Alarm.com Holdings Q2 2025: Navigating Key Contradictions in Retention Rates, Tariffs, and Growth Strategies

Retention rate trends, impact of tariffs on revenue, hardware revenue and tariff impact, and growth drivers and investment strategies are the key contradictions discussed in Alarm.com Holdings' latest 2025Q2 earnings call.



Revenue and Profitability Growth:
- Alarm.com reported SaaS and license revenue of $170 million for Q2, growing by 9% year-over-year, and adjusted EBITDA was $48.4 million.
- Growth was driven by strong contributions from commercial, international, and EnergyHub businesses, all growing at around 25% year-over-year.

Commercial and International Business Expansion:
- The company's commercial, international, and EnergyHub businesses combined contributed approximately 30% to total SaaS revenue in Q2.
- This performance was supported by the adoption of unified video access control and commercial intrusion platforms, as well as expanding international market penetration.

Impact of Tariffs and Price Adjustment:
- Alarm.com implemented a 10% price increase on hardware in early June to reflect the impact of tariffs, with a pass-through that slightly dilutes margins but maintains gross profit dollars.
- This strategic move allows the company to manage potential tariff exposure and maintain financial stability.

Strong Financial Outlook and Guidance:
- For the full year of 2025, Alarm.com raised its expectations for SaaS and license revenue to between $681 million and $681.4 million.
- This increase reflects the company's confidence in its second half outlook and its ability to manage through uncertainties like tariffs.