Revenue of $115 million, at the top end of
guidance range ARR ended at $194 million, growing 66% year
over year Free cash flow (FCF) of $12 million with FCF
margin of 10% (1) Service gross profit exceeds non-GAAP
operating expenses GAAP EPS of $(0.08); Record non-GAAP EPS
of $0.06
Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home
security brand, today reported financial results for the second
quarter ended July 2, 2023.
“The continued acceleration of our services business drove
outstanding results in Q2 across all of our key metrics. Strong
demand, increased subscriptions, higher ARPU, and record gross
margin are fueling Arlo’s trajectory of improving performance and
profitability," said Matthew McRae, Chief Executive Officer of Arlo
Technologies. “Our strategy and excellent execution also produced a
significant increase in the long-term value of our subscribers
which expands shareholder value.”
Financial and Business Highlights (2)
- Q2 total revenue of $115.1 million, a decrease of 3.3% year
over year.
- Record Q2 service revenue of $50.3 million, growing 53.5% year
over year.
- Ended the quarter with ARR (3) of $193.6 million, growing 66.1%
year over year.
- Added 245,000 paid accounts (4) in Q2, ending cumulative paid
accounts around 2.3 million, growing 54.9% year over year.
- Record Q2 GAAP services gross margin of 74.6% and non-GAAP
services gross margin of 75.2%.
- GAAP net loss per share of $(0.08); Record non-GAAP earnings
per diluted share of $0.06.
- Ending cash and cash equivalents and short-term investments
balance of $123.7 million, up $5.0 million sequentially.
Three Months Ended
Six Months Ended
July 2, 2023
April 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
(In thousands, except
percentage and per share data)
Revenue
$
115,076
$
111,004
$
118,979
$
226,080
$
243,730
GAAP Gross Margin
36.4
%
31.7
%
28.4
%
34.1
%
27.6
%
Non-GAAP Gross Margin (2)
37.3
%
32.6
%
29.5
%
35.0
%
28.5
%
GAAP Net Loss per Share
$
(0.08
)
$
(0.16
)
$
(0.13
)
$
(0.24
)
$
(0.23
)
Non-GAAP Net Income per Diluted Share
(2)
$
0.06
$
0.01
$
0.01
$
0.07
$
0.02
_________________________
(1)
Free cash flow is calculated as net cash
provided by (used in) operating activities less capital
expenditures. Free cash flow margin is the free cash flow divided
by revenue.
(2)
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.
(3)
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.
(4)
The 245,000 new paid accounts in Q2
includes a number of paid accounts in our EMEA region which were
managed by Verisure and now onboarded with us. This does not have
an impact to our financial statements and key business metrics
other than our number of cumulative paid accounts.
Third Quarter 2023 Business Outlook (5)
A reconciliation of our business outlook on a GAAP and non-GAAP
basis is provided in the following table:
Three Months Ended October 1,
2023
Revenue
Net Income (Loss)
per Diluted
Share
(In millions, except per share
data)
GAAP
$122 - $132
$(0.07) - $(0.01)
Estimated adjustment for stock-based
compensation and other expense
—
0.11
Non-GAAP
$122 - $132
$0.04 - $0.10
_________________________
(5)
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 second quarter 2023 results and discuss
management’s expectations for the third quarter of 2023 today,
Thursday, August 10, 2023 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, home security systems, and
the Arlo Apps: Arlo Secure, and Arlo Safe, AI-based subscription
services 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.
