, from the dealer community has been very positive. Both from the training and uptake as well as the installation progress on ADT plus. it is going to be about a 3- to 4-quarter migration of the dealer community across the board. We are being very thoughtful and very intentional about that rollout. So as you know, about a third of our ads come from the dealer community. So it is going to be, like I said, about a 3-quarter to 4-quarter transition for the dealer community to ADT Plus. So you will see that benefit phasing in over time. Over the next, call it, 9 to 12 months.

James David DeVries: George, I am going to add to that, not directly, related to ADT plus, but a couple items we are sharing with you Short term, I would say proof points for us. NPS is my up over Q2 of last year. All of our operating metrics and customer service, first call resolution, digital self-service, are tracking nicely relatively speaking. Retention team, we have lower employee turnover in the team than we have ever had before. And then a little bit longer term influence here is we have tightened up our credit standards a bit there is been some changes around how we do proactive save offers. So some of the process changes that we made, I think will start to layer in to help us move the needle on attrition. And then to Omar's point into your question, I think product experience essentially deeper, more frequent customer engagement bodes well for us longer term.

George Tong: Got it. Very helpful. Thank you.

Operator: Thank you. Your next question is from the line of Ashish Sabadra with RBC Capital Markets. Your line is now open. Please go ahead.

Ashish Sabadra: Thanks for taking my Really strong momentum in free cash flow. I was just wondering if you could help parse out some of the tailwinds that we are seeing from some of the working capitals, tax planning, but also lowered SAC? So if you could quantify that. But also, if you could just provide some preliminary color on how should we think about some of the increased-- sorry, interest expense and cash taxes in 2027? And just maybe a follow-up on this would be just how should we think about the free cash flow trajectory now over the midterm? The free cash flow obviously has significantly exceeded our expectation and your original guidance as well. So how should we think about over the midterm? Thank you.

Jeffrey Likosar: Okay. I will take that. it is Jeffrey. We feel, as I already mentioned, really good about our cash performance. So far in the year, the most significant reason that we were able to increase our outlook is progress on some tax planning. Initiatives that we have undertaken But setting that aside and just looking at the results, we are up on a year-to-date basis a little bit more than $300 million. About half of that is working capital management. there is a discrete item or 2 associated with timing of some payroll outflows aside from that, it is inventory and payables. We also benefit as you will see in our results, meaningfully from not having made a material cash tax payment this year related to the point I already made. And then our interest is also lower year-over-year. Driven by mainly coupon timing along with the benefits of all of our recent refinancing activities. Then SACs is a little bit lower. there is always a lot of puts and takes. In cash flow and working capital timing specifically. I will also note that we while we always manage working capital tightly, we did so with especially this quarter due to the attractiveness of our stock price and in support of Apollo's secondary to be able to repurchase shares. Then your question about longer range outlook, we, of course, have not given any particular guidance or specific guidance, beyond the current year. But taxes, we would expect to become a bigger cash taxpayer next year. We exhausted our NOLs a couple years ago. Last year, last year, our taxes were $142 million. We expect less this year. But probably more next year. We are always working to optimize and minimize, but likely headwind there. And then likewise, on interest expense, this year, I mentioned lower than last year, but we do still have some attractive interest rate swaps that expire the end of this year. And our upcoming refinancing next year is at 3/8 and unlikely in current market conditions, would be able to refinance at that rate. So both of those items are probably $50 million to $100 million each of headwind next year. But, of course, we will continue to work to optimize that and find other ways to continue to generate strong cash.

Ashish Sabadra: that is very, very helpful color. And maybe if I can just ask a quick question on ADT Blue. I was just wondering if you could share any initial feedback from the launch And then as this scales how do you think about the ARPU and SAC for ADT Blue compared to your more traditional customer acquisition channel? Thank you.

Omar Sharif Khan: Yeah. So for ADT Blue, it is still very early from a from a progress perspective we just launched. The ARPU is obviously lower because we have plans starting at $10 per month for video only, but we are encouraged with the initial results, and it is going to play out over time as we scale our channels. But the initial results show a majority of customers adopting and engaging with us in the fully monitored, security package, which tends to obviously price $34.99 and above. Depending on the choices of accessories. So we are seeing very good progress from an ADT Blue perspective. And while the overall ARPU is lower, we are trending higher than general market in terms of adoption of full security packages as well as fully monitored security. But that is going to play out over time. The initial results are positive. Yeah.

James David DeVries: A little context here, Ashish. The for DIY, for ADT Blue, our lawn was almost exclusively on the Amazon in the second quarter. And so the customer response to Omar's to Omar's point has been really We feel great about customer receptivity but we are really early in the process and just really just now starting to put some advertising fuel behind ADT plus that we are optimistic will get us some incremental volume.

Jeffrey Likosar: And maybe worth mentioning too that the economics that we seek on our self install offerings are very similar. With respect to the returns that we will generate on the SAC. That we deploy. So even though the average pricing is lower and other characteristics are different, it is important to note that the subscriber acquisition cost to take on these customers is also much lower.

