Record fourth quarter service revenue of $55.9
million, growing 45.9% year over year
Record GAAP net earnings per diluted share
(EPS) of $0.01 and record non-GAAP EPS of $0.11 in the fourth
quarter
Annual recurring revenue (ARR) ended at $210.1
million, growing 52.5% year over year (1)
Full year service revenue of $201.2 million,
growing 47.4% year over year
Full year free cash flow (FCF) of $35.5 million
with FCF margin of 7.2% (2)
Full year GAAP net loss per share of $(0.24);
record non-GAAP EPS of $0.28
Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home
security company, today reported financial results for the fourth
quarter and full year ended December 31, 2023.
“Arlo finished the year strong with the largest product launch
in our company history contributing to solid revenue growth of 14%
and ARR growth of over 50% compared to Q4 of the prior year. This
culminated in record non-GAAP earnings of $0.11 per share and our
first ever profit on a GAAP basis,” said Matthew McRae, Chief
Executive Officer of Arlo technologies. “The growth is even more
impressive when looking at Arlo’s full year results with our annual
service revenue growing 47% to more than $200 million and an $83
million increase in our free cash flow from the prior year. Arlo is
clearly well positioned for success in 2024 as evidenced by our
announcement that we crossed the 3 million subscribers milestone,
substantially earlier than originally projected in our Long-Range
Plan.”
Financial and Business Highlights
Q4 2023 Summary
- Total revenue of $135.1 million, an increase of 14.0% year over
year.
- Record service revenue of $55.9 million, growing 45.9% year
over year.
- GAAP services gross margin of 73.9% and non-GAAP services gross
margin of 74.4%.
- GAAP gross profit of $47.3 million, an increase of 48.1% year
over year; non-GAAP gross profit of $48.3 million, an increase of
45.6% year over year.
- GAAP gross margin of 35.0%; non-GAAP gross margin of
35.8%.
- Record GAAP net earnings per diluted share of $0.01; record
non-GAAP earnings per diluted share of $0.11.
- Cumulative paid accounts increased to 2.8 million, growing
51.1% year over year.
- Ended the quarter with ARR(1) of $210.1 million, growing 52.5%
year over year.
FY2023 Summary
- Total revenue of $491.2 million, a slight increase year over
year.
- Record service revenue of $201.2 million, growing 47.4% year
over year.
- GAAP gross profit of $167.6 million, an increase of 23.2% year
over year; non-GAAP gross profit of $171.7 million, an increase of
21.9% year over year.
- GAAP gross margin of 34.1% up 640 basis points year over year;
non-GAAP gross margin of 35.0% up 630 basis points year over
year.
- GAAP net loss per share - basic and diluted of $(0.24);
non-GAAP net earnings per diluted share of $0.28.
- Ended with cash and cash equivalents and short-term investments
balance of $136.5 million, up $22.8 million year over year.
Three Months Ended
Twelve Months Ended
December 31,
2023
October 1, 2023
December 31,
2022
December 31, 2023
December 31, 2022
(In thousands, except
percentage and per share data)
Revenue
$
135,093
$
130,003
$
118,527
$
491,176
$
490,414
GAAP Gross Margin
35.0
%
33.2
%
27.0
%
34.1
%
27.7
%
Non-GAAP Gross Margin (3)
35.8
%
34.0
%
28.0
%
35.0
%
28.7
%
GAAP Net Income (Loss) per Share - Basic
and Diluted
$
0.01
$
(0.01
)
$
(0.25
)
$
(0.24
)
$
(0.65
)
Non-GAAP Net Income (Loss) per Share -
Basic and Diluted (3)
$
0.11
$
0.09
$
(0.04
)
$
0.28
$
(0.07
)
_________________________
(1)
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.
(2)
FCF is calculated as net cash provided by
(used in) operating activities less capital expenditures. FCF
margin is the FCF divided by revenue.
(3)
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.
