Alarm.com Reports First Quarter 2026 Results

Published: 2026-05-07 16:11:06 ET ALRM

-- SaaS and license revenue increased 10.8% to $181.5 million, compared to $163.8 million for the first quarter of 2025 -- -- GAAP net income was $23.4 million, compared to $27.7 million -- -- Non-GAAP adjusted EBITDA was $49.6 million, compared to $45.8 million --

Published on 05/07/2026 at 04:11 pm EDT

Alarm.com Holdings, Inc. (Nasdaq: ALRM), the leading platform for intelligently connected properties, today reported financial results for its first quarter ended March 31, 2026. Alarm.com also provided its financial outlook for SaaS and license revenue for the second quarter of 2026 and increased its guidance for the full year of 2026.

First Quarter 2026 Financial Results as Compared to First Quarter 2025

Balance Sheet and Cash Flow

(*) Reconciliations of the non-GAAP measures are set forth at the end of this press release. (^) During the first quarter of 2026, the Company revised its definition of certain non-GAAP metrics to exclude gains and losses on investments with readily determinable fair value. Comparable information for the prior periods presented has been updated to conform to the current presentation. Further details are set forth at the end of this press release.

Recent Business Highlights

Financial Outlook

Alarm.com is providing its outlook for SaaS and license revenue for the second quarter of 2026 and increasing its guidance for the full year of 2026 based upon current management expectations.

For the second quarter of 2026:

For the full year of 2026:

The 2026 guidance provided above is forward-looking in nature. Actual results may differ materially. See the cautionary note regarding “Forward-Looking Statements” below. The guidance provided above is based on expectations as of the date of this press release and Alarm.com undertakes no obligation to update guidance after such date.

Conference Call and Webcast Information

Alarm.com will host a conference call to discuss its first quarter 2026 financial results and its outlook for the second quarter and full year of 2026. A live audio webcast is scheduled to begin at 4:30 p.m. ET on May 7, 2026. To participate on the live call, analysts and investors should pre-register to obtain a dial-in number and individual passcode by visiting: https://register-conf.media-server.com/register/BI5a72758bb63a4af6bba09f1a89dc7256. Alarm.com will also offer a live and archived webcast of the conference call accessible on Alarm.com’s Investor Relations website at http://investors.alarm.com. The information contained on any referenced website is not incorporated herein.

About Alarm.com Holdings, Inc.

Alarm.com is the leading platform for intelligently connected properties. Millions of homeowners and businesses rely on Alarm.com's technology to secure, monitor and manage their environments from anywhere. Our comprehensive suite of solutions — including security, video surveillance, access control, active shooter detection, intelligent automation, energy management and wellness — is delivered exclusively through a trusted network of thousands of professional service providers and commercial integrators across North America and worldwide. Alarm.com's common stock is traded on Nasdaq under the ticker symbol ALRM. Alarm.com delivers serious security for serious people. To learn more, visit www.alarm.com.

Non-GAAP Financial Measures

To supplement our consolidated selected financial data presented on a basis consistent with GAAP, this press release contains certain non-GAAP financial measures, including non-GAAP adjusted EBITDA, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders, non-GAAP adjusted net income attributable to common stockholders per share and non-GAAP free cash flow. We have included non-GAAP measures in this press release because they are financial, operating or liquidity measures used by our management to (i) understand and evaluate our core operating performance and trends and generate future operating plans, (ii) make strategic decisions regarding the allocation of capital and investments in initiatives that are focused on cultivating new markets for our solutions and (iii) provide useful information to management about the amount of cash generated by the business after necessary capital expenditures. We also use non-GAAP adjusted EBITDA as a performance measure under our executive bonus plan. Further, we believe that these non-GAAP measures of our financial results provide useful information to investors and others in understanding and evaluating our results of operations, business trends and financial condition. While we believe the use of these non-GAAP measures provides useful information to investors and management in analyzing our financial performance, non-GAAP measures have inherent limitations in that they do not reflect all of the amounts and transactions that are included in our financial statements prepared in accordance with GAAP. Non-GAAP measures do not serve as an alternative to GAAP nor do we consider our non-GAAP measures in isolation. Accordingly, we present non-GAAP financial measures only in connection with GAAP results. We urge investors to consider non-GAAP measures only in conjunction with our GAAP financials and to review the reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measures, which are included in this press release.

We consider non-GAAP free cash flow to be a liquidity measure, which we define as cash flows from operating activities less purchases of property and equipment.

