Sign In  |  Register  |  About Sunnyvale  |  Contact Us

Sunnyvale, CA
September 01, 2020 10:10am
7-Day Forecast | Traffic
  • Search Hotels in Sunnyvale

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Arlo Reports Third Quarter 2023 Results

Revenue of $130.0 million, at the high end of guidance range

Annual recurring revenue (ARR) ended at $200.0 million, growing 59.5% year over year

Free cash flow (FCF) of $7.0 million with FCF margin of 5.4% (1)

GAAP EPS of $(0.01); record non-GAAP EPS of $0.09

Successful launch of innovative Essential 2 camera portfolio

Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security brand, today reported financial results for the third quarter ended October 1, 2023.

“Our third quarter results illustrate the power of our services business, which reached $200 million in annual recurring revenue, a significant milestone that grew nearly 60% year over year. This performance drove our solid free cash flow and record earnings per share, and continued Arlo's trajectory of profit expansion," said Matthew McRae, Chief Executive Officer of Arlo Technologies. “We also launched our Essential 2 product line, the largest product launch in our company's history, bringing higher performance and an improved experience to new lower price points. Arlo believes everyone has a right to feel safe and Essential 2 allows us to address a wider audience just as our industry expands into the mass market this holiday season.”

Financial and Business Highlights (2)

  • Q3 total revenue of $130.0 million, an increase of 1.4% year over year.
  • Record Q3 service revenue of $51.0 million, growing 44.0% year over year.
  • Q3 GAAP services gross margin of 73.5% and non-GAAP services gross margin of 74.1%.
  • GAAP net loss per share of $(0.01); record non-GAAP earnings per diluted share of $0.09.
  • Ended the quarter with ARR (3) of $200.0 million, growing 59.5% year over year.
  • Added 197,000 paid accounts in Q3, ending cumulative paid accounts around 2.5 million, growing 48.6% year over year.
  • Successful launch of Essential 2 camera portfolio targeted at creating a lower price entry point into the Arlo ecosystem.
  • Ending cash and cash equivalents and short-term investments balance of $126.0 million, up $2.4 million sequentially.

 

Three Months Ended

 

Nine Months Ended

 

October 1,

2023

 

July 2,

2023

 

October 2,

2022

 

October 1,

2023

 

October 2,

2022

 

(In thousands, except percentage and per share data)

Revenue

$

130,003

 

 

$

115,076

 

 

$

128,157

 

 

$

356,083

 

 

$

371,887

 

GAAP Gross Margin

 

33.2

%

 

 

36.4

%

 

 

28.7

%

 

 

33.8

%

 

 

28.0

%

Non-GAAP Gross Margin (2)

 

34.0

%

 

 

37.3

%

 

 

29.7

%

 

 

34.6

%

 

 

29.0

%

GAAP Net Loss per Share

$

(0.01

)

 

$

(0.08

)

 

$

(0.16

)

 

$

(0.25

)

 

$

(0.40

)

Non-GAAP Net Income per Diluted Share (2)

$

0.09

 

 

$

0.06

 

 

$

(0.05

)

 

$

0.17

 

 

$

(0.03

)

_________________________

(1)

FCF is calculated as net cash provided by (used in) operating activities less capital expenditures. FCF margin is the FCF divided by revenue.

(2)

Reconciliation of financial measures computed on a GAAP basis to the most directly comparable financial measures computed on a non-GAAP basis is provided at the end of this press release.

(3)

ARR is calculated by taking our recurring paid service revenue for the last calendar month in the fiscal quarter, multiplied by 12 months. Recurring paid service revenue represents the revenue we recognized from our paid accounts and excludes prepaid service revenue.

Fourth Quarter 2023 Business Outlook (4)

A reconciliation of our business outlook on a GAAP and non-GAAP basis is provided in the following table:

 

Three Months Ended December 31, 2023

 

Revenue

 

Net Income (Loss)

per Diluted Share

 

(In millions, except per share data)

GAAP

$129 - $139

 

$(0.05) - $0.01

Estimated adjustment for stock-based compensation and other expense

 

0.11

Non-GAAP

$129 - $139

 

$0.06 - $0.12

_________________________

(4)

Business outlook does not include estimates for any currently unknown income and expense items which, by their nature, could arise late in a quarter, including: litigation reserves, net; impairment charges; discrete tax benefits or detriments relating to tax windfalls or shortfalls from equity awards; and any additional impacts relating to the implementation of U.S. tax reform. New material income and expense items such as these could have a significant effect on our guidance and future results.

