• SaaS and License Revenue: $159.3 million, up 9.8% year-over-year.

• Hardware Revenue: $81.2 million, up 5.7% from Q3 2023.

• Total Revenue: $240.5 million, an increase of 8.4% year-over-year.

• Revenue Retention Rate: 95%, above historical range.

• Gross Margin: Total gross margin at 64.8%, up from 63.3% in the prior year quarter.

• License Gross Margin: 85.5%, slightly up from 84.9% in the previous year.

• Hardware Gross Margin: 24.1%, up from 22.6% in Q3 2023.

• GAAP Net Income: $36.7 million, an increase of 88% from the previous year.

• Non-GAAP Adjusted EBITDA: $50 million, up 20.6% from Q3 2023.

• Non-GAAP Adjusted Net Income: $35.2 million or $0.62 per diluted share, up from $30.6 million or $0.56 per share in Q3 2023.

• Cash and Cash Equivalents: $1.17 billion, up from $697 million at the end of 2023.

• Non-GAAP Free Cash Flow: $74.5 million for Q3 2024, up from $60.9 million in Q3 2023.

• R&D Expenses: $62.2 million, compared to $61 million in Q3 2023.

• Sales and Marketing Expenses: $27 million, representing 11.2% of total revenue.

• G&A Expenses: $25.7 million, down from $31.5 million in the previous year.

• Warning! GuruFocus has detected 4 Warning Signs with ALRM.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alarm.com Holdings Inc (NASDAQ:ALRM) reported financial results for the third quarter that exceeded expectations, with SAS and license revenue growing to $159.3 million.

• The company saw a revenue retention rate increase to 95%, which is above their historical range, indicating strong customer loyalty and satisfaction.

• Alarm.com Holdings Inc (NASDAQ:ALRM) introduced new capabilities in their commercial and residential video offerings, including an AI deterrent feature that enhances their remote video monitoring solution.

• The OpenEye business is on the verge of surpassing 1 million active channels, contributing to the company's growth and leading the transformation of the enterprise security video management market.

• The company raised its full-year 2024 guidance for SAS and license revenue and total revenue, reflecting confidence in continued growth and profitability.

Negative Points

• The slower U.S. housing market has reduced subscriber moves, which can impact new subscriber acquisition and growth.

• The transition of ADT's corporate residential account production to the ADT Google software is expected to create a headwind for SAS revenue growth in 2025.

• The company faces challenges in forecasting 2025 revenue due to the dependency on the ADT Google rollout, making visibility into the next year less clear.

• Alarm.com Holdings Inc (NASDAQ:ALRM) experienced a modest increase in sales and marketing expenses, which could impact profitability if not managed effectively.

• The company's initial look at 2025 suggests a potential slowdown in SAS growth compared to 2024, partly due to the absence of a one-time IP license revenue bump experienced in 2024.