Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ALARM.COM HOLDINGS, INC. | ||
Entity Central Index Key | 1,459,200 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 47,205,817 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 850.5 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenue: | ||||
SaaS and license revenue | $ 236,283 | $ 173,540 | $ 140,936 | |
Hardware and other revenue | 102,654 | 87,566 | 67,952 | |
Total revenue | 338,937 | 261,106 | 208,888 | |
Cost of revenue: | ||||
Cost of SaaS and license revenue | [1] | 35,610 | 30,229 | 25,722 |
Cost of hardware and other revenue | [1] | 80,578 | 69,151 | 51,652 |
Total cost of revenue | [1] | 116,188 | 99,380 | 77,374 |
Operating expenses: | ||||
Sales and marketing | 43,490 | 38,980 | 32,240 | |
General and administrative | 55,396 | 57,926 | 35,473 | |
Research and development | 72,755 | 44,272 | 40,002 | |
Amortization and depreciation | 17,734 | 6,490 | 5,808 | |
Total operating expenses | 189,375 | 147,668 | 113,523 | |
Operating income | 33,374 | 14,058 | 17,991 | |
Interest expense | (2,199) | (190) | (178) | |
Other income / (expense), net | 1,066 | 513 | (348) | |
Income before income taxes | 32,241 | 14,381 | 17,465 | |
Provision for income taxes | 2,990 | 4,227 | 5,697 | |
Net income | 29,251 | 10,154 | 11,768 | |
Dividends paid to participating securities | 0 | 0 | (18,987) | |
Income allocated to participating securities | (13) | (12) | 0 | |
Net income / (loss) attributable to common stockholders | $ 29,238 | $ 10,142 | $ (7,219) | |
Net income / (loss) per share: | ||||
Basic (USD per share) | $ 0.63 | $ 0.22 | $ (0.30) | |
Diluted (USD per share) | $ 0.59 | $ 0.21 | $ (0.30) | |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 46,682,141 | 45,716,757 | 24,108,362 | |
Diluted (in shares) | 49,153,948 | 47,875,522 | 24,108,362 | |
Cash dividends declared per share (USD per share) | $ 0 | $ 0 | $ 0.36 | |
[1] | Exclusive of amortization and depreciation shown in operating expenses below. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 96,329 | $ 140,634 |
Accounts receivable, net | 40,634 | 29,810 |
Inventory, net | 14,177 | 10,543 |
Other current assets | 12,796 | 9,197 |
Total current assets | 163,936 | 190,184 |
Property and equipment, net | 23,459 | 20,180 |
Intangible assets, net | 94,286 | 4,568 |
Goodwill | 63,591 | 24,723 |
Deferred tax assets | 18,444 | 16,752 |
Other assets | 7,925 | 4,838 |
Total assets | 371,641 | 261,245 |
Current liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 29,084 | 28,300 |
Accrued compensation | 12,127 | 8,814 |
Deferred revenue | 3,292 | 2,585 |
Total current liabilities | 44,503 | 39,699 |
Deferred revenue | 9,386 | 10,040 |
Long-term debt | 71,000 | 6,700 |
Other liabilities | 13,925 | 13,557 |
Total liabilities | 138,814 | 69,996 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2017 and December 31, 2016. | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized; 47,215,720 and 46,172,318 shares issued; and 47,202,310 and 46,142,483 shares outstanding as of December 31, 2017 and December 31, 2016, respectively. | 472 | 461 |
Additional paid-in capital | 321,032 | 308,697 |
Accumulated deficit | (88,677) | (117,909) |
Total stockholders’ equity | 232,827 | 191,249 |
Total liabilities and stockholders’ equity | $ 371,641 | $ 261,245 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 47,215,720 | 46,172,318 |
Common stock, shares outstanding (in shares) | 47,202,310 | 46,142,483 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 29,251 | $ 10,154 | $ 11,768 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Provision for doubtful accounts | 453 | 648 | 276 |
Reserve for product returns | 2,055 | 2,071 | 1,559 |
Amortization on patents and tooling | 965 | 786 | 391 |
Amortization and depreciation | 17,734 | 6,490 | 5,808 |
Amortization of debt issuance costs | 97 | 103 | 108 |
Deferred income taxes | 2,488 | 263 | (2,670) |
Change in fair value of contingent liability | 0 | (230) | (470) |
Undistributed losses from equity investees | 120 | 81 | 681 |
Stock-based compensation | 7,413 | 4,001 | 3,347 |
Disposal of property and equipment | 828 | 0 | 0 |
Changes in operating assets and liabilities (net of business acquisitions): | |||
Accounts receivable | (1,911) | (11,181) | (5,910) |
Inventory | (3,335) | (4,068) | 378 |
Other assets | (2,542) | (837) | (2,725) |
Accounts payable, accrued expenses and other current liabilities | 3,774 | 10,458 | 5,966 |
Deferred revenue | (517) | 636 | 1,081 |
Other liabilities | 314 | 3,225 | 8,431 |
Cash flows from operating activities | 57,187 | 22,600 | 28,019 |
Cash flows used in investing activities: | |||
Business acquisitions, net of cash acquired | (154,289) | 0 | (5,632) |
Additions to property and equipment | (10,464) | (9,055) | (10,347) |
Investment in cost and equity method investees | (42) | (139) | (247) |
Issuances of notes receivable | (8,000) | (3,073) | (406) |
Receipt of payment on notes receivable | 4,000 | 2,441 | 0 |
Purchases of licenses to patents | 0 | (1,600) | (1,000) |
Cash flows used in investing activities | (168,795) | (11,426) | (17,632) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock from initial public offering, net of underwriting discount and commission | 0 | 0 | 97,976 |
Proceeds from credit facility | 139,000 | 0 | 0 |
Repayments of credit facility | (74,700) | 0 | 0 |
Payments of debt issuance costs | (438) | (131) | 0 |
Payments of long-term consideration for business acquisitions | 0 | (417) | (417) |
Dividends paid to common stockholders | 0 | 0 | (1,013) |
Dividends paid to employees for unvested shares | 0 | 0 | (57) |
Dividends paid to redeemable convertible preferred stockholders | 0 | 0 | (18,930) |
Payments of offering costs | 0 | 0 | (2,632) |
Repurchases of common stock | (9) | (11) | (1) |
Proceeds from early exercise of stock-based awards | 0 | 0 | 129 |
Issuances of common stock from equity based plans | 3,450 | 1,661 | 344 |
Cash flows from financing activities | 67,303 | 1,102 | 75,399 |
Net (decrease) / increase in cash and cash equivalents | (44,305) | 12,276 | 85,786 |
Cash and cash equivalents at beginning of the period | 140,634 | 128,358 | 42,572 |
Cash and cash equivalents at end of the period | 96,329 | 140,634 | 128,358 |
Supplemental disclosures: | |||
Cash paid for interest | 2,010 | 181 | 175 |
Cash paid for income taxes, net of refunds | 1,805 | 6,021 | 8,508 |
Noncash investing and financing activities: | |||
Conversion of redeemable convertible preferred stock to common stock | 0 | 0 | 202,456 |
Assumed options from business acquisition | 1,375 | 0 | 0 |
Cash not yet paid for business acquisitions | 0 | 0 | 417 |
Contingent liability from business acquisition | 0 | 0 | 230 |
Cash not yet paid for capital expenditures | 322 | 1,235 | 625 |
Reclassification of deferred offering costs to additional paid-in capital | $ 0 | $ 0 | $ 5,024 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In- Capital | Treasury Stock | Accumulated Deficit |
Balance at Dec. 31, 2014 | $ (121,844) | $ 0 | $ 26 | $ 7,168 | $ (42) | $ (128,996) |
Balance (in shares) at Dec. 31, 2014 | 0 | 2,614 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from initial public offering, net of issuance costs | 92,953 | $ 75 | 92,878 | |||
Issuance of common stock from initial public offering, net of issuance costs (in shares) | 7,525 | |||||
Conversion of redeemable convertible preferred stock to common stock | 202,456 | $ 350 | 202,106 | |||
Conversion of redeemable convertible preferred stock to common stock (in shares) | 35,018 | |||||
Common stock issued in connection with equity based plans | 344 | $ 3 | 341 | |||
Common stock issued in connection with equity based plans (in shares) | 277 | |||||
Vesting of common stock subject to repurchase | 453 | $ 2 | 451 | |||
Vesting of common stock subject to repurchase (in shares) | 126 | |||||
Stock-based compensation expense | 3,347 | 3,347 | ||||
Tax benefit from stock-based awards, net | 700 | 700 | ||||
Modification of employee stock-based award and repurchase of common stock | (46) | $ (1) | (45) | |||
Modification of employee stock-based award and repurchase of common stock (in shares) | (75) | |||||
Dividends paid to common stockholders | (1,013) | (673) | (340) | |||
Dividends paid to employees with unvested common stock | (57) | (38) | (19) | |||
Dividends paid to redeemable convertible preferred stockholders | (18,930) | (8,454) | (10,476) | |||
Net income | 11,768 | 11,768 | ||||
Balance at Dec. 31, 2015 | 170,131 | $ 0 | $ 455 | 297,781 | (42) | (128,063) |
Balance (in shares) at Dec. 31, 2015 | 0 | 45,485 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued in connection with equity based plans | 1,661 | $ 5 | 1,656 | |||
Common stock issued in connection with equity based plans (in shares) | 593 | |||||
Vesting of common stock subject to repurchase | 254 | $ 1 | 253 | |||
Vesting of common stock subject to repurchase (in shares) | 64 | |||||
Stock-based compensation expense | 4,001 | 4,001 | ||||
Tax benefit from stock-based awards, net | 5,048 | 5,048 | ||||
Retirement of treasury stock | 0 | (42) | 42 | |||
Net income | 10,154 | 10,154 | ||||
Balance at Dec. 31, 2016 | 191,249 | $ 0 | $ 461 | 308,697 | 0 | (117,909) |
Balance (in shares) at Dec. 31, 2016 | 0 | 46,142 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of accounting standard on employee share based payments | 12 | 31 | (19) | |||
Common stock issued in connection with equity based plans | 3,450 | $ 11 | 3,439 | |||
Common stock issued in connection with equity based plans (in shares) | 1,045 | |||||
Vesting of common stock subject to repurchase | 77 | $ 0 | 77 | |||
Vesting of common stock subject to repurchase (in shares) | 15 | |||||
Stock-based compensation expense | 7,413 | 7,413 | ||||
Stock options assumed from acquisition | 1,375 | 1,375 | ||||
Net income | 29,251 | 29,251 | ||||
Balance at Dec. 31, 2017 | $ 232,827 | $ 0 | $ 472 | $ 321,032 | $ 0 | $ (88,677) |
Balance (in shares) at Dec. 31, 2017 | 0 | 47,202 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Alarm.com Holdings, Inc. (referred to herein as Alarm.com, the Company, or we) is the leading platform for the intelligently connected property. We offer a comprehensive suite of cloud-based solutions for the smart residential and commercial property , including interactive security, video monitoring, intelligent automation and energy management. Millions of property owners rely on our technology to intelligently secure, monitor and manage their residential and commercial properties. Our solutions are delivered through an established network of over 7,000 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. We completed our initial public offering, or IPO, on July 1, 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation Our consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. Equity investments over which we are able to exercise significant influence but do not control the investee are accounted for using the equity method. We determine whether we have a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity, or VIE. Voting interest entities are entities that have sufficient equity and provide equity investor voting rights that give them power to make significant decisions relating to the entity’s operations. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. In VIEs, a controlling financial interest is attained through means other than voting rights and the entities lack one or more of the characteristics of a voting entity. We account for our unconsolidated investments in businesses under the cost or equity method dependent on factors such as percent ownership and factors that would determine significant influence. Our cost method investments are recorded at cost. Equity method investments are recorded at cost and adjusted to record our share of the company’s undistributed gains and losses in our consolidated statements of operations. We evaluate our cost and equity method investments for impairment whenever events or circumstances indicate that carrying amount of such investments may not be recoverable. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. Estimates are used when accounting for revenue recognition, allowances for doubtful accounts, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, stock-based compensation, income taxes, legal reserves, contingent consideration and goodwill and intangible assets. Cash and Cash Equivalents We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents. As of December 31, 2017 and 2016 , we have invested $65.6 million and $135.2 million in cash equivalents in the form of money market funds with one financial institution. We consider these money market funds to be Level 1 financial instruments (see Note 10 ). Accounts Receivable Accounts receivable are principally derived from sales to customers located in the United States and Canada. Substantially all of our sales in Canada are transacted in U.S. dollars. Revenue in countries outside of North America accounted for 1% of our total revenue for the year ended December 31, 2017 and less than 1% of our total revenue for the years ended December 31, 2016 and 2015 . As of December 31, 2017 and 2016 , approximately 4% and 3% of accounts receivable balances were related to service providers partners outside of North America. Our accounts receivable are stated at estimated realizable value. We utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectibility of the amounts due. Our estimate is based on historical collection experience and a review of the current status of accounts receivable. Each of our service provider partners is evaluated for creditworthiness through a credit review process at the inception of the arrangement or if risk indicators arise during our arrangement at such other time. Our terms for hardware sales to our service provider partners and distributors typically allow for returns for up to one year. We apply our estimate as a percentage of sales monthly, based on historical data, as a reserve against revenue to account for our provision for returns. We have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. Notes Receivable Notes receivable are presented net of an allowance for uncollectibility, if any. We accrue interest on notes receivable based on the contractual terms of the note. Outstanding notes receivable that are aged 30 days or more from the contractual payment date are considered past due. We do not accrue interest on notes receivable that are considered impaired or are greater than 90 days past due based on their contractual payment terms. Notes receivable may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a note receivable has been placed in nonaccrual status, interest will be recognized when cash is received. A note receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and collection of all remaining contractual amounts due is reasonably assured. As of December 31, 2017 and 2016 , there were no allowances for uncollectibility and there were no notes receivable in nonaccrual status. Inventory Our inventory, which is comprised of raw materials and finished goods, includes materials used to produce our wireless communications network enabled radios, video cameras, home automation system parts and peripherals, is stated at the lower of cost or market, and is charged to cost of sales on a first in, first out, or FIFO, basis when the inventory is shipped from our manufacturer and received by our service provider partners. We periodically evaluate our inventory quantities for obsolescence based on criteria such as customer demand and changing technology and record an obsolescence write-off when necessary. Internal-Use Software We capitalize the costs directly related to the development of internal-use software for our platforms during the application development stage of the projects. Such costs primarily include payroll and payroll-related costs for engineers and product development employees directly associated with the development project. Our internal-use software is reported at cost less accumulated depreciation. Depreciation begins once the project is ready for its intended use, which is usually when the code goes into production in weekly software builds on our platforms. We depreciate the asset on a straight-line basis over a period of three years, which is the estimated useful life. We update our software for our SaaS multi-tenant platforms on a weekly basis utilizing continuous agile development methods, which primarily consists of bug-fixes and user interface changes. We evaluate whether a project should be capitalized if it adds significant functionality to our platforms. Maintenance activities or minor upgrades are expensed in the period performed. External Software Costs incurred in researching and developing a computer software product that will be marketed and sold are charged to expense when incurred until technological feasibility is established. Technological feasibility is established upon completion of a detailed program design or, in its absence, completion of a working model (a beta version). After technological feasibility is established, certain payroll and payroll-related costs are capitalized for engineers and product development employees directly associated with the development project. Cost capitalization ceases when the product is available for general release. The Connect software is typically developed in an agile environment with frequent revisions to product release features and functions. Agile development results in a short duration between completion of the detailed program design and beta release. Accordingly, as of December 31, 2017, we do not have any capitalized external software due to the shorter development cycle associated with agile development. Revenue Recognition and Deferred Revenue We derive our revenue from three primary sources: the sale of cloud-based SaaS services on our integrated Alarm.com platform, the sale of licenses and services on the Connect software platform and the sale of hardware products. We sell our platform and hardware solutions to service provider partners that resell our solutions and hardware to residential and commercial property owners, who are the service provider partners’ customers. Our subscribers consist of all of the properties maintained by those residential and commercial property owners to which we are delivering at least one of our solutions. We also sell our hardware to distributors who resell the hardware to service provider partners. We enter into contracts with our service provider partners that establish pricing for access to our platform solutions and for the sale of hardware. These contracts typically have an initial term of one year, with subsequent renewal terms of one year. Our service provider partners typically enter into contracts with our subscribers, which our service provider partners have indicated range from three to five years in length. Our hardware includes cellular radio modules that enable access to our cloud-based platforms, as well as video cameras, image sensors and other peripherals. Our service provider partners may purchase our hardware in anticipation of installing the hardware in a residential or commercial property when they create a new subscriber account, or for use in existing subscriber properties. The purchase of hardware occurs in a transaction that is separate and typically in advance of the purchase of our platform services. Service provider partners transact with us to purchase our platform solutions and resell our solutions to a new subscriber, or to upgrade or downgrade the solutions of an existing subscriber, at which time the subscriber’s access to our platform solutions is enabled and the delivery of the services commences. The purchase of platform solutions and the purchase of hardware are separate transactions because at the time of sale of the hardware, the service provider partner is not obligated to and may not purchase a platform solution for the hardware sold, and the level and duration of platform solutions, if any, to be provided through the hardware sold cannot be determined. We recognize revenue with respect to our solutions when all of the following conditions are met: • Persuasive evidence of an arrangement exists; • Delivery to the customer, which may be either a service provider partner, distributor or a subscriber, has occurred or service has been rendered; • Fees are fixed or determinable; and • Collection of the fees is reasonably assured. We consider a signed contract with a service provider partner to be persuasive evidence that an agreement exists, and the fees to be fixed or determinable if the fees are contractually agreed to with our service provider partners. Collectibility is evaluated based on a number of factors, including a credit review of new service provider partners, and the payment history of existing service provider partners. If collectibility is not reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon the receipt of payment. SaaS and License Revenue We generate the majority of our SaaS and license revenue primarily from monthly fees charged to our service provider partners sold on a per subscriber basis for access to our cloud-based intelligently connected property platform and related solutions. Our fees per subscriber vary based upon the service plan and features utilized. Under terms in our contractual arrangements with our service provider partners, we are entitled to payment and recognize revenue based on a monthly fee that is billed in advance of the month of service. We have demonstrated that we can sell our SaaS offering on a stand-alone basis, as it can be sold separately from hardware and activation services. As there is neither a minimum required initial service term nor a stated renewal term in our contractual arrangements, we recognize revenue over the period of service, which is monthly. Our service provider partners typically incur and pay the same monthly fee per subscriber account for the entire period a subscriber account is active. We also generate SaaS and license revenue from monthly fees charged to service providers sold on a per subscriber basis for access to our Connect software platform. The Connect software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center. Our agreements for the Connect platform solution typically include software and services, such as post-contract customer support, or PCS. Software sales that include multiple elements are typically allocated to the various elements based on vendor-specific objective evidence of fair value, or VSOE. There have been no separate sales of PCS, as PCS is always bundled with the software license for the Connect platform solution. Therefore, the VSOE of fair value for PCS cannot be established. The entire Connect arrangement fee is recognized ratably over the period during which the services are expected to be performed or the PCS period, whichever is longer, once the software is delivered and services have commenced, if all the other basic revenue recognition criteria have been met. Under the terms of our contractual arrangements with our service provider partners, we are entitled to the payment of a monthly fee for Connect that is billed per subscriber for the month of service. We recognize revenue over the period of service, which is monthly. Our service provider partners typically incur and pay the same monthly fee per subscriber account for the entire period a subscriber account is active. We offer multiple service level packages for our platform solutions including a range of solutions and a range of a la carte add-ons for additional features. The fee paid by our service provider partners each month for the delivery of our solutions is based on the combination of packages and add-ons enabled for each subscriber. We utilize tiered pricing plans where our service provider partners may receive prospective pricing discounts driven by volume. We also generate SaaS and license revenue from the fees paid to us when we license our intellectual property to third parties on a per customer basis for use of our patents. In addition, in certain markets our EnergyHub subsidiary sells its demand response software with an annual service fee, with pricing based on the number of subscribers or amount of aggregate electricity demand made available for a utility’s or market’s control. Hardware and Other Revenue We generate hardware and other revenue primarily from the sale of video cameras and cellular radio modules that provide access to our cloud-based platforms and, to a lesser extent, the sale of other devices, including image sensors and peripherals. We recognize hardware and other revenue when the hardware is received by our service provider partner or distributor, net of a reserve for estimated returns. Amounts due from the sale of hardware are payable in accordance with the terms of our agreements with our service provider partners or distributors, and are not contingent on resale to end-users, or to service provider partners in the case of sales of hardware to distributors. Our terms for hardware sales sold directly to either service provider partners or distributors typically allow for the return of hardware up to one year past the date of sale. Our distributors sell directly to our service provider partners under terms between the two parties. We record a reserve against revenue for hardware returns based on historical returns, which was 2% of hardware and other revenue for the years ended December 31, 2017 , 2016 and 2015 . We evaluate our hardware reserve on a quarterly basis or if there is an indication of significant changes in return experience. Historically, our returns of hardware have not significantly differed from our estimated reserve. Hardware and other revenue also includes activation fees charged to service provider partners for activation of a new subscriber account on our platforms, as well as fees paid by service provider partners for our marketing services. Our service provider partners use services on our platforms, such as support tools and applications, to assist in the installation of our solutions in subscriber properties. This installation marks the beginning of the service period on our platforms and on occasion, we earn activation revenue for fees charged for this service. The activation fee is non-refundable, separately negotiated and specified in our contractual arrangements with our service provider partners and is charged to the service provider partner for each subscriber activated on our platforms. Activation fees are not offered on a stand-alone basis separate from our SaaS offering and are billed and received at the beginning of the arrangement. We record activation fees initially as deferred revenue and we recognize these fees ratably over the expected term of the subscribers’ account which we estimate is ten years based on our annual attrition rate. The portion of these activation fees included in current and long-term deferred revenue as of our balance sheet date represents the amounts that will be recognized ratably as revenue over the following twelve months, or longer as appropriate, until the ten -year expected term is complete. The combined current and long-term balance for deferred revenue for activation fees was $10.5 million