Alarm.com Holdings Inc gross margin has been in long-term decline. The average rate of decline per year is -1.3%.
The historical rank and industry rank for Alarm.com Holdings's Gross Margin % or its related term are showing as below:
ALRM'
s Gross Margin % Range Over the Past 10 Years
Min: 59.16 Med: 63.04 Max: 65.72
Current: 63.12
During the past 12 years, the highestGross Margin % of Alarm.com Holdings was 65.72%. The lowest was 59.16%. And the median was 63.04%.
ALRM's Gross Margin % is ranked better than 71.49% of 2627
companies
in the Software industry
Industry Median: 41.72
vs ALRM: 63.12
Alarm.com Holdings had a gross margin of 64.10% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Alarm.com Holdings was -1.30% per year.
Alarm.com Holdings Gross Margin % Historical Data
The historical data trend for Alarm.com Holdings's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Alarm.com Holdings's Gross Margin %
For the Software - Application subindustry, Alarm.com Holdings's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Alarm.com Holdings's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Alarm.com Holdings had a gross margin of 64.10% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Alarm.com Holdings Gross Margin % Related Terms
Thank you for viewing the detailed overview of Alarm.com Holdings's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Alarm.com Holdings (Alarm.com Holdings) Business Description
Alarm.com Holdings Inc has two reportable segments: Alarm.com & Other. The Alarm.com segment represents the cloud-based Software platforms for intelligently connected property & related solutions. The other segment is focused on researching, developing & offering residential & commercial automation solutions & energy management products & services in adjacent markets. The majority of revenue is from the Alarm.com segment. The platform allows home & business owners to secure their properties and automate & control an array of connected devices. SaaS & license fees from service providers, who resell these services & pay Alarm.com a monthly subscription, are the sources of revenue for the firm. A majority of revenue is generated in the United States & Canada.
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