Alarm.com Holdings, Inc is a platform solution for the connected home. The company through its cloud-based services, makes connected home tech accessible to millions of home and business owners.
The company provides 4 primary solutions to its customers:
– Interactive Security (i.e. Alarm systems, etc)
– Intelligent Automation (eg.controlling household systems remotely)
– Video Monitoring (i.e. intelligent video monitoring and event capture technologies)
– Energy Management (i.e. temperature, solar panels, air conditioning)
The company is also engaged in the design and manufacturing of various types of hardware, including cellular communication modules, image sensor, video cams and smart thermostats.
In both 2013 and 2014, the company posted profits. These were relatively thin ($122,000 on $130 million in revenue and $563,000 on $167 million, respectively), but they were profits nonetheless.
That 2014 revenue figure, by the way, represents nearly 30% growth over the prior year. The company is growing rapidly.
So far, 2015 also seems to be shaping up profitably for the company with continued revenue growth. The first quarter saw a top line of $46 million and a net profit of $146,000, compared to $37 million and $148,000 for the year-ago quarter. This is also healthy news…
Alarm.com had $19 million in long-term obligations as of the most recent quarter but over twice that amount in cash and equivalents. Interest expense only came in at $42,000 during the quarter, indicating that servicing these borrowings is currently a non-issue.
The majority shareholders are ABS Capital Partners & Technology Crossover Ventures.
Alarm.com is operating at “Internet of Things” or IoT market. This is a rapid growing market sector. IoT is in its simplest form is the network of physical objects or “things” embedded with electronics, software, sensors, and connectivity to enable it to achieve greater value and service by exchanging data with the manufacturer, operator and/or other connected devices.
In Energy Management market, IoT devices is expected to be integrated into all forms of energy consuming devices (switches, power outlets, bulbs, televisions, etc.) and be able to communicate with the utility supply company in order to effectively balance power generation and energy usage. There are number of national and international standards pushing exactly for this. Such devices would also offer the opportunity for users to remotely control their devices, or centrally manage them via a cloud based interface (just like Alarm.com’s cloud based system), and enable advanced functions like scheduling (e.g., remotely powering on or off heating systems, controlling ovens, changing lighting conditions etc. which most of these functions are already available from Alarm.com).
In Building and Home Automation, IoT devices can be used to monitor and control the mechanical, electrical and electronic systems used in various types of buildings (e.g., public and private, industrial, institutions, or residential). Home automation systems, like other building automation systems, are typically used to control lighting, heating, ventilation, air conditioning, appliances, communication systems, entertainment and home security devices to improve convenience, comfort, energy efficiency, and security.
Home automation and home security is also a major step forward when it comes to applying IoT. All these advances add to the the numerous list of IoT applications. Now with IoT, you can control the electrical devices installed in your house while you are sorting out your files in office. Your water will be warm as soon as you get up in the morning for the shower. All credit goes to smart devices which make up the smart home. Everything connected with the help of Internet.Alarm.com is already providing some of this functionality.
One would expect Alarm.com to become the defacto name for Home Automation and security within IoT spectrum. They have the early mover advantage and fast becoming a very well known name in this sector. With the recent IPO, it will become more of a brand rather just a company name.
All things said, I expect Alarm.com to grow rapidly from here. They already have a good management system and a good financial support network. It is a short term and also longer term BUY from me at the moment.
More info on their products and services (and some multimedia presentations) can be found here: https://www.alarm.com/productservices/interactive_security.aspx