-- Third quarter SaaS and license revenue
increased 12.8% year-over-year to $133.1 million --
-- Third quarter total revenue increased 12.4% year-over-year to
$216.1 million -- -- Third quarter GAAP net income
attributable to common stockholders was $18.3 million, compared to
$13.5 million for the third quarter of 2021 -- -- Third
quarter non-GAAP adjusted EBITDA was $40.8 million, compared to
$37.6 million for the third quarter of 2021 --
Alarm.com Holdings, Inc. (Nasdaq: ALRM), the leading platform
for the intelligently connected property, today reported financial
results for its third quarter ended September 30, 2022. Alarm.com
also provided its financial outlook for SaaS and license revenue
for the fourth quarter of 2022 and its guidance for the full year
of 2022.
“Our core businesses in residential and commercial security,
video, and energy management all contributed nicely to another
solid quarter and have sustained their momentum to date,” said
Steve Trundle, President and CEO of Alarm.com. “We were also
pleased to spend time in person with many of our service providers
during our annual partner summit in early October and also to have
completed the acquisition of Noonlight during the third
quarter.”
Third Quarter 2022 Financial Results as Compared to Third Quarter
2021
- SaaS and license revenue increased 12.8% to $133.1 million,
compared to $118.1 million.
- Total revenue increased 12.4% to $216.1 million, compared to
$192.3 million.
- GAAP net income attributable to common stockholders increased
to $18.3 million, or $0.35 per diluted share, compared to $13.5
million, or $0.26 per diluted share.
- Non-GAAP adjusted EBITDA(*) increased to $40.8 million,
compared to $37.6 million.
- Non-GAAP adjusted net income attributable to common
stockholders(*) increased to $30.1 million, or $0.55 per diluted
share, compared to $27.4 million or $0.53 per diluted share.
Balance Sheet and Cash
Flow
- Total cash and cash equivalents decreased to $621.3 million as
of September 30, 2022, compared to $710.6 million as of December
31, 2021, primarily due to the repurchase of 840,249 shares of
Alarm.com common stock, approximately 1.7% of total outstanding
shares, for $51.9 million during the nine months ended September
30, 2022, as well as cash used for an acquisition and a land
purchase to support future growth plans.
- For the quarter ended September 30, 2022, cash flows from
operations was $10.2 million, compared to $37.9 million for the
quarter ended September 30, 2021. For the quarter ended September
30, 2022, non-GAAP free cash flow(*) was $8.4 million, compared to
$36.3 million for the quarter ended September 30, 2021. These
decreases in cash flows from operations and free cash flow were
primarily due to an increase in purchased inventory in an effort to
reduce risks and uncertainties in our supply chain and differences
in the timing of disbursements and the collection of receipts.
(*) Reconciliations of the non-GAAP measures are set forth at
the end of this press release.
Recent Business
Highlights
- Released Third-Party Camera Support for Commercial
Video: Alarm.com’s commercial video solution offering can now
operate with a diverse array of third-party commercial video
cameras. Supporting third-party cameras reduces barriers to entry
for small and medium-sized businesses that want to benefit from
Alarm.com’s intelligently integrated solutions without replacing
existing installed cameras.
- Acquired Noonlight: Noonlight is a fast-growing company
that provides an innovative, connected safety and event management
software and services platform that enables new applications and
provides enhanced emergency response capabilities. Consumers can
access emergency response capabilities directly through Noonlight’s
innovative mobile application or through integrations with partners
such as Lyft, Uber and Tinder. Leading vendors of IoT devices also
leverage Noonlight’s SaaS offering to add context aware event
management and emergency response services to their products. The
acquisition will allow Alarm.com to expand markets for emergency
response services and participate in a broader segment of the
connected property market.
- Introduced New Video-based Monitoring Solution:
Escalated Events enables monitoring stations to receive and respond
to events generated by Alarm.com’s suite of video analytics
capabilities. For example, Alarm.com can detect a person in a
customer's backyard or in the parking lot of a business after hours
and alert a central monitoring station. A monitoring agent can then
access video clips and live feeds to evaluate the situation quickly
and dispatch first responders as needed. Escalated Events adds a
new layer of proactive security protection for property owners and
creates new opportunities and applications for the professional
monitoring services provided by Alarm.com’s partners.
