Alarmcom Holdings Inc

Previous wording

We primarily generate SaaS and license revenue, our largest source of revenue, through our service provider partners who resell our services and pay us monthly fees. Our service provider partners sell, install and support Alarm.com solutions that enable residential and commercial property owners to intelligently secure, connect, control and automate their properties. 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 derive a portion of our revenue from licensing our intellectual property to third parties on a per customer basis. SaaS and license revenue represented 67% of our revenue during each of the three and six months ended June 30, 2024, as compared to 63% and 64% in the same periods in the prior year.

Current wording

We primarily generate SaaS and license revenue, our largest source of revenue, through our service provider partners who resell our services and pay us monthly fees. Our service provider partners sell, install and support Alarm.com solutions that enable residential and commercial property owners to intelligently secure, connect, control and automate their properties. 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 derive a portion of our revenue from licensing our intellectual property to third parties on a per customer basis. SaaS and license revenue represented 66% and 67% of our revenue during the three and nine months ended September 30, 2024, respectively, as compared to 65% and 64% in the same periods in the prior year.

Previous wording

We also generate SaaS and license revenue from monthly fees charged to service providers on a per subscriber basis for access to our non-hosted software platform, or Software platform. The non-hosted software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center. Software license revenue represented 2% of our revenue during each of the three and six months ended June 30, 2024, as compared to 3% in the same periods in the prior year.

Current wording

We also generate SaaS and license revenue from monthly fees charged to service providers on a per subscriber basis for access to our non-hosted software platform, or Software platform. The non-hosted software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center. Software license revenue represented 2% of our revenue during each of the three and nine months ended September 30, 2024, as compared to 3% in the same periods in the prior year.

Previous wording

We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, smart thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions. Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee. Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees. Hardware and other revenue represented 33% of our revenue during each of the three and six months ended June 30, 2024, as compared to 37% and 36% in the same periods in the prior year. We typically expect hardware and other revenue to fluctuate as a percentage of total revenue.

Current wording

We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, smart thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions. Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee. Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees. Hardware and other revenue represented 34% and 33% of our revenue during the three and nine months ended September 30, 2024, respectively, as compared to 35% and 36% in the same periods in the prior year. We typically expect hardware and other revenue to fluctuate as a percentage of total revenue.

Previous wording

•SaaS and license revenue increased 11% to $155.9 million during the three months ended June 30, 2024 from $140.4 million during the three months ended June 30, 2023. SaaS and license revenue increased 11% to $306.3 million in the six months ended June 30, 2024 from $275.8 million in the six months ended June 30, 2023. Included in SaaS and license revenue was software license revenue, which decreased to $5.2 million during the three months ended June 30, 2024 from $5.9 million during the three months ended June 30, 2023. Software license revenue decreased to $10.4 million in the six months ended June 30, 2024 from $12.1 million in the six months ended June 30, 2023.

Current wording

•SaaS and license revenue increased 10% to $159.3 million during the three months ended September 30, 2024 from $145.0 million during the three months ended September 30, 2023. SaaS and license revenue increased 11% to $465.5 million in the nine months ended September 30, 2024 from $420.9 million in the nine months ended September 30, 2023. Included in SaaS and license revenue was software license revenue, which decreased to $5.0 million during the three months ended September 30, 2024 from $5.7 million during the three months ended September 30, 2023. Software license revenue decreased to $15.4 million in the nine months ended September 30, 2024 from $17.8 million in the nine months ended September 30, 2023.

Previous wording

•Total revenue increased 4% to $233.8 million during the three months ended June 30, 2024 from $223.9 million during the three months ended June 30, 2023. Total revenue increased 5% to $457.1 million in the six months ended June 30, 2024 from $433.6 million in the six months ended June 30, 2023.

Current wording

•Total revenue increased 8% to $240.5 million during the three months ended September 30, 2024 from $221.9 million during the three months ended September 30, 2023. Total revenue increased 6% to $697.6 million in the nine months ended September 30, 2024 from $655.4 million in the nine months ended September 30, 2023.

Previous wording

•Net income increased to $32.5 million during the three months ended June 30, 2024, as compared to $15.6 million during the three months ended June 30, 2023. Net income increased to $55.9 million in the six months ended June 30, 2024, as compared to $29.8 million in the six months ended June 30, 2023. Net income attributable to common stockholders increased to $33.5 million during the three months ended June 30, 2024, as compared to $15.8 million during the three months ended June 30, 2023. Net income attributable to common stockholders increased to $57.1 million in the six months ended June 30, 2024, as compared to $30.2 million in the six months ended June 30, 2023.

Current wording

•Net income increased to $36.5 million during the three months ended September 30, 2024, as compared to $19.4 million during the three months ended September 30, 2023. Net income increased to $92.4 million in the nine months ended September 30, 2024, as compared to $49.2 million in the nine months ended September 30, 2023. Net income attributable to common stockholders increased to $36.7 million during the three months ended September 30, 2024, as compared to $19.5 million during the three months ended September 30, 2023. Net income attributable to common stockholders increased to $93.8 million in the nine months ended September 30, 2024, as compared to $49.7 million in the nine months ended September 30, 2023.

