Alarm.com — Third Quarter 2026 Earnings Summary

Financial Performance:

• SaaS and license revenue increased 9.0% year-over-year to $191.2 million for the quarter ended September 30, 2026, compared to $175.4 million in the same period in 2025.
• Total revenue increased 9.0% year-over-year to $279.4 million for the quarter, compared to $256.4 million in 2025.
• GAAP net income was $34.3 million for the quarter, compared to $35.1 million in 2025.
• GAAP net income attributable to common stockholders was $34.4 million, or $0.66 per diluted share, compared to $35.3 million, or $0.65 per diluted share, in 2025.
• Non-GAAP adjusted EBITDA was $66.2 million for the quarter, compared to $55.5 million in 2025.
• Non-GAAP adjusted net income attributable to common stockholders was $48.3 million, or $0.90 per diluted share, compared to $39.5 million, or $0.71 per diluted share, in 2025.
• For the nine months ended September 30, 2026, cash flows from operating activities were $167.6 million, compared to $117.4 million in 2025.
• Non-GAAP free cash flow for the nine months ended September 30, 2026, was $156.3 million, compared to $102.0 million in 2025.
• Total cash and cash equivalents were $534.7 million as of September 30, 2026, down from $960.6 million as of December 31, 2025.
• Deferred revenue increased to $34.0 million ($20.1 million current, $13.9 million non-current) as of September 30, 2026, from $29.9 million ($16.4 million current, $13.5 million non-current) as of December 31, 2025.
• Convertible senior notes, net, were $491.8 million non-current as of September 30, 2026; the $500.0 million aggregate principal amount of 0% convertible senior notes due 2026 was fully settled on January 14, 2026.

Guidance and Future Outlook:

• SaaS and license revenue for the fourth quarter of 2026 is expected to be between $194.6 million and $194.8 million.
• Full-year 2026 SaaS and license revenue guidance was increased to a range of $756.1 million to $756.3 million, an increase of $12.2 million from the midpoint of the February 2026 guidance.
• Full-year 2026 total revenue is expected to be between $1.1011 billion and $1.1113 billion, including anticipated hardware and other revenue of $345.0 million to $355.0 million.
• Full-year 2026 Non-GAAP adjusted EBITDA expectations were increased to a range of $227.0 million to $229.0 million.
• Full-year 2026 Non-GAAP adjusted net income attributable to common stockholders is expected to be between $161.2 million and $162.6 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 between $3.02 and $3.04, based on an estimated 56.3 million weighted average diluted shares outstanding.

Business Segments and Product Lines:

• Acquired CellGate to expand reach through an established fence and gate channel, adding cellular-powered gate access control and video intercom solutions for commercial, small business, multifamily, ranch, and estate properties.
• Expanded video portfolio with new doorbell and indoor cameras, including a battery-powered video doorbell with additional analytics capabilities and two new indoor cameras featuring 4MP resolution, integrated illumination, and a physical privacy shutter.
• Launched AI Video Clip Summaries to provide subscribers with concise, plain-language descriptions of recorded video content for quicker incident understanding.

Market and Competitive Landscape:

• Alarm.com operates as the leading platform for intelligently connected properties, serving millions of homeowners and businesses through a network of thousands of professional service providers and commercial integrators across North America and worldwide.
• The company's solutions include security, video surveillance, access control, active shooter detection, intelligent automation, energy management, and wellness.

Risks and Challenges:

• Forward-looking statements involve risks including global economic uncertainty, financial market conditions, public health crises, geopolitical upheaval, supply chain disruptions, interest rate fluctuations, tariffs, recession, and inflation.
• Specific risks include impacts on hardware sales and SaaS/license revenue growth rates, trade policies, and new or increased tariffs affecting hardware revenue margins.
• Non-GAAP financial measures exclude items such as non-ordinary course litigation expense, acquisition-related expense, and tax adjustments, which can have unpredictable fluctuations and significantly impact future GAAP results.

Management Commentary and Tone:

• Management increased guidance for the full year of 2026 based on current expectations.
• The acquisition of CellGate is expected to add a growing recurring revenue business with established distributor relationships.
• New product launches aim to give service provider partners more options to match customer installation requirements and expand the reach of video analytics and proactive deterrence services.

Other Key Points:

• The $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, was paid and fully settled on January 14, 2026.
• During the nine months ended September 30, 2026, the company purchased $58.5 million of treasury stock.
• 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 included in non-GAAP adjustments was $6.3 million for the quarter and $16.4 million for the nine months ended September 30, 2026.
• Stock-based compensation expense was $8.0 million for the quarter and $23.6 million for the nine months ended September 30, 2026.