Arlo Reports Third Quarter 2024 Results
Arlo Technologies (NYSE: ARLO) reported strong Q3 2024 results with total revenue reaching $137.7 million, up 5.9% year over year. The company achieved record service revenue of $61.9 million, growing 21.2% YoY with a GAAP service gross margin of 76.7%. Annual Recurring Revenue (ARR) grew 20.8% to $241.6 million, while paid accounts increased 70.4% to 4.24 million. The company reported a GAAP net loss of $(0.04) per share and non-GAAP net income of $0.11 per share. Free cash flow was robust at $17.4 million with a 12.6% margin. For Q4 2024, Arlo projects revenue between $116-126 million with non-GAAP EPS of $0.07-$0.13.
Arlo Technologies (NYSE: ARLO) ha riportato risultati solidi per il terzo trimestre del 2024, con un fatturato totale raggiunto di $137,7 milioni, in aumento del 5,9% rispetto all’anno precedente. L’azienda ha raggiunto un ricavo da servizi record di $61,9 milioni, in crescita del 21,2% su base annua, con un margine lordo dei servizi GAAP del 76,7%. I Ricavi Ricorrenti Annuali (ARR) sono aumentati del 20,8% arrivando a $241,6 milioni, mentre gli account a pagamento sono aumentati del 70,4%, raggiungendo 4,24 milioni. L'azienda ha riportato una perdita netta GAAP di $(0,04) per azione e un utile netto non GAAP di $0,11 per azione. Il flusso di cassa libero è stato robusto a $17,4 milioni, con un margine del 12,6%. Per il quarto trimestre del 2024, Arlo prevede un fatturato compreso tra $116 e $126 milioni, con un EPS non GAAP di $0,07-$0,13.
Arlo Technologies (NYSE: ARLO) informó resultados sólidos para el tercer trimestre de 2024, alcanzando ingresos totales de $137,7 millones, un aumento del 5,9% interanual. La compañía logró un ingreso por servicios récord de $61,9 millones, creciendo un 21,2% interanual con un margen bruto de servicios GAAP del 76,7%. Los Ingresos Recurrentes Anuales (ARR) crecieron un 20,8% hasta los $241,6 millones, mientras que las cuentas pagadas aumentaron un 70,4% hasta alcanzar los 4,24 millones. La empresa reportó una pérdida neta GAAP de $(0,04) por acción y un ingreso neto no GAAP de $0,11 por acción. El flujo de caja libre fue robusto en $17,4 millones, con un margen del 12,6%. Para el cuarto trimestre de 2024, Arlo proyecta ingresos entre $116 y $126 millones con un EPS no GAAP de $0,07 a $0,13.
Arlo Technologies (NYSE: ARLO)는 2024년 3분기 강력한 실적을 발표하며 총 수익이 1억 3,770만 달러에 이르렀고, 이는 전년 대비 5.9% 증가한 수치입니다. 회사는 6170만 달러의 기록적인 서비스 수익을 달성했으며, 이는 전년 대비 21.2% 증가하였고, GAAP 서비스 총 마진은 76.7%입니다. 연간 반복 수익(ARR)은 20.8% 성장하여 2억 4,160만 달러에 이르렀고, 유료 계정 수는 70.4% 증가하여 424만 개에 달했습니다. 회사는 주당 GAAP 순손실이 $(0.04)이며 비GAAP 순이익이 주당 $0.11이라고 보고했습니다. 자유 현금 흐름은 1,740만 달러로 건강한 수준이며, 마진은 12.6%입니다. 2024년 4분기 동안 Arlo는 매출을 1억 1,600만 달러에서 1억 2,600만 달러 사이로 예측하며, 비GAAP 주당순이익(EPS)은 $0.07-$0.13로 예측합니다.
