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Revenue continued to grow at a steady pace during the first quarter, and a combination of higher margin and a lower tax rate led to a big increase in profit.
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Connected-home platform provider Alarm.com (ALRM +0.00%) reported its first-quarter results after the market closed on May 9. Revenue growth accelerated a bit from the fourth quarter, and profitability improved dramatically. The acquisition of the Connect and Piper business units provided a boost to the numbers, and the company slightly raised its guidance for the full year. Here's what investors need to know about Alarm.com's first-quarter results.
|
Metric |
Q1 2017 |
Q1 2016 |
Change (YOY) |
|---|---|---|---|
|
Revenue |
$74.2 million |
$59.0 million |
25.7% |
|
Net income |
$3.96 million |
$2.73 million |
45.1% |
|
Non-GAAP EPS |
$0.23 |
$0.13 |
76.9% |
Data source: Alarm.com.
Image source: Alarm.com.
Profitability improved as software-as-a-service (SaaS) and license revenue surged.
Alarm.com provided the following guidance for the second quarter and the full year:
Alarm.com President and CEO Steve Trundle discussed the company's progress during the quarter: "We're off to a solid start in 2017, with continued growth in SaaS and license revenue and increased profitability. Our service provider partners continue to lead the security industry's transformation from traditional service to higher-value interactive solutions, and we announced new product initiatives to help them deliver a best-in-class experience to their customers."
The company outlined some new features that were added to its mobile app for service provider partners during the quarter:
MobileTech, Alarm.com's installation and support app for technicians, includes new features to help ensure accurate and reliable installations and rapid troubleshooting. The new design is optimized to surface commands based on the device being installed for simpler navigation and feature access. New capabilities include account setup and device enrollment features, full access to security panel settings, and a comprehensive system diagnostics capability that identifies potential trouble conditions so they can be proactively addressed during the installation process.
Solid revenue growth continued for Alarm.com during the first quarter, along with a substantial improvement in profitability. The big driver of the bottom-line increase, however, was a lower tax rate; GAAP operating income was up just 5.3% year over year.
Alarm.com boosted its full-year guidance slightly, compared with its previous outlook. The new guidance calls for revenue growth of about 24% this year, just a touch lower than its first-quarter growth rate. The company's strategy of partnering with service providers has been successful so far, and Alarm.com will continue to leverage those relationships to grow revenue going forward.