Alarm.com Surpasses $1B in Revenue as EnergyHub and AI Drive Growth

Date of Call: Feb 19, 2026

Financials Results

• Revenue: $1.058B to $1.065B for full year 2026 (implied), exceeded $1B for 2025
• EPS: $0.72 per diluted share (non-GAAP adjusted), up 24.1% YOY
• Gross Margin: Not explicitly provided. Revenue growth of 8.8% YOY noted, with hardware gross profit up 13.4% YOY.
• Operating Margin: Not explicitly provided. Adjusted EBITDA margin implied at 20.2% for 2026, with non-GAAP free cash flow of $137M for 2025.

Guidance:

• Q1 2026 SaaS & license revenue expected between $175.8M and $176M.
• Full year 2026 SaaS & license revenue expected between $743M and $745M, implying total revenue of $1.058B to $1.065B.
• Full year 2026 non-GAAP adjusted EBITDA expected between $213M and $215M, implying margins of 20.2% at the midpoint.
• Full year 2026 non-GAAP adjusted EPS expected between $2.78 and $2.79 per diluted share.

Business Commentary:

Revenue and Earnings Growth:

• Alarm.com reported SaaS and license revenue of $180 million for Q4 2025, up 8.8% year-over-year, and total revenue exceeded $1 billion for the full year.
• The growth was driven by strong performance across its diversified business segments, including residential, commercial, and energy solutions.

EnergyHub Expansion and Acquisition:

• EnergyHub, a part of Alarm.com, saw the number of connected devices under management increase by more than 50% in 2025, with the acquisition of Resideo Grid Services (RGS) contributing to its growth.
• The acquisition allowed EnergyHub to introduce its multi-device platform to RGS clients, enhancing utility clients' ability to manage a broad ecosystem of distributed energy resources.

Commercial and Energy Segment Growth:

• The commercial and energy businesses contributed 25% of Alarm.com's SaaS revenue for the full year 2025 and grew about 25% year-over-year.
• The growth in the commercial segment was supported by the integration of video, access control, and intrusion protection solutions, while the energy segment benefited from increasing demand for virtual power plants due to grid stability needs.

International Market Expansion:

• Alarm.com's international business saw an uptick in video attachment rates to 33% in 2025 as the company expanded its core residential and commercial technology offerings.
• The increase in video attachment rates was due to the deployment of core video offerings and the adoption of remote video monitoring by international partners.

R&D Investment and AI Integration:

• Alarm.com's R&D expense increased by 6.8% year-over-year in Q4 2025, focusing on leveraging AI for internal productivity gains and product enhancement.
• The company is utilizing AI to augment existing capabilities, such as AI-based deterrents and monitoring, while not seeing AI as a driver for fundamental changes to its business model structure.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed satisfaction with exceeding expectations in 2025, describing results as exceeding expectations and achieving scale with over $1B in annual revenue. Statements include: 'We are pleased to report fourth quarter and full year results that exceeded our expectations' and 'I'm pleased with our 2025 results, and the continued growth we see across the business as we roll into 2026.'

Q&A:

• Question from Adam Tindle (Raymond James): Concerns about the raise in SaaS guidance and the organic growth assumption, seeking a breakdown of RGS contribution and the factors underpinning organic growth.
  Response: The SaaS guide increase of ~$21M includes full-year RGS revenue contribution and slightly better organic growth (about 10-20 bps better) than previously projected.

• Question from Adam Tindle (Raymond James): Request for details on the competitive environment, market size, and RGS's role in EnergyHub.
  Response: EnergyHub aims to be the most appealing partner by leveraging network effects; market potential is large with ~130M meters in North America, currently serving ~50M, targeting higher enrollment and device diversity.

• Question from Jordan (Jefferies on for Samad Samana): Inquiry about AI R&D pivot and monetization of new AI features.
  Response: Focus is on enhancing product capabilities (e.g., AI deterrence, analytics) and leveraging LLMs for user interfaces; monetization and productivity gains are in early stages but expected over time.

• Question from Jordan (Jefferies on for Samad Samana): Concerns on tariff pass-through impacts on demand and hardware manufacturing costs.
  Response: No discernible demand impact from prior tariff pass-throughs; expects no degradation from current higher pass-throughs. No significant manufacturing cost increases yet, with potential inventory buffer for supply chain derisking.

• Question from Saket Kalia (Barclays): Request for details on synergies from the RGS acquisition in the combined EnergyHub business.
  Response: Synergies are not substantial in the near term but expected to materialize over 12-24 months as platforms are fused, leading to a more valuable integrated solution.

• Question from Saket Kalia (Barclays): Growth outlook for commercial, energy, and international businesses collectively in 2026.
  Response: Expects these segments to grow between 25% and 30%, potentially becoming ~1/3 of total SaaS revenue.

• Question from Stephen Sheldon (William Blair): Inquiry about traction and utilization trends for commercial video solutions.
  Response: Strength in high-crime, high-asset areas; Central Station augmented remote video monitoring is a key growth driver, shifting from forensic to deterrent use cases.

• Question from Stephen Sheldon (William Blair): Follow-up on 2026 spending plans and areas of stepped-up reinvestment.
  Response: R&D spend as a percentage of revenue is stable; focus is on productivity and integrating new platforms/AI initiatives, with some surge capacity required.