Investor Conference Call / Webcast Details

Arlo will review the third quarter 2023 results and discuss management’s expectations for the fourth quarter of 2023 today, Thursday, November 9, 2023 at 5:00 p.m. ET (2:00 p.m. PT). The toll-free dial-in number for the live audio call is (888) 660-6387. The international dial-in number for the live audio call is +1 (929) 203-1909. The conference ID for the call is 7749064. A live webcast of the conference call will be available on Arlo’s Investor Relations website at https://investor.arlo.com. A replay of the call will be available via the web at https://investor.arlo.com.

About Arlo Technologies, Inc.

Arlo is the award-winning, industry leader that is transforming the way people experience the connected lifestyle. Arlo’s deep expertise in product design, wireless connectivity, cloud infrastructure and cutting-edge AI capabilities focuses on delivering a seamless, smart home experience for Arlo users that is easy to setup and interact with every day. Arlo’s cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. To date, Arlo has launched several categories of award-winning smart connected devices, software and services, including wire-free smart Wi-Fi and LTE-enabled security cameras, audio and video doorbells, a floodlight, home security systems, and the Arlo Apps: Arlo Secure, and Arlo Safe, AI-based subscription services designed to maximize security through personalized notifications and emergency services for quicker help during a crisis.

With a mission to bring users peace of mind, Arlo is as passionate about protecting user privacy as it is about safeguarding homes and families. Arlo is committed to supporting industry standards for data protection designed to keep users' personal information private and in their control. Arlo does not monetize personal data, provides enhanced controls for user data, supports privacy legislation, keeps user data safely secure, and puts security at the forefront of company culture.

© 2023 Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks and/or registered trademarks of Arlo Technologies, Inc. and/or certain of its affiliates in the United States and/or other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s). The information contained herein is subject to change without notice. Arlo shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for Arlo Technologies, Inc.:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent our expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding our potential future business, operating performance and financial condition, including descriptions of our expected revenue and profitability (and related timing), GAAP and non-GAAP gross margins, operating margins, tax rates, expenses, cash outlook, free cash flow and free cash flow margin; the ability of the Essential 2 product line to allow us to address a wider audience; strategic objectives and initiatives; the recurring revenue business model; expectations regarding market expansion and future growth; and others. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for our products may be lower than anticipated, including due to inflation, fluctuating consumer confidence, banking failures and rising interest rates; we may be unsuccessful in developing and expanding our sales and marketing capabilities; we may not be able to increase sales of our paid subscription services; consumers may choose not to adopt our new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; we may be unsuccessful or experience delays in manufacturing and distributing our new and existing products; we may fail to manage costs and cost saving initiatives, including restructuring initiatives, the cost of developing new products and manufacturing and distribution of our existing offerings. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect our business are detailed in our periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Risk Factors” in the most recently filed Annual Report and Quarterly Report filed with the Securities and Exchange Commission (the “SEC”) and subsequent filings with the SEC. Given these circumstances, you should not place undue reliance on these forward-looking statements. We undertake no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information:

To supplement our unaudited selected financial data presented on a basis consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP total operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP other income (expenses), net, non-GAAP provision for income taxes, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. These supplemental measures exclude adjustments for stock-based compensation expense, restructuring charges, impairment charges, separation expense, amortization of development of software cost, litigation reserves, net, employee retention credit and the related tax effects. In addition, we use free cash flow as non-GAAP measure when assessing the sources of liquidity, capital resources, and quality of earnings. We believe that free cash flow (usage) is helpful in understanding our capital requirements and provides an additional means to reflect the cash flow trends in our business. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP measures, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of our on-going operating results;
  • the ability to better identify trends in our underlying business and perform related trend analyses;
  • a better understanding of how management plans and measures our underlying business; and
  • an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of stock options, performance-based stock options, restricted stock units (RSU), performance-based restricted stock units, shares under the employee stock purchase plan granted to employees and employees' annual bonus in RSU form. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results.

Other non-GAAP items are the result of either unique or unplanned events, including, when applicable: restructuring charges, impairment charges, separation expense, amortization of development of software cost, litigation reserves, net and employee retention credit. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred.

