ADT Inc. (ADT) presents a deeply negative liquidation posture as of March 31, 2026. MFFAIS CLV is -$8.4B, LLV -$8.0B, and OLV -$7.8B, consistent with a capital structure dominated by intangible assets and long-term debt that would recover near-zero in a stop-and-liquidate scenario. Total assets are $15.9B; total liabilities are $12.1B, leaving GAAP book equity of $3.8B. Under liquidation haircuts, this reverses sharply. The two largest asset lines—goodwill ($5.0B, 0% recovery) and finite-lived intangibles net ($3.5B, 0% recovery)—together represent approximately $8.5B of gross balance sheet value that evaporates on day one. Deferred subscriber acquisition costs ($1.5B capitalized cost, XBRL tag DeferredPolicyAcquisitionCosts) similarly recover nothing in liquidation. After zeroing these three categories alone, recoverable assets are reduced to roughly $2.4B against $12.1B of liabilities at face value, producing a deep negative recovery to equity. The liability stack is anchored by $7.7B of total debt including finance leases, $2.1B of noncurrent deferred revenue (ContractWithCustomerLiabilityNoncurrent) that does not extinguish on windup, $1.3B of net deferred tax liabilities, and $320M of other noncurrent liabilities. Operating and finance lease liabilities total $141M, stable with the prior filing. The Origin AI Acquisition (closed February 2026, $164M total consideration, $114M goodwill) added intangible-heavy assets that contribute incrementally to liquidation deficit. Q1 2026 cash of $119M and $32M restricted cash are modest against near-term debt maturities—the First Lien Notes due 2026 were redeemed at $75M in April 2026 (post-period), and the next maturity is First Lien Notes due 2027. Share repurchases of $116M in Q1 2026 under the $1.5B 2026 Plan reduce the equity cushion. The Google Cloud commitment ($200M through 2030) and $48M standby LC exposure represent off-balance-sheet production and guarantee obligations that would not extinguish in liquidation. AR at $368M (90-95% recovery haircut applied) and inventory at $189M (60% recovery) are the primary tangible near-cash assets. PP&E net at $273M (50-70% recovery range) adds modest recovery. The filing discloses customer revenue attrition of 13.1% as of March 31, 2026, up from 12.6% prior year, which is operationally relevant to subscriber contract value but has no direct liquidation balance-sheet effect. Interest expense declined $22.5M YoY due to lower unrealized swap losses and reduced debt levels, reflecting continued deleveraging that modestly reduces the liability stack.
▼ Community Notes