and $11.2 million as of December 31, 2017 and 2016 , respectively. Cost of Revenue Our cost of SaaS and license revenue primarily includes the amounts paid to wireless network providers and, to a lesser extent, the costs of running our network operation centers which are expensed as incurred. We record the payroll and payroll-related costs of the department dedicated to providing service exclusively to a specific service provider for the Connect platform to cost of SaaS and license revenue. Our cost of hardware and other revenue primarily includes cost of raw materials and amounts paid to our third-party manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, which we purchase from an original equipment manufacturer, and other devices. Our cost of revenue excludes amortization and depreciation. Fair Value Measurements The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This accounting standard established a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for similar assets and liabilities, either directly or indirectly; quoted prices in markets that are not active; and Level 3 - Unobservable inputs supported by little or no market activity. The carrying amount of financial assets, including cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the short maturity and liquidity of those instruments. Assets and Liabilities Measured at Fair Value on a Recurring Basis - in 2017 , 2016 and 2015 , we recorded liabilities for subsidiary unit awards and a contingent consideration liability related to acquisitions at fair value on a recurring basis. Assets Measured at Fair Value on a Nonrecurring Basis - We measure certain assets, including property and equipment, goodwill, intangible and long-lived assets, cost and equity method investments at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. Concentration of Credit Risk The financial instruments that potentially subject us to concentrations of credit risk consists principally of cash and cash equivalents and accounts receivables. All of our cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. Our cash and cash equivalent accounts may exceed federally insured limits at times. We have not experienced any losses on cash and cash equivalents to date. To manage accounts receivable risk, we evaluate the credit worthiness of our service provider partners and maintain an allowance for doubtful accounts. The majority of our accounts receivable balance is due from our service provider partners in North America. We assess the concentrations of credit risk with respect to accounts receivables based on one industry and geographic region and believe that our reserve for uncollectible accounts is appropriate based on our history and this concentration. Stock-Based Compensation We compensate our executive officers, board of directors, employees and consultants with stock-based compensation plans under our 2015 Equity Incentive Plan, or 2015 Plan. We record stock-based compensation expense based upon the award’s grant date fair value and use an accelerated attribution method, net of actual forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. Our equity awards generally vest over five years and are settled in shares of our common stock. During 2017 , 2016 and 2015 , we recognized compensation expense of $7.4 million , $4.0 million and $4.1 million , respectively, and associated income tax benefit of $12.7 million , $5.0 million and $0.7 million , respectively, in connection with our stock-based compensation plans. We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these options is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option. Our Employee Stock Purchase Plan, or 2015 ESPP, allows eligible employees to purchase shares of our common stock at 90% of the fair market value of the closing price on the purchase date. The maximum number of shares of our common stock that a participant may purchase during any calendar year is limited to the lesser of 10% of the participant's base compensation for that year or the number of shares with a fair market value of $15,000 . The 2015 ESPP is considered compensatory for purposes of share-based compensation expense. Compensation expense is recognized for the amount of the discount, net of actual forfeitures, over the six -month purchase period. 401(k) Defined Contribution Plan We adopted the Alarm.com Holdings 401(k) Plan ("the Plan") on April 30, 2009. All of our employees are eligible to participate in the Plan. Our discretionary match is 100% of employee contributions up to 6% of salary and up to a $3,000 maximum match. We recognized compensation expense of $1.8 million , $1.2 million and $1.0 million for the years ended December 31, 2017 , 2016 and 2015 related to our matching contributions. Business Combinations We are required to allocate the purchase price of acquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. The net assets and results of operations of an acquired entity are included in our consolidated financial statements from the acquisition date. Acquisition-related costs are expensed as incurred. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired net of liabilities assumed. This allocation and valuation require management to make significant estimates and assumptions, especially with respect to long-lived and intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, estimates about future expected cash flows from customer contracts, customer lists, proprietary technology and non-competition agreements, the acquired company’s brand awareness and market position, assumptions about the period of time the brand will continue to be used in our solutions, as well as expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed, and discount rates. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur. Other estimates associated with the accounting for these acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. Goodwill, Intangible Assets and Long-lived Assets Goodwill Goodwill represents the excess of (1) the aggregate of the fair value of consideration transferred in a business combination, over (2) the fair value of assets acquired, net of liabilities assumed. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments. Goodwill is not amortized, but is subject to annual impairment tests. We perform our annual impairment review of goodwill on October 1 and when a triggering event occurs between annual impairment tests. We test our goodwill at the reporting unit level. We perform either a qualitative analysis or a quantitative analysis every year depending on the changes to our goodwill balance as well as changes in our business and the economy. Qualitative factors we consider include, but are not limited to, macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances and market capitalization. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment," which removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment amount will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We elected to early adopt ASU 2017-04, therefore, a Step 2 analysis will not be performed in the event that a reporting unit fails Step 1 of the impairment test. For our 2017 annual impairment review, we performed a quantitative assessment for our Alarm.com reporting unit, our only reporting unit with a goodwill balance. This reporting unit had a fair value that exceeded its carrying value by more than 100% , therefore, we concluded that there was no goodwill impairment as of October 1, 2017 . Our assessment was performed as of October 1, 2017 , and we have determined there have been no triggering events from our assessment date through December 31, 2017 . Intangible Assets and Long-lived Assets Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives. We evaluate the recoverability of our intangible assets with definite lives and long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of intangible assets with definite lives and long-lived assets are measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. For the year ended December 31, 2017 , we determined there were no impairments of our intangible assets with definite lives or long-lived assets. Advertising Costs We expense advertising costs as incurred. Advertising costs totaled $4.1 million , $4.6 million and $3.7 million for the years ended December 31, 2017 , 2016 and 2015 . Advertising costs are included within sales and marketing expenses on our consolidated statements of operations. Accounting for Income Taxes We account for income taxes under the asset and liability method as required by accounting standards codification, or ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that are included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. During 2013, in connection with the EnergyHub acquisition, we acquired significant net operating losses, a deferred tax asset, which we recorded at its expected realizable value. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets as of December 31, 2017 and 2016 . Accordingly, we have no t recorded a valuation allowance as of December 31, 2017 and 2016 . We are subject to income taxes in the United States and foreign jurisdictions based upon our business operations in those jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. We record interest and penalties as a component of our income tax provision. Comprehensive Income Our comprehensive income for each of the years ended December 31, 2017 , 2016 and 2015 was equal to our net income disclosed in the consolidated statements of operations. Earnings per Share, or EPS Our basic net income / (loss) per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Our diluted net income / (loss) per share attributable to common stockholders is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income / (loss) per share calculation, options to purchase common stock, redeemable convertible preferred stock, restricted stock units and unvested shares iss |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net The components of accounts receivable, net are as follows (in thousands): December 31, 2017 2016 Accounts receivable $ 44,554 $ 33,406 Allowance for doubtful accounts (1,449 ) (1,282 ) Allowance for product returns (2,471 ) (2,314 ) Accounts receivable, net $ 40,634 $ 29,810 For the years ended December 31, 2017 , 2016 and 2015 , we recorded a provision for doubtful accounts of $0.5 million , $0.6 million and $0.3 million , respectively. For the years ended December 31, 2017 , 2016 and 2015 , we recorded a $2.1 million , $2.1 million and $1.6 million reserve for product returns in our hardware and other revenue, respectively. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. |
Inventory, Net
Inventory, Net | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | Inventory, Net The components of inventory, net are as follows (in thousands): December 31, 2017 2016 Raw materials $ 7,484 $ 4,313 Finished goods 6,693 6,230 Total inventory, net $ 14,177 $ 10,543 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Furniture and fixtures, computer software and equipment and leasehold improvements are recorded at cost and presented net of depreciation. Furniture and fixtures and computer software and equipment are depreciated on a straight-line basis over lives ranging from three to five years. Internal-use software is amortized on a straight-line basis over a three -year period. During the application development phase, we categorize capitalized costs in our construction in progress account until the build is put into production and we move the asset to internal-use software. We record land at historical cost. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease terms or the asset lives. The components of property and equipment, net are as follows (in thousands): December 31, 2017 2016 Furniture and fixtures $ 3,699 $ 3,090 Computer software and equipment 11,624 9,988 Internal-use software 1,643 1,514 Construction in progress 4,605 1,009 Leasehold improvements 16,351 13,466 Land 398 398 Total property and equipment 38,320 29,465 Accumulated depreciation (14,861 ) (9,285 ) Property and equipment, net $ 23,459 $ 20,180 Depreciation expense related to property and equipment for the years ended December 31, 2017 , 2016 and 2015 was $5.4 million , $4.7 million and $3.6 million , respectively. Amortization expense related to internal-use software of $0.4 million , $0.4 million and $0.3 million was included in those expenses for the years ended December 31, 2017 , 2016 and 2015 , respectively. Within the Alarm.com segment, we disposed of and wrote off $0.8 million of capitalized costs to research and development expenses within the consolidated statements of operations primarily related to the design of internal-use software that no longer met the requirements for capitalization during the year ended December 31, 2017 . |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Connect and Piper Business Units from Icontrol Networks, Inc. On March 8, 2017 , in accordance with the asset purchase agreement we entered into with Icontrol Networks, Inc., or Icontrol, on June 23, 2016, we acquired certain assets and assumed certain liabilities of the Connect line of business and all of the outstanding equity interests of the two subsidiaries through which Icontrol conducted its Piper line of business, or the Acquisition. Connect provides an interactive security and home automation platform for service providers. Piper provides an all-in-one video and home automation hub. We expect the addition of new technology infrastructure, talent, key relationships and hardware devices to help accelerate our development of intelligent, data-driven smart residential and commercial property services. The cash consideration was $148.5 million , after the estimated working capital adjustment, of which $14.5 million was deposited in escrow and will be released in accordance with the asset purchase agreement for indemnification obligations of Icontrol stockholders and the final determination of closing working capital. We used $81.5 million of cash on hand and drew $67.0 million under our senior line of credit with Silicon Valley Bank, or SVB, and a syndicate of lenders to fund the Acquisition. The Acquisition also included non-cash consideration. In accordance with the terms of the asset purchase agreement, we were obligated to assume the Icontrol 2013 Equity Incentive Plan and Icontrol 2003 Stock Plan, or collectively, the Icontrol Plans, and converted the 2,001,387 unvested employee stock options into 70,406 Alarm.com stock options using a conversion ratio stated in the agreement to convert the original exercise price and number of options. The fair value of the unvested stock options on the date of the Acquisition was $1.7 million calculated using a Black-Scholes model with a volatility and risk-free interest rate over the expected term of the options and the closing price of the Alarm.com common stock on the date of acquisition. We applied our graded vesting accounting policy to the fair value of these assumed options and determined $1.4 million of the fair value was attributable to pre-combination services and was included as a component of total purchase consideration. The remaining $0.3 million of the fair value was determined to be attributable to post-combination services and will be recognized over the remaining service periods of the stock options. The table below sets forth the purchase consideration and the fair value allocation of the tangible and intangible net assets acquired (in thousands): March 8, 2017 Calculation of Purchase Consideration: Cash paid, net of working capital adjustment $ 148,500 Assumed stock options 1,375 Total consideration $ 149,875 Estimated Tangible and Intangible Net Assets: Cash $ 211 Accounts receivable 11,421 Current assets 883 Long-term assets 4,446 Customer relationships 93,260 Developed technology 4,770 Trade name 170 Current liabilities (1,608 ) Long-term liabilities (288 ) Goodwill 36,610 Total estimated tangible and intangible net assets $ 149,875 Goodwill of $36.6 million reflects the value of acquired workforce and synergies we expect to achieve from integrating support for Connect's security service providers and for the Connect platform. The goodwill will be deductible for tax purposes. We allocated goodwill to reporting units based on expected benefit from our synergies, and have allocated the goodwill to the Alarm.com segment. The purchase price allocation for the Acquisition was finalized during the third quarter of 2017. The final fair value of the assets and liabilities related to the Acquisition reflects an increase of $0.1 million in tangible assets, net and a decrease of $0.1 million in goodwill based on working capital adjustments identified by us. Fair Value of Net Assets Acquired and Intangibles In accordance with ASC 805, the business units acquired in the Acquisition constituted a business and the assets and liabilities were recorded at their respective fair values as of March 8, 2017 . We developed our estimate of the fair value of intangible net assets using a multi-period excess earnings method for customer relationships, the relief from royalty method for the developed technology and the relief from royalty method for the trade name. Customer Relationships We recorded the customer relationships intangible separately from goodwill based on determination of the length, strength and contractual nature of the relationship that Connect shared with its customers. We valued two groups of customer relationships using the multi-period excess earnings method, an income approach. We used several assumptions in the income approach, including attrition and renewal rate, margin and discount rate. We are amortizing the first customer relationship, valued at $92.5 million , on an attribution basis derived from the discounted cash flows of the model over an estimated useful life of twelve years and the second group of customer relationships, valued at $0.8 million , on the same basis, over an estimated useful life of four years. Developed Technology Developed technology primarily consists of intellectual property of proprietary software that is marketed for sale. The Connect platform is software for interactive security, automation and related solutions that is typically deployed and operated by the service provider in its own network operations center. We valued the developed technology by applying the relief from royalty method, an income approach. We used several assumptions in the relief from royalty method, which included royalty rate and discount rate. We are amortizing the Connect developed technology, valued at $4.4 million , on an attribution method based on the discounted cash flows of the model over an estimated useful life of three years. Other developed technologies, valued at $0.3 million , were also acquired. Trade Name We determined that there was no fair value for the Connect trade name as the largest service provider partner for Connect had re-branded the interactive security and automation platform and marketed it under the service provider partner 's own name. We valued the other trade names acquired using a relief from royalty method. We used several assumptions in the income approach, including royalty and discount rates. We are amortizing the other trade names, valued at $0.2 million , on an attribution basis derived from the discounted cash flows of the model over an estimated useful life of three years. Deferred Tax Asset The equity interests in the subsidiaries we acquired provided for a carryover tax basis in goodwill and intangible assets that arose from a previous acquisition. We have recorded a deferred tax asset of $4.1 million that represents the excess of the carryover tax basis in those previously acquired goodwill and intangible assets over the fair value of goodwill and intangible assets we recorded on the date of the Acquisition. ObjectVideo On January 1, 2017 , in accordance with an asset purchase agreement, we acquired certain assets of ObjectVideo, Inc., or ObjectVideo, that constituted a business now called ObjectVideo Labs, LLC, or ObjectVideo Labs, including products, technology portfolio and engineering team. ObjectVideo is a pioneer in the fields of video analytics and computer vision with technology that extracts meaning and intelligence from video streams in real-time to enable object tracking, pattern recognition and activity identification. We anticipate that the ObjectVideo Labs engineering team's capabilities and expertise will accelerate our research and development of video services and video analytic applications. In addition, ObjectVideo Labs will continue to perform advanced research and engineering services for the federal government. The consideration included $6.0 million of cash paid at closing. The table below sets forth the purchase consideration and the fair value allocation of the tangible and intangible net assets acquired (in thousands): January 1, 2017 Calculation of Purchase Consideration: Cash paid, net of working capital adjustment $ 6,000 Estimated Tangible and Intangible Net Assets: Developed technology $ 3,800 Current liabilities (58 ) Goodwill 2,258 Total estimated tangible and intangible net assets $ 6,000 Goodwill of $2.3 million reflects the value of acquired workforce and expected synergies from pairing ObjectVideo Labs' video analytics capabilities with our offerings. The goodwill will be deductible for tax purposes. The purchase price allocation for the ObjectVideo Labs acquisition was finalized during the third quarter of 2017. The final fair value of the assets and liabilities related to the ObjectVideo Labs acquisition reflects an increase of $0.4 million in developed technology and a decrease of $0.4 million in goodwill as well as a corresponding change to amortization of the developed technology based on our use of the replacement cost method to value the developed technology. Fair Value of Net Assets Acquired and Intangibles In accordance with ASC 805, the assets and liabilities of ObjectVideo Labs we acquired were recorded at their respective fair values as of January 1, 2017 , the date of the acquisition. We developed our estimate of the fair value of intangible assets using the replacement cost method for the developed technology. Developed Technology Developed technology recorded separately from goodwill consists of intellectual property such as proprietary software used internally for revenue producing activities. ObjectVideo Labs proprietary software consists of source code and video analytics testing programs used internally to provide video analytics consulting services and research and development to customers and for the SaaS Alarm.com platform. We valued the developed technology by applying the replacement cost method. We used several assumptions in this cost approach, which included analyzing costs that a company would expect to incur to recreate an asset of equivalent utility. We are amortizing the developed technology, valued at $3.8 million , on a straight-line basis over an estimated useful life of two years which coincides with the rapidly developing technology of video analytics. Unaudited Pro Forma Information The following unaudited pro forma data is presented as if the Acquisition and ObjectVideo Labs were included in our historical consolidated statements of operations beginning January 1, 2016. These pro forma results do not necessarily represent what would have occurred if all the business combinations had taken place on January 1, 2016, nor do they represent the results that may occur in the future. This pro forma financial information includes our historical financial statements and those of our business combinations with the following adjustments: (i) we adjusted the pro forma amounts for income taxes, (ii) we applied interest expense as if the additional borrowing for the acquisitions were as of January 1, 2016, (iii) we adjusted for amortization expense assuming the fair value adjustments to intangible assets had been applied beginning January 1, 2016, and (iv) we adjusted for transaction fees incurred and reclassified them to January 1, 2016. The pro forma adjustments were based on available information and upon assumptions that we believe are reasonable to reflect the impact of these acquisitions on our historical financial information on a supplemental pro forma basis, as follows (in thousands): Pro forma 2017 2016 Revenue $ 350,007 $ 322,238 Net income 33,191 6,173 Net income per diluted share $ 0.68 $ 0.13 Business Combinations in Operations The operations of each of the business combinations discussed above were included in the consolidated financial statements as of each of their respective acquisition dates. The following table presents the revenue and earnings of the business combinations in the year of acquisition as reported within the consolidated financial statements (in thousands): Year Ended December 31, 2017 Revenue $ 33,418 Net loss (4,072 ) For the Acquisition, we included the results of Connect's operations since its acquisition date in the Alarm.com segment and the results of Piper's operations since its acquisition date in the Other segment. We included the results of ObjectVideo Labs operations since its acquisition date in the Alarm.com segment. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 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, 2016 $ 24,723 $ — $ 24,723 Goodwill acquired — — — Balance as of December 31, 2016 24,723 — 24,723 Goodwill acquired 38,868 — 38,868 Balance as of December 31, 2017 $ 63,591 $ — $ 63,591 On January 1, 2017 , we acquired ObjectVideo Labs and recorded $2.3 million of goodwill in the Alarm.com segment. On March 8, 2017 , in connection with the Acquisition, we recorded $36.6 million of goodwill in the Alarm.com segment. There were no impairments of goodwill recorded during the year s ended December 31, 2017 , 2016 or 2015 . As of December 31, 2017 , the accumulated balance of goodwill impairments was $4.8 million , which is related to our acquisition of EnergyHub in 2013. The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Developed Trade Name Other Total Balance as of January 1, 2016 $ 4,449 $ 1,486 $ 273 $ 110 $ 6,318 Amortization (1,086 ) (438 ) (116 ) (110 ) (1,750 ) Balance as of December 31, 2016 3,363 1,048 157 — 4,568 Intangible assets acquired 93,260 8,570 170 — 102,000 Amortization (8,097 ) (4,086 ) (99 ) — (12,282 ) Balance as of December 31, 2017 $ 88,526 $ 5,532 $ 228 $ — $ 94,286 We recorded $ 12.3 million , $1.8 million and $2.2 million of amortization related to our intangible assets for the years ended December 31, 2017 , 2016 and 2015 , respectively. There were no impairments of long-lived assets during the years ended December 31, 2017 , 2016 and 2015 . The following tables reflect the weighted-average remaining life and carrying value of finite-lived intangible assets (in thousands): December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- Average Remaining Life Customer relationships $ 103,926 $ (15,400 ) $ 88,526 10.8 Developed technology 13,959 (8,427 ) 5,532 2.1 Trade name 1,084 (856 ) 228 3.3 Other 234 (234 ) — 0.0 Total intangible assets $ 119,203 $ (24,917 ) $ 94,286 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- Average Remaining Life Customer relationships $ 10,666 $ (7,303 ) $ 3,363 3.8 Developed technology 5,390 (4,342 ) 1,048 4.1 Trade name 914 (757 ) 157 4.3 Other 234 (234 ) — 0.0 Total intangible assets $ 17,204 $ (12,636 ) $ 4,568 The following table reflects the future estimated amortization expense for intangible assets (in thousands): Year Ended December 31, Amortization 2018 $ 15,219 2019 13,644 2020 12,217 2021 11,062 2022 and thereafter 42,144 Total future amortization expense $ 94,286 |
