Alarm.com (ALRM) Q3 2026 Earnings Call: Prognose für 2026 angehoben

Zentrale Ergebnisse

• Alarm.com (NASDAQ: ALRM) meldete für das dritte Quartal 2026 einen SaaS- und Lizenzumsatz von 191,2 Millionen US-Dollar, ein Plus von 9 % gegenüber dem Vorjahr. Der Gesamtumsatz stieg um 9 % auf 279,4 Millionen US-Dollar.
• Das bereinigte EBITDA kletterte um 19,3 % auf 66,2 Millionen US-Dollar bei einer Marge von 23,7 %. Nach Angaben des Managements spiegelte dieser Anstieg im Wesentlichen einen vorübergehenden positiven Effekt von 3,8 Millionen US-Dollar aus zollbezogenen Erstattungen von Hardwarekosten wider.
• Die Umsatzbindungsrate lag weiterhin im Bereich von 95 %. Wachstumsinitiativen machten etwa ein Drittel des Umsatzes aus und wuchsen mit einer Gesamtrate von 25 % bis 30 % weiter.
• Das Management hob die Prognose für das Gesamtjahr 2026 für den SaaS- und Lizenzumsatz, den Gesamtumsatz, das bereinigte EBITDA und das Non-GAAP-EPS an.
• Alarm.com hat CellGate übernommen und baut damit sein gewerbliches Angebot auf mobilfunkbasierte Torzufahrts- und Video-Gegensprechanlagen aus. Für CellGate wird im Jahr 2027 ein Beitrag von 15 bis 20 Millionen US-Dollar zum SaaS- und Lizenzumsatz erwartet.
• Die vorläufige Prognose für 2027 sieht einen Gesamtumsatz von rund 1,175 bis 1,19 Milliarden US-Dollar und ein bereinigtes EBITDA von 240 bis 245 Millionen US-Dollar vor.

Wichtigste Finanzergebnisse

Der freie Cashflow für die ersten neun Monate des Jahres 2026 belief sich auf rund 156,3 Millionen US-Dollar, was einer kumulierten Conversion Rate von 90 % aus dem bereinigten EBITDA entspricht. Alarm.com kaufte im dritten Quartal etwa 241.000 Aktien für 13,5 Millionen US-Dollar zurück; damit erhöhten sich die Rückkäufe seit Jahresbeginn auf rund 1,2 Millionen Aktien für 58,5 Millionen US-Dollar.

Geschäftliche und operative Entwicklung

Das nordamerikanische Kerngeschäft von Alarm.com mit Privatkunden entwickelte sich im Rahmen der Erwartungen des Managements. Eine hohe Kundenbindung, Neukundengewinnung und ein höherer videobezogener durchschnittlicher Erlös pro Nutzer stützten das Wachstum der wiederkehrenden Umsätze.

Das Unternehmen erweiterte sein Videoportfolio um eine batteriebetriebene Video-Türklingel und eine verbesserte Innenkamera. Die Türklingel unterstützt die Erkennung bekannter Gesichter, wobei eine KI-Abschreckungsfunktion geplant ist. Die Premium-Innenkamera bietet eine 4-Megapixel-Bildqualität, integrierte Beleuchtung und eine mechanische Privatsphäre-Blende.

Zudem stattete Alarm.com seine KI-Abschreckungslösung mit abgestuften Sprachansagen aus. Das System kann von einer neutralen Nachricht zu deutlicheren Warnungen übergehen, wenn eine erkannte Person im gesicherten Bereich verweilt.

Mit der Übernahme von CellGate erweitert das Unternehmen sein Angebot um Torzufahrts- und Video-Gegensprechsysteme für Gewerbeimmobilien, Kleinunternehmen, Wohnanlagen, Ranches und Anwesen. Das Management schätzt, dass bis zu 6.000 US-Zaun- und Tordienstleister regelmäßig automatische Tore installieren. CellGate wird als eigenständiges Geschäft betrieben, während Alarm.com Integrationen in seine Plattform entwickelt.

