What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-09 · 405 added, 203 removed, 755 unchanged (45% of the section changed)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

SaaS and license revenue $ 169,993 $ 155,927 $ 333,793 $ 306,271

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Provision for income taxes 5,458 884 12,765 3,631

Income from equity method investments, net ( 316 ) — ( 316 ) —

Net income 34,217 32,520 61,929 55,924

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net income $ 34,217 $ 32,520 $ 61,929 $ 55,924

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Cash and cash equivalents $ 1,024,862 $ 1,220,701

Accounts receivable, net of allowance for credit losses of $ 4,721 and $ 3,870 , and net of allowance for product returns of $ 1,999 and $ 2,448 as of March 31, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 5,142 and $ 3,870 , and net of allowance for product returns of $ 1,890 and $ 2,448 as of June 30, 2025 and December 31, 2024, respectively

122,254 126,082

Inventory 90,027 87,435

Other current assets, net 57,662 47,374

Other current assets, net of allowance for credits losses of $ 749 and $ 0 as of June 30, 2025 and December 31, 2024, respectively

55,413 47,374

Total current assets 1,292,556 1,481,592

4 unchanged sentences

Operating lease right-of-use assets 53,167 53,425

Other assets, net of allowance for credit losses of $ 1 as of March 31, 2025 and December 31, 2024

Investments in unconsolidated entities 198,609 17,170

Other assets, net of allowance for credit losses of $ 1 as of June 30, 2025 and December 31, 2024

42,798 24,162

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Preferred stock, $ 0.001 par value, 10,000,000 shares authorized;

no shares issued and outstanding as of March 31, 2025 and December 31, 2024

no shares issued and outstanding as of June 30, 2025 and December 31, 2024

Common stock, $ 0.01 par value, 300,000,000 shares authorized;

53,146,668 and 52,756,077 shares issued;

and 49,679,679 and 49,618,346 shares outstanding as of March 31, 2025 and December 31, 2024, respectively

and 49,834,537 and 49,618,346 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 537,865 521,192

Treasury stock, at cost;

3,224,131 and 3,137,731 shares as of March 31, 2025 and December 31, 2024, respectively

3,312,131 and 3,137,731 shares as of June 30, 2025 and December 31, 2024, respectively

( 196,458 ) ( 186,291 )

7 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

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Capitalized software development costs ( 758 ) ( 632 )

Purchase of investment in unconsolidated entities ( 3,773 ) —

Purchase of investments in unconsolidated entities ( 174,700 ) ( 2,950 )

Purchases of other intangible assets — ( 45 )

Cash flows used in investing activities ( 232,988 ) ( 9,159 )

Cash flows (used in) / from financing activities:

Proceeds from issuance of convertible senior notes — 500,000

Payments of debt issuance costs — ( 13,946 )

Purchases of capped calls related to convertible senior notes — ( 63,050 )

Payments of deferred consideration for acquisitions ( 1,741 ) ( 4,569 )

Purchases of treasury stock, including transaction costs ( 10,167 ) ( 75,000 )

Payments of tax withholdings related to vesting of restricted stock units — ( 3,401 )

Issuances of common stock from equity-based plans 2,314 6,734

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Balance as of March 31, 2025 $ 52,585 52,904 $ 529 $ 530,528 3,224 $ ( 191,350 ) $ 1,644 $ 418,252 $ 759,603

Common stock issued in connection with equity-based plans — 243 2 729 — — — — 731

Purchase of treasury stock, including transaction costs and excise tax — — — 3 88 ( 5,108 ) — — ( 5,105 )

Stock-based compensation expense — — — 8,943 — — — — 8,943

Accretion adjustments of redeemable noncontrolling interest to redemption value 2,338 — — ( 2,338 ) — — — — ( 2,338 )

Net income / (loss) attributable to common stockholders ( 335 ) — — — — — — 34,552 34,552

Other comprehensive income — — — — — — 959 — 959

Balance as of June 30, 2025 $ 54,588 53,147 $ 531 $ 537,865 3,312 $ ( 196,458 ) $ 2,603 $ 452,804 $ 797,345

ALARM.COM HOLDINGS, INC.

Condensed Consolidated Statements of Equity — (Continued)

(in thousands)

Redeemable Noncontrolling Interests Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income Retained Earnings Total Stockholders’ Equity

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Balance as of March 31, 2024 $ 37,712 52,113 $ 521 $ 547,832 2,021 $ ( 111,291 ) $ 1,251 $ 289,781 $ 728,094

Common stock issued in connection with equity-based plans — 209 2 376 — — — — 378

Purchase of treasury stock, including transaction costs and excise tax — — — ( 559 ) 1,117 ( 75,000 ) — — ( 75,559 )

Tax withholding related to vesting of restricted stock units — — — ( 3,401 ) — — — ( 3,401 )

Stock-based compensation expense — — — 11,250 — — — — 11,250

Accretion adjustments of redeemable noncontrolling interest to redemption value 1,212 — — ( 1,212 ) — — — — ( 1,212 )

Purchases of capped calls related to convertible senior notes, net of tax — — — ( 47,436 ) — — — — ( 47,436 )

Net income / (loss) attributable to common stockholders ( 991 ) — — — — — — 33,511 33,511

Other comprehensive loss — — — — — — ( 156 ) — ( 156 )

Balance as of June 30, 2024 $ 37,933 52,322 $ 523 $ 506,850 3,138 $ ( 186,291 ) $ 1,095 $ 323,292 $ 645,469

See accompanying notes to the condensed consolidated financial statements.

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Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2025 and 2024

June 30, 2025 and 2024

Alarm.com Holdings, Inc.

(referred to herein as Alarm.com, the Company, or we) is the leading platform for the intelligently connected property.

(referred to herein as Alarm.com, the Company, or we) is the leading platform for intelligently connected properties.

Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions addressing global opportunities in the residential, multi-family, small business and enterprise commercial markets.

Alarm.com’s solution suite includes security, video and video analytics, energy management, access control, electric utility grid management, indoor gunshot detection, water management, health and wellness, personal safety and data-rich emergency response.

Alarm.com’s solution suite includes security, video surveillance and video analytics, energy management, access control, electric utility grid management, active shooter detection, water management, health and wellness, personal safety 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.

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It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2025, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2025, 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.

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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, goodwill, intangible assets and other long-lived assets.

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, equity method investments, goodwill, intangible assets and other long-lived assets.

Reclassifications

Certain previously reported amounts in the liabilities footnote for the year ended December 31, 2024 have been reclassified to conform to our current presentation, including the addition of the holdback liability from business combinations and asset acquisitions as a separate line item within the presentation of other liabilities.

Certain previously reported amounts in the condensed consolidated balance sheets for the year ended December 31, 2024 have been reclassified to conform to our current presentation, including the addition of the investments in unconsolidated entities as a separate line item.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

June 30, 2025 and 2024

Significant Accounting Policies

There have been no material changes to our significant accounting policies during the three months ended March 31, 2025 from those disclosed in our Annual Report.

Other than those disclosed herein, there have been no other material changes to our significant accounting policies during the three and six months ended June 30, 2025 from those disclosed in our Annual Report.

Equity Method Investments

We account for equity investments where we can exercise significant influence over, but not control, an investee using the equity method of accounting.

Equity method investments are initially recorded at cost in investments in unconsolidated entities in the condensed consolidated balance sheets.

