Alarm.com Holdings, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS (unaudited) ALARM.COM HOLDINGS, INC. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: SaaS and license revenue $ 188,778 $ 169,993 $ 370,302 $ 333,793 Hardware and other revenue 88,956 84,315 172,625 159,337 Total revenue 277,734 254,308 542,927 493,130 Cost of revenue (1) : Cost of SaaS and license revenue 29,917 23,653 57,812 45,221 Cost of hardware and other revenue 65,736 63,809 128,352 120,475 Total cost of revenue 95,653 87,462 186,164 165,696 Operating expenses: Sales and marketing 32,979 31,136 67,413 59,685 General and administrative 36,646 27,084 64,100 54,085 Research and development 71,008 69,070 143,067 137,437 Amortization and depreciation 8,964 7,534 18,056 14,558 Total operating expenses 149,597 134,824 292,636 265,765 Operating income 32,484 32,022 64,127 61,669 Interest expense ( 3,543 ) ( 4,321 ) ( 7,215 ) ( 8,635 ) Interest income 4,491 11,808 9,422 24,179 Other expense, net ( 2,336 ) ( 175 ) ( 6,245 ) ( 2,835 ) Income before income taxes 31,096 39,334 60,089 74,378 Provision for income taxes 7,737 5,458 13,593 12,765 Income from equity method investments, net ( 849 ) ( 341 ) ( 1,094 ) ( 316 ) Net income 24,208 34,217 47,590 61,929 Net loss attributable to redeemable noncontrolling interests 38 335 239 573 Net income attributable to common stockholders $ 24,246 $ 34,552 $ 47,829 $ 62,502 Per share information attributable to common stockholders: Net income attributable to common stockholders per share: Basic $ 0.49 $ 0.69 $ 0.97 $ 1.26 Diluted $ 0.48 $ 0.63 $ 0.95 $ 1.15 Weighted average common shares outstanding: Basic 49,328,402 49,806,105 49,463,300 49,733,328 Diluted 55,924,506 60,137,204 56,160,666 60,159,849 _______________ (1) Exclusive of amortization and depreciation shown in operating expenses below. See accompanying notes to the condensed consolidated financial statements. 2 ALARM.COM HOLDINGS, INC. Condensed Consolidated Statements of Comprehensive Income (in thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 24,208 $ 34,217 $ 47,590 $ 61,929 Other comprehensive (loss) / income Foreign currency translation adjustment ( 101 ) 959 ( 661 ) 1,788 Total other comprehensive (loss) / income ( 101 ) 959 ( 661 ) 1,788 Comprehensive income 24,107 35,176 46,929 63,717 Comprehensive loss attributable to redeemable noncontrolling interests 38 335 239 573 Comprehensive income attributable to common stockholders $ 24,145 $ 35,511 $ 47,168 $ 64,290 See accompanying notes to the condensed consolidated financial statements. 3 ALARM.COM HOLDINGS, INC. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (unaudited) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 479,418 $ 960,584 Accounts receivable, net of allowance for credit losses of $ 8,016 and $ 5,171 , and net of allowance for product returns of $ 2,050 and $ 2,140 as of June 30, 2026 and December 31, 2025, respectively 161,709 141,852 Inventory 94,349 94,429 Other current assets, net of allowance for credits losses of $ 750 and $ 749 as of June 30, 2026 and December 31, 2025, respectively 65,879 75,646 Total current assets 801,355 1,272,511 Property and equipment, net 67,966 64,799 Intangible assets, net 87,791 99,352 Goodwill 224,641 224,987 Deferred tax assets 147,694 152,255 Operating lease right-of-use assets 52,283 52,636 Investments in unconsolidated entities 232,470 226,931 Other assets, net of allowance for credit losses of $ 2 and $ 0 as of June 30, 2026 and December 31, 2025, respectively 42,778 43,120 Total assets $ 1,656,978 $ 2,136,591 Liabilities, redeemable noncontrolling interests and stockholders’ equity Current liabilities: Accounts payable, accrued expenses and other current liabilities $ 108,201 $ 107,195 Accrued compensation 27,522 31,126 Deferred revenue 17,912 16,428 Convertible senior notes, net — 499,867 Operating lease liabilities 7,941 8,524 Total current liabilities 161,576 663,140 Deferred revenue 13,902 13,456 Convertible senior notes, net, noncurrent 491,094 489,641 Operating lease liabilities 68,430 67,609 Other liabilities 11,656 11,735 Total liabilities 746,658 1,245,581 Commitments and contingencies (Note 12) Redeemable noncontrolling interests 45,865 42,847 Stockholders’ equity Preferred stock, $ 0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2026 and December 31, 2025 — — Common stock, $ 0.01 par value, 300,000,000 shares authorized; 53,941,823 and 53,540,939 shares issued; and 49,033,533 and 49,630,714 shares outstanding as of June 30, 2026 and December 31, 2025, respectively 540 536 Additional paid-in capital 564,053 549,913 Treasury stock, at cost; 4,908,290 and 3,910,225 shares as of June 30, 2026 and December 31, 2025, respectively ( 272,872 ) ( 227,852 ) Accumulated other comprehensive income 2,029 2,690 Retained earnings 570,705 522,876 Total stockholders’ equity 864,455 848,163 Total liabilities, redeemable noncontrolling interests and stockholders’ equity $ 1,656,978 $ 2,136,591 See accompanying notes to the condensed consolidated financial statements. 4 ALARM.COM HOLDINGS, INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended June 30, Cash flows from operating activities: 2026 2025 Net income $ 47,590 $ 61,929 Adjustments to reconcile net income to net cash flows from operating activities: Provision for credit losses on accounts receivable 3,346 1,552 Reserve for product returns 987 1,111 Provision for credit losses on notes receivable 3 749 Amortization and depreciation 18,056 14,558 Amortization of debt issuance costs 1,586 3,002 Amortization of operating leases 7,587 7,829 Deferred income taxes 6,205 ( 15,673 ) Stock-based compensation 15,625 18,392 Distributions on investments in unconsolidated entities 6,430 — Loss from investments in unconsolidated entities 4,422 3,454 Other adjustments 710 67 Changes in operating assets and liabilities (net of business acquisitions): Accounts receivable ( 24,204 ) 1,574 Inventory ( 24 ) ( 1,544 ) Other current and non-current assets 5,471 ( 4,732 ) Accounts payable and other current liabilities 5,193 ( 39,711 ) Deferred revenue 1,930 682 Operating lease liabilities ( 8,320 ) ( 6,393 ) Other liabilities ( 71 ) ( 73 ) Cash flows from operating activities 92,522 46,773 Cash flows used in investing activities: Business acquisitions, net of cash acquired — ( 23,412 ) Additions to property and equipment ( 5,759 ) ( 10,667 ) Issuances of notes receivable ( 4,342 ) ( 23,500 ) Receipt of payments on notes receivable 61 49 Capitalized software development costs ( 538 ) ( 758 ) Proceeds from sale of investments in unconsolidated entities 6,039 — Purchase of investments in unconsolidated entities ( 16,173 ) ( 174,700 ) Cash flows used in investing activities ( 20,712 ) ( 232,988 ) Cash flows used in financing activities: Repayments of convertible senior notes ( 500,000 ) — Payments of deferred consideration for acquisitions and investments in unconsolidated entities ( 12,089 ) ( 1,741 ) Purchases of treasury stock, including transaction costs ( 45,020 ) ( 10,167 ) Issuances of common stock from equity-based plans 2,102 2,314 Cash flows used in financing activities ( 555,007 ) ( 9,594 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 73 ) ( 184 ) Net decrease in cash, cash equivalents and restricted cash ( 483,270 ) ( 195,993 ) Cash, cash equivalents and restricted cash at beginning of the period 968,807 1,229,132 Cash, cash equivalents and restricted cash at end of the period $ 485,537 $ 1,033,139 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 479,418 $ 1,024,862 Restricted cash included in other current assets, net, and other assets, net 6,119 8,277 Total cash, cash equivalents and restricted cash $ 485,537 $ 1,033,139 See accompanying notes to the condensed consolidated financial statements. 