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Why Shares of Jumped Today

By Timothy Green - Aug 8, 2018 at 5:29PM

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While growth is slowing down, the company still beat expectations an all fronts.

What happened

Shares of smart-home software company (ALRM 0.38%) rose on Wednesday following a strong second-quarter report. beat analyst estimates for both revenue and earnings, and it raised its guidance for the full year. The stock had gained 7.3% by market close, but it was up as much as 17% earlier in the day.

So what reported second-quarter revenue of $104.5 million, up 21.5% year over year and about $9.8 million above the average analyst estimate. Software-as-a-Service (SaaS) and software license revenue rose 20.4% to $71.0 million.

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Non-GAAP earnings per share came in at $0.34, up from $0.22 in the prior-year period and $0.08 higher than analysts were expecting. Earnings growth came despite increased spending on sales and marketing targeted at growing the for Business offering. expects third-quarter SaaS and license revenue between $72.2 million and $72.4 million. For the full year, total revenue is expected between $388 million and $390.5 million, along with non-GAAP earnings per share (EPS) between $1.19 and $1.20. Both represent increases over the company's previous guidance ranges.

Now what

While expects to grow revenue by about 15% this year, a significant slowdown, new initiatives could help win new customers. The Builder Program is targeted at pairing up home builders and the company's service provider partners. And for Business looks to move beyond residential customers.

While 15% revenue growth isn't as impressive as the typical numbers puts up, the company's results and guidance were good enough to push up the stock.

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Alarm.Com Holdings, Inc. Stock Quote
Alarm.Com Holdings, Inc.
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