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This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
−Removed: These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” “would,” or the negative or plural of these words or similar expressions or variations and such forward-looking statements include, but are not limited to, statements with respect to the anticipated impact of the global economic uncertainty and financial market conditions caused by significant worldwide events, including public health crises, and geopolitical upheaval (including the ongoing conflicts in Ukraine and in the Middle East and surrounding areas), disruptions to global supply chains, fluctuations in interest rates, the U.S.
−Removed: government shutdown, tariffs, risk of recession and inflation (collectively, the Macroeconomic Conditions) on our business, results of operations and financial condition, including on our hardware sales and our Software-as-a-Service, or SaaS, and license revenue growth rate;
+Added: These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” “would,” or the negative or plural of these words or similar expressions or variations and such forward-looking statements include, but are not limited to, statements with respect to the anticipated impact of the global economic uncertainty and financial market conditions caused by significant worldwide events, including public health crises, and geopolitical upheaval (including the ongoing conflicts in Ukraine and in the Middle East and surrounding areas), disruptions to global supply chains, fluctuations in interest rates, tariffs, risk of recession and inflation (collectively, the Macroeconomic Conditions) on our business, results of operations and financial condition, including on our hardware sales and our Software-as-a-Service, or SaaS, and license revenue growth rate;
our business strategy, plans and objectives for future operations;
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Alarm.com is the leading platform for intelligently connected properties.
−Removed: Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions a ddressing global opportunities in the residential, multi-family, small business and enterprise commercial markets.
−Removed: 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.
+Added: Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions a ddressing global opportunities in the residential, multi-family, small business, enterprise commercial and energy markets.
+Added: 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, personal safety and data-rich emergency response.
During 2025, our platforms processed more than 365 billion data points generated by over 170 million connected devices.
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The Alarm.com platform enables our service provider partners to address the needs of a broad range of residential and commercial customers.
−Removed: They can deploy interactive security, video monitoring, property automation, access control, energy management, gunshot detection, water management, vehicle and fleet management, and wellness and personal safety solutions as stand-alone offerings or as integrated solutions.
−Removed: Highlights of Third Quarter Results
+Added: They can deploy interactive security, video monitoring, property automation, access control, energy management, gunshot detection, water management, vehicle and fleet management, and personal safety solutions as stand-alone offerings or as integrated solutions.
+Added: Highlights of First Quarter Results
We primarily generate SaaS and license revenue, our largest source of revenue, through our service provider partners, who resell our services and pay us monthly fees.
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We derive a portion of our revenue from licensing our intellectual property to third parties on a per customer basis.
−Removed: SaaS and license revenue represented 68% of our revenue during each of the three and nine months ended September 30, 2025, respectively, as compared to 66% and 67% in the same periods in the prior year.
−Removed: We also generate SaaS and license revenue from monthly fees charged to service providers on a per subscriber basis for access to our non-hosted software platform, or Software platform.
−Removed: The non-hosted software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center.
−Removed: Software license revenue represented 2% of our revenue during each of the three and nine months ended September 30, 2025 and 2024.
+Added: SaaS and license revenue represented 68% of our revenue during the three months ended March 31, 2026, as compared to 69% in the same period in the prior year.
We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, smart thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions.
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Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees.
−Removed: Hardware and other revenue represented 32% of our revenue during each of the three and nine months ended September 30, 2025, respectively, as compared to 34% and 33% in the same periods in the prior year.
+Added: Hardware and other revenue represented 32% of our revenue during the three months ended March 31, 2026, as compared to 31% in the same period in the prior year.
We typically expect hardware and other revenue to fluctuate as a percentage of total revenue.
Highlights of our financial performance for the periods covered in this Quarterly Report include:
−Removed: • SaaS and license revenue increased 10% to $175.4 million during the three months ended September 30, 2025 from $159.3 million during the three months ended September 30, 2024.
−Removed: SaaS and license revenue increased 9% to $509.2 million during the nine months ended September 30, 2025 from $465.5 million during the nine months ended September 30, 2024.
−Removed: Included in SaaS and license revenue was software license revenue, which decreased to $4.3 million during the three months ended September 30, 2025 from $5.0 million during the three months ended September 30, 2024.
−Removed: Software license revenue decreased to $13.5 million during the nine months ended September 30, 2025 from $15.4 million during the nine months ended September 30, 2024.
−Removed: • Total revenue increased 7% to $256.4 million during the three months ended September 30, 2025 from $240.5 million during the three months ended September 30, 2024.
−Removed: Total revenue increased 7% to $749.5 million during the nine months ended September 30, 2025 from $697.6 million during the nine months ended September 30, 2024.
−Removed: • Net income decreased to $35.1 million during the three months ended September 30, 2025, as compared to $36.5 million during the three months ended September 30, 2024.
−Removed: Net income increased to $97.0 million during the nine months ended September 30, 2025, as compared to $92.4 million during the nine months ended September 30, 2024.
−Removed: Net income attributable to common stockholders decreased to $35.3 million during the three months ended September 30, 2025, as compared to $36.7 million during the three months ended September 30, 2024.
−Removed: Net income attributable to common stockholders increased to $97.8 million during the nine months ended September 30, 2025, as compared to $93.8 million during the nine months ended September 30, 2024.
−Removed: • Non-GAAP adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $59.2 million during the three months ended September 30, 2025 from $50.0 million during the three months ended September 30, 2024.
−Removed: Non-GAAP adjusted EBITDA increased to $151.1 million during the nine months ended September 30, 2025 from $129.9 million during the nine months ended September 30, 2024.
−Removed: Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of non-GAAP adjusted EBITDA (a non-GAAP measure) and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three and nine months ended September 30, 2025 and 2024.
+Added: • SaaS and license revenue increased 11% to $181.5 million during the three months ended March 31, 2026 from $163.8 million during the three months ended March 31, 2025.
+Added: • Total revenue increased 11% to $265.2 million during the three months ended March 31, 2026 from $238.8 million during the three months ended March 31, 2025.
+Added: • Net income decreased to $23.4 million during the three months ended March 31, 2026, as compared to $27.7 million during the three months ended March 31, 2025.
+Added: Net income attributable to common stockholders decreased to $23.6 million during the three months ended March 31, 2026, as compared to $28.0 million during the three months ended March 31, 2025.
+Added: • Non-GAAP adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $49.6 million during the three months ended March 31, 2026 from $45.8 million during the three months ended March 31, 2025.
+Added: Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of non-GAAP adjusted EBITDA (a non-GAAP measure) and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three months ended March 31, 2026 and 2025.
Recent Developments
−Removed: 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.
−Removed: The OBBBA includes a broad range of tax provisions that impact the timing and the magnitude of certain key tax deductions.
−Removed: The most significant provisions to us are the permanent reinstatement of the full and immediate deduction for domestic research and development expenditures in the year such costs are incurred and the 100% first-year bonus depreciation deduction, with both provisions reducing our associated deferred tax assets.
−Removed: We currently anticipate these provisions will significantly reduce our current federal income tax cash outlays over the next several years.
−Removed: Certain other international tax provisions may also be favorable to us beginning in 2026.
−Removed: We will continue to analyze the OBBBA tax provisions, including any additional guidance that is issued, to assess their potential impact on our financial position, results of operations and cash flows.
−Removed: On August 15, 2025, EnergyHub, Inc., one of our wholly-owned subsidiaries, acquired all of the issued and outstanding shares of capital stock of Bridge to Renewables, Inc., or BTR.
−Removed: BTR provides a managed charging solution for electric vehicle manufacturers and drivers.
−Removed: BTR’s technology integrates directly into a vehicle’s native mobile app, delivering utility program enrollment, charging insights and incentives to electric vehicle drivers.
−Removed: The acquisition is anticipated to expand EnergyHub’s ecosystem of automotive partners and strengthen its end-to-end managed charging offering, supporting improved driver engagement and grid optimization for utility clients.
−Removed: In consideration for the purchase of BTR, we paid $12.4 million in cash on August 15, 2025, after deducting $1.6 million related to agreed holdback provisions.
−Removed: The acquisition was accounted for as a business combination within the Other segment.
−Removed: The purchase price allocation was not finalized as of the date of this Quarterly Report on Form 10-Q and is pending the final determination of the working capital adjustment as well as tax adjustments.
+Added: On January 20, 2021, we issued $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, in a private placement to qualified institutional buyers, or the 2026 Notes.
+Added: On January 14, 2026, we paid $500.0 million in aggregate principal amount to holders of the 2026 Notes, fully settling the outstanding balance in accordance with the repayment terms.