5 ALARM.COM HOLDINGS, INC. Condensed Consolidated Statements of Equity (in thousands) (unaudited) Redeemable Noncontrolling Interests Additional Paid-In Capital Accumulated Other Comprehensive Income / (Loss) Retained Earnings Total Stockholders’ Equity Common Stock Treasury Stock Shares Amount Shares Amount Balance as of December 31, 2025 $ 42,847 53,541 $ 536 $ 549,913 3,910 $ ( 227,852 ) $ 2,690 $ 522,876 $ 848,163 Common stock issued in connection with equity-based plans — 182 2 2,057 — — — — 2,059 Purchase of treasury stock, including transaction costs and excise tax — — — ( 155 ) 428 ( 19,995 ) — — ( 20,150 ) Stock-based compensation expense — — — 8,049 — — — — 8,049 Accretion adjustments of redeemable noncontrolling interest to redemption value 1,332 — — ( 1,332 ) — — — — ( 1,332 ) Net income / (loss) attributable to common stockholders ( 201 ) — — — — — — 23,583 23,583 Other comprehensive loss — — — — — — ( 560 ) — ( 560 ) Balance as of March 31, 2026 $ 43,978 53,723 $ 538 $ 558,532 4,338 $ ( 247,847 ) $ 2,130 $ 546,459 $ 859,812 Common stock issued in connection with equity-based plans — 219 2 41 — — — — 43 Purchase of treasury stock, including transaction costs and excise tax — — — ( 186 ) 570 ( 25,025 ) — — ( 25,211 ) Stock-based compensation expense — — — 7,591 — — — — 7,591 Accretion adjustments of redeemable noncontrolling interest to redemption value 1,925 — — ( 1,925 ) — — — — ( 1,925 ) Net income / (loss) attributable to common stockholders ( 38 ) — — — — — — 24,246 24,246 Other comprehensive loss — — — — — — ( 101 ) — ( 101 ) Balance as of June 30, 2026 $ 45,865 53,942 $ 540 $ 564,053 4,908 $ ( 272,872 ) $ 2,029 $ 570,705 $ 864,455 6 ALARM.COM HOLDINGS, INC. Condensed Consolidated Statements of Equity — (Continued) (in thousands) (unaudited) Redeemable Noncontrolling Interests Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income Retained Earnings Total Stockholders’ Equity Shares Amount Shares Amount Balance as of December 31, 2024 $ 44,747 52,756 $ 528 $ 521,192 3,138 $ ( 186,291 ) $ 815 $ 390,302 $ 726,546 Common stock issued in connection with equity-based plans — 148 1 1,582 — — — — 1,583 Purchase of treasury stock, including transaction costs and excise tax — — — ( 3 ) 86 ( 5,059 ) — — ( 5,062 ) Stock-based compensation expense — — — 9,481 — — — — 9,481 Noncontrolling interest assumed through acquisition 6,352 — — — — — — — — Accretion adjustments of redeemable noncontrolling interest to redemption value 1,724 — — ( 1,724 ) — — — — ( 1,724 ) Net income / (loss) attributable to common stockholders ( 238 ) — — — — — — 27,950 27,950 Other comprehensive income — — — — — — 829 — 829 Balance as of March 31, 2025 $ 52,585 52,904 $ 529 $ 530,528 3,224 $ ( 191,350 ) $ 1,644 $ 418,252 $ 759,603 Common stock issued in connection with equity-based plans — 243 2 729 — — — — 731 Purchase of treasury stock, including transaction costs and excise tax — — — 3 88 ( 5,108 ) — — ( 5,105 ) Stock-based compensation expense — — — 8,943 — — — — 8,943 Accretion adjustments of redeemable noncontrolling interest to redemption value 2,338 — — ( 2,338 ) — — — — ( 2,338 ) Net income / (loss) attributable to common stockholders ( 335 ) — — — — — — 34,552 34,552 Other comprehensive income — — — — — — 959 — 959 Balance as of June 30, 2025 $ 54,588 53,147 $ 531 $ 537,865 3,312 $ ( 196,458 ) $ 2,603 $ 452,804 $ 797,345 See accompanying notes to the condensed consolidated financial statements. 7 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) June 30, 2026 and 2025 Note 1. Organization Alarm.com Holdings, Inc. (referred to herein as Alarm.com, the Company, or we) is the leading platform for intelligently connected properties. Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions addressing global opportunities in the residential, multi-family, small business, enterprise commercial and energy markets. 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. Our solutions are delivered through an established network of trusted service provider partners, who are experts at selling, installing and supporting our solutions. We derive revenue from the sale of our cloud-based Software-as-a-Service, or SaaS, services, license fees, software, hardware, activation fees and other revenue. Our fiscal year ends on December 31. Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the SEC on February 19, 2026, or the Annual Report. The condensed consolidated balance sheet as of December 31, 2025 was derived from our audited financial statements but does not include all disclosures required by GAAP for annual financial statements. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented. However, the global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of 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). These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, tariffs, energy prices and consumer sentiment. It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions. The results of operations for the three and six months ended June 30, 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 uncertainties could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. Reclassifications Certain previously reported amounts in the condensed consolidated statements of operations for the three months ended June 30, 2025 have been reclassified to conform to our current presentation to reflect (income) / loss from equity method investments, net, as a separate line item, which was previously included in other expense, net. Certain previously reported amounts in the condensed consolidated statement of cash flows for the six months ended June 30, 2025 have been reclassified to conform to our current presentation, including the addition of other adjustments as a separate line item within the adjustments to reconcile net income to net cash flows from the operating activities section. Significant Accounting Policies and Use of Estimates There have been no material changes to our significant accounting policies or our use of estimates during the three and six months ended June 30, 2026 from those disclosed in our Annual Report. Recent Accounting Pronouncements Adopted During the three and six months ended June 30, 2026, we did not adopt any new accounting pronouncements. 