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Alarm.com Holdings, Inc.

Alarm.com Holdings, Inc.ALRM決算レポート

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Alarm.com, Inc. is an American technology company that provides cloud-based services for remote control, home automation, and alarm monitoring services. The company was founded in 2000 as a spinoff from MicroStrategy. The company is based in Tysons, Virginia.

What changed in Alarm.com Holdings, Inc.'s 10-K — 2024 vs 2025

Top changes in Alarm.com Holdings, Inc.'s 2025 10-K

527 paragraphs added · 482 removed · 409 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

128 edited+28 added−23 removed117 unchanged
Growth Strategy We intend to maintain our leadership position and expand into new market opportunities by continuing to develop and deploy innovative technologies and by expanding our ecosystem of partners. Our key growth strategies include: ◦ Drive SaaS and license revenue growth by expanding the solutions our service providers deploy.
Growth Strategy We intend to maintain our leadership position and expand into new market opportunities by continuing to develop and deploy innovative technologies and expanding our ecosystem of partners. Our key growth strategies include: ◦ Drive SaaS and license revenue growth by expanding the solutions our service providers deploy.
Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading "Corporate Governance." The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 21
Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading "Governance." The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 21
Continued growth in the connected property market has invited new participants into the space that can complement our current partner ecosystem. We intend to continue to develop partnerships with heating, ventilation and air 13 conditioning installers, property management companies, utility companies, insurance providers and other service companies to expand avenues into residential and commercial properties. ◦ Pursue selective strategic acquisitions.
Continued growth in the connected property market has invited new participants into the space that can complement our current partner ecosystem. We intend to continue to develop partnerships with heating, ventilation and air conditioning installers, property management companies, utility companies, insurance providers and other service companies to expand avenues into residential and commercial properties. ◦ Pursue selective strategic acquisitions.
Gunshot sensors communicate to the Guardian Gateway Software, which provides notification pathways to first responders and building occupants, and enables cloud-based capabilities such as the Guardian situational awareness application that tracks and maps gunshot events. Beginning in 2023, Shooter Detection Systems indoor gunshot detection became available as a SaaS solution integrated with Alarm.com for commercial properties.
Gunshot sensors communicate to the Guardian Gateway Software, which provides notification pathways to first responders and building occupants, and enables cloud-based capabilities such as the Guardian situational awareness application that tracks and maps gunshot events. Beginning in 2023, Shooter Detection Systems gunshot detection became available as a SaaS solution integrated with Alarm.com for commercial properties.
We have also seen growth in other areas of our channel network, including new providers in the intelligent automation, HVAC, property management and insurance markets. We believe this highly trusted, established network is a core strength that enables an efficient and scalable customer acquisition model, allowing us to focus on technology innovation.
We have also seen growth in other areas of our channel network, including new providers in the intelligent automation, HVAC, property management, network operator and insurance markets. We believe this highly trusted, established network is a core strength that enables an efficient and scalable customer acquisition model, allowing us to focus on technology innovation.
OpenEye software offers Video Surveillance as a Service, or VSaaS, as well as cameras, recorders and other peripherals designed for video applications, and supports enterprise-level requirements such as advanced forensic video search, point of sale system integration and customer site mapping, as well as large-scale camera deployments. Key benefits of the OpenEye solution include: ◦ Intelligent Cloud Architecture.
OpenEye software offers Video Surveillance as a Service, or VSaaS, as well as cameras, recorders and other peripherals designed for video applications, and supports enterprise-level requirements such as advanced forensic video search, point-of- 8 sale system integration and customer site mapping, as well as large-scale camera deployments. Key benefits of the OpenEye solution include: ◦ Intelligent Cloud Architecture.
We seek to protect our intellectual property rights by requiring our employees and independent contractors involved in development to enter into agreements acknowledging that all inventions, trade secrets, works of authorship, developments, 17 concepts, processes, improvements and other works generated by them on our behalf are our intellectual property, and assigning to us any rights, including intellectual property rights, that they may claim in those works.
We seek to protect our intellectual property rights by requiring our employees and independent contractors involved in development to enter into agreements acknowledging that all inventions, trade secrets, works of authorship, developments, concepts, processes, improvements and other works generated by them on our behalf are our intellectual property, and assigning to us any rights, including intellectual property rights, that they may claim in those works.
Further, we added a lifestyle spending account to reimburse employees for up to $300 per year in wellness-related expenses, such as exercise equipment, gym memberships, fitness trackers and weight loss programs. We also offer a charitable giving reimbursement program to our employees, in which they receive a partial reimbursement for charitable contributions made to 501(c)(3) organizations.
Further, we offer a lifestyle spending account to reimburse employees for up to $300 per year in wellness-related expenses, such as exercise equipment, gym memberships, fitness trackers and weight loss programs. We also offer a charitable giving reimbursement program to our employees, in which they receive a partial reimbursement for charitable contributions made to 501(c)(3) organizations.
Additionally, smart thermostats and lights can be automatically adjusted based on the subscriber's location. Subscribers can create multiple geo-fences and customize the opt-in feature to meet their specific needs. ◦ Whole Home Water Safety Solution. Our comprehensive whole home water safety solution helps subscribers conserve water and proactively protect their property from a full range of water-related damage.
Additionally, smart thermostats and lights can be automatically adjusted based on the subscriber's location. Subscribers can create multiple geo-fences and customize the opt-in feature to meet their specific needs. ◦ Whole Home Water Safety Solution. Our comprehensive whole-home water safety solution helps subscribers proactively protect their property from a full range of water-related damage.
Our multi-sensor solution provides highly accurate indoor gunshot detection to help alert employees, the public and emergency services about active shooter threats. The solution uses a dual-mode detection technology that combines acoustic sensors with specialized infrared flash detectors, in tandem with proprietary gunshot detection software algorithms to maximize detection without driving false positives.
Our multi-sensor solution provides highly accurate gunshot detection to help alert employees, the public and emergency services about active shooter threats. The solution uses a dual-mode detection technology that combines acoustic sensors with specialized infrared flash detectors, in tandem with proprietary gunshot detection software algorithms to maximize detection without driving false positives.
The MobileTech app assists in proper wiring and installation and Remote Toolkit enables remote access to the thermostat settings for easy troubleshooting and support. 14 • Our Smart Thermostat HQ includes a built-in, cellular-based smart hub that supports compatible Z-Wave devices such as light switches, water protection sensors and sump pump monitors.
The MobileTech app assists in proper wiring and installation and Remote Toolkit enables remote access to the thermostat settings for easy troubleshooting and support. • Our Smart Thermostat HQ includes a built-in, cellular-based smart hub that supports compatible Z-Wave devices such as light switches, water protection sensors and sump pump monitors.
Supporting third-party cameras facilitates adoption of our commercial video solution by reducing the barriers to entry for small and medium-sized businesses that want to benefit from our intelligently integrated solutions without the cost of replacing existing installed cameras. ◦ Commercial Video Analytics. Business Activity Analytics can help improve and optimize business operations.
Supporting third-party cameras facilitates adoption of our commercial video solution by reducing the barriers to entry for small and medium- 7 sized businesses that want to benefit from our intelligently integrated solutions without the cost of replacing existing installed cameras. ◦ Commercial Video Analytics. Business Activity Analytics can help improve and optimize business operations.
We believe our sales and marketing approach enables us to expand our breadth of service providers, provide highly customized services and scale quickly. Service Provider Support We support the full suite of software and hardware products on the Alarm.com platform through a highly trained and experienced team of professionals based in the United States.
We believe our sales and marketing approach enables us to expand our breadth of service providers, provide highly customized services and scale quickly. Service Provider Partner Support We support the full suite of software and hardware products on the Alarm.com platform through a highly trained and experienced team of professionals based in the United States.
Connect provides a custom, on-premise interactive security and home automation platform for ADT Pulse® and several other service providers. Piper provides an all-in-one video and home automation hub. • In September 2019, we acquired certain assets from an unrelated third party. In March of 2020, we acquired certain additional assets from two separate unrelated parties.
Connect provides a custom, on-premise interactive security and home automation platform for ADT Pulse® and several other service providers. Piper provided an all-in-one video and home automation hub. • In September 2019, we acquired certain assets from an unrelated third party. In March of 2020, we acquired certain additional assets from two separate unrelated parties.
Additionally, we provide notifications of news or announcements regarding our business and financial performance, SEC filings, investor events, and our press and earnings releases, as part of our investor relations website. Investors and others can receive real-time notifications of new information posted on our investor relations website by 20 signing up for email alerts and RSS feeds.
Additionally, we provide notifications of news or announcements regarding our business and financial performance, SEC filings, investor events, and our press and earnings releases, as part of our investor relations website. Investors and others can receive real-time notifications of new information posted on our investor relations website by signing up for email alerts and RSS feeds.
They can deploy interactive security, video monitoring, property automation, access control, energy management, gunshot detection, water management, vehicle and fleet management, and wellness and personal safety solutions as stand-alone offerings or as integrated solutions. 4 Residential Solutions Interactive Security Interactive security is the entry point for most of our smart home and business subscribers.
They can deploy interactive security, video monitoring, property automation, access control, energy management, gunshot detection, water management, vehicle and fleet management, and personal safety solutions as stand-alone offerings or as integrated solutions. 4 Residential Solutions Interactive Security Interactive security is the entry point for most of our smart home and business subscribers.
In the future, we, or our service providers or subscribers, may be the subject of legal proceedings alleging our solutions or underlying technology infringe or violate the intellectual property rights of others. Environmental, Social and Corporate Governance Matters Environmental To operate long-term, we need to ensure our local communities and the natural environment are thriving.
In the future, we, or our service providers or subscribers, may be the subject of legal proceedings alleging our solutions or underlying technology infringe or violate the intellectual property rights of others. Environmental and Corporate Governance Matters Environmental To operate long-term, we need to ensure our local communities and the natural environment are thriving.
Our solutions help broaden our service provider partners' offerings beyond traditional security to also include comprehensive smart residential and commercial solutions like intelligent automation, video monitoring and energy management. They can access new market opportunities and drive incremental recurring monthly revenue by expanding their offerings with our solutions.
Our solutions help broaden our service provider partners' offerings beyond traditional security to also include comprehensive smart residential and commercial solutions like video monitoring and video analytics, intelligent automation and energy management. They can access new market opportunities and drive incremental recurring monthly revenue by expanding their offerings with our solutions.
We previously launched Belonging, an employee-led community group that offers community events and learning opportunities centered around promoting belonging in 18 the workplace. We continued our Women in Tech group, aimed at empowering women to grow their technical and professional skillsets and expertise as well as promoting greater allyship in tech through education.
We previously launched Belonging, an employee-led community group that offers community events and learning opportunities centered around promoting belonging in the workplace. We continued our Women in Tech group, aimed at empowering women to grow their technical and professional skillsets and expertise as well as promoting greater allyship in tech through education.
The claims for which we have sought patent protection apply to a wide array of our products and services, including those of our subsidiaries and acquired businesses. Our portfolio of patents and patent applications applies broadly to the features and functionality of the various technology platforms we maintain as well as potential new products, services and offerings.
The claims for which we have sought patent protection apply to a wide array of our products and services, including those of our subsidiaries and acquired businesses. Our portfolio of patents and patent applications applies broadly to the features and functionality of the various technology platforms we maintain as well as potential new products, 17 services and offerings.
For example, when the security system is armed away, an arming state used when the property is not occupied, the thermostat can automatically adjust to save energy. Additionally, if a window is open for a period of time, the smart thermostat can adjust to an efficiency setting and alert the property owners. 6 ◦ Precision Comfort.
For example, when the security system is armed away, an arming state used when the property is not occupied, the thermostat can automatically adjust to save energy. Additionally, if a window is open for a period of time, the smart thermostat can adjust to an efficiency setting and alert the property owners. ◦ Precision Comfort.
Smarter business security powered by Alarm.com is supported by our authorized service provider partners from start to finish, with installation, configuration and technical support included. 8 Our OpenEye subsidiary offers enterprise commercial video management solutions that complement the Alarm.com for Business platform.
Smarter business security powered by Alarm.com is supported by our authorized service provider partners from start to finish, with installation, configuration and technical support included. Our OpenEye subsidiary offers enterprise commercial video management solutions that complement the Alarm.com for Business platform.
Subscribers can receive real-time alerts and video clips if the alarm goes off, a door is unlocked, or unexpected activity occurs outside of normal business hours. Our 7 commercial video solution operates with a diverse array of third-party commercial video cameras.
Subscribers can receive real-time alerts and video clips if the alarm goes off, a door is unlocked, or unexpected activity occurs outside of normal business hours. Our commercial video solution operates with a diverse array of third-party commercial video cameras.
Amazon.com offers Amazon Home Services security packages with bundled equipment and professional installation, and Amazon Key, a security camera and smart lock integration feature. Ring Inc., owned by Amazon.com, offers a connected 16 video doorbell, video cameras and an integrated security system, Ring Alarm. Samsung's SmartThings offers a security system and a home automation and awareness hub.
Amazon.com offers Amazon Home Services security packages with bundled equipment and professional installation, and Amazon Key, a security camera and smart lock integration feature. Ring Inc., owned by Amazon.com, offers a connected video doorbell, video cameras and an integrated security system, Ring Alarm. Samsung's SmartThings offers a security system and a home automation and awareness hub.
Our solution can then recommend thermostat schedules that have the potential to increase energy efficiency when the property is not likely to be occupied. ◦ Responsive Savings . Smart thermostats connected to our platforms can automatically respond to sensors and other devices in the property to conserve energy.
Our solution can then recommend thermostat schedules that have the potential to increase energy efficiency when the property is not likely to be occupied. 6 ◦ Responsive Savings . Smart thermostats connected to our platforms can automatically respond to sensors and other devices in the property to conserve energy.
We provide sales and marketing resources to help our service provider partners become more effective in selling our expanding range of solutions and we will continue to make significant investments to support our service provider network. ◦ Upgrade traditional security customers to our solutions.
We provide sales and marketing resources to help our service provider partners become more effective in selling our expanding range of solutions and we will continue to make significant investments to support our service provider partner network. ◦ Upgrade traditional security customers to our solutions.
We completed our initial public offering in July 2015 and our common stock is listed on The Nasdaq Global Select Market under the symbol "ALRM." Historically, we have completed acquisitions of complementary companies or their technologies.
We completed our initial public offering in July 2015 and our common stock is listed on The Nasdaq Global Select Market under the symbol "ALRM." 19 Historically, we have completed acquisitions of complementary companies or their technologies.
This resource is accessible through the Alarm.com Partner Portal and the MobileTech application. • Video Health Reports: Video Health Reports give Alarm.com’s service provider partners and their commercial video customers a monthly snapshot of the condition of video cameras and stream video recorders.
This resource is accessible through the Alarm.com service provider portal and the MobileTech application. • Video Health Reports: Video Health Reports give Alarm.com’s service provider partners and their commercial video customers a monthly snapshot of the condition of video cameras and stream video recorders.
We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging home automation, security monitoring, video monitoring and automation, wellness, and energy management companies as well as large technology companies.
We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging home automation, security monitoring, video monitoring and automation, and energy management companies as well as large technology companies.
We believe this scale of subscribers, connected devices and data operations makes us the leader in the connected property market. Alarm.com has established a global network of trusted service provider partners who distribute our solutions to their customers. Our service provider partners represent a diverse range of independent businesses, and are experts at selling, installing and supporting our technology.
We believe this scale of subscribers, connected devices and data operations makes us the leader in the connected property market. Alarm.com has established a global network of trusted service provider partners who distribute our solutions to their customers. Our service provider partners represent a wide range of independent businesses, and are experts at selling, installing and supporting our technology.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP, for the years ended December 31, 2024, 2023 and 2022.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP, for the years ended December 31, 2025, 2024 and 2023.
We believe the combination of the 12 size of our subscriber base, service provider network and the volume of data generated by the integrated devices on our platforms creates a competitive advantage for us. ◦ Security Grade, Cloud-Based Architecture. We built our platforms with a cloud-based, multi-tenant architecture that allows for real-time updates and upgrades.