- Launched Partnership with Kastle Systems: Alarm.com and
Kastle Systems are partnering to provide comprehensive security and
connected property solutions designed for multifamily properties.
PointCentral, an Alarm.com company, and Kastle Systems will provide
a combined service to help property managers streamline operations
with remote access management, protect their assets with smart
water monitoring and HVAC analytics, and provide an enhanced
resident experience with in-unit technology such as smart
thermostats and lighting control.
Financial Outlook
Alarm.com is providing its outlook for SaaS and license revenue
for the fourth quarter of 2022 and its guidance for the full year
of 2022 based upon current management expectations. This guidance
considers the recently filed demand for arbitration on October 27,
2022 related to a dispute arising under the Patent Cross License
agreement between Alarm.com and Vivint, Inc., or Vivint, executed
in November 2013. Vivint notified Alarm.com it will stop paying
license fees to Alarm.com under the agreement. Vivint has paid the
required license fees to Alarm.com since the agreement was executed
in November 2013. Alarm.com disputes Vivint's refusal of payment
and is seeking continued payments of license fees in the
arbitration, as well as interest and declaratory relief. As a
result of Vivint’s refusal to pay license fees under the agreement,
beginning with the fourth quarter of 2022, Alarm.com believes that
quarterly SaaS and license revenue and total revenue will be
impacted by approximately $6.0 million. Alarm.com also believes
that quarterly earnings and cash flow will be impacted by the
aforementioned $6.0 million, plus significant additional legal
fees.
For the fourth quarter of 2022:
- SaaS and license revenue is expected to be in the range of
$130.5 million to $130.7 million.
For the full year of 2022:
- SaaS and license revenue is expected to be in the range of
$516.3 million to $516.5 million.
- Total revenue is expected to be in the range of $840.3 million
to $842.5 million, which includes anticipated hardware and other
revenue in the range of $324.0 million to $326.0 million.
- Non-GAAP adjusted EBITDA is expected to be in the range of
$141.6 million to $142.6 million.
- Non-GAAP adjusted net income attributable to common
stockholders is expected to be in the range of $101.1 million to
$101.6 million, based on an estimated tax rate of 21.0%.
- Based on an expected 55.0 million weighted average diluted
shares outstanding, non-GAAP adjusted net income attributable to
common stockholders is expected to be $1.84 to $1.85 per diluted
share.
The 2022 guidance provided above is forward-looking in nature.
Actual results may differ materially. See the cautionary note
regarding “Forward-Looking Statements” below. The guidance provided
above is based on expectations as of the date of this press release
and Alarm.com undertakes no obligation to update guidance after
such date.
Conference Call and Webcast
Information
Alarm.com will host a conference call to discuss its third
quarter 2022 financial results and its outlook for the fourth
quarter and full year of 2022. A live audio webcast is scheduled to
begin at 4:30 p.m. ET on November 8, 2022. To participate on the
live call, analysts and investors should pre-register to obtain a
dial-in number and individual passcode by visiting:
https://register.vevent.com/register/BIe310ec27a99440fda6ac9f604ddb3196.
Alarm.com will also offer a live and archived webcast of the
conference call accessible on Alarm.com’s Investor Relations
website at http://investors.alarm.com.
About Alarm.com Holdings, Inc.
Alarm.com is the leading platform for the intelligently
connected property. Millions of consumers and businesses depend on
Alarm.com's technology to manage and control their property from
anywhere. Our platform integrates with a growing variety of
Internet of Things devices through our apps and interfaces. Our
security, video, access control, intelligent automation, energy
management, and wellness solutions are available through our
network of thousands of professional service providers in North
America and around the globe. Alarm.com's common stock is traded on
Nasdaq under the ticker symbol ALRM. For more information, please
visit www.alarm.com.
