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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 | |
---|---|---|---|---|---|---|---|---|
0.21 | 1.74% | 12.30 | 12.42 | 11.91 | 11.97 | 158,579 | 16:03:34 |
Exceeded Revenue and EPS Guidance
104% GAAP Gross Profit Growth Year Over Year
100% Non-GAAP Gross Profit Growth Year Over Year
61% Service Revenue Growth Year Over Year
Cash, Cash Equivalents and Short-term Investments Balance of $193.6 million with No Debt
Arlo Technologies, Inc. (NYSE: ARLO), a leading internet-connected security camera brand, today reported financial results for the third quarter ended September 27, 2020.
Financial Highlights (1)
“The Arlo team delivered another strong quarter that exceeded our guidance in every measure. Paid account growth and strong performance from our European partner, Verisure, helped contribute to revenue coming in at $110.2 million for a growth rate of 65% sequentially and 4% year over year. We also made considerable progress on gross margins – both product and service – and maintained our operating discipline to improve our non-GAAP net loss by $16.3 million year over year,” said Matthew McRae, Chief Executive Officer of Arlo Technologies. “In our most prolific new product quarter ever, we added four new cameras to our line up and entered a large and fast-growing market with our wire-free video doorbell. All of these new products are on our new business model, a free, 90-day trial of Arlo Smart, and should add to our service revenue growth. Fueled by our robust innovation and new business model, the third quarter marks another example of the progress Arlo is making in the business.”
Three Months Ended
Nine Months Ended
September 27, 2020
June 28, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(in thousands, except percentage and per share data)
Revenue
$
110,236
$
66,632
$
106,116
$
242,318
$
247,594
GAAP Gross Margin
19.4
%
8.2
%
9.9
%
12.7
%
8.9
%
Non-GAAP Gross Margin (1)
20.6
%
9.6
%
10.7
%
14.0
%
9.9
%
GAAP Net Income (Loss) per Diluted Share
$
(0.22
)
$
(0.38
)
$
(0.41
)
$
(1.11
)
$
(1.41
)
Non-GAAP Net Income (Loss) per Diluted Share (1)
$
(0.10
)
$
(0.31
)
$
(0.32
)
$
(0.74
)
$
(1.15
)
_________________________
(1) Reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis are provided at the end of this press release.
Business Highlights
Fourth Quarter 2020 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 December 31, 2020
Revenue
Net Loss per Diluted Share
(in millions, except per share data)
GAAP
$105.0 - $115.0
$(0.36) - $(0.26)
Estimated adjustments for (1):
Stock-based compensation expense
—
0.10
Tax effects of non-GAAP adjustments
—
—
Non-GAAP
$105.0 - $115.0
$(0.26) - $(0.16)
_________________________
(1) 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 third quarter of 2020 results and discuss management’s expectations for the fourth quarter of 2020 today, Thursday, November 5, 2020 at 5:00 p.m. ET (2:00 p.m. PT). The toll-free dial-in number for the live audio call is (866) 393-4306. The international dial-in number for the live audio call is (734) 385-2616. The conference ID for the call is 3079383. A live webcast of the conference call will be available on Arlo’s Investor Relations website at https://investor.arlo.com. A replay of the call will be available via the web at https://investor.arlo.com.
About Arlo Technologies, Inc.
Arlo (NYSE: ARLO) is the award-winning, industry leader that is transforming the way people experience the connected lifestyle. Arlo’s deep expertise in product design, wireless connectivity, cloud infrastructure and cutting-edge AI capabilities focuses on delivering a seamless, smart home experience for Arlo users that is easy to setup and interact with every day. Arlo’s cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. To date, Arlo has launched several categories of award-winning smart connected devices, including wire-free smart Wi-Fi and LTE-enabled cameras, video doorbells and floodlight cameras.
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.