8 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Not Yet Adopted On November 5, 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)," which requires more detailed information about the types of expenses included in certain expense captions presented on the consolidated statements of operations, including purchases of inventory, employee compensation, depreciation, amortization and depletion. Additionally, this amendment requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the disclosure of the total amount of selling expenses and, on an annual basis, an entity's definition of selling expenses. The amendment is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. This amendment should be applied either on a prospective basis or a retrospective basis to any or all prior periods presented. We are currently assessing the impact this pronouncement will have on our consolidated financial statement disclosures. On September 18, 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)," to align the accounting for software costs with the evolution of software development, including the shift from using a prescriptive and sequential development method to using an incremental and iterative development method. This amendment clarifies that capitalization of internal-use software costs begins when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. Additionally, this amendment supersedes the website development costs guidance and it clarifies certain disclosure requirements for internal-use software costs. The amendment is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. This amendment should be applied either on a (i) prospective basis, (ii) retrospective basis to any or all prior periods presented, or (iii) modified transition basis that is based on the status of the project and whether software costs were capitalized before the date of adoption. We are currently assessing the impact this pronouncement will have on our consolidated financial statements and related disclosures. On May 19, 2026, the FASB issued ASU 2026-02, "Environmental Credits and Environmental Credit Obligations (Topic 818)," to improve the financial accounting and disclosure of environmental credits and environmental credit obligations. This amendment provides recognition, measurement, presentation and disclosure requirements for all entities that generate, purchase or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. The amendment is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. This amendment should be applied on a retrospective basis as of the beginning of the annual reporting period of adoption. We are currently assessing the impact this pronouncement will have on our consolidated financial statements and related disclosures. Note 3. Revenue from Contracts with Customers Contract Assets Our assets related to costs incurred to obtain or fulfill a contract primarily consist of capitalized commission costs, upfront payments made to customers and costs incurred on contracts with an outstanding performance obligation. The current portion of capitalized commission costs, upfront payments made to customers and costs incurred on contracts with an outstanding performance obligation is included in other current assets, net, within our condensed consolidated balance sheets. The non-current portion of capitalized commission costs, upfront payments made to customers and costs incurred on contracts with an outstanding performance obligation is reflected in other assets, net, within our condensed consolidated balance sheets. The changes in our contract assets are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Beginning of period balance $ 18,297 $ 13,147 $ 17,947 $ 12,088 Additions to contract assets 2,924 2,589 6,751 5,773 Amortization or satisfaction of outstanding performance obligation of capitalized contract assets ( 3,436 ) ( 2,262 ) ( 6,913 ) ( 4,387 ) End of period balance $ 17,785 $ 13,474 $ 17,785 $ 13,474 9 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Contract Liabilities Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. The changes in our contract liabilities are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Beginning of period balance $ 31,843 $ 27,524 $ 29,884 $ 26,559 Revenue deferred in period 9,883 7,445 21,292 15,711 Revenue recognized from amounts included in contract liabilities ( 9,912 ) ( 7,728 ) ( 19,362 ) ( 15,029 ) End of period balance $ 31,814 $ 27,241 $ 31,814 $ 27,241 Note 4. Accounts Receivable, Net The components of accounts receivable, net are as follows (in thousands): June 30, 2026 December 31, 2025 Accounts receivable $ 171,775 $ 149,163 Allowance for credit losses ( 8,016 ) ( 5,171 ) Allowance for product returns ( 2,050 ) ( 2,140 ) Accounts receivable, net $ 161,709 $ 141,852 For the three and six months ended June 30, 2026, we recorded a reserve for product returns of $ 0.6 million and $ 1.0 million in our hardware and other revenue, respectively, as compared to $ 0.7 million and $ 1.1 million for the same periods in the prior year. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. Allowance for Credit Losses - Accounts Receivable We identified the following two portfolio segments for our accounts receivable: (i) outstanding accounts receivable balances within Alarm.com and certain subsidiaries and (ii) outstanding accounts receivable balances within all other subsidiaries. There were no changes to our portfolio segments for our accounts receivable during the three and six months ended June 30, 2026, and no changes to our policies or practices that influenced our estimate of expected credit losses for accounts receivable. Additionally, there were no significant changes in the amount of accounts receivable write-offs during the three and six months ended June 30, 2026, as compared to historical periods. The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Alarm.com and Certain Subsidiaries All Other Subsidiaries Alarm.com and Certain Subsidiaries All Other Subsidiaries Alarm.com and Certain Subsidiaries All Other Subsidiaries Alarm.com and Certain Subsidiaries All Other Subsidiaries Beginning of period balance $ ( 5,887 ) $ ( 226 ) $ ( 4,600 ) $ ( 121 ) $ ( 4,931 ) $ ( 240 ) $ ( 3,777 ) $ ( 93 ) (Provision for) / recovery of expected credit losses ( 2,187 ) 8 ( 456 ) ( 119 ) ( 3,347 ) 1 ( 1,402 ) ( 150 ) Write-offs 276 — 138 16 480 21 261 19 End of period balance $ ( 7,798 ) $ ( 218 ) $ ( 4,918 ) $ ( 224 ) $ ( 7,798 ) $ ( 218 ) $ ( 4,918 ) $ ( 224 ) 10 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Note 5. Inventory The components of inventory are as follows (in thousands): June 30, 2026 December 31, 2025 Raw materials $ 19,584 $ 18,238 Work-in-process 360 372 Finished goods 74,405 75,819 Total inventory $ 94,349 $ 94,429 Note 6. Acquisitions On November 21, 2025, EnergyHub, Inc., or EnergyHub, one of our wholly-owned subsidiaries, acquired 100 % of the