We believe the combination of the size of our subscriber base, service provider partner network and the volume of data generated by the integrated devices on our platforms creates a competitive advantage for us. ◦ Security Grade, Cloud-Based Architecture. We built our platforms with a cloud-based, multi-tenant architecture that allows for real-time updates and upgrades.
Additionally, Canary and other companies offer all in one video monitoring and awareness devices. In addition, we may compete with other large and small technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader connected home market.
Additionally, Canary and other companies offer all in one video monitoring and awareness devices. In addition, we may compete with other large and small technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader smart home market.
Today, our products are currently localized and available in over 50 countries outside of North America, including Argentina, Chile, Switzerland, Turkey and the United Kingdom. We intend to continue to grow our number of international subscribers by strengthening our presence in existing markets and expanding to additional markets.
Today, our products are currently localized and available in over 50 countries outside of North America, including Argentina, Chile, Sweden, Turkey and the United Kingdom. We intend to continue to grow our number of international subscribers by strengthening our presence in existing markets and expanding to additional markets.
Intelligent Automation and Energy Management Our solution provides enhanced monitoring and control for a large ecosystem of connected devices, including thermostats, lights, locks, power meters, shades and other devices. Increasing awareness of energy usage and providing intelligent control over connected devices enables subscribers to create personalized automation rules and schedules.
Intelligent Automation and Energy Management Our solution provides enhanced monitoring and control for a large ecosystem of connected devices, including thermostats, lights, locks, power monitors, shades and other devices. Increasing awareness of energy usage and providing intelligent control over connected devices enables subscribers to create personalized automation rules and schedules.
We have an open platform which allows service provider partners to respond to market innovation and consumer demands for connected devices. Device hardware is deeply integrated into our platforms to provide a more cohesive experience than stand-alone products deliver. Our platforms also support various broadly adopted communications protocols commonly used in many automation devices, including Z-Wave, Wi-Fi and cellular.
We have an open platform that allows service provider partners to respond to market innovation and consumer demands for connected devices. Device hardware is deeply integrated into our software platforms to provide a more cohesive experience than stand-alone products deliver. Our platforms also support various broadly adopted communications protocols commonly used in many automation devices, including Z-Wave, Wi-Fi and cellular.
ADT LLC, or ADT, represented greater than 15% but not more than 20% of our revenue in each of 2022, 2023 and 2024. Subscribers We define subscribers as residential or commercial properties to which we are delivering at least one of our solutions.
ADT LLC, or ADT, represented greater than 15% but not more than 20% of our revenue in each of 2023, 2024 and 2025. Subscribers We define subscribers as residential or commercial properties to which we are delivering at least one of our solutions.
SDS is a provider of an indoor gunshot detection solution that helps alert employees and the public against active shooter threats. • On September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., or Noonlight.
SDS is a provider of a gunshot detection solution that helps alert employees and the public against active shooter threats. • On September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., or Noonlight.
When unexpected activity is detected, the subscriber is automatically notified. ◦ Alarm Transmission. We transmit alarm signals from monitored properties through our cloud platforms to approximately 1,000 third-party central monitoring stations staffed 24 hours a day, seven days a week with live operators ready to initiate emergency response. ◦ Smart Signal.
When unexpected activity is detected, the subscriber can choose to be automatically notified. ◦ Alarm Transmission. We transmit alarm signals from monitored properties through our cloud platforms to approximately 1,000 third-party central monitoring stations staffed 24 hours a day, seven days a week with live operators ready to initiate emergency response. ◦ Smart Signal.
Our current competitors include providers of other technology platforms for the connected property with interactive security, including Alula (formed following the merger of ipDatatel, LLC and Resolution Products, LLC), Ajax Systems CH, Avigilon Corporation, Brivo Inc., Digital Monitoring Products Inc., Eagle Eye Networks Inc., Hangzhou Hikvision Digital Technology Co., Ltd., Honeywell International Inc., Napco Security Technologies, Inc., Resideo Technologies Inc., SecureNet Technologies, LLC, Telular Corporation (acquired by AMETEK, Inc.), and Verkada Inc., which sell solutions to service providers, cable operators, technology retailers and other residential and commercial automation providers.
Our current competitors include providers of other technology platforms for the connected property with interactive security, including Alula (formed following the merger of ipDatatel, LLC and Resolution Products, LLC), Ajax Systems CH, Avigilon Corporation, Brivo Inc., Digital Monitoring Products 16 Inc., Hangzhou Hikvision Digital Technology Co., Ltd., Honeywell International Inc., Napco Security Technologies, Inc., Resideo Technologies Inc., SecureNet Technologies, LLC, Telular Corporation (acquired by AMETEK, Inc.), and Verkada Inc., which sell solutions to service providers, cable operators, technology retailers and other residential and commercial automation providers.
The Guardian system from Shooter Detection Systems includes proprietary, dual-mode gunshot sensors that are installed inside the subscriber's property to help protect people against active shooter threats. Each gunshot sensor uses a dual-mode detection technology that combines acoustic sensors with specialized infrared flash detectors. Proprietary gunshot detection software algorithms maximize detection and minimize false positives.
The Guardian system from Shooter Detection Systems includes proprietary, dual-mode gunshot sensors that are installed to help protect people against active shooter threats. Each gunshot sensor uses a dual-mode detection technology that combines acoustic sensors with specialized infrared flash detectors. Proprietary gunshot detection software algorithms maximize detection and minimize false positives.
ITEM 1. BUSINESS Overview Alarm.com is the leading platform for the intelligently connected property. Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions addressing global opportunities in the residential, multi-family, small business and enterprise commercial markets.
ITEM 1. BUSINESS Overview Alarm.com is the leading platform for intelligently connected properties. Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions addressing global opportunities in the residential, multi-family, small business, enterprise commercial and energy markets.
Our smarter thermostats help subscribers reduce energy costs automatically, even if someone forgets to adjust the temperature when they are closing up at the end of the day, generating a return on investment. ◦ Proactive Protection for Valuables and Inventory.
Our smarter thermostats can help subscribers reduce energy costs automatically, even if someone forgets to adjust the temperature when they are closing up at the end of the day, and generate a return on investment. ◦ Proactive Protection for Valuables and Inventory.
On-Site Wrap Up helps Alarm.com’s service provider partners ensure that their field technicians deliver consistent, high-quality service that reduces support costs and customer attrition. ▪ On My Way. The On My Way feature within the MobileTech application modernizes the management of service appointments and customer expectations.
On-Site Wrap Up helps Alarm.com’s service provider partners ensure that their field technicians deliver consistent, high-quality installations that reduce support costs and customer attrition. ▪ On My Way. The On My Way feature within the MobileTech application modernizes the management of service appointments and customer expectations.
We also believe that the combination of our solutions and our service provider partners’ expertise is the most effective way to drive mass market adoption of the intelligently connected property. 15 The traditional security and home automation market is highly fragmented.
We also believe that the combination of our solutions and our service provider partners’ expertise is the most effective way to drive mass market adoption of intelligently connected properties. The traditional security and home automation market is highly fragmented.
Additionally, OpenEye's Sales Connect solution combines point-of-sale system data with video so subscribers can create custom alerts and conduct forensic searches on detailed transaction data to deliver a more robust solution for significant verticals such as retail, grocery and quick-serve restaurants. ◦ Enterprise-Level Capabilities.
Additionally, OpenEye's Sales Connect solution combines point-of-sale system data with video so subscribers can create custom alerts and conduct forensic searches on detailed transaction data to deliver a more robust solution for significant verticals such as retail, grocery and quick-serve restaurants. ◦ CloudConnect.
Notifications and reminders for any type of system event are delivered through push notifications, short message service, or SMS, or email, based on the subscriber's preference. Our proprietary algorithms help safeguard connected properties by continuously monitoring devices and sensors and learning the unique activity patterns in a property.
Notifications and reminders for any type of system event are delivered through push notifications, email or text message based on the subscriber's preference. Our proprietary algorithms help safeguard connected properties by continuously monitoring devices and sensors and learning the unique activity patterns in a property.
Capabilities such as advanced forensic video search, point of sale system integration and customer site mapping address the specific needs of enterprise-level subscribers and allow loss prevention officers, business analysts and other IT resources to employ video as a key operational and management tool. ◦ Large-Scale Video Deployments.
Capabilities such as advanced forensic video search, point-of-sale system integration and customer site mapping address the specific needs of enterprise-level subscribers and allow loss prevention officers, business analysts and other IT resources to employ video as a key operational and management tool. ◦ Ecosystem Integration.
Real-time and historical energy usage and solar energy production data for the entire property and individual devices can give subscribers greater insight into the property’s energy profile and encourage more efficient use of energy-consuming devices. ◦ HVAC Monitoring Service .
Real-time and historical energy usage and solar energy production data for the entire property and individual devices can give subscribers greater insight into the property’s energy profile and encourage more efficient use of energy-consuming devices.
Remote temperature sensors enable a subscriber to manage comfort in a specific area within their property. For example, a homeowner can set a desired temperature for a child's nursery to improve the child’s comfort. Subscribers can easily customize detailed schedules and rules to have the right temperature in the right location at the right time. ◦ Energy Usage Monitoring.
Remote temperature sensors enable a subscriber to manage comfort in a specific area within their property. For example, a homeowner can set a desired temperature for a child's nursery to improve the child’s comfort. Subscribers can easily customize detailed schedules and rules to have the right temperature in the right location at the right time. ◦ HVAC Monitoring Service .
We also provide a doorbell video camera solution that supports two-way audio with guests at the door, as well as video management software and cameras for enterprise commercial applications through our OpenEye business. The capabilities associated with our video monitoring solution include: ◦ Video Analytics .
We also provide doorbell video camera solutions that support two-way audio with guests at the door, as well as video management software and cameras for enterprise commercial applications through our OpenEye business. The capabilities associated with our video monitoring solution include: ◦ Video Analytics .
Our open platforms and interoperability give our service provider partners a wide selection of devices to suit their customers' needs now and in the future. ◦ Dedicated Service Provider Support. We operate support centers focused on providing timely support to our service providers and their technicians.
Our open platforms and interoperability give our service provider partners a wide selection of devices to suit their customers' needs now and in the future. 12 ◦ Dedicated Service Provider Support. We operate support centers that focus on providing timely support to our service providers and their technicians.
According to the Barnes Buchanan 2025 Security Alarm Industry Overview and Update report, the top six dealers represented approximately 37% of all industry recurring monthly revenue in 2023. The distribution of revenue among our service provider partners is reflective of the industry overall.
According to the Barnes Buchanan 2026 Security Alarm Industry Overview and Update report, the top six dealers represented approximately 37% of all industry recurring monthly revenue in 2024. The distribution of revenue among our service provider partners is reflective of the industry overall.
We believe the acquisitions of the IPR&D will further our commitment to make significant investments in innovative research and development in the intelligently connected property market to broaden our suite of solutions as well as strengthen our smart intercom capability. • In December of 2021, we acquired certain assets from an unrelated party.
The acquisitions of the IPR&D have furthered our commitment to make significant investments in innovative research and development in the intelligently connected property market to broaden our suite of solutions as well as strengthen our smart intercom capability. • In December of 2021, we acquired certain assets from an unrelated party.
Substantially all of the assets acquired consisted of developed technology. We believe the acquisition of the developed technology will continue to advance our load-shaping energy management solution allowing additional devices to participate in utility programs that reduce or shift power consumption during peak demand periods. • On April 21, 2023, we acquired certain assets of Vintra, Inc., or Vintra.
Substantially all of the assets acquired consisted of developed technology. The acquisition of the developed technology has continued to advance our load-shaping energy management solution allowing additional devices to participate in utility programs that reduce or shift power consumption during peak demand periods. 20 • On April 21, 2023, we acquired certain assets of Vintra, Inc., or Vintra.
Our demand response programs manage over 1.6 million connected devices for more than 70 energy utilities in North America. These programs support energy utilities as they pursue ambitious clean energy goals. Our lineup of smart thermostats and intelligent energy management solutions can automatically adjust to reduce energy waste in residential and commercial properties.
Our demand response programs manage over 2.5 million connected devices for more than 120 energy utilities in North America. These programs support energy utilities as they pursue ambitious clean energy goals. Our lineup of smart thermostats and intelligent energy management solutions can automatically adjust to reduce energy waste in residential and commercial properties.
To help meet these goals we intend to continue promoting, providing and investing in the further development of solutions that can help reduce energy waste and facilitate water conservation. These include demand response programs, smart thermostats, energy management solutions, solar monitoring solutions, Smart Water Valve + Meter device and advanced functionality within the Alarm.com app.
To help meet these goals we intend to continue promoting, providing and investing in the further development of solutions that can help reduce energy waste and facilitate water conservation. These include demand response programs, smart thermostats, energy management solutions, solar monitoring solutions, whole home water safety solutions and advanced functionality within the Alarm.com app.
Through an integration with Alarm.com's Noonlight subsidiary, SDS provides an advanced emergency response solution that enhances situational awareness for first responders during active shooter incidents. The solution enables the 911 operators, responding officers, onsite security and building managers to communicate and share information in real-time and view critical contextual data, including the building, room and floor location of gunshot events.
Through an integration with Alarm.com's Noonlight subsidiary, SDS provides an advanced emergency response solution that enhances situational awareness for first responders during active shooter incidents. The solution enables the 911 operators, responding officers, onsite security and building managers to communicate and share information in real-time and view critical contextual data.
Alarm.com's artificial intelligence, or AI, driven video analytics engine provides object classification and object tracking capabilities that can distinguish between people, vehicles and animals, determine an object's direction of movement and measure the duration of activity.
Alarm.com's artificial intelligence, or AI, driven video analytics engine provides object classification and object tracking capabilities that can distinguish between people, vehicles and animals, detect package deliveries, determine an object's direction of movement, measure the duration of activity, and identify familiar vehicles and people.
To accomplish these objectives, we rely on a combination of patent, trademark, copyright and trade secret laws in the United States and other jurisdictions, as well as license agreements, confidentiality agreements and other contractual protections. As of December 31, 2024, we owned 883 issued United States utility patents, one issued United States design patent and 251 issued international patents.
To accomplish these objectives, we rely on a combination of patent, trademark, copyright and trade secret laws in the United States and other jurisdictions, as well as license agreements, confidentiality agreements and other contractual protections. As of December 31, 2025, we owned 976 issued United States utility patents, one issued United States design patent and 373 issued international patents.
The integrated solution allows subscribers to monitor and track the location of gunshots, quickly view videos of the time and place that gunshots occurred and share critical situational awareness information with first responders with no onsite software installation required. ◦ Smart Water Valve + Meter and Water Dragon.
The integrated solution allows subscribers to monitor and track the location of gunshots, quickly view videos of the time and place that gunshots occurred and share critical situational awareness information with first responders with no onsite software installation required.
Security systems, thermostats, door locks, video cameras, lights, garage doors and other devices that were once inert can now be intelligent and connected. Our intelligently connected property solutions provide a wealth of benefits to our subscribers and our service provider partners. 11 Benefits to Subscribers: ◦ Single Connected Platform.
Security systems, thermostats, door locks, video cameras, lights, garage doors and other devices that were once inert can now be intelligent and connected. Our connected property software platform provides a wealth of benefits to our subscribers and our service provider partners. Benefits to Subscribers: ◦ Single Connected Platform.
Monitoring stations can rapidly dispatch emergency services to the highest priority alarms, while also reducing the likelihood of false alarm dispatches. • Visual Verification. Our Visual Verification solution empowers monitoring station operators to make more informed decisions and expedite emergency response while supporting service providers.
Monitoring stations can rapidly dispatch emergency services to the highest priority alarms, while also reducing the likelihood of false alarm dispatches. • Visual Verification. Our Visual Verification solution empowers monitoring station operators to make more informed decisions and expedite emergency response when intrusion alarms occur.
CloudConnect is a two-way integration between the OpenEye Cloud Video Platform and the Alarm.com for Business platform that directly associates event data from intrusion sensors and access control readers with OpenEye’s VSaaS offering.
