Alarm.com(ALRM) - 2024 Q4 - Annual Results

Earnings Release Overview Alarm.com reported its Q4 and FY 2024 results, highlighting strong SaaS and license revenue growth and significant increases in full year GAAP net income and non-GAAP adjusted EBITDA Key Financial Highlights Alarm.com reported solid financial performance for Q4 and full year 2024, with SaaS and license revenue showing strong growth and significant increases in full year GAAP net income and non-GAAP adjusted EBITDA Key Financial Highlights (Q4 & Full Year 2024) | Metric | Q4 2024 (Millions) | FY 2024 (Millions) | | :-------------------------------- | :----------------- | :----------------- | | SaaS and license revenue | $165.7 | $631.2 | | GAAP net income (FY) | N/A | $122.5 | | Non-GAAP adjusted EBITDA (FY) | N/A | $176.2 | - Fourth quarter SaaS and license revenue increased to $165.7 million, compared to $148.3 million for the fourth quarter of 2023[2] - Full year 2024 SaaS and license revenue increased to $631.2 million, compared to $569.2 million for 2023[6] - Full year 2024 GAAP net income increased to $122.5 million, compared to $80.3 million for 2023[6] CEO Commentary CEO Steve Trundle highlighted solid financial performance, product innovation including new AI-based video analytics, and expanded opportunities in remote video monitoring through R&D and corporate development - Strengthened market position through product innovation, including new AI-based video analytics capabilities[3] - Expanded opportunity in the remote video monitoring market through organic research and development and corporate development strategy[3] - Growth initiatives contributed strongly to consolidated growth as they continued to scale[3] Recent Business Highlights Recent business highlights include EnergyHub's record grid flexibility, expanded remote video monitoring through CHeKT acquisition, and enhanced commercial activity analytics EnergyHub Achievements EnergyHub's platform achieved record-breaking grid flexibility in 2024, shifting over 44 gigawatt hours of electricity and leveraging AI-driven optimizations for distributed energy resources - EnergyHub's utility clients called on its platform over 2,000 times during the 2024 summer[6] - Shifted over 44 gigawatt hours of electricity out of peak demand periods[6] - Leveraged new dynamic load-shaping capability using AI-driven optimizations to coordinate distributed energy resources[6] Remote Video Monitoring Expansion Alarm.com acquired 81% of CHeKT, a comprehensive RVM solution provider, to expand its emerging opportunity in commercial and residential remote video monitoring markets - Acquired 81% of CHeKT on February 10, 2025, a comprehensive RVM solution that enables professional monitoring through on-premise video surveillance systems[14] - CHeKT serves central stations and service providers and works with a broad range of third-party cameras and security products[14] - The acquisition expands Alarm.com's emerging opportunity to provide RVM solutions in the commercial and residential markets[14] Enhanced Business Activity Analytics Alarm.com enhanced its commercial video analytics solution with an intuitive BAA dashboard on its mobile app, providing AI-driven insights for operational decision-making - Commercial video analytics solution now includes an intuitive BAA dashboard on the Alarm.com mobile app[14] - Leverages AI-driven insights including people counting, crowd gathering, and queue monitoring[14] - Enables commercial subscribers to make informed operational decisions and manage their business efficiently while on the go[14] Financial Performance - GAAP & Non-GAAP This section details Alarm.com's GAAP and non-GAAP financial results for Q4 and full year 2024, including revenue, net income, EBITDA, balance sheet, and cash flow Fourth Quarter 2024 Results Alarm.com reported an 11.7% increase in SaaS and license revenue for Q4 2024, reaching $165.7 million, while total revenue grew 7.1% to $242.2 million Fourth Quarter 2024 Financial Highlights (YoY, Millions) | Metric | Q4 2024 (Millions) | Q4 2023 (Millions) | Change (%) | Chunk | | :-------------------------------- | :----------------- | :----------------- | :--------- | :---- | | SaaS and license revenue | $165.7 | $148.3 | +11.7% | 7 | | Total revenue | $242.2 | $226.2 | +7.1% | 7 | | GAAP net income | $30.1 | $31.2 | -3.5% | 7 | | GAAP net income attributable to common stockholders