issued and outstanding shares of capital stock of Zona NewCo, LLC, which acquired substantially all of the assets and liabilities of Resideo Grid Services, or RGS, from Resideo Technologies, Inc. Pursuant to the terms of the stock purchase agreement, following the preliminary determination of the working capital of RGS as of the closing date, the purchase price increased by $ 1.6 million. The working capital adjustment was finalized during the second quarter of 2026 and $ 1.6 million was paid to stockholders of RGS at that time. The purchase price allocation was not finalized as of the filing date of this Quarterly Report on Form 10-Q and is primarily pending the final determination of the tax adjustments. Note 7. Goodwill and Intangible Assets, Net The changes in goodwill by reportable segment are outlined below (in thousands): Alarm.com Other Total Balance as of January 1, 2026 $ 178,598 $ 46,389 $ 224,987 Measurement period adjustments — ( 26 ) ( 26 ) Foreign currency translation adjustment ( 320 ) — ( 320 ) Balance as of June 30, 2026 $ 178,278 $ 46,363 $ 224,641 The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Relationships Developed Technology Trade Name Capitalized Software Development Costs Other Total Balance as of January 1, 2026 $ 55,024 $ 39,621 $ 1,302 $ 3,359 $ 46 $ 99,352 Intangible assets acquired — — — — 90 90 Capitalized software development costs — — — 553 — 553 Amortization ( 5,272 ) ( 6,335 ) ( 152 ) ( 445 ) — ( 12,204 ) Balance as of June 30, 2026 $ 49,752 $ 33,286 $ 1,150 $ 3,467 $ 136 $ 87,791 We recorded $ 6.0 million and $ 12.0 million of amortization related to our intangible assets for the three and six months ended June 30, 2026, respectively, as compared to $ 4.7 million and $ 9.2 million for the same periods in the prior year. There were no impairments of long-lived intangible assets during the three and six months ended June 30, 2026 and 2025. 11 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets (in thousands, except weighted-average remaining life): June 30, 2026 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- Average Remaining Life (in years) Customer relationships $ 162,400 $ ( 112,648 ) $ 49,752 10.7 Developed technology 89,714 ( 56,428 ) 33,286 4.9 Trade name 5,532 ( 4,382 ) 1,150 4.7 Capitalized software development costs 4,587 ( 1,120 ) 3,467 3.0 Other 136 — 136 5.7 Total intangible assets $ 262,369 $ ( 174,578 ) $ 87,791 8.1 December 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- Average Remaining Life (in years) Customer relationships $ 162,400 $ ( 107,376 ) $ 55,024 10.8 Developed technology 89,714 ( 50,093 ) 39,621 5.2 Trade name 5,532 ( 4,230 ) 1,302 5.0 Capitalized software development costs 4,034 ( 675 ) 3,359 3.8 Other 46 — 46 5.0 Total intangible assets $ 261,726 $ ( 162,374 ) $ 99,352 8.3 Note 8. Investments in Unconsolidated Entities On February 24, 2026, a technology partner in which we previously invested was acquired by an unrelated third party. 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. 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 six months ended June 30, 2026. On May 29, 2026, we paid $ 14.1 million in cash to purchase an additional investment in SafeStreets USA, LLC, to maintain our 24.7 % ownership percentage. This investment is included in the Alarm.com segment and is accounted for under the equity method of accounting. 12 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Summary of Investments in Unconsolidated Entities Our investments in unconsolidated entities are as follows (in thousands): June 30, 2026 December 31, 2025 Ownership Percentage Carrying Value Excess Carrying Value of Investment Over Proportionate Share of Net Assets Carrying Value Excess Carrying Value of Investment Over Proportionate Share of Net Assets Safe Haven (1) and All Access (2) 32.5 % $ 137,683 $ 138,558 $ 141,205 $ 143,134 SafeStreets (3) 24.7 40,595 45,518 29,436 31,144 Pronet (4) 20.3 31,275 9,561 30,142 — Other unconsolidated entities 22,917 725 26,148 707 Total $ 232,470 $ 194,362 $ 226,931 $ 174,985 _______________________ (1) Safe Haven Security Services, LLC, or Safe Haven (2) All Access Holdings, LLC, or All Access (3) SafeStreets USA, LLC, or SafeStreets (4) Protegger Luxembourg S.à r.l, or Pronet Equity method income from our investments in unconsolidated entities are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income from equity method investments, net $ ( 849 ) $ ( 341 ) $ ( 1,094 ) $ ( 316 ) Other related party transactions and balances outstanding with our equity method investees for activity subsequent to our investments are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue from equity method investees $ 6,035 $ 2,561 $ 13,638 $ 2,698 Interest income from equity method investees 376 283 749 288 Distributions received from equity method investees 3,762 — 6,430 — June 30, 2026 December 31, 2025 Outstanding principal from loans to equity method investees $ 21,887 $ 21,947 Interest receivable from equity method investees 4 381 Accounts receivable from equity method investees 2,351 1,774 Total amounts receivable from equity method investees $ 24,242 $ 24,102 13 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Note 9. Other Assets Loan to SafeStreets On January 30, 2025, we entered into a senior secured loan agreement with SafeStreets, 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 SafeStreets. Quarterly principal payments begin in the second quarter of 2027. Interest on the outstanding principal accrues at a rate per annum equal to the overnight financing rate published by the Federal Reserve Bank of New York for a period of three months, plus 3.0 %. For the first two years of the loan, monthly interest payments can be payable in kind at the election of the borrower. The maturity date of the loan is January 30, 2030. As of June 30, 2026 and December 31, 2025, $ 21.5 million of principal was outstanding from SafeStreets under the loan agreement. Loan to a Service Provider Partner In July 2020, we entered into a loan agreement with a service provider partner, under which we agreed to loan the service provider partner up to $ 2.5 million, collateralized by the assets of the service provider partner. Interest on the outstanding principal accrues at a rate per annum equal to 9.0 % and monthly interest and principal payments began in April 2021. The maturity date of the loan was July 24, 2025. In July 2025, we learned that this service provider partner may have a lien placed on its property that may have a priority over our security interest. Based on the information provided by the service provider partner, during the three months ended June 30, 2025, we recorded a credit loss expense of $ 0.7 million in general and administrative expense and we placed this loan in nonaccrual status as of June 30, 2025. As of June 30, 2026 and December 31, 2025, $ 0.9 million of principal was outstanding from the service provider partner under the loan agreement. For the