Under the equity method of accounting, investments are adjusted to recognize our proportionate share of net income or losses of the investees and are recorded in income from equity method investments, net in our condensed consolidated statements of operations.

The equity method investments are also adjusted by contributions to and distributions from the investees as well as any impairments resulting from other-than-temporary declines in fair value that is less than its carrying value.

Depending on the timing of the availability of the financial statements of the investees, we may apply a three-month lag period based on when financial information is received.

When applying a lag period, we adjust for any known significant changes from the lag period to our reporting date.

In cases where our equity method investments provide for a disproportionate allocation of the profits and losses of the investees, our share of income or losses from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value, or HLBV, method.

Under the HLBV method, at the end of each reporting period, a calculation is prepared to determine the amount that we would receive if an equity investment entity were to liquidate its net assets and distribute that cash to the investors based on the contractually defined liquidation priorities.

The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions as well as the amortization of basis differences, is the amount we recognize for our share of the income or losses from the equity investments for the period.

We have certain investments in unconsolidated entities accounted for under the equity method of accounting in which our carrying value exceeds our proportionate share of net assets of the unconsolidated entity.

We record our proportionate share of amortization expense related to basis differences in income from equity method investments, net in our condensed consolidated statements of operations.

Recent Accounting Pronouncements

During the three months ended March 31, 2025, we did not adopt any new accounting pronouncements.

During the three and six months ended June 30, 2025, we did not adopt any new accounting pronouncements.

Not Yet Adopted

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We are currently assessing the impact this pronouncement will have on our consolidated financial statement disclosures.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Revenue from Contracts with Customers

Contract Assets

Our assets related to costs incurred to obtain a contract consist of capitalized commission costs and upfront payments made to customers.

Our assets related to costs incurred to obtain a contract primarily consist of capitalized commission costs and upfront payments made to customers.

The current portion of capitalized commission costs and upfront payments made to customers is included in other current assets within our condensed consolidated balance sheets.

The non-current portion of capitalized commission costs and upfront payments made to customers is reflected in other assets within our condensed consolidated balance sheets.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

changes in our contract assets are as follows (in thousands):

The changes in our contract assets are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Beginning of period balance $ 13,147 $ 10,466 $ 12,088 $ 9,099

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Beginning of period balance $ 27,524 $ 24,212 $ 26,559 $ 22,885

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Accounts receivable, net $ 122,254 $ 126,082

For the three months ended March 31, 2025, we recorded a provision for credit losses of $ 1.0 million, as compared to $ 0.3 million for the same period in the prior year.

For the three months ended March 31, 2025, we recorded a reserve for product returns of $ 0.4 million in our hardware and other revenue, as compared to $ 1.1 million for the same period in the prior year.

For the three and six months ended June 30, 2025, we recorded a provision for credit losses of $ 0.6 million and $ 1.6 million, respectively, as compared to $ 0.1 million and $ 0.4 million for the same periods in the prior year.

For the three and six months ended June 30, 2025, we recorded a reserve for product returns of $ 0.7 million and $ 1.1 million in our hardware and other revenue, respectively, as compared to $ 0.9 million and $ 2.0 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.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Allowance for Credit Losses

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These risk characteristics are relevant to accounts receivable and notes receivable.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

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 months ended March 31, 2025, we recorded credit loss expense for accounts receivable and notes receivable of $ 0.7 million, in general and administrative expense in our condensed consolidated statements of operations.

For the three months ended March 31, 2024, we recorded credit loss expense for accounts receivable and notes receivable of $ 4.0 million, in general and administrative expense in our condensed consolidated statements of operations.

For the three and six months ended June 30, 2025, we recorded credit loss expense for accounts receivable and notes receivable of $ 1.1 million and $ 1.8 million, respectively, in general and administrative expense in our condensed consolidated statements of operations.

For the three and six months ended June 30, 2024, we recorded credit loss expense for accounts receivable and notes receivable of $ 0.2 million and $ 4.2 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.

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(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 months ended March 31, 2025, 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 months ended March 31, 2025, as compared to historical periods.

There were no changes to our portfolio segments for our accounts receivable during the three and six months ended June 30, 2025, 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 six months ended June 30, 2025, as compared to historical periods.

The changes in our allowance for credit losses for accounts receivable are as follows (in thousands):

Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

June 30, 2025 Three Months Ended

June 30, 2024 Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

Subsidiaries All Other

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Subsidiaries All Other

Subsidiaries Alarm.com

Subsidiaries All Other

Subsidiaries Alarm.com

Subsidiaries All Other

Beginning of period balance $ ( 4,600 ) $ ( 121 ) $ ( 3,966 ) $ ( 88 ) $ ( 3,777 ) $ ( 93 ) $ ( 3,723 ) $ ( 141 )

8 unchanged sentences

Total inventory $ 90,027 $ 87,435

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Asset Acquisition

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Acquisition of a Business – CHeKT

On February 10, 2025, Alarm.com Incorporated, one of our wholly-owned subsidiaries, acquired 81 % of the issued and

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

outstanding shares of capital stock of CHeKT, Inc., or CHeKT.

On February 10, 2025, Alarm.com Incorporated, one of our wholly-owned subsidiaries, acquired 81 % of the issued and outstanding shares of capital stock of CHeKT, Inc., or CHeKT.

CHeKT provides a remote video monitoring service for central station operators that is compatible with a variety of cameras.

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Pursuant to the terms of the stock purchase agreement, following the preliminary determination of the working capital of CHeKT as of the closing date, the purchase price decreased by $ 0.2 million.

The working capital adjustment is expected to be finalized by the second quarter of 2025 and $ 0.5 million of the holdback is expected to be paid to stockholders of CHeKT at that time.

The working capital adjustment was finalized during the second quarter of 2025 and $ 0.5 million of the holdback was paid to stockholders of CHeKT at that time.

The remaining $ 3.0 million of the holdback is expected to be paid to the stockholders of CHeKT by the end of the second quarter of 2026, subject to offset for any indemnification obligations.

As a result of the acquisition of CHeKT, we recorded approximately $ 0.3 million in acquisition-related costs for the three months ended March 31, 2025.

As a result of the acquisition of CHeKT, we recorded approximately $ 0.3 million in acquisition-related costs for the three and six months ended June 30, 2025.

These costs include expenses directly related to acquiring CHeKT, are expensed as incurred and are included in general and administrative expense in our condensed consolidated statements of operations.

The purchase price allocation was not finalized as of the filing date of this Quarterly Report on Form 10-Q and is primarily pending the final determination of the working capital adjustment as well as tax adjustments, including the assessment of any net operating losses acquired and the related limitations on any identified net operating losses.

The purchase price allocation was not finalized as of the filing date of this Quarterly Report on Form 10-Q and is primarily pending additional tax adjustments, including the assessment of any net operating losses acquired and the related limitations on any identified net operating losses.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

The table below sets forth the purchase consideration and the preliminary allocation used to estimate the fair value of the tangible and intangible net assets acquired (in thousands):

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We developed the fair value of intangible net assets using the multi-period excess earnings method for developed technology, the with-and-without method for customer relationships and the relief from royalty method for the trade name.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

Developed Technology

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We are amortizing the customer relationships, valued at $ 0.5 million, on a straight-line basis over an estimated useful life of three years .

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

We valued the trade names acquired using a relief from royalty method.

