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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arlo Technologies Inc | NYSE:ARLO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.15 | 0.89% | 17.00 | 1,250 | 13:13:19 |
Exceeded High-End of both Revenue and Non-GAAP EPS Guidance for the Quarter
48% Year over Year growth in Service Revenue, Product Revenue and Total Revenue
133% Year over Year growth in Total Paid Accounts
Ended quarter with Cash, Cash Equivalents and Short-term Investments Balance at $178.7 million, with No Debt
Arlo Technologies, Inc. (NYSE: ARLO), a leading internet-connected security camera brand, today reported financial results for the second quarter ended June 27, 2021.
Financial Highlights (1)
“I am proud to say the Arlo team delivered exceptional results across the entire business in Q2, successfully navigating considerable supply chain challenges. Revenue and non-GAAP EPS both came in above the high end of our guidance range. Our new business model for services continued to gather momentum, adding a record 146,000 Paid Accounts in the quarter and surpassing 700,000 Paid Accounts in total on July 4th, propelling our service revenue to a record $25.3 million, up an impressive 48% year-over-year. Our refreshed product line-up also contributed to very strong product revenue growth of 48% year-over-year. We continued to execute to plan in our partnership with Verisure, delivering 123% year-over-year revenue growth in Europe and commencing production of a new camera system designed specifically for the needs of the Verisure Security Channel,” said Matthew McRae, Chief Executive Officer of Arlo Technologies. “Our impressive revenue growth of 48% was significantly over-indexed by non-GAAP gross profit, which grew 328% and by $21.0 million year-over-year. Our innovation in Services accelerated with the launch of Arlo Secure and Arlo Secure Plus, our new Service plans, which will extend Arlo’s technological leadership, while adding significant value to our customers. Our industry-leading hardware continued to garner acclaim, winning multiple awards and commendations. With this tremendous progress on all fronts, we believe we are well-positioned to achieve $100.0 million in service revenue and $410.0 to $420.0 million total revenue this year.”
Three Months Ended
Six Months Ended
June 27, 2021
March 28, 2021
June 28, 2020
June 27, 2021
June 28, 2020
(in thousands, except percentage and per share data)
Revenue
$
98,571
$
82,556
$
66,632
$
181,127
$
132,082
GAAP Gross Margin
26.6
%
31.3
%
8.2
%
28.7
%
7.1
%
Non-GAAP Gross Margin (1)
27.9
%
32.3
%
9.6
%
29.9
%
8.5
%
GAAP Net Income (Loss) per Diluted Share
$
(0.28
)
$
(0.13
)
$
(0.38
)
$
(0.42
)
$
(0.89
)
Non-GAAP Net Income (Loss) per Diluted Share (1)
$
(0.04
)
$
(0.03
)
$
(0.31
)
$
(0.07
)
$
(0.64
)
_________________________
(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.
Financial and Business Highlights
Third Quarter 2021 Business Outlook (2)
A reconciliation of our business outlook on a GAAP and non-GAAP basis is provided in the following table:
Three Months Ending October 3, 2021
Revenue
Net Loss per Diluted Share
(in millions, except per share data)
GAAP
$100.0 - $110.0
$(0.30) - $(0.23)
Estimated adjustments for (2):
Stock-based compensation expense
—
0.10
Separation expense
—
0.01
Tax effects of non-GAAP adjustments
—
—
Non-GAAP
$100.0 - $110.0
$(0.19) - $(0.12)
_________________________
(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 second quarter of 2021 results and discuss management’s expectations for the third quarter of 2021 today, Wednesday, August 4, 2021 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 2694444. 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. The company’s cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. To date, Arlo has launched several categories of award-winning smart connected devices, including wire-free smart Wi-Fi and LTE-enabled security cameras, indoor security cameras, video doorbells, and floodlight.
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 doesn't 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.
