알람닷컴(ALRM) 2026년 3분기 실적 콘퍼런스콜: 2026년 가이던스 상향

핵심 요약

• 알람닷컴(NASDAQ: ALRM)은 2026년 3분기 SaaS 및 라이선스 매출이 전년 동기 대비 9% 증가한 1억 9,120만 달러를 기록했다고 발표했다. 총매출은 9% 증가한 2억 7,940만 달러를 기록했다.
• 조정 EBITDA는 19.3% 증가한 6,620만 달러, 마진율은 23.7%를 기록했다. 경영진은 이러한 마진 확대가 관세 관련 하드웨어 비용 회수에 따른 380만 달러의 일시적 이익을 주로 반영한 것이라고 설명했다.
• 매출 유지율은 95%대를 유지했다. 성장 이니셔티브는 매출의 약 3분의 1을 차지했으며, 총 25%~30%의 성장률을 이어갔다.
• 경영진은 SaaS 및 라이선스 매출, 총매출, 조정 EBITDA, 비GAAP EPS에 대한 2026년 연간 가이던스를 상향 조정했다.
• 알람닷컴은 셀게이트(CellGate)를 인수하여 상업용 제품군을 셀룰러 연결 기반 출입 게이트 및 비디오 인터콤 시스템으로 확장했다. 셀게이트는 2027년 SaaS 및 라이선스 매출에 1,500만~2,000만 달러를 기여할 것으로 예상된다.
• 2027년 예비 가이던스는 총매출 약 11억 7,500만~11억 9,000만 달러, 조정 EBITDA 2억 4,000만~2억 4,500만 달러를 제시했다.

주요 재무 실적

2026년 첫 9개월간 잉여현금흐름은 총 약 1억 5,630만 달러로, 조정 EBITDA 대비 90%의 누적 전환율을 나타냈다. 알람닷컴은 3분기 중 약 24만 1,000주를 1,350만 달러에 자사주 매입하여 연초 누적 자사주 매입 규모는 약 120만 주, 5,850만 달러에 달했다.

사업 및 운영 성과

알람닷컴의 핵심 사업인 북미 주거 부문은 경영진의 예상에 부합하는 실적을 기록했다. 견조한 유지율, 신규 계정 생성, 비디오 관련 사용자당 평균 매출(ARPU) 상승이 반복 매출 성장을 뒷받침했다.

회사는 배터리 구동식 비디오 도어폰과 업그레이드된 실내용 카메라로 비디오 포트폴리오를 확장했다. 도어폰은 친숙한 얼굴 인식 기능을 지원하며, 향후 AI 기반 침입 억제 기능도 지원할 예정이다. 프리미엄 실내용 카메라는 400만 화소 화질, 내장 조명, 물리적 프라이버시 셔터를 제공한다.

알람닷컴은 또한 AI 침입 억제 솔루션에 단계별 음성 응답 기능을 추가했다. 이 시스템은 감지된 인물이 보호 구역에 계속 머물 경우 중립적인 메시지에서 더 강력한 경고로 수위를 높일 수 있다.

셀게이트 인수를 통해 상업용 부동산, 중소기업, 다가구 주택 단지, 목장 및 대저택을 위한 출입 게이트 및 비디오 인터콤 제품이 추가된다. 경영진은 미국 내 최대 6,000개에 달하는 펜스 및 게이트 서비스 업체가 자동 게이트를 정기적으로 설치하는 것으로 추정하고 있다. 알람닷컴이 플랫폼 연동을 개발하는 동안 셀게이트는 독립 사업체로 운영될 예정이다.

해외 사업은 가입자 수 100만 명을 돌파하며 연결 기준 전체 사업보다 빠른 성장을 지속했다. 다만 경영진은 유럽 주거용 소비자에 대한 압박과 더 빠른 확장의 필요성을 들어 해외 사업을 성장 이니셔티브 중 상대적으로 부진한 부문으로 평가했다. 회사는 상업용 계정, 비디오 결합 판매, 해외 통신사 및 복수유선방송사업자(MSO)와의 기회를 강조하고 있다.

