Riding High: Alarm.Com

Shares of Alarm.Com Holdings Inc. (ALRM) are up more than 33% year-to-date compared to a modest 8% rise by Dow Jones U.S. Software Index for the same period.

Alarm.Com provides cloud-based solutions via SaaS (software as a service) platform to property owners to secure, monitor and manage their homes and businesses even when they are away through an established network of over 6,000 service providers.

The Company’s offerings include, interactive security, video monitoring, intelligent automation and energy management solutions, which enable subscribers to seamlessly connect to their property. In other words, the Company’s offerings help the property owners to stay connected to their homes even when they are away by being able to control the door locks, security system, lights and thermostat through their smart device.

In addition, the Company also offers a comprehensive suite of enterprise-grade business management solutions for its service provider partners.

Recent acquisitions:

In March of this year, the Company completed the acquisition of Connect and Piper business units, purchased from Icontrol Networks.

Connect, based in Redwood City, California, provides an interactive security and home automation platform while Piper, based in Ottawa, Canada, designs, produces and sells a Wi-Fi-enabled video and home automation hub.

Another company bought out by Alarm.Com this March is ObjectVideo, a pioneer in the fields of video analytics and computer vision.

Subscriber base & Renewal rate…

As of March 15, 2017, Alarm.com had 5 million residential and business subscribers. This number compares favorably with the subscriber base of over 2.3 million in 2014.
The Company’s SaaS and license revenue renewal rate has been 93% or 94% over the years, and in future, is estimated to stay within its long-term expectation of 92 to 94 percent.

What’s driving Alarm.Com’s business?

— Securitycentric services, delivered by professionals, are driving the broad adoption of Internet of Things technology for both homes and businesses.
— The ongoing proliferation of devices capable of being integrated into an Alarm.com installation has lead to a steady increase in the *attachment rate of home automation devices. (*means of gauging demand for the goods)
— Consumers are looking to service providers for a full complement of installation, monitoring and support services, and Alarm.Com’s fully integrated solutions address the needs of these consumers.

(Source: Q1 2017 Earnings Call…

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