Tag Archives: independent software stock research


alarm.comAlarm.com (NASDAQ: ALRM), a cloud-based security systems provider is among the recent additions to our Battle Road IPO Review Software sector coverage. Founded in 2000 as part of a research and development unit within MicroStrategy (NASDAQ: MSTR), a provider of business intelligence software, Alarm.com was later spun off from MSTR. Alarm.com is headquartered in Vienna, Virginia, and its CEO and president is Steve Trundle. Consensus estimates call for EPS of $0.14 in 2015, flat with $0.14 in 2014, while revenues are projected to increase by 16 percent in 2015 to $194 million.

Alarm.com debuted on the NASDAQ on June 26, 2015 at $14.00 per share. All proceeds from the seven million share offering went to Alarm.com. Goldman Sachs, Credit Suisse and Merrill Lynch acted as book-running managers for the transaction, with Stifel, Raymond James, William Blair, and Imperial Capital acting as co-managers. At a recent share price of $14.00, the company’s market cap is roughly $635 million.

Alarm.com deploys wireless security systems that can be monitored using video, mobile apps, and web-based apps. In 2010, Alarm.com added to these systems by allowing users to control heating and cooling temperatures using these apps. With 2.3 million subscribers, 25 million connected sensors and devices, and 20 billion data points processed in the last year alone, Alarm.com claims to be the largest connected home platform. This platform has been built specifically for home and business security, with a network of more than 5,000 service providers, with expertise in design, sales, installation, and support for the platform.

The connected home platform designed by Alarm.com has four main segments: Interactive Security, Intelligent Automation, Video Monitoring, and Energy Management. Interactive Security is an always-on security system powered by cellular connection which can survive otherwise detrimental occurrences such as line cuts, power outages and network problems. Interactive Security includes app alerts and triggers and constant emergency response. Intelligent Automation allows users to connect and control security systems, garage doors, lights, locks, thermostats, electricity and other devices. Intelligent Automation learns patterns and recommends adjustments.

Video Monitoring allows for on-demand viewing of security footage which can be accessed at any time, including live streaming, video alerts, constant high definition recording and clip captures. Video Monitoring can be accessed through the web and mobile apps. Energy Management enables users to control energy usage and comfort and is connected to thermostats, power meters, lights, shades, solar panels and appliances. Energy Management controls devices and manages temperatures. Users can also obtain a real-time look into their energy usage and efficiency. The pricing for Alarm.com is a monthly fee starting at $13.99 for homes and $19.99 for businesses, with more features available for a higher cost. There is also an initial set-up fee.

The Alarm.com app, which can control the entire connected home platform, is available on the iPhone, iPad, Android, Windows Phone, Apple Watch, Pebble Watch, and Amazon Fire TV. This app is what brings the connected home platform together, allowing users access to their homes while out and about. Main competitors of Alarm.com include iControl, Frontpoint, Protect America, LiveWatch, Link Interactive, SimpliSafe, LifeShield, AlarmForce, ADT, and Vivint. Post-IPO, we note that Alarm.com has a solid balance sheet, with over $100 million in cash and net debt of just $7 million.

New Relic

newRelic_250x252px-270x270New Relic (NYSE: NEWR), headquartered in San Francisco, California, becomes another addition to our Software sector coverage. Founded in 2007, the company provides a cloud software platform for software analytics. Consensus estimates call for revenue of $102 million and a Loss per Share (LPS) of about $1.00 for the period ending March 31, 2015, followed by revenue of $137 million and a similar Loss per Share for the fiscal year ending March 31, 2016.

New Relic’s five million share IPO took place on the NYSE on December 12, 2014 at $23.00 per share in a transaction led by Morgan Stanley, J.P. Morgan, Allen & Company, UBS, JMP Securities, and Raymond James. At a recent share price of $34, New Relic’s market cap is roughly $1.5 billion.

New Relic positions itself as a provider of next generation cloud software that analyzes the performance of software applications, including software that is accessed from mobile devices. One of its key features is the ability to collect, store and analyze data in real time and then diagnose software performance problems, and provide reports and alerts to IT professionals. New Relic’s software can also track user time spent on a particular website page, and pinpoint browser or operating system software code problems, response time, and user satisfaction.
As of the end of September 2014, New Relic had 10,590 “paid business accounts” and over 250,000 “users,” which it defines as an email address associated with an account that has deployed its software code, and from which it receives data from at least one application. Roughly 30 percent of sales comes from outside the US.

New Relic has a broad range of competitors in the software performance management category, including IBM, HP, Microsoft, Oracle, BMC Software, Compuware, Riverbed Technologies, Splunk, Google, and once publicly-traded but now privately-held Webtrends.

To see how New Relic screens against a comparable group of 55 Software IPOs of the last seven years, please contact Battle Road Research.