The two-way integration between the OpenEye Cloud Video Platform and the Alarm.com for Business platform associates event data from intrusion sensors and access control readers with OpenEye’s VSaaS offering.
We have developed a highly scalable data analytics engine to deliver unique features and capabilities based on insights derived from this growing set of data. For example, learning detailed activity patterns in a property enables our platforms to proactively alert the subscriber about unexpected events.
We have developed a highly scalable data analytics and AI engine to deliver unique features and capabilities based on insights derived from this growing dataset. For example, learning detailed activity patterns in a property enables our platforms to proactively alert the subscriber about unexpected events or identify familiar vehicles and people.
Our video analytics offering includes capabilities such as Perimeter Guard, which can proactively identify and 5 engage would-be intruders before they can threaten physical property, and Familiar Vehicle Analytics, which enables subscribers to customize their system by tagging specific vehicles as “familiar” and enabling their video system to send alerts when a familiar or an unfamiliar vehicle is identified. ◦ AI Deterrence .
Our video analytics offering includes capabilities such as Perimeter Guard®, which can proactively identify and engage potential intruders before they can threaten physical property, and Familiar Vehicle and Face Analytics, which enables subscribers to customize their system by 5 tagging specific vehicles or people as “familiar” and enabling their video system to send alerts when a familiar or an unfamiliar object is identified. ◦ Remote Video Monitoring, or RVM.
Leveraging advanced algorithms, our Smarter Access Control solution intelligently learns the activity patterns of users and access points for single or multiple property installations, detects unexpected events and alerts the subscriber of the irregular activity. ◦ Cell Connector .
Leveraging advanced algorithms, our Smarter Access Control solution intelligently learns the activity patterns of users and access points for single or multiple property installations, detects unexpected events and alerts the subscriber of the irregular activity. ◦ Enterprise Dashboard and Multi-site Management.
Alarm.com is a pioneer in the intelligently connected property market. In 2024, our platforms processed more than 345 billion data points generated by over 160 million connected devices.
Alarm.com is a pioneer in the intelligently connected property market. In 2025, our platforms processed more than 365 billion data points generated by over 170 million connected devices.
We also generated net income attributable to common stockholders of $124.1 million, $81.0 million and $56.3 million in 2024, 2023 and 2022, respectively, as well as non-GAAP adjusted EBITDA of $176.2 million, $154.0 million and $146.8 million in 2024, 2023 and 2022, respectively. See the "Non-GAAP Measures" section of Item 7.
We also generated net income attributable to common stockholders of $132.6 million, $124.1 million and $81.0 million in 2025, 2024 and 2023, respectively, as well as non-GAAP adjusted EBITDA of $206.0 million, $176.2 million and $154.0 million in 2025, 2024 and 2023, respectively. See the "Non-GAAP Measures" section of Item 7.
We generated total revenue of $939.8 million, $881.7 million and $842.6 million in 2024, 2023 and 2022, respectively. Our SaaS and license revenue was $631.2 million, $569.2 million and $520.4 million in 2024, 2023 and 2022, respectively, representing a compound annual growth rate of 10.1%.
We generated total revenue of $1.0112 billion, $939.8 million and $881.7 million in 2025, 2024 and 2023, respectively. Our SaaS and license revenue was $689.4 million, $631.2 million and $569.2 million in 2025, 2024 and 2023, respectively, representing a compound annual growth rate of 10.1%.
The ease of installation and cost of supporting connected property solutions are critical considerations for our service provider partners. We support the end-to-end process for deploying and managing our solutions with tools that make installation and support more efficient. • MobileTech Application and Remote Toolkit.
The ease of installation and cost of supporting connected property solutions are critical considerations for our service provider partners and the performance of their businesses. The Alarm.com platform supports the end-to-end process for deploying and managing our solutions with tools that make installation and support more efficient and accurate. • MobileTech Application and Remote Toolkit.
We believe the acquisition of the developed technology will expand Alarm.com's learning program and accelerate deployment of advanced video analytics solutions for the Alarm.com and OpenEye platforms. • On November 22, 2024, we acquired certain assets of Kapacity.io to help accelerate deployment of a cloud-based demand response platform internationally for our EnergyHub subsidiary.
The acquisition of the developed technology has expanded Alarm.com's learning program and accelerated deployment of advanced video analytics solutions for the Alarm.com and OpenEye platforms. • On November 22, 2024, we acquired certain assets of Kapacity.io, which have helped accelerate deployment of a cloud-based demand response platform internationally for our EnergyHub subsidiary.
We continue to broaden our intellectual property portfolio and file patent applications and as of December 31, 2024, we had 169 pending utility patent applications and 21 pending provisional patent applications filed in the United States. We also had 134 pending international patent applications and four international patent applications pending under the Patent Cooperation Treaty.
We continue to broaden our intellectual property portfolio and file patent applications and as of December 31, 2025, we had 141 pending utility patent applications and 24 pending provisional patent applications filed in the United States. We also had 125 pending international patent applications and six international patent applications pending under the Patent Cooperation Treaty.
Some of our prior acquisitions of companies include: • On October 21, 2019, we acquired 85% of the issued and outstanding capital stock of PC Open Incorporated, a Washington corporation, doing business as OpenEye.
Some of our prior acquisitions of companies include: • On October 21, 2019, we acquired 85% of the issued and outstanding capital stock of PC Open Incorporated, a Washington corporation, doing business as OpenEye. OpenEye provides cloud-managed video surveillance solutions for the enterprise commercial market.
Alarm.com’s solution suite includes security, video and video analytics, energy management, access control, electric utility grid management, indoor gunshot detection, water management, health and wellness, personal safety and data-rich emergency response. During 2024, our platforms processed more than 345 billion data points generated by over 160 million connected devices.
Alarm.com’s solution suite includes security, video surveillance and video analytics, energy management, access control, electric utility grid management, active shooter detection, water management, personal safety and data-rich emergency response. During 2025, our platforms processed more than 365 billion data points generated by over 170 million connected devices.
We designed these capabilities 10 to streamline their operations, empower them to provide critical information to public safety dispatchers and first responders, enhance the value of the monitoring services they provide to subscribers and reduce false alarm dispatches. • Ambient Insights for Alarm Response.
We apply our advanced, AI architecture to provide our third-party monitoring station partners with powerful insights. We designed these capabilities to streamline their operations, empower them to provide critical information to public safety dispatchers and first responders, enhance the value of the monitoring services they provide to subscribers and reduce false alarm dispatches. • Ambient Insights for Alarm Response.
In addition, we regularly conduct employee surveys to gauge employee engagement and identify areas of focus. Government Regulations Our business, operations and service provider partners are subject to various U.S. federal, state and local consumer protection laws, licensing regulation and other laws and regulations, and to similar laws and regulations in the other countries in which we operate.
Government Regulations Our business, operations and service provider partners are subject to various U.S. federal, state and local consumer protection laws, licensing regulation and other laws and regulations, and to similar laws and regulations in the other countries in which we operate.
We continue to make significant investments in innovative research and development. Our investment resulted in hundreds of issued patents as of December 31, 2024 and numerous patent applications pending which we believe can help ensure our technology remains competitively differentiated and legally protected.
Our investment resulted in hundreds of issued patents as of December 31, 2025 and numerous patent applications pending which we believe can help ensure our technology remains competitively differentiated and legally protected.
We intend to leverage many of our existing solutions, including our Alarm.com for Business solution, to provide such businesses with visibility into their key operational activities, keep businesses secure, provide facility access to employees and vendors remotely and manage their energy costs. ◦ Channel expansion. Today, many consumers purchase connected devices through a security service provider.
We intend to leverage many of our existing solutions, including our Alarm.com for Business solution, to provide such businesses with visibility into their key operational activities, keep businesses secure, provide facility access to employees and vendors remotely and manage their energy costs. ◦ Grow our energy business .
OpenEye's software also works with a wide variety of devices to enable unique solutions. For example, environmental sensors can trigger OpenEye alerts and video recording based on events of interest, including new Vaping Alerts for school settings.
OpenEye's software integrates with a wide variety of third-party devices and systems to enable unique solutions. For example, environmental sensors can trigger OpenEye alerts and video recording, including vaping alerts for school settings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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If any one of these risks materializes, our business, financial condition, cash flows or results of operations could be materially and adversely affected.
If any one of these risks materializes, our business, financial condition, cash flows or results of operations could be materially and adversely affected.
DPF may receive personal data from the UK and Gibraltar in reliance on the UK Extension to the EU-U.S.
DPF may receive personal data from the UK and Gibraltar in reliance on the UK Extension to the EU-U.S. DPF.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue preferred stock, without further stockholder action and with voting liquidation, dividend and other rights superior to our common stock; 49 • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent, and limit the ability of our stockholders to call special meetings; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for director nominees; and • provide that vacancies on our board of directors may be filled only by the vote of a majority of directors then in office, even though less than a quorum.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue preferred stock, without further stockholder action and with voting liquidation, dividend and other rights superior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent, and limit the ability of our stockholders to call special meetings; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for director nominees; and • provide that vacancies on our board of directors may be filled only by the vote of a majority of directors then in office, even though less than a quorum.
Our overall leverage and certain obligations contained in the related documentation could adversely affect our financial health and business and future operations by, among other things: • making it more difficult to satisfy our obligations, including under the terms of the 2026 Notes and 2029 Notes; • limiting our ability to refinance our debt on terms acceptable to us or at all; • limiting our flexibility to plan for and adjust to changing business and market conditions and increasing our vulnerability to general adverse economic and industry conditions; • limiting our ability to use our available cash flow to fund future acquisitions, working capital, business activities, and other general corporate requirements; and • limiting our ability to obtain additional financing for working capital, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity.
Our overall leverage and certain obligations contained in the related documentation could adversely affect our financial health and business and future operations by, among other things: • making it more difficult to satisfy our obligations, including under the terms of the 2029 Notes; • limiting our ability to refinance our debt on terms acceptable to us or at all; • limiting our flexibility to plan for and adjust to changing business and market conditions and increasing our vulnerability to general adverse economic and industry conditions; • limiting our ability to use our available cash flow to fund future acquisitions, working capital, business activities, and other general corporate requirements; and • limiting our ability to obtain additional financing for working capital, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity.
To successfully manage our growth and obligations as a public company, we believe we must effectively, among other things: • maintain our relationships with existing service provider partners and add new service provider partners; • increase our subscriber base and help our service provider partners maintain and improve their revenue retention rates, while also expanding their cross-sell effectiveness; • manage our relationships with our hardware vendors and other key suppliers; • add, train and integrate sales and marketing personnel; • expand our international operations; and • continue to implement and improve our administrative, financial and operational systems, procedures and controls.
To successfully manage our growth and obligations as a public company, we believe we must effectively, among other things: • maintain our relationships with existing service provider partners and add new service provider partners; 25 • increase our subscriber base and help our service provider partners maintain and improve their revenue retention rates, while also expanding their cross-sell effectiveness; • manage our relationships with our hardware vendors and other key suppliers; • add, train and integrate sales and marketing personnel; • expand our international operations; and • continue to implement and improve our administrative, financial and operational systems, procedures and controls.
These acquisitions and any other acquisitions we may complete in the future will give rise to certain risks, including: • incurring higher than anticipated capital expenditures and operating expenses; 35 • failing to assimilate and integrate the operations and personnel or failing to retain the key personnel of the acquired company or business; • failing to retain customers and service providers and other third-party business partners seeking to terminate or renegotiate their relationships with us; • failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies into our platforms and solutions; • disrupting our ongoing business; • encountering complexities associated with managing a larger, more complex and growing business; • diverting our management’s attention and other company resources; • failing to maintain uniform standards, controls and policies; • incurring significant accounting charges; • impairing relationships with employees, service provider partners or subscribers; • finding that the acquired technology, asset or business does not further our business strategy, that we overpaid for the technology, asset or business or that we may be required to write off acquired assets or investments partially or entirely; • failing to realize the expected synergies of the transaction; • being exposed to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and • being unable to generate sufficient revenue and profits from acquisitions to offset the associated acquisition costs.
These acquisitions and any other acquisitions we may complete in the future will give rise to certain risks, including: • incurring higher than anticipated capital expenditures and operating expenses; • failing to assimilate and integrate the operations and personnel or failing to retain the key personnel of the acquired company or business; • failing to retain customers and service providers and other third-party business partners seeking to terminate or renegotiate their relationships with us; • failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies into our platforms and solutions; • disrupting our ongoing business; 36 • encountering complexities associated with managing a larger, more complex and growing business; • diverting our management’s attention and other company resources; • failing to maintain uniform standards, controls and policies; • incurring significant accounting charges; • impairing relationships with employees, service provider partners or subscribers; • finding that the acquired technology, asset or business does not further our business strategy, that we overpaid for the technology, asset or business or that we may be required to write off acquired assets or investments partially or entirely; • failing to realize the expected synergies of the transaction; • being exposed to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and • being unable to generate sufficient revenue and profits from acquisitions to offset the associated acquisition costs.
Our ability to compete depends on a number of factors, including: • our platforms and solutions’ functionality, performance, ease of use and installation, reliability, availability and cost effectiveness relative to that of our competitors’ products; • our success in utilizing new and proprietary technologies to offer solutions and features previously not available in the marketplace; • our success in identifying new markets, applications and technologies; • our ability to attract and retain service provider partners; • our name recognition and reputation; • our ability to recruit software engineers and sales and marketing personnel; and • our ability to protect our intellectual property.
Our ability to compete depends on a number of factors, including: • our platforms and solutions’ functionality, performance, ease of use and installation, reliability, availability and cost effectiveness relative to that of our competitors’ products; • our success in utilizing new and proprietary technologies to offer solutions and features previously not available in the marketplace; • our success in identifying new markets, applications and technologies; • our ability to attract and retain service provider partners; • our name recognition and reputation; • our ability to recruit software engineers and sales and marketing personnel; and 27 • our ability to protect our intellectual property.
In connection with the amendment to the MSA, we agreed to provide ADT a license to use certain Alarm.com intellectual property following the termination or expiration of the initial term of the MSA for which ADT pays us a monthly royalty 30 for each subscriber to its ADT branded residential interactive security, automation and video service offerings that is covered by any of our licensed patents and not enabled by one of our software platforms.
In connection with the amendment to the MSA, we agreed to provide ADT a license to use certain Alarm.com intellectual property following the termination or expiration of the initial term of the MSA for which ADT pays us a monthly royalty for each subscriber to its ADT branded residential interactive security, automation and video service offerings that is covered by any of our licensed patents and not enabled by one of our software platforms.
As a result, our revenue could be reduced by: • any decline in demand for our connected property solutions; • the failure of our connected property solutions to achieve continued market acceptance; • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our connected property solutions; • technological innovations or new communications standards our connected property solutions do not address; and • our inability to release enhanced versions of our connected property solutions on a timely basis.
As a result, our revenue could be reduced by: • any decline in demand for our connected property solutions; 32 • the failure of our connected property solutions to achieve continued market acceptance; • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our connected property solutions; • technological innovations or new communications standards our connected property solutions do not address; and • our inability to release enhanced versions of our connected property solutions on a timely basis.
The market for solutions that bring objects and systems not typically connected to the Internet, such as home automation, security monitoring, video monitoring, energy management and wellness solutions, into an Internet-like structure is still developing, and it is uncertain how rapidly or how consistently this market will continue to develop and the degree to which our platforms and solutions will be accepted into the markets in which we operate.
The market for solutions that bring objects and systems not typically connected to the Internet, such as home automation, security monitoring, video monitoring and energy management solutions, into an Internet-like structure is still developing, and it is uncertain how rapidly or how consistently this market will continue to develop and the degree to which our platforms and solutions will be accepted into the markets in which we operate.
We cannot be certain that advances in cyber-capabilities or other developments will not compromise or breach the technology protecting the networks that access our platforms and solutions, including the networks of our third-party service providers, and we can make no assurance that we will be able to detect, prevent, timely and adequately address or mitigate the negative effects of cyber-attacks or other security breaches.