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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 CHeKT noncontrolling interest was $ 6.4 million as of February 10, 2025 and March 31, 2025.

The redemption value of the CHeKT noncontrolling interest was $ 6.4 million as of February 10, 2025 and June 30, 2025.

Business Combinations in Operations - CHeKT

The operations of the CHeKT 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 income of the business combination were not material to the condensed consolidated financial statements for the three months ended March 31, 2025.

The pro forma information as well as the revenue and net income of the business combination were not material to the condensed consolidated financial statements for the three and six months ended June 30, 2025.

Goodwill and Intangible Assets, Net

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Foreign currency translation adjustment 867 — 867

Balance as of March 31, 2025 $ 178,193 $ — $ 178,193

Balance as of June 30, 2025 $ 178,657 $ — $ 178,657

On February 10, 2025, we acquired 81 % of the issued and outstanding shares of capital stock of CHeKT and recorded $ 23.6 million of goodwill in the Alarm.com segment.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands):

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Amortization ( 4,017 ) ( 4,212 ) ( 94 ) ( 180 ) — ( 8,503 )

Balance as of March 31, 2025 $ 28,108 $ 37,900 $ 1,270 $ 2,802 $ 46 $ 70,126

We recorded $ 4.5 million of amortization related to our intangible assets for the three months ended March 31, 2025, as compared to $ 4.7 million for the same period in the prior year.

There were no impairments of long-lived intangible assets during the three months ended March 31, 2025 and 2024.

Balance as of June 30, 2025 $ 26,094 $ 35,743 $ 1,220 $ 3,055 $ 46 $ 66,158

We recorded $ 4.7 million and $ 9.2 million of amortization related to our intangible assets for the three and six months ended June 30, 2025, respectively, as compared to $ 4.7 million and $ 9.4 million for the same periods in the prior year.

There were no impairments of long-lived intangible assets during the three and six months ended June 30, 2025 and 2024.

During the six months ended June 30, 2024, $ 0.3 million of fully amortized developed technology intangible assets previously acquired were written-off in the Alarm.com segment as the technology was no longer in use.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets (in thousands, except weighted-average remaining life):

March 31, 2025

June 30, 2025

Amount Accumulated

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Total intangible assets $ 206,796 $ ( 143,637 ) $ 63,159 4.6

Loan to a Distribution Partner

In December 2022, we amended a subordinated credit agreement with the affiliated entity of one of our distribution partners, or the Affiliate.

The amended subordinated credit agreement with the Affiliate 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.

In March 2024, the Affiliate was in default on a loan arrangement with one of its third party secured lenders.

Based on this information from the Affiliate, during the three months ended March 31, 2024, we recorded a credit loss expense of $ 4.0 million in general and administrative expense and recorded a reduction to our interest income of $ 0.5 million related to the reversal of payable in kind interest associated with the subordinated credit agreement.

We placed this loan in nonaccrual status and recorded a full allowance for credit losses for this note receivable as of March 31, 2024.

During the three months ended June 30, 2024, we wrote off the entire $ 4.0 million outstanding note receivable balance that originated in 2017 and reversed the previously recorded allowance for credit losses.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

For the three months ended March 31, 2025, we recognized $ 0.5 million of revenue from the distribution partner associated with this loan, as compared to $ 0.7 million for the same period in the prior year.

Loans to Service Provider Partners

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 March 31, 2025 and December 31, 2024, $ 1.0 million of principal was outstanding from the service provider partner under the loan agreement.

For the three months ended March 31, 2025 and 2024, we recognized less than $ 0.1 million of revenue from the service provider partner associated with this loan.

On January 30, 2025, we entered into a senior secured loan agreement with another service provider partner, under which a term loan was provided to the service provider partner in the original principal amount of $ 21.5 million, which loan is collateralized by the assets of the service provider partner.

Quarterly principal payments begin in the second quarter of 2027.

Interest on the outstanding principal accrues at a rate per annum equal to the overnight financing rate published by the Federal Reserve Bank of New York for a period of three months, plus 3.0 %.

For the first two years of the loan, monthly interest payments can be payable in kind at the election of the borrower.

The maturity date of the loan is January 30, 2030.

As of March 31, 2025, $ 21.5 million of principal was outstanding from the service provider partner under the loan agreement.

For the three months ended March 31, 2025 and 2024, we recognized less than $ 0.1 million 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 March 31, 2025 and December 31, 2024, $ 1.5 million of principal was outstanding from the technology partner under the convertible promissory note.

For the three months ended March 31, 2025 and 2024, we did not record any revenue from the technology partner associated with this convertible promissory note.

June 30, 2025 and 2024

Investments in Unconsolidated Entities

Investments in Safe Haven Security Services, LLC, or Safe Haven, and All Access Holdings, LLC, or All Access

On May 30, 2025, we paid $ 119.3 million in cash to purchase 32.5 % of the outstanding shares of Safe Haven, after deducting $ 6.3 million related to an agreed holdback provision that is expected to be paid during the second quarter of 2026.

On June 6, 2025, we paid $ 19.2 million in cash to purchase 32.5 % of the outstanding shares of All Access, after deducting $ 1.0 million related to an agreed holdback provision that is expected to be paid during the second quarter of 2026.

After consummation of these transactions, All Access and Safe Haven were under common control.

We do not have a controlling financial interest in Safe Haven or All Access, but based on the legal form of Safe Haven and All Access, our level of ownership and our extent of influence, we concluded that the equity investments in Safe Haven and All Access, which are included in the Alarm.com segment, do not meet the criteria for consolidation and will be accounted for under the equity method of accounting.

As of June 30, 2025, the carrying value of our equity investments in Safe Haven and All Access exceeded our share of Safe Haven's and All Access' net assets primarily due to trade name intangible assets, customer relationship intangible assets and goodwill.

Trade names and customer relationships are definite-lived intangible assets and are amortized on an attribution method based on the projected discounted cash flows over useful lives ranging from nine years to 14 years.

Investment in Safe Streets USA, LLC, or Safe Streets

On April 28, 2025 we paid $ 29.1 million in cash to purchase 24.7 % of the outstanding shares of Safe Streets.

We do not have a controlling financial interest in Safe Streets, but based on the legal form of Safe Streets, our level of ownership and our extent of influence, we concluded that this equity investment in Safe Streets, which is included in the Alarm.com segment, does not meet the criteria for consolidation and will be accounted for under the equity method of accounting.

As of June 30, 2025, the carrying value of our equity investment in Safe Streets exceeded our share of Safe Streets' net assets primarily due to trade name intangible assets, customer relationship intangible assets and goodwill.

Trade names and customer relationships are definite-lived intangible assets and are amortized on an attribution method based on the projected discounted cash flows over their useful lives of 10 years and 11 years, respectively.

Investment in a Hardware Supplier

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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 March 31, 2025 and December 31, 2024, our investment in the hardware supplier was $ 5.6 million.

As of June 30, 2025 and December 31, 2024, our investment in the hardware supplier was $ 5.6 million.

Investments in Technology Partners

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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 March 31, 2025 and December 31, 2024, our investment in the technology partner was $ 5.7 million.

As of June 30, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, our investment in the technology partner was $ 5.1 million.

As of June 30, 2025 and December 31, 2024, our investment in the technology partner was $ 5.1 million.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

June 30, 2025 and 2024

In December 2023, we paid $ 1.5 million to another technology partner as part of a Simple Agreement for Future Equity, or SAFE.

