Alarm.com (NASDAQ:ALRM) Announces Quarterly Earnings Results, Beats Expectations By $0.15 EPS

Alarm.com (NASDAQ:ALRM) posted its quarterly earnings results on Thursday. The software maker reported $0.90 earnings per share for the quarter, topping the consensus estimate of $0.75 by $0.15, FiscalAI reports. Alarm.com had a net margin of 11.11% and a return on equity of 15.65%. The firm had revenue of $279.44 million for the quarter, compared to the consensus estimate of $265.82 million. During the same period last year, the firm posted $0.76 earnings per share. The company’s revenue for the quarter was up 9.0% on a year-over-year basis.

Here are the key takeaways from Alarm.com’s conference call:

• Third-quarter SaaS and license revenue rose 9% year over year to $191.2 million, exceeding expectations, and Alarm.com raised its 2026 SaaS and license revenue outlook to $756.1 million–$756.3 million. Full-year adjusted EBITDA guidance also increased to $227 million–$229 million.
• Q3 adjusted EBITDA and hardware margins benefited from about $3.8 million in temporary tariff-related cost recoveries, which the company does not expect to continue. Higher memory costs and the absence of those recoveries are expected to pressure Q4 hardware gross margin to about 20.5%, creating an estimated $6.6 million sequential EBITDA headwind.
• Alarm.com’s preliminary 2027 outlook calls for $815 million–$820 million in SaaS and license revenue and $240 million–$245 million in adjusted EBITDA, implying a roughly 20.5% margin. That is near, but below, its previously stated goal of exiting 2027 with margins around 21%; hardware costs and reinvestment decisions could affect progress.
• The newly acquired CellGate is expected to contribute $15 million–$20 million of SaaS and license revenue in 2027 and expand Alarm.com’s reach into the fence and gate contractor market. Management expects modest SaaS gross-margin and adjusted EBITDA dilution for the next couple of years, while citing longer-term opportunity as recurring revenue scales.
• Management cited revenue retention in the 95% range and continued momentum in growth initiatives, which it expects to account for about one-third of revenue and grow 25%–30% in 2026. Video adoption is also lifting new-account residential ARPU, which management estimated at about $5.50 per month.

Alarm.com Price Performance

ALRM stock opened at $65.03 on Friday. The company has a quick ratio of 4.38, a current ratio of 4.96 and a debt-to-equity ratio of 0.57. The business has a fifty day moving average of $57.91 and a two-hundred day moving average of $50.49. Alarm.com has a 52-week low of $41.49 and a 52-week high of $69.39. The stock has a market cap of $3.22 billion, a price-to-earnings ratio of 28.65, a price-to-earnings-growth ratio of 2.08 and a beta of 0.70.

Insider Buying and Selling at Alarm.com

In other Alarm.com news, CFO Kevin Bradley sold 5,400 shares of Alarm.com stock in a transaction that occurred on Wednesday, August 12th. The stock was sold at an average price of $55.07, for a total value of $297,378.00. Following the sale, the chief financial officer owned 78,222 shares of the company’s stock, valued at approximately $4,307,685.54. The trade was a 6.46% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Stephen Trundle sold 50,000 shares of Alarm.com stock in a transaction dated Monday, August 24th. The shares were sold at an average price of $57.67, for a total value of $2,883,500.00. Following the completion of the sale, the chief executive officer owned 324,842 shares of the company’s stock, valued at $18,733,638.14. This trade represents a 13.34% decrease in their position. The SEC filing for this sale provides additional information. Corporate insiders own 4.80% of the company’s stock.

Key Stories Impacting Alarm.com

Here are the key news stories impacting Alarm.com this week:

• Positive Sentiment: Q3 revenue rose 9% year over year to $279.44 million, beating analysts’ expectations of $265.82 million. Adjusted earnings of $0.90 per share also exceeded estimates of about $0.75–$0.77 and were up from $0.76 a year earlier. Alarm.com Q3 results
• Positive Sentiment: Alarm.com raised its full-year 2026 outlook. Its Q4 forecast calls for SaaS and license revenue of approximately $194.6 million to $194.8 million, supporting expectations for continued recurring-revenue growth. Q4 revenue outlook
• Neutral Sentiment: Barclays raised its price target from $60 to $70, but kept an “equal weight” rating, signaling a more balanced view rather than a strong bullish endorsement. Barclays recommendations
• Negative Sentiment: Despite the earnings beat and higher guidance, shares declined in Friday trading. The supplied reports do not identify a specific negative catalyst; the market response may indicate that investors had already priced in strong results.

Wall Street Analyst Weigh In

A number of research firms recently weighed in on ALRM. William Blair reaffirmed a “market perform” rating on shares of Alarm.com in a report on Friday. Wall Street Zen upgraded Alarm.com from a “hold” rating to a “buy” rating in a report on Sunday, August 16th. Barclays upped their target price on Alarm.com from $60.00 to $70.00 and gave the stock an “equal weight” rating in a report on Friday. Raymond James Financial reissued a “strong-buy” rating and issued a $65.00 target price on shares of Alarm.com in a research report on Friday, August 7th. Finally, Zacks Research downgraded Alarm.com from a “strong-buy” rating to a “hold” rating in a report on Tuesday, October 6th. One research analyst has rated the stock with a Strong Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $61.67.

About Alarm.com

Alarm.com Holdings, Inc develops cloud-based technology for connected security and smart automation. Its platform helps residential and commercial customers monitor and manage security systems, video cameras, access control, energy use, and other connected devices through mobile applications and web-based tools.

The company’s products and services are delivered primarily through a network of authorized service providers, including security dealers and integrators. Its offerings include intrusion detection, smart-home automation, video surveillance, commercial security and access management, energy management, and solutions designed for property managers and other business customers.

Founded in 2000 and headquartered in Vienna, Virginia, Alarm.com serves customers through service providers in the United States and international markets.