Financial Performance - Total revenue for 2023 was $881.7 million, up from $842.6 million in 2022, representing a year-over-year growth of 4.1%[16] - SaaS and license revenue reached $569.2 million in 2023, a 9.4% increase from $520.4 million in 2022, reflecting a compound annual growth rate of 11.2%[16] - Net income attributable to common stockholders was $81.0 million in 2023, compared to $56.3 million in 2022, marking a 43.9% increase[16] - Non-GAAP adjusted EBITDA for 2023 was $154.0 million, up from $146.8 million in 2022, indicating a growth of 4.9%[16] Revenue Generation and Business Model - The company relies on a network of service provider partners for revenue generation, with contracts typically having an initial term of one year and subsequent renewals[15] - The company generated hardware revenue from connected devices, including video cameras and smart thermostats, contributing to overall revenue growth[15] - ADT LLC represented greater than 15% but not more than 20% of the company's revenue in each of 2021, 2022, and 2023[87] Product and Service Offerings - The company’s solutions include interactive security, video monitoring, intelligent automation, and energy management, designed for both residential and commercial properties[17] - Alarm.com offers a comprehensive whole home water safety solution that monitors water usage, detects leaks, and can automatically shut off the water supply when a leak is detected[31] - The EnergyHub subsidiary provides software that enables utilities to manage power consumption during peak demand periods, potentially reducing costs and supporting renewable energy transitions[34] - Alarm.com for Business combines intelligent intrusion detection, video surveillance, access control, and energy management into a single solution for small and medium businesses[35] - The commercial video solution integrates with third-party cameras, allowing businesses to capture important activity and receive real-time alerts[36] - The Smarter Access Control solution allows businesses to manage user permissions and access points from a single web view, enhancing property control and security[37] - The new temperature monitoring solution provides 24/7 monitoring and alerts for out-of-range temperatures, helping businesses prevent spoilage and maintain safety[40] - Shooter Detection Systems (SDS) offers indoor gunshot detection and integrates with Alarm.com's Noonlight subsidiary for enhanced emergency response capabilities[47] - OpenEye's video analytics platform supports enterprise-level customers with advanced forensic video search and point of sale system integration[43] - The Visual Verification solution enhances emergency response by providing monitoring operators with live video feeds and contextual indicators[57] Competition and Market Dynamics - The company faces significant competition in the home and business automation markets, which could impact its growth and market share[12] - The market for connected property solutions is highly fragmented, with the top 5 dealers representing approximately 35% of all industry recurring monthly revenue in 2022[87] Strategic Initiatives and Acquisitions - The company is pursuing potential acquisitions to enhance its technology and service offerings, which may affect financial results if not successfully integrated[12] - The company acquired 100% of EBS, an international producer of smart communicator devices, to enhance its service offerings in over 50 countries[71] - The company intends to pursue selective strategic acquisitions to complement its platforms and accelerate innovation[73] - The company acquired 85% of Noonlight, Inc. on September 23, 2022, to expand its emergency response services and accelerate innovation[115] Research and Development - Alarm.com has made significant investments in research and development, resulting in hundreds of issued patents and numerous pending applications as of December 31, 2023[68] - As of December 31, 2023, the company owned 761 issued United States utility patents and had 210 pending utility patent applications[98] - The company has invested significantly in research and development to enhance technology capabilities and support infrastructure[85] Employee Relations and Corporate Governance - The company launched an employee-led community group called Belonging in 2022 to promote diversity, equity, and inclusion in the workplace[106] - The company provides additional remote healthcare benefits, including mental health services and health coaching, to enhance employee well-being[107] - The company has no employees covered by collective bargaining agreements and maintains good relations with its workforce[109] - The company has a strong focus on employee retention and engagement through competitive compensation packages and wellness initiatives[110] - The company’s governance practices are