Alarm.com: Hold as 2.87% SBC Discipline and Commercial Video Balance 7.79% Growth
Exclusive 11,000-dealer security distribution, OpenEye commercial video, and EnergyHub grid software generate $157.28M in true owner cash flow on $1.06B of TTM revenue near our $48.26 DCF mark.
Score Locked · Full AccessResearchPublished Nov 9, 2026 · Data as of Jun 30, 2026· 2 min read · 2 exhibits
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Alarm.com crossed the billion-dollar milestone in FY2025 ($1.01B) and generated $1.06B ($1,060.98M) in trailing twelve-month GAAP revenue (+7.79% year over year), $136.10M in GAAP operating income (12.83% margin), and $187.71M in GAAP free cash flow (17.69% margin) across more than 9 million connected residential and commercial properties.
Unlike nearly every sub-$5B cybersecurity or IoT software vendor in public markets, Alarm.com treats shareholder equity as scarce capital: stock-based compensation totaled just
$30.42M
(
2.87%
of revenue, down from
6.25%
in FY2022), allowing
$157.28M
(
14.82%
of revenue) to accrue directly to owners after CapEx and SBC.
Our variant perception explains both why Alarm.com is far more durable than DIY smart-home skeptics claim and why its stock lacks near-term re-rating torque at $51.47. Bears who lump Alarm.com in with consumer retail cameras (Ring, Arlo, and Google Nest) miss its two-sided channel moat: Alarm.com never sells direct to consumers, instead serving as the multi-tenant cloud operating system for more than 11,000 independent professional security dealers who rely on Alarm.com's technician diagnostic tools, cellular dual-path signaling, and recurring monthly monitoring billing to run their businesses.
At the same time, bulls anticipating an imminent breakout back to 15%+ top-line growth confront two structural realities in the SEC filings: frozen North American existing-home turnover dampens residential move-in originations, and Alarm.com spends $275.86M annually on R&D (26.72% pillar R&D intensity, yielding a 0.22x 1-year gross-profit payback) to incubate OpenEye commercial video, EnergyHub grid load management, and proprietary camera firmware. [1] With $51.47 sitting within 6.65% of our $48.26 DCF base case and supported by $479.42M in balance-sheet cash, Hold captures the balanced risk-reward.
Free cash flowGAAP operating cash flow less capital expenditures ($11.37M TTM CapEx)
$28.26M
$128.45M
$196.28M
$137.05M
$187.71M
Stock-based compensation
$52.65M
$47.28M
$41.24M
$33.19M
$30.42M
Owner FCF (ex-SBC)Retains 83.79% of TTM GAAP free cash flow after deducting equity grants
-$24.39M
$81.17M
$155.04M
$103.86M
$157.28M
Source: Alarm.com Holdings, Inc. SEC Form 10-K and Form 10-Q filings.
Exhibit 2Data Exhibit
Revenue surpassed $1.06B as GAAP FCF margin rebounded to 17.69% in TTM Q2 2026
Filed annual and TTM GAAP revenue (primary bars) and free cash flow margin (secondary line).
Revenue
FCF margin
Source: Alarm.com Holdings, Inc. SEC Form 10-K and Form 10-Q filings.
Post-reset Vector ad-network gains lifted TTM revenue +13.6% to $2.03B, yet $616.0M in GAAP operating losses, $341.9M in SBC, and 55.2% multi-year share expansion cap DCF fair value at $9.13.
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