Revenue of $128 million, growing 15% year
over year
Q3 ARR ended at $125 million, growing 56%
year over year
1.7 million in Cumulative Paid Accounts,
growing 91% year over year
Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home
security brand, today reported financial results for the third
quarter ended October 2, 2022.
"In Q3, amidst a rapidly changing economic climate, the Arlo
team executed well delivering 15.3% year over year revenue growth
for total revenue of $128.2 million. And our service-first strategy
continues to show impressive gains with paid accounts growing 91%
year over year and our annual recurring revenue reaching $125.4
million," said Matthew McRae, Chief Executive Officer of Arlo
Technologies. “Looking ahead, we remain committed to broadening our
routes to market through strategic enterprise partnerships and
expanding our value proposition to customers through our innovative
product introductions of Arlo Safe, Arlo Pro 5S and the new
Security System with multi-sensors."
Financial and Business Highlights (1)
- Q3 total revenue of $128.2 million, an increase of 15.3% year
over year.
- Record Q3 service revenue of $35.4 million, for growth of 31.3%
year over year.
- Ended the quarter with ARR of $125.4 million, growing 56.0%
year over year. (2)
- GAAP services gross margin of 66.1%; non-GAAP services gross
margin of 66.7% in Q3.
- Added 195,000 paid accounts in Q3, a year over year increase of
7.1%.
- GAAP gross profit of $36.8 million, an increase of 51.0% year
over year; non-GAAP gross profit of $38.1 million, an increase of
51.7% year over year.
- GAAP gross margin of 28.7%; non-GAAP gross margin of
29.7%.
- GAAP net loss per diluted share of $(0.16); non-GAAP net loss
per diluted share of $(0.05).
Three Months Ended
Nine Months Ended
October 2, 2022
July 3, 2022
October 3, 2021
October 2, 2022
October 3, 2021
(in thousands, except
percentage and per share data)
Revenue
$
128,157
$
118,979
$
111,149
$
371,887
$
292,276
GAAP Gross Margin
28.7
%
28.4
%
21.9
%
28.0
%
26.1
%
Non-GAAP Gross Margin (1)
29.7
%
29.5
%
22.6
%
29.0
%
27.1
%
GAAP Net Loss per Diluted Share
$
(0.16
)
$
(0.13
)
$
(0.18
)
$
(0.40
)
$
(0.60
)
Non-GAAP Net Income (Loss) per Diluted
Share (1)
$
(0.05
)
$
0.01
$
(0.08
)
$
(0.03
)
$
(0.16
)
_________________________
(1)
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.
(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.
Fourth Quarter 2022 Business Outlook (3)
A reconciliation of our business outlook on a GAAP and non-GAAP
basis is provided in the following table:
Three Months Ending December
31, 2022
Revenue
Net Loss per Diluted
Share
(in millions, except per share
data)
GAAP
$105 - $115
$(0.30) - $(0.23)
Estimated adjustments for (3):
Stock-based compensation expense
—
0.14
Other non-recurring expenses
—
0.03
Non-GAAP
$105 - $115
$(0.13) - $(0.06)
_________________________
(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; 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 third quarter of 2022 results and discuss
management’s expectations for the fourth quarter of 2022 today,
Tuesday, November 8, 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, software and services,
including wire-free smart Wi-Fi and LTE-enabled security cameras,
audio and video doorbells, a floodlight, the Arlo App and Arlo
Secure, an AI-based subscription service designed to maximize
security through personalized notifications and emergency services
for quicker help during a crisis.