three and six months ended June 30, 2026 and 2025, we recognized less than $ 0.1 million and $ 0.1 million of revenue from the service provider partner associated with this loan, respectively. Allowance for Credit Losses - Notes Receivable We identified one portfolio segment, loan receivables, for our notes receivable. There were no changes to our policies or practices involving the issuance of notes receivable, customer acquisitions or any other factors that influenced our estimate of expected credit losses for notes receivable during the three and six months ended June 30, 2026. The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Beginning of period balance $ ( 749 ) $ ( 1 ) $ ( 749 ) $ ( 1 ) Provision for expected credit losses ( 3 ) ( 749 ) ( 3 ) ( 749 ) Write-offs — — — — End of period balance $ ( 752 ) $ ( 750 ) $ ( 752 ) $ ( 750 ) We manage our notes receivables using delinquency as a key credit quality indicator. The following tables reflect the current and delinquent notes receivable by class of financing receivables and by year of origination (in thousands): June 30, 2026 Loan Receivables: 2026 2025 2024 2023 2022 Prior Total Current $ 4,550 $ 22,400 $ 500 $ 387 $ 1,500 $ — $ 29,337 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — 943 943 Total $ 4,550 $ 22,400 $ 500 $ 387 $ 1,500 $ 943 $ 30,280 14 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 December 31, 2025 Loan Receivables: 2025 2024 2023 2022 2021 Prior Total Current $ 22,600 $ 500 $ 447 $ 1,500 $ — $ — $ 25,047 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — 943 943 Total $ 22,600 $ 500 $ 447 $ 1,500 $ — $ 943 $ 25,990 There was one note receivable placed on nonaccrual status as of June 30, 2026 and December 31, 2025. During the three and six months ended June 30, 2026 and 2025, there was no interest income recognized related to notes receivable that were in nonaccrual status. As of June 30, 2026 and December 31, 2025, there were $ 0.2 million of notes receivable placed in nonaccrual status for which there was not a related allowance for credit losses. As of June 30, 2026 and December 31, 2025, there were no notes receivable that were 90 days or greater past due for which we continued to accrue interest income. Prepaid Expenses As of June 30, 2026 and December 31, 2025, $ 23.4 million and $ 19.4 million of prepaid expenses were included in other current assets, net, respectively, primarily related to software licenses, long lead-time parts related to our inventory and insurance. Note 10. Fair Value Measurements The following tables present our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis Assets: Level 1 Level 2 Level 3 Total Money market accounts as of June 30, 2026 $ 456,301 $ — $ — $ 456,301 Money market accounts as of December 31, 2025 941,134 — — 941,134 Equity securities with readily determinable fair value as of June 30, 2026 8,496 — — 8,496 Equity securities with readily determinable fair value as of December 31, 2025 14,858 — — 14,858 As of June 30, 2026, $ 450.3 million of our money market accounts was included in cash and cash equivalents, $ 4.1 million was included in other assets, net, and $ 1.9 million was included in other current assets, net, in our condensed consolidated balance sheets. As of December 31, 2025, $ 933.0 million of our money market accounts was included in cash and cash equivalents, $ 6.1 million was included in other assets, net, and $ 2.0 million was included in other current assets, net, in our condensed consolidated balance sheets. Our assets from money market accounts are valued using quoted prices in active markets. Our equity securities with readily determinable fair value represent our investments in publicly traded companies, which are valued using quoted prices in active markets. During the three and six months ended June 30, 2026, we recorded a loss on equity securities of $ 2.1 million and $ 5.8 million, respectively, as compared to a loss of $ 1.5 million and $ 3.8 million for the same periods in the prior year. Our investments in public entities are recorded at fair value within other current assets, net, in our condensed consolidated balance sheets and changes in fair value of the investments are recorded within other expense, net within our condensed consolidated statements of operations. See Note 12 for the carrying amount and estimated fair value of our existing convertible senior notes as of June 30, 2026 and December 31, 2025. We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. There were no transfers into or out of Level 3 or reclassifications between levels of the fair value hierarchy during the three and six months ended June 30, 2026 and 2025. 15 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Note 11. Liabilities The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): June 30, 2026 December 31, 2025 Accounts payable $ 29,852 $ 22,200 Accrued expenses 58,123 51,360 Income taxes payable 648 1,785 Holdback and working capital liabilities from business combinations, asset acquisitions and investments in unconsolidated entities 1,500 13,713 Contingent consideration liability from acquisition 1,266 1,223 Other current liabilities 16,812 16,914 Accounts payable, accrued expenses and other current liabilities $ 108,201 $ 107,195 Note 12. Debt, Commitments and Contingencies The debt, commitments and contingencies described below would require us, or our subsidiaries, to make payments to third parties under certain circumstances. Convertible Senior Notes - 2026 Notes 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. 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. As of December 31, 2025, the fair value of our 2026 Notes was $ 499.1 million. The fair value was determined based on the quoted price of the 2026 Notes in an inactive market on the last traded day of the quarter and was classified as Level 2 in the fair value hierarchy. Convertible Senior Notes - 2029 Notes 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, or the 2029 Notes. As of June 30, 2026 and December 31, 2025, the fair value of our 2029 Notes was $ 475.2 million and $ 477.3 million, respectively. The fair value was determined based on the quoted price of the 2029 Notes in an inactive market on the last traded day of the quarter and has been classified as Level 2 in the fair value hierarchy. Based on the closing price of our common stock of $ 46.72 on the last trading day of the quarter, the if-converted value of the 2029 Notes did not exceed the principal amount of $ 500.0 million as of June 30, 2026. The net carrying amount of the liability component of the 2029 Notes is as follows (in thousands): June 30, 2026 December 31, 2025 Principal $ 500,000 $ 500,000 Unamortized debt issuance costs ( 8,906 ) ( 10,359 ) Net carrying amount $ 491,094 $ 489,641 16 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Interest expense related to the 2029 Notes is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest expense $ 2,812 $ 