We cannot be certain that advances in cyber-capabilities or other developments, including AI, will not compromise or breach the technology protecting the networks that access our platforms and solutions, including the networks of our third-party service providers, and we can make no assurance that we will be able to detect, prevent, timely and adequately address or mitigate the negative effects of cyber-attacks or other security breaches.
If one or more holders elect to convert their 2026 Notes or 2029 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If one or more holders elect to convert their 2029 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
In the event a consumer decides to evaluate a new home automation, security monitoring, video monitoring, energy management, or wellness solution, the consumer may be more inclined to select one of our competitors whose product offerings are broader than those that we offer. In addition, consumers may prefer to purchase products that they can install themselves.
In the event a consumer decides to evaluate a new home automation, security monitoring, video monitoring, or energy management solution, the consumer may be more inclined to select one of our competitors whose product offerings are broader than those that we offer. In addition, consumers may prefer to purchase products that they can install themselves.
Several U.S. states, such 38 as Washington, Nevada, and Connecticut, have passed health privacy laws, which may increase the risk of regulatory actions or consumer class actions being brought against Alarm.com. These laws may also increase our costs of doing business as well as legal costs, and slow down our contracting process.
Several U.S. states, such as Washington, Nevada, and Connecticut, have passed health privacy laws, which may increase the risk of regulatory actions or consumer class actions being brought against Alarm.com. These laws may also increase our costs of doing business as well as legal costs, and slow down our contracting process.
Specifically, the use of facial images and other biometric data in the training of video models has been subject to increased scrutiny and in some cases regulatory review. The FTC as well as certain states and individuals have brought legal actions against companies regarding the collection and use of facial and biometric information for product development and other purposes.
Specifically, the use of facial images and other biometric data in the training of video models has been subject to increased scrutiny and in some cases regulatory review. The FTC as well as certain states and individuals have brought legal actions against companies regarding the collection and use of facial and biometric information for product development and other 39 purposes.
If we are unable to meet the stated service level commitments for these service provider partners or suffer extended periods of service unavailability, we are or may be contractually obligated to provide these service provider partners with credits for future services, provide services at no cost or 39 pay other penalties, which could adversely impact our revenue.
If we are unable to meet the stated service level commitments for these service provider partners or suffer extended periods of service unavailability, we are or may be contractually obligated to provide these service provider partners with credits for future services, provide services at no cost or pay other penalties, which could adversely impact our revenue.
If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock.
If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our 41 common stock.
If we are unable to cost-effectively maintain and increase awareness of our brand, our business, financial condition, cash flows and results of operations could be harmed. We operate in the emerging and evolving connected property market, which may develop more slowly or differently than we expect.
If we are unable to cost-effectively maintain and increase awareness of our brand, our business, financial condition, cash flows and results of operations could be harmed. 35 We operate in the emerging and evolving connected property market, which may develop more slowly or differently than we expect.
In addition, changes in our platforms or solutions or changes in applicable export or import laws and regulations may create delays in the introduction and sale of our platforms and solutions in international markets, prevent our service provider partners with international operations from deploying our platforms and 42 solutions or, in some cases, prevent the export or import of our platforms and solutions to certain countries, governments or persons altogether.
In addition, changes in our platforms or solutions or changes in applicable export or import laws and regulations may create delays in the introduction and sale of our platforms and solutions in international markets, prevent our service provider partners with international operations from deploying our platforms and solutions or, in some cases, prevent the export or import of our platforms and solutions to certain countries, governments or persons altogether.
Under the terms of the license, ADT pays us a monthly royalty for each subscriber to its branded residential interactive security, automation and video service offerings that is covered by any of our licensed patents and not supported on our platforms.
Under the terms of the license, ADT pays us a monthly royalty for each subscriber to its branded residential interactive security, automation and video service offerings that is covered by any of our licensed patents and 30 not supported on our platforms.
In addition, if these third-party solution providers choose not to partner with us, choose to integrate their solutions with our competitors’ platforms, or are unable or unwilling to update their solutions, our business, financial condition, cash flows and results of operations could be harmed.
In addition, if these third-party solution providers choose not to partner with us, choose to integrate their solutions with our competitors’ platforms, or are unable or unwilling to update their solutions, our business, financial 33 condition, cash flows and results of operations could be harmed.
The FTC and the Federal Communications Commission have issued regulations that place restrictions on, among other things, unsolicited automated telephone calls to residential and wireless telephone subscribers by means of automatic telephone dialing systems and the use of prerecorded or artificial voice messages.
The FTC and the Federal Communications Commission, or the FCC, have issued regulations that place restrictions on, among other things, unsolicited automated telephone calls to residential and wireless telephone subscribers by means of automatic telephone dialing systems and the use of prerecorded or artificial voice messages.
Any failure on our part to comply with encryption or other applicable export control requirements could result in financial penalties or other sanctions under the U.S. export regulations, including restrictions on future export activities, which could harm our business and operating results.
Any failure on our part to comply with 43 encryption or other applicable export control requirements could result in financial penalties or other sanctions under the U.S. export regulations, including restrictions on future export activities, which could harm our business and operating results.
Risks Related to our Outstanding Convertible Senior Notes We may not have the ability to raise the funds necessary to settle cash conversions of the 2026 Notes or 2029 Notes or to repurchase the 2026 Notes or 2029 Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2026 Notes or 2029 Notes.
Risks Related to our Outstanding Convertible Senior Notes We may not have the ability to raise the funds necessary to settle cash conversions of the 2029 Notes or to repurchase the 2029 Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Notes.
The 2029 Notes are senior unsecured obligations that bear interest at a rate of 2.25% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024, and the principal amount of the 2029 Notes will not accrete.
The 2029 Notes are senior unsecured obligations that bear interest at a rate of 2.25% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning on 50 December 1, 2024, and the principal amount of the 2029 Notes will not accrete.
These risks include: • localization of our solutions, including the addition of foreign languages and adaptation to new local practices, as well as certification, registration and other regulatory requirements; • lack of experience in other geographic markets; • strong local competitors; • the cost and burden of complying with, lack of familiarity with, and unexpected changes in, foreign legal and regulatory requirements, including the development of policies and procedures for different countries when requirements under privacy regulations in such countries may conflict or be inconsistent with one another; • difficulties in managing and staffing international operations; • increased costs due to new or increased tariffs, sanctions, penalties, trade restrictions and other trade barriers, which may increase our cost of hardware revenue and reduce our hardware revenue margins in the future; • fluctuations in currency exchange rates or restrictions on foreign currency; • potentially adverse tax consequences, including the complexities of transfer pricing, value added or other tax systems, double taxation and restrictions and/or taxes on the repatriation of earnings; • dependence on third parties, including commercial partners with whom we do not have extensive experience; • increased financial accounting and reporting burdens and complexities; • political, social, and economic instability, such as the ongoing conflicts in Ukraine, and in Israel and surrounding areas, terrorist attacks, and security concerns in general; and • reduced or varied protection for intellectual property rights in some countries.
These risks include: • localization of our solutions, including the addition of foreign languages and adaptation to new local practices, as well as certification, registration and other regulatory requirements; • lack of experience in other geographic markets; • strong local competitors; • the cost and burden of complying with, lack of familiarity with, and unexpected changes in, foreign legal and regulatory requirements, including the development of policies and procedures for different countries when requirements under privacy regulations in such countries may conflict or be inconsistent with one another; 44 • difficulties in managing and staffing international operations; • increased costs due to new or increased tariffs, sanctions, penalties, trade restrictions and other trade barriers, which may increase our cost of hardware revenue and reduce our hardware revenue margins in the future; • fluctuations in currency exchange rates or restrictions on foreign currency; • potentially adverse tax consequences, including the complexities of transfer pricing, value added or other tax systems, double taxation and restrictions and/or taxes on the repatriation of earnings; • dependence on third parties, including commercial partners with whom we do not have extensive experience; • increased financial accounting and reporting burdens and complexities; • political, social, and economic instability, such as the ongoing conflicts in Ukraine, and in the Middle East and surrounding areas, terrorist attacks, and security concerns in general; and • reduced or varied protection for intellectual property rights in some countries.
Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate 29 these techniques or to implement adequate preventative measures.
If our products are deemed to be subject to additional duties and taxes as determined by a court or governmental agency, we may suffer additional hardware revenue margin erosion or be required to raise our prices on certain 44 imported products.
If our products are deemed to be subject to additional duties and taxes as determined by a court or governmental agency, we may suffer additional hardware revenue margin erosion or be required to raise our prices on certain imported products.
We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management’s attention. Sales of a substantial number of shares of our common stock in the public market could cause our market price to decline.
We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management’s attention. 48 Sales of a substantial number of shares of our common stock in the public market could cause our market price to decline.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2026 Notes or 2029 Notes surrendered therefor or pay cash with respect to 2026 Notes or 2029 Notes being converted.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2029 Notes surrendered therefor or pay cash with respect to 2029 Notes being converted.
In addition, the existence of the 2026 Notes or 2029 Notes may encourage short selling by market participants because the conversion of the 2026 Notes or 2029 Notes could be used to satisfy short positions, or anticipated conversion of the 2026 Notes or 2029 Notes into shares of our common stock could depress the price of our common stock.
In addition, the existence of the 2029 Notes may encourage short selling by market participants because the conversion of the 2029 Notes could be used to satisfy short positions, or anticipated conversion of the 2029 Notes into shares of our common stock could depress the price of our common stock.
Our advertising and sales practices and that of our U.S. service provider partner network are subject to regulation by the U.S. Federal Trade Commission, or the FTC, in addition to state consumer protection laws.
Our advertising and sales practices and that of our U.S. service provider partner network are subject to 26 regulation by the U.S. Federal Trade Commission, or the FTC, in addition to state consumer protection laws.
We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging home automation, security monitoring, video monitoring and automation, wellness, and energy management companies as well as large technology companies.
We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging home automation, security monitoring, video monitoring and automation, and energy management companies as well as large technology companies.
Increased 27 competition could also result in price reductions and loss of market share, any of which could result in lower revenue and negatively affect our ability to grow our business. Aggressive business tactics by our competitors may reduce our revenue.
Increased competition could also result in price reductions and loss of market share, any of which could result in lower revenue and negatively affect our ability to grow our business. Aggressive business tactics by our competitors may reduce our revenue.
The legal, regulatory and contractual environment surrounding information security, privacy and credit card fraud is constantly evolving and companies that collect and retain such information are under increasing attack by cyber-criminals around 28 the world.
The legal, regulatory and contractual environment surrounding information security, privacy and credit card fraud is constantly evolving and companies that collect and retain such information are under increasing attack by cyber-criminals around the world.
DPF. 37 Our work adopting, implementing and complying with the changing legal landscape governing international data transfers slows down our contracting process and increases our legal and compliance costs (including an increase in exposure to substantial fines under EEA data protection laws, increasing requests from our customers for compliance-related product changes, as well as injunctions against processing or transferring personal data from the EEA), which could adversely affect our cash flows and financial condition.
Our work adopting, implementing and complying with the changing legal landscape governing international data transfers slows down our contracting process and increases our legal and compliance costs (including an increase in exposure to substantial fines under EEA data protection laws, increasing requests from our customers for compliance-related product changes, as well as injunctions against processing or transferring personal data from the EEA), which could adversely affect our cash flows and financial condition.
If a service provider partner elects to invest resources in enforcing a claim for indemnification against us, we could incur significant costs disputing it. If we do not succeed in disputing it, we could face substantial liability.
If a service provider partner elects to invest resources in enforcing a claim for indemnification against us, we could incur 40 significant costs disputing it. If we do not succeed in disputing it, we could face substantial liability.
Our failure to repurchase the 2026 Notes or 2029 Notes at a time when the repurchase is required by the 2026 Indenture or 2029 Indenture or to pay any cash payable on future conversions of the 2026 Notes or 2029 Notes as required by the 2026 Indenture or 2029 Indenture would constitute a default under the 2026 Indenture or 2029 Indenture.
Our failure to repurchase the 2029 Notes at a time when the repurchase is required by the 2029 Indenture or to pay any cash payable on future conversions of the 2029 Notes as required by the 2029 Indenture would constitute a default under the 2029 Indenture.
For data transfers from Switzerland, Alarm.com will continue to rely upon the SCCs adopted by the European Commission in August 2021 with any necessary modifications required by the regulatory authorities in Switzerland.
For data transfers from 38 Switzerland, Alarm.com will continue to rely upon the SCCs adopted by the European Commission in August 2021 with any necessary modifications required by the regulatory authorities in Switzerland.
We received proceeds from the issuance of the 2026 Notes of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs. We received proceeds from the issuance of the 2029 Notes of $485.2 million, net of $14.8 million of transaction fees and 40 other debt issuance costs.
We received proceeds from the issuance of the 2026 Notes of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs. We received proceeds from the issuance of the 2029 Notes of $485.2 million, net of $14.8 million of transaction fees and other debt issuance costs.
In addition, our ability to repurchase the 2026 Notes or 2029 Notes or to pay cash upon conversions of the 2026 Notes or 2029 Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
In addition, our ability to repurchase the 2029 Notes or to pay cash upon conversions of the 2029 Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be different from our historical tax practices, provisions and accruals.
Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be 42 different from our historical tax practices, provisions and accruals.
Upon conversion of the 2026 Notes or 2029 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock.
Upon conversion of the 2029 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock.
In addition, there is a continued interest within the European Union, Canada and other jurisdictions to apply new taxes on companies participating in the digital economy. Such tax rule changes could materially and adversely affect our cash flows, deferred tax assets and financial results. We may be subject to additional tax liabilities, which would harm our results of operations.
In addition, there is a continued interest within the European Union, Canada and other jurisdictions to apply new taxes on companies participating in the digital economy. Such tax rule changes could materially and adversely affect our cash flows and financial results. We may be subject to additional tax liabilities, which would harm our results of operations.
Our current competitors include providers of other technology platforms for the connected property with interactive security, including Alula (formed following the merger of ipDatatel, LLC and Resolution Products, LLC), Ajax Systems CH, Avigilon Corporation, Brivo Inc., Digital Monitoring Products Inc., Eagle Eye Networks Inc., Hangzhou Hikvision Digital Technology Co., Ltd., Honeywell International Inc., Napco Security Technologies, Inc., Resideo Technologies Inc., SecureNet Technologies, LLC, Telular Corporation (acquired by AMETEK, Inc.), and Verkada Inc., which sell solutions to service providers, cable operators, technology retailers and other residential and commercial automation providers.
Our current competitors include providers of other technology platforms for the connected property with interactive security, including Alula (formed following the merger of ipDatatel, LLC and Resolution Products, LLC), Ajax Systems CH, Avigilon Corporation, Brivo Inc., Digital Monitoring Products Inc., Hangzhou Hikvision Digital Technology Co., Ltd., Honeywell International Inc., Napco Security Technologies, Inc., Resideo Technologies Inc., SecureNet Technologies, LLC, Telular Corporation (acquired by AMETEK, Inc.), and Verkada Inc., which sell solutions to service providers, cable operators, technology retailers and other residential and commercial automation providers.
A default under the 2026 Indenture governing the 2026 Notes or the 2029 Indenture governing the 2029 Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
A default under the 2029 Indenture governing the 2029 Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
Additionally, Canary and other companies offer all in one video monitoring and awareness devices. In addition, we may compete with other large and small technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader connected home market.
Additionally, Canary and other companies offer all in one video monitoring and awareness devices. In addition, we may compete with other large and small technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader smart home market.
We have incorporated, and expect to continue to incorporate in the future, artificial intelligence, or AI, solutions into our operations and product offerings, and the use of AI involves various risks and challenges that could adversely affect our business, financial condition or results of operations.
We have incorporated, and expect to continue to incorporate in the future, AI solutions into our operations and product offerings, and the use of AI involves various risks and challenges that could adversely affect our business, financial condition or results of operations.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the years ended December 31, 2024, 2023 and 2022.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the years ended December 31, 2025, 2024 and 2023.
For example, in August 2022, the Inflation Reduction Act of 2022 was enacted in the United States which, among other provisions, includes a minimum 15.0% tax on companies that have a three-year average annual adjusted financial statement income of more than $1.0 billion and a 1.0% excise tax on the value of net corporate stock repurchases.