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 expansion of the Company’s product portfolio with
Arlo Safe and the Security System; strategic objectives and
initiatives, including the broadening of routes to market via
strategic enterprise partnerships; the Company's recurring revenue
business model; expectations regarding market expansion and future
growth; 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: the expansion of the Company’s product portfolio with
Arlo Safe and the Security System may not materialize; routes to
market may not materialize or prove as successful as anticipated;
the relationships with strategic enterprise partners may
deteriorate; future demand for the Company's products may be lower
than anticipated, including due to inflation, lower consumer
confidence and rising interest rates; 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; the Company may fail to manage costs, including the cost
of developing new products and manufacturing and distribution of
its existing offerings. 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: impairment charges, 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
October 2, 2022
December 31,
2021
(In thousands, except share
and per share data)
ASSETS
Current assets:
Cash and cash equivalents
$
80,773
$
175,749
Short-term investments
44,499
—
Accounts receivable, net
82,707
79,564
Inventories
73,243
38,390
Prepaid expenses and other current
assets
9,871
9,919
Total current assets
291,093
303,622
Property and equipment, net
6,588
9,595
Operating lease right-of-use assets,
net
14,161
14,814
Goodwill
11,038
11,038
Restricted cash
4,128
4,107
Other non-current assets
4,208
4,314
Total assets
$
331,216
$
347,490
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
107,103
$
84,098
Deferred revenue
11,893
29,442
Accrued liabilities
92,117
97,389
Total current liabilities
211,113
210,929
Non-current operating lease
liabilities
20,239
21,470
Other non-current liabilities
2,543
2,439
Total liabilities
233,895
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:
88,410,113 at October 2, 2022 and 84,453,212 at December 31,
2021
88
84
Additional paid-in capital
420,727
401,367
Accumulated other comprehensive income
(loss)
(224
)
—
Accumulated deficit
(323,270
)
(288,799
)
Total stockholders’ equity
97,321
112,652
Total liabilities and stockholders’
equity
$
331,216
$
347,490
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
October 2, 2022
July 3, 2022
October 3, 2021
October 2, 2022
October 3, 2021
(in thousands, except
percentage and per share data)
Revenue:
Products
$
92,720
$
86,191
$
84,152
$
273,736
$
217,224
Services
35,437
32,788
26,997
98,151
75,052
Total revenue
128,157
118,979
111,149
371,887
292,276
Cost of revenue:
Products
79,386
73,829
75,682
233,992
184,858
Services
12,021
11,410
11,124
33,830
31,099
Total cost of revenue
91,407
85,239
86,806
267,822
215,957
Gross profit
36,750
33,740
24,343
104,065
76,319
Gross margin
28.7
%
28.4
%
21.9
%
28.0
%
26.1
%
Operating expenses:
Research and development
16,471
17,402
14,377
50,252
45,419
Sales and marketing
22,193
14,506
12,779
49,867
36,445
General and administrative
12,253
13,149
12,119
38,023
36,905
Impairment charges
—
—
—
—
9,116
Separation expense
273
25
683
377
1,342
Total operating expenses
51,190
45,082
39,958
138,519
129,227
Loss from operations
(14,440
)
(11,342
)
(15,615
)
(34,454
)
(52,908
)
Operating margin
(11.3
)%
(9.5
)%
(14.0
)%
(9.3
)%
(18.1
)%
Interest income (expense), net
290
129
(1
)
414
26
Other income (expense), net
19
(116
)
599
314
4,170
Loss before income taxes
(14,131
)
(11,329
)
(15,017
)
(33,726
)
(48,712
)
Provision for income taxes
304
228
181
745
525
Net loss
$
(14,435
)
$
(11,557
)
$
(15,198
)
$
(34,471
)
$
(49,237
)
Net loss per share:
Basic
$
(0.16
)
$
(0.13
)
$
(0.18
)
$
(0.40
)
$
(0.60
)
Diluted
$
(0.16
)
$
(0.13
)
$
(0.18
)
$
(0.40
)
$
(0.60
)
Weighted average shares used to compute
net loss per share:
Basic
88,124
86.868
83,809
86,677
82,191
Diluted
88,124
86.868
83,809
86,677
82,191
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
