Alarm.com (ALRM 51.72, +6.78, +15.09%) is trading higher today after reporting Q2
results/guidance last night. Alarm.com offers a suite of cloud-based software
for the smart home and business, including interactive security, video monitoring,
intelligent automation, and energy management. Millions of property owners rely
on ALRM to secure, monitor, and manage their homes and businesses. ALRM's
technology enables subscribers to connect to their property through mobile
apps, websites, Amazon Echo, Apple TV, and Amazon Fire TV.
Most of its revenue is generated via an established network of over 6,000 trusted partner providers, who are experts at selling, installing, and supporting ALRM's platform. These service provider partners resell these services and pay ALRM monthly fees. Service provider partners typically sign 3-5 year contracts with home or business owners, whom ALRM calls subscribers. ALRM also generates hardware and other revenue, primarily from its service provider partners for things like gateway modules, video cameras, and smart thermostats.
Turning to its Q2 results, non-GAAP EPS jumped 55% year/year to $0.34, which was above market expectations. Revenue rose 21.5% year/year to $104.5 mln, which also above market expectations. SaaS and license revenue is a key metric for ALRM and it increased 20.4% to $71.0 mln. SaaS and license revenue includes software license revenue of $10.2 mln. Q3 SaaS and license revenue are expected to be in the range of $72.2-72.4 mln.
In terms of recent developments, ALRM recently launched the Alarm.com Builder Program which is designed to facilitate partnerships between home builders and Alarm.com's service provider partners. The program offers a turn-key platform for rapidly deploying a full-range of smart home offerings in new home communities.
ALRM has also expanded its hardware ecosystem by integrating new connected devices. New devices include the DSC iotega security panel and a range of smart locks from leading brands August Home, Kwikset and Yale. A new Smarter Heating Control system integrates a series of new devices to provide an easy retrofit for boiler systems popular in European markets.
The company also recently announced a partnership with Aviva, the largest insurance provider in the UK. The Aviva Smart Home is tailored for its policy holders. It's a first of its kind application of Internet of Things services. Aviva Smart Home includes security, automation and energy management. It will launch Aviva Smart Home in Ireland this fall.
In sum, this was another impressive quarter for Alarm.com. In fact, the company has reported EPS upside in each of the past nine quarters. It's not as well-known as some other smart home service providers, but Alarm.com has been posting solid numbers for some time. This stock has more than tripled from its $14 IPO offering price in June 2015 fueled by a series of impressive earnings results.
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