Smart property technology provider Alarm.com (NASDAQ: ALRM) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 11% year on year to $265.2 million. On the other hand, the company’s full-year revenue guidance of $1.07 million at the midpoint came in 99.9% below analysts’ estimates. Its non-GAAP profit of $0.65 per share was 7.6% above analysts’ consensus estimates.
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Alarm.com (ALRM) Q1 CY2026 Highlights:
- Revenue: $265.2 million vs analyst estimates of $251 million (11% year-on-year growth, 5.6% beat)
- Adjusted EPS: $0.65 vs analyst estimates of $0.60 (7.6% beat)
- Adjusted Operating Income: $39.69 million vs analyst estimates of $28.97 million (15% margin, 37% beat)
- The company slightly lifted its revenue guidance for the full year to $1.07 million at the midpoint from $1.06 million
- Management slightly raised its full-year Adjusted EPS guidance to $2.82 at the midpoint
- EBITDA guidance for the full year is $215.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 11.9%, in line with the same quarter last year
- Free Cash Flow Margin: 18.7%, up from 13.4% in the previous quarter
- Billings: $256.8 million at quarter end, up 7.1% year on year
- Market Capitalization: $2.24 billion
Company Overview
Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ: ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Alarm.com grew its sales at a 10.2% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Alarm.com’s recent performance shows its demand has slowed as its annualized revenue growth of 7.7% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, Alarm.com reported year-on-year revenue growth of 11%, and its $265.2 million of revenue exceeded Wall Street’s estimates by 5.6%.
Looking ahead, sell-side analysts expect revenue to grow 3.7% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will see some demand headwinds.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Alarm.com’s billings came in at $256.8 million in Q1, and over the last four quarters, its growth was underwhelming as it averaged 7.3% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Alarm.com is efficient at acquiring new customers, and its CAC payback period checked in at 36.6 months this quarter. The company’s relatively fast recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.
Key Takeaways from Alarm.com’s Q1 Results
We enjoyed seeing Alarm.com beat analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed. Overall, this print was mixed. The stock remained flat at $46.97 immediately following the results.
Big picture, is Alarm.com a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