October 2, 2022
October 3, 2021
(In thousands)
Cash flows from operating
activities:
Net loss
$
(34,471
)
$
(49,237
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock-based compensation expense
31,787
27,548
Impairment charges
—
9,116
Depreciation and amortization
3,653
4,546
Allowance for credit losses and inventory
reserves
(211
)
(2,530
)
Deferred income taxes
259
(284
)
Others
39
54
Changes in assets and liabilities:
Accounts receivable, net
(3,171
)
7,712
Inventories
(34,613
)
27,274
Prepaid expenses and other assets
(105
)
(5,166
)
Accounts payable
23,229
(27
)
Deferred revenue
(18,544
)
(28,019
)
Accrued and other liabilities
(2,635
)
(23,643
)
Net cash used in operating activities
(34,783
)
(32,656
)
Cash flows from investing
activities:
Purchases of property and equipment
(815
)
(1,938
)
Purchases of short-term investments
(69,305
)
—
Proceeds from maturities of short-term
investments
24,542
20,000
Net cash provided by (used in) investing
activities
(45,578
)
18,062
Cash flows from financing
activities:
Proceeds related to employee benefit
plans
3,172
7,403
Restricted stock unit withholdings
(17,766
)
(12,938
)
Net cash used in financing activities
(14,594
)
(5,535
)
Net decrease in cash and cash equivalents
and restricted cash
(94,955
)
(20,129
)
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
$
84,901
$
170,162
Non-cash investing activities:
Purchases of property and equipment
included in accounts payable and accrued liabilities
$
209
$
423
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
UNAUDITED STATEMENT OF OPERATIONS
DATA:
Three Months Ended
Nine Months Ended
October 2, 2022
July 3, 2022
October 3, 2021
October 2, 2022
October 3, 2021
(in thousands, except
percentage data)
GAAP gross profit:
Products
$
13,334
$
12,362
$
8,470
$
39,744
$
32,366
Services
23,416
21,378
15,873
64,321
43,953
Total GAAP gross profit
36,750
33,740
24,343
104,065
76,319
GAAP gross margin:
Products
14.4
%
14.3
%
10.1
%
14.5
%
14.9
%
Services
66.1
%
65.2
%
58.8
%
65.5
%
58.6
%
Total GAAP gross margin
28.7
%
28.4
%
21.9
%
28.0
%
26.1
%
Stock-based compensation expense -
Products
1,132
1,148
593
3,135
2,756
Stock-based compensation expense -
Services
233
187
194
475
194
Non-GAAP gross profit:
Products
14,466
13,510
9,063
42,879
35,122
Services
23,649
21,565
16,067
64,796
44,147
Total Non-GAAP gross profit
$
38,115
$
35,075
$
25,130
$
107,675
$
79,269
Non-GAAP gross margin:
Products
15.6
%
15.7
%
10.8
%
15.7
%
16.2
%
Services
66.7
%
65.8
%
59.5
%
66.0
%
58.8
%
Total Non-GAAP gross margin
29.7
%
29.5
%
22.6
%
29.0
%
27.1
%
GAAP research and development
$
16,471
$
17,402
$
14,377
$
50,252
$
45,419
Stock-based compensation expense
(2,679
)
(3,621
)
(2,086
)
(8,602
)
(8,474
)
Non-GAAP research and development
$
13,792
$
13,781
$
12,291
$
41,650
$
36,945
10.8
%
11.6
%
11.1
%
11.2
%
12.6
%
GAAP sales and marketing
$
22,193
$
14,506
$
12,779
$
49,867
$
36,445
Stock-based compensation expense
(1,389
)
(1,790
)
(1,119
)
(4,559
)
(3,947
)
Non-GAAP sales and marketing
$
20,804
$
12,716
$
11,660
$
45,308
$
32,498
16.2
%
10.7
%
10.5
%
12.2
%
11.1
%
GAAP general and administrative
$
12,253
$
13,149
$
12,119
$
38,023
$
36,905
Stock-based compensation expense
(4,520
)
(5,499
)
(3,607
)
(15,016
)
(12,177
)
Litigation reserves, net
(5
)
(65
)
—
(117
)
(167
)
Non-GAAP general and administrative
$
7,728
$
7,585
$
8,512
$
22,890
$
24,561
6.0
%
6.4
%
7.7
%
6.2
%
8.4
%
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
Nine Months Ended
October 2, 2022
July 3, 2022
October 3, 2021
October 2, 2022
October 3, 2021
(in thousands, except
percentage and per share data)
GAAP total operating expenses
$
51,190
$
45,082
$
39,958
$
138,519
$
129,227
Separation expense
(273
)
(25
)
(683
)
(377
)
(1,342
)
Stock-based compensation expense
(8,588
)
(10,910
)
(6,812
)
(28,177
)
(24,598
)
Impairment charges
—
—
—
—
(9,116
)
Litigation reserves, net
(5
)
(65
)
—
(117
)
(167
)
Non-GAAP total operating expenses
$
42,324
$
34,082
$
32,463
$
109,848
$
94,004
GAAP operating loss
$
(14,440
)
$
(11,342
)
$
(15,615
)
$
(34,454
)
$
(52,908
)
GAAP operating margin
(11.3
)%
(9.5
)%
(14.0
)%
(9.3
)%
(18.1
)%
Separation expense
273
25
683
377
1,342
Stock-based compensation expense
9,953
12,245
7,599
31,787
27,548
Impairment charges
—
—
—
—
9,116
Litigation reserves, net
5
65
—
117
167
Non-GAAP operating income (loss)
$
(4,209
)
$
993
$
(7,333
)
$
(2,173
)
$
(14,735
)
Non-GAAP operating margin
(3.3
)%
0.8
%
(6.6
)%
(0.6
)%
(5.0
)%
GAAP other income (expense),
net
$
19
$
(116
)
$
599
$
314
$
4,170
Employee Retention Credit
—
(26
)
(196
)
(65
)
(2,007
)
Non-GAAP other income (expense), net
$
19
$
(142
)
$
403
$
249
$
2,163
GAAP provision for income taxes
$
304
$
228
$
181
$
745
$
525
GAAP income tax rate
(2.2
)%
(2.0
)%
(1.2
)%
(2.2
)%
(1.1
)%
Non-GAAP provision for income taxes
$
304
$
228
$
181
$
745
$
525
Non-GAAP income tax rate
(7.8
)%
23.3
%
(2.6
)%
(49.3
)%
(4.2
)%
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
Nine Months Ended
October 2, 2022
July 3, 2022
October 3, 2021
October 2, 2022
October 3, 2021
(in thousands, except
percentage and per share data)
GAAP net loss
$
(14,435
)
$
(11,557
)
$
(15,198
)
$
(34,471
)
$
(49,237
)
Separation expense
273
25
683
377
1,342
Stock-based compensation expense
9,953
12,245
7,599
31,787
27,548
Impairment charges
—
—
—
—
9,116
Litigation reserves, net
5
65
—
117
167
Employee Retention Credit
—
(26
)
(196
)
(65
)
(2,007
)
Non-GAAP net income (loss)
$
(4,204
)
$
752
$
(7,112
)
$
(2,255
)
$
(13,071
)
NET LOSS PER SHARE - BASIC AND
DILUTED:
GAAP net loss per share - basic and
diluted
$
(0.16
)
$
(0.13
)
$
(0.18
)
$
(0.40
)
$
(0.60
)
Separation expense
—
—
0.01
—
0.02
Stock-based compensation expense
0.11
0.14
0.09
0.37
0.34
Impairment charges
—
—
—
—
0.11
Employee Retention Credit
—
—
—
—
(0.03
)
Non-GAAP net income (loss) - diluted
$
(0.05
)
$
0.01
$
(0.08
)
$
(0.03
)
$
(0.16
)
Shares used in computing GAAP net income
(loss) - basic
88,124
86,868
83,809
86,677
82,191
Shares used in computing non-GAAP net
income (loss) - diluted
88,124
91,787
83,809
86,677
82,191
ARLO TECHNOLOGIES,
INC.
UNAUDITED SUPPLEMENTAL
FINANCIAL INFORMATION
Three Months Ended
October 2, 2022
July 3, 2022
April 3, 2022
December 31,
2021
October 3, 2021
(in thousands, except
headcount and per share data)
Cash, cash equivalents and short-term
investments
$
125,272
$
135,258
$
145,541
$
175,749
$
166,057
Cash, cash equivalents and short-term
investments per diluted share
$
1.42
$
1.47
$
1.56
$
1.94
$
1.98
Accounts receivable, net
$
82,707
$
73,998
$
78,054
$
79,564
$
70,124
Days sales outstanding
59
57
58
50
62
Inventories
$
73,243
$
39,208
$
37,038
$
38,390
$
39,769
Inventory turns
4.3
7.5
8.7
10.5
7.6
Weeks of channel inventory:
U.S. retail channel
13.6
11.9
15.8
7.0
14.0
U.S. distribution channel
5.5
7.4
10.5
8.5
8.0
APAC distribution channel
9.4
9.8
18.1
8.9
10.2
Deferred revenue (current and
non-current)
$
12,242
$
14,022
$
17,375
$
30,786
$
41,686
Cumulative registered accounts (1)
6,930
6,640
6,389
6,131
5,822
Cumulative paid accounts (2)
1,673
1,478
1,272
1,067
877
Annual recurring revenue (ARR) (3)
$
125,402
$
116,601
$
101,341
$
90,100
$
80,400
Headcount
360
354
358
353
346
Non-GAAP diluted shares
88,124
91,787
93,135
90,679
83,809
_________________________
(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), plus paid service plans of a duration of more than three
months bundled with products (such bundles being counted as a paid
account after 90 days have elapsed from the date of
registration).
(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
Nine Months Ended
October 2, 2022
July 3, 2022
October 3, 2021
October 2, 2022
October 3, 2021
(in thousands, except
percentage data)
Americas
$
71,040
55
%
$
60,345
51
%
$
74,511
67
%
$
199,851
54
%
$
190,828
65
%
EMEA
52,542
41
%
54,483
46
%
30,931
28
%
157,000
42
%
80,623
28
%
APAC
4,575
4
%
4,151
3
%
5,707
5
%
15,036
4
%
20,825
7
%
Total
$
128,157
100
%
$
118,979
100
%
$
111,149
100
%
$
371,887
100
%
$
292,276
100
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221108005532/en/
Arlo Investor Relations Erik Bylin investors@arlo.com (510)
315-1004
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