Summary
Alarm.com Holdings reported first quarter fiscal 2025 total revenue of $238.8 million, up 7.0% from the prior-year quarter. Operating income rose 58.3% to $29.6 million, and net income increased 18.4% to $27.7 million. Diluted earnings per share came in at $0.52, up from $0.44 in the prior-year quarter. Operating margin expanded to 12.4%, up 4.0 percentage points. The company also reported non-GAAP adjusted EBITDA of $43.5 million, up 17.5% from $37.0 million. SaaS and license revenue renewal rate was 95% for the trailing twelve months ended March 31, 2025, compared with 94% for the prior-year period. The quarter showed better profitability even as growth in the top line remained moderate.
Cash generation weakened. Operating cash flow was $24.1 million, down 51.7% from the prior-year quarter. Capital expenditures were $6.1 million, up 99.4%. Non-GAAP free cash flow, defined as operating cash flow less purchases of property and equipment, was $17.9 million, compared with $46.8 million in the prior-year quarter. The decline in operating cash flow reflected a decrease in cash from operating assets and liabilities, including a change in inventory and the timing of disbursements and receipts. Deferred revenue was $27.5 million, up 13.7% from the prior-year quarter, which offers some visibility into future revenue. The company also completed the acquisition of 81% of CHeKT, Inc. on February 10, 2025 for $23.6 million in cash. In April 2025, it paid $29.1 million for a 24.7% stake in Safe Streets USA, LLC.
Operational highlights focused on video, deterrence, and energy management. Alarm.com launched the ADC-V516 indoor Wi-Fi camera, an entry-level product designed for residential and commercial markets with AI-powered analytics and deterrence features. The company enhanced its AI Deterrence capability to adapt voice tones, genders, and custom messaging. It integrated Smart Signal into its Remote Video Monitoring platform, allowing subscribers to transmit critical information to monitoring stations in real time. EnergyHub announced a partnership with General Motors to integrate electric vehicles and home energy storage into utility programs. The platform processed more than 345 billion data points from over 160 million connected devices during 2024. Headcount was 2,020 employees as of March 31, 2025, compared with 2,002 as of March 31, 2024.
Guidance points to continued growth. For the second quarter of 2025, SaaS and license revenue is expected to be $167.0 million to $167.2 million. For the full year 2025, SaaS and license revenue is expected to be $675.8 million to $676.2 million, and total revenue is expected to be $975.8 million to $991.2 million. Non-GAAP adjusted EBITDA is expected to be $190.0 million to $193.0 million. Non-GAAP adjusted net income attributable to common stockholders is expected to be $131.5 million to $132.5 million, based on an estimated tax rate of 21.0% and 60.5 million weighted average diluted shares outstanding. Non-GAAP adjusted net income attributable to common stockholders per diluted share is expected to be $2.32 to $2.33. The guidance is for the second quarter and full year 2025.
Risks remain. Macroeconomic conditions, including supply chain disruptions, inflation, tariffs, and geopolitical conflict, could pressure demand and costs. In April 2025, the U.S. government announced a baseline tariff of 10% on all products imported into the United States, with additional individualized tariffs by country. A significant portion of hardware is produced outside the United States, and the company said there was no impact to cost of hardware revenue from these new tariffs during the first quarter of 2025. If tariffs are not passed through to customers, hardware revenue margins may be impacted. The company also faces competition, reliance on its service provider network, and dependence on key suppliers. Section 174 requires capitalization and amortization of research and development expenditures. The company calculated the 2024 federal and state cash tax increase from Section 174 to be $33.5 million, which it paid in April 2025, and it estimates the 2025 Section 174 federal and state cash tax payable to be $25.0 million to $30.0 million. The 2026 Notes are due January 15, 2026, and are presented as a current liability. Alarm.com paid no dividends during the quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $238.8M | $242.2M | -1.4% | $223.3M | +7.0% |
| Gross profit | $160.6M | $158.6M | +1.2% | $146.8M | +9.4% |
| Gross margin | 67.2% | 65.5% | +1.8 pp | 65.7% | +1.5 pp |
