- Revenue Milestone: Alarm.com surpassed $1 billion in annual total revenue for the first time in 2025, with SaaS and license revenue reaching $180 million in Q4, up 8.8% YoY.
- Segment Growth: Commercial security and energy segments contributed 25% of SaaS revenue in 2025, growing 25% YoY, driven by expansion into adjacent markets.
- EnergyHub Expansion: Connected devices under EnergyHub increased by over 50% in 2025, with utilities calling on its virtual power plants 25% more, aided by the Resideo Grid Services acquisition.
- 2026 Guidance: SaaS and license revenue projected between $743–$745 million, with total revenue expected to reach $1.058–$1.065 billion and adjusted EBITDA of $213–$215 million.
- Strategic AI Integration: AI is enhancing productivity and automation but not altering the core business model, with EnergyHub poised to benefit from AI-driven data center electricity demand growth.
Revenue Growth Drivers
The growth in Alarm.com's revenue was driven primarily by ARPU expansion in its core residential business, with service providers effectively selling residential video solutions. The company has also introduced new products, such as a premium video doorbell and a battery-powered camera, and enhanced its software with AI capabilities to improve automation and personalization for subscribers. The commercial business continued to show solid growth, despite economic uncertainty, with the company believing that the underlying demand environment remains strong.
EnergyHub's Significant Growth Opportunities
The EnergyHub business, which provides mission-critical distributed IoT management solutions to utilities, saw the number of connected devices under its management increase by more than 50% in 2025. Utilities increased the number of times they called on EnergyHub's virtual power plants by 25%. The acquisition of Resideo Grid Services is expected to accelerate EnergyHub's scale and introduce its multi-device platform to new clients. The company sees significant growth opportunities in the EnergyHub business, with around 130 million meters in North America and current enrollment at 5% of the 50 million meters it transacts with.
Valuation and Outlook
With a P/E Ratio of 17.13 and an EV/EBITDA of 13.44, Alarm.com's valuation appears reasonable considering its growth prospects. Analysts estimate revenue growth at 4.5% for the next year. The company's focus on high-return organic investments and selective acquisitions is expected to drive future growth. The grid's increasing variability, driven by a higher percentage of power coming from variable sources like solar and wind, creates a need for utilities to find new sources of power, making them more open to virtual power plants like EnergyHub.
Margins and Operating Performance
Alarm.com's adjusted EBITDA margins in 2025 contained $4.5 million of unrealized gains, which, if excluded, would result in a margin of around 19.9%. The company completed an acquisition in the fourth quarter with 0% EBITDA margin, which they are working to absorb. The competitive environment in the North American residential business remains relatively stable, with the company feeling good about its position. The company's growth has been driven by ARPU expansion, with 20-25% of cameras sold going into the installed base, leading to package upgrades.