Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37461 | |
Entity Registrant Name | ALARM.COM HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-4247032 | |
Entity Address, Address Line One | 8281 Greensboro Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Tysons | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | 877 | |
Local Phone Number | 389-4033 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | ALRM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 49,987,784 | |
Entity Central Index Key | 0001459200 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Revenue: | |||||
Total revenue | $ 221,854 | $ 216,138 | $ 655,445 | $ 634,420 | |
Cost of revenue: | |||||
Total cost of revenue | [1] | 81,405 | 85,586 | 243,944 | 263,009 |
Operating expenses: | |||||
Sales and marketing | 23,861 | 23,057 | 74,278 | 69,182 | |
General and administrative | 31,455 | 28,011 | 88,753 | 81,314 | |
Research and development | 61,014 | 55,581 | 183,840 | 161,227 | |
Amortization and depreciation | 7,948 | 7,587 | 23,481 | 23,123 | |
Total operating expenses | 124,278 | 114,236 | 370,352 | 334,846 | |
Operating income | 16,171 | 16,316 | 41,149 | 36,565 | |
Interest expense | (906) | (787) | (2,601) | (2,356) | |
Interest income | 8,493 | 2,903 | 21,092 | 4,062 | |
Other (expense) / income, net | (435) | (76) | (1,214) | 42 | |
Income before income taxes | 23,323 | 18,356 | 58,426 | 38,313 | |
Provision for income taxes | 3,972 | 246 | 9,257 | 472 | |
Net income | 19,351 | 18,110 | 49,169 | 37,841 | |
Net loss attributable to redeemable noncontrolling interests | 173 | 222 | 570 | 412 | |
Net income attributable to common stockholders | $ 19,524 | $ 18,332 | $ 49,739 | $ 38,253 | |
Net income per share: | |||||
Basic (in dollars per share) | $ 0.39 | $ 0.37 | $ 1 | $ 0.77 | |
Diluted (in dollars per share) | $ 0.37 | $ 0.35 | $ 0.94 | $ 0.73 | |
Weighted average common shares outstanding: | |||||
Basic (in shares) | 49,917,533 | 49,791,465 | 49,782,571 | 49,974,925 | |
Diluted (in shares) | 54,778,793 | 54,832,528 | 54,588,826 | 54,988,020 | |
SaaS and License | |||||
Revenue: | |||||
Total revenue | $ 145,027 | $ 133,126 | $ 420,853 | $ 385,826 | |
Cost of revenue: | |||||
Total cost of revenue | [1] | 21,917 | 18,437 | 63,076 | 54,019 |
Hardware and Other | |||||
Revenue: | |||||
Total revenue | 76,827 | 83,012 | 234,592 | 248,594 | |
Cost of revenue: | |||||
Total cost of revenue | [1] | $ 59,488 | $ 67,149 | $ 180,868 | $ 208,990 |
[1]Exclusive of amortization and depreciation shown in operating expenses below. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 19,351 | $ 18,110 | $ 49,169 | $ 37,841 |
Other comprehensive (loss) / income | ||||
Foreign currency translation adjustment | (752) | 0 | 76 | 0 |
Total other comprehensive (loss) / income | (752) | 0 | 76 | 0 |
Comprehensive income | 18,599 | 18,110 | 49,245 | 37,841 |
Comprehensive loss attributable to redeemable noncontrolling interests | 173 | 222 | 570 | 412 |
Comprehensive income attributable to common stockholders | $ 18,772 | $ 18,332 | $ 49,815 | $ 38,253 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 679,969 | $ 622,165 |
Accounts receivable, net of allowance for credit losses of $3,856 and $2,835, and net of allowance for product returns of $2,175 and $1,551 as of September 30, 2023 and December 31, 2022, respectively | 110,267 | 124,283 |
Inventory | 114,248 | 115,584 |
Other current assets, net of allowance for credit losses of $0 as of September 30, 2023 and December 31, 2022 | 26,685 | 29,056 |
Total current assets | 931,169 | 891,088 |
Property and equipment, net | 55,862 | 57,172 |
Intangible assets, net | 82,498 | 82,458 |
Goodwill | 153,847 | 148,183 |
Deferred tax assets | 126,800 | 84,185 |
Operating lease right-of-use assets | 26,840 | 28,933 |
Other assets, net of allowance for credit losses of $2 as of September 30, 2023 and December 31, 2022 | 34,481 | 37,356 |
Total assets | 1,411,497 | 1,329,375 |
Current liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 122,552 | 119,657 |
Accrued compensation | 26,491 | 25,582 |
Deferred revenue | 10,336 | 7,540 |
Operating lease liabilities | 12,538 | 12,157 |
Total current liabilities | 171,917 | 164,936 |
Deferred revenue | 12,503 | 10,792 |
Convertible senior notes, net | 492,727 | 490,370 |
Operating lease liabilities | 23,245 | 27,380 |
Other liabilities | 13,065 | 13,050 |
Total liabilities | 713,457 | 706,528 |
Commitments and contingencies (Note 12) | ||
Redeemable noncontrolling interests | 30,342 | 23,988 |
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized; 51,687,998 and 50,985,454 shares issued; and 49,915,713 and 49,452,709 shares outstanding as of September 30, 2023 and December 31, 2022, respectively | 517 | 510 |
Additional paid-in capital | 529,070 | 497,199 |
Treasury stock, at cost; 1,772,285 and 1,532,745 shares as of September 30, 2023 and December 31, 2022, respectively | (96,847) | (83,993) |
Accumulated other comprehensive income | 76 | 0 |
Retained earnings | 234,882 | 185,143 |
Total stockholders’ equity | 667,698 | 598,859 |
Total liabilities, redeemable noncontrolling interests and stockholders’ equity | $ 1,411,497 | $ 1,329,375 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss | $ 3,856 | $ 2,835 |
Allowance for product returns | 2,175 | 1,551 |
Other assets, allowance for credit loss, current | 0 | 0 |
Other assets, allowance for credit loss | $ 2 | $ 2 |
Preferred stock, par value ( in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value ( in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 51,687,998 | 50,985,454 |
Common stock, shares outstanding (in shares) | 49,915,713 | 49,452,709 |
Treasury stock, shares repurchased (in shares) | 1,772,285 | 1,532,745 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 49,169 | $ 37,841 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Provision for credit losses on accounts receivable | 1,422 | 1,606 |
Reserve for product returns | 2,979 | 3,721 |
Recovery of credit losses on notes receivable | 0 | (77) |
Inventory write-down | 1,181 | 0 |
Amortization on patents and tooling | 965 | 1,037 |
Amortization and depreciation | 23,481 | 23,123 |
Amortization of debt issuance costs | 2,357 | 2,342 |
Amortization of operating leases | 8,540 | 7,767 |
Deferred income taxes | (42,612) | (42,566) |
Change in fair value of contingent liability | 23 | 0 |
Stock-based compensation | 36,423 | 38,053 |
Gain on investment | 0 | (140) |
Changes in operating assets and liabilities (net of business acquisitions): | ||
Accounts receivable | 11,048 | (18,321) |
Inventory | 2,750 | (37,043) |
Other current and non-current assets | 6,423 | (7,443) |
Accounts payable, accrued expenses and other current liabilities | 371 | 17,803 |
Deferred revenue | 4,507 | 3,531 |
Operating lease liabilities | (10,329) | (9,390) |
Other liabilities | (2,605) | 611 |
Cash flows from operating activities | 96,093 | 22,455 |
Cash flows used in investing activities: | ||
Business acquisition, net of cash acquired | (9,696) | (31,730) |
Additions to property and equipment | (5,349) | (28,084) |
Issuances of notes receivable | (300) | (3,000) |
Receipt of payments on notes receivable | 40 | 49 |
Capitalized software development costs | (315) | 0 |
Purchase of investment in unconsolidated entity | (200) | 0 |
Proceeds from sale of investment | 0 | 140 |
Purchases of developed technology and other assets | (5,915) | 0 |
Cash flows used in investing activities | (21,735) | (62,625) |
Cash flows used in financing activities: | ||
Payments of deferred consideration for acquisitions | (1,672) | 0 |
Purchases of treasury stock, including transaction costs | (12,854) | (51,866) |
Purchases of redeemable noncontrolling interest | (832) | 0 |
Payments of acquired debt | (3,016) | 0 |
Issuances of common stock from equity-based plans | 3,129 | 3,391 |
Cash flows used in financing activities | (15,245) | (48,475) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (57) | 0 |
Net increase / (decrease) in cash, cash equivalents and restricted cash | 59,056 | (88,645) |
Cash, cash equivalents and restricted cash at beginning of the period | 622,879 | 710,621 |
Cash, cash equivalents and restricted cash at end of the period | 681,935 | 621,976 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 679,969 | 621,347 |
Restricted cash included in other current assets and other assets | 1,966 | 629 |
Total cash, cash equivalents and restricted cash | $ 681,935 | $ 621,976 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Impact of adoption | Common Stock | Additional Paid-In Capital | Additional Paid-In Capital Impact of adoption | Treasury Stock | Accumulated Other Comprehensive Income / (Loss) | Retained Earnings | Retained Earnings Impact of adoption |
Beginning balance at Dec. 31, 2021 | $ 12,888 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 2,569 | ||||||||
Net income / (loss) attributable to common stockholders | (176) | ||||||||
Ending balance at Mar. 31, 2022 | 15,281 | ||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 50,407,000 | ||||||||
Beginning balance at Dec. 31, 2021 | 613,167 | $ (46,543) | $ 504 | $ 498,979 | $ (56,515) | $ (5,149) | $ 118,833 | $ 9,972 | |
Beginning balance (in shares) at Dec. 31, 2021 | 147,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 85,000 | ||||||||
Common stock issued in connection with equity-based plans | 1,080 | $ 1 | 1,079 | ||||||
Purchase of treasury stock (in shares) | 354,000 | ||||||||
Purchase of treasury stock | (23,331) | $ (23,331) | |||||||
Stock-based compensation expense | 12,110 | 12,110 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (2,569) | (2,569) | |||||||
Net income / (loss) attributable to common stockholders | 9,079 | 9,079 | |||||||
Ending balance (in shares) at Mar. 31, 2022 | 50,492,000 | ||||||||
Ending balance at Mar. 31, 2022 | 562,993 | $ 505 | 453,084 | $ (28,480) | 137,884 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 501,000 | ||||||||
Beginning balance at Dec. 31, 2021 | 12,888 | ||||||||
Ending balance at Sep. 30, 2022 | 23,029 | ||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 50,407,000 | ||||||||
Beginning balance at Dec. 31, 2021 | 613,167 | $ (46,543) | $ 504 | 498,979 | $ (56,515) | $ (5,149) | 118,833 | $ 9,972 | |
Beginning balance (in shares) at Dec. 31, 2021 | 147,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other comprehensive income (loss) | 0 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 50,847,000 | ||||||||
Ending balance at Sep. 30, 2022 | 593,776 | $ 508 | 483,225 | $ (57,015) | 167,058 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 987,000 | ||||||||
Beginning balance at Mar. 31, 2022 | 15,281 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 860 | ||||||||
Net income / (loss) attributable to common stockholders | (14) | ||||||||
Ending balance at Jun. 30, 2022 | 16,127 | ||||||||
Beginning balance (in shares) at Mar. 31, 2022 | 50,492,000 | ||||||||
Beginning balance at Mar. 31, 2022 | 562,993 | $ 505 | 453,084 | $ (28,480) | 137,884 | ||||
Beginning balance (in shares) at Mar. 31, 2022 | 501,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 205,000 | ||||||||
Common stock issued in connection with equity-based plans | 583 | $ 2 | 581 | ||||||
Purchase of treasury stock (in shares) | 481,000 | ||||||||
Purchase of treasury stock | (28,168) | $ (28,168) | |||||||
Reclassification of subsidiary long-term incentive plan liability related to modification | 3,104 | 3,104 | |||||||
Stock-based compensation expense | 12,789 | 12,789 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (860) | (860) | |||||||
Net income / (loss) attributable to common stockholders | 10,842 | 10,842 | |||||||
Ending balance (in shares) at Jun. 30, 2022 | 50,697,000 | ||||||||
Ending balance at Jun. 30, 2022 | 561,283 | $ 507 | 468,698 | $ (56,648) | 148,726 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 982,000 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Noncontrolling interest assumed through acquisition | 6,770 | ||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 354 | ||||||||
Net income / (loss) attributable to common stockholders | (222) | ||||||||
Ending balance at Sep. 30, 2022 | 23,029 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 150,000 | ||||||||
Common stock issued in connection with equity-based plans | 1,728 | $ 1 | 1,727 | ||||||
Purchase of treasury stock (in shares) | 5,000 | ||||||||
Purchase of treasury stock | (367) | $ (367) | |||||||
Stock-based compensation expense | 13,154 | 13,154 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (354) | (354) | |||||||
Net income / (loss) attributable to common stockholders | 18,332 | 18,332 | |||||||
Other comprehensive income (loss) | 0 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 50,847,000 | ||||||||
Ending balance at Sep. 30, 2022 | 593,776 | $ 508 | 483,225 | $ (57,015) | 167,058 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 987,000 | ||||||||
Beginning balance at Dec. 31, 2022 | 23,988 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 2,061 | ||||||||
Net income / (loss) attributable to common stockholders | (209) | ||||||||
Ending balance at Mar. 31, 2023 | $ 25,840 | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 50,985,454 | 50,985,000 | |||||||
Beginning balance at Dec. 31, 2022 | $ 598,859 | $ 510 | 497,199 | $ (83,993) | $ 0 | 185,143 | |||
Beginning balance (in shares) at Dec. 31, 2022 | 1,532,745 | 1,533,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 270,000 | ||||||||
Common stock issued in connection with equity-based plans | $ 1,311 | $ 3 | 1,308 | ||||||
Stock-based compensation expense | 12,686 | 12,686 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (2,061) | (2,061) | |||||||
Net income / (loss) attributable to common stockholders | 14,416 | 14,416 | |||||||
Other comprehensive income (loss) | 170 | 170 | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 51,255,000 | ||||||||
Ending balance at Mar. 31, 2023 | 625,381 | $ 513 | 509,132 | $ (83,993) | 170 | 199,559 | |||
Ending balance (in shares) at Mar. 31, 2023 | 1,533,000 | ||||||||
Beginning balance at Dec. 31, 2022 | 23,988 | ||||||||
Ending balance at Sep. 30, 2023 | $ 30,342 | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 50,985,454 | 50,985,000 | |||||||
Beginning balance at Dec. 31, 2022 | $ 598,859 | $ 510 | 497,199 | $ (83,993) | 0 | 185,143 | |||
Beginning balance (in shares) at Dec. 31, 2022 | 1,532,745 | 1,533,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other comprehensive income (loss) | $ 76 | ||||||||
Ending balance (in shares) at Sep. 30, 2023 | 51,687,998 | 51,688,000 | |||||||
Ending balance at Sep. 30, 2023 | $ 667,698 | $ 517 | 529,070 | $ (96,847) | 76 | 234,882 | |||
Ending balance (in shares) at Sep. 30, 2023 | 1,772,285 | 1,772,000 | |||||||
Beginning balance at Mar. 31, 2023 | $ 25,840 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Purchases of redeemable noncontrolling interest | (1,238) | ||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 3,454 | ||||||||
Net income / (loss) attributable to common stockholders | (188) | ||||||||
Ending balance at Jun. 30, 2023 | 27,868 | ||||||||
Beginning balance (in shares) at Mar. 31, 2023 | 51,255,000 | ||||||||
Beginning balance at Mar. 31, 2023 | 625,381 | $ 513 | 509,132 | $ (83,993) | 170 | 199,559 | |||
Beginning balance (in shares) at Mar. 31, 2023 | 1,533,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 270,000 | ||||||||
Common stock issued in connection with equity-based plans | 202 | $ 2 | 200 | ||||||
Purchase of treasury stock (in shares) | 134,000 | ||||||||
Purchase of treasury stock | (6,726) | $ (6,726) | |||||||
Stock-based compensation expense | 11,965 | 11,965 | |||||||
Purchases of redeemable noncontrolling interest | 406 | 406 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (3,454) | (3,454) | |||||||
Net income / (loss) attributable to common stockholders | 15,799 | 15,799 | |||||||
Other comprehensive income (loss) | 658 | 658 | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 51,525,000 | ||||||||
Ending balance at Jun. 30, 2023 | 644,231 | $ 515 | 518,249 | $ (90,719) | 828 | 215,358 | |||
Ending balance (in shares) at Jun. 30, 2023 | 1,667,000 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 2,647 | ||||||||
Net income / (loss) attributable to common stockholders | (173) | ||||||||
Ending balance at Sep. 30, 2023 | 30,342 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 163,000 | ||||||||
Common stock issued in connection with equity-based plans | 1,616 | $ 2 | 1,614 | ||||||
Purchase of treasury stock (in shares) | 105,000 | ||||||||
Purchase of treasury stock | (6,128) | $ (6,128) | |||||||
Stock-based compensation expense | 11,854 | 11,854 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (2,647) | (2,647) | |||||||
Net income / (loss) attributable to common stockholders | 19,524 | 19,524 | |||||||
Other comprehensive income (loss) | $ (752) | (752) | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 51,687,998 | 51,688,000 | |||||||
Ending balance at Sep. 30, 2023 | $ 667,698 | $ 517 | $ 529,070 | $ (96,847) | $ 76 | $ 234,882 | |||
