Alarm.com Holdings, Inc. Q1 FY2025 earnings call

• Welcomed new CFO Kevin Bradley, who has been with the company since 2009 and has deep financial understanding.
• SaaS and license revenue exceeded expectations, driven by growth in commercial and energy markets and higher residential revenue retention.
• Provided update on 729 floodlight camera, with strong installation rates and high attachment of video analytics services. Announced upgrade of entry-level video camera to 516 Wi-Fi camera for broader adoption.
• EnergyHub's growth due to increasing demand from EV adoption, AI data centers, etc., and partnership with GM Energy.
• Discussed tariff management, having diversified supply chain and proactively built inventory, with plans to pass through tariffs.

SaaS and license revenue in the first quarter grew to $163.8 million, and adjusted EBITDA was $43.5 million. Commercial: Revenue retention for commercial subscribers is 98%, well above the consolidated 92-94% target range. Video: The 729 floodlight video camera is installed in nearly 4,000 properties per month, with over 85% of installed 729 cameras having a PerimeterGuard subscription. International video accounts made up 30% of new international accounts in Q1, twice the rate of the prior year. EnergyHub: Demand is growing due to EV adoption, AI data centers, and extreme weather, and it announced a partnership with General Motors Energy to integrate GM EVs and home battery storage into its ecosystem.

• Q2 2025 SaaS and license revenue expected at $167.2 million.
• Full-year 2025 SaaS and license revenue raised to $675.8M to $676.2M, an increase of $4.5M from prior guidance.
• Total revenue for 2025 projected $975.8M to $991.2M, including hardware and other revenue $300M to $315M.
• Non-GAAP adjusted EBITDA raised to $190M to $193M.
• Non-GAAP adjusted net income projected $131.5M to $132.5M, or $2.32 to $2.33 per diluted share.

• US tariff policies are difficult to predict and can change with little warning, though the company is managing current 10% tariffs.
• Macro environment uncertainties could affect account origination activity.

Q: On commercial, talk about recent average revenue per account trends and upsell opportunity?

A: Steve Trundle said retention is due to land and expand, ARPU is upward with commercial ARPU more than twice residential. Upsell includes adding systems like access control and video.

Q: Quantify revenue contribution from tariff-related pricing increases for 2025?

A: Kevin Bradley said a 10% cost increase on $300M hardware revenue would equate to ~$20M annualized, but adjusted for timing and sourcing, it's less than that.

Q: On SaaS growth moderation, key factors?

A: Kevin Bradley said Q1 beat included EnergyHub's strong quarter (annual/recurring vs monthly/recurring) and return of revenue retention to historical range.

Q: On international video, competitive position?

A: Steve Trundle said international is early innings, building dealer base, growing faster than domestic, strong in Latin America and Europe but competitive on cost.

Q: On macro in Q2 guide, material changes in account origination?

A: Steve Trundle said first two weeks of April had commercial change, but last two weeks and residential were business as usual, no meaningful macro change.

Q: Initial priorities as CFO for Kevin Bradley?

A: Kevin Bradley said getting more intimately familiar with speaking to stakeholders and becoming more externally focused.

Q: On SaaS guidance and tariffs, conservatism?

A: Steve Trundle said model has no major tariff impact baked in, and conservatism is in revenue retention model.

Q: On service providers selling commercial, initiative?

A: Steve Trundle said focus on diversity, some service providers are commercial integrators, team prospecting there.

Q: On North American residential and commercial subscriber growth?

A: Steve Trundle said both subscriber counts growing, housing market headwind but revenue retention positive.

Q: On competitive landscape impact on outlook?

A: Steve Trundle said ADT is a partner, and threat from low-cost direct-to-consumer cameras exists but monitored customers are focus.