With respect to our expectations under “Financial Outlook” above, reconciliation of non-GAAP adjusted EBITDA and non-GAAP adjusted net income attributable to common stockholders guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures. In particular, non-ordinary course litigation expense, acquisition-related expense and tax adjustments can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted. We expect the above charges to have a significant and potentially highly variable impact on our future GAAP financial results.

We exclude one or more of the following items from non-GAAP financial and operating measures:

Interest expense: We record interest expense primarily related to the January 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, or the 2026 Notes, and the May 2024 issuance of $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, or the 2029 Notes. We exclude interest expense in calculating our non-GAAP adjusted EBITDA. For non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, we do not exclude interest expense other than the interest expense related to the amortization of debt issuance costs related to the 2026 Notes and 2029 Notes as discussed below.

Interest income and certain activity within other expense, net: We exclude interest income as well as certain activity within other expense, net including gains, losses or impairments on investments with readily determinable fair values and without readily determinable fair values and on other assets, gains on settlement fees as well as losses on the early extinguishment of the debt, when applicable, from our non-GAAP financial measures because we do not consider it part of our ongoing results of operations.

Provision for income taxes: We exclude the impact related to our provision for income taxes from our non-GAAP adjusted EBITDA calculation. We do not consider this tax adjustment to be part of our ongoing results of operations.

(Income) / loss from equity method investments, net: We exclude (income) / loss from equity method investments, net from our non-GAAP financial measures because we do not consider it part of our ongoing results of operations.

Amortization expense: GAAP requires that operating expenses include the amortization of acquired intangible assets, which principally include acquired customer relationships, developed technology and trade names. We exclude amortization of intangibles from our non-GAAP financial measures because we do not consider amortization expense when we evaluate our ongoing business operations, nor do we factor amortization expense into our evaluation of potential acquisitions, or our measurement of the performance of those acquisitions. We believe that the exclusion of amortization expense enables the comparison of our performance to other companies in our industry as other companies may be more or less acquisitive than we are and therefore, amortization expense may vary significantly by company based on their acquisition history. Although we exclude amortization of acquired intangible assets from our non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Depreciation expense: We record depreciation primarily for investments in property and equipment. We exclude depreciation in calculating non-GAAP adjusted EBITDA because we do not consider depreciation when we evaluate our ongoing business operations. For non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, we do not exclude depreciation.

Amortization of debt issuance costs: We record amortization of debt issuance costs related to the 2026 Notes and 2029 Notes as interest expense. We exclude amortization of debt issuance costs from our non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, because we believe that the exclusion of this non-cash interest expense will provide for more meaningful information about our financial performance.

Stock-based compensation expense: We exclude stock-based compensation expense, which relates to restricted stock units and other forms of equity incentives primarily awarded to employees of Alarm.com, because they are non-cash charges that we do not consider when assessing the operating performance of our business. Additionally, the determination of stock-based compensation expense can be calculated using various methodologies and is dependent upon subjective assumptions and other factors that vary on a company-by-company basis. Therefore, we believe that excluding stock-based compensation expense from our non-GAAP financial measures improves the comparability of our results to the results of other companies in our industry.

Acquisition-related expense: Included in operating expenses are incremental costs directly related to business and asset acquisitions as well as changes in the fair value of contingent consideration liabilities, when applicable. We exclude acquisition-related expense from our non-GAAP financial measures because we believe that the exclusion of this expense allows us to better provide meaningful information about our operating performance, facilitates comparisons to our historical operating results, improves the comparability of our results to the results of other companies in our industry, and ultimately, we believe helps investors better understand the acquisition-related expense and the effects of the transaction on our results of operations.