Previous wording

•Non-GAAP adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $42.8 million during the three months ended June 30, 2024 from $36.4 million during the three months ended June 30, 2023. Non-GAAP adjusted EBITDA increased to $79.9 million in the six months ended June 30, 2024 from $66.9 million in the six months ended June 30, 2023.

Current wording

•Non-GAAP adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $50.0 million during the three months ended September 30, 2024 from $41.4 million during the three months ended September 30, 2023. Non-GAAP adjusted EBITDA increased to $129.9 million in the nine months ended September 30, 2024 from $108.4 million in the nine months ended September 30, 2023.

Previous wording

Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of non-GAAP adjusted EBITDA (a non-GAAP measure) and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three and six months ended June 30, 2024 and 2023.

Current wording

Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of non-GAAP adjusted EBITDA (a non-GAAP measure) and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three and nine months ended September 30, 2024 and 2023.

Previous wording

The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of the Macroeconomic Conditions. These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment. It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2024, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions. Prolonged uncertainty with respect to the Macroeconomic Conditions could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.

Current wording

The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of the Macroeconomic Conditions. These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment. It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2024, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions. Prolonged uncertainty with respect to the Macroeconomic Conditions could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.

Previous wording

Non-GAAP adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other expense, net, provision for income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation. We do not consider these items to be indicative of our core operating performance. The non-cash items include amortization and depreciation expense; amortization of debt issuance costs for the January 20, 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, or the 2026 Notes, included in interest expense; amortization of debt issuance costs for the 2029 Notes included in interest expense; and stock-based compensation expense related to restricted stock units and other forms of equity compensation, including, but not limited to, the sale of common stock. We do not adjust for ordinary course legal expenses resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

Current wording

Non-GAAP adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other expense, net, provision for income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation. We do not consider these items to be indicative of our core operating performance. The non-cash items include amortization and depreciation expense; amortization of debt issuance costs for the January 20, 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026, or the 2026 Notes, included in interest expense; amortization of debt issuance costs for the May 31, 2024 issuance of $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029, or the 2029 Notes, included in interest expense; and stock-based compensation expense related to restricted stock units and other forms of equity compensation, including, but not limited to, the sale of common stock. We do not adjust for ordinary course legal expenses resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

Previous wording

Non-GAAP adjusted EBITDA is a key measure our management uses to understand and evaluate our core operating performance and trends to generate future operating plans, to make strategic decisions regarding the allocation of capital, and to make investments in initiatives that are focused on cultivating new markets for our solutions. In particular, the exclusion of certain expenses in calculating non-GAAP adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis and, in the case of exclusion of acquisition-related adjustments and certain historical legal expenses, excludes items that we do not consider to be indicative of our core operating performance. Non-GAAP adjusted EBITDA is not a measure calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Please see Non-GAAP Measuresin this section for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the three and six months ended June 30, 2024 and 2023.

Current wording

Non-GAAP adjusted EBITDA is a key measure our management uses to understand and evaluate our core operating performance and trends to generate future operating plans, to make strategic decisions regarding the allocation of capital, and to make investments in initiatives that are focused on cultivating new markets for our solutions. In particular, the exclusion of certain expenses in calculating non-GAAP adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis and, in the case of exclusion of acquisition-related adjustments and certain historical legal expenses, excludes items that we do not consider to be indicative of our core operating performance. Non-GAAP adjusted EBITDA is not a measure calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Please see Non-GAAP Measuresin this section for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the three and nine months ended September 30, 2024 and 2023.

Previous wording

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 operations centers which are expensed as incurred, as well as patent and royalty costs in connection with technology licensed from third-party providers and amounts paid to distributed energy resource providers. Our cost of SaaS and license revenue also includes our cost of software license revenue, which primarily includes the payroll and payroll-related costs of the department dedicated to providing service exclusively to those service providers that host the Software platform. As of June 30, 2024 and 2023, we had 79 and 104 employees who manufacture hardware for oursuite of IoT solutions, respectively. Our cost of hardware and other revenue primarily includes cost of raw materials, tooling, freight shipments 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, video recorders, smart thermostats and gunshot detection sensors, which we purchase from an original equipment manufacturer, and other devices. Cost of hardware and other revenue also includes material costs and labor cost related to our employees who manufacture hardware for oursuite of IoT solutions. Additionally, our cost of hardware and other revenue includes royalty costs in connection with technology licensed from third-party providers.

Current wording

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 operations centers which are expensed as incurred, as well as patent and royalty costs in connection with technology licensed from third-party providers and amounts paid to distributed energy resource providers. Our cost of SaaS and license revenue also includes our cost of software license revenue, which primarily includes the payroll and payroll-related costs of the department dedicated to providing service exclusively to those service providers that host the Software platform. As of September 30, 2024 and 2023, we had 76 and 77 employees who manufacture hardware for oursuite of IoT solutions, respectively. Our cost of hardware and other revenue primarily includes cost of raw materials, tooling, freight shipments 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, video recorders, smart thermostats and gunshot detection sensors, which we purchase from an original equipment manufacturer, and other devices. Cost of hardware and other revenue also includes material costs and labor cost related to our employees who manufacture hardware for oursuite of IoT solutions. Additionally, our cost of hardware and other revenue includes royalty costs in connection with technology licensed from third-party providers.

