Alarm.com — Second Quarter 2026 Earnings Summary

Financial Performance

• SaaS and license revenue increased 11.1% year-over-year to $188.8 million for the quarter ended June 30, 2026, compared to $170.0 million in the prior year period.
• Total revenue increased 9.2% year-over-year to $277.7 million for the quarter, compared to $254.3 million.
• GAAP net income was $24.2 million for the quarter, down from $34.2 million in the prior year period.
• GAAP net income attributable to common stockholders was $24.2 million, or $0.48 per diluted share, compared to $34.6 million, or $0.63 per diluted share, in the prior year period.
• Non-GAAP adjusted EBITDA increased to $57.7 million for the quarter, compared to $49.9 million in the prior year period.
• Non-GAAP adjusted net income attributable to common stockholders was $41.1 million, or $0.77 per diluted share, compared to $35.2 million, or $0.62 per diluted share, in the prior year period.
• Cash flows from operating activities for the six months ended June 30, 2026, were $92.5 million, compared to $46.8 million for the same period in 2025.
• Non-GAAP free cash flow for the six months ended June 30, 2026, was $86.8 million, compared to $36.1 million in the prior year period.
• Total cash and cash equivalents were $479.4 million as of June 30, 2026, down from $960.6 million as of December 31, 2025, primarily due to the settlement of $500.0 million in convertible senior notes.
• Deferred revenue increased to $31.8 million ($17.9 million current + $13.9 million non-current) as of June 30, 2026, from $29.9 million ($16.4 million current + $13.5 million non-current) as of December 31, 2025.
• Convertible senior notes, net, decreased from $499.9 million (current) and $489.6 million (non-current) at December 31, 2025, to $0 (current) and $491.1 million (non-current) at June 30, 2026, following the full settlement of the 2026 Notes.

Guidance and Future Outlook

• SaaS and license revenue for the third quarter of 2026 is expected to be in the range of $189.8 million to $190.0 million.
• Full-year 2026 SaaS and license revenue guidance was increased to a range of $754.0 million to $754.4 million, up $10.2 million from the midpoint of the February 2026 guidance.
• Full-year 2026 total revenue is expected to be in the range of $1.0790 billion to $1.0894 billion, including anticipated hardware and other revenue of $325.0 million to $335.0 million.
• Full-year 2026 Non-GAAP adjusted EBITDA expectations were increased to a range of $221.0 million to $223.0 million.
• Full-year 2026 Non-GAAP adjusted net income attributable to common stockholders is expected to be in the range of $156.0 million to $157.0 million, based on an estimated tax rate of 21.0%.
• Full-year 2026 Non-GAAP adjusted net income per diluted share is expected to be $2.92 to $2.94, based on an estimated 56.3 million weighted average diluted shares outstanding.

Business Segments and Product Lines

• Launched the Commercial Fire Solution (Fire Communicator), extending the commercial platform into the commercial fire market and enabling service providers to modernize fire communications while consolidating account management, billing, and support.
• EnergyHub platform delivered grid-scale flexibility during the July heat wave, with utilities across 31 states and Ontario dispatching 304 demand response events that shifted 17.5 gigawatt-hours of load.
• CHeKT subsidiary expanded Remote Video Monitoring (RVM) capabilities with advanced system partitioning to support multiple independent RVM partitions for larger and more complex commercial deployments.

Market and Competitive Landscape

• The EnergyHub platform's growing scale demonstrates the critical role of distributed energy resources in helping utilities manage peak demand and support long-term grid reliability.
• The company serves a trusted network of thousands of professional service providers and commercial integrators across North America and worldwide.

Risks and Challenges

• Forward-looking statements involve risks including global economic uncertainty, financial market conditions, public health crises, and geopolitical upheaval (including conflicts in Ukraine and the Middle East).
• Risks include disruptions to global supply chains, fluctuations in interest rates, tariffs, risk of recession, and inflation impacting hardware sales and SaaS revenue growth.
• Trade policies and new tariffs could impact the cost of hardware revenue and hardware revenue margins.
• Actual results may differ materially from guidance due to high variability, complexity, and low visibility regarding non-ordinary course litigation expenses, acquisition-related expenses, and tax adjustments.

Management Commentary and Tone

• Management increased guidance for the full year of 2026 based on current expectations.
• The press release highlights the "critical role" of distributed energy resources and the "cost-effective path" provided by new commercial solutions.
• Management notes that non-GAAP measures are used to evaluate core operating performance and make strategic decisions regarding capital allocation.

Other Key Points

• The company paid and fully settled the $500.0 million aggregate principal amount of its 0% convertible senior notes due January 15, 2026, on January 14, 2026.
• During the six months ended June 30, 2026, the company purchased treasury stock, including transaction costs, totaling $45.0 million.
• The company revised its definition of certain non-GAAP metrics in the first quarter of 2026 to exclude gains and losses on investments with readily determinable fair value, updating prior period comparables.
• Litigation expense for the quarter was $9.3 million, compared to $87,000 in the prior year period.
• Stock-based compensation expense was $7.6 million for the quarter and $15.6 million for the six months ended June 30, 2026.