Arlo Technologies (NYSE: ARLO) a annoncé de solides résultats pour le troisième trimestre 2024, avec un chiffre d'affaires total atteignant 137,7 millions de dollars, en hausse de 5,9% par rapport à l'année précédente. L'entreprise a réalisé un revenu de service record de 61,9 millions de dollars, en croissance de 21,2% d'une année sur l'autre et une marge brute de services GAAP de 76,7%. Les Revenus Récurrents Annuels (ARR) ont augmenté de 20,8% pour atteindre 241,6 millions de dollars, tandis que le nombre de comptes payants a augmenté de 70,4%, atteignant 4,24 millions. L'entreprise a déclaré une perte nette GAAP de $(0,04) par action et un revenu net non-GAAP de $0,11 par action. Le flux de trésorerie libre était solide à 17,4 millions de dollars avec une marge de 12,6%. Pour le quatrième trimestre 2024, Arlo prévoit des revenus compris entre 116 et 126 millions de dollars, avec un BPA non-GAAP de $0,07 à $0,13.
Arlo Technologies (NYSE: ARLO) hat starke Ergebnisse für das 3. Quartal 2024 berichtet, mit einem Gesamtumsatz von 137,7 Millionen USD, was einem Anstieg von 5,9% im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte einen Rekordumsatz aus Dienstleistungen von 61,9 Millionen USD, mit einem jährlichen Wachstum von 21,2% und einer GAAPdienstleistungs-Bruttomarge von 76,7%. Der wiederkehrende Jahresumsatz (ARR) wuchs um 20,8% auf 241,6 Millionen USD, während die bezahlten Konten um 70,4% auf 4,24 Millionen stiegen. Das Unternehmen meldete einen GAAP-Nettoverlust von $(0,04) pro Aktie und ein nicht-GAAP-Nettoeinkommen von $0,11 pro Aktie. Der freie Cashflow war robust bei 17,4 Millionen USD mit einer Marge von 12,6%. Für das 4. Quartal 2024 prognostiziert Arlo einen Umsatz zwischen 116 und 126 Millionen USD sowie einen nicht-GAAP EPS von $0,07 bis $0,13.
- Record service revenue of $61.9M, up 21.2% YoY
- Strong service gross margins: 76.7% GAAP, 77.4% non-GAAP
- ARR grew 20.8% to $241.6M
- Paid accounts increased 70.4% YoY to 4.24 million
- Robust free cash flow of $17.4M with 12.6% margin
- Total revenue increased 5.9% YoY to $137.7M
- GAAP net loss of $(0.04) per share
- Expected revenue decline in Q4 2024 guidance compared to Q3
Insights
The Q3 results demonstrate strong operational performance with notable highlights: service revenue reached a record
Key metrics show sustainable growth: ARR reached
Arlo's strategic focus on subscription services is proving successful, with the launch of Arlo Secure 5.0 strengthening their competitive position. The
The transition to a daily recognition model for service revenue shows improved accounting precision and transparency. This recurring revenue focus, combined with AI and CV-powered analytics capabilities, positions Arlo well in the growing smart security market.
Record service revenue of
GAAP service gross margin of
GAAP net loss per share of
Annual recurring revenue (ARR) ended at
Free cash flow (FCF) of
“Arlo demonstrated operational excellence in the third quarter, driven by our services business, with our highly profitable ARR growing
Financial and Business Highlights
-
Q3 total revenue of
, an increase of$137.7 million 5.9% year over year.
-
Record Q3 service revenue of
, an increase of$61.9 million 21.2% year over year.
-
Record Q3 GAAP services gross margin of
76.7% and record non-GAAP services gross margin of77.4% .
-
GAAP gross profit of
, an increase of$48.4 million 12.2% year over year; non-GAAP gross profit of , an increase of$49.5 million 12.1% year over year.
-
GAAP gross margin of
35.2% ; non-GAAP gross margin of36.0% .
-
GAAP net loss per share of
and non-GAAP net income per share of$(0.04) .$0.11
-
Cumulative paid accounts increased to 4.24 million, growing
70.4% year over year.
-
Ended the quarter with ARR(1) of
, growing$241.6 million 20.8% year over year.