per diluted share | $0.56 | $0.58 | -3.4% | 7 | | Non-GAAP adjusted EBITDA | $46.4 | $45.6 | +1.8% | 7 | | Non-GAAP adjusted net income attributable to common stockholders per diluted share | $0.58 | $0.62 | -6.5% | 7 | Full Year 2024 Results For the full year 2024, Alarm.com achieved significant growth, with SaaS and license revenue increasing by 10.9% to $631.2 million and total revenue by 6.6% to $939.8 million Full Year 2024 Financial Highlights (YoY, Millions) | Metric | FY 2024 (Millions) | FY 2023 (Millions) | Change (%) | Chunk | | :-------------------------------- | :----------------- | :----------------- | :--------- | :---- | | SaaS and license revenue | $631.2 | $569.2 | +10.9% | 7 | | Total revenue | $939.8 | $881.7 | +6.6% | 7 | | GAAP net income | $122.5 | $80.3 | +52.6% | 7 | | GAAP net income attributable to common stockholders per diluted share | $2.29 | $1.53 | +49.7% | 7 | | Non-GAAP adjusted EBITDA | $176.2 | $154.0 | +14.4% | 7 | | Non-GAAP adjusted net income attributable to common stockholders per diluted share | $2.28 | $2.07 | +10.1% | 7 | Balance Sheet and Cash Flow As of December 31, 2024, Alarm.com significantly increased its cash and cash equivalents, primarily due to the issuance of convertible senior notes, and reported strong positive cash flows from operations Balance Sheet and Cash Flow Highlights (YoY, Millions) | Metric | As of Dec 31, 2024 (Millions) | As of Dec 31, 2023 (Millions) | Change (%) | Chunk | | :-------------------------------- | :---------------------------- | :---------------------------- | :--------- | :---- | | Total cash and cash equivalents | $1,220.7 | $697.0 | +75.1% | 7, 34 | | Cash flows from operations (FY) | $206.4 | $136.0 | +51.8% | 7, 36 | | Non-GAAP free cash flow (FY) | $196.3 | $128.4 | +52.9% | 7, 43 | - The increase in cash and cash equivalents was primarily due to the May 2024 issuance of $500.0 million aggregate principal amount of 2.25% convertible senior notes, resulting in proceeds of $485.2 million, net of transaction fees[7] Financial Outlook This section provides Alarm.com's financial guidance for the first quarter and full year 2025, projecting continued growth across key revenue and profitability metrics First Quarter 2025 Outlook Alarm.com expects SaaS and license revenue for the first quarter of 2025 to be in the range of $160.2 million to $160.4 million First Quarter 2025 Financial Outlook (Millions) | Metric | Q1 2025 Outlook (Millions) | Chunk | | :----------------------- | :------------------------- | :---- | | SaaS and license revenue | $160.2 - $160.4 | 9 | Full Year 2025 Guidance For the full year 2025, Alarm.com projects continued growth across key financial metrics, including SaaS and license revenue, total revenue, non-GAAP adjusted EBITDA, and non-GAAP adjusted net income attributable to common stockholders Full Year 2025 Financial Guidance (Millions) | Metric | FY 2025 Guidance (Millions) | Chunk | | :------------------------------------------------ | :-------------------------- | :---- | | SaaS and license revenue | $671.2 - $671.8 | 15 | | Total revenue | $978.2 - $980.8 | 15 | | Non-GAAP adjusted EBITDA | $188.0 - $192.0 | 15 | | Non-GAAP adjusted net income attributable to common stockholders | $130.0 - $131.0 | 15 | | Non-GAAP adjusted net income attributable to common stockholders per diluted share | $2.28 - $2.29 (based on 60.6M shares) | 15 | About Alarm.com Holdings, Inc. Alarm.com is the leading platform for intelligently connected properties, offering security, video, access control, intelligent automation, energy management, and wellness solutions through a global network of professional service providers - Alarm.com is the leading platform for the intelligently connected property, serving millions of consumers and businesses[13] - The platform integrates with a growing variety of Internet of Things devices through its apps and interfaces[13] - Solutions include security, video, access control, intelligent automation, energy management, and wellness, available through thousands of professional service providers globally[13] Non-GAAP Financial Measures Explanation This section explains Alarm.com's use of non-GAAP financial measures, their rationale, limitations, and specific adjustments made to GAAP results for clearer operational performance insights Rationale for Non-GAAP Measures Alarm.com uses non-GAAP financial measures to evaluate core