overseen by the Nominating and Corporate Governance Committee of the Board of Directors[108] Operational Scale and Efficiency - In 2023, the platforms processed over 325 billion data points generated by more than 150 million connected devices, highlighting significant operational scale[67] - The Service Provider Portal provides account management and support tools for service provider partners, enhancing operational efficiency[48] - The Gopher Info feature is an AI-powered chatbot that assists technicians with installation and support, improving service provider efficiency[51] - The Smart Gateway enables service provider partners to create a dedicated Wi-Fi network for Alarm.com video cameras, improving installation efficiency and connectivity[54] - Alarm.com manages over 1.2 million connected devices through demand response programs for more than 60 energy utilities in North America[101] Market Risks - The company’s market risk exposure is primarily due to inflation and foreign exchange rates, with significant volatility noted in financial markets[122] - The subscriber acquisition cost payback period has historically been one year or less[88] Pricing and Cost Management - The company has implemented price increases on certain products in 2022 to offset inflationary pressures on inventory and freight costs[471]

TYSONS, Va.--(BUSINESS WIRE)--Alarm.com has discovered an unusual safety anomaly that seems to happen every February 14. Homeowners across the U.S. are far more likely to report a fire alarm in the evening hours on Valentine’s Day compared to a typical night. Analysis of aggregated and anonymized data from the millions of properties secured by Alarm.com technology reveals a 64% increase in smoke and carbon monoxide alarms on Valentine’s Day. The engineers at Alarm.com are only able to speculate why this ma ...

NEW YORK--(BUSINESS WIRE)--EnergyHub, a leading grid-edge flexibility provider, in partnership with Ontario’s Independent Electricity System Operator (IESO), has enrolled more than 100,000 homes in the Save on Energy Peak Perks™ program in just six months to create the largest residential virtual power plant (VPP) in Canada. It’s the fastest growing flexibility program in EnergyHub’s decade-plus working with over 60 utility clients on Bring Your Own Thermostat™ programs. With 100,000 homes enrolled, the VP ...

TYSONS, Va.--(BUSINESS WIRE)--Alarm.com Holdings, Inc. (Nasdaq: ALRM), the leading platform for the intelligently connected property, today announced that it will report 2023 fourth quarter and full year financial results after the market close on February 22, 2024. Management will host a conference call and webcast to discuss the company's financial results at 4:30 p.m. ET that same day. Participants, please click here to pre-register for the conference call and obtain a dial-in number and individual pass ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Alarm.com Holdings (ALRM) , which belongs to the Zacks Security and Safety Services industry.When looking at the last two reports, this security service company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 40%, on average, in the last two quarters.For the last reported quarter, Alarm.com came out with earn ...

Financial Data and Key Metrics Changes - SaaS and license revenue for Q3 2023 was $145 million, an increase of 8.9% year-over-year [5][15] - Adjusted EBITDA for Q3 2023 was $41.4 million, slightly up from $40.8 million in Q3 2022 [18] - Total revenue for Q3 2023 was $221.9 million, growing 2.6% year-over-year [16] - GAAP net income for Q3 2023 was $19.5 million, compared to $18.3 million in the same quarter last year [18] - Free cash flow for Q3 2023 was $60.9 million, significantly up from $8.4 million in Q3 2022 [19] Business Line Data and Key Metrics Changes - SaaS and license revenue excluding Vivint grew 13.9% year-over-year [15] - Hardware revenue was $76.8 million, down 7.5% from Q3 2022, attributed to a decline in LTE cellular module sales and slowing hardware sales in the commercial enterprise market [15][16] - SaaS and license gross margin was 84.9%, slightly up from 84.6% in the previous quarter [16] Market Data and Key Metrics Changes - The company serves over 60 countries globally, with partnerships with major security companies [7] - The international business continues to grow, with a focus on expanding into new markets [34] Company Strategy and Development Direction - The company plans to invest in residential and commercial solutions while continuing to build growth initiatives in video, commercial, international, and energy management [8][20] - The company aims to maintain momentum in SaaS revenue growth through strategic investments and product development [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining SaaS revenue growth despite challenges in hardware sales [5][8] - The company anticipates