Previous wording

Since 2019, the U.S. government has implemented and imposed significant changes to U.S. trade policy with respect to China. Tariffs have subjected certain Alarm.com products manufactured overseas to additional import duties of up to 25%. The amount of the import tariff and the number of products subject to tariffs have changed numerous times based on action by the U.S. government. Approximately one-fifth to one-half of the hardware products that we sell to our service provider partners are imported from China and could be subject to increased tariffs. While the additional import duties resulted in an increase to our cost of hardware revenue, these import duties had a modest impact on hardware revenue margins. If tariffs are increased or are expanded to apply to more of our products, such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future. We continue to monitor the changes in tariffs.

Current wording

Since 2019, the U.S. government has implemented and imposed significant changes to U.S. trade policy with respect to China. Tariffs have subjected certain Alarm.com products manufactured overseas to additional import duties of up to 25%. The amount of the import tariff and the number of products subject to tariffs have changed numerous times based on action by the U.S. government. Less than one-third of the hardware products that we sell to our service provider partners are imported from China and could be subject to increased tariffs. While the additional import duties resulted in an increase to our cost of hardware revenue, these import duties had a modest impact on hardware revenue margins. If tariffs are increased or are expanded to apply to more of our products, such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future. We continue to monitor the changes in tariffs.

Previous wording

Our operating expenses consist of sales and marketing, general and administrative, research and development and amortization and depreciation expenses. Salaries, bonuses, stock-based compensation, benefits and other personnel related costs are the most significant components of each of these expense categories, excluding amortization and depreciation. We include stock-based compensation expense in connection with the grant of restricted stock units and other forms of equity compensation, including equity compensation with performance conditions, in the applicable operating expense category based on the respective equity award recipient’s function (sales and marketing, general and administrative or research and development). We grew from 1,909 employees as of June 30, 2023 to 2,033 employees as of June 30, 2024, and grew from 2,002 employees as of March 31, 2024. We expect to continue to hire new employees to support the projected future growth of our business.

Current wording

Our operating expenses consist of sales and marketing, general and administrative, research and development and amortization and depreciation expenses. Salaries, bonuses, stock-based compensation, benefits and other personnel related costs are the most significant components of each of these expense categories, excluding amortization and depreciation. We include stock-based compensation expense in connection with the grant of restricted stock units and other forms of equity compensation, including equity compensation with performance conditions, in the applicable operating expense category based on the respective equity award recipient’s function (sales and marketing, general and administrative or research and development). We grew from 1,986 employees as of September 30, 2023 to 2,055 employees as of September 30, 2024, and grew from 2,033 employees as of June 30, 2024. We expect to continue to hire new employees to support the projected future growth of our business.

Previous wording

The number of employees in sales and marketing functions increased from 553 as of June 30, 2023 to 576 as of June 30, 2024 and increased from 564 as of March 31, 2024. We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally and we expect to increase our marketing expense in 2024 as compared to 2023. We intend to increase the size of our sales force and our service provider partner support team to provide additional support to our existing service provider partner base to drive their productivity in selling our solutions as well as to enroll new service provider partners in North America and in international markets.

Current wording

The number of employees in sales and marketing functions increased from 566 as of September 30, 2023 to 583 as of September 30, 2024 and increased from 576 as of June 30, 2024. We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally and we expect to increase our marketing expense in 2024 as compared to 2023. We intend to increase the size of our sales force and our service provider partner support team to provide additional support to our existing service provider partner base to drive their productivity in selling our solutions as well as to enroll new service provider partners in North America and in international markets.

Previous wording

The number of employees in general and administrative functions increased from 199 as of June 30, 2023 to 223 as of June 30, 2024 and decreased from 224 as of March 31, 2024. Excluding intellectual property litigation and acquisition-related expense, we expect general and administrative costs to increase prospectively as our business grows. This includes cost increases related to human resources, accounting, finance, and legal personnel, additional external legal, audit fees and other expenses associated with regulations governing public companies. While somewhat unpredictable, we also expect to continue to incur costs related to litigation involving intellectual property. See the section of this Quarterly Report titled "Legal Proceedings" for additional information regarding litigation matters.

Current wording

The number of employees in general and administrative functions increased from 227 as of September 30, 2023 to 232 as of September 30, 2024 and increased from 223 as of June 30, 2024. Excluding intellectual property litigation and acquisition-related expense, we expect general and administrative costs to increase prospectively as our business grows. This includes cost increases related to human resources, accounting, finance, and legal personnel, additional external legal, audit fees and other expenses associated with regulations governing public companies. While somewhat unpredictable, we also expect to continue to incur costs related to litigation involving intellectual property. See the section of this Quarterly Report titled "Legal Proceedings" for additional information regarding litigation matters.