operating performance, make strategic capital allocation decisions, and provide useful information to investors, emphasizing that these measures supplement, not replace, GAAP results - Non-GAAP measures are used by management to understand core operating performance, generate future operating plans, and make strategic capital allocation decisions[14][16] - These measures provide useful information to investors in understanding and evaluating results of operations, business trends, and financial condition[16] - Non-GAAP measures have inherent limitations, do not serve as an alternative to GAAP, and are presented only in conjunction with GAAP results[16] - Non-GAAP free cash flow is defined as cash flows from operating activities less purchases of property and equipment[17] - Reconciliation of forward-looking non-GAAP guidance to GAAP is not available without unreasonable efforts due to high variability and low visibility of certain excluded charges[18] Specific Adjustments Alarm.com excludes various items from its non-GAAP financial measures, such as certain interest expenses, non-operating income/expense, income taxes, amortization, stock-based compensation, acquisition-related costs, and non-ordinary course litigation expenses, to provide a clearer view of core operational performance Interest Expense Interest expense, primarily from convertible senior notes, is excluded from non-GAAP adjusted EBITDA, with specific exclusions for non-GAAP adjusted net income - Interest expense, primarily from convertible senior notes, is excluded in calculating non-GAAP adjusted EBITDA[19] - For non-GAAP adjusted net income, only interest expense related to the amortization of debt issuance costs is excluded[19] Interest Income and Other (Expense) / Income, Net Non-operating items like interest income and certain other income/expense are excluded from non-GAAP measures as they are not considered part of ongoing operations - Interest income and certain activity within other (expense) / income, net (e.g., gains/losses on investments, early debt extinguishment) are excluded from non-GAAP measures[20] - These items are excluded because they are not considered part of ongoing results of operations[20] Provision for Income Taxes The impact of the provision for income taxes is excluded from non-GAAP adjusted EBITDA as it is not considered part of ongoing operations - The impact related to the provision for income taxes is excluded from the non-GAAP adjusted EBITDA calculation[21] - This tax adjustment is not considered part of ongoing results of operations[21] Amortization Expense Amortization of acquired intangible assets is excluded from non-GAAP measures to facilitate performance comparison and is not factored into ongoing business operations - Amortization of acquired intangible assets (customer relationships, developed technology, trade names) is excluded from non-GAAP financial measures[22] - Exclusion enables comparison of performance to other companies and is not factored into ongoing business operations or acquisition performance evaluation[22] Depreciation Expense Depreciation expense for property and equipment is excluded from non-GAAP adjusted EBITDA, as it is not considered when evaluating ongoing business operations - Depreciation expense for property and equipment is excluded in calculating non-GAAP adjusted EBITDA[23] - Depreciation is not considered when evaluating ongoing business operations[23] - Depreciation is not excluded from non-GAAP adjusted net income or non-GAAP adjusted net income attributable to common stockholders[23] Amortization of Debt Issuance Costs Amortization of debt issuance costs is excluded from non-GAAP adjusted net income and per-share metrics to provide more meaningful financial performance information - Amortization of debt issuance costs related to the 2026 and 2029 Notes is excluded from non-GAAP adjusted net income and related per-share metrics[24] - Exclusion provides more meaningful information about financial performance by removing this non-cash interest expense[24] Stock-Based Compensation Expense Stock-based compensation expense is excluded from non-GAAP measures due to its non-cash nature and to improve comparability with industry peers - Stock-based compensation expense is excluded because it is a non-cash charge not considered when assessing operating performance[25] - Excluding this expense improves comparability