Non-GAAP Financial Measures
To supplement our consolidated selected financial data presented
on a basis consistent with GAAP, this press release contains
certain non-GAAP financial measures, including adjusted EBITDA,
non-GAAP adjusted income before income taxes, non-GAAP adjusted net
income, non-GAAP adjusted income attributable to common
stockholders before income taxes, non-GAAP adjusted net income
attributable to common stockholders, non-GAAP adjusted net income
attributable to common stockholders per share and non-GAAP free
cash flow. We have included non-GAAP measures in this press release
because they are financial, operating or liquidity measures used by
our management to (i) understand and evaluate our core operating
performance and trends and generate future operating plans, (ii)
make strategic decisions regarding the allocation of capital and
investments in initiatives that are focused on cultivating new
markets for our solutions and (iii) provide useful information to
management about the amount of cash generated by the business after
necessary capital expenditures. We also use adjusted EBITDA as a
performance measure under our executive bonus plan. Further, we
believe that these non-GAAP measures of our financial results
provide useful information to investors and others in understanding
and evaluating our results of operations, business trends and
financial condition. While we believe the use of these non-GAAP
measures provides useful information to investors and management in
analyzing our financial performance, non-GAAP measures have
inherent limitations in that they do not reflect all of the amounts
and transactions that are included in our financial statements
prepared in accordance with GAAP. Non-GAAP measures do not serve as
an alternative to GAAP nor do we consider our non-GAAP measures in
isolation, accordingly we present non-GAAP financial measures only
in connection with GAAP results. We urge investors to consider
non-GAAP measures only in conjunction with our GAAP financials and
to review the reconciliation of our non-GAAP financial measures to
the comparable GAAP financial measures, which are included in this
press release.
We consider non-GAAP free cash flow to be a liquidity measure,
which we define as cash flows from operating activities less
purchases of property and equipment.
With respect to our expectations under “Financial Outlook”
above, reconciliation of adjusted EBITDA and adjusted net income
attributable to common stockholders guidance to the closest
corresponding GAAP measure is not available without unreasonable
efforts on a forward-looking basis due to the high variability,
complexity and low visibility with respect to the charges excluded
from these non-GAAP measures, in particular, non-ordinary course
litigation expense, acquisition-related expense and tax windfall
adjustments can have unpredictable fluctuations based on unforeseen
activity that is out of our control and/or cannot reasonably be
predicted. We expect the above charges to have a significant and
potentially highly variable impact on our future GAAP financial
results.
We exclude one or more of the following items from non-GAAP
financial and operating measures:
Stock-based compensation expense: We exclude stock-based
compensation expense, which relates to restricted stock units and
other forms of equity incentives primarily awarded to employees of
Alarm.com, because they are non-cash charges that we do not
consider when assessing the operating performance of our business.
Additionally, the determination of stock-based compensation expense
can be calculated using various methodologies and is dependent upon
subjective assumptions and other factors that vary on a
company-by-company basis. Therefore, we believe that excluding
stock-based compensation expense from our non-GAAP financial
measures improves the comparability of our results to the results
of other companies in our industry.
Litigation expense: We exclude non-ordinary course litigation
expense because we do not consider legal costs and settlement fees
incurred in litigation and litigation-related matters of
non-ordinary course lawsuits and other disputes, particularly costs
incurred in ongoing intellectual property litigation, to be
indicative of our core operating performance. We do not adjust for
ordinary course legal expenses, including those expenses resulting
from maintaining and enforcing our intellectual property portfolio
and license agreements.
Acquisition-related expense: Included in operating expenses are
incremental costs directly related to business and asset
acquisitions as well as changes in the fair value of contingent
consideration liabilities, when applicable. We exclude
acquisition-related expense from our non-GAAP financial measures
because we believe that the exclusion of this expense allows us to
better provide meaningful information about our operating
performance, facilitates comparisons to our historical operating
results, improves the comparability of our results to the results
of other companies in our industry, and ultimately, we believe
helps investors better understand the acquisition-related expense
and the effects of the transaction on our results of
operations.
Depreciation expense: We record depreciation primarily for
investments in property and equipment. We exclude depreciation in
calculating adjusted EBITDA because we do not consider depreciation
when we evaluate our ongoing business operations. For non-GAAP
adjusted net income, non-GAAP adjusted net income attributable to
common stockholders and non-GAAP adjusted net income attributable
to common stockholders per share, basic and diluted, we do not
exclude depreciation.
Amortization expense: GAAP requires that operating expenses
include the amortization of acquired intangible assets, which
principally include acquired customer relationships, developed
technology and trade names. We exclude amortization of intangibles
from our non-GAAP financial measures because we do not consider
amortization expense when we evaluate our ongoing business
operations, nor do we factor amortization expense into our
evaluation of potential acquisitions, or our measurement of the
performance of those acquisitions. We believe that the exclusion of
amortization expense enables the comparison of our performance to
other companies in our industry as other companies may be more or
less acquisitive than us and therefore, amortization expense may
vary significantly by company based on their acquisition history.