a SaaS and license revenue growth of approximately 8% for 2024, reflecting a stable outlook [20][27] - Management noted that macroeconomic conditions are influencing purchasing cycles, particularly in the commercial sector [39] Other Important Information - The company ended Q3 2023 with $680 million in cash and cash equivalents, an increase of $57.8 million from the end of 2022 [19] - Legal expenses in Q3 2023 were $5.9 million, up from $3.1 million in the previous year, reflecting ongoing legal activities [18][49] Q&A Session Summary Question: What are the drivers of the SaaS line for 2024? - Management indicated that the initial guidance for SaaS growth is around 8%, with assumptions based on ADT's transition activities [24][25] Question: Can you elaborate on the hardware weakness in Q3? - Management noted that the weakness was due to longer purchasing cycles in the commercial enterprise space and fewer LTE module sales as the upgrade cycle has mostly concluded [28][29] Question: What are the growth businesses mentioned last quarter? - Management confirmed that 30% of the SaaS business is growing at around 25%, with notable contributions from EnergyHub and international markets [32][34] Question: How are legal costs factored into the 2024 outlook? - Management acknowledged that legal costs have been factored into the guidance, with a portion of legal expenses adjusted out of the EBITDA forecast [36] Question: How does the transition of ADT impact hardware sales? - Management confirmed that ADT's transition to its own platform will impact hardware sales, as fewer devices are expected to be sold during this period [50][51]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37461 ALARM.COM HOLDINGS, INC. (Exact name of registrant as specified in its charter) | --- | --- | |---------------------- ...

Financial Data and Key Metrics Changes - SaaS and license revenue for Q2 2023 was $140.4 million, reflecting a non-GAAP growth rate of 13.3% year-over-year, excluding Vivint [5][13] - Total revenue for Q2 2023 was $223.9 million, a 5.2% increase from the previous year [14] - GAAP net income increased to $15.8 million from $10.8 million in the same quarter last year [15] - Non-GAAP adjusted EBITDA for Q2 2023 was $36.4 million, slightly down from $37.1 million in Q2 2022 [15] Business Line Data and Key Metrics Changes - SaaS and license revenue visibility remains high with a renewal rate of 93% [13] - Hardware and other revenue was $83.4 million, consistent with Q2 2022, but up 12.3% quarter-over-quarter due to increased sales of cameras and access door controllers [13][14] - SaaS and license gross margin was 84.6%, down from 85.6% year-over-year, while hardware gross margin improved to 22.4% from 17.7% [14] Market Data and Key Metrics Changes - International revenue growth was around 25%, with a long-term target of 30% or more of total revenue [21] - Commercial ARPU is approximately 2x that of residential ARPU, with expectations for gradual increases as more products and services are added [22][23] Company Strategy and Development Direction - The company is focusing on growth strategies in commercial, international video, and venture businesses, with SaaS revenue from these initiatives growing at about 25% on a trailing 12-month basis [6][12] - New product launches, such as the VDB750 video doorbell, aim to enhance service provider offerings and drive up attachment rates [7][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for the second half of the year, citing strong performance despite macroeconomic uncertainties [6][12] - The company anticipates continued growth in its international segment and aims to increase its share of total revenue from this market [21] Other Important Information - The company ended Q2 2023 with $627 million in cash and cash equivalents, up from $622.2 million at the end of 2022 [16] - Adjusted non-GAAP EBITDA for 2023 is projected to be between $128 million to $131 million, an increase from prior guidance [17] Q&A Session Summary Question: Update on international progress and revenue growth expectations - Management indicated that international growth remains around 25% and expects to sustain this rate over the next two years, with a long-term target of 30% of total revenue [21] Question: Context on commercial ARPU compared to residential ARPU - Commercial ARPU is about 2x residential ARPU, with expectations for gradual increases as the commercial platform expands [22][23] Question: Size and components of growth initiatives - Growth initiatives currently account for about 30% of total revenue, with commercial and video being the largest components [26] Question: Renewal rate targets and potential increases - The renewal rate has been stable at 92% to 94%, with expectations for gradual increases as value-added services are implemented [35][36] Question: Returning to 20% plus