Stay-at-Home Trends Drove Alarm.com Q1 Subscription Growth
Momentum in the North American market drove a 13.5% increase in Alarm.com Q1 revenue to $172.5 million, the company reported. Software-as-a-service and license revenue grew 16.8% to $107.4 million. Commercial sales opportunities in the large enterprise segment were below pre-pandemic…
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levels, said CEO Steve Trundle on a Tuesday call; international business is more affected by COVID-19 than the U.S. and Canadian business. Alarm.com expects Q2 SaaS and license revenue to be $108.9 million-$109.1 million, based on higher than expected Q1 revenue due to a higher rate of new subscribers: “We don’t anticipate them going anywhere,” said Trundle. Chief Financial Officer Steve Valenzuela noted video and video analytics attachment rates, over 70%, continued to grow. Customers get a much better experience with intelligence from video alerts, said Trundle. If customers are impressed with technology, and it’s making their lives easier, “I'd like to believe that you're more durable as a customer,” he said. As customers see more areas where they can benefit from smart home -- video or the company’s smart water valve that can detect leaks, for instance -- they become more dependent on it, he said. There’s also the likelihood of customers not being satisfied with their experience, which could have negative results, he said. Ongoing residential momentum in the past couple of quarters is a “positive contribution from COVID,” said Trundle, citing people being at home more and an overall shift to the suburbs. On whether he sees those trends continuing, he said it could be that the shift to more homeownership and a shift out of urban centers will be an ongoing trend for five years or more, “but we just don't know for sure.” Alarm.com’s Florida service providers say business is “popping” and they can’t keep up, said Trundle. Though there’s some migration to there, most new business is from suburban customers who have left urban locations, he said.