Sign in

You're signed outSign in or to get full access.

AH

Alarm.com Holdings, Inc. (ALRM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean beat on both revenue and EPS: total revenue $238.8M vs consensus $234.3M, and non-GAAP diluted EPS $0.54 vs $0.47; management attributed upside to EnergyHub seasonal strength and elevated revenue retention, and raised full-year SaaS and license guidance accordingly . Consensus values marked with * and sourced from S&P Global.
  • Non-GAAP adjusted EBITDA rose 17.5% YoY to $43.5M; operating leverage improved as OpEx grew modestly and gross profit expanded 9.4% YoY to ~$160.6M .
  • FY 2025 guidance raised: SaaS & license to $675.8–$676.2M (from $671.2–$671.8M), adjusted EBITDA to $190–$193M (from $188–$192M), and adjusted diluted EPS to $2.32–$2.33 (from $2.28–$2.29). Total revenue range widened to $975.8–$991.2M to reflect tariff and hardware uncertainty .
  • Narrative catalysts: strategic EnergyHub-GM partnership, AI Deterrence (AID) momentum, remote video monitoring build-out (CHeKT acquisition), and clarity on tariff pass-through plan; watch for retention normalization and ADT transition pacing .

What Went Well and What Went Wrong

What Went Well

  • Strong beat and guidance raise: SaaS & license revenue $163.8M (vs $160.2–$160.4M guide) and adjusted EPS $0.54; “results exceeded our expectations,” driven by commercial/energy initiatives and higher residential revenue retention .
  • EnergyHub momentum: announced partnership with GM Energy to integrate EVs/home storage into utility programs; management sees managed charging as a meaningful contributor over time .
  • Video/RVM traction: ADC‑V729 floodlight adoption at ~4,000 installs/month with >85% Perimeter Guard attach; international video attach reached 30% of new accounts (2x YoY); AID enhancements broaden effectiveness and support RVM integration .

Management quotes:

  • “We are pleased to report financial results for the first quarter that exceeded our expectations.” — CEO Stephen Trundle .
  • “EnergyHub… enrollments in Q1 exceeded our expectations.” — CFO Kevin Bradley .
  • “Commercial subscribers… revenue retention… 98%.” — CEO Stephen Trundle .

What Went Wrong

  • Operating cash flow declined YoY to $24.1M (from $49.9M) and non-GAAP free cash flow to $17.9M (from $46.8M), reflecting working capital swings and investment/acquisition activity .
  • Hardware margin headwinds likely from tariff pass-through: plan to pass along 10% baseline tariffs; management cautioned slightly diluted gross margin mix on “pure pass-through” hardware even if gross profit dollars unchanged .
  • Expectation of retention normalization: the 95% consolidated revenue retention tailwind may revert to historical 92–94% range in 2H, moderating SaaS growth trajectory vs Q1 .

Financial Results

Consolidated Performance vs Prior Quarters

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Millions)$240.5 $242.2 $238.8
GAAP Diluted EPS ($)$0.67 $0.56 $0.52
Non-GAAP Adjusted Diluted EPS ($)$0.62 $0.58 $0.54
Gross Profit Margin (%)64.8%*65.5% 67.2%*
EBIT Margin (%)13.9%*12.8%*12.4%*
Net Income Margin (%)15.3%*12.5%*11.7%*
Cash from Operations ($USD Millions)$77.3 $56.3 $24.1

Values with * retrieved from S&P Global.

Segment Revenue Breakdown

SegmentQ3 2024Q4 2024Q1 2025
SaaS & License ($USD Millions)$159.3 $165.7 $163.8
Hardware & Other ($USD Millions)$81.2 $76.6 $75.0
Total Revenue ($USD Millions)$240.5 $242.2 $238.8

Q1 2025 Actuals vs Wall Street Consensus

MetricQ1 2025 ActualQ1 2025 ConsensusSurprise
Total Revenue ($USD Millions)$238.8 $234.3*+$4.5 (+1.9%)*
Non-GAAP Diluted EPS ($)$0.54 $0.47*+$0.07 (+14%)*

Values with * retrieved from S&P Global.

KPIs

KPIQ3 2024Q4 2024Q1 2025
Consolidated Revenue Retention (%)95% 95% 95% modeled to normalize later
Commercial Revenue Retention (%)——98%
ADC‑V729 Floodlight Installs (per month)——~4,000
Perimeter Guard Attach on 729 (%)——>85%
International New Accounts with Video (%)——30% (2× YoY)
Cash & Equivalents ($USD Billions)$1.17 $1.22 $1.19

Guidance Changes

MetricPeriodPrevious Guidance (Feb-20-2025)Current Guidance (May-08-2025)Change
SaaS & License Revenue ($M)Q2 2025—$167.0–$167.2 New
SaaS & License Revenue ($M)FY 2025$671.2–$671.8 $675.8–$676.2 Raised
Total Revenue ($M)FY 2025$978.2–$980.8 $975.8–$991.2 Range widened
Hardware & Other Revenue ($M)FY 2025$307–$309 $300–$315 Range widened
Adj. EBITDA ($M)FY 2025$188–$192 $190–$193 Raised (midpoint)
Adj. Net Income ($M)FY 2025$130–$131 $131.5–$132.5 Raised
Adj. Diluted EPS ($)FY 2025$2.28–$2.29 $2.32–$2.33 Raised
Weighted Avg Diluted Shares (M)FY 202560.6 60.5 Slightly lower