Ending balance (in shares) at Sep. 30, 2023 | 1,772,285 | 1,772,000 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Alarm.com Holdings, Inc. (referred to herein as Alarm.com, the Company, or we) is the leading platform for the intelligently connected property. Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions addressing opportunities in the residential, multi-family, small business and enterprise commercial markets. Alarm.com’s solutions include security, video and video analytics, energy management, access control, electric utility grid management, indoor gunshot detection, water management, health and wellness and data-rich emergency response. Our solutions are delivered through an established network of trusted service provider partners, who are experts at selling, installing and supporting our solutions. The number of our service provider partners exceeded 11,000 as of December 31, 2022. We derive revenue from the sale of our cloud-based Software-as-a-Service, or SaaS, services, license fees, software, hardware, activation fees and other revenue. Our fiscal year ends on December 31. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2023, or the Annual Report. The condensed consolidated balance sheet as of December 31, 2022 was derived from our audited financial statements but does not include all disclosures required by GAAP for annual financial statements. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented. However, the global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine and the war between Israel and Hamas, disruptions to global supply chains, rising interest rates, risk of recession and inflation (collectively, the Macroeconomic Conditions). These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment. It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2023, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions. Prolonged uncertainties could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions and judgments or revise the carrying value of our assets or liabilities. However, our estimates, judgments and assumptions are continually evaluated based on available information and experience and may change as new events occur and additional information is obtained. Because of the use of estimates inherent in the financial reporting process and in light of the continuing uncertainty arising from the Macroeconomic Conditions, actual results could differ from those estimates and any such differences may be material. Estimates are used when accounting for revenue recognition, allowances for credit losses, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, the lease term and incremental borrowing rates for leases, stock-based compensation, income taxes, legal reserves and goodwill, intangible assets and other long-lived assets. Significant Accounting Policies Other than those disclosed herein, there have been no other material changes to our significant accounting policies during the three and nine months ended September 30, 2023 from those disclosed in our Annual Report. Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive (loss) / income refers to gains and losses that are recorded as an element of stockholders' equity and excluded from net income. Our other comprehensive (loss) / income consists of foreign currency translation adjustments. Foreign Currency For foreign operations where substantially all monetary transactions are in the local currency, we use the local currency as our functional currency. For these foreign operations, assets and liabilities are translated at period-end exchange rates and revenue and expense items are translated at weighted-average exchange rates prevailing during the periods being reported. The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment within accumulated other comprehensive income, a separate component of stockholders’ equity. Gains or losses from foreign currency remeasurements that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in our results of operations. Redeemable Noncontrolling Interests Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. Our redeemable noncontrolling interests relate to our 86% equity ownership interest in PC Open Incorporated, a Washington corporation, doing business as OpenEye and our 85% equity ownership interest in Noonlight, Inc., or Noonlight, a Delaware corporation. The OpenEye and Noonlight stockholder agreements contain a put option that gives the minority stockholders the right to sell their shares to us based on the fair value of the shares and also contain a call option that gives us the right to purchase the remaining shares from the minority stockholders based on the fair value of the shares. The next put and call options related to OpenEye can each be exercised beginning in the first quarter of 2024. The put and call options related to Noonlight can each be exercised beginning in the first quarter of 2026. These redeemable noncontrolling interests are considered temporary equity and we report them between liabilities and stockholders’ equity in the condensed consolidated balance sheets. The amount of the net income or loss attributable to the redeemable noncontrolling interests is recorded in the condensed consolidated statements of operations and the accretion of the redemption values is recorded as an adjustment to additional paid-in capital. We account for purchases of redeemable noncontrolling interest as a component of stockholders' equity when control is maintained. We recognize the difference between the consideration paid for the acquired redeemable noncontrolling interest and the fair value of the acquired redeemable noncontrolling interest as an adjustment to additional paid-in capital. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Contract Assets The changes in our contract assets are as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Beginning of period balance $ 13,581 $ 7,415 $ 13,975 $ 4,520 Commission costs and upfront payments to a customer capitalized in period 1,808 5,253 5,028 9,980 Reimbursement of previously capitalized upfront payments to customers (6,774) — (6,774) — Amortization of contract assets (1,117) (1,369) (4,731) (3,201) End of period balance $ 7,498 $ 11,299 $ 7,498 $ 11,299 On July 27, 2023, we received $6.9 million in cash related to the reimbursement of previously capitalized upfront payments to a customer. On the date of payment, the $6.8 million unamortized portion of the contract asset balance was reduced to zero and the remaining amount of $0.1 million recorded as an increase to SaaS and license revenue. Contract Liabilities The changes in our contract liabilities are as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Beginning of period balance $ 21,460 $ 17,241 $ 18,332 $ 14,837 Revenue deferred in period 6,250 4,373 17,909 13,750 Revenue recognized from amounts included in contract liabilities (4,871) (3,179) (13,402) (10,152) End of period balance $ 22,839 $ 18,435 $ 22,839 $ 18,435 |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net The components of accounts receivable, net are as follows (in thousands): September 30, December 31, Accounts receivable $ 116,298 $ 128,669 Allowance for credit losses (3,856) (2,835) Allowance for product returns (2,175) (1,551) Accounts receivable, net $ 110,267 $ 124,283 For the three and nine months ended September 30, 2023, we recorded a provision for credit losses of $0.8 million and $1.4 million, respectively, as compared to $1.1 million and $1.6 million for the same periods in the prior year. For the three and nine months ended September 30, 2023, we recorded a reserve for product returns of $0.5 million and $3.0 million in our hardware and other revenue, respectively, as compared to $2.0 million and $3.7 million for the same periods in the prior year. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. Allowance for Credit Losses - Accounts Receivable The allowance for credit losses is a valuation account that is deducted from the accounts receivable and notes receivable amortized cost basis (see Note 8) to present the net amount expected to be collected. We estimate the allowance balance by applying the loss-rate method using relevant available information from internal and external sources, including historical write-off activity, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in economic conditions, such as changes in unemployment rates. We use projected economic conditions over a period no more than twelve months based on data from external sources. For periods beyond the twelve-month reasonable and supportable forecast period, we revert to historical loss information immediately. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, we considered various risk characteristics, including the financial asset type, size and the historical or expected credit loss pattern. We identified the following two portfolio segments for our accounts receivable: (i) outstanding accounts receivable balances within Alarm.com and certain subsidiaries and (ii) outstanding accounts receivable balances within all other subsidiaries. There were no changes to our portfolio segments for our accounts receivable during the three and nine months ended September 30, 2023, and no changes to our policies or practices that influenced our estimate of expected credit losses for accounts receivable. Additionally, there were no significant changes in the amount of accounts receivable write-offs during the three and nine months ended September 30, 2023, as compared to historical periods. Expected credit losses are estimated over the contractual term of the financial assets and we adjust the term for expected prepayments when appropriate. For the three and nine months ended September 30, 2023, we recorded credit loss expense for accounts receivable and notes receivable of $0.6 million and $1.1 million, respectively, in general and administrative expense in our condensed consolidated statements of operations. For the three and nine months ended September 30, 2022, we recorded credit loss expense of $1.0 million and $1.3 million, respectively, in general and administrative expense in our condensed consolidated statements of operations. The contractual term excludes expected extensions, renewals and modifications because extension and renewal options are unconditionally cancelable by us. Write-offs of the amortized cost basis are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense. The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Alarm.com All Other Alarm.com All Other Alarm.com All Other Alarm.com All Other Beginning of period balance $ (2,968) $ (191) $ (2,450) $ (58) $ (2,755) $ (80) $ (2,035) $ (133) (Provision for) / recovery of expected credit losses (820) 15 (1,057) (2) (1,307) (115) (1,676) 70 Write-offs 89 19 30 1 363 38 234 4 End of period balance $ (3,699) $ (157) $ (3,477) $ (59) $ (3,699) $ (157) $ (3,477) $ (59) |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The components of inventory are as follows (in thousands): September 30, December 31, Raw materials $ 33,675 $ 38,098 Work-in-process 404 — Finished goods 80,169 77,486 Total inventory $ 114,248 $ 115,584 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Asset Acquisition On April 21, 2023, Alarm.com Incorporated, one of our wholly-owned subsidiaries, acquired certain assets of Vintra, Inc., or Vintra. Substantially all of the acquired assets consisted of developed technology. We believe the acquisition of the developed technology will expand Alarm.com's learning program and accelerate deployment of advanced video analytics solutions for the Alarm.com and OpenEye platforms. In consideration for the purchase of the acquired assets, we paid $5.5 million in cash on April 21, 2023, after deducting $0.3 million related to the settlement of an outstanding loan issued to Vintra during March 2023 and $1.0 million related to an agreed holdback provision. The holdback is expected to be paid by the third quarter of 2024, subject to offset for any indemnification obligations. Additionally, we incurred $0.4 million in direct transaction costs related to legal fees during 2023 that were capitalized as a component of the consideration transferred. The $7.1 million purchase price consideration allocated to developed technology was recorded as an intangible asset at the time of the asset acquisition and is being amortized on a straight-line basis over an estimated useful life of five years. The remaining $0.1 million purchase price consideration was allocated to property and equipment. Acquisition of a Business - EBS On January 18, 2023, one of our wholly-owned subsidiaries acquired 100% of the issued and outstanding shares of capital stock of EBS Spółka z ograniczoną odpowiedzialnością, or EBS, an international producer of universal smart communicator devices, headquartered in Warsaw, Poland. We believe this acquisition will assist in the continued expansion of our international operations as well as benefit our supply chain operations. In consideration for the purchase of EBS, we paid $9.8 million in cash on January 18, 2023, after deducting $2.2 million related to agreed holdback provisions. An earn-out up to an additional $2.5 million is payable if certain performance targets are met, which was initially recorded at the acquisition date fair value of $2.0 million. The acquisition was accounted for as a business combination within our Alarm.com segment. The purchase price allocation was finalized during the third quarter of 2023. The overall impacts to our condensed consolidated financial statements were not considered material for the three and nine months ended September 30, 2023. Acquisition of a Business - Noonlight On September 23, 2022, Alarm.com Incorporated acquired 85% of the issued and outstanding shares of capital stock of Noonlight. Noonlight provides a connected safety and event management software and services platform that enables new applications and provides enhanced emergency response capabilities. We believe the acquisition of Noonlight will enhance our comprehensive suite of interactive cloud-based services and allow us to expand markets for emergency response services as well as accelerate innovation in those services. In consideration for the purchase of 85% of the issued and outstanding shares of capital stock of Noonlight, we paid $31.9 million in cash on September 23, 2022, after deducting $1.5 million related to an outstanding loan issued to Noonlight during May 2022 and $4.9 million related to agreed holdback provisions. The working capital adjustment was finalized during the first quarter of 2023 and $0.4 million was paid during the second quarter of 2023. The remaining amount of the holdback of $4.6 million is expected to be paid to the stockholders of Noonlight by the end of the first quarte r of 2024, subject to off set for any indemnification obligations. The table below sets forth the purchase consideration and the fair value allocation of the tangible and intangible net assets acquired (in thousands): September 23, 2022 Calculation of Purchase Consideration: Cash paid, net of working capital adjustment $ 31,805 Outstanding principal and interest of loan provided to Noonlight 1,537 Holdback consideration 4,910 Total consideration $ 38,252 Tangible and Intangible Net Assets: Cash $ 188 Accounts receivable 291 Other current and non-current assets 200 Property and equipment 45 Deferred tax assets 424 Developed technology 9,335 Trade names 150 Accounts payable (321) Accrued expenses and other current liabilities (318) Deferred revenue (67) Redeemable noncontrolling interest (6,770) Goodwill 35,095 Total tangible and intangible net assets $ 38,252 Goodwill of $35.1 million reflects the value of acquired workforce and synergies we expect to achieve from integrating Noonlight's suite of emergency response cloud-managed application program interfaces into our existing comprehensive suite of interactive cloud-based services. None of the goodwill recognized is expected to be deductible for income tax purposes in future periods. We allocate goodwill to reporting units based on expected benefit from synergies and have allocated the goodwill to the Alarm.com segment. Fair Value of Net Assets Acquired and Intangibles The acquired activities and assets in the purchase of Noonlight constituted a business and with the exception of contract liabilities accounted for under Topic 606, in accordance with Accounting Standards Codification, or ASC 805, " Business Combinations ," the assets and liabilities were recorded at their respective fair values as of September 23, 2022. We developed the fair value of intangible net assets using a multi-period excess earnings method for developed technology and the relief from royalty method for the trade name. Developed Technology Developed technology primarily consists of intellectual property of proprietary software that is marketed for sale. We valued the developed technology using the multi-period excess earnings method, an income approach. The significant assumptions used in the income approach include estimates about future expected cash flows from the developed technology, the obsolescence factor and the discount rate. We are amortizing the Noonlight developed technology, valued at $9.3 million, on an attribution method based on the discounted cash flows of the model over an estimated useful life of seven years. Trade Names We valued the trade names acquired using a relief from royalty method. The significant assumptions used in the income approach include future expected cash flows from the trade name, the royalty rate and the discount rate. We are amortizing the trade names, valued at $0.2 million, on an attribution basis derived from the discounted cash flows of the model over an estimated useful life of five years. Redeemable Noncontrolling Interest We have a redeemable noncontrolling interest related to our 85% equity ownership interest in Noonlight. The Noonlight stockholder agreement contains a put option that gives the minority Noonlight stockholders the right to sell their remaining 15% equity ownership interest to us based on the fair value of the shares and also contains a call option that gives us the right to purchase the remaining Noonlight shares from the minority Noonlight stockholders based on the fair value of the shares. The put and call options can each be exercised beginning in the first quarter of 2026. This redeemable noncontrolling interest was recorded at fair value on September 23, 2022, by applying the income approach using unobservable inputs for projected cash flows, including projected financial results and a discount rate, which are considered Level 3 inputs. This redeemable noncontrolling interest is considered temporary equity and we report it between liabilities and stockholders’ equity in the condensed consolidated balance sheets. The redemption value of the Noonlight noncontrolling interest was $6.8 million as of September 23, 2022 and $6.5 million as of September 30, 2023. Business Combinations in Operations - Noonlight The operations of the Noonlight business combination discussed above were included in the condensed consolidated financial statements as of the acquisition date. The pro forma information as well as the revenue and net losses of the business combination were not material to the condensed consolidated financial statements in the year of acquisition. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The changes in goodwill by reportable segment are outlined below (in thousands): Alarm.com Other Total Balance as of January 1, 2023 $ 148,183 $ — $ 148,183 Goodwill acquired 7,200 — 7,200 Measurement period adjustments (1,509) — (1,509) Foreign currency translation adjustment (27) — (27) Balance as of September 30, 2023 $ 153,847 $ — $ 153,847 On January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS and initially recorded $7.2 million of goodwill in the Alarm.com segment. The measurement period adjustments relate to the Noonlight and EBS working capital and tax adjustments during the three and nine months ended September 30, 2023. The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Developed Trade Name Capitalized Software Development Costs Total Balance as of January 1, 2023 $ 47,522 $ 33,553 $ 1,383 $ — $ 82,458 Intangible assets acquired 2,395 11,583 537 — 14,515 Capitalized software development costs — — — 397 397 Amortization (8,141) (6,168) (563) — (14,872) Balance as of September 30, 2023 $ 41,776 $ 38,968 $ 1,357 $ 397 $ 82,498 We recorded $5.6 million and $14.9 million of amortization related to our intangible assets for the three and nine months ended September 30, 2023, respectively, as compared to $4.6 million and $13.7 million for the same periods in the prior year. There were no impairments of long-lived intangible assets during the three and nine months ended September 30, 2023 and 2022. During the nine months ended September 30, 2022, we wrote-off $0.7 million in fully amortized intangible assets in the Alarm.com segment that were acquired in 2014 related to customer relationships, developed technology, trade name and other intangible assets that no longer existed as of January 1, 2022. The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets (in thousands, except weighted-average remaining life): September 30, 2023 Gross Accumulated Net Weighted- Customer relationships $ 128,280 $ (86,504) $ 41,776 6.4 Developed technology 70,061 (31,093) 38,968 5.0 Trade name 4,474 (3,117) 1,357 2.7 Capitalized software development costs 397 — 397 3.0 Total intangible assets $ 203,212 $ (120,714) $ 82,498 5.6 December 31, 2022 Gross Accumulated Net Weighted- Customer relationships $ 125,885 $ (78,363) $ 47,522 7.0 Developed technology 58,478 (24,925) 33,553 5.8 Trade name 3,937 (2,554) 1,383 2.4 Total intangible assets $ 188,300 $ (105,842) $ 82,458 6.5 |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Loan to a Distribution Partner In December 2022, we amended a subordinated credit agreement with the affiliated entity of one of our distribution partners. The amended subordinated credit agreement with the affiliated entity of the distribution partner matures on June 18, 2027 and interest on the outstanding principal balance accrues at a rate of 12.0% per annum and is payable in kind. As of September 30, 2023 and December 31, 2022, $4.4 million and $4.0 million of the notes receivable balance related to the subordinated credit agreement was included in other assets in our condensed consolidated balance sheets, respectively. For the three and nine months ended September 30, 2023, we recognized $0.9 million and $2.5 million of revenue from the distribution partner associated with this loan, respectively, as compared to $0.8 million and $2.3 million for the same periods in the prior year. Loan to a Service Provider Partner In July 2020, we entered into a loan agreement with a service provider partner, under which we agreed to loan the service provider partner up to $2.5 million, collateralized by the assets of the service provider partner. Interest on the outstanding principal accrues at a rate per annum equal to 9.0% and monthly interest and principal payments began in April 2021. The maturity date of the loan is July 24, 2025. As of September 30, 2023 and December 31, 2022, $1.1 million of principal was outstanding from the service provider partner under the loan agreement. For three and nine months ended September 30, 2023 and 2022, we recognized less than $0.1 million and $0.1 million, respectively, of revenue from the service provider partner associated with this loan. Loan to a Technology Partner In June 2022, we entered into a convertible promissory note with a technology partner, under which we agreed to loan the technology partner $1.5 million. Interest on the outstanding principal accrues at a rate per annum equal to 6.5%, starting one year from the effective date of the loan. Interest and principal payments are due on the maturity date of the loan, which is June 27, 2029, unless the loan is converted prior to the maturity date, which may occur upon a qualified financing event, as defined in the convertible promissory note, upon a sale of the technology partner or upon our election on the maturity date of the loan. As of September 30, 2023 and December 31, 2022, $1.5 million of principal was outstanding from the technology partner under the convertible promissory note. For the three and nine months ended September 30, 2023 and 2022, we did not record any revenue from the technology partner associated with this convertible promissory note. Investment in a Hardware Supplier In October 2018, we entered into a subordinate convertible promissory note with one of our hardware suppliers. In July 2019, we converted the outstanding notes receivable balance of $5.6 million into 9,520,832 shares of Series B preferred stock in the hardware supplier. We concluded that the $5.6 million equity investment, which is included in the Alarm.com segment, does not meet the criteria for consolidation and will be accounted for using the measurement alternative. Under the alternative, we measure investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments. As of September 30, 2023 and December 31, 2022, our investment in the hardware supplier was $5.6 million. Investments in Technology Partners In February 2021, we paid $5.0 million in cash to purchase 1,000,000 shares of Series B-2 Preferred Stock from a technology partner as part of a financing round that included other investors. The $5.0 million equity investment, which is included in the Alarm.com segment, does not meet the criteria for consolidation and is accounted for using the measurement alternative. Under the measurement alternative, we measure investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments. As of September 30, 2023 and December 31, 2022, our investment in the technology partner was $5.7 million. In December 2022, we paid $5.1 million in cash to another technology partner to purchase 4,231,717 shares of its Series A Preferred Stock. The $5.1 million equity investment, which is included in the Alarm.com segment, does not meet the criteria for consolidation and is accounted for using the measurement alternative. As of September 30, 2023 and December 31, 2022, our investment in the technology partner was $5.1 million. Allowance for Credit Losses - Notes Receivable We identified the following two portfolio segments for our notes receivable: (i) loan receivables and (ii) hardware financing receivables. There were no changes to our portfolio segments for our notes receivable during the three and nine months ended September 30, 2023, and no changes to our policies or practices involving the issuance of notes receivable, customer acquisitions or any other factors that influenced our estimate of expected credit losses for notes receivable. There were no hardware financing receivables outstanding as of September 30, 2023 and December 31, 2022. We do not accrue interest on notes receivable that are considered impaired or are 90 days or greater past due based on their contractual payment terms. Notes receivable that are 90 days or greater past due are placed on nonaccrual status. Notes receivable may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a note receivable has been placed on nonaccrual status, interest will be recognized when cash is received. A note receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and collection of all remaining contractual amounts due is reasonably assured. We have elected not to measure an allowance for credit losses for accrued interest receivables . We write-off any accrued interest on notes receivable that are considered impaired or are 90 days or greater past due based on their contractual payment terms by reversing interest income. The accrued interest receivable as of September 30, 2023 and December 31, 2022 was less than $0.1 million, and is reflected in other current assets and other assets within our condensed consolidated balance sheets and excluded from the amortized cost basis of the notes receivable . We did not write-off any accrued interest receivable during the three and nine months ended September 30, 2023 and 2022. There were no purchases or sales of financial assets during the three and nine months ended September 30, 2023 and 2022. There were no significant changes in the amount of note receivable write-offs during the three and nine months ended September 30, 2023, as compared to historical periods. The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Loan Hardware Loan Hardware Loan Hardware Loan Hardware Beginning of period balance $ (2) $ — $ (2) $ — $ (2) $ — $ (79) $ (1) Recovery of / (provision for) expected credit losses — — (1) — — — 76 1 Write-offs — — — — — — — — End of period balance $ (2) $ — $ (3) $ — $ (2) $ — $ (3) $ — We manage our notes receivables using delinquency as a key credit quality indicator. The following tables reflect the current and delinquent notes receivable by class of financing receivables and by year of origination (in thousands): September 30, 2023 Loan Receivables: 2023 2022 2021 2020 2019 Prior Total Current $ — $ 1,500 $ — $ 1,053 $ — $ 4,389 $ 6,942 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ 1,500 $ — $ 1,053 $ — $ 4,389 $ 6,942 December 31, 2022 Loan Receivables: 2022 2021 2020 2019 2018 Prior Total Current $ 1,500 $ — $ 1,093 $ 1 $ — $ 4,015 $ 6,609 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ 1,500 $ — $ 1,093 $ 1 $ — $ 4,015 $ 6,609 There were no notes receivable placed on nonaccrual status as of September 30, 2023 and December 31, 2022. During the three and nine months ended September 30, 2023 and 2022, there was no interest income recognized related to notes receivable that were in nonaccrual status. As of September 30, 2023 and December 31, 2022, there were no notes receivable placed in nonaccrual status for which there was not a related allowance for credit losses. As of September 30, 2023 and December 31, 2022, there were no notes receivable that were 90 days or greater past due for which we continued to accrue interest income. Prepaid Expenses As of September 30, 2023 and December 31, 2022, $17.4 million and $14.5 million of prepaid expenses were included in other current assets, respectively, primarily related to software licenses, insurance, and long lead-time parts related to our inventory. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables present our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis Assets: Level 1 Level 2 Level 3 Total Money market accounts as of September 30, 2023 $ 658,036 $ — $ — $ 658,036 Money market accounts as of December 31, 2022 510,326 — — 510,326 Liabilities: Contingent consideration liability from acquisition as of September 30, 2023 $ — $ — $ 2,016 $ 2,016 Contingent consideration liability from acquisition as of December 31, 2022 — — — — The following table summarizes the change in fair value of the Level 3 liabilities with significant unobservable inputs (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Contingent Consideration Liability from Acquisition Subsidiary Long-Term Incentive Plan Contingent Consideration Liability from Acquisition Subsidiary Long-Term Incentive Plan Beginning of period balance $ 2,020 $ — $ — $ 3,351 Acquired liabilities — — 1,993 — Changes in fair value included in earnings (4) — 23 (247) Reclassification to additional paid in capital upon modification — — — (3,104) End of period balance $ 2,016 $ — $ 2,016 $ — As of September 30, 2023, $656.1 million of our money market accounts was included in cash and cash equivalents and $1.9 million was included in other assets in our condensed consolidated balance sheets. As of December 31, 2022, $509.6 million was included in cash and cash equivalents and $0.7 million was included in other assets in our condensed consolidated balance sheets. Our money market assets are valued using quoted prices in active markets. See Note 12 for the carrying amount and estimated fair value of our convertible senior notes as of September 30, 2023 and December 31, 2022. The liability for the subsidiary long-term incentive plan consisted of the potential cash payment contingent upon meeting certain financial milestones related to the agreement established with certain employees of one of our subsidiaries. This incentive plan was established in November 2017 and the amount of compensation awarded to employees depended on the fair market value of the subsidiary, which was determined in part by the subsidiary’s projected financial results. We accounted for the subsidiary long-term incentive plan using fair value and established liabilities for the future payments under the terms of the incentive plan based on estimating revenue, EBITDA and EBITDA margin of the subsidiary over the period of the incentive plan through the anticipated achievement of the milestones. We estimated the fair value of the liability by using a Monte Carlo simulation model which involves several Level 3 unobservable inputs. The significant unobservable inputs used in the valuation included a weighted average revenue volatility and the revenue risk adjustment. The revenue volatility was weighted using revenue volatility results from the subsidiary’s peer group as well as market transaction metrics. The revenue risk adjustment was calculated using capital structure allocations from the subsidiary’s peer group, market transaction metrics as well as United States Treasury yields. In May 2022, we terminated the subsidiary long-term incentive plan. The fair value of the liability related to the subsidiary long-term incentive plan as of the termination date was consistent with the liability as of March 31, 2022. Concurrent with the termination of the subsidiary long-term incentive plan, we granted performance-based restricted stock units to those employees who previously participated in the subsidiary long-term incentive plan. We accounted for the termination of the subsidiary long- term incentive plan and concurrent grant of performance-based restricted stock units as a modification of the original subsidiary long-term incentive plan. As a result, we reclassified the $3.1 million liability related to the subsidiary long-term incentive plan to additional paid-in capital during the three months ended June 30, 2022. Additionally, we recorded $1.2 million in incremental compensation costs as additional stock-based compensation expense to the applicable operating expense category based on the respective employee’s function (sales and marketing, general and administrative or research and development) during the three months ended June 30, 2022. The incremental compensation costs represented the excess of the fair value of the performance-based restricted stock units over the fair value of the subsidiary long-term incentive plan as of the modification date of the subsidiary long-term incentive plan. The contingent consideration liability consists of the potential earn-out payment related to our acquisition of 100% of the issued and outstanding capital stock of EBS on January 18, 2023. The earn-out payment is contingent on the satisfaction of certain performance targets related to the integration of EBS's hardware into the Alarm.com platform by December 31, 2025 and has a maximum potential payment of up to $2.5 million. We account for the contingent consideration using fair value and established a liability for the future earn-out payment based on an estimation of the probability of the future achievement of the performance targets. The contingent consideration liability was valued with Level 3 unobservable inputs, including the probability of expected achievement of the performance targets. At January 18, 2023, the fair value of the liability was $2.0 million. At each reporting date until December 31, 2025, or the achievement of the performance targets, we will remeasure the liability, using the same valuation approach. Changes in fair value resulting from information that existed subsequent to the acquisition date are recorded in general and administrative expense in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2023, the contingent consideration liability did not materially change from the acquisition date fair value of $2.0 million as there were minor changes in the expected probability of achievement for the performance targets. The unobservable inputs used in the valuation as of September 30, 2023 included a weighted average expected achievement percentage of 89.5%, weighted by the potential payout of the performance targets, including a range of 80.0% to 99.0%. The valuation also included a weighted average discount rate of 6.9%, weighted by the probability of achievement of the performance targets at various dates, including a range of 6.8% to 6.9%. Selecting another probability of expected achievement or discount rate within an acceptable range would not result in a significant change to the fair value of the contingent consideration liability. We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. There were no transfers into Level 3 or reclassifications between levels of the fair value hierarchy during the three and nine months ended September 30, 2023 and 2022. We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the three and nine months ended September 30, 2023 and 2022. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases As of September 30, 2023, we leased office space, data centers and office equipment under non-cancelable operating leases with various expiration dates through 2030. In August 2014, we signed a lease for office space in Tysons, Virginia, where we relocated our headquarters to in February 2016. We have subsequently entered into amendments to this lease to provide us with additional office space. The lease term ends in 2026, includes a five-year renewal option and a cumulative tenant improvement allowance of $12.1 million. Supplemental information related to leases is presented in the table below (in thousands, except weighted-average term and discount rate): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating lease cost $ 2,919 $ 2,702 $ 8,540 $ 7,767 Cash paid for amounts included in the measurement of operating lease liabilities 3,533 3,290 10,329 9,390 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 1,214 1,415 5,329 7,127 September 30, December 31, Weighted-average remaining lease term — operating leases 3.2 years 3.4 years Weighted-average discount rate — operating leases 4.6 % 3.9 % Maturities of lease liabilities are as follows (in thousands): Year Ended December 31, Operating Leases (1) Remainder of 2023 $ 3,732 2024 13,736 2025 11,601 2026 6,962 2027 1,610 2028 and thereafter 2,386 Total lease payments 40,027 Less: imputed interest (2) 4,244 Present value of lease liabilities $ 35,783 _______________ (1) Excludes $5.1 million of legally binding minimum lease payments for leases executed but not yet commenced. There are no options to extend lease terms that were reasonably certain of being exercised included in these balances. (2) Imputed interest was calculated using the incremental borrowing rate applicable for each lease. We did not have any finance leases or subleases as of September 30, 2023 or December 31, 2022. Our lease agreements do not contain any material residual value guarantees, restrictive covenants or variable lease payments. Short-term lease costs were immaterial for the three and nine months ended September 30, 2023 and 2022. |