Source: Arlo-F

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

As of

 

October 1,

2023

 

December 31,

2022

 

(In thousands, except share and per share data)

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

51,133

 

 

$

84,024

 

Short-term investments

 

74,916

 

 

 

29,700

 

Accounts receivable, net

 

70,313

 

 

 

65,960

 

Inventories

 

53,496

 

 

 

46,554

 

Prepaid expenses and other current assets

 

11,100

 

 

 

6,544

 

Total current assets

 

260,958

 

 

 

232,782

 

Property and equipment, net

 

5,752

 

 

 

7,336

 

Operating lease right-of-use assets, net

 

12,190

 

 

 

12,809

 

Goodwill

 

11,038

 

 

 

11,038

 

Restricted cash

 

4,079

 

 

 

4,155

 

Other non-current assets

 

3,620

 

 

 

4,081

 

Total assets

$

297,637

 

 

$

272,201

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

82,479

 

 

$

52,132

 

Deferred revenue

 

17,678

 

 

 

11,291

 

Accrued liabilities

 

85,999

 

 

 

98,855

 

Total current liabilities

 

186,156

 

 

 

162,278

 

Non-current operating lease liabilities

 

17,970

 

 

 

19,279

 

Other non-current liabilities

 

3,318

 

 

 

2,949

 

Total liabilities

 

207,444

 

 

 

184,506

 

Commitments and contingencies

 

 

 

Stockholders’ Equity:

 

 

 

Preferred stock: $0.001 par value; 50,000,000 shares authorized; none issued or outstanding

 

 

 

 

 

Common stock: $0.001 par value; 500,000,000 shares authorized; shares issued and outstanding: 94,581,808 at October 1, 2023 and 88,887,139 at December 31, 2022

 

94

 

 

 

89

 

Additional paid-in capital

 

458,015

 

 

 

433,138

 

Accumulated other comprehensive income (loss)

 

237

 

 

 

(107

)

Accumulated deficit

 

(368,153

)

 

 

(345,425

)

Total stockholders’ equity

 

90,193

 

 

 

87,695

 

Total liabilities and stockholders’ equity

$

297,637

 

 

$

272,201

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended

 

Nine Months Ended

 

October 1,

2023

 

July 2,

2023

 

October 2,

2022

 

October 1,

2023

 

October 2,

2022

 

(In thousands, except percentage and per share data)

Revenue:

 

 

 

 

 

 

 

 

 

Products

$

78,961

 

 

$

64,749

 

 

$

92,720

 

 

$

210,770

 

 

$

273,736

 

Services

 

51,042

 

 

 

50,327

 

 

 

35,437

 

 

 

145,313

 

 

 

98,151

 

Total revenue

 

130,003

 

 

 

115,076

 

 

 

128,157

 

 

 

356,083

 

 

 

371,887

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Products

 

73,335

 

 

 

60,446

 

 

 

79,386

 

 

 

197,520

 

 

 

233,992

 

Services

 

13,529

 

 

 

12,772

 

 

 

12,021

 

 

 

38,349

 

 

 

33,830

 

Total cost of revenue

 

86,864

 

 

 

73,218

 

 

 

91,407

 

 

 

235,869

 

 

 

267,822

 

Gross profit

 

43,139

 

 

 

41,858

 

 

 

36,750

 

 

 

120,214

 

 

 

104,065

 

Gross margin

 

33.2

%

 

 

36.4

%

 

 

28.7

%

 

 

33.8

%

 

 

28.0

%

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

16,829

 

 

 

17,618

 

 

 

16,471

 

 

 

52,197

 

 

 

50,252

 

Sales and marketing

 

15,863

 

 

 

16,921

 

 

 

22,193

 

 

 

48,137

 

 

 

49,867

 

General and administrative

 

12,460

 

 

 

15,007

 

 

 

12,253

 

 

 

43,089

 

 

 

38,023

 

Others

 

263

 

 

 

341

 

 

 

273

 

 

 

1,236

 

 

 

377

 

Total operating expenses

 

45,415

 

 

 

49,887

 

 

 

51,190

 

 

 

144,659

 

 

 

138,519

 

Loss from operations

 

(2,276

)

 

 

(8,029

)

 

 

(14,440

)

 

 

(24,445

)

 

 

(34,454

)

Operating margin

 

(1.8

)%

 

 

(7.0

)%

 

 

(11.3

)%

 

 