© 2021 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 our potential future business, operating performance and financial condition, including descriptions of our expected revenue, GAAP and non-GAAP gross margins, operating margins, tax rates, expenses, and cash outlook; our transition to a services-first business model; the commercial launch and momentum of Arlo Secure and Arlo Secure Plus; strategic objectives and initiatives, including our collaboration with Verisure; the commercial launch and momentum of Arlo Secure and Arlo Secure Plus; strategic objectives and initiatives, including our collaboration with Verisure; expectations regarding market expansion and future growth; plans to invest in product innovation; the Company's future product offerings; supply chain challenges; and the quote from the Company's Chief Executive Officer. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for the Company's products may be lower than anticipated; 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 the Company and its partners and customers operate; the Company may fail to successfully continue to effect operating expense savings; changes in the level of the Company's cash resources and the Company's planned usage of such resources; changes in the Company's stock price and developments in the business that could increase the Company's cash needs; fluctuations in foreign exchange rates; the actions and financial health of the Company's customers; the anticipated financial capacity under the Company'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 the Company's 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 II - Item 1A. Risk Factors,” in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2021, filed with the Securities and Exchange Commission on May 6, 2021 and subsequent filings with the Securities and Exchange Commission. 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, amortization of intangibles, impairment charges, 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 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.
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.
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, litigation reserves, net and Impairment charges. 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
June 27, 2021
December 31, 2020
(In thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents
$
178,698
$
186,127
Short-term investments (amortized cost of $— and $19,996)
—
19,997
Accounts receivable, net (net of allowance for credit losses of $536 and $519)
51,890
77,643
Inventories
43,155
64,705
Prepaid expenses and other current assets
11,852
8,076
Total current assets
285,595
356,548
Property and equipment, net
11,368
15,821
Operating lease right-of-use assets, net
15,148
23,998
Goodwill
11,038
11,038
Restricted cash
4,113
4,164
Other non-current assets
3,519
2,399
Total assets
$
330,781
$
413,968
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
42,884
$
62,171
Deferred revenue
47,668
53,142
Accrued liabilities
97,707
121,766
Income tax payable
96
267
Total current liabilities
188,355
237,346
Non-current deferred revenue
3,235
16,563
Non-current operating lease liabilities
22,780
25,029
Non-current income taxes payable
111
104
Other non-current liabilities
1,515
1,159
Total liabilities
215,996
280,201
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: 82,916,535 at June 27, 2021 and 79,336,242 at December 31, 2020
83
79
Additional paid-in capital
381,511
366,455
Accumulated other comprehensive income