Liabilities
Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Liabilities | Liabilities The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): September 30, December 31, Accounts payable $ 52,806 $ 53,121 Accrued expenses 18,342 17,539 Income taxes payable 36,114 43,576 Holdback liability from business combinations and asset acquisitions 7,340 — Other current liabilities 7,950 5,421 Accounts payable, accrued expenses and other current liabilities $ 122,552 $ 119,657 The components of other liabilities are as follows (in thousands): September 30, December 31, Holdback liability from business combination $ — $ 4,560 Contingent consideration liability from acquisition 2,016 — Other liabilities 11,049 8,490 Other liabilities $ 13,065 $ 13,050 |
Debt, Commitments and Contingen
Debt, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Debt, Commitments and Contingencies | Debt, Commitments and ContingenciesThe debt, commitments and contingencies described below would require us, or our subsidiaries, to make payments to third parties under certain circumstances. Convertible Senior Notes On January 20, 2021, we issued $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026 in a private placement to qualified institutional buyers, or the 2026 Notes. The terms of the 2026 Notes are governed by an Indenture, or the Indenture, by and between Alarm.com Holdings, Inc. and U.S. Bank National Association, as trustee. The 2026 Notes are senior unsecured obligations that do not bear regular interest and the principal amount of the 2026 Notes will not accrete. The 2026 Notes may bear special interest under specified circumstances related to our failure to comply with our reporting obligations under the Indenture. Special interest, if any, will be payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2021. We received proceeds from the issuance of the 2026 Notes of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs. We may not redeem the 2026 Notes prior to January 20, 2024. We may redeem for cash, all or any portion of the 2026 Notes, at our option, on or after January 20, 2024, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the 2026 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. No sinking fund is provided for the 2026 Notes. The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day; (2) during the five business day period immediately after any 10 consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2026 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2026 Notes on each such trading day; (3) if we call any or all of the 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2026 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as set forth in the Indenture. On or after August 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2026 Notes, holders of the 2026 Notes may convert all or any portion of their 2026 Notes at any time, regardless of the foregoing conditions. Upon conversion, we may satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. It is our current intent to settle the principal amount of the 2026 Notes with cash. The initial conversion rate for the 2026 Notes is 6.7939 shares of our common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of $147.19 per share of our common stock, subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date of the 2026 Notes or if we deliver a notice of redemption in respect of the 2026 Notes, we will, under certain circumstances, increase the conversion rate of the 2026 Notes for a holder who elects to convert its 2026 Notes (or any portion thereof) in connection with such a corporate event or convert its 2026 Notes called (or deemed called) for redemption during the related redemption period (as defined in the Indenture), as the case may be. If we undergo a fundamental change (as defined in the Indenture), subject to certain exceptions and except as described in the Indenture, holders may require us to repurchase for cash all or any portion of their 2026 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date. The Indenture includes customary covenants and sets forth certain events of default after which the 2026 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving us after which the 2026 Notes become automatically due and payable. We used some of the proceeds to repay the $110.0 million outstanding principal balance under our credit facility and also used some of the proceeds to pay accrued interest, fees and expenses related to our credit facility, which was terminated effective January 20, 2021. We are using the remaining net proceeds from the issuance of the 2026 Notes for working capital and other general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies. We account for the 2026 Notes as a liability. The debt issuance costs are presented as a deduction from the outstanding principal balance of the 2026 Notes and are amortized to interest expense using the effective interest method over the contractual term of the 2026 Notes at a rate of 0.6%. As of September 30, 2023 and December 31, 2022, the fair value of our 2026 Notes was $434.3 million and $411.5 million, respectively. The fair value was determined based on the quoted price of the 2026 Notes in an inactive market on the last traded day of the quarter and has been classified as Level 2 in the fair value hierarchy. Based on the closing price of our common stock of $61.14 on the last trading day of the quarter, the if-converted value of the 2026 Notes did not exceed the principal amount of $500.0 million as of September 30, 2023. The net carrying amount of the liability component of the 2026 Notes is as follows (in thousands): September 30, December 31, Principal $ 500,000 $ 500,000 Unamortized debt issuance costs (7,273) (9,630) Net carrying amount $ 492,727 $ 490,370 Interest expense related to the 2026 Notes is as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Amortization of debt issuance costs $ 787 $ 782 $ 2,357 $ 2,342 Total interest expense $ 787 $ 782 $ 2,357 $ 2,342 Acquired Debt - EBS On January 18, 2023, one of our wholly-owned subsidiaries acquired 100% of the issued and outstanding shares of capital stock of EBS. As part of this acquisition we acquired $2.9 million of outstanding debt, which decreased to zero as of September 30, 2023. Commitments and Contingencies Indemnification Agreements We have various agreements that may obligate us to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business. Although we cannot predict the maximum potential amount of future payments that may become due under these indemnification agreements, we do not believe any potential liability that might arise from such indemnity provisions is probable or material. Legal Proceedings On June 2, 2015, Vivint, Inc., or Vivint, filed a lawsuit against us in U.S. District Court, District of Utah, alleging that our technology directly and indirectly infringes six patents that Vivint purchased. Vivint is seeking permanent injunctions, enhanced damages and attorneys' fees. We answered the complaint on July 23, 2015. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question. In 2017 and 2019, the U.S. Patent Trial and Appeal Board, or PTAB, issued final written decisions in inter partes reviews finding all or some of the claims in five of the asserted patents unpatentable. These decisions were affirmed on appeal. Discovery has closed with respect to seven claims in three of the asserted patents. Vivint has moved for partial summary judgment and Alarm.com has moved for summary judgment as to those seven claims; both motions are pending decision. Alarm.com has also moved for summary judgment as to the six asserted claims from the fourth asserted patent. Discovery has been stayed with respect to the fourth patent while the summary judgment motion remains pending. No trial date has been set. Should Vivint prevail in proving Alarm.com infringes one or more of its patent claims, we could be required to pay damages of Vivint’s lost profits and/or a reasonable royalty for sales of our solution. Since all remaining patent claims in the litigation have expired, Vivint shall not be entitled to injunctive relief as a remedy in this matter. While we believe we have valid defenses to Vivint’s claims, any of these outcomes could result in a material adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. Further related to Vivint, on October 27, 2022, we filed a demand for arbitration of a dispute arising under the Patent Cross License Agreement between Alarm.com and Vivint executed in November 2013. Vivint has stopped paying license fees to Alarm.com under the agreement. Vivint had been paying the required license fees to Alarm.com since the agreement was executed in November 2013. Alarm.com disputes Vivint's refusal of payment and is seeking continued payments of license fees in the arbitration, as well as interest and declaratory relief. There can be no assurance that Alarm.com will be successful in the arbitration proceedings. As a result of Vivint’s refusal to pay license fees under the agreement, which began during the fourth quarter of 2022, SaaS and license revenue and total revenue will continue to be lowered by approximately $6.0 million on a quarterly basis. We also believe that quarterly earnings and cash flow will continue to be impacted by the aforementioned $6.0 million, plus additional legal fees. We also filed a lawsuit against Vivint on January 4, 2023 in U.S. District Court, Eastern District of Texas, alleging that Vivint infringes 15 of our patents. Since then, we have voluntarily dismissed without prejudice the infringement claims with respect to one of the patents, leaving 14 asserted patents. The case is docketed as No. 2:23-CV-0004-JRG-RSP (E.D. Tex.). We are seeking compensatory and enhanced damages, a permanent injunction and other relief. Vivint filed a partial motion to dismiss the complaint on February 27, 2023 which we have opposed. On March 8, 2023, Vivint filed counterclaims in the action alleging that Alarm.com’s products and services directly and indirectly infringe 14 patents owned by Vivint. Most of Vivint’s counterclaims also name our service provider ADT LLC as a defendant. Vivint is seeking permanent injunctions, enhanced damages and attorneys' fees. We answered the complaint on April 28, 2023. Among other things, we asserted defenses based on non-infringement and invalidity of Vivint’s patents. Trial is scheduled to begin on September 9, 2024. While we believe we have valid defenses to Vivint’s counterclaims, the outcome of these legal claims cannot be predicted with certainty and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. On January 10, 2022, EcoFactor, Inc., or EcoFactor, filed a lawsuit against us in U.S. District Court, District of Oregon, alleging Alarm.com’s products and services directly and indirectly infringe five U.S. patents owned by EcoFactor. EcoFactor is seeking permanent injunctions, enhanced damages and attorneys' fees. We moved to dismiss the case for failure to state a claim on March 28, 2022. EcoFactor had previously asserted two of the same patents against us in an October 2019 complaint with the U.S. International Trade Commission, or ITC. In July 2021, the ITC found in favor of Alarm.com. EcoFactor appealed the decision but withdrew its appeal in December 2021. Four of the asserted patents are in ex parte reexamination proceedings at the PTO, and all claims of the fifth were found unpatentable by the PTAB in inter partes review on April 18, 2022. Also on April 18, 2022, the district court stayed the case at the request of the parties pending the disposition of other proceedings involving the asserted patents. Should EcoFactor prevail in its lawsuit we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. While we believe we have valid defenses to EcoFactor’s claims, the outcome of these legal claims cannot be predicted with certainty and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. On July 22, 2021, Causam Enterprises, Inc., or Causam, filed a lawsuit against us in U.S. District Court, Western District of Texas, alleging that Alarm.com’s smart thermostats infringe four U.S. patents owned by Causam. Causam is seeking preliminary and permanent injunctions, enhanced damages and attorneys’ fees. We have not yet responded to the complaint. On September 3, 2021, the court issued an order staying the lawsuit until the ITC investigation described below is finally resolved. On July 28, 2021, Causam filed a complaint with the ITC naming Alarm.com Incorporated, Alarm.com Holdings, Inc., and EnergyHub, Inc., among others, as proposed respondents. The complaint alleges infringement of the same four patents Causam asserted in district court. Causam is seeking a permanent limited exclusion order and permanent cease and desist order. On August 27, 2021, the ITC instituted an investigation into Causam’s allegations naming Alarm.com Incorporated, Alarm.com Holdings, Inc., EnergyHub Inc. and others as respondents. We answered the complaint on October 4, 2021. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question. An evidentiary hearing in the investigation was held from June 28, 2022 through July 1, 2022. On February 16, 2023, the ITC issued a final decision in favor of Alarm.com and EnergyHub. Causam filed an appeal of the ITC decision on April 14, 2023. Should Causam prevail in its district court lawsuit we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. While we believe we have valid defenses to Causam’s claims, the outcome of these legal claims cannot be predicted with certainty, and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. In addition to the matters described above, we may be required to provide indemnification to certain of our service provider partners for certain claims regarding our solutions. For example, we are incurring costs associated with the indemnification of our service provider ADT, LLC in ongoing patent infringement suits. On February 25, 2021, Vivint filed a lawsuit against ADT LLC a/k/a ADT LLC of Delaware d/b/a ADT Security Services in U.S. District Court, District of Utah, alleging that ADT Pulse, Control, and Blue each infringe one or more patents owned by Vivint. Vivint is seeking damages and attorneys’ fees. Vivint filed a second amended complaint on March 8, 2022. ADT answered the second amended complaint on March 22, 2022, asserted defenses based on non-infringement and invalidity of all five asserted patents and counterclaimed for declaratory judgment of invalidity of all five asserted patents. The PTAB granted inter partes review of two of the asserted patents at ADT's request. On June 17, 2022, the court entered an order staying the case in view of the pending proceedings before the PTAB, with the exception of certain discovery of source code. In decisions issued in February and March 2023, the PTAB found all challenged claims of the two patents under review unpatentable. Vivint filed appeals of the PTAB decisions on April 13, 2023 and May 30, 2023. Should Vivint prevail on the claims that one or more elements of ADT’s products infringe, we could be required to indemnify ADT for damages in the form of a reasonable royalty or ADT could be enjoined from making, using and selling our solution if a license or other right to continue selling our technology is not made available or we are unable to design around such patents, and required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. The outcome of these legal claims cannot be predicted with certainty. We believe there are valid defenses to the claims made by Vivint. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. We also incurred costs associated with the indemnification of our service provider Monitronics International, Inc. d/b/a Brinks in patent infringement suits. On November 4, 2022, January 13, 2023 and April 18, 2023, IOT Innovations LLC, or IOT, sued Monitronics in U.S. District Court, Eastern District of Texas, alleging patent infringement of certain products and services sold by Monitronics. Together, IOT asserted infringement of 26 patents and sought permanent injunctions, enhanced damages and attorneys' fees. On October 3, 2023, IOT filed a stipulation of dismissal of all three cases, ending the cases and the Company's involvement therein. We may also be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Other than the preceding matters, we are not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible or probable of having a material adverse effect on our financial position, results of operations or cash flows. We reserve for contingent liabilities based on ASC 450, " Contingencies ," when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, we will not incur material costs. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stock Repurchase Programs On December 3, 2020, our board of directors authorized a stock repurchase program, under which we were authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the three-year period ending December 3, 2023. No shares of our common stock were repurchased under this program during the three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2022, we repurchased 5,595 and 840,249 shares of our common stock under this program for $0.4 million and $51.9 million, respectively, which includes applicable commissions and fees. On February 15, 2023, our board of directors authorized the cancellation of the balance under the stock repurchase program ending December 3, 2023 and also authorized a stock repurchase program, effective February 23, 2023, under which we are authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025. During the three and nine months ended September 30, 2023, 105,285 and 239,540 shares of our common stock were repurchased under this program for $6.2 million and $12.9 million, respectively, which includes applicable commissions and fees. As of January 1, 2023, we are subject to a 1.0% excise tax on the value of net corporate stock repurchases under the Inflation Reduction Act of 2022. When applicable, the excise tax will be included as part of the cost basis of shares acquired and is presented within stockholders’ equity in the condensed consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is included in the following line items in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of hardware and other revenue $ 3 $ — $ 3 $ — Sales and marketing 854 983 2,778 3,481 General and administrative 3,260 3,953 9,873 11,135 Research and development 7,689 8,218 23,769 23,437 Total stock-based compensation expense $ 11,806 $ 13,154 $ 36,423 $ 38,053 The following table summarizes the components of non-cash stock-based compensation expense (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Stock options $ 1,133 $ 1,015 $ 3,116 $ 2,742 Restricted stock units 10,629 12,087 33,170 35,165 Employee stock purchase plan 44 52 137 146 Total stock-based compensation expense $ 11,806 $ 13,154 $ 36,423 $ 38,053 Tax (shortfall) / windfall benefit from stock-based awards $ (111) $ 916 $ (802) $ 1,949 We granted 4,500 and 197,900 stock options pursuant to our 2015 Equity Incentive Plan during the three and nine months ended September 30, 2023, respectively, as compared to 87,000 and 182,000 stock options for the same periods in the prior year. There were 38,044 and 121,179 stock options exercised during the three and nine months ended September 30, 2023, respectively, as compared to 62,324 and 101,586 stock options for the same periods in the prior year. There was an aggregate of 117,025 and 303,422 restricted stock units without performance conditions granted to certain of our employees and directors during the three and nine months ended September 30, 2023, respectively, as compared to an aggregate of 229,400 and 819,824 restricted stock units without performance conditions for the same periods in the prior year. There were no restricted stock units with performance conditions granted to certain of our employees during the three and nine months ended September 30, 2023, as compared to 96,289 and 168,223 restricted stock units with performance conditions for the same periods in the prior year. There were 112,310 and 506,260 restricted stock units without performance conditions that vested during the three and nine months ended September 30, 2023, respectively, as compared to 75,452 and 312,947 restricted stock units without performance conditions vested during the same periods in the prior year. There were zero and 39,406 restricted stock units with performance conditions that vested during the three and nine months ended September 30, 2023, respectively, as compared to zero restricted stock units with performance conditions vested for the same periods in the prior year. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and Diluted Earnings Per Share The components of basic and diluted earnings per share are as follows (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended Numerator: 2023 2022 2023 2022 Net income $ 19,351 $ 18,110 $ 49,169 $ 37,841 Net loss attributable to redeemable noncontrolling interests 173 222 570 412 Net income attributable to common stockholders - basic (A) 19,524 18,332 49,739 38,253 Add back interest expense, net of tax, attributable to convertible senior notes 593 588 1,774 1,761 Net income attributable to common stockholders - diluted (B) $ 20,117 $ 18,920 $ 51,513 $ 40,014 Denominator: Weighted average common shares outstanding — basic (C) 49,917,533 49,791,465 49,782,571 49,974,925 Dilutive effect of convertible senior notes, stock options and restricted stock units 4,861,260 5,041,063 4,806,255 5,013,095 Weighted average common shares outstanding — diluted (D) 54,778,793 54,832,528 54,588,826 54,988,020 Net income per share: Basic (A/C) $ 0.39 $ 0.37 $ 1.00 $ 0.77 Diluted (B/D) $ 0.37 $ 0.35 $ 0.94 $ 0.73 The following securities have been excluded from the calculation of diluted weighted average common shares outstanding as the inclusion of these securities would have an anti-dilutive effect: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Stock options 587,476 346,283 587,476 396,742 Restricted stock units 36,000 128,675 87,425 248,792 Our redeemable noncontrolling interests are related to our 86% equity ownership interests in OpenEye, and our 85% equity ownership interest in Noonlight. See Note 6 for details on the put option and call option contained in the Noonlight stockholder agreement. We use the if-converted method when calculating the dilutive impact of the 2026 Notes on net income per share. As a result, we included 3,396,950 shares related to the 2026 Notes within the weighted average shares outstanding when calculating the diluted net income per share for each of the three and nine months ended September 30, 2023 and 2022. Additionally, we included $0.6 million and $1.8 million of debt issuance cost amortization, net of tax, within the numerator of the diluted net income per share for the three and nine months ended September 30, 2023 and 2022, respectively. |
Significant Service Providers a
Significant Service Providers and Distributors | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Significant Service Providers and Distributors | Significant Service Providers and Distributors During the three and nine months ended September 30, 2023, our 10 largest revenue service provider partners or distributors accounted for 49% and 50% of our consolidated revenue, respectively, as compared to 52% and 49% for the same periods in the prior year. One of our service provider partners within the Alarm.com segment individually represented greater than 15% but not more than 20% of our revenue for each of the three and nine months ended September 30, 2023 and 2022. No service provider partner or distributor in the Alarm.com segment represented more than 10% of accounts receivable as of September 30, 2023. Two service provider partners or distributors in the Alarm.com segment each represented greater than 10% of accounts receivable as of December 31, 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For purposes of interim reporting, our annual effective income tax rate is estimated in accordance with ASC 740-270, "Interim Reporting." This rate is applied to the pre-tax book income of the entities expected to be benefited during the year. Discrete items that impact the tax provision are recorded in the period incurred. For the three and nine months ended September 30, 2023, we recorded a provision for income taxes of $4.0 million and $9.3 million, respectively, resulting in an effective income tax rate of 17.0% and 15.8% for those periods. For the three and nine months ended September 30, 2022, we recorded a provision for income taxes of $0.2 million and $0.5 million, respectively, resulting in an effective income tax rate of 1.3% and 1.2% for those periods. For the three months ended September 30, 2023, our effective tax rate was below the 21.0% statutory rate primary due to research and development tax credits claimed, the foreign derived intangible income deduction and a favorable true-up adjustment of our 2022 income tax provision estimate, partially offset by the impact of state taxes, foreign withholding taxes and a stock-based compensation tax shortfall. For the nine months ended September 30, 2023, our effective tax rate was below the 21.0% statutory rate primarily due to research and development tax credits claimed and the foreign derived intangible income deduction, partially offset by an unfavorable true-up adjustment of our 2022 income tax provision estimate associated with research and development tax credits, the impact of state taxes, foreign withholding taxes, other nondeductible expenses and a stock-based compensation tax shortfall. For the three and nine months ended September 30, 2022, our effective tax rate was below the 21.0% statutory rate primarily due to research and development tax credits claimed, tax windfall benefits from employee stock-based compensation and the foreign derived intangible income deduction, partially offset by the impact of state taxes, foreign withholding taxes and other nondeductible expenses. We recognize a valuation allowance if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Our valuation allowance for state research and development tax credit carryforwards was $2.6 million as of December 31, 2022 and increased to $2.9 million as of September 30, 2023. We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. We recorded a net increase to the unrecognized tax benefits liability of $1.1 million primarily for research and development tax credits claimed during the nine months ended September 30, 2023. We recorded an increase to the unrecognized tax benefits liability of $2.1 million primarily for research and development tax credits claimed during the nine months ended September 30, 2022. Our tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in our tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. On October 13, 2021, the Internal Revenue Service commenced an examination of our federal income tax return for 2018 and on August 12, 2022, the Internal Revenue Service expanded the examination to include our federal income tax return for 2019, both of which are ongoing. The anticipated completion date of the Internal Revenue Service examinations cannot be estimated at this time. As of September 30, 2023 and December 31, 2022, our condensed consolidated balance sheets included a $0.3 million accrual for total interest expense related to unrecognized tax benefits. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. In August 2022, the Inflation Reduction Act of 2022 was enacted in the United States which, among other provisions, includes a minimum 15.0% tax on companies that have a three-year average annual adjusted financial statement income of more than $1.0 billion and a 1.0% excise tax on the value of net corporate stock repurchases. Both provisions became effective on January 1, 2023 and the provisions did not have a material impact on our financial condition or results of operations as of September 30, 2023. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have two reportable segments: • Alarm.com segment • Other segment Our chief operating decision maker is our chief executive officer. Management determined the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that contributed 93% and 94% of our revenue, net of intersegment eliminations, for the three and nine months ended September 30, 2023, respectively, as compared to 94% for the same periods in the prior year. Our Other segment is focused on researching, developing and offering residential and commercial automation solutions and energy management products and services in adjacent markets. Inter-segment revenue includes sales of hardware between our segments. Management evaluates the performance of its segments and allocates resources to them based on operating income / (loss) as compared to prior periods and current performance levels. The reportable segment operational data is presented in the tables below (in thousands): Three Months Ended September 30, 2023 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 130,711 $ 14,316 $ — $ — $ 145,027 Hardware and other revenue 76,336 1,685 (1,021) (173) 76,827 Total revenue 207,047 16,001 (1,021) (173) 221,854 Operating income / (loss) 18,929 (3,270) 406 106 16,171 Three Months Ended September 30, 2022 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 122,555 $ 10,571 $ — $ — $ 133,126 Hardware and other revenue 82,300 1,876 (1,059) (105) 83,012 Total revenue 204,855 12,447 (1,059) (105) 216,138 Operating income / (loss) 20,874 (4,738) 105 75 16,316 Nine Months Ended September 30, 2023 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 384,116 $ 36,737 $ — $ — $ 420,853 Hardware and other revenue 232,464 5,263 (2,678) (457) 234,592 Total revenue 616,580 42,000 (2,678) (457) 655,445 Operating income / (loss) 52,761 (12,340) 453 275 41,149 Nine Months Ended September 30, 2022 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 357,031 $ 28,795 $ — $ — $ 385,826 Hardware and other revenue 245,679 6,834 (3,302) (617) 248,594 Total revenue 602,710 35,629 (3,302) (617) 634,420 Operating income / (loss) 50,545 (14,467) 459 28 36,565 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Assets as of September 30, 2023 $ 1,457,416 $ 46,326 $ (92,247) $ 2 $ 1,411,497 Assets as of December 31, 2022 1,366,343 53,927 (90,929) 34 1,329,375 Our SaaS and license revenue for the Alarm.com segment included software license revenue of $5.7 million and $17.8 million for the three and nine months ended September 30, 2023, respectively, as compared to $6.5 million and $20.5 million for the same periods in the prior year. There was no software license revenue recorded for the Other segment during the three and nine months ended September 30, 2023 and 2022. Amortization and depreciation expense was $7.7 million and $22.7 million for the Alarm.com segment for the three and nine months ended September 30, 2023, respectively, as compared to $7.3 million and $22.2 million for the same periods in the prior year. Amortization and depreciation expense was $0.2 million and $0.8 million for the Other segment for the three and nine months ended September 30, 2023, respectively, as compared to $0.3 million and $0.9 million for the same periods in the prior year. Additions to property and equipment were $2.1 million and $7.9 million for the Alarm.com segment for the three and nine months ended September 30, 2023, respectively, as compared to $1.9 million and $27.6 million for the same periods in the prior year. Additions to property and equipment were $0.1 million and $0.2 million for the Other segment for the three and nine months ended September 30, 2023, respectively, as compared to less than $0.1 million and $0.2 million for the same periods in the prior year. We derived substantially all revenue from North America for the three and nine months ended September 30, 2023 and 2022. Substantially all of our long-lived assets were in North America as of September 30, 2023 and December 31, 2022. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Name and Title Action Total Number of Shares to be Purchased or Sold Pursuant to the Trading Arrangement Adoption Date Expiration Date Steve Trundle, Chief Executive Officer Adoption Sale of up to 150,000 shares of common stock August 29, 2023 December 31, 2025 | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Steve Trundle [Member] | ||
Trading Arrangements, by Individual | ||
Name | Steve Trundle | |
Title | Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | August 29, 2023 | |
Arrangement Duration | 855 days | |
Aggregate Available | 150,000 | 150,000 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2023, or the Annual Report. The condensed consolidated balance sheet as of December 31, 2022 was derived from our audited financial statements but does not include all disclosures required by GAAP for annual financial statements. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented. However, the global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine and the war between Israel and Hamas, disruptions to global supply chains, rising interest rates, risk of recession and inflation (collectively, the Macroeconomic Conditions). These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment. It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2023, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions. Prolonged uncertainties could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions and judgments or revise the carrying value of our assets or liabilities. However, our estimates, judgments and assumptions are continually evaluated based on available information and experience and may change as new events occur and additional information is obtained. Because of the use of estimates inherent in the financial reporting process and in light of the continuing uncertainty arising from the Macroeconomic Conditions, actual results could differ from those estimates and any such differences may be material. Estimates are used when accounting for revenue recognition, allowances for credit losses, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, the lease term and incremental borrowing rates for leases, stock-based compensation, income taxes, legal reserves and goodwill, intangible assets and other long-lived assets. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive (loss) / income |
Foreign Currency | Foreign Currency For foreign operations where substantially all monetary transactions are in the local currency, we use the local currency as our functional currency. For these foreign operations, assets and liabilities are translated at period-end exchange rates and revenue and expense items are translated at weighted-average exchange rates prevailing during the periods being reported. The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment within accumulated other comprehensive income, a separate component of stockholders’ equity. Gains or losses from foreign currency remeasurements that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in our results of operations. |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. Our redeemable noncontrolling interests relate to our 86% equity ownership interest in PC Open Incorporated, a Washington corporation, doing business as OpenEye and our 85% equity ownership interest in Noonlight, Inc., or Noonlight, a Delaware corporation. The OpenEye and Noonlight stockholder agreements contain a put option that gives the minority stockholders the right to sell their shares to us based on the fair value of the shares and also contain a call option that gives us the right to purchase the remaining shares from the minority stockholders based on the fair value of the shares. The next put and call options related to OpenEye can each be exercised beginning in the first quarter of 2024. The put and call options related to Noonlight can each be exercised beginning in the first quarter of 2026. These redeemable noncontrolling interests are considered temporary equity and we report them between liabilities and stockholders’ equity in the condensed consolidated balance sheets. The amount of the net income or loss attributable to the redeemable noncontrolling interests is recorded in the condensed consolidated statements of operations and the accretion of the redemption values is recorded as an adjustment to additional paid-in capital. We account for purchases of redeemable noncontrolling interest as a component of stockholders' equity when control is maintained. We recognize the difference between the consideration paid for the acquired redeemable noncontrolling interest and the fair value of the acquired redeemable noncontrolling interest as an adjustment to additional paid-in capital. |
