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Accounts Receivable, Net | 9 Months Ended
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Sep. 30, 2025
Receivables [Abstract] |
Accounts Receivable, Net | Accounts Receivable, Net The components of accounts receivable, net are as follows (in thousands):
| September 30, 2025 |  | December 31, 2024
Accounts receivable | $ | 117,785 |  |  | $ | 132,400 |
Allowance for credit losses | (4,576) |  |  | (3,870) |
Allowance for product returns | (2,225) |  |  | (2,448) |
Accounts receivable, net | $ | 110,984 |  |  | $ | 126,082 |
For the three and nine months ended September 30, 2025, we recorded a recovery of credit losses of $0.2 million and a provision for credit losses of $1.4 million, respectively, as compared to a provision for credit losses of $0.1 million and $0.5 million for the same periods in the prior year. For the three and nine months ended September 30, 2025, we recorded a reserve for product returns of $1.3 million and $2.4 million in our hardware and other revenue, respectively, as compared to $0.7 million and $2.7 million for the same periods in the prior year. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from the accounts receivable and notes receivable amortized cost basis (see Note 9) to present the net amount expected to be collected. We estimate the allowance balance by applying the loss-rate method using relevant available information from internal and external sources, including historical write-off activity, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in economic conditions, such as changes in unemployment rates. We use projected economic conditions over a period no more than twelve months based on data from external sources. For periods beyond the twelve-month reasonable and supportable forecast period, we revert to historical loss information immediately. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, we considered various risk characteristics, including the financial asset type, size and the historical or expected credit loss pattern. These risk characteristics are relevant to accounts receivable and notes receivable. Expected credit losses are estimated over the contractual term of the financial assets and we adjust the term for expected prepayments when appropriate. For the three months ended September 30, 2025, we recorded a reduction to credit loss expense for accounts receivable and notes receivable of $0.4 million and for the nine months ended September 30, 2025, we recorded credit loss expense for accounts receivable and notes receivable of $1.4 million in general and administrative expense in our condensed consolidated statements of operations. For the three months ended September 30, 2024, we recorded a reduction to credit loss expense for accounts receivable and notes receivable of $0.1 million and for the nine months ended September 30, 2024, we recorded credit loss expense for accounts receivable and notes receivable of $4.1 million in general and administrative expense in our condensed consolidated statements of operations. The contractual term excludes expected extensions, renewals and modifications because extension and renewal options are unconditionally cancelable by us. Write-offs of the amortized cost basis are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense. Allowance for Credit Losses - Accounts Receivable We identified the following two portfolio segments for our accounts receivable: (i) outstanding accounts receivable balances within Alarm.com and certain subsidiaries and (ii) outstanding accounts receivable balances within all other subsidiaries. There were no changes to our portfolio segments for our accounts receivable during the three and nine months ended September 30, 2025, and no changes to our policies or practices that influenced our estimate of expected credit losses for accounts receivable. Additionally, there were no significant changes in the amount of accounts receivable write-offs during the three and nine months ended September 30, 2025, as compared to historical periods. The changes in our allowance for credit losses for accounts receivable are as follows (in thousands):
| Three Months Ended September 30, 2025 |  | Three Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2025 |  | Nine Months Ended September 30, 2024
| Alarm.com and Certain Subsidiaries |  | All Other Subsidiaries |  | Alarm.com and Certain Subsidiaries |  | All Other Subsidiaries |  | Alarm.com and Certain Subsidiaries |  | All Other Subsidiaries |  | Alarm.com and Certain Subsidiaries |  | All Other Subsidiaries
Beginning of period balance | $ | (4,918) |  |  | $ | (224) |  |  | $ | (3,677) |  |  | $ | (89) |  |  | $ | (3,777) |  |  | $ | (93) |  |  | $ | (3,723) |  |  | $ | (141) |
Recovery of / (provision for) expected credit losses | 139 |  |  | 14 |  |  | (103) |  |  | (70) |  |  | (1,263) |  |  | (136) |  |  | (491) |  |  | (39) |
Write-offs | 381 |  |  | 32 |  |  | 90 |  |  | 2 |  |  | 642 |  |  | 51 |  |  | 524 |  |  | 23 |
End of period balance | $ | (4,398) |  |  | $ | (178) |  |  | $ | (3,690) |  |  | $ | (157) |  |  | $ | (4,398) |  |  | $ | (178) |  |  | $ | (3,690) |  |  | $ | (157) |

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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