ALRM

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How ALRM rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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OpenEye provides cloud-managed video surveillance solutions for the enterprise commercial market.
As of December 31, 2025, our ownership interest had increased to 89%. • On December 14, 2020, we acquired 100% of the issued and outstanding ownership interest units of Shooter Detection Systems, LLC, or SDS.
SDS is a provider of a gunshot detection solution that helps alert employees and the public against active shooter threats. • On September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., or Noonlight.
The acquisition of Noonlight has helped enhance our comprehensive suite of interactive cloud-based services, allow us to expand markets for emergency response services as well as accelerate innovation in those services.
As of December 31, 2025, our ownership interest had increased to 99%. • On January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS, an international producer of universal smart communicator devices, headquartered in Warsaw, Poland.
This acquisition has assisted in the continued expansion of our international operations as well as benefited our supply chain operations. • On February 10, 2025, we acquired 81% of the issued and outstanding shares of capital stock of CHeKT.
CHeKT provides a RVM service for central station operators that is compatible with a variety of cameras.
The acquisition of CHeKT has helped expand our opportunity to provide RVM solutions in the commercial and residential markets. • On August 15, 2025, EnergyHub, Inc., or EnergyHub, one of our wholly-owned subsidiaries, acquired all of the issued and outstanding shares of capital stock of Bridge to Renewables, Inc., or BTR.
BTR provides a managed charging solution for electric vehicle manufacturers and drivers.
BTR’s technology integrates directly into a vehicle’s native mobile app, delivering utility program enrollment, charging insights and incentives to electric vehicle drivers.
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. • On November 21, 2025, EnergyHub 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.
RGS provides demand response aggregation and program management services for utilities.
The acquisition is anticipated to strengthen EnergyHub’s position in the demand response market and make its multi-DERs solutions available to RGS customers.
Piper provided an all-in-one video and home automation hub. • In September 2019, we acquired certain assets from an unrelated third party.
The acquisitions of the IPR&D have furthered our commitment to make significant investments in innovative research and development in the intelligently connected property market to broaden our suite of solutions as well as strengthen our smart intercom capability. • In December of 2021, we acquired certain assets from an unrelated party.
The acquisition of the developed technology has continued to advance our load-shaping energy management solution allowing additional devices to participate in utility programs that reduce or shift power consumption during peak demand periods. • On April 21, 2023, we acquired certain assets of Vintra, Inc., or Vintra.
The acquisition of the developed technology has expanded Alarm.com's learning program and accelerated deployment of advanced video analytics solutions for the Alarm.com and OpenEye platforms. • On November 22, 2024, we acquired certain assets of Kapacity.io, which have helped accelerate deployment of a cloud-based demand response platform internationally for our EnergyHub subsidiary.
Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading "Governance." The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" 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 years ended December 31, 2025, 2024 and 2023.
Negative Macroeconomic Conditions in the general economy both in the United States and abroad, including conditions resulting from inflation, new or increased tariffs, changes in gross domestic product growth, financial and credit market fluctuations, energy costs, international trade relations and other geopolitical tensions, the availability and cost of credit, fluctuations in interest rates and the global housing and mortgage markets could cause a decrease in consumer discretionary spending and business investment and diminish growth expectations in the U.S. economy and abroad.
Since we operate on a global basis, our operations could be disrupted by geopolitical conditions, trade disputes, international boycotts and sanctions, political and social instability, acts of war (including the ongoing conflicts in Ukraine, and in the Middle East and surrounding areas), terrorist activity or other similar events.
There is currently significant uncertainty about the future relationship between the United States and various other countries, including China, the European Union, Canada and Mexico, with respect to trade policies, treaties, tariffs, customs duties, sanctions and taxes.
In particular, the U.S. government has imposed tariffs on products imported from certain countries, and some countries have responded with new or increased tariffs of their own.
These imposed and announced tariffs have impacted, or have the potential to impact, our imports from other countries.
In April 2025, the U.S. 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.
Certain of these tariffs have been subsequently paused or modified, 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.
The U.S. 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.
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. tariffs, and the specific timing of when and the degree to which we pass through the cost of the tariffs to our customers consistent with our contractual rights.
Furthermore, our business may be adversely affected by tariffs or trade measures taken by other countries, which could materially harm our business, financial condition and results of operations.
These tariffs may include tariffs imposed by other countries on services, including cloud-based technology services such as those offered by us.
Our revenue increased from $881.7 million in 2023 to $1.0112 billion in 2025.
We increased our number of full-time employees from 1,733 as of December 31, 2022 to 2,058 as of December 31, 2025.