Die internationalen Aktivitäten übertrafen die Marke von einer Million Abonnenten und wuchsen weiterhin schneller als das Gesamtgeschäft. Allerdings bezeichnete das Management das internationale Segment als Nachzügler unter seinen Wachstumsinitiativen und verwies auf den Druck auf die europäischen Privatverbraucher sowie die Notwendigkeit einer rascheren Expansion. Das Unternehmen konzentriert sich auf Geschäftskunden, Video-Zusatzverkäufe und Kooperationen mit internationalen Mobilfunkanbietern und Breitbandnetzbetreibern.

Im Bereich gewerblicher Brandschutz haben mehr als 600 Dienstleister mindestens eine kostenpflichtige Einheit installiert. Laut Management entwickelten sich die frühe Partnerbindung und der ARPU erwartungsgemäß, wenngleich weitere UL-Zertifizierungen erforderlich sind, um das gesamte Marktpotenzial zu erschließen.

Prognose des Managements

Der aktualisierte Ausblick für den SaaS- und Lizenzumsatz 2026 stieg im Mittelwert um 2 Millionen US-Dollar, während die Prognose für das bereinigte EBITDA um 6 Millionen US-Dollar angehoben wurde. Zudem erhöhte das Management seinen Ausblick für das Non-GAAP-EPS gegenüber der Prognose vom August um rund 0,10 US-Dollar.

Der vorläufige Ausblick für 2027 enthält 15 bis 20 Millionen US-Dollar an SaaS- und Lizenzumsätzen von CellGate. Das Management geht davon aus, dass die Übernahme in den nächsten zwei Jahren die SaaS-Bruttomarge und die bereinigte EBITDA-Marge leicht verwässern wird, während sie sich positiv auf die Hardware-Bruttomarge auswirken dürfte.

Risiken und Beobachtungsschwerpunkte

Die Hardware-Marge und das bereinigte EBITDA im dritten Quartal profitierten von vorübergehenden zollbezogenen Kostenerstattungen, mit deren Fortbestehen das Management nicht rechnet. Deren Wegfall dürfte in Kombination mit höheren Speicherkosten vor Preisanpassungen im vierten Quartal zu einem sequenziellen EBITDA-Gegenwind von rund 6,6 Millionen US-Dollar führen.

Nach Angaben des Managements wird das Erreichen einer bereinigten EBITDA-Exit-Marge von nahe 21 % bis Ende 2027 stark von Komponentenpreisen, der Weitergabe von Zöllen und organischen Investitionsentscheidungen, einschließlich Investitionen in CellGate, abhängen.

Sollte der Hardware-Umsatz im Jahr 2027 die Unternehmensprognose übertreffen, erwartet das Management ein nominal unverändertes bereinigtes EBITDA, während die Margen zusätzlich unter Druck geraten dürften. Alarm.com beabsichtigt, außergewöhnliche externe Kostensteigerungen ohne zusätzlichen Aufschlag weiterzugeben.

Wichtigste Punkte aus der Fragerunde der Analysten

• SaaS-Wachstumstreiber 2027: Das Management nannte eine Kundenbindung über dem historischen Niveau, eine solide Umsetzung bei den Wachstumsinitiativen, Neukundengewinnung im Privatkundenbereich und einen höheren videobezogenen ARPU.
• Wachstumsinitiativen: Diese Geschäftsbereiche dürften rund ein Drittel des Umsatzes von 2026 ausmachen und um 25 % bis 30 % wachsen. Für 2027 geht der vorläufige Ausblick des Managements davon aus, dass das Gesamtwachstum in den Bereich von 20 % bis 25 % zurückkehrt.
• ARPU im Privatkundengeschäft: Der ARPU bei Neukunden stieg jährlich um rund 5 %. Der Video-ARPU legte über zwei Jahre hinweg um etwa 30 % zu, was zu einem kumulierten Anstieg des ARPU bei Neukunden um rund 10 % auf etwa 5,50 US-Dollar beitrug.
• Beziehung zu ADT: Das Management erwartet nach der Thrive-Transaktion eine fortlaufende Zusammenarbeit mit ADT sowie potenzielle Kooperationschancen, rechnet derzeit jedoch nicht mit einer grundlegenden Veränderung des Beitrags von ADT zu Alarm.com.
• Apples Smart-Home-Plattform: Alarm.com zeigte sich erfreut über die Unterstützung einer weiteren Benutzeroberfläche im Heimbereich und erklärte, dass solche Geräte die Nutzerinteraktion steigern können. Das Management sieht bei den genannten DIY-Kameraprodukten keine direkte Überschneidung mit seiner Zielkundschaft.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Please be advised, today's conference is being recorded. I would like to hand the conference over to your speaker today, Matthew Zartman. Please go ahead.