Further, in August 2022, the Inflation Reduction Act of 2022 was enacted in the United States which, among other provisions, includes a minimum 15.0% tax on companies that have a three-year average annual adjusted financial statement income of more than $1.0 billion and a 1.0% excise tax on the value of net corporate stock repurchases.
Negative Macroeconomic Conditions in the general economy both in the United States and abroad, including conditions resulting from inflation, changes in gross domestic product growth, financial and credit market fluctuations, energy costs, international trade relations and other geopolitical tensions, the availability and cost of credit, fluctuations in interest rates and the global housing and mortgage markets could cause a decrease in consumer discretionary spending and business investment and diminish growth expectations in the U.S. economy and abroad.
Negative Macroeconomic Conditions in the general economy both in the United States and abroad, including conditions resulting from inflation, new or increased tariffs, changes in gross domestic product growth, financial and credit market fluctuations, energy costs, international trade relations and other geopolitical tensions, the availability and cost of credit, fluctuations in interest rates and the global housing and mortgage markets could cause a decrease in consumer discretionary spending and business investment and diminish growth expectations in the U.S. economy and abroad.
Since we operate on a global basis, our operations could be disrupted by geopolitical conditions, trade disputes, international boycotts and sanctions, political and social instability, acts of war (including the ongoing conflicts in Ukraine, and in Israel and surrounding areas), terrorist activity or other similar events.
Since we operate on a global basis, our operations could be disrupted by geopolitical conditions, trade disputes, international boycotts and sanctions, political and social instability, acts of war (including the ongoing conflicts in Ukraine, and in the Middle East and surrounding areas), terrorist activity or other similar events.
In addition, upon conversion of the 2026 Notes or 2029 Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2026 Notes or 2029 Notes being converted as defined in the 2026 Indenture and 2029 Indenture.
In addition, upon conversion of the 2029 Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2029 Notes being converted as defined in the 2029 Indenture.
In the event the conditional conversion feature of the 2026 Notes or 2029 Notes is triggered, holders of 2026 Notes or 2029 Notes will be entitled to convert the 2026 Notes or 2029 Notes at any time during specified periods at their option.
In the event the conditional conversion feature of the 2029 Notes is triggered, holders of 2029 Notes will be entitled to convert the 2029 Notes at any time during specified periods at their option.
Conversion of the 2026 Notes and 2029 Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock. The conversion of some or all of the 2026 Notes or 2029 Notes may dilute the ownership interests of our stockholders.
Conversion of the 2029 Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock. The conversion of some or all of the 2029 Notes may dilute the ownership interests of our stockholders.
Reliance on suppliers generally involves several risks, including increased costs, the possibility of defective parts, and loss of a supplier due to their ability to effectively manage their own supply chain, ability to obtain a contract on commercially reasonable terms, bankruptcy, or other events, which can adversely affect the reliability and reputation of our platforms and solutions and our profitability.
Reliance on suppliers generally involves several risks, including volatile pricing, the possibility of defective parts, and loss of a supplier due to their ability to effectively manage their own supply chain, ability to obtain a contract on commercially reasonable terms, bankruptcy, or other events, which can adversely affect the 34 reliability and reputation of our platforms and solutions and our profitability.
During the years ended December 31, 2024, 2023 and 2022, our 10 largest revenue service provider partners or distributors accounted for 46%, 50% and 49% of our revenue, respectively. ADT represented greater than 15% but not more than 20% of our revenue in 2024, 2023 and 2022.
During the years ended December 31, 2025, 2024 and 2023, our 10 largest revenue service provider partners or distributors accounted for 45%, 46% and 50% of our revenue, respectively. ADT represented greater than 15% but not more than 20% of our revenue in 2025, 2024 and 2023.
Revenue in countries outside of North America accounted for 6%, 4% and 4% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
Revenue in countries outside of North America accounted for 5%, 6% and 4% of our total revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
We are also dependent on industry supply conditions and subject to supply chain risks, including a shortage of components and reduced control over delivery schedules and increases in component costs, which can also adversely affect the reliability and reputation of our platforms and solutions and our profitability.
We are also dependent on industry supply conditions and subject to supply chain risks, including unpredictable availability of components and reduced control over delivery schedules and significant increases in component costs, which can also adversely affect the reliability and reputation of our platforms and solutions and our profitability.
Even if we are able to procure components from alternative sources, we may be required to pay more for them, which could adversely affect our profitability.
Even if we are able to procure components from alternative sources, we may be required to pay significantly higher prices for them, which could adversely affect our profitability.
While it is uncertain whether the U.S. will enact legislation to adopt the minimum tax directive, certain countries in which we operate have adopted such legislation, and other countries are in the process of introducing legislation to implement the minimum tax directive.
While it is currently unlikely the U.S. will enact legislation to adopt the minimum tax directive, the European Union and certain other countries in which we operate have adopted such legislation, and other countries are in the process of introducing legislation to implement the minimum tax directive.
We have several large hardware suppliers from which we procure hardware on a purchase order basis, including three key suppliers that supplied products and components of our inventory which collectively represented 46% of our hardware revenue for the year ended December 31, 2024 (29%, 10% and 7% of hardware revenue, respectively).
We have several large hardware suppliers from which we procure hardware on a purchase order basis, including three key suppliers that supplied products and components of our inventory which collectively represented 44% of our hardware revenue for the year ended December 31, 2025 (26%, 10% and 8% of hardware revenue, respectively).
We increased our number of full-time employees from 1,500 as of December 31, 2021 to 2,010 as of December 31, 2024. Our growth has placed, and may continue to place, a significant strain on our managerial, administrative, operational, financial and other resources.
We increased our number of full-time employees from 1,733 as of December 31, 2022 to 2,058 as of December 31, 2025. Our growth has placed, and may continue to place, a significant strain on our managerial, administrative, operational, financial and other resources.
ADT also represented more than 10% of accounts receivable as of December 31, 2023. We amended our master service agreement with ADT, or MSA, to extend the initial term through January 1, 2023, which also includes subsequent renewal terms of one year unless either party provides written notice of non-renewal.
We amended our master service agreement with ADT, or MSA, to extend the initial term through January 1, 2023, which also includes subsequent renewal terms of one year unless either party provides written notice of non-renewal.
Moreover, some holders of shares of our common 48 stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or our stockholders.
Moreover, some holders of shares of our common stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or our stockholders. We have also registered shares of common stock that we may issue under our employee equity incentive plans.
For example, on February 10, 2025, we acquired 81% of the issued and outstanding shares of capital stock of CHeKT, on November 22, 2024, we acquired certain assets of Kapacity.io, on April 21, 2023, we acquired certain assets of Vintra, on January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS, on September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., on October 21, 2019, we acquired 85% of the issued and outstanding shares of capital stock of PC Open Incorporated, doing business as OpenEye, and on December 14, 2020 , we acquired Shooter Detection Systems, LLC.
For example, on November 21, 2025, EnergyHub acquired 100% of the issued and outstanding shares of capital stock of Zona NewCo, LLC, which acquired substantially all of the assets and liabilities of Resideo Grid Services, or RGS, from Resideo Technologies, Inc.; on August 15, 2025, EnergyHub acquired all of the issued and outstanding shares of capital stock of BTR; on February 10, 2025, we acquired 81% of the issued and outstanding shares of capital stock of CHeKT; on November 22, 2024, we acquired certain assets of Kapacity.io; on April 21, 2023, we acquired certain assets of Vintra; on January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS; on September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc.; on October 21, 2019, we acquired 85% of the issued and outstanding shares of capital stock of PC Open Incorporated, doing business as OpenEye; and on December 14, 2020 , we acquired Shooter Detection Systems, LLC.
The loss of any key supplier or the inability of a key supplier to deliver their products to us on time or at the contracted price would materially and adversely affect our business, financial condition, cash flows and results of operations.
The loss of any key supplier, or their inability to deliver products or components to us on time, with sufficient availability, or at stable prices would materially and adversely affect our business, financial condition, cash flows and results of operations.
We currently intend to use the remaining net proceeds from the issuance of the 2026 Notes and 2029 Notes for general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies, other repurchases of our common stock, repurchases of our 2026 Notes and for working capital, operating expenses and capital expenditures.
We are using the remaining net proceeds from the issuance of the 2029 Notes for general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies, other repurchases of our common stock, and for working capital, operating expenses and capital expenditures. We invested a portion of the proceeds in a portfolio of securities and other investments.
Our financial results may be adversely affected by changes in accounting principles applicable to us. Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies are highly complex and involve many assumptions, estimates and judgments.
Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies are highly complex and involve many assumptions, estimates and judgments.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2026 Notes or 2029 Notes or make cash payments upon conversions thereof.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2029 Notes or make cash payments upon conversions thereof. The conditional conversion feature of the 2029 Notes, if triggered, may adversely affect our financial condition and operating results.
We do not expect to achieve similar growth rates in future periods. You should not rely on our operating results for any prior quarterly or annual periods as an indication of our future operating performance.
Our revenue increased from $881.7 million in 2023 to $1.0112 billion in 2025. We do not expect to achieve similar growth rates in future periods. You should not rely on our operating results for any prior quarterly or annual periods as an indication of our future operating performance.
We are obligated to develop and maintain a system of effective internal control over financial reporting. These internal controls may be determined to be not effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
These internal controls may be determined to be not effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
We received proceeds from the issuance of the 2029 Notes of $485.2 million, net of $14.8 million of transaction fees and other debt issuance costs. 50 Holders of the 2026 Notes or 2029 Notes will have the right, subject to certain conditions and limited exceptions, to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes or 2029 Notes to be repurchased, plus accrued and unpaid special interest or interest, if any, as defined in the 2026 Indenture and 2029 Indenture.
Holders of the 2029 Notes will have the right, subject to certain conditions and limited exceptions, to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid special interest or interest, if any, as defined in the 2029 Indenture.
We provide our service provider partners with specific training and programs to assist 29 them in selling and providing support for our platforms and solutions, but we cannot assure you that these steps will be effective.
We provide our service provider partners with specific training and programs to assist them in selling and providing support for our platforms and solutions, but we cannot assure you that these steps will be effective. In addition, we rely on our service provider partners to sell our platforms and solutions into new markets in the intelligent and connected property space.
We invested a portion of the proceeds in a portfolio of securities and other investments. We cannot give assurances that the assets in our investment portfolio will not lose value, become impaired or suffer from illiquidity.
We cannot give assurances that the assets in our investment portfolio will not lose value, become impaired or suffer from illiquidity.
If a significant number of consumers in our target market choose to adopt point products rather than our connected property solutions, then our business, financial condition, cash flows and results of operations will be harmed, and we may not be able to achieve sustained growth or our business may decline. 31 Mergers or other strategic transactions involving our competitors could weaken our competitive position, which could adversely affect our ability to compete effectively and harm our results of operations.
If a significant number of consumers in our target market choose to adopt point products rather than our connected property solutions, then our business, financial condition, cash flows and results of operations will be harmed, and we may not be able to achieve sustained growth or our business may decline.
If we were required to find alternative sources of supply, qualification of alternative suppliers and the establishment of reliable supplies could result in delays, loss of sales and/or less profitable sales, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations. 34 Growth of our business will depend on market awareness and a strong brand, and any failure to develop, maintain, protect and enhance our brand would hurt our ability to retain or attract subscribers.
If we were required to find alternative sources of supply, qualification of alternative suppliers and the establishment of reliable supplies could result in delays, loss of sales and/or less profitable sales, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
This undertaxed profits safe harbor transition rule will apply to us through our year ending December 31, 2025. 41 While we do not currently expect the Pillar Two minimum tax directive to have a material impact on our effective tax rate or operations, our analysis is ongoing as the OECD (and many countries) continue to release additional guidance and implement legislation.
While we do not currently expect the Pillar Two minimum tax directive to have a material impact on our effective tax rate or operations, our analysis is ongoing as the OECD (and many countries) continue to release additional guidance and implement legislation.
These could include sovereign default, liquidity and capital pressures on financial institutions in other parts of the world including the eurozone, reducing the availability of credit and increasing the risk of financial sector failures and the risk of one or more eurozone member states leaving the euro, resulting in the possibility of capital and exchange controls and uncertainty about the impact of contracts and currency exchange rates. 43 In addition, conducting expanded international operations subjects us to additional risks that we do not generally face in our North American markets.
These could include sovereign default, liquidity and capital pressures on financial institutions in other parts of the world including the eurozone, reducing the availability of credit and increasing the risk of financial sector failures and the risk of one or more eurozone member states leaving the euro, resulting in the possibility of capital and exchange controls and uncertainty about the impact of contracts and currency exchange rates.
See “Conversion of the 2026 Notes and 2029 Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock” below for further details on the risks related to the dilutive impact of the 2026 Notes and 2029 Notes.
See “Conversion of the 2029 Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock” below for further details on the risks related to the dilutive impact of the 2029 Notes. We are obligated to develop and maintain a system of effective internal control over financial reporting.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The board of directors oversees our overall risk management system, including cybersecurity risks. The Chief Information Officer presents at quarterly Board meetings and discusses specific risk areas, including those relating to cybersecurity.
The board of directors oversees our overall risk management system, including cybersecurity risks. The Chief Information Officer presents at Board meetings and discusses specific risk areas, including those relating to cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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As of December 31, 2024, we occupied 210,657 square feet of commercial space in our principal office under a lease we entered into in August 2014 that is scheduled to expire in 2034. This lease agreement has been periodically amended to expand our square footage as we have continued to grow.
As of December 31, 2025, we occupied 250,210 square feet of commercial space in our principal office under a lease we entered into in August 2014 that is scheduled to expire in 2034. This lease agreement has been periodically amended to expand our square footage as we have continued to grow, including the most recent expansions in 2024 and 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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While we believe we have valid defenses to Causam’s claims, the outcome of these legal claims cannot be predicted with certainty, and any of these outcomes could result in an adverse effect on our business.
While we believe we have valid defenses to SkyBell’s claims, the outcome of these legal claims cannot be predicted with certainty, and any of these outcomes could result in an adverse effect on our business.
For a description of our legal proceedings, see Note 13 to our consolidated financial statements for additional information. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 55 PART II.
For a description of our legal proceedings, see Note 14 to our consolidated financial statements for additional information. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 55 PART II.
Should Causam prevail in its district court lawsuit we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us.
Should Causam choose to pursue the district court lawsuit, and prevail, then we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us.
The ex parte reexamination of a third patent is still ongoing, and ex parte reexamination of a fourth patent concluded on August 23, 2023 after the claims were amended. On April 18, 2022, all claims of a fifth patent were found unpatentable by the U.S.
Ex parte reexamination of a fourth patent concluded on August 23, 2023 after the claims were amended. On April 18, 2022, all claims of a fifth patent were found unpatentable by the PTAB in inter partes review, and all claims were canceled on February 1, 2024.
District Court, Western District of Texas, alleging that Alarm.com’s smart thermostats infringe four U.S. patents owned by Causam. Causam is seeking preliminary and permanent injunctions, enhanced damages and attorneys’ fees. We have not yet responded to the complaint. On September 3, 2021, the court issued an order staying the lawsuit until the ITC investigation described below is finally resolved.
District Court, Western District of Texas, alleging that Alarm.com’s smart thermostats infringe four U.S. patents owned by Causam. Causam is seeking preliminary and permanent injunctions, enhanced damages and attorneys’ fees. Causam had previously asserted the same four patents against us in a July 2021 complaint with the ITC.
In addition to the matters described above, we may be required to provide indemnification to certain of our service provider partners for certain claims regarding our solutions. For example, we incurred costs associated with the indemnification of our service provider Central Security Group – Nationwide, Inc. (d/b/a Alert 360), or CSG, in an ongoing patent litigation.
In addition to the matters described above, we may be required to provide indemnification to certain of our service provider partners for certain claims regarding our solutions. We may also be a party to litigation and subject to claims incident to the ordinary course of business.
CSG could be enjoined from making, using, and selling our solution if a license or other right to continue selling our technology is not made available or if we are unable to design around such patents, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us.