Litigation expense: We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred and received in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes, particularly costs incurred in ongoing intellectual property litigation, to be indicative of our core operating performance. We do not adjust for ordinary course legal expenses, including those expenses resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “designed,” “enable,” “ensure,” “expect,” “intend,” “will,” and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company’s opportunities, positioning, the benefits of recently launched offerings, acquisitions and investments, and the Company’s guidance for the second quarter and full year of 2026 described under “Financial Outlook” above and key assumptions related thereto. The events described in these forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: impact of the global economic uncertainty and financial market conditions caused by significant worldwide events, including public health crises, and geopolitical upheaval (including the ongoing conflicts in Ukraine and in the Middle East and surrounding areas), disruptions to global supply chains, fluctuations in interest rates, tariffs, risk of recession and inflation (collectively, the Macroeconomic Conditions) on the Company's business, results of operations and financial condition, including on the Company's hardware sales and Software-as-a-Service, or SaaS, and license revenue growth rate; the Company's business strategy, plans and objectives for future operations; continued enhancements of the Company's platform and offerings; the potential impact of trade policies and new or increased tariffs on the Company's cost of hardware revenue and hardware revenue margins; and the Company's future financial and business performance; and other risks and uncertainties discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2026 and other subsequent filings the Company makes with the Securities and Exchange Commission from time to time, including its Form 10-Q for the quarter ended March 31, 2026. In addition, the forward-looking statements included in this press release represent the Company’s views and expectations as of the date hereof and are based on information currently available to the Company. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so except as required by law. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof.

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

Three Months Ended March 31,

2026

2025

Revenue:

SaaS and license revenue

181,524

163,800

Hardware and other revenue

83,669

75,022

Total revenue

265,193

238,822

Cost of revenue(1):

Cost of SaaS and license revenue

27,895

21,568

Cost of hardware and other revenue

62,616

56,666

Total cost of revenue

90,511

78,234

Operating expenses:

Sales and marketing

34,434

28,549

General and administrative

27,454

27,001

Research and development

72,059

68,367

Amortization and depreciation

9,092

7,024

Total operating expenses

143,039

130,941

Operating income

31,643

29,647

Interest expense

(3,672

)

(4,314

)

Interest income

4,931

12,371

Other expense, net

(3,909

)

(2,660

)

Income before income taxes

28,993

35,044

Provision for income taxes

5,856

7,307

(Income) / loss from equity method investments, net

(245

)

Net income

23,382

27,712

Net loss attributable to redeemable noncontrolling interests

201

238

Net income attributable to common stockholders

23,583

27,950

Per share information attributable to common stockholders:

Net income attributable to common stockholders per share:

Basic

0.48

0.56

Diluted

0.47

0.52

Weighted average common shares outstanding:

Basic

49,599,698

49,659,741

Diluted

56,322,662

60,077,247

______________________________

(1) Exclusive of amortization and depreciation shown in operating expenses below.

Stock-based compensation expense data:

Three Months Ended March 31,

2026

2025

Sales and marketing

742

480

General and administrative

3,056

2,972

Research and development

4,251

6,006

Total stock-based compensation expense

8,049

9,458

ALARM.COM HOLDINGS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

March 31, 2026

December 31, 2025

Assets

Current assets:

Cash and cash equivalents

497,449

960,584

Accounts receivable, net of allowance for credit losses of $6,113 and $5,171, and net of allowance for product returns of $2,080 and $2,140 as of March 31, 2026 and December 31, 2025, respectively

141,221

141,852

Inventory

95,132

94,429

Other current assets, net of allowance for credits losses of $749 as of March 31, 2026 and December 31, 2025

67,192

75,646

Total current assets

800,994

1,272,511

Property and equipment, net

62,819

64,799

Intangible assets, net

93,421

99,352

Goodwill

224,708

224,987

Deferred tax assets

149,463

152,255

Operating lease right-of-use assets

51,880

52,636

Investments in unconsolidated entities

219,850

226,931

Other assets, net of allowance for credit losses of $0 as of March 31, 2026 and December 31, 2025

40,502

43,120

Total assets

1,643,637

2,136,591

Liabilities, redeemable noncontrolling interests and stockholders’ equity

Current liabilities:

Accounts payable, accrued expenses and other current liabilities

106,522

107,195

Accrued compensation

23,021

31,126

Deferred revenue

18,088

16,428

Convertible senior notes, net

—

499,867

Operating lease liabilities

7,624

8,524

Total current liabilities

155,255

663,140

Deferred revenue

13,755

13,456

Convertible senior notes, net, noncurrent

490,365

489,641

Operating lease liabilities

68,740

67,609

Other liabilities

11,732

11,735

Total liabilities

739,847

1,245,581

Redeemable noncontrolling interests

43,978

42,847

Stockholders’ equity

Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2026 and December 31, 2025

—

Common stock, $0.01 par value, 300,000,000 shares authorized; 53,723,295 and 53,540,939 shares issued; and 49,385,005 and 49,630,714 shares outstanding as of March 31, 2026 and December 31, 2025, respectively