Although we exclude amortization of acquired intangible assets from
our non-GAAP financial measures, management believes that it is
important for investors to understand that such intangible assets
were recorded as part of purchase accounting and contribute to
revenue generation.
Amortization of debt discount and debt issuance costs: We record
amortization of debt issuance costs and previously recorded
amortization of debt discount related to the January 2021 issuance
of $500.0 million aggregate principal amount of 0% convertible
senior notes due January 15, 2026, or the 2026 Notes, as interest
expense. We exclude amortization of debt issuance costs and debt
discount from our non-GAAP adjusted net income, non-GAAP adjusted
net income attributable to common stockholders and non-GAAP
adjusted net income attributable to common stockholders per share,
basic and diluted, because we believe that the exclusion of this
non-cash interest expense will provide for more meaningful
information about our financial performance.
Interest expense: We record interest expense primarily related
to our 2026 Notes and previously recorded interest expense related
to our debt facility. We exclude interest expense in calculating
our adjusted EBITDA calculation. For non-GAAP adjusted net income,
non-GAAP adjusted net income attributable to common stockholders
and non-GAAP adjusted net income attributable to common
stockholders per share, basic and diluted, we do not exclude
interest expense other than the interest expense related to the
amortization of debt issuance costs and debt discount related to
the 2026 Notes as discussed above.
Interest income and certain activity within other (expense) /
income, net: We exclude interest income as well as certain activity
within other (expense) / income, net including gains, losses or
impairments on investments and other assets as well as losses on
the early extinguishment of the debt, when applicable, from our
non-GAAP financial measures because we do not consider it part of
our ongoing results of operations.
Provision for / (benefit from) income taxes: We exclude the
impact related to our provision for / (benefit from) income taxes
from our adjusted EBITDA calculation. We do not consider this tax
adjustment to be part of our ongoing results of operations.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements may be identified by their
use of terms and phrases such as “anticipate,” “believe,”
“continue,” “designed,” “enable,” “ensure,” “expect,” “intend,”
“will,” and other similar terms and phrases, and such
forward-looking statements include, but are not limited to, the
statements regarding the Company’s opportunities, positioning, the
benefits of recently launched offerings, acquisitions and
investments, and the Company’s guidance for the fourth quarter and
full year of 2022 described under “Financial Outlook” above and key
assumptions related thereto. The events described in these
forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from the results anticipated by these
forward-looking statements, including, but not limited to: the
Company’s actual operating results and business operations may be
negatively impacted by the anticipated impact of the global
economic uncertainty and financial market conditions caused by
significant worldwide events, including public health crises, such
as the COVID-19 pandemic, and geopolitical upheaval, such as
Russia’s incursion into Ukraine (collectively Macroeconomic
Conditions). Macroeconomic Conditions and their economic effects
may reduce demand, the reliability of the Company’s network
operations centers, the Company’s ability to retain service
provider partners and residential and commercial subscribers and
sustain its growth rate, the Company’s ability to manage growth and
execute on its business strategies, the effects of increased
competition and evolving technologies, the Company’s ability to
integrate acquired assets and businesses and to manage service
provider partners, customers and employees, consumer demand for
interactive security, video monitoring, intelligent automation,
energy management and wellness solutions, the Company’s reliance on
its service provider network to attract new customers and retain
existing customers, the Company's dependence on its suppliers, the
potential loss of any key supplier or the inability of a key
supplier to deliver their products to us on time or at the
contracted price, the reliability of the Company’s hardware and
wireless network suppliers and enhanced United States tax, tariff,
import/export restrictions, or other trade barriers, particularly
tariffs from China as well as other risks and uncertainties
discussed in the “Risk Factors” section of the Company’s Quarterly
Report on Form 10-Q filed with the Securities and Exchange
Commission on August 9, 2022 and other subsequent filings the
Company makes with the Securities and Exchange Commission from time
to time, including its Form 10-Q for the quarter ended September
30, 2022. In addition, the forward-looking statements included in
this press release represent the Company’s views and expectations
as of the date hereof and are based on information currently
available to the Company. The Company anticipates that subsequent
events and developments may cause the Company’s views to change.
