Alarm.com Holdings (NASDAQ: ALRM) reported second-quarter SaaS and license revenue of $188.8 million, marking an 11% increase year over year. The company also posted adjusted EBITDA of $57.7 million, reflecting strong execution across its residential, commercial, and international segments.

The performance exceeded the midpoint of prior guidance by approximately $3.2 million. International active subscriber accounts surpassed the 1 million milestone, supported by localization efforts in over 70 countries. Commercial initiatives, including Energy Hub and OpenEye, collectively grew more than 30% year over year.

Financial Performance Highlights

The quarter demonstrated resilience in core residential retention and acceleration in commercial verticals. Hardware gross margins expanded due to enterprise demand for video surveillance hardware.

Total operating expenses excluding depreciation, amortization, and stock-based compensation rose 4.6% year over year to approximately $123.7 million. Research and development expense remained the largest investment area at approximately $71 million, a 2.8% increase year over year.

What the Numbers Show

A divergence exists between GAAP and non-GAAP profitability metrics driven by balance sheet actions. GAAP net income fell to $24.2 million from $34.6 million a year ago, primarily due to lower interest income following the retirement of $500 million in convertible notes in January. However, non-GAAP adjusted net income increased 17% to $41.1 million, indicating that operational efficiency and margin expansion offset the reduced interest yield on cash reserves.

Strategic Updates and Guidance

Management highlighted the launch of a new commercial fire communicator, targeting an addressable market of 4 to 5 million fire panels in the U.S. and Canada. This product leverages existing cellular infrastructure and aims to provide service providers with a unified platform for fire and security monitoring.

Energy Hub utility programs saw significant growth, with utilities dispatching over 300 demand response events across more than 30 states during the July 4th weekend. These events shifted 17.5 gigawatt-hours of electricity, demonstrating the platform's scalability during peak demand periods.

For the third quarter of FY26, Alarm.com expects SaaS and license revenue between $189.8 million and $190 million. The full-year total revenue outlook was raised to between $1.079 billion and $1.089 billion, with adjusted EBITDA guidance increased to $221 million to $223 million.