We paid an additional $ 1.5 million during both May 2024 and December 2024 to the same technology partner via a SAFE for a total investment of $ 4.5 million.

The SAFE provides us the right to be issued certain shares of the technology partner's stock in connection with a qualified equity financing or liquidity event.

Our 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 March 31, 2025 and December 31, 2024, our investment in the privately-held company was $ 4.5 million.

On June 11, 2025, the $ 4.5 million SAFE was converted into shares of Series B preferred stock representing 25.9 % of the outstanding shares of the technology partner.

Our preferred stock provides us with a liquidation preference that is considered substantive.

Accordingly, our equity ownership interest is not considered in-substance common stock.

We concluded that the equity investment in the technology partner, which is included in the Alarm.com segment, does not meet the criteria for consolidation and will be accounted for under the measurement alternative.

As of June 30, 2025 and December 31, 2024, our investment in the technology partner was $ 4.5 million.

Summary of Investments in Unconsolidated Entities

Our investments in unconsolidated entities are as follows (in thousands):

June 30, 2025 December 31, 2024

Ownership Percentage

Carrying Value

Excess Carrying Value of Investment Over Proportionate Share of Net Assets

Carrying Value

Excess Carrying Value of Investment Over Proportionate Share of Net Assets

Safe Haven and All Access

32.5 % $ 146,194 $ 147,824 $ — $ —

24.7 % 29,503 29,573 — —

Other unconsolidated entities

22,912 721 17,170 733

$ 198,609 $ 178,118 $ 17,170 $ 733

Equity method income from our investments in unconsolidated entities are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Income from equity method investments, net $ 316 $ — $ 316 $ —

Other related party transactions and balances outstanding with our equity method investees for activity subsequent to our investments are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Revenue from equity method investees

$ 2,561 $ — $ 2,698 $ —

Interest income from equity method investees

Distributions received from equity method investees

June 30, 2025 December 31, 2024

Outstanding principal from loans to equity method investees

$ 21,626 $ 145

Interest receivable from equity method investees

Accounts receivable from equity method investees

Total amounts receivable from equity method investees

$ 23,997 $ 227

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Loan to Safe Streets

On January 30, 2025, we entered into a senior secured loan agreement with Safe Streets, under which a term loan was provided to them in the original principal amount of $ 21.5 million, which loan is collateralized by the assets of Safe Streets.

Quarterly principal payments begin in the second quarter of 2027.

Interest on the outstanding principal accrues at a rate per annum equal to the overnight financing rate published by the Federal Reserve Bank of New York for a period of three months, plus 3.0 %.

For the first two years of the loan, monthly interest payments can be payable in kind at the election of the borrower.

The maturity date of the loan is January 30, 2030.

As of June 30, 2025, $ 21.5 million of principal was outstanding from Safe Streets under the loan agreement.

Loan to a Distribution Partner

In December 2022, we amended a subordinated credit agreement with the affiliated entity of one of our distribution partners, or the Affiliate.

The amended subordinated credit agreement with the Affiliate 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.

In March 2024, the Affiliate was in default on a loan arrangement with one of its third party secured lenders.

We placed this loan in nonaccrual status and recorded a full allowance for credit losses for this note receivable as of March 31, 2024.

For the three and six months ended June 30, 2025, we recognized $ 0.4 million and $ 0.9 million of revenue from the distribution partner associated with this loan, respectively, as compared to $ 0.6 million and $ 1.3 million for the same periods in the prior year.

Loan to a 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 June 30, 2025 and December 31, 2024, $ 1.0 million of principal was outstanding from the service provider partner under the loan agreement.

In July 2025, we learned that this service provider partner may have a lien placed on its property that may have a priority over our security interest.

Based on the information provided by the service provider partner, during the three months ended June 30, 2025, we recorded a credit loss expense of $ 0.7 million in general and administrative expense and we placed this loan in nonaccrual status as of June 30, 2025.

For the three and six months ended June 30, 2025 and 2024, we recognized less than $ 0.1 million and $ 0.1 million of revenue from the service provider partner associated with this loan, respectively.

Allowance for Credit Losses - Notes Receivable

We identified one portfolio segment, loan receivables, for our notes receivable.

There were 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 during the three months ended March 31, 2025.

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.

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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 March 31, 2025 and December 31, 2024 was $ 0.5 million and $ 0.2 million, respectively, 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 .

During the three months ended March 31, 2024, we recorded a reduction to our interest income of $ 0.5 million related to the reversal of payable in kind interest associated with a subordinated credit agreement with the Affiliate.

We did not write off any accrued interest receivable during the three months ended March 31, 2025.

There were no purchases or sales of financial assets during the three months ended March 31, 2025 and 2024.

There were no significant changes in the amount of note receivable write-offs during the three months ended March 31, 2025, as compared to historical periods.

The accrued interest receivable as of June 30, 2025 and December 31, 2024 was $ 0.7 million and $ 0.2 million, respectively, 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 .

During the six months ended June 30, 2024, we recorded a reduction to our interest income of $ 0.5 million related to the reversal of payable in kind interest associated with a subordinated credit agreement with the Affiliate.

We did not write off any accrued interest receivable during the three and six months ended June 30, 2025 or the three months ended June 30, 2024.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

There were no purchases or sales of financial assets during the three and six months ended June 30, 2025 and 2024.

During the three and six months ended June 30, 2024, we wrote off $ 4.0 million related to a note receivable that originated in 2017 with the Affiliate and reversed the previously recorded allowance for credit losses.

The changes in our allowance for credit losses for notes receivable are as follows (in thousands):

Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

June 30, 2025 Three Months Ended

June 30, 2024 Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

Beginning of period balance $ ( 1 ) $ ( 4,003 ) $ ( 1 ) $ ( 5 )

Provision for expected credit losses

(Provision for) / recovery of expected credit losses

( 749 ) 2 ( 749 ) ( 3,996 )

Write-offs — 4,000 — 4,000

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The following tables reflect the current and delinquent notes receivable by class of financing receivables and by year of origination (in thousands):

March 31, 2025

June 30, 2025

Loan Receivables:

6 unchanged sentences

Total $ 23,500 $ 500 $ 126 $ 1,500 $ — $ 964 $ 26,590

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

December 31, 2024

7 unchanged sentences

Total $ 500 $ 146 $ 1,500 $ — $ 993 $ — $ 3,139

There were no notes receivable placed on nonaccrual status as of March 31, 2025 and December 31, 2024.

During the three months ended March 31, 2025 and 2024, there was no interest income recognized related to notes receivable that were in nonaccrual status.

As of March 31, 2025 and December 31, 2024, there were no notes receivable placed in nonaccrual status for which there was not a related allowance for credit losses.

As of March 31, 2025 and December 31, 2024, there were no notes receivable that were 90 days or greater past due for which we continued to accrue interest income.

There was one note receivable placed on nonaccrual status as of June 30, 2025 and no notes receivable placed on nonaccrual status as of December 31, 2024.

During the three and six months ended June 30, 2025 and 2024, there was no interest income recognized related to notes receivable that were in nonaccrual status.

As of June 30, 2025, there was $ 0.2 million of notes receivable placed in nonaccrual status for which there was not a related allowance for credit losses.

