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ALRM (Alarm.com Holdings) Degree of Operating Leverage : 6.68 (As of Mar. 2025)


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What is Alarm.com Holdings Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. Alarm.com Holdings's Degree of Operating Leverage for the quarter that ended in Mar. 2025 was 6.68. The higher Degree of Operating Leverage, the higher operating risk the company will take.

The industry rank for Alarm.com Holdings's Degree of Operating Leverage or its related term are showing as below:

ALRM's Degree of Operating Leverage is ranked worse than
83.34% of 2665 companies
in the Software industry
Industry Median: 0.78 vs ALRM: 6.68

Alarm.com Holdings Degree of Operating Leverage Historical Data

The historical data trend for Alarm.com Holdings's Degree of Operating Leverage 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.

* Premium members only.

Alarm.com Holdings Degree of Operating Leverage Chart

Alarm.com Holdings Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
Degree of Operating Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.47 -1.18 -0.30 14.97 7.78

Alarm.com Holdings Quarterly Data
Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24 Mar25
Degree of Operating Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.51 12.51 12.52 7.78 6.68

Competitive Comparison of Alarm.com Holdings's Degree of Operating Leverage

For the Software - Application subindustry, Alarm.com Holdings's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage 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 Degree of Operating Leverage Distribution in the Software Industry

For the Software industry and Technology sector, Alarm.com Holdings's Degree of Operating Leverage distribution charts can be found below:

* The bar in red indicates where Alarm.com Holdings's Degree of Operating Leverage falls into.


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Alarm.com Holdings Degree of Operating Leverage Calculation

Alarm.com Holdings's Degree of Operating Leverage for the quarter that ended in Mar. 2025 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 165.619 (Mar. 2025) / 114.348 (Mar. 2024) - 1 )/( 955.366 (Mar. 2025) / 895.249 (Mar. 2024) - 1 )
=0.4484/0.0672
=6.68***

* 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.

** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


Alarm.com Holdings  (NAS:ALRM) Degree of Operating Leverage Explanation

Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.

A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.

Be Aware

The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.


Alarm.com Holdings Degree of Operating Leverage Related Terms

Thank you for viewing the detailed overview of Alarm.com Holdings's Degree of Operating Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.


Alarm.com Holdings Business Description

Traded in Other Exchanges
Address
8281 Greensboro Drive, Suite 100, Tysons, VA, USA, 22102
Alarm.com Holdings Inc has a cloud-based platform that offers an expansive suite of IoT solutions addressing world-wide opportunities in the residential, multi-family, small business and enterprise commercial markets. It 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.
Executives
Daniel Ramos officer: Sr. VP-Corporate Development C/O ALARM.COM, INC., 8150 LEESBURG PIKE, VIENNA VA 22182
Jeffrey A Bedell officer: Chief Strategy & Innovation C/O MICROSTRATEGY INC, 1850 TOWERS CRESCENT PLAZA, VIENNA VA 22182
Stephen Trundle director, officer: President and CEO C/O ALARM.COM HOLDINGS, INC., 8150 LEESBURG PIKE, VIENNA VA 22182
Daniel Kerzner officer: Chief Product Officer C/O ALARM.COM HOLDINGS, INC., 8150 LEESBURG PIKE, VIENNA VA 22182
Steve Valenzuela officer: Chief Financial Officer 1800 GREEN HILLS ROAD, SCOTTS VALLEY CA 95066
Stephen C. Evans director C/O ALARM.COM HOLDINGS, INC., 8281 GREENSBORO DRIVE, SUITE 100, TYSONS VA 22102
Darius G Nevin director C/O WCI COMMUNITIES, INC., 24301 WALDEN CENTER DRIVE, BONITA SPRINGS FL 34134
Timothy P Mcadam director 250 MIDDLEFIELD RD, MENLO PARK CA 94025
Simone Wu director 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Timothy J. Whall director C/O ADT, LLC, 1501 YAMATO ROAD, BOCA RATON FL 33431
Donald E Clarke director C/O VISUAL NETWORKS INC, 2092 GAITHER ROAD, ROCKVILLE MD 20850
Hugh Panero director
Shattuck Mayo A Iii director C/O GAP, INC., 2 FOLSOM ST., SAN FRANCISCO CA 94105
Tcv Vii Management, L.l.c. 10 percent owner, other: May be part of a13(d) group 528 RAMONA STREET, PALO ALTO CA 94301
Technology Crossover Management Vii, L.p. 10 percent owner, other: May be part of a 13(d) group 528 RAMONA STREET, PALO ALTO CA 94301