Ashish Sabadra: that is very helpful color. Thank you, and congrats on such a strong free cash flow. Thanks. Thanks, Ashish.

Operator: Your next question is from the line of Manav Patnaik with Barclays. Your line is now open. Please go ahead.

Ronan Kennedy: Hi. Good morning. This is Ronan Kennedy on for Manav. Thank you for taking our questions. I was hoping that please, if I may, unpack attrition and the trends and drivers there. Also, if you could comment on the impact of non pay cancellations, the trends there relative where you exited 2025, and any retention benefits you are seeing from ADT Plus My Safety Trusted Neighbor, or and or increasing engagement the ecosystem.

James David DeVries: Good morning, Ronan. it is Jim. I will answer that 1 for you. So we ended the quarter rounding the attrition, flat sequentially. The metric as you know, measures trailing 12 months If we zoom into the last 3 months, we are actually flat to last year. A little more color and specific to your question relocation losses were flat There was modest pressure from non payment cancellations. They were higher than last year, but only modestly so. Voluntary cancels were better than last year. I mentioned earlier on the call that our customer service metrics are tracking very, very nice, and we are seeing the benefit of that in fewer voluntary cancels. The sale of multifamily was a small headwind for us compared to last year. And small business was flat to last year, about 4% or so attrition for small business. Interestingly, and I think noteworthy non pay cancels in small business were actually a little bit better than last year. So the, you know, and while attrition is flat overall, canceled demand is down modestly. And handful of leading indicators that I mentioned earlier, team stability, customer service metrics, the process changes, that we are making are all moving in the right direction.

Operator: And then your question about credit losses the drivers there are very similar.

Jeffrey Likosar: it is almost just a different manifestation of the exact same dynamics. For non pay, there is some different recognition of that expense as we have more outright sales. Because with an outright sale, we record the install revenue. Much of it is financed. Therefore, we record our estimate of the credit loss at the time we record that install revenue. it is a cost we consider when we evaluate subscriber. Economics, almost like a cost of sale. We are always fine tuning our credit policies. So while credit losses and related provisions are elevated year-over-year, generally, it is in line with our expect our expectations.

Ronan Kennedy: that is very helpful. Thank you. And then shifting gears, please, if I may. I think you had highlighted nearly 20% fewer customer contracts, and I would like you human agents and a similar reduction in service tickets. Then also commented on how AI initiatives could potentially be a meaningful contributor. Just looking for some more context on this, you know, in terms of, say, what AI applications currently have the highest ROI and are expected to. Whether that is the customer care, marketing, sales conversion, the field, optimization, or even the product innovation. And then you help us think about how much of that benefit is already showing up? I think that would be primarily now from the cost standpoint. Standpoint. And then you know, the opportunities there over, say, the next 12 to 24 months. Thanks, Ronan.

James David DeVries: there is a lot there. So I will give you some, tree tops, perspective. On the business and where we are deploying AI in the progress that we have made and maybe a couple of comments about some areas that we will be leaning into here in the back half of the year and then invite Omar to talk about AI on the product side in share some perspective. Most of our focus in AI so far has been around the call center, call routing technology, and virtual AI agents, and driving more calls to AI agents and more chats to AI agents. And in doing so while we continue to improve NPS. And I would say generally that is going pretty well We are no longer in the early innings, we are in the middle innings now. And beginning to focus our next generation of AI efforts in areas like call transcription and insights, 2 way SMS, essentially lead nurturing. We are deploying Gemini across the enterprise. To move it from, you know, sort of a move AI from a buzzword to a employee productivity tool. We are using it in fleet safety. So virtually every area of the organization is being exposed to AI as we ramp up and more fully scale it. And then Omar, maybe a couple comments on the product side.

Omar Sharif Khan: Yep. Thank you. This is Omar. So a couple things. I will first talked about AI in terms of internal efficiencies on the product side. You know, we started using AI from a coding perspective and software perspective in the third quarter of last year. In the first year, we have seen incredible uptake across our software organization from an adoption and efficiency perspective. Last month, an example, over 3 quarters of our code generated by our product software team was generated and accepted and committed from AI. And so we are moving very quickly, that helps us improve our efficiency of new feature launches and prototyping our software organization. Shifting to the product side specifically, there is 2 areas that you are gonna see from us over the next several quarters in terms of AI impact for customer experience in the app. 1 area is which we can talk about a little bit more deeply, is Origin AI. The AI features from Origin that include everything from motion intelligence, the ability to classify motion, alarm event intelligence, which is in the event of an alarm guiding first responders in terms of how to respond. To that alarm event and then zone based intelligence of the home are all AI model driven capabilities that we will be rolling out starting in the first half of 27 to our customers. And then video analytics and video based AI solutions in terms of insights generated by AI processing of our video for insights as well as helping our monitoring centers as well. So those are all the areas that we are both working on and will start to roll out at the beginning of next year to our customers through ADT plus.

Ronan Kennedy: Thank you. Appreciate it. Thanks for holding.