© 2020 Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks and/or registered trademarks of Arlo Technologies, Inc. and/or certain of its affiliates in the United States and/or other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s). The information contained herein is subject to change without notice. Arlo shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent Arlo Technologies, Inc.’s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding: Arlo’s future operating performance and financial condition, expected revenue, GAAP and non-GAAP gross margins, operating margins, and tax expense; expectations regarding market expansion and future growth; plans to invest in product innovation; Arlo's future product offerings; and the quote from Arlo's Chief Executive Officer. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for the Company's products may be lower than anticipated; consumers may choose not to adopt the Company's new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; the Company may be unsuccessful or experience delays in manufacturing and distributing its new and existing products; telecommunications service providers may choose to slow their deployment of the Company's products or utilize competing products; the Company may be unable to collect receivables as they become due; the Company may fail to manage costs, including the cost of developing new products and manufacturing and distribution of its existing offerings; the Company may incur additional costs and charges associated with the transactions contemplated by the Verisure partnership; the Company may not receive the minimum commitment amounts from Verisure; the COVID-19 pandemic could have an adverse impact on the Company's business, operations and the markets and communities in which Arlo and its partners and customers operate; the Company may fail to successfully continue to effect operating expense savings; changes in the level of Arlo's cash resources and the Company's planned usage of such resources; changes in the Company's stock price and developments in the business that could increase the Company's cash needs; fluctuations in foreign exchange rates; the actions and financial health of the Company's customers; the anticipated financial capacity under Arlo's revolving credit line may not be available when expected, or at all; and the Company may not be able to carry out its restructuring plan. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect Arlo and its business are detailed in the Company's periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Part II - Item 1A. Risk Factors,” in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2020, filed with the Securities and Exchange Commission on August 6, 2020 and other periodic filings with the Securities and Exchange Commission. Given these circumstances, you should not place undue reliance on these forward-looking statements. Arlo undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Non-GAAP Financial Information:
To supplement our unaudited selected financial data presented on a basis consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP total operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP provision for income taxes, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. These supplemental measures exclude adjustments for separation expense, stock-based compensation expense, amortization of intangibles, activist shareholder response costs, restructuring and other charges, strategic initiative and transaction expenses, gain on sale of business, litigation reserves, and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.
In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP measures, provide useful information to investors by offering:
– the ability to make more meaningful period-to-period comparisons of our on-going operating results;
– the ability to better identify trends in our underlying business and perform related trend analyses;
– a better understanding of how management plans and measures our underlying business; and
– an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.
The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures:
Separation expense consists of expenses that are related to the separation of our business from NETGEAR. These consist primarily of third-party consulting fees, legal fees, IT costs, employee bonuses for services related to the separation, and other one-time expenses incurred to complete the separation. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.
Stock-based compensation expense consists of non-cash charges for the estimated fair value of stock options, performance-based stock options, restricted stock units and shares under the employee stock purchase plan granted to employees. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results.
Amortization of intangibles consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to an assessment of our internal operations and comparisons to our prior and future periods and to the performance of our competitors.
Activist shareholder response costs primarily consist of legal fees and third-party consulting costs incurred. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.
Strategic initiative and transaction expenses consist of legal fees associated with the strategic review of the Company and legal fees, accounting fees and other one-time costs incurred to complete the Verisure transaction. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.
Gain on sale of business represents gain from sale of the Company's commercial operations in Europe. We consider our operating results without this gain when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such gain when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding the gain is relevant to our assessment of internal operations and comparisons to the performance of our competitors.
Other items are the result of either unique or unplanned events, including, when applicable: restructuring and other charges and litigation reserves, net. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred.
Tax effects consist of the various above adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income. We also believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures provides our management and users of the financial statements with better clarity regarding the on-going performance of our business.