(6.9

)%

 

 

(9.3

)%

Interest income, net

 

1,175

 

 

 

835

 

 

 

290

 

 

 

2,736

 

 

 

414

 

Other income, net

 

10

 

 

 

52

 

 

 

19

 

 

 

23

 

 

 

314

 

Loss before income taxes

 

(1,091

)

 

 

(7,142

)

 

 

(14,131

)

 

 

(21,686

)

 

 

(33,726

)

Provision for income taxes

 

29

 

 

 

221

 

 

 

304

 

 

 

1,042

 

 

 

745

 

Net loss

$

(1,120

)

 

$

(7,363

)

 

$

(14,435

)

 

$

(22,728

)

 

$

(34,471

)

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.01

)

 

$

(0.08

)

 

$

(0.16

)

 

$

(0.25

)

 

$

(0.40

)

Weighted average shares used to compute net loss per share - basic and diluted

 

94,243

 

 

 

92,337

 

 

 

88,124

 

 

 

92,069

 

 

 

86,677

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Nine Months Ended

 

October 1,

2023

 

October 2,

2022

 

(In thousands)

Cash flows from operating activities:

 

 

 

Net loss

$

(22,728

)

 

$

(34,471

)

Adjustments to reconcile net loss to net cash provided by (used in)

operating activities:

 

 

 

Stock-based compensation expense

 

37,851

 

 

 

31,787

 

Depreciation and amortization

 

3,809

 

 

 

3,653

 

Allowance for credit losses and inventory reserves

 

1,218

 

 

 

(211

)

Deferred income taxes

 

257

 

 

 

259

 

Others

 

(1,224

)

 

 

39

 

Changes in assets and liabilities:

 

 

 

Accounts receivable, net

 

(4,262

)

 

 

(3,171

)

Inventories

 

(8,250

)

 

 

(34,613

)

Prepaid expenses and other assets

 

(4,353

)

 

 

(105

)

Accounts payable

 

31,049

 

 

 

23,229

 

Deferred revenue

 

6,202

 

 

 

(18,544

)

Accrued and other liabilities

 

(9,202

)

 

 

(2,635

)

Net cash provided by (used in) operating activities

 

30,367

 

 

 

(34,783

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(2,448

)

 

 

(815

)

Purchases of short-term investments

 

(110,905

)

 

 

(69,305

)

Proceeds from maturities of short-term investments

 

67,259

 

 

 

24,542

 

Net cash used in investing activities

 

(46,094

)

 

 

(45,578

)

Cash flows from financing activities:

 

 

 

Proceeds related to employee benefit plans

 

5,293

 

 

 

3,172

 

Restricted stock unit withholdings

 

(22,533

)

 

 

(17,766

)

Net cash used in financing activities

 

(17,240

)

 

 

(14,594

)

Net decrease in cash, cash equivalents and restricted cash

 

(32,967

)

 

 

(94,955

)

Cash, cash equivalents and restricted cash, at beginning of period

 

88,179

 

 

 

179,856

 

Cash, cash equivalents and restricted cash, at end of period

$

55,212

 

 

$

84,901

 

 

 

 

 

Non-cash investing activities:

 

 

 

Purchases of property and equipment included in accounts payable and accrued liabilities

$

726

 

 

$

209

 

ARLO TECHNOLOGIES, INC.

 

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

 
UNAUDITED STATEMENT OF OPERATIONS DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

October 1,

2023

 

July 2,

2023

 

October 2,

2022

 

October 1,

2023

 

October 2,

2022

 

(In thousands, except percentage data)

GAAP gross profit:

 

 

 

 

 

 

 

 

 

Products

$

5,626

 

 

$

4,303

 

 

$

13,334

 

 

$

13,250

 

 

$

39,744

 

Services

 

37,513

 

 

 

37,555

 

 

 

23,416

 

 

 

106,964

 

 

 

64,321

 

Total GAAP gross profit

 

43,139

 

 

 

41,858

 

 

 

36,750

 

 

 

120,214

 

 

 

104,065

 

GAAP gross margin:

 

 

 

 

 

 

 

 

 

Products

 

7.1

%

 

 

6.6

%

 

 

14.4

%

 

 

6.3

%

 

 

14.5

%

Services

 

73.5

%

 

 

74.6

%

 

 

66.1

%

 

 

73.6

%

 

 

65.5

%

Total GAAP gross margin

 