As of December 31, 2024, there were no notes receivable placed in nonaccrual status for which there was not a related allowance for credit losses.

As of June 30, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, $ 23.4 million and $ 16.1 million of prepaid expenses were included in other current assets, respectively, primarily related to software licenses, long lead-time parts related to our inventory and insurance.

As of June 30, 2025 and December 31, 2024, $ 22.1 million and $ 16.1 million of prepaid expenses were included in other current assets, respectively, primarily related to software licenses, long lead-time parts related to our inventory and insurance.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Fair Value Measurements

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Level 1 Level 2 Level 3 Total

Money market accounts as of March 31, 2025

Money market accounts as of June 30, 2025

$ 1,020,079 $ — $ — $ 1,020,079

1 unchanged sentence

1,209,474 — — 1,209,474

Equity securities with readily determinable fair value as of March 31, 2025

Equity securities with readily determinable fair value as of June 30, 2025

9,342 — — 9,342

1 unchanged sentence

7,425 — — 7,425

Contingent consideration liability from acquisition as of March 31, 2025

Contingent consideration liability from acquisition as of June 30, 2025

$ — $ — $ 613 $ 613

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Beginning of period balance $ 1,868 $ 2,092 $ 2,169 $ 2,061

Performance target achievement payment ( 1,266 ) — ( 1,266 ) —

Changes in fair value included in earnings 11 13 ( 290 ) 44

End of period balance $ 613 $ 2,105 $ 613 $ 2,105

As of March 31, 2025, $ 1.17 billion of our money market accounts was included in cash and cash equivalents, $ 6.2 million was included in other assets and $ 1.9 million was included in other current assets in our condensed consolidated balance sheets.

As of June 30, 2025, $ 1.01 billion of our money market accounts was included in cash and cash equivalents, $ 6.1 million was included in other assets and $ 2.0 million was included in other current assets in our condensed consolidated balance sheets.

As of December 31, 2024, $ 1.20 billion of our money market accounts was included in cash and cash equivalents, $ 1.9 million was included in other current assets and $ 6.2 million was included in other assets in our condensed consolidated balance sheets.

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Our equity securities with readily determinable fair value represent our investments in publicly traded companies, which are valued using quoted prices in active markets.

During the three months ended March 31, 2025, we recorded an unrealized loss on equity securities of $ 2.3

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

During the three and six months ended June 30, 2025, we recorded an unrealized loss on equity securities of $ 1.5 million and $ 3.8 million, respectively, as compared to less than $ 0.1 million for the same periods in the prior year.

Our investments in public entities are recorded at fair value within other current assets in our condensed consolidated balance sheets and changes in fair value of the investments are recorded within other expense, net within our condensed consolidated statements of operations.

See Note 12 for the carrying amounts and estimated fair values of our convertible senior notes as of March 31, 2025 and December 31, 2024.

See Note 13 for the carrying amounts and estimated fair values of our convertible senior notes as of June 30, 2025 and December 31, 2024.

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.

4 unchanged sentences

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.

The fair value of the contingent consideration liability as of March 31, 2025 was included within accounts payable, accrued expenses and other current liabilities within our condensed consolidated balance sheet.

The fair value of the contingent consideration liability as of June 30, 2025 was included within accounts payable, accrued expenses and other current liabilities within our condensed consolidated balance sheet.

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.

One of the performance targets was achieved during the three months ended March 31, 2025, and the related payment of $ 1.3 million is expected to be made during the second quarter of 2025.

The $ 0.3 million decrease in the contingent consideration liability during the three months ended March 31, 2025 was primarily due to a decrease in the expected probability of achievement for the remaining performance target.

The unobservable inputs used in the valuation for the remaining performance target as of March 31, 2025 included an expected achievement percentage of 50.0 %.

One of the performance targets was achieved during the six months ended June 30, 2025, and the related payment of $ 1.3 million was made during the second quarter of 2025.

The unobservable inputs used in the valuation for the remaining performance target as of June 30, 2025 included an expected achievement percentage of 50.0 %.

The valuation also included a weighted average discount rate of 5.1 %, weighted by the probability of achievement of the performance targets at various dates, including a range of 5.0 % to 5.1 %.

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.

Selecting another probability of

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

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 or out of Level 3 or reclassifications between levels of the fair value hierarchy during the three months ended March 31, 2025 and 2024.

As of March 31, 2025, we leased office space, data centers and office equipment under non-cancelable operating leases with various expiration dates through 2034.

There were no transfers into or out of Level 3 or reclassifications between levels of the fair value hierarchy during the three and six months ended June 30, 2025 and 2024.

As of June 30, 2025, we leased office space, data centers and office equipment under non-cancelable operating leases with various expiration dates through 2034.

In August 2014, we signed a lease for office space in Tysons, Virginia where we relocated our corporate headquarters to in February 2016.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Operating lease cost $ 3,926 $ 2,977 $ 7,829 $ 5,953

4 unchanged sentences

Weighted-average discount rate — operating leases 8.2 % 8.2 %

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

Maturities of lease liabilities are as follows (in thousands):

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(2) Imputed interest was calculated using the incremental borrowing rate applicable for each lease.

Our finance leases and sublease were not material to the condensed consolidated financial statements as of March 31, 2025.

Our finance leases and subleases were not material to the condensed consolidated financial statements as of June 30, 2025.

We did not have any finance leases or subleases as of December 31, 2024.

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 months ended March 31, 2025 and 2024.

Short-term lease costs were immaterial for the three and six months ended June 30, 2025 and 2024.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands):

3 unchanged sentences

Income taxes payable 16,081 28,045

Holdback liability from business combinations and asset acquisitions 679 —

Holdback liability from business combinations, asset acquisitions and investments in unconsolidated entities

Contingent consideration liability from acquisition

4 unchanged sentences

Holdback liability from business combinations and asset acquisitions

$ 3,000 $ 200

Contingent consideration liability from acquisition — 953

3 unchanged sentences

The debt, commitments and contingencies described below would require us, or our subsidiaries, to make payments to third parties under certain circumstances.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

Convertible Senior Notes - 2026 Notes

11 unchanged sentences

(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;

(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

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

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 2026 Indenture.

10 unchanged sentences

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 %.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

As of March 31, 2025 and December 31, 2024, the fair value of our 2026 Notes was $ 480.8 million and $ 473.8 million, respectively.

As of June 30, 2025 and December 31, 2024, the fair value of our 2026 Notes was $ 486.0 million and $ 473.8 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 $ 55.65 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 March 31, 2025.

Based on the closing price of our common stock of $ 56.57 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 June 30, 2025.

The net carrying amount of the liability component of the 2026 Notes is as follows (in thousands):

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Amortization of debt issuance costs $ 796 $ 791 $ 1,590 $ 1,581

Total interest expense $ 796 $ 791 $ 1,590 $ 1,581

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Convertible Senior Notes - 2029 Notes

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It is our current intent to settle the principal amount of the 2029 Notes with cash.

The initial conversion rate for the 2029 Notes is 11.4571 shares of our common stock per $1,000 principal amount of 2029 Notes, which is equivalent to an initial conversion

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

price of $ 87.28 per share of our common stock, subject to adjustment under certain circumstances in accordance with the terms of the 2029 Indenture.