Operator: Your next question is from the line of Gregory Parrish with Morgan Stanley. Your line is now open. Please go ahead.

Greg Parrish: Hi, everyone. Good morning. Thanks for taking my question. ADT Blue. I think Omar, you said majority of customers are adopting the fully monitored package. I just wanted to clarify that. Do you mean 1 of the monitoring? You do not mean the professionally monitored Because I know uptake of that, and this channel tends to be pretty low. And then maybe just to double click, like, of ADT Blue customers, how many are choosing the professionally monitored $35 package? Thanks.

Omar Sharif Khan: So what I meant by the comment was specifically around the $35 package. So it is still pretty early in the adoption cycle, but the initial data is showing us that customers are choosing the full security package, which includes not just cameras, but sensors and the base, not the camera only package from a self monitoring perspective, so the fully monitored package. And but as I do believe that over time, we will see that balance out because our goal is for us to bring in customers from an earlier stage perspective using camera only in self monitoring and moving them up the value chain when it comes to adoption and for them to adopt security products in addition to their cameras. The goal for us here is to actually get additional customers coming in at the entry level and move them up the chain, but the initial data that we are seeing is majority of customers choosing the full security packages, which include sensors, and our base.

Greg Parrish: Okay. Okay. Thanks for clarifying. I am pretty impressive uptake there. So you for clarifying. And then maybe for just a follow-up. You talked about rationalizing marketing spend in your highest cost channel. So it is you know, you been doing this for some time. So talked about subscriber ads being temporarily impacted from that. I just want to think about the strategy going forward. You know, do you expect to increase ads in other channels to sort of offset that? Or is this sort of a change of go-to-market marketing strategy and you expect ads in the pro install channel to improve? Just help us think through the puts and takes of those.

James David DeVries: Yeah. that is the objective. Absolutely. The mentioned this and it is worth sharing again, core do-it-for-me business, the organic business for us is up high single digit year to date. And SMB sort of mid single digit, I think 4 ish percent or so. And a handful of areas where we have from a unit ad perspective is related to ADT plus expansion. More assertive, more differentiator oriented advertising. We have advances in AI technology and the origin product And lastly, DIY, I would mentioned it is early in the game, Amazon only. But we are just getting to e commerce talking to a handful of retail partners, and are generally optimistic on gross ads DIY. Okay. Thank you.

Operator: Thank you. Your next question is from the line of Peter Christiansen. With Citigroup. Your line is now open. Please go ahead.

Peter Christiansen: Thank you. Good morning. Thanks for the question. Nice execution here. Just following questions. Jeffrey, if you can walk us through working capital, a little bit deeper here. I know you called out some timing. Elements and some 1 time ish kinda items. How should we expect working capital to flow over the next 2 quarters? And how should we think about normalized contribution to free cash flow going forward here?

Jeffrey Likosar: Yeah. So over the next couple quarters, I would expect it to be less of a benefit it is implicit in our cash flow guidance that the second half will be lower than the first half And there as I have mentioned earlier, there is lots of drivers that go in various directions on timing items, but the net of all of those things is such that I would not expect it. To be a benefit. The couple specific things I have mentioned earlier. 1, there was a discrete item associated with some payroll timing that benefited us in the first half of this year. We also as I think I also mentioned, we are we are very tight on managing working capital because of our desire to repurchase shares at such attractive prices. And most of those things have to do with the management of timing of inventory and payables. And, you know, as we head into 2020, '7, I would not expect it to be as much of a benefit as it was in 2026, but we are always working to optimize our working capital.

Peter Christiansen: Fair enough. And then on installation, the pickup and installation revenue, the acceleration there, there a way you can give us a sense of, you know, that you know, how much outright system sales are contributing to that acceleration?

Jeffrey Likosar: Yes. Our total in revenue in the quarter was up 17% Outright sales was up about 30%. The main driver there as we have talked about in the past is us transitioning or moving away from our historic model where we generally retained ownership of the equipment and with the launch of ADT plus, we began transitioning equipment ownership to the customer. there is a variety of reasons that we made that decision and made that change. And during this year, we are continuing to progress in the direction of moving more and more of our customers. To an equipment ownership model where the customer owns the equipment even on non ADT plus offerings, and that will continue. So I would expect to continue to see higher growth in outright sales in the third and fourth quarter after which we will have largely completed the transition, so less growth in installation revenue next year. But I would expect second half to continue to grow like you have seen in the last couple quarters.

Peter Christiansen: Impressive. Okay. Thank you so much. Thanks, Peter.

Operator: We have reached the end of the Q&A session. Will now turn the call back to Jim DeVries, CEO, for closing remarks. Please go ahead.

James David DeVries: Thank you, Fern, and thanks, everyone, for taking time to join us today. ADT delivered another solid quarter. We continue to feel good about the direction of the business. And confident in our 2026 plans. Both operational and the investments that we are making for a stronger future. I would like to extend my appreciation to our ADT employees and dealer partners Congrats on a good first half of the year. And thanks again everyone and have a great day.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.