33.2

%

 

 

36.4

%

 

 

28.7

%

 

 

33.8

%

 

 

28.0

%

Stock-based compensation expense - Products

 

723

 

 

 

848

 

 

 

1,132

 

 

 

2,483

 

 

 

3,135

 

Stock-based compensation expense - Services

 

145

 

 

 

119

 

 

 

233

 

 

 

213

 

 

 

475

 

Amortization of development of software cost - Services

 

152

 

 

 

151

 

 

 

 

 

 

454

 

 

 

 

Non-GAAP gross profit:

 

 

 

 

 

 

 

 

 

Products

 

6,349

 

 

 

5,151

 

 

 

14,466

 

 

 

15,733

 

 

 

42,879

 

Services

 

37,810

 

 

 

37,825

 

 

 

23,649

 

 

 

107,631

 

 

 

64,796

 

Total Non-GAAP gross profit

$

44,159

 

 

$

42,976

 

 

$

38,115

 

 

$

123,364

 

 

$

107,675

 

Non-GAAP gross margin:

 

 

 

 

 

 

 

 

 

Products

 

8.0

%

 

 

8.0

%

 

 

15.6

%

 

 

7.5

%

 

 

15.7

%

Services

 

74.1

%

 

 

75.2

%

 

 

66.7

%

 

 

74.1

%

 

 

66.0

%

Total Non-GAAP gross margin

 

34.0

%

 

 

37.3

%

 

 

29.7

%

 

 

34.6

%

 

 

29.0

%

 

 

 

 

 

 

 

 

 

 

GAAP research and development

$

16,829

 

 

$

17,618

 

 

$

16,471

 

 

$

52,197

 

 

$

50,252

 

Stock-based compensation expense

 

(2,847

)

 

 

(3,311

)

 

 

(2,679

)

 

 

(10,069

)

 

 

(8,602

)

Non-GAAP research and development

$

13,982

 

 

$

14,307

 

 

$

13,792

 

 

$

42,128

 

 

$

41,650

 

Percentage of revenue

 

10.8

%

 

 

12.4

%

 

 

10.8

%

 

 

11.8

%

 

 

11.2

%

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

15,863

 

 

$

16,921

 

 

$

22,193

 

 

$

48,137

 

 

$

49,867

 

Stock-based compensation expense

 

(1,224

)

 

 

(1,670

)

 

 

(1,389

)

 

 

(4,616

)

 

 

(4,559

)

Non-GAAP sales and marketing

$

14,639

 

 

$

15,251

 

 

$

20,804

 

 

$

43,521

 

 

$

45,308

 

Percentage of revenue

 

11.3

%

 

 

13.3

%

 

 

16.2

%

 

 

12.2

%

 

 

12.2

%

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

12,460

 

 

$

15,007

 

 

$

12,253

 

 

$

43,089

 

 

$

38,023

 

Stock-based compensation expense

 

(5,348

)

 

 

(7,025

)

 

 

(4,520

)

 

 

(20,470

)

 

 

(15,016

)

Litigation reserves, net

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(117

)

Non-GAAP general and administrative

$

7,112

 

 

$

7,982

 

 

$

7,728

 

 

$

22,619

 

 

$

22,890

 

Percentage of revenue

 

5.5

%

 

 

6.9

%

 

 

6.0

%

 

 

6.4

%

 

 

6.2

%

ARLO TECHNOLOGIES, INC.

 

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)

 
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

October 1,

2023

 

July 2,

2023

 

October 2,

2022

 

October 1,

2023

 

October 2,

2022

 

(In thousands, except percentage data)

GAAP total operating expenses

$

45,415

 

 

$

49,887

 

 

$

51,190

 

 

$

144,659

 

 

$

138,519

 

Stock-based compensation expense

 

(9,419

)

 

 

(12,006

)

 

 

(8,588

)

 

 

(35,155

)

 

 

(28,177

)

Others

 

(263

)

 

 

(341

)

 

 

(278

)

 

 

(1,236

)

 

 

(494

)

Non-GAAP total operating expenses

$

35,733

 

 

$

37,540

 

 

$

42,324

 

 

$

108,268

 

 

$

109,848

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

$

(2,276

)

 

$

(8,029

)

 

$

(14,440

)

 

$

(24,445

)

 

$

(34,454

)

GAAP operating margin

 

(1.8

)%

 