© 2023 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 for Arlo Technologies, Inc.:
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 our expectations or beliefs concerning future events
based on information available at the time such statements were
made and include statements regarding our potential future
business, operating performance and financial condition, including
descriptions of our expected revenue and profitability (and related
timing), GAAP and non-GAAP gross margins, operating margins, tax
rates, expenses, cash outlook, free cash flow and free cash flow
margin; strategic objectives and initiatives; the recurring revenue
business model; expectations regarding market expansion and future
growth; and others. These statements are based on management's
current expectations and are subject to certain risks and
uncertainties, including the following: future demand for our
products may be lower than anticipated, including due to inflation,
fluctuating consumer confidence, banking failures and rising
interest rates; we may be unsuccessful in developing and expanding
our sales and marketing capabilities; we may not be able to
increase sales of our paid subscription services; consumers may
choose not to adopt our new product offerings or adopt competing
products; product performance may be adversely affected by real
world operating conditions; we may be unsuccessful or experience
delays in manufacturing and distributing our new and existing
products; we may fail to manage costs and cost saving initiatives,
including restructuring initiatives, the cost of developing new
products and manufacturing and distribution of our 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 our
business are detailed in our 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 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. We undertake 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 stock-based
compensation expense, restructuring charges, impairment charges,
separation expense, amortization of development of software cost,
litigation reserves, net, employee retention credit and the related
tax effects. In addition, we use free cash flow as non-GAAP measure
when assessing the sources of liquidity, capital resources, and
quality of earnings. We believe that free cash flow (usage) is
helpful in understanding our capital requirements and provides an
additional means to reflect the cash flow trends in our business.
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:
Stock-based compensation expense consists of non-cash charges
for the estimated fair value of stock options, performance-based
stock options, restricted stock units (RSU), performance-based
restricted stock units, shares under the employee stock purchase
plan granted to employees and employees' annual bonus in RSU form.
We believe that the exclusion of these charges provides for more
accurate comparisons of our operating results to peer companies due
to the varying available valuation methodologies, subjective
assumptions and the variety of award types. In addition, we believe
it is useful to investors to understand the specific impact
stock-based compensation expense has on our operating results.
Other non-GAAP items are the result of either unique or
unplanned events, including, when applicable: restructuring
charges, impairment charges, separation expense, amortization of
development of software cost, litigation reserves, net and employee
retention credit. It is difficult to predict the occurrence or
estimate the amount or timing of these items in advance. Although
these events are reflected in our GAAP financial statements, these
unique transactions may limit the comparability of our on-going
operations with prior and future periods. The amounts result from
events that often arise from unforeseen circumstances, which often
occur outside of the ordinary course of continuing operations.
Therefore, the amounts do not accurately reflect the underlying
performance of our continuing business operations for the period in
which they are incurred.
Source: Arlo-F
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
As of
July 2, 2023
December 31,
2022
(In thousands, except share
and per share data)
ASSETS
Current assets:
Cash and cash equivalents
$
61,951
$
84,024
Short-term investments
61,724
29,700
Accounts receivable, net
57,327
65,960
Inventories
39,429
46,554