Matthew Zartman

Thank you. Good afternoon, everyone, and welcome to Alarm.com's third quarter 2026 earnings conference call. Please note that this call is being recorded. Joining us today are Steve Trundle, our CEO, and Kevin Bradley, our CFO.

During today's call, we will be making forward-looking statements, which are predictions, projections, estimates, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. We refer you to the risk factors discussed in our most recent quarterly report on Form 10-Q, our other SEC filings, and today's earnings release. The call is subject to these risk factors, and we encourage you to review them. Alarm.com assumes no obligation to update forward-looking statements or other information that speak as of their respective dates.

In addition, several non-GAAP financial measures will be discussed on the call. The reconciliation of GAAP to non-GAAP measures can be found in today's release on our Investor Relations website. I'll now turn the call over to Steve Trundle. Steve?

Stephen Trundle

Thank you, Matt. Good afternoon, and welcome to everyone. We're pleased to report third quarter results that exceeded our expectations. SaaS and license revenue was $191.2 million, and adjusted EBITDA was $66.2 million. I want to thank our service provider partners and our employees for their contributions to these results.

Today, I'll discuss our operating performance, recent additions to our video platform, and our acquisition of CellGate, which we announced today. I'll also provide some thoughts on recent industry developments before turning things over to Kevin to review financials, including our initial look at 2027. During the quarter, we continued to see solid results across our increasingly diverse business.

Third quarter SaaS revenue grew 9% year over year. We expect to finish the year strong and have raised our full-year SaaS revenue guidance. Our core North American residential business performed in line with our expectations, supported by continued strength in revenue retention. During the quarter, our growth initiatives continued to contribute at a size and pace in line with expectations, as indicated by our increased outlook for SaaS revenue in 2026.

Our strong adjusted EBITDA performance benefited from certain one-time hardware cost recoveries and timing effects within hardware gross margin. We do not expect these Q3 timing benefits to persist, and our outlook assumes hardware gross margins return to more typical levels going forward. Kevin will discuss this in more detail.

Shifting to product development, we recently released several new video cameras that give our service providers more installation options and a broader range of price points, allowing them to bring our video services to more customers. Our new battery-powered video doorbell simplifies installation and expands the locations where partners can offer video coverage, including side entrances and detached garages without doorbell wiring. It supports our advanced video analytics capabilities, including familiar face recognition, with AI deterrent support coming soon, and its customer-installable design gives service provider partners another way to offer video upgrades to existing accounts without a service visit.

We also launched an upgraded indoor camera on the premium side of our residential lineup. It combines sharp 4-megapixel image quality, integrated illumination for deterrence, and a privacy shutter that physically blocks the camera's view. This premium model complements the lower-cost indoor camera that we launched earlier this year, giving partners more options to match customers' needs and budgets.

We also enhanced our AI deterrent solution with progressive voice responses. When our video software detects a person in a protected area, it can now initially engage them with a neutral-sounding voice message and then progress to stronger-worded warnings if the person continues to linger. The progression makes the response sound natural and credible, reinforcing the deterrent when a stronger warning is needed.

In our commercial business, we recently acquired CellGate, a provider of gate access and video intercom solutions for commercial properties, small businesses, multifamily communities, ranches, and estate properties. Its cellular-connected products serve vehicle and pedestrian gates with an access control capability without requiring a network line or access to the property's Wi-Fi.

