Alarm.com Q3 Report: Total Revenue Increases 12.4%
Though Alarm.com had a successful Q3, it expects its fourth quarter to be negatively impacted because Vivint has stopped paying patent license fees.
TYSONS, Va. — Alarm.com (Nasdaq: ALRM) has reported its financial results for its third quarter ended Sept. 30, 2022. The connected platform provider also provided its financial outlook for SaaS and license revenue for the fourth quarter of 2022 and its guidance for the full year of 2022.
“Our core businesses in residential and commercial security, video, and energy management all contributed nicely to another solid quarter and have sustained their momentum to date,” says Steve Trundle, president and CEO of Alarm.com. “We were also pleased to spend time in person with many of our service providers during our annual partner summit in early October and also to have completed the acquisition of Noonlight during the third quarter.”
In Q3, SaaS and license revenue increased 12.8% to $133.1 million, compared to $118.1 million, while total revenue increased 12.4% to $216.1 million, compared to $192.3 million.
GAAP net income attributable to common stockholders increased to $18.3 million, or $0.35 per diluted share, compared to $13.5 million, or $0.26 per diluted share.
Non-GAAP adjusted EBITDA increased to $40.8 million, compared to $37.6 million and non-GAAP adjusted net income attributable to common stockholders increased to $30.1 million, or $0.55 per diluted share, compared to $27.4 million or $0.53 per diluted share.
Total cash and cash equivalents decreased to $621.3 million as of Sept. 30, 2022, compared to $710.6 million as of Dec. 31, 2021, primarily due to the repurchase of 840,249 shares of Alarm.com common stock, approximately 1.7% of total outstanding shares, for $51.9 million during the nine months ended September 30, 2022, as well as cash used for an acquisition and a land purchase to support future growth plans.
For the quarter ended Sept. 30, 2022, cash flows from operations was $10.2 million, compared to $37.9 million for the quarter ended Sept. 30, 2021. For the quarter ended Sept. 30, 2022, non-GAAP free cash flow was $8.4 million, compared to $36.3 million for the quarter ended Sept. 30, 2021. These decreases in cash flows from operations and free cash flow were primarily due to an increase in purchased inventory in an effort to reduce risks and uncertainties in its supply chain and differences in the timing of disbursements and the collection of receipts, according to the company.
For Q4 2022, SaaS and license revenue is expected to be in the range of $130.5 million to $130.7 million. For the full year of 2022, SaaS and license revenue is expected to be in the range of $516.3 million to $516.5 million, while total revenue is expected to be in the range of $840.3 million to $842.5 million, which includes anticipated hardware and other revenue in the range of $324.0 million to $326.0 million.
Alarm.com also announced it expects its Q4 SaaS and license revenue, total revenue, quarterly earnings and cash flow will be impacted by $6.0 million due to Vivint announcing it would stop paying Alarm.com license fees under a Patent Cross License agreement executed in November 2013.
Alarm.com disputes Vivint’s refusal of payment and is seeking continued payments of license fees in an arbitration case it filed in October, as well as interest and declaratory relief.
SSI recently spoke with execs at Alarm.com to discuss the company’s roadmap, including playing commercial catchup to its residential sector dominance. Check out the discussion here.
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