Summary
Alarm.com closed fiscal 2022 with fourth quarter total revenue of $208.1 million, up 6.6% from the prior-year quarter. Full year revenue reached $842.6 million, up 12.5%. Operating income for the quarter rose 34.5% to $14.5 million, but full year operating income fell 17.1% to $51.0 million. Net income attributable to common stockholders rose 97.7% to $18.1 million in the quarter. Diluted EPS rose 88.9% to $0.34 in the fourth quarter and rose 5.9% to $1.07 for the full year. Operating margin improved 1.4 percentage points to 7.0% in the quarter. For the full year, operating margin fell 2.2 percentage points to 6.1%. Deferred revenue rose 23.6% to $18.3 million. Operating cash flow rose 72.5% to $34.4 million in the quarter, while full year operating cash flow fell 44.8% to $56.9 million. Capital expenditures fell 73.8% to $0.6 million in the quarter and rose 158.9% to $28.6 million for the full year.
Non-GAAP results showed a similar split between the quarter and the year. Fourth quarter non-GAAP adjusted EBITDA rose 24.5% to $39.0 million. Non-GAAP adjusted net income attributable to common stockholders rose 27.1% to $28.7 million, or $0.53 per diluted share. For the full year, non-GAAP adjusted EBITDA rose 3.1% to $146.8 million. Full year non-GAAP adjusted net income attributable to common stockholders rose 3.3% to $106.9 million, or $1.95 per diluted share. Non-GAAP free cash flow was $33.9 million in the fourth quarter compared with $17.8 million in the prior-year quarter. Full year non-GAAP free cash flow was $28.3 million compared with $92.1 million. Alarm.com attributed the full year decline in cash flows from operations and free cash flow to an increase in purchased inventory, higher costs, and the timing of disbursements.
The company continued to push new products. Alarm.com launched Water Dragon, a water monitoring device that clamps onto the main water line and uses ultrasonic transducers. It introduced a battery-powered version of its 780 video doorbell. Smart Arming earned recognition from the CES Innovation Awards. Shooter Detection Systems received a Platinum finalist award from American Security Today and announced a patent for cable-free gunshot detection. The SaaS and license revenue renewal rate was 94% for 2022. Alarm.com served 9.1 million homes and businesses and worked with more than 11,000 service provider partners as of December 31, 2022.
Alarm.com provided guidance for the first quarter and full year 2023. For the first quarter of 2023, Alarm.com guided SaaS and license revenue to $132.4 million to $132.6 million. For the full year 2023, SaaS and license revenue is expected at $551.5 million to $552.5 million. Total revenue is expected at $851.5 million to $877.5 million. Non-GAAP adjusted EBITDA is expected at $115.0 million to $125.0 million. Non-GAAP adjusted net income attributable to common stockholders is expected at $79.7 million to $86.5 million, based on an estimated tax rate of 21.0%. Based on an expected 55.2 million weighted average diluted shares, non-GAAP adjusted net income per diluted share is expected at $1.44 to $1.57. The guidance assumes no contribution from the Vivint license agreement.
The Vivint dispute remains a major risk. Vivint stopped paying license fees under the Patent Cross License Agreement. Alarm.com filed a demand for arbitration on October 27, 2022. The company believes SaaS and license revenue, total revenue, earnings, and cash flow will be impacted by approximately $6.0 million each quarter, plus significant additional legal fees. Other risks include supply chain disruptions, inventory disruptions, inflation, interest rates, geopolitical upheaval such as Russia's incursion into Ukraine, and COVID-19. Tariffs from China can reach up to 25%, and one-fifth to one-half of hardware products are imported from China. Section 174 requires capitalization and amortization of research and development expenditures. Alarm.com calculated the 2022 federal and state cash tax increase at $38.1 million and did not pay it in 2022 estimated tax payments. It estimates the increased 2023 Section 174 federal and state cash tax payable at $40.0 million to $45.0 million if the requirement is not deferred, modified, or repealed. Alarm.com also repurchased 1,385,592 shares for $78.8 million during 2022, about 2.8% of total outstanding shares.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $208.1M | $216.1M | -3.7% | $195.3M | +6.6% |
| Gross profit | $128.6M | $130.6M | -1.5% | $112.9M | +13.9% |
| Gross margin | 61.8% | 60.4% | +1.4 pp | 57.8% | +4.0 pp |
| Research & development | $57.4M | $55.6M | +3.3% | $47.6M | +20.6% |
| Sales & marketing | $23.6M | $23.1M | +2.2% | $24.6M | -4.1% |
| General & administrative | $25.4M | $28.0M | -9.4% | $22.6M | +12.4% |
| Total operating expenses | $114.1M | $114.2M | -0.1% | $102.1M | +11.7% |
| Operating income (loss) | $14.5M | $16.3M | -11.3% | $10.8M | +34.5% |
| Operating margin | 7.0% | 7.5% | -0.6 pp | 5.5% | +1.4 pp |
| Net income (loss) | $17.8M | $18.3M | -3.0% | $8.8M | +101.2% |
| Net margin | 8.6% | 8.5% | +0.1 pp | 4.5% | +4.0 pp |
| Diluted EPS | $0.33 | $0.35 | -$0.02 | $0.18 | +$0.15 |
Risks
Vivint stopped paying license fees under the Patent Cross License Agreement beginning in the fourth quarter of 2022; Alarm.com filed for arbitration in October 2022 and states SaaS and license revenue and total revenue will decrease by approximately $6.0 million on a quarterly basis, with quarterly earnings and cash flow also impacted by that estimate plus additional legal fees.
The filing highlights prolonged Macroeconomic Conditions, including inflation, rising interest rates, financial market volatility and weakness in housing and mortgage markets, which could reduce consumer discretionary spending and service provider demand and increase partner bankruptcies.
The connected property market is highly competitive, with large technology companies such as Amazon, Google, Apple, SimpliSafe and cable or broadband providers; competitors may use aggressive tactics such as discounting or bundled offerings and service provider partners may switch to competing products.
The filing notes supply chain disruptions, increased lead times and shipping delays, and U.S. tariffs of up to 25% on certain products imported from China, which have increased hardware costs and could reduce hardware revenue margins if tariffs expand.
The business is subject to FTC and FCC telemarketing rules, state licensing, consumer protection and evolving privacy and data security laws, and proposed SEC rules on climate and cybersecurity disclosures could increase compliance costs or restrict service provider lead generation.
Headcount grew from 1,160 employees as of December 31, 2019 to 1,733 as of December 31, 2022, and the filing says this growth strains managerial, operational and financial resources and requires continued investment in controls and personnel.
The 2026 Notes have a conditional conversion feature and may require cash settlement or repurchase, which could reduce liquidity; conversion could also dilute stockholders or depress the market price of common stock.
SaaS KPIs
All quarters →SaaS and license revenue
Non-GAAP free cash flow
Non-GAAP adjusted EBITDA
Non-GAAP Adjusted SaaS and License Revenue Growth Rate
SaaS and License Revenue Growth Rate
Summary, forecast, risks and KPIs are extracted from Alarm.com Holdings, Inc.'s SEC filings for Q4 FY2022 (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.