-
Ended with cash and cash equivalents and short-term investments of
, up$146.6 million year over year.$20.5 million
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29,
|
|
June 30,
|
|
October 1,
|
|
September 29,
|
|
October 1,
|
||||||||||
|
(In thousands, except percentage and per share data) |
||||||||||||||||||
Revenue |
$ |
137,667 |
|
|
$ |
127,447 |
|
|
$ |
130,003 |
|
|
$ |
389,314 |
|
|
$ |
356,083 |
|
GAAP Gross Margin |
|
35.2 |
% |
|
|
36.8 |
% |
|
|
33.2 |
% |
|
|
36.6 |
% |
|
|
33.8 |
% |
Non-GAAP Gross Margin (3) |
|
36.0 |
% |
|
|
37.9 |
% |
|
|
34.0 |
% |
|
|
37.7 |
% |
|
|
34.6 |
% |
GAAP Net Loss per Share - Basic and Diluted |
$ |
(0.04 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.25 |
) |
Non-GAAP Net Income per Share - Basic and Diluted (3) |
$ |
0.11 |
|
|
$ |
0.10 |
|
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.17 |
|
(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. |
Fourth 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 December 31, 2024 |
||
|
Revenue |
|
Net Income (Loss) per Diluted Share |
|
(In millions, except per share data) |
||
GAAP |
|
|
|
Estimated adjustment for stock-based compensation and other expense |
— |
|
|
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 third quarter 2024 results and discuss management’s expectations for the fourth quarter 2024 today, Thursday, November 7, 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 293127. 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, write-off of deferred financing, separation expenses, 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 |
||||||
|
September 29,
|
|
December 31,
|
||||
|
(In thousands, except share and per share data) |
||||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
77,032 |
|
|
$ |
56,522 |
|
Short-term investments |
|
69,542 |
|
|
|
79,974 |
|
Accounts receivable, net |
|
68,567 |
|
|
|
65,360 |
|
Inventories |
|
51,975 |
|
|
|
38,408 |
|
Prepaid expenses and other current assets |
|
12,424 |
|
|
|
10,271 |
|
Total current assets |
|
279,540 |
|
|
|
250,535 |
|
Property and equipment, net |
|
4,436 |
|
|
|
4,761 |
|
Operating lease right-of-use assets, net |
|
9,510 |
|
|
|
11,450 |
|
Goodwill |
|
11,038 |
|
|
|
11,038 |
|
Restricted cash |
|
3,654 |
|
|
|
4,131 |
|
Other non-current assets |
|
4,197 |
|
|
|
3,623 |
|
Total assets |
$ |
312,375 |
|
|
$ |
285,538 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
93,745 |
|
|
$ |
55,201 |
|
Deferred revenue |
|
24,596 |
|
|
|
18,041 |
|
Accrued liabilities |
|
78,933 |
|
|
|
88,209 |
|
Total current liabilities |
|
197,274 |
|
|
|
161,451 |
|
Non-current operating lease liabilities |
|
14,479 |
|
|
|
17,021 |
|
Other non-current liabilities |
|
3,713 |
|
|
|
3,790 |
|
Total liabilities |
|
215,466 |
|
|
|
182,262 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ Equity: |
|
|
|
||||
Preferred stock: |
|
— |
|
|
|
— |
|
Common stock: |
|
100 |
|
|
|
95 |
|
Additional paid-in capital |
