Alarm.com Reports Third Quarter 2021 Results

Rhea-AI Summary

Alarm.com Holdings reported a 21.1% year-over-year increase in total revenue for Q3 2021, reaching $192.3 million. SaaS and license revenue also rose 17.9% to $118.1 million. However, GAAP net income dropped to $13.5 million from $36.1 million in Q3 2020, primarily due to a prior year investment gain. Non-GAAP adjusted EBITDA increased by 8.9% to $37.6 million. The company’s cash and equivalents surged to $700.3 million. Looking ahead, SaaS revenue is projected between $456.7 million and $456.9 million for the full year.

Positive

• Total revenue increased 21.1% year-over-year to $192.3 million.
• SaaS and license revenue grew 17.9% to $118.1 million.
• Non-GAAP adjusted EBITDA rose 8.9% to $37.6 million.
• Total cash and cash equivalents increased significantly to $700.3 million.

Negative

• GAAP net income decreased to $13.5 million from $36.1 million due to a prior year investment gain.

-- Third quarter total revenue increased 21.1% year-over-year to $192.3 million --

-- Third quarter SaaS and license revenue increased 17.9% year-over-year to $118.1 million --

-- Third quarter GAAP net income attributable to common stockholders was $13.5 million, compared to $36.1 million for the third quarter of 2020 --

-- Third quarter non-GAAP adjusted EBITDA increased 8.9% year-over-year to $37.6 million, compared to $34.5 million for the third quarter of 2020 --

TYSONS, Va.--(BUSINESS WIRE)-- Alarm.com Holdings, Inc. (Nasdaq: ALRM), the leading platform for the intelligently connected property, today reported financial results for its third quarter ended September 30, 2021. Alarm.com also provided its financial outlook for SaaS and license revenue for the fourth quarter of 2021 and increased its guidance for the full year of 2021.

“We are pleased to report another quarter of solid results,” said Steve Trundle, President and CEO of Alarm.com. “During the third quarter, we saw continued momentum as our service provider partners successfully deployed the growing range of Alarm.com’s connected property solutions. The Alarm.com team also introduced innovative new technology, including video analytics capabilities, that will expand our opportunities in both the residential and commercial markets.”

Third Quarter 2021 Financial Results as Compared to Third Quarter 2020

• SaaS and license revenue increased 17.9% to $118.1 million, compared to $100.1 million.
• Total revenue increased 21.1% to $192.3 million, compared to $158.9 million.
• GAAP net income attributable to common stockholders decreased to $13.5 million, or $0.26 per diluted share, compared to $36.1 million, or $0.71 per diluted share, primarily due to a gain of $24.7 million on the sale of an investment in one of our platform partners during the third quarter of 2020.
• Non-GAAP adjusted EBITDA(*) increased to $37.6 million, compared to $34.5 million.
• Non-GAAP adjusted net income attributable to common stockholders(*) increased to $27.4 million, or $0.53 per diluted share, compared to $24.8 million or $0.49 per diluted share.

Balance Sheet and Cash Flow

• Total cash and cash equivalents increased to $700.3 million as of September 30, 2021, compared to $253.5 million as of December 31, 2020. The increase in cash and cash equivalents was primarily due to the January 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026 in a private placement to qualified institutional buyers, resulting in proceeds of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs.
• For the quarter ended September 30, 2021, cash flows from operations was $37.9 million, compared to $18.6 million for the quarter ended September 30, 2020. For the quarter ended September 30, 2021, non-GAAP free cash flow(*) was $36.3 million, compared to $15.1 million for the quarter ended September 30, 2020.

(*) Reconciliations of the non-GAAP measures are set forth at the end of this press release.

Recent Business Highlights

• Launched Perimeter Guard: Based on Alarm.com's advanced video analytics software, Perimeter Guard can proactively identify and engage would-be intruders before they can threaten physical property. Perimeter Guard enables certain outdoor video cameras to automatically respond to suspicious activity with audible alerts and flashing red LED lights to deter potential break-ins. Subscribers can target specific activity and areas of their property with loitering detection, directional tripwires and ground zones capabilities. Perimeter Guard is offered as an enhancement to Alarm.com’s video analytics services and supports residential and commercial subscribers.

• Introduced Commercial Video Analytics: Business Activity Analytics significantly enhances Alarm.com’s commercial video offering with capabilities that can help improve and optimize business operations. Commercial subscribers can intelligently monitor a full range of customer and employee activity through occupancy tracking, people counting, queue monitoring, crowd gathering and heat mapping. Real-time notifications and powerful business intelligence reporting can help streamline customer flows, reduce wait times, measure the effectiveness of marketing campaigns and enforce occupancy and social distancing limits.

• Released Pro-Series Commercial Video Cameras: Designed to commercial specifications, the Pro-Series line enables the full range of Alarm.com’s Business Activity Analytics and enhances the forensic image quality of recorded video. The cameras are compliant with National Defense Authorization Act and are available in a turret, bullet and dome form factor with 4-megapixel image sensor options and varifocal lenses. Whether a commercial customer needs to monitor a large area such as a parking lot, or a narrow hallway or a door, Pro-Series cameras can flexibly adjust to meet the robust coverage and image quality requirements of mid-market commercial installations.

• Improving Service Provider Efficiency and Customer Experience: Alarm.com’s Partner Services Platform now provides a new Service Dashboard, a unified interface that displays key operational and customer experience indicators, including technician performance, system reliability and customer engagement metrics. Service managers can quickly identify and implement operational efficiencies through Alarm.com’s service provider tools, including the award-winning On Site Wrap Up capability and System Check tool.

Financial Outlook

Alarm.com is providing its outlook for SaaS and license revenue for the fourth quarter of 2021 and increasing its guidance for the full year of 2021 based upon current management expectations.

For the fourth quarter of 2021:

• SaaS and license revenue is expected to be in the range of $118.1 million to $118.3 million.

For the full year of 2021:

• SaaS and license revenue is expected to be in the range of $456.7 million to $456.9 million.
• Total revenue is expected to be in the range of $721.7 million to $731.9 million, which includes anticipated hardware and other revenue in the range of $265.0 million to $275.0 million.
• Non-GAAP adjusted EBITDA is expected to be in the range of $138.0 million to $140.0 million.
• Non-GAAP adjusted net income attributable to common stockholders is expected to be in the range of $97.3 million to $98.0 million, based on an estimated tax rate of 21.0%.
• Based on an expected 52.1 million weighted average diluted shares outstanding, non-GAAP adjusted net income attributable to common stockholders is expected to be $1.87 to $1.88 per diluted share.

The guidance provided above is forward-looking in nature. Actual results may differ materially. See the cautionary note regarding “Forward-Looking Statements” below. The guidance provided above is based on expectations as of the date of this press release and Alarm.com undertakes no obligation to update guidance after such date.

Conference Call and Webcast Information

Alarm.com will host a conference call to discuss its third quarter 2021 financial results and its outlook for the fourth quarter and full year of 2021. A live audio webcast is scheduled to begin at 4:30 p.m. ET on November 4, 2021. To participate on the live call, analysts and investors should dial 866.588.3290 (U.S./Canada) or 262.558.6169 (International) at least ten minutes prior to the start time of the call. A telephonic replay of the call will be available through November 11, 2021 by dialing 855.859.2056 (U.S./Canada) or 404.537.3406 (International) and providing Conference ID: 4968939. Alarm.com will also offer a live and archived webcast of the conference call accessible on Alarm.com’s Investor Relations website at http://investors.alarm.com.

About Alarm.com Holdings, Inc.

Alarm.com is the leading platform for the intelligently connected property. Millions of consumers and businesses depend on Alarm.com's technology to manage and control their property from anywhere. Our platform integrates with a growing variety of Internet of Things (IoT) devices through our apps and interfaces. Our security, video, access control, intelligent automation, energy management, and wellness solutions are available through our network of thousands of professional service providers in North America and around the globe. Alarm.com's common stock is traded on Nasdaq under the ticker symbol ALRM. For more information, please visit www.alarm.com.

Non-GAAP Financial Measures

To supplement our consolidated selected financial data presented on a basis consistent with GAAP, this press release contains certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP adjusted income before income taxes, non-GAAP adjusted net income, non-GAAP adjusted income attributable to common stockholders before income taxes, non-GAAP adjusted net income attributable to common stockholders, non-GAAP adjusted net income attributable to common stockholders per share and non-GAAP free cash flow. We have included non-GAAP measures in this press release because they are financial, operating or liquidity measures used by our management to (i) understand and evaluate our core operating performance and trends and generate future operating plans, (ii) make strategic decisions regarding the allocation of capital and investments in initiatives that are focused on cultivating new markets for our solutions and (iii) provide useful information to management about the amount of cash generated by the business after necessary capital expenditures. We also use adjusted EBITDA as a performance measure under our executive bonus plan. Further, we believe that these non-GAAP measures of our financial results provide useful information to investors and others in understanding and evaluating our results of operations, business trends and financial condition. While we believe the use of these non-GAAP measures provides useful information to investors and management in analyzing our financial performance, non-GAAP measures have inherent limitations in that they do not reflect all of the amounts and transactions that are included in our financial statements prepared in accordance with GAAP. Non-GAAP measures do not serve as an alternative to GAAP nor do we consider our non-GAAP measures in isolation, accordingly we present non-GAAP financial measures only in connection with GAAP results. We urge investors to consider non-GAAP measures only in conjunction with our GAAP financials and to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release.

We consider non-GAAP free cash flow to be a liquidity measure, which we define as cash flows from operating activities less purchases of property and equipment.

With respect to our expectations under “Financial Outlook” above, reconciliation of adjusted EBITDA and adjusted net income attributable to common stockholders guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, non-ordinary course litigation expense, acquisition-related expense and tax windfall adjustments can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted. We expect the above charges to have a significant and potentially highly variable impact on our future GAAP financial results.

We exclude one or more of the following items from non-GAAP financial and operating measures:

Stock-based compensation expense: We exclude stock-based compensation expense, which relates to stock options and other forms of equity incentives primarily awarded to employees of Alarm.com, because they are non-cash charges that we do not consider when assessing the operating performance of our business. Additionally, the determination of stock-based compensation expense can be calculated using various methodologies and is dependent upon subjective assumptions and other factors that vary on a company-by-company basis. Therefore, we believe that excluding stock-based compensation expense from our non-GAAP financial measures improves the comparability of our results to the results of other companies in our industry.

Secondary offering expense: We exclude secondary offering expense because we do not consider costs associated with the secondary offering to be indicative of our core operating performance and we believe that the exclusion of this expense allows us to better provide meaningful information about our operating performance, facilitates comparisons to our historical operating results and improves the comparability of our results to the results of other companies in our industry.

Litigation expense: We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes, particularly costs incurred in ongoing intellectual property litigation, to be indicative of our core operating performance. We do not adjust for ordinary course legal expenses, including those expenses resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

Acquisition-related (benefit) / expense: Included in operating expenses are incremental costs directly related to business and asset acquisitions as well as changes in the fair value of contingent consideration liabilities, when applicable. We exclude acquisition-related expense from our non-GAAP financial measures because we believe that the exclusion of this expense allows us to better provide meaningful information about our operating performance, facilitates comparisons to our historical operating results, improves the comparability of our results to the results of other companies in our industry, and ultimately, we believe helps investors better understand the acquisition-related expense and the effects of the transaction on our results of operations.

Depreciation expense: We record depreciation primarily for investments in property and equipment. We exclude depreciation in calculating adjusted EBITDA because we do not consider depreciation when we evaluate our ongoing business operations. For non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, we do not exclude depreciation.

Amortization expense: GAAP requires that operating expenses include the amortization of acquired intangible assets, which principally include acquired customer relationships, developed technology and trade names. We exclude amortization of intangibles from our non-GAAP financial measures because we do not consider amortization expense when we evaluate our ongoing business operations, nor do we factor amortization expense into our evaluation of potential acquisitions, or our measurement of the performance of those acquisitions. We believe that the exclusion of amortization expense enables the comparison of our performance to other companies in our industry as other companies may be more or less acquisitive than us and therefore, amortization expense may vary significantly by company based on their acquisition history. Although we exclude amortization of acquired intangible assets from our non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Amortization of debt discount and debt issuance costs: We record amortization of debt discount and debt issuance costs related to our convertible senior notes as interest expense. We exclude amortization of debt discount and debt issuance costs from our non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, because we believe that the exclusion of this non-cash interest expense will provide for more meaningful information about our financial performance.

Interest expense: We record interest expense primarily related to our debt facility. We exclude interest expense in calculating our adjusted EBITDA calculation. For non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, we do not exclude interest expense other than the interest expense related to the amortization of debt discount and debt issuance costs related to our convertible senior notes as discussed above.

Interest income and other income / (expense), net: We exclude interest income and other income / (expense), net from our non-GAAP financial measures because we do not consider it part of our ongoing results of operations.

Income taxes: We exclude the impact related to our provision for / (benefit from) income taxes from our adjusted EBITDA calculation. We do not consider this tax adjustment to be part of our ongoing results of operations.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “designed,” “enable,” “ensure,” “expect,” “intend,” “will,” and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company’s opportunities, positioning, the benefits of recently launched offerings, and the Company’s guidance for the fourth quarter and full year of 2021 described under “Financial Outlook” above and key assumptions related thereto. The events described in these forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: the Company's results and business operations may be negatively impacted by the COVID-19 pandemic, the Company’s actual operating results may differ significantly from any guidance provided, certain precautions the Company is taking due to the COVID-19 pandemic could harm its business, the Company’s quarterly results may fluctuate, downturns in general economic and market conditions, including due to the COVID-19 pandemic, may reduce demand, the reliability of the Company’s network operations centers, the Company’s ability to retain service provider partners and residential and commercial subscribers and sustain its growth rate, the Company’s ability to manage growth and execute on its business strategies, the effects of increased competition and evolving technologies, the Company’s ability to integrate acquired assets and businesses and to manage service provider partners, customers and employees, consumer demand for interactive security, video monitoring, intelligent automation, energy management and wellness solutions, the Company’s reliance on its service provider network to attract new customers and retain existing customers, the Company's dependence on its suppliers, the reliability of the Company’s hardware and wireless network suppliers and enhanced United States tax, tariff, import/export restrictions, or other trade barriers, particularly tariffs from China as well as other risks and uncertainties discussed in the “Risk Factors” section of the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 5, 2021 and other subsequent filings the Company makes with the Securities and Exchange Commission from time to time, including its Form 10-Q for the quarter ended September 30, 2021. In addition, the forward-looking statements included in this press release represent the Company’s views and expectations as of the date hereof and are based on information currently available to the Company. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so except as required by law. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof.

ALARM.COM HOLDINGS, INC.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Revenue:
SaaS and license revenue		$	118,059			$	100,126			$	338,628			$	287,780
Hardware and other revenue			74,265				58,725				215,051				164,647
Total revenue			192,324				158,851				553,679				452,427
Cost of revenue:
Cost of SaaS and license revenue			17,425				14,344				49,782				39,673
Cost of hardware and other revenue			62,959				46,839				173,731				128,495
Total cost of revenue			80,384				61,183				223,513				168,168
Operating expenses:
Sales and marketing			22,557				18,410				62,085				52,405
General and administrative			18,689				17,410				64,839				55,634
Research and development			44,143				36,914				130,101				113,280
Amortization and depreciation			7,467				6,878				22,329				20,023
Total operating expenses			92,856				79,612				279,354				241,342
Operating income			19,084				18,056				50,812				42,917
Interest expense			(4,196	)			(556	)			(11,718	)			(2,069	)
Interest income			140				118				446				734
Other income / (expense), net			53				24,753				(70	)			24,910
Income before income taxes			15,081				42,371				39,470				66,492
Provision for / (benefit from) income taxes			1,787				6,546				(2,864	)			5,471
Net income			13,294				35,825				42,334				61,021
Net loss attributable to redeemable noncontrolling interest			244				259				779				865
Net income attributable to common stockholders		$	13,538			$	36,084			$	43,113			$	61,886
Per share information attributable to common stockholders:
Net income per share:
Basic		$	0.27			$	0.74			$	0.87			$	1.27
Diluted		$	0.26			$	0.71			$	0.83			$	1.22
Weighted average common shares outstanding:
Basic			49,954,565				49,007,343				49,776,578				48,842,333
Diluted			51,836,239				50,979,679				51,879,061				50,673,752
		Three Months Ended September 30,								Nine Months Ended September 30,
Stock-based compensation expense included in operating expenses:		2021				2020				2021				2020
Sales and marketing		$	1,189			$	734			$	3,232			$	2,263
General and administrative			1,974				2,154				7,217				6,033
Research and development			6,255				4,560				16,913				12,605
Total stock-based compensation expense		$	9,418			$	7,448			$	27,362			$	20,901

ALARM.COM HOLDINGS, INC.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
		September 30, 2021				December 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	700,307			$	253,459
Accounts receivable, net of allowance for credit losses of $3,158 and $4,696, respectively, and net of allowance for product returns of $1,025 and $1,480, respectively			90,624				83,326
Inventory			56,526				44,281
Other current assets, net of allowance for credit losses of $3 and $17, respectively			23,310				16,348
Total current assets			870,767				397,414
Property and equipment, net			42,412				44,796
Intangible assets, net			90,476				103,259
Goodwill			112,901				112,838
Deferred tax assets			11,430				21,692
Operating lease right-of-use assets			29,911				33,455
Other assets, net of allowance for credit losses of $76 and $72, respectively			23,857				18,233
Total assets		$	1,181,754			$	731,687
Liabilities, redeemable noncontrolling interest and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities		$	62,966			$	53,927
Accrued compensation			21,442				22,307
Deferred revenue			7,037				4,037
Operating lease liabilities			10,242				9,973
Total current liabilities			101,687				90,244
Deferred revenue			9,040				8,492
Convertible senior notes, net			421,112				—
Long-term debt			—				110,000
Operating lease liabilities			32,322				37,697
Other liabilities			8,530				6,811
Total liabilities			572,691				253,244
Redeemable noncontrolling interest			11,889				10,691
Stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2021 and December 31, 2020			—				—
Common stock, $0.01 par value, 300,000,000 shares authorized; 50,174,272 and 49,630,773 shares issued; and 50,027,119 and 49,483,620 shares outstanding as of September 30, 2021 and December 31, 2020, respectively			501				496
Additional paid-in capital			492,135				405,831
Treasury stock, at cost; 147,153 shares as of September 30, 2021 and December 31, 2020			(5,149	)			(5,149	)
Retained earnings			109,687				66,574
Total stockholders’ equity			597,174				467,752
Total liabilities, redeemable noncontrolling interest and stockholders’ equity		$	1,181,754			$	731,687

ALARM.COM HOLDINGS, INC.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Nine Months Ended September 30,
Cash flows from operating activities:		2021				2020
Net income		$	42,334			$	61,021
Adjustments to reconcile net income to net cash from operating activities:
Recovery of credit losses on accounts receivable			(238	)			(237	)
Reserve for product returns			1,628				1,491
Recovery of credit losses on notes receivable			(10	)			(368	)
Provision for excess and obsolete inventory			374				1,178
Amortization on patents and tooling			947				604
Amortization and depreciation			22,329				20,023
Amortization of debt discount and debt issuance costs			11,590				81
Amortization of operating leases			7,173				6,562
Deferred income taxes			(5,918	)			(1,480	)
Change in fair value of contingent liability			—				(2,593	)
Stock-based compensation			27,362				20,901
Acquired in-process research and development			—				3,297
Gain on sale of investment			—				(24,737	)
Loss on early extinguishment of debt			185				—
Changes in operating assets and liabilities:
Accounts receivable			(8,689	)			(7,131	)
Inventory			(12,619	)			(7,209	)
Other current and non-current assets			(8,368	)			(5,549	)
Accounts payable, accrued expenses and other current liabilities			10,672				5,897
Deferred revenue			3,548				2,374
Operating lease liabilities			(8,745	)			(7,427	)
Other liabilities			(361	)			(28	)
Cash flows from operating activities			83,194				66,670
Cash flows (used in) / from investing activities:
Additions to property and equipment			(8,939	)			(10,677	)
Purchases of in-process research and development			—				(3,297	)
Issuances of notes receivable			—				(600	)
Receipt of payments on notes receivable			42				2,023
Purchase of investment in unconsolidated entity			(5,000	)			—
Proceeds from sale of investment			—				25,687
Purchases of patents and patent licenses			—				(900	)
Cash flows (used in) / from investing activities			(13,897	)			12,236
Cash flows from financing activities:
Proceeds from credit facility			—				50,000
Repayments of credit facility			(110,000	)			(2,000	)
Proceeds from issuance of convertible senior notes			500,000				—
Payments of debt issuance costs			(15,698	)			—
Payments of deferred consideration for business acquisitions			(1,160	)			(819	)
Purchases of treasury stock			—				(5,149	)
Issuances of common stock from equity-based plans			4,409				6,609
Cash flows from financing activities			377,551				48,641
Net increase in cash and cash equivalents			446,848				127,547
Cash and cash equivalents at beginning of the period			253,459				119,629
Cash and cash equivalents at end of the period		$	700,307			$	247,176

ALARM.COM HOLDINGS, INC.
Reconciliation of Non-GAAP Measures
(in thousands)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Adjusted EBITDA:
Net income		$	13,294			$	35,825			$	42,334			$	61,021
Adjustments:
Interest expense, interest income and other income / (expense), net			4,003				(24,315	)			11,342				(23,575	)
Provision for / (benefit from) income taxes			1,787				6,546				(2,864	)			5,471
Amortization and depreciation expense			7,467				6,878				22,329				20,023
Stock-based compensation expense			9,418				7,448				27,362				20,901
Secondary offering expense			—				—				—				543
Acquisition-related (benefit) / expense			—				(304	)			29				2,044
Litigation expense			1,609				2,418				10,658				6,467
Total adjustments			24,284				(1,329	)			68,856				31,874
Adjusted EBITDA		$	37,578			$	34,496			$	111,190			$	92,895
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Adjusted net income:
Net income, as reported		$	13,294			$	35,825			$	42,334			$	61,021
Provision for / (benefit from) income taxes			1,787				6,546				(2,864	)			5,471
Income before income taxes			15,081				42,371				39,470				66,492
Adjustments:
Less: interest income and other income / (expense), net			(193	)			(24,871	)			(376	)			(25,644	)
Amortization expense			4,329				4,084				12,987				12,209
Amortization of debt discount and debt issuance costs			4,191				—				11,584				—
Stock-based compensation expense			9,418				7,448				27,362				20,901
Secondary offering expense			—				—				—				543
Acquisition-related (benefit) / expense			—				(304	)			29				2,044
Litigation expense			1,609				2,418				10,658				6,467
Non-GAAP adjusted income before income taxes			34,435				31,146				101,714				83,012
Income taxes 1			(7,231	)			(6,541	)			(21,360	)			(17,433	)
Non-GAAP adjusted net income		$	27,204			$	24,605			$	80,354			$	65,579
1 Income taxes are calculated using a rate of 21.0% for each of the three and nine months ended September 30, 2021 and 2020. The 21.0% effective tax rate for each of the three and nine months ended September 30, 2021 and 2020 exclude the income tax effect on the non-GAAP adjustments and reflect the estimated long-term corporate tax rate.

ALARM.COM HOLDINGS, INC.
Reconciliation of Non-GAAP Measures - continued
(in thousands, except share and per share data)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Adjusted net income attributable to common stockholders:
Net income attributable to common stockholders, as reported		$	13,538			$	36,084			$	43,113			$	61,886
Provision for / (benefit from) income taxes			1,787				6,546				(2,864	)			5,471
Income attributable to common stockholders before income taxes			15,325				42,630				40,249				67,357
Adjustments:
Less: interest income and other income / (expense), net			(193	)			(24,871	)			(376	)			(25,644	)
Amortization expense			4,329				4,084				12,987				12,209
Amortization of debt discount and debt issuance costs			4,191				—				11,584				—
Stock-based compensation expense			9,418				7,448				27,362				20,901
Secondary offering expense			—				—				—				543
Acquisition-related (benefit) / expense			—				(304	)			29				2,044
Litigation expense			1,609				2,418				10,658				6,467
Non-GAAP adjusted income attributable to common stockholders before income taxes			34,679				31,405				102,493				83,877
Income taxes 1			(7,283	)			(6,595	)			(21,524	)			(17,614	)
Non-GAAP adjusted net income attributable to common stockholders		$	27,396			$	24,810			$	80,969			$	66,263
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Adjusted net income attributable to common stockholders per share:
Net income attributable to common stockholders per share - basic, as reported		$	0.27			$	0.74			$	0.87			$	1.27
Provision for / (benefit from) income taxes			0.04				0.13				(0.06	)			0.11
Income attributable to common stockholders before income taxes			0.31				0.87				0.81				1.38
Adjustments:
Less: interest income and other income / (expense), net			—				(0.51	)			—				(0.52	)
Amortization expense			0.09				0.09				0.26				0.25
Amortization of debt discount and debt issuance costs			0.08				—				0.23				—
Stock-based compensation expense			0.19				0.15				0.55				0.43
Secondary offering expense			—				—				—				0.01
Acquisition-related (benefit) / expense			—				(0.01	)			—				0.04
Litigation expense			0.03				0.05				0.21				0.13
Non-GAAP adjusted income before income taxes			0.70				0.64				2.06				1.72
Income taxes 1			(0.15	)			(0.13	)			(0.43	)			(0.36	)
Non-GAAP adjusted net income attributable to common stockholders per share - basic		$	0.55			$	0.51			$	1.63			$	1.36
Non-GAAP adjusted net income attributable to common stockholders per share - diluted		$	0.53			$	0.49			$	1.56			$	1.31
Weighted average common shares outstanding:
Basic, as reported			49,954,565				49,007,343				49,776,578				48,842,333
Diluted, as reported			51,836,239				50,979,679				51,879,061				50,673,752
1 Income taxes are calculated using a rate of 21.0% for each of the three and nine months ended September 30, 2021 and 2020. The 21.0% effective tax rate for each of the three and nine months ended September 30, 2021 and 2020 exclude the income tax effect on the non-GAAP adjustments and reflect the estimated long-term corporate tax rate.

ALARM.COM HOLDINGS, INC.
Reconciliation of Non-GAAP Measures - continued
(in thousands)
(unaudited)
				Three Months Ended September 30,								Nine Months Ended September 30,
				2021				2020				2021				2020
Non-GAAP free cash flow:
Cash flows from operating activities				$	37,886			$	18,622			$	83,194			$	66,670
Additions to property and equipment					(1,558	)			(3,561	)			(8,939	)			(10,677	)
Non-GAAP free cash flow				$	36,328			$	15,061			$	74,255			$	55,993

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006269/en/

Investor Relations:

David Trone

Alarm.com

dtrone@alarm.com

Media Relations:

Matthew Zartman

Alarm.com

mzartman@alarm.com

Source: Alarm.com Holdings, Inc.

FAQ

What were Alarm.com's Q3 2021 revenue figures?

Alarm.com reported total revenue of $192.3 million for Q3 2021, which is a 21.1% increase year-over-year.

How did Alarm.com's SaaS and license revenue perform in Q3 2021?

SaaS and license revenue increased by 17.9% to $118.1 million in Q3 2021.

What was Alarm.com's GAAP net income for Q3 2021?

The GAAP net income attributable to common stockholders was $13.5 million for Q3 2021.

What is the financial outlook for Alarm.com for Q4 2021?

For Q4 2021, Alarm.com expects SaaS and license revenue between $118.1 million and $118.3 million.

What is the guidance for Alarm.com’s full year 2021 revenue?

For the full year 2021, total revenue is projected to be in the range of $721.7 million to $731.9 million.