On August 25, 2025, we moved to dismiss the complaint as barred by the statute of limitations. 54 Should SkyBell prevail in its lawsuit, we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us, and we could be required to assign, transfer, and return any SkyBell trade secret that we are found to improperly possess.
Patent and Trademark Office and one inter partes review. Two of the patents were found unpatentable in reexamination, and EcoFactor appealed the decision with respect to one of the patents to the United States Court of Appeals for the Federal Circuit on July 9, 2024, while its time to appeal the second decision has not yet expired.
Patent and Trademark Office and one inter partes review. Three of the patents were found unpatentable in reexamination.
Removed
Patent Trial and Appeal Board, or PTAB, in inter partes review, and all claims were canceled on February 1, 2024.
Added
The decision with respect to one of the patents was affirmed by the United States Court of Appeals for the Federal Circuit, or Federal Circuit, on January 21, 2026, EcoFactor filed an appeal of the decision with respect to the second patent with the Federal Circuit on November 20, 2025, and EcoFactor is appealing the rejection of the third patent to the Patent Trial and Appeal Board, or PTAB, having filed its appeal brief on June 10, 2024.
Removed
On July 28, 2021, Causam filed a complaint with the ITC naming Alarm.com Incorporated, Alarm.com Holdings, Inc., and EnergyHub, Inc., among others, as proposed respondents. The complaint alleges infringement of the same four patents Causam asserted in district court. Causam is seeking a permanent limited exclusion order and permanent cease and desist order.
Added
In February 2023, the ITC found in favor of Alarm.com and Causam’s appeal of the decision with respect to one patent was dismissed as moot on October 15, 2025 based on the Federal Circuit’s affirmance, on the same day, of a PTAB decision that found the patent at issue in the appeal is invalid.
Removed
On August 27, 2021, the ITC instituted an investigation into Causam’s allegations naming Alarm.com Incorporated, Alarm.com Holdings, Inc., EnergyHub Inc. and others as respondents. We answered the complaint on October 4, 2021. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question.
Added
Separately, the Federal Circuit affirmed a PTAB decision finding a second of the asserted patents invalid on September 5, 2025. Before we responded to Causam’s district court complaint, the court issued a stay of the case until the ITC investigation was finally resolved.
Removed
An evidentiary hearing in the investigation was held from June 28, 2022 through July 1, 2022. On February 16, 2023, the ITC issued a final decision in favor of Alarm.com and EnergyHub. Causam filed an appeal of the ITC decision on April 14, 2023. Causam did not appeal the ITC decision with respect to Alarm.com and EnergyHub.
Added
Now that the appeal proceedings have been completed in the ITC investigation, Causam may seek to pursue the district court lawsuit.
Removed
In 2018, 54 Ubiquitous Connectivity, LP, or Ubiquitous, brought suit against CSG in U.S. District Court, Northern District of Oklahoma, alleging infringement of two U.S. patents. The case was stayed by agreement of the parties for several years while the patents in suit were challenged before the PTAB.
Added
While we believe we have valid defenses to Causam’s claims, the outcome of these legal claims cannot be predicted with certainty, and any of these outcomes could result in an adverse effect on our business. On July 3, 2025, SkyBell Technologies, Inc., or SkyBell, filed a lawsuit against us in U.S.
Removed
In January 2021, the PTAB deemed 42 out of 46 claims of the two asserted patents unpatentable. Ubiquitous appealed a portion of the PTAB’s findings to the United States Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the PTAB’s ruling on August 8, 2023.
Added
District Court, Eastern District of Virginia, alleging that Alarm.com misappropriated SkyBell’s trade secrets relating to video doorbells. SkyBell is seeking injunctive relief, enhanced damages, attorneys’ fees, a constructive trust, and an order that Alarm.com assign to SkyBell the alleged trade secrets.
Removed
As a result, only four patent claims remain at issue and the Northern District of Oklahoma case is no longer stayed. The case is currently in the discovery phase. The court held a claim construction hearing on December 12, 2024, but has not yet rendered a claim construction opinion.
Removed
A hearing on dispositive motions, including for summary judgment, is scheduled for April 15, 2026. A trial is scheduled for July 6, 2026. Should Ubiquitous prevail on its infringement claims, we could be required to indemnify CSG for damages in the form of a reasonable royalty or of Ubiquitous’s lost profits.
Removed
The outcome of these legal claims cannot be predicted with certainty. We may also be a party to litigation and subject to claims incident to the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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On February 13, 2025, the closing price of our common stock on The Nasdaq Global Select Market was $63.82 per share. Holders As of February 13, 2025, there were 20 stockholders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company, or DTC.
On February 12, 2026, the closing price of our common stock on The Nasdaq Global Select Market was $45.62 per share. Holders As of February 12, 2026, there were 19 stockholders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company, or DTC.
Issuer Purchases of Equity Securities On February 15, 2023, our board of directors authorized a stock repurchase program, effective February 23, 2023, under which we are authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025.
On February 15, 2023, our board of directors authorized the cancellation of the balance under the stock repurchase program ending December 3, 2023, and also authorized a stock repurchase program, effective February 23, 2023, under which we were authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025.
The following graph shows a comparison for the period from December 31, 2019 through December 31, 2024 of the cumulative total return for (i) our common stock, (ii) the Nasdaq Composite Index and (iii) Standard & Poor's 500 Index, or S&P 500 Index, assuming an initial investment of $100 on the last trading day for the fiscal year ended December 31, 2019 and reinvestment of all dividends.
The following graph shows a comparison for the period from December 31, 2020 through December 31, 2025 of the cumulative total return for (i) our common stock, (ii) the Nasdaq Composite Index, (iii) S&P 500 Index, (iv) the Russell 2000 Index and (v) the S&P North American Expanded Technology Software Index, assuming an initial investment of $100 on the last trading day for the fiscal year ended December 31, 2020 and reinvestment of all dividends.
In determining whether to authorize repurchases and the size of the repurchase program, our board of directors considers whether we have funds legally available to repurchase shares of common stock and various alternative uses for our cash and cash equivalents. 57 The stock repurchase program is designed to enable us to make both opportunistic repurchases based on market conditions at management’s discretion and consistent repurchases over time.
In determining whether to authorize repurchases and the size of the repurchase program, our board of directors considers whether we have funds legally available to repurchase shares of common stock and various alternative uses for our cash and cash equivalents.
Our board of directors determines repurchase program amounts through an analysis of projected capital needs to sustain growth as well as to meet other investing and financing criteria.
We utilize our stock repurchase program in an effort to return surplus cash to stockholders when we believe the repurchase of such shares represents an attractive allocation of capital. Our board of directors determines repurchase program amounts through an analysis of projected capital needs to sustain growth as well as to meet other investing and financing criteria.
As of January 1, 2023, we are subject to a 1.0% excise tax on the value of net corporate stock repurchases under the Inflation Reduction Act of 2022.
These withheld shares are not issued or considered common stock repurchases under our stock repurchase program and therefore, are excluded from our repurchase activity. We are subject to a 1.0% excise tax on the value of net corporate stock repurchases under the Inflation Reduction Act of 2022.
The returns in the graph are not intended to forecast or be indicative of possible future performance of our common stock. 56 Recent Sales of Unregistered Securities In May 2024, we issued $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, in a private offering pursuant to Rule 144A under the Securities Act.
The returns in the graph are not intended to forecast or be indicative of possible future performance of our common stock. 56 Recent Sales of Unregistered Securities None. Use of Proceeds None.
Stock repurchases may be made through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, block trades, tender offers and by any combination of the foregoing. No shares were repurchased under our stock repurchase program during the three months ended December 31, 2024.
Stock repurchases may be made through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, block trades, tender offers and by any combination of the foregoing. 57 The following table contains information relating to the repurchases of our common stock made by us and the approximate dollar value of shares that may yet be purchased under our stock repurchase program during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as a Part of a Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program October 1 to October 31, 2025 — $ — — $ 77,580,956 November 1 to November 30, 2025 99,426 50.00 99,426 72,609,851 December 1 to December 31, 2025 273,574 51.80 273,574 58,438,881 Total 373,000 $ 51.32 373,000 We withhold shares of common stock in connection with the vesting of restricted stock unit awards issued to employees to satisfy applicable tax withholding requirements.
Removed
The offer and sale of the 2029 Notes to the initial purchasers for the 2029 Notes was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
Added
Beginning with this Annual Report on Form 10‑K, we have revised the indexes used for comparison in the stock performance graph. In prior filings, the stock performance graph compared the cumulative total return of our common stock to the Standard & Poor's 500 Index, or S&P 500 Index, and the Nasdaq Composite Index.
Removed
We relied on this exemption from registration based in part on representations made by the initial purchasers, including that such initial purchasers would only offer, sell or deliver the 2029 Notes to persons whom they reasonably believe to be qualified institutional buyers within the meaning of Rule 144A under the Securities Act.
Added
We believe the Russell 2000 Index and the S&P North American Expanded Technology Software Index provide a more appropriate comparison group for our business. Accordingly, the stock performance graph now compares the cumulative total return of our common stock to these indexes.
Removed
For more information related to the 2029 Notes, see Note 13 to our consolidated financial statements included in this Annual Report on Form 10-K. Use of Proceeds None.
Added
We believe these indexes provide a more relevant benchmark for evaluating our stock performance because they more closely reflect the market capitalization profile and industry characteristics of our business and peer companies. This change in indexes affects only the presentation of the stock performance graph and does not reflect any change in our business, operations or strategy.
Removed
We utilize our stock repurchase program in an effort to return surplus cash to stockholders efficiently and to offset dilution related to the issuance of stock under our 2015 Equity Incentive Plan, or 2015 Plan, and our employee stock purchase plan.
Added
For purposes of comparison, the stock performance graph for the current year includes both the historical indexes and the new indexes. The S&P 500 Index and Nasdaq Composite Index will not be included in future stock performance graphs.
Removed
We withhold shares of common stock in connection with the vesting of restricted stock unit awards issued to employees to satisfy applicable tax withholding requirements. These withheld shares are not issued or considered common stock repurchases under our stock repurchase program and therefore, are excluded from our repurchase activity.
Added
Issuer Purchases of Equity Securities On December 3, 2020, our board of directors authorized a stock repurchase program, under which we were authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the three-year period ending December 3, 2023.
Added
The stock repurchase program is designed to enable us to make both opportunistic repurchases based on market conditions at management’s discretion and consistent repurchases over time.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. [Reserved] 58 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 58 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 81 Item 8.
Item 6. [Reserved] 58 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 58 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 82 Item 8.
Financial Statements and Supplementary Data 82 Report of Independent Registered Public Accounting Firm 83 Consolidated Statements of Operations 85 Consolidated Statements of Comprehensive Income 86 Consolidated Balance Sheets 87 Consolidated Statements of Cash Flows 88 Consolidated Statements of Equity 90 Notes to the Consolidated Financial Statements 92 Schedule II. Valuation and Qualifying Accounts 133
Financial Statements and Supplementary Data 83 Report of Independent Registered Public Accounting Firm 84 Consolidated Statements of Operations 86 Consolidated Statements of Comprehensive Income 87 Consolidated Balance Sheets 88 Consolidated Statements of Cash Flows 89 Consolidated Statements of Equity 91 Notes to the Consolidated Financial Statements 93 Schedule II. Valuation and Qualifying Accounts 137

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee.
Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee.
Significant estimates and assumptions in valuing acquired developed technology intangible assets include estimates about future expected cash flows, obsolescence factors and discount rates. Significant estimates and assumptions in valuing acquired trade name intangible assets include estimates about future expected cash flows, royalty rates and discount rates.
Significant estimates and assumptions in valuing acquired developed technology intangible assets include estimates about future expected cash flows, obsolescence factors, royalty rates and discount rates. Significant estimates and assumptions in valuing acquired trade name intangible assets include estimates about future expected cash flows, royalty rates and discount rates.
If triggering events arise in the future that require changes in the underlying assumptions used in our assessment of our goodwill, and, should those changes be significant, they could have a material impact on our goodwill and potentially our other (expense) / income, net, if those significant changes result in an impairment.
If triggering events arise in the future that require changes in the underlying assumptions used in our assessment of our goodwill, and, should those changes be significant, they could have a material impact on our goodwill and potentially our other income / (expense), net, if those significant changes result in an impairment.
If triggering events arise in the future, depending on the significance of the underlying assumptions in the impairment analysis, they could have a material impact on our intangible assets and long-lived assets and potentially our other (expense) / income, net, if those significant changes result in an impairment.
If triggering events arise in the future, depending on the significance of the underlying assumptions in the impairment analysis, they could have a material impact on our intangible assets and long-lived assets and potentially our other income / (expense), net, if those significant changes result in an impairment.
In addition, following certain corporate events that occur prior to the maturity date of the 2026 Notes or if we deliver a notice of redemption in respect of the 2026 Notes, we will, under certain circumstances, increase the conversion rate of the 2026 Notes for a holder who elects to convert its 2026 Notes (or any portion thereof) in connection with such a corporate event or convert its 2026 Notes called (or deemed called) for redemption during the related redemption period (as defined in the Indenture), as the case may be.
In addition, following certain corporate events that occur prior to the maturity date of the 2026 Notes or if we deliver a notice of redemption in respect of the 2026 Notes, we will, under certain circumstances, increase the conversion rate of the 2026 Notes for a holder who elects to convert its 2026 Notes (or any portion thereof) in connection with such a corporate event or convert its 2026 Notes called (or deemed called) for redemption during the related redemption period (as defined in the 2026 Indenture), as the case may be.
These increases in cash flows from financing activities were partially offset by a $47.7 million increase in purchases of shares of our common stock and $63.1 million purchases of capped calls related to the 2029 Notes in 2024, which did not occur in 2023.
These increases in cash flows from financing activities were partially offset by a $47.7 million increase in purchases of shares of our common stock and $63.1 million in purchases of capped calls related to the 2029 Notes in 2024, which did not occur in 2023.
We do not consider these items to be indicative of our core operating performance.
We do not consider these items to be indicative of our core operating performance.
We may redeem for cash, all or any portion of the 2029 Notes (subject to the partial redemption limitation described below), at our option, on or after June 7, 2027, at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the 2029 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending 76 on, and including, the trading day immediately preceding the date on which we provide notice of redemption.
We may redeem for cash, all or any portion of the 2029 Notes (subject to the partial redemption limitation described below), at our option, on or after June 7, 2027, at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the 2029 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption.
The 2026 Notes are discussed in more detail above under “Convertible Senior Notes - 2026.” 77 On May 31, 2024, we issued $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, in a private placement to qualified institutional buyers and received proceeds of $485.2 million, net of $14.8 million of transaction fees and other debt issuance costs.
The 2026 Notes are discussed in more detail above under “Convertible Senior Notes - 2026.” On May 31, 2024, we issued $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, in a private placement to qualified institutional buyers and received proceeds of $485.2 million, net of $14.8 million of transaction fees and other debt issuance costs.
Some of these limitations are: (a) although amortization and depreciation are non-cash charges, the assets being amortized and depreciated may have to be replaced in the future, and non-GAAP adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) non-GAAP adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) non-GAAP adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) non-GAAP adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate non-GAAP adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure. 80 Because of these and other limitations, you should consider non-GAAP adjusted EBITDA alongside our other GAAP-based financial performance measures, net income and our other GAAP financial results.
Some of these limitations are: (a) although amortization and depreciation are non-cash charges, the assets being amortized and depreciated may have to be replaced in the future, and non-GAAP adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) non-GAAP adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) non-GAAP adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) non-GAAP adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate non-GAAP adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure. 81 Because of these and other limitations, you should consider non-GAAP adjusted EBITDA alongside our other GAAP-based financial performance measures, net income and our other GAAP financial results.
Our agreements for the Software platform solution typically include software and services, such as post-contract customer support, or PCS. Software license revenue included in SaaS and license revenue is expected to continue to decline over time as we transition subscribers to our cloud-based hosted platform. Hardware and Other Revenue.