+Added: On February 24, 2026, a technology partner in which we invested was acquired by an unrelated third party.
+Added: As a result of the sale, we received proceeds of $5.4 million in exchange for all of our shares of the technology partner stock after deducting $0.1 million related to an agreed holdback.
+Added: As a result of the sale, we recorded a loss of $0.2 million within other expense, net, in our condensed consolidated statements of operations during the three months ended March 31, 2026.
The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of the Macroeconomic Conditions.
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It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions.
−Removed: The results of operations for the three and nine months ended September 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.
+Added: The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2026, which is increasingly true in periods of uncertainty, such as the uncertainty caused by the Macroeconomic Conditions.
Prolonged uncertainty with respect to the Macroeconomic Conditions 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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Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2025 2024 2025 2024
SaaS and license revenue $ 181,524 $ 163,800
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Twelve Months Ended
−Removed: September 30,
SaaS and license revenue renewal rate 95 % 95 %
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Non-GAAP Adjusted EBITDA
−Removed: Non-GAAP adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other income / (expense), net, provision for income taxes, income from equity method investments, net, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
+Added: Non-GAAP adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other expense, net, provision for income taxes, (income) / loss from equity method investments, net, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
We do not consider these items to be indicative of our core operating performance.
The non-cash items include amortization and depreciation expense;
−Removed: income from equity method investments, net;
−Removed: amortization of debt issuance costs for the January 20, 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, or the 2026 Notes, included in interest expense;
+Added: (income) / loss from equity method investments, net;
+Added: amortization of debt issuance costs for the 2026 Notes included in interest expense;
amortization of debt issuance costs for the May 31, 2024 issuance of $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, or the 2029 Notes, included in interest expense;
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We exclude interest expense in calculating non-GAAP adjusted EBITDA because we believe the exclusion of interest expense will provide for more meaningful information about our financial performance.
−Removed: We exclude interest income and certain activity within other income / (expense), net including gains, losses or impairments on investments without readily determinable fair values and other assets, gains on settlement fees and losses on the early extinguishment of debt, when applicable, from non-GAAP adjusted EBITDA because we do not consider it part of our ongoing results of operations.
−Removed: We exclude the impact related to our provision for income taxes and income from equity method investments, net from non-GAAP adjusted EBITDA because we do not consider these adjustments to be part of our ongoing results of operations.
+Added: We exclude interest income and certain activity within other expense, net including gains, losses or impairments on investments with readily determinable fair values and without readily determinable fair values and on other assets, gains on settlement fees and losses on the early extinguishment of debt, when applicable, from non-GAAP adjusted EBITDA because we do not consider it part of our ongoing results of operations.
+Added: We exclude the impact related to our provision for income taxes and (income) / loss from equity method investments, net from non-GAAP adjusted EBITDA because we do not consider these adjustments to be part of our ongoing results of operations.
GAAP requires that operating expenses include the amortization of acquired intangible assets, which principally include acquired customer relationships, developed technology and trade names.
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Non-GAAP adjusted EBITDA is not a measure calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
−Removed: Please see Non-GAAP Measures in this section for a discussion of the limitations of non-GAAP adjusted
−Removed: EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the three and nine months ended September 30, 2025 and 2024.
+Added: Please see Non-GAAP Measures in this section for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the three months ended March 31, 2026 and 2025.
SaaS and License Revenue Renewal Rate
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In addition, in certain markets, our EnergyHub subsidiary sells its demand response service for an annual service fee, with pricing based on the number of subscribers or amount of aggregate electricity demand made available for a utility’s or market’s control.
−Removed: Software License Revenue .
−Removed: Our SaaS and license revenue also includes our software license revenue from monthly fees charged to service providers on a per subscriber basis for access to our Software platform.
−Removed: The non-hosted software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center.
−Removed: Our agreements for the Software platform solution typically include software and services, such as post-contract customer support, or PCS.
−Removed: Software license revenue included in SaaS and license revenue is expected to continue to decline over time as we transition subscribers to our cloud-based hosted platform.
Hardware and Other Revenue.
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Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee.
−Removed: Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our indoor gunshot detection solution in exchange for license fees.
+Added: Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees.
Hardware and other revenue may also include activation fees charged to some of our service provider partners for activation of a new subscriber account on our platforms, as well as fees paid by service provider partners for our marketing services.
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Our cost of SaaS and license revenue primarily includes the amounts paid to wireless network providers and, to a lesser extent, the costs of running our network operations centers which are expensed as incurred, as well as patent and royalty costs in connection with technology licensed from third-party providers and amounts paid to distributed energy resource providers.
−Removed: Our cost of SaaS and license revenue also includes our cost of software license revenue, which primarily includes the payroll and payroll-related costs of the department dedicated to providing service exclusively to those service providers that host the Software platform.
−Removed: As of September 30, 2025 and 2024, we had 76 employees who manufacture hardware for our suite of IoT solutions, respectively .
+Added: As of March 31, 2026 and 2025, we had 66 and 76 employees who manufacture hardware for our suite of IoT solutions, respectively .
Our cost of hardware and other revenue primarily includes cost of raw materials, tooling, freight shipments and amounts paid to our third-party manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, video recorders, smart thermostats and gunshot detection sensors, which we purchase from an original equipment manufacturer, and other devices.
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government announced a baseline tariff of 10% on all products imported into the United States (with certain limited exceptions) and additional individualized tariffs based on country of origin at different rates per country.
−Removed: Certain of these tariffs have been subsequently paused or modified, and the situation remains fluid.
+Added: While the U.S.
+Added: Supreme Court invalidated these tariffs in February 2026, the U.S.
+Added: government may continue to impose tariffs under alternative statutory authorities, and the situation remains fluid.
The United States and/or countries into which we import products have adjusted and/or imposed and may, in the future, adjust and/or impose new quotas, duties, tariffs or reciprocal tariffs or other restrictions.
A significant portion of our hardware is produced outside the United States, including in Vietnam, Thailand and Taiwan.
−Removed: government has since announced several tariff framework agreements, including with countries where a significant portion of our hardware is produced.
−Removed: While we began passing through the costs of baseline tariffs to our customers in the second quarter of 2025, we have not yet adjusted those pass-throughs to account for certain newer tariffs at higher rates.
−Removed: We do not currently anticipate making further adjustments to these pass-throughs for the remainder of 2025.
−Removed: As a result, we have begun to absorb these additional costs, which we expect will negatively impact our hardware revenue margins.
−Removed: The ultimate impact of any tariffs will depend on various factors, including how long such tariffs remain in place, the ultimate levels of such tariffs, the outcome of pending legal challenges to their validity, how other countries respond to the U.S.
−Removed: tariffs, and the specific timing of when we implement higher pass-through costs.
+Added: government has since announced several tariff framework agreements, including with countries where a significant portion of our hardware is produced, which have impacted our hardware revenue margins.
+Added: The ultimate impact of any tariffs will depend on various factors, including how long such tariffs remain in place, the ultimate levels of such tariffs, the outcome of any new legal challenges to their validity, the process and timing for obtaining any refunds for previously paid tariffs, how other countries respond to the U.S.
+Added: tariffs, and the specific timing of when we implement any additional pass-through costs.
Operating Expenses
Our operating expenses consist of sales and marketing, general and administrative, research and development and amortization and depreciation expenses.
−Removed: Salaries, bonuses, stock-based compensation, benefits and other personnel related costs are the most significant components of each of these expense categories, excluding amortization and depreciation.
+Added: Salaries, bonuses, stock-based compensation, benefits and other personnel related costs are the most significant components of these expense categories, excluding amortization and depreciation.
We include stock-based compensation expense in connection with the grant of restricted stock units and other forms of equity compensation, including equity compensation with performance conditions, in the applicable operating expense category based on the respective equity award recipient’s function (sales and marketing, general and administrative or research and development).
−Removed: We grew from 2,055 employees as of September 30, 2024 to 2,075 employees as of September 30, 2025 , and grew from 2,048 employees as of June 30, 2025.
+Added: We grew from 2,020 employees as of March 31, 2025 to 2,051 employees as of March 31, 2026 , and decreased from 2,058 employees as of December 31, 2025.
We may continue to hire new employees to support the projected future growth of our business.
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Our sales and marketing teams engage in sales, account management, service provider partner support, advertising, promotion of our products and services and marketing.
−Removed: The number of employees in sales and marketing functions increased from 583 as of September 30, 2024 to 614 as of September 30, 2025 and increased from 599 as of June 30, 2025.