상업용 화재 부문에서는 600개 이상의 서비스 제공업체가 최소 1대 이상의 유료 기기를 설치했다. 경영진은 전체 시장 기회를 공략하기 위해 추가적인 UL 인증이 필요하지만, 초기 파트너 참여도와 ARPU는 예상대로 진행되고 있다고 밝혔다.

경영진 가이던스

업데이트된 2026년 SaaS 및 라이선스 매출 전망치는 중간값 기준 200만 달러 상향되었으며, 조정 EBITDA 가이던스는 600만 달러 상향되었다. 경영진은 또한 비GAAP EPS 전망치를 8월 가이던스 대비 약 0.10달러 상향 조정했다.

2027년 예비 전망치에는 셀게이트로부터 발생하는 1,500만~2,000만 달러의 SaaS 및 라이선스 매출이 포함된다. 경영진은 이번 인수가 향후 몇 년간 SaaS 매출총이익률과 조정 EBITDA 마진율을 다소 희석시킬 것으로 예상하지만, 하드웨어 매출총이익률에는 긍정적으로 작용할 것으로 기대하고 있다.

위험 요인 및 주시할 부문

3분기 하드웨어 마진과 조정 EBITDA는 경영진이 지속될 것으로 기대하지 않는 관세 관련 일시적 비용 회수의 혜택을 입었다. 이러한 요인의 부재와 가격 인상을 앞둔 메모리 비용 상승이 결합되어 4분기 EBITDA에 전 분기 대비 약 660만 달러의 역풍으로 작용할 것으로 예상된다.

경영진은 2027년 말까지 21%에 가까운 연말(exit) 조정 EBITDA 마진율을 달성할 수 있을지는 부품 비용, 관세 전가, 그리고 셀게이트 투자를 포함한 자체 투자 결정에 크게 좌우될 것이라고 밝혔다.

2027년 하드웨어 매출이 회사 전망치를 초과할 경우, 경영진은 마진율이 추가적인 압박을 받는 반면 조정 EBITDA 금액은 변동이 없을 것으로 예상한다. 알람닷컴은 추가 마크업 없이 이례적인 외부 비용 증가분을 그대로 전가할 방침이다.

애널리스트 Q&A 주요 내용

• 2027년 SaaS 성장 동력: 경영진은 과거 범위를 상회하는 유지율, 성장 이니셔티브의 견조한 실행, 주거용 계정 생성, 비디오 관련 ARPU 상승을 언급했다.
• 성장 이니셔티브: 이들 사업은 2026년 매출의 약 3분의 1을 차지하고 25%~30% 성장할 것으로 예상된다. 2027년에 대해 경영진의 예비 전망은 총 성장률이 20%~25% 범위로 복귀하는 것으로 가정하고 있다.
• 주거 부문 ARPU: 신규 계정 ARPU는 연간 약 5%씩 증가했다. 비디오 ARPU는 2년간 약 30% 증가하여 신규 계정 ARPU가 약 5.50달러로 누적 약 10% 상승하는 데 기여했다.
• ADT와의 관계: 경영진은 스라이브(Thrive) 인수 거래 이후 ADT와의 지속적인 협력 및 잠재적 공조 기회를 기대하고 있으나, 현재 모델에서는 ADT의 알람닷컴 기여도에 근본적인 변화가 발생할 것으로 가정하지 않고 있다.
• 애플의 홈 플랫폼: 알람닷컴은 또 다른 가정 내 인터페이스 지원에 긍정적인 입장을 나타내며 이러한 기기가 사용자 참여도를 높일 수 있다고 밝혔다. 경영진은 언급된 DIY 카메라 제품이 자사의 타깃 고객과 직접적으로 겹치지는 않는 것으로 보고 있다.

실적 발표 컨퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

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.

질의응답

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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