538

536

Additional paid-in capital

558,532

549,913

Treasury stock, at cost; 4,338,290 and 3,910,225 shares as of March 31, 2026 and December 31, 2025, respectively

(247,847

)

(227,852

)

Accumulated other comprehensive income

2,130

2,690

Retained earnings

546,459

522,876

Total stockholders’ equity

859,812

848,163

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

1,643,637

2,136,591

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures

(in thousands)

(unaudited)

Three Months Ended March 31,

Cash flows from operating activities:

2026

2025

Net income

23,382

27,712

Adjustments to reconcile net income to net cash flows from operating activities:

Provision for credit losses on accounts receivable

1,167

977

Reserve for product returns

381

425

Amortization and depreciation

9,092

7,024

Amortization of debt issuance costs

857

1,498

Amortization of operating leases

3,726

3,903

Deferred income taxes

2,792

(8,791

)

Stock-based compensation

8,049

9,458

Distributions on investments in unconsolidated entities

2,668

—

Loss from investments in unconsolidated entities

3,620

2,313

Other adjustments

305

(123

)

Changes in operating assets and liabilities (net of business acquisitions):

Accounts receivable

(904

)

6,283

Inventory

(776

)

(1,859

)

Other current and non-current assets

6,758

(8,768

)

Accounts payable and other current liabilities

(8,373

)

(12,749

)

Deferred revenue

1,959

965

Operating lease liabilities

(4,072

)

(3,474

)

Other liabilities

(737

)

Cash flows from operating activities

50,635

24,057

Cash flows from / (used in) investing activities:

Business acquisitions, net of cash acquired

—

(23,412

)

Additions to property and equipment

(912

)

(6,115

)

Issuances of notes receivable

(1,462

)

(21,500

)

Receipt of payments on notes receivable

Capitalized software development costs

(212

)

(408

)

Proceeds from sale of investments in unconsolidated entities

6,012

—

Purchase of investments in unconsolidated entities

(1,062

)

(3,773

)

Cash flows from / (used in) investing activities

2,405

(55,179

)

Cash flows used in financing activities:

Repayments of convertible senior notes

(500,000

)

—

Payments of deferred consideration for acquisitions

(300

)

—

Purchases of treasury stock, including transaction costs

(19,995

)

(5,059

)

Issuances of common stock from equity-based plans

2,059

1,583

Cash flows used in financing activities

(518,236

)

(3,476

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(36

)

(118

)

Net decrease in cash, cash equivalents and restricted cash

(465,232

)

(34,716

)

Cash, cash equivalents and restricted cash at beginning of the period

968,807

1,229,132

Cash, cash equivalents and restricted cash at end of the period

503,575

1,194,416

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents

497,449

1,186,195

Restricted cash included in other current assets and other assets

6,126

8,221

Total cash, cash equivalents and restricted cash

503,575

1,194,416

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures

(in thousands)

(unaudited)

Three Months Ended March 31,

2026

2025

Non-GAAP adjusted EBITDA:

Net income

23,382

27,712

Adjustments:

Interest expense, interest income and certain activity within other expense, net1

2,606

(5,769

)

Provision for income taxes

5,856

7,307

(Income) / loss from equity method investments, net

(245

)

Amortization and depreciation expense

9,092

7,024

Stock-based compensation expense

8,049

9,458

Acquisition-related expense

Litigation expense

774

Total adjustments

26,191

18,116

Non-GAAP adjusted EBITDA

49,573

45,828

Three Months Ended March 31,

2026

2025

Non-GAAP adjusted net income:

Net income, as reported

23,382

27,712

Provision for income taxes

5,856

7,307

(Income) / loss from equity method investments, net

(245

)

Income before income taxes

28,993

35,044

Adjustments:

Interest income and certain activity within other expense, net1

(1,066

)

(10,083

)

Amortization expense

6,030

4,558

Amortization of debt issuance costs

857

1,498

Stock-based compensation expense

8,049

9,458

Acquisition-related expense

Litigation expense

774

Total adjustments

14,703

5,502

Income taxes 2

(9,176

)

(8,515

)

Non-GAAP adjusted net income

34,520

32,031

1 During the three months ended March 31, 2026, the Company revised its definition of non-GAAP adjusted EBITDA and non-GAAP adjusted net income to exclude gains and losses on investments with readily determinable fair value, in addition to gains and losses on investments without readily determinable fair value, which the Company has historically excluded. The Company believes this change provides a consistent and useful view of its core operating performance, as such gains and losses are not reflective of the Company’s underlying business operations, are driven by market price fluctuations that are outside of management’s control and can vary significantly from period to period in ways that may obscure trends in operating results. For comparability and to conform the prior period to the current presentation, the Company has revised non-GAAP adjusted EBITDA and non-GAAP adjusted net income for the three months ended March 31, 2025. As a result, the Company adjusted for losses on investments with readily determinable fair value of $3.7 million and $2.3 million during the three months ended March 31, 2026 and 2025, respectively, within “Interest expense, interest income and certain activity within other expense, net” and “Interest income and certain activity within other expense, net.”

