Smart property technology provider Alarm.com (NASDAQ: ALRM) reported Q3 2026 results topping the market’s revenue expectations, with revenue up 9% year on year to $279.4 million. The company’s full-year revenue guidance of $1.11 billion at the midpoint came in 2.1% above analysts’ consensus estimates. Its non-GAAP profit of $0.90 per share was 19.4% above analysts’ consensus estimates.
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Alarm.com (ALRM) Q3 2026 highlights:
- Revenue $279.4 million vs S&P analysts’ consensus estimates of $267.2 million (9% year-on-year growth, 4.6% beat)
- Adjusted EPS $0.90 vs S&P analysts’ consensus estimates of $0.75 (19.4% beat)
- Adjusted EBITDA $66.25 million vs analysts’ consensus estimates of $57.87 million (23.7% margin, 14.5% beat)
- Revenue guidance The company lifted its revenue guidance for the full year to $1.11 billion at the midpoint from $1.08 billion, a 2% increase
- Adjusted EPS guidance Management raised its full-year adjusted EPS guidance to $3.03 at the midpoint, a 3.4% increase
- EBITDA guidance $228 million at the midpoint for the full year, above analysts’ consensus estimates of $222.1 million
- Operating margin 15.7%, up from 14.4% in the same quarter last year
- Free cash flow margin 24.9%, up from 13.3% in the previous quarter
- Billings $281.6 million at quarter end, up 9.5% year on year
- Market capitalization $3.34 billion
Revenue growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Alarm.com’s revenue grew at a sluggish 8.6% annualized rate over the last five years, falling short of the software sector standard.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Alarm.com’s annualized revenue growth of 8.3% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
This quarter, Alarm.com reported year-on-year revenue growth of 9%, and its $279.4 million of revenue exceeded Wall Street’s consensus estimates by 4.6%.
Looking ahead, sell-side analysts expect revenue to grow 3.4% over the next 12 months, according to S&P, a deceleration versus the last two years. That underwhelming projection suggests its products and services will face some demand challenges.
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 $281.6 million in Q3, and over the last four quarters, its growth was underwhelming as it averaged 9.5% year-on-year increases. This performance mirrored its total revenue and suggests that increasing competition is making it harder to acquire and retain customers. 
Customer acquisition efficiency
The customer acquisition cost, or 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 was 42.4 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 Q3 results
Alarm.com delivered a good Q3 report, with clear positives in billings, which came in well above analysts’ consensus estimates, and full-year EBITDA guidance, which topped Wall Street’s consensus. Still, the market seemed to be hoping for more. Shares edged lower 1.5% to $66.00 immediately after the release.
Is Alarm.com a buy at its current price? The latest quarter is only one piece of the longer-term business-quality picture. Quality, combined with valuation, can help determine whether the stock is a buy. Read our full research report here (it’s free).