First Quarter 2024 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 March 31,
2024
Revenue
Net Income (Loss)
per Diluted Share
(In millions, except per share
data)
GAAP
$117 - $127
$(0.08) - $(0.02)
Estimated adjustment for stock-based
compensation and other expense
—
0.13
Non-GAAP
$117 - $127
$0.05 - $0.11
_________________________
(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 fourth quarter and full-year 2023 results,
discuss management’s expectations for the first quarter and
full-year 2024, and discuss new long-range plan targets today,
Thursday, February 29, 2024 at 5:00 p.m. ET (2:00 p.m. PT). To view
the accompanying presentation a live webcast of the conference call
will be available on Arlo’s Investor Relations website at
https://investor.arlo.com. 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 replay of the call will be available via the
web at https://investor.arlo.com.
About Arlo Technologies, Inc.
Arlo is an award-winning, industry leader that is transforming
the ways in which people can protect everything that matters to
them with advanced home, business, and personal security solutions.
Arlo’s deep expertise in AI- and CV-powered analytics, cloud
services, user experience and product design, and innovative
wireless and RF connectivity enables the delivery of a seamless,
smart security experience for Arlo users that is easy to set up 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 connected
devices, software and services. These include wire-free, smart
Wi-Fi and LTE-enabled security cameras, video doorbells,
floodlights, security system, and Arlo's subscription services:
Arlo Secure, and Arlo Safe.
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 implementing
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.
© 2024 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
margins; the ability of our subscription services and security
product portfolio to position us for a successful 2024; 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, 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 December 31,
2023
2022
(In thousands, except share
and per share data)
ASSETS
Current assets:
Cash and cash equivalents
$
56,522
$
84,024
Short-term investments
79,974
29,700
Accounts receivable, net
65,360
65,960
Inventories
38,408
46,554
Prepaid expenses and other current
assets
10,271
6,544
Total current assets
250,535
232,782
Property and equipment, net
4,761
7,336
Operating lease right-of-use assets,
net
11,450
12,809
Goodwill
11,038
11,038
Restricted cash
4,131
4,155
Other non-current assets
3,623
4,081
Total assets
$
285,538
$
272,201
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
55,201
$
52,132
Deferred revenue
18,041
11,291
Accrued liabilities
88,209
98,855
Total current liabilities
161,451
162,278
Non-current operating lease
liabilities
17,021
19,279
Other non-current liabilities
3,790
2,949
Total liabilities
182,262
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:
95,380,281 at December 31, 2023 and 88,887,139 at December 31,
2022
95
89
Additional paid-in capital
470,322
433,138
Accumulated other comprehensive income
(loss)
320
(107
)
Accumulated deficit
(367,461
)
(345,425
)
Total stockholders’ equity
103,276
87,695
Total liabilities and stockholders’
equity
$
285,538
$
272,201