Investments in Other Entities
Investments in Other Entities | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Investments in Other Entities | Investments in Other Entities Investments in and Loans to a Platform Partner We have invested in the form of loans and equity investments in a platform partner which produces connected devices to provide it with the capital required to bring its devices to market and integrate them onto our connected property Alarm.com platform. Based upon the level of equity investment at risk, the platform partner is a VIE. We have concluded that we are not the primary beneficiary of the platform partner VIE. We do not control the product design, software development, manufacturing, marketing, or sales functions of the platform partner and therefore, we do not direct the activities of the platform partner that most significantly impact its economic performance. We account for this investment under the cost method. As of December 31, 2017 and 2016 , the fair value of this cost method investment was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. As of December 31, 2017 and 2016 , our $1.0 million cost method investment in the platform partner was recorded in other assets in our consolidated balance sheets. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Patent Licenses From time to time, we enter into agreements to license patents. The carrying value, net of amortization, was $2.4 million and $3.2 million as of December 31, 2017 and 2016 , respectively. As of December 31, 2017 and 2016 , $0.5 million and $0.7 million was included in other current assets and $1.9 million and $2.5 million was included in other assets, respectively. We have $4.9 million of historical cost in patent licenses related to such agreements. We are amortizing the patent licenses over the estimated useful lives of the patents, which range from three years to eleven years. Amortization expense on patent licenses was $0.7 million , $0.6 million and $0.4 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, and was included in cost of SaaS and license revenue in our consolidated statements of operations. Loan to a Distribution Partner In September 2016, we entered into dealer and loan agreements with a distribution partner. The dealer agreement enables the distribution partner to resell our SaaS services and hardware to their subscribers. Under the loan agreements, we agreed to loan the distribution partner up to $4.0 million , collateralized by all assets owned by the distribution partner. The advance period for the loan was amended in August 2017 and now begins each year on September 1 and ends each year on December 31. Interest on the outstanding principal accrues at a rate per annum equal to the greater of 6.0% or the Eurodollar Base Rate, or LIBOR, plus 4.0% , as determined on the first date of each annual advance period. The repayment of principal and accrued interest is due in three installments beginning in July and ending in August following the advance period. The term date of the loan is August 31, 2019; however, the borrower has the option to extend the term of the loan for two successive terms of one year each. During the third quarter of 2017, the distribution partner repaid the entire $4.2 million balance of principal and interest due for this note receivable under the first advance period, in accordance with the provisions of the loan agreement. From September 2017 to December 2017, our distribution partner drew $4.0 million under the second advance period. The note receivable balance, which is recorded in other current assets, was $4.0 million and $3.0 million as of December 31, 2017 and 2016 , respectively. In April 2017, we entered into a subordinated credit agreement with an affiliated entity of the distribution partner and loaned the affiliated entity $3.0 million , with a maturity date of November 21, 2022. Interest on the outstanding principal balance accrues at a rate of 8.5% per annum and requires monthly interest payments. The $3.0 million loan receivable balance was included in other assets as of December 31, 2017 . For the year ended December 31, 2017 , we recognized approximately $1.2 million of revenue from the distribution partners associated with these loans. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following presents our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis as of Fair value measurements in: Level 1 Level 2 Level 3 Total Assets: Money market account $ 65,620 $ — $ — $ 65,620 Total $ 65,620 $ — $ — $ 65,620 Liabilities: Subsidiary unit awards $ — $ — $ 3,160 $ 3,160 Contingent consideration liability from acquisition — — — — Total $ — $ — $ 3,160 $ 3,160 Fair Value Measurements on a Recurring Basis as of Fair value measurements in: Level 1 Level 2 Level 3 Total Assets: Money market account $ 135,204 $ — $ — $ 135,204 Total $ 135,204 $ — $ — $ 135,204 Liabilities: Subsidiary unit awards $ — $ — $ 2,768 $ 2,768 Contingent consideration liability from acquisition — — — — Total $ — $ — $ 2,768 $ 2,768 The following table summarizes the change in fair value of the Level 3 liabilities for subsidiary unit awards and the contingent consideration liability from acquisition (in thousands): Fair Value Measurements Using Significant Unobservable Inputs Year Ended December 31, 2017 Year Ended December 31, 2016 Subsidiary Unit Awards Contingent Consideration Liability from Acquisition Subsidiary Unit Awards Contingent Consideration Liability from Acquisition Beginning of period balance $ 2,768 $ — $ 532 $ 230 Total losses / (gains) included in earnings 392 — 2,236 (230 ) Ending of period balance $ 3,160 $ — $ 2,768 $ — The money market account is included in our cash and cash equivalents in our consolidated balance sheets. Our money market assets are valued using quoted prices in active markets. The liability for the subsidiary unit awards relates to agreements established with employees of our subsidiaries for cash awards contingent upon the subsidiary companies meeting certain financial milestones such as revenue, working capital, EBITDA and EBITDA margin. We account for these subsidiary awards using fair value and establish liabilities for the future payment for the repurchase of subsidiary units under the terms of the agreements based on estimating revenue, working capital, EBITDA and EBITDA margin of the subsidiary units over the periods of the awards through the anticipated repurchase dates. We estimated the fair value of each liability by using a Monte Carlo simulation model for determining each of the projected measures by using an expected distribution of potential outcomes. The fair value of each liability is calculated with thousands of projected outcomes, the results of which are averaged and then discounted to estimate the present value. At each reporting date until the respective payment dates, we will remeasure these liabilities, using the same valuation approach based on the applicable subsidiary's revenue, an unobservable input, and we will record any changes in the employee's compensation expense. Some of the awards are subject to the employees' continued employment and therefore recorded on a straight-line basis over the remaining service period. The liability balances are included in either accounts payable, accrued expenses and other current liabilities or other liabilities in our consolidated balance sheets (See Note 12 ). The amount of contingent consideration liability to be paid, up to a maximum of $2.0 million , from our acquisition of SecurityTrax in the first quarter of 2015, was determined based on revenue and adjusted EBITDA for the year ended December 31, 2017. From the first quarter of 2015 to the third quarter of 2017, we estimated the fair value of the contingent consideration liability by using a Monte Carlo simulation model for determining projected revenue by using an expected distribution of potential outcomes. The fair value of contingent consideration liability was calculated with thousands of projected revenue outcomes, the results of which are averaged and then discounted to estimate the present value. At each reporting date, we remeasured the contingent consideration liability, using the same valuation approach based on our subsidiary’s revenue, an unobservable input. Based on the results for the year ended December 31, 2017 , we do not expect to payout any of the contingent consideration during the first quarter of 2018, and therefore, we did no t record a liability related to this contingent consideration in our consolidated balance sheet as of December 31, 2017 and 2016 , as the fair value of the contingent consideration liability was zero . 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. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the years ended December 31, 2017 , 2016 and 2015 . We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the years ended December 31, 2017 , 2016 and 2015 . |
Liabilities
Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Liabilities | Liabilities The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): December 31, 2017 2016 Accounts payable $ 17,008 $ 18,289 Accrued expenses 4,301 5,298 Subsidiary unit awards 2,802 2,506 Other current liabilities 4,973 2,207 Accounts payable, accrued expenses and other current liabilities $ 29,084 $ 28,300 The components of other liabilities are as follows (in thousands): December 31, 2017 2016 Deferred rent $ 12,279 $ 11,056 Other liabilities 1,646 2,501 Other liabilities $ 13,925 $ 13,557 |
Debt, Commitments and Contingen
Debt, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Debt, Commitments and Contingencies | 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. Debt We previously had a $75.0 million revolving credit facility with SVB, as administrative agent, and a syndicate of lenders that had a maturity date in November 2018, or the 2014 Facility. As of December 31, 2016 , the outstanding balance of the 2014 Facility was $6.7 million . On March 7, 2017, we drew $67.0 million under the 2014 Facility to partially fund the Acquisition. During the nine months ended September 30, 2017, we repaid $1.7 million of the outstanding balance of the 2014 Facility. On October 6, 2017 , we refinanced the $72.0 million remaining outstanding balance under the 2014 Facility, by entering into a new $125.0 million senior secured revolving credit facility, or the 2017 Facility, with SVB, as administrative agent, PNC Bank, National Association, as documentation agent, and a syndicate of lenders. Upon entry into the 2017 Facility, we borrowed $72.0 million , which was used to repay the previously outstanding balance under the 2014 Facility. From October 6, 2017 to December 31, 2017 , no additional amounts were drawn under the 2017 Facility and $1.0 million of the outstanding balance has been repaid. The 2017 Facility matures in October 2022 and includes an option to further increase the borrowing capacity to $175.0 million with the consent of the lenders. Costs incurred in connection with the 2017 Facility were capitalized and are amortized as interest expense over the term of the 2017 Facility. The 2017 Facility is secured by substantially all of our assets, including our intellectual property. The outstanding principal balance on the 2017 Facility accrues interest at a rate equal to, at our option, either (1) LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the highest of (a) the Wall Street Journal prime rate, (b) the Federal Funds rate plus 0.50% , or (c) LIBOR plus 1.00% plus an applicable margin based on our consolidated leverage ratio. For the year ended December 31, 2017 , we elected for the outstanding principal balance to accrue interest at LIBOR plus 1.50% , LIBOR plus 1.75% , LIBOR plus 2.00% , and LIBOR plus 2.50% when our consolidated leverage ratio is less than 1.00 :1.00, greater than or equal to 1.00 :1.00 but less than 2.00 :1.00, greater than or equal to 2.00 :1.00 but less than 3.00 :1.00 and greater than or equal to 3.00 :1.00, respectively. For the years ended December 31, 2017 , 2016 and 2015 , the effective interest rate on the credit facilities was 3.44% , 2.82% and 2.63% . The carrying value of the 2017 Facility was $71.0 million as of December 31, 2017 . The 2017 Facility includes a variable interest rate that approximates market rates and, as such, we classified the liability as Level 2 within the fair value hierarchy and determined that the carrying amount of the 2017 Facility approximates its fair value as of December 31, 2017 . The 2017 Facility also carries an unused line commitment fee of 0.20% . The 2017 Facility contains various financial and other covenants that require us to maintain a maximum consolidated leverage ratio not to exceed 3.50 :1.00 and a consolidated fixed charge coverage ratio of at least 1.25 :1.00. During the year ended December 31, 2017 , we were in compliance with all financial and non-financial covenants and there were no events of default. Commitments and Contingencies Repurchase of Subsidiary Units In 2011, we formed a subsidiary that offers to professional residential property management and vacation rental management companies technology solutions for remote monitoring and control of properties, including access control and energy management. Since its formation, we granted an award of subsidiary stock to the founder and president. The vesting of the award is based upon the subsidiary meeting certain minimum financial targets from the date of commercial availability, which was determined to be June 1, 2013, until the fourth anniversary. In 2016, we amended the term of the award, extending the valuation date for the first payment in cash to December 31, 2017, amending the financial targets and allowing for payments in cash from 2018 through 2020 based on collection of financed customer receivables that existed as of the valuation date. We recorded a liability of $2.8 million in accounts payable, accrued expenses and other current liabilities and $0.4 million in other liabilities related to this commitment in our consolidated balance sheet as of December 31, 2017 . We recorded a liability of $2.5 million in accounts payable, accrued expenses and other current liabilities and a liability of $0.3 million in other liabilities related to this commitment in our consolidated balance sheet as of December 31, 2016 . At each reporting date until the respective payment dates, we will remeasure these liabilities, and we will record any changes in fair value in general and administrative expense (see Note 10 ). Leases We lease office space and office equipment under non-cancelable operating leases with various expiration dates through 2026. We recognize rent expense for lease payments on a straight-line basis over the expected lease term and amortize tenant improvement allowances over the term of the lease. In August 2014, we signed a lease for new office space in Tysons, Virginia, where we relocated our headquarters in February 2016. The lease term ends in 2026 and includes a five -year renewal option, an $8.0 million tenant improvement allowance and scheduled rent increases. During 2016, we entered into amendments to this lease which provided for 30,662 square feet of additional office space and an additional $1.7 million in tenant improvement allowance. We took possession of the additional space in February 2017 and we were allowed to utilize the tenant improvement allowance for design prior to moving into the space. As of December 31, 2017 , we have utilized the entire $9.7 million tenant improvement allowance. Rent expense was $6.2 million , $4.8 million and $4.9 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. The following table presents the future minimum lease payments under the non-cancelable operating leases as of December 31, 2017 (in thousands): Year Ended December 31, Minimum Lease Payments 2018 $ 6,898 2019 5,845 2020 5,478 2021 5,260 2022 5,135 2023 and thereafter 16,894 Total $ 45,510 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. Letters of Credit As of December 31, 2017 and 2016 , we had no outstanding letters of credit under our credit facilities. Legal Proceedings On June 2, 2015, Vivint, Inc., or Vivint, filed a lawsuit against us in U.S. District Court, District of Utah, alleging that our technology directly and indirectly infringes six patents that Vivint purchased. Vivint is seeking permanent injunctions, enhanced damages and attorney’s fees. We answered the complaint on July 23, 2015. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question. On August 19, 2016, the U.S. District Court, District of Utah stayed the litigation pending inter partes review, or IPR, by the U.S. Patent Trial and Appeal Board, or PTAB, of five of the patents in suit. In March 2017, the PTAB issued final written decisions relating to two patents finding all challenged claims unpatentable. In May 2017, the PTAB issued final written decisions relating to the remaining patents that found certain claims unpatentable, while certain other claims were not found to be unpatentable. Vivint has appealed the decisions to the U.S. Court of Appeals for the Federal Circuit, and we have cross-appealed. The U.S. District Court, District of Utah lifted the stay on the litigation on June 26, 2017, and Vivint is proceeding with its case on four of the six patents in its complaint. Fact discovery is scheduled to close on or about March 15, 2018, and no trial date has been set. In September 2017, the U.S. Patent and Trademark Office ordered ex parte reexaminations of certain claims of two of the remaining patents in suit, at our request. Should Vivint prevail on its claims that one or more elements of our solution infringe one or more of its patents, we could be required to pay damages of Vivint’s lost profits and/or a reasonable royalty for sales of our solution, 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 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 to us. The outcome of the legal claim and proceeding against us cannot be predicted with certainty. We believe we have valid defenses to Vivint’s claims. Based on currently available information, we determined a loss is not probable or reasonably estimable at this time. On December 30, 2015, a putative class action lawsuit was filed against us in the U.S. District Court for the Northern District of California, alleging violations of the Telephone Consumer Protection Act, or TCPA. The complaint does not allege that Alarm.com itself violated the TCPA, but instead seeks to hold us responsible for the marketing activities of our service provider partners under principles of agency and vicarious liability. The complaint seeks monetary damages under the TCPA, injunctive relief, and other relief, including attorney’s fees. We answered the complaint on February 26, 2016. On May 5, 2017, the court granted plaintiffs' motion for class certification. Discovery is underway, and the matter remains pending in the U.S. District Court for the Northern District of California. Based on the current schedule, we anticipate a trial will take place in October 2018. Based on currently available information, we determined a loss is not probable or reasonably estimable at this time. On February 9, 2016, we were sued along with one of our service provider partners in the Circuit Court for the City of Virginia Beach, Virginia by the estate of a deceased service provider partner customer alleging wrongful death, among other claims. The suit seeks a total of $7 million in compensatory damages and $350,000 in punitive damages. We filed our answer on March 22, 2016. Discovery is underway, and the matter remains pending. The Court has scheduled trial to begin on July 10, 2018. Based on currently available information, we determined a loss is not probable or reasonably estimable at this time. On March 21, 2017, Taraneh Vessal filed a complaint against us and Monitronics International, Inc. in the United States District Court for the Northern District of Illinois, alleging violation of the TCPA and the Illinois Consumer Fraud and Deceptive Business Practices Act, or ICFDBA. We filed a motion to dismiss the complaint on May 12, 2017. Plaintiff filed her First Amended Complaint on June 2, 2017, alleging similar violations of the TCPA and ICFDBA. We filed a motion to dismiss the First Amended Complaint on June 16, 2017. On October 18, 2017, the Court granted our motion to dismiss the claims with respect to violations of the ICFDBA without prejudice, but allowed the claims with respect to the TCPA to proceed. Discovery is underway, and the matter remains pending. Based on currently available information, we determined a loss is not probable or reasonably estimable at this time. On August 14, 2017, Alarm.com filed a lawsuit against ABS Capital Partners, Inc., ABS Partners V, LLC, ABS Partners VII, LLC, and Ralph Terkowitz in the Delaware Court of Chancery, or the Chancery Court. The complaint sought declaratory and injunctive relief preventing the defendants from using Alarm.com’s confidential information and trade secrets to compete with Alarm.com, and preventing the defendants from executing their planned transaction to invest in two companies (ipDatatel, LLC, or ipDatatel, and Resolution Products, Inc., or Resolution Products). The complaint alleged claims of breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, misappropriation of trade secrets, and misappropriation of confidential information, in connection with the defendants’ planned investment. On September 22, 2017, Alarm.com filed an amended complaint against ABS Capital Partners, Inc., ABS Partners V, LLC, and ABS Partners VII, LLC, alleging claims for misappropriation of trade secrets and misappropriation of confidential information. The amended complaint seeks damages, declaratory relief, and injunctive relief enjoining ABS Capital Partners, Inc., ABS Partners V, LLC, and ABS Partners VII, LLC from using Alarm.com’s trade secrets and confidential information to compete with Alarm.com. On October 6, 2017, the defendants filed a motion to dismiss the lawsuit. The matter remains pending. On August 24, 2017, Alarm.com Incorporated and its wholly owned subsidiary ICN Acquisition, LLC, filed a patent infringement complaint against ipDatatel, in the United States District Court for the Eastern District of Texas. The complaint seeks injunctive relief to stop the further sale of the infringing ipDatatel’s products and systems, and damages for the infringement of Alarm.com’s patents. The complaint asserts that the technology in the ipDatatel products infringe one or more claims of Alarm.com’s patents: United States Patent Numbers 7,113,090; 7,633,385; 7,956,736; 8,478,871; and 9,141,276. If the litigation is successful, Alarm.com will be entitled to receive monetary damages, injunctive relief, and any other relief, including attorney’s fees, from ipDatatel. The Court has scheduled a claim construction hearing for June 2018 and commencement of trial in March 2019. ipDatatel has not yet answered the complaint or asserted counterclaims and defenses. ipDatatel has moved for dismissal based on alleged patent ineligibility as to each patent in suit. On April 25, 2017, Alarm.com Incorporated and its wholly owned subsidiary ICN Acquisition, LLC, filed a patent infringement complaint against Protect America, Inc., or Protect America, and SecureNet Technologies, LLC, or SecureNet, in the United States District Court for the Eastern District of Virginia. The complaint seeks injunctive relief to stop the further sale of the infringing Protect America and SecureNet products and systems, and damages for the infringement of Alarm.com’s patents. The complaint asserts that the technology in the Protect America and SecureNet Alarm Systems products infringe one or more claims of Alarm.com’s patents: United States Patent Numbers 7,113,090; 7,633,385; 8,395,494; 8,493,202; 8,612,591; 8,860,804; and 9,141,276. If the litigation is successful, Alarm.com will be entitled to receive monetary damages, injunctive relief, and any other relief, including attorney’s fees, from Protect America and SecureNet. In June 2017, Alarm.com filed an amended complaint against Protect America only and voluntarily dismissed SecureNet from the suit, reserving the right to refile. In September 2017, Alarm.com voluntarily dismissed the amended complaint in the United States District Court of the Eastern District of Virginia and refiled a complaint against Protect America, with substantially the same allegations, in the United States District Court of the Eastern District of Texas. The Court has scheduled a claim construction hearing for September 2018 and commencement of trial in May 2019. Protect America has not yet answered the complaint or asserted counterclaims and defenses. Protect America has moved for dismissal or transfer to the Western District of Texas based on allegedly improper venue. In September 2014, Icontrol filed a Complaint in the United States District Court, District of Delaware, asserting that SecureNet infringes certain U.S. Patents owned by Icontrol, patents now owned by Alarm.com through a subsidiary. In March 2015, Icontrol voluntarily agreed to dismiss the case, reserving the right to refile. In September 2015, Icontrol refiled the case against SecureNet in the same district court alleging infringement of some of the same patents. SecureNet filed petitions for inter partes review of the patents-in-suit before the PTAB. Proceedings as to one of the patents in suit (United States Patent Number 7,855,635) was instituted, resulting in the cancellation of some, but not all, claims of that patent. That decision is currently before the Court of Appeals for the Federal Circuit. The PTAB has rejected the remaining applications for inter partes review, and SecureNet requested rehearing of the rejection as to one of the patents in suit, which request has been rejected by the PTAB. The Court has scheduled a claim construction hearing for March 2018 and commencement of trial in February 2019. In September 2014, Icontrol filed a Complaint in the United States District Court, District of Delaware, asserting that Zonoff Inc., or Zonoff, infringes certain U.S. Patents owned by Icontrol, all of which are now owned by Alarm.com through a subsidiary. In November 2015, Icontrol filed a second lawsuit, also in the United States District Court, District of Delaware, alleging that Zonoff infringes additional U.S. Patents owned by Icontrol, now owned by Alarm.com through a subsidiary. The Court held a claim construction hearing in the first case on March 14, 2016 and consolidated the cases on August 1, 2016. On November 3, 2017, Zonoff and Alarm.com entered into a proposed consent judgment whereby Zonoff stipulated to its infringement of the patents in suit and the validity of the patents in suit. The Court entered a consent judgment against Zonoff, and the matter is now closed. From time to time, we may 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. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders’ equity Authorized shares We are authorized to issue two classes of stock, common stock and preferred stock. On June 9, 2015, the board of directors amended and restated our Amended and Restated Certificate of Incorporation, effective upon the closing of our IPO on July 1, 2015, and authorized us to issue up to 300,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock. IPO Upon the closing of our IPO on July 1, 2015, all outstanding shares of previously issued redeemable convertible preferred stock converted into an aggregate of 35,017,884 shares of common stock. Additionally, we issued 7,525,000 shares of common stock in our IPO. Dividend On June 12, 2015, our board of directors declared a cash dividend to our stockholders of record on our common and previously issued redeemable convertible 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. The dividends were paid in June 2015. Common and Preferred Stock As of December 31, 2017 and 2016 , there were 47,215,720 and 46,172,318 shares of common stock issued, and 47,202,310 and 46,142,483 shares of common stock outstanding, respectively. As of December 31, 2017 and 2016 , there were no preferred shares issued and outstanding. Each outstanding share of common stock is entitled to one vote per share. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is included in the following line items in the consolidated statements of operations (in thousands): Year Ended December 31, Stock-based compensation expense data: 2017 2016 2015 Sales and marketing $ 561 $ 536 $ 372 General and administrative 2,638 1,430 2,486 Research and development 4,214 2,035 1,266 Total stock-based compensation expense $ 7,413 $ 4,001 $ 4,124 The following table summarizes the components of non-cash stock-based compensation expense (in thousands): Year Ended December 31, 2017 2016 2015 Stock options and assumed options $ 3,913 $ 3,783 $ 3,154 Restricted stock units 3,366 141 — Restricted stock awards 19 — — Employee stock purchase plan 115 77 — Compensation related to the sale of common stock — — 193 Compensation related to the cash settlement of stock options — — 777 Total stock-based compensation expense $ 7,413 $ 4,001 $ 4,124 Tax benefit from stock-based awards $ 12,719 $ 5,048 $ 700 2015 Equity Incentive Plan We issue stock options pursuant to our 2015 Plan. The 2015 Plan allows for the grant of stock options to employees and for the grant of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, or RSUs, performance-based stock awards, and other forms of equity compensation to our employees, directors and non-employee directors and consultants. In June 2015, our board of directors adopted and our stockholders approved our 2015 Plan pursuant to which we initially reserved a total of 4,700,000 shares of common stock for issuance under the 2015 Plan, which included shares of our common stock previously reserved for issuance under our Amended and Restated 2009 Stock Incentive Plan, or the 2009 Plan. The number of shares of common stock reserved for issuance under the 2015 Plan will automatically increase on January 1 each year, for a period of not more than ten years, commencing on January 1, 2016 through January 1, 2024, by 5% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the board of directors. As a result of the adoption of the 2015 Plan, no further grants may be made under the 2009 Plan. As of December 31, 2017 , 7,980,705 shares remained available for future grant under the 2015 Plan. Stock Options Stock options under the 2015 Plan have been granted at exercise prices based on the closing price of our common stock on the date of grant. Stock options under the 2009 Plan were granted at exercise prices as determined by the board of directors to be the fair market value of our common stock. Our stock options generally vest over a five -year period and each option, if not exercised or forfeited, expires on the ten th anniversary of the grant date. Certain stock options granted under the 2015 Plan and previously granted under the 2009 Plan may be exercised before the options have vested. Unvested shares issued as a result of early exercise are subject to repurchase by us upon termination of employment or services at the original exercise price. The proceeds from the early exercise of stock options are initially recorded as a current liability and are reclassified to common stock and additional paid-in capital as the awards vest and our repurchase right lapses. There were 13,281 and 29,835 unvested shares of common stock outstanding subject to our right of repurchase as of December 31, 2017 and 2016 , respectively. We repurchased 1,492 and 2,156 unvested shares of common stock related to early exercised stock options in connection with employee terminations during the years ended December 31, 2017 and 2016 , respectively. We recorded $0.1 million and $0.2 million in accounts payable, accrued expenses and other current liabilities on our consolidated balance sheets for the proceeds from the early exercise of the unvested stock options as of December 31, 2017 and 2016 , respectively. Included in the stock-based compensation expense for the year ended December 31, 2015 was $0.8 million related to the cash settlement of recently exercised stock options of a terminated employee, at the company's election. We accounted for this cash settlement as a liability modification of the stock option awards. We account for stock-based compensation options based on the fair value of the award as of the grant date. We recognize stock-based compensation expense using the accelerated attribution method, net of actual forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. We value our stock options using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected term, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of our stock options. The expected term represents the period of time the stock options are expected to be outstanding and is based on the “simplified method.” Under the “simplified method,” the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. We use the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options. Expected volatility is based on historical volatilities of our stock and publicly traded stock of comparable companies over the estimated expected term of the stock options. There were 252,100 , 653,900 and 540,548 stock options granted during the years ended December 31, 2017 , 2016 and 2015 , respectively. We declared and paid dividends in June 2015 in anticipation of our IPO, which we closed on July 1, 2015. Subsequent to the IPO, we do not expect to declare or pay dividends on a recurring basis. As such, we assume that the dividend rate is zero . The following table summarizes the assumptions used for estimating the fair value of stock options granted: Year Ended December 31, 2017 2016 2015 Volatility 44.4 - 61.6% 47.6 - 50.6% 48.5 - 51.8% Expected term 6.3 years 5.6 - 6.3 years 4.5 - 6.3 years Risk-free interest rate 2.0 - 2.2% 1.3 - 1.9% 1.3 - 1.9% Dividend rate — % — % — % The following table summarizes stock option activity: Number of Weighted Weighted Average Aggregate Outstanding as of December 31, 2016 3,547,528 $ 6.91 6.4 $ 74,267 Granted 252,100 31.69 Exercised (1,011,174 ) 2.55 34,999 Forfeited (97,415 ) 12.53 Expired (4,063 ) 11.99 Outstanding as of December 31, 2017 2,686,976 $ 10.67 6.4 $ 72,823 Vested and expected to vest as of December 31, 2017 2,700,257 $ 10.64 6.4 $ 73,258 Exercisable as of December 31, 2017 1,733,849 $ 6.38 5.6 $ 54,398 The weighted average grant date fair value for our stock options granted during the years ended December 31, 2017 , 2016 and 2015 was $14.95 , $8.77 and $5.90 , respectively. The total fair value of stock options vested during the years ended December 31, 2017 , 2016 and 2015 was $3.5 million , $2.2 million and $2.7 million , respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2017 , 2016 and 2015 was $35.0 million , $14.1 million and $3.3 million , respectively. As of December 31, 2017 , the total compensation cost related to nonvested awards not yet recognized was $4.2 million , which will be recognized over a weighted average period of 2.2 years. Cash received from exercises of stock options was $2.6 million , $1.1 million and $0.5 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. Stock Options Assumed from Acquisition On March 8, 2017, we completed the Acquisition and assumed the Icontrol Plans. The assumed unvested stock options are exercisable for 70,406 shares of Alarm.com common stock. On March 15, 2017, we filed a Form S-8 Registration Statement related to the Acquisition. The registration also covers an additional 2,308,615 shares of common stock that were automatically added to the shares authorized for issuance under the 2015 Plan pursuant to an evergreen provision contained in the 2015 Plan and an additional 461,723 shares of common stock that were automatically added to the shares authorized for issuance under the 2015 ESPP, pursuant to an evergreen provision contained in the 2015 ESPP. In accordance with the terms of the asset purchase agreement, we were obligated to assume the Icontrol Plans, and converted the 2,001,387 unvested employee stock options into 70,406 Alarm.com stock options using a conversion ratio stated in the agreement to convert the original exercise price and number of options. The fair value of the unvested stock options on the date of the Acquisition was $1.7 million calculated using a Black-Scholes model with a volatility and risk-free interest rate over the expected term of the options and the closing price of the Alarm.com common stock on the date of acquisition. We applied our graded vesting accounting policy to the fair value of these assumed options and determined $1.4 million of the fair value was attributable to pre-combination services and was included as a component of total purchase consideration. The remaining $0.3 million of the fair value was determined to be attributable to post-combination services and will be recognized over the remaining service periods of the stock options. The following table summarizes the assumptions used for estimating the fair value of stock options assumed from the Connect business unit of Icontrol: Year Ended December 31, 2017 Volatility 42.7 - 44.4% Expected term 2.5 - 5.0 years Risk-free interest rate 1.4 - 2.0% Dividend rate — % The following table summarizes the assumed stock option activity: Number of Weighted Weighted Average Aggregate Outstanding as of December 31, 2016 — $ — 0.0 $ — Options assumed from Connect 70,406 5.48 Exercised (7,232 ) 5.57 252 Forfeited (21,514 ) 4.70 Expired (21 ) 4.55 Outstanding as of December 31, 2017 41,639 $ 5.88 7.2 $ 1,327 Vested and expected to vest as of December 31, 2017 41,639 $ 5.88 7.2 $ 1,327 Exercisable as of December 31, 2017 18,973 $ 5.24 6.9 $ 617 The weighted average grant date fair value for the assumed stock options granted the year ended December 31, 2017 was $4.78 . The total fair value of assumed stock options vested during the year ended December 31, 2017 was $0.1 million . The aggregate intrinsic value of assumed stock options exercised during the year ended December 31, 2017 was $0.3 million . As of December 31, 2017 , the total compensation cost related to the nonvested awards not yet recognized was $0.1 million , which will be recognized over a weighted average period of 1.2 years. Restricted Stock Awards In March 2017, we assumed 1,622 stock options from Connect upon completion of the Acquisition, which were early exercised according to the provisions of the Icontrol Plans for which the employees had not yet provided service for the applicable vesting periods. We canceled those stock options and issued restricted stock awards, or RSAs, with no exercise price at the fair value of Alarm.com common stock upon the closing of the Acquisition and recorded less than $0.1 million of compensation expense during the year ended December 31, 2017 . We expect these RSAs to vest over two years and we will recognize compensation expense for the fair value of the awards in stock-based compensation. We repurchased 750 RSAs in connection with employee terminations during the year ended December 31, 2017 . There were no repurchases of RSAs during the year ended December 31, 2016. Restricted Stock Units There was an aggregate of 534,146 and 61,482 RSUs granted to certain of our employees during the years ended December 31, 2017 and 2016 , respectively. We granted no RSUs during the year ended December 31, 2015 . The RSUs vest over a five -year period from the vesting commencement date, which is generally the grant date. We account for RSUs based on the fair value of the award as of the grant date. We recognize stock-based compensation expense using the accelerated attribution method, net of actual forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the grant date to the vesting date for that tranche. The condition for vesting of the RSUs is based on continued employment. As of December 31, 2017 , the total unrecognized compensation expense related to RSU awards granted amounted to $15.9 million , which is expected to be recognized over a weighted average period of 2.9 years. The following table summarizes RSU activity: Number of Weighted Aggregate Outstanding as of December 31, 2016 61,482 $ 30.00 $ 1,711 Granted 534,146 35.03 Vested — — — Forfeited (37,360 ) 31.56 Outstanding as of December 31, 2017 558,268 $ 34.71 $ 21,075 Vested and expected to vest as of December 31, 2017 558,268 $ 34.71 $ 21,075 Employee Stock Purchase Plan Our board of directors adopted our 2015 ESPP in June 2015. As of December 31, 2017 , 1,604,310 shares have been reserved for future grant under the 2015 ESPP, with provisions established to increase the number of shares available on January 1 of each subsequent year for nine years. The annual automatic increase in the number of shares available for issuance under the 2015 ESPP is the lesser of 1% of each class of common stock outstanding as of December 31 of the preceding fiscal year, 1,500,000 shares of common stock, or such lesser number as determined by the board of directors. The 2015 ESPP allows eligible employees to purchase shares of our common stock at 90% of the fair market value, rounded up to the nearest cent, based on the closing price of our common stock on the purchase date. The maximum number of shares of our common stock that a participant may purchase during any calendar year shall not exceed such number of shares having a fair market value equal to the lesser of $15,000 or 10% of the participant's base compensation for that year. The 2015 ESPP is considered compensatory for purposes of share-based compensation expense due to the 10% discount on the fair market value of the common stock. For the years ended December 31, 2017 and 2016 , an aggregate of 25,616 and 31,797 shares were purchased by employees for which we recognized $0.1 million and $0.1 million of compensation expense, respectively. There were no purchases of shares during the year ended December 31, 2015 and less than $0.1 million compensation expense was recognized over the purchase period. Compensation expense is recognized for the amount of the discount, net of actual forfeitures and voluntary withdrawals, over the six -month purchase period. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and Diluted Earnings Per Share The components of basic and diluted EPS are as follows (in thousands, except share and per share amounts): Year Ended December 31, 2017 2016 2015 Net income $ 29,251 $ 10,154 $ 11,768 Less: dividends paid to participating securities — — (18,987 ) Less: income allocated to participating securities (13 ) (12 ) — Net income / (loss) available for common stockholders (A) $ 29,238 $ 10,142 $ (7,219 ) Weighted average common shares outstanding — basic (B) 46,682,141 45,716,757 24,108,362 Dilutive effect of stock options, RSUs and RSAs 2,471,807 2,158,765 — Weighted average common shares outstanding — diluted (C) 49,153,948 47,875,522 24,108,362 Net income / (loss) per share: Basic (A/B) $ 0.63 $ 0.22 $ (0.30 ) Diluted (A/C) $ 0.59 $ 0.21 $ (0.30 ) Diluted net loss per common share is the same as basic net loss per common share for the year ended December 31, 2015 because the effects of potentially dilutive items were anti-dilutive due to our net loss attributable to common stockholders. 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: Year Ended December 31, 2017 2016 2015 Stock options 258,917 197,350 522,997 RSAs 129 — — RSUs 188,050 25,640 — Common stock subject to repurchase 13,281 29,835 96,368 |
Significant Service Provider Pa
Significant Service Provider Partners | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Significant Service Provider Partners | Significant Service Provider Partners During the year s ended December 31, 2017 , 2016 and 2015 , our 10 largest revenue service provider partners accounted for 60% , 60% and 63% of our consolidated revenue. 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 the year ended December 31, 2017 . Another one of our service provider partners in the Alarm.com segment individually represented greater than 10% but not more than 15% of our revenue for the years ended December 31, 2017 and 2016 and represented greater than 15% but not more than 20% of our revenue for the year ended December 31, 2015 . One individual service provider partner in the Alarm.com segment represented more than 10% of accounts receivable as of December 31, 2017 . No individual service provider partner represented more than 10% of accounts receivable as of December 31, 2016 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Tax Cuts and Jobs Act, or the “Tax Act,” was signed into law on December 22, 2017. This legislation makes significant change in U.S. tax law, including a reduction in the corporate tax rate, changes to net operating loss carryforwards and carrybacks and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the current rate of 35% to 21%. As a result of the enacted Tax Act, we were required to revalue deferred tax assets and liabilities at the rate in effect when the deferred tax balances are scheduled to reverse. This revaluation resulted in an additional $8.8 million of income tax expense and a corresponding reduction in the deferred tax asset. Additionally, on December 22, 2017, the Securities and Exchange Commission staff also issued Staff Accounting Bulletin No. 118, or "SAB 118," to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. Specifically, SAB 118 provides a measurement period for companies to evaluate the impacts of the Tax Act on their financial statements. We consider the $8.8 million of income tax expense recorded to be a provisional amount primarily because we continue to evaluate the tax effects of the Tax Act on taxes related to our international operations, the realizability of deferred tax assets, remeasurement of certain temporary differences at the new tax rates and the impact of other retroactive provisions. The components of our income tax expense are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current Federal $ 584 $ 7,227 $ 7,730 State (88 ) 1,829 1,519 Foreign 6 — — Total Current 502 9,056 9,249 Deferred Federal 3,837 (4,283 ) (3,372 ) State (1,368 ) (546 ) (180 ) Foreign 19 — — Total Deferred 2,488 (4,829 ) (3,552 ) Total $ 2,990 $ 4,227 $ 5,697 The difference between the income tax expense at the federal statutory rate and income tax expense in the consolidated statements of operations is as follows: Year Ended December 31, 2017 2016 2015 Federal statutory rate 35.0 % 35.0 % 35.0 % State income tax expense, net of federal benefits 0.1 4.9 4.5 Nondeductible meals and entertainment 0.6 1.6 1.2 Research and development tax credits (16.1 ) (10.8 ) (8.9 ) Tax windfall benefits (36.5 ) — — Change in tax rate due to tax reform 27.2 — — Other (1.0 ) (1.3 ) 0.8 Effective rate 9.3 % 29.4 % 32.6 % The components of our net deferred tax assets (liabilities) are as follows (in thousands): December 31, 2017 2016 Deferred tax assets, non-current Provision for doubtful accounts $ 714 $ 1,046 Accrued expenses 2,362 2,622 Deferred revenue 2,455 3,627 Deferred rent 3,384 4,671 Stock-based compensation 3,613 3,468 Acquisition costs 3,310 4,482 Subsidiary unit compensation 1,413 1,566 Equity investments 116 182 Net operating losses 1,357 2,678 Tax credits 2,546 — Intangible assets and prepaid patent licenses 156 — Other 160 107 Total deferred tax assets, non-current 21,586 24,449 Deferred tax liabilities, non-current Intangible assets and prepaid patent licenses (74 ) (2,780 ) Depreciation (2,917 ) (4,649 ) Contingent liability (171 ) (268 ) Total deferred tax liabilities, non-current $ (3,162 ) $ (7,697 ) Net deferred tax assets, non-current $ 18,424 $ 16,752 A reconciliation of the beginning and ending amounts of unrecognized tax benefits (without related interest expense) is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Beginning balance $ 681 $ 506 $ 208 Additions based on tax positions of the current year 718 197 152 Additions based on tax positions of prior year 373 79 146 Additions resulting from acquisitions 277 — — Decreases due to lapse of applicable statute of limitations (76 ) — — Decreases related to settlements of prior year tax positions — (101 ) — Ending balance $ 1,973 $ 681 $ 506 Our effective income tax rates were 9.3% , 29.4% and 32.6% for the years ended December 31, 2017 , 2016 and 2015 , respectively. Our effective tax rates were below the statutory rate primarily due to recognizing the tax windfall benefits from employee stock-based payment transactions through the income statement provision for income taxes in the period incurred, as well as the research and development tax credits claimed, partially offset by the impact of state taxes and non-deductible meal and entertainment expenses. We adopted the accounting provision that simplified the tax accounting for employee share-based payment transactions in the first quarter of 2017. Prior to adoption of the new accounting provision, tax windfall benefits were required to be recorded in additional paid-in capital. These decreases in the effective tax rate were partially offset by the effects of the Tax Act, which required us to revalue deferred tax assets and liabilities at the rate in effect when the deferred tax balances are scheduled to reverse. 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. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets as of December 31, 2017 and 2016 . Accordingly, we have no t recorded a valuation allowance as of December 31, 2017 and 2016 . 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 unrecognized tax benefits of $1.0 million , $0.2 million and $0.3 million for research and development tax credits claimed during the years ended December 31, 2017 , 2016 and 2015 , respectively. We also recorded an unrecognized tax benefit of $0.3 million within our Canadian subsidiary related to an existing net operating loss acquired as part of the Acquisition. As of December 31, 2017 and 2016 , we accrued less than $0.1 million of total interest related to unrecognized tax benefits. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. We are not aware of any events that make it reasonably possible that there would be a significant change in our unrecognized tax benefits over the next twelve months. Our cumulative liability for uncertain tax positions was $2.0 million and $0.7 million as of December 31, 2017 and 2016 , respectively, and if recognized, would reduce our income tax expense and the effective tax rate. We file income tax returns in the United States and Canada. We are no longer subject to U.S. income tax examinations for years prior to 2014, with the exception that operating loss carryforwards generated prior to 2014 may be subject to tax audit adjustment. We are generally no longer subject to state and local income tax examinations by tax authorities for years prior to 2014. As of December 31, 2017 , we had federal net operating loss carryforwards of approximately $6.0 million as well as state net operating loss carryforwards of approximately $1.9 million , which are scheduled to begin to expire in 2030. As of December 31, 2017 , we had federal research and development tax credit carryforwards of approximately $2.2 million , which are scheduled to begin to expire in 2037. As of December 31, 2017 , we had state research and development tax credit carryforwards of approximately $1.4 million , which are scheduled to begin to expire in 2021.The federal net operating loss carryforward arose in connection with the 2013 acquisition of EnergyHub. Utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change limitations as provided by the Internal Revenue Code of 1986, as amended. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 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 platforms for the intelligently connected property and related solutions that contributed approximately 94% , 94% and 97% of our revenue for the years ended December 31, 2017 , 2016 and 2015 . 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 table below (in thousands): Year Ended December 31, 2017 Alarm.com Other Intersegment Intersegment Total SaaS and license revenue $ 227,583 $ 8,700 $ — $ — $ 236,283 Hardware and other revenue 92,445 15,154 (2,945 ) (2,000 ) 102,654 Total revenue 320,028 23,854 (2,945 ) (2,000 ) 338,937 Operating income / (loss) 41,439 (8,248 ) (175 ) 358 33,374 Assets 352,766 18,875 — — 371,641 Year Ended December 31, 2016 Alarm.com Other Intersegment Intersegment Total SaaS and license revenue $ 168,732 $ 4,808 $ — $ — $ 173,540 Hardware and other revenue 79,049 14,018 (2,863 ) (2,638 ) 87,566 Total revenue 247,781 18,826 (2,863 ) (2,638 ) 261,106 Operating income / (loss) 21,282 (7,229 ) (312 ) 317 14,058 Assets 246,798 14,447 — — 261,245 Year Ended December 31, 2015 Alarm.com Other Intersegment Intersegment Total SaaS and license revenue $ 139,036 $ 1,928 $ (28 ) $ — $ 140,936 Hardware and other revenue 63,716 7,124 (924 ) (1,964 ) 67,952 Total revenue 202,752 9,052 (952 ) (1,964 ) 208,888 Operating income / (loss) 38,437 (20,151 ) (279 ) (16 ) 17,991 Depreciation and amortization expense was $17.4 million , $6.3 million and $5.5 million for the Alarm.com segment for the years ended December 31, 2017 , 2016 and 2015 , respectively. Depreciation and amortization expense was $0.3 million , $0.2 million and $0.3 million for the Other segment for the years ended December 31, 2017 , 2016 and 2015 , respectively. Additions to property and equipment were $9.3 million , $5.7 million and $10.2 million for the Alarm.com segment for the years ended December 31, 2017 , 2016 and 2015 , respectively. Additions to property and equipment were $0.1 million , less than $0.1 million and $0.2 million for the Other segment for the years ended December 31, 2017 , 2016 and 2015 , respectively. We derived substantially all revenue from North America for the years ended December 31, 2017 , 2016 and 2015 . Substantially all our long-lived assets were in North America as of December 31, 2017 and 2016 . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Our installation partner in which we have a 48.2% ownership interest performs installation services for security dealers and also provides installation services for us and certain of our subsidiaries. On December 11, 2015, we purchased an additional 9,290 common units of the same company for $0.2 million , which did not change our proportional share of ownership interest. We account for this investment using the equity method (see Note 8 ). During the years ended December 31, 2017 , 2016 and 2015 , we recorded $0.7 million , $1.3 million and $0.8 million of cost of hardware and other revenue in connection with this installation partner. As of December 31, 2017 and 2016 , the accounts payable balance to our installation partner was less than $0.1 million and $0.1 million . In September 2014, we loaned $0.3 million to our installation partner under a secured promissory note that accrues interest at 8.0% . Interest is payable monthly with the entire principal balance plus accrued but unpaid interest due at maturity in September 2018. We recorded less than $0.1 million of interest income related to this note receivable in each of the years ended December 31, 2017 , 2016 and 2015 . |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following table shows selected unaudited quarterly consolidated statement of operations data for each of our eight most recently completed quarters. In the opinion of management, the information for each of these quarters has been prepared on the same basis as our audited financial statements and include all adjustments, consisting of normal recurring adjustments and accruals, necessary for the fair statement of financial information in accordance with GAAP. Historical results are not necessarily indicative of results that may be achieved in future periods, and operating results for quarterly periods are not necessarily indicative of operating results for a full year. The selected consolidated statements of operation data in amounts are presented below (in thousands, except per share data): Three Months Ended Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Total revenue $ 59,043 $ 64,423 $ 67,846 $ 69,794 $ 74,194 $ 85,988 $ 89,962 $ 88,793 Total cost of revenue 21,116 25,183 26,366 26,715 26,635 29,835 31,833 27,885 Net income $ 2,738 $ 1,873 $ 2,567 $ 2,976 $ 3,963 $ 9,865 $ 15,103 $ 320 Net income / (loss) per share: Basic $ 0.06 $ 0.04 $ 0.06 $ 0.06 $ 0.09 $ 0.21 $ 0.32 $ 0.01 Diluted $ 0.06 $ 0.04 $ 0.05 $ 0.06 $ 0.08 $ 0.20 $ 0.31 $ 0.01 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | Schedule II – Valuation and Qualifying Accounts and Reserves Alarm.com Holdings, Inc. Schedule II Valuation and Qualifying Accounts and Reserves (In thousands) Description Balance at Additions Additions Deductions Balance at Year ended December 31, 2017 Allowance for doubtful accounts $ 1,282 $ — $ 453 $ (286 ) $ 1,449 Allowance for product returns 2,314 2,055 — (1,898 ) 2,471 Year ended December 31, 2016 Allowance for doubtful accounts 1,315 — 648 (681 ) 1,282 Allowance for product returns 2,116 2,071 — (1,873 ) 2,314 Year ended December 31, 2015 Allowance for doubtful accounts 1,397 — 276 (358 ) 1,315 Allowance for product returns 1,838 1,559 — (1,281 ) 2,116 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. Equity investments over which we are able to exercise significant influence but do not control the investee are accounted for using the equity method. We determine whether we have a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity, or VIE. Voting interest entities are entities that have sufficient equity and provide equity investor voting rights that give them power to make significant decisions relating to the entity’s operations. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. In VIEs, a controlling financial interest is attained through means other than voting rights and the entities lack one or more of the characteristics of a voting entity. We account for our unconsolidated investments in businesses under the cost or equity method dependent on factors such as percent ownership and factors that would determine significant influence. Our cost method investments are recorded at cost. Equity method investments are recorded at cost and adjusted to record our share of the company’s undistributed gains and losses in our consolidated statements of operations. We evaluate our cost and equity method investments for impairment whenever events or circumstances indicate that carrying amount of such investments may not be recoverable. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. Estimates are used when accounting for revenue recognition, allowances for doubtful accounts, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, stock-based compensation, income taxes, legal reserves, contingent consideration and goodwill and intangible assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents. |
Accounts Receivable and Notes Receivable | Accounts Receivable Accounts receivable are principally derived from sales to customers located in the United States and Canada. Substantially all of our sales in Canada are transacted in U.S. dollars. Revenue in countries outside of North America accounted for 1% of our total revenue for the year ended December 31, 2017 and less than 1% of our total revenue for the years ended December 31, 2016 and 2015 . As of December 31, 2017 and 2016 , approximately 4% and 3% of accounts receivable balances were related to service providers partners outside of North America. Our accounts receivable are stated at estimated realizable value. We utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectibility of the amounts due. Our estimate is based on historical collection experience and a review of the current status of accounts receivable. Each of our service provider partners is evaluated for creditworthiness through a credit review process at the inception of the arrangement or if risk indicators arise during our arrangement at such other time. Our terms for hardware sales to our service provider partners and distributors typically allow for returns for up to one year. We apply our estimate as a percentage of sales monthly, based on historical data, as a reserve against revenue to account for our provision for returns. We have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. Notes Receivable Notes receivable are presented net of an allowance for uncollectibility, if any. We accrue interest on notes receivable based on the contractual terms of the note. Outstanding notes receivable that are aged 30 days or more from the contractual payment date are considered past due. We do not accrue interest on notes receivable that are considered impaired or are greater than 90 days past due based on their contractual payment terms. Notes receivable may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a note receivable has been placed in nonaccrual status, interest will be recognized when cash is received. A note receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and collection of all remaining contractual amounts due is reasonably assured. |
Inventory | Inventory Our inventory, which is comprised of raw materials and finished goods, includes materials used to produce our wireless communications network enabled radios, video cameras, home automation system parts and peripherals, is stated at the lower of cost or market, and is charged to cost of sales on a first in, first out, or FIFO, basis when the inventory is shipped from our manufacturer and received by our service provider partners. We periodically evaluate our inventory quantities for obsolescence based on criteria such as customer demand and changing technology and record an obsolescence write-off when necessary. |
Internal-Use Software | Internal-Use Software We capitalize the costs directly related to the development of internal-use software for our platforms during the application development stage of the projects. Such costs primarily include payroll and payroll-related costs for engineers and product development employees directly associated with the development project. Our internal-use software is reported at cost less accumulated depreciation. Depreciation begins once the project is ready for its intended use, which is usually when the code goes into production in weekly software builds on our platforms. We depreciate the asset on a straight-line basis over a period of three years, which is the estimated useful life. We update our software for our SaaS multi-tenant platforms on a weekly basis utilizing continuous agile development methods, which primarily consists of bug-fixes and user interface changes. We evaluate whether a project should be capitalized if it adds significant functionality to our platforms. Maintenance activities or minor upgrades are expensed in the period performed. |
External Software | External Software Costs incurred in researching and developing a computer software product that will be marketed and sold are charged to expense when incurred until technological feasibility is established. Technological feasibility is established upon completion of a detailed program design or, in its absence, completion of a working model (a beta version). After technological feasibility is established, certain payroll and payroll-related costs are capitalized for engineers and product development employees directly associated with the development project. Cost capitalization ceases when the product is available for general release. The Connect software is typically developed in an agile environment with frequent revisions to product release features and functions. Agile development results in a short duration between completion of the detailed program design and beta release. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue We derive our revenue from three primary sources: the sale of cloud-based SaaS services on our integrated Alarm.com platform, the sale of licenses and services on the Connect software platform and the sale of hardware products. We sell our platform and hardware solutions to service provider partners that resell our solutions and hardware to residential and commercial property owners, who are the service provider partners’ customers. Our subscribers consist of all of the properties maintained by those residential and commercial property owners to which we are delivering at least one of our solutions. We also sell our hardware to distributors who resell the hardware to service provider partners. We enter into contracts with our service provider partners that establish pricing for access to our platform solutions and for the sale of hardware. These contracts typically have an initial term of one year, with subsequent renewal terms of one year. Our service provider partners typically enter into contracts with our subscribers, which our service provider partners have indicated range from three to five years in length. Our hardware includes cellular radio modules that enable access to our cloud-based platforms, as well as video cameras, image sensors and other peripherals. Our service provider partners may purchase our hardware in anticipation of installing the hardware in a residential or commercial property when they create a new subscriber account, or for use in existing subscriber properties. The purchase of hardware occurs in a transaction that is separate and typically in advance of the purchase of our platform services. Service provider partners transact with us to purchase our platform solutions and resell our solutions to a new subscriber, or to upgrade or downgrade the solutions of an existing subscriber, at which time the subscriber’s access to our platform solutions is enabled and the delivery of the services commences. The purchase of platform solutions and the purchase of hardware are separate transactions because at the time of sale of the hardware, the service provider partner is not obligated to and may not purchase a platform solution for the hardware sold, and the level and duration of platform solutions, if any, to be provided through the hardware sold cannot be determined. We recognize revenue with respect to our solutions when all of the following conditions are met: • Persuasive evidence of an arrangement exists; • Delivery to the customer, which may be either a service provider partner, distributor or a subscriber, has occurred or service has been rendered; • Fees are fixed or determinable; and • Collection of the fees is reasonably assured. We consider a signed contract with a service provider partner to be persuasive evidence that an agreement exists, and the fees to be fixed or determinable if the fees are contractually agreed to with our service provider partners. Collectibility is evaluated based on a number of factors, including a credit review of new service provider partners, and the payment history of existing service provider partners. If collectibility is not reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon the receipt of payment. SaaS and License Revenue We generate the majority of our SaaS and license revenue primarily from monthly fees charged to our service provider partners sold on a per subscriber basis for access to our cloud-based intelligently connected property platform and related solutions. Our fees per subscriber vary based upon the service plan and features utilized. Under terms in our contractual arrangements with our service provider partners, we are entitled to payment and recognize revenue based on a monthly fee that is billed in advance of the month of service. We have demonstrated that we can sell our SaaS offering on a stand-alone basis, as it can be sold separately from hardware and activation services. As there is neither a minimum required initial service term nor a stated renewal term in our contractual arrangements, we recognize revenue over the period of service, which is monthly. Our service provider partners typically incur and pay the same monthly fee per subscriber account for the entire period a subscriber account is active. We also generate SaaS and license revenue from monthly fees charged to service providers sold on a per subscriber basis for access to our Connect software platform. The Connect software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center. Our agreements for the Connect platform solution typically include software and services, such as post-contract customer support, or PCS. Software sales that include multiple elements are typically allocated to the various elements based on vendor-specific objective evidence of fair value, or VSOE. There have been no separate sales of PCS, as PCS is always bundled with the software license for the Connect platform solution. Therefore, the VSOE of fair value for PCS cannot be established. The entire Connect arrangement fee is recognized ratably over the period during which the services are expected to be performed or the PCS period, whichever is longer, once the software is delivered and services have commenced, if all the other basic revenue recognition criteria have been met. Under the terms of our contractual arrangements with our service provider partners, we are entitled to the payment of a monthly fee for Connect that is billed per subscriber for the month of service. We recognize revenue over the period of service, which is monthly. Our service provider partners typically incur and pay the same monthly fee per subscriber account for the entire period a subscriber account is active. We offer multiple service level packages for our platform solutions including a range of solutions and a range of a la carte add-ons for additional features. The fee paid by our service provider partners each month for the delivery of our solutions is based on the combination of packages and add-ons enabled for each subscriber. We utilize tiered pricing plans where our service provider partners may receive prospective pricing discounts driven by volume. We also generate SaaS and license revenue from the fees paid to us when we license our intellectual property to third parties on a per customer basis for use of our patents. In addition, in certain markets our EnergyHub subsidiary sells its demand response software with an annual service fee, with pricing based on the number of subscribers or amount of aggregate electricity demand made available for a utility’s or market’s control. Hardware and Other Revenue We generate hardware and other revenue primarily from the sale of video cameras and cellular radio modules that provide access to our cloud-based platforms and, to a lesser extent, the sale of other devices, including image sensors and peripherals. We recognize hardware and other revenue when the hardware is received by our service provider partner or distributor, net of a reserve for estimated returns. Amounts due from the sale of hardware are payable in accordance with the terms of our agreements with our service provider partners or distributors, and are not contingent on resale to end-users, or to service provider partners in the case of sales of hardware to distributors. Our terms for hardware sales sold directly to either service provider partners or distributors typically allow for the return of hardware up to one year past the date of sale. Our distributors sell directly to our service provider partners under terms between the two parties. We record a reserve against revenue for hardware returns based on historical returns, which was 2% of hardware and other revenue for the years ended December 31, 2017 , 2016 and 2015 . We evaluate our hardware reserve on a quarterly basis or if there is an indication of significant changes in return experience. Historically, our returns of hardware have not significantly differed from our estimated reserve. Hardware and other revenue also includes activation fees charged to service provider partners for activation of a new subscriber account on our platforms, as well as fees paid by service provider partners for our marketing services. Our service provider partners use services on our platforms, such as support tools and applications, to assist in the installation of our solutions in subscriber properties. This installation marks the beginning of the service period on our platforms and on occasion, we earn activation revenue for fees charged for this service. The activation fee is non-refundable, separately negotiated and specified in our contractual arrangements with our service provider partners and is charged to the service provider partner for each subscriber activated on our platforms. Activation fees are not offered on a stand-alone basis separate from our SaaS offering and are billed and received at the beginning of the arrangement. We record activation fees initially as deferred revenue and we recognize these fees ratably over the expected term of the subscribers’ account which we estimate is ten years based on our annual attrition rate. The portion of these activation fees included in current and long-term deferred revenue as of our balance sheet date represents the amounts that will be recognized ratably as revenue over the following twelve months, or longer as appropriate, until the ten -year expected term is complete. |
Cost of Revenue | Cost of Revenue Our cost of SaaS and license revenue primarily includes the amounts paid to wireless network providers and, to a lesser extent, the costs of running our network operation centers which are expensed as incurred. We record the payroll and payroll-related costs of the department dedicated to providing service exclusively to a specific service provider for the Connect platform to cost of SaaS and license revenue. Our cost of hardware and other revenue primarily includes cost of raw materials and amounts paid to our third-party manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, which we purchase from an original equipment manufacturer, and other devices. Our cost of revenue excludes amortization and depreciation. |
Fair Value Measurements | Fair Value Measurements The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This accounting standard established a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for similar assets and liabilities, either directly or indirectly; quoted prices in markets that are not active; and Level 3 - Unobservable inputs supported by little or no market activity. The carrying amount of financial assets, including cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the short maturity and liquidity of those instruments. Assets and Liabilities Measured at Fair Value on a Recurring Basis - in 2017 , 2016 and 2015 , we recorded liabilities for subsidiary unit awards and a contingent consideration liability related to acquisitions at fair value on a recurring basis. Assets Measured at Fair Value on a Nonrecurring Basis - We measure certain assets, including property and equipment, goodwill, intangible and long-lived assets, cost and equity method investments at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. The liability for the subsidiary unit awards relates to agreements established with employees of our subsidiaries for cash awards contingent upon the subsidiary companies meeting certain financial milestones such as revenue, working capital, EBITDA and EBITDA margin. We account for these subsidiary awards using fair value and establish liabilities for the future payment for the repurchase of subsidiary units under the terms of the agreements based on estimating revenue, working capital, EBITDA and EBITDA margin of the subsidiary units over the periods of the awards through the anticipated repurchase dates. We estimated the fair value of each liability by using a Monte Carlo simulation model for determining each of the projected measures by using an expected distribution of potential outcomes. The fair value of each liability is calculated with thousands of projected outcomes, the results of which are averaged and then discounted to estimate the present value. At each reporting date until the respective payment dates, we will remeasure these liabilities, using the same valuation approach based on the applicable subsidiary's revenue, an unobservable input, and we will record any changes in the employee's compensation expense. Some of the awards are subject to the employees' continued employment and therefore recorded on a straight-line basis over the remaining service period. |
Concentration of Credit Risk | Concentration of Credit Risk The financial instruments that potentially subject us to concentrations of credit risk consists principally of cash and cash equivalents and accounts receivables. All of our cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. Our cash and cash equivalent accounts may exceed federally insured limits at times. We have not experienced any losses on cash and cash equivalents to date. To manage accounts receivable risk, we evaluate the credit worthiness of our service provider partners and maintain an allowance for doubtful accounts. The majority of our accounts receivable balance is due from our service provider partners in North America. We assess the concentrations of credit risk with respect to accounts receivables based on one industry and geographic region and believe that our reserve for uncollectible accounts is appropriate based on our history and this concentration. |
Stock-Based Compensation | Stock-Based Compensation We compensate our executive officers, board of directors, employees and consultants with stock-based compensation plans under our 2015 Equity Incentive Plan, or 2015 Plan. We record stock-based compensation expense based upon the award’s grant date fair value and use an accelerated attribution method, net of actual forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. Our equity awards generally vest over five years and are settled in shares of our common stock. During 2017 , 2016 and 2015 , we recognized compensation expense of $7.4 million , $4.0 million and $4.1 million , respectively, and associated income tax benefit of $12.7 million , $5.0 million and $0.7 million , respectively, in connection with our stock-based compensation plans. We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these options is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option. Our Employee Stock Purchase Plan, or 2015 ESPP, allows eligible employees to purchase shares of our common stock at 90% of the fair market value of the closing price on the purchase date. The maximum number of shares of our common stock that a participant may purchase during any calendar year is limited to the lesser of 10% of the participant's base compensation for that year or the number of shares with a fair market value of $15,000 . The 2015 ESPP is considered compensatory for purposes of share-based compensation expense. Compensation expense is recognized for the amount of the discount, net of actual forfeitures, over the six -month purchase period. We value our stock options using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected term, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of our stock options. The expected term represents the period of time the stock options are expected to be outstanding and is based on the “simplified method.” Under the “simplified method,” the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. We use the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options. Expected volatility is based on historical volatilities of our stock and publicly traded stock of comparable companies over the estimated expected term of the stock options. |
401(k) Defined Contribution Plan | 401(k) Defined Contribution Plan We adopted the Alarm.com Holdings 401(k) Plan ("the Plan") on April 30, 2009. All of our employees are eligible to participate in the Plan. Our discretionary match is 100% of employee contributions up to 6% of salary and up to a $3,000 maximum match. |
Business Combinations | Business Combinations We are required to allocate the purchase price of acquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. The net assets and results of operations of an acquired entity are included in our consolidated financial statements from the acquisition date. Acquisition-related costs are expensed as incurred. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired net of liabilities assumed. This allocation and valuation require management to make significant estimates and assumptions, especially with respect to long-lived and intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, estimates about future expected cash flows from customer contracts, customer lists, proprietary technology and non-competition agreements, the acquired company’s brand awareness and market position, assumptions about the period of time the brand will continue to be used in our solutions, as well as expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed, and discount rates. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur. Other estimates associated with the accounting for these acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. |