The FTC and the Federal Communications Commission, or the FCC, have issued regulations that place restrictions on, among other things, unsolicited automated telephone calls to residential and wireless telephone subscribers by means of automatic telephone dialing systems and the use of prerecorded or artificial voice messages.
In addition, because certain of our products require government certification before they can be sold, our business could be harmed by delays in obtaining these certifications.
For instance, the U.S. government shutdown that occurred during part of the fourth quarter of 2025 significantly limited the FCC’s ability to approve new products, which caused delays in the launch of certain new products.
Any prolonged delay in receiving required certifications for our new or existing products could materially and adversely affect our business, financial condition, and results of operations.
We compete in several markets, including security, video, automation and energy management solutions .
In the event a consumer decides to evaluate a new home automation, security monitoring, video monitoring, or energy management solution, the consumer may be more inclined to select one of our competitors whose product offerings are broader than those that we offer.

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OpenEye provides cloud-managed video surveillance solutions for the enterprise commercial market. • On December 14, 2020, we acquired 100% of the issued and outstanding ownership interest units of Shooter Detection Systems, LLC, or SDS.
SDS is a provider of an indoor gunshot detection solution that helps alert employees and the public against active shooter threats. • On September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., or Noonlight.
We believe the acquisition of Noonlight will enhance our comprehensive suite of interactive cloud-based services and allow us to expand markets for emergency response services as well as accelerate innovation in those services. • On January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS, an international producer of universal smart communicator devices, headquartered in Warsaw, Poland.
We believe this acquisition will assist in the continued expansion of our international operations as well as benefit our supply chain operations. • On February 10, 2025, we acquired 81% of the issued and outstanding shares of capital stock of CHeKT, Inc., or CHeKT.
CHeKT provides a remote video monitoring service for central station operators that is compatible with a variety of cameras.
We believe the acquisition of CHeKT will help to expand our opportunity to provide remote video monitoring solutions in the commercial and residential markets.
Piper provides an all-in-one video and home automation hub. • In September 2019, we acquired certain assets from an unrelated third party.
We believe the acquisitions of the IPR&D will further our commitment to make significant investments in innovative research and development in the intelligently connected property market to broaden our suite of solutions as well as strengthen our smart intercom capability. • In December of 2021, we acquired certain assets from an unrelated party.
We believe the acquisition of the developed technology will continue to advance our load-shaping energy management solution allowing additional devices to participate in utility programs that reduce or shift power consumption during peak demand periods. • On April 21, 2023, we acquired certain assets of Vintra, Inc., or Vintra.
We believe the acquisition of the developed technology will expand Alarm.com's learning program and accelerate deployment of advanced video analytics solutions for the Alarm.com and OpenEye platforms. • On November 22, 2024, we acquired certain assets of Kapacity.io to help accelerate deployment of a cloud-based demand response platform internationally for our EnergyHub subsidiary.
Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading "Corporate Governance." The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" 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 years ended December 31, 2024, 2023 and 2022.
Negative Macroeconomic Conditions in the general economy both in the United States and abroad, including conditions resulting from inflation, changes in gross domestic product growth, financial and credit market fluctuations, energy costs, international trade relations and other geopolitical tensions, the availability and cost of credit, fluctuations in interest rates and the global housing and mortgage markets could cause a decrease in consumer discretionary spending and business investment and diminish growth expectations in the U.S. economy and abroad.
Since we operate on a global basis, our operations could be disrupted by geopolitical conditions, trade disputes, international boycotts and sanctions, political and social instability, acts of war (including the ongoing conflicts in Ukraine, and in Israel and surrounding areas), terrorist activity or other similar events.
Our revenue increased from $749.0 million in 2021 to $939.8 million in 2024.
We increased our number of full-time employees from 1,500 as of December 31, 2021 to 2,010 as of December 31, 2024.
The FTC and the Federal Communications Commission have issued regulations that place restrictions on, among other things, unsolicited automated telephone calls to residential and wireless telephone subscribers by means of automatic telephone dialing systems and the use of prerecorded or artificial voice messages.
We compete in several markets, including security, video, automation, energy management and wellness solutions .
In the event a consumer decides to evaluate a new home automation, security monitoring, video monitoring, energy management, or wellness solution, the consumer may be more inclined to select one of our competitors whose product offerings are broader than those that we offer.