EBITDA margin range - Management is focused on cost control and revenue growth, with an internal guideline aiming for 17% to 18% EBITDA margins [38] Question: Impact of new products on margins - New products like the Gopher AI functionality are expected to enhance service efficiency, potentially impacting costs positively over time [41][42] Question: Performance of the Canadian market - The Canadian market has continued to perform well, attributed to strong service provider relationships and resilient consumer demand [56]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Alarm.com Holdings, Inc.'s unaudited condensed consolidated financial statements as of June 30, 2023, including operations, balance sheets, cash flows, and equity, with accounting policy notes [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$223,875** | **$212,845** | **$433,591** | **$418,282** | | SaaS and license revenue | $140,432 | $129,475 | $275,826 | $252,700 | | Hardware and other revenue | $83,443 | $83,370 | $157,765 | $165,582 | | **Operating Income** | **$16,159** | **$11,336** | **$24,978** | **$20,249** | | **Net Income** | **$15,611** | **$10,828** | **$29,818** | **$19,731** | | Net Income Attributable to Common Stockholders | $15,799 | $10,842 | $30,215 | $19,921 | | **Diluted EPS** | **$0.30** | **$0.21** | **$0.58** | **$0.38** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,382,720** | **$1,329,375** | | Cash and cash equivalents | $627,041 | $622,165 | | Accounts receivable, net | $123,285 | $124,283 | | Goodwill | $153,997 | $148,183 | | **Total Liabilities** | **$710,621** | **$706,528** | | Convertible senior notes, net | $491,940 | $490,370 | | **Total Stockholders' Equity** | **$644,231** | **$598,859** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Category | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash from operating activities** | **$33,267** | **$12,258** | | Net cash used in investing activities | ($19,591) | ($29,130) | | Net cash used in financing activities | ($8,089) | ($49,836) | | **Net increase / (decrease) in cash** | **$5,463** | **($66,708)** | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies and financial results, covering revenue, acquisitions, goodwill, debt, legal proceedings, stock repurchases, and segment performance - On April 21, 2023, the company acquired certain assets of Vintra, Inc. for **$5.5 million in cash**, primarily for developed technology to enhance video analytics solutions[45](index=45&type=chunk)[46](index=46&type=chunk) - On January 18, 2023, the company acquired 100% of EBS Spółka z ograniczoną odpowiedzialnością (EBS) for **$9.8 million in cash** plus a potential **$2.5 million earn-out** to expand international operations and supply chain[47](index=47&type=chunk)[48](index=48&type=chunk) - The company is in a dispute with Vivint, which stopped paying license fees in Q4 2022, resulting in an approximate **$6.0 million quarterly reduction** in SaaS and license revenue, earnings, and cash flow[106](index=106&type=chunk) - The Alarm.com segment contributed **94% of consolidated revenue** for the six months ended June 30, 2023. The Other segment focuses on adjacent markets like energy management[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2023 financial performance, including a **5% total revenue increase** driven by SaaS growth, analyzing revenue, costs, profitability, liquidity, cash flows, and non-GAAP measures, alongside key business developments Q2 2023 Financial Highlights vs. Q2 2022 | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $223.9M | $212.8M | 5% | | SaaS and license revenue | $140.4M | $129.5M | 8% | | Net Income | $15.6M | $10.8M | 44% | | Non-GAAP adjusted EBITDA | $36.4M | $37.1M | -2% | - The dispute with Vivint, which stopped paying license fees in Q4 2022, is expected to continue lowering SaaS and license revenue by approximately **$6.0 million quarterly**[170](index=170&type=chunk)[224](index=224&type=chunk) - The company anticipates its 2023 hardware revenue margins to be similar to those in Q3 and Q4 2022, benefiting from price increases implemented in early 2022 to offset higher freight and component costs[179](index=179&type=chunk) - The company paid an additional **$38.1 million in federal** and **$7.5 million in state cash taxes** in early 2023 for the 2022 tax year due to changes in IRC Section 174, which now requires capitalization and amortization of R&D expenses. A similar impact of **$45.0 to $50.0 million** is estimated for 2023[225](index=225&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are inflation and foreign currency exchange rates, with inflation's impact offset by price increases and foreign currency risk deemed immaterial due to USD-denominated transactions - The company's main market risks are identified as **inflation** and **foreign currency exchange