Goodwill, Intangible Assets and Long-lived Assets | Goodwill, Intangible Assets and Long-lived Assets Goodwill Goodwill represents the excess of (1) the aggregate of the fair value of consideration transferred in a business combination, over (2) the fair value of assets acquired, net of liabilities assumed. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments. Goodwill is not amortized, but is subject to annual impairment tests. We perform our annual impairment review of goodwill on October 1 and when a triggering event occurs between annual impairment tests. We test our goodwill at the reporting unit level. We perform either a qualitative analysis or a quantitative analysis every year depending on the changes to our goodwill balance as well as changes in our business and the economy. Qualitative factors we consider include, but are not limited to, macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances and market capitalization. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment," which removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment amount will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We elected to early adopt ASU 2017-04, therefore, a Step 2 analysis will not be performed in the event that a reporting unit fails Step 1 of the impairment test. For our 2017 annual impairment review, we performed a quantitative assessment for our Alarm.com reporting unit, our only reporting unit with a goodwill balance. This reporting unit had a fair value that exceeded its carrying value by more than 100% , therefore, we concluded that there was no goodwill impairment as of October 1, 2017 . Our assessment was performed as of October 1, 2017 , and we have determined there have been no triggering events from our assessment date through December 31, 2017 . Intangible Assets and Long-lived Assets Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives. We evaluate the recoverability of our intangible assets with definite lives and long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of intangible assets with definite lives and long-lived assets are measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. |
Advertising Costs | Advertising Costs We expense advertising costs as incurred. Advertising costs totaled $4.1 million , $4.6 million and $3.7 million for the years ended December 31, 2017 , 2016 and 2015 . Advertising costs are included within sales and marketing expenses on our consolidated statements of operations. |
Accounting for Income Taxes | Accounting for Income Taxes We account for income taxes under the asset and liability method as required by accounting standards codification, or ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that are included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. During 2013, in connection with the EnergyHub acquisition, we acquired significant net operating losses, a deferred tax asset, which we recorded at its expected realizable value. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets as of December 31, 2017 and 2016 . Accordingly, we have no t recorded a valuation allowance as of December 31, 2017 and 2016 . We are subject to income taxes in the United States and foreign jurisdictions based upon our business operations in those jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. We record interest and penalties as a component of our income tax provision. 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. |
Earnings per Share, or EPS | Earnings per Share, or EPS Our basic net income / (loss) per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Our diluted net income / (loss) per share attributable to common stockholders is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income / (loss) per share calculation, options to purchase common stock, redeemable convertible preferred stock, restricted stock units and unvested shares issued upon the early exercise of options that are subject to repurchase are considered to be potential common stock. We have issued securities other than common stock that participate in dividends (“participating securities”), and therefore utilize the two-class method to calculate net income / (loss) per share. These participating securities include redeemable convertible preferred stock and unvested shares issued upon the early exercise of options that are subject to repurchase, both of which have non-forfeitable rights to participate in any dividends declared on our common stock. The two-class method requires a portion of net income to be allocated to the participating securities to determine the net income / (loss) attributable to common stockholders. Net income / (loss) attributable to the common stockholders is equal to the net income less dividends paid on redeemable convertible preferred stock and unvested shares with any remaining earnings allocated in accordance with the bylaws between the outstanding common and preferred stock as of the end of each period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted On March 30, 2016, the Financial Accounting Standards Board, or FASB, issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and we adopted ASU 2016-09 during the first quarter of 2017. The adoption of this standard had the following impact on our financial statements: • Tax windfall benefits or deficiencies from stock-based awards are now recorded in provision for income taxes in the period incurred, whereas previous guidance required the tax windfall benefits to be recorded in additional paid-in capital. This change has been applied prospectively. • Tax windfall benefits from stock-based awards after adoption are reported in cash flows from operating activities in the statement of cash flows. For comparability, we elected to retrospectively apply this guidance which resulted in a reclassification of $5.1 million and $0.9 million from tax windfall benefit from stock options (a financing activity) to deferred income taxes (an operating activity) for the years ended December 31, 2016 and 2015 , respectively. • We elected to record forfeitures as they occur in our calculation of stock-based compensation expense. In prior periods, we estimated forfeitures for the calculation of stock-based compensation expense. We adopted this change using the modified retrospective method, which resulted in an increase of less than $0.1 million to accumulated deficit, additional paid-in capital and deferred tax assets as of January 1, 2017. • Cash flows from tax windfall benefits from stock-based awards will no longer factor into the calculation of the number of shares for diluted earnings per share. This change was applied prospectively and did not have a material impact on diluted earnings per share for the year ended December 31, 2017 . On July 22, 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory , ” which requires entities to measure most inventory "at the lower of cost and net realizable value," thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures). The guidance does not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. Under current guidance, an entity subsequently measures inventory at the lower of cost or market, with market defined as replacement cost provided that it is not above the ceiling (net realizable value) or below the floor (net realizable value less an approximately normal profit margin) which is unnecessarily complex. The amendment does not change other guidance on measuring inventory. The amendment is effective for annual periods, including periods within those annual periods beginning after December 15, 2016 with early adoption permitted. We adopted this pronouncement prospectively in the first quarter of 2017, and the adoption of this pronouncement did no t have a material effect on our financial statements. On January 26, 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment , " which removes step two of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment amount will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted for goodwill impairment tests performed after January 1, 2017. We adopted this guidance prospectively in the first quarter of 2017. Our goodwill impairment test is performed annually on October 1. Based on our October 1, 2017 goodwill impairment test, we concluded that our goodwill was not impaired. Therefore, the adoption of this pronouncement had no impact on our financial statements. Not Yet Adopted Revenue from Contracts with Customers (Topic 606): In May 2014, the FASB and International Accounting Standards Board jointly issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606) , " a new revenue recognition standard that provides a framework for addressing revenue issues, improves the comparability of revenue recognition practices across industries, provides useful information to users of financial statements through improved disclosure requirements and simplifies the presentation of financial statements. From March to December 2016, amendments to Topic 606 were issued to clarify numerous accounting topics, including, but not limited to: (i) the implementation guidance on principal versus agent considerations, (ii) the identification of performance obligations, (iii) the licensing implementation guidance, (iv) the objective of the collectibility criterion, (v) the application of the variable consideration guidance and modified retrospective transition method, (vi) the way in which impairment testing is performed and (vii) the disclosure requirements for revenue recognized from performance obligations. This guidance permits the use of either a full retrospective method or a modified retrospective method. We will adopt Topic 606 on January 1, 2018, using the modified retrospective transition method. The modified retrospective transition method applies only to the most current period presented along with a cumulative-effect adjustment at the date of adoption. As a result of the January 1, 2018 adoption of Topic 606, we identified and implemented appropriate changes to our business processes and controls to support the recognition and disclosure requirements under the new standard. Our assessment of Topic 606 focused on our (i) standard service provider partner agreements, (ii) the largest non-standard service provider partner agreements, including distributors of our hardware and licensees of our intellectual property, (iii) subsidiaries’ service provider partner agreements and, (iv) commissions paid to employees. Based on our assessment, we do not believe Topic 606 will have a material impact on our revenue recognition policies. The adoption of the new standard will change our current treatment of commissions paid to employees, which we currently expense as incurred. Under the new standard, we will capitalize a portion of our commission costs as an incremental cost of obtaining a contract and will amortize our commission costs over a period of three years, which is consistent with the period over which the products and services related to the commission are transferred to the customer. The three-year period was determined based on our review of historical enhancements and upgrades to our products and services. These changes in the treatment of commissions paid to employees are not expected to have a material impact on our consolidated financial statements. Other Accounting Standards : On May 10, 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting , " which amends the scope of modification accounting for share-based payment arrangements. The update provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. The amendment is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We are required to adopt ASU 2017-09 in the first quarter of 2018 and we do not anticipate the adoption will have a material impact on our financial statements. On January 5, 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805) - Clarifying the Definition of a Business , " which provides guidance to assist entities in evaluating when a set of transferred assets and activities is a business. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The amendment is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We are required to adopt ASU 2017-01 no later than the first quarter of 2018. This guidance is not expected to have a material impact on our consolidated financial statements and related disclosures. On June 16, 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326)," which provides guidance designed to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. When determining such expected credit losses, the guidance requires companies to apply a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendment is effective on a modified retrospective basis for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years and interim periods beginning after December 15, 2018. We are currently assessing the impact this pronouncement may have on our trade receivables and notes receivables. On February 25, 2016, the FASB issued ASU 2016-02, “Leases (Topic 842) , ” which requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. The update also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. We are required to adopt ASU 2016-02 no later than the first quarter of 2019, and we are currently assessing the impact of this pronouncement on our financial statements. We have begun to evaluate our existing leases which all have been classified as operating leases under Topic 840. We anticipate using some of the available practical expedients upon adoption. We have not yet determined the amount of operating and financing lease liabilities and corresponding right-of-use assets we will record on our balance sheet; however, we anticipate that most of our operating lease commitments will be subject to the new standard. |
Property and Equipment, Net | Furniture and fixtures, computer software and equipment and leasehold improvements are recorded at cost and presented net of depreciation. Furniture and fixtures and computer software and equipment are depreciated on a straight-line basis over lives ranging from three to five years. Internal-use software is amortized on a straight-line basis over a three -year period. During the application development phase, we categorize capitalized costs in our construction in progress account until the build is put into production and we move the asset to internal-use software. We record land at historical cost. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease terms or the asset lives. |
Leases | We recognize rent expense for lease payments on a straight-line basis over the expected lease term and amortize tenant improvement allowances over the term of the lease. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Components of Accounts Receivable | The components of accounts receivable, net are as follows (in thousands): December 31, 2017 2016 Accounts receivable $ 44,554 $ 33,406 Allowance for doubtful accounts (1,449 ) (1,282 ) Allowance for product returns (2,471 ) (2,314 ) Accounts receivable, net $ 40,634 $ 29,810 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory, net are as follows (in thousands): December 31, 2017 2016 Raw materials $ 7,484 $ 4,313 Finished goods 6,693 6,230 Total inventory, net $ 14,177 $ 10,543 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | The components of property and equipment, net are as follows (in thousands): December 31, 2017 2016 Furniture and fixtures $ 3,699 $ 3,090 Computer software and equipment 11,624 9,988 Internal-use software 1,643 1,514 Construction in progress 4,605 1,009 Leasehold improvements 16,351 13,466 Land 398 398 Total property and equipment 38,320 29,465 Accumulated depreciation (14,861 ) (9,285 ) Property and equipment, net $ 23,459 $ 20,180 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Acquisitions | The table below sets forth the purchase consideration and the fair value allocation of the tangible and intangible net assets acquired (in thousands): January 1, 2017 Calculation of Purchase Consideration: Cash paid, net of working capital adjustment $ 6,000 Estimated Tangible and Intangible Net Assets: Developed technology $ 3,800 Current liabilities (58 ) Goodwill 2,258 Total estimated tangible and intangible net assets $ 6,000 The table below sets forth the purchase consideration and the fair value allocation of the tangible and intangible net assets acquired (in thousands): March 8, 2017 Calculation of Purchase Consideration: Cash paid, net of working capital adjustment $ 148,500 Assumed stock options 1,375 Total consideration $ 149,875 Estimated Tangible and Intangible Net Assets: Cash $ 211 Accounts receivable 11,421 Current assets 883 Long-term assets 4,446 Customer relationships 93,260 Developed technology 4,770 Trade name 170 Current liabilities (1,608 ) Long-term liabilities (288 ) Goodwill 36,610 Total estimated tangible and intangible net assets $ 149,875 |
Unaudited Pro Forma Financial Information and Business Combinations in Operations | The pro forma adjustments were based on available information and upon assumptions that we believe are reasonable to reflect the impact of these acquisitions on our historical financial information on a supplemental pro forma basis, as follows (in thousands): Pro forma 2017 2016 Revenue $ 350,007 $ 322,238 Net income 33,191 6,173 Net income per diluted share $ 0.68 $ 0.13 The following table presents the revenue and earnings of the business combinations in the year of acquisition as reported within the consolidated financial statements (in thousands): Year Ended December 31, 2017 Revenue $ 33,418 Net loss (4,072 ) |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in goodwill by reportable segment are outlined below (in thousands): Alarm.com Other Total Balance as of January 1, 2016 $ 24,723 $ — $ 24,723 Goodwill acquired — — — Balance as of December 31, 2016 24,723 — 24,723 Goodwill acquired 38,868 — 38,868 Balance as of December 31, 2017 $ 63,591 $ — $ 63,591 |
Schedule of Intangible Assets | The following tables reflect the weighted-average remaining life and carrying value of finite-lived intangible assets (in thousands): December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- Average Remaining Life Customer relationships $ 103,926 $ (15,400 ) $ 88,526 10.8 Developed technology 13,959 (8,427 ) 5,532 2.1 Trade name 1,084 (856 ) 228 3.3 Other 234 (234 ) — 0.0 Total intangible assets $ 119,203 $ (24,917 ) $ 94,286 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- Average Remaining Life Customer relationships $ 10,666 $ (7,303 ) $ 3,363 3.8 Developed technology 5,390 (4,342 ) 1,048 4.1 Trade name 914 (757 ) 157 4.3 Other 234 (234 ) — 0.0 Total intangible assets $ 17,204 $ (12,636 ) $ 4,568 The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Developed Trade Name Other Total Balance as of January 1, 2016 $ 4,449 $ 1,486 $ 273 $ 110 $ 6,318 Amortization (1,086 ) (438 ) (116 ) (110 ) (1,750 ) Balance as of December 31, 2016 3,363 1,048 157 — 4,568 Intangible assets acquired 93,260 8,570 170 — 102,000 Amortization (8,097 ) (4,086 ) (99 ) — (12,282 ) Balance as of December 31, 2017 $ 88,526 $ 5,532 $ 228 $ — $ 94,286 |
Schedule of Future Estimated Amortization Expense | The following table reflects the future estimated amortization expense for intangible assets (in thousands): Year Ended December 31, Amortization 2018 $ 15,219 2019 13,644 2020 12,217 2021 11,062 2022 and thereafter 42,144 Total future amortization expense $ 94,286 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following presents our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis as of Fair value measurements in: Level 1 Level 2 Level 3 Total Assets: Money market account $ 65,620 $ — $ — $ 65,620 Total $ 65,620 $ — $ — $ 65,620 Liabilities: Subsidiary unit awards $ — $ — $ 3,160 $ 3,160 Contingent consideration liability from acquisition — — — — Total $ — $ — $ 3,160 $ 3,160 Fair Value Measurements on a Recurring Basis as of Fair value measurements in: Level 1 Level 2 Level 3 Total Assets: Money market account $ 135,204 $ — $ — $ 135,204 Total $ 135,204 $ — $ — $ 135,204 Liabilities: Subsidiary unit awards $ — $ — $ 2,768 $ 2,768 Contingent consideration liability from acquisition — — — — Total $ — $ — $ 2,768 $ 2,768 |
Summary of Fair Value of Level 3 Liability | The following table summarizes the change in fair value of the Level 3 liabilities for subsidiary unit awards and the contingent consideration liability from acquisition (in thousands): Fair Value Measurements Using Significant Unobservable Inputs Year Ended December 31, 2017 Year Ended December 31, 2016 Subsidiary Unit Awards Contingent Consideration Liability from Acquisition Subsidiary Unit Awards Contingent Consideration Liability from Acquisition Beginning of period balance $ 2,768 $ — $ 532 $ 230 Total losses / (gains) included in earnings 392 — 2,236 (230 ) Ending of period balance $ 3,160 $ — $ 2,768 $ — |
Liabilities (Tables)
Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable. Accrued Expenses and Other Current Liabilities | The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): December 31, 2017 2016 Accounts payable $ 17,008 $ 18,289 Accrued expenses 4,301 5,298 Subsidiary unit awards 2,802 2,506 Other current liabilities 4,973 2,207 Accounts payable, accrued expenses and other current liabilities $ 29,084 $ 28,300 |
Schedule of Other Liabilities | The components of other liabilities are as follows (in thousands): December 31, 2017 2016 Deferred rent $ 12,279 $ 11,056 Other liabilities 1,646 2,501 Other liabilities $ 13,925 $ 13,557 |
Debt, Commitments and Conting36
Debt, Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | The following table presents the future minimum lease payments under the non-cancelable operating leases as of December 31, 2017 (in thousands): Year Ended December 31, Minimum Lease Payments 2018 $ 6,898 2019 5,845 2020 5,478 2021 5,260 2022 5,135 2023 and thereafter 16,894 Total $ 45,510 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense is included in the following line items in the consolidated statements of operations (in thousands): Year Ended December 31, Stock-based compensation expense data: 2017 2016 2015 Sales and marketing $ 561 $ 536 $ 372 General and administrative 2,638 1,430 2,486 Research and development 4,214 2,035 1,266 Total stock-based compensation expense $ 7,413 $ 4,001 $ 4,124 The following table summarizes the components of non-cash stock-based compensation expense (in thousands): Year Ended December 31, 2017 2016 2015 Stock options and assumed options $ 3,913 $ 3,783 $ 3,154 Restricted stock units 3,366 141 — Restricted stock awards 19 — — Employee stock purchase plan 115 77 — Compensation related to the sale of common stock — — 193 Compensation related to the cash settlement of stock options — — 777 Total stock-based compensation expense $ 7,413 $ 4,001 $ 4,124 Tax benefit from stock-based awards $ 12,719 $ 5,048 $ 700 |
Summary of Assumptions Used for Estimating Fair Value of Stock Options | The following table summarizes the assumptions used for estimating the fair value of stock options granted: Year Ended December 31, 2017 2016 2015 Volatility 44.4 - 61.6% 47.6 - 50.6% 48.5 - 51.8% Expected term 6.3 years 5.6 - 6.3 years 4.5 - 6.3 years Risk-free interest rate 2.0 - 2.2% 1.3 - 1.9% 1.3 - 1.9% Dividend rate — % — % — % The following table summarizes the assumptions used for estimating the fair value of stock options assumed from the Connect business unit of Icontrol: Year Ended December 31, 2017 Volatility 42.7 - 44.4% Expected term 2.5 - 5.0 years Risk-free interest rate 1.4 - 2.0% Dividend rate — % |
Summary of Stock Option Activity | The following table summarizes stock option activity: Number of Weighted Weighted Average Aggregate Outstanding as of December 31, 2016 3,547,528 $ 6.91 6.4 $ 74,267 Granted 252,100 31.69 Exercised (1,011,174 ) 2.55 34,999 Forfeited (97,415 ) 12.53 Expired (4,063 ) 11.99 Outstanding as of December 31, 2017 2,686,976 $ 10.67 6.4 $ 72,823 Vested and expected to vest as of December 31, 2017 2,700,257 $ 10.64 6.4 $ 73,258 Exercisable as of December 31, 2017 1,733,849 $ 6.38 5.6 $ 54,398 The following table summarizes the assumed stock option activity: Number of Weighted Weighted Average Aggregate Outstanding as of December 31, 2016 — $ — 0.0 $ — Options assumed from Connect 70,406 5.48 Exercised (7,232 ) 5.57 252 Forfeited (21,514 ) 4.70 Expired (21 ) 4.55 Outstanding as of December 31, 2017 41,639 $ 5.88 7.2 $ 1,327 Vested and expected to vest as of December 31, 2017 41,639 $ 5.88 7.2 $ 1,327 Exercisable as of December 31, 2017 18,973 $ 5.24 6.9 $ 617 |
Schedule of Unvested Restricted Stock Units | The following table summarizes RSU activity: Number of Weighted Aggregate Outstanding as of December 31, 2016 61,482 $ 30.00 $ 1,711 Granted 534,146 35.03 Vested — — — Forfeited (37,360 ) 31.56 Outstanding as of December 31, 2017 558,268 $ 34.71 $ 21,075 Vested and expected to vest as of December 31, 2017 558,268 $ 34.71 $ 21,075 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted EPS | The components of basic and diluted EPS are as follows (in thousands, except share and per share amounts): Year Ended December 31, 2017 2016 2015 Net income $ 29,251 $ 10,154 $ 11,768 Less: dividends paid to participating securities — — (18,987 ) Less: income allocated to participating securities (13 ) (12 ) — Net income / (loss) available for common stockholders (A) $ 29,238 $ 10,142 $ (7,219 ) Weighted average common shares outstanding — basic (B) 46,682,141 45,716,757 24,108,362 Dilutive effect of stock options, RSUs and RSAs 2,471,807 2,158,765 — Weighted average common shares outstanding — diluted (C) 49,153,948 47,875,522 24,108,362 Net income / (loss) per share: Basic (A/B) $ 0.63 $ 0.22 $ (0.30 ) Diluted (A/C) $ 0.59 $ 0.21 $ (0.30 ) |
Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect | 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: Year Ended December 31, 2017 2016 2015 Stock options 258,917 197,350 522,997 RSAs 129 — — RSUs 188,050 25,640 — Common stock subject to repurchase 13,281 29,835 96,368 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of our income tax expense are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current Federal $ 584 $ 7,227 $ 7,730 State (88 ) 1,829 1,519 Foreign 6 — — Total Current 502 9,056 9,249 Deferred Federal 3,837 (4,283 ) (3,372 ) State (1,368 ) (546 ) (180 ) Foreign 19 — — Total Deferred 2,488 (4,829 ) (3,552 ) Total $ 2,990 $ 4,227 $ 5,697 |
Schedule of Effective Income Tax Rate Reconciliation | The difference between the income tax expense at the federal statutory rate and income tax expense in the consolidated statements of operations is as follows: Year Ended December 31, 2017 2016 2015 Federal statutory rate 35.0 % 35.0 % 35.0 % State income tax expense, net of federal benefits 0.1 4.9 4.5 Nondeductible meals and entertainment 0.6 1.6 1.2 Research and development tax credits (16.1 ) (10.8 ) (8.9 ) Tax windfall benefits (36.5 ) — — Change in tax rate due to tax reform 27.2 — — Other (1.0 ) (1.3 ) 0.8 Effective rate 9.3 % 29.4 % 32.6 % |