−Removed: We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally and we expect to increase our marketing expense in 2025 as compared to 2024.
+Added: The number of employees in sales and marketing functions increased from 579 as of March 31, 2025 to 615 as of March 31, 2026 and increased from 607 as of December 31, 2025.
+Added: We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally.
We may increase the size of our sales force and our service provider partner support team to provide additional support to our existing service provider partner base to drive their productivity in selling our solutions as well as to enroll new service provider partners in North America and in international markets.
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Also included in general and administrative expenses are credit losses and acquisition-related expenses, which consist primarily of legal, accounting and professional service fees directly related to acquisitions and valuation gains or losses on acquisition-related contingent liabilities.
−Removed: The number of employees in general and administrative functions decreased from 232 as of September 30, 2024 to 231 as of September 30, 2025 and decreased from 238 as of June 30, 2025.
+Added: The number of employees in general and administrative functions decreased from 236 as of March 31, 2025 to 230 as of March 31, 2026 and decreased from 235 as of December 31, 2025.
Excluding intellectual property litigation and acquisition-related expense, we expect general and administrative costs to increase prospectively as our business grows.
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Also included are non-personnel costs such as consulting and professional fees paid to third-party development resources.
−Removed: The number of employees in research and development functions decreased from 1,164 as of September 30, 2024 to 1,154 as of September 30, 2025 and increased from 1,136 as of June 30, 2025.
+Added: The number of employees in research and development functions increased from 1,129 as of March 31, 2025 to 1,140 as of March 31, 2026 and decreased from 1,150 as of December 31, 2025.
Our research and development efforts are focused on innovating new features and enhancing the functionality of our platforms and the solutions we offer to our service provider partners and subscribers.
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We record interest expense associated with our 2026 Notes and 2029 Notes.
−Removed: Interest expense in 2025 is expected to increase as compared to 2024 due to the issuance of the 2029 Notes.
+Added: Interest expense in 2026 is expected to decrease as compared to 2025 due to the maturity of the 2026 Notes on January 15, 2026.
Interest Income
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Interest income in 2026 will depend, in part, on our use of cash and fluctuations in interest rates.
−Removed: Other Income / (Expense), Net
−Removed: Other income / (expense), net primarily consists of non-operating and miscellaneous expense and income, including the impacts of fluctuations in foreign currency exchange rates.
+Added: Other Expense, Net
+Added: Other expense, net primarily consists of non-operating and miscellaneous expense and income, including the impacts of fluctuations in foreign currency exchange rates as well as gains and losses on equity securities.
Provision for Income Taxes
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As a result, we recognize tax liabilities based on estimates of whether additional taxes will be due.
−Removed: For the three months ended September 30, 2025, our effective tax rate was above the 21.0% statutory rate primarily due to the impact of state taxes, foreign withholding taxes, a reduced foreign derived intangible income deduction and other nondeductible expenses, partially offset by the impact of 2025 research and development tax credits claimed.
−Removed: For the nine months ended September 30, 2025, our effective tax rate was above the 21.0% statutory rate primarily due to the impact of state taxes, foreign withholding taxes and other nondeductible expenses, partially offset by the impact of 2025 research and development tax credits claimed and a favorable true-up adjustment of our 2024 income tax provision estimate associated with research and development tax credits.
+Added: For the three months ended March 31, 2026, our effective tax rate was below the 21.0% statutory rate primarily due to the impact of 2026 research and development tax credits claimed and the foreign derived deduction eligible income deduction, partially offset by the impact of state taxes, foreign withholding taxes, a shortfall from employee stock-based compensation and other nondeductible expenses.
We recognize stock-based compensation tax shortfalls and excess tax windfall benefits on a discrete basis during the quarter in which they occur, and we anticipate our effective tax rate will vary from quarter to quarter depending on our stock price as well as the vesting and exercises of various forms of equity compensation under our equity incentive plans each period, including restricted stock units and stock options.
+Added: (Income) / Loss from Equity Method Investments, Net
+Added: (Income) / loss from equity method investments, net primarily consists of our share of the net assets and net income / (losses) of our investees accounted for under the equity method, including the impacts of amortization expense related to basis differences.
Results of Operations
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Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2025 2024 2025 2024
SaaS and license revenue $ 181,524 68 % $ 163,800 69 %
18 unchanged sentences
Interest income 4,931 2 12,371 5
−Removed: Other income / (expense), net 3,538 2 (89) — 703 — (1,665) —
+Added: Other expense, net (3,909) (2) (2,660) (1)
Income before income taxes 28,993 11 35,044 15
Provision for income taxes 5,856 2 7,307 3
−Removed: Income from equity method investments, net (2,793) (1) — — (3,109) — — —
+Added: (Income) / loss from equity method investments, net (245) — 25 —
Net income $ 23,382 9 % $ 27,712 12 %
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Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
Stock-based compensation expense data:
−Removed: 2025 2024 2025 2024
−Removed: Cost of hardware and other revenue
−Removed: $ — $ — $ — $ 2
Sales and marketing $ 742 $ 480
4 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2025 2024 2025 2024
Components of cost of revenue as a percentage of revenue:
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Total cost of revenue as a percentage of total revenue 34 % 33 %
−Removed: Comparison of the Three and Nine Months Ended September 30, 2025 to September 30, 2024
−Removed: The following tables in this section set forth our selected condensed consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the three and nine months ended September 30, 2025 and September 30, 2024.
+Added: Comparison of the Three Months Ended March 31, 2026 to March 31, 2025
+Added: The following tables in this section set forth our selected condensed consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the three months ended March 31, 2026 and March 31, 2025.
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
SaaS and license revenue $ 181,524 $ 163,800 11 %
1 unchanged sentence
Total revenue $ 265,193 $ 238,822 11 %
−Removed: The $15.9 million increase in total revenue for the three months ended September 30, 2025 as compared to the same period in the prior year was primarily the result of a $16.1 million, or 10%, increase in our SaaS and license revenue, partially offset by a $0.2 million decrease in our hardware and other revenue.
−Removed: Our software license revenue included within SaaS and license revenue decreased $0.7 million to $4.3 million during the three months ended September 30, 2025 as compared to $5.0 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud-based hosted platform.
−Removed: The SaaS and license revenue for the Alarm.com segment increased $12.0 million for the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2024.
−Removed: The SaaS and license revenue for our Other segment increased $4.1 million for the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution.
−Removed: The decrease in hardware and other revenue for the three months ended September 30, 2025 as compared to the same period in the prior year was primarily from the $2.3 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of video cameras and thermostats sold, partially offset by price increases we have implemented on certain products to cover a portion of our increases in costs.
−Removed: Hardware and other revenue, net of intersegment eliminations, in our Other segment increased $2.1 million for the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to sales of energy credits related to the acquisition of BTR as well as increased sales related to our property management solution.
−Removed: The $51.9 million increase in total revenue for the nine months ended September 30, 2025 as compared to the same period in the prior year was primarily the result of a $43.6 million, or 9%, increase in our SaaS and license revenue and a $8.3 million, or 4%, increase in our hardware and other revenue.
−Removed: Our software license revenue included within SaaS and license revenue decreased $1.9 million to $13.5 million during the nine months ended September 30, 2025, as compared to $15.4 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud-based hosted platform.
−Removed: The SaaS and license revenue for the Alarm.com segment increased $31.9 million for the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2024.
−Removed: The SaaS and license revenue for our Other segment increased $11.7 million for the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution.
−Removed: The increase in hardware and other revenue for the nine months ended September 30, 2025 as compared to the same period in the prior year was primarily from the $5.0 million increase in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment due to an increase in the volume of video cameras sold as well as price increases we have implemented on certain products to cover a portion of our increases in costs.
−Removed: Hardware and other revenue, net of intersegment eliminations, in our Other segment increased $3.3 million for the nine months ended September 30, 2025 as compared to the same period in the prior year, primarily due to sales of energy credits related to the acquisition of BTR as well as an increase in sales related to our property management solution.
+Added: The $26.4 million increase in total revenue was primarily the result of a $17.7 million, or 11%, increase in our SaaS and license revenue, and an $8.7 million, or 12%, increase in our hardware and other revenue.
+Added: The SaaS and license revenue for the Alarm.com segment increased $9.7 million primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2025.
+Added: The SaaS and license revenue for our Other segment increased $8.0 million primarily due to an increase in sales of our energy management and demand response solutions, including revenue from the purchase of RGS on November 21, 2025.
