IPO Report: Alarm.com Holdings (ALRM)

Francis Gaskins |

Alarm.com Holdings (ALRM) is the leading platform solution for the connected home. Through its cloud-based services, Alarm.com makes connected home technology broadly accessible to millions of home and business owners. It is based in Vienna, VA.

Twelve other companies are scheduled for the week of June 22.  The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Goldman Sachs, Credit Suisse, BofA Merrill Lynch
Co-managers: Stifel, Raymond James, William Blair, Imperial Capital

End of lockup (180 days): Wednesday, December 23, 2015
End of 25-day quiet period: Tuesday, July 21, 2015

ALRM scheduled a $98 million IPO with a market capitalization of $628 million at a price range midpoint of $14 for Friday, June 26, 2015 on Nasdaq.

ALRM IPO Summary

ALRM is the leading platform solution for the connected home. Through its cloud-based services, Alarm.com makes connected home technology broadly accessible to millions of home and business owners.

ALRM Valuation


Accumulated deficit (mm)





Per share dilution





Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Alarm.com Holdings (ALRM)








ALRM Conclusion


Q1 rev +25% to $46mm

Net income -29% Q1 '15 vs Q1 '14

P/E of 52.5

69% SaaS

SaaS retention rate 92%

63% gross profit

Price to sales 3.4 price to bk 4.2

ALRM Business

ALRM is the leading platform solution for the connected home. Through its cloud-based services, Alarm.com makes connected home technology broadly accessible to millions of home and business owners.

ALRM’s multi-tenant software-as-a-service, or SaaS, platform enables home and business owners to intelligently secure their properties and automate and control a broad array of connected devices through a single, intuitive user interface. ALRM’s connected home platform currently has more than 2.3 million residential and business subscribers and connects to more than 25 million devices.

More than 20 billion data points were generated and processed by those subscribers and devices in the last year alone. This scale of subscribers, devices and data makes Alarm.com the largest connected home platform.

Service providers

ALRM’s solutions are delivered through an established network of over 5,000 trusted service providers, who are experts at designing, selling, installing and supporting its solutions.

ALRM’s technology platform was purpose-built for the entire connected home ecosystem, including the consumers who use it, the service providers who deliver it and the hardware partners whose devices are enabled by the platform. ALRM’s solutions are used by both home and business owners, and ALRM refers to this market as the connected home market.

ALRM invented solutions that connect people in new ways with their properties and devices, making them safer, smarter and more efficient. ALRM’s scalable, flexible platform is designed to meet a wide range of user needs with its breadth of services, depth of feature capability and broad support for the growing Internet of Things devices in the home.

Intellectual property

As of March 31, 2015, ALRM owned 35 issued United States patents that are scheduled to expire between 2021 and 2032.

ALRM continues to file patent applications and as of March 31, 2015, ALRM had 40 pending utility patent applications and 18 provisional patent applications filed in the United States.

ALRM also had 5 pending patent applications in Canada. The claims for which ALRM has sought patent protection apply to both its platform and solutions.

ALRM’s patent and patent applications generally apply to the features and functions of its platform, and solutions and the applications associated with its platform.

ALRM also has, and may be required to seek, licenses under patents or intellectual property rights owned by third parties, including open-source software and other commercially available software.


ALRM’s current primary competitors include providers of other technology platforms for the connected home, including iControl Networks, Inc. and Honeywell International Inc. that sell to dealers such as cable operators and other home automation providers.

In addition, ALRM’s service providers compete with managed service providers, such as cable television, telephone and security companies like Comcast Corporation, AT&T Inc. and Time Warner Cable Inc., as well as providers of point products, including Nest Labs, Inc. (acquired by Google Inc.), which offers a thermostat, and DropCam, Inc. (acquired by Nest Labs, Inc.), which offers video monitoring. Because its service providers compete with these entities, ALRM considers them competitive.

5% shareholders pre-IPO

Entities affiliated with Technology Crossover Ventures                42.9%

Entities affiliated with ABS Capital Partners                                41.6%

Backbone Partners, LLC                        5.7%

Stephen Trundle                        8.3%    

Timothy McAdam          42.9%

Ralph Terkowitz               41.6%                       


In June 2015, ALRM’s board of directors declared a cash dividend on its common and preferred stock in the amount of (1) $0.36368 per share of common stock and Series A preferred stock and (2) $0.72736 per share of Series B preferred stock and Series B-1 preferred stock, or $20.0 million in the aggregate, which ALRM refers to as the 2015 Dividends.

The 2015 Dividends are payable to ALRM’s stockholders of record as of June 12, 2015 and shall be payable contingent upon and immediately prior to the closing of this offering.

ALRM cannot provide any assurance that ALRM will declare or pay cash dividends on its common stock in the future.

ALRM currently anticipate that ALRM will retain all of its future earnings, if any, for use in the operation and expansion of its business and ALRM does not anticipate paying cash dividends in the foreseeable future.

Use of proceeds

ALRM expects to receive $87 million from its IPO and use it for the following:

for working capital and other general corporate purposes. ALRM may use a portion of the proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies, although ALRM does not currently have any plans for any such acquisitions or investments. ALRM has not allocated specific amounts of net proceeds for any of these purposes.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
ALRM Alarm.com Holdings Inc. 29.62 0.03 0.10 85,130


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