Allowance for Credit Losses - Accounts Receivable and Notes Receivable | Allowance for Credit Losses - Accounts Receivable The allowance for credit losses is a valuation account that is deducted from the accounts receivable and notes receivable amortized cost basis (see Note 8) to present the net amount expected to be collected. We estimate the allowance balance by applying the loss-rate method using relevant available information from internal and external sources, including historical write-off activity, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in economic conditions, such as changes in unemployment rates. We use projected economic conditions over a period no more than twelve months based on data from external sources. For periods beyond the twelve-month reasonable and supportable forecast period, we revert to historical loss information immediately. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, we considered various risk characteristics, including the financial asset type, size and the historical or expected credit loss pattern. We identified the following two portfolio segments for our accounts receivable: (i) outstanding accounts receivable balances within Alarm.com and certain subsidiaries and (ii) outstanding accounts receivable balances within all other subsidiaries. There were no changes to our portfolio segments for our accounts receivable during the three and nine months ended September 30, 2023, and no changes to our policies or practices that influenced our estimate of expected credit losses for accounts receivable. Additionally, there were no significant changes in the amount of accounts receivable write-offs during the three and nine months ended September 30, 2023, as compared to historical periods. Expected credit losses are estimated over the contractual term of the financial assets and we adjust the term for expected prepayments when appropriate. For the three and nine months ended September 30, 2023, we recorded credit loss expense for accounts receivable and notes receivable of $0.6 million and $1.1 million, respectively, in general and administrative expense in our condensed consolidated statements of operations. For the three and nine months ended September 30, 2022, we recorded credit loss expense of $1.0 million and $1.3 million, respectively, in general and administrative expense in our condensed consolidated statements of operations. The contractual term excludes expected extensions, renewals and modifications because extension and renewal options are unconditionally cancelable by us. Write-offs of the amortized cost basis are recorded to the We do not accrue interest on notes receivable that are considered impaired or are 90 days or greater past due based on their contractual payment terms. Notes receivable that are 90 days or greater past due are placed on nonaccrual status. Notes receivable may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a note receivable has been placed on nonaccrual status, interest will be recognized when cash is received. A note receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and collection of all remaining contractual amounts due is reasonably assured. We have elected not to measure an allowance for credit losses for accrued interest receivables . We write-off any accrued interest on notes receivable |
Income Taxes | We recognize a valuation allowance if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Our valuation allowance for state research and development tax credit carryforwards was $2.6 million as of December 31, 2022 and increased to $2.9 million as of September 30, 2023.We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Contract Liabilities | The changes in our contract assets are as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Beginning of period balance $ 13,581 $ 7,415 $ 13,975 $ 4,520 Commission costs and upfront payments to a customer capitalized in period 1,808 5,253 5,028 9,980 Reimbursement of previously capitalized upfront payments to customers (6,774) — (6,774) — Amortization of contract assets (1,117) (1,369) (4,731) (3,201) End of period balance $ 7,498 $ 11,299 $ 7,498 $ 11,299 The changes in our contract liabilities are as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Beginning of period balance $ 21,460 $ 17,241 $ 18,332 $ 14,837 Revenue deferred in period 6,250 4,373 17,909 13,750 Revenue recognized from amounts included in contract liabilities (4,871) (3,179) (13,402) (10,152) End of period balance $ 22,839 $ 18,435 $ 22,839 $ 18,435 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Components of Accounts Receivable | The components of accounts receivable, net are as follows (in thousands): September 30, December 31, Accounts receivable $ 116,298 $ 128,669 Allowance for credit losses (3,856) (2,835) Allowance for product returns (2,175) (1,551) Accounts receivable, net $ 110,267 $ 124,283 |
Schedule of Changes in Allowance for Credit Losses for Accounts Receivable | The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Alarm.com All Other Alarm.com All Other Alarm.com All Other Alarm.com All Other Beginning of period balance $ (2,968) $ (191) $ (2,450) $ (58) $ (2,755) $ (80) $ (2,035) $ (133) (Provision for) / recovery of expected credit losses (820) 15 (1,057) (2) (1,307) (115) (1,676) 70 Write-offs 89 19 30 1 363 38 234 4 End of period balance $ (3,699) $ (157) $ (3,477) $ (59) $ (3,699) $ (157) $ (3,477) $ (59) The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Loan Hardware Loan Hardware Loan Hardware Loan Hardware Beginning of period balance $ (2) $ — $ (2) $ — $ (2) $ — $ (79) $ (1) Recovery of / (provision for) expected credit losses — — (1) — — — 76 1 Write-offs — — — — — — — — End of period balance $ (2) $ — $ (3) $ — $ (2) $ — $ (3) $ — |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory are as follows (in thousands): September 30, December 31, Raw materials $ 33,675 $ 38,098 Work-in-process 404 — Finished goods 80,169 77,486 Total inventory $ 114,248 $ 115,584 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Paid and Fair Value of Tangible and Intangible Net Assets Acquired | The table below sets forth the purchase consideration and the fair value allocation of the tangible and intangible net assets acquired (in thousands): September 23, 2022 Calculation of Purchase Consideration: Cash paid, net of working capital adjustment $ 31,805 Outstanding principal and interest of loan provided to Noonlight 1,537 Holdback consideration 4,910 Total consideration $ 38,252 Tangible and Intangible Net Assets: Cash $ 188 Accounts receivable 291 Other current and non-current assets 200 Property and equipment 45 Deferred tax assets 424 Developed technology 9,335 Trade names 150 Accounts payable (321) Accrued expenses and other current liabilities (318) Deferred revenue (67) Redeemable noncontrolling interest (6,770) Goodwill 35,095 Total tangible and intangible net assets $ 38,252 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in goodwill by reportable segment are outlined below (in thousands): Alarm.com Other Total Balance as of January 1, 2023 $ 148,183 $ — $ 148,183 Goodwill acquired 7,200 — 7,200 Measurement period adjustments (1,509) — (1,509) Foreign currency translation adjustment (27) — (27) Balance as of September 30, 2023 $ 153,847 $ — $ 153,847 |
Schedule of Intangible Assets | The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Developed Trade Name Capitalized Software Development Costs Total Balance as of January 1, 2023 $ 47,522 $ 33,553 $ 1,383 $ — $ 82,458 Intangible assets acquired 2,395 11,583 537 — 14,515 Capitalized software development costs — — — 397 397 Amortization (8,141) (6,168) (563) — (14,872) Balance as of September 30, 2023 $ 41,776 $ 38,968 $ 1,357 $ 397 $ 82,498 The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets (in thousands, except weighted-average remaining life): September 30, 2023 Gross Accumulated Net Weighted- Customer relationships $ 128,280 $ (86,504) $ 41,776 6.4 Developed technology 70,061 (31,093) 38,968 5.0 Trade name 4,474 (3,117) 1,357 2.7 Capitalized software development costs 397 — 397 3.0 Total intangible assets $ 203,212 $ (120,714) $ 82,498 5.6 December 31, 2022 Gross Accumulated Net Weighted- Customer relationships $ 125,885 $ (78,363) $ 47,522 7.0 Developed technology 58,478 (24,925) 33,553 5.8 Trade name 3,937 (2,554) 1,383 2.4 Total intangible assets $ 188,300 $ (105,842) $ 82,458 6.5 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Changes in Allowance for Credit Losses for Accounts Receivable | The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Alarm.com All Other Alarm.com All Other Alarm.com All Other Alarm.com All Other Beginning of period balance $ (2,968) $ (191) $ (2,450) $ (58) $ (2,755) $ (80) $ (2,035) $ (133) (Provision for) / recovery of expected credit losses (820) 15 (1,057) (2) (1,307) (115) (1,676) 70 Write-offs 89 19 30 1 363 38 234 4 End of period balance $ (3,699) $ (157) $ (3,477) $ (59) $ (3,699) $ (157) $ (3,477) $ (59) The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Loan Hardware Loan Hardware Loan Hardware Loan Hardware Beginning of period balance $ (2) $ — $ (2) $ — $ (2) $ — $ (79) $ (1) Recovery of / (provision for) expected credit losses — — (1) — — — 76 1 Write-offs — — — — — — — — End of period balance $ (2) $ — $ (3) $ — $ (2) $ — $ (3) $ — |
Schedule of Financing Receivable Credit Quality Indicators | We manage our notes receivables using delinquency as a key credit quality indicator. The following tables reflect the current and delinquent notes receivable by class of financing receivables and by year of origination (in thousands): September 30, 2023 Loan Receivables: 2023 2022 2021 2020 2019 Prior Total Current $ — $ 1,500 $ — $ 1,053 $ — $ 4,389 $ 6,942 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ 1,500 $ — $ 1,053 $ — $ 4,389 $ 6,942 December 31, 2022 Loan Receivables: 2022 2021 2020 2019 2018 Prior Total Current $ 1,500 $ — $ 1,093 $ 1 $ — $ 4,015 $ 6,609 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ 1,500 $ — $ 1,093 $ 1 $ — $ 4,015 $ 6,609 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis Assets: Level 1 Level 2 Level 3 Total Money market accounts as of September 30, 2023 $ 658,036 $ — $ — $ 658,036 Money market accounts as of December 31, 2022 510,326 — — 510,326 Liabilities: Contingent consideration liability from acquisition as of September 30, 2023 $ — $ — $ 2,016 $ 2,016 Contingent consideration liability from acquisition as of December 31, 2022 — — — — |
Summary of Fair Value of Level 3 Liability | The following table summarizes the change in fair value of the Level 3 liabilities with significant unobservable inputs (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Contingent Consideration Liability from Acquisition Subsidiary Long-Term Incentive Plan Contingent Consideration Liability from Acquisition Subsidiary Long-Term Incentive Plan Beginning of period balance $ 2,020 $ — $ — $ 3,351 Acquired liabilities — — 1,993 — Changes in fair value included in earnings (4) — 23 (247) Reclassification to additional paid in capital upon modification — — — (3,104) End of period balance $ 2,016 $ — $ 2,016 $ — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Information Related to Leases | Supplemental information related to leases is presented in the table below (in thousands, except weighted-average term and discount rate): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating lease cost $ 2,919 $ 2,702 $ 8,540 $ 7,767 Cash paid for amounts included in the measurement of operating lease liabilities 3,533 3,290 10,329 9,390 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 1,214 1,415 5,329 7,127 September 30, December 31, Weighted-average remaining lease term — operating leases 3.2 years 3.4 years Weighted-average discount rate — operating leases 4.6 % 3.9 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities are as follows (in thousands): Year Ended December 31, Operating Leases (1) Remainder of 2023 $ 3,732 2024 13,736 2025 11,601 2026 6,962 2027 1,610 2028 and thereafter 2,386 Total lease payments 40,027 Less: imputed interest (2) 4,244 Present value of lease liabilities $ 35,783 _______________ (1) Excludes $5.1 million of legally binding minimum lease payments for leases executed but not yet commenced. There are no options to extend lease terms that were reasonably certain of being exercised included in these balances. (2) Imputed interest was calculated using the incremental borrowing rate applicable for each lease. |
Liabilities (Tables)
Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities | The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): September 30, December 31, Accounts payable $ 52,806 $ 53,121 Accrued expenses 18,342 17,539 Income taxes payable 36,114 43,576 Holdback liability from business combinations and asset acquisitions 7,340 — Other current liabilities 7,950 5,421 Accounts payable, accrued expenses and other current liabilities $ 122,552 $ 119,657 The components of other liabilities are as follows (in thousands): September 30, December 31, Holdback liability from business combination $ — $ 4,560 Contingent consideration liability from acquisition 2,016 — Other liabilities 11,049 8,490 Other liabilities $ 13,065 $ 13,050 |
Debt, Commitments and Conting_2
Debt, Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Carrying Values of Debt | The net carrying amount of the liability component of the 2026 Notes is as follows (in thousands): September 30, December 31, Principal $ 500,000 $ 500,000 Unamortized debt issuance costs (7,273) (9,630) Net carrying amount $ 492,727 $ 490,370 Interest expense related to the 2026 Notes is as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Amortization of debt issuance costs $ 787 $ 782 $ 2,357 $ 2,342 Total interest expense $ 787 $ 782 $ 2,357 $ 2,342 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense is included in the following line items in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of hardware and other revenue $ 3 $ — $ 3 $ — Sales and marketing 854 983 2,778 3,481 General and administrative 3,260 3,953 9,873 11,135 Research and development 7,689 8,218 23,769 23,437 Total stock-based compensation expense $ 11,806 $ 13,154 $ 36,423 $ 38,053 The following table summarizes the components of non-cash stock-based compensation expense (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Stock options $ 1,133 $ 1,015 $ 3,116 $ 2,742 Restricted stock units 10,629 12,087 33,170 35,165 Employee stock purchase plan 44 52 137 146 Total stock-based compensation expense $ 11,806 $ 13,154 $ 36,423 $ 38,053 Tax (shortfall) / windfall benefit from stock-based awards $ (111) $ 916 $ (802) $ 1,949 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Components of Basic and Diluted EPS | The components of basic and diluted earnings per share are as follows (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended Numerator: 2023 2022 2023 2022 Net income $ 19,351 $ 18,110 $ 49,169 $ 37,841 Net loss attributable to redeemable noncontrolling interests 173 222 570 412 Net income attributable to common stockholders - basic (A) 19,524 18,332 49,739 38,253 Add back interest expense, net of tax, attributable to convertible senior notes 593 588 1,774 1,761 Net income attributable to common stockholders - diluted (B) $ 20,117 $ 18,920 $ 51,513 $ 40,014 Denominator: Weighted average common shares outstanding — basic (C) 49,917,533 49,791,465 49,782,571 49,974,925 Dilutive effect of convertible senior notes, stock options and restricted stock units 4,861,260 5,041,063 4,806,255 5,013,095 Weighted average common shares outstanding — diluted (D) 54,778,793 54,832,528 54,588,826 54,988,020 Net income per share: Basic (A/C) $ 0.39 $ 0.37 $ 1.00 $ 0.77 Diluted (B/D) $ 0.37 $ 0.35 $ 0.94 $ 0.73 |
Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect | The following securities have been excluded from the calculation of diluted weighted average common shares outstanding as the inclusion of these securities would have an anti-dilutive effect: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Stock options 587,476 346,283 587,476 396,742 Restricted stock units 36,000 128,675 87,425 248,792 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Operational Data | The reportable segment operational data is presented in the tables below (in thousands): Three Months Ended September 30, 2023 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 130,711 $ 14,316 $ — $ — $ 145,027 Hardware and other revenue 76,336 1,685 (1,021) (173) 76,827 Total revenue 207,047 16,001 (1,021) (173) 221,854 Operating income / (loss) 18,929 (3,270) 406 106 16,171 Three Months Ended September 30, 2022 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 122,555 $ 10,571 $ — $ — $ 133,126 Hardware and other revenue 82,300 1,876 (1,059) (105) 83,012 Total revenue 204,855 12,447 (1,059) (105) 216,138 Operating income / (loss) 20,874 (4,738) 105 75 16,316 Nine Months Ended September 30, 2023 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 384,116 $ 36,737 $ — $ — $ 420,853 Hardware and other revenue 232,464 5,263 (2,678) (457) 234,592 Total revenue 616,580 42,000 (2,678) (457) 655,445 Operating income / (loss) 52,761 (12,340) 453 275 41,149 Nine Months Ended September 30, 2022 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 357,031 $ 28,795 $ — $ — $ 385,826 Hardware and other revenue 245,679 6,834 (3,302) (617) 248,594 Total revenue 602,710 35,629 (3,302) (617) 634,420 Operating income / (loss) 50,545 (14,467) 459 28 36,565 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Assets as of September 30, 2023 $ 1,457,416 $ 46,326 $ (92,247) $ 2 $ 1,411,497 Assets as of December 31, 2022 1,366,343 53,927 (90,929) 34 1,329,375 |
Organization (Details)
Organization (Details) service_provider in Thousands | Dec. 31, 2022 service_provider |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of trusted service providers (more than) | 11 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | Sep. 30, 2023 | Sep. 23, 2022 |
OpenEye | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Percentage of business acquired | 86% | |