CellGate brings together several characteristics we look for in an acquisition: a specialized product offering, an established relationship with the trade channel, and an opportunity to build recurring services around connected devices. The acquisition extends our reach into the fence and gate contractor market, a channel we have not traditionally served. We estimate that as many as 6,000 fence and gate servicing companies regularly install automated gates in the United States.

CellGate will operate as a standalone business similar to OpenEye, Checked, and others. We plan to support its growth over time by driving integrations with parts of the Alarm.com platform. I want to welcome the CellGate team to Alarm.com.

Lastly, I want to comment on the recent announcement that ADT will receive a major investment from State Farm. In the last 12 months, we have seen substantial capital flow into the residential side of our industry. First, SimpliSafe was acquired by GTCR, and now ADT is being acquired at a substantial premium to its unaffected public market value. I want to congratulate the ADT management team on achieving a great outcome for its shareholders.

We believe that investors continue to find the residential sector attractive for the same reasons that we do. They have a service that many consumers view as essential and a history of steady performance with strong cash flow production in both good times and bad. The work that Alarm.com has done over the years to reimagine security system capabilities and convenience has made these systems even more valued by consumers today.

When substantial investment flows into our industry, it tends to benefit the overall market, including our service providers, our manufacturing partners, banks, and other investors, as confirmation that the industry is deserving of capital. So this is a positive trend for us and other players in the industry.

As it relates to Alarm.com specifically, we will continue to work with and support ADT as a large customer on both the residential side and the SMB side, just as we have been doing for the last decade. And while we are optimistic that the Thrive deal will create opportunities to unlock growth for ADT, we are currently modeling the business contribution to Alarm.com the same way we had been prior to the announcement of the acquisition.

In summary, I'm pleased with our third quarter results and the continued growth we see across the business. Alarm.com has developed durable positions addressing diverse opportunities in residential and commercial security and in virtual power production. With CellGate, we are adding another business line that fits our strong track record of building IoT-integrated SaaS businesses. I want to thank our service provider partners and our team for their hard work, and our investors for their continued trust in our business.

With that, I'll turn things over to Kevin Bradley to review our financials for the quarter, our updated guidance for 2026, and our initial view of 2027. Kevin?

Kevin Bradley

Thanks, Steve. I'll begin by reviewing our third quarter financial results, then turn to our updated guidance for the fourth quarter and full year 2026 before providing our preliminary view of 2027. We are pleased to report another quarter of financial results that exceeded our expectations with continued growth in recurring revenue, earnings, and cash generation.

SaaS and license revenue grew 9% year-over-year to $191.2 million, exceeding the midpoint of our guidance by approximately $1.3 million. This performance reflects contributions from across the business and continued strength in our revenue retention rate, which remained in the 95% range. Hardware and other revenue totaled $88.3 million, up 8.9% year over year. Total revenue grew 9% to $279.4 million, and gross profit increased 10.6% to $186.8 million.

In the core business, higher unit volumes contributed about half of the sequential increase in hardware revenue, with video doorbells making the largest contribution to that volume-driven increase. Hardware gross margin was 28.4%, approximately 650 basis points higher than a year ago.

Results included approximately $3.8 million of temporary benefit associated with tariff-related cost recoveries, which accounts for the majority of the year-over-year gross margin expansion. Separately, higher memory costs are expected to pressure hardware margins going forward, which I will address with our outlook.

During the third quarter, total operating expenses, including depreciation and amortization, were $142.9 million. Total operating expenses excluding depreciation and amortization, stock-based compensation, and other items we adjust from G&A for non-GAAP purposes were $120.2 million, a 6.3% increase year-over-year.

R&D expense, inclusive of stock-based compensation, was $69.7 million, up 4.6% year over year. We ended the quarter with 1,153 R&D employees, essentially unchanged from a year ago. Total Alarm.com headcount was 2,055, which is flat to September 30, 2024, even as we made several acquisitions.

GAAP net income attributable to common stockholders was $34.4 million, or $0.66 per diluted share, compared with $35.3 million, or $0.65 per diluted share, a year ago. Non-GAAP adjusted net income grew 22.3% year-over-year to $48.3 million, and non-GAAP EPS increased 26.8% to $0.90 per diluted share. Adjusted EBITDA grew 19.3% year-over-year to $66.2 million. Adjusted EBITDA margin was 23.7%, approximately 200 basis points higher than in the year-ago quarter. These comparisons use revised non-GAAP definitions we adopted earlier this year applied to both periods.