Prepaid expenses and other current
assets
12,318
6,544
Total current assets
232,749
232,782
Property and equipment, net
6,421
7,336
Operating lease right-of-use assets,
net
11,089
12,809
Goodwill
11,038
11,038
Restricted cash
4,035
4,155
Other non-current assets
3,689
4,081
Total assets
$
269,021
$
272,201
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
61,221
$
52,132
Deferred revenue
17,639
11,291
Accrued liabilities
88,217
98,855
Total current liabilities
167,077
162,278
Non-current operating lease
liabilities
17,141
19,279
Other non-current liabilities
3,047
2,949
Total liabilities
187,265
184,506
Commitments and contingencies
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:
93,653,934 at July 2, 2023 and 88,887,139 at December 31, 2022
94
89
Additional paid-in capital
448,543
433,138
Accumulated other comprehensive income
(loss)
152
(107
)
Accumulated deficit
(367,033
)
(345,425
)
Total stockholders’ equity
81,756
87,695
Total liabilities and stockholders’
equity
$
269,021
$
272,201
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Six Months Ended
July 2, 2023
April 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
(In thousands, except
percentage and per share data)
Revenue:
Products
$
64,749
$
67,060
$
86,191
$
131,809
$
181,016
Services
50,327
43,944
32,788
94,271
62,714
Total revenue
115,076
111,004
118,979
226,080
243,730
Cost of revenue:
Products
60,446
64,041
73,829
124,487
154,606
Services
12,772
11,746
11,410
24,518
21,809
Total cost of revenue
73,218
75,787
85,239
149,005
176,415
Gross profit
41,858
35,217
33,740
77,075
67,315
Gross margin
36.4
%
31.7
%
28.4
%
34.1
%
27.6
%
Operating expenses:
Research and development
17,618
17,750
17,402
35,368
33,781
Sales and marketing
16,921
15,353
14,506
32,274
27,674
General and administrative
15,007
15,622
13,149
30,629
25,770
Others
341
632
25
973
104
Total operating expenses
49,887
49,357
45,082
99,244
87,329
Loss from operations
(8,029
)
(14,140
)
(11,342
)
(22,169
)
(20,014
)
Operating margin
(7.0
)%
(12.7
)%
(9.5
)%
(9.8
)%
(8.2
)%
Interest income, net
835
726
129
1,561
124
Other income (expense), net
52
(39
)
(116
)
13
295
Loss before income taxes
(7,142
)
(13,453
)
(11,329
)
(20,595
)
(19,595
)
Provision for income taxes
221
792
228
1,013
441
Net loss
$
(7,363
)
$
(14,245
)
$
(11,557
)
$
(21,608
)
$
(20,036
)
Net loss per share - basic and diluted
$
(0.08
)
$
(0.16
)
$
(0.13
)
$
(0.24
)
$
(0.23
)
Weighted average shares used to compute
net loss per share - basic and diluted
92,337
89,653
86,868
90,984
85,966
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
July 2, 2023
July 3, 2022
(In thousands)
Cash flows from operating
activities:
Net loss
$
(21,608
)
$
(20,036
)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Stock-based compensation expense
27,564
21,834
Depreciation and amortization
2,353
2,523
Allowance for credit losses and inventory
reserves
613
(120
)
Deferred income taxes
243
133
Others
(567
)
89
Changes in assets and liabilities:
Accounts receivable, net
8,734
5,498
Inventories
6,411
(628
)
Prepaid expenses and other assets
(5,624
)
767
Accounts payable
9,836
(6,565
)
Deferred revenue
6,198
(16,763
)
Accrued and other liabilities
(11,245
)
(16,113
)
Net cash provided by (used in) operating
activities
22,908
(29,381
)
Cash flows from investing
activities:
Purchases of property and equipment
(1,954
)
(451
)
Purchases of short-term investments
(61,152
)
(59,490
)
Proceeds from maturities of short-term
investments
29,956
9,512
Net cash used in investing activities
(33,150
)
(50,429
)
Cash flows from financing
activities:
Proceeds related to employee benefit
plans
4,611
3,171
Restricted stock unit withholdings
(16,562
)
(13,555
)
Net cash used in financing activities
(11,951
)
(10,384
)
Net decrease in cash, cash equivalents and
restricted cash
(22,193
)
(90,194
)
Cash, cash equivalents and restricted
cash, at beginning of period
88,179
179,856
Cash, cash equivalents and restricted
cash, at end of period
$
65,986
$
89,662
Non-cash investing activities:
Purchases of property and equipment
included in accounts payable and accrued liabilities
$
433
$
333
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
UNAUDITED STATEMENT OF OPERATIONS
DATA:
Three Months Ended
Six Months Ended
July 2, 2023
April 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
(In thousands, except
percentage data)
GAAP gross profit:
Products
$
4,303
$
3,019
$
12,362
$
7,322
$
26,410
Services
37,555
32,198
21,378
69,753
40,905
Total GAAP gross profit
41,858
35,217
33,740
77,075
67,315
GAAP gross margin:
Products
6.6
%
4.5
%
14.3
%
5.6
%
14.6
%
Services
74.6
%
73.3
%
65.2
%
74.0
%
65.2
%
Total GAAP gross margin
36.4
%
31.7
%
28.4
%
34.1
%
27.6
%
Stock-based compensation expense -
Products
848
912
1,148
1,760
2,003
Stock-based compensation expense -
Services
119
(51
)
187
68
242
Amortization of development of software
cost - Services
151
151
—
302
—
Non-GAAP gross profit:
Products
5,151
3,931
13,510
9,082
28,413
Services
37,825
32,298
21,565
70,123
41,147
Total Non-GAAP gross profit
$
42,976
$
36,229
$
35,075
$
79,205
$
69,560
Non-GAAP gross margin:
Products
8.0
%
5.9
%
15.7
%
6.9
%
15.7
%
Services
75.2
%
73.5
%
65.8
%
74.4
%
65.6
%
Total Non-GAAP gross margin
37.3
%
32.6
%
29.5
%
35.0
%
28.5
%
GAAP research and development
$
17,618
$
17,750
$
17,402
$
35,368
$
33,781
Stock-based compensation expense
(3,311
)
(3,911
)
(3,621
)
(7,222
)
(5,923
)
Non-GAAP research and development
$
14,307
$
13,839
$
13,781
$
28,146
$
27,858
Percentage of revenue
12.4
%
12.5
%
11.6
%
12.4
%
11.4
%
GAAP sales and marketing
$
16,921
$
15,353
$
14,506
$
32,274
$
27,674
Stock-based compensation expense
(1,670
)
(1,722
)
(1,790
)
(3,392
)
(3,170
)
Non-GAAP sales and marketing
$
15,251
$
13,631
$
12,716
$
28,882
$
24,504
Percentage of revenue
13.3
%
12.3
%
10.7
%
12.8
%
10.1
%
GAAP general and administrative
$
15,007
$
15,622
$
13,149
$
30,629
$
25,770
Stock-based compensation expense
(7,025
)
(8,097
)
(5,499
)
(15,122
)
(10,496
)
Litigation reserves, net
—
—
(65
)
—
(112
)
Non-GAAP general and administrative
$
7,982
$
7,525
$
7,585
$
15,507
$
15,162
Percentage of revenue
6.9
%
6.8
%
6.4
%
6.9
%
6.2
%
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
Six Months Ended
July 2, 2023
April 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
(In thousands, except
percentage data)
GAAP total operating expenses
$
49,887
$
49,357
$
45,082
$
99,244
$
87,329
Stock-based compensation expense
(12,006
)
(13,730
)
(10,910
)
(25,736
)
(19,589
)
Others
(341
)
(632
)
(90
)
(973
)
(216
)
Non-GAAP total operating expenses
$
37,540
$
34,995
$
34,082
$
72,535
$
67,524
GAAP operating loss
$
(8,029
)
$
(14,140
)
$
(11,342
)
$
(22,169
)
$
(20,014
)
GAAP operating margin
(7.0
)%
(12.7
)%
(9.5
)%
(9.8
)%
(8.2
)%
Stock-based compensation expense
12,973
14,591
12,245
27,564
21,834
Others
492
783
90
1,275
216
Non-GAAP operating income
$
5,436
$
1,234
$
993
$
6,670
$
2,036
Non-GAAP operating margin
4.7
%
1.1
%
0.8
%
3.0
%
0.8
%
GAAP other income (expense),
net
$
52
$
(39
)
$
(116
)
$
13
$
295
Employee retention credit
—
—
(26
)
—
(65
)
Non-GAAP other income (expense), net
$
52
$
(39
)
$
(142
)
$
13
$
230
GAAP provision for income taxes
$
221
$
792
$
228
$
1,013
$
441
GAAP income tax rate
(3.1
)%
(5.9
)%
(2.0
)%
(4.9
)%
(2.3
)%
Non-GAAP provision for income taxes
$
221
$
792
$
228
$
1,013
$
441
Non-GAAP income tax rate
3.5
%
41.2
%
23.3
%
12.3
%
18.5
%
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
Six Months Ended
July 2, 2023
April 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
(In thousands, except
percentage and per share data)
GAAP net loss
$
(7,363
)
$
(14,245
)
$
(11,557
)
$
(21,608
)
$
(20,036
)
Stock-based compensation expense
12,973
14,591
12,245
27,564
21,834
Others
492
783
64
1,275
151
Non-GAAP net income
$
6,102
$
1,129
$
752
$
7,231
$
1,949
GAAP net loss per share - basic and
diluted
$
(0.08
)
$
(0.16
)
$
(0.13
)
$
(0.24
)
$
(0.23
)
Stock-based compensation expense
0.14
0.17
0.14
0.30
0.25
Others
—
—
—
0.01
—
Non-GAAP net income - diluted
$
0.06
$
0.01
$
0.01
$
0.07
$
0.02
Shares used in computing GAAP net loss -
basic
92,337
89,653
86,868
90,984
85,966
Shares used in computing non-GAAP net
income - diluted
99,187
93,236
91,787
96,800
92,687
Free cash flow (usage):
Net cash provided by (used in) operating
activities
$
12,578
$
10,329
$
(4,824
)
$
22,908
$
(29,381
)
Less: Purchases of property and
equipment
(1,031
)
(923
)
(153
)
(1,954
)
(451
)
Free cash flow (usage) (1)
$
11,547
$
9,406
$
(4,977
)
$
20,954
$
(29,832
)
Free cash flow (usage) margin (1)
10.0
%
8.5
%
(4.2
)%
9.3
%
(25.1
)%
_________________________
(1)
Free cash flow (usage) is calculated as
net cash provided by (used in) operating activities less capital
expenditures. Free cash flow (usage) margin is the free cash flow
(usage) divided by revenue.
