Alarm.com (ALRM) Q4 2025 earnings summary

Executive summary

• Q4 and full year 2025 results exceeded expectations, with SaaS and license revenue up 8.8% year-over-year in Q4 to $180.2M and 9.2% for the full year to $689.4M, and total annual revenue surpassing $1.011 billion.

• Business model is differentiated from typical SaaS, with revenue tied to connected IoT devices rather than seat-based pricing, providing durability against AI-driven disruption.

• Expansion into commercial security and energy markets contributed 25% of SaaS revenue in 2025, growing about 25% year-over-year.

• Acquisition of Resideo Grid Services (RGS) enhances EnergyHub's platform, expanding utility relationships and device management capabilities.

• International markets saw increased adoption, with video attachment rates rising to 33% in 2025.

Financial highlights

• Q4 SaaS and license revenue: $180.2 million, up 8.8% year-over-year; full year: $689.4 million, up 9.2%.

• Q4 total revenue: $261.7 million, up 8% year-over-year; full year total revenue: $1.011 billion, up 7.6%.

• Q4 GAAP net income: $34.7 million ($0.66 per diluted share); full year: $131.6 million ($2.46 per share).

• Q4 adjusted EBITDA: $54.9 million, up 18.3% year-over-year; full year adjusted EBITDA: $206 million, up 16.9%.

• Q4 non-GAAP free cash flow: $35.1 million; full year: $137 million.

Outlook and guidance

• Q1 2026 SaaS and license revenue expected between $175.8 million and $176 million.

• Full year 2026 SaaS and license revenue expected between $743 million and $745 million; total revenue between $1.058 billion and $1.065 billion.

• 2026 non-GAAP adjusted EBITDA guidance: $213–$215 million (20.2% margin midpoint); non-GAAP adjusted net income: $150.5–$151 million ($2.78–$2.79 per diluted share, 57.2M shares diluted).

• Expect to exit 2027 with a 21% adjusted EBITDA run rate margin.

• Commercial, energy, and international segments expected to grow 25–30% in 2026, becoming about a third of SaaS revenue.