Previous wording

The number of employees in research and development functions increased from 1,053 as of June 30, 2023 to 1,155 as of June 30, 2024 and increased from 1,139 as of March 31, 2024. Our research and development efforts are focused on innovating new features and enhancing the functionality of our platforms and the solutions we offer to our service provider partners and subscribers. We will also continue to invest in efforts to extend our platforms to adjacent markets and internationally to maintain our leadership position in the development of intelligently connected property technology, and continued enhancement of our Partner Services Platform, a comprehensive suite of enterprise-grade business management solutions for our service provider partners.

Current wording

The number of employees in research and development functions increased from 1,116 as of September 30, 2023 to 1,164 as of September 30, 2024 and increased from 1,155 as of June 30, 2024. Our research and development efforts are focused on innovating new features and enhancing the functionality of our platforms and the solutions we offer to our service provider partners and subscribers. We will also continue to invest in efforts to extend our platforms to adjacent markets and internationally to maintain our leadership position in the development of intelligently connected property technology, and continued enhancement of our Partner Services Platform, a comprehensive suite of enterprise-grade business management solutions for our service provider partners.

Previous wording

We are subject to U.S. federal, state and local income taxes as well as foreign income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, we recognize tax liabilities based on estimates of whether additional taxes will be due. For the three months ended June 30, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to a favorable true-up adjustment of our 2023 income tax provision estimate associated with research and development tax credits, 2024 research and development tax credits claimed, the foreign derived intangible income deduction and tax windfall benefits from employee stock-based compensation. For the six months ended June 30, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to a favorable true-up adjustment of our 2023 income tax provision estimate associated with research and development tax credits, 2024 research and development tax credits claimed, the foreign derived intangible income deduction, the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax examination and tax windfall benefits from employee stock-based compensation, partially offset by the impact of state taxes, federal estimated tax payment interest expense and other nondeductible expenses. We recognize stock-based compensation tax shortfalls and excess tax windfall benefits on a discrete basis during the quarter in which they occur, and we anticipate our effective tax rate will vary from quarter to quarter depending on our stock price as well as the vesting and exercises of various forms of equity compensation under our equity incentive plans each period, including restricted stock units and stock options.

Current wording

We are subject to U.S. federal, state and local income taxes as well as foreign income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, we recognize tax liabilities based on estimates of whether additional taxes will be due. For the three months ended September 30, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to 2024 research and development tax credits claimed, the foreign derived intangible income deduction and a favorable true-up adjustment of our 2023 income tax provision estimate and amended prior year state income tax returns, partially offset by the impact of state taxes, foreign withholding taxes and other nondeductible expenses. For the nine months ended September 30, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to a favorable true-up adjustment of our 2023 income tax provision estimate, the foreign derived intangible income deduction, 2024 research and development tax credits claimed, the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax examination and tax windfall benefits from employee stock-based compensation, partially offset by the impact of state taxes, federal estimated tax payment interest expense and other nondeductible expenses. We recognize stock-based compensation tax shortfalls and excess tax windfall benefits on a discrete basis during the quarter in which they occur, and we anticipate our effective tax rate will vary from quarter to quarter depending on our stock price as well as the vesting and exercises of various forms of equity compensation under our equity incentive plans each period, including restricted stock units and stock options.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 to June 30, 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 to September 30, 2023

Previous wording

The following tables in this section set forth our selected condensed consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the three and six months ended June 30, 2024 and June 30, 2023.

Current wording

The following tables in this section set forth our selected condensed consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the three and nine months ended September 30, 2024 and September 30, 2023.

Previous wording

The $9.9 million increase in total revenue for the three months ended June 30, 2024 as compared to the same period in the prior year was primarily the result of a $15.5 million, or 11%, increase in our SaaS and license revenue, partially offset by a $5.6 million, or 7%, decrease in our hardware and other revenue. Our software license revenue included within SaaS and license revenue decreased $0.7 million to $5.2 million during the three months ended June 30, 2024 as compared to $5.9 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform. The SaaS and license revenue for the Alarm.com segment increased $13.1 million for the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2023. The SaaS and license revenue for our Other segment increased $2.4 million for the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution. The decrease in hardware and other revenue for the three months ended June 30, 2024 as compared to the same period in the prior year was primarily from the $5.1 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of cameras sold. Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $0.5 million for the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to decreased sales related to our property management solution.

Current wording

The $18.6 million increase in total revenue for the three months ended September 30, 2024 as compared to the same period in the prior year was primarily the result of a $14.2 million, or 10%, increase in our SaaS and license revenue, and a $4.4 million, or 6%, increase in our hardware and other revenue. Our software license revenue included within SaaS and license revenue decreased $0.7 million to $5.0 million during the three months ended September 30, 2024 as compared to $5.7 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform. The SaaS and license revenue for the Alarm.com segment increased $10.6 million for the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2023. The SaaS and license revenue for our Other segment increased $3.6 million for the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution. The increase in hardware and other revenue for the three months ended September 30, 2024 as compared to the same period in the prior year was primarily from the $4.5 million increase in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from an increase in the volume of commercial video devices sold. Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $0.1 million for the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to decreased sales related to our property management solution.