ARLO TECHNOLOGIES,
INC.
UNAUDITED SUPPLEMENTAL
FINANCIAL INFORMATION
Three Months Ended
July 2, 2023
April 2, 2023
December 31,
2022
October 2, 2022
July 3, 2022
(In thousands, except
headcount and per share data)
Cash, cash equivalents and short-term
investments
$ 123,675
$ 118,673
$ 113,724
$ 125,272
$ 135,258
Cash, cash equivalents and short-term
investments per diluted share
$ 1.25
$ 1.27
$ 1.28
$ 1.42
$ 1.47
Accounts receivable, net
$ 57,327
$ 52,837
$ 65,960
$ 82,707
$ 73,998
Days sales outstanding
45
44
50
59
57
Inventories
$ 39,429
$ 39,922
$ 46,554
$ 73,243
$ 39,208
Inventory turns
6.1
6.4
6.4
4.3
7.5
Weeks of channel inventory:
U.S. retail channel
9.7
14.6
11.9
13.6
11.9
U.S. distribution channel
9.3
17.6
14.1
5.5
7.4
APAC distribution channel
7.7
5.8
4.7
9.4
9.8
Deferred revenue
(current and non-current)
$ 17,702
$ 15,289
$ 11,503
$ 12,242
$ 14,022
Cumulative registered accounts (1)
7,860
7,510
7,220
6,930
6,640
Cumulative paid accounts (2)
2,289
2,044
1,862
1,673
1,478
Annual recurring revenue (ARR) (3)
$ 193,633
$ 182,583
$ 137,764
$ 125,402
$ 116,601
Headcount
345
334
343
360
354
Non-GAAP diluted shares
99,187
93,236
88,743
88,124
91,787
_________________________
(1)
We define our registered accounts at the
end of a particular period as the number of unique registered
accounts on the Arlo platform as of the end of such period. The
number of registered accounts does not necessarily reflect the
number of end-users on the Arlo platform as one registered account
may be used by multiple end-users to monitor the devices attached
to that household.
(2)
Paid accounts are defined as any account
worldwide where a subscription to a paid service is being collected
(either by us or by our customers or channel partners, including
Verisure).
(3)
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. 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
Six Months Ended
July 2, 2023
April 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
(In thousands, except
percentage data)
Americas
$
78,136
67.9
%
$
56,632
51.0
%
$
60,345
50.7
%
$
134,768
59.6
%
$
128,811
52.8
%
EMEA
30,958
26.9
%
48,472
43.7
%
54,483
45.8
%
79,430
35.1
%
104,458
42.9
%
APAC
5,982
5.2
%
5,900
5.3
%
4,151
3.5
%
11,882
5.3
%
10,461
4.3
%
Total
$
115,076
100.0
%
$
111,004
100.0
%
$
118,979
100.0
%
$
226,080
100.0
%
$
243,730
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810654062/en/
Arlo Investor Relations Erik Bylin investors@arlo.com (510)
315-1004
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