Noonlight | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Percentage of business acquired | 85% | 85% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Change In Contract With Customer, Asset [Roll Forward] | ||||
Beginning of period balance | $ 13,581 | $ 7,415 | $ 13,975 | $ 4,520 |
Commission costs and upfront payments to a customer capitalized in period | 1,808 | 5,253 | 5,028 | 9,980 |
Reimbursement of previously capitalized upfront payments to customers | (6,774) | 0 | (6,774) | 0 |
Amortization of contract assets | (1,117) | (1,369) | (4,731) | (3,201) |
End of period balance | 7,498 | 11,299 | 7,498 | 11,299 |
Change In Contract With Customer, Liability [Roll Forward] | ||||
Beginning of period balance | 21,460 | 17,241 | 18,332 | 14,837 |
Revenue deferred in period | 6,250 | 4,373 | 17,909 | 13,750 |
Revenue recognized from amounts included in contract liabilities | (4,871) | (3,179) | (13,402) | (10,152) |
End of period balance | $ 22,839 | $ 18,435 | $ 22,839 | $ 18,435 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Jul. 27, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||||||
Reimbursement of previously capitalized upfront payments to customers | $ 6,774,000 | $ 0 | $ 6,774,000 | $ 0 | |||||
Contract asset, unamortized balance | $ 7,498,000 | $ 11,299,000 | $ 7,498,000 | $ 11,299,000 | $ 13,581,000 | $ 13,975,000 | $ 7,415,000 | $ 4,520,000 | |
One customer | |||||||||
Disaggregation of Revenue [Line Items] | |||||||||
Proceeds from previously capitalized upfront payments | $ 6,900,000 | ||||||||
Reimbursement of previously capitalized upfront payments to customers | 6,800,000 | ||||||||
Contract asset, unamortized balance | 0 | ||||||||
SaaS and License | One customer | |||||||||
Disaggregation of Revenue [Line Items] | |||||||||
Contract asset, revenue satisfied in previous period | $ 100,000 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 116,298 | $ 128,669 |
Allowance for credit losses | (3,856) | (2,835) |
Allowance for product returns | (2,175) | (1,551) |
Accounts receivable, net | $ 110,267 | $ 124,283 |
Accounts Receivable, Net - Narr
Accounts Receivable, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Provision for expected credit losses | $ 800 | $ 1,100 | $ 1,422 | $ 1,606 |
Reserve for product returns | 2,979 | 3,721 | ||
Credit loss expense (reversal) for accounts and notes receivable | 600 | 1,000 | 1,100 | 1,300 |
Hardware and other revenue | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Reserve for product returns | $ 500 | $ 2,000 | $ 3,000 | $ 3,700 |
Accounts Receivable, Net - Sc_2
Accounts Receivable, Net - Schedule of Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning of period balance | $ (2,835) | |||
(Provision for) / recovery of expected credit losses | $ (800) | $ (1,100) | (1,422) | $ (1,606) |
End of period balance | (3,856) | (3,856) | ||
Alarm.com and Certain Subsidiaries | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning of period balance | (2,968) | (2,450) | (2,755) | (2,035) |
(Provision for) / recovery of expected credit losses | (820) | (1,057) | (1,307) | (1,676) |
Write-offs | 89 | 30 | 363 | 234 |
End of period balance | (3,699) | (3,477) | (3,699) | (3,477) |
All Other Subsidiaries | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning of period balance | (191) | (58) | (80) | (133) |
(Provision for) / recovery of expected credit losses | 15 | (2) | (115) | 70 |
Write-offs | 19 | 1 | 38 | 4 |
End of period balance | $ (157) | $ (59) | $ (157) | $ (59) |
Inventory - Schedule of Compone
Inventory - Schedule of Components of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 33,675 | $ 38,098 |
Work-in-process | 404 | 0 |
Finished goods | 80,169 | 77,486 |
Total inventory | $ 114,248 | $ 115,584 |
Inventory - Narrative (Details)
Inventory - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | ||
Inventory write-down | $ 1,181 | $ 0 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Apr. 21, 2023 | Jan. 18, 2023 | Sep. 23, 2022 | Mar. 31, 2023 | May 31, 2022 | Mar. 31, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||||||
Holdback consideration | $ 0 | $ 4,560,000 | |||||||
Contingent consideration liability from acquisition | 2,016,000 | 0 | |||||||
Goodwill | $ 153,847,000 | $ 148,183,000 | |||||||
Noonlight | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership by noncontrolling owners | 15% | ||||||||
EBS | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of business acquired | 100% | ||||||||
Cash paid to acquire business | $ 9,800,000 | ||||||||
Holdback consideration | 2,200,000 | ||||||||
Additional earn-out | 2,500,000 | ||||||||
Contingent consideration liability from acquisition | $ 2,000,000 | ||||||||
Noonlight | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of business acquired | 85% | 85% | |||||||
Cash paid to acquire business | $ 31,900,000 | ||||||||
Holdback consideration | 4,910,000 | ||||||||
Loan amount consideration | $ 1,500,000 | ||||||||
Payments for business combination holdback | $ 400,000 | ||||||||
Goodwill | 35,095,000 | ||||||||
Expected tax deductible amount of goodwill | 0 | ||||||||
Redeemable noncontrolling interest | $ 6,770,000 | ||||||||
Redemption value of noncontrolling interest | $ 6,500,000 | ||||||||
Noonlight | Trade Name | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average estimated useful life of intangible assets acquired (years) | 5 years | ||||||||
Intangible assets | $ 150,000 | ||||||||
Noonlight | Developed technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average estimated useful life of intangible assets acquired (years) | 7 years | ||||||||
Intangible assets | $ 9,335,000 | ||||||||
Noonlight | Forecast | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments for business combination holdback | $ 4,600,000 | ||||||||
Vintra | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire developed technology | $ 5,500,000 | ||||||||
Asset acquisition, consideration transferred, deduction, loan amount | $ 300,000 | ||||||||
Asset acquisition, consideration transferred, holdback amount | 1,000,000 | ||||||||
Transaction costs | $ 400,000 | ||||||||
Asset acquisition consideration | $ 7,100,000 | ||||||||
Weighted-average estimated useful life of intangible assets acquired (years) | 5 years | ||||||||
Consideration transferred, property and equipment | $ 100,000 |
Acquisitions - Noonlight Consid
Acquisitions - Noonlight Consideration Paid and Fair Value of Assets Acquired (Details) - USD ($) $ in Thousands | Sep. 23, 2022 | Sep. 30, 2023 | Dec. 31, 2022 |
Calculation of Purchase Consideration: | |||
Holdback consideration | $ 0 | $ 4,560 | |
Tangible and Intangible Net Assets: | |||
Goodwill | $ 153,847 | $ 148,183 | |
Noonlight | |||
Calculation of Purchase Consideration: | |||
Cash paid, net of working capital adjustment | $ 31,805 | ||
Outstanding principal and interest of loan provided to Noonlight | 1,537 | ||
Holdback consideration | 4,910 | ||
Total consideration | 38,252 | ||
Tangible and Intangible Net Assets: | |||
Cash | 188 | ||
Accounts receivable | 291 | ||
Other current and non-current assets | 200 | ||
Property and equipment | 45 | ||
Deferred tax assets | 424 | ||
Accounts payable | (321) | ||
Accrued expenses and other current liabilities | (318) | ||
Deferred revenue | (67) | ||
Redeemable noncontrolling interest | (6,770) | ||
Goodwill | 35,095 | ||
Total tangible and intangible net assets | 38,252 | ||
Noonlight | Developed technology | |||
Tangible and Intangible Net Assets: | |||
Intangible assets acquired | 9,335 | ||
Noonlight | Trade Name | |||
Tangible and Intangible Net Assets: | |||
Intangible assets acquired | $ 150 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 148,183 |
Goodwill acquired | 7,200 |
Measurement period adjustments | (1,509) |
Foreign currency translation adjustment | (27) |
Ending balance | 153,847 |
Alarm.com | |
Goodwill [Roll Forward] | |
Beginning balance | 148,183 |
Goodwill acquired | 7,200 |
Measurement period adjustments | (1,509) |
Foreign currency translation adjustment | (27) |
Ending balance | 153,847 |
Other | |
Goodwill [Roll Forward] | |
Beginning balance | 0 |
Goodwill acquired | 0 |
Measurement period adjustments | 0 |
Foreign currency translation adjustment | 0 |
Ending balance | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jan. 18, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill acquired | $ 7,200,000 | ||||
Amortization | $ 5,600,000 | $ 4,600,000 | 14,872,000 | $ 13,700,000 | |
Impairment of long-lived assets | $ 0 | $ 0 | 0 | 0 | |
Alarm.com | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill acquired | $ 7,200,000 | ||||
Intangible assets written off | $ 700,000 | ||||
EBS | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Percentage of business acquired | 100% | ||||
EBS | Alarm.com | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill acquired | $ 7,200,000 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Schedule of Net Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | $ 82,458 | |||
Intangible assets acquired | 14,515 | |||
Capitalized software development costs | 397 | |||
Amortization | $ (5,600) | $ (4,600) | (14,872) | $ (13,700) |
Ending balance | 82,498 | 82,498 | ||
Customer Relationships | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 47,522 | |||
Intangible assets acquired | 2,395 | |||
Capitalized software development costs | 0 | |||
Amortization | (8,141) | |||
Ending balance | 41,776 | 41,776 | ||
Developed Technology | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 33,553 | |||
Intangible assets acquired | 11,583 | |||
Capitalized software development costs | 0 | |||
Amortization | (6,168) | |||
Ending balance | 38,968 | 38,968 | ||
Trade Name | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 1,383 | |||
Intangible assets acquired | 537 | |||
Capitalized software development costs | 0 | |||
Amortization | (563) | |||
Ending balance | 1,357 | 1,357 | ||
Capitalized Software Development Costs | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 0 | |||
Intangible assets acquired | 0 | |||
Capitalized software development costs | 397 | |||
Amortization | 0 | |||
Ending balance | $ 397 | $ 397 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Weighted Average Remaining Life and Carrying Value of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 203,212 | $ 188,300 |
Accumulated Amortization | (120,714) | (105,842) |
Net Carrying Value | $ 82,498 | $ 82,458 |
Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 5 years 7 months 6 days | 6 years 6 months |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 128,280 | $ 125,885 |
Accumulated Amortization | (86,504) | (78,363) |
Net Carrying Value | $ 41,776 | $ 47,522 |
Customer Relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 6 years 4 months 24 days | 7 years |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 70,061 | $ 58,478 |
Accumulated Amortization | (31,093) | (24,925) |
Net Carrying Value | $ 38,968 | $ 33,553 |
Developed Technology | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 5 years | 5 years 9 months 18 days |
Trade Name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,474 | $ 3,937 |
Accumulated Amortization | (3,117) | (2,554) |
Net Carrying Value | $ 1,357 | $ 1,383 |
Trade Name | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 2 years 8 months 12 days | 2 years 4 months 24 days |
Capitalized Software Development Costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 397 | |
Accumulated Amortization | 0 | |
Net Carrying Value | $ 397 | $ 0 |
Capitalized Software Development Costs | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 3 years |
Other Assets - Loan to a Distri
Other Assets - Loan to a Distribution Partner (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Revenue from distribution partners | $ 221,854 | $ 216,138 | $ 655,445 | $ 634,420 | |
Distribution Partner Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt instrument, interest rate | 12% | ||||
Distribution Partners Two and Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Revenue from distribution partners | 900 | $ 800 | 2,500 | $ 2,300 | |
Other Assets | Distribution Partner Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivable, noncurrent | $ 4,400 | $ 4,400 | $ 4,000 |
Other Assets - Loan to a Servic
Other Assets - Loan to a Service Provider Partner (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jul. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total revenue | $ 221,854 | $ 216,138 | $ 655,445 | $ 634,420 | ||
Service Provider | Loan Receivables | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Notes receivable, maximum available | $ 2,500 | |||||
Debt instrument, interest rate | 9% | |||||
Loan balance | 1,100 | 1,100 | $ 1,100 | |||
Total revenue | $ 100 | $ 100 | $ 100 | $ 100 |
Other Assets - Loan to a Techno
Other Assets - Loan to a Technology Partner (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total revenue | $ 221,854,000 | $ 216,138,000 | $ 655,445,000 | $ 634,420,000 | ||
Technology Partner Two | Loans Receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loan balance | 1,500,000 | 1,500,000 | $ 1,500,000 | $ 1,500,000 | ||
Debt instrument, interest rate | 6.50% | |||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Other Assets - Investment in a
Other Assets - Investment in a Hardware Supplier (Details) - Hardware Supplier - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Conversion of outstanding notes receivable | $ 5.6 | $ 5.6 | $ 5.6 |
Conversion of outstanding notes receivable (in shares) | 9,520,832 |
Other Assets - Investments in a
Other Assets - Investments in a Technology Partner (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash purchase of shares | $ 200 | $ 0 | ||
Technology Partner | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash purchase of shares | $ 5,000 | |||
Investment | $ 5,700 | 5,700 | ||
Technology Partner | Series B-2 Preferred Stock | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Shares purchased (in shares) | 1,000,000 | |||
Technology Partner Three | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash purchase of shares | 5,100 | |||
Investment | $ 5,100 | $ 5,100 | ||
Technology Partner Three | Series A Preferred Stock | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Shares purchased (in shares) | 4,231,717 |
Other Assets - Allowance For Cr
Other Assets - Allowance For Credit Losses Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) portfolio_segment | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) portfolio_segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Financing Receivable, Nonaccrual [Line Items] | |||||
Number of portfolio segments | portfolio_segment | 2 | 2 | |||
Interest income recognized for notes receivables in nonaccrual status | $ 0 | $ 0 | $ 0 | $ 0 | |
Prepaid expense | 17,400,000 | 17,400,000 | $ 14,500,000 | ||
Other Current Assets and Other Assets | |||||
Financing Receivable, Nonaccrual [Line Items] | |||||
Interest receivable less than | 100,000 | 100,000 | 100,000 | ||
Hardware Financing Receivables | |||||
Financing Receivable, Nonaccrual [Line Items] | |||||
Loan balance | 0 | 0 | 0 | ||
Notes Receivable | |||||
Financing Receivable, Nonaccrual [Line Items] | |||||
Nonaccrual notes receivable without related allowance for credit loss | 0 | 0 | 0 | ||
Notes receivable 90 days or more past due still accruing | $ 0 | $ 0 | $ 0 |
Other Assets - Schedule of Note
Other Assets - Schedule of Notes Receivable Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Recovery of / (provision for) expected credit losses | $ 0 | $ 77 | ||
Loan Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning of period balance | $ (2) | $ (2) | (2) | (79) |
Recovery of / (provision for) expected credit losses | 0 | (1) | 0 | 76 |
Write-offs | 0 | 0 | 0 | 0 |
End of period balance | (2) | (3) | (2) | (3) |
Hardware Financing Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning of period balance | 0 | 0 | 0 | (1) |
Recovery of / (provision for) expected credit losses | 0 | 0 | 0 | 1 |
Write-offs | 0 | 0 | 0 | 0 |
End of period balance | $ 0 | $ 0 | $ 0 | $ 0 |
Other Assets - Credit Quality I
Other Assets - Credit Quality Indicators (Details) - Loan Receivables - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated in fiscal year | $ 0 | $ 1,500 |
Originated one year before fiscal year | 1,500 | 0 |
Originated two years before fiscal year | 0 | 1,093 |
Originated three years before fiscal year | 1,053 | 1 |
Originated four years before fiscal year | 0 | 0 |
Prior | 4,389 | 4,015 |
Total | 6,942 | 6,609 |
Current | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated in fiscal year | 0 | 1,500 |
Originated one year before fiscal year | 1,500 | 0 |
Originated two years before fiscal year | 0 | 1,093 |
Originated three years before fiscal year | 1,053 | 1 |
Originated four years before fiscal year | 0 | 0 |
Prior | 4,389 | 4,015 |
Total | 6,942 | 6,609 |
30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated in fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated in fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
90-119 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated in fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
120+ days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated in fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability from acquisition | $ 2,016 | $ 0 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 658,036 | 510,326 |
Contingent consideration liability from acquisition | 2,016 | 0 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 658,036 | 510,326 |
Contingent consideration liability from acquisition | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 0 | 0 |
Contingent consideration liability from acquisition | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 0 | 0 |
Contingent consideration liability from acquisition | $ 2,016 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Level 3 Subsidiary Unit Awards and Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Contingent Consideration Liability From Acquisitions | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning of period balance | $ 2,020 | $ 0 | ||
Acquired liabilities | 0 | 1,993 | ||
Changes in fair value included in earnings | (4) | 23 | ||
Reclassification to additional paid in capital upon modification | 0 | 0 | ||
End of period balance | $ 2,016 | $ 2,016 | ||
Subsidiary Long-Term Incentive Plan | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning of period balance | $ 0 | $ 3,351 | ||