Previous wording

The $23.5 million increase in total revenue for the six months ended June 30, 2024 as compared to the same period in the prior year was primarily the result of a $30.4 million, or 11%, increase in our SaaS and license revenue, partially offset by a $6.9 million, or 4%, decrease in our hardware and other revenue. Our software license revenue included within SaaS and license revenue decreased $1.7 million to $10.4 million during the six months ended June 30, 2024, as compared to $12.1 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform. The SaaS and license revenue for the Alarm.com segment increased $25.3 million for the six months ended June 30, 2024 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2023. The SaaS and license revenue for our Other segment increased $5.1 million for the six months ended June 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution. The decrease in hardware and other revenue for the six months ended June 30, 2024 as compared to the same period in the prior year was primarily from the $6.2 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of cameras and thermostats sold. Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $0.7 million for the six months ended June 30, 2024 as compared to the same period in the prior year, primarily due to decreased sales related to our property management and Heating, Ventilation and Air Conditioning solutions.

Current wording

The $42.1 million increase in total revenue for the nine months ended September 30, 2024 as compared to the same period in the prior year was primarily the result of a $44.7 million, or 11%, increase in our SaaS and license revenue, partially offset by a $2.6 million, or 1%, decrease in our hardware and other revenue. Our software license revenue included within SaaS and license revenue decreased $2.4 million to $15.4 million during the nine months ended September 30, 2024, as compared to $17.8 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform. The SaaS and license revenue for the Alarm.com segment increased $35.9 million for the nine months ended September 30, 2024 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2023, as well as an increase in our license revenue. The SaaS and license revenue for our Other segment increased $8.8 million for the nine months ended September 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions as well as our property management solution. The decrease in hardware and other revenue for the nine months ended September 30, 2024 as compared to the same period in the prior year was primarily from the $1.7 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of cameras sold. Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $0.9 million for the nine months ended September 30, 2024 as compared to the same period in the prior year, primarily due to decreased sales related to our property management solution.

Previous wording

The $4.7 million decrease in cost of revenue for the six months ended June 30, 2024 as compared to the same period in the prior year was the result of a $6.1 million, or 5%, decrease in cost of hardware and other revenue, partially offset by a $1.4 million, or 3%, increase in cost of SaaS and license revenue. Our cost of software license revenue included within cost of SaaS and license revenue was $0.3 million for each of the six months ended June 30, 2024 and 2023. The cost of hardware and other revenue for the Alarm.com segment decreased $5.6 million during the six months ended June 30, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped and a decrease in costs for freight shipments. The cost of hardware and other revenue for the Other segment decreased $0.5 million during the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped and a decrease in costs for freight shipments. The cost of SaaS and license revenue for the Alarm.com segment during the six months ended June 30, 2024 remained relatively consistent with the same period in the prior year. The cost of SaaS and license revenue for the Other segment increased $1.3 million during the six months ended June 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.

Current wording

The $3.3 million increase in cost of revenue for the three months ended September 30, 2024 as compared to the same period in the prior year was the result of a $2.1 million, or 4%, increase in cost of hardware and other revenue, and a $1.2 million, or 5%, increase in cost of SaaS and license revenue. Our cost of software license revenue included within cost of SaaS and license revenue was $0.2 million and $0.1 million for the three months ended September 30, 2024 and 2023, respectively. The cost of hardware and other revenue for the Alarm.com segment increased $2.3 million during the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to a change in the mix of product sales to more hardware with higher costs as well as an increase in the number of hardware units shipped. The cost of hardware and other revenue for the Other segment decreased $0.2 million during the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to a change in the mix of product sales. The cost of SaaS and license revenue for the Alarm.com segment increased $0.4 million during the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers. The cost of SaaS and license revenue for the Other segment increased $0.8 million during the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.

Previous wording

Cost of hardware and other revenue as a percentage of hardware and other revenue was 76% for the three months ended June 30, 2024 and 78% for the same period in the prior year. The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the three months ended June 30, 2024 as compared to the same period in the prior year is primarily a reflection of the mix of product sales during the periods. Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for three months ended June 30, 2024 and 15% for the same period in the prior year. Cost of software license revenue as a percentage of software license revenue was 3% for the three months ended June 30, 2024 and 2% for the same period in the prior year.

Current wording

Cost of hardware and other revenue as a percentage of hardware and other revenue was 76% for the three months ended September 30, 2024 and 77% for the same period in the prior year. The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the three months ended September 30, 2024 as compared to the same period in the prior year is primarily a reflection of the mix of product sales during the periods. Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 15% for each of three months ended September 30, 2024 and 2023. Cost of software license revenue as a percentage of software license revenue was 3% for the three months ended September 30, 2024 and 2% for the same period in the prior year.