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Twelve Months Ended
December 31,
2023
October 1, 2023
December 31,
2022
December 31,
2023
December 31,
2022
(In thousands, except
percentage and per share data)
Revenue:
Products
$
79,168
$
78,961
$
80,199
$
289,938
$
353,935
Services
55,925
51,042
38,328
201,238
136,479
Total revenue
135,093
130,003
118,527
491,176
490,414
Cost of revenue:
Products
73,143
73,335
74,700
270,663
308,692
Services
14,601
13,529
11,857
52,950
45,687
Total cost of revenue
87,744
86,864
86,557
323,613
354,379
Gross profit
47,349
43,139
31,970
167,563
136,035
Gross margin
35.0
%
33.2
%
27.0
%
34.1
%
27.7
%
Operating expenses:
Research and development
16,450
16,829
14,457
68,647
64,709
Sales and marketing
18,004
15,863
20,214
66,141
70,081
General and administrative
13,282
12,460
17,909
56,371
55,932
Others
71
263
1,815
1,307
2,192
Total operating expenses
47,807
45,415
54,395
192,466
192,914
Loss from operations
(458
)
(2,276
)
(22,425
)
(24,903
)
(56,879
)
Operating margin
(0.3
)%
(1.8
)%
(18.9
)%
(5.1
)%
(11.6
)%
Interest income, net
1,199
1,175
512
3,935
926
Other income (loss), net
84
10
(12
)
107
302
Income (loss) before income taxes
825
(1,091
)
(21,925
)
(20,861
)
(55,651
)
Provision for income taxes
133
29
230
1,175
975
Net income (loss)
$
692
$
(1,120
)
$
(22,155
)
$
(22,036
)
$
(56,626
)
Net income (loss) per share:
Basic
$
0.01
$
(0.01
)
$
(0.25
)
$
(0.24
)
$
(0.65
)
Diluted
$
0.01
$
(0.01
)
$
(0.25
)
$
(0.24
)
$
(0.65
)
Weighted average shares used to compute
net income (loss) per share:
Basic
94,819
94,243
88,743
92,754
87,173
Diluted
101,938
94,243
88,743
92,754
87,173
ARLO TECHNOLOGIES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December
31,
2023
2022
(In thousands)
Cash flows from operating
activities:
Net loss
$
(22,036
)
$
(56,626
)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Stock-based compensation expense
47,948
48,476
Depreciation and amortization
4,661
4,768
Allowance for credit losses and inventory
reserves
279
(190
)
Deferred income taxes
112
181
Others
(2,005
)
24
Changes in assets and liabilities:
Accounts receivable, net
690
13,517
Inventories
7,777
(7,887
)
Prepaid expenses and other assets
(1,498
)
3,427
Accounts payable
3,723
(32,520
)
Deferred revenue
6,610
(19,281
)
Accrued and other liabilities
(7,959
)
149
Net cash provided by (used in) operating
activities
38,302
(45,962
)
Cash flows from investing
activities:
Purchases of property and equipment
(2,847
)
(2,010
)
Purchases of short-term investments
(149,870
)
(69,305
)
Proceeds from maturities of short-term
investments
102,031
39,542
Net cash used in investing activities
(50,686
)
(31,773
)
Cash flows from financing
activities:
Proceeds related to employee benefit
plans
8,493
4,260
Restricted stock unit withholdings
(23,635
)
(18,202
)
Net cash used in financing activities
(15,142
)
(13,942
)
Net decrease in cash, cash equivalents and
restricted cash
(27,526
)
(91,677
)
Cash, cash equivalents and restricted
cash, at beginning of period
88,179
179,856
Cash, cash equivalents and restricted
cash, at end of period
$
60,653
$
88,179
Non-cash investing activities:
Purchases of property and equipment
included in accounts payable and accrued liabilities
$
189
$
946
Supplemental cash flow
information:
Cash paid for income taxes, net
$
1,196
$
415
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
UNAUDITED STATEMENT OF OPERATIONS
DATA:
Three Months Ended
Twelve Months Ended
December 31,
2023
October 1, 2023
December 31,
2022
December 31,
2023
December 31,
2022
(In thousands, except
percentage data)
GAAP gross profit:
Products
$
6,025
$
5,626
$
5,499
$
19,275
$
45,243
Services
41,324
37,513
26,471
148,288
90,792
Total GAAP gross profit
47,349
43,139
31,970
167,563
136,035
GAAP gross margin:
Products
7.6
%
7.1
%
6.9
%
6.6
%
12.8
%
Services
73.9
%
73.5
%
69.1
%
73.7
%
66.5
%
Total GAAP gross margin
35.0
%
33.2
%
27.0
%
34.1
%
27.7
%
Stock-based compensation expense -
Products
692
723
1,001
3,175
4,136
Stock-based compensation expense -
Services
145
145
230
358
705
Amortization of development of software
cost - Services
151
152
—
605
—
Non-GAAP gross profit:
Products
6,717
6,349
6,500
22,450
49,379
Services
41,620
37,810
26,701
149,251
91,497
Total Non-GAAP gross profit
$
48,337
$
44,159
$
33,201
$
171,701
$
140,876
Non-GAAP gross margin:
Products
8.5
%
8.0
%
8.1
%
7.7
%
14.0
%
Services
74.4
%
74.1
%
69.7
%
74.2
%
67.0
%
Total Non-GAAP gross margin
35.8
%
34.0
%
28.0
%
35.0
%
28.7
%
GAAP research and development
$
16,450
$
16,829
$
14,457
$
68,647
$
64,709
Stock-based compensation expense
(2,631
)
(2,847
)
(3,715
)
(12,700
)
(12,317
)
Non-GAAP research and development
$
13,819
$
13,982
$
10,742
$
55,947
$
52,392
Percentage of revenue
10.2
%
10.8
%
9.1
%
11.4
%
10.7
%
GAAP sales and marketing
$
18,004
$
15,863
$
20,214
$
66,141
$
70,081
Stock-based compensation expense
(1,283
)
(1,224
)
(1,731
)
(5,899
)
(6,290
)
Non-GAAP sales and marketing
$
16,721
$
14,639
$
18,483
$
60,242
$
63,791
Percentage of revenue
12.4
%
11.3
%
15.6
%
12.3
%
13.0
%
GAAP general and administrative
$
13,282
$
12,460
$
17,909
$
56,371
$
55,932
Stock-based compensation expense
(5,346
)
(5,348
)
(10,012
)
(25,816
)
(25,028
)
Litigation reserves, net
—
—
(30
)
—
(147
)
Non-GAAP general and administrative
$
7,936
$
7,112
$
7,867
$
30,555
$
30,757
Percentage of revenue
5.9
%
5.5
%
6.6
%
6.2
%
6.3
%
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
Twelve Months Ended
December 31,
2023
October 1, 2023
December 31,
2022
December 31,
2023
December 31,
2022
(In thousands, except
percentage data)
GAAP total operating expenses
$
47,807
$
45,415
$
54,395
$
192,466
$
192,914
Stock-based compensation expense
(9,260
)
(9,419
)
(15,458
)
(44,415
)
(43,635
)
Others
(71
)
(263
)
(1,845
)
(1,307
)
(2,339
)
Non-GAAP total operating expenses
$
38,476
$
35,733
$
37,092
$
146,744
$
146,940
GAAP operating loss
$
(458
)
$
(2,276
)
$
(22,425
)
$
(24,903
)
$
(56,879
)
GAAP operating margin
(0.3
)%
(1.8
)%
(18.9
)%
(5.1
)%
(11.6
)%
Stock-based compensation expense
10,097
10,287
16,689
47,948
48,476
Others
222
415
1,845
1,912
2,339
Non-GAAP operating income (loss)
$
9,861
$
8,426
$
(3,891
)
$
24,957
$
(6,064
)
Non-GAAP operating margin
7.3
%
6.5
%
(3.3
)%
5.1
%
(1.2
)%
GAAP other income (loss), net
$
84
$
10
$
(12
)
$
107
$
302
Employee retention credit
—
—
—
—
(65
)
Non-GAAP other income (loss), net
$
84
$
10
$
(12
)
$
107
$
237
GAAP provision for income taxes
$
133
$
29
$
230
$
1,175
$
975
GAAP income tax rate
16.1
%
(2.7
)%
(1.0
)%
(5.6
)%
(1.8
)%
Non-GAAP provision for income taxes
$
133
$
29
$
230
$
1,175
$
975
