Revenue of $130.0 million, at the high end
of guidance range
Annual recurring revenue (ARR) ended at
$200.0 million, growing 59.5% year over year
Free cash flow (FCF) of $7.0 million with
FCF margin of 5.4% (1)
GAAP EPS of $(0.01); record non-GAAP EPS of
$0.09
Successful launch of innovative Essential 2
camera portfolio
Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home
security brand, today reported financial results for the third
quarter ended October 1, 2023.
“Our third quarter results illustrate the power of our services
business, which reached $200 million in annual recurring revenue, a
significant milestone that grew nearly 60% year over year. This
performance drove our solid free cash flow and record earnings per
share, and continued Arlo's trajectory of profit expansion," said
Matthew McRae, Chief Executive Officer of Arlo Technologies. “We
also launched our Essential 2 product line, the largest product
launch in our company's history, bringing higher performance and an
improved experience to new lower price points. Arlo believes
everyone has a right to feel safe and Essential 2 allows us to
address a wider audience just as our industry expands into the mass
market this holiday season.”
Financial and Business Highlights (2)
- Q3 total revenue of $130.0 million, an increase of 1.4% year
over year.
- Record Q3 service revenue of $51.0 million, growing 44.0% year
over year.
- Q3 GAAP services gross margin of 73.5% and non-GAAP services
gross margin of 74.1%.
- GAAP net loss per share of $(0.01); record non-GAAP earnings
per diluted share of $0.09.
- Ended the quarter with ARR (3) of $200.0 million, growing 59.5%
year over year.
- Added 197,000 paid accounts in Q3, ending cumulative paid
accounts around 2.5 million, growing 48.6% year over year.
- Successful launch of Essential 2 camera portfolio targeted at
creating a lower price entry point into the Arlo ecosystem.
- Ending cash and cash equivalents and short-term investments
balance of $126.0 million, up $2.4 million sequentially.
Three Months Ended
Nine Months Ended
October 1, 2023
July 2, 2023
October 2, 2022
October 1, 2023
October 2, 2022
(In thousands, except
percentage and per share data)
Revenue
$
130,003
$
115,076
$
128,157
$
356,083
$
371,887
GAAP Gross Margin
33.2
%
36.4
%
28.7
%
33.8
%
28.0
%
Non-GAAP Gross Margin (2)
34.0
%
37.3
%
29.7
%
34.6
%
29.0
%
GAAP Net Loss per Share
$
(0.01
)
$
(0.08
)
$
(0.16
)
$
(0.25
)
$
(0.40
)
Non-GAAP Net Income per Diluted Share
(2)
$
0.09
$
0.06
$
(0.05
)
$
0.17
$
(0.03
)
_________________________
(1)
FCF is calculated as net cash provided by
(used in) operating activities less capital expenditures. FCF
margin is the FCF 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.
Fourth Quarter 2023 Business Outlook (4)
A reconciliation of our business outlook on a GAAP and non-GAAP
basis is provided in the following table:
Three Months Ended December
31, 2023
Revenue
Net Income (Loss) per
Diluted Share
(In millions, except per share
data)
GAAP
$129 - $139
$(0.05) - $0.01
Estimated adjustment for stock-based
compensation and other expense
—
0.11
Non-GAAP
$129 - $139
$0.06 - $0.12
_________________________
(4)
Business outlook does not include
estimates for any currently unknown income and expense items which,
by their nature, could arise late in a quarter, including:
litigation reserves, net; impairment charges; discrete tax benefits
or detriments relating to tax windfalls or shortfalls from equity
awards; and any additional impacts relating to the implementation
of 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 2023 results and discuss