The initial conversion rate for the 2029 Notes is 11.4571 shares of our common stock per $1,000 principal amount of 2029 Notes, which is equivalent to an initial conversion price of $ 87.28 per share of our common stock, subject to adjustment under certain circumstances in accordance with the terms of the 2029 Indenture.

In addition, following certain corporate events that occur prior to the maturity date of the 2029 Notes or if we deliver a notice of redemption in respect of some or all of the 2029 Notes, we will, under certain circumstances, increase the conversion rate of the 2029 Notes for a holder who elects to convert its 2029 Notes (or any portion thereof) in connection with such a corporate event or convert its 2029 Notes called (or deemed called) for redemption during the related redemption period (as defined in the 2029 Indenture), as the case may be.

3 unchanged sentences

We are using the remaining net proceeds from the issuance of the 2029 Notes for general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies, other repurchases of our common stock, repurchases of our 2026 Notes and for working capital, operating expenses and capital expenditures.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

We account for the 2029 Notes as a liability.

The debt issuance costs are presented as a deduction from the outstanding principal balance of the 2029 Notes and are amortized to interest expense using the effective interest method over the contractual term of the 2029 Notes at a rate of 2.9 %.

As of March 31, 2025 and December 31, 2024, the fair value of our 2029 Notes was $ 484.5 million and $ 496.7 million, respectively.

As of June 30, 2025 and December 31, 2024, the fair value of our 2029 Notes was $ 484.5 million and $ 496.7 million, respectively.

The fair value was determined based on the quoted price of the 2029 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 $ 55.65 on the last trading day of the quarter, the if-converted value of the 2029 Notes did not exceed the principal amount of $ 500.0 million as of March 31, 2025.

Based on the closing price of our common stock of $ 56.57 on the last trading day of the quarter, the if-converted value of the 2029 Notes did not exceed the principal amount of $ 500.0 million as of June 30, 2025.

The net carrying amount of the liability component of the 2029 Notes is as follows (in thousands):

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Interest expense

$ 2,812 $ 938 $ 5,625 $ 938

Amortization of debt issuance costs 708 230 1,412 230

Total interest expense $ 3,520 $ 1,168 $ 7,037 $ 1,168

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

Capped Call – 2029 Notes

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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.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Legal Proceedings

12 unchanged sentences

Three of the patents were found unpatentable in reexamination.

EcoFactor appealed the decision with respect to one of the patents to the United States Court of Appeals for the Federal Circuit on July 9, 2024, EcoFactor filed a pending request for rehearing in the U.S.

Patent Trial and Appeal Board, or PTAB, with respect to a second patent on March 28, 2025, and EcoFactor appealed the rejection of the third patent to the PTAB, filing its appeal brief on June 10, 2024.

EcoFactor appealed the decision with respect to one of the patents to the United States Court of Appeals for the Federal Circuit on July 9, 2024, EcoFactor has until October 3, 2025 to appeal the rejection of the second patent to the Federal Circuit, and EcoFactor appealed the rejection of the third patent to the U.S.

Patent Trial and Appeal Board, or PTAB, filing its appeal brief on June 10, 2024.

Ex parte reexamination of a fourth patent concluded on August 23, 2023 after the claims were amended.

9 unchanged sentences

On September 3, 2021, the court issued an order staying the lawsuit until the ITC investigation described below is finally resolved.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

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.

9 unchanged sentences

Causam did not appeal the ITC decision with respect to Alarm.com and EnergyHub.

Oral arguments on the appeal are scheduled for September 3, 2025.

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.

1 unchanged sentence

Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time.

On July 3, 2025, SkyBell Technologies, Inc., or SkyBell, filed a lawsuit against us in U.S.

District Court, Eastern District of Virginia, alleging that Alarm.com misappropriated SkyBell’s trade secrets relating to video doorbells.

SkyBell is seeking injunctive relief, enhanced damages, attorneys’ fees, a constructive trust, and an order that Alarm.com assign to SkyBell the alleged trade secrets.

We have not yet responded to the complaint.

Should SkyBell 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, we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us, and we could be required to assign, transfer, and return any SkyBell trade secret that we are found to improperly possess.

While we believe we have valid defenses to SkyBell’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.

1 unchanged sentence

(d/b/a Alert 360), or CSG, in an ongoing patent litigation.

In 2018, Ubiquitous Connectivity, LP, or Ubiquitous, brought suit against CSG in U.S.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Ubiquitous Connectivity, LP, or Ubiquitous, brought suit against CSG in U.S.

District Court, Northern District of Oklahoma, alleging infringement of two U.S.

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The case is currently in the discovery phase.

The court held a claim construction hearing on December 12, 2024, but has not yet rendered a claim construction opinion.

The court held a claim construction hearing on December 12, 2024, and rendered a claim construction opinion on May 20, 2025.

A hearing on dispositive motions, including for summary judgment, is scheduled for April 15, 2026.

12 unchanged sentences

On May 24, 2024, our board of directors authorized the repurchase of our common stock in connection with the issuance of the 2029 Notes and also authorized a stock repurchase program, effective May 31, 2024, 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 May 31, 2026.

During the three months ended March 31, 2025, we repurchased 86,400 shares of our common stock under this program for $ 5.1 million, which includes applicable commissions and fees.

No shares were repurchased under our stock repurchase programs during the three months ended March 31, 2024.

During the three and six months ended June 30, 2025, we repurchased 88,000 and 174,400 shares of our common stock under this program for $ 5.1 million and $ 10.2 million, respectively, which includes applicable commissions and fees.

During the three and six months ended June 30, 2024, we repurchased 1,117,068 shares of our common stock under our stock repurchase program authorized in connection with the issuance of the 2029 Notes for $ 75.0 million.

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.

Shares Withheld

As permitted under the terms of the 2015 Equity Incentive Plan, in 2021 the Compensation Committee authorized the withholding of shares of common stock in connection with the vesting of restricted stock unit awards issued to employees to satisfy applicable tax withholding requirements.

These withheld shares are not issued or considered common stock repurchases under our stock repurchase program.

No tax withholdings related to the vesting of restricted stock units were paid during the three and six months ended June 30, 2025.

We paid $ 3.4 million of tax withholding related to vesting of restricted stock units during the three and six months ended June 30, 2024.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

June 30, 2025 and 2024

Stock-Based Compensation

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Cost of hardware and other revenue

$ — $ 1 $ — $ 2

Sales and marketing 620 724 1,100 1,479

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Stock options $ 841 $ 1,146 $ 1,834 $ 2,133

4 unchanged sentences

$ ( 299 ) $ 645 $ ( 550 ) $ 1,131

We granted 35,000 stock options pursuant to our 2015 Equity Incentive Plan during the three months ended March 31, 2025, as compared to 6,000 stock options for the same period in the prior year.

There were 21,715 stock options exercised during the three months ended March 31, 2025, as compared to 128,526 stock options for the same period in the prior year.

There was an aggregate of 63,072 restricted stock units without performance conditions granted to certain of our employees during the three months ended March 31, 2025, as compared to an aggregate of 88,150 restricted stock units without performance conditions for the same period in the prior year.

There were no restricted stock units with performance conditions granted to our employees during the three months ended March 31, 2025 and 2024.

There were 71,984 restricted stock units without performance conditions that vested during the three months ended March 31, 2025, as compared to 81,696 restricted stock units without performance conditions vested during the same period in the prior year.

There were 30,667 restricted stock units with performance conditions that vested during the three months ended March 31, 2025.