|
489,677 |
|
|
|
470,322 |
|
Accumulated other comprehensive income |
|
236 |
|
|
|
320 |
|
Accumulated deficit |
|
(393,104 |
) |
|
|
(367,461 |
) |
Total stockholders’ equity |
|
96,909 |
|
|
|
103,276 |
|
Total liabilities and stockholders’ equity |
$ |
312,375 |
|
|
$ |
285,538 |
|
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29,
|
|
June 30,
|
|
October 1,
|
|
September 29,
|
|
October 1,
|
||||||||||
|
(In thousands, except percentage and per share data) |
||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
$ |
75,784 |
|
|
$ |
67,186 |
|
|
$ |
78,961 |
|
|
$ |
210,463 |
|
|
$ |
210,770 |
|
Services |
|
61,883 |
|
|
|
60,261 |
|
|
|
51,042 |
|
|
|
178,851 |
|
|
|
145,313 |
|
Total revenue |
|
137,667 |
|
|
|
127,447 |
|
|
|
130,003 |
|
|
|
389,314 |
|
|
|
356,083 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
74,820 |
|
|
|
66,036 |
|
|
|
73,335 |
|
|
|
204,080 |
|
|
|
197,520 |
|
Services |
|
14,431 |
|
|
|
14,557 |
|
|
|
13,529 |
|
|
|
42,584 |
|
|
|
38,349 |
|
Total cost of revenue |
|
89,251 |
|
|
|
80,593 |
|
|
|
86,864 |
|
|
|
246,664 |
|
|
|
235,869 |
|
Gross profit |
|
48,416 |
|
|
|
46,854 |
|
|
|
43,139 |
|
|
|
142,650 |
|
|
|
120,214 |
|
Gross margin |
|
35.2 |
% |
|
|
36.8 |
% |
|
|
33.2 |
% |
|
|
36.6 |
% |
|
|
33.8 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
||||||||||
Research and development |
|
17,562 |
|
|
|
19,561 |
|
|
|
16,829 |
|
|
|
57,916 |
|
|
|
52,197 |
|
Sales and marketing |
|
17,832 |
|
|
|
17,698 |
|
|
|
15,863 |
|
|
|
52,900 |
|
|
|
48,137 |
|
General and administrative |
|
17,052 |
|
|
|
21,430 |
|
|
|
12,460 |
|
|
|
57,830 |
|
|
|
43,089 |
|
Others |
|
1,423 |
|
|
|
966 |
|
|
|
263 |
|
|
|
2,868 |
|
|
|
1,236 |
|
Total operating expenses |
|
53,869 |
|
|
|
59,655 |
|
|
|
45,415 |
|
|
|
171,514 |
|
|
|
144,659 |
|
Loss from operations |
|
(5,453 |
) |
|
|
(12,801 |
) |
|
|
(2,276 |
) |
|
|
(28,864 |
) |
|
|
(24,445 |
) |
Operating margin |
|
(4.0 |
)% |
|
|
(10.0 |
)% |
|
|
(1.8 |
)% |
|
|
(7.4 |
)% |
|
|
(6.9 |
)% |
Interest income, net |
|
1,400 |
|
|
|
1,495 |
|
|
|
1,175 |
|
|
|
4,281 |
|
|
|
2,736 |
|
Other income (loss), net |
|
(57 |
) |
|
|
(18 |
) |
|
|
10 |
|
|
|
(100 |
) |
|
|
23 |
|
Loss before income taxes |
|
(4,110 |
) |
|
|
(11,324 |
) |
|
|
(1,091 |
) |
|
|
(24,683 |
) |
|
|
(21,686 |
) |
Provision for income taxes |
|
329 |
|
|
|
236 |
|
|
|
29 |
|
|
|
960 |
|
|
|
1,042 |
|
Net loss |
$ |
(4,439 |
) |
|
$ |
(11,560 |
) |
|
$ |
(1,120 |
) |
|
$ |
(25,643 |
) |
|
$ |
(22,728 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per share - basic and diluted |
$ |
(0.04 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.25 |
) |
Weighted average shares used to compute net loss per share - basic and diluted |
|
99,731 |
|
|
|
97,843 |
|
|
|
94,243 |
|
|
|
97,932 |
|
|
|
92,069 |
|
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
|
Nine Months Ended |
||||||
|
September 29,
|
|
October 1,
|
||||
|
(In thousands) |
||||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(25,643 |
) |
|
$ |
(22,728 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Stock-based compensation expense |
|
54,159 |
|
|
|
37,851 |
|
Depreciation and amortization |
|
2,395 |
|
|
|
3,809 |
|
Allowance for credit losses and non-cash changes to reserves |
|
2,930 |
|
|
|
1,218 |
|
Deferred income taxes |
|
(23 |
) |
|
|
257 |
|
Others |
|
(2,493 |
) |
|
|
(1,224 |
) |
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(3,095 |
) |
|
|
(4,262 |
) |
Inventories |
|
(16,609 |
) |
|
|
(8,250 |
) |
Prepaid expenses and other assets |
|
(2,703 |
) |
|
|
(4,353 |
) |
Accounts payable |
|
38,159 |
|
|
|
31,049 |
|
Deferred revenue |
|
6,714 |
|
|
|
6,202 |
|
Accrued and other liabilities |
|
(9,157 |
) |
|
|
(9,202 |
) |
Net cash provided by operating activities |
|
44,634 |
|
|
|
30,367 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(1,612 |
) |
|
|
(2,448 |
) |
Purchases of short-term investments |
|
(145,955 |
) |
|
|
(110,905 |
) |
Proceeds from maturities of short-term investments |
|
158,796 |
|
|
|
67,259 |
|
Net cash provided by (used in) investing activities |
|
11,229 |
|
|
|
(46,094 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds related to employee benefit plans |
|
7,113 |
|
|
|
5,293 |
|
Restricted stock unit withholdings |
|
(42,943 |
) |
|
|
(22,533 |
) |
Net cash used in financing activities |
|
(35,830 |
) |
|
|
(17,240 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
20,033 |
|
|
|
(32,967 |
) |
Cash, cash equivalents and restricted cash, at beginning of period |
|
60,653 |
|
|
|
88,179 |
|
Cash, cash equivalents and restricted cash, at end of period |
$ |
80,686 |
|
|
$ |
55,212 |
|
|
|
|
|
||||
Non-cash investing activities: |
|
|
|
||||
Purchases of property and equipment included in accounts payable and accrued liabilities |
$ |
647 |
|
|
$ |
726 |
|
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
|
|||||||||||||||||||
UNAUDITED STATEMENT OF OPERATIONS DATA: |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29,
|
|
June 30,
|
|
October 1,
|
|
September 29,
|
|
October 1,
|
||||||||||
|
(In thousands, except percentage data) |
||||||||||||||||||
GAAP gross profit: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
$ |
964 |
|
|
$ |
1,150 |
|
|
$ |
5,626 |
|
|
$ |
6,383 |
|
|
$ |
13,250 |
|
Services |
|
47,452 |
|
|
|
45,704 |
|
|
|
37,513 |
|
|
|
136,267 |
|
|
|
106,964 |
|
Total GAAP gross profit |
|
48,416 |
|
|
|
46,854 |
|
|
|
43,139 |
|
|
|
142,650 |
|
|
|
120,214 |
|
GAAP gross margin: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
1.3 |
% |
|
|
1.7 |
% |
|
|
7.1 |
% |
|
|
3.0 |
% |
|
|
6.3 |
% |
Services |
|
76.7 |
% |
|
|
75.8 |
% |
|
|
73.5 |
% |
|
|
76.2 |
% |
|
|
73.6 |
% |
Total GAAP gross margin |
|
35.2 |
% |
|
|
36.8 |
% |
|
|
33.2 |
% |
|
|
36.6 |
% |
|
|
33.8 |
% |
Stock-based compensation expense - Products |
|
666 |
|
|
|
1,127 |
|
|
|
723 |
|
|
|
2,907 |
|
|
|
2,483 |
|
Stock-based compensation expense - Services |
|
289 |
|
|
|
165 |
|
|
|
145 |
|
|
|
711 |
|
|
|
213 |
|
Amortization of development of software cost - Services |
|
152 |
|
|
|
151 |
|
|
|
152 |
|
|
|
454 |
|
|
|
454 |
|
Non-GAAP gross profit: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
1,630 |
|
|
|
2,277 |
|
|
|
6,349 |
|
|
|
9,290 |
|
|
|
15,733 |
|
Services |
|
47,893 |
|
|
|
46,020 |
|
|
|
37,810 |
|
|
|
137,432 |
|
|
|
107,631 |
|
Total Non-GAAP gross profit |
$ |
49,523 |
|
|
$ |
48,297 |
|
|
$ |
44,159 |
|
|
$ |
146,722 |
|
|
$ |
123,364 |
|
Non-GAAP gross margin: |
|
|
|
|
|
|
|
|
|
||||||||||
Products |
|
2.2 |
% |
|
|
3.4 |
% |
|
|
8.0 |
% |
|
|
4.4 |
% |
|
|
7.5 |
% |
Services |
|
77.4 |
% |
|
|
76.4 |
% |
|
|
74.1 |
% |
|
|
76.8 |
% |
|
|
74.1 |
% |
Total Non-GAAP gross margin |
|
36.0 |
% |
|
|
37.9 |
% |
|
|
34.0 |
% |
|
|
37.7 |
% |
|
|
34.6 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP research and development |
$ |
17,562 |
|
|
$ |
19,561 |
|
|
$ |
16,829 |
|
|
$ |
57,916 |
|
|
$ |
52,197 |
|
Stock-based compensation expense |
|
(3,584 |
) |
|
|
(4,778 |
) |
|
|
(2,847 |
) |
|
|
(13,266 |
) |
|
|
(10,069 |
) |
Non-GAAP research and development |
$ |
13,978 |
|
|
$ |
14,783 |
|
|
$ |
13,982 |
|
|
$ |
44,650 |
|
|
$ |
42,128 |
|
Percentage of revenue |
|
10.2 |
% |
|
|
11.6 |
% |
|
|
10.8 |
% |
|
|
11.5 |
% |
|
|
11.8 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP sales and marketing |
$ |
17,832 |
|
|
$ |
17,698 |
|
|
$ |
15,863 |
|
|
$ |
52,900 |
|
|
$ |
48,137 |
|
Stock-based compensation expense |
|
(1,594 |
) |
|
|
(2,176 |
) |
|
|
(1,224 |
) |
|
|
(6,010 |
) |
|
|
(4,616 |
) |
Non-GAAP sales and marketing |
$ |
16,238 |
|
|
$ |
15,522 |
|
|
$ |
14,639 |
|
|
$ |
46,890 |
|
|
$ |
43,521 |
|
Percentage of revenue |
|
11.8 |
% |
|
|
12.2 |
% |
|
|
11.3 |
% |
|
|
12.0 |
% |
|
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP general and administrative |
$ |
17,052 |
|
|
$ |
21,430 |
|
|
$ |
12,460 |
|
|
$ |
57,830 |
|
|
$ |
43,089 |
|
Stock-based compensation expense |
|
(8,556 |
) |
|
|
(12,674 |
) |
|
|
(5,348 |
) |
|
|
(31,265 |
) |
|
|
(20,470 |
) |
Non-GAAP general and administrative |
$ |
8,496 |
|
|
$ |
8,756 |
|
|
$ |
7,112 |
|
|
$ |
26,565 |
|
|
$ |
22,619 |
|
Percentage of revenue |
|
6.2 |
% |
|
|
6.9 |
% |
|
|
5.5 |
% |
|
|
6.8 |
% |
|
|
6.4 |
% |
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
|
|||||||||||||||||||
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED): |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29,
|
|
June 30,
|
|
October 1,
|
|
September 29,
|
|
October 1,
|
||||||||||
|
(In thousands, except percentage data) |
||||||||||||||||||
GAAP total operating expenses |
$ |
53,869 |
|
|
$ |
59,655 |
|
|
$ |
45,415 |
|
|
$ |
171,514 |
|
|
$ |
144,659 |
|
Stock-based compensation expense |
|
(13,734 |
) |
|
|
(19,628 |
) |
|
|
(9,419 |
) |
|
|
(50,541 |
) |
|
|
(35,155 |
) |
Others |
|
(1,423 |
) |
|
|
(966 |
) |
|
|
(263 |
) |
|
|
(2,868 |
) |
|
|
(1,236 |
) |
Non-GAAP total operating expenses |
$ |
38,712 |
|
|
$ |
39,061 |
|
|
$ |
35,733 |
|
|
$ |
118,105 |
|
|
$ |
108,268 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP operating loss |
$ |
(5,453 |
) |
|
$ |
(12,801 |
) |
|
$ |
(2,276 |
) |
|
$ |
(28,864 |
) |
|
$ |
(24,445 |
) |
GAAP operating margin |
|
(4.0 |
)% |
|
|
(10.0 |
)% |
|
|
(1.8 |
)% |
|
|
(7.4 |
)% |
|
|
(6.9 |
)% |
Stock-based compensation expense |
|
14,689 |
|
|
|
20,920 |
|
|
|
10,287 |
|
|
|
54,159 |
|
|
|
37,851 |
|
Others |
|
1,575 |
|
|
|
1,117 |
|
|
|
415 |
|
|
|
3,322 |
|
|
|
1,690 |
|
Non-GAAP operating income |
$ |
10,811 |
|
|
$ |
9,236 |
|
|
$ |
8,426 |
|
|
$ |
28,617 |
|
|
$ |
15,096 |
|
Non-GAAP operating margin |
|
7.9 |
% |
|
|
7.2 |
% |
|
|
6.5 |
% |
|
|
7.4 |
% |
|
|
4.2 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP provision for income taxes |
$ |
329 |
|
|
$ |
236 |
|
|
$ |
29 |
|
|
$ |
960 |
|
|
$ |
1,042 |
|
GAAP income tax rate |
|
(8.0 |
)% |
|
|
(2.1 |
)% |
|
|
(2.7 |
)% |
|
|
(3.9 |
)% |
|
|
(4.8 |
)% |
Non-GAAP provision for income taxes |
$ |
329 |
|
|
$ |
236 |
|
|
$ |
29 |
|
|
$ |
960 |
|
|
$ |
1,042 |
|
Non-GAAP income tax rate |
|
2.7 |
% |
|
|
2.2 |
% |
|
|
0.3 |
% |
|
|
2.9 |
% |
|
|
5.8 |
% |
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
|
|||||||||||||||||||
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED): |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29,
|
|
June 30,
|
|
October 1,
|
|
September 29,
|
|
October 1,
|
||||||||||
|
(In thousands, except percentage and per share data) |
||||||||||||||||||
GAAP net loss |
$ |
(4,439 |
) |
|
$ |
(11,560 |
) |
|
$ |
(1,120 |
) |
|
$ |
(25,643 |
) |
|
$ |
(22,728 |
) |
Stock-based compensation expense |
|
14,689 |
|
|
|
20,920 |
|
|
|
10,287 |
|
|
|
54,159 |
|
|
|
37,851 |
|
Others |
|
1,575 |
|
|
|
1,117 |
|
|
|
415 |
|
|
|
3,322 |
|
|
|
1,690 |
|
Non-GAAP net income |
$ |
11,825 |
|
|
$ |
10,477 |
|
|
$ |
9,582 |
|
|
$ |
31,838 |
|
|
$ |
16,813 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net loss per share - basic |
$ |
(0.04 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.25 |
) |
Stock-based compensation expense |
|
0.13 |
|
|
|
0.21 |
|
|
|
0.10 |
|
|
|
0.52 |
|
|
|
0.41 |
|
Others |
|
0.02 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.04 |
|
|
|
0.01 |
|
Non-GAAP net income per share - diluted |
$ |
0.11 |
|
|
$ |
0.10 |
|
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shares used in computing GAAP net loss - basic |
|
99,731 |
|
|
|
97,843 |
|
|
|
94,243 |
|
|
|
97,932 |
|
|
|
92,069 |
|
Shares used in computing non-GAAP net income - diluted |
|
107,294 |
|
|
|
106,127 |
|
|
|
102,116 |
|
|
|
106,368 |
|
|
|
99,238 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Free cash flow: |
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities |
$ |
18,366 |
|
|
$ |
6,463 |
|
|
$ |
7,459 |
|
|
$ |
44,634 |
|
|
$ |
30,367 |
|
Less: Purchases of property and equipment |
|
(961 |
) |
|
|
(295 |
) |
|
|
(494 |
) |
|
|
(1,612 |
) |
|
|
(2,448 |
) |
Free cash flow (1) |
$ |
17,405 |
|
|
$ |
6,168 |
|
|
$ |
6,965 |
|
|
$ |
43,022 |
|
|
$ |
27,919 |
|
Free cash flow margin (1) |
|
12.6 |
% |
|
|
4.8 |
% |
|
|
5.4 |
% |
|
|
11.1 |
% |
|
|
7.8 |
% |
(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 |
|||||||||||||
|
September 29,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
October 1,
|
|||||
|
(In thousands, except headcount and per share data) |
|||||||||||||
Cash, cash equivalents and short-term investments |
$ |
146,574 |
|
$ |
144,005 |
|
$ |
142,863 |
|
$ |
136,496 |
|
$ |
126,049 |
|
|
|
|
|
|
|
|
|
|
|||||
Accounts receivable, net |
$ |
68,567 |
|
$ |
61,746 |
|
$ |
56,496 |
|
$ |
65,360 |
|
$ |
70,313 |
Days sales outstanding |
|
45 |
|
|
44 |
|
|
41 |
|
|
44 |
|
|
49 |
|
|
|
|
|
|
|
|
|
|
|||||
Inventories |
$ |
51,975 |
|
$ |
45,227 |
|
$ |
44,676 |
|
$ |
38,408 |
|
$ |
53,496 |
Inventory turns |
|
5.8 |
|
|
5.8 |
|
|
5.7 |
|
|
7.6 |
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|||||
Weeks of channel inventory: |
|
|
|
|
|
|
|
|
|
|||||
|
|
14.2 |
|
|
14.8 |
|
|
12.9 |
|
|
11.1 |
|
|
10.9 |
|
|
7.1 |
|
|
12.5 |
|
|
11.4 |
|
|
20.5 |
|
|
7.4 |
APAC distribution channel |
|
7.5 |
|
|
3.9 |
|
|
6.4 |
|
|
3.9 |
|
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|||||
Deferred revenue (current and non-current) |
$ |
24,827 |
|
$ |
23,695 |
|
$ |
21,540 |
|
$ |
18,114 |
|
$ |
17,706 |
|
|
|
|
|
|
|
|
|
|
|||||
Cumulative registered accounts (1) |
|
10,383 |
|
|
9,987 |
|
|
9,173 |
|
|
8,652 |
|
|
8,193 |
Cumulative paid accounts (2) |
|
4,235 |
|
|
3,980 |
|
|
3,235 |
|
|
2,813 |
|
|
2,486 |
Annual recurring revenue (ARR) (3) |
$ |
241,572 |
|
$ |
234,981 |
|
$ |
226,968 |
|
$ |
210,078 |
|
$ |
199,993 |
|
|
|
|
|
|
|
|
|
|
|||||
Headcount |
|
355 |
|
|
362 |
|
|
373 |
|
|
363 |
|
|
353 |
Non-GAAP diluted shares |
|
107,294 |
|
|
106,127 |
|
|
103,803 |
|
|
101,938 |
|
|
102,116 |
(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 |
|
Nine Months Ended |
|||||||||||||||||||||
|
September 29,
|
|
June 30,
|
|
October 1,
|
|
September 29,
|
|
October 1,
|
|||||||||||||||
|
(In thousands, except percentage data) |
|||||||||||||||||||||||
|
$ |
73,303 |
53.2 |
% |
|
$ |
65,294 |
51.2 |
% |
|
$ |
79,948 |
61.5 |
% |
|
$ |
195,766 |
50.3 |
% |
|
$ |
214,716 |
60.3 |
% |
EMEA |
|
57,773 |
42.0 |
% |
|
|
56,827 |
44.6 |
% |
|
|
42,887 |
33.0 |
% |
|
|
175,980 |
45.2 |
% |
|
|
122,317 |
34.4 |
% |
APAC |
|
6,591 |
4.8 |
% |
|
|
5,326 |
4.2 |
% |
|
|
7,168 |
5.5 |
% |
|
|
17,568 |
4.5 |
% |
|
|
19,050 |
5.3 |
% |
Total |
$ |
137,667 |
100.0 |
% |
|
$ |
127,447 |
100.0 |
% |
|
$ |
130,003 |
100.0 |
% |
|
$ |
389,314 |
100.0 |
% |
|
$ |
356,083 |
100.0 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107741439/en/
Arlo Investor Relations
Tahmin Clarke
investors@arlo.com
Source: Arlo Technologies, Inc.
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