Previous wording

The $5.1 million decrease in cost of revenue for the three months ended June 30, 2024 as compared to the same period in the prior year was the result of a $5.6 million, or 9%, decrease in cost of hardware and other revenue, partially offset by a $0.5 million, or 2%, increase in cost of SaaS and license revenue. Our cost of software license revenue included within cost of SaaS and license revenue was $0.1 million for each of the three months ended June 30, 2024 and 2023. The cost of hardware and other revenue for the Alarm.com segment decreased $5.3 million during the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped and a decrease in costs for freight shipments. The cost of hardware and other revenue for the Other segment decreased $0.3 million during the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped and a decrease in costs for freight shipments. The cost of SaaS and license revenue for the Alarm.com segment during the three months ended June 30, 2024 remained relatively consistent with the same period in the prior year. The cost of SaaS and license revenue for the Other segment increased $0.5 million during the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.

Current wording

The $1.4 million decrease in cost of revenue for the nine months ended September 30, 2024 as compared to the same period in the prior year was the result of a $3.9 million, or 2%, decrease in cost of hardware and other revenue, partially offset by a $2.5 million, or 4%, increase in cost of SaaS and license revenue. Our cost of software license revenue included within cost of SaaS and license revenue was $0.5 million and $0.4 million for the nine months ended September 30, 2024 and 2023, respectively. The cost of hardware and other revenue for the Alarm.com segment decreased $3.2 million during the nine months ended September 30, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped. The cost of hardware and other revenue for the Other segment decreased $0.7 million during the three months ended September 30, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped. The cost of SaaS and license revenue for the Alarm.com segment increased $0.5 million during the nine months ended September 30, 2024 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers. The cost of SaaS and license revenue for the Other segment increased $2.0 million during the nine months ended September 30, 2024 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.

Previous wording

Cost of hardware and other revenue as a percentage of hardware and other revenue was 76% for the six months ended June 30, 2024 and 77% for the same period in the prior year. The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the six months ended June 30, 2024 as compared to the same period in the prior year is primarily a reflection of the mix of product sales during the periods. Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for the six months ended June 30, 2024 and 15% for the same period in the prior year. Cost of software license revenue as a percentage of software license revenue was 3% for the six months ended June 30, 2024 and 2% for the same period in the prior year.

Current wording

Cost of hardware and other revenue as a percentage of hardware and other revenue was 76% for the nine months ended September 30, 2024 and 77% for the same period in the prior year. The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the nine months ended September 30, 2024 as compared to the same period in the prior year is primarily a reflection of the mix of product sales during the periods. Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for the nine months ended September 30, 2024 and 15% for the same period in the prior year. Cost of software license revenue as a percentage of software license revenue was 3% for the nine months ended September 30, 2024 and 2% for the same period in the prior year.

Previous wording

The $4.1 million increase in sales and marketing expense for the three months ended June 30, 2024 as compared to the same period in the prior year was primarily due to a $1.9 million increase in marketing expense and a $1.8 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth. Personnel and related costs includes salary, benefits, stock-based compensation and travel expenses. These increases in sales and marketing expense for our Alarm.com segment were partially offset by a $0.5 million decrease in our expenses for external consultants for the three months ended June 30, 2024 as compared to the same period in the prior year. Sales and marketing expense from our Other segment increased $1.2 million for the three months ended June 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team.

Current wording

The $3.1 million increase in sales and marketing expense for the three months ended September 30, 2024 as compared to the same period in the prior year was primarily due to a $1.7 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth, and a $0.5 million increase in marketing expense for our Alarm.com segment. Personnel and related costs includes salary, benefits, stock-based compensation and travel expenses. These increases in sales and marketing expense for our Alarm.com segment were partially offset by a $0.2 million decrease in our expenses for external consultants for the three months ended September 30, 2024 as compared to the same period in the prior year. Sales and marketing expense from our Other segment increased $1.0 million for the three months ended September 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team.

Previous wording

The $2.9 million increase in sales and marketing expense for the six months ended June 30, 2024 as compared to the same period in the prior year was primarily due to a $2.0 million increase in sales and marketing expense from our Other segment, primarily due to an increase in personnel and related costs for our Other segment, attributable in part to increases in the headcount for our sales team to support our growth. Sales and marketing expense from our Alarm.com segment increased $0.9 million for the six months ended June 30, 2024, as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team. The number of employees in sales and marketing functions increased from 553 as of June 30, 2023 to 576 as of June 30, 2024.

Current wording

The $6.0 million increase in sales and marketing expense for the nine months ended September 30, 2024 as compared to the same period in the prior year was primarily due to a $2.7 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth, and a $1.0 million increase in marketing expense for our Alarm.com segment. These increases in sales and marketing expense for our Alarm.com segment were partially offset by a $0.5 million decrease in our expenses for external consultants and recruiting for the nine months ended September 30, 2024 as compared to the same period in the prior year. Sales and marketing expense from our Other segment increased $3.0 million for the three months ended September 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team. The number of employees in sales and marketing functions increased from 566 as of September 30, 2023 to 583 as of September 30, 2024.

Previous wording

The $2.7 million decrease in general and administrative expense for the three months ended June 30, 2024 as compared to the same period in the prior year was primarily due to a $4.6 million decrease in legal costs for our Alarm.com segment related to intellectual property litigation, partially offset by a $0.5 million increase in consulting and recruiting costs for our Alarm.com segment. General and administrative expenses from our Other segment increased by $0.4 million for the three months ended June 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs.