—
3
Accumulated deficit
(266,809
)
(232,770
)
Total stockholders’ equity
114,785
133,767
Total liabilities and stockholders’ equity
$
330,781
$
413,968
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Six Months Ended
June 27, 2021
March 28, 2021
June 28, 2020
June 27, 2021
June 28, 2020
(in thousands, except percentage and per share data)
Revenue:
Products
$
73,311
$
59,761
$
49,603
$
133,072
$
100,326
Services
25,260
22,795
17,029
48,055
31,756
Total revenue
98,571
82,556
66,632
181,127
132,082
Cost of revenue:
Products
62,019
47,157
51,186
109,176
103,374
Services
10,383
9,592
9,957
19,975
19,266
Total cost of revenue
72,402
56,749
61,143
129,151
122,640
Gross profit
26,169
25,807
5,489
51,976
9,442
Gross margin
26.6
%
31.3
%
8.2
%
28.7
%
7.1
%
Operating expenses:
Research and development
16,251
14,791
14,192
31,042
29,435
Sales and marketing
12,459
11,207
11,713
23,666
22,751
General and administrative
13,559
11,227
9,837
24,786
28,621
Impairment charges
9,116
—
—
9,116
—
Separation expense
605
54
82
659
161
Gain on sale of business
—
—
—
—
(292
)
Total operating expenses
51,990
37,279
35,824
89,269
80,676
Loss from operations
(25,821
)
(11,472
)
(30,335
)
(37,293
)
(71,234
)
Operating margin
(26.2
)%
(13.9
)%
(45.5
)%
(20.6
)%
(53.9
)%
Interest income
3
24
151
27
686
Other income (expense), net
2,662
909
1,111
3,571
2,294
Loss before income taxes
(23,156
)
(10,539
)
(29,073
)
(33,695
)
(68,254
)
Provision for income taxes
164
180
183
344
328
Net loss
$
(23,320
)
$
(10,719
)
$
(29,256
)
$
(34,039
)
$
(68,582
)
Net loss per share:
Basic
$
(0.28
)
$
(0.13
)
$
(0.38
)
$
(0.42
)
$
(0.89
)
Diluted
$
(0.28
)
$
(0.13
)
$
(0.38
)
$
(0.42
)
$
(0.89
)
Weighted average shares used to compute net loss per share:
Basic
82,134
80,370
77,885
81,275
77,229
Diluted
82,134
80,370
77,885
81,275
77,229
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 27, 2021
June 28, 2020
(In thousands)
Cash flows from operating activities:
Net loss
$
(34,039
)
$
(68,582
)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense
19,949
17,337
Impairment charges
9,116
—
Depreciation and amortization
3,169
5,476
Allowance for credit losses and inventory reserves
(1,085
)
1,182
Deferred income taxes
(115
)
27
Premium amortization (discount accretion) on investments, net
(3
)
44
Gain on sale of business
—
(292
)
Changes in assets and liabilities:
Accounts receivable, net
25,736
80,650
Inventories
22,652
1,827
Prepaid expenses and other assets
(4,782
)
8,745
Accounts payable
(19,189
)
(58,669
)
Deferred revenue
(18,802
)
(11,553
)
Accrued and other liabilities
(26,073
)
(24,875
)
Net cash used in operating activities
(23,466
)
(48,683
)
Cash flows from investing activities:
Purchases of property and equipment
(1,066
)
(1,184
)
Purchases of short-term investments
—
(25,094
)
Maturities of short-term investments
20,000
25,000
Net cash provided by (used in) investing activities
18,934
(1,278
)
Cash flows from financing activities:
Proceeds related to employee benefit plans
6,136
1,856
Restricted stock unit withholdings
(9,084
)
(3,149
)
Net cash used in financing activities
(2,948
)
(1,293
)
Net decrease in cash and cash equivalents and restricted cash
(7,480
)
(51,254
)
Cash and cash equivalents and restricted cash, at beginning of period
190,291
240,819
Cash and cash equivalents and restricted cash, at end of period
$
182,811
$
189,565
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued liabilities
$
549
$
1,523
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
