57.4% Paid Account Growth Year over
Year
Arlo Technologies, Inc. (NYSE: ARLO), a global network connected
camera company that delivers innovative internet connected products
to consumers and businesses, today reported financial results for
the first quarter ended March 29, 2020.
Financial Highlights (1)
- Revenue of $65.5 million, an increase of 13.1% year over
year.
- GAAP gross margin of 6.0%; non-GAAP gross margin of 7.4%.
- GAAP net loss per diluted share of $(0.51), non-GAAP net loss
per diluted share of $(0.34).
“The team at Arlo showed their dedication to our business in
delivering a solid first quarter despite facing unprecedented
challenges across all aspects of business execution. While our
supply chain and internal teams are largely at full force, we are
seeing disruptions in our distribution channels that impede our
ability to serve our customer in the near term,” said Matthew
McRae, Chief Executive Officer of Arlo Technologies. “However, we
saw both record growth of paid subscribers and record service
revenue, as our revenue for paid accounts comfortably surpassed
pre-paid in the quarter. These are important data points that
reflect our new business model phasing in and we expect continued
strength in the services business as we complete our new product
launches throughout 2020. Our latest launch, Arlo’s new Pro 3
Floodlight, the first wire-free floodlight in the world, is now
available in our channels, brings our award winning Pro 3
technology to a large, fast-growing market segment and is
well-received by customers and critics alike. We feel that we are
well positioned with a solid balance sheet, best-in-class product
offering, and strengthening services momentum.”
Three Months Ended
March 29, 2020
December 31, 2019
March 31, 2019
(in thousands, except
percentage and per share data)
Revenue
$
65,450
$
122,413
$
57,880
GAAP Gross Margin
6.0
%
11.2
%
3.4
%
Non-GAAP Gross Margin
7.4
%
12.2
%
4.7
%
GAAP Net Income (Loss) per Diluted
Share
$
(0.51
)
$
0.26
$
(0.55
)
Non-GAAP Net Income (Loss) per Diluted
Share
$
(0.34
)
$
(0.26
)
$
(0.47
)
_________________________
(1) Reconciliation of financial measures
computed on a GAAP basis to financial measures computed on a
non-GAAP basis are provided at the end of this press release.
Business Highlights
- Service revenue of $14.7 million, for growth of 30.7% year over
year.
- 57.4% year over year paid account growth in Q1.
- 35.8% year over year cumulative registered account growth in
Q1.
- Added a record 25,000 paid subscribers in the quarter.
- Announced a partnership with Second Harvest in Silicon Valley
and Orange County to provide meals with each purchase of an Ultra
system, Pro 3 system or Video Doorbell, resulting in over 30,000
meals donated to feed those in need.
- Partnered with Kartchner Homes to integrate Arlo’s Video
Doorbell into homes built over the next twelve months, providing
homebuyers with a premiere solution in smart entry technology and a
free three-month trial of Arlo Smart.
- Announced the channel availability of our all-new Arlo
Floodlight Camera, the first wire-free integrated floodlight camera
on the market, featuring powerful LEDs, an integrated 2K HDR
camera, 160-degree field of view, two-way audio, custom lighting
configurations, a rechargeable battery, and a built-in siren. The
Floodlight Camera is paired with a three month subscription to Arlo
Smart.
Second Quarter 2020 Business Outlook (2)
- Revenue of $50.0 million to $60.0 million.
- GAAP net loss per diluted share of $(0.53) to $(0.46), and
non-GAAP net loss per diluted share of $(0.46) to $(0.39).
Due to the uncertainty presented by the ongoing COVID-19
pandemic Arlo is withdrawing full year guidance.
A reconciliation of our business outlook on a GAAP and non-GAAP
basis is provided in the following table:
Three Months Ending June 28,
2020
Revenue
Net Loss per Diluted
Share
(in millions, except per share
data)
GAAP
$50.0 - $60.0
($0.53) - ($0.46)
Estimated adjustments for (2):
Stock-based compensation expense
—
0.06
Amortization of intangibles
—
0.01
Tax effects of non-GAAP adjustments
—
—
Non-GAAP
$50.0 - $60.0
($0.46) - ($0.39)
_________________________
(2) 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 2020 results and discuss
management’s expectations for the second quarter of 2020 today,
Monday, May 11, 2020 at 5:00 p.m. ET (2:00 p.m. PT). The toll free
dial-in number for the live audio call is (866) 393-4306. The
international dial-in number for the live audio call is (734)
385-2616. The conference ID for the call is 8891925. 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 (NYSE: 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 cameras, advanced baby monitors and smart
security lights.
© 2019 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 expectations or beliefs
concerning future events based on information available at the time
such statements were made and include statements regarding: Arlo’s
future operating performance and financial condition, expected
revenue, GAAP and non-GAAP gross margins, operating margins, and
tax expense; expectations regarding market expansion and future
growth; plans to invest in product innovation; Arlo's future
product offerings; and the quote from Arlo'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; 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 incur additional costs
and charges associated with the transactions contemplated by the
Verisure partnership; the Company may not receive the minimum
commitment amounts from Verisure; the COVID-19 pandemic could have
an adverse impact on the Company's business, operations and the
markets and communities in which Arlo and its partners and
customers operate; the Company may fail to successfully continue to
effect operating expense savings; changes in the level of Arlo'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; the actions and financial health of the
Company's customers; the anticipated financial capacity under
Arlo's revolving credit line may not be available when expected, or
at all; and the Company may not be able to carry out its
restructuring plan. 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 Arlo 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 “Part I - Item 1A.
Risk Factors,” in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2019, filed with the Securities and
Exchange Commission on February 28, 2020 and other periodic filings
with the Securities and Exchange Commission. Given these
circumstances, you should not place undue reliance on these
forward-looking statements. Arlo 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 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,
amortization of intangibles, activist shareholder response costs,
restructuring and other charges, strategic initiative and
transaction expenses, gain on sale of business, litigation
reserves, 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
third-party consulting fees, legal fees, IT costs, employee bonuses
for services related to the separation, and other one-time expenses
incurred to complete the separation. 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 and shares under the employee
stock purchase plan granted to employees. 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.
Amortization of intangibles consists primarily of non-cash
charges that can be impacted by, among other things, the timing and
magnitude of acquisitions. 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
an assessment of our internal operations and comparisons to our
prior and future periods and to the performance of our
competitors.
Activist shareholder response costs primarily consist of legal
fees and third-party consulting costs incurred. 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.
Strategic initiative and transaction expenses consist of legal
fees associated with the strategic review of the Company and legal
fees, accounting fees and other one-time costs incurred to complete
the Verisure transaction. 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.
Gain on sale of business represents gain from sale of the
Company's commercial operations in Europe. We consider our
operating results without this gain when evaluating our ongoing
performance and forecasting our earnings trends, and therefore
exclude such gain when presenting non-GAAP financial measures. We
believe that the assessment of our operations excluding the gain is
relevant to our assessment of internal operations and comparisons
to the performance of our competitors.
Other items are the result of either unique or unplanned events,
including, when applicable: restructuring and other charges and
litigation reserves, net. 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
March 29, 2020
December 31, 2019
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
176,425
$
236,680
Short-term investments
30,157
19,990
Accounts receivable, net
61,376
127,317
Inventories
61,027
68,624
Prepaid expenses and other current
assets
12,569
16,958
Total current assets
341,554
469,569
Property and equipment, net
19,284
21,352
Operating lease right-of-use assets,
net
30,184
31,300
Intangibles, net
950
1,306
Goodwill
11,038
11,038
Restricted cash
4,117
4,139
Other non-current assets
3,049
4,008
Total assets
$
410,176
$
542,712
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
39,103
$
111,650
Deferred revenue
46,875
50,362
Accrued liabilities
100,447
127,400
Income tax payable
4,120
4,489
Total current liabilities
190,545
293,901
Non-current deferred revenue
12,973
15,736
Non-current operating lease
liabilities
27,776
29,001
Non-current income taxes payable
92
92
Other non-current liabilities
229
606
Total liabilities
231,615
339,336
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:
75,785,952 at December 31, 2019 and 74,247,250 at December 31,
2018
77
76
Additional paid-in capital
349,212
334,821
Accumulated other comprehensive income
117
(2
)
Accumulated deficit
(170,845
)
(131,519
)
Total stockholders’ equity
178,561
203,376
Total liabilities and stockholders’
equity
$
410,176
$
542,712
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 29, 2020
December 31, 2019
March 31, 2019
(in thousands, except
percentage and per share data)
Revenue:
Products
$
50,723
$
109,883
$
46,608
Services
14,727
12,530
11,272
Total revenue
65,450
122,413
57,880
Cost of revenue:
Products
52,188
100,470
50,284
Services
9,309
8,237
5,651
Total cost of revenue
61,497
108,707
55,935
Gross profit
3,953
13,706
1,945
Gross margin
6.0
%
11.2
%
3.4
%
Operating expenses:
Research and development
15,243
16,928
18,161
Sales and marketing
11,038
14,596
14,221
General and administrative
18,784
15,112
10,536
Separation expense
79
153
906
Gain on sale of business
(292
)
(54,881
)
—
Total operating expenses
44,852
(8,092
)
43,824
Income (loss) from operations
(40,899
)
21,798
(41,879
)
Operating margin
(62.5
)%
17.8
%
(72.4
)%
Interest income
535
567
862
Other income (expense), net
1,183
775
(47
)
Income (loss) before income taxes
(39,181
)
23,140
(41,064
)
Provision for income taxes
145
3,525
220
Net income (loss)
$
(39,326
)
$
19,615
$
(41,284
)
Net income (loss) per share:
Basic
$
(0.51
)
$
0.26
$
(0.55
)
Diluted
$
(0.51
)
$
0.26
$
(0.55
)
Weighted average shares used to compute
net income (loss) per share:
Basic
76,560
75,805
74,409
Diluted
76,560
76,090
74,409
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 29, 2020
March 31, 2019
(In thousands)
Cash flows from operating
activities:
Net loss
$
(39,326
)
$
(41,284
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
2,773
2,375
Stock-based compensation expense
12,773
4,653
Allowance for credit losses and inventory
reserves
1,709
3,280
Gain on sale of business
(292
)
—
Deferred income taxes
100
(12
)
Premium amortization / discount accretion
on investments, net
(5
)
(137
)
Changes in assets and liabilities:
Accounts receivable, net
65,685
94,174
Inventories
6,142
(9,411
)
Prepaid expenses and other assets
5,273
13,114
Accounts payable
(71,834
)
(27,486
)
Deferred revenue
(6,251
)
(2,254
)
Accrued and other liabilities
(25,651
)
(52,497
)
Net cash used in operating activities
(48,904
)
(15,485
)
Cash flows from investing
activities:
Purchases of property and equipment
(1,111
)
(4,260
)
Purchases of short-term investments
(20,096
)
(9,897
)
Maturities of short-term investments
10,000
15,000
Net cash provided by (used in) used in
investing activities
(11,207
)
843
Cash flows from financing
activities:
Proceeds related to employee benefit
plans
1,854
1
Restricted stock unit withholdings
(2,020
)
(1,068
)
Net cash used in financing activities
(166
)
(1,067
)
Net decrease in cash and cash equivalents
and restricted cash
(60,277
)
(15,709
)
Cash and cash equivalents and restricted
cash, at beginning of period
240,819
155,424
Cash and cash equivalents and restricted
cash, at end of period
$
180,542
$
139,715
Non-cash investing and financing
activities:
Purchases of property and equipment
included in accounts payable and accrued liabilities
$
323
$
1,880
De-recognition of build-to-suit assets and
liabilities
$
—
$
(21,610
)
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
STATEMENT OF OPERATIONS DATA:
Three Months Ended
March 29, 2020
December 31, 2019
March 31, 2019
(in thousands, except
percentage data)
GAAP gross profit
$
3,953
$
13,706
$
1,945
GAAP gross margin
6.0
%
11.2
%
3.4
%
Stock-based compensation expense
503
727
369
Amortization of intangibles
356
373
381
Restructuring and other charges
23
69
—
Non-GAAP gross profit
$
4,835
$
14,875
$
2,695
Non-GAAP gross margin
7.4
%
12.2
%
4.7
%
GAAP research and development
$
15,243
$
16,928
$
18,161
Stock-based compensation expense
(1,660
)
(2,367
)
(1,297
)
Restructuring and other charges
—
(262
)
—
Non-GAAP research and development
$
13,583
$
14,299
$
16,864
GAAP sales and marketing
$
11,038
$
14,596
$
14,221
Stock-based compensation expense
(751
)
(1,137
)
(940
)
Restructuring and other charges
—
(198
)
—
Non-GAAP sales and marketing
$
10,287
$
13,261
$
13,281
GAAP general and administrative
$
18,784
$
15,112
$
10,536
Stock-based compensation expense
(9,859
)
(3,402
)
(2,047
)
Restructuring and other charges
(21
)
(102
)
—
Strategic initiative and transaction
expenses
(545
)
(1,868
)
—
Litigation reserves, net
(7
)
(1,287
)
—
Non-GAAP general and administrative
$
8,352
$
8,453
$
8,489
GAAP total operating expenses
$
44,852
$
(8,092
)
$
43,824
Separation expense
(79
)
(154
)
(906
)
Strategic initiative and transaction
expenses
(545
)
(1,868
)
—
Stock-based compensation expense
(12,270
)
(6,906
)
(4,284
)
Restructuring and other charges
(21
)
(562
)
—
Litigation reserves, net
(7
)
(1,287
)
—
Gain on sale of business
292
54,881
—
Non-GAAP total operating expenses
$
32,222
$
36,012
$
38,634
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
March 29, 2020
December 31, 2019
March 31, 2019
(in thousands, except
percentage and per share data)
GAAP operating income (loss)
$
(40,899
)
$
21,798
$
(41,879
)
GAAP operating margin
(62.5
)%
17.8
%
(72.4
)%
Separation expense
79
154
906
Strategic initiative and transaction
expenses
545
1,868
—
Stock-based compensation expense
12,773
7,633
4,653
Amortization of intangibles
356
373
381
Restructuring and other charges
44
631
—
Litigation reserves, net
7
1,287
—
Gain on sale of business
(292
)
(54,881
)
—
Non-GAAP operating loss
$
(27,387
)
$
(21,137
)
$
(35,939
)
Non-GAAP operating margin
(41.8
)%
(17.3
)%
(62.1
)%
GAAP provision for income taxes
$
145
$
3,525
$
220
GAAP income tax rate
(0.4
)%
15.2
%
(0.5
)%
Tax effects
29
3,241
—
Non-GAAP provision for income taxes
$
116
$
284
$
220
Non-GAAP income tax rate
(0.5
)%
(1.4
)%
(0.6
)%
GAAP net income (loss)
$
(39,326
)
$
19,615
$
(41,284
)
Separation expense
79
154
906
Strategic initiative and transaction
expenses
545
1,868
—
Stock-based compensation expense
12,773
7,633
4,653
Amortization of intangibles
356
373
381
Restructuring and other charges
44
631
—
Litigation reserves, net
7
1,287
—
Gain on sale of business
(292
)
(54,881
)
—
Tax effects
29
3,241
—
Non-GAAP net loss
$
(25,785
)
$
(20,079
)
$
(35,344
)
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
March 29, 2020
December 31, 2019
March 31, 2019
(in thousands, except
percentage and per share data)
NET INCOME (LOSS) PER DILUTED SHARE:
GAAP net income (loss) per diluted
share
$
(0.51
)
$
0.26
$
(0.55
)
Separation expense
—
—
0.01
Strategic initiative and transaction
expenses
0.01
0.02
—
Stock-based compensation expense
0.16
0.10
0.06
Amortization of intangibles
—
—
0.01
Restructuring and other charges
—
0.01
—
Litigation reserves, net
—
0.02
—
Gain on sale of business
—
(0.72
)
—
Tax effects
—
0.05
—
Non-GAAP net loss per diluted share
$
(0.34
)
$
(0.26
)
$
(0.47
)
Shares used in computing GAAP net income
(loss) per diluted share
76,560
76,090
74,409
Shares used in computing non-GAAP net
income (loss) per diluted share
76,560
76,090
74,409
ARLO TECHNOLOGIES,
INC.
UNAUDITED SUPPLEMENTAL
FINANCIAL INFORMATION
Three Months Ended
March 29, 2020
December 31, 2019
September 29, 2019
June 30, 2019
March 31, 2019
(in thousands, except
headcount and per share data)
Cash, cash equivalents and short-term
investments
$
206,582
$
256,670
$
153,811
$
137,927
$
180,374
Cash, cash equivalents and short-term
investments per diluted share
$
2.70
$
3.37
$
2.04
$
1.85
$
2.42
Accounts receivable, net
$
61,376
$
127,317
$
99,698
$
79,707
$
71,566
Days sales outstanding
83
97
85
87
111
Inventories
$
61,027
$
68,624
$
74,117
$
97,222
$
131,227
Inventory turns
3.4
5.9
4.8
2.8
1.5
Weeks of channel inventory:
U.S. retail channel
13.7
6.3
13.3
10.1
14.5
U.S. distribution channel
20.3
8.0
3.3
8.9
8.9
APAC distribution channel
6.0
3.6
4.3
5.1
6.7
Deferred revenue (current and
non-current)
$
59,848
$
66,098
$
47,995
$
47,464
$
47,737
Cumulative registered accounts (1)
4,245
4,015
3,691
3,397
3,126
Cumulative paid accounts (2)
255
230
211
187
162
*
Headcount
356
349
406
402
401
Non-GAAP diluted shares
76,560
76,090
75,337
74,729
74,409
_________________________
*
We factored in an adjustment to our Q1’19
paid account number and have subsequently revised the Q1’19 total
to 162,000.
(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 S.a.r.l. 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
S.a.r.l.
REVENUE BY GEOGRAPHY
Three Months Ended
March 29, 2020
December 31, 2019
March 31, 2019
(in thousands, except
percentage data)
Americas
$
50,158
77
%
$
94,668
77
%
$
44,366
77
%
EMEA
7,573
11
%
19,862
16
%
9,302
16
%
APAC
7,719
12
%
7,883
7
%
4,212
7
%
Total
$
65,450
100
%
$
122,413
100
%
$
57,880
100
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200511005849/en/
Arlo Investor Relations Erik Bylin investors@arlo.com (510)
315-1004
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