Okay. Thanks everybody for joining us today. My name is Adam Tindle. I cover the IT supply chain and connected devices here at Raymond James. Very happy to be here with the team from Alarm.com. We have Steve Valenzuela, who is the CFO of the company. We also have David Trone , who is the VP of IR, participating in meetings. We will do a fireside chat format for this presentation here. We'll keep it fairly informal. If you do have a question in the audience, you'll have a button to click within your application here that you could submit a question. That will just email a question to me. If you'd like to skip that step and email me directly, it's adam.tindle, T-I-N-D-L-E, @raymondjames.com, and I'll be happy to get your question in for Steve.
Steve, I know that there's going to be various levels of investor education here in the audience, so I figured we would start with a fairly high level view of the core market for this company. For Alarm.com, for those that are not as familiar, if you could maybe set the stage for the quick history of the company, the size of that core residential market, the penetration level, how far we are along in terms of subscribers, and what Alarm.com's competitive position is. I'll throw you a four-part multi-parter right at the beginning to wake you right up.
All right. Thanks, Adam, and thanks for having us. This is a great opportunity to communicate with some international investors I know, and this is always a great conference. Certainly, as we were talking, I hope we can do this in person next year. Let's all hope. Again, good morning or good evening, everyone. This is Steve Valenzuela. Before I begin, I do want to say that we do have an investor presentation on our website. If you go to alarm.com, under Events, you'll see a nice investor presentation, which gives you a good background, also has a timeline there, and also has a safe harbor, which I need to say that this presentation is subject to the safe harbor.
Read that, of course. Also separately, there's a separate group of videos, and some of those are customer testimonials about Alarm.com. That'll give you some good background as well. To start to answer the four-part question, let me give you a little bit of background, how the company was started. Steve Trundle, the CEO, founder of the company, was CTO of MicroStrategy in the early.
He was getting an alarm system installed, and he asked the installer, "What happens if somebody cuts that wire?" The installer says, "You have no security system." Steve realized that there was an opportunity here, being a technologist and a CTO. To make a long story short, he incubated Alarm.com within MicroStrategy from 2000 to 2008, then spun out Alarm.com in 2008, with ABS Capital as an investor. Then that was right around the time, interestingly, that Apple came out with the iPhone and the App Store. It was very good timing.
The other major innovation that Alarm.com came out with is to take the plain old security system, whereas in the past, you could only go in your control panel at your home and turn off and turn on your alarm system. Another innovation that Steve and team came out with was to make the security system interactive, meaning you can use an app. We were actually one of the first apps in the Apple App Store, where you can use an app, and outside of your home, you could disarm and arm your alarm system. That was around 2008. Also important to mention, around that time, Alarm.com was trying to do DIY. We were trying to sell out of Best Buy, out of the office, and realized it was going to be a very long haul.
Steve and team realized that there's all these dealers out there that are providing security systems, and so started signing up dealers. Dealers started getting very good success rates in terms of signing up new subscribers, and that kind of built up to the point where 2012, we got to 1 million subscribers, and then next year we got to 2 million and really went up from there. Today we have over 6.8 million subscribers, and we have over 9,000 dealers. It really took a period of time to get the inflection point with the number of dealers we needed. We call these dealers service provider partners because they truly are. Even though they're independent businesses, they really are partners.
We work closely with them to provide them the software that they use to provide the security system and the smart home to their end customers, either residential or commercial. When you look at the go-to-market, if you will, for Alarm.com, again, we actually focus on technology. We focus on the software. We provide the software for the dealers to be able to provide the alarm systems and the security system and smart property systems to the end subscriber. The dealers are focused on the marketing, sales, and installation. It's a great relationship, and we provide a lot of technology that a lot of investors don't realize for the dealer as well to better operate their back end, to be able to interact with the central station when there is an alarm. The Alarm.com dealer portal obviously enables that connection.