Our agreements for the Software platform solution typically include software and services, such as post-contract customer support, or PCS. Software license revenue included in SaaS and license revenue is expected to continue to decline over time as we transition subscribers to our cloud-based hosted platform. 62 Hardware and Other Revenue.
This valuation contains uncertainties and requires management to apply significant judgment in estimating the fair value of long-lived and intangible assets acquired, which involves the use of significant estimates and assumptions. Significant estimates and assumptions in valuing certain acquired customer relationship intangible assets include estimates about future expected cash flows and discount rates.
This valuation contains uncertainties and requires management to apply significant judgment in estimating the fair value of long-lived and intangible assets acquired, which involves the use of significant estimates and assumptions. Significant estimates and assumptions in valuing certain acquired customer relationship intangible assets include estimates about future expected cash flows, attrition rates and discount rates.
We are using the remaining net proceeds from the issuance of the 2029 Notes for general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies, other repurchases of our common stock, repurchases of our 2026 Notes and for working capital, operating expenses and capital expenditures.
We are using the remaining net proceeds from the issuance of the 2029 Notes for general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies, other repurchases of our common stock, and for working capital, operating expenses and capital expenditures.
Our technology platforms support property owners who subscribe to our services, the hardware partners who manufacture devices that integrate with our platforms and the service provider partners who install and maintain our solutions. The Alarm.com platform enables our service provider partners to address the needs of a broad range of residential and commercial customers.
Our technology platforms support property owners who subscribe to our services, the hardware partners who manufacture devices that integrate with our platforms and the service provider partners who install and maintain our solutions. 58 The Alarm.com platform enables our service provider partners to address the needs of a broad range of residential and commercial customers.
Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing teams, including salaries, bonuses, stock-based compensation, benefits, travel, and commissions. Our 63 sales and marketing teams engage in sales, account management, service provider partner support, advertising, promotion of our products and services and marketing.
Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing teams, including salaries, bonuses, stock-based compensation, benefits, travel, and commissions. Our sales and marketing teams engage in sales, account management, service provider partner support, advertising, promotion of our products and services and marketing.
The 2029 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding January 1, 2029, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2024 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2029 Notes on each applicable trading day; (2) during the five business day period immediately after any ten consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2029 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2029 Notes on each such trading day; (3) if we call any or all of the 2029 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as set forth in the 2029 Indenture.
The 2029 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding January 1, 2029, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2024 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days 77 ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2029 Notes on each applicable trading day; (2) during the five business day period immediately after any 10 consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2029 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2029 Notes on each such trading day; (3) if we call any or all of the 2029 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as set forth in the 2029 Indenture.
We primarily transfer hardware to 62 our customers upon delivery to the customer, which corresponds with the time at which the customer obtains control of the hardware. We record a reserve against revenue for hardware returns based on historical returns.
We primarily transfer hardware to our customers upon delivery to the customer, which corresponds with the time at which the customer obtains control of the hardware. We record a reserve against revenue for hardware returns based on historical returns.
Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our indoor gunshot detection solution in exchange for license fees.
Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees.
The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day; (2) during the five business day period immediately after any 10 consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2026 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2026 Notes on each such trading day; (3) if we call any or all of the 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2026 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as set forth in the 2026 Indenture.
The 2026 Notes were convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day; (2) during the five business day period immediately after any 10 consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 76 2026 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2026 Notes on each such trading day; (3) if we call any or all of the 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2026 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as set forth in the 2026 Indenture.
We exclude interest income and certain activity within other (expense) / income, net including gains, losses or impairments on investments without readily determinable fair values and other assets, gains and losses from equity method investments, gains on settlement fees and losses on the early extinguishment of debt, when applicable, from non-GAAP adjusted EBITDA because we do not consider it part of our ongoing results of operations.
We exclude interest income and certain activity within other income / (expense), net including gains, losses or impairments on investments without readily determinable fair values and other assets, gains on settlement fees and losses on the early extinguishment of debt, when applicable, from non-GAAP adjusted EBITDA because we do not consider it part of our ongoing results of operations.
Our service provider partners represent a diverse range of independent businesses, and are experts at selling, installing and supporting our technology. They depend on the Alarm.com platform for connected property technology and to operate and manage their businesses efficiently. Alarm.com primarily generates SaaS and license revenue through our service provider partners, who resell our services and pay us monthly fees.
Our service provider partners represent a wide range of independent businesses, and are experts at selling, installing and supporting our technology. They depend on the Alarm.com platform for connected property technology and to operate and manage their businesses efficiently. Alarm.com primarily generates SaaS and license revenue through our service provider partners, who resell our services and pay us monthly fees.
"Risk Factors" and "Special Note Regarding Forward-Looking Statements" in this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview Alarm.com is the leading platform for the intelligently connected property.
"Risk Factors" and "Special Note Regarding Forward-Looking Statements" in this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview Alarm.com is the leading platform for intelligently connected properties.
Please see Non-GAAP Measures in this section for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the years ended December 31, 2024, 2023 and 2022. SaaS and License Revenue Renewal Rate Our SaaS and license revenue renewal rate is an operating metric.
Please see Non-GAAP Measures in this section for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the years ended December 31, 2025, 2024 and 2023. SaaS and License Revenue Renewal Rate Our SaaS and license revenue renewal rate is an operating metric.
Software license revenue represented 2%, 3% and 3% of our revenue in 2024, 2023 and 2022, respectively. We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, smart thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions.
Software license revenue represented 2%, 2% and 3% of our revenue in 2025, 2024 and 2023, respectively. We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, smart thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions.
If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. There were no indicators of impairment of our intangible assets with definite lives or long-lived assets during the years ended December 31, 2024, 2023 and 2022.
If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. There were no indicators of impairment of our intangible assets with definite lives or long-lived assets during the years ended December 31, 2025, 2024 and 2023.
We intend to increase the size of our sales force and our service provider partner support team to provide additional support to our existing service provider partner base to drive their productivity in selling our solutions as well as to enroll new service provider partners in North America and in international markets. General and Administrative Expense.
We may increase the size of our sales force and our service provider partner support team to provide additional support to our existing service provider partner base to drive their productivity in selling our solutions as well as to enroll new service provider partners in North America and in international markets. General and Administrative Expense.
Our cash and cash equivalents as of December 31, 2024 are available for working capital purposes. Our investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification and maturities of our investments to preserve capital, maintain liquidity and limit the amount of credit risk exposure.
Our cash and cash equivalents as of December 31, 2025 are available for working capital purposes. Our investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification and maturities of our investments to preserve capital, maintain liquidity and limit the amount of credit risk exposure.
While variable consideration assumptions are specific to each contract, we did not make any material changes to these assumptions for the year ended December 31, 2024. We do not expect any material changes in the near term to the underlying assumptions used to recognize revenue during the year ended December 31, 2024.
While variable consideration assumptions are specific to each contract, we did not make any material changes to these assumptions for the year ended December 31, 2025. We do not expect any material changes in the near term to the underlying assumptions used to recognize revenue during the year ended December 31, 2025.
We did not make any material changes to the underlying assumptions used to calculate deferred tax assets and liabilities as well as uncertain tax positions for the year ended December 31, 2024, and we do not expect any material changes in the near term to the underlying assumptions used to calculate deferred tax assets and liabilities as well as uncertain tax positions for the year ended December 31, 2024.
We did not make any material changes to the underlying assumptions used to calculate deferred tax assets and liabilities as well as uncertain tax positions for the year ended December 31, 2025, and we do not expect any material changes in the near term to the underlying assumptions used to calculate deferred tax assets and liabilities as well as uncertain tax positions for the year ended December 31, 2025.
Comparison of Years Ended December 31, 2023 to December 31, 2022 A comparison of the years ended December 31, 2023 and 2022 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7.
Comparison of Years Ended December 31, 2024 to December 31, 2023 A comparison of the years ended December 31, 2024 and 2023 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7.
Research and development expense consists primarily of personnel and related expenses for our employees working on our product development and software and device engineering teams, including salaries, bonuses, stock-based compensation, benefits and other personnel costs. Also included are non-personnel costs such as consulting and professional fees paid to third-party development resources.
Research and development expense consists primarily of personnel and related expenses for our employees working on our product development and software and device engineering teams as well as employees supporting research and development efforts, including salaries, bonuses, stock-based compensation, benefits and other personnel costs. Also included are non-personnel costs such as consulting and professional fees paid to third-party development resources.
We did not make any material changes to the underlying assumptions used as of the acquisition date to calculate the purchase price of the business combinations that occurred during 2023 and 2022.
We did not make any material changes to the underlying assumptions used as of the acquisition date to calculate the purchase price of the business combinations that occurred during 2025 and 2023.
The 2029 Notes are discussed in more detail above under "Convertible Senior Notes - 2029 Notes." Dividends We did not declare or pay dividends during the years ended December 31, 2024, 2023 or 2022. We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future.
The 2029 Notes are discussed in more detail above under "Convertible Senior Notes - 2029 Notes." 78 Dividends We did not declare or pay dividends during the years ended December 31, 2025, 2024 or 2023. We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations." Geographic Areas We believe there is significant opportunity to expand our international business, as 6% of our total revenue during the year ended December 31, 2024 originated from customers located outside of North America. Our products are currently localized and available in over 50 countries outside of North America.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations." Geographic Areas We believe there is significant opportunity to expand our international business, as 5% of our total revenue during the year ended December 31, 2025 originated from customers located outside of North America. Our products are currently localized and available in over 50 countries outside of North America.
Non-GAAP Measures We define non-GAAP adjusted EBITDA as our net income before interest expense, interest income, certain activity within other (expense) / income, net, provision for income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
Non-GAAP Measures We define non-GAAP adjusted EBITDA as our net income before interest expense, interest income, certain activity within other income / (expense), net, provision for income taxes, income from equity method investments, net, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
The non-cash items include amortization and depreciation expense; amortization of debt issuance costs for the January 20, 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, or the 2026 Notes, included in interest expense; amortization of debt issuance costs for the May 31, 2024 issuance of $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, or the 2029 Notes, included in interest expense; and stock-based compensation expense related to restricted stock units and other forms of equity compensation, including, but not limited to, the sale of common stock.
The non-cash items include amortization and depreciation expense; income from equity method investments, net; amortization of debt issuance costs for the January 20, 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, or the 2026 Notes, included in interest expense; amortization of debt issuance costs for the May 31, 2024 issuance of $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, or the 2029 Notes, included in interest expense; and stock-based compensation expense related to restricted stock units and other forms of equity compensation, including, but not limited to, the sale of common stock.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024. Segment Information We have two reportable segments: Alarm.com and Other.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 20, 2025. Segment Information We have two reportable segments: Alarm.com and Other.
The number of employees in research and development functions increased from 1,118 as of January 1, 2024 to 1,127 as of December 31, 2024. Our research and development efforts are focused on innovating new features and enhancing the functionality of our platforms and the solutions we offer to our service provider partners and subscribers.
The number of employees in research and development functions increased from 1,127 as of January 1, 2025 to 1,150 as of December 31, 2025. Our research and development efforts are focused on innovating new features and enhancing the functionality of our platforms and the solutions we offer to our service provider partners and subscribers.
The cost of SaaS and license revenue for the Alarm.com segment increased $0.3 million in 2024 as compared to 2023 primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
The cost of SaaS and license revenue for the Alarm.com segment increased $1.3 million in 2025, as compared to 2024, primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees. Hardware and other revenue represented 33%, 35% and 38% of our revenue in 2024, 2023 and 2022, respectively.
Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees. Hardware and other revenue represented 32%, 33% and 35% of our revenue in 2025, 2024 and 2023, respectively.
During 2024 , our platforms processed more than 345 billion data points generated by over 160 million connected devices. We believe this scale of subscribers, connected devices and data operations makes us the leader in the connected property market. Alarm.com has established a global network of trusted service provider partners who distribute our solutions to their customers.
During 2025 , our platforms processed more than 365 billion data points generated by over 170 million connected devices. We believe this scale of subscribers, connected devices and data operations makes us the leader in the connected property market. Alarm.com has established a global network of trusted service provider partners who distribute our solutions to their customers.
As of December 31, 2024, we recorded a liability for long-term accrued taxes and interest payable of $9.3 million. Due to the uncertainty in the timing of future payments, we have excluded the liability related to these uncertain tax positions from the table above. See Note 18 to our consolidated financial statements for additional information regarding income taxes.
As of December 31, 2025, we recorded a liability for long-term accrued taxes and interest payable of $8.9 million. Due to the uncertainty in the timing of future payments, we have excluded the liability related to these uncertain tax positions from the table above. See Note 19 to our consolidated financial statements for additional information regarding income taxes.
We test our goodwill at the reporting unit level. We perform either a qualitative analysis or a quantitative analysis every year depending on the changes to our goodwill balance as well as changes in our business and the economy. Significant estimates and assumptions when we perform a quantitative assessment include estimates about future expected cash flows and discount rates.
We perform either a qualitative analysis or a quantitative analysis every year depending on the changes to our goodwill balance as well as changes in our business and the economy. Significant estimates and assumptions when we perform a quantitative assessment include estimates about future expected cash flows and discount rates.
Information about the 2029 Notes and the related interest expense as well as changes in legal costs, which may affect the comparability of historical financial information, is disclosed in the Comparison of Years Ended December 31, 2024 to December 31, 2023 section below within Item 7.
Business – Governance – Corporate Information. Information about the 2029 Notes and the related interest expense as well as changes in legal costs, which may affect the comparability of historical financial information, is disclosed in the Comparison of Years Ended December 31, 2025 to December 31, 2024 section below within Item 7.
The non-cash items include amortization and depreciation expense, amortization of debt issuance costs for the 2026 Notes and 2029 Notes included in interest expense, stock-based compensation expense related to restricted stock units and other forms of equity compensation, including, but not limited to, the sale of common stock.
The non-cash items include amortization and depreciation expense; income from equity method investments, net; amortization of debt issuance costs for the 2026 Notes and 2029 Notes included in interest expense; stock-based compensation expense related to restricted stock units and other forms of equity compensation, including, but not limited to, the sale of common stock.
Our capital expenditures have primarily been for general business use, including leasehold improvements as we have expanded our office space to accommodate our growth in headcount, computer equipment used internally and expansion of our network operations centers. For 2024, cash flows used in investing activities was $24.7 million, compared to $26.0 million in 2023.
Our capital expenditures have primarily been for general business use, including leasehold improvements as we have expanded our office space to accommodate our growth in headcount, computer equipment used internally and expansion of our network operations centers. For 2025, cash flows used in investing activities was $358.5 million, compared to $24.7 million in 2024.
We derive a portion of our revenue from licensing our intellectual property to third parties on a per customer basis. SaaS and license revenue represented 67%, 65% and 62% of our revenue in 2024, 2023 and 2022, respectively.
We derive a portion of our revenue from licensing our intellectual property to third parties on a per customer basis. SaaS and license revenue represented 68%, 67% and 65% of our revenue in 2025, 2024 and 2023, respectively.
Sales and marketing expense from our Other segment increased $4.8 million in 2024 as compared to 2023, primarily due to increases in personnel and related costs, attributable in part to increases in the headcount for our sales team.
Sales and marketing expense from our Other segment increased $3.4 million in 2025, as compared to 2024, primarily due to increases in personnel and related costs, attributable in part to increases in the headcount for our sales team.
Also included in general and administrative expenses are credit losses and acquisition-related expenses, which consist primarily of legal, accounting and professional service fees directly related to acquisitions and valuation gains or losses on acquisition-related contingent liabilities. The number of employees in general and administrative functions increased from 229 as of January 1, 2024 to 237 as of December 31, 2024.
Also included in general and administrative expenses are credit losses and acquisition-related expenses, which consist primarily of legal, accounting and professional service fees directly related to acquisitions and valuation gains or losses on acquisition-related contingent liabilities. The number of employees in general and administrative functions decreased from 237 as of January 1, 2025 to 235 as of December 31, 2025.
Research and development expense from our Other segment increased by $3.3 million in 2024 as compared to 2023 primarily due to an increase in our personnel and related costs. The overall number of employees in research and development functions increased from 1,118 as of December 31, 2023 to 1,127 as of December 31, 2024.