Source: Arlo-F
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of
September 27, 2020
December 31, 2019
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
173,619
$
236,680
Short-term investments
19,992
19,990
Accounts receivable, net
56,431
127,317
Inventories
69,038
68,624
Prepaid expenses and other current assets
10,317
16,958
Total current assets
329,397
469,569
Property and equipment, net
16,832
21,352
Operating lease right-of-use assets, net
25,031
31,300
Intangibles, net
238
1,306
Goodwill
11,038
11,038
Restricted cash
4,147
4,139
Other non-current assets
2,216
4,008
Total assets
$
388,899
$
542,712
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
74,727
$
111,650
Deferred revenue
30,567
50,362
Accrued liabilities
106,027
127,400
Income tax payable
431
4,489
Total current liabilities
211,752
293,901
Non-current deferred revenue
7,963
15,736
Non-current operating lease liabilities
26,024
29,001
Non-current income taxes payable
92
92
Other non-current liabilities
1,261
606
Total liabilities
247,092
339,336
Stockholders’ Equity:
Preferred stock: $0.001 par value; 50,000,000 shares authorized; none issued or outstanding
—
—
Common stock: $0.001 par value; 500,000,000 shares authorized; shares issued and outstanding: 79,026,508 at September 27, 2020 and 75,785,952 at December 31, 2019
79
76
Additional paid-in capital
359,297
334,821
Accumulated other comprehensive income
(9
)
(2
)
Accumulated deficit
(217,560
)
(131,519
)
Total stockholders’ equity
141,807
203,376
Total liabilities and stockholders’ equity
$
388,899
$
542,712
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
September 27, 2020
June 28, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(in thousands, except percentage and per share data)
Revenue:
Products
$
91,271
$
49,603
$
94,306
$
191,597
$
213,359
Services
18,965
17,029
11,810
50,721
34,235
Total revenue
110,236
66,632
106,116
242,318
247,594
Cost of revenue:
Products
79,107
51,186
88,755
182,481
206,878
Services
9,720
9,957
6,858
28,986
18,618
Total cost of revenue
88,827
61,143
95,613
211,467
225,496
Gross profit
21,409
5,489
10,503
30,851
22,098
Gross margin
19.4
%
8.2
%
9.9
%
12.7
%
8.9
%
Operating expenses:
Research and development
15,436
14,192
16,701
44,871
52,456
Sales and marketing
12,720
11,713
13,657
35,471
42,389
General and administrative
11,137
9,837
11,062
39,758
32,512
Separation expense
77
82
137
238
1,760
Gain on sale of business
—
—
—
(292
)
—
Total operating expenses
39,370
35,824
41,557
120,046
129,117
Loss from operations
(17,961
)
(30,335
)
(31,054
)
(89,195
)
(107,019
)
Operating margin
(16.3
)%
(45.5
)%
(29.3
)%
(36.8
)%
(43.2
)%
Interest income
74
151
596
760
2,170
Other income, net
543
1,111
154
2,837
138
Loss before income taxes
(17,344
)
(29,073
)
(30,304
)
(85,598
)
(104,711
)
Provision for income taxes
115
183
286
443
855
Net loss
$
(17,459
)
$
(29,256
)
$
(30,590
)
$
(86,041
)
$
(105,566
)
Net loss per share:
Basic
$
(0.22
)
$
(0.38
)
$
(0.41
)
$
(1.11
)
$
(1.41
)
Diluted
$
(0.22
)
$
(0.38
)
$
(0.41
)
$
(1.11
)
$
(1.41
)
Weighted average shares used to compute net loss per share:
Basic
78,662
77,885
75,337
77,705
74,831
Diluted
78,662
77,885
75,337
77,705
74,831
ARLO TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 27, 2020
September 29, 2019
(In thousands)
Cash flows from operating activities:
Net loss
$
(86,041
)
$
(105,566
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
8,024
7,757
Loss on disposal of fixed assets
19
—
Stock-based compensation expense
26,338
15,261
Allowance for (release of) credit losses and inventory reserves
1,322
(3,232
)
Gain on sale of business
(292
)
—
Deferred income taxes
63
(109
)
Premium amortization (discount accretion) on investments, net
60
(391
)
Changes in assets and liabilities:
Accounts receivable, net
70,985
65,920
Inventories
(1,838
)
54,335
Prepaid expenses and other assets
8,369
(1,729
)
Accounts payable
(37,554
)
(24,381
)
Deferred revenue
(27,569
)
(1,996
)
Accrued and other liabilities
(21,203
)
(48,584
)
Net cash used in operating activities
(59,317
)
(42,715
)
Cash flows from investing activities:
Purchases of property and equipment
(2,070
)
(5,023
)
Purchases of short-term investments
(45,085
)
(29,768
)
Maturities of short-term investments
45,000
40,000
Net cash provided by (used in) investing activities
(2,155
)
5,209
Cash flows from financing activities:
Proceeds related to employee benefit plans
3,051
1,837
Restricted stock unit withholdings
(4,632
)
(1,755
)
Net cash provided by (used in) financing activities
(1,581
)
82
Net decrease in cash and cash equivalents and restricted cash
(63,053
)
(37,424
)
Cash and cash equivalents and restricted cash, at beginning of period
240,819
155,424
Cash and cash equivalents and restricted cash, at end of period
$
177,766
$
118,000
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued liabilities
$
1,470
$
1,578
De-recognition of build-to-suit assets and liabilities
$
—
$
(21,610
)
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
STATEMENT OF OPERATIONS DATA:
Three Months Ended
Nine Months Ended
September 27, 2020
June 28, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(in thousands, except percentage data)
GAAP gross profit
$
21,409
$
5,489
$
10,503
$
30,851
$
22,098
GAAP gross margin
19.4
%
8.2
%
9.9
%
12.7
%
8.9
%
Stock-based compensation expense
942
562
467
2,007
1,286
Amortization of intangibles
356
357
381
1,069
1,144
Restructuring and other charges
—
—
—
23
—
Non-GAAP gross profit
$
22,707
$
6,408
$
11,351
$
33,950
$
24,528
Non-GAAP gross margin
20.6
%
9.6
%
10.7
%
14.0
%
9.9
%
GAAP research and development
$
15,436
$
14,192
$
16,701
$
44,871
$
52,456
Stock-based compensation expense
(2,870
)
(1,729
)
(1,569
)
(6,259
)
(4,501
)
Non-GAAP research and development
$
12,566
$
12,463
$
15,132
$
38,612
$
47,955
GAAP sales and marketing
$
12,720
$
11,713
$
13,657
$
35,471
$
42,389
Stock-based compensation expense
(1,160
)
(984
)
(791
)
(2,895
)
(2,722
)
Non-GAAP sales and marketing
$
11,560
$
10,729
$
12,866
$
32,576
$
39,667
GAAP general and administrative
$
11,137
$
9,837
$
11,062
$
39,758
$
32,512
Stock-based compensation expense
(4,029
)
(1,289
)
(2,392
)
(15,177
)
(6,752
)
Restructuring and other charges
—
—
—
(21
)
—
Strategic initiative and transaction expenses
(17
)
(206
)
(502
)
(768
)
(502
)
Litigation reserves, net
—
(249
)
(140
)
(256
)
(140
)
Non-GAAP general and administrative
$
7,091
$
8,093
$
8,028
$
23,536
$
25,118
GAAP total operating expenses
$
39,370
$
35,824
$
41,557
$
120,046
$
129,117
Separation expense
(77
)
(82
)
(136
)
(238
)
(1,759
)
Strategic initiative and transaction expenses
(17
)
(206
)
(502
)
(768
)
(502
)
Stock-based compensation expense
(8,059
)
(4,002
)
(4,752
)
(24,331
)
(13,975
)
Restructuring and other charges
—
—
—
(21
)
—
Litigation reserves, net
—
(249
)
(140
)
(256
)
(140
)
Activist shareholder response costs
—
—
—
—
(237
)
Gain on sale of business
—
—
—
292
—
Non-GAAP total operating expenses
$
31,217
$
31,285
$
36,027
$
94,724
$
112,504
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
STATEMENT OF OPERATIONS DATA (CONTINUED):
Three Months Ended
Nine Months Ended
September 27, 2020
June 28, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(in thousands, except percentage and per share data)
GAAP operating loss
$
(17,961
)
$
(30,335
)
$
(31,054
)
$
(89,195
)
$
(107,019
)
GAAP operating margin
(16.3
)%
(45.5
)%
(29.3
)%
(36.8
)%
(43.2
)%
Separation expense
77
82
136
238
1,759
Strategic initiative and transaction expenses
17
206
502
768
502
Stock-based compensation expense
9,001
4,564
5,219
26,338
15,261
Amortization of intangibles
356
357
381
1,069
1,144
Restructuring and other charges
—
—
—
44
—
Litigation reserves, net
—
249
140
256
140
Activist shareholder response costs
—
—
—
—
237
Gain on sale of business