Non-GAAP income tax rate
1.2
%
0.3
%
(6.8
)%
4.1
%
(19.9
)%
ARLO TECHNOLOGIES,
INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
UNAUDITED STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
Twelve Months Ended
December 31,
2023
October 1, 2023
December 31,
2022
December 31,
2023
December 31,
2022
(In thousands, except
percentage and per share data)
GAAP net income (loss)
$
692
$
(1,120
)
$
(22,155
)
$
(22,036
)
$
(56,626
)
Stock-based compensation expense
10,097
10,287
16,689
47,948
48,476
Others
222
415
1,845
1,912
2,274
Non-GAAP net income (loss)
$
11,011
$
9,582
$
(3,621
)
$
27,824
$
(5,876
)
GAAP net income (loss) per share -
basic and diluted
$
0.01
$
(0.01
)
$
(0.25
)
$
(0.24
)
$
(0.65
)
Stock-based compensation expense
0.10
0.10
0.19
0.52
0.56
Others
—
—
0.02
—
0.02
Non-GAAP net income (loss) - diluted
$
0.11
$
0.09
$
(0.04
)
$
0.28
$
(0.07
)
Shares used in computing GAAP net income
(loss) - basic
94,819
94,243
88,743
92,754
87,173
Shares used in computing non-GAAP net
income (loss) - diluted
101,938
102,116
88,743
100,217
87,173
Free cash flow (usage):
Net cash provided by (used in) operating
activities
$
7,935
$
7,459
$
(11,181
)
$
38,302
$
(45,962
)
Less: Purchases of property and
equipment
(399
)
(494
)
(1,194
)
(2,847
)
(2,010
)
Free cash flow (usage) (1)
$
7,536
$
6,965
$
(12,375
)
$
35,455
$
(47,972
)
Free cash flow (usage) margin (1)
5.6
%
5.4
%
(10.4
)%
7.2
%
(9.8
)%
_________________________
(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
December 31,
2023
October 1, 2023
July 2, 2023
April 2, 2023
December 31,
2022
(In thousands, except
headcount and per share data)
Cash, cash equivalents and short-term
investments
$
136,496
$
126,049
$
123,675
$
118,673
$
113,724
Cash, cash equivalents and short-term
investments per diluted share
$
1.34
$
1.23
$
1.25
$
1.27
$
1.28
Accounts receivable, net
$
65,360
$
70,313
$
57,327
$
52,837
$
65,960
Days sales outstanding
44
49
45
44
50
Inventories
$
38,408
$
53,496
$
39,429
$
39,922
$
46,554
Inventory turns
7.6
5.5
6.1
6.4
6.4
Weeks of channel inventory:
U.S. retail channel
11.1
10.9
9.7
14.6
11.9
U.S. distribution channel
20.5
7.4
9.3
17.6
14.1
APAC distribution channel
3.9
7.2
7.7
5.8
4.7
Deferred revenue
(current and non-current)
$
18,114
$
17,706
$
17,702
$
15,289
$
11,503
Cumulative registered accounts (1)
8,652
8,193
7,860
7,510
7,220
Cumulative paid accounts (2)
2,813
2,486
2,289
2,044
1,862
Annual recurring revenue (ARR) (3)
$
210,078
$
199,993
$
193,633
$
182,583
$
137,764
Headcount
363
353
345
334
343
Non-GAAP diluted shares
101,938
102,116
99,187
93,236
88,743
_________________________
(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
Twelve Months Ended
December 31,
2023
October 1, 2023
December 31,
2022
December 31,
2023
December 31,
2022
(In thousands, except
percentage data)
Americas
$
86,702
64.2
%
$
79,948
61.5
%
$
74,131
62.5
%
$
301,418
61.4
%
$
273,981
55.8
%
EMEA
42,433
31.4
%
42,887
33.0
%
39,464
33.3
%
164,750
33.5
%
196,465
40.1
%
APAC
5,958
4.4
%
7,168
5.5
%
4,932
4.2
%
25,008
5.1
%
19,968
4.1
%
Total
$
135,093
100.0
%
$
130,003
100.0
%
$
118,527
100.0
%
$
491,176
100.0
%
$
490,414
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229980205/en/
Arlo Investor Relations Tahmin Clarke investors@arlo.com
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