of results to other companies in the industry due to varying calculation methodologies and subjective assumptions[25] Acquisition-Related Expense Acquisition-related expenses are excluded from non-GAAP financial measures to provide meaningful information about operating performance and facilitate historical and industry comparisons - Acquisition-related expenses, including incremental costs and changes in fair value of contingent consideration liabilities, are excluded from non-GAAP financial measures[26] - Exclusion provides meaningful information about operating performance, facilitates historical comparisons, and improves comparability within the industry[26] Litigation Expense Non-ordinary course litigation expense is excluded from non-GAAP measures as it is not considered indicative of core operating performance - Non-ordinary course litigation expense is excluded as it is not considered indicative of core operating performance[27] - Ordinary course legal expenses, such as those for maintaining intellectual property, are not adjusted[27] Forward-Looking Statements This section contains forward-looking statements regarding the company's opportunities, positioning, benefits of new offerings, acquisitions, investments, and financial guidance for Q1 and full year 2025. It highlights that actual results may differ materially due to various known and unknown risks and uncertainties, including macroeconomic conditions, competition, and supply chain disruptions - Forward-looking statements cover the Company's opportunities, positioning, benefits of recently launched offerings, acquisitions, investments, and financial guidance for Q1 and full year 2025[28] - Actual results may differ materially due to known and unknown risks, uncertainties, and other factors[28] - Key risk factors include macroeconomic conditions (public health crises, geopolitical upheaval, supply chain disruptions, interest rates, inflation), demand for products, network reliability, ability to retain partners/subscribers, increased competition, and dependence on suppliers[28] - The Company disclaims any obligation to update these forward-looking statements except as required by law[28] Consolidated Financial Statements This section presents Alarm.com's comprehensive GAAP financial statements, including statements of operations, balance sheets, and cash flows, for the reported periods Consolidated Statements of Operations The Consolidated Statements of Operations provide a detailed breakdown of Alarm.com's revenues, costs, operating expenses, and net income for the three months and full years ended December 31, 2024, 2023, and 2022 Consolidated Statements of Operations Highlights (FY 2024 vs. FY 2023, thousands) | Metric (in thousands) | FY 2024 | FY 2023 | Change | | :-------------------------------- | :------ | :------ | :----- | | SaaS and license revenue | $631,198 | $569,200 | +10.9% | | Hardware and other revenue | $308,629 | $312,482 | -1.2% | | Total revenue | $939,827 | $881,682 | +6.6% | | Total cost of revenue | $326,149 | $325,159 | +0.3% | | Operating income | $108,548 | $66,829 | +62.4% | | Net income | $122,513 | $80,340 | +52.5% | | Diluted EPS | $2.29 | $1.53 | +49.7% | Consolidated Balance Sheets The Consolidated Balance Sheets present Alarm.com's financial position as of December 31, 2024, and 2023, showing significant increases in total assets, primarily driven by cash and cash equivalents, and a corresponding rise in liabilities due to convertible senior notes Consolidated Balance Sheets Highlights (As of Dec 31, 2024 vs. 2023, thousands) | Metric (in thousands) | Dec 31, 2024 | Dec 31, 2023 | Change | | :-------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $1,220,701 | $696,983 | +75.1% | | Total current assets | $1,481,592 | $956,780 | +54.8% | | Total assets | $2,038,208 | $1,439,563 | +41.6% | | Convertible senior notes, net | $983,477 | $493,515 | +99.3% | | Total liabilities | $1,266,915 | $714,709 | +77.3% | | Total stockholders' equity | $726,546 | $688,546 | +5.5% | Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows detail the cash inflows and outflows from operating, investing, and financing activities for the years ended December 31, 2024, 2023, and 2022, highlighting a substantial increase in cash from operating and financing activities in 2024 Consolidated Statements of Cash Flows Highlights (FY 2024 vs. FY 2023, thousands) | Metric (in