+Added: The increase in hardware and other revenue was primarily from the $6.7 million increase in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from price increases we have implemented on certain products to cover a portion of our increases in costs as well as an increase in hardware sold related to our video surveillance software.
+Added: Hardware and other revenue, net of intersegment eliminations, in our Other segment increased $2.0 million primarily due to sales of energy credits related to the acquisition of Bridge to Renewables, Inc., or BTR, on August 15, 2025, as well as increased sales related to our property management solution.
Cost of Revenue
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Cost of revenue (1)
5 unchanged sentences
(1) Excludes amortization and depreciation shown in operating expenses.
−Removed: The $2.8 million increase in cost of revenue for the three months ended September 30, 2025 as compared to the same period in the prior year was the result of a $1.7 million, or 3%, increase in cost of hardware and other revenue, and a $1.1 million, or 5%, increase in cost of SaaS and license revenue.
−Removed: Our cost of software license revenue included within cost of SaaS and license revenue was $0.1 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively.
−Removed: The cost of hardware and other revenue for the Alarm.com segment decreased $0.3 million during the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped.
−Removed: The cost of hardware and other revenue for the Other segment increased $2.0 million during the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to costs associated with sales of energy credits related to the acquisition of BTR and an increase in the number of hardware units shipped related to our property management solution.
−Removed: The cost of SaaS and license revenue for the Other segment increased $0.9 million during the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.
−Removed: The cost of SaaS and license revenue for the Alarm.com segment increased $0.2 million during the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
−Removed: Cost of hardware and other revenue as a percentage of hardware and other revenue was 78% for the three months ended September 30, 2025 and 76% for the same period in the prior year.
−Removed: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% and 15% for the three months ended September 30, 2025 and 2024, respectively.
−Removed: Cost of software license revenue as a percentage of software license revenue was 2% for the three months ended September 30, 2025 as compared to 3% for the same period in the prior year.
−Removed: The $10.7 million increase in cost of revenue for the nine months ended September 30, 2025 as compared to the same period in the prior year was the result of a $6.9 million, or 4%, increase in cost of hardware and other revenue, and a $3.8 million, or 6%, increase in cost of SaaS and license revenue.
−Removed: Our cost of software license revenue included within cost of SaaS and license revenue was $0.3 million for the nine months ended September 30, 2025 as compared to $0.5 million during the same period in the prior year.
−Removed: The cost of hardware and other revenue for the Alarm.com segment increased $4.0 million during the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to an increase in the number of various hardware units shipped.
−Removed: The cost of hardware and other revenue for the Other segment increased $2.9 million during the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to costs associated with sales of energy credits related to the acquisition of BTR and an increase in the number of hardware units shipped related to our property management solution.
−Removed: The cost of SaaS and license revenue for the Other segment increased $2.8 million during the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.
−Removed: The cost of SaaS and license revenue for the Alarm.com segment increased $1.0 million during the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
−Removed: Cost of hardware and other revenue as a percentage of hardware and other revenue was 76% for each of the nine months ended September 30, 2025 and 2024.
−Removed: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for each of the nine months ended September 30, 2025 and 2024.
−Removed: Cost of software license revenue as a percentage of software license revenue was 2% for the nine months ended September 30, 2025 as compared to 3% for the same period in the prior year.
+Added: The $12.3 million increase in cost of revenue was the result of a $6.3 million, or 29%, increase in cost of SaaS and license revenue, and a $6.0 million, or 11%, increase in cost of hardware and other revenue.
+Added: The cost of SaaS and license revenue for the Other segment increased $4.9 million primarily due to an increase in sales of our energy management and demand response solutions, including from our acquisition of RGS on November 21, 2025, which drove a corresponding increase in amounts paid to distributed energy resource providers.
+Added: The cost of SaaS and license revenue for the Alarm.com segment increased $1.4 million primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
+Added: The cost of hardware and other revenue for the Alarm.com segment increased $4.7 million primarily due to a change in the mix of product sales to more hardware with higher costs related to tariffs and supplier price increases.
+Added: The cost of hardware and other revenue for the Other segment increased $1.3 million primarily due to costs associated with sales of energy credits related to the acquisition of BTR on August 15, 2025, and an increase in the number of hardware units shipped related to our property management solution.
+Added: Cost of hardware and other revenue as a percentage of hardware and other revenue was 75% and 76% for the three months ended March 31, 2026 and 2025, respectively.
+Added: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 15% and 13% for the three months ended March 31, 2026 and 2025, respectively.
Sales and Marketing Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Sales and marketing $ 34,434 $ 28,549 21 %
% of total revenue 13 % 12 %
−Removed: The $2.5 million increase in sales and marketing expense for the three months ended September 30, 2025 as compared to the same period in the prior year was primarily due to a $0.9 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth, and a $0.5 million increase in marketing expense for our Alarm.com segment.
+Added: The $5.9 million increase in sales and marketing expense was primarily due to a $2.7 million increase in marketing expense, due in part to an increase in marketing conference costs, and a $1.4 million increase in personnel and related costs, attributable in part to increases in the headcount for our sales team to support our growth for our Alarm.com segment.
Personnel and related costs includes salary, benefits, stock-based compensation and travel expenses.
−Removed: Sales and marketing expense from our Other segment increased $0.8 million for the three months ended September 30, 2025 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team.
−Removed: The $8.9 million increase in sales and marketing expense for the nine months ended September 30, 2025 as compared to the same period in the prior year was primarily due to a $3.8 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth, and a $2.1 million increase in marketing expense for our Alarm.com segment.
−Removed: Sales and marketing expense from our Other segment increased $2.6 million for the nine months ended September 30, 2025, as compared to the same period in the prior year, primarily due to increases in personnel and related costs, attributable in part to increases in the headcount for our sales team.
−Removed: The number of employees in sales and marketing functions increased from 583 as of September 30, 2024 to 614 as of September 30, 2025.
+Added: Sales and marketing expense from our Other segment increased $1.7 million primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team.
+Added: The number of employees in sales and marketing functions increased from 579 as of March 31, 2025 to 615 as of March 31, 2026.
General and Administrative Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
General and administrative $ 27,454 $ 27,001 2 %
% of total revenue 10 % 11 %
−Removed: The $2.2 million increase in general and administrative expense for the three months ended September 30, 2025 as compared to the same period in the prior year was primarily due to a $1.9 million increase in legal costs related to intellectual property litigation and a $0.3 million increase in rent expense for our Alarm.com segment.
−Removed: General and administrative expenses from our Other segment decreased by $0.1 million for the three months ended September 30, 2025 as compared to the same period in the prior year, primarily due to a decrease in personnel and related costs.
−Removed: The $0.9 million increase in general and administrative expense for the nine months ended September 30, 2025 as compared to the same period in the prior year was primarily due to a $2.4 million increase in our expenses for external consultants and a $1.4 million increase in personnel and related costs for our Alarm.com segment.
−Removed: These increases in general and administrative expense are partially offset by a $2.9 million decrease in the provision for credit losses for our Alarm.com segment primarily related to credit loss expense recorded during the nine months ended September 30, 2024 related to a loan we previously provided to an affiliated entity of one of our distribution partners that did not occur during the nine months ended September 30, 2025 as well as a decrease of $0.8 million in recruiting costs for our Alarm.com segment.
−Removed: General and administrative expenses from our Other segment increased by $0.7 million for the nine months ended September 30, 2025 as compared to the same period in the prior year, primarily due to an increase in legal costs.
−Removed: The number of employees in general and administrative functions decreased from 232 as of September 30, 2024 to 231 as of September 30, 2025.
+Added: The $0.5 million increase in general and administrative expense was primarily due to a $0.7 million increase in personnel and related costs for our Alarm.com segment.
+Added: General and administrative expenses from our Other segment decreased by $0.3 million primarily due to a decrease in personnel and related costs.
+Added: The number of employees in general and administrative functions decreased from 236 as of March 31, 2025 to 230 as of March 31, 2026.
Research and Development Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Research and development $ 72,059 $ 68,367 5 %
% of total revenue 27 % 28 %
−Removed: The $4.4 million increase in research and development expense for the three months ended September 30, 2025 as compared to the same period in the prior year was primarily due to a $1.8 million increase in personnel and related costs for our Alarm.com segment, a $1.1 million increase in our expenses for external consultants and a $0.7 million increase in expenses for software licenses for our Alarm.com segment.