We don't actually handle the alarm itself. That's handled by the dealer themselves. There's a lot of analytics that the dealers get from the Alarm.com system to be able to determine what's happening with the alarm system, to be able to add new subscribers. It's all through the Partner Portal. Our solution is a hosted software that we actually host for the dealers and operate the software for the dealers.
When you look at the, kind of going to your next one part of your four-part question here, is the market potential. The market is very large because we operate in a number of different segments. So, if you think about the history of the company, starting with North American residential, even today, of the 140 million homes in North America, only about 24 million-25 million of those have professionally installed monitored security systems. Of those, and it depends upon which data point you look at, about 10 million or so probably have interactive security systems. Alarm.com, at the beginning of this year, we said we had 6.8 million interactive subscribers. We have a good share of the market there, and that's just North American residential.
Then you think about commercial, which is an area that we really got into just in the last 2.5 years. The market for commercial is about $4 billion in terms of security systems. Commercial is interesting in that there is a higher penetration of security systems with commercial. Again, most of those are the legacy systems that are not interactive. Again, think about Alarm.com as being an app-based interactive security system where you can interact with your alarm system outside of your property. If you have a restaurant or you have a series of chain of retail stores, you can actually use the Alarm.com app to be able to see what's happening in your restaurants, and you can manage access to your restaurants for your employees, and you can monitor what's happening around your property.
Those are really a big commercial, a big opportunity for us. International as well is a big opportunity. We started investing in international right around the time we went public in 2015. Today, we have a number of partners internationally, including Securitas is a good partner of ours. They've been expanding into a number of countries. We have dealers in both Latin America, Europe, and Asia. Last quarter, we signed an agreement with ADT International, Johnson Controls, which we think is a great opportunity. It's not the same ADT as ADT in North America. It's a different company. We think there's a good opportunity with Johnson Controls to expand internationally. We think international is a growth opportunity for us. Over the last couple of years, one thing that's been a major driver of growth has been video.
The adoption of video has been very strong as the video cameras have really gotten a lot better with the technology and then the innovations that we've come out with Video Analytics, where you get smart alerts, and it makes the system a lot more smart and provides a lot of value to the end subscriber in terms of being able to tell what's happening in your property. Video Analytics is a big growth area for us and an area where we've actually driven a lot of innovation, and we continue to innovate in that area. I think that kind of gives an overview, if you will, of the market opportunity, and we think we're in the early stages of a long-term growth cycle for both the smart property as well as security systems.
We think over the next 10 years every property will be a smart property, given all the features and capabilities. We're expanding into water. We have a Water Valve+Meter that we recently announced that we think is a great opportunity to protect properties from water damage, which is typically 10 times the insurance claim compared to fire. Then we have the other segment as well with EnergyHub at PointCentral. We have a wide opportunity, if you will, for both for the smart property and the security system.
Yep. That's a helpful overview, Steve. Thank you. A lot for investors to think about there. I think the way that a lot of investors will simplify it would be to say, we've got the core market, how the company started, this kind of residential, domestic residential market. We've got the international opportunity that you talked about. We've got the commercial opportunity that you talked about, some of these other things like EnergyHub, et cetera. I just want to stay on the core residential market for a moment, given it's the largest and longest standing business under the umbrella.
You touched on this a little bit, the go-to-market there is different than some of the smart home products that investors might be more familiar with on the retail side. Just briefly touch on the go-to-market, that service provider channel, and I guess more specifically, help investors with how the pricing model works for dealers. Why do they choose to partner with Alarm.com? What does pricing for a core residential dealer look like?
Yeah. We very early on, again, around 2008, 2009, started partnering with these service providers, and we really provide them a lot of support, a lot of training. We've invested in a lot of technologies to help the service provider and their technicians to be able to be very efficient, to be able to remotely diagnose if there's a problem later with a subscriber's system, to be able to have a service provider quickly be able to come up to speed, because again, we provide all the technology, so we host it.