Schedule of Components of Deferred Tax Assets and Liabilities | The components of our net deferred tax assets (liabilities) are as follows (in thousands): December 31, 2017 2016 Deferred tax assets, non-current Provision for doubtful accounts $ 714 $ 1,046 Accrued expenses 2,362 2,622 Deferred revenue 2,455 3,627 Deferred rent 3,384 4,671 Stock-based compensation 3,613 3,468 Acquisition costs 3,310 4,482 Subsidiary unit compensation 1,413 1,566 Equity investments 116 182 Net operating losses 1,357 2,678 Tax credits 2,546 — Intangible assets and prepaid patent licenses 156 — Other 160 107 Total deferred tax assets, non-current 21,586 24,449 Deferred tax liabilities, non-current Intangible assets and prepaid patent licenses (74 ) (2,780 ) Depreciation (2,917 ) (4,649 ) Contingent liability (171 ) (268 ) Total deferred tax liabilities, non-current $ (3,162 ) $ (7,697 ) Net deferred tax assets, non-current $ 18,424 $ 16,752 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amounts of unrecognized tax benefits (without related interest expense) is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Beginning balance $ 681 $ 506 $ 208 Additions based on tax positions of the current year 718 197 152 Additions based on tax positions of prior year 373 79 146 Additions resulting from acquisitions 277 — — Decreases due to lapse of applicable statute of limitations (76 ) — — Decreases related to settlements of prior year tax positions — (101 ) — Ending balance $ 1,973 $ 681 $ 506 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Operational Data | The reportable segment operational data is presented in the table below (in thousands): Year Ended December 31, 2017 Alarm.com Other Intersegment Intersegment Total SaaS and license revenue $ 227,583 $ 8,700 $ — $ — $ 236,283 Hardware and other revenue 92,445 15,154 (2,945 ) (2,000 ) 102,654 Total revenue 320,028 23,854 (2,945 ) (2,000 ) 338,937 Operating income / (loss) 41,439 (8,248 ) (175 ) 358 33,374 Assets 352,766 18,875 — — 371,641 Year Ended December 31, 2016 Alarm.com Other Intersegment Intersegment Total SaaS and license revenue $ 168,732 $ 4,808 $ — $ — $ 173,540 Hardware and other revenue 79,049 14,018 (2,863 ) (2,638 ) 87,566 Total revenue 247,781 18,826 (2,863 ) (2,638 ) 261,106 Operating income / (loss) 21,282 (7,229 ) (312 ) 317 14,058 Assets 246,798 14,447 — — 261,245 Year Ended December 31, 2015 Alarm.com Other Intersegment Intersegment Total SaaS and license revenue $ 139,036 $ 1,928 $ (28 ) $ — $ 140,936 Hardware and other revenue 63,716 7,124 (924 ) (1,964 ) 67,952 Total revenue 202,752 9,052 (952 ) (1,964 ) 208,888 Operating income / (loss) 38,437 (20,151 ) (279 ) (16 ) 17,991 |
Quarterly Financial Data (Una41
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Financial Information | The selected consolidated statements of operation data in amounts are presented below (in thousands, except per share data): Three Months Ended Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Total revenue $ 59,043 $ 64,423 $ 67,846 $ 69,794 $ 74,194 $ 85,988 $ 89,962 $ 88,793 Total cost of revenue 21,116 25,183 26,366 26,715 26,635 29,835 31,833 27,885 Net income $ 2,738 $ 1,873 $ 2,567 $ 2,976 $ 3,963 $ 9,865 $ 15,103 $ 320 Net income / (loss) per share: Basic $ 0.06 $ 0.04 $ 0.06 $ 0.06 $ 0.09 $ 0.21 $ 0.32 $ 0.01 Diluted $ 0.06 $ 0.04 $ 0.05 $ 0.06 $ 0.08 $ 0.20 $ 0.31 $ 0.01 |
Organization (Details)
Organization (Details) service_provider in Thousands | Dec. 31, 2017service_provider |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of trusted service providers (more than) | 7 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Money market account | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | $ 65.6 | $ 135.2 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Accounts Receivable and Notes Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Period for returns (up to one year) | 1 year | ||
Allowance for uncollectibility | $ 0 | $ 0 | |
Notes receivable in nonaccrual status | $ 0 | $ 0 | |
Geographic Concentration Risk | Revenue | Outside of North America | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 1.00% | 1.00% | 1.00% |
Geographic Concentration Risk | Accounts Receivable | Outside of North America | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 4.00% | 3.00% |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Internal-Use Software (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Internal-use software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)source | Dec. 31, 2016USD ($) | Dec. 31, 2015 | |
Deferred Revenue Arrangement [Line Items] | |||
Number of primary revenue sources | source | 3 | ||
Service provider contract term (years) | 1 year | ||
Service provider renewal term (years) | 1 year | ||
Period for returns (up to one year) | 1 year | ||
Percentage of revenue reserved for returns (percent) | 2.00% | 2.00% | 2.00% |
Minimum | |||
Deferred Revenue Arrangement [Line Items] | |||
Subscriber contract term (years) | 3 years | ||
Maximum | |||
Deferred Revenue Arrangement [Line Items] | |||
Subscriber contract term (years) | 5 years | ||
Activation Fees | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | $ | $ 10.5 | $ 11.2 | |
Activation Fees | Minimum | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue recognition period | 12 months | ||
Activation Fees | Maximum | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue recognition period | 10 years |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Accounts Receivable | 12 Months Ended |
Dec. 31, 2017industrygeographic_region | |
Industry Concentration Risk | |
Concentration Risk [Line Items] | |
Number of industries included in assessment | industry | 1 |
Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Number of geographic regions included in assessment | geographic_region | 1 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 5 years | ||
Stock-based compensation expense | $ 7,413,000 | $ 4,001,000 | $ 4,124,000 |
Tax benefit from stock-based compensation | 12,719,000 | 5,048,000 | 700,000 |
Employee Stock | 2015 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 100,000 | $ 100,000 | $ 100,000 |
Fair market value purchase discount (percent) | 90.00% | ||
Maximum number of shares participant may purchase as a percentage of base compensation (not to exceed) (percent) | 10.00% | ||
Maximum number of shares participant may purchase, fair market value (not to exceed) (shares) | $ 15,000 | ||
Purchase period (in years) | 6 months |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - 401(k) Defined Contribution Plan (Details) - 401(k) Defined Contribution Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution (percent) | 100.00% | ||
Maximum annual contributions per employee (percent) | 6.00% | ||
Maximum annual contributions per employee | $ 3,000 | ||
Compensation expense | $ 1,800,000 | $ 1,200,000 | $ 1,000,000 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 | |
Alarm.com | ||||
Goodwill [Line Items] | ||||
Reporting unit, percentage of fair value that exceeded carrying value (more than) | 100.00% |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Advertising Costs and Accounting for Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 4,100,000 | $ 4,600,000 | $ 3,700,000 |
Deferred tax assets, valuation allowance | $ 0 | $ 0 |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase in cash flows from operating activities | $ 57,187 | $ 22,600 | $ 28,019 | |
Decrease in cash flows from financing activities | (67,303) | (1,102) | (75,399) | |
Accumulated deficit | 88,677 | 117,909 | ||
Additional paid-in capital | 321,032 | 308,697 | ||
Deferred income tax assets | $ 18,424 | 16,752 | ||
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase in cash flows from operating activities | 5,100 | 900 | ||
Decrease in cash flows from financing activities | $ 5,100 | $ 900 | ||
Accounting Standards Update 2016-09, Forfeiture Rate Component | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accumulated deficit | $ 100 | |||
Additional paid-in capital | 100 | |||
Deferred income tax assets | $ 100 |
Accounts Receivable, Net - Comp
Accounts Receivable, Net - Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 44,554 | $ 33,406 |
Allowance for doubtful accounts | (1,449) | (1,282) |
Allowance for product returns | (2,471) | (2,314) |
Accounts receivable, net | $ 40,634 | $ 29,810 |
Accounts Receivable, Net - Narr
Accounts Receivable, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Provision for doubtful accounts | $ 453 | $ 648 | $ 276 |
Reserve for product returns | 2,055 | 2,071 | 1,559 |
Hardware and Other Revenue | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reserve for product returns | $ 2,100 | $ 2,100 | $ 1,600 |
Inventory, Net (Details)
Inventory, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,484 | $ 4,313 |
Finished goods | 6,693 | 6,230 |
Total inventory, net | $ 14,177 | $ 10,543 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 5.4 | $ 4.7 | $ 3.6 |
Amortization | 0.4 | $ 0.4 | $ 0.3 |
Write-off of property and equipment | $ 0.8 | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 5 years | ||
Computer software and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 3 years | ||
Computer software and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 5 years | ||
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 3 years |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 38,320 | $ 29,465 |
Accumulated depreciation | (14,861) | (9,285) |
Property and equipment, net | 23,459 | 20,180 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,699 | 3,090 |
Computer software and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 11,624 | 9,988 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,643 | 1,514 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,605 | 1,009 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 16,351 | 13,466 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 398 | $ 398 |
Acquisitions - Connect and Pipe
Acquisitions - Connect and Piper Business Units from Icontrol Networks, Inc. (Details) $ in Thousands | Mar. 08, 2017USD ($)business_unitshares | Mar. 07, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||||
Assumed options from business acquisition | $ 1,375 | $ 0 | $ 0 | |||
Compensation cost not yet recognized on nonvested awards | 4,200 | |||||
Goodwill | $ 63,591 | $ 24,723 | $ 24,723 | |||
Connect And Piper | ||||||
Business Acquisition [Line Items] | ||||||
Number of business units acquired | business_unit | 2 | |||||
Cash paid to acquire business | $ 148,500 | |||||
Amount deposited in escrow | 14,500 | |||||
Cash portion | 81,500 | |||||
Amounts drawn under senior line of credit | $ 67,000 | |||||
Assumed options from business acquisition | 1,375 | |||||
Goodwill | 36,610 | |||||
Increase to intangible assets | $ 100 | |||||
Decrease in goodwill due to working capital adjustment | $ (100) | |||||
Connect | ||||||
Business Acquisition [Line Items] | ||||||
Unvested employee stock options converted during period (in shares) | shares | 2,001,387 | |||||
Options assumed in period (in shares) | shares | 70,406 | 70,406 | ||||
Fair value of unvested stock options | $ 1,700 | |||||
Assumed options from business acquisition | 1,400 | |||||
Compensation cost not yet recognized on nonvested awards | $ 100 | |||||
Piper | ||||||
Business Acquisition [Line Items] | ||||||
Deferred tax asset | 4,100 | |||||
Customer Relationships Group 1 | Connect | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 92,500 | |||||
Weighted-average estimated useful life of intangible assets acquired (years) | 12 years | |||||
Customer Relationships Group 2 | Connect | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 800 | |||||
Weighted-average estimated useful life of intangible assets acquired (years) | 4 years | |||||
Developed Technology | Connect And Piper | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 4,770 | |||||
Developed Technology | Connect | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 4,400 | |||||
Weighted-average estimated useful life of intangible assets acquired (years) | 3 years | |||||
Developed Technology | Piper | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 300 | |||||
Trade Name | Connect And Piper | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | 170 | |||||
Trade Name | Piper | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 200 | |||||
Weighted-average estimated useful life of intangible assets acquired (years) | 3 years | |||||
Share-based Compensation Award, Tranche One | Connect | ||||||
Business Acquisition [Line Items] | ||||||
Compensation cost not yet recognized on nonvested awards | $ 300 |
Acquisitions - Connect and Pi59
Acquisitions - Connect and Piper - Consideration Paid and Estimated Fair Value of Assets Acquired (Details) - USD ($) $ in Thousands | Mar. 08, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Calculation of Purchase Consideration: | ||||
Assumed options from business acquisition | $ 1,375 | $ 0 | $ 0 | |
Estimated Tangible and Intangible Net Assets: | ||||
Goodwill | $ 63,591 | $ 24,723 | $ 24,723 | |
Connect And Piper | ||||
Calculation of Purchase Consideration: | ||||
Cash paid, net of working capital adjustment | $ 148,500 | |||
Assumed options from business acquisition | 1,375 | |||
Total consideration | 149,875 | |||
Estimated Tangible and Intangible Net Assets: | ||||
Cash | 211 | |||
Accounts receivable | 11,421 | |||
Current assets | 883 | |||
Long-term assets | 4,446 | |||
Current liabilities | (1,608) | |||
Long-term liabilities | (288) | |||
Goodwill | 36,610 | |||
Total estimated tangible and intangible net assets | 149,875 | |||
Customer Relationships | Connect And Piper | ||||
Estimated Tangible and Intangible Net Assets: | ||||
Intangible assets acquired | 93,260 | |||
Developed Technology | Connect And Piper | ||||
Estimated Tangible and Intangible Net Assets: | ||||
Intangible assets acquired | 4,770 | |||
Trade Name | Connect And Piper | ||||
Estimated Tangible and Intangible Net Assets: | ||||
Intangible assets acquired | $ 170 |
Acquisitions - ObjectVideo (Det
Acquisitions - ObjectVideo (Details) - USD ($) $ in Thousands | Jan. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 63,591 | $ 24,723 | $ 24,723 | ||
ObjectVideo | |||||
Business Acquisition [Line Items] | |||||
Cash paid to acquire business | $ 6,000 | ||||
Goodwill | 2,258 | ||||
Decrease in goodwill due to working capital adjustment | $ (400) | ||||
Developed Technology | ObjectVideo | |||||
Business Acquisition [Line Items] | |||||
Increase to intangible assets | $ 400 | ||||
Intangible assets acquired | $ 3,800 | ||||
Weighted-average estimated useful life of intangible assets acquired (years) | 2 years |
Acquisitions - ObjectVideo - Co
Acquisitions - ObjectVideo - Consideration Paid and Estimated Fair Value of Assets Acquired (Details) - USD ($) $ in Thousands | Jan. 01, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 63,591 | $ 24,723 | $ 24,723 | |
ObjectVideo | ||||
Business Acquisition [Line Items] | ||||
Cash paid, net of working capital adjustment | $ 6,000 | |||
Current liabilities | (58) | |||
Goodwill | 2,258 | |||
Total estimated tangible and intangible net assets | 6,000 | |||
Developed Technology | ObjectVideo | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 3,800 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Combinations [Abstract] | ||
Revenue | $ 350,007 | $ 322,238 |
Net income | $ 33,191 | $ 6,173 |
Net income per diluted share (in usd per share) | $ 0.68 | $ 0.13 |
Acquisitions - Business Combina
Acquisitions - Business Combinations in Operations (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Business Combinations [Abstract] | |
Revenue | $ 33,418 |
Net loss | $ (4,072) |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 24,723 | $ 24,723 |
Goodwill acquired | 38,868 | 0 |
Ending balance | 63,591 | 24,723 |
Alarm.com | ||
Goodwill [Roll Forward] | ||
Beginning balance | 24,723 | 24,723 |
Goodwill acquired | 38,868 | 0 |
Ending balance | 63,591 | 24,723 |
Other | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0 | 0 |
Goodwill acquired | 0 | 0 |
Ending balance | $ 0 | $ 0 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) | Mar. 08, 2017 | Jan. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | ||||||
Goodwill acquired | $ 38,868,000 | $ 0 | ||||
Goodwill impairment | $ 0 | 0 | 0 | $ 0 | ||
Amortization | 12,282,000 | 1,750,000 | 2,200,000 | |||
Impairment of long-lived assets | 0 | $ 0 | $ 0 | |||
ObjectVideo | ||||||
Goodwill [Line Items] | ||||||
Goodwill acquired | $ 2,300,000 | |||||
Connect And Piper [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill acquired | $ 36,600,000 | |||||
EnergyHub | ||||||
Goodwill [Line Items] | ||||||
Accumulated balance of goodwill impairments | $ 4,800,000 |
Goodwill and Intangible Asset66
Goodwill and Intangible Assets, Net - Net Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ 4,568 | $ 6,318 | |
Intangible assets acquired | 102,000 | ||
Amortization | (12,282) | (1,750) | $ (2,200) |
Ending balance | 94,286 | 4,568 | 6,318 |
Customer Relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | 3,363 | 4,449 | |
Intangible assets acquired | 93,260 | ||
Amortization | (8,097) | (1,086) | |
Ending balance | 88,526 | 3,363 | 4,449 |
Developed Technology | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | 1,048 | 1,486 | |
Intangible assets acquired | 8,570 | ||
Amortization | (4,086) | (438) | |
Ending balance | 5,532 | 1,048 | 1,486 |
Trade Name | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | 157 | 273 | |
Intangible assets acquired | 170 | ||
Amortization | (99) | (116) | |
Ending balance | 228 | 157 | 273 |
Other | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | 0 | 110 | |
Intangible assets acquired | 0 | ||
Amortization | 0 | (110) | |
Ending balance | $ 0 | $ 0 | $ 110 |
Goodwill and Intangible Asset67
Goodwill and Intangible Assets, Net - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 119,203 | $ 17,204 | |
Accumulated Amortization | (24,917) | (12,636) | |
Net Carrying Value | 94,286 | 4,568 | $ 6,318 |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 103,926 | 10,666 | |
Accumulated Amortization | (15,400) | (7,303) | |
Net Carrying Value | 88,526 | 3,363 | 4,449 |
Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 13,959 | 5,390 | |
Accumulated Amortization | (8,427) | (4,342) | |
Net Carrying Value | 5,532 | 1,048 | 1,486 |
Trade Name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,084 | 914 | |
Accumulated Amortization | (856) | (757) | |
Net Carrying Value | 228 | 157 | 273 |
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 234 | 234 | |
Accumulated Amortization | (234) | (234) | |
Net Carrying Value | $ 0 | $ 0 | $ 110 |
Weighted-Average | Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted- average Remaining Life (years) | 10 years 9 months 18 days | 3 years 9 months 19 days | |
Weighted-Average | Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted- average Remaining Life (years) | 2 years 1 month 6 days | 4 years 1 month 20 days | |
Weighted-Average | Trade Name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted- average Remaining Life (years) | 3 years 3 months 18 days | 4 years 3 months | |
Weighted-Average | Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted- average Remaining Life (years) | 0 days | 0 days |
Goodwill and Intangible Asset68
Goodwill and Intangible Assets, Net - Future Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2,018 | $ 15,219 | ||
2,019 | 13,644 | ||
2,020 | 12,217 | ||
2,021 | 11,062 | ||
2022 and thereafter | 42,144 | ||
Net Carrying Value | $ 94,286 | $ 4,568 | $ 6,318 |
Investments in Other Entities -
Investments in Other Entities - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity, Not Primary Beneficiary | Other Assets | Platform Partner | ||
Variable Interest Entity [Line Items] | ||
Cost Method Investments | $ 1 | $ 1 |
Other Assets - Patent Licenses
Other Assets - Patent Licenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | $ 94,286 | $ 4,568 | $ 6,318 |
Finite-lived intangible assets, gross | 119,203 | 17,204 | |
Amortization on patents and tooling | 965 | 786 | 391 |
Patent Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | 2,400 | 3,200 | |
Finite-lived intangible assets, gross | 4,900 | ||
Patent Licenses | Cost of SaaS and License Revenue | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization on patents and tooling | $ 700 | 600 | $ 400 |
Patent Licenses | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life (in years) | 3 years | ||
Patent Licenses | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life (in years) | 11 years | ||
Patent Licenses | Other Current Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | $ 500 | 700 | |
Patent Licenses | Other Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | $ 1,900 | $ 2,500 |
Other Assets - Loan to a Distri
Other Assets - Loan to a Distribution Partner (Details) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2016USD ($)renewal_option | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 30, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Payments for notes issued | $ 8,000,000 | $ 3,073,000 | $ 406,000 | |||||||||||
Total revenue | $ 88,793,000 | $ 89,962,000 | $ 85,988,000 | $ 74,194,000 | $ 69,794,000 | $ 67,846,000 | $ 64,423,000 | $ 59,043,000 | 338,937,000 | 261,106,000 | $ 208,888,000 | |||
Distribution Partner Two | Notes Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Notes receivable, maximum available | $ 4,000,000 | $ 4,000,000 | ||||||||||||
Interest rate (percent) | 6.00% | 6.00% | ||||||||||||
Number of renewal options | renewal_option | 2 | |||||||||||||
Renewal term (years) | 1 year | |||||||||||||
Proceeds from notes receivable | $ 4,200,000 | |||||||||||||
Payments for notes issued | $ 4,000,000 | |||||||||||||
Note receivable | 4,000,000 | $ 3,000,000 | 4,000,000 | 4,000,000 | $ 3,000,000 | |||||||||
Distribution Partner Three | Notes Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Notes receivable, maximum available | $ 3,000,000 | |||||||||||||
Interest rate (percent) | 8.50% | |||||||||||||
Distribution Partners Two and Three | Notes Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total revenue | 1,200,000 | |||||||||||||
LIBOR | Distribution Partner Two | Notes Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Basis spread on variable rate (percent) | 4.00% | 4.00% | ||||||||||||
Other Assets | Distribution Partner Three | Notes Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Notes receivable, maximum available | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Total | $ 65,620 | $ 135,204 |
Liabilities: | ||
Subsidiary unit awards | 3,160 | 2,768 |
Contingent consideration liability from acquisition | 0 | 0 |
Total | 3,160 | 2,768 |
Money market account | ||
Assets: | ||
Money market account | 65,620 | 135,204 |
Level 1 | ||
Assets: | ||
Total | 65,620 | 135,204 |
Liabilities: | ||
Subsidiary unit awards | 0 | 0 |
Contingent consideration liability from acquisition | 0 | 0 |
Total | 0 | 0 |
Level 1 | Money market account | ||
Assets: | ||
Money market account | 65,620 | 135,204 |
Level 2 | ||
Assets: | ||
Total | 0 | 0 |
Liabilities: | ||
Subsidiary unit awards | 0 | 0 |
Contingent consideration liability from acquisition | 0 | 0 |
Total | 0 | 0 |
Level 2 | Money market account | ||
Assets: | ||
Money market account | 0 | 0 |
Level 3 | ||
Assets: | ||
Total | 0 | 0 |
Liabilities: | ||
Subsidiary unit awards | 3,160 | 2,768 |
Contingent consideration liability from acquisition | 0 | 0 |
Total | 3,160 | 2,768 |
Level 3 | Money market account | ||
Assets: | ||
Money market account | $ 0 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Level 3 Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Subsidiary Unit Awards | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period balance | $ 2,768 | $ 532 |
Total losses / (gains) included in earnings | 392 | 2,236 |
Ending of period balance | 3,160 | 2,768 |
Contingent Consideration Liability from Acquisition | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period balance | 0 | 230 |
Total losses / (gains) included in earnings | 0 | (230) |
Ending of period balance | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Other-than-temporary impairments | $ 0 | $ 0 | $ 0 | |
Contingent Consideration, Earn Out Program | SecurityTrax | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Maximum amount of contingent consideration liability to be paid | $ 2,000,000 | |||
Liabilities related to contingent consideration | 0 | 0 | ||
Fair value of the contingent consideration liability | $ 0 | $ 0 |
Liabilities - Accounts Payable,
Liabilities - Accounts Payable, Accrued Expenses, and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 17,008 | $ 18,289 |
Accrued expenses | 4,301 | 5,298 |
Subsidiary unit awards | 2,802 | 2,506 |
Other current liabilities | 4,973 | 2,207 |
Accounts payable, accrued expenses and other current liabilities | $ 29,084 | $ 28,300 |
Liabilities - Components of Oth
Liabilities - Components of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Deferred rent | $ 12,279 | $ 11,056 |
Other liabilities | 1,646 | 2,501 |
Total other liabilities | $ 13,925 | $ 13,557 |
Debt, Commitments and Conting77
Debt, Commitments and Contingencies - Debt (Details) | Oct. 06, 2017USD ($) | Mar. 07, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Aug. 10, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||
Repayments of credit facility | $ 74,700,000 | $ 0 | $ 0 | |||||
Connect And Piper | ||||||||
Debt Instrument [Line Items] | ||||||||
Amounts drawn under senior line of credit | $ 67,000,000 | |||||||
Line of Credit | 2014 Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Current borrowing capacity | $ 75,000,000 | |||||||
Long-term debt | $ 72,000,000 | $ 6,700,000 | ||||||
Amounts drawn under senior line of credit | $ 67,000,000 | |||||||
Repayments of credit facility | 72,000,000 | $ 1,700,000 | ||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Current borrowing capacity | 125,000,000 | |||||||
Long-term debt | 72,000,000 | $ 71,000,000 | $ 71,000,000 | |||||
Repayments of credit facility | $ 1,000,000 | |||||||
Maximum borrowing capacity | $ 175,000,000 | |||||||
Consolidated leverage ratio covenant (not to exceed) | 3.5 | 3.5 | ||||||
Unused line commitment fee (percent) | 0.20% | |||||||
Effective interest rate (percent) | 3.44% | 2.82% | 2.63% | |||||
Consolidated fixed charge coverage ratio covenant (at least) | 1.25 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | Federal Funds rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 0.50% | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 1.00% | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | Scenario One, Leverage Ratio | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 1 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | Scenario Two, Leverage Ratio | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 1 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | Scenario Two, Leverage Ratio | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 2 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | Scenario Three, Leverage Ratio | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 2 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | Scenario Three, Leverage Ratio | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 3 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | LIBOR | Scenario Four, Leverage Ratio | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated leverage ratio | 3 | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | Consolidated Leverage Ratio, Less Than 1.00 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 1.50% | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | Consolidated Leverage Ratio, Greater Than Or Equal To 1.00 But Less Than 2.00 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 1.75% | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | Consolidated Leverage Ratio, Greater Than Or Equal To 2.00 But Less Than 3.00 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 2.00% | |||||||