−Removed: Research and development expense from our Other segment increased by $0.5 million for the three months ended September 30, 2025 as compared to the same period in the prior year, primarily due to an
−Removed: increase in personnel and related costs attributable in part to an increase in headcount of employees in research and development functions.
−Removed: The $10.2 million increase in research and development expense for the nine months ended September 30, 2025 as compared to the same period in the prior year was primarily due to a $3.0 million increase in our expenses for external consultants, a $2.1 million increase in personnel and related costs, a $1.8 million increase in expenses for software licenses and a $0.5 million increase in rent expense for our Alarm.com segment.
−Removed: Research and development expense from our Other segment increased by $1.8 million for the nine months ended September 30, 2025 as compared to the same period in the prior year due to an increase in personnel and related costs.
−Removed: The overall number of employees in research and development functions decreased from 1,164 as of September 30, 2024 to 1,154 as of September 30, 2025.
+Added: The $3.7 million increase in research and development expense was primarily due to a $2.0 million increase in personnel and related costs for our Other segment attributable in part to an increase in headcount of employees in research and development functions from the acquisitions of BTR on August 15, 2025 and RGS on November 21, 2025.
+Added: Additionally, the increase in research and development expense was due to a $0.7 million increase in our expenses for external consultants for our Other segment.
+Added: Research and development expense from our Alarm.com segment increased by $0.6 million primarily due to an increase in expenses for software licenses.
+Added: The overall number of employees in research and development functions increased from 1,129 as of March 31, 2025 to 1,140 as of March 31, 2026.
Amortization and Depreciation
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Amortization and depreciation $ 9,092 $ 7,024 29 %
% of total revenue 4 % 3 %
−Removed: Amortization and depreciation increased $0.2 million and $0.3 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to changes in depreciation expense related to property and equipment as well as intangible assets that were acquired in connection with the purchase of 81% of the issued and outstanding shares of capital stock of CHeKT, Inc., or CHeKT, on February 10, 2025, and the purchase of 100% of the issued and outstanding shares of capital stock of BTR.
+Added: Amortization and depreciation increased $2.1 million primarily due to intangible assets that were acquired in connection with the acquisition of BTR on August 15, 2025, the acquisition of RGS on November 21, 2025, the purchase of 81% of the issued and outstanding shares of capital stock of CHeKT, Inc., or CHeKT, on February 10, 2025, as well as changes in depreciation expense related to property and equipment.
Interest Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Interest expense $ (3,672) $ (4,314) (15) %
% of total revenue (1) % (2) %
−Removed: Interest expense increased by $5.9 million for the nine months ended September 30, 2025 as compared to the same period in the prior year, primarily due to the interest expense and amortization of the debt issuance costs related to the 2029 Notes.
+Added: Interest expense decreased by $0.6 million primarily due to the maturity of the 2026 Notes on January 15, 2026.
Interest Income
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Interest income $ 4,931 $ 12,371 (60) %
% of total revenue 2 % 5 %
−Removed: Interest income decreased by $3.1 million for the three months ended September 30, 2025, as compared to the same period in the prior year, primarily due to a decrease in interest income earned on cash and cash equivalents from lower average interest rates and lower amounts of cash and cash equivalents during the three months ended September 30, 2025, as compared to the same period in the prior year.
−Removed: Interest income increased $1.7 million for the nine months ended September 30, 2025, as compared to the same period in the prior year, primarily due to an increase in interest income earned on cash and cash equivalents from higher amounts of cash and cash equivalents during the nine months ended September 30, 2025 as compared to the same period in the prior year.
−Removed: Other Income / (Expense), Net
+Added: Interest income decreased by $7.4 million primarily due to a decrease in interest income earned on cash and cash equivalents from lower amounts of cash and cash equivalents due to the $500.0 million paid in aggregate principal amount to holders of the 2026 Notes on January 14, 2026, and lower average interest rates.
+Added: Other Expense, Net
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
−Removed: Other income / (expense), net $ 3,538 $ (89) (4,075) % $ 703 $ (1,665) (142) %
+Added: Other expense, net $ (3,909) $ (2,660) 47 %
% of total revenue (2) % (1) %
−Removed: Other income / (expense), net increased $3.6 million for the three months ended September 30, 2025 as compared to the same period in the prior year, primarily due to a $3.8 million increase in unrealized gain on equity securities.
−Removed: Other income / (expense), net increased $2.4 million for the nine months ended September 30, 2025 as compared to the same period in the prior year, primarily due to a $1.3 million gain on fluctuations in foreign currency exchange rates and a $1.0 million reduction in expenses related to a program to help our service providers resell our solutions and hardware to our subscribers.
+Added: Other expense, net increased $1.2 million primarily due to an increase in losses on equity securities during the three months ended March 31, 2026 as compared to the same period in the prior year.
Provision for Income Taxes
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
Provision for income taxes $ 5,856 $ 7,307 (20) %
% of total revenue 2 % 3 %
−Removed: The provision for income taxes increased by $8.5 million and $17.6 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in the prior year.
−Removed: Our effective tax rate was 30.2% and 22.4% for the three and nine months ended September 30, 2025, respectively, as compared to 15.6% and 10.1% for the same periods in the prior year.
−Removed: The increase in the provision for income taxes for the three and nine months ended September 30, 2025 as compared to the same periods in the prior year was primarily due to the increase in income before income taxes, a reduction in our foreign derived intangible income deduction, a tax shortfall in employee stock-based compensation during the three and nine months ended September 30, 2025 as opposed to a windfall tax benefit recognized during the nine months ended September 30, 2024 and a less favorable true-up adjustment of our 2024 income tax provision estimate associated with research and development tax credits recorded during the nine months ended September 30, 2025 as compared to a similar true-up adjustment of our 2023 income tax provision estimate associated with research and development tax credits recorded during the same period in the prior year.
−Removed: Further, the net $1.7 million tax benefit recognized during the three months ended March 31, 2024 from the closure of the 2018 and 2019 Internal Revenue Service examination did not recur during the nine months ended September 30, 2025.
−Removed: Income from Equity Method Investments, Net
+Added: The provision for income taxes decreased by $1.5 million.
+Added: Our effective tax rate was 20.2% for the three months ended March 31, 2026, as compared to 20.9% for the same period in the prior year.
+Added: The decrease in the provision for income taxes was primarily due to the decrease in income before income taxes and a decrease in our research and development tax credits claimed during the three months ended March 31, 2026 as compared to the same period in the prior year.
+Added: (Income) / Loss from Equity Method Investments, Net
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2025 2024 2025 2024
−Removed: Income from equity method investments, net $ (2,793) $ — N/A $ (3,109) $ — N/A
+Added: (Income) / loss from equity method investments, net $ (245) $ 25 N/A
% of total revenue — % — %
−Removed: Income from equity method investments, net increased by $2.8 million and $3.1 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in the prior year.
−Removed: The increase in the income from equity method investments, net for the three and nine months ended September 30, 2025 as compared to the same periods in the prior year was due to the increase in our share of the net assets and net income of our investees accounted for under the equity method, partially offset by amortization expense related to basis differences in our equity method investments.
+Added: (Income) / loss from equity method investments, net increased by $0.3 million.
+Added: The increase in the (income) / loss from equity method investments, net was due to the increase in our share of the net assets and net income of our investees accounted for under the equity method, partially offset by amortization expense related to basis differences in our equity method investments.
Segment Information
1 unchanged sentence
Alarm.com and Other.
−Removed: Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that c ontributed 90% and 91% of our revenue, net of intersegment eliminations, for the three and nine months ended September 30, 2025, respectively, as compared to 92% and 93% for the same periods in the prior year.
+Added: Our Alarm.com segment represents our cloud-based and Software platforms for intelligently connected properties and related solutions that c ontributed 90% of our revenue, net of intersegment eliminations, for the three months ended March 31, 2026, as compared to 93% for the same period 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.
The consolidated subsidiaries that make up our Other segment are in the investment stage and have incurred significant operating expenses relative to their revenue.
−Removed: Our Alarm.com segment decreased from 1,815 employees as of September 30, 2024 to 1,810 employees as of September 30, 2025 and increased from 1,795 employees as of June 30, 2025.
−Removed: Our Other segment increased from 240 employees as of September 30, 2024 to 265 employees as of September 30, 2025 and increased from 253 employees as of June 30, 2025.
−Removed: Inter-segment revenue includes sales of hardware between our segments.
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.
