Summary
Alarm.com opened fiscal 2024 with total revenue of $223.3 million for the first quarter, up 6.5% from $209.7 million in the prior-year quarter. Operating income reached $18.7 million, up from $8.8 million, and operating margin rose to 8.4% from 4.2%. Net income attributable to common stockholders climbed 63.7% to $23.6 million, and diluted earnings per share came in at $0.44 versus $0.28 a year earlier. The quarter absorbed a $4.0 million credit loss reserve tied to a subordinated credit agreement with one service provider partner. That charge hit both GAAP and non-GAAP earnings. Profitability still improved sharply on the larger revenue base.
Cash generation swung hard into positive territory. Operating cash flow was $49.9 million, compared with $3.5 million used in operations in the prior-year quarter. Capital expenditures were $3.1 million, up 27.9%. Non-GAAP free cash flow reached $46.8 million, compared with $(5.9) million a year earlier. Non-GAAP adjusted EBITDA rose 21.2% to $37.0 million. Non-GAAP adjusted net income attributable to common stockholders increased 24.1% to $27.3 million, or $0.50 per diluted share, against $0.41. Deferred revenue was $24.2 million, up 19.7% from $20.2 million. The working capital movements and non-cash items drove most of the operating cash flow swing, including a change in deferred income taxes tied to the capitalization and amortization of research and development costs.
Management used the quarter to push deeper into commercial and video markets. The company launched Connected Fleet, a cloud-based vehicle management offering tied to the Alarm.com for Business platform, which uses the enterprise reporting engine to deliver automated reports and alerts across dispersed fleets. A new Familiar Vehicle Analytics feature lets subscribers tag specific vehicles and receive alerts when those vehicles are identified, relying on AI recognition of physical attributes. Alarm.com also introduced a Remote Video Monitoring Console that gives central station operators situation assessment and response tools, including access to onsite hardware such as cameras and lights. The trailing 12-month SaaS and license revenue renewal rate was 94%, up from 93%. Headcount grew to 2,002 employees from 1,858 a year earlier.
Guidance points to continued growth. For the second quarter of 2024, SaaS and license revenue is expected to be $153.8 million to $154.0 million. For the full year 2024, SaaS and license revenue is expected to be $624.5 million to $625.0 million, and total revenue is expected to be $914.5 million to $931.0 million. Full year non-GAAP adjusted EBITDA is expected to be $164.0 million to $166.0 million. Non-GAAP adjusted net income attributable to common stockholders is expected to be $118.5 million to $119.5 million, or $2.14 to $2.16 per diluted share, based on an estimated tax rate of 21.0% and 55.3 million weighted average diluted shares outstanding.
Several risks sit behind those targets. Macroeconomic conditions, supply chain disruptions, interest rates, inflation, and geopolitical conflict could weigh on demand and on operations. The company leans on its service provider network to attract and retain subscribers, so partner losses would matter. Tariffs are another exposure: roughly one-fifth to one-half of the hardware products sold are imported from China and could face higher import duties, which would raise cost of hardware revenue and pressure hardware margins. Section 174 also shapes cash taxes. Alarm.com estimated 2024 federal and state cash tax payable of $35.0 million to $40.0 million if the requirement to capitalize and amortize research and development expenditures is not deferred, modified, or repealed. It paid the 2023 increase of $43.5 million in April 2024. Capital expenditure requirements for the final nine months of fiscal 2024 are expected to be $4.0 million to $6.0 million.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $223.3M | $226.2M | -1.3% | $209.7M | +6.5% |
| Gross profit | $146.8M | $145.0M | +1.2% | $133.5M | +9.9% |
| Gross margin | 65.7% | 64.1% | +1.6 pp | 63.7% | +2.1 pp |
| Research & development | $66.0M | $61.3M | +7.6% | $61.9M | +6.5% |
| Sales & marketing | $25.5M | $25.9M | -1.9% | $26.6M | -4.5% |
| General & administrative | $29.3M | $24.2M | +21.2% | $28.5M | +2.8% |
| Total operating expenses | $128.0M | $119.3M | +7.3% | $124.7M | +2.7% |
| Operating income (loss) | $18.7M | $25.7M | -27.1% | $8.8M | +112.3% |
| Operating margin | 8.4% | 11.3% | -3.0 pp | 4.2% | +4.2 pp |
| Net income (loss) | $23.4M | $31.2M | -24.9% | $14.2M | +64.7% |
| Net margin | 10.5% | 13.8% | -3.3 pp | 6.8% | +3.7 pp |
| Diluted EPS | $0.44 | $0.57 | -$0.13 | $0.28 | +$0.16 |
Risks
Risk factors and MD&A highlight the Macroeconomic Conditions, including inflation, rising interest rates, recession risk, and geopolitical conflicts, which have caused significant uncertainty and may reduce consumer discretionary spending and home construction and renovation activity, harming revenue and cash flow.
Substantially all revenue comes through service provider partners, and the 10 largest partners accounted for 50%, 49%, and 47% of revenue in 2023, 2022, and 2021; ADT represented greater than 15% but not more than 20% of revenue in each of those years and more than 10% of accounts receivable as of December 31, 2023.
Highly competitive markets include large technology companies such as Google Nest, Amazon Ring, and Samsung SmartThings, and competitors may use aggressive tactics like selling at a discount, bundling similar products at no charge, or offering financing incentives, which could reduce revenue and profitability.
EcoFactor filed a lawsuit on January 10, 2022 alleging Alarm.com products infringe five U.S. patents, and Causam filed lawsuits on July 22, 2021 alleging smart thermostats infringe four U.S. patents and an ITC complaint; adverse outcomes could require damages, royalties, injunctions, or indemnification of service provider partners.
Failure to maintain security of information and technology networks could expose the company to liability; acquired businesses and subsidiaries have distinct data infrastructure and less mature platforms, potentially heightening data security vulnerabilities, and the hybrid return-to-office plan may increase cyber-attack exposure.
Alarm.com has limited visibility into end consumers and relies on third-party service provider channel sell-through data that may be incomplete or inaccurate; a finite pool of service providers and difficulty in recruiting or retaining them could slow subscriber growth.
Operations are subject to FTC, FCC, state licensing, and privacy regulations, including TCPA restrictions on telemarketing; past TCPA settlement costs and potential changes in law could reduce subscriber acquisition opportunities or increase compliance expenditures.
Tariffs on certain Alarm.com products manufactured overseas have imposed import duties up to 25%, and approximately one-fifth to one-half of hardware products sold are imported from China; further tariff increases could raise cost of hardware revenue and reduce hardware revenue margins.
Total revenue increased 6.5% to $223.28 million in FY2024 Q1 from $209.72 million in FY2023 Q1, but the company stated it does not expect to achieve similar growth rates in future periods, and failure to maintain expected growth could cause financial results or stock price to decline.
The 2026 Notes are $500.0 million of 0% convertible senior notes due January 15, 2026; the company may lack funds to settle cash conversions or repurchase notes upon a fundamental change, and conversion could dilute stockholders or require reclassifying principal as a current liability, reducing net working capital.
General and administrative expense in FY2024 Q1 included a $4.0 million increase in provision for credit losses related to a loan to an affiliated entity of one of the company's distribution partners, highlighting counterparty credit exposure.
Hardware and other revenue decreased 2% to $72.9 million during the three months ended March 31, 2024 from $74.3 million in the prior-year period, driven by lower thermostat volume, and hardware margins could face further pressure.
SaaS KPIs
All quarters →SaaS and license revenue
Non-GAAP free cash flow
Non-GAAP adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from Alarm.com Holdings, Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.