Research and development expense from our Other segment increased by $3.0 million in 2025, as compared to 2024, primarily due to an increase in personnel and related costs. The overall number of employees in research and development functions increased from 1,127 as of December 31, 2024, to 1,150 as of December 31, 2025.
Our cloud-based platform offers an expansive suite of IoT solutions addressing global opportunities in the residential, multi-family, small business and enterprise commercial markets. Alarm.com’s solution suite includes security, video and video analytics, energy management, access control, electric utility grid management, indoor gunshot detection, water management, health and wellness, personal safety and data-rich emergency response.
Our cloud-based platform offers an expansive suite of IoT solutions addressing global opportunities in the residential, multi-family, small business, enterprise commercial and energy markets. Alarm.com’s solution suite includes security, video surveillance and video analytics, energy management, access control, electric utility grid management, active shooter detection, water management, personal safety and data-rich emergency response.
On or after August 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2026 Notes, holders of the 2026 Notes may convert all or any portion of their 2026 Notes at any time, regardless of the foregoing conditions.
On or after August 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2026 Notes, holders of the 2026 Notes could have converted all or any portion of their 2026 Notes at any time, regardless of the foregoing conditions.
Our other business metrics may be calculated in a manner different from the way similar business metrics used by other companies are calculated and include the following (dollars in thousands): Year Ended December 31, 2024 2023 2022 SaaS and license revenue $ 631,198 $ 569,200 $ 520,377 Non-GAAP adjusted EBITDA 176,239 153,967 146,848 SaaS and license revenue renewal rate 95 % 94 % 94 % SaaS and License Revenue SaaS and license revenue is a GAAP measure that we use to measure our current performance and estimate our future performance.
Our other business metrics may be calculated in a manner different from the way similar business metrics used by other companies are calculated and include the following (dollars in thousands): Year Ended December 31, 2025 2024 2023 SaaS and license revenue $ 689,397 $ 631,198 $ 569,200 Non-GAAP adjusted EBITDA 206,005 176,239 153,967 SaaS and license revenue renewal rate 95 % 95 % 94 % 60 SaaS and License Revenue SaaS and license revenue is a GAAP measure that we use to measure our current performance and estimate our future performance.
Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that contributed 92%, 93% and 94% of our revenue, net of intersegment eliminations, for the years ended December 31, 2024, 2023 and 2022, respectively.
Our Alarm.com segment represents our cloud-based and Software platforms for intelligently connected properties and related solutions that contributed 91%, 92% and 93% of our revenue, net of intersegment eliminations, for the years ended December 31, 2025, 2024 and 2023, respectively.
(2) Operating expenses include stock-based compensation expense as follows (in thousands): 65 Year Ended December 31, 2024 2023 2022 Stock-based compensation expense data: Cost of hardware and other revenue $ 2 $ 5 $ — Sales and marketing 2,833 3,522 4,342 General and administrative 13,080 13,028 15,037 Research and development 25,327 30,728 33,275 Total stock-based compensation expense $ 41,242 $ 47,283 $ 52,654 The following table sets forth the components of cost of revenue as a percentage of revenue: Year Ended December 31, 2024 2023 2022 Components of cost of revenue as a percentage of revenue: Cost of SaaS and license revenue as a percentage of SaaS and license revenue 14 % 15 % 14 % Cost of hardware and other revenue as a percentage of hardware and other revenue 77 77 83 Total cost of revenue as a percentage of total revenue 35 % 37 % 41 % Comparison of Years Ended December 31, 2024 to December 31, 2023 The following tables in this section set forth our selected consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the years ended December 31, 2024 and 2023.
(2) Operating expenses include stock-based compensation expense as follows (in thousands): 65 Year Ended December 31, 2025 2024 2023 Stock-based compensation expense data: Cost of hardware and other revenue $ — $ 2 $ 5 Sales and marketing 2,441 2,833 3,522 General and administrative 10,474 13,080 13,028 Research and development 20,275 25,327 30,728 Total stock-based compensation expense $ 33,190 $ 41,242 $ 47,283 The following table sets forth the components of cost of revenue as a percentage of revenue: Year Ended December 31, 2025 2024 2023 Components of cost of revenue as a percentage of revenue: Cost of SaaS and license revenue as a percentage of SaaS and license revenue 14 % 14 % 15 % Cost of hardware and other revenue as a percentage of hardware and other revenue 76 77 77 Total cost of revenue as a percentage of total revenue 34 % 35 % 37 % Comparison of Years Ended December 31, 2025 to December 31, 2024 The following tables in this section set forth our selected consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the years ended December 31, 2025 and 2024.
Stock Repurchase Programs On February 15, 2023, our board of directors authorized a stock repurchase program, effective February 23, 2023, under which we were authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025.
On February 15, 2023, our board of directors authorized the cancellation of the balance under the stock repurchase program ending December 3, 2023, and also authorized a stock repurchase program, effective February 23, 2023, under which we were authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025.
We typically expect hardware and other revenue to fluctuate as a percentage of total revenue. Highlights of our financial performance for the periods covered in this Annual Report include: • SaaS and license revenue increased 11% to $631.2 million in 2024 from $569.2 million in 2023.
We typically expect hardware and other revenue to fluctuate as a percentage of total revenue. Highlights of our financial performance for the periods covered in this Annual Report include: • SaaS and license revenue increased 9% to $689.4 million in 2025 from $631.2 million in 2024.
The number of employees in sales and marketing functions increased from 565 as of January 1, 2024 to 572 as of December 31, 2024. We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally and we expect to increase our marketing expense in 2025 as compared to 2024.
The number of employees in sales and marketing functions increased from 572 as of January 1, 2025 to 607 as of December 31, 2025. We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally.
The SaaS and license revenue for our Other segment increased $12.2 million in 2024 as compared to 2023 primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution.
The SaaS and license revenue for our Other segment increased $17.5 million in 2025, as compared to 2024, primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution.
As of December 31, 2024, our cash and cash equivalents were primarily held in money market accounts. Liquidity and Capital Resources As of December 31, 2024, we had $1.22 billion in cash and cash equivalents. We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents.
As of December 31, 2025, our cash and cash equivalents were primarily held in money market accounts. Liquidity and Capital Resources As of December 31, 2025, we had $960.6 million in cash and cash equivalents. We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents.
As of December 31, 2024 and 2023, we had 74 and 77 employees who manufacture hardware for our suite of IoT solutions, respectively.
As of December 31, 2025 and 2024, we had 66 and 74 employees who manufacture hardware for our suite of IoT solutions, respectively.
The overall number of employees in our sales and marketing teams increased from 565 as of December 31, 2023 to 572 as of December 31, 2024.
The overall number of employees in our sales and marketing teams increased from 572 as of December 31, 2024, to 607 as of December 31, 2025.
In consideration for the purchase of 81% of the issued and outstanding shares of capital stock of CHeKT, we paid $23.6 million in cash on February 10, 2025, after deducting $3.7 million related to agreed holdback provisions.
The maturity date of the loan is January 30, 2030. In consideration for the purchase of 81% of the issued and outstanding shares of capital stock of CHeKT, we paid $23.6 million in cash on February 10, 2025, after deducting $3.7 million related to agreed holdback provisions.
Our software license revenue included within SaaS and license revenue decreased $2.9 million to $20.3 million in 2024 as compared to $23.2 million during 2023, primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform.
Our software license revenue included within SaaS and license revenue decreased $2.6 million to $17.7 million in 2025, as compared to $20.3 million during 2024, primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform.
We received proceeds from the issuance of the 2026 Notes of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs. 75 We may redeem for cash, all or any portion of the 2026 Notes, at our option, on or after January 20, 2024, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the 2026 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption.
We may redeem for cash, all or any portion of the 2026 Notes, at our option, on or after January 20, 2024, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the 2026 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption.
Cash used in financing activities typically includes repurchases of common stock, repayments of debt, payments of debt issuance costs and purchases of capped calls related to the 2029 Notes. 79 For 2024, cash flows from financing activities was $346.4 million, compared to cash flows used in financing activities of $31.9 million in 2023.
Cash used in financing activities typically includes repurchases of common stock, repayments of debt, payments of debt issuance costs and purchases of capped calls related to the 2029 Notes. 80 For 2025, cash flows used in financing activities was $55.0 million, compared to cash flows from financing activities of $346.4 million in 2024.
We grew from 1,989 employees as of January 1, 2024 to 2,010 employees as of December 31, 2024 . W e expect to continue to hire new employees to support the projected future growth of our business. Sales and Marketing Expense.
We grew from 2,010 employees as of January 1, 2025 to 2,058 employees as of December 31, 2025 . W e may continue to hire new employees to support the projected future growth of our business. 63 Sales and Marketing Expense.
The full repurchase balance for this program of $100.0 million was available as of December 31, 2024. During the year ended December 31, 2024, we repurchased 1,117,068 shares of our common stock for $75.0 million concurrently with the pricing of the 2029 Notes, which was separately authorized by our board of directors.
During the year ended December 31, 2024, we repurchased 1,117,068 shares of our common stock for $75.0 million concurrently with the pricing of the 2029 Notes, which was separately authorized by our board of directors.
Qualitative factors we consider when we perform a qualitative analysis include, but are not limited to, macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances and market capitalization. For our 2024 annual impairment review, we performed a qualitative assessment for our Alarm.com reporting unit, our only reporting unit with a goodwill balance.
Qualitative factors we consider when we perform a qualitative analysis include, but are not limited to, macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances and market capitalization. For our 2025 annual impairment review, we performed a qualitative assessment for our Alarm.com and Other reporting units.
There were no triggering events that occurred between our qualitative annual impairment test performed as of October 1, 2024 and December 31, 2024.
There were no indicators of impairment that occurred between our qualitative annual impairment test performed as of October 1, 2025 and December 31, 2025.
Upon conversion, we may satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. It is our current intent to settle the principal amount of the 2026 Notes with cash.
Upon conversion, prior to August 15, 2025, we had the ability to satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. It was our intent to settle the principal amount of the 2026 Notes with cash.
Sales and Marketing Expense Year Ended December 31, % Change 2024 2023 2024 vs. 2023 Sales and marketing $ 111,242 $ 100,226 11 % % of total revenue 12 % 11 % The $11.0 million increase in sales and marketing expense in 2024 as compared to 2023 was primarily due to a $3.7 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth, and a $3.5 million increase in marketing expense for our Alarm.com segment.
Sales and Marketing Expense Year Ended December 31, % Change 2025 2024 2025 vs. 2024 Sales and marketing $ 123,788 $ 111,242 11 % % of total revenue 12 % 12 % The $12.5 million increase in sales and marketing expense in 2025, as compared to 2024, was primarily due to a $6.2 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth, and a $2.4 million increase in marketing expense for our Alarm.com segment.
For 2024, cash flows from operating activities were $206.4 million, compared to $136.0 million for 2023. This $70.4 million increase in cash flows from operating activities was due to a $42.2 million increase in net income, a $19.7 million increase in cash from operating assets and liabilities and a $8.5 million increase in non-cash and other reconciling items.
This $70.4 million increase in cash flows from operating activities was due to a $42.2 million increase in net income, a $19.7 million increase in cash from operating assets and liabilities and a $8.5 million increase in non-cash and other reconciling items.
Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% and 15% in 2024 and 2023, respectively. The decrease in cost of SaaS and license revenue as a percentage of SaaS and license revenue in 2024 as compared to 2023 is a reflection of the mix of sales and services during the periods.
The decrease in cost of SaaS and license revenue as a percentage of SaaS and license revenue in 2025, as compared to 2024, is a reflection of the mix of sales and services during the periods. Cost of software license revenue as a percentage of software license revenue was 2% and 3% in 2025 and 2024, respectively.
Over the next 12 months, we expect our capital expenditure requirements to be between $12.0 million and $15.0 million, primarily related to purchases of computer software and equipment as well as the continued build out of our leased and owned office space.
Over the next 12 months, we expect our capital expenditure requirements to be between $8.0 million and $11.0 million, primarily related to purchases of computer software and equipment as well as the continued build out of our leased and owned office space, excluding any leasehold improvements related to tenant improvement allowances.
The SaaS and license revenue for the Alarm.com segment increased $49.8 million in 2024 as compared to 2023 primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2023, as well as an increase in our license revenue.
The SaaS and license revenue for the Alarm.com segment increased $40.7 million in 2025, as compared to 2024, primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2024.
For each of the years ended December 31, 2024, 2023 and 2022, our reserve against revenue for hardware returns was 1% of hardware and other revenue. We evaluate our hardware reserve on a quarterly basis or if there is an indication of significant changes in return experience. Historically, our returns of hardware have not significantly differed from our estimated reserve.
We record a reserve against revenue for hardware returns based on historical returns. For each of the years ended December 31, 2025, 2024 and 2023, our reserve against revenue for hardware returns was 1% of hardware and other revenue. We evaluate our hardware reserve on a quarterly basis or if there is an indication of significant changes in return experience.
Our Alarm.com segment decreased from 1,776 employees as of January 1, 2024 to 1,773 employees as of December 31, 2024. Our Other segment increased from 213 employees as of January 1, 2024 to 237 employees as of December 31, 2024.
Our Alarm.com segment decreased from 1,773 employees as of January 1, 2025 to 1,768 employees as of December 31, 2025. Our Other segment increased from 237 employees as of January 1, 2025 to 290 employees as of December 31, 2025.
Historical Cash Flows The following table sets forth our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Cash flows from operating activities $ 206,413 $ 135,965 $ 56,901 Cash flows used in investing activities (24,681) (25,966) (68,319) Cash flows from / (used in) financing activities 346,430 (31,865) (76,324) 78 Operating Activities Cash flows from operating activities have typically been generated from our net income and by changes in our operating assets and liabilities, particularly from accounts receivable, accounts payable and inventory, adjusted for non-cash expense items such as amortization and depreciation, deferred income taxes and stock-based compensation.
Historical Cash Flows The following table sets forth our cash flows for the periods indicated (in thousands): Year Ended December 31, 2025 2024 2023 Cash flows from operating activities $ 153,330 $ 206,413 $ 135,965 Cash flows used in investing activities (358,482) (24,681) (25,966) Cash flows (used in) / from financing activities (55,006) 346,430 (31,865) Operating Activities Cash flows from operating activities have typically been generated from our net income and by changes in our operating assets and liabilities, particularly from accounts receivable, accounts payable and inventory, adjusted for non-cash expense items such as amortization and depreciation, deferred income taxes and stock-based compensation. 79 For 2025, cash flows from operating activities were $153.3 million, compared to $206.4 million for 2024.
The cost of SaaS and license revenue for the Other segment increased $3.3 million in 2024 as compared to 2023 primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.The cost of hardware and other revenue for the Alarm.com segment decreased $2.1 million in 2024 as compared to 2023 primarily due to a decrease in the number of hardware units shipped.
The cost of SaaS and license revenue for the Other segment increased $5.3 million in 2025, as compared to 2024, primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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If a significant portion of our revenue and operating expenses becomes denominated in currencies other than U.S. dollars, we may not be able to effectively manage this risk, and our business, financial condition and results of operations could be adversely affected by translation and by transactional foreign currency conversions. 81
If a significant portion of our revenue and operating expenses becomes denominated in currencies other than U.S. dollars, we may not be able to effectively manage this risk, and our business, financial condition and results of operations could be adversely affected by translation and by transactional foreign currency conversions. 82
The uncertainty that exists with respect to the economic impact of the Macroeconomic Conditions continues to create significant volatility in the financial markets subsequent to the year ended December 31, 2024. Market Risk On January 20, 2021, we issued the 2026 Notes. On May 31, 2024, we issued the 2029 Notes.
The uncertainty that exists with respect to the economic impact of the Macroeconomic Conditions continues to create significant volatility in the financial markets subsequent to the year ended December 31, 2025. Market Risk On January 20, 2021, we issued the 2026 Notes and on May 31, 2024, we issued the 2029 Notes.

Other ALRM 10-K year-over-year comparisons