−Removed: The reportable segment operational data is presented in the tables below (in thousands):
−Removed: Three Months Ended September 30, 2025
−Removed: Alarm.com Other Intersegment Alarm.com Intersegment Other Total
−Removed: SaaS and license revenue $ 153,289 $ 22,083 $ — $ — $ 175,372
−Removed: Hardware and other revenue
−Removed: 78,298 3,771 (810) (231) 81,028
−Removed: Total revenue
−Removed: 231,587 25,854 (810) (231) 256,400
−Removed: Cost of SaaS and license revenue 17,715 6,518 90 (90) 24,233
−Removed: Cost of hardware and other revenue 61,002 3,489 (870) (292) 63,329
−Removed: Total cost of revenue 78,717 10,007 (780) (382) 87,562
−Removed: Selling and marketing expense 23,266 6,232 — — 29,498
−Removed: General and administrative expense 26,438 1,451 — — 27,889
−Removed: Research and development expense 59,347 7,290 — — 66,637
−Removed: Amortization and depreciation expense 7,367 426 — — 7,793
−Removed: Total operating expenses 116,418 15,399 — — 131,817
−Removed: Operating income / (loss)
−Removed: $ 36,452 $ 448 $ (30) $ 151 $ 37,021
−Removed: Reconciliation of operating income to income before income taxes
−Removed: Operating income $ 37,021
−Removed: Interest expense (4,326)
−Removed: Interest income 11,274
−Removed: Other income / (expense), net 3,538
−Removed: Income before income taxes $ 47,507
−Removed: Three Months Ended September 30, 2024
−Removed: Alarm.com Other Intersegment Alarm.com Intersegment Other Total
−Removed: SaaS and license revenue $ 141,319 $ 17,957 $ — $ — $ 159,276
−Removed: Hardware and other revenue
−Removed: 80,597 1,610 (817) (169) 81,221
−Removed: Total revenue
−Removed: 221,916 19,567 (817) (169) 240,497
−Removed: Cost of SaaS and license revenue 17,542 5,557 75 (75) 23,099
−Removed: Cost of hardware and other revenue 61,214 1,346 (785) (126) 61,649
−Removed: Total cost of revenue 78,756 6,903 (710) (201) 84,748
−Removed: Selling and marketing expense 21,604 5,406 — — 27,010
−Removed: General and administrative expense 24,174 1,538 — — 25,712
−Removed: Research and development expense 55,479 6,742 — — 62,221
−Removed: Amortization and depreciation expense 7,357 255 — — 7,612
−Removed: Total operating expenses 108,614 13,941 — — 122,555
−Removed: Operating income / (loss)
−Removed: $ 34,546 $ (1,277) $ (107) $ 32 $ 33,194
−Removed: Reconciliation of operating income to income before income taxes
−Removed: Operating income $ 33,194
−Removed: Interest expense (4,315)
−Removed: Interest income 14,384
−Removed: Other income / (expense), net (89)
−Removed: Income before income taxes $ 43,174
−Removed: Nine Months Ended September 30, 2025
−Removed: Alarm.com Other Intersegment Alarm.com Intersegment Other Total
−Removed: SaaS and license revenue $ 451,934 $ 57,231 $ — $ — $ 509,165
−Removed: Hardware and other revenue
−Removed: 235,222 8,301 (2,147) (1,011) 240,365
−Removed: Total revenue
−Removed: 687,156 65,532 (2,147) (1,011) 749,530
−Removed: Cost of SaaS and license revenue 51,987 17,467 261 (261) 69,454
−Removed: Cost of hardware and other revenue 179,372 7,671 (2,080) (1,159) 183,804
−Removed: Total cost of revenue 231,359 25,138 (1,819) (1,420) 253,258
−Removed: Selling and marketing expense 70,768 18,415 — — 89,183
−Removed: General and administrative expense 76,619 5,355 — — 81,974
−Removed: Research and development expense 181,288 22,786 — — 204,074
−Removed: Amortization and depreciation expense 21,334 1,017 — — 22,351
−Removed: Total operating expenses 350,009 47,573 — — 397,582
−Removed: Operating income / (loss)
−Removed: $ 105,788 $ (7,179) $ (328) $ 409 $ 98,690
−Removed: Reconciliation of operating income to income before income taxes
−Removed: Operating income $ 98,690
−Removed: Interest expense (12,961)
−Removed: Interest income 35,453
−Removed: Other income / (expense), net 703
−Removed: Income before income taxes $ 121,885
−Removed: Nine Months Ended September 30, 2024
−Removed: Alarm.com Other Intersegment Alarm.com Intersegment Other Total
−Removed: SaaS and license revenue $ 420,032 $ 45,515 $ — $ — $ 465,547
−Removed: Hardware and other revenue
−Removed: 230,424 4,472 (2,362) (494) 232,040
−Removed: Total revenue
−Removed: 650,456 49,987 (2,362) (494) 697,587
−Removed: Cost of SaaS and license revenue 51,012 14,572 250 (213) 65,621
−Removed: Cost of hardware and other revenue 175,600 3,973 (2,283) (366) 176,924
−Removed: Total cost of revenue 226,612 18,545 (2,033) (579) 242,545
−Removed: Selling and marketing expense 64,467 15,834 — — 80,301
−Removed: General and administrative expense 76,408 4,704 — — 81,112
−Removed: Research and development expense 172,894 21,013 — — 193,907
−Removed: Amortization and depreciation expense 21,268 761 — — 22,029
−Removed: Total operating expenses 335,037 42,312 — — 377,349
−Removed: Operating income / (loss)
−Removed: $ 88,807 $ (10,870) $ (329) $ 85 $ 77,693
−Removed: Reconciliation of operating income to income before income taxes
−Removed: Operating income $ 77,693
−Removed: Interest expense (7,079)
−Removed: Interest income 33,780
−Removed: Other income / (expense), net (1,665)
−Removed: Income before income taxes $ 102,729
−Removed: Alarm.com Other Intersegment Alarm.com Intersegment Other Total
−Removed: Assets as of September 30, 2025
−Removed: $ 2,174,476 $ 86,006 $ (136,886) $ (6) $ 2,123,590
−Removed: Assets as of December 31, 2024
−Removed: 2,081,214 85,468 (128,465) (9) 2,038,208
−Removed: Our SaaS and license revenue for the Alarm.com segment included software license revenue of $4.3 million and $13.5 million for the three and nine months ended September 30, 2025, respectively, as compared to $5.0 million and $15.4 million for the same periods in the prior year.
−Removed: There was no software license revenue recorded for the Other segment during the three and nine months ended September 30, 2025 and 2024.
−Removed: Additions to property and equipment were $3.9 million and $16.9 million for the Alarm.com segment for the three and nine months ended September 30, 2025, respectively, as compared to $12.6 million and $18.4 million for the same periods in the prior year.
−Removed: Additions to property and equipment were less than $0.1 million and $0.1 million for the Other segment for the three and nine months ended September 30, 2025, respectively, as compared to less than $0.1 million and $0.1 million for the Other segment for the three and nine months ended September 30, 2024, respectively.
+Added: Our Alarm.com segment decreased from 1,774 employees as of March 31, 2025 to 1,757 employees as of March 31, 2026 and decreased from 1,768 employees as of December 31, 2025.
+Added: Our Other segment increased from 246 employees as of March 31, 2025 to 294 employees as of March 31, 2026 and increased from 290 employees as of December 31, 2025.
+Added: Inter-segment revenue includes sales of hardware between our segments.
+Added: See Note 18 of our condensed consolidated financial statements for additional segment information.
Critical Accounting Estimates
10 unchanged sentences
The following table summarizes our cash and cash equivalents, accounts receivable, net and working capital, for the periods indicated (in thousands):
−Removed: September 30, 2025 December 31, 2024
+Added: March 31, 2026 December 31, 2025
Cash and cash equivalents $ 497,449 $ 960,584
2 unchanged sentences
We define working capital as current assets minus current liabilities.
−Removed: Our cash and cash equivalents as of September 30, 2025 are available for working capital purposes.
+Added: Our cash and cash equivalents as of March 31, 2026 are available for working capital purposes.
Our investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification and maturities of our investments to preserve capital, maintain liquidity and limit the amount of credit risk exposure.
−Removed: As of September 30, 2025, our cash and cash equivalents were primarily held in money market accounts.
+Added: As of March 31, 2026, our cash and cash equivalents were primarily held in money market accounts.
Liquidity and Capital Resources
−Removed: As of September 30, 2025, we had $1.07 billion in cash and cash equivalents.
+Added: As of March 31, 2026, we had $497.4 million in cash and cash equivalents.
