Alarm.com’s third quarter results were well received by the market, reflecting broad-based growth and operational execution. Management pointed to robust performance in the company’s energy segment and growing momentum in commercial video and access control solutions as key contributors. CEO Stephen Trundle highlighted the impact of new video product launches and platform enhancements, particularly those leveraging artificial intelligence, which have driven greater adoption and customer engagement. Trundle noted, “Our unified commercial solutions are winning in the market due to the ease of managing these complex systems through a single integrated interface.”
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Alarm.com (ALRM) Q3 CY2025 Highlights:
- Revenue: $256.4 million vs analyst estimates of $251 million (6.6% year-on-year growth, 2.2% beat)
- Adjusted EPS: $0.76 vs analyst estimates of $0.61 (24.3% beat)
- Adjusted Operating Income: $52.8 million vs analyst estimates of $37.18 million (20.6% margin, 42% beat)
- Management raised its full-year Adjusted EPS guidance to $2.53 at the midpoint, a 5.4% increase
- Operating Margin: 14.4%, in line with the same quarter last year
- Billings: $257.1 million at quarter end, up 6.4% year on year
- Market Capitalization: $2.50 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Alarm.com’s Q3 Earnings Call
- Adam Tindle (Raymond James) asked about drivers behind SaaS growth forecasts for 2026. CFO Kevin Bradley explained the guidance assumes continued 20%-25% growth in key initiatives, with some headwinds shifting from 2025 to next year.
- Adam Tindle (Raymond James) also questioned the balance between growth and profitability. CEO Stephen Trundle stated the company prioritizes long-term growth investments while continuing to improve efficiency and margin expansion.
- William Fitzsimmons (Jefferies) sought detail on EnergyHub’s customer trends and the impact of revenue pulled forward from Q4 to Q3. Management clarified the shift was minor and described how utilities are shifting from pilot projects to full-scale program adoption.
- Matthew Filek (William Blair) inquired about the durability of EnergyHub’s growth and the role of pricing. Trundle cited substantial headroom in customer adoption and ongoing expansion into new device classes, with pricing now a consistent growth lever.
- Eleanor Smith (J.P. Morgan) asked about SaaS mix impact on margins and future M&A plans. Management expects SaaS to remain a stable driver of gross margins and characterized its M&A approach as active but measured.
Catalysts in Upcoming Quarters
Looking forward, our analyst team will be watching (1) whether EnergyHub can sustain or accelerate its utility client growth, especially as electrification and data center trends persist; (2) the pace of commercial solution adoption as new AI-driven video and access control products reach market; and (3) the normalization of hardware gross margins after tariff and shipping-related pressures. Progress in international markets and the impact of potential M&A will also be critical signposts.
Alarm.com currently trades at $50.08, up from $47.07 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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