2,812 $ 5,625 $ 5,625 Amortization of debt issuance costs 729 708 1,453 1,412 Total interest expense $ 3,541 $ 3,520 $ 7,078 $ 7,037 Commitments and Contingencies Indemnification Agreements We have various agreements that may obligate us to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business. Although we cannot predict the maximum potential amount of future payments that may become due under these indemnification agreements, we do not believe any potential liability that might arise from such indemnity provisions is probable or material. Legal Proceedings On January 10, 2022, EcoFactor, Inc., or EcoFactor, filed a lawsuit against us in U.S. District Court, District of Oregon, alleging Alarm.com’s products and services directly and indirectly infringe five U.S. patents owned by EcoFactor. EcoFactor is seeking a permanent injunction, enhanced damages and attorneys' fees. EcoFactor had previously asserted two of the same patents against us in an October 2019 complaint with the U.S. International Trade Commission, or ITC. In July 2021, the ITC found in favor of Alarm.com. EcoFactor appealed the decision but withdrew its appeal in December 2021. We moved to dismiss the Oregon case for failure to state a claim on March 28, 2022. On April 18, 2022, the district court stayed the case at the request of the parties pending the disposition of other proceedings involving the asserted patents. These proceedings include four ex parte reexamination proceedings at the U.S. Patent and Trademark Office and one inter partes review. Three of the patents were found unpatentable in reexamination. The decision with respect to one of the patents was affirmed by the United States Court of Appeals for the Federal Circuit, or Federal Circuit, on January 21, 2026, EcoFactor filed an appeal of the decision with respect to the second patent with the Federal Circuit on November 20, 2025, and EcoFactor is appealing the rejection of the third patent to the Patent Trial and Appeal Board, or PTAB, having filed its appeal brief on June 10, 2024. Ex parte reexamination of a fourth patent concluded on August 23, 2023 after the claims were amended. On April 18, 2022, all claims of a fifth patent were found unpatentable by the PTAB in inter partes review, and all claims were canceled on February 1, 2024. Should EcoFactor prevail in its lawsuit, we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. While we believe we have valid defenses to EcoFactor’s claims, the outcome of these legal claims cannot be predicted with certainty and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. On July 3, 2025, SkyBell Technologies, Inc., or SkyBell, filed a lawsuit against us in U.S. District Court, Eastern District of Virginia, alleging that Alarm.com misappropriated SkyBell’s trade secrets relating to video doorbells. On May 26, 2026, SkyBell filed an amended complaint adding allegations that Alarm.com infringed copyrights in its computer source code. SkyBell is seeking injunctive relief, enhanced damages, attorneys’ fees, a constructive trust, and an order that Alarm.com assign to SkyBell the alleged trade secrets. On June 5, 2026, we filed an answer to the amended complaint denying any misappropriation of trade secrets or infringement of copyrights. Discovery is expected to be completed in September 2026. No trial date has been set. Should SkyBell prevail in its lawsuit, we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us, and we could be required to assign, transfer, and return any SkyBell trade secret that we are found to improperly possess. While we believe we have valid defenses to SkyBell’s claims, the outcome of these legal claims cannot be predicted with certainty, and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. In addition to the matters described above, we may be required to provide indemnification to certain of our service provider partners for certain claims regarding our solutions. 17 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 For example, we are incurring costs associated with the indemnification of Southern Electric Maryland Electric Cooperative, Inc., or SMECO, in an ongoing patent infringement suit. On May 26, 2026, Causam Enterprises, Inc. filed a lawsuit against SMECO in U.S. District Court, District of Maryland, alleging that SMECO infringes six patents owned by Causam relating to SMECO’s demand response program which includes, among other systems, the EnergyHub platform. Causam is seeking damages and attorneys’ fees. Should Causam prevail, we could be required to indemnify SMECO for damages if a license or other right to continue using our technology is not made available or we are unable to design around such patents, and required to pay ongoing royalties and comply with unfavorable terms if such a license is made available. The outcome of these legal claims cannot be predicted with certainty. We may also be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Other than the preceding matters, we are not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible or probable of having a material adverse effect on our financial position, results of operations or cash flows. We reserve for contingent liabilities based on ASC 450, " Contingencies ," when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, we will not incur material costs. Tariff Matters On April 20, 2026, the U.S. Customs and Border Protection began accepting refund requests through its Consolidated Administration and Processing of Entries portal, and we subsequently filed for an estimated $ 14.5 million in tariffs previously paid under the International Emergency Economic Powers Act. During the three and six months ended June 30, 2026, we recorded less than one third of the estimated $ 14.5 million as a reduction to cost of hardware and other revenue and processed a commensurate amount of refunds to customers, excluding certain processing fees, as a reduction to hardware and other revenue. As of June 30, 2026, we have not recorded any additional receivables related to potential refunds for previous tariffs we paid because we are unable to assess the probability of their recovery. Note 13. Stockholders' Equity Stock Repurchase Programs 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 were authorized to purchase up to an aggregate of $ 100.0 million of our outstanding common stock during the two-year period ended May 31, 2026. On May 4, 2026, our board of directors authorized the cancellation of the balance under the stock repurchase program ended May 31, 2026 and adopted 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. During the three and six months ended June 30, 2026, we repurchased 570,000 and 998,065 shares of our common stock under these programs for $ 25.0 million and $ 45.0 million, respectively, which includes applicable commissions and fees. During the three and six months ended June 30, 2025, we repurchased 88,000 and 174,400 shares of our common stock under these programs for $ 5.1 million and $ 10.2 million, respectively, which includes applicable commissions and fees. We are subject to a 1.0% excise tax on the value of net corporate stock repurchases under the Inflation Reduction Act of 2022. When applicable, the excise tax will be included as part of the cost basis of shares acquired and is presented within stockholders’ equity in the condensed consolidated balance sheets. 