We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents.
−Removed: To date, we have principally financed our operations through cash generated by operating activities and through private and public equity and debt financings.
We mitigate the risk of loss for our cash and cash equivalents by depositing funds with a number of reputable financial institutions and monitoring both the risk profiles and investment strategies of money market funds.
−Removed: Beginning in 2022, the Tax Cuts and Jobs Act of 2017 amended Internal Revenue Code Section 174, or Section 174, to eliminate the option to immediately deduct research and development expenditures in the year incurred, requiring these expenditures to be capitalized and amortized over five years for domestic expenditures and over 15 years for foreign expenditures.
−Removed: We calculated the 2023 federal and state cash tax increase from Section 174 to be $43.5 million, which we paid in April 2024, and we calculated the 2024 federal and state cash tax increase from Section 174 to be $33.5 million, which we paid in April 2025.
−Removed: On July 4, 2025, OBBBA was enacted in the United States.
−Removed: The OBBBA includes a broad range of tax provisions that impact the timing and the magnitude of certain key tax deductions.
−Removed: The most significant provisions to us are the permanent reinstatement of the full and immediate deduction for domestic research and development expenditures in the year such costs are incurred and the 100% first-year bonus depreciation deduction, with both provisions reducing our associated deferred tax assets.
−Removed: We currently anticipate these provisions will significantly reduce our current federal income tax cash outlays over the next several years.
−Removed: Certain other international tax provisions may also be favorable to us beginning in 2026.
−Removed: We will continue to analyze the OBBBA tax provisions, including any additional guidance that is issued, to assess their potential impact on our financial position, results of operations and cash flows.
+Added: To date, we have principally financed our operations through cash generated by operating activities and through private and public equity and debt financings.
+Added: For further discussion on our debt arrangements, see Note 12 to our condensed consolidated financial statements.
We believe our existing cash and cash equivalents and our future cash flows from operating activities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months.
−Removed: Over the final three months of fiscal year 2025, we expect our capital expenditure requirements to be between $1.0 million and $3.0 million, primarily related to purchases of computer software and equipment as well as the continued build out of our leased and owned office space, excluding any leasehold improvements related to tenant improvement allowances.
−Removed: Maturities of lease liabilities for our various office, data center and equipment leases as of September 30, 2025 are as follows:
−Removed: $4.1 million for the remainder of 2025, $14.3 million in 2026, $14.8 million in 2027, $13.9 million in 2028, $12.3 million in 2029 and $48.6 million in 2030 and thereafter.
−Removed: 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.
−Removed: Quarterly principal payments begin in the second quarter of 2027.
−Removed: 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%.
−Removed: For the first two years of the loan, monthly interest payments can be payable in kind at the election of the borrower.
−Removed: The maturity date of the loan is January 30, 2030.
−Removed: In consideration for the purchase of 81% of the issued and outstanding shares of capital stock of CHeKT, we paid $23.6 million in cash on February 10, 2025, after deducting $3.7 million related to agreed holdback provisions.
−Removed: Pursuant to the terms of
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: On April 28, 2025, we paid $29.1 million in cash to purchase 24.7% of the outstanding shares of Safe Streets.
−Removed: 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 the 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.
−Removed: 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.
−Removed: 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.
−Removed: After consummation of these transactions, All Access and Safe Haven were under common control.
−Removed: 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 the 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.
−Removed: On August 15, 2025, EnergyHub, Inc.
−Removed: acquired all of the issued and outstanding shares of capital stock of BTR.
−Removed: BTR provides a managed charging solution for electric vehicle manufacturers and drivers.
−Removed: BTR’s technology integrates directly into a vehicle’s native mobile app, delivering utility program enrollment, charging insights and incentives to electric vehicle drivers.
−Removed: The acquisition is anticipated to expand EnergyHub’s ecosystem of automotive partners and strengthen its end-to-end managed charging offering, supporting improved driver engagement and grid optimization for utility clients.
−Removed: In consideration for the purchase of BTR, we paid $12.4 million in cash on August 15, 2025, after deducting $1.6 million related to agreed holdback provisions.
−Removed: The acquisition was accounted for as a business combination within the Other segment.
−Removed: The purchase price allocation was not finalized as of the date of this Quarterly Report on Form 10-Q and is pending the final determination of the working capital adjustment as well as tax adjustments.
+Added: As of March 31, 2026, there were no material changes in our cash requirements from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.
+Added: Our 2026 Notes were paid in full on January 14, 2026.
Our future working capital, capital expenditure and cash requirements will depend on many factors, including the impact of the Macroeconomic Conditions on the economy and our operations, the rate of our revenue growth, the amount and timing of our investments in human resources and capital equipment, future acquisitions and investments, and the timing and extent of our introduction of new solutions and platform and solution enhancements.
3 unchanged sentences
Any additional equity financing would be dilutive to our current stockholders.
−Removed: Material Cash Requirements
−Removed: As of September 30, 2025, there were no material changes in our cash requirements from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.
−Removed: Our 2026 Notes are due January 15, 2026 and are presented as a current liability in the condensed consolidated balance sheets as of September 30, 2025.
−Removed: Sources of Liquidity
−Removed: On January 20, 2021, we issued $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026 in a private placement to qualified institutional buyers and received proceeds of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs.
−Removed: On May 31, 2024, we issued $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029 in a private placement to qualified institutional buyers and received proceeds of $485.2 million, net of $14.8 million of transaction fees and other debt issuance costs.
−Removed: In connection with the offering of the 2029 Notes, we entered into privately negotiated capped call transactions with one of the initial purchasers and certain other financial institutions, at a cost of $63.1 million.
−Removed: The 2026 Notes and 2029 Notes are discussed in more detail in Note 13 of our notes to the condensed consolidated financial statements.
−Removed: We did not declare or pay dividends during the three and nine months ended September 30, 2025 or 2024.
+Added: Capital Expenditures
+Added: Over the final nine months of fiscal year 2026, we expect our capital expenditure requirements to be between $7.0 million and $10.0 million, primarily related to purchases of computer software and equipment as well as the continued build out of our leased and owned office space, excluding any leasehold improvements related to tenant improvement allowances.
+Added: We did not declare or pay dividends during the three months ended March 31, 2026 or 2025.
We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future.
3 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.
−Removed: During the three and nine months ended September 30, 2025, we repurchased 225,094 and 399,494 shares of our common stock under this program for $12.2 million and $22.4 million, which includes applicable commissions and fees.
−Removed: No shares were repurchased under our stock repurchase program during the three months ended September 30, 2024.
−Removed: During the nine months ended September 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.
+Added: During the three months ended March 31, 2026, we repurchased 428,065 shares of our common stock under this program for $20.0 million, which includes applicable commissions and fees.
+Added: 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.
+Added: On May 4, 2026, our board of directors authorized the cancellation of the balance under the stock repurchase program ending May 31, 2026 and the adoption of a new stock repurchase program, under which we are authorized to purchase up to an aggregate of $150.0 million of our outstanding common stock during the two-year period ending May 4, 2028.
We are subject to a 1.0% excise tax on the value of net corporate stock repurchases under the Inflation Reduction Act of 2022.
2 unchanged sentences
The following table sets forth our cash flows for the periods indicated (in thousands):
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Cash flows from operating activities $ 50,635 $ 24,057
−Removed: Cash flows used in investing activities (250,003) (16,553)
−Removed: Cash flows (used in) / from financing activities (21,470) 344,286
+Added: Cash flows from / (used in) investing activities 2,405 (55,179)
+Added: Cash flows used in financing activities (518,236) (3,476)
Operating Activities
Cash flows from operating activities have typically been generated from our net income and by changes in our operating assets and liabilities, particularly from accounts receivable, accounts payable and inventory, adjusted for non-cash expense items such as amortization and depreciation, deferred income taxes and stock-based compensation.
−Removed: For the nine months ended September 30, 2025, cash flows from operating activities were $117.4 million, compared to $150.2 million for the same period in the prior year.
−Removed: This $32.8 million decrease in cash flows from operating activities was due to a $85.7 million decrease in cash from operating assets and liabilities, partially offset by a $48.3 million increase in non-cash and other reconciling items and a $4.6 million increase in net income.
−Removed: The $85.7 million decrease in cash from operating assets and liabilities was primarily due to a $38.2 million change in accounts receivable, accounts payable and other current liabilities primarily due to the timing of disbursements and the collection of receipts, a $24.7 million change in inventory resulting from an increase in the change of purchased inventory during the nine months ended September 30, 2025 as compared to the same period in the prior year as well as a $8.3 million income tax receivable recorded during the nine months ended September 30, 2025.