When a service provider becomes a dealer of Alarm.com, they don't have to invest in technologies. They have to invest in training, of course, but we provide the technology. We provide what's called the Dealer Portal. A dealer comes online, they actually start adding subscribers into the Dealer Portal. The way the economics work, we don't charge the dealer for adding a subscriber. We charge the dealer on a per month basis, the ARPU, based upon the configuration of the end subscriber system.
To give you an idea of a residential system, let's say a dealer has installed an average system into a home, and it might have some smart features like a thermostat and some cameras. The average they might be charging the end customer, the residential customer, might be anywhere from $50-$55 per month. Our average ARPU that we charge the dealer is in the mid to upper $5 per month. Again, it's kind of like a cell phone plan. The more features that the end subscriber has, the more we charge the dealer and the more they charge the end subscriber.
What we've done is, again, that dealer channel has been to us, and we've not raised prices to the dealers. What we do is we provide incentives to the dealers as they get more volume. The next 1 million subscribers, they get a little bit lower discount, if you will. What we've been really focusing on is providing the subscribers more of technology that allows the service provider to charge more and adds more value.
An example being video and then Video Analytics. If a dealer has a customer that has video, they're probably charging that customer a bit more, and we're probably charging that dealer in the upper end of the $5 range. If they have Video Analytics, which really provides a lot of value add, and in fact, some dealers are just going standardizing with Video Analytics because it's so compelling.
If a customer has video, we might charge the dealer closer to $6.50 or $7 a month, because we typically charge $0.80-$1 more to the dealer if the customer has Video Analytics. We focused on providing more innovations that allow the dealer to be able to monetize more and allows Alarm.com to charge the dealer more, but the economics work well for everybody. The end subscriber gets a better system, the dealer is able to monetize that, and Alarm.com is able to monetize that. When you think about Alarm.com, we're really a software company. We provide the SaaS operating system for the smart property, that's really the area that we focus on. Over 70% of our revenue is recurring SaaS revenue. We do have about 30% of our revenue being hardware.
About 65% of that hardware are video cameras because video has done so well. Our goal really is to drive down the cost of hardware over time so that we drive the high recurring SaaS revenue. When you think about the historical trend rates in terms of retention, we've talked about in the past, retention a number of years ago was 92%, and now the retention is 94% in terms of subscribers. We're actually seeing a continued nice little uptick in retention as the systems become more valuable. It's one of these things where once you have an Alarm.com system, the benefits you get are just so compelling. It's not just the alarm system, it's fire, it's carbon monoxide, but it's also all the smart features.
Being able to have the convenience of being able to let in your housekeeper, your dog walker, being able to tell if your garage door is open, being able to remotely close the garage door, open the locks to your house, seeing who's around your property. These are things that become very compelling, and you just get used to it, and you really don't want to give it up. It's very sticky for the end subscriber as well, with all these features.
Right. That take rate, so to speak, is fairly light relative to the overall dealer's contract. Just $5 or so a month, right? Makes sense from their standpoint. I want to zoom in on just kind of a near term debate. You addressed a large dealer's announcement to partner with Google on the last call. We've seen partnerships like this in the past actually have little material impact to Alarm. Actually, specifically a Google partnership with a different dealer really had no impact from Alarm. Obviously, we've seen a big pullback in the stock and investors are concerned about it. Maybe you could just touch on the message there, recap kind of the message, and what could be similar or different about this versus the last time Google tried to do this.
I think that, well, first of all, the dealer, we don't like to talk too much about our dealers because they're customers. I would say that this dealer has publicly said that Alarm.com is a great partner of theirs. We power over 3 million of their subscribers, and we work closely with this dealer, we have a great partnership with them. I can't really comment too much about the Google relationship. It'll be interesting to see, but we're excited about the opportunities with all of our dealers, including this dealer. We think the technology that we have is pretty complex and pretty compelling, because we have to integrate with all these different control panels, with all these different third party devices.