thousands) | FY 2024 | FY 2023 | Change | | :-------------------------------- | :------ | :------ | :----- | | Cash flows from operating activities | $206,413 | $135,965 | +51.8% | | Cash flows used in investing activities | $(24,681) | $(25,966) | -4.9% | | Cash flows from / (used in) financing activities | $346,430 | $(31,865) | N/A | | Net increase in cash, cash equivalents and restricted cash | $528,053 | $78,200 | +575.3% | - Proceeds from the issuance of convertible senior notes contributed $500.0 million to financing activities in FY 2024[36] Reconciliation of Non-GAAP Measures This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts, including adjusted EBITDA, net income, and free cash flow Non-GAAP Adjusted EBITDA Reconciliation This section reconciles GAAP net income to Non-GAAP Adjusted EBITDA, showing the adjustments made for interest, taxes, amortization, depreciation, stock-based compensation, acquisition-related, and litigation expenses Non-GAAP Adjusted EBITDA Reconciliation (FY 2024 vs. FY 2023, thousands) | Metric (in thousands) | FY 2024 | FY 2023 | Change | | :-------------------------- | :------ | :------ | :----- | | Net income (GAAP) | $122,513 | $80,340 | +52.5% | | Total adjustments | $53,726 | $73,627 | -27.0% | | Non-GAAP adjusted EBITDA | $176,239 | $153,967 | +14.5% | Non-GAAP Adjusted Net Income Reconciliation This section reconciles GAAP net income to Non-GAAP Adjusted Net Income, detailing adjustments for non-operating income/expense, amortization, debt issuance costs, stock-based compensation, acquisition-related, and litigation expenses, followed by a tax adjustment Non-GAAP Adjusted Net Income Reconciliation (FY 2024 vs. FY 2023, thousands) | Metric (in thousands) | FY 2024 | FY 2023 | Change | | :-------------------------- | :------ | :------ | :----- | | Net income, as reported (GAAP) | $122,513 | $80,340 | +52.5% | | Non-GAAP adjusted income before income taxes | $159,284 | $142,530 | +11.7% | | Non-GAAP adjusted net income | $125,834 | $112,599 | +11.8% | Non-GAAP Adjusted Net Income Attributable to Common Stockholders Reconciliation This section provides the reconciliation from GAAP net income attributable to common stockholders to its non-GAAP adjusted counterpart, incorporating adjustments for non-operating items, amortization, stock-based compensation, and other specific expenses Non-GAAP Adjusted Net Income Attributable to Common Stockholders Reconciliation (FY 2024 vs. FY 2023, thousands) | Metric (in thousands) | FY 2024 | FY 2023 | Change | | :------------------------------------------------ | :------ | :------ | :----- | | Net income attributable to common stockholders, as reported (GAAP) | $124,116 | $81,043 | +53.1% | | Non-GAAP adjusted income attributable to common stockholders before income taxes | $160,887 | $143,233 | +12.3% | | Non-GAAP adjusted net income attributable to common stockholders | $127,101 | $113,154 | +12.3% | Non-GAAP Adjusted Net Income Attributable to Common Stockholders Per Share Reconciliation This section reconciles GAAP diluted EPS to Non-GAAP Adjusted Net Income Attributable to Common Stockholders Per Diluted Share, detailing per-share adjustments for various non-GAAP exclusions Non-GAAP Adjusted Net Income Attributable to Common Stockholders Per Share Reconciliation (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :------------------------------------------------ | :------ | :------ | :----- | | Net income attributable to common stockholders per share - diluted, as reported (GAAP) | $2.29 | $1.53 | +49.7% | | Non-GAAP adjusted net income attributable to common stockholders per share - diluted | $2.28 | $2.07 | +10.1% | Non-GAAP Free Cash Flow Reconciliation This section reconciles cash flows from operating activities to Non-GAAP Free Cash Flow by subtracting additions to property and equipment Non-GAAP Free Cash Flow Reconciliation (FY 2024 vs. FY 2023, thousands) | Metric (in thousands) | FY 2024 | FY 2023 | Change | | :-------------------------- | :------ | :------ | :----- | | Cash flows from operating activities | $206,413 | $135,965 | +51.8% | | Additions to property and equipment | $(10,133) | $(7,517) | +34.8% | | Non-GAAP free cash flow | $196,280 | $128,448 | +52.8% | Investor & Media Relations This section provides contact information for investor and media relations inquiries - Contact Matthew Zartman at ir@alarm.com for investor and media relations[29]