Alarm.com Holdings, Inc. Net Income surged on 45.4% while EBITDA Margin decreased on 2.4 pp from 16.1% to 13.7%
02/25/2021 • About Alarm.com Holdings, Inc. (
$ALRM) • By InTwits
Alarm.com Holdings, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Alarm.com Holdings, Inc. is a fast growth stock: 2020 revenue growth was 23.0%, 5 year revenue CAGR was 24.2% at 2020 ROIC 10.3%
- Alarm.com Holdings, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 3.2%
- CAPEX is quite volatile: $16m in 2020, $19m in 2019, $0m in 2018, $10m in 2017, $9m in 2016
- The company has business model with average profitability: ROIC is 10.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 23.0%. Revenue growth showed slowdown in 20Q4 - it was 17.9% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 16.1% to 13.7% in 2020.
Gross Margin showed almost no change in 2020. During 2016-2020 Gross Margin topped in 2017 at 65.7% and was declining since that time. SG&A as a % of Revenue decreased slightly on 1.2 pp from 26.2% to 25.0% in 2020.
Net Income margin increased slightly on 1.9 pp from 10.7% to 12.6% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 Alarm.com Holdings, Inc. had CAPEX/Revenue of 2.6%. Alarm.com Holdings, Inc. showed almost no change in CAPEX/Revenue from 2017 to 2020.
Return on investment
The company operates at good ROE (18.9%) while ROIC is low (10.3%). ROIC decreased on 2.7 pp from 13.0% to 10.3% in 2020. ROE increased on 2.0 pp from 16.9% to 18.9% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.1x and Debt / EBITDA is 1.9x. Debt surged on 46.2% while cash jumped on 112%.
Alarm.com Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (2,541.5%).
Valuation and dividends
Alarm.com Holdings, Inc.'s trades at EV/EBITDA 47.9x and P/E 53.3x.
Management team
Alarm.com Holdings, Inc.'s CEO Stephen S Trundle "Steve" has spent 17 years with the company. Alarm.com Holdings, Inc.'s CFO Steve Valenzuela has spent 4 years with the company.
Financial and operational results
FY ended 12/31/2020
Alarm.com Holdings, Inc. ($ALRM) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 261.1 | 338.9 | 420.5 | 502.4 | 618.0 | 23.0% |
| Gross Profit | 161.7 | 222.7 | 274.8 | 318.8 | 390.6 | 22.5% |
| SG&A | 96.9 | 98.9 | 151.7 | 131.8 | 154.6 | 17.3% |
| EBITDA | 21.3 | 52.1 | 34.8 | 80.8 | 84.7 | 4.8% |
| EBIT | 14.1 | 33.4 | 12.2 | | | |
| Interest expence | 0.2 | | 2.9 | | | |
| Tax | 4.2 | 3.0 | -9.8 | | | |
| Net Income | 10.2 | 29.3 | 21.5 | 53.5 | 77.9 | 45.4% |
| Stock Based Compensation | 4.0 | 7.4 | 13.4 | | | |
Balance Sheet
|
|---|
| Cash | 140.6 | 96.3 | 146.1 | 119.6 | 253.5 | 111.9% |
| Accounts Receivable | 29.8 | 40.6 | 49.5 | | | |
| Inventory | 10.5 | 14.2 | 23.0 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 7.7 | 10.0 | 29.8% |
| Long Term Debt | 6.7 | 71.0 | 67.0 | 100.2 | 147.7 | 47.4% |
Cash flow
|
|---|
| Capex | 9.1 | 10.5 | 0.0 | 19.3 | 16.1 | -16.5% |
| Acquisitions | | 154.3 | | | | |
Ratios
|
|---|
| Revenue growth | 25.0% | 29.8% | 24.1% | 19.5% | 23.0% | |
| EBITDA growth | -11.8% | 144.1% | -33.1% | 132.2% | 4.8% | |
|
|---|
| Gross Margin | 61.9% | 65.7% | 65.3% | 63.5% | 63.2% | -0.3% |
| EBITDA Margin | 8.2% | 15.4% | 8.3% | 16.1% | 13.7% | -2.4% |
| EBIT Margin | 5.4% | 9.8% | 2.9% | | |
| SG&A, % of revenue | 37.1% | 29.2% | 36.1% | 26.2% | 25.0% | -1.2% |
| SBC, % of revenue | 1.5% | 2.2% | 3.2% | | |
| Net Income Margin | 3.9% | 8.6% | 5.1% | 10.7% | 12.6% | 1.9% |
| CAPEX, % of revenue | 3.5% | 3.1% | 0.0% | 3.8% | 2.6% | -1.2% |
|
|---|
| ROIC | 8.1% | 14.2% | 4.0% | 13.0% | 10.3% | -2.7% |
| ROE | 5.6% | 13.8% | 8.4% | 16.9% | 18.9% | 2.0% |
| Net Debt/EBITDA | -6.3x | -0.5x | -2.3x | -0.1x | -1.1x | -1.0x |
| Interest expence / Average debt | 2.8% | | 4.2% | | | |
People
|
|---|
| Insider ownership | 7.3% | 7.3% | 7.3% | | | |
| Employees | 607 | 784 | 844 | | | |
| Revenue/Employee, th. $ | 430 | 432 | 498 | | | |
Alarm.com Holdings, Inc. ($ALRM) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 152 | 142 | 159 | 166 | | 35.3% | 16.4% | 24.2% | 17.9% |
| EBITDA | 19 | 24 | 27 | 21 | | 12.9% | 13.8% | 39.0% | -9.9% |
| Net Income | 9 | 17 | 36 | 16 | | -2.3% | 23.2% | 104.0% | 22.5% |
Balance Sheet
|
|---|
| Cash | 172 | 206 | 247 | 253 | | 40.3% | 36.4% | 50.4% | 111.9% |
| Short Term Debt | 9 | 9 | 9 | 10 | | 41.4% | 40.4% | 41.7% | 29.8% |
| Long Term Debt | 153 | 150 | 150 | 148 | | 49.8% | 49.7% | 50.7% | 47.4% |
Ratios
|
|---|
| Gross Margin | 61.8% | 65.4% | 61.5% | 64.2% | | -3.5% | 2.0% | -1.4% | 1.6% |
| EBITDA Margin | 12.2% | 17.0% | 17.3% | 12.8% | | -2.4% | -0.4% | 1.8% | -3.9% |
| Net Income Margin | 5.8% | 12.0% | 22.7% | 9.6% | | -2.2% | 0.7% | 8.9% | 0.4% |
Peers in Application Software
Below we provide Alarm.com Holdings, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.5% |
|---|
| Alarm.com Holdings, Inc. ($ALRM) | - | 29.8% | 24.1% | 19.5% | 23.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.4% | 66.0% | 68.4% | 70.6% |
|---|
| Alarm.com Holdings, Inc. ($ALRM) | 61.9% | 65.7% | 65.3% | 63.5% | 63.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| Alarm.com Holdings, Inc. ($ALRM) | 8.2% | 15.4% | 8.3% | 16.1% | 13.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 2.9% | 2.5% |
|---|
| Alarm.com Holdings, Inc. ($ALRM) | 3.5% | 3.1% | 0.0% | 3.8% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| Alarm.com Holdings, Inc. ($ALRM) | 8.1% | 14.2% | 4.0% | 13.0% | 10.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.6x | 0.4x | 0.3x |
|---|
| Alarm.com Holdings, Inc. ($ALRM) | -6.3x | -0.5x | -2.3x | -0.1x | -1.1x |