We integrate with Sonos, we integrate with the garage door opening companies, Rain Bird Sprinkler Systems. That takes a lot of development, a lot of technology. When you think you multiply that by many different countries, the complexity is really there. When you think about with this specific dealer, we got the relationship with this dealer back in March of 2017 when we acquired the business that was licensing the software to this dealer, then we started working with them on their new platform that is Alarm.com. That took two years to come out with that solution. It's doing really well in the marketplace, by the way. These are very complex systems, we're continuing innovations. We're continuing the Video Analytics capabilities, the potential.
We feel we're in a very good position, and we have great dealers and great partnerships, so we'll see. I think it's too early to tell, but I think if anything, it perhaps makes people realize that this is a growth market, right? If a company like Google is looking at this and continuing to make investments, they probably want to have more of their devices in the home, which makes sense. We do integrate with the Nest Thermostat. The Nest Thermostat is actually pretty good. We have our own thermostat, but we integrate with that. We don't integrate with the Nest Cam, and I guess perhaps going forward, we might. That might be part of the initiative.
I think if anything, it shows that just like we believe, Stephen Trundle from the very early days said this is going to be a long-term secular growth industry for many, many years, and having a presence in the home is really valuable. I think that's what Google realizes, and that's I'm sure others like Amazon and Apple and Samsung and others and LG are also looking at this and realizing the same. I think if anything, it just validates the importance of this market.
Yeah. Maybe you could touch on, it wasn't too long ago that you actually introduced a new software platform product with that specific dealer, the command and control platform. It seems like everything that we can hear on the numbers that the dealer reports and stuff like that, and the way that you guys are talking about it, that platform has been a success. Maybe you want to just quickly touch on how long that took to develop, what kind of uptake that you're seeing there, and do you think that's a product that will continue for some time now?
Yeah. That product, again, the engineering work started on that after we acquired the legacy product, Pulse. The prior company we acquired was licensing to this dealer. That was in March of 2017, and then this dealer came out with their command and control about two years later in the beginning of 2019. It took two years, and that is Alarm.com software.
It took two years to be able to take the various look and feel that this dealer wanted for their, what they call the command and control, and that's starting with Alarm.com software. These are very complex. We had to integrate with different panels, and so it takes quite a bit of work, and there's a lot of complexity there. Yeah, I would say that from everything we've seen, we're very pleased with the success of command and control.
I think they are also very pleased with the success. It's a very good product. Again, it's Alarm.com software that we host and we operate for this dealer. It's a little bit different version of what we have for other dealers, but it's still the Alarm.com platform that our other dealers have. It's just that this dealer has a little bit different look and feel and some other different integrations. Other than that, they get the benefit of the Alarm.com technology, just like all of our 9,000 other dealers and the video and data analytic capability. The only thing I would say is that for this dealer, we don't sell as much hardware. Typically, they don't get the cameras from us, which is fine. Again, hardware is simply an enabler for SaaS.
The trend over the years is one of the early innovations, again, was the radio module for making the systems cellular based versus landline, which was the earlier systems. Today we actually license the radio modules to the control panel manufacturers. The control panel is the brains, if you will, that goes into your closet in your home for the security system. We don't make those control panels. We provide technology to be able to integrate into that control panel and then the radio module. Again, we're licensing that radio module now, so we're selling fewer of the radio modules when we used to sell millions and millions of dollars of radio modules. We're fine with not having as much hardware revenue.
I'm getting to an emailed question. Obviously, the heart of the question is understand that the potential headwinds from that announcement with Google. Is there, maybe stepping back a bigger picture, where this is showing further investment in the smart property in general? Would you expect to see, rarely do we see Google do something and then Amazon or Apple, these other big players, not respond. As you think about a crystal ball and what those other big players could do, how do you think that would develop, and would Alarm.com potentially participate in something like that with them?