Acquired liabilities | 0 | 0 | ||
Changes in fair value included in earnings | 0 | (247) | ||
Reclassification to additional paid in capital upon modification | 0 | (3,104) | ||
End of period balance | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | ||||
Jun. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Jan. 18, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Cash and cash equivalents | $ 679,969 | $ 622,165 | $ 621,347 | ||
Other assets | 34,481 | 37,356 | |||
Reclassification of subsidiary long-term incentive plan liability related to modification | $ 3,104 | ||||
Incremental compensation cost | $ 1,200 | ||||
Contingent consideration liability from acquisition | $ 2,016 | 0 | |||
Expected Achievement | Weighted Average | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Measurement input | 0.895 | ||||
Expected Achievement | Minimum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Measurement input | 0.800 | ||||
Expected Achievement | Maximum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Measurement input | 0.990 | ||||
Discount Rate | Weighted Average | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Measurement input | 0.069 | ||||
Discount Rate | Minimum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Measurement input | 0.068 | ||||
Discount Rate | Maximum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Measurement input | 0.069 | ||||
EBS | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Percentage of business acquired | 100% | ||||
Additional earn-out | $ 2,500 | ||||
Contingent consideration liability from acquisition | $ 2,000 | ||||
Money market accounts | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Cash and cash equivalents | $ 656,100 | 509,600 | |||
Other assets | $ 1,900 | $ 700 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
Available leasehold tenant improvement allowance | $ 12,100,000 | |
Finance leases | 0 | $ 0 |
Subleases | $ 0 | $ 0 |
Five Year Renewal Option | ||
Lessee, Lease, Description [Line Items] | ||
Lease renewal term | 5 years |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||||
Operating lease cost | $ 2,919 | $ 2,702 | $ 8,540 | $ 7,767 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 3,533 | 3,290 | 10,329 | 9,390 | |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,214 | $ 1,415 | $ 5,329 | $ 7,127 | |
Weighted-average remaining lease term — operating leases | 3 years 2 months 12 days | 3 years 2 months 12 days | 3 years 4 months 24 days | ||
Weighted-average discount rate — operating leases | 4.60% | 4.60% | 3.90% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) | Sep. 30, 2023 USD ($) |
Maturities of Lease Liabilities Under Topic 842 | |
Remainder of 2023 | $ 3,732,000 |
2024 | 13,736,000 |
2025 | 11,601,000 |
2026 | 6,962,000 |
2027 | 1,610,000 |
2028 and thereafter | 2,386,000 |
Total lease payments | 40,027,000 |
Less: imputed interest | 4,244,000 |
Present value of lease liabilities | 35,783,000 |
Legally binding minimum lease payments on leases not yet commenced | 5,100,000 |
Amount for options to extend lease | $ 0 |
Liabilities - Components of Acc
Liabilities - Components of Accounts Payable, Accrued Expenses, and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 52,806 | $ 53,121 |
Accrued expenses | 18,342 | 17,539 |
Income taxes payable | 36,114 | 43,576 |
Holdback liability from business combinations and asset acquisitions | 7,340 | 0 |
Other current liabilities | 7,950 | 5,421 |
Accounts payable, accrued expenses and other current liabilities | $ 122,552 | $ 119,657 |
Liabilities - Other Liabilities
Liabilities - Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Holdback liability from business combination | $ 0 | $ 4,560 |
Contingent consideration liability from acquisition | 2,016 | 0 |
Other liabilities | 11,049 | 8,490 |
Other liabilities | $ 13,065 | $ 13,050 |
Debt, Commitments and Conting_3
Debt, Commitments and Contingencies - Convertible Senior Notes (Details) | Jan. 20, 2021 USD ($) day $ / shares | Sep. 30, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |||
Share price (in dollars per share) | $ / shares | $ 61.14 | ||
Convertible Senior Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Proceeds from convertible debt | $ | $ 484,300,000 | ||
Debt issuance costs | $ | $ 15,700,000 | ||
Debt instrument, redemption price, percentage | 100% | ||
Conversion ratio | 0.0067939 | ||
Conversion price (in dollars per share) | $ / shares | $ 147.19 | ||
Convertible Senior Notes due 2026 | Redemption period one | |||
Debt Instrument [Line Items] | |||
Debt instrument, redemption price, percentage | 100% | ||
Threshold percentage stock price trigger | 130% | ||
Trading days threshold | 20 | ||
Consecutive trading days threshold | 30 | ||
Convertible Senior Notes due 2026 | Redemption period two | |||
Debt Instrument [Line Items] | |||
Threshold percentage stock price trigger | 130% | ||
Trading days threshold | 20 | ||
Consecutive trading days threshold | 30 | ||
Number of business days | 5 | ||
Number of consecutive trading days | 10 | ||
Percentage of last reported sale price threshold | 98% | ||
Senior Notes | Convertible Senior Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ | $ 500,000,000 | $ 500,000,000 | |
Debt instrument, interest rate | 0% | ||
Effective interest rate | 0.60% | ||
Debt instrument, fair value | $ | $ 434,300,000 | $ 411,500,000 | |
Line of Credit | 2017 Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ | $ 110,000,000 |
Debt, Commitments and Conting_4
Debt, Commitments and Contingencies - Carrying Amount of Liability Component (Details) - Convertible Senior Notes due 2026 - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Principal | $ 500,000 | $ 500,000 |
Unamortized debt issuance costs | (7,273) | (9,630) |
Net carrying amount | $ 492,727 | $ 490,370 |
Debt, Commitments and Conting_5
Debt, Commitments and Contingencies - Summary of Interest Expense (Details) - Convertible Senior Notes due 2026 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs | $ 787 | $ 782 | $ 2,357 | $ 2,342 |
Total interest expense | $ 787 | $ 782 | $ 2,357 | $ 2,342 |
Debt, Commitments and Conting_6
Debt, Commitments and Contingencies - Acquired Debt - EBS (Details) - EBS - USD ($) | Sep. 30, 2023 | Jan. 18, 2023 |
Business Acquisition [Line Items] | ||
Percentage of business acquired | 100% | |
Outstanding debt amount | $ 2,900,000 | |
Short-term debt | $ 0 |
Debt, Commitments and Conting_7
Debt, Commitments and Contingencies - Legal Proceedings (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 36 Months Ended | |||||||||||||
Oct. 03, 2023 case | Mar. 08, 2023 patent | Jan. 04, 2023 patent | Mar. 22, 2022 patent | Jan. 10, 2022 patent | Jul. 28, 2021 patent | Jul. 22, 2021 patent | Feb. 25, 2021 patent | Jun. 02, 2015 patent | Oct. 31, 2019 patent | Mar. 31, 2023 patent | Sep. 30, 2023 USD ($) patent claim | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Apr. 18, 2023 patent | Sep. 30, 2023 patent claim | Sep. 30, 2023 USD ($) patent claim | Sep. 30, 2022 USD ($) | Dec. 31, 2019 patent | |
Loss Contingencies [Line Items] | |||||||||||||||||||
Total revenue | $ | $ (221,854) | $ (216,138) | $ (655,445) | $ (634,420) | |||||||||||||||
Net income | $ | (19,351) | (18,110) | (49,169) | (37,841) | |||||||||||||||
SaaS and License | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Total revenue | $ | $ (145,027) | $ (133,126) | $ (420,853) | $ (385,826) | |||||||||||||||
Vivint, Inc. vs. Alarm.com Holdings, Inc | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Patent lawsuit dismissed | 1 | ||||||||||||||||||
IOT Innovations LLC vs Monitronics International, Inc. | Subsequent Event | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of cases dismissed | case | 3 | ||||||||||||||||||
Pending Litigation | SaaS and License | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Total revenue | $ | $ 6,000 | ||||||||||||||||||
Net income | $ | $ 6,000 | ||||||||||||||||||
Pending Litigation | Vivint, Inc. vs. Alarm.com Holdings, Inc | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 14 | 15 | 6 | 14 | |||||||||||||||
Number of patents found to be unpatentable | 5 | ||||||||||||||||||
Number of patents allegedly infringed by elements in solution | 1 | ||||||||||||||||||
Pending Litigation | 3 Patents | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents found to be unpatentable | 3 | ||||||||||||||||||
Number of claims | claim | 7 | 7 | 7 | ||||||||||||||||
Pending Litigation | 4th Patent | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of claims | 6 | 6 | 6 | ||||||||||||||||
Pending Litigation | EcoFactor, Inc. vs. Alarm.com Holdings, Inc. | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 5 | 2 | |||||||||||||||||
Number of patents under ex parte reexamination | 4 | ||||||||||||||||||
Pending Litigation | Causam Enterprises, Inc vs Alarm.com Holdings, Inc | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 4 | ||||||||||||||||||
Pending Litigation | Causam Enterprises, Inc vs Alarm.com Holdings, Inc and EnergyHub, Inc | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 4 | ||||||||||||||||||
Pending Litigation | Vivint, Inc vs ADT LLC | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 5 | ||||||||||||||||||
Number of patents found to be unpatentable | 2 | ||||||||||||||||||
Patents under inter partes review | 2 | ||||||||||||||||||
Pending Litigation | Vivint, Inc vs ADT LLC | Minimum | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 1 | ||||||||||||||||||
Pending Litigation | IOT Innovations LLC vs Monitronics International, Inc. | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed upon by the company | 26 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Feb. 15, 2023 | Dec. 03, 2020 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | |||||||||
Purchases of treasury stock | $ 6,128,000 | $ 6,726,000 | $ 367,000 | $ 28,168,000 | $ 23,331,000 | ||||
December 2020 Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Authorized repurchase amount | $ 100,000,000 | ||||||||
Stock repurchase program, period | 3 years | ||||||||
Purchases of treasury stock (in shares) | 0 | 5,595 | 0 | 840,249 | |||||
Purchases of treasury stock | $ 400,000 | $ 51,900,000 | |||||||
February 2023 Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Authorized repurchase amount | $ 100,000,000 | ||||||||
Stock repurchase program, period | 2 years | ||||||||
Purchases of treasury stock (in shares) | 105,285 | 239,540 | |||||||
Purchases of treasury stock | $ 6,200,000 | $ 12,900,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 11,806 | $ 13,154 | $ 36,423 | $ 38,053 |
Tax (shortfall) / windfall benefit from stock-based awards | (111) | 916 | (802) | 1,949 |
Stock options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,133 | 1,015 | 3,116 | 2,742 |
Restricted stock units | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 10,629 | 12,087 | 33,170 | 35,165 |
Employee stock purchase plan | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 44 | 52 | 137 | 146 |
Cost of hardware and other revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 3 | 0 | 3 | 0 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 854 | 983 | 2,778 | 3,481 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 3,260 | 3,953 | 9,873 | 11,135 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 7,689 | $ 8,218 | $ 23,769 | $ 23,437 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options exercised (in shares) | 38,044 | 62,324 | 121,179 | 101,586 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock units granted (in shares) | 117,025 | 229,400 | 303,422 | 819,824 |
Restricted stock units vested (in shares) | 112,310 | 75,452 | 506,260 | 312,947 |
Performance-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock units granted (in shares) | 0 | 96,289 | 0 | 168,223 |
Restricted stock units vested (in shares) | 0 | 0 | 39,406 | 0 |
2015 Equity Incentive Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted (in shares) | 4,500 | 87,000 | 197,900 | 182,000 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 19,351 | $ 18,110 | $ 49,169 | $ 37,841 |
Net loss attributable to redeemable noncontrolling interests | 173 | 222 | 570 | 412 |
Net income attributable to common stockholders | 19,524 | 18,332 | 49,739 | 38,253 |
Add back interest expense, net of tax, attributable to convertible senior notes | 593 | 588 | 1,774 | 1,761 |
Net income attributable to common stockholders - diluted | $ 20,117 | $ 18,920 | $ 51,513 | $ 40,014 |
Weighted average common shares outstanding - basic (in shares) | 49,917,533 | 49,791,465 | 49,782,571 | 49,974,925 |
Dilutive effect of convertible senior notes, stock options and restricted stock units (in shares) | 4,861,260 | 5,041,063 | 4,806,255 | 5,013,095 |
Weighted average common shares outstanding - diluted (in shares) | 54,778,793 | 54,832,528 | 54,588,826 | 54,988,020 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.39 | $ 0.37 | $ 1 | $ 0.77 |
Diluted (in dollars per share) | $ 0.37 | $ 0.35 | $ 0.94 | $ 0.73 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 23, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Dilutive effect of convertible senior notes (in shares) | 4,861,260 | 5,041,063 | 4,806,255 | 5,013,095 | |
Debt issuance cost amortization included | $ 593 | $ 588 | $ 1,774 | $ 1,761 | |
Convertible Senior Notes due 2026 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Dilutive effect of convertible senior notes (in shares) | 3,396,950 | 3,396,950 | 3,396,950 | 3,396,950 | |
Stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 587,476 | 346,283 | 587,476 | 396,742 | |
Restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 36,000 | 128,675 | 87,425 | 248,792 | |
OpenEye | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Percentage of business acquired | 86% | 86% | |||
Noonlight | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Percentage of business acquired | 85% | 85% | 85% |
Significant Service Providers_2
Significant Service Providers and Distributors (Details) - Service Provider Concentration Risk - Revenue | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Ten Largest Service Providers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 49% | 52% | 50% | 49% |
Minimum | Service Provider A | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 15% | 15% | 15% | 15% |
Maximum | Service Provider A | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 20% | 20% | 20% | 20% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||||
Provision (benefit) for income taxes | $ 3,972 | $ 246 | $ 9,257 | $ 472 | |
Effective income tax rate (percent) | 17% | 1.30% | 15.80% | 1.20% | |
Accrued interest and penalties related to unrecognized tax benefits | $ 300 | $ 300 | $ 300 | ||
State Research Tax Credit Carryforward | |||||
Operating Loss Carryforwards [Line Items] | |||||
Valuation allowance | $ 2,900 | 2,900 | $ 2,600 | ||
Research Tax Credit Carryforward | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits | $ 1,100 | $ 2,100 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Total revenue | $ 221,854,000 | $ 216,138,000 | $ 655,445,000 | $ 634,420,000 | |
Operating income / (loss) | 16,171,000 | 16,316,000 | 41,149,000 | 36,565,000 | |
Total assets | 1,411,497,000 | 1,411,497,000 | $ 1,329,375,000 | ||
Amortization and depreciation | 7,948,000 | 7,587,000 | 23,481,000 | 23,123,000 | |
Operating Segments | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 207,047,000 | 204,855,000 | 616,580,000 | 602,710,000 | |
Operating income / (loss) | 18,929,000 | 20,874,000 | 52,761,000 | 50,545,000 | |
Total assets | 1,457,416,000 | 1,457,416,000 | 1,366,343,000 | ||
Amortization and depreciation | 7,700,000 | 7,300,000 | 22,700,000 | 22,200,000 | |
Additions to property and equipment | 2,100,000 | 1,900,000 | 7,900,000 | 27,600,000 | |
Operating Segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 16,001,000 | 12,447,000 | 42,000,000 | 35,629,000 | |
Operating income / (loss) | (3,270,000) | (4,738,000) | (12,340,000) | (14,467,000) | |
Total assets | 46,326,000 | 46,326,000 | 53,927,000 | ||
Amortization and depreciation | 200,000 | 300,000 | 800,000 | 900,000 | |
Additions to property and equipment | 100,000 | 100,000 | 200,000 | 200,000 | |
Intersegment Eliminations | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | (1,021,000) | (1,059,000) | (2,678,000) | (3,302,000) | |
Operating income / (loss) | 406,000 | 105,000 | 453,000 | 459,000 | |
Total assets | (92,247,000) | (92,247,000) | (90,929,000) | ||
Intersegment Eliminations | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | (173,000) | (105,000) | (457,000) | (617,000) | |
Operating income / (loss) | 106,000 | $ 75,000 | 275,000 | $ 28,000 | |
Total assets | $ 2,000 | $ 2,000 | $ 34,000 | ||
Segment Concentration Risk | Revenue | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk percentage | 93% | 94% | 94% | 94% | |
SaaS and license revenue | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 145,027,000 | $ 133,126,000 | $ 420,853,000 | $ 385,826,000 | |
SaaS and license revenue | Operating Segments | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 130,711,000 | 122,555,000 | 384,116,000 | 357,031,000 | |
SaaS and license revenue | Operating Segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 14,316,000 | 10,571,000 | 36,737,000 | 28,795,000 | |
SaaS and license revenue | Intersegment Eliminations | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
SaaS and license revenue | Intersegment Eliminations | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
Hardware and other revenue | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 76,827,000 | 83,012,000 | 234,592,000 | 248,594,000 | |
Hardware and other revenue | Operating Segments | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 76,336,000 | 82,300,000 | 232,464,000 | 245,679,000 | |
Hardware and other revenue | Operating Segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 1,685,000 | 1,876,000 | 5,263,000 | 6,834,000 | |
Hardware and other revenue | Intersegment Eliminations | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | (1,021,000) | (1,059,000) | (2,678,000) | (3,302,000) | |
Hardware and other revenue | Intersegment Eliminations | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | (173,000) | (105,000) | (457,000) | (617,000) | |
Software License Revenue | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 5,700,000 | 6,500,000 | 17,800,000 | 20,500,000 | |
Software License Revenue | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Uncategorized Items - alrm-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |