Exceeded $100 million of ARR, ending Q1 at $101 million, growing 74% year over year

Revenue Growth of 51.1% year over year, exceeding high-end of Guidance for the Quarter

Record GAAP gross profit of $33.6 million, record non-GAAP gross profit of $34.5 million

132% Year over Year growth in Cumulative Paid Accounts

Delivered GAAP operating loss of $8.7 million, second consecutive quarter of non-GAAP Operating Profit of $1.0 million

Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security brand, today reported financial results for the first quarter ended April 3, 2022.

Financial Highlights (1)

  • Revenue of $124.8 million, an increase of 51.1% year over year.
  • GAAP gross profit of $33.6 million, an increase of 30.1% year over year; non-GAAP gross profit of $34.5 million, an increase of 29.3% year over year and an all-time record for the company.
  • GAAP gross margin of 26.9%; non-GAAP gross margin of 27.6%.
  • GAAP operating loss of $8.7 million, a decrease of $2.8 million year over year; non-GAAP operating profit of $1.0 million, an increase of $4.1 million year over year and the second consecutive quarter of non-GAAP operating profitability.
  • GAAP net loss per diluted share of $(0.10); non-GAAP net income per diluted share of $0.01.

"The strong growth of our service business continues to produce exceptional results across all metrics. In Q1 revenue reached $124.8 million for 51.1% growth year over year and above the top end of our guidance. Fueled by highly profitable ARR that just surpassed $100 million for the first time in Q1, Arlo posted record non-GAAP gross profit and our second consecutive quarter of non-GAAP operating profitability. These exceptional Q1 results underline how the powerful combination of our recurring revenue business model, coupled with our successful channel and product diversification, are delivering truly transformative results for Arlo,” said Matthew McRae, Chief Executive Officer of Arlo Technologies. “Our team continues to execute well on many fronts – from navigating supply chain challenges to bringing innovative, best-in-class products and services to market – and we are excited to continue our innovation and product and service excellence. With a compelling customer lifetime value and industry-leading customer retention as our base, we will look to leverage our strong execution to grow our subscriber base and expand ARPU. This year we will introduce a full security system with a unique all-in-one sensor to augment our security ecosystem and will make investments to generate awareness of our brand, expand our funnel and, thereby, grow our household base. We look forward to reporting more to you on the success of these initiatives which we believe will drive incremental long term growth and profitability."

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

March 28, 2021

 

(in thousands, except percentage and per share data)

Revenue

$

124,751

 

 

$

142,861

 

 

$

82,556

 

GAAP Gross Margin

 

26.9

%

 

 

22.2

%

 

 

31.3

%

Non-GAAP Gross Margin (1)

 

27.6

%

 

 

22.9

%

 

 

32.3

%

GAAP Net Loss per Diluted Share

$

(0.10

)

 

$

(0.08

)

 

$

(0.13

)

Non-GAAP Net Income (Loss) per Diluted Share (1)

$

0.01

 

 

$

0.04

 

 

$

(0.03

)

_________________________

(1)

 

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

Financial and Business Highlights

  • Service revenue of $29.9 million for Q1, for growth of 31.3% year over year, the eleventh consecutive quarter of record service revenue.
  • Exceeded $100.0 million of ARR for the first time, ending Q1 with ARR of $101.3 million, growing 74.0% year over year. (2)
  • GAAP service gross margin of 65.3%; non-GAAP service gross margin of 65.4% in Q1 and a record for Arlo as a standalone company. (1)
  • Added a record 205,000 paid accounts in Q1, a sequential increase of 7.9% over Q4, and a year over year increase of 79.8%.
  • Announced significant expansion of our service and product offerings with Arlo Security Systems and Arlo Safe.
  • Our Pro 4 camera won Best Product’s Editor’s Choice and How-to Geek’s Best of 2022 awards, while our customized camera developed with Verisure was recognized with an IF design award.

_________________________

(1)

 

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

 

 

 

(2)

 

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

Second Quarter 2022 Business Outlook (3)

  • Revenue of $105.0 million to $115.0 million.
  • GAAP net loss per diluted share of $(0.19) to $(0.14), and non-GAAP net loss per diluted share of $(0.08) to $(0.03).

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

 

Three Months Ending July 3, 2022

 

Revenue

 

Net Loss per Diluted Share

 

(in millions, except per share data)

GAAP

$105.0 - $115.0

 

$(0.19) - $(0.14)

Estimated adjustments for (3):

 

 

 

Stock-based compensation expense

 

0.11

Tax effects of non-GAAP adjustments

 

Non-GAAP

$105.0 - $115.0

 

$(0.08) - $(0.03)

_________________________

(3)

 

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; acquisition-related charges; impairment charges; discrete tax benefits or detriments relating to tax windfalls or shortfalls from equity awards; and any additional impacts relating to the implementation of U.S. tax reform. New material income and expense items such as these could have a significant effect on our guidance and future results.

Investor Conference Call / Webcast Details

Arlo will review the first quarter of 2022 results and discuss management’s expectations for the second quarter of 2022 today, Tuesday, May 10, 2022 at 5:00 p.m. ET (2:00 p.m. PT). The toll-free dial-in number for the live audio call is (888) 660-6387. The international dial-in number for the live audio call is +1 (929) 203-1909. The conference ID for the call is 7749064. A live webcast of the conference call will be available on Arlo’s Investor Relations website at https://investor.arlo.com. A replay of the call will be available via the web at https://investor.arlo.com.

About Arlo Technologies, Inc.

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

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

© 2022 Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks and/or registered trademarks of Arlo Technologies, Inc. and/or certain of its affiliates in the United States and/or other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s). The information contained herein is subject to change without notice. Arlo shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent Arlo Technologies, Inc.’s (the "Company") expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding its potential future business, operating performance and financial condition, including descriptions of its expected revenue, GAAP and non-GAAP gross margins, operating margins, tax rates, expenses, and cash outlook; the Company's recurring revenue business model and its channel and product diversification; the commercial launch and momentum of new products and services; including a full security system with all-in one sensor; strategic objectives and initiatives, including the Company's collaboration with Verisure; expectations regarding market expansion and future growth; plans to invest in product innovation; the Company's future product offerings; supply chain challenges; the impact of COVID-19 on the Company's business; and quotes from the Company's Chief Executive Officer. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for the Company's products may be lower than anticipated; the Company may be unsuccessful in developing and expanding its sales and marketing capabilities; the Company may not be able to increase sales of its paid subscription services; consumers may choose not to adopt the Company's new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; the Company may be unsuccessful or experience delays in manufacturing and distributing its new and existing products; telecommunications service providers may choose to slow their deployment of the Company's products or utilize competing products; the Company may be unable to collect receivables as they become due; the Company may fail to manage costs, including the cost of developing new products and manufacturing and distribution of its existing offerings; the Company may not receive the minimum commitment amounts from Verisure; the COVID-19 pandemic could continue to have an adverse impact on the Company's business, operations and the markets and communities in which the Company and its partners and customers operate; the Company may fail to successfully continue to effect operating expense savings; changes in the level of the Company's cash resources and the Company's planned usage of such resources; changes in the Company's stock price and developments in the business that could increase the Company's cash needs; fluctuations in foreign exchange rates; and the actions and financial health of the Company's customers. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect the Company and its business are detailed in the Company's periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Risk Factors” in the Company's most recently filed Annual Report and Quarterly Report filed with the Securities and Exchange Commission (the “SEC”) and subsequent filings with the SEC. Given these circumstances, you should not place undue reliance on these forward-looking statements. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information:

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

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

– the ability to make more meaningful period-to-period comparisons of our on-going operating results;

– the ability to better identify trends in our underlying business and perform related trend analyses;

– a better understanding of how management plans and measures our underlying business; and

– an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

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

Separation expense consists of expenses that are related to the separation of our business from NETGEAR. These consist primarily of costs of legal and professional services for IPO-related litigation associated with our separation from NETGEAR. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.

Stock-based compensation expense consists of non-cash charges for the estimated fair value of stock options, performance-based stock options, restricted stock units, 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 items are the result of either unique or unplanned events, including, when applicable: 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.

Tax effects consist of the various above adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income. We also believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures provides our management and users of the financial statements with better clarity regarding the on-going performance of our business.

Source: Arlo-F

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

As of

 

April 3, 2022

 

December 31, 2021

 

(In thousands, except share and per share data)

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

100,975

 

 

$

175,749

 

Short-term investments (amortized cost of $44,612 and $—)

 

44,566

 

 

 

 

Accounts receivable, net (net of allowance for credit losses of $339 and $337)

 

78,054

 

 

 

79,564

 

Inventories

 

37,038

 

 

 

38,390

 

Prepaid expenses and other current assets

 

9,015

 

 

 

9,919

 

Total current assets

 

269,648

 

 

 

303,622

 

Property and equipment, net

 

8,522

 

 

 

9,595

 

Operating lease right-of-use assets, net

 

13,797

 

 

 

14,814

 

Goodwill

 

11,038

 

 

 

11,038

 

Restricted cash

 

4,114

 

 

 

4,107

 

Other non-current assets

 

4,671

 

 

 

4,314

 

Total assets

$

311,790

 

 

$

347,490

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

68,266

 

 

$

84,098

 

Deferred revenue

 

16,460

 

 

 

29,442

 

Accrued liabilities

 

91,732

 

 

 

97,377

 

Income tax payable

 

45

 

 

 

12

 

Total current liabilities

 

176,503

 

 

 

210,929

 

Non-current deferred revenue

 

915

 

 

 

1,344

 

Non-current operating lease liabilities

 

20,308

 

 

 

21,470

 

Non-current income taxes payable

 

94

 

 

 

94

 

Other non-current liabilities

 

1,966

 

 

 

1,001

 

Total liabilities

 

199,786

 

 

 

234,838

 

Stockholders’ Equity:

 

 

 

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

 

 

 

 

 

Common stock: : $0.001 par value; 500,000,000 shares authorized; shares issued and outstanding: 85,834,841 at April 3, 2022 and 84,453,212 at December 31, 2021

 

86

 

 

 

84

 

Additional paid-in capital

 

409,242

 

 

 

401,367

 

Accumulated other comprehensive income

 

(46

)

 

 

 

Accumulated deficit

 

(297,278

)

 

 

(288,799

)

Total stockholders’ equity

 

112,004

 

 

 

112,652

 

Total liabilities and stockholders’ equity

$

311,790

 

 

$

347,490

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

March 28, 2021

 

(in thousands, except percentage and per share data)

Revenue:

 

 

 

 

 

Products

$

94,825

 

 

$

114,396

 

 

$

59,761

 

Services

 

29,926

 

 

 

28,465

 

 

 

22,795

 

Total revenue

 

124,751

 

 

 

142,861

 

 

 

82,556

 

Cost of revenue:

 

 

 

 

 

Products

 

80,777

 

 

 

100,476

 

 

 

47,157

 

Services

 

10,399

 

 

 

10,669

 

 

 

9,592

 

Total cost of revenue

 

91,176

 

 

 

111,145

 

 

 

56,749

 

Gross profit

 

33,575

 

 

 

31,716

 

 

 

25,807

 

Gross margin

 

26.9

%

 

 

22.2

%

 

 

31.3

%

Operating expenses:

 

 

 

 

 

Research and development

 

16,379

 

 

 

13,644

 

 

 

14,791

 

Sales and marketing

 

13,168

 

 

 

12,464

 

 

 

11,207

 

General and administrative

 

12,621

 

 

 

12,584

 

 

 

11,227

 

Separation expense

 

79

 

 

 

254

 

 

 

54

 

Total operating expenses

 

42,247

 

 

 

38,946

 

 

 

37,279

 

Loss from operations

 

(8,672

)

 

 

(7,230

)

 

 

(11,472

)

Operating margin

 

(7.0

)%

 

 

(5.1

)%

 

 

(13.9

)%

Interest income (expense), net

 

(5

)

 

 

(15

)

 

 

24

 

Other income (expense), net

 

411

 

 

 

605

 

 

 

909

 

Loss before income taxes

 

(8,266

)

 

 

(6,640

)

 

 

(10,539

)

Provision for income taxes

 

213

 

 

 

152

 

 

 

180

 

Net loss

$

(8,479

)

 

$

(6,792

)

 

$

(10,719

)

Net loss per share:

 

 

 

 

 

Basic

$

(0.10

)

 

$

(0.08

)

 

$

(0.13

)

Diluted

$

(0.10

)

 

$

(0.08

)

 

$

(0.13

)

Weighted average shares used to compute net loss per share:

 

 

 

 

 

Basic

 

85,222

 

 

 

84,367

 

 

 

80,370

 

Diluted

 

85,222

 

 

 

84,367

 

 

 

80,370

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Three Months Ended

 

April 3, 2022

 

March 28, 2021

 

(In thousands)

Cash flows from operating activities:

 

 

 

Net loss

$

(8,479

)

 

$

(10,719

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Stock-based compensation expense

 

9,589

 

 

 

8,340

 

Depreciation and amortization

 

1,302

 

 

 

1,547

 

Allowance for credit losses and inventory reserves

 

(135

)

 

 

(562

)

Deferred income taxes

 

(9

)

 

 

(130

)

Premium amortization (discount accretion) on investments, net

 

28

 

 

 

(3

)

Changes in assets and liabilities:

 

 

 

Accounts receivable, net

 

1,508

 

 

 

26,522

 

Inventories

 

1,490

 

 

 

9,296

 

Prepaid expenses and other assets

 

556

 

 

 

361

 

Accounts payable

 

(15,676

)

 

 

(34,647

)

Deferred revenue

 

(13,411

)

 

 

(8,101

)

Accrued and other liabilities

 

(1,320

)

 

 

(22,072

)

Net cash used in operating activities

 

(24,557

)

 

 

(30,168

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(298

)

 

 

(803

)

Purchases of short-term investments

 

(44,640

)

 

 

 

Proceeds from maturities of short-term investments

 

 

 

 

15,000

 

Net cash provided by (used in) investing activities

 

(44,938

)

 

 

14,197

 

Cash flows from financing activities:

 

 

 

Proceeds related to employee benefit plans

 

1,388

 

 

 

6,133

 

Restricted stock unit withholdings

 

(6,660

)

 

 

(4,177

)

Net cash provided by (used in) financing activities

 

(5,272

)

 

 

1,956

 

Net decrease in cash and cash equivalents and restricted cash

 

(74,767

)

 

 

(14,015

)

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

 

179,856

 

 

 

190,291

 

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

$

105,089

 

 

$

176,276

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

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

$

310

 

 

$

82

 

ARLO TECHNOLOGIES, INC.

 

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

UNAUDITED STATEMENT OF OPERATIONS DATA:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

March 28, 2021

 

(in thousands, except percentage data)

GAAP gross profit:

 

 

 

 

 

Products

$

14,048

 

 

$

13,920

 

 

$

12,604

 

Services

 

19,527

 

 

 

17,796

 

 

 

13,203

 

Total GAAP gross profit

 

33,575

 

 

 

31,716

 

 

 

25,807

 

GAAP gross margin:

 

 

 

 

 

Products

 

14.8

%

 

 

12.2

%

 

 

21.1

%

Services

 

65.3

%

 

 

62.5

%

 

 

57.9

%

Total GAAP gross margin

 

26.9

%

 

 

22.2

%

 

 

31.3

%

Stock-based compensation expense - Products

 

855

 

 

 

776

 

 

 

874

 

Stock-based compensation expense - Services

 

55

 

 

 

191

 

 

 

 

Non-GAAP gross profit:

 

 

 

 

 

Products

 

14,903

 

 

 

14,696

 

 

 

13,478

 

Services

 

19,582

 

 

 

17,987

 

 

 

13,203

 

Total Non-GAAP gross profit

$

34,485

 

 

$

32,683

 

 

$

26,681

 

Non-GAAP gross margin:

 

 

 

 

 

Products

 

15.7

%

 

 

12.9

%

 

 

22.6

%

Services

 

65.4

%

 

 

63.2

%

 

 

57.9

%

Total Non-GAAP gross margin

 

27.6

%

 

 

22.9

%

 

 

32.3

%

 

 

 

 

 

 

GAAP research and development

$

16,379

 

 

$

13,644

 

 

$

14,791

 

Stock-based compensation expense

 

(2,302

)

 

 

(2,391

)

 

 

(2,556

)

Non-GAAP research and development

$

14,077

 

 

$

11,253

 

 

$

12,235

 

 

 

 

 

 

 

GAAP sales and marketing

$

13,168

 

 

$

12,464

 

 

$

11,207

 

Stock-based compensation expense

 

(1,380

)

 

 

(1,444

)

 

 

(1,190

)

Non-GAAP sales and marketing

$

11,788

 

 

$

11,020

 

 

$

10,017

 

 

 

 

 

 

 

GAAP general and administrative

$

12,621

 

 

$

12,584

 

 

$

11,227

 

Stock-based compensation expense

 

(4,997

)

 

 

(5,680

)

 

 

(3,720

)

Litigation reserves, net

 

(47

)

 

 

(3

)

 

 

(10

)

Non-GAAP general and administrative

$

7,577

 

 

$

6,901

 

 

$

7,497

 

ARLO TECHNOLOGIES, INC.

 

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

UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED):

 

 

 

 

 

 

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

March 28, 2021

 

(in thousands, except percentage and per share data)

GAAP total operating expenses

$

42,247

 

 

$

38,946

 

 

$

37,279

 

Separation expense

 

(79

)

 

 

(254

)

 

 

(54

)

Stock-based compensation expense

 

(8,679

)

 

 

(9,515

)

 

 

(7,466

)

Litigation reserves, net

 

(47

)

 

 

(3

)

 

 

(10

)

Non-GAAP total operating expenses

$

33,442

 

 

$

29,174

 

 

$

29,749

 

 

 

 

 

 

 

GAAP operating loss

$

(8,672

)

 

$

(7,230

)

 

$

(11,472

)

GAAP operating margin

 

(7.0

)%

 

 

(5.1

)%

 

 

(13.9

)%

Separation expense

 

79

 

 

 

254

 

 

 

54

 

Stock-based compensation expense

 

9,589

 

 

 

10,482

 

 

 

8,340

 

Litigation reserves, net

 

47

 

 

 

3

 

 

 

10

 

Non-GAAP operating income (loss)

$

1,043

 

 

$

3,509

 

 

$

(3,068

)

Non-GAAP operating margin

 

0.8

%

 

 

2.5

%

 

 

(3.7

)%

 

 

 

 

 

 

GAAP other income (expense), net

$

411

 

 

$

605

 

 

$

909

 

Employee Retention Credit

 

(39

)

 

 

(103

)

 

 

 

Non-GAAP other income (expense), net

$

372

 

 

$

502

 

 

$

909

 

 

 

 

 

 

 

GAAP provision for income taxes

$

213

 

 

$

152

 

 

$

180

 

GAAP income tax rate

 

(2.6

)%

 

 

(2.3

)%

 

 

(1.7

)%

Tax effects

 

 

 

 

 

 

 

 

Non-GAAP provision for income taxes

$

213

 

 

$

152

 

 

$

180

 

Non-GAAP income tax rate

 

15.1

%

 

 

3.8

%

 

 

(8.4

)%

ARLO TECHNOLOGIES, INC.

 

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

UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED):

 

 

 

 

 

 

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

March 28, 2021

 

(in thousands, except percentage and per share data)

GAAP net loss

$

(8,479

)

 

$

(6,792

)

 

$

(10,719

)

Separation expense

 

79

 

 

 

254

 

 

 

54

 

Stock-based compensation expense

 

9,589

 

 

 

10,482

 

 

 

8,340

 

Litigation reserves, net

 

47

 

 

 

3

 

 

 

10

 

Employee Retention Credit

 

(39

)

 

 

(103

)

 

 

 

Tax effects

 

 

 

 

 

 

 

 

Non-GAAP net income (loss)

$

1,197

 

 

$

3,844

 

 

$

(2,315

)

 

 

 

 

 

 

NET LOSS PER SHARE - BASIC AND DILUTED:

 

 

GAAP net loss per share - basic and diluted

$

(0.10

)

 

$

(0.08

)

 

$

(0.13

)

Stock-based compensation expense

 

0.11

 

 

 

0.12

 

 

 

0.10

 

Non-GAAP net income (loss) - diluted

$

0.01

 

 

$

0.04

 

 

$

(0.03

)

 

 

 

 

 

 

Shares used in computing GAAP net income (loss) - basic

 

85,222

 

 

 

84,367

 

 

 

80,370

 

Shares used in computing non-GAAP net income (loss) - diluted

 

93,135

 

 

 

90,679

 

 

 

80,370

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

October 3, 2021

 

June 27, 2021

 

March 28, 2021

 

(in thousands, except headcount and per share data)

Cash, cash equivalents and short-term investments

$

145,541

 

$

175,749

 

$

166,057

 

$

178,698

 

$

177,113

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

$

1.56

 

$

1.94

 

$

1.98

 

$

2.18

 

$

2.20

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

$

78,054

 

$

79,564

 

$

70,124

 

$

51,890

 

$

51,121

Days sales outstanding

 

58

 

 

50

 

 

62

 

 

48

 

 

54

 

 

 

 

 

 

 

 

 

 

Inventories

$

37,038

 

$

38,390

 

$

39,769

 

$

43,155

 

$

55,972

Inventory turns

 

8.7

 

 

10.5

 

 

7.6

 

 

5.7

 

 

3.4

 

 

 

 

 

 

 

 

 

 

Weeks of channel inventory:

 

 

 

 

 

 

 

 

 

U.S. retail channel

 

15.8

 

 

7.0

 

 

14.0

 

 

8.0

 

 

12.5

U.S. distribution channel

 

10.5

 

 

8.5

 

 

8.0

 

 

12.5

 

 

9.6

APAC distribution channel

 

18.1

 

 

8.9

 

 

10.2

 

 

8.6

 

 

6.9

 

 

 

 

 

 

 

 

 

 

Deferred revenue (current and non-current)

$

17,375

 

$

30,786

 

$

41,686

 

$

50,903

 

$

61,604

 

 

 

 

 

 

 

 

 

 

Cumulative registered accounts (1)

 

6,389

 

 

6,131

 

 

5,822

 

 

5,527

 

 

5,275

Cumulative paid accounts (2)

 

1,272

 

 

1,067

 

 

877

 

 

695

 

 

549

Annual recurring revenue (ARR) (3)

$

101,341

 

$

90,100

 

$

80,400

 

$

69,753

 

$

58,238

 

 

 

 

 

 

 

 

 

 

Headcount

 

358

 

 

353

 

 

346

 

 

349

 

 

355

Non-GAAP diluted shares

 

93,135

 

 

90,679

 

 

83,809

 

 

82,134

 

 

80,370

_________________________

(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 particular period, and includes accounts owned by Verisure. 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 people.

 

 

 

(2)

 

Paid accounts worldwide measured as any account where a subscription to a paid service is being collected (either by the Company or by the Company’s customers or channel partners), plus paid service plans of a duration of more than 3 months bundled with products (such bundles being counted as a paid account after 90 days have elapsed from the date of registration). Paid accounts includes accounts transferred to Verisure.

 

 

 

(3)

 

Effective as of the third quarter of 2021, we adopted ARR as one of the key indicators of our business performance. ARR represents the amount of paid service revenue that we expect to recur annually and is calculated by taking our recurring paid service revenue for the last calendar month in the fiscal quarter, multiplied by 12 months. Recurring paid service revenue represents the revenue we recognize from our paid accounts and excludes prepaid service revenue, and NRE service revenue from strategic partners. The ARR for the comparative periods presented was derived following the same methodology. ARR is a performance metric and should be viewed independently of revenue and deferred revenue, and is not intended to be a substitute for, or combined with, any of these items.

REVENUE BY GEOGRAPHY

 

Three Months Ended

 

April 3, 2022

 

December 31, 2021

 

March 28, 2021

 

(in thousands, except percentage data)

Americas

$

68,466

55

%

 

$

80,354

56

%

 

$

49,636

60

%

EMEA

 

49,975

40

%

 

 

53,609

38

%

 

 

24,591

30

%

APAC

 

6,310

5

%

 

 

8,898

6

%

 

 

8,329

10

%

Total

$

124,751

100

%

 

$

142,861

100

%

 

$

82,556

100

%

 

Arlo Investor Relations Erik Bylin investors@arlo.com (510) 315-1004

Arlo Technologies (NYSE:ARLO)
Historical Stock Chart
Von Jun 2022 bis Jul 2022 Click Here for more Arlo Technologies Charts.
Arlo Technologies (NYSE:ARLO)
Historical Stock Chart
Von Jul 2021 bis Jul 2022 Click Here for more Arlo Technologies Charts.