Alarm.com(ALRM) - 2025 Q1 - Quarterly Results

Alarm.com First Quarter 2025 Results First Quarter 2025 Financial Highlights Alarm.com reported strong growth in Q1 2025, with a 9.0% increase in SaaS and license revenue and a 7.0% rise in total revenue year-over-year. GAAP net income grew by 18.4% to $27.7 million, and non-GAAP adjusted EBITDA increased by 17.5% to $43.5 million. However, cash flow from operations decreased compared to the prior year Q1 2025 vs. Q1 2024 Financial Performance | Financial Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | SaaS and license revenue | $163.8 million | $150.3 million | +9.0% | | Total revenue | $238.8 million | $223.3 million | +7.0% | | GAAP net income | $27.7 million | $23.4 million | +18.4% | | GAAP diluted EPS | $0.52 | $0.44 | +18.2% | | Non-GAAP adjusted EBITDA | $43.5 million | $37.0 million | +17.5% | | Non-GAAP adjusted net income | $30.4 million | $27.3 million | +11.3% | | Non-GAAP diluted EPS | $0.54 | $0.50 | +8.0% | | Cash flows from operating activities | $24.1 million | $49.9 million | -51.7% | Recent Business Highlights Alarm.com expanded its product line with a new, more competitively priced indoor Wi-Fi camera (ADC-V516) featuring AI analytics. The company also enhanced its AI Deterrence capabilities with adaptive voice responses and integrated Smart Signal functionality into its Remote Video Monitoring (RVM) platform. Additionally, its subsidiary EnergyHub announced a partnership with General Motors to integrate GM's electric vehicles and home energy solutions into its platform - Expanded its video product line with the new ADC-V516 indoor Wi-Fi camera, designed for residential and commercial markets with a lower cost point and AI-powered analytics[7] - Launched new video monitoring capabilities, including AI Deterrence (AID) with adaptive voice synthesis and Smart Signal integration for faster incident verification[7] - Subsidiary EnergyHub partnered with General Motors (GM) to integrate GM's EVs and home energy storage into its platform, enabling participation in utility programs and optimizing charging schedules[7] Financial Outlook The company provided guidance for Q2 2025, expecting SaaS and license revenue between $167.0 million and $167.2 million. For the full year 2025, it projects total revenue of $975.8 million to $991.2 million, non-GAAP adjusted EBITDA of $190.0 million to $193.0 million, and non-GAAP adjusted net income per diluted share of $2.32 to $2.33 Q2 2025 Outlook | Metric | Expected Range | | :--- | :--- | | SaaS and license revenue | $167.0 million to $167.2 million | Full Year 2025 Guidance | Metric | Expected Range | | :--- | :--- | | SaaS and license revenue | $675.8 million to $676.2 million | | Total revenue | $975.8 million to $991.2 million | | Non-GAAP adjusted EBITDA | $190.0 million to $193.0 million | | Non-GAAP adjusted net income | $131.5 million to $132.5 million | | Non-GAAP adjusted net income per diluted share | $2.32 to $2.33 | Consolidated Financial Statements This section presents the detailed, unaudited financial results for the first quarter ended March 31, 2025, including the statements of operations, balance sheets, and cash flows, providing a comprehensive view of the company's financial position and performance Consolidated Statements of Operations For Q1 2025, total revenue was $238.8 million, up from $223.3 million in Q1 2024. This growth was driven by a 9.0% increase in SaaS and license revenue. Operating income significantly increased to $29.6 million from $18.7 million, and net income rose to $27.7 million from $23.4 million year-over-year Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $238,822 | $223,283 | | SaaS and license revenue | $163,800 | $150,344 | | Hardware and other revenue | $75,022 | $72,939 | | Operating income | $29,647 | $18,725 | | Net income | $27,712 | $23,404 | | Diluted EPS | $0.52 | $0.44 | Consolidated Balance Sheets As of March 31, 2025, the company held $1.19 billion in cash and cash equivalents, a slight decrease from $1.22 billion at year-end 2024. Total assets increased to $2.08 billion from $2.04 billion, while total liabilities remained stable at approximately $1.27 billion. Total stockholders' equity grew to $759.6 million Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,186,195 | $1,220,701 | | Total current assets | $1,452,750 | $1,481,592 | | Total assets | $2,077,431 | $2,038,208 | | Total current liabilities | $677,428 | $188,806 | | Total liabilities | $1,265,243 | $1,266,915 | | Total stockholders' equity | $759,603 | $726,546 | Consolidated Statements of