rates**[246](index=246&type=chunk) - Inflationary pressures on inventory and freight costs have been partially offset by price increases implemented in 2022, and management believes inflation has not had a material effect on the business[248](index=248&type=chunk) - Foreign currency exchange risk is considered not material as the vast majority of revenue and expenses are in U.S. dollars[249](index=249&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - As of June 30, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective at the reasonable assurance level**[252](index=252&type=chunk) - No changes were made during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[253](index=253&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal matters, including multiple patent infringement lawsuits with Vivint, Inc., impacting revenue, and other patent suits involving EcoFactor, Causam, and indemnification of service providers - The company is in arbitration with Vivint, which stopped paying license fees under a 2013 agreement. This has lowered SaaS and license revenue by approximately **$6.0 million per quarter** since Q4 2022[258](index=258&type=chunk) - Alarm.com and Vivint are involved in multiple patent infringement lawsuits against each other in U.S. District Courts, with a trial in one case scheduled for **September 9, 2024**[256](index=256&type=chunk)[259](index=259&type=chunk) - The company is also defending against patent infringement lawsuits from EcoFactor, Inc. and Causam Enterprises, Inc., and is incurring costs to indemnify service providers ADT and Monitronics in separate patent suits[261](index=261&type=chunk)[263](index=263&type=chunk)[267](index=267&type=chunk)[269](index=269&type=chunk) [Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) The company outlines numerous material business risks, including fluctuating quarterly results, potential solution failures, intense competition, reliance on service providers, cybersecurity threats, acquisition challenges, technological obsolescence, and complex legal and intellectual property disputes - Key business risks include **fluctuating quarterly results**, potential failure of life safety solutions, **intense competition**, reliance on service provider networks, and **cybersecurity threats**[273](index=273&type=chunk) - A substantial portion of revenue comes from a limited number of service provider partners. For the year ended Dec 31, 2022, the **10 largest partners accounted for 49% of revenue**, with **ADT representing over 15%**[316](index=316&type=chunk) - The company faces significant legal risks, including costly patent infringement litigation with competitors like Vivint, EcoFactor, and Causam, which could result in damages, injunctions, or expensive licenses[297](index=297&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[384](index=384&type=chunk) - Dependence on suppliers, particularly for hardware components, poses a risk. **Three key suppliers accounted for 49% of hardware revenue** in the first six months of 2023[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=94&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred in Q2 2023; the company repurchased **134,255 shares** for approximately **$6.7 million** under a new **$100 million stock repurchase program** authorized in February 2023 - No unregistered sales of equity securities occurred in Q2 2023[406](index=406&type=chunk) Issuer Purchases of Equity Securities (Q2 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 2023 | 0 | $— | $100,000,000 | | May 2023 | 112,654 | $50.26 | $94,337,853 | | June 2023 | 21,601 | $49.29 | $93,273,123 | | **Total** | **134,255** | **$50.11** | **$93,273,123** | - On February 15, 2023, the board authorized a new stock repurchase program for up to **$100.0 million of common stock**, effective through February 23, 2025[408](index=408&type=chunk) [Defaults Upon Senior Securities](index=95&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[409](index=409&type=chunk) [Mine Safety Disclosures](index=95&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[410](index=410&type=chunk) [Other Information](index=95&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2023 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2023[411](index=411&type=chunk) [Exhibits](index=96&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and XBRL data files

Alarm.com Holdings, Inc. (NASDAQ:ALRM) Q1 2023 Earnings Conference Call May 10, 2023 4:30 PM ET Company Participants Matt Zartman - Investor Relations Steve Trundle - Chief Executive Officer Steve Valenzuela - Chief Financial Officer Jeff Bedell - President, Ventures Business and Corporate Strategy Conference Call Participants Matt Bullock - Bank of America Saket Kalia - Barclays Matthew Pfau - William Blair Mark Cash - Raymond James Darren Aftahi - ROTH Jack Codera - Maxim Group Operator Good day and thank ...