Alarm.com Grows SaaS and License Revenue 39 Percent in Q4 2017
Company also adds new smart thermostat with advanced features.
Alarm.com, a home and business security solutions provider, is seeing growth in its SaaS and license revenue as that line of business becomes a larger part of total revenue. In fact, in its fourth quarter and full year 2017 financial report, Alarm.com Holdings, Inc. (NASDAQ: ALRM) reported SaaS and license revenue of $65.2 million, a 39 percent increase compared to Q4 2016 revenue of $46.9 million. Total revenue grew to $88.8 million, a 27 percent increase over $69.8 million for the same period last year.
SaaS and license revenue now comprises 73.4 percent of total revenue, compared to 67.2 percent for the prior year period. Hardware and other revenue represents the remaining 26.6 percent at $23.5 million for the fourth quarter, compared to 32.8 percent of the total and $22.0 million for the fourth quarter of 2017.
Alarm.com offers a variety of home and business security solutions including interactive security, energy management, video monitoring, automation and wellness. Their services and accompanying devices can be controlled through the company’s intuitive mobile app, and they are exclusively sold, set up and supported by authorized service providers.
Financial highlights for the quarter include:
- GAAP net income was $0.3 million, $0.01 per diluted share, compared to $3.0 million, or $0.06 per diluted share for the same period last year.
- Non-GAAP adjusted net income was $13.0 million, or $0.26 per diluted share, compared to $9.1 million, or $0.19 per diluted share.
‘We’re pleased to report solid results for the quarter and the year and are thankful for the continued performance of our service providers with our solutions,’ said Steve Trundle, President and CEO of Alarm.com, in a news release. ‘The market continues to favor the type of innovative connected property services that we provide. In addition to our financial results for the quarter, we also expanded our energy management portfolio by announcing a new smart thermostat with advanced capabilities for energy-efficiency and proactive detection of maintenance issues.’
Highlights for the full year 2017 include the following:
- SaaS and license revenue was $236.3 million, a 36 percent increase over $173.5 million the prior year.
- Total revenue was $338.9 million, a 30 percent increase over $261.1 million the prior year.
- GAA net income was $29.3 million, or $0.59 per diluted share, compared to $10.2 million or $0.21 per diluted share the prior year.
- Non-GAAP adjusted net income was $45.1 million, or $0.92 per diluted share, compared to $31.1 million, or $0.65 per share, in 2016.
- Total cash and cash equivalents was $96.3 million at December 31, 2017, compared to $140.6 million at the end of 2016.
In its financial report, Alarm.com offered some business highlights as well:
- In January, the company appointed Michelle K. Lee to its board of directors. Lee is an attorney who teaches disruptive technologies and intellectual property at Stanford Law School. She also worked at the U.S. Patent and Trademark Office and Google.
- Alarm.com announced a next generation smart thermostat with energy-saving features for consumers.
- The company also announced HVAC Safeguards, a machine-learning feature that proactively monitors HVAC systems to alert service providers and homeowners of potential problems before they escalate to system failures or other costly problems.
- The company has updated its mobile app capabilities, allowing subscribers to communicate directly with their monitoring station for faster emergency responses.
- EnergyHub, a subsidiary of Alarm.com, has partnered with Rheem to integrate with intelligent water heaters to add to its list of smart energy devices that an be controlled and managed through the EnergyHub platform.
Looking ahead, Alarm.com estimates it will have SaaS and license revenue between $66.9 million and $67.1 million for the first quarter of 2018. For the full year 2018, the company estimates SaaS and license revenue between $282.5 million and $283 million. They estimate total revenue between $380.0 million and $382.0 million. Estimated non-GAAP adjusted net income for the year will range between $56.0 million and $57.0 million.
On February 28, the day after Alarm.com financials were reported, the stock price dropped from $38.17 to $36.13 per share. It has rebounded and was $38.25 per share as of 4:59 p.m. EST yesterday.
As the popularity of smart device-controlled homes grows, the demand for Alarm.com’s services are likely to grow as well. With new products, services and features, the company is setting the pace for other providers. While investors weren’t particularly impressed with Alarm.com’s most recent financials, the growth in total revenue and SaaS and license revenue as a growing percentage of total revenue gave Alarm.com solid footing to start the year off strong.