management’s expectations for the fourth quarter of 2023 today,
Thursday, November 9, 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; the ability of the Essential 2 product line to allow us to
address a wider audience; 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
October 1, 2023
December 31,
2022
(In thousands, except share
and per share data)
ASSETS
Current assets:
Cash and cash equivalents
$
51,133
$
84,024
Short-term investments
74,916
29,700
Accounts receivable, net
70,313
65,960
Inventories
53,496
46,554
Prepaid expenses and other current
assets
11,100
6,544
Total current assets
260,958
232,782
Property and equipment, net
5,752
7,336
Operating lease right-of-use assets,
net
12,190
12,809
Goodwill
11,038
11,038
Restricted cash
4,079
4,155
Other non-current assets
3,620
4,081
Total assets
$
297,637
$
272,201
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
82,479
$
52,132
Deferred revenue
17,678
11,291
Accrued liabilities
85,999
98,855
Total current liabilities
186,156
162,278
Non-current operating lease
liabilities
17,970
19,279
Other non-current liabilities
3,318
2,949
Total liabilities
207,444
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:
94,581,808 at October 1, 2023 and 88,887,139 at December 31,
2022
94
89
Additional paid-in capital
458,015
433,138
Accumulated other comprehensive income
(loss)
237
(107
)
Accumulated deficit
(368,153
)
(345,425
)
Total stockholders’ equity
90,193
87,695
Total liabilities and stockholders’
equity
$
297,637
$
272,201
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
October 1, 2023
July 2, 2023
October 2, 2022
October 1, 2023
October 2, 2022
(In thousands, except
percentage and per share data)
Revenue:
Products
$
78,961
$
64,749
$
92,720
$
210,770
$
273,736
Services
51,042
50,327
35,437
145,313
98,151
Total revenue
130,003
115,076
128,157
356,083
371,887
Cost of revenue:
Products
73,335
60,446
79,386
197,520
233,992
Services
13,529
12,772
12,021
38,349
33,830
Total cost of revenue
86,864
73,218
91,407
235,869
267,822
Gross profit
43,139
41,858
36,750
120,214
104,065
Gross margin
33.2
%
36.4
%
28.7
%
33.8
%
28.0
%
Operating expenses:
Research and development
16,829
17,618
16,471
52,197
50,252
Sales and marketing
15,863
16,921
22,193
48,137
49,867
General and administrative
12,460
15,007
12,253
43,089
38,023
Others
263
341
273
1,236
377
Total operating expenses
45,415
49,887
51,190
144,659
138,519
Loss from operations
(2,276
)
(8,029
)
(14,440
)
(24,445
)
(34,454
)
Operating margin
(1.8
)%
(7.0
)%
(11.3
)%
(6.9
)%
(9.3
)%
Interest income, net
1,175
835
290
2,736
414
Other income, net
10
52
19
23
314
Loss before income taxes
(1,091
)
(7,142
)
(14,131
)
(21,686
)
(33,726
)
Provision for income taxes
29
221
304
1,042
745
Net loss
$
(1,120
)
$
(7,363
)
$
(14,435
)
$
(22,728
)
$
(34,471
)
Net loss per share - basic and diluted
$
(0.01
)
$
(0.08
)
$
(0.16
)
$
(0.25
)
$
(0.40
)
Weighted average shares used to compute
net loss per share - basic and diluted
94,243
92,337
88,124
92,069
86,677
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
October 1, 2023
October 2, 2022
(In thousands)
Cash flows from operating
activities:
Net loss
$
(22,728
)
$
(34,471
)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Stock-based compensation expense
37,851
31,787
Depreciation and amortization
3,809
3,653
Allowance for credit losses and inventory
reserves
1,218
(211
)
Deferred income taxes
257
259
Others
(1,224
)
39
Changes in assets and liabilities:
Accounts receivable, net
(4,262
)
(3,171
)
Inventories
(8,250
)
(34,613
)
Prepaid expenses and other assets
(4,353
)
(105
)
Accounts payable
31,049
23,229
Deferred revenue
6,202
(18,544
)
Accrued and other liabilities