−Removed: The $48.3 million increase in non-cash and other reconciling items was primarily due to a $51.5 million change in deferred income taxes, which was primarily driven by the enactment of the OBBBA, which allows for the immediate deduction of post-2024 domestic research and development expenditures, resulting in a reduction to the associated deferred tax asset, as well as the current year amortization of the capitalized pre-2025 domestic research and development expenditures.
−Removed: This increase in non-cash and other reconciling items was partially offset by a $5.1 million decrease in stock-based compensation as well as a $3.3 million increase in gains from investments in unconsolidated entities during the nine months ended September 30, 2025 as compared to the same period in the prior year.
+Added: For the three months ended March 31, 2026, cash flows from operating activities were $50.6 million, compared to $24.1 million for the same period in the prior year.
+Added: This $26.5 million increase in cash flows from operating activities was due to a $15.9 million increase in non-cash and other reconciling items and a $14.9 million increase in cash from operating assets and liabilities, partially offset by a $4.3 million decrease in net income.
+Added: The $15.9 million increase in non-cash and other reconciling items was primarily due to a $11.6 million change in deferred income taxes, which was primarily driven by the enactment of the One Big Beautiful Bill Act, or OBBBA, which allows for the immediate deduction of post-2024 domestic research and development expenditures, resulting in a reduction to the associated deferred tax asset, as well as the current year amortization of the capitalized pre-2025 domestic research and development expenditures.
+Added: The increase in non-cash and other reconciling items was also due to $2.7 million in distributions received from our equity method investees.
+Added: The $14.9 million increase in cash from operating assets and liabilities was primarily due to a $5.4 million reduction to an income tax receivable, a $3.6 million change in prepaid expenses and a $1.1 million change in inventory resulting from a decrease in the change of purchased inventory during the three months ended March 31, 2026 as compared to the same period in the prior year.
Investing Activities
Our investing activities typically include acquisitions, capital expenditures, investments in unconsolidated entities, notes receivable issued to companies with offerings complementary to ours and proceeds from the repayment of those notes receivable.
−Removed: Our capital expenditures have primarily been for general business use, including leasehold improvements as we
−Removed: have expanded our office space to accommodate our growth in headcount, computer equipment used internally and expansion of our network operations centers.
−Removed: For the nine months ended September 30, 2025, cash flows used in investing activities were $250.0 million, compared to $16.6 million for the same period in the prior year.
−Removed: The $233.4 million increase in cash flows used in investing activities was primarily due to an increase of $168.0 million in purchases of investments in unconsolidated entities during the nine months ended September 30, 2025 as compared to the same period in the prior year as well as $23.6 million paid to purchase 81% of the issued and outstanding shares of capital stock of CHeKT on February 10, 2025 and $12.4 million paid to purchase all of the issued and outstanding shares of capital stock of BTR on August 15, 2025.
−Removed: Additionally, the increase in cash flows used in investing activities was due to an increase of $23.8 million in notes receivable issued, primarily due to the $21.5 million note receivable issued to Safe Streets during the nine months ended September 30, 2025 that did not occur during the same period in the prior year.
+Added: Our capital expenditures have primarily been for general business use, including leasehold improvements as we have expanded our office space to accommodate our growth in headcount, computer equipment used internally and expansion of our network operations centers.
+Added: For the three months ended March 31, 2026, cash flows from investing activities were $2.4 million, compared to cash flows used in investing activities of $55.2 million for the same period in the prior year.
+Added: The $57.6 million increase in cash flows from investing activities was primarily due to the $23.6 million paid to purchase 81% of the issued and outstanding shares of capital stock of CHeKT on February 10, 2025 as well as a decrease of $20.0 million in notes receivable issued, primarily due to the $21.5 million note receivable issued to SafeStreets during the three months ended March 31, 2025, that did not occur during the three months ended March 31, 2026.
+Added: Additionally, the increase in cash flows from investing activities was due to $6.0 million in proceeds from the sale of investments in unconsolidated entities during the three months ended March 31, 2026 that did not occur during the same period in the prior year.
Financing Activities
−Removed: Cash generated by financing activities has historically included proceeds from the 2026 Notes, the 2029 Notes and the issuance of common stock from employee stock option exercises and from our employee stock purchase plan.
−Removed: Cash used in financing activities has historically included repurchases of common stock, repayments of debt, payments of debt issuance costs and purchases of capped calls related to the 2029 Notes.
−Removed: For the nine months ended September 30, 2025, cash flows used in financing activities were $21.5 million, compared to cash flows from financing activities of $344.3 million for the same period in the prior year.
−Removed: The $365.8 million decrease in cash flows from financing activities was primarily due to $485.2 million in proceeds from the issuance of the 2029 Notes, net of issuances costs paid during the nine months ended September 30, 2024 that did not occur during the nine months ended September 30, 2025.
−Removed: The decrease in cash flows used in financing activities was partially offset by a $52.6 million decrease in purchases of shares of our common stock and $63.1 million purchases of capped calls related to the 2029 Notes during the nine months ended September 30, 2024, which did not occur during the nine months ended September 30, 2025.
+Added: Cash generated by financing activities includes proceeds from the 2029 Notes and proceeds from the issuance of common stock from employee stock option exercises and from our employee stock purchase plan.
+Added: Cash used in financing activities typically includes repurchases of common stock, repayments of debt, payments of debt issuance costs and purchases of capped calls related to the 2029 Notes.
+Added: For the three months ended March 31, 2026, cash flows used in financing activities were $518.2 million, compared to $3.5 million for the same period in the prior year.
+Added: The $514.7 million increase in cash flows used in financing activities was primarily due to the $500.0 million payment of the 2026 Notes during the three months ended March 31, 2026 that did not occur during the same period in the prior year as well as a $14.9 million increase in purchases of shares of our common stock during the three months ended March 31, 2026 as compared to the same period in the prior year.
Non-GAAP Measures
−Removed: We define non-GAAP adjusted EBITDA as our net income before interest expense, interest income, certain activity within other income / (expense), net, provision for income taxes, income from equity method investments, net, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
+Added: We define non-GAAP adjusted EBITDA as our net income before interest expense, interest income, certain activity within other expense, net, provision for income taxes, (income) / loss from equity method investments, net, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
We do not consider these items to be indicative of our core operating performance.
The non-cash items include amortization and depreciation expense;
−Removed: income from equity method investments, net;
+Added: (income) / loss from equity method investments, net;
amortization of debt issuance costs for the 2026 Notes and 2029 Notes included in interest expense;
15 unchanged sentences
Because of these and other limitations, you should consider non-GAAP adjusted EBITDA alongside our other GAAP-based financial performance measures, net income and our other GAAP financial results.
−Removed: The following table presents a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):
+Added: The following table presents a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measure, for the periods indicated (in thousands):
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2025 2024 2025 2024
Non-GAAP adjusted EBITDA:
Net income $ 23,382 $ 27,712
−Removed: Interest expense, interest income and certain activity within other income / (expense), net (7,049) (10,069) (22,593) (26,701)
+Added: Interest expense, interest income and certain activity within other expense, net 1
+Added: 2,606 (5,769)
Provision for income taxes 5,856 7,307
−Removed: Income from equity method investments, net (2,793) — (3,109) —
+Added: (Income) / loss from equity method investments, net (245) 25
Amortization and depreciation expense 9,092 7,024
4 unchanged sentences
Non-GAAP adjusted EBITDA $ 49,573 $ 45,828
+Added: _____________
+Added: (1) During the three months ended March 31, 2026, we revised the definition of non-GAAP adjusted EBITDA to exclude gains and losses on investments with readily determinable fair value, in addition to gains and losses on investments without readily determinable fair value, which we have historically excluded.
+Added: We believe this change provides a consistent and useful view of our core operating performance, as such gains and losses are not reflective of our underlying business operations, are driven by market price fluctuations that are outside of our control and can vary significantly from period to period in ways that may obscure trends in operating results.
+Added: For comparability and to conform the prior period to the current presentation, we have revised non-GAAP adjusted EBITDA and non-GAAP adjusted net income for the three months ended March 31, 2025.
+Added: As a result, we adjusted for losses on investments with readily determinable fair value of $3.7 million and $2.3 million during the three months ended March 31, 2026 and 2025, respectively, within “Interest expense, interest income and certain activity within other expense, net.”
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.