Yeah, I think that's an interesting question. Again, I can't specifically comment on anything there, but I would say generally, it's a very logical conclusion that it's a big to get into the home, and the ability to get into the home has been recognized certainly by Amazon with Amazon Alexa, they've done quite well. Although I kind of feel that the voice assistants are kind of waning a little bit, where people are maybe not using them as much, but I think the value of being in a home certainly is recognized by Amazon. I got to imagine Apple is looking at this as well, and Samsung, LG. I think if anything, like you said, it probably does perhaps get people to look and say, "Huh, what is Google doing here?
What should we be doing? I think it just highlights the importance of the industry, and I think Alarm is in a great position. We have a great market position. We have great dealers. We have the lion's share of the market. These relationships we built, if you think about it's been 12 years where we built these relationships with these service providers. They've standardized a lot on Alarm.com because of the technology, because of the complexity. Even though systems are becoming easier to use for the end subscriber, that makes it actually harder, if you think about it from a technology point of view, to be able to make all these innovations and with Video Analytics. I think Alarm.com, given our reputation in the industry of being a great provider, great partner to the service providers, providing great support.
We have a great support center in Minneapolis, Minnesota, where we have a dedicated team that all they do all day long is answer questions for the service providers, even if it's about Amazon Alexa or Google Home. We get on the phone, when the technician is in the home or the business, we're helping them to make sure if there's any issues. We're continuing to innovate, because again, a lot of investors don't realize almost half of our software is supporting the dealers and their back end.
Even this large dealer has dealers who need to have that software and the Alarm.com Partner Portal. There's a lot of innovations and analytics for the dealer that we've developed over the years that makes their business operate a lot more smoothly. Yeah, I think it just validates that this is a very good growth area and you want to be in the home. You want to be in the home.
Yep. Keep those questions coming. Again, if you have questions, if you want to email me directly, adam.tindle@raymondjames.com. I'll be happy to get those over to Steve. We've got about 15 minutes left, Steve. I want to see if we can tackle international, then commercial, then 2020-
Sure
near term stuff. Let's start on international, just because we've got an international flavor to this conference, international audience of investors that are largely dialing in here. You recapped earlier the core residential, how it went from 1 million subscribers to 2 million to 6.8 million and hits this S-curve, so to speak, when you get these next million subscribers takes a shorter period, right?
Right.
Maybe just compare the timeline that you saw in residential to what you're currently experiencing in international and just some of the key milestones that investors should look out for.
Yeah, that's a very good point. I think international has taken longer, if you will, because of each of the different countries we have to establish relationships with different carriers, and then there's different certifications required in those countries, and then, of course, local language support. Today, the good news is we're in over 40 countries, and we've done all that heavy lifting, if you will.
There still obviously is a lot of opportunity internationally. We're at the very beginning stages, and we've certainly not hit that inflection point yet in international. Recently we signed up ADT International, which is owned by Johnson Controls, and they're a new dealer we announced last quarter. We have Securitas, and we have a number of dealers in different countries. We're seeing good opportunities in Europe, Latin America, and just starting to see some opportunities in Asia.
We have dealers in Australia and New Zealand. I would say that international is still at the early stages of, and not hitting that inflection point yet. Prior to COVID, we had a number of new dealers who were launching this year, which has been delayed. Probably international has been more impacted by COVID and more slowed down by COVID because of the lockdown was more severe in some of the countries, and that slowed down some of our new dealers who were rolling out the Alarm.com system to their installed base.
We think it's just a matter of time. It's just a slowdown of the implementations, and they're continuing to make those innovations and add those new subscribers. It's just slowing it down a bit. We think international is a great opportunity. If you think about over the years, future years, international should be 25%-30% of our revenue, and today it's only 2%-3% of our revenue. We think there's quite of opportunity, but we're not at that inflection point yet for international.
Okay. Helpful. Then maybe a similar question for commercial. You touched on the size of the market a little bit. OpenEye obviously gives you some new dealers, new customers. Just where are we at? When does the S curve really start to accelerate there?