However, while the Company may elect to update these
forward-looking statements at some point in the future, the Company
specifically disclaims any obligation to do so except as required
by law. These forward-looking statements should not be relied upon
as representing the Company’s views as of any date subsequent to
the date hereof.
ALARM.COM HOLDINGS,
INC.
Consolidated Statements of
Operations
(in thousands, except share
and per share data)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenue:
SaaS and license revenue
$
133,126
$
118,059
$
385,826
$
338,628
Hardware and other revenue
83,012
74,265
248,594
215,051
Total revenue
216,138
192,324
634,420
553,679
Cost of revenue(1):
Cost of SaaS and license revenue
18,437
17,425
54,019
49,782
Cost of hardware and other revenue
67,149
62,959
208,990
173,731
Total cost of revenue
85,586
80,384
263,009
223,513
Operating expenses:
Sales and marketing
23,057
22,557
69,182
62,085
General and administrative
28,011
18,689
81,314
64,839
Research and development
55,581
44,143
161,227
130,101
Amortization and depreciation
7,587
7,467
23,123
22,329
Total operating expenses
114,236
92,856
334,846
279,354
Operating income
16,316
19,084
36,565
50,812
Interest expense
(787
)
(4,196
)
(2,356
)
(11,718
)
Interest income
2,903
140
4,062
446
Other (expense) / income, net
(76
)
53
42
(70
)
Income before income taxes
18,356
15,081
38,313
39,470
Provision for / (benefit from) income
taxes
246
1,787
472
(2,864
)
Net income
18,110
13,294
37,841
42,334
Net loss attributable to redeemable
noncontrolling interests
222
244
412
779
Net income attributable to common
stockholders
$
18,332
$
13,538
$
38,253
$
43,113
Per share information attributable to
common stockholders:
Net income per share:
Basic
$
0.37
$
0.27
$
0.77
$
0.87
Diluted
$
0.35
$
0.26
$
0.73
$
0.83
Weighted average common shares
outstanding:
Basic
49,791,465
49,954,565
49,974,925
49,776,578
Diluted
54,832,528
51,836,239
54,988,020
51,879,061
______________________________
(1) Exclusive of amortization and
depreciation shown in operating expenses below.
Stock-based compensation expense
included in operating expenses:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Sales and marketing
$
983
$
1,189
$
3,481
$
3,232
General and administrative
3,953
1,974
11,135
7,217
Research and development
8,218
6,255
23,437
16,913
Total stock-based compensation expense
$
13,154
$
9,418
$
38,053
$
27,362
ALARM.COM HOLDINGS,
INC.
Consolidated Balance
Sheets
(in thousands, except share
and per share data)
(unaudited)
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
621,347
$
710,621
Accounts receivable, net of allowance for
credit losses of $3,536 and $2,168, and net of allowance for
product returns of $1,535 and $1,181 as of September 30, 2022 and
December 31, 2021, respectively
118,833
105,548
Inventory
112,319
75,276
Other current assets, net of allowance for
credit losses of zero and $2 as of September 30, 2022 and December
31, 2021, respectively
27,498
26,175
Total current assets
879,997
917,620
Property and equipment, net
59,483
41,713
Intangible assets, net
87,171
91,406
Goodwill
150,808
112,901
Deferred tax assets
69,117
13,547
Operating lease right-of-use assets
30,915
30,479
Other assets, net of allowance for credit
losses of $3 and $78 as of September 30, 2022 and December 31,
2021, respectively
32,282
24,349
Total assets
$
1,309,773
$
1,232,015
Liabilities, redeemable noncontrolling
interest and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
106,653
$
89,816
Accrued compensation
24,585
23,495
Deferred revenue
7,879
5,697
Operating lease liabilities
12,024
10,331
Total current liabilities
151,141
129,339
Deferred revenue
10,556
9,140
Convertible senior notes, net
489,586
425,345
Operating lease liabilities
30,074
32,591
Other liabilities
11,611
9,545
Total liabilities
692,968
605,960
Redeemable noncontrolling interests
23,029
12,888
Stockholders’ equity
Preferred stock, $0.001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of September 30, 2022 and December 31, 2021
—
—
Common stock, $0.01 par value, 300,000,000
shares authorized; 50,846,671 and 50,406,606 shares issued; and
49,859,269 and 50,259,453 shares outstanding as of September 30,
2022 and December 31, 2021, respectively
508
504
Additional paid-in capital
483,225
498,979
Treasury stock, at cost; 987,402 and
147,153 shares as of September 30, 2022 and December 31, 2021,
respectively
(57,015
)
(5,149
)
Retained earnings
167,058
118,833
Total stockholders’ equity
593,776
613,167
Total liabilities, redeemable
noncontrolling interests and stockholders’ equity
$
1,309,773
$
1,232,015
ALARM.COM HOLDINGS,
INC.
Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
September 30,
Cash flows from operating
activities:
2022
2021
Net income
$
37,841
$
42,334
Adjustments to reconcile net income to net
cash from operating activities:
Provision for / (recovery of) credit
losses on accounts receivable
1,606
(238
)
Reserve for product returns
3,721
1,628
Recovery of credit losses on notes
receivable
(77
)
(10
)
Provision for excess and obsolete
inventory
—
374
Amortization on patents and tooling
1,037
947
Amortization and depreciation
23,123
22,329
Amortization of debt discount and debt
issuance costs
2,342
11,590
Amortization of operating leases
7,767
7,173
Deferred income taxes
(42,566
)
(5,918
)
Stock-based compensation
38,053
27,362
Gain on investment
(140
)
—
Loss on early extinguishment of debt
—
185
Changes in operating assets and
liabilities (net of business acquisitions):
Accounts receivable
(18,321
)
(8,689
)
Inventory
(37,043
)
(12,619
)
Other current and non-current assets
(7,443
)
(8,368
)
Accounts payable, accrued expenses and
other current liabilities
17,803
10,672
Deferred revenue
3,531
3,548
Operating lease liabilities
(9,390
)
(8,745
)
Other liabilities
611
(361
)
Cash flows from operating activities
22,455
83,194
Cash flows used in investing
activities:
Business acquisition, net of cash
acquired
(31,730
)
—
Additions to property and equipment
(28,084
)
(8,939
)
Issuances of notes receivable
(3,000
)
—
Receipt of payments on notes
receivable
49
42
Purchase of investment in unconsolidated
entity
—
(5,000
)
Proceeds from sale of investment
140
—
Cash flows used in investing
activities
(62,625
)
(13,897
)
Cash flows (used in) / from financing
activities:
Repayments of credit facility
—
(110,000
)
Proceeds from issuance of convertible
senior notes
—
500,000
Payments of debt issuance costs
—
(15,698
)
Payments of deferred consideration for
business acquisitions
—
(1,160
)
Purchases of treasury stock
(51,866
)
—
Issuances of common stock from
equity-based plans
3,391
4,409
Cash flows (used in) / from financing
activities
(48,475
)
377,551
Net (decrease) / increase in cash, cash
equivalents and restricted cash
(88,645
)
446,848
Cash, cash equivalents and restricted
cash at beginning of the period
710,621
253,459
Cash, cash equivalents and restricted
cash at end of the period
$
621,976
$
700,307
Reconciliation of cash, cash
equivalents and restricted cash:
Cash and cash equivalents
$
621,347
$
700,307
Restricted cash included in other current
assets and other assets
629
—
Total cash, cash equivalents and
restricted cash
$
621,976
$
700,307
ALARM.COM HOLDINGS,
INC.
Reconciliation of Non-GAAP
Measures
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Adjusted EBITDA:
Net income
$
18,110
$
13,294
$
37,841
$
42,334
Adjustments:
Interest expense, interest income and
certain activity within other (expense) / income, net
(2,116
)
4,003
(1,859
)
11,342
Provision for / (benefit from) income
taxes
246
1,787
472
(2,864
)
Amortization and depreciation expense
7,587
7,467
23,123
22,329
Stock-based compensation expense
13,154
9,418
38,053
27,362
Acquisition-related expense
728
—
728
29
Litigation expense
3,131
1,609
9,536
10,658
Total adjustments
22,730
24,284
70,053
68,856
Adjusted EBITDA
$
40,840
$
37,578
$
107,894
$
111,190
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Adjusted net income:
Net income, as reported
$
18,110
$
13,294
$
37,841
$
42,334
Provision for / (benefit from) income
taxes
246
1,787
472
(2,864
)
Income before income taxes
18,356
15,081
38,313
39,470
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(2,903
)
(193
)
(4,215
)
(376
)
Amortization expense
4,647
4,329
13,924
12,987
Amortization of debt discount and debt
issuance costs
782
4,191
2,342
11,584
Stock-based compensation expense
13,154
9,418
38,053
27,362
Acquisition-related expense
728
—
728
29
Litigation expense
3,131
1,609
9,536
10,658
Non-GAAP adjusted income before income
taxes
37,895
34,435
98,681
101,714
Income taxes 1
(7,958
)
(7,231
)
(20,723
)
(21,360
)
Non-GAAP adjusted net income
$
29,937
$
27,204
$
77,958
$
80,354
1 Income taxes are calculated using a rate
of 21.0% for each of the three and nine months ended September 30,
2022 and 2021. The 21.0% effective tax rate for each of the three
and nine months ended September 30, 2022 and 2021 exclude the
income tax effect on the non-GAAP adjustments and reflect the
estimated long-term corporate tax rate.