No restricted stock units with performance conditions vested during the three months ended March 31, 2024.

We granted 99,000 and 134,000 stock options pursuant to our 2015 Equity Incentive Plan during the three and six months ended June 30, 2025, respectively, as compared to 93,500 and 99,500 stock options for the same periods in the prior year.

There were 23,572 and 45,287 stock options exercised during the three and six months ended June 30, 2025, respectively, as compared to 14,467 and 142,993 stock options for the same periods in the prior year.

There was an aggregate of 311,138 and 374,210 restricted stock units without performance conditions granted to certain of our employees and directors during the three and six months ended June 30, 2025, respectively, as compared to an aggregate of 241,728 and 329,878 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 our employees during the three and six months ended June 30, 2025 and 2024.

There were 219,074 and 291,058 restricted stock units without performance conditions that vested during the three and six months ended June 30, 2025, respectively, as compared to 209,087 and 290,783 restricted stock units without performance conditions vested during the same periods in the prior year.

There were zero and 30,667 restricted stock units with performance conditions that vested during the three and six months ended June 30, 2025, respectively, as compared to 33,395 restricted stock units with performance conditions vested during each of the three and six months ended June 30, 2024.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

June 30, 2025 and 2024

Earnings Per Share

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net income $ 34,217 $ 32,520 $ 61,929 $ 55,924

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Add back total interest expense, net of tax, attributable to convertible senior notes

3,249 1,473 6,494 2,067

Net income attributable to common stockholders - diluted (B) $ 37,801 $ 34,984 $ 68,996 $ 59,173

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Stock options 789,688 422,524 698,302 422,524

4 unchanged sentences

We use the if-converted method when calculating the dilutive impact of the 2026 Notes and 2029 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 months ended March 31, 2025 and 2024.

We included 5,728,550 shares related to the 2029 Notes within the weighted average shares outstanding when calculating the diluted net income per share for the three months ended March 31, 2025.

Additionally, we included $ 3.2 million of interest expense and debt issuance cost amortization, net of tax, within the numerator of the diluted net income per share for the three months ended March 31, 2025, as compared to $ 0.6 million for the same period in the prior year.

We included 5,728,550 shares related to the 2029 Notes within the weighted average shares outstanding when calculating the diluted net income per share for the three and six months ended June 30, 2025, as compared to 1,951,484 and 975,742 shares during the same periods in the prior year.

Additionally, we included $ 3.2 million and $ 6.5 million of interest expense and debt issuance cost amortization, net of tax, within the numerator of the diluted net income per share for the three and six months ended June 30, 2025, respectively, as compared to $ 1.5 million and $ 2.1 million for the same periods in the prior year.

The denominator for diluted net income per share does not include any effect from the capped call transactions we entered into concurrently with the issuance of the 2029 Notes, as this effect would be anti-dilutive.

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See Note 13 for further details on our 2029 Notes and the related capped call transactions.

Significant Service Providers and Distributors

During the three months ended March 31, 2025, our 10 largest revenue service provider partners or distributors accounted for 46 % of our consolidated revenue, as compared to 48 % for the same period 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 the three months ended March 31, 2025 and 2024.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

No service provider partners represented more than 10% of accounts receivable as of March 31, 2025 and December 31, 2024.

June 30, 2025 and 2024

Significant Service Providers and Distributors

During the three and six months ended June 30, 2025, our 10 largest revenue service provider partners or distributors accounted for 46 % of our consolidated revenue, as compared to 47 % 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 six months ended June 30, 2025 and 2024.

No service provider partners represented more than 10% of accounts receivable as of June 30, 2025 and December 31, 2024.

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 months ended March 31, 2025, we recorded a provision for income taxes of $ 7.3 million, resulting in an effective income tax rate of 20.9 %.

For the three months ended March 31, 2024, we recorded a provision for income taxes of $ 2.7 million, resulting in an effective income tax rate of 10.5 %.

For the three months ended March 31, 2025, our effective tax rate was below the 21.0% statutory rate primarily due to 2025 research and development tax credits claimed and the foreign derived intangible income deduction, partially offset by the impact of state taxes, foreign withholding taxes and other nondeductible expenses.

For the three months ended March 31, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to research and development tax credits claimed, the foreign derived intangible income deduction, the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax examination and tax windfall benefits from employee stock-based compensation, partially offset by the impact of state taxes, federal estimated tax payment interest expense and other nondeductible expenses.

For the three and six months ended June 30, 2025, we recorded a provision for income taxes of $ 5.5 million and $ 12.8 million, respectively, resulting in an effective income tax rate of 13.8 % and 17.1 % for those periods.

For the three and six months ended June 30, 2024, we recorded a provision for income taxes of $ 0.9 million and $ 3.6 million, respectively, resulting in an effective income tax rate of 2.6 % and 6.1 % for those periods.

For the three and six months ended June 30, 2025, our effective tax rate was below the 21.0% statutory rate primarily due to 2025 research and development tax credits claimed, the foreign derived intangible income deduction and a favorable true-up adjustment of our 2024 income tax provision estimate associated with research and development tax credits, partially offset by the impact of state taxes, foreign withholding taxes and other nondeductible expenses.

For the three months ended June 30, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to a favorable true-up adjustment of our 2023 income tax provision estimate associated with research and development tax credits, 2024 research and development tax credits claimed, the foreign derived intangible income deduction and tax windfall benefits from employee stock-based compensation.

For the six months ended June 30, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to a favorable true-up adjustment of our 2023 income tax provision estimate associated with research and development tax credits, 2024 research and development tax credits claimed, the foreign derived intangible income deduction, the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax examination and tax windfall benefits from employee stock-based compensation, partially offset by the impact of state taxes, federal estimated tax payment interest expense 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, net deferred tax assets of our EBS subsidiary and an unrealized U.S.

federal capital loss was $ 5.0 million as of December 31, 2024 and increased to $ 5.8 million as of March 31, 2025.

federal capital loss was $ 5.0 million as of December 31, 2024 and increased to $ 6.1 million as of June 30, 2025.

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 $ 0.6 million primarily due to a liability for research and development tax credits claimed during the three months ended March 31, 2025.

We recorded a net decrease to the unrecognized tax benefits liability of $ 1.9 million primarily due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax return examination, partially offset by a liability for research and development tax credits claimed during the three months ended March 31, 2024.

Our condensed consolidated balance sheets included an accrual for total interest expense related to unrecognized tax benefits of $ 1.0 million and $ 0.9 million as of March 31, 2025 and December 31, 2024, respectively.

We recorded a net increase to the unrecognized tax benefits liability of $ 1.7 million primarily due to a liability for research and development tax credits claimed during the six months ended June 30, 2025.

We recorded a net decrease to the unrecognized tax benefits liability of $ 0.4 million primarily due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax return examination, partially offset by a liability for research and development tax credits claimed during the six months ended June 30, 2024.

Our condensed consolidated balance sheets included an accrual for total interest expense related to unrecognized tax benefits of $ 1.2 million and $ 0.9 million as of June 30, 2025 and December 31, 2024, respectively.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense.

4 unchanged sentences

As a result, we paid $ 0.6 million in additional federal taxes, including interest, during the three months ended June 30, 2024, and recognized a net income tax benefit of $ 1.7 million during the three months ended March 31, 2024.

