Alarm.com Reports Upbeat Q3 Results
Alarm.com revenue increased 26% to $67.8 million for the third quarter, compared to $54 million for the same period in 2015.
TYSONS, Va. – Alarm.com Holdings (NASDAQ: ALRM) issued third-quarter earnings results after the market closed on Monday. Revenue grew by more than 25% compared with the same period in 2015, driven by both software and hardware sales. Higher operating costs hurt GAAP profitability, but adjusted earnings grew faster than revenue.
The company reported 19 cents earnings per share (EPS) for the quarter, beating the consensus estimate of 11 cents by 8 cents. The company earned $67.8 million during the quarter, compared to analysts’ expectations of $59.73 million.
SaaS and license revenue for the third quarter was $44.6 million, an increase of 23% year-over-year. Total revenue amounted to $67.8 million for the quarter, a 26% increase year-over-year. Net income was $2.6 million and non-GAAP adjusted net income was $9.1 million for the third quarter. Adjusted EBITDA for the third quarter was $11.7 million.
During an earnings call on Monday, Alarm.com President & CEO Steve Trundle said security remains the primary buying criteria for consumers interested in smart home capabilities. Many consumers, he said, prefer to hire security professionals to design, install, service and monitor their systems.
“Our service providers look to Alarm.com for our market-leading technology which begins with interactive home security but also includes video, automation and energy management,” Trundle said. “And our team continues to work hard to deliver innovation and new capabilities that are ahead of the curve in these emerging areas.”
Alarm.com’s more than 6,000 service providers have deployed one or more smart home features beyond interactive security to 53% of the properties serviced by Alarm.com. For new installations in the last 12 months that figure is closer to 66%. Trundle said this metric demonstrates the progress the company and its service providers are making to activate new accounts that include more capable and compelling services, including video doorbells and outdoor cameras.
“A video centric parameter coupled with internal motion, fire, water and carbon monoxide detection along with key automation elements enables our service providers to deliver a more secure and engaging solution,” Trundle said.
During the third quarter ending Sept. 30, the company amended its existing master services agreement with ADT. The agreement provides that following the closing of Apollo Global Management’s mega deal for ADT, Alarm.com will serve as the exclusive provider of services for ADTs professionally installed residential interactive security, automation and video offerings for up to five years.
Trundle said the agreement is subject to Alarm.com achieving certain performance conditions and allows for certain exclusions. “This agreement is an important component of our Icontrol acquisition strategy, but also serves to provide a foundation for Alarm.com’s overall longer-term service relationship with ADT,” he said.
Alarm.com Holdings has a 52-week low of $14 and a 52-week high of $33.13. The firm reports a market cap of $1.48 billion, a price-to-earnings ratio of 137.16. The firm’s 50-day moving average price is $29.32 and its 200-day moving average price is $26.52.
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