ALARM.COM HOLDINGS,
INC.
Reconciliation of Non-GAAP
Measures - continued
(in thousands, except share
and per share data)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Adjusted net income attributable to
common stockholders:
Net income attributable to common
stockholders, as reported
$
18,332
$
13,538
$
38,253
$
43,113
Provision for / (benefit from) income
taxes
246
1,787
472
(2,864
)
Income attributable to common stockholders
before income taxes
18,578
15,325
38,725
40,249
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(2,903
)
(193
)
(4,215
)
(376
)
Amortization expense
4,647
4,329
13,924
12,987
Amortization of debt discount and debt
issuance costs
782
4,191
2,342
11,584
Stock-based compensation expense
13,154
9,418
38,053
27,362
Acquisition-related expense
728
—
728
29
Litigation expense
3,131
1,609
9,536
10,658
Non-GAAP adjusted income attributable to
common stockholders before income taxes
38,117
34,679
99,093
102,493
Income taxes 1
(8,005
)
(7,283
)
(20,810
)
(21,524
)
Non-GAAP adjusted net income
attributable to common stockholders
$
30,112
$
27,396
$
78,283
$
80,969
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Adjusted net income attributable to
common stockholders per share:
Net income attributable to common
stockholders per share - basic, as reported
$
0.37
$
0.27
$
0.77
$
0.87
Provision for / (benefit from) income
taxes
—
0.04
0.01
(0.06
)
Income attributable to common stockholders
before income taxes
0.37
0.31
0.78
0.81
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(0.06
)
—
(0.08
)
—
Amortization expense
0.09
0.09
0.28
0.26
Amortization of debt discount and debt
issuance costs
0.02
0.08
0.05
0.23
Stock-based compensation expense
0.27
0.19
0.76
0.55
Acquisition-related expense
0.01
—
0.01
—
Litigation expense
0.06
0.03
0.19
0.21
Non-GAAP adjusted income attributable to
common stockholders before income taxes
0.76
0.70
1.99
2.06
Income taxes 1
(0.16
)
(0.15
)
(0.42
)
(0.43
)
Non-GAAP adjusted net income
attributable to common stockholders per share - basic
$
0.60
$
0.55
$
1.57
$
1.63
Non-GAAP adjusted net income
attributable to common stockholders per share - diluted
$
0.55
$
0.53
$
1.42
$
1.56
Weighted average common shares
outstanding:
Basic, as reported
49,791,465
49,954,565
49,974,925
49,776,578
Diluted, as reported
54,832,528
51,836,239
54,988,020
51,879,061
1 Income taxes are calculated using a rate
of 21.0% for each of the three and nine months ended September 30,
2022 and 2021. The 21.0% effective tax rate for each of the three
and nine months ended September 30, 2022 and 2021 exclude the
income tax effect on the non-GAAP adjustments and reflect the
estimated long-term corporate tax rate.
ALARM.COM HOLDINGS,
INC.
Reconciliation of Non-GAAP
Measures - continued
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Non-GAAP free cash flow:
Cash flows from operating activities
$
10,197
$
37,886
$
22,455
$
83,194
Additions to property and equipment
(1,782
)
(1,558
)
(28,084
)
(8,939
)
Non-GAAP free cash flow
$
8,415
$
36,328
$
(5,629
)
$
74,255
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221108005957/en/
Investor & Media Relations: Matthew Zartman Alarm.com
ir@alarm.com
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