Much like with hardware gross margins, the year-over-year expansion in adjusted EBITDA margins can largely be attributed to the temporary benefit associated with tariff cost recoveries that I mentioned earlier. Q3 was a bit of an anomaly in that regard.

We produced $69.5 million of free cash flow in the quarter, representing approximately 105% conversion of adjusted EBITDA to free cash flow. Through the first nine months, free cash flow totaled approximately $156.3 million, with cumulative conversion from adjusted EBITDA of 90%. We ended the quarter with $534.7 million of cash on the balance sheet.

We repurchased approximately 241,000 shares for $13.5 million during the quarter, bringing our year-to-date repurchases to approximately 1.2 million shares for $58.5 million. We continue to operate under the $150 million buyback authorization our Board approved earlier this year.

I'll turn now to our financial outlook. For the fourth quarter of 2026, we expect SaaS and license revenue of between $194.6 million and $194.8 million, representing approximately 8% growth at the midpoint.

For the full year 2026, we are raising our SaaS and license revenue outlook to between $756.1 million and $756.3 million, an increase of $2 million at the midpoint from our previous guidance. This represents approximately 9.7% growth for the year. We are raising our total revenue guidance to be between $1.1011 billion and $1.1113 billion, including hardware and other revenue of between $345 million and $355 million. And we're raising our non-GAAP adjusted EBITDA outlook to between $227 million and $229 million, an increase of $6 million at the midpoint from our previous guidance. This implies an adjusted EBITDA margin of approximately 20.6% for the year.

Our fourth quarter outlook reflects the absence of the temporary tariff-related cost recovery benefit recognized in Q3, together with near-term pressure from higher memory costs ahead of the full effect of our pricing changes. We anticipate hardware gross margins of approximately 20.5% in Q4. Together, these hardware effects represent approximately $6.6 million of sequential EBITDA headwind.

Fourth quarter marketing spend also includes our large annual partner event, consistent with our normal expense seasonality. Non-GAAP adjusted net income for 2026 is projected to be between $161.2 million and $162.6 million, or $3.02 to $3.04 per diluted share. This increases our EPS outlook by approximately $0.10 from our August guidance. EPS is based on approximately 56.3 million weighted average diluted shares outstanding for the year.

We currently project our non-GAAP tax rate to remain at approximately 21%. We expect full-year stock-based compensation expense of between $32 million and $33 million.

Before turning to our preliminary view of 2027, I want to comment on our annual planning process, which is well underway. We continue to prioritize organic reinvestment based on the returns we can earn across the business. Each year, we review our existing initiatives and assess their progress to determine where to continue investing and where to reallocate capital.

As Steve discussed, CellGate adds another recurring revenue business built around connected devices. We expect it to contribute between $15 million and $20 million of SaaS and license revenue in 2027, with modestly dilutive SaaS gross margins, accretive hardware gross margins, and dilutive adjusted EBITDA margins for the next couple of years. We believe it provides us with another solid growth vector in our commercial and SMB business, and we see longer-term opportunities to expand profitability as its recurring revenue base scales.

Our preliminary outlook for 2027 includes SaaS and license revenue of between $815 million and $820 million. We anticipate approximately $360 million to $370 million of hardware and other revenue, implying total revenue of approximately $1.175 billion to $1.19 billion. We currently project non-GAAP adjusted EBITDA of between $240 million and $245 million, implying an adjusted EBITDA margin of approximately 20.5% for the full year at the midpoint.

As Steve discussed on our earnings call a year ago at this time, we have been operating with a target of exiting 2027 with adjusted EBITDA margins in the 21% range, assuming broadly consistent revenue mix and gross margin profiles. Our preliminary look at 2027 places us near that target with full-year performance at around the 20.5% level.

Our ability to squeeze out another half a percent by end of year will likely be heavily dependent on how hardware margins trend in the face of substantial component cost increases and tariff pass-throughs, as well as the choices we make in 2027 regarding organic reinvestment into the business, including newly acquired CellGate.