Cash Flows Cash flow from operating activities was $24.1 million for Q1 2025, a significant decrease from $49.9 million in the prior-year period. The company used $55.2 million in investing activities, primarily for a business acquisition ($23.4 million) and issuance of notes receivable ($21.5 million). This resulted in a net decrease in cash of $34.7 million for the quarter Q1 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | $24,057 | $49,853 | | Cash flows used in investing activities | ($55,179) | ($3,961) | | Cash flows (used in) / from financing activities | ($3,476) | $6,356 | | Net (decrease) / increase in cash | ($34,716) | $52,068 | Reconciliation of Non-GAAP Measures This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts. It bridges Net Income to Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted Net Income, and Cash Flow from Operations to Non-GAAP Free Cash Flow, offering a clearer view of core operating performance by excluding certain non-cash or non-recurring items Reconciliation of Non-GAAP Adjusted EBITDA Non-GAAP adjusted EBITDA for Q1 2025 was $43.5 million, an increase from $37.0 million in Q1 2024. This was reconciled from a GAAP net income of $27.7 million by adding back adjustments totaling $15.8 million, primarily for interest, taxes, depreciation, amortization, and stock-based compensation Reconciliation of Net Income to Non-GAAP Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $27,712 | $23,404 | | Total adjustments | $15,828 | $13,642 | | Non-GAAP adjusted EBITDA | $43,540 | $37,046 | Reconciliation of Non-GAAP Adjusted Net Income Non-GAAP adjusted net income attributable to common stockholders increased to $30.4 million ($0.54 per diluted share) in Q1 2025 from $27.3 million ($0.50 per diluted share) in Q1 2024. The reconciliation starts with GAAP net income and adjusts for items such as amortization, stock-based compensation, and related tax effects Reconciliation to Non-GAAP Adjusted Net Income (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income attributable to common stockholders | $27,950 | $23,595 | | Adjustments (Amortization, Stock-Comp, etc.) | $1,681 | $7,235 | | Income taxes (at 21.0% rate) | ($8,084) | ($7,261) | | Non-GAAP adjusted net income attributable to common stockholders | $30,412 | $27,316 | Reconciliation of Non-GAAP Free Cash Flow Non-GAAP free cash flow for Q1 2025 was $17.9 million, a sharp decrease from $46.8 million in Q1 2024. This was calculated by subtracting $6.1 million in additions to property and equipment from the $24.1 million in cash flows from operating activities Reconciliation to Non-GAAP Free Cash Flow (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | $24,057 | $49,853 | | Additions to property and equipment | ($6,115) | ($3,066) | | Non-GAAP free cash flow | $17,942 | $46,787 | About Non-GAAP Financial Measures The company explains its use of non-GAAP measures like adjusted EBITDA, adjusted net income, and free cash flow to help management and investors understand core operating performance and trends. These measures are used for strategic planning and are believed to provide useful comparisons. The company details specific items excluded from these calculations, such as amortization of intangibles, stock-based compensation, acquisition-related expenses, and certain litigation costs - Management uses non-GAAP measures to understand core operating performance, make strategic capital allocation decisions, and provide useful information to investors[11] - Key items excluded from various non-GAAP calculations include: interest expense/income, provision for income taxes, amortization of intangible assets, depreciation, stock-based compensation expense, acquisition-related expenses, and non-ordinary course litigation expenses[15][18][21] Forward-Looking Statements This section contains a standard safe harbor statement, warning that forward-looking statements, including financial guidance and benefits of new offerings, are subject to various risks and uncertainties. Key risks highlighted include global economic uncertainty, geopolitical conflicts, supply chain disruptions, inflation, competition, and reliance on service provider partners and suppliers - The press release includes forward-looking statements regarding financial guidance and business opportunities, which are not guarantees of future performance[25] - Identified risks include macroeconomic conditions (geopolitical upheaval, inflation, interest rates), supply chain issues, competition, ability to retain partners and subscribers, and reliance on key suppliers[25]