| Research & development | $68.4M | $62.0M | +10.3% | $66.0M | +3.7% |
| Sales & marketing | $28.5M | $30.9M | -7.7% | $25.5M | +12.2% |
| General & administrative | $27.0M | $27.8M | -2.8% | $29.3M | -7.8% |
| Total operating expenses | $130.9M | $127.8M | +2.5% | $128.0M | +2.3% |
| Operating income (loss) | $29.6M | $30.9M | -3.9% | $18.7M | +58.3% |
| Operating margin | 12.4% | 12.7% | -0.3 pp | 8.4% | +4.0 pp |
| Net income (loss) | $27.7M | $30.1M | -8.0% | $23.4M | +18.4% |
| Net margin | 11.6% | 12.4% | -0.8 pp | 10.5% | +1.1 pp |
| Diluted EPS | $0.52 | $0.52 | ±$0.00 | $0.44 | +$0.08 |
Risks
In April 2025 the U.S. announced a 10% baseline tariff on most imports plus country-specific tariffs, and a significant portion of hardware is produced in Vietnam, Thailand and Taiwan. No impact was recorded in cost of hardware revenue for Q1 2025 because the tariffs took effect in April 2025, but future hardware revenue margins may be pressured depending on pass-through.
The filing repeatedly cites Macroeconomic Conditions, including inflation, tariffs, interest rates and geopolitical tensions, that could reduce consumer discretionary spending and service provider viability. MD&A says prolonged uncertainty could cause further economic slowdown or other unpredictable events affecting business, results of operations or financial condition.
A substantial portion of revenue comes from a limited number of service provider partners, and losing or materially reducing orders from one or more major partners would decrease revenue and profitability. The filing also notes Vivint and ADT arrangements generate lower per-customer revenue than SaaS solutions, which may lower the revenue growth rate.
The company paid $23.6 million for 81% of CHeKT in February 2025 and $29.1 million for 24.7% of Safe Streets USA in April 2025 while continuing to pursue acquisitions. Integration of acquired technologies, assets or businesses may harm financial results.
Section 174 requires capitalization and amortization of R&D expenditures; the company paid a $33.5 million federal and state cash tax increase in April 2025 and estimates a $25.0 million to $30.0 million 2025 Section 174 cash tax payable if not modified or repealed. Q1 2025 operating cash flow decreased 51.7% to $24.1 million from $49.9 million, partly due to operating asset and liability changes.
The company is defending patent infringement suits from EcoFactor and Causam, among other legal proceedings, and expects to continue incurring costs related to intellectual property litigation. A negative outcome could materially affect business, financial condition, cash flows and results of operations.
Failure to maintain security of information and technology networks could expose the company to liability, especially as acquired businesses and subsidiaries have distinct data security vulnerabilities and a hybrid return-to-office plan may increase cyber-attack exposure.
The connected property market is highly competitive, with large technology companies such as Google, Amazon, Apple and security providers targeting home and business automation. Competitors may use aggressive tactics like discounting, bundling and IP assertions, which could reduce revenue or require price reductions.
The company depends on key suppliers and hardware vendors; loss of a key supplier or inability to deliver products on time or at contracted prices would materially and adversely affect business. MD&A also cites supply chain and inventory disruptions linked to Macroeconomic Conditions and tariffs.
The 2026 Notes are due January 15, 2026 and are presented as a current liability as of March 31, 2025; interest expense increased 442% to $4.3 million in Q1 2025 due to the 2029 Notes. The company may not have cash or financing available to settle conversions or repurchase notes upon a fundamental change.
The company issued a $21.5 million senior secured term loan to a service provider partner in January 2025 and holds receivables from service provider partners. MD&A notes a $4.3 million decrease in provision for credit losses in Q1 2025 driven by a $4.0 million loan to an affiliated entity of a distribution partner, highlighting exposure to partner creditworthiness.
Operations and service provider partners are subject to FTC, FCC, TCPA, state licensing and privacy laws; past TCPA settlement costs and potential fines or enforcement actions could harm results. Changes in laws or regulations could require operational changes and increase costs.
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 FY2025 (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.