• Question from Adam Hotchkiss (Goldman Sachs): Request for explanation of how EnergyHub benefits from AI-driven data center demand and tracking metrics for the business.
  Response: Data center demand increases electricity consumption and grid variability, driving utility need for virtual power plants. Trajectory is best tracked through company updates.

• Question from Adam Hotchkiss (Goldman Sachs): Clarification on margin progression and trade-offs between investment and scaling.
  Response: Adjusted EBITDA margin progression is evident from ~19.9% (normalizing 2025) to a targeted exit 2027 rate; includes absorption of zero-margin RGS acquisition.

• Question from Jack Vander Aarde (Maxim Group): Inquiry about competitive trends in North American residential business and performance relative to the ADT headwind.
  Response: Competitive environment stable; ADT transition headwind was less dramatic than initially forecasted, with ~25% transition as of Q3 2025.

• Question from Jack Vander Aarde (Maxim Group): Performance of the installed base in North America and its role in raised SaaS guidance.
  Response: Growth is primarily ARPU expansion (~70-75%) driven by product-led video adoption; ~20-25% of cameras sold enter the installed base, supporting consistent upgrades.

• Question from Bella (JPMorgan on for Ella Smith): Request to frame EnergyHub's growth using KPIs like DER assets under management or opt-in rates.
  Response: Key metrics are percentage of meters passed (currently ~50M of 130M potential) and enrollment rate (~5% currently, target >10%), plus device category diversity.

• Question from Bella (JPMorgan on for Ella Smith): Follow-up on utility penetration rates and sales cycle trends for EnergyHub.
  Response: Penetration aligns with 30-40% range; drivers include electrification and data center demand. Sales cycles are long but may be shortening due to supply shortages.

Contradiction Point 1

2026 SaaS Revenue Guidance Drivers

Contradiction on the magnitude and nature of headwinds/tailwinds affecting 2026 residential growth.

What are your thoughts on the current market outlook? - Adam Tindle (Raymond James)

2025Q4: Organic SaaS growth, which is about 10-20 basis points better than previously projected, excluding RGS. - Kevin Bradley(CFO)

Can you break out the contribution from the RGS acquisition and what's driving the improved organic growth assumption behind the increased SaaS guidance? - Adam Tindle (Raymond James)

2025Q3: A ~200 bps residential headwind noted at the start of 2025 did not materialize... this headwind is now pushed to 2026, with no additional currency headwinds assumed. - Kevin Bradley(CFO)

Contradiction Point 2

EnergyHub Growth Rate and Durability

Contradiction on the declared growth contribution and underlying durability of EnergyHub's growth.

What are your key takeaways from the recent earnings report? - Adam Tindle (Raymond James)

2025Q4: Growth will come from increasing enrollment, adding more utilities, and supporting a wider variety of energy-consuming devices. - Stephen Trundle(CEO)

What is the competitive environment and market size for EnergyHub, particularly regarding the RGS acquisition? - Matthew Filek (William Blair)

2025Q3: EnergyHub contributes significantly to the overall growth initiatives (~20-25% growth). Growth is considered durable due to multiple factors... - Stephen Trundle(CEO)

Contradiction Point 3

RGS Acquisition Impact on Margins

Contradiction on the margin profile of the RGS acquisition and its integration impact.

Can you discuss the company's current financial performance and outlook? - Adam Hotchkiss (Goldman Sachs)

2025Q4: The acquisition of RGS, which has 0% EBITDA margin, is being absorbed into the bottom line... - Stephen Trundle(CEO) & Kevin Bradley(CFO)

How to balance growth investments with margin progression amid flat margins next year? - Adam Tindle (Raymond James)

2025Q3: The company is improving efficiency and plans to continue moving adjusted EBITDA margins up, targeting ~21% by the end of 2027. - Stephen Trundle(CEO)

Contradiction Point 4

Growth Outlook and Investment for Commercial & Energy Businesses

Contradiction on whether to accelerate investment to further boost growth.

What are your key priorities for the next fiscal year? - Saket Kalia (Barclays)

2025Q4: These businesses are expected to grow between 25% and 30% in 2026, inclusive of some inorganic growth. This growth would increase their share of total SaaS revenue to about one-third or slightly more. - Kevin Bradley(CFO)

What growth rate is expected for the combined commercial and energy businesses (25% of SaaS) in 2026? - Matthew John Bullock (Bank of America)

2025Q2: 各业务增速在25%±500 bps范围内，公司正评估2026年是否加大投资以进一步提速。 - Stephen S. Trundle(CEO)

Contradiction Point 5

Impact of Tariff Cost Pass-Throughs on Demand

Contradiction on whether past tariff implementations affected demand.

Jordan of Jefferies, stepping in for Samad Samana, what are your thoughts on the recent market trends? - Jordan (Jefferies, on for Samad Samana)

2025Q4: Past tariff implementations (e.g., during COVID) did not show a meaningful change in demand, and this thesis has held. The business will assume no demand degradation from the full tariff pass-through in 2026. - Kevin Bradley(CFO)

How are tariff cost pass-throughs affecting demand and manufacturing costs? - Adam Tyler Tindle (Raymond James)

2025Q2: 2026年，假设关税框架固化，硬件收入可能在2025年基础上增加$5M-$10M（不包括潜在更高关税影响）... 关税仅是成本转嫁，硬件毛利对销售获取成本的覆盖作用未变，因此收入规划和销售预算方法保持不变。 - Kevin Bradley(CFO)