Our current competitors include providers of other technology platforms for the connected property with interactive security, including Alula (formed following the merger of ipDatatel, LLC and Resolution Products, LLC), Ajax Systems CH, Avigilon Corporation, Brivo Inc., Digital Monitoring Products Inc., Eagle Eye Networks Inc., Hangzhou Hikvision Digital Technology Co., Ltd., Honeywell International Inc., Napco Security Technologies, Inc., Resideo Technologies Inc., SecureNet Technologies, LLC, Telular Corporation (acquired by AMETEK, Inc.), and Verkada Inc., which sell solutions to service providers, cable operators, technology retailers and other residential and commercial automation providers.
In addition, we may compete with other large and small technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader connected home market.
We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging home automation, security monitoring, video monitoring and automation, wellness, and energy management companies as well as large technology companies.
We cannot be certain that advances in cyber-capabilities or other developments will not compromise or breach the technology protecting the networks that access our platforms and solutions, including the networks of our third-party service providers, and we can make no assurance that we will be able to detect, prevent, timely and adequately address or mitigate the negative effects of cyber-attacks or other security breaches.
During the years ended December 31, 2024, 2023 and 2022, our 10 largest revenue service provider partners or distributors accounted for 46%, 50% and 49% of our revenue, respectively.
ADT represented greater than 15% but not more than 20% of our revenue in 2024, 2023 and 2022.
ADT also represented more than 10% of accounts receivable as of December 31, 2023.
The loss of any key supplier or the inability of a key supplier to deliver their products to us on time or at the contracted price would materially and adversely affect our business, financial condition, cash flows and results of operations.
Reliance on suppliers generally involves several risks, including increased costs, the possibility of defective parts, and loss of a supplier due to their ability to effectively manage their own supply chain, ability to obtain a contract on commercially reasonable terms, bankruptcy, or other events, which can adversely affect the reliability and reputation of our platforms and solutions and our profitability.
We are also dependent on industry supply conditions and subject to supply chain risks, including a shortage of components and reduced control over delivery schedules and increases in component costs, which can also adversely affect the reliability and reputation of our platforms and solutions and our profitability.
While the global shortage of semiconductors used in our video, cellular communicator, and other products has eased, shortages of essential components of our products or significantly increased lead times for obtaining such components may lead to delays in our production, and we may be unable to fulfill orders for our hardware products on a timely basis or at all.
Even if we are able to procure components from alternative sources, we may be required to pay more for them, which could adversely affect our profitability.
We have several large hardware suppliers from which we procure hardware on a purchase order basis, including three key suppliers that supplied products and components of our inventory which collectively represented 46% of our hardware revenue for the year ended December 31, 2024 (29%, 10% and 7% of hardware revenue, respectively).
The market for solutions that bring objects and systems not typically connected to the Internet, such as home automation, security monitoring, video monitoring, energy management and wellness solutions, into an Internet-like structure is still developing, and it is uncertain how rapidly or how consistently this market will continue to develop and the degree to which our platforms and solutions will be accepted into the markets in which we operate.
For example, on February 10, 2025, we acquired 81% of the issued and outstanding shares of capital stock of CHeKT, on November 22, 2024, we acquired certain assets of Kapacity.io, on April 21, 2023, we acquired certain assets of Vintra, on January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS, on September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., on October 21, 2019, we acquired 85% of the issued and outstanding shares of capital stock of PC Open Incorporated, doing business as OpenEye, and on December 14, 2020 , we acquired Shooter Detection Systems, LLC.
Our platforms and solutions enable us to collect, manage and store a wide range of data related to our subscribers’ interactive security, intelligent automation, video monitoring, energy management and wellness systems.
We have incorporated, and expect to continue to incorporate in the future, artificial intelligence, or AI, solutions into our operations and product offerings, and the use of AI involves various risks and challenges that could adversely affect our business, financial condition or results of operations.
We currently intend to use the remaining net proceeds from the issuance of the 2026 Notes and 2029 Notes for general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies, other repurchases of our common stock, repurchases of our 2026 Notes and for working capital, operating expenses and capital expenditures.
Our overall leverage and certain obligations contained in the related documentation could adversely affect our financial health and business and future operations by, among other things: • making it more difficult to satisfy our obligations, including under the terms of the 2026 Notes and 2029 Notes; • limiting our ability to refinance our debt on terms acceptable to us or at all; • limiting our flexibility to plan for and adjust to changing business and market conditions and increasing our vulnerability to general adverse economic and industry conditions; • limiting our ability to use our available cash flow to fund future acquisitions, working capital, business activities, and other general corporate requirements; and • limiting our ability to obtain additional financing for working capital, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity.
See “Risks Related to our Outstanding Convertible Senior Notes” below for further details on risks related to the 2026 Notes and 2029 Notes.
As of December 31, 2024, we had $217.4 million of goodwill and identifiable intangible assets.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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