 

(7.0

)%

 

 

(11.3

)%

 

 

(6.9

)%

 

 

(9.3

)%

Stock-based compensation expense

 

10,287

 

 

 

12,973

 

 

 

9,953

 

 

 

37,851

 

 

 

31,787

 

Others

 

415

 

 

 

492

 

 

 

278

 

 

 

1,690

 

 

 

494

 

Non-GAAP operating income (loss)

$

8,426

 

 

$

5,436

 

 

$

(4,209

)

 

$

15,096

 

 

$

(2,173

)

Non-GAAP operating margin

 

6.5

%

 

 

4.7

%

 

 

(3.3

)%

 

 

4.2

%

 

 

(0.6

)%

 

 

 

 

 

 

 

 

 

 

GAAP other income, net

$

10

 

 

$

52

 

 

$

19

 

 

$

23

 

 

$

314

 

Employee retention credit

 

 

 

 

 

 

 

 

 

 

 

 

 

(65

)

Non-GAAP other income, net

$

10

 

 

$

52

 

 

$

19

 

 

$

23

 

 

$

249

 

 

 

 

 

 

 

 

 

 

 

GAAP provision for income taxes

$

29

 

 

$

221

 

 

$

304

 

 

$

1,042

 

 

$

745

 

GAAP income tax rate

 

(2.7

)%

 

 

(3.1

)%

 

 

(2.2

)%

 

 

(4.8

)%

 

 

(2.2

)%

Non-GAAP provision for income taxes

$

29

 

 

$

221

 

 

$

304

 

 

$

1,042

 

 

$

745

 

Non-GAAP income tax rate

 

0.3

%

 

 

3.5

%

 

 

(7.8

)%

 

 

5.8

%

 

 

(49.3

)%

ARLO TECHNOLOGIES, INC.

 

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)

 

UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

October 1,

2023

 

July 2,

2023

 

October 2,

2022

 

October 1,

2023

 

October 2,

2022

 

(In thousands, except percentage and per share data)

GAAP net loss

$

(1,120

)

 

$

(7,363

)

 

$

(14,435

)

 

$

(22,728

)

 

$

(34,471

)

Stock-based compensation expense

 

10,287

 

 

 

12,973

 

 

 

9,953

 

 

 

37,851

 

 

 

31,787

 

Others

 

415

 

 

 

492

 

 

 

278

 

 

 

1,690

 

 

 

429

 

Non-GAAP net income (loss)

$

9,582

 

 

$

6,102

 

 

$

(4,204

)

 

$

16,813

 

 

$

(2,255

)

 

 

 

 

 

 

 

 

 

 

GAAP net loss per share - basic and diluted

$

(0.01

)

 

$

(0.08

)

 

$

(0.16

)

 

$

(0.25

)

 

$

(0.40

)

Stock-based compensation expense

 

0.10

 

 

 

0.14

 

 

 

0.11

 

 

 

0.41

 

 

 

0.37

 

Others

 

 

 

 

 

 

 

 

 

 

0.01

 

 

 

 

Non-GAAP net income (loss) - diluted

$

0.09

 

 

$

0.06

 

 

$

(0.05

)

 

$

0.17

 

 

$

(0.03

)

 

 

 

 

 

 

 

 

 

 

Shares used in computing GAAP net loss - basic

 

94,243

 

 

 

92,337

 

 

 

88,124

 

 

 

92,069

 

 

 

86,677

 

Shares used in computing non-GAAP net income - diluted

 

102,116

 

 

 

99,187

 

 

 

88,124

 

 

 

99,238

 

 

 

86,677

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (usage):

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

7,459

 

 

$

12,578

 

 

$

(5,402

)

 

$

30,367

 

 

$

(34,783

)

Less: Purchases of property and equipment

 

(494

)

 

 

(1,031

)

 

 

(364

)

 

 

(2,448

)

 

 

(815

)

Free cash flow (usage) (1)

$

6,965

 

 

$

11,547

 

 

$

(5,766

)

 

$

27,919

 

 

$

(35,598

)

Free cash flow (usage) margin (1)

 

5.4

%

 

 

10.0

%

 

 

(4.5

)%

 

 

7.8

%

 

 

(9.6

)%

_________________________

(1)

Free cash flow (usage) is calculated as net cash provided by (used in) operating activities less capital expenditures. Free cash flow (usage) margin is the free cash flow (usage) divided by revenue.

