Smart property technology provider Alarm.com NASDAQ:ALRM reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 9.2% year on year to $277.7 million. The company’s full-year revenue guidance of $1.08 billion at the midpoint came in 1.7% above analysts’ estimates. Its non-GAAP profit of $0.77 per share was 18.9% above analysts’ consensus estimates.
Alarm.com (ALRM) Q2 CY2026 Highlights:
- Revenue: $277.7 million vs analyst estimates of $264.8 million (9.2% year-on-year growth, 4.9% beat)
- Adjusted EPS: $0.77 vs analyst estimates of $0.65 (18.9% beat)
- Adjusted EBITDA: $57.7 million vs analyst estimates of $50.96 million (20.8% margin, 13.2% beat)
- The company lifted its revenue guidance for the full year to $1.08 billion at the midpoint from $1.07 billion, a 1.8% increase
- Management raised its full-year Adjusted EPS guidance to $2.93 at the midpoint, a 4.1% increase
- EBITDA guidance for the full year is $222 million at the midpoint, above analyst estimates of $216.3 million
- Operating Margin: 11.7%, in line with the same quarter last year
- Free Cash Flow Margin: 13.3%, down from 18.7% in the previous quarter
- Billings: $288 million at quarter end, up 13.4% year on year
- Market Capitalization: $2.80 billion
Company Overview
Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com NASDAQ:ALRM provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Alarm.com’s sales grew at a sluggish 9.1% compounded annual growth rate over the last five years. This fell short of our benchmark for the software sector and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Alarm.com’s annualized revenue growth of 8.3% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.
This quarter, Alarm.com reported year-on-year revenue growth of 9.2%, and its $277.7 million of revenue exceeded Wall Street’s estimates by 4.9%.
Looking ahead, sell-side analysts expect revenue to grow 2.5% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will see some demand headwinds.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Alarm.com’s billings came in at $288 million in Q2, and over the last four quarters, its growth was underwhelming as it averaged 9.7% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers.
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Alarm.com is efficient at acquiring new customers, and its CAC payback period checked in at 37.6 months this quarter. The company’s relatively fast recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.
Key Takeaways from Alarm.com’s Q2 Results
We were impressed by how significantly Alarm.com blew past analysts’ billings expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 3.7% to $58.38 immediately following the results.
Alarm.com put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. .