(9,202
)
(2,635
)
Net cash provided by (used in) operating
activities
30,367
(34,783
)
Cash flows from investing
activities:
Purchases of property and equipment
(2,448
)
(815
)
Purchases of short-term investments
(110,905
)
(69,305
)
Proceeds from maturities of short-term
investments
67,259
24,542
Net cash used in investing activities
(46,094
)
(45,578
)
Cash flows from financing
activities:
Proceeds related to employee benefit
plans
5,293
3,172
Restricted stock unit withholdings
(22,533
)
(17,766
)
Net cash used in financing activities
(17,240
)
(14,594
)
Net decrease in cash, cash equivalents and
restricted cash
(32,967
)
(94,955
)
Cash, cash equivalents and restricted
cash, at beginning of period
88,179
179,856
Cash, cash equivalents and restricted
cash, at end of period
$
55,212
$
84,901
Non-cash investing activities:
Purchases of property and equipment
included in accounts payable and accrued liabilities
$
726
$
209
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
UNAUDITED STATEMENT OF OPERATIONS DATA:
Three Months Ended
Nine Months Ended
October 1, 2023
July 2, 2023
October 2, 2022
October 1, 2023
October 2, 2022
(In thousands, except
percentage data)
GAAP gross profit:
Products
$
5,626
$
4,303
$
13,334
$
13,250
$
39,744
Services
37,513
37,555
23,416
106,964
64,321
Total GAAP gross profit
43,139
41,858
36,750
120,214
104,065
GAAP gross margin:
Products
7.1
%
6.6
%
14.4
%
6.3
%
14.5
%
Services
73.5
%
74.6
%
66.1
%
73.6
%
65.5
%
Total GAAP gross margin
33.2
%
36.4
%
28.7
%
33.8
%
28.0
%
Stock-based compensation expense -
Products
723
848
1,132
2,483
3,135
Stock-based compensation expense -
Services
145
119
233
213
475
Amortization of development of software
cost - Services
152
151
—
454
—
Non-GAAP gross profit:
Products
6,349
5,151
14,466
15,733
42,879
Services
37,810
37,825
23,649
107,631
64,796
Total Non-GAAP gross profit
$
44,159
$
42,976
$
38,115
$
123,364
$
107,675
Non-GAAP gross margin:
Products
8.0
%
8.0
%
15.6
%
7.5
%
15.7
%
Services
74.1
%
75.2
%
66.7
%
74.1
%
66.0
%
Total Non-GAAP gross margin
34.0
%
37.3
%
29.7
%
34.6
%
29.0
%
GAAP research and development
$
16,829
$
17,618
$
16,471
$
52,197
$
50,252
Stock-based compensation expense
(2,847
)
(3,311
)
(2,679
)
(10,069
)
(8,602
)
Non-GAAP research and development
$
13,982
$
14,307
$
13,792
$
42,128
$
41,650
Percentage of revenue
10.8
%
12.4
%
10.8
%
11.8
%
11.2
%
GAAP sales and marketing
$
15,863
$
16,921
$
22,193
$
48,137
$
49,867
Stock-based compensation expense
(1,224
)
(1,670
)
(1,389
)
(4,616
)
(4,559
)
Non-GAAP sales and marketing
$
14,639
$
15,251
$
20,804
$
43,521
$
45,308
Percentage of revenue
11.3
%
13.3
%
16.2
%
12.2
%
12.2
%
GAAP general and administrative
$
12,460
$
15,007
$
12,253
$
43,089
$
38,023
Stock-based compensation expense
(5,348
)
(7,025
)
(4,520
)
(20,470
)
(15,016
)
Litigation reserves, net
—
—
(5
)
—
(117
)
Non-GAAP general and administrative
$
7,112
$
7,982
$
7,728
$
22,619
$
22,890
Percentage of revenue
5.5
%
6.9
%
6.0
%
6.4
%
6.2
%
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 1, 2023
July 2, 2023
October 2, 2022
October 1, 2023
October 2, 2022
(In thousands, except
percentage data)
GAAP total operating expenses
$
45,415
$
49,887
$
51,190
$
144,659
$
138,519
Stock-based compensation expense
(9,419
)
(12,006
)
(8,588
)
(35,155
)
(28,177
)
Others
(263
)
(341
)
(278
)
(1,236
)
(494
)
Non-GAAP total operating expenses
$
35,733
$
37,540
$
42,324
$
108,268
$
109,848
GAAP operating loss
$
(2,276
)
$
(8,029
)
$
(14,440
)
$
(24,445
)
$
(34,454
)
GAAP operating margin
(1.8
)%
(7.0
)%
(11.3
)%
(6.9
)%
(9.3
)%
Stock-based compensation expense
10,287
12,973
9,953
37,851