Generally, investors should anticipate that if hardware revenues in 2027 exceed our forecast, then adjusted EBITDA dollars will be flat and margins will be pressured some. We believe passing through these external and somewhat extraordinary cost increases without an additional markup from Alarm.com is the right approach for our service provider partners and their customers, reinforcing the long-term alignment that underpins our business model.

We will continue to firm up our estimates and will provide formal annual guidance for 2027 when we report our fourth quarter 2026 financial results early next year.

In closing, we're pleased with our results through the first nine months of the year. We remain focused on expanding our recurring revenue base, sustaining earnings and cash generation, and deploying capital toward opportunities that create long-term value for our shareholders.

With that, operator, please open the call for Q&A.

Operator

[Operator Instructions]

Our first question comes from Adam Tindle with Raymond James.

Fragen und Antworten

Adam Tindle

I just wanted to start, Kevin, and maybe Steve, you can jump in here. I was doing the math on the initial guidance for the SaaS revenue in 2027. And if I've got it right on an organic basis, ex-CellGate, I think it's just north of 5.5% and maybe even close to 6% growth organic, which going back through my notes is a tick above where you initially started out 2026 despite a higher revenue dollar base.

So I'm just wondering, it seems like this business or this line item is maybe poised to accelerate a little bit. Just what are the drivers that lead you to a robust initial forecast and the momentum that you're seeing in the business on the SaaS side?

Kevin Bradley

Yes, hey, Adam. Thanks for the question. You know, I think we've seen a myriad of things that are leading us to maybe appear a little bit more bullish than we were around this time last year. We continue to see the growth initiatives sort of execute at a level slightly above what our expectations were.

I think as you've seen over the past three quarters, we've continuously operated above the high end of what our historical range was in terms of revenue retention, which has been a nice tailwind that will lead some RMR roll-forward this year. And the residential business, outside of that, in terms of account creation and ARPU specifically related to video, has been a bit of a positive for us as well.

Stephen Trundle

Yes, Adam, good question. I think Kevin probably hit it all. I just would generally say some of the areas that are growing are reaching a bit more scale, so we're getting a little uplift there.

Adam Tindle

Got it. Okay. And maybe just as a follow-up, Steve, you mentioned sort of the industry developments in your prepared remarks. I wanted to double-click on that. Obviously, with ADT, good acknowledgment of value. I wonder, you know, how that could potentially change your relationship with ADT. Is this maybe an opportunity to re-engage? I know it's probably very preliminary, but just some thoughts there.

And the other one that you didn't mention was Apple and their announcement to kind of, you know, re-enter or whatever we want to call it in the home. I wonder if you might just opine a little bit on that announcement as well. Thanks.

Stephen Trundle

Sure. Sure. Yes, with regard to Apple, so I guess the way we look at their entry is we welcome any type of Alexa-like interface coming from Apple that may sit in the home and compete with both Alexa and the Google Home device. Those tend to be devices that we like to support and that drive a lot of user engagement.

And of course, over the years, we've always been pretty solid in our support for all of the Apple interfaces, whether it be CarPlay or Siri or anything, all iPhone devices. I think we were the first to build a security app on the iPhone. So general excitement that we now have a device coming in from Apple.

Not that worried about some of the DIY products, I guess I would say, on the LG cameras and things of that nature that don't really intersect with our type of customer, but I think our premium customer may well have a desire to have a device in the kitchen that provides us another interface. So general, I'd say, enthusiasm for supporting the device.

With regard to the Thrive deal that I mentioned, yes, I think we'll have some opportunities to re-engage through time. I mean, we probably need to give them a month or so to let the dust settle and to figure out sort of the strategy. It's not as if we've ever really, by the way, sort of disengaged, if you will. We talk to the existing ADT management team regularly and have a good relationship there.

I think my expectation at the moment is that that will be the team going forward. And so I would expect to maintain the engagement, look for some opportunities that are maybe win-win, that we can collaborate on and kind of keep going. I don't know that I'm expecting a fundamental change of any sort at this moment, just sort of a public-to-private shift.

