Alarm.com posts adjusted earnings of $0.90 per share and raises 2026 revenue outlook
Key Facts
Alarm.com reported third-quarter 2026 results on November 5, with adjusted non-GAAP net income of $48.3 million, or $0.90 per diluted share, compared with $39.5 million and $0.71 per share a year earlier. Total revenue rose 9.0% to $279.4 million from $256.4 million in the year-earlier quarter. The results came as recurring software-as-a-service and license revenue grew, a prominent driver of the company's performance. By contrast, GAAP net income fell to $34.3 million from $35.1 million. The company raised its annual outlook, citing improved estimates for subscription and license revenue and adjusted operating earnings.
Software-as-a-service and license revenue was $191.2 million, up 9.0% from $175.4 million in the third quarter of 2025. In its filing, the company said the $23.0 million increase in total revenue was primarily driven by a $15.8 million, or 9%, increase in software and license revenue, alongside a $7.2 million, or 9%, increase in hardware and other revenue. The company attributed growth in subscription and license revenue in the Alarm.com segment primarily to an expanding subscriber base. This included the impact of subscribers added during 2025, according to its filing with the U.S. Securities and Exchange Commission. The figures link growth in recurring business to a larger customer base, alongside contributions from hardware and other sales to quarterly revenue growth.
On operating profitability, the company posted adjusted EBITDA of $66.2 million, compared with $55.5 million a year earlier. The increase came alongside higher quarterly revenue, while GAAP net income moved in the opposite direction, falling from $35.1 million to $34.3 million. Adjusted net income attributable to common stockholders rose to $48.3 million from $39.5 million, and diluted earnings per share reached $0.90, compared with $0.71. The results show a divergence between GAAP and adjusted measures during the same quarter. Total revenue had risen 9.2% in the second quarter to $277.7 million from $254.3 million, while software and license revenue then increased 11.1% to $188.8 million from $170.0 million.
Alarm.com raised its 2026 outlook for software-as-a-service and license revenue to a range of $756.1 million to $756.3 million, an increase of $12.2 million from the midpoint of the guidance issued in February. It now expects annual total revenue of between $1.1011 billion and $1.1113 billion, including expected hardware and other revenue of between $345 million and $355 million. The company targets adjusted EBITDA of between $227 million and $229 million, up $6 million at the midpoint from its previous guidance. It estimated adjusted net income attributable to common stockholders at between $161.2 million and $162.6 million, or $3.02 to $3.04 per diluted share. These revisions raise annual estimates across subscription revenue, total revenue and adjusted profitability.
For the fourth quarter of 2026, the company expects software-as-a-service and license revenue of between $194.6 million and $194.8 million. It said the outlook reflects the absence of the temporary benefit from recovering costs related to tariffs, which was recorded in the third quarter. It added that the outlook takes into account near-term pressure from higher memory costs, before the full impact of pricing changes emerges. In the stock market, EL7 data showed ALRM shares closed at $67.96 on November 4. That was the session before the results report published on November 5.