What ADT Inc. told the SEC could break it.

Much of ADT's end-user equipment is manufactured in China, Mexico, or other countries, exposing it to tariffs and trade restrictions on those imports.

“Existing or new tariffs and other trade restrictions imposed on imports from China, Mexico, or other countries where much of our end-user equipment is manufactured, or any counter-measures taken in response, may harm our business and results of operations.”

Tariffs on alarm equipment components and electronics manufactured in China (batteries, thermostats) — up to 25% — passed through to ADT by suppliers, raising costs.

“In the past, the U.S. federal government imposed tariffs on certain alarm equipment components manufactured in China, and on other categories of electronic equipment manufactured in China that we install in our customers' premises, such as batteries and thermostats. Certain of these tariffs were as high as 25% and such tariffs increased our costs for such equipment as a result of some or all of such new tariffs being passed on to us by our suppliers.”

ADT buys equipment and product components from a limited number of suppliers and distributors, mitigated by dual-sourcing; has experienced supply-chain disruptions in recent years.

“We purchase equipment and product components from a limited number of suppliers and distributors. To minimize the risk of a disruption from any single supplier, we utilize dual sourcing methods whenever possible.”