Operator

[Operator Instructions]

Our next question comes from Steven Sheldon with William Blair.

Matthew Filek

Hey, everyone. You have Matt Filek on for Steven Sheldon. Can you provide some more color on the growth segments? What was their percentage of SaaS revenue and rough growth rates for the quarter? And then what did you embed in your early look 2027 guidance for these growth segments?

Kevin Bradley

Yes, Matt, thanks for the question. I think the way we're referring to the growth initiatives this quarter is that cumulatively through Q3 and for the full year based on our new outlook, we're still expecting them to be about a third of revenue and growing in that 25% to 30% range. There's really no real change to that. They performed slightly better than we thought in Q3, so that's kind of basis points better than we thought, but generally in line.

As we get into next year a little bit, you know, the expectation has always been that it's sort of reverting back to the 20% to 25% sort of aggregate growth range that we've been referring to for the past several years. So that's what our current expectation is in that first look we gave.

Matthew Bullock

Great, thank you for that color, Kevin. And then in your core residential business, I think you have historically talked about blended residential ARPU roughly $5 per subscriber per month, but with increased camera adoption and upselling opportunities, how should we think about where that blended ARPU stands today and the potential for further upside to that over time?

Kevin Bradley

Yes, I would say that that's, on new account creation, that's been moving steadily up to the tune of 5% or so per year. So if you rewind the clock a couple of years, for example, we would have said probably around $5. What we've seen over the past couple years with video specifically, as we've spent a great deal of R&D dollars on building out that solution, is that the ARPU, when you're taking video, has actually grown by about 30%.

So when you combine that with our video attach rate, you wind up getting probably a 10% or so cumulative increase in new account ARPU over that two-year period. So I think about that more as like the $5.50 range at this point.

Matthew Bullock

Great. Very helpful. Thank you.

Operator

[Operator Instructions]

Our next question comes from Jack Vander Aarde with Maxim Group.

Jack Vander Aarde

Steve, maybe keep it short. You provided an update last quarter on the commercial fire opportunity and offering that you announced. It sounded like that was a pretty meaningful long-term driver. How's that progressing? Any material updates to note there?

Stephen Trundle

Yes. Good reminder, Jack. That's—it's progressing. We've now gotten to the point that I think we have over 600 service providers that have installed at least one service—not a test unit, but one commercial paying unit. ARPU is about where we expect it. We're building momentum there.

We've got a couple of UL listings to continue to sort of grab, UL being just the ratings that you put on the communication device. So still have a little work to do there to get to the full TAM, but early engagement with our partners is solid and looks like things are going well there so far.

Jack Vander Aarde

Okay, great. And then maybe just separately, on the international business specifically, I appreciate, Kevin, your comments on the kind of the combined aggregate growth businesses. As far as international goes, it's not a routine metric that you provide, but it did hit that milestone of over a million subscribers, which is great to see.

Just any general comments there, how international's been, how new account creation is trending, anything you can provide there? Thanks.

Stephen Trundle

Sure, Jack. Yes, that was an exciting milestone. International is still growing at a rate faster than the overall consolidated business, but relative to our goals, has been a little bit slower—not a little slower than we had hoped.

I think that on the residential side, the international consumer, particularly in Europe, is probably feeling more pressure now even than what we sense here in the U.S., particularly around fuel prices. So we've been focused a bit more on commercial, getting some traction there, getting decent video attachment on the commercial accounts.

And then we've got, I think, a decent pipeline at the moment of opportunities. We're having some success with MSOs or carriers outside of the U.S. So we've got a couple of pipeline opportunities there we're excited about.

So it's continuing to move. I'd like to see it accelerate and really be kind of an accretive driver to the overall set of growth initiatives. At the moment, it's probably, of the ones we talk about, the laggard, but still growing faster than the consolidated business.

Jack Vander Aarde

Okay, great. I appreciate the time, guys. Thank you.

Operator

I'm not showing any further questions at this time. This does conclude today's conference. We thank you for your participation. You may now disconnect and have a wonderful day.

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