31,787
Others
415
492
278
1,690
494
Non-GAAP operating income (loss)
$
8,426
$
5,436
$
(4,209
)
$
15,096
$
(2,173
)
Non-GAAP operating margin
6.5
%
4.7
%
(3.3
)%
4.2
%
(0.6
)%
GAAP other income, net
$
10
$
52
$
19
$
23
$
314
Employee retention credit
—
—
—
—
(65
)
Non-GAAP other income, net
$
10
$
52
$
19
$
23
$
249
GAAP provision for income taxes
$
29
$
221
$
304
$
1,042
$
745
GAAP income tax rate
(2.7
)%
(3.1
)%
(2.2
)%
(4.8
)%
(2.2
)%
Non-GAAP provision for income taxes
$
29
$
221
$
304
$
1,042
$
745
Non-GAAP income tax rate
0.3
%
3.5
%
(7.8
)%
5.8
%
(49.3
)%
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 1, 2023
July 2, 2023
October 2, 2022
October 1, 2023
October 2, 2022
(In thousands, except
percentage and per share data)
GAAP net loss
$
(1,120
)
$
(7,363
)
$
(14,435
)
$
(22,728
)
$
(34,471
)
Stock-based compensation expense
10,287
12,973
9,953
37,851
31,787
Others
415
492
278
1,690
429
Non-GAAP net income (loss)
$
9,582
$
6,102
$
(4,204
)
$
16,813
$
(2,255
)
GAAP net loss per share - basic and
diluted
$
(0.01
)
$
(0.08
)
$
(0.16
)
$
(0.25
)
$
(0.40
)
Stock-based compensation expense
0.10
0.14
0.11
0.41
0.37
Others
—
—
—
0.01
—
Non-GAAP net income (loss) - diluted
$
0.09
$
0.06
$
(0.05
)
$
0.17
$
(0.03
)
Shares used in computing GAAP net loss -
basic
94,243
92,337
88,124
92,069
86,677
Shares used in computing non-GAAP net
income - diluted
102,116
99,187
88,124
99,238
86,677
Free cash flow (usage):
Net cash provided by (used in) operating
activities
$
7,459
$
12,578
$
(5,402
)
$
30,367
$
(34,783
)
Less: Purchases of property and
equipment
(494
)
(1,031
)
(364
)
(2,448
)
(815
)
Free cash flow (usage) (1)
$
6,965
$
11,547
$
(5,766
)
$
27,919
$
(35,598
)
Free cash flow (usage) margin (1)
5.4
%
10.0
%
(4.5
)%
7.8
%
(9.6
)%
_________________________
(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
October 1, 2023
July 2, 2023
April 2, 2023
December 31,
2022
October 2, 2022
(In thousands, except
headcount and per share data)
Cash, cash equivalents and short-term
investments
$
126,049
$
123,675
$
118,673
$
113,724
$
125,272
Cash, cash equivalents and short-term
investments per diluted share
$
1.23
$
1.25
$
1.27
$
1.28
$
1.42
Accounts receivable, net
$
70,313
$
57,327
$
52,837
$
65,960
$
82,707
Days sales outstanding
49
45
44
50
59
Inventories
$
53,496
$
39,429
$
39,922
$
46,554
$
73,243
Inventory turns
5.5
6.1
6.4
6.4
4.3
Weeks of channel inventory:
U.S. retail channel
10.9
9.7
14.6
11.9
13.6
U.S. distribution channel
7.4
9.3
17.6
14.1
5.5
APAC distribution channel
7.2
7.7
5.8
4.7
9.4
Deferred revenue
(current and non-current)
$
17,706
$
17,702
$
15,289
$
11,503
$
12,242
Cumulative registered accounts (1)
8,193
7,860
7,510
7,220
6,930
Cumulative paid accounts (2)
2,486
2,289
2,044
1,862
1,673
Annual recurring revenue (ARR) (3)
$
199,993
$
193,633
$
182,583
$
137,764
$
125,402
Headcount
353
345
334
343
360
Non-GAAP diluted shares
102,116
99,187
93,236
88,743
88,124
_________________________
(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
Nine Months Ended
October 1, 2023
July 2, 2023
October 2, 2022
October 1, 2023
October 2, 2022
(In thousands, except
percentage data)
Americas
$
79,948
61.5
%
$
78,136
67.9
%
$
71,040
55.4
%
$
214,716
60.3
%
$
199,851
53.8
%
EMEA
42,887
33.0
%
30,958
26.9
%
52,542
41.0
%
122,317
34.4
%
157,000
42.2
%
APAC
7,168
5.5
%
5,982
5.2
%
4,575
3.6
%
19,050
5.3
%
15,036
4.0
%
Total
$
130,003
100.0
%
$
115,076
100.0
%
$
128,157
100.0
%
$
356,083
100.0
%
$
371,887
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109334651/en/
Arlo Investor Relations Tahmin Clarke investors@arlo.com
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