Alarm.com Raises Outlook on Strong Q3 Performance
Alarm.com said its third quarter SaaS and license revenue increased 17.9% year-over-year to $100.1 million.
TYSONS, Va. — Alarm.com (Nasdaq: ALRM) reported third-quarter earnings of 49 cents per share, beating the Zacks Consensus Estimate of 31 per share. This compares to earnings of 37 cents per share a year ago. The figures are adjusted for non-recurring items.
The quarterly report represents an earnings surprise of 58.06%. A quarter ago, it was expected the company would post earnings of 31 cents per share when it actually produced earnings of 41 cents, delivering a surprise of 32.26%.
Alarm.com has bested consensus earnings per share (EPS) estimates in four consecutive quarters.
The company posted quarterly SaaS and license revenue of $100.1 million, up 17.9% over the same period last year. Non-GAAP adjusted EBITDA in the third quarter was $34.5 million, compared to $26.3 million in the same period last year.
During an investor’s call with analysts on Thursday, Alarm.com President and CEO Stephen Trundle attributed the strong quarterly results, in part, to the company’s ongoing continued strength in the professionally-serviced smart home market in the United States and Canada. In particular, he noted strong growth in residential video. During the third quarter, 40% of the company’s new subscribers opted to include video services with their systems.
“The commercial market, while not fully recovered to pre-COVID levels, also began showing some positive momentum in the third quarter. The strength of the recovery and the overall performance of our service provider partners, particularly in the residential segment, exceeded our expectations and drove the strong results,” he said.
The quarterly SaaS and license revenue total included Connect software license revenue of approximately $9.5 million, down from $10.8 million in the year ago quarter. The SaaS and license revenue had renewal rate of 94% in the third quarter, which is at the high end of the company’s historical range of 92% to 94%, and consistent with levels prior to the COVID pandemic.
“This high retention rate contributes to our favorable SaaS metrics with a very positive LTV-to-CAC ratio of approximately 3.9 due to our long lifetime customer value,” CFO Steve Valenzuela explained on the earnings call. “Hardware and other revenue in the third quarter was $58.7 million, up 36.7% over Q3 2019.”
For the fourth quarter of 2020, Alarm.com is forecasting SaaS and license revenue to be in the range of $101.2 million to $101.4 million. The company raised its guidance for total revenue for 2020 to $594 million to $604.2 million, up from the prior guidance of $552.7 million to $563.1 million. This includes estimated hardware and other revenue of $205 million to $215 million. Guidance for non-GAAP adjusted EBITDA for 2020 is in the range of $113 million to $115 million, up from prior guidance of $106 million to $107 million.
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