18 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Note 14. Stock-Based Compensation Stock-based compensation expense is included in the following line items in the condensed consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Sales and marketing $ 592 $ 620 $ 1,334 $ 1,100 General and administrative 3,076 2,474 6,132 5,446 Research and development 3,908 5,840 8,159 11,846 Total stock-based compensation expense $ 7,576 $ 8,934 $ 15,625 $ 18,392 Note 15. Earnings Per Share Basic and Diluted Earnings Per Share The components of basic and diluted earnings per share are as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, Numerator: 2026 2025 2026 2025 Net income $ 24,208 $ 34,217 $ 47,590 $ 61,929 Net loss attributable to redeemable noncontrolling interests 38 335 239 573 Net income attributable to common stockholders - basic (A) 24,246 34,552 47,829 62,502 Add back total interest expense, net of tax, attributable to convertible senior notes 2,666 3,249 5,328 6,494 Net income attributable to common stockholders - diluted (B) $ 26,912 $ 37,801 $ 53,157 $ 68,996 Denominator: Weighted average common shares outstanding — basic (C) 49,328,402 49,806,105 49,463,300 49,733,328 Dilutive effect of convertible senior notes, stock options and restricted stock units 6,596,104 10,331,099 6,697,366 10,426,521 Weighted average common shares outstanding — diluted (D) 55,924,506 60,137,204 56,160,666 60,159,849 Net income attributable to common stockholders per share: Basic (A/C) $ 0.49 $ 0.69 $ 0.97 $ 1.26 Diluted (B/D) $ 0.48 $ 0.63 $ 0.95 $ 1.15 The following securities have been excluded from the calculation of diluted weighted average common shares outstanding as the inclusion of these securities would have an anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Stock options 800,577 789,688 800,577 698,302 Restricted stock units 8,300 91,570 11,300 — Our redeemable noncontrolling interests relate to our 89 % equity ownership interest in OpenEye, our 99 % equity ownership interest in Noonlight and our 81 % equity ownership interest in CHeKT. We use the treasury stock method when calculating the dilutive impact of the stock options and restricted stock units on net income per share. We use the if-converted method when calculating the dilutive impact of the 2026 Notes and 2029 Notes on net income per share. Prior to the repayment of the 2026 Notes, after August 15, 2025, we were required to pay cash to satisfy the principal portion of our conversion obligation and deliver shares to satisfy any excess conversion value. 19 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 The following securities have been included in the calculation of diluted weighted average common shares outstanding: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 2026 Notes — 3,396,950 — 3,396,950 2029 Notes 5,728,550 5,728,550 5,728,550 5,728,550 The denominator for diluted net income per share does not include any effect from the capped call transactions we entered into concurrently with the issuance of the 2029 Notes, as this effect would be anti-dilutive. In the event of conversion of the 2029 Notes, shares delivered to us under the capped call will offset the dilutive effect of the shares that we would issue under the 2029 Notes. See Note 12 for further details on our 2029 Notes. Note 16. Significant Service Providers and Distributors During the three and six months ended June 30, 2026, our 10 largest revenue service provider partners or distributors accounted for 42 % of our consolidated revenue, as compared to 46 % for the same periods in the prior year. One of our service provider partners within the Alarm.com segment individually represented greater than 15 % but not more than 20 % of our revenue for each of the three and six months ended June 30, 2026 and 2025. One service provider partner represented more than 10 % of accounts receivable as of June 30, 2026, and no service provider partner represented more than 10% of accounts receivable as of December 31, 2025. Note 17. Income Taxes For purposes of interim reporting, our annual effective income tax rate is estimated in accordance with ASC 740-270, "Interim Reporting." This rate is applied to income before income taxes, including income from equity method investments, net of the entities expected to be benefited during the year. Discrete items that impact the tax provision are recorded in the period incurred. For the three and six months ended June 30, 2026, we recorded a provision for income taxes of $ 7.7 million and $ 13.6 million, respectively, resulting in an effective income tax rate of 24.9 % and 22.6 % for those periods. For the three and six months ended June 30, 2025, we recorded a provision for income taxes of $ 5.5 million and $ 12.8 million, respectively, resulting in an effective income tax rate of 13.8 % and 17.1 % for those periods. For the three and six months ended June 30, 2026, our effective tax rate was above the 21.0% statutory rate primarily due to the impact of state taxes, foreign withholding taxes, a shortfall from employee stock-based compensation and other nondeductible expenses, partially offset by the impact of 2026 research and development tax credits claimed and the foreign derived deduction eligible income deduction. For the three and six months ended June 30, 2025, our effective tax rate was below the 21.0% statutory rate primarily due to 2025 research and development tax credits claimed, the foreign derived intangible income deduction and a favorable true-up adjustment of our 2024 income tax provision estimate associated with research and development tax credits, partially offset by the impact of state taxes, foreign withholding taxes and other nondeductible expenses. We recognize a valuation allowance if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Our valuation allowance for state research and development tax credit carryforwards, net deferred tax assets of our EBS subsidiary, state net operating losses and an unrealized U.S. federal capital loss was $ 5.6 million as of June 30, 2026 and December 31, 2025. We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. We recorded a net increase to the unrecognized tax benefits liability of $ 0.6 million primarily due to a liability for research and development tax credits claimed during the six months ended June 30, 2026. We recorded a net increase to the unrecognized tax benefits liability of $ 1.7 million primarily due to a liability for research and development tax credits claimed during the six months ended June 30, 2025. Our condensed consolidated balance sheets included an accrual for total interest expense related to unrecognized tax benefits and penalties of $ 1.4 million and $ 1.2 million as of June 30, 2026 and December 31, 2025, respectively. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. Our tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in our tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. 20 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 As of June 30, 2026, we did not have material undistributed foreign earnings. We have not historically recorded a deferred tax liability on the undistributed earnings from our foreign subsidiaries, as such earnings are considered to be indefinitely reinvested. During the three months ended September 30, 2025, we changed this assertion with respect to a portion of the 2024 and 2025 current earnings of our Canadian business to begin providing deferred taxes on such earnings, the tax impact of which was not material. Note 18. Segment Information We have two reportable segments: • Alarm.com segment • Other segment Our chief operating decision maker is our chief executive officer. Management determined the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Our Alarm.com segment represents our cloud-based platform and licenses and services on our non-hosted software platform for intelligently connected properties and related solutions that contributed 87 % and 88 % of our revenue, net of intersegment eliminations, for the three and six months ended June 30, 2026, respectively, as compared to 92 % for the same periods in the prior year. Our Other segment is focused on researching, developing and offering residential and commercial automation solutions and energy management products and services in adjacent markets. Inter-segment revenue includes sales of hardware between our segments. Management evaluates the performance of its segments and allocates resources to them based on operating income / (loss) as compared to prior periods and current performance levels. The reportable segment operational data is presented in the tables below (in thousands): Three Months Ended June 30, 2026 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 159,781 $ 28,997 $ — $ — $ 188,778 Hardware and other revenue 83,314 6,989 ( 951 ) ( 396 ) 88,956 Total revenue 243,095 35,986 ( 951 ) ( 396 ) 277,734 Cost of SaaS and license revenue 18,282 11,635 99 ( 99 ) 29,917 Cost of hardware and other revenue 60,695 6,422 ( 978 ) ( 403 ) 65,736 Total cost of revenue 78,977 18,057 ( 879 ) ( 502 ) 95,653 Selling and marketing expense 24,886 8,093 — — 32,979 General and administrative expense 33,048 3,598 — — 36,646 Research and development expense 60,222 10,786 — — 71,008 Amortization and depreciation expense 7,272 1,692 — — 8,964 Total operating expenses 125,428 24,169 — — 149,597 Operating income / (loss) $ 38,690 $ ( 6,240 ) $ ( 72 ) $ 106 $ 32,484 Reconciliation of operating income to income before income taxes Operating income $ 32,484 Interest expense ( 3,543 ) Interest income 4,491 Other expense, net ( 2,336 ) Income before income taxes $ 31,096 21 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Three Months Ended June 30, 2025 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 150,997 $ 18,996 $ — $ — $ 169,993 Hardware and other revenue 82,873 2,641 ( 663 ) ( 536 ) 84,315 Total revenue 233,870 21,637 ( 663 ) ( 536 ) 254,308 Cost of SaaS and license revenue 17,489 6,164 87 ( 87 ) 23,653 Cost of hardware and other revenue 62,483 2,417 ( 551 ) ( 540 ) 63,809 Total cost of revenue 79,972 8,581 ( 464 ) ( 627 ) 87,462 Selling and marketing expense 25,035 6,101 — — 31,136 General and administrative expense 25,345 1,739 — — 27,084 Research and development expense 61,257 7,813 — — 69,070 Amortization and depreciation expense 7,239 295 — — 7,534 Total operating expenses 118,876 15,948 — — 134,824 Operating income / (loss) $ 35,022 $ ( 2,892 ) $ ( 199 ) $ 91 $ 32,022 Reconciliation of operating income to income before income taxes Operating income $ 32,022 Interest expense ( 4,321 ) Interest income 11,808 Other expense, net ( 175 ) Income before income taxes $ 39,334 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Total assets as of June 30, 2026 $ 1,711,476 $ 181,724 $ ( 236,112 ) $ ( 110 ) $ 1,656,978 Total assets as of December 31, 2025 2,181,210 190,095 ( 234,681 ) ( 33 ) 2,136,591 22 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Six Months Ended June 30, 2026 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 317,173 $ 53,129 $ — $ — $ 370,302 Hardware and other revenue 164,338 11,007 ( 1,977 ) ( 743 ) 172,625 Total revenue 481,511 64,136 ( 1,977 ) ( 743 ) 542,927 Cost of SaaS and license revenue 36,441 21,371 195 ( 195 ) 57,812 Cost of hardware and other revenue 121,604 9,564 ( 2,032 ) ( 784 ) 128,352 Total cost of revenue 158,045 30,935 ( 1,837 ) ( 979 ) 186,164 Selling and marketing expense 51,541 15,872 — — 67,413 General and administrative expense 58,614 5,486 — — 64,100 Research and development expense 121,537 21,530 — — 143,067 Amortization and depreciation expense 14,684 3,372 — — 18,056 Total operating expenses 246,376 46,260 — — 292,636 Operating income / (loss) $ 77,090 $ ( 13,059 ) $ ( 140 ) $ 236 $ 64,127 Reconciliation of operating income to income before income taxes Operating income $ 64,127 Interest expense ( 7,215 ) Interest income 9,422 Other income / (expense), net ( 6,245 ) Income before income taxes $ 60,089 23 ALARM.COM HOLDINGS, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) — (Continued) June 30, 2026 and 2025 Six Months Ended June 30, 2025 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 298,645 $ 35,148 $ — $ — $ 333,793 Hardware and other revenue 156,922 4,531 ( 1,336 ) ( 780 ) 159,337 Total revenue 455,567 39,679 ( 1,336 ) ( 780 ) 493,130 Cost of SaaS and license revenue 34,272 10,949 171 ( 171 ) 45,221 Cost of hardware and other revenue 118,369 4,183 ( 1,210 ) ( 867 ) 120,475 Total cost of revenue 152,641 15,132 ( 1,039 ) ( 1,038 ) 165,696 Selling and marketing expense 47,502 12,183 — — 59,685 General and administrative expense 50,181 3,904 — — 54,085 Research and development expense 121,941 15,496 — — 137,437 Amortization and depreciation expense 13,967 591 — — 14,558 Total operating expenses 233,591 32,174 — — 265,765 Operating income / (loss) $ 69,335 $ ( 7,627 ) $ ( 297 ) $ 258 $ 61,669 Reconciliation of operating income to income before income taxes Operating income $ 61,669 Interest expense ( 8,635 ) Interest income 24,179 Other income / (expense), net ( 2,835 ) Income before income taxes $ 74,378 Cash additions to property and equipment for our segments are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Alarm.com $ 4,623 $ 4,544 $ 5,368 $ 10,656 Other 224 8 391 11 We derived substantially all revenue from North America for the three and six months ended June 30, 2026 and 2025. Substantially all of our long-lived assets were in North America as of June 30, 2026 and December 31, 2025. 24