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI Deterrence (AID) & RVMIntroduced gen‑AI deterrence capability; OpenEye cloud cameras; RVM strategy forming AID enhancements (adaptive voice), Smart Signal in RVM; CHeKT integration plans Expanding features and ecosystem
EnergyHub & DERMSEnergyHub ~$50M SaaS; dynamic load shaping; strong Q4 seasonality GM Energy partnership; managed charging seen as strategic lever Strengthening partnerships, secular tailwinds
Tariffs & Supply ChainPreemptive inventory build; diversified manufacturing outside China Less than 10% of hardware revenue from China; 10% baseline tariff pass-through; ~7.5% price uplift on hardware Managed exposure; margin mix risk on hardware
Commercial ARPU & Land-and-ExpandCommercial, OpenEye growing; integrators focus ARPU trending up via multi‑service installs (access, video); 98% retention Positive ARPU and retention dynamics
International Expansion6% of total revenue; plan to build long tail of partners Video attach 30% in new accounts; competitive on cost (Asia imports) Early innings, faster growth than domestic
ADT TransitionModeled ~200 bps headwind in 2025 No change; still modeled; not a factor in Q1 beat/guide Ongoing headwind baked into outlook
Operating Margin Focus2025 EBITDA margin guided ~19–19.5% Raised 2025 EBITDA guide; continued leverage in G&A and mature growth businesses Gradual margin expansion

Management Commentary

  • Strategic focus: diversify growth via commercial, energy, and international while pushing operating leverage higher; “strong start to 2025… a combination of revenue growth, revenue quality and operating leverage contributed to our profitability” — CFO Kevin Bradley .
  • Commercial strategy: standardized offerings across access, intrusion, and video; positive ARPU from “land and expand” deployments; 98% commercial retention underscores stickiness — CEO Stephen Trundle .
  • Energy strategy: partnerships (GM, Tesla, Toyota) to enable managed charging and load flexibility; utilities’ need rising with EVs, AI data centers, and extreme weather — CEO Stephen Trundle .
  • Tariffs posture: diversified supply, minimal China exposure (<10% of hardware revenue), pass‑through pricing with limited elasticity based on 2022 experience — CFO Kevin Bradley and CEO Stephen Trundle .

Q&A Highlights

  • Commercial ARPU and upsell: ARPU trending up as customers add doors and video; commercial ARPU >2× residential on average for many deployments .
  • Tariff pass-through quantification: ~7.5% hardware price uplift equates to ~$20M annualized at $300M hardware, tempered for mid‑year start and non‑overseas sourcing .
  • SaaS growth moderation: Q1 beat driven ~50% by seasonal EnergyHub and ~50% by elevated retention; model assumes retention normalizes to historical range later in year .
  • International competitive dynamics: growing attach and building long tail of partners; competition from low-cost direct-to-consumer cameras persists, but Alarm.com targets “serious security” segment .
  • Residential video upsell: dealers are busy; pipeline includes fully wireless, battery-powered indoor camera to unlock more use cases and upsell opportunities .

Estimates Context

  • Q1 2025 beat: revenue $238.8M vs $234.3M consensus; adjusted diluted EPS $0.54 vs $0.47 consensus — beat driven by EnergyHub outperformance and elevated retention; expect retention to drift back toward 92–94% range later in the year . Consensus values marked with * and sourced from S&P Global.
  • Guidance vs estimates: Q2 2025 SaaS & license guide $167.0–$167.2M and FY 2025 total revenue $975.8–$991.2M bracket consensus; investors should note wider hardware range due to tariffs .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 print was high quality: broad-based upside in SaaS & license with margin leverage; management raised full-year SaaS and EPS guidance, a positive sentiment signal .
  • EnergyHub is an increasingly strategic growth vector; GM partnership suggests rising utility program scale and monetization potential over time .
  • Hardware tariff pass-through should dilute gross margin mix but preserve gross profit dollars; watch guidance sensitivity to hardware revenue ranges .
  • Commercial momentum continues with superior retention and ARPU expansion via multi-service installs; supports medium-term SaaS growth durability .
  • Expect retention tailwind to ease in 2H; model tempered SaaS growth trajectory vs Q1 outperformance to avoid disappointment .
  • Video analytics and AID/RVM capabilities are differentiators; product cadence (ADC‑V516, wireless camera) may further lift attach and ARPU, incl. internationally .
  • Monitor ADT transition/200 bps headwind and potential tariff policy changes; both are embedded in guidance but could drive intra-quarter estimate revisions .
Note: Values marked with * are retrieved from S&P Global (analyst consensus) and may reflect different calculation bases than company-reported non-GAAP metrics.

Citations:

  • Press release and 8-K:
  • Q1 2025 earnings call (remarks and Q&A):
  • Prior quarters: Q4 2024 press release and call ; Q3 2024 press release