2 Income taxes are calculated using a rate of 21.0% for each of the three months ended March 31, 2026 and 2025. The 21.0% effective tax rate for each of the three months ended March 31, 2026 and 2025 excludes the income tax effect on the non-GAAP adjustments and reflects the estimated long-term corporate tax rate.

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures - continued

(in thousands)

(unaudited)

Three Months Ended March 31,

2026

2025

Non-GAAP adjusted net income attributable to common stockholders:

Net income attributable to common stockholders, as reported

23,583

27,950

Provision for income taxes

5,856

7,307

(Income) / loss from equity method investments, net

(245

)

Income attributable to common stockholders before income taxes

29,194

35,282

Adjustments:

Interest income and certain activity within other expense, net1

(1,066

)

(10,083

)

Amortization expense

6,030

4,558

Amortization of debt issuance costs

857

1,498

Stock-based compensation expense

8,049

9,458

Acquisition-related expense

Litigation expense

774

Total adjustments

14,703

5,502

Income taxes 2

(9,218

)

(8,565

)

Non-GAAP adjusted net income attributable to common stockholders

34,679

32,219

1 During the three months ended March 31, 2026, the Company revised its definition of non-GAAP adjusted net income attributable to common stockholders to exclude gains and losses on investments with readily determinable fair value. For comparability and to conform the prior period to the current presentation, the Company has revised non-GAAP adjusted net income attributable to common stockholders for the three months ended March 31, 2025. As a result, the Company adjusted for losses on investments with readily determinable fair value of $3.7 million and $2.3 million during the three months ended March 31, 2026 and 2025, respectively, within “Interest income and certain activity within other expense, net.”

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures - continued

(in thousands, except share and per share data)

(unaudited)

Three Months Ended March 31,

2026

2025

Non-GAAP adjusted net income attributable to common stockholders per share:

Net income attributable to common stockholders per share - basic, as reported

0.48

0.56

Provision for income taxes

0.12

0.15

(Income) / loss from equity method investments, net

—

Income attributable to common stockholders before income taxes

0.60

0.71

Adjustments:

Interest income and certain activity within other expense, net1

(0.02

)

(0.20

)

Amortization expense

0.12

0.09

Amortization of debt issuance costs

0.02

0.03

Stock-based compensation expense

0.15

0.19

Acquisition-related expense

—

Litigation expense

0.02

—

Total adjustments

0.29

0.11

Income taxes 2

(0.19

)

(0.17

)

Non-GAAP adjusted net income attributable to common stockholders per share - basic

0.70

0.65

Non-GAAP adjusted net income attributable to common stockholders per share - diluted3

0.65

0.57

Weighted average common shares outstanding:

Basic, as reported

49,599,698

49,659,741

Diluted, as reported

56,322,662

60,077,247

1 During the three months ended March 31, 2026, the Company revised its definition of non-GAAP adjusted net income attributable to common stockholders per share – basic and diluted, to exclude gains and losses on investments with readily determinable fair value. For comparability and to conform the prior period to the current presentation, the Company has revised non-GAAP adjusted net income attributable to common stockholders for the three months ended March 31, 2025. As a result, the Company adjusted for losses on investments with readily determinable fair value of $3.7 million and $2.3 million during the three months ended March 31, 2026 and 2025, respectively, within “Interest income and certain activity within other expense, net,” impacting the per share amounts.

3 Non-GAAP adjusted net income attributable to common stockholders per diluted share includes the add back of cash interest expense, net of tax, attributable to convertible senior notes of $2.1 million for each of the three months ended March 31, 2026 and 2025.

Three Months Ended March 31,

2026

2025

Non-GAAP free cash flow:

Cash flows from operating activities

50,635

24,057

Additions to property and equipment

(912

)

(6,115

)

Non-GAAP free cash flow

49,723

17,942

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