As of March 31, 2025, we did not have material undistributed foreign earnings.

As of June 30, 2025, we did not have material undistributed foreign earnings.

We have not recorded a deferred tax liability on the undistributed earnings from our foreign subsidiaries, as such earnings are considered to be indefinitely reinvested.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

On July 4, 2025, Public Law 119-21, commonly referred to as the One Big Beautiful Bill Act, or OBBBA, was enacted in the United States.

The OBBBA includes a broad range of tax provisions that may impact the timing and the magnitude of certain key tax deductions.

The most significant provisions to us are the permanent reinstatement of the full domestic research and development expenditure deduction in the year such costs are incurred and the 100% first-year bonus depreciation deduction.

We currently anticipate these provisions will significantly reduce our current federal income tax cash outlays over the next several years.

Certain other international tax provisions may also be favorable to us.

We continue to analyze the OBBBA tax provisions to assess their potential impact on our financial position, results of operations and cash flows.

Segment Information

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Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

Our Alarm.com segment represents our cloud-based platform and licenses and services on our non-hosted software platform for the intelligently connected property and related solutions that contributed 93 % of our revenue, net of intersegment eliminations, for the three months ended March 31, 2025, as compared to 94 % for the same period in the prior year.

Our Alarm.com segment represents our cloud-based platform and licenses and services on our non-hosted software platform for the intelligently connected property and related solutions that contributed 92 % of our revenue, net of intersegment eliminations, for the three and six months ended June 30, 2025, as compared to 93 % 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.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

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 March 31, 2025

Three Months Ended June 30, 2025

Alarm.com Other Intersegment Alarm.com Intersegment Other Total

14 unchanged sentences

$ 35,022 $ ( 2,892 ) $ ( 199 ) $ 91 $ 32,022

Assets $ 2,133,644 $ 73,148 $ ( 129,250 ) $ ( 111 ) $ 2,077,431

Reconciliation of operating income to income before income taxes

6 unchanged sentences

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

March 31, 2025 and 2024

Three Months Ended March 31, 2024

June 30, 2025 and 2024

Three Months Ended June 30, 2024

Alarm.com Other Intersegment Alarm.com Intersegment Other Total

14 unchanged sentences

$ 30,690 $ ( 4,851 ) $ ( 89 ) $ 24 $ 25,774

Assets $ 1,538,429 $ 64,350 $ ( 115,786 ) $ ( 11 ) $ 1,486,982

Reconciliation of operating income to income before income taxes

4 unchanged sentences

Income before income taxes $ 33,404

Our SaaS and license revenue for the Alarm.com segment included software license revenue of $ 4.7 million for the three months ended March 31, 2025, as compared to $ 5.2 million for the same period in the prior year.

There was no software license revenue recorded for the Other segment during the three months ended March 31, 2025 and 2024.

Additions to property and equipment were $ 8.0 million for the Alarm.com segment for the three months ended March 31, 2025, as compared to $ 3.9 million the same period in the prior year.

Additions to property and equipment were less than $ 0.1 million for the Other segment for each of the three months ended March 31, 2025 and 2024.

We derived substantially all revenue from North America for the three months ended March 31, 2025 and 2024.

Substantially all of our long-lived assets were in North America as of March 31, 2025 and December 31, 2024.

Subsequent Event

Investment in Service Provider Partner

On April 28, 2025, we paid $ 29.1 million in cash to purchase 24.7 % of the outstanding shares of Safe Streets USA, LLC.

We are still evaluating the accounting treatment for this investment, which will be finalized during the second quarter of 2025.

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Six Months Ended June 30, 2025

Alarm.com Other Intersegment Alarm.com Intersegment Other Total

SaaS and license revenue $ 298,645 $ 35,148 $ — $ — $ 333,793

Hardware and other revenue

156,922 4,531 ( 1,336 ) ( 780 ) 159,337

Total revenue

455,567 39,679 ( 1,336 ) ( 780 ) 493,130

Cost of SaaS and license revenue 34,272 10,949 171 ( 171 ) 45,221

Cost of hardware and other revenue 118,369 4,183 ( 1,210 ) ( 867 ) 120,475

Total cost of revenue 152,641 15,132 ( 1,039 ) ( 1,038 ) 165,696

Selling and marketing expense 47,502 12,183 — — 59,685

General and administrative expense 50,181 3,904 — — 54,085

Research and development expense 121,941 15,496 — — 137,437

Amortization and depreciation expense 13,967 591 — — 14,558

Total operating expenses 233,591 32,174 — — 265,765

Operating income / (loss)

$ 69,335 $ ( 7,627 ) $ ( 297 ) $ 258 $ 61,669

Assets $ 2,154,748 $ 64,107 $ ( 120,596 ) $ ( 205 ) $ 2,098,054

Reconciliation of operating income to income before income taxes

Operating income $ 61,669

Interest expense ( 8,635 )

Interest income 24,179

Other income / (expense), net ( 2,835 )

Income before income taxes $ 74,378

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued)

June 30, 2025 and 2024

Six Months Ended June 30, 2024

Alarm.com Other Intersegment Alarm.com Intersegment Other Total

SaaS and license revenue $ 278,713 $ 27,558 $ — $ — $ 306,271

Hardware and other revenue

149,827 2,862 ( 1,545 ) ( 325 ) 150,819

Total revenue

428,540 30,420 ( 1,545 ) ( 325 ) 457,090

Cost of SaaS and license revenue 33,470 9,015 175 ( 138 ) 42,522

Cost of hardware and other revenue 114,386 2,627 ( 1,498 ) ( 240 ) 115,275

Total cost of revenue 147,856 11,642 ( 1,323 ) ( 378 ) 157,797

Selling and marketing expense 42,863 10,428 — — 53,291

General and administrative expense 52,234 3,166 — — 55,400

Research and development expense 117,415 14,271 — — 131,686

Amortization and depreciation expense 13,911 506 — — 14,417

Total operating expenses 226,423 28,371 — — 254,794

Operating income / (loss)

$ 54,261 $ ( 9,593 ) $ ( 222 ) $ 53 $ 44,499

Assets $ 1,907,486 $ 55,017 $ ( 107,239 ) $ ( 17 ) $ 1,855,247

Reconciliation of operating income to income before income taxes

Operating income $ 44,499

Interest expense ( 2,764 )

Interest income 19,396

Other income / (expense), net ( 1,576 )

Income before income taxes $ 59,555

Our SaaS and license revenue for the Alarm.com segment included software license revenue of $ 4.5 million and $ 9.2 million for the three and six months ended June 30, 2025, respectively, as compared to $ 5.2 million and $ 10.4 million for the same periods in the prior year.

There was no software license revenue recorded for the Other segment during the three and six months ended June 30, 2025 and 2024.

Additions to property and equipment were $ 5.0 million and $ 13.0 million for the Alarm.com segment for the three and six months ended June 30, 2025, respectively, as compared to $ 1.9 million and $ 5.8 million for the same periods in the prior year.

Additions to property and equipment were less than $ 0.1 million for the Other segment for each of the three and six months ended June 30, 2025 as compared to less than $ 0.1 million and $ 0.1 million for the Other segment for the three and six months ended June 30, 2024, respectively.

We derived substantially all revenue from North America for the three and six months ended June 30, 2025 and 2024.

Substantially all of our long-lived assets were in North America as of June 30, 2025 and December 31, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements