Arlo Reports Second Quarter 2024 Results
Arlo Technologies reported Q2 2024 results with record service revenue of $60.3 million, a 19.7% YoY increase. The company posted a GAAP net loss per share of $(0.12) and a non-GAAP net income per share of $0.10. Annual recurring revenue (ARR) reached $235.0 million, up 21.4% YoY. Arlo achieved a free cash flow of $25.6 million with a 10.2% margin for H1 2024.
The company surpassed 4 million subscribers in July 2024. CEO Matthew McRae highlighted the 76% non-GAAP gross margin of the service business, which now accounts for nearly 50% of total revenue. Total Q2 revenue was $127.4 million, an increase of 10.8% YoY, with a GAAP gross margin of 36.8% and non-GAAP gross margin of 37.9%.
The business outlook for Q3 2024 projects revenue between $132 and $142 million, with non-GAAP net income per share of $0.08 to $0.14. The company also announced a strategic partnership with Allstate in July 2024.
Arlo Technologies ha riportato i risultati del secondo trimestre 2024 con un record di entrate da servizi di 60,3 milioni di dollari, un aumento del 19,7% rispetto all'anno precedente. L'azienda ha registrato una perdita netta GAAP per azione di $(0,12) e un utile netto non-GAAP per azione di $0,10. Le entrate ricorrenti annuali (ARR) hanno raggiunto 235,0 milioni di dollari, un incremento del 21,4% rispetto all'anno precedente. Arlo ha ottenuto un flusso di cassa libero di 25,6 milioni di dollari con un margine del 10,2% per il primo semestre del 2024.
L'azienda ha superato i 4 milioni di abbonati a luglio 2024. Il CEO Matthew McRae ha evidenziato il margine lordo non-GAAP del 76% del business dei servizi, che ora rappresenta quasi il 50% del fatturato totale. Le entrate totali del secondo trimestre sono state di 127,4 milioni di dollari, con un aumento del 10,8% rispetto all'anno precedente, un margine lordo GAAP del 36,8% e un margine lordo non-GAAP del 37,9%.
Le prospettive aziendali per il terzo trimestre del 2024 prevedono entrate comprese tra 132 e 142 milioni di dollari, con un utile netto non-GAAP per azione di $0,08 a $0,14. L'azienda ha inoltre annunciato una partnership strategica con Allstate a luglio 2024.
Arlo Technologies informó sobre los resultados del segundo trimestre de 2024 con ingresos por servicios récord de $60.3 millones, un aumento del 19.7% interanual. La compañía reportó una pérdida neta GAAP por acción de $(0.12) y un ingreso neto no-GAAP por acción de $0.10. Los ingresos recurrentes anuales (ARR) alcanzaron $235.0 millones, un incremento del 21.4% interanual. Arlo logró un flujo de caja libre de $25.6 millones con un margen del 10.2% para la primera mitad de 2024.
La compañía superó los 4 millones de suscriptores en julio de 2024. El CEO Matthew McRae destacó el margen bruto no-GAAP del 76% del negocio de servicios, que ahora representa casi el 50% de los ingresos totales. Los ingresos totales del segundo trimestre fueron de $127.4 millones, un aumento del 10.8% interanual, con un margen bruto GAAP del 36.8% y un margen bruto no-GAAP del 37.9%.
Las perspectivas comerciales para el tercer trimestre de 2024 proyectan ingresos entre $132 y $142 millones, con un ingreso neto no-GAAP por acción de $0.08 a $0.14. La compañía también anunció una asociación estratégica con Allstate en julio de 2024.
Arlo Technologies는 2024년 2분기 결과를 발표하면서 기록적인 서비스 수익 6,030만 달러를 달성했으며, 이는 전년 대비 19.7% 증가한 수치입니다. 회사는 GAAP 기준 주당 손실이 $(0.12)로 나타났으며, 비GAAP 기준 주당 순이익은 $0.10로 기록했습니다. 연간 반복 수익(ARR)은 2억 3,500만 달러에 도달하였으며, 이는 21.4% 증가하였습니다. Arlo는 2024년 상반기 동안 자유 현금 흐름으로 2,560만 달러를 기록했으며, 10.2%의 마진을 보였습니다.
회사는 2024년 7월에 400만 명의 가입자를 초과했습니다. CEO Matthew McRae는 현재 전체 수익의 거의 50%를 차지하는 서비스 사업의 비GAAP 총 마진이 76%임을 강조했습니다. 2분기 총 수익은 1억 2,740만 달러로 전년 대비 10.8% 증가했으며, GAAP 총 마진은 36.8%이고 비GAAP 총 마진은 37.9%입니다.
2024년 3분기 비즈니스 전망은 수익이 1억 3,200만 달러와 1억 4,200만 달러 사이일 것으로 예상되며, 비GAAP 기준 주당 순이익은 $0.08에서 $0.14 사이입니다. 회사는 또한 2024년 7월에 Allstate와의 전략적 파트너십을 발표했습니다.
Arlo Technologies a annoncé les résultats du deuxième trimestre 2024 avec des revenus liés aux services record de 60,3 millions de dollars, soit une augmentation de 19,7 % par rapport à l'année précédente. L'entreprise a affiché une perte nette GAAP par action de $(0,12) et un résultat net non-GAAP par action de 0,10 $. Les revenus récurrents annuels (ARR) ont atteint 235,0 millions de dollars, en hausse de 21,4 % par rapport à l'année précédente. Arlo a réalisé un flux de trésorerie libre de 25,6 millions de dollars avec une marge de 10,2 % pour le premier semestre 2024.
L'entreprise a dépassé 4 millions d'abonnés en juillet 2024. Le PDG Matthew McRae a souligné la marge brute non-GAAP de 76 % du secteur des services, qui représente désormais près de 50 % des revenus totaux. Les revenus totaux du deuxième trimestre étaient de 127,4 millions de dollars, une augmentation de 10,8 % par rapport à l'année précédente, avec une marge brute GAAP de 36,8 % et une marge brute non-GAAP de 37,9 %.
Les perspectives commerciales pour le troisième trimestre 2024 prévoient des revenus entre 132 et 142 millions de dollars, avec un résultat net non-GAAP par action de 0,08 à 0,14 $. L'entreprise a également annoncé un partenariat stratégique avec Allstate en juillet 2024.
Arlo Technologies berichtete über die Ergebnisse des zweiten Quartals 2024 mit einem Rekord von Dienstleistungenumsätzen in Höhe von 60,3 Millionen Dollar, was einem Anstieg von 19,7 % im Jahresvergleich entspricht. Das Unternehmen verzeichnete einen GAAP-Nettoverlust pro Aktie von $(0,12) und ein Nicht-GAAP-Nettoeinkommen pro Aktie von 0,10 $. Die jährlichen wiederkehrenden Einnahmen (ARR) beliefen sich auf 235,0 Millionen Dollar, was einem Anstieg von 21,4 % im Jahresvergleich entspricht. Arlo erzielte einen freien Cashflow von 25,6 Millionen Dollar mit einer Marge von 10,2 % für das erste Halbjahr 2024.
Das Unternehmen überschritt im Juli 2024 die 4-Millionen-Abonnenten-Marke. CEO Matthew McRae hob die Non-GAAP Bruttomarge von 76 % des Dienstgeschäfts hervor, das nun fast 50 % des Gesamtumsatzes ausmacht. Der Gesamterlös des 2. Quartals betrug 127,4 Millionen Dollar, was einem Anstieg von 10,8 % im Jahresvergleich entspricht, mit einer GAAP-Grossmarge von 36,8 % und einer Non-GAAP-Grossmarge von 37,9 %.
Die Geschäftsausichten für das 3. Quartal 2024 projizieren Einnahmen zwischen 132 und 142 Millionen Dollar, mit einem Non-GAAP-Nettoeinkommen pro Aktie von 0,08 bis 0,14 $. Das Unternehmen kündigte außerdem im Juli 2024 eine strategische Partnerschaft mit Allstate an.
- Record service revenue of $60.3 million, up 19.7% YoY.
- Non-GAAP net income per share of $0.10.
- Annual recurring revenue (ARR) of $235.0 million, up 21.4% YoY.
- Free cash flow of $25.6 million with a 10.2% margin for H1 2024.
- Surpassed 4 million subscribers in July 2024.
- 76% non-GAAP gross margin for the service business.
- Total Q2 revenue of $127.4 million, up 10.8% YoY.
- GAAP net loss per share of $(0.12) for Q2 2024.
- GAAP gross margin decreased to 36.8% from 38.1% in Q1 2024.
Insights
Arlo's Q2 2024 results show strong growth, particularly in its service business. Record service revenue of
The company's profitability is improving, with non-GAAP net income per share of
Arlo's Q3 2024 outlook projects revenue between
Arlo's performance indicates a successful transition to a services-focused business model in the smart home security market. Surpassing 4 million paid accounts in July 2024, with a
The non-GAAP services gross margin of
The strategic partnership with Allstate signals Arlo's efforts to expand its ecosystem and value proposition. This move could enhance customer loyalty and potentially open new revenue streams. As the smart home security market continues to grow, Arlo's focus on services and strategic partnerships could be key differentiators in a competitive landscape.
Record service revenue of
GAAP net loss per share of
Annual recurring revenue (ARR) ended at
Free cash flow (FCF) of
Surpassed 4 million subscribers in July 2024
“Arlo’s service business continues its strong growth path, recently surpassing 4 million paid accounts and
Financial and Business Highlights
-
Q2 total revenue of
$127.4 million 10.8% year over year.
-
Record Q2 service revenue of
$60.3 million 19.7% year over year.
-
Q2 GAAP services gross margin of
75.8% and non-GAAP services gross margin of76.4% .
-
GAAP gross profit of
$46.9 million 11.9% year over year; non-GAAP gross profit of$48.3 million 12.4% year over year.
-
GAAP gross margin of
36.8% ; non-GAAP gross margin of37.9% .
-
GAAP net loss per share of
$(0.12) $0.10 $(0.22) $0.19
-
Cumulative paid accounts increased to 3.98 million, growing
73.9% year over year; surpassed 4.0 million subscribers in July 2024.
-
Ended the quarter with ARR(1) of
$235.0 million 21.4% year over year.
-
Ended with cash and cash equivalents and short-term investments of
$144.0 million $20.3 million
- Announced a strategic partnership with Allstate in July 2024 offering protection plans to Arlo customers’ security devices purchases.
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
||||||||||
|
(In thousands, except percentage and per share data) |
||||||||||||||||||
Revenue |
$ |
127,447 |
|
|
$ |
124,200 |
|
|
$ |
115,076 |
|
|
$ |
251,647 |
|
|
$ |
226,080 |
|
GAAP Gross Margin |
|
36.8 |
% |
|
|
38.1 |
% |
|
|
36.4 |
% |
|
|
37.4 |
% |
|
|
34.1 |
% |
Non-GAAP Gross Margin (3) |
|
37.9 |
% |
|
|
39.4 |
% |
|
|
37.3 |
% |
|
|
38.6 |
% |
|
|
35.0 |
% |
GAAP Net Loss per Share - Basic and Diluted |
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.24 |
) |
Non-GAAP Net Income per Share - Basic and Diluted (3) |
$ |
0.10 |
|
|
$ |
0.09 |
|
|
$ |
0.06 |
|
|
$ |
0.19 |
|
|
$ |
0.07 |
|
(1) |
|
In the first fiscal quarter of 2024, we changed the methodology on paid service revenue recognition from a mid-month convention to a daily recognition model which recognizes paid service revenue based on the number of service days within the fiscal reporting period, commencing on the start date of the subscription and continuing over the term of the arrangement. Accordingly, the methodology used to calculate ARR was also changed as of March 31, 2024 and is now calculated by taking the average daily paid service revenue of the last calendar month in the fiscal quarter, multiplied by 365 days. We believe the daily recognition model aligns with our customers’ subscription period and service usage and allows for a more precise measurement of paid service revenue relative to the former methodology of a mid-month convention, which was based on paid service revenue for the last calendar month in the fiscal quarter, multiplied by 12 months. This change in calculation methodology has no material impact on our financial statements or any previously reported ARR numbers. |
|
|
|
(2) |
|
FCF is calculated as net cash provided by operating activities less capital expenditures. FCF margin is the FCF divided by revenue. |
|
|
|
(3) |
|
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. |
Third Quarter 2024 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 September 29, 2024 |
||
|
Revenue |
|
Net Income (Loss) per Diluted Share |
|
(In millions, except per share data) |
||
GAAP |
|
|
|
Estimated adjustment for stock-based compensation and other expense |
— |
|
0.15 |
Non-GAAP |
|
|
|
(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 |
Investor Conference Call / Webcast Details
Arlo will review the second quarter 2024 results and discuss management’s expectations for the third quarter 2024 today, Thursday, August 8, 2024 at 5:00 p.m. ET (2:00 p.m. PT). To view the accompanying presentation, a live webcast of the conference call will be available on Arlo’s Investor Relations website at https://investor.arlo.com. The toll-free dial-in number for the live audio call is (833) 470-1428. The international dial-in number for the live audio call is (404) 975-4839. The conference ID for the call is 838472. A replay of the call will be available via the web at https://investor.arlo.com.
About Arlo Technologies, Inc.
Arlo is an award-winning, industry leader that is transforming the ways in which people can protect everything that matters to them with advanced home, business, and personal security solutions. Arlo’s deep expertise in AI- and CV-powered analytics, cloud services, user experience and product design, and innovative wireless and RF connectivity enables the delivery of a seamless, smart security experience for Arlo users that is easy to set up 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 connected devices, software and services. These include wire-free, smart Wi-Fi and LTE-enabled security cameras, video doorbells, floodlights, security system, and Arlo's subscription services: Arlo Secure, and Arlo Safe.
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 implementing 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.
© 2024 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
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
Non-GAAP Financial Information:
To supplement our unaudited selected financial data presented on a basis consistent with
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 |
||||||
|
June 30, 2024 |
|
December 31, 2023 |
||||
|
(In thousands, except share and per share data) |
||||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
62,928 |
|
|
$ |
56,522 |
|
Short-term investments |
|
81,077 |
|
|
|
79,974 |
|
Accounts receivable, net |
|
61,746 |
|
|
|
65,360 |
|
Inventories |
|
45,227 |
|
|
|
38,408 |
|
Prepaid expenses and other current assets |
|
12,253 |
|
|
|
10,271 |
|
Total current assets |
|
263,231 |
|
|
|
250,535 |
|
Property and equipment, net |
|
3,771 |
|
|
|
4,761 |
|
Operating lease right-of-use assets, net |
|
10,242 |
|
|
|
11,450 |
|
Goodwill |
|
11,038 |
|
|
|
11,038 |
|
Restricted cash |
|
3,624 |
|
|
|
4,131 |
|
Other non-current assets |
|
3,900 |
|
|
|
3,623 |
|
Total assets |
$ |
295,806 |
|
|
$ |
285,538 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
74,084 |
|
|
$ |
55,201 |
|
Deferred revenue |
|
23,505 |
|
|
|
18,041 |
|
Accrued liabilities |
|
80,024 |
|
|
|
88,209 |
|
Total current liabilities |
|
177,613 |
|
|
|
161,451 |
|
Non-current operating lease liabilities |
|
15,399 |
|
|
|
17,021 |
|
Other non-current liabilities |
|
3,526 |
|
|
|
3,790 |
|
Total liabilities |
|
196,538 |
|
|
|
182,262 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ Equity: |
|
|
|
||||
Preferred stock: |
|
— |
|
|
|
— |
|
Common stock: |
|
98 |
|
|
|
95 |
|
Additional paid-in capital |
|
487,644 |
|
|
|
470,322 |
|
Accumulated other comprehensive income |
|
191 |
|
|
|
320 |
|
Accumulated deficit |
|
(388,665 |
) |
|
|
(367,461 |
) |
Total stockholders’ equity |
|
99,268 |
|
|
|
103,276 |
|
Total liabilities and stockholders’ equity |
$ |
295,806 |
|
|
$ |
285,538 |
|
ARLO TECHNOLOGIES, INC. |
|||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
||||||||||
|
(In thousands, except percentage and per share data) |
||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
$ |
67,186 |
|
|
$ |
67,493 |
|
|
$ |
64,749 |
|
|
$ |
134,679 |
|
|
$ |
131,809 |
|
Services |
|
60,261 |
|
|
|
56,707 |
|
|
|
50,327 |
|
|
|
116,968 |
|
|
|
94,271 |
|
Total revenue |
|
127,447 |
|
|
|
124,200 |
|
|
|
115,076 |
|
|
|
251,647 |
|
|
|
226,080 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
66,036 |
|
|
|
63,224 |
|
|
|
60,446 |
|
|
|
129,260 |
|
|
|
124,487 |
|
Services |
|
14,557 |
|
|
|
13,596 |
|
|
|
12,772 |
|
|
|
28,153 |
|
|
|
24,518 |
|
Total cost of revenue |
|
80,593 |
|
|
|
76,820 |
|
|
|
73,218 |
|
|
|
157,413 |
|
|
|
149,005 |
|
Gross profit |
|
46,854 |
|
|
|
47,380 |
|
|
|
41,858 |
|
|
|
94,234 |
|
|
|
77,075 |
|
Gross margin |
|
36.8 |
% |
|
|
38.1 |
% |
|
|
36.4 |
% |
|
|
37.4 |
% |
|
|
34.1 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
||||||||||
Research and development |
|
19,561 |
|
|
|
20,793 |
|
|
|
17,618 |
|
|
|
40,354 |
|
|
|
35,368 |
|
Sales and marketing |
|
17,698 |
|
|
|
17,370 |
|
|
|
16,921 |
|
|
|
35,068 |
|
|
|
32,274 |
|
General and administrative |
|
21,430 |
|
|
|
19,348 |
|
|
|
15,007 |
|
|
|
40,778 |
|
|
|
30,629 |
|
Others |
|
966 |
|
|
|
479 |
|
|
|
341 |
|
|
|
1,445 |
|
|
|
973 |
|
Total operating expenses |
|
59,655 |
|
|
|
57,990 |
|
|
|
49,887 |
|
|
|
117,645 |
|
|
|
99,244 |
|
Loss from operations |
|
(12,801 |
) |
|
|
(10,610 |
) |
|
|
(8,029 |
) |
|
|
(23,411 |
) |
|
|
(22,169 |
) |
Operating margin |
|
(10.0 |
)% |
|
|
(8.5 |
)% |
|
|
(7.0 |
)% |
|
|
(9.3 |
)% |
|
|
(9.8 |
)% |
Interest income, net |
|
1,495 |
|
|
|
1,386 |
|
|
|
835 |
|
|
|
2,881 |
|
|
|
1,561 |
|
Other income (loss), net |
|
(18 |
) |
|
|
(25 |
) |
|
|
52 |
|
|
|
(43 |
) |
|
|
13 |
|
Loss before income taxes |
|
(11,324 |
) |
|
|
(9,249 |
) |
|
|
(7,142 |
) |
|
|
(20,573 |
) |
|
|
(20,595 |
) |
Provision for income taxes |
|
236 |
|
|
|
395 |
|
|
|
221 |
|
|
|
631 |
|
|
|
1,013 |
|
Net loss |
$ |
(11,560 |
) |
|
$ |
(9,644 |
) |
|
$ |
(7,363 |
) |
|
$ |
(21,204 |
) |
|
$ |
(21,608 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per share - basic and diluted |
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.24 |
) |
Weighted average shares used to compute net loss per share - basic and diluted |
|
97,843 |
|
|
|
96,264 |
|
|
|
92,337 |
|
|
|
97,051 |
|
|
|
90,984 |
|
ARLO TECHNOLOGIES, INC. |
|||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
Six Months Ended |
||||||
|
June 30, 2024 |
|
July 2, 2023 |
||||
|
(In thousands) |
||||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(21,204 |
) |
|
$ |
(21,608 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Stock-based compensation expense |
|
39,470 |
|
|
|
27,564 |
|
Depreciation and amortization |
|
1,684 |
|
|
|
2,353 |
|
Allowance for credit losses and non-cash changes to reserves |
|
(225 |
) |
|
|
613 |
|
Deferred income taxes |
|
(5 |
) |
|
|
243 |
|
Others |
|
(1,615 |
) |
|
|
(567 |
) |
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
3,805 |
|
|
|
8,734 |
|
Inventories |
|
(6,785 |
) |
|
|
6,411 |
|
Prepaid expenses and other assets |
|
(2,254 |
) |
|
|
(5,624 |
) |
Accounts payable |
|
18,785 |
|
|
|
9,836 |
|
Deferred revenue |
|
5,582 |
|
|
|
6,198 |
|
Accrued and other liabilities |
|
(10,970 |
) |
|
|
(11,245 |
) |
Net cash provided by operating activities |
|
26,268 |
|
|
|
22,908 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(651 |
) |
|
|
(1,954 |
) |
Purchases of short-term investments |
|
(111,519 |
) |
|
|
(61,152 |
) |
Proceeds from maturities of short-term investments |
|
111,902 |
|
|
|
29,956 |
|
Net cash used in investing activities |
|
(268 |
) |
|
|
(33,150 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds related to employee benefit plans |
|
2,380 |
|
|
|
4,611 |
|
Restricted stock unit withholdings |
|
(22,481 |
) |
|
|
(16,562 |
) |
Net cash used in financing activities |
|
(20,101 |
) |
|
|
(11,951 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
5,899 |
|
|
|
(22,193 |
) |
Cash, cash equivalents and restricted cash, at beginning of period |
|
60,653 |
|
|
|
88,179 |
|
Cash, cash equivalents and restricted cash, at end of period |
$ |
66,552 |
|
|
$ |
65,986 |
|
|
|
|
|
||||
Non-cash investing activities: |
|
|
|
||||
Purchases of property and equipment included in accounts payable and accrued liabilities |
$ |
233 |
|
|
$ |
433 |
|
ARLO TECHNOLOGIES, INC. |
|||||||||||||||||||
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
|||||||||||||||||||
UNAUDITED STATEMENT OF OPERATIONS DATA: |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
||||||||||
|
(In thousands, except percentage data) |
||||||||||||||||||
GAAP gross profit: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
$ |
1,150 |
|
|
$ |
4,269 |
|
|
$ |
4,303 |
|
|
$ |
5,419 |
|
|
$ |
7,322 |
|
Services |
|
45,704 |
|
|
|
43,111 |
|
|
|
37,555 |
|
|
|
88,815 |
|
|
|
69,753 |
|
Total GAAP gross profit |
|
46,854 |
|
|
|
47,380 |
|
|
|
41,858 |
|
|
|
94,234 |
|
|
|
77,075 |
|
GAAP gross margin: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
1.7 |
% |
|
|
6.3 |
% |
|
|
6.6 |
% |
|
|
4.0 |
% |
|
|
5.6 |
% |
Services |
|
75.8 |
% |
|
|
76.0 |
% |
|
|
74.6 |
% |
|
|
75.9 |
% |
|
|
74.0 |
% |
Total GAAP gross margin |
|
36.8 |
% |
|
|
38.1 |
% |
|
|
36.4 |
% |
|
|
37.4 |
% |
|
|
34.1 |
% |
Stock-based compensation expense - Products |
|
1,127 |
|
|
|
1,114 |
|
|
|
848 |
|
|
|
2,241 |
|
|
|
1,760 |
|
Stock-based compensation expense - Services |
|
165 |
|
|
|
257 |
|
|
|
119 |
|
|
|
422 |
|
|
|
68 |
|
Amortization of development of software cost - Services |
|
151 |
|
|
|
151 |
|
|
|
151 |
|
|
|
302 |
|
|
|
302 |
|
Non-GAAP gross profit: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
2,277 |
|
|
|
5,383 |
|
|
|
5,151 |
|
|
|
7,660 |
|
|
|
9,082 |
|
Services |
|
46,020 |
|
|
|
43,519 |
|
|
|
37,825 |
|
|
|
89,539 |
|
|
|
70,123 |
|
Total Non-GAAP gross profit |
$ |
48,297 |
|
|
$ |
48,902 |
|
|
$ |
42,976 |
|
|
$ |
97,199 |
|
|
$ |
79,205 |
|
Non-GAAP gross margin: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
3.4 |
% |
|
|
8.0 |
% |
|
|
8.0 |
% |
|
|
5.7 |
% |
|
|
6.9 |
% |
Services |
|
76.4 |
% |
|
|
76.7 |
% |
|
|
75.2 |
% |
|
|
76.6 |
% |
|
|
74.4 |
% |
Total Non-GAAP gross margin |
|
37.9 |
% |
|
|
39.4 |
% |
|
|
37.3 |
% |
|
|
38.6 |
% |
|
|
35.0 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP research and development |
$ |
19,561 |
|
|
$ |
20,793 |
|
|
$ |
17,618 |
|
|
$ |
40,354 |
|
|
$ |
35,368 |
|
Stock-based compensation expense |
|
(4,778 |
) |
|
|
(4,904 |
) |
|
|
(3,311 |
) |
|
|
(9,682 |
) |
|
|
(7,222 |
) |
Non-GAAP research and development |
$ |
14,783 |
|
|
$ |
15,889 |
|
|
$ |
14,307 |
|
|
$ |
30,672 |
|
|
$ |
28,146 |
|
Percentage of revenue |
|
11.6 |
% |
|
|
12.8 |
% |
|
|
12.4 |
% |
|
|
12.2 |
% |
|
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP sales and marketing |
$ |
17,698 |
|
|
$ |
17,370 |
|
|
$ |
16,921 |
|
|
$ |
35,068 |
|
|
$ |
32,274 |
|
Stock-based compensation expense |
|
(2,176 |
) |
|
|
(2,240 |
) |
|
|
(1,670 |
) |
|
|
(4,416 |
) |
|
|
(3,392 |
) |
Non-GAAP sales and marketing |
$ |
15,522 |
|
|
$ |
15,130 |
|
|
$ |
15,251 |
|
|
$ |
30,652 |
|
|
$ |
28,882 |
|
Percentage of revenue |
|
12.2 |
% |
|
|
12.2 |
% |
|
|
13.3 |
% |
|
|
12.2 |
% |
|
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP general and administrative |
$ |
21,430 |
|
|
$ |
19,348 |
|
|
$ |
15,007 |
|
|
$ |
40,778 |
|
|
$ |
30,629 |
|
Stock-based compensation expense |
|
(12,674 |
) |
|
|
(10,035 |
) |
|
|
(7,025 |
) |
|
|
(22,709 |
) |
|
|
(15,122 |
) |
Non-GAAP general and administrative |
$ |
8,756 |
|
|
$ |
9,313 |
|
|
$ |
7,982 |
|
|
$ |
18,069 |
|
|
$ |
15,507 |
|
Percentage of revenue |
|
6.9 |
% |
|
|
7.5 |
% |
|
|
6.9 |
% |
|
|
7.2 |
% |
|
|
6.9 |
% |
ARLO TECHNOLOGIES, INC. |
|||||||||||||||||||
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED) |
|||||||||||||||||||
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED): |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
||||||||||
|
(In thousands, except percentage data) |
||||||||||||||||||
GAAP total operating expenses |
$ |
59,655 |
|
|
$ |
57,990 |
|
|
$ |
49,887 |
|
|
$ |
117,645 |
|
|
$ |
99,244 |
|
Stock-based compensation expense |
|
(19,628 |
) |
|
|
(17,179 |
) |
|
|
(12,006 |
) |
|
|
(36,807 |
) |
|
|
(25,736 |
) |
Others |
|
(966 |
) |
|
|
(479 |
) |
|
|
(341 |
) |
|
|
(1,445 |
) |
|
|
(973 |
) |
Non-GAAP total operating expenses |
$ |
39,061 |
|
|
$ |
40,332 |
|
|
$ |
37,540 |
|
|
$ |
79,393 |
|
|
$ |
72,535 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP operating loss |
$ |
(12,801 |
) |
|
$ |
(10,610 |
) |
|
$ |
(8,029 |
) |
|
$ |
(23,411 |
) |
|
$ |
(22,169 |
) |
GAAP operating margin |
|
(10.0 |
)% |
|
|
(8.5 |
)% |
|
|
(7.0 |
)% |
|
|
(9.3 |
)% |
|
|
(9.8 |
)% |
Stock-based compensation expense |
|
20,920 |
|
|
|
18,550 |
|
|
|
12,973 |
|
|
|
39,470 |
|
|
|
27,564 |
|
Others |
|
1,117 |
|
|
|
630 |
|
|
|
492 |
|
|
|
1,747 |
|
|
|
1,275 |
|
Non-GAAP operating income |
$ |
9,236 |
|
|
$ |
8,570 |
|
|
$ |
5,436 |
|
|
$ |
17,806 |
|
|
$ |
6,670 |
|
Non-GAAP operating margin |
|
7.2 |
% |
|
|
6.9 |
% |
|
|
4.7 |
% |
|
|
7.1 |
% |
|
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP provision for income taxes |
$ |
236 |
|
|
$ |
395 |
|
|
$ |
221 |
|
|
$ |
631 |
|
|
$ |
1,013 |
|
GAAP income tax rate |
|
(2.1 |
)% |
|
|
(4.3 |
)% |
|
|
(3.1 |
)% |
|
|
(3.1 |
)% |
|
|
(4.9 |
)% |
Non-GAAP provision for income taxes |
$ |
236 |
|
|
$ |
395 |
|
|
$ |
221 |
|
|
$ |
631 |
|
|
$ |
1,013 |
|
Non-GAAP income tax rate |
|
2.2 |
% |
|
|
4.0 |
% |
|
|
3.5 |
% |
|
|
3.1 |
% |
|
|
12.3 |
% |
ARLO TECHNOLOGIES, INC. |
|||||||||||||||||||
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED) |
|||||||||||||||||||
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED): |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
||||||||||
|
(In thousands, except percentage and per share data) |
||||||||||||||||||
GAAP net loss |
$ |
(11,560 |
) |
|
$ |
(9,644 |
) |
|
$ |
(7,363 |
) |
|
$ |
(21,204 |
) |
|
$ |
(21,608 |
) |
Stock-based compensation expense |
|
20,920 |
|
|
|
18,550 |
|
|
|
12,973 |
|
|
|
39,470 |
|
|
|
27,564 |
|
Others |
|
1,117 |
|
|
|
630 |
|
|
|
492 |
|
|
|
1,747 |
|
|
|
1,275 |
|
Non-GAAP net income |
$ |
10,477 |
|
|
$ |
9,536 |
|
|
$ |
6,102 |
|
|
$ |
20,013 |
|
|
$ |
7,231 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net loss per share - basic |
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.24 |
) |
Stock-based compensation expense |
|
0.21 |
|
|
|
0.18 |
|
|
|
0.14 |
|
|
|
0.39 |
|
|
|
0.30 |
|
Others |
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
0.01 |
|
Non-GAAP net income per share - diluted |
$ |
0.10 |
|
|
$ |
0.09 |
|
|
$ |
0.06 |
|
|
$ |
0.19 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shares used in computing GAAP net loss - basic |
|
97,843 |
|
|
|
96,264 |
|
|
|
92,337 |
|
|
|
97,051 |
|
|
|
90,984 |
|
Shares used in computing non-GAAP net income - diluted |
|
106,127 |
|
|
|
103,803 |
|
|
|
99,187 |
|
|
|
105,441 |
|
|
|
96,800 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Free cash flow: |
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities |
$ |
6,463 |
|
|
$ |
19,806 |
|
|
$ |
12,578 |
|
|
$ |
26,268 |
|
|
$ |
22,908 |
|
Less: Purchases of property and equipment |
|
(295 |
) |
|
|
(356 |
) |
|
|
(1,031 |
) |
|
|
(651 |
) |
|
|
(1,954 |
) |
Free cash flow (1) |
$ |
6,168 |
|
|
$ |
19,450 |
|
|
$ |
11,547 |
|
|
$ |
25,617 |
|
|
$ |
20,954 |
|
Free cash flow margin (1) |
|
4.8 |
% |
|
|
15.7 |
% |
|
|
10.0 |
% |
|
|
10.2 |
% |
|
|
9.3 |
% |
(1) |
|
Free cash flow is calculated as net cash provided by operating activities less capital expenditures. Free cash flow margin is the free cash flow divided by revenue. |
ARLO TECHNOLOGIES, INC. |
|||||||||||||||||||
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION |
|||||||||||||||||||
As of and for the three months ended |
|||||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
October 1, 2023 |
|
July 2, 2023 |
||||||||||
|
(In thousands, except headcount and per share data) |
||||||||||||||||||
Cash, cash equivalents and short-term investments |
$ |
144,005 |
|
$ |
142,863 |
|
$ |
136,496 |
|
$ |
126,049 |
|
$ |
123,675 |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable, net |
$ |
61,746 |
|
|
$ |
56,496 |
|
|
$ |
65,360 |
|
|
$ |
70,313 |
|
|
$ |
57,327 |
|
Days sales outstanding |
|
44 |
|
|
|
41 |
|
|
|
44 |
|
|
|
49 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Inventories |
$ |
45,227 |
|
|
$ |
44,676 |
|
|
$ |
38,408 |
|
|
$ |
53,496 |
|
|
$ |
39,429 |
|
Inventory turns |
|
5.8 |
|
|
|
5.7 |
|
|
|
7.6 |
|
|
|
5.5 |
|
|
|
6.1 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weeks of channel inventory: |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
14.8 |
|
|
|
12.9 |
|
|
|
11.1 |
|
|
|
10.9 |
|
|
|
9.7 |
|
|
|
12.5 |
|
|
|
11.4 |
|
|
|
20.5 |
|
|
|
7.4 |
|
|
|
9.3 |
|
APAC distribution channel |
|
3.9 |
|
|
|
6.4 |
|
|
|
3.9 |
|
|
|
7.2 |
|
|
|
7.7 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred revenue (current and non-current) |
$ |
23,695 |
|
|
$ |
21,540 |
|
|
$ |
18,114 |
|
|
$ |
17,706 |
|
|
$ |
17,702 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cumulative registered accounts (1) |
|
9,987 |
|
|
|
9,173 |
|
|
|
8,652 |
|
|
|
8,193 |
|
|
|
7,860 |
|
Cumulative paid accounts (2) |
|
3,980 |
|
|
|
3,235 |
|
|
|
2,813 |
|
|
|
2,486 |
|
|
|
2,289 |
|
Annual recurring revenue (ARR) (3) |
$ |
234,981 |
|
|
$ |
226,968 |
|
|
$ |
210,078 |
|
|
$ |
199,993 |
|
|
$ |
193,633 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Headcount |
|
362 |
|
|
|
373 |
|
|
|
363 |
|
|
|
353 |
|
|
|
345 |
|
Non-GAAP diluted shares |
|
106,127 |
|
|
|
103,803 |
|
|
|
101,938 |
|
|
|
102,116 |
|
|
|
99,187 |
|
(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) |
|
In the first fiscal quarter of 2024, we changed the methodology on paid service revenue recognition from a mid-month convention to a daily recognition model which recognizes paid service revenue based on the number of service days within the fiscal reporting period, commencing on the start date of the subscription and continuing over the term of the arrangement. Accordingly, the methodology used to calculate ARR was also changed as of March 31, 2024 and is now calculated by taking the average daily paid service revenue of the last calendar month in the fiscal quarter, multiplied by 365 days. We believe the daily recognition model aligns with our customers’ subscription period and service usage and allows for a more precise measurement of paid service revenue relative to the former methodology of a mid-month convention, which was based on paid service revenue for the last calendar month in the fiscal quarter, multiplied by 12 months. This change in calculation methodology has no material impact on our financial statements or any previously reported ARR numbers. |
|
|
|
REVENUE BY GEOGRAPHY |
||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
|||||||||||||||
|
(In thousands, except percentage data) |
|||||||||||||||||||||||
|
$ |
65,294 |
51.2 |
% |
|
$ |
57,169 |
46.0 |
% |
|
$ |
78,136 |
67.9 |
% |
|
$ |
122,463 |
48.7 |
% |
|
$ |
134,768 |
59.6 |
% |
EMEA |
|
56,827 |
44.6 |
% |
|
|
61,380 |
49.4 |
% |
|
|
30,958 |
26.9 |
% |
|
|
118,207 |
47.0 |
% |
|
|
79,430 |
35.1 |
% |
APAC |
|
5,326 |
4.2 |
% |
|
|
5,651 |
4.6 |
% |
|
|
5,982 |
5.2 |
% |
|
|
10,977 |
4.3 |
% |
|
|
11,882 |
5.3 |
% |
Total |
$ |
127,447 |
100.0 |
% |
|
$ |
124,200 |
100.0 |
% |
|
$ |
115,076 |
100.0 |
% |
|
$ |
251,647 |
100.0 |
% |
|
$ |
226,080 |
100.0 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808648891/en/
Arlo Investor Relations
Tahmin Clarke
investors@arlo.com
Source: Arlo Technologies, Inc.
FAQ
What was Arlo's service revenue in Q2 2024?
What was Arlo's GAAP net loss per share in Q2 2024?
How much did Arlo's annual recurring revenue (ARR) grow?
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How did Arlo's non-GAAP net income per share perform in Q2 2024?