UNAUDITED STATEMENT OF OPERATIONS DATA:
Three Months Ended
Six Months Ended
June 27, 2021
March 28, 2021
June 28, 2020
June 27, 2021
June 28, 2020
(in thousands, except percentage data)
GAAP gross profit:
Products
$
11,292
$
12,604
$
(1,583
)
$
23,896
$
(3,048
)
Services
14,877
13,203
7,072
28,080
12,490
Total GAAP gross profit
26,169
25,807
5,489
51,976
9,442
GAAP gross margin:
Products
15.4
%
21.1
%
(3.2
)%
18.0
%
(3.0
)%
Services
58.9
%
57.9
%
41.5
%
58.4
%
39.3
%
Total GAAP gross margin
26.6
%
31.3
%
8.2
%
28.7
%
7.1
%
Stock-based compensation expense
1,289
874
562
2,163
1,065
Amortization of intangibles
—
—
357
—
713
Restructuring and other charges
—
—
—
—
23
Non-GAAP gross profit:
Products
12,581
13,478
(664
)
26,059
(1,247
)
Services
14,877
13,203
7,072
28,080
12,490
Total Non-GAAP gross profit
$
27,458
$
26,681
$
6,408
$
54,139
$
11,243
Non-GAAP gross margin:
Products
17.2
%
22.6
%
(1.3
)%
19.6
%
(1.2
)%
Services
58.9
%
57.9
%
41.5
%
58.4
%
39.3
%
Total Non-GAAP gross margin
27.9
%
32.3
%
9.6
%
29.9
%
8.5
%
GAAP research and development
$
16,251
$
14,791
$
14,192
$
31,042
$
29,435
Stock-based compensation expense
(3,832
)
(2,556
)
(1,729
)
(6,388
)
(3,389
)
Non-GAAP research and development
$
12,419
$
12,235
$
12,463
$
24,654
$
26,046
GAAP sales and marketing
$
12,459
$
11,207
$
11,713
$
23,666
$
22,751
Stock-based compensation expense
(1,638
)
(1,190
)
(984
)
(2,828
)
(1,735
)
Non-GAAP sales and marketing
$
10,821
$
10,017
$
10,729
$
20,838
$
21,016
GAAP general and administrative
$
13,559
$
11,227
$
9,837
$
24,786
$
28,621
Stock-based compensation expense
(4,850
)
(3,720
)
(1,289
)
(8,570
)
(11,148
)
Restructuring and other charges
—
—
—
—
(21
)
Strategic initiative and transaction expenses
—
—
(206
)
—
(751
)
Litigation reserves, net
(157
)
(10
)
(249
)
(167
)
(256
)
Non-GAAP general and administrative
$
8,552
$
7,497
$
8,093
$
16,049
$
16,445
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED):
Three Months Ended
Six Months Ended
June 27, 2021
March 28, 2021
June 28, 2020
June 27, 2021
June 28, 2020
(in thousands, except percentage and per share data)
GAAP total operating expenses
$
51,990
$
37,279
$
35,824
$
89,269
$
80,676
Separation expense
(605
)
(54
)
(82
)
(659
)
(161
)
Strategic initiative and transaction expenses
—
—
(206
)
—
(751
)
Stock-based compensation expense
(10,320
)
(7,466
)
(4,002
)
(17,786
)
(16,272
)
Impairment charges
(9,116
)
—
—
(9,116
)
—
Restructuring and other charges
—
—
—
—
(21
)
Litigation reserves, net
(157
)
(10
)
(249
)
(167
)
(256
)
Gain on sale of business
—
—
—
—
292
Non-GAAP total operating expenses
$
31,792
$
29,749
$
31,285
$
61,541
$
63,507
GAAP operating loss
$
(25,821
)
$
(11,472
)
$
(30,335
)
$
(37,293
)
$
(71,234
)
GAAP operating margin
(26.2
)%
(13.9
)%
(45.5
)%
(20.6
)%
(53.9
)%
Separation expense
605
54
82
659
161
Strategic initiative and transaction expenses
—
—
206
—
751
Stock-based compensation expense
11,609
8,340
4,564
19,949
17,337
Impairment charges
9,116
—
—
9,116
—
Amortization of intangibles
—
—
357
—
713
Restructuring and other charges
—
—
—
—
44
Litigation reserves, net
157
10
249
167
256
Gain on sale of business
—
—
—
—
(292
)
Non-GAAP operating loss
$
(4,334
)
$
(3,068
)
$
(24,877
)
$
(7,402
)
$
(52,264
)
Non-GAAP operating margin
(4.4
)%
(3.7
)%
(37.3
)%
(4.1
)%
(39.6
)%
GAAP other income (expense), net
$
2,662
$
909
$
1,111
$
3,571
$
2,294
Employee Retention Credit
$
(1,811
)
$
—
$
—
$
(1,811
)
$
—
Non-GAAP other income (expense), net
$
851
$
909
$
1,111
$
1,760
$
2,294