ARLO TECHNOLOGIES, INC.

 

UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

 

 

Three Months Ended

 

October 1,

2023

 

July 2,

2023

 

April 2,

2023

 

December 31,

2022

 

October 2,

2022

 

(In thousands, except headcount and per share data)

Cash, cash equivalents and short-term investments

$

126,049

 

$

123,675

 

$

118,673

 

$

113,724

 

$

125,272

Cash, cash equivalents and short-term investments per diluted share

$

1.23

 

$

1.25

 

$

1.27

 

$

1.28

 

$

1.42

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

$

70,313

 

$

57,327

 

$

52,837

 

$

65,960

 

$

82,707

Days sales outstanding

 

49

 

 

45

 

 

44

 

 

50

 

 

59

 

 

 

 

 

 

 

 

 

 

Inventories

$

53,496

 

$

39,429

 

$

39,922

 

$

46,554

 

$

73,243

Inventory turns

 

5.5

 

 

6.1

 

 

6.4

 

 

6.4

 

 

4.3

 

 

 

 

 

 

 

 

 

 

Weeks of channel inventory:

 

 

 

 

 

 

 

 

 

U.S. retail channel

 

10.9

 

 

9.7

 

 

14.6

 

 

11.9

 

 

13.6

U.S. distribution channel

 

7.4

 

 

9.3

 

 

17.6

 

 

14.1

 

 

5.5

APAC distribution channel

 

7.2

 

 

7.7

 

 

5.8

 

 

4.7

 

 

9.4

 

 

 

 

 

 

 

 

 

 

Deferred revenue

(current and non-current)

$

17,706

 

$

17,702

 

$

15,289

 

$

11,503

 

$

12,242

 

 

 

 

 

 

 

 

 

 

Cumulative registered accounts (1)

 

8,193

 

 

7,860

 

 

7,510

 

 

7,220

 

 

6,930

Cumulative paid accounts (2)

 

2,486

 

 

2,289

 

 

2,044

 

 

1,862

 

 

1,673

Annual recurring revenue (ARR) (3)

$

199,993

 

$

193,633

 

$

182,583

 

$

137,764

 

$

125,402

 

 

 

 

 

 

 

 

 

 

Headcount

 

353

 

 

345

 

 

334

 

 

343

 

 

360

Non-GAAP diluted shares

 

102,116

 

 

99,187

 

 

93,236

 

 

88,743

 

 

88,124

_________________________

(1)

We define our registered accounts at the end of a particular period as the number of unique registered accounts on the Arlo platform as of the end of such period. The number of registered accounts does not necessarily reflect the number of end-users on the Arlo platform as one registered account may be used by multiple end-users to monitor the devices attached to that household.

(2)

Paid accounts are defined as any account worldwide where a subscription to a paid service is being collected (either by us or by our customers or channel partners, including Verisure).

(3)

ARR represents the amount of paid service revenue that we expect to recur annually and is calculated by taking our recurring paid service revenue for the last calendar month in the fiscal quarter, multiplied by 12 months. Recurring paid service revenue represents the revenue we recognize from our paid accounts and excludes prepaid service revenue. ARR is a performance metric and should be viewed independently of revenue and deferred revenue, and is not intended to be a substitute for, or combined with, any of these items.

REVENUE BY GEOGRAPHY

 

 

Three Months Ended

 

Nine Months Ended

 

October 1,

2023

 

July 2,

2023

 

October 2,

2022

 

October 1,

2023

 

October 2,

2022

 

(In thousands, except percentage data)

Americas

$

79,948

61.5

%

 

$

78,136

67.9

%

 

$

71,040

55.4

%

 

$

214,716

60.3

%

 

$

199,851

53.8

%

EMEA

 

42,887

33.0

%

 

 

30,958

26.9

%

 

 

52,542

41.0

%

 

 

122,317

34.4

%

 

 

157,000

42.2

%

APAC

 

7,168

5.5

%

 

 

5,982

5.2

%

 

 

4,575

3.6

%

 

 

19,050

5.3

%

 

 

15,036

4.0

%

Total

$

130,003

100.0

%

 

$

115,076

100.0

%

 

$

128,157

100.0

%

 

$

356,083

100.0

%

 

$

371,887

100.0

%

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 Sunnyvale.com & California Media Partners, LLC. All rights reserved.