Commercial is, I would say, it's probably bigger than international right now, but both have very good growth opportunities. Commercial, we actually really came out with Alarm.com for Business about 2.5 years ago, and that's really geared towards small business. If you have a restaurant chain with five or six different restaurants, you could use Alarm.com for Business, and you can manage your property. We came out with access control, which allows the owner to provide access for their employees that they can give an electronic key to the employees. Alarm.com for Business has done quite well and to the point where we now acquired OpenEye in October of last year, which expands us into the enterprise segment of the commercial market, which is about a $4 billion market opportunity.
The difference with OpenEye is that their platform is sold through large integrators that sell into, like Olive Garden, Bed Bath & Beyond, Gonzaga University, and many other customers, some of those we can't name, that are big companies that have many franchisees, or they have theme parks and such. So there's quite a big opportunity. I will say that just like international, commercial has been more impacted by COVID than North American residential, because of certainly some of the restaurants have not opened, some of the commercial stores have not opened. We think, again, it's just a matter of just a push out, if you will, of time. The pipeline is very good for OpenEye, and I think once things open up, I think we'll continue to see good growth in commercial.
Commercial again is, most commercial businesses do need a security system, but as I mentioned, most of those are the legacy systems. We think there's a lot of opportunity for commercial to provide the interactive systems of Alarm.com both for OpenEye as well as for the Alarm.com for Business. When you think about it, the world is not getting any safer for commercial businesses or residential customers. They really need a good security system. With Video Analytics like Alarm.com, they can see what's happening around their property, make sure their employees are safe, and make sure that their properties are safe, even if they're not at the establishment. We think both of those are very good growth opportunities, international and commercial.
Yep. I want to zoom in just real quick with the remaining 5 to 10 minutes that we have here. 2020 performance was fairly different than a lot of businesses that we've seen out there. Your recurring revenue model and the durability of the business was certainly on display. Maybe, for investors who haven't seen the story or haven't kind of lived through it, walk us through the impact that you saw, and then where we stand today.
Yes. We did see, in March and April, as we talked about on the Q1 call in May, that we did see an impact from COVID shutdown, where March and April, we started to see, with the shelter in place, the installations being at about 70% of the pre-COVID levels. The retention, the good news is retention has stayed solid. If not, it's actually ticked up a little bit, which is great. We started to see North America in a quick recovery. Not all dealers, certainly some dealers are doing better than ours, but I think there are some macro trends that are really driving the need for the security system for the smart home that have really helped our dealers. Our dealers adapted pretty quickly to being able to go into homes, even with COVID, with protective equipment.
What's interesting, too, is some of the benefit with people being home is the dealers were able to reach customers, so they were able to get some new customers that way. I think the dealers have just done a good job of adapting to the COVID situation, which obviously is something that, if it wasn't for COVID, we would even have better growth. I think North American residential has done, for the most part, really well. Overall, the dealers are doing quite well given the circumstances. We would certainly be doing much better if it wasn't for COVID.
Yep. Entering this year. Nature of the business.
Yeah, because of the recurring SaaS nature of the business, it continues to grow, it continues to evolve. The dealers we have, again, you have 9,000 dealers out there that are every day putting in new systems. Certainly with COVID, not at the same rate, but we continue to see that benefit.
Okay. We've got about five minutes left. I've got a couple emailed questions to get to. I do want to ask, so entering 2020, you explained that there would be some investments that might limit some of the normal operating leverage near term, but you're obviously very thoughtful about long-term opportunities. Maybe just take us through how those investments that you spoke about are playing out, and really how investors can think about operating leverage going forward. What's the right level of investment for this company?
I think we've done a good job of balancing both the level of investments and provided a good level of EBITDA and profitability and cash flow at the same time of investing in the business. We do invest a lot in R&D, and even in this period of COVID, we've actually continued to hire and actually been able to attract some good engineers, some software engineers we weren't able to hire before.
