Alarm.com (NASDAQ:ALRM) Posts Quarterly Earnings Results, Beats Expectations By $0.15 EPS

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

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 Trading Down 1.4%

Shares of NASDAQ ALRM traded down $0.93 during midday trading on Thursday, reaching $67.03. The stock had a trading volume of 549,565 shares, compared to its average volume of 515,111. The firm has a market cap of $3.32 billion, a price-to-earnings ratio of 27.29, a price-to-earnings-growth ratio of 2.14 and a beta of 0.70. Alarm.com has a twelve month low of $41.49 and a twelve month high of $69.39. The company has a debt-to-equity ratio of 0.57, a quick ratio of 4.38 and a current ratio of 4.96. The company’s 50 day moving average price is $57.76 and its 200 day moving average price is $50.41.

Wall Street Analysts Forecast Growth

A number of research analysts recently issued reports on the stock. Barclays raised their price objective on shares of Alarm.com from $55.00 to $60.00 and gave the company an “equal weight” rating in a report on Monday, August 10th. JPMorgan Chase & Co. boosted their target price on shares of Alarm.com from $40.00 to $50.00 and gave the stock an “underweight” rating in a report on Friday, October 30th. Zacks Research cut shares of Alarm.com from a “strong-buy” rating to a “hold” rating in a research report on Tuesday, October 6th. Wall Street Zen raised shares of Alarm.com from a “hold” rating to a “buy” rating in a research note on Sunday, August 16th. Finally, Weiss Ratings raised shares of Alarm.com from a “hold (c)” rating to a “hold (c+)” rating in a research note on Thursday, October 15th. One analyst has rated the stock with a Strong Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Alarm.com presently has an average rating of “Hold” and a consensus target price of $58.33.

Insider Buying and Selling at Alarm.com

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