Alarm.com (NASDAQ:ALRM) Announces Quarterly Earnings Results

Alarm.com (NASDAQ:ALRM) posted its earnings results on Thursday. The software maker reported $0.90 EPS for the quarter, topping the consensus estimate of $0.75 by $0.15, FiscalAI reports. Alarm.com had a net margin of 11.11% and a return on equity of 15.65%. The firm had revenue of $279.44 million for the quarter, compared to the consensus estimate of $265.82 million. During the same period in the prior year, the business posted $0.76 earnings per share. The business’s quarterly revenue was up 9.0% on a year-over-year basis.

Here are the key takeaways from Alarm.com’s conference call:

• Third-quarter SaaS and license revenue rose 9% year over year to $191.2 million, exceeding expectations, and Alarm.com raised its 2026 SaaS and license revenue outlook to $756.1 million–$756.3 million. Full-year adjusted EBITDA guidance also increased to $227 million–$229 million.
• Q3 adjusted EBITDA and hardware margins benefited from about $3.8 million in temporary tariff-related cost recoveries, which the company does not expect to continue. Higher memory costs and the absence of those recoveries are expected to pressure Q4 hardware gross margin to about 20.5%, creating an estimated $6.6 million sequential EBITDA headwind.
• Alarm.com’s preliminary 2027 outlook calls for $815 million–$820 million in SaaS and license revenue and $240 million–$245 million in adjusted EBITDA, implying a roughly 20.5% margin. That is near, but below, its previously stated goal of exiting 2027 with margins around 21%; hardware costs and reinvestment decisions could affect progress.
• The newly acquired CellGate is expected to contribute $15 million–$20 million of SaaS and license revenue in 2027 and expand Alarm.com’s reach into the fence and gate contractor market. Management expects modest SaaS gross-margin and adjusted EBITDA dilution for the next couple of years, while citing longer-term opportunity as recurring revenue scales.
• Management cited revenue retention in the 95% range and continued momentum in growth initiatives, which it expects to account for about one-third of revenue and grow 25%–30% in 2026. Video adoption is also lifting new-account residential ARPU, which management estimated at about $5.50 per month.

Alarm.com Stock Performance

ALRM stock traded down $0.93 during mid-day trading on Thursday, reaching $67.03. 549,565 shares of the stock traded hands, compared to its average volume of 515,111. The company has a quick ratio of 4.38, a current ratio of 4.96 and a debt-to-equity ratio of 0.57. Alarm.com has a 52 week low of $41.49 and a 52 week high of $69.39. The business has a 50-day moving average of $57.76 and a two-hundred day moving average of $50.41. The firm has a market capitalization of $3.32 billion, a PE ratio of 27.29, a P/E/G ratio of 2.14 and a beta of 0.70.

Wall Street Analysts Forecast Growth

Several analysts have recently issued reports on ALRM shares. Wall Street Zen upgraded Alarm.com from a “hold” rating to a “buy” rating in a research note on Sunday, August 16th. Zacks Research downgraded Alarm.com from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, October 6th. JPMorgan Chase & Co. raised their price objective on Alarm.com from $40.00 to $50.00 and gave the company an “underweight” rating in a research note on Friday, October 30th. Weiss Ratings upgraded Alarm.com from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, October 15th. Finally, Raymond James Financial reaffirmed a “strong-buy” rating and set a $65.00 target price on shares of Alarm.com in a research report on Friday, August 7th. One investment analyst has rated the stock with a Strong Buy rating, three have given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has an average rating of “Hold” and a consensus target price of $58.33.

Insider Activity

In related news, CFO Kevin Bradley sold 5,400 shares of the stock in a transaction that occurred on Wednesday, August 12th. The stock was sold at an average price of $55.07, for a total transaction of $297,378.00. Following the completion of the sale, the chief financial officer owned 78,222 shares in the company, valued at $4,307,685.54. This represents a 6.46% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CEO Stephen Trundle sold 50,000 shares of the stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $57.67, for a total value of $2,883,500.00. Following the sale, the chief executive officer owned 324,842 shares of the company’s stock, valued at approximately $18,733,638.14. The trade was a 13.34% decrease in their position. The SEC filing for this sale provides additional information. Company insiders own 4.80% of the company’s stock.

About Alarm.com

Alarm.com Holdings, Inc develops cloud-based technology for connected security and smart automation. Its platform helps residential and commercial customers monitor and manage security systems, video cameras, access control, energy use, and other connected devices through mobile applications and web-based tools.

The company’s products and services are delivered primarily through a network of authorized service providers, including security dealers and integrators. Its offerings include intrusion detection, smart-home automation, video surveillance, commercial security and access management, energy management, and solutions designed for property managers and other business customers.

Founded in 2000 and headquartered in Vienna, Virginia, Alarm.com serves customers through service providers in the United States and international markets.