Alarm.com Surpasses $1B Revenue on AI, Energy Push

TYSONS, Va. – February 19, 2026 – Alarm.com Holdings, Inc. (Nasdaq: ALRM) announced it has crossed the significant threshold of $1 billion in annual revenue for the first time, capping a strong 2025 fiscal year with fourth-quarter results that surpassed analyst expectations. The smart property technology leader demonstrated robust growth fueled by strategic advancements in artificial intelligence and a major expansion of its energy management services, though a cautious outlook for 2026 tempered investor enthusiasm.

The company reported total fourth-quarter revenue of $261.7 million, an 8% increase year-over-year that comfortably beat consensus estimates. Non-GAAP adjusted earnings per share came in at $0.72, also exceeding market predictions. Despite the strong performance and an initial post-earnings stock bump, the company's full-year 2026 revenue guidance of $1.058 billion to $1.065 billion fell slightly shy of some analyst projections, leading to a measured market reaction.

A Billion-Dollar Milestone Built on Software

Alarm.com's achievement of $1.0112 billion in total revenue for 2025 marks a pivotal moment for the company, underscoring the success of its platform-based business model. The core of this success lies in its recurring Software-as-a-Service (SaaS) and license revenue, which grew 9.2% to $689.4 million for the full year. This high-margin, predictable revenue stream is a key attraction for investors and demonstrates the "stickiness" of its ecosystem with millions of home and business owners.

In the fourth quarter alone, SaaS and license revenue climbed 8.8% to $180.2 million. This consistent growth highlights the continued demand for the company's integrated solutions, which are sold exclusively through a network of thousands of professional security and smart home service providers. While hardware sales remain a component of the business, the software platform is the engine driving profitability, with the company reporting a healthy non-GAAP adjusted EBITDA of $206.0 million for the year, a 16.9% increase over 2024. The company's financial health remains strong, though its cash position decreased from $1.22 billion to $960.6 million, a change largely attributed to strategic investments, including acquisitions and share repurchases, rather than operational weakness.

Beyond the Doorbell: AI Redefines Property Intelligence

A key driver of Alarm.com's recent momentum is its aggressive push into artificial intelligence, transforming its offerings from reactive security alerts to proactive property intelligence. The company is actively moving beyond traditional alarms and into a future where properties can anticipate needs and provide deeper insights. This strategy was highlighted by several key product launches in 2025.

The introduction of the new VDB775 video doorbell is a prime example. It is designed not just as a security camera but as a gateway to higher-tier, AI-driven video subscriptions. These services include advanced capabilities like "Familiar Faces," which allows the system to distinguish between known individuals and strangers, significantly reducing nuisance alerts and providing more meaningful notifications.

Perhaps more revolutionary is the release of a generative AI-powered video search tool. Available to advanced subscribers, this feature allows users to search through their saved video footage using natural language queries, such as "show me when a red car pulled into the driveway last week." This eliminates the tedious process of scrubbing through hours of video, making surveillance far more practical and powerful for both residential and commercial customers. The strong adoption of the company's cloud-based video solutions, which recently surpassed 2 million active devices in the commercial sector, provides a massive base for upselling these new AI features.

The Quiet Giant: EnergyHub's Growing Role in Grid Stability

While security and video remain its public face, Alarm.com's subsidiary, EnergyHub, has quietly become a powerhouse in the increasingly vital energy management sector. In 2025, EnergyHub played a critical role in supporting grid reliability across the United States, particularly during periods of record heat and surging demand. The platform now manages over 2.5 million distributed energy resources (DERs)—such as smart thermostats, batteries, and EV chargers—and was called upon by utilities over 3,000 times to help balance the grid.

Throughout the year, EnergyHub's platform shifted approximately 38,000 megawatt-hours of electricity load, demonstrating the tangible impact of its Virtual Power Plants (VPPs) on preventing blackouts and integrating renewable energy. This performance underscores a significant strategic diversification for Alarm.com, positioning it as a key player in the clean energy transition.

To solidify this leadership position, the company announced the acquisition of Resideo Grid Services (RGS), a provider of demand response and aggregation services. This move is expected to accelerate EnergyHub's scale, expand its utility partnerships, and enhance its ability to manage a broad ecosystem of energy-consuming and -producing devices. The acquisition directly contributed to a stronger SaaS revenue forecast for 2026, signaling management's confidence in the segment's growth trajectory.

Navigating a Competitive and Evolving Market

Alarm.com operates in a fiercely competitive landscape, facing off against established security providers like ADT and Vivint, as well as tech giants like Google and Amazon, who are aggressively pushing their own smart home ecosystems. A notable headwind acknowledged by the company is the transition of ADT, a major partner, toward its new ADT+ platform integrated with Google Nest, which is expected to gradually reduce revenue from that channel.

However, Alarm.com's strategy of empowering a vast network of professional service providers remains a key differentiator. Rather than competing in the do-it-yourself (DIY) hardware market, it provides a comprehensive, professionally installed and monitored platform that integrates security, video, access control, and energy management into a single, cohesive experience. This B2B2C model creates a deep moat and fosters long-term customer relationships through its service provider partners. The company's continued investment in research and development, which saw a 5.6% increase for the full year, signals its commitment to maintaining a technological edge and expanding its integrated platform to meet the future needs of intelligently connected properties.