GAAP provision for income taxes
$
164
$
180
$
183
$
344
$
328
GAAP income tax rate
(0.7
)%
(1.7
)%
(0.6
)%
(1.0
)%
(0.5
)%
Tax effects
—
—
2
—
31
Non-GAAP provision for income taxes
$
164
$
180
$
181
$
344
$
297
Non-GAAP income tax rate
(4.7
)%
(8.4
)%
(0.8
)%
(6.1
)%
(0.6
)%
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA (CONTINUED):
Three Months Ended
Six Months Ended
June 27, 2021
March 28, 2021
June 28, 2020
June 27, 2021
June 28, 2020
(in thousands, except percentage and per share data)
GAAP net loss
$
(23,320
)
$
(10,719
)
$
(29,256
)
$
(34,039
)
$
(68,582
)
Separation expense
605
54
82
659
161
Strategic initiative and transaction expenses
—
—
206
—
751
Stock-based compensation expense
11,609
8,340
4,564
19,949
17,337
Impairment charges
9,116
—
—
9,116
—
Amortization of intangibles
—
—
357
—
713
Restructuring and other charges
—
—
—
—
44
Litigation reserves, net
157
10
249
167
256
Gain on sale of business
—
—
—
—
(292
)
Employee Retention Credit
(1,811
)
—
—
(1,811
)
—
Tax effects
—
—
2
—
31
Non-GAAP net loss
$
(3,644
)
$
(2,315
)
$
(23,796
)
$
(5,959
)
$
(49,581
)
NET LOSS PER DILUTED SHARE:
GAAP net loss per diluted share
$
(0.28
)
$
(0.13
)
$
(0.38
)
$
(0.42
)
$
(0.89
)
Separation expense
0.01
—
—
0.01
0.01
Strategic initiative and transaction expenses
—
—
—
—
0.01
Stock-based compensation expense
0.14
0.10
0.06
0.25
0.22
Impairment charges
0.11
—
—
0.11
—
Amortization of intangibles
—
—
0.01
—
0.01
Employee Retention Credit
$
(0.02
)
$
—
$
—
$
(0.02
)
$
—
Non-GAAP net loss per diluted share
$
(0.04
)
$
(0.03
)
$
(0.31
)
$
(0.07
)
$
(0.64
)
Shares used in computing GAAP net loss per diluted share
82,134
80,370
77,885
81,275
77,229
Shares used in computing non-GAAP net loss per diluted share
82,134
80,370
77,885
81,275
77,229
ARLO TECHNOLOGIES, INC.
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
Three Months Ended
June 27, 2021
March 28, 2021
December 31, 2020
September 27, 2020
June 28, 2020
(in thousands, except headcount and per share data)
Cash, cash equivalents and short-term investments
$
178,698
$
177,113
$
206,124
$
193,611
$
205,454
Cash, cash equivalents and short-term investments per diluted share
$
2.18
$
2.20
$
2.60
$
2.46
$
2.64
Accounts receivable, net
$
51,890
$
51,121
$
77,643
$
56,431
$
46,466
Days sales outstanding
48
54
64
47
63
Inventories
$
43,155
$
55,972
$
64,705
$
69,038
$
65,814
Inventory turns
5.7
3.4
5.0
4.6
3.1
Weeks of channel inventory:
U.S. retail channel
8.0
12.5
9.2
8.4
6.6
U.S. distribution channel
12.5
9.6
11.7
8.6
8.4
APAC distribution channel
8.6
6.9
2.8
4.2
6.8
Deferred revenue (current and non-current)
$
50,903
$
61,604
$
69,705
$
38,530
$
54,546
Cumulative registered accounts (1)
5,527
5,275
5,047
4,774
4,518
Cumulative paid accounts (2)
695
549
435
356
298
Headcount
349
355
359
358
355
Non-GAAP diluted shares
82,134
80,370
79,164
78,662
77,885
(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
Six Months Ended
June 27, 2021
March 28, 2021
June 28, 2020
June 27, 2021
June 28, 2020
(in thousands, except percentage data)
Americas
$
66,681
68
%
$
49,636
60
%
$
50,999
76
%
$
116,317
65
%
$
101,169
77
%
EMEA
25,101
25
%
24,591
30
%
11,263
17
%
49,692
27
%
18,521
14
%
APAC
6,789
7
%
8,329
10
%
4,370
7
%
15,118
8
%
12,392
9
%
Total
$
98,571
100
%
$
82,556
100
%
$
66,632
100
%
$
181,127
100
%
$
132,082
100
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20210804006037/en/
Arlo Investor Relations Erik Bylin investors@arlo.com (510) 315-1004
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