—
—
—
(292
)
—
Non-GAAP operating loss
$
(8,510
)
$
(24,877
)
$
(24,676
)
$
(60,774
)
$
(87,976
)
Non-GAAP operating margin
(7.7
)%
(37.3
)%
(23.3
)%
(25.1
)%
(35.5
)%
GAAP provision for income taxes
$
115
$
183
$
286
$
443
$
855
GAAP income tax rate
(0.7
)%
(0.6
)%
(0.9
)%
(0.5
)%
(0.8
)%
Tax effects
—
2
(46
)
31
96
Non-GAAP provision for income taxes
$
115
$
181
$
332
$
412
$
759
Non-GAAP income tax rate
(1.5
)%
(0.8
)%
(1.4
)%
(0.7
)%
(0.9
)%
GAAP net loss
$
(17,459
)
$
(29,256
)
$
(30,590
)
$
(86,041
)
$
(105,566
)
Separation expense
77
82
136
238
1,759
Strategic initiative and transaction expenses
17
206
502
768
502
Stock-based compensation expense
9,001
4,564
5,219
26,338
15,261
Amortization of intangibles
356
357
381
1,069
1,144
Restructuring and other charges
—
—
—
44
—
Litigation reserves, net
—
249
140
256
140
Activist shareholder response costs
—
—
—
—
237
Gain on sale of business
—
—
—
(292
)
—
Tax effects
—
2
(46
)
31
96
Non-GAAP net loss
$
(8,008
)
$
(23,796
)
$
(24,258
)
$
(57,589
)
$
(86,427
)
ARLO TECHNOLOGIES, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
STATEMENT OF OPERATIONS DATA (CONTINUED):
Three Months Ended
Nine Months Ended
September 27, 2020
June 28, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(in thousands, except percentage and per share data)
NET INCOME (LOSS) PER DILUTED SHARE:
GAAP net income (loss) per diluted share
$
(0.22
)
$
(0.38
)
$
(0.41
)
$
(1.11
)
$
(1.41
)
Separation expense
—
—
—
0.01
0.02
Strategic initiative and transaction expenses
—
—
0.01
0.01
0.01
Stock-based compensation expense
0.11
0.06
0.07
0.34
0.21
Amortization of intangibles
0.01
0.01
0.01
0.01
0.02
Restructuring and other charges
—
—
—
—
—
Litigation reserves, net
—
—
—
—
—
Gain on sale of business
—
—
—
—
—
Tax effects
—
—
—
—
0.00
Non-GAAP net loss per diluted share
$
(0.10
)
$
(0.31
)
$
(0.32
)
$
(0.74
)
$
(1.15
)
Shares used in computing GAAP net income (loss) per diluted share
78,662
77,885
75,337
77,705
74,831
Shares used in computing non-GAAP net income (loss) per diluted share
78,662
77,885
75,337
77,705
74,831
ARLO TECHNOLOGIES, INC.
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
Three Months Ended
September 27, 2020
June 28, 2020
March 29, 2020
December 31, 2019
September 29, 2019
(in thousands, except headcount and per share data)
Cash, cash equivalents and short-term investments
$
193,611
$
205,454
$
206,582
$
256,670
$
153,811
Cash, cash equivalents and short-term investments per diluted share
$
2.46
$
2.64
$
2.70
$
3.37
$
2.04
Accounts receivable, net
$
56,431
$
46,466
$
61,376
$
127,317
$
99,698
Days sales outstanding
47
63
83
97
85
Inventories
$
69,038
$
65,814
$
61,027
$
68,624
$
74,117
Inventory turns
4.6
3.1
3.4
5.9
4.8
Weeks of channel inventory:
U.S. retail channel
8.4
6.6
13.7
6.3
13.3
U.S. distribution channel
8.6
8.4
20.3
8.0
3.3
APAC distribution channel
4.2
6.8
6.0
3.6
4.3
Deferred revenue (current and non-current)
$
38,530
$
54,546
$
59,848
$
66,098
$
47,995
Cumulative registered accounts (1)
4,774
4,518
4,245
4,015
3,691
Cumulative paid accounts (2)
356
298
255
230
211
Headcount
358
355
356
349
406
Non-GAAP diluted shares
78,662
77,885
76,560
76,090
75,337
_________________________
(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
Nine Months Ended
September 27, 2020
June 28, 2020
September 29, 2019
September 27, 2020
September 29, 2019
(in thousands, except percentage data)
Americas
$
75,861
69
%
$
50,971
76
%
$
85,562
81
%
$
176,990
73
%
$
194,492
79
%
EMEA
28,010
25
%
11,263
17
%
13,002
12
%
46,846
19
%
37,370
15
%
APAC
6,365
6
%
4,398
7
%
7,552
7
%
18,482
8
%
15,732
6
%
Total
$
110,236
100
%
$
66,632
100
%
$
106,116
100
%
$
242,318
100
%
$
247,594
100
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20201105006024/en/
Arlo Investor Relations Erik Bylin investors@arlo.com (510) 315-1004
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