Line of Credit | 2017 Facility | Revolving Credit Facility | Consolidated Leverage Ratio, Greater Than Or Equal To 3.00 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 2.50% |
Debt, Commitments and Conting78
Debt, Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 6,898 |
2,019 | 5,845 |
2,020 | 5,478 |
2,021 | 5,260 |
2,022 | 5,135 |
2023 and thereafter | 16,894 |
Total | $ 45,510 |
Debt, Commitments and Conting79
Debt, Commitments and Contingencies - Commitments and Contingencies (Details) | Aug. 24, 2017claim | Jun. 26, 2017patent | Apr. 25, 2017claim | Aug. 19, 2016patent | Feb. 09, 2016USD ($)service_provider | Jun. 02, 2015patentelement | Mar. 31, 2017patent | Sep. 30, 2015patent | Aug. 31, 2014USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) |
Related Party Transaction [Line Items] | ||||||||||||
Renewal term option (years) | 5 years | |||||||||||
Available leasehold improvement allowance | $ 8,000,000 | $ 9,700,000 | ||||||||||
Additional office space (square feet) | ft² | 30,662 | |||||||||||
Increase in tenant improvement allowance | $ 1,700,000 | |||||||||||
Rent expense | 6,200,000 | 4,800,000 | $ 4,900,000 | |||||||||
Pending Litigation | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Compensatory damages sought | $ 7,000,000 | |||||||||||
Punitive damages sought | $ 350,000 | |||||||||||
Number of service providers | service_provider | 1 | |||||||||||
Number of patents instituted | patent | 1 | |||||||||||
Number of patents appealed | patent | 1 | |||||||||||
Alarm.com and ICN Acquisition, LLC vs. Protect America,Inc. and SecureNet Technologies, LLC | Pending Litigation | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of patents allegedly infringed upon | claim | 1 | |||||||||||
Alarm.com and ICN Acquisition, LLC vs. ipDatatel | Pending Litigation | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of patents allegedly infringed upon | claim | 1 | |||||||||||
Vivint, Inc. vs. Alarm.com Holdings, Inc | Pending Litigation | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of patents allegedly infringed | patent | 4 | 5 | 6 | 2 | ||||||||
Number of patents under reexamination | patent | 2 | |||||||||||
Number of elements of a solution in a patent, potentially infringed (or more) | element | 1 | |||||||||||
Number of patents allegedly infringed by elements in solution | patent | 1 | |||||||||||
Line of Credit | 2014 Facility | Letter of Credit | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Letters of credit outstanding | 0 | 0 | ||||||||||
Founder and President | Repurchase of Subsidiary Units, February 2011 | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Due to related parties, current | 2,800,000 | 2,500,000 | ||||||||||
Due to related parties, noncurrent | $ 400,000 | $ 300,000 |
Stockholders' equity (Details)
Stockholders' equity (Details) $ / shares in Units, $ in Millions | Jul. 01, 2015shares | Jun. 12, 2015USD ($)$ / shares | Dec. 31, 2015shares | Dec. 31, 2017class_of_stockshares | Dec. 31, 2016shares |
Equity [Abstract] | |||||
Number of classes of stock authorized | class_of_stock | 2 | ||||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||
Class of Stock [Line Items] | |||||
Common stock, shares issued (in shares) | 47,215,720 | 46,172,318 | |||
Common stock, shares outstanding (in shares) | 47,202,310 | 46,142,483 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Common stock votes per share | 1 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common Stock and Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Dividends declared, per share (USD per share) | $ / shares | $ 0.36368 | ||||
Series B and Series B-1 Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Dividends declared, per share (USD per share) | $ / shares | $ 0.72736 | ||||
Dividends declared and paid to common stockholders | $ | $ 20 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock from initial public offering, net of issuance costs (in shares) | 7,525,000 | ||||
IPO | Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued upon conversion of redeemable convertible preferred stock (in shares) | 35,017,884 | ||||
Issuance of common stock from initial public offering, net of issuance costs (in shares) | 7,525,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 7,413 | $ 4,001 | $ 4,124 |
Tax benefit from stock-based awards | 12,719 | 5,048 | 700 |
Stock options and assumed options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 3,913 | 3,783 | 3,154 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 3,366 | 141 | 0 |
Restricted stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 19 | 0 | 0 |
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 115 | 77 | 0 |
Compensation related to the sale of common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 0 | 0 | 193 |
Compensation related to the cash settlement of stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 0 | 0 | 777 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 561 | 536 | 372 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 2,638 | 1,430 | 2,486 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 4,214 | $ 2,035 | $ 1,266 |
Stock-Based Compensation - 2015
Stock-Based Compensation - 2015 Equity Incentive Plan (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2015 | |
2015 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares reserved for issuance (in shares) | 4,700,000 | |
Common shares reserved for issuance, annual increase period (not more than) (years) | 10 years | |
Common shares reserved for issuance, percentage of annual increase (percent) | 5.00% | |
Shares available to be issued (shares) | 7,980,705 | |
2009 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available to be issued (shares) | 0 |
Stock-Based Compensation - St83
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 5 years | ||
Granted (in shares) | 252,100 | 653,900 | 540,548 |
Weighted average grant date fair value for stock options (USD per share) | $ 14.95 | $ 8.77 | $ 5.90 |
Fair value of stock options vested during period | $ 3,500 | $ 2,200 | $ 2,700 |
Aggregate intrinsic value of stock options exercised during period | 34,999 | 14,100 | 3,300 |
Compensation cost not yet recognized on nonvested awards | 4,200 | ||
Cash received from exercise of stock options | $ 2,600 | $ 1,100 | 500 |
Stock options and assumed options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash settlement of exercised stock options included in stock-based compensation | $ 800 | ||
Dividend rate (percent) | 0.00% | 0.00% | 0.00% |
Compensation cost not yet recognized, period for recognition (in years) | 2 years 2 months 12 days | ||
2009 and 2015 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested shares of common stock outstanding (shares) | 13,281 | 29,835 | |
2009 and 2015 Plan | Stock options and assumed options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 5 years | ||
Award expiration period (in years) | 10 years | ||
Common Stock | 2009 and 2015 Plan | Stock options and assumed options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Repurchase of unvested shares (shares) | 1,492 | 2,156 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | 2009 and 2015 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Liability from proceeds of early exercise of stock options | $ 100 | $ 200 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used for Estimating Fair Value (Details) - Stock options and assumed options | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility, minimum (percent) | 44.40% | 47.60% | 48.50% |
Volatility, maximum (percent) | 61.60% | 50.60% | 51.80% |
Expected term (in years) | 6 years 3 months 18 days | ||
Risk-free interest rate, minimum (percent) | 2.00% | 1.30% | 1.30% |
Risk-free interest rate, maximum (percent) | 2.20% | 1.90% | 1.90% |
Dividend rate (percent) | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 7 months 6 days | 4 years 6 months | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 3 months 18 days | 6 years 3 months 18 days | |
Connect | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility, minimum (percent) | 42.70% | ||
Volatility, maximum (percent) | 44.40% | ||
Risk-free interest rate, minimum (percent) | 1.40% | ||
Risk-free interest rate, maximum (percent) | 2.00% | ||
Dividend rate (percent) | 0.00% | ||
Connect | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 2 years 6 months | ||
Connect | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years |
Stock-Based Compensation - St85
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 08, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Number of Options | ||||
Beginning balance (in shares) | 3,547,528 | |||
Granted (in shares) | 252,100 | 653,900 | 540,548 | |
Exercised (in shares) | (1,011,174) | |||
Forfeited (in shares) | (97,415) | |||
Expired (in shares) | (4,063) | |||
Ending balance (in shares) | 2,686,976 | 3,547,528 | ||
Weighted Average Exercise Price Per Share | ||||
Beginning balance (USD per share) | $ 6.91 | |||
Granted (USD per share) | 31.69 | |||
Exercised (USD per share) | 2.55 | |||
Forfeited (USD per share) | 12.53 | |||
Expired (USD per share) | 11.99 | |||
Ending balance (USD per share) | $ 10.67 | $ 6.91 | ||
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||||
Outstanding, weighted average remaining contractual life (in years) | 6 years 4 months 24 days | 6 years 4 months 24 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value [Roll Forward] | ||||
Outstanding, beginning balance, aggregate intrinsic value | $ 74,267 | |||
Aggregate intrinsic value of stock options exercised during period | 34,999 | $ 14,100 | $ 3,300 | |
Outstanding, ending balance, aggregate intrinsic value | $ 72,823 | $ 74,267 | ||
Vested and expected to vest (in shares) | 2,700,257 | |||
Vested and expected to vest, weighted average exercise (USD per share) | $ 10.64 | |||
Vested and expected to vest, weighted average remaining contractual life (in years) | 6 years 4 months 24 days | |||
Vested and expected to vest, aggregate intrinsic value | $ 73,258 | |||
Exercisable (in shares) | 1,733,849 | |||
Exercisable, weighted average exercise (USD per share) | $ 6.38 | |||
Exercisable, weighted average remaining contractual life (in years) | 5 years 7 months 6 days | |||
Exercisable, aggregate intrinsic value | $ 54,398 | |||
Connect | ||||
Number of Options | ||||
Beginning balance (in shares) | 0 | |||
Options assumed in from Connect (in shares) | 70,406 | 70,406 | ||
Exercised (in shares) | (7,232) | |||
Forfeited (in shares) | (21,514) | |||
Expired (in shares) | (21) | |||
Ending balance (in shares) | 41,639 | 0 | ||
Weighted Average Exercise Price Per Share | ||||
Beginning balance (USD per share) | $ 0 | |||
Options assumed from Connect (USD per share) | 5.48 | |||
Exercised (USD per share) | 5.57 | |||
Forfeited (USD per share) | 4.70 | |||
Expired (USD per share) | 4.55 | |||
Ending balance (USD per share) | $ 5.88 | $ 0 | ||
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||||
Outstanding, weighted average remaining contractual life (in years) | 7 years 2 months 12 days | 0 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value [Roll Forward] | ||||
Outstanding, beginning balance, aggregate intrinsic value | $ 0 | |||
Aggregate intrinsic value of stock options exercised during period | 252 | |||
Outstanding, ending balance, aggregate intrinsic value | $ 1,327 | $ 0 | ||
Vested and expected to vest (in shares) | 41,639 | |||
Vested and expected to vest, weighted average exercise (USD per share) | $ 5.88 | |||
Vested and expected to vest, weighted average remaining contractual life (in years) | 7 years 2 months 12 days | |||
Vested and expected to vest, aggregate intrinsic value | $ 1,327 | |||
Exercisable (in shares) | 18,973 | |||
Exercisable, weighted average exercise (USD per share) | $ 5.24 | |||
Exercisable, weighted average remaining contractual life (in years) | 6 years 10 months 24 days | |||
Exercisable, aggregate intrinsic value | $ 617 |
Stock-Based Compensation - St86
Stock-Based Compensation - Stock Options Assumed from Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 08, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value for stock options (USD per share) | $ 14.95 | $ 8.77 | $ 5.90 | |
Assumed options from business acquisition | $ 1,375 | $ 0 | $ 0 | |
Compensation cost not yet recognized on nonvested awards | 4,200 | |||
Fair value of stock options vested during period | 3,500 | 2,200 | 2,700 | |
Aggregate intrinsic value of stock options exercised during period | $ 34,999 | $ 14,100 | $ 3,300 | |
Connect | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value for stock options (USD per share) | $ 4.78 | |||
Options assumed in from Connect (in shares) | 70,406 | 70,406 | ||
Unvested employee stock options converted during period (in shares) | 2,001,387 | |||
Fair value of unvested stock options | $ 1,700 | |||
Assumed options from business acquisition | 1,400 | |||
Compensation cost not yet recognized on nonvested awards | $ 100 | |||
Fair value of stock options vested during period | 100 | |||
Aggregate intrinsic value of stock options exercised during period | $ 252 | |||
Connect | Share-based Compensation Award, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized on nonvested awards | $ 300 | |||
Stock options and assumed options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized, period for recognition (in years) | 2 years 2 months 12 days | |||
Stock options and assumed options | Connect | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized, period for recognition (in years) | 1 year 2 months 12 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Details) - USD ($) $ in Thousands | Mar. 08, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 7,413 | $ 4,001 | $ 4,124 | ||
Award vesting period (in years) | 5 years | ||||
Restricted stock awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 19 | $ 0 | $ 0 | ||
Connect | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options assumed in period (in shares) | 70,406 | 70,406 | |||
Connect | Restricted stock awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options assumed in period (in shares) | 1,622 | ||||
Stock-based compensation expense | $ 100 | ||||
Award vesting period (in years) | 2 years | ||||
Options repurchased (in shares) | 750 | 0 |
Stock-Based Compensation - Re88
Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 5 years | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 534,146 | 61,482 | 0 |
Award vesting period (in years) | 5 years | ||
Unrecognized compensation expense | $ 15.9 | ||
Compensation cost not yet recognized, period for recognition (in years) | 2 years 10 months 24 days |
Stock-Based Compensation - Re89
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of RSUs | |||
Beginning balance (in shares) | 61,482 | ||
Granted (in shares) | 534,146 | 61,482 | 0 |
Vested (in shares) | 0 | ||
Forfeited (in shares) | (37,360) | ||
Ending balance (in shares) | 558,268 | 61,482 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (USD per share) | $ 30 | ||
Granted (USD per share) | 35.03 | ||
Vested (USD per share) | 0 | ||
Forfeited (USD per share) | 31.56 | ||
Ending balance (USD per share) | $ 34.71 | $ 30 | |
Aggregate Intrinsic Value (in thousands) | |||
Beginning balance | $ 1,711 | ||
Granted | |||
Vested | 0 | ||
Forfeited | |||
Ending balance | $ 21,075 | $ 1,711 | |
Vested and expected to vest (in shares) | 558,268 | ||
Vested and expected to vest (USD per share) | $ 34.71 | ||
Vested and expected to vest, aggregate intrinsic value | $ 21,075 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 7,413,000 | $ 4,001,000 | $ 4,124,000 |
Employee stock purchase plan | Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for future grant (in shares) | 1,604,310 | ||
Shares reserved for grant, annual increase period (in years) | 9 years | ||
Annual automatic increase in shares available, percentage of each class of common stock outstanding (percent) | 1.00% | ||
Annual automatic increase in shares available (in shares) | 1,500,000 | ||
Fair market value purchase discount (percent) | 90.00% | ||
Maximum number of shares participant may purchase, fair market value (not to exceed) (shares) | $ 15,000 | ||
Maximum number of shares participant may purchase as a percentage of base compensation (not to exceed) (percent) | 10.00% | ||
Discount of the market value on the date of purchase (not to exceed) (percent) | 10.00% | ||
Shares purchased by employees (in shares) | 25,616 | 31,797 | 0 |
Stock-based compensation expense | $ 100,000 | $ 100,000 | $ 100,000 |
Compensation cost not yet recognized, period for recognition (in years) | 6 months |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 320 | $ 15,103 | $ 9,865 | $ 3,963 | $ 2,976 | $ 2,567 | $ 1,873 | $ 2,738 | $ 29,251 | $ 10,154 | $ 11,768 |
Less: dividends paid to participating securities | 0 | 0 | (18,987) | ||||||||
Less: income allocated to participating securities | (13) | (12) | 0 | ||||||||
Net income / (loss) attributable to common stockholders | $ 29,238 | $ 10,142 | $ (7,219) | ||||||||
Weighted average common shares outstanding — basic (in shares) | 46,682,141 | 45,716,757 | 24,108,362 | ||||||||
Dilutive effect of stock options, restricted stock units and restricted stock awards (in shares) | 2,471,807 | 2,158,765 | 0 | ||||||||
Weighted average common shares outstanding — diluted (in shares) | 49,153,948 | 47,875,522 | 24,108,362 | ||||||||
Net income / (loss) per share: | |||||||||||
Basic (USD per share) | $ 0.01 | $ 0.32 | $ 0.21 | $ 0.09 | $ 0.06 | $ 0.06 | $ 0.04 | $ 0.06 | $ 0.63 | $ 0.22 | $ (0.30) |
Diluted (USD per share) | $ 0.01 | $ 0.31 | $ 0.20 | $ 0.08 | $ 0.06 | $ 0.05 | $ 0.04 | $ 0.06 | $ 0.59 | $ 0.21 | $ (0.30) |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options and assumed options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding (in shares) | 258,917 | 197,350 | 522,997 |
Restricted stock awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding (in shares) | 129 | 0 | 0 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding (in shares) | 188,050 | 25,640 | 0 |
Common stock subject to repurchase | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding (in shares) | 13,281 | 29,835 | 96,368 |
Significant Service Provider 93
Significant Service Provider Partners (Details) - Service Provider Concentration Risk - Revenue | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
10 Largest Service Providers | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 60.00% | 60.00% | 63.00% |
Minimum | Service Provider A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 15.00% | ||
Minimum | Service Provider B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 10.00% | 10.00% | 15.00% |
Maximum | Service Provider A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 20.00% | ||
Maximum | Service Provider B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (percent) | 15.00% | 15.00% | 20.00% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||
Federal | $ 584 | $ 7,227 | $ 7,730 |
State | (88) | 1,829 | 1,519 |
Foreign | 6 | 0 | 0 |
Total Current | 502 | 9,056 | 9,249 |
Deferred | |||
Federal | 3,837 | (4,283) | (3,372) |
State | (1,368) | (546) | (180) |
Foreign | 19 | 0 | 0 |
Total Deferred | 2,488 | (4,829) | (3,552) |
Total | $ 2,990 | $ 4,227 | $ 5,697 |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State income tax expense, net of federal benefits | 0.10% | 4.90% | 4.50% |
Nondeductible meals and entertainment | 0.60% | 1.60% | 1.20% |
Research and development tax credits | (16.10%) | (10.80%) | (8.90%) |
Tax windfall benefits | (36.50%) | (0.00%) | (0.00%) |
Change in tax rate due to tax reform | 27.20% | 0.00% | 0.00% |
Other | (1.00%) | (1.30%) | 0.80% |
Effective rate | 9.30% | 29.40% | 32.60% |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets, non-current | ||
Provision for doubtful accounts | $ 714 | $ 1,046 |
Accrued expenses | 2,362 | 2,622 |
Deferred revenue | 2,455 | 3,627 |
Deferred rent | 3,384 | 4,671 |
Stock-based compensation | 3,613 | 3,468 |
Acquisition costs | 3,310 | 4,482 |
Subsidiary unit compensation | 1,413 | 1,566 |
Equity investments | 116 | 182 |
Net operating losses | 1,357 | 2,678 |
Tax credits | 2,546 | 0 |
Intangible assets and prepaid patent licenses | 156 | 0 |
Other | 160 | 107 |
Total deferred tax assets, non-current | 21,586 | 24,449 |
Deferred tax liabilities, non-current | ||
Intangible assets and prepaid patent licenses | (74) | (2,780) |
Depreciation | (2,917) | (4,649) |
Contingent liability | (171) | (268) |
Total deferred tax liabilities, non-current | (3,162) | (7,697) |
Net deferred tax assets, non-current | $ 18,424 | $ 16,752 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 681 | $ 506 | $ 208 |
Additions based on tax positions of the current year | 718 | 197 | 152 |
Additions based on tax positions of prior year | 373 | 79 | 146 |
Additions resulting from acquisitions | 277 | 0 | 0 |
Decreases due to lapse of applicable statute of limitations | (76) | 0 | 0 |
Decreases related to settlements of prior year tax positions | 0 | (101) | 0 |
Ending balance | $ 1,973 | $ 681 | $ 506 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Additional income tax expense due to remeasurement of deferred tax balances | $ 8,800,000 | ||
Effective income tax rate (percent) | 9.30% | 29.40% | 32.60% |
Deferred tax assets, valuation allowance | $ 0 | $ 0 | |
Accrued interest and penalties related to unrecognized tax benefits | 100,000 | 100,000 | |
Unrecognized tax benefits that would impact the effective tax rate | 2,000,000 | 700,000 | |
U.S. | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 6,000,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 1,900,000 | ||
Existing Net Operating Loss | |||
Operating Loss Carryforwards [Line Items] | |||
Additions to unrecognized tax benefit | 300,000 | ||
Research Tax Credit Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Additions to unrecognized tax benefit | 1,000,000 | $ 200,000 | $ 300,000 |
Research Tax Credit Carryforward | U.S. | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | 2,200,000 | ||
Research Tax Credit Carryforward | State | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | $ 1,400,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Segment Reporting Information [Line Items] | |||||||||||
SaaS and license revenue | $ 236,283 | $ 173,540 | $ 140,936 | ||||||||
Hardware and other revenue | 102,654 | 87,566 | 67,952 | ||||||||
Total revenue | $ 88,793 | $ 89,962 | $ 85,988 | $ 74,194 | $ 69,794 | $ 67,846 | $ 64,423 | $ 59,043 | 338,937 | 261,106 | 208,888 |
Operating income / (loss) | 33,374 | 14,058 | 17,991 | ||||||||
Assets | 371,641 | 261,245 | 371,641 | 261,245 | |||||||
Amortization and depreciation | 17,734 | 6,490 | 5,808 | ||||||||
Additions to property and equipment | 10,464 | 9,055 | 10,347 | ||||||||
Alarm.com | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Amortization and depreciation | 17,400 | 6,300 | 5,500 | ||||||||
Additions to property and equipment | 9,300 | 5,700 | 10,200 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Amortization and depreciation | 300 | 200 | 300 | ||||||||
Additions to property and equipment | 100 | 100 | 200 | ||||||||
Operating Segments | Alarm.com | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
SaaS and license revenue | 227,583 | 168,732 | 139,036 | ||||||||
Hardware and other revenue | 92,445 | 79,049 | 63,716 | ||||||||
Total revenue | 320,028 | 247,781 | 202,752 | ||||||||
Operating income / (loss) | 41,439 | 21,282 | 38,437 | ||||||||
Assets | 352,766 | 246,798 | 352,766 | 246,798 | |||||||
Operating Segments | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
SaaS and license revenue | 8,700 | 4,808 | 1,928 | ||||||||
Hardware and other revenue | 15,154 | 14,018 | 7,124 | ||||||||
Total revenue | 23,854 | 18,826 | 9,052 | ||||||||
Operating income / (loss) | (8,248) | (7,229) | (20,151) | ||||||||
Assets | 18,875 | 14,447 | 18,875 | 14,447 | |||||||
Intersegment Eliminations | Alarm.com | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
SaaS and license revenue | 0 | 0 | (28) | ||||||||
Hardware and other revenue | (2,945) | (2,863) | (924) | ||||||||
Total revenue | (2,945) | (2,863) | (952) | ||||||||
Operating income / (loss) | (175) | (312) | (279) | ||||||||
Assets | 0 | 0 | 0 | 0 | |||||||
Intersegment Eliminations | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
SaaS and license revenue | 0 | 0 | 0 | ||||||||
Hardware and other revenue | (2,000) | (2,638) | (1,964) | ||||||||
Total revenue | (2,000) | (2,638) | (1,964) | ||||||||
Operating income / (loss) | 358 | 317 | $ (16) | ||||||||
Assets | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Segment Concentration Risk | Revenue | Alarm.com | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Concentration risk percentage (percent) | 94.00% | 94.00% | 97.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - Installation Partner - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 11, 2015 | Sep. 30, 2014 | |
Related Party Transaction [Line Items] | |||||
Ownership percentage in equity method investment (percent) | 48.20% | ||||
Equity method investment (shares) | 9,290 | ||||
Equity method investment, cost | $ 0.2 | ||||
Equity Method Investee | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable to related party | $ 0.1 | $ 0.1 | |||
Interest income from related party (less than) | 0.1 | 0.1 | $ 0.1 | ||
Equity Method Investee | Secured Promissory Note | |||||
Related Party Transaction [Line Items] | |||||
Related party notes receivable, face amount | $ 0.3 | ||||
Interest rate (percent) | 8.00% | ||||
Equity Method Investee | Cost of Hardware and Other Revenue | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred from related party | $ 0.7 | $ 1.3 | $ 0.8 |
Quarterly Financial Data (Un101
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Total revenue | $ 88,793 | $ 89,962 | $ 85,988 | $ 74,194 | $ 69,794 | $ 67,846 | $ 64,423 | $ 59,043 | $ 338,937 | $ 261,106 | $ 208,888 | |||
Total cost of revenue | 27,885 | 31,833 | 29,835 | 26,635 | 26,715 | 26,366 | 25,183 | 21,116 | 116,188 | [1] | 99,380 | [1] | 77,374 | [1] |
Net income | $ 320 | $ 15,103 | $ 9,865 | $ 3,963 | $ 2,976 | $ 2,567 | $ 1,873 | $ 2,738 | $ 29,251 | $ 10,154 | $ 11,768 | |||
Net income / (loss) per share: | ||||||||||||||
Basic (USD per share) | $ 0.01 | $ 0.32 | $ 0.21 | $ 0.09 | $ 0.06 | $ 0.06 | $ 0.04 | $ 0.06 | $ 0.63 | $ 0.22 | $ (0.30) | |||
Diluted (USD per share) | $ 0.01 | $ 0.31 | $ 0.20 | $ 0.08 | $ 0.06 | $ 0.05 | $ 0.04 | $ 0.06 | $ 0.59 | $ 0.21 | $ (0.30) | |||
[1] | Exclusive of amortization and depreciation shown in operating expenses below. |
Schedule II - Valuation and 102
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 1,282 | $ 1,315 | $ 1,397 |
Additions Charged Against Revenue | 0 | 0 | 0 |
Additions Charged to Other Accounts | 453 | 648 | 276 |
Deductions | (286) | (681) | (358) |
Balance at End of Year | 1,449 | 1,282 | 1,315 |
Allowance for product returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 2,314 | 2,116 | 1,838 |
Additions Charged Against Revenue | 2,055 | 2,071 | 1,559 |
Additions Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (1,898) | (1,873) | (1,281) |
Balance at End of Year | $ 2,471 | $ 2,314 | $ 2,116 |