Current wording

The $5.7 million decrease in general and administrative expense for the three months ended September 30, 2024 as compared to the same period in the prior year was primarily due to a $6.9 million decrease in legal costs for our Alarm.com segment related to intellectual property litigation. This decrease in general and administrative expense was partially offset by a $0.7 million increase in personnel and related costs, a $0.5 million increase in consulting and recruiting costs and a $0.3 million increase in rent expense for our Alarm.com segment. General and administrative expenses from our Other segment decreased by $0.4 million for the three months ended September 30, 2024 as compared to the same period in the prior year, primarily due to a decrease in the provision for credit losses.

Previous wording

The $1.9 million decrease in general and administrative expense for the six months ended June 30, 2024 as compared to the same period in the prior year was primarily due to a $7.6 million decrease in legal costs for our Alarm.com segment related to intellectual property litigation. This decrease in general and administrative expense was partially offset by $4.0 million increase in the provision for credit losses related to a loan we previously provided to an affiliated entity of one of our distribution partners and a $0.4 million increase in recruiting costs for the six months ended June 30, 2024 as compared to the same period in the prior year. General and administrative expenses from our Other segment increased primarily due to a $0.4 million increase in personnel and related costs for the six months ended June 30, 2024 as compared to the same period in the prior year. The overall number of employees in general and administrative functions increased from 199 as of June 30, 2023 to 223 as of June 30, 2024.

Current wording

The $7.6 million decrease in general and administrative expense for the nine months ended September 30, 2024 as compared to the same period in the prior year was primarily due to a $14.5 million decrease in legal costs for our Alarm.com segment related to intellectual property litigation. This decrease in general and administrative expense was partially offset by a $4.0 million increase in the provision for credit losses related to a loan we previously provided to an affiliated entity of one of our distribution partners, a $0.5 million increase in rent expense, a $0.4 million increase in recruiting costs and a $0.4 million increase in personnel and related costs for the nine months ended September 30, 2024 as compared to the same period in the prior year. General and administrative expenses from our Other segment decreased $0.4 million primarily due to a decrease in the provision for credit losses for the nine months ended September 30, 2024 as compared to the same period in the prior year. The overall number of employees in general and administrative functions increased from 227 as of September 30, 2023 to 232 as of September 30, 2024.

Previous wording

The $4.8 million increase in research and development expense for the three months ended June 30, 2024 as compared to the same period in the prior year was primarily due to a $3.6 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $0.6 million increase in our expenses for external consultants. Research and development expense from our Other segment increased by $1.2 million for the three months ended June 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs.

Current wording

The $1.2 million increase in research and development expense for the three months ended September 30, 2024 as compared to the same period in the prior year was primarily due to a $0.5 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $0.4 million increase in our expenses for external consultants. Research and development expense from our Other segment increased by $0.5 million for the three months ended September 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs.

Previous wording

The $8.9 million increase in research and development expense for the six months ended June 30, 2024 as compared to the same period in the prior year was primarily due to a $6.1 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $1.4 million increase in our expenses for external consultants. Research and development expense from our Other segment increased by $2.2 million for the six months ended June 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs. The overall number of employees in research and development functions increased from 1,053 as of June 30, 2023 to 1,155 as of June 30, 2024.

Current wording

The $10.1 million increase in research and development expense for the nine months ended September 30, 2024 as compared to the same period in the prior year was primarily due to a $6.5 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $1.7 million increase in our expenses for external consultants. Research and development expense from our Other segment increased by $2.8 million for the nine months ended September 30, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs. The overall number of employees in research and development functions increased from 1,116 as of September 30, 2023 to 1,164 as of September 30, 2024.

Previous wording

Amortization and depreciation decreased $0.8 million and $1.1 million for the three and six months ended June 30, 2024, respectively, as compared to the same periods in the prior year, primarily due to changes in amortization expense related to the intangible assets we previously acquired.

Current wording

Amortization and depreciation decreased $0.3 million and $1.5 million for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year, primarily due to changes in amortization expense related to the intangible assets we previously acquired.

Previous wording

Interest expense increased $1.1 million for each of the three and six months ended June 30, 2024, as compared to the same periods in the prior year, primarily due to the interest expense and amortization of the debt issuance costs related to the 2029 Notes.

Current wording

Interest expense increased $3.4 million and $4.5 million for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year, primarily due to the interest expense and amortization of the debt issuance costs related to the 2029 Notes.

Previous wording

Interest income increased $3.4 million and $6.8 million for the three and six months ended June 30, 2024, respectively, as compared to the same periods in the prior year, primarily due to an increase in interest income earned on cash and cash equivalents from higher amounts of cash and cash equivalents and higher interest rates. The increase in interest income was partially offset by a $0.5 million reduction to interest income for the reversal of payable in kind interest associated with a subordinated credit agreement with an affiliated entity of one of our distribution partners during the six months ended June 30, 2024, which did not occur during the six months ended June 30, 2023.