When you think about Alarm.com, we spend about 25%-26% of our revenue on R&D, because that's really our expertise. There's a lot of innovations we're focusing on, like continuing to expand commercial. There's a lot of features and capabilities we're investing there, both for OpenEye as well as for Alarm.com for Business. International takes investment because you've got to train, you've got to get the certifications in the countries.
Video and Video Analytics is an area of investment for us. We're continuing to evolve our AI system to make it smarter. For example, for a commercial business to be able to do line counting, to be able to tell if a commercial business needs to send more employees to a store, to be able to do A/B testing. There's a lot of areas of investment there. I think the performance this year in a COVID environment and the durability, as you mentioned, of the model and of the revenue shows the areas we've invested have been appropriate and have a good return. When you look at over the last five years, we've more than doubled the revenue, we more than doubled the EBITDA.
I think, when investors think about Alarm.com, they should think about a team that is conscious of both the level of investment and providing a good level of profitability. We do think that longer term, certainly there's even today we could have a lot higher profitability, but it would be at the expense of not investing in the areas that we think will provide a long-term growth trend for the company over the next 10 years. It would be a disservice today to have a much higher profitability level and not make those investments, given the opportunities we see with the Water Valve plus Meter we just announced that's coming out, with the Video Analytics, and there's other technologies we're investing in, with the Car Connector that we have.
There's a lot of technologies that we're investing in, and many of those, of course, we haven't discussed, because we're innovating. I think investors should have confidence that we do provide a good level of profitability and a good level of cash flow based on our performance over the last five years. When you look at the M&A and the acquisitions we've done, I think we've done a good job. We've been careful with M&A. We just haven't acquired just to acquire, and pretty much all the acquisitions we've done have paid off really well. Including OpenEye. OpenEye has certainly been delayed with COVID, but we're really happy with OpenEye, and the team there has really done a great job. Then we've got ObjectVideo that we acquired, the Connect piece we acquired, and a number of other technologies we've acquired that actually have done quite well.
EnergyHub is doing really well with residential demand response, given the need to manage your utility and the drain on the utilities and the need to be able to control their energy use. No, we're very pleased with the areas we've invested in. I think when we think about R&D and investments, we think about the return, too. We're not just investing in areas just to drive the top line. We're also thinking about it's got to have an ROI.
Okay. That's helpful. Maybe just the quick take on how investors can think about SaaS and license revenue growth. What's the right level? EBITDA margin, what's the right level? There once was a time where it was 20%+ in each of those, and you had the magic rule of 40 that everybody likes. As I think about long term or even 2021, just maybe take us through what the right levels for what you think the business could support on those two lines.
Yeah, I think that we've be careful not to set too many expectations. We did say when we went public five years ago that we had and we haven't really given a growth trajectory. We're trying not to get hung up on just one year growth rate, because we think over the next 10 years, the growth opportunity is quite compelling. I don't want to really give out a necessarily growth number there. I would say from a profitability point of view, the history of where we've been profitability-wise, we have been around the 20% range. I think certainly makes sense continuing that. At some point, you could certainly see cutting back on R&D, and you could see EBITDA in the 30% range.
If you're investing 26% in R&D today, at some point in the distant future, you could see typical R&D investment would be 12%-14%. You could certainly see 30%+ EBITDA. That would be the wrong thing to do today. I think investors should think that we're making the right investments. We're at about the same level of investment that we told investors we would be, the same level of EBITDA. If anything, we've probably been over-performing on EBITDA this year because of the not traveling and such. I think we're very optimistic, if you will, about the growth opportunities and about the level of profitability we can provide.
Well, I think we're out of time. That was a great summary, Steve. Thank you so much for your time. Thanks to the audience for all your questions. If you do have additional questions that you want me to follow up with that you didn't get answered on this, email them to me. We'll get them to the Alarm.com team. They're very gracious with their time. We appreciate it, Steve. Thank you very much.
Thanks, Adam. Thanks for the opportunity. Have a great day. Thanks, everyone. Bye-bye.