Current wording

Interest income increased $5.9 million and $12.7 million for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year, primarily due to an increase in interest income earned on cash and cash equivalents from higher amounts of cash and cash equivalents and higher average interest rates during the nine months ended September 30, 2024 as compared to the same period in the prior year. The increase in interest income was partially offset by a $0.5 million reduction to interest income for the reversal of payable in kind interest associated with a subordinated credit agreement with an affiliated entity of one of our distribution partners during the nine months ended September 30, 2024, which did not occur during the nine months ended September 30, 2023.

Previous wording

Other expense, net increased $0.6 million and $0.8 million for the three and six months ended June 30, 2024, respectively, as compared to the same periods in the prior year, primarily due to an increase in non-operating and miscellaneous expenses.

Current wording

Other expense, net decreased $0.3 million for the three months ended September 30, 2024 and increased $0.5 million for the nine months ended September 30, 2024, as compared to the same periods in the prior year, primarily due to changes in non-operating and miscellaneous expenses.

Previous wording

The provision for income taxes decreased by $5.6 million and $1.7 million for the three and six months ended June 30, 2024, respectively, as compared to the same periods in the prior year. Our effective tax rate was 2.6% and 6.1% for the three and six months ended June 30, 2024, respectively, as compared to 29.4% and 15.1% for the same periods in the prior year. The decrease in the provision for income taxes for the three and six months ended June 30, 2024 as compared to the same periods in the prior year was primarily due to a favorable true-up adjustment of our 2023 income tax provision estimate associated with research and development tax credits during the three months ended June 30, 2024 as well as the unfavorable true-up adjustment of our 2022 income tax provision estimate associated with research and development tax credits during the three months ended June 30, 2023. The decrease in the provision for income taxes for the six months ended June 30, 2024 as compared to the same period in the prior year was also due to the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax examination during the six months ended June 30, 2024, which did not occur during the six months ended June 30, 2023.

Current wording

The provision for income taxes increased by $2.7 million and $1.1 million for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year. Our effective tax rate was 15.6% and 10.1% for the three and nine months ended September 30, 2024, respectively, as compared to 17.0% and 15.8% for the same periods in the prior year. The increase in the provision for income taxes for the three months ended September 30, 2024 as compared to the same periods in the prior year was primarily due to the increase in income before income taxes. The increase in the provision for income taxes for the nine months ended September 30, 2024 as compared to the same period in the prior year was also due to the increase in income before income taxes, partially offset by a favorable true-up adjustment of our 2023 income tax provision estimate as compared to an unfavorable true-up adjustment of our 2022 income tax provision estimate and the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax examination during the nine months ended September 30, 2024, which did not occur during the nine months ended September 30, 2023.

Previous wording

We have two reportable segm ents: Alarm.com and Other. Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that contributed 93% of our revenue, net of intersegment eliminations, for each of the three and six months ended June 30, 2024, as compared to 94% for the same periods in the prior year. Our Other segment is focused on researching, developing and offering residential and commercial automation solutions and energy management products and services in adjacent markets. The consolidated subsidiaries that make up our Other segment are in the investment stage and have incurred significant operating expenses relative to their revenue.

Current wording

We have two reportable segm ents: Alarm.com and Other. Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that contributed 92% and 93% of our revenue, net of intersegment eliminations, for the three and nine months ended September 30, 2024, respectively, as compared to 93% and 94% for the same periods in the prior year. Our Other segment is focused on researching, developing and offering residential and commercial automation solutions and energy management products and services in adjacent markets. The consolidated subsidiaries that make up our Other segment are in the investment stage and have incurred significant operating expenses relative to their revenue.

Previous wording

Our Alarm.com segment increased from 1,712 employees as of June 30, 2023 to 1,801 employees as of June 30, 2024 and increased from 1,780 employees as of March 31, 2024. Our Other segment increased from 197 employees as of June 30, 2023 to 232 employees as of June 30, 2024 and increased from 222 employees as of March 31, 2024. Inter-segment revenue includes sales of hardware between our segments.

Current wording

Our Alarm.com segment increased from 1,778 employees as of September 30, 2023 to 1,815 employees as of September 30, 2024 and increased from 1,801 employees as of June 30, 2024. Our Other segment increased from 208 employees as of September 30, 2023 to 240 employees as of September 30, 2024 and increased from 232 employees as of June 30, 2024. Inter-segment revenue includes sales of hardware between our segments.

Previous wording

Our SaaS and license revenue for the Alarm.com segment included software license revenue of $5.2 million and $10.4 million for the three and six months ended June 30, 2024, respectively, as compared to $5.9 million and $12.1 million for the same periods in the prior year. There was no software license revenue recorded for the Other segment during the three and six months ended June 30, 2024 and 2023.

Current wording

Our SaaS and license revenue for the Alarm.com segment included software license revenue of $5.0 million and $15.4 million for the three and nine months ended September 30, 2024, respectively, as compared to $5.7 million and $17.8 million for the same periods in the prior year. There was no software license revenue recorded for the Other segment during the three and nine months ended September 30, 2024 and 2023.