-- Second quarter SaaS and license revenue
increased to $140.4 million, compared to $129.5 million for
the second quarter of 2022 -- -- Second quarter GAAP net
income attributable to common stockholders increased to $15.8
million, compared to $10.8 million for the second quarter of 2022
-- -- Second quarter non-GAAP adjusted EBITDA of $36.4
million, compared to $37.1 million for the second quarter of 2022
--
Alarm.com Holdings, Inc. (Nasdaq: ALRM), the leading platform
for the intelligently connected property, today reported financial
results for its second quarter ended June 30, 2023. Alarm.com also
provided its financial outlook for SaaS and license revenue for the
third quarter of 2023 and increased its guidance for the full year
of 2023.
“We’re pleased to report solid results in our second quarter and
progress on our goals for this year,” said Steve Trundle, CEO of
Alarm.com. “During the quarter, we released important new products
and capabilities that give our service providers best-in-class
solutions for the residential and commercial smart property
markets.”
Second Quarter 2023 Financial Results as Compared to Second Quarter
2022
- SaaS and license revenue increased 8.5% to $140.4 million,
compared to $129.5 million.
- Excluding Vivint license revenue from the second quarter of
2022, non-GAAP adjusted SaaS & license revenue growth rate(*)
was 13.3%.
- Total revenue increased 5.2% to $223.9 million, compared to
$212.8 million.
- GAAP net income attributable to common stockholders increased
to $15.8 million, or $0.30 per diluted share, compared to $10.8
million, or $0.21 per diluted share, primarily due to a $6.4
million increase in interest income.
- Non-GAAP adjusted EBITDA(*) was $36.4 million, compared to
$37.1 million.
- Non-GAAP adjusted net income attributable to common
stockholders(*) was $26.6 million, or $0.49 per diluted share,
compared to $26.9 million or $0.49 per diluted share.
Balance Sheet and Cash
Flow
- Total cash and cash equivalents increased to $627.0 million as
of June 30, 2023, compared to $622.2 million as of December 31,
2022. During the second quarter of 2023, we repurchased 134,255
shares of Alarm.com common stock at an average price of $50.11, for
$6.7 million.
- For the quarter ended June 30, 2023, cash flows from operations
was $36.8 million, compared to $26.2 million for the quarter ended
June 30, 2022. For the quarter ended June 30, 2023, non-GAAP free
cash flow(*) was $35.8 million, compared to $2.1 million for the
quarter ended June 30, 2022. The increase in non-GAAP free cash
flow was primarily due to the $21.5 million purchase during the
quarter ended June 30, 2022 of developable land in close proximity
to our headquarters in Tysons, Virginia.
(*) Reconciliations of the non-GAAP measures are set forth at
the end of this press release.
Recent Business
Highlights
- Expanded AI-Powered Capabilities for Professional Monitoring
Station Partners: Alarm.com enhanced its suite of solutions
designed to help monitoring station partners minimize false alarms,
optimize responses and deliver a more seamless and secure
experience to subscribers. Monitoring operators can access new
contextual information and intelligent insights about alarm-related
events so they can quickly assess the situation and make more
informed decisions about the appropriate level of response. The new
capabilities leverage activity data associated with the alarm
event, such as incorrect panel code entries, unlocked doors and
video of any person detected at the property.
- Launched Industry’s First Battery-Free Video Doorbell:
Alarm.com engineered the new 750 video doorbell with newly patented
technology that delivers a robust user experience without requiring
batteries. With no consumable parts, the 750 achieves an
industry-leading range of operating temperatures and is the least
service-intensive video doorbell product that Alarm.com service
provider partners can install. The 750 also includes Alarm.com’s
video analytics software package and delivers advanced performance
specifications, including an expansive field of view and
two-megapixel resolution.
- Multiple Award Recognition: Cell Connector, Alarm.com’s
new Access Control product, won an ESX Innovation Award during the
2023 Electronic Security Expo in June. Introduced in early 2023,
Cell Connector leverages 4G/LTE cellular networks to connect access
points directly to the Alarm.com platform and provides a highly
flexible and streamlined option for selling and installing
Alarm.com’s Access Control Solution. Service providers also
selected Alarm.com for multiple 2023 Security Sales &
Integration Stellar Service Awards. Alarm.com won the highest
honors for its service and support for critical areas of service
provider operations, such as best recurring revenue support
program, best sales and marketing assistance, and best training
program.
Financial Outlook
Alarm.com is providing its outlook for SaaS and license revenue
for the third quarter of 2023 and increasing its guidance for the
full year of 2023 based upon current management expectations. This
guidance assumes no contribution from the Vivint license
agreement.
For the third quarter of 2023:
- SaaS and license revenue is expected to be in the range of
$141.4 million to $141.6 million.
For the full year of 2023:
- SaaS and license revenue is expected to be in the range of
$562.3 million to $562.7 million.
- Total revenue is expected to be in the range of $872.3 million
to $887.7 million, which includes anticipated hardware and other
revenue in the range of $310.0 million to $325.0 million.
- Non-GAAP adjusted EBITDA is expected to be in the range of
$128.0 million to $131.0 million.
- Non-GAAP adjusted net income attributable to common
stockholders is expected to be in the range of $92.2 million to
$94.2 million, based on an estimated tax rate of 21.0%.
- Based on an expected 54.6 million weighted average diluted
shares outstanding, non-GAAP adjusted net income attributable to
common stockholders is expected to be $1.69 to $1.73 per diluted
share.
The 2023 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 second
quarter 2023 financial results and its outlook for the third
quarter and full year of 2023. A live audio webcast is scheduled to
begin at 4:30 p.m. ET on August 9, 2023. 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/BI06bbce3f158b4474832b0a58f668f2a5.
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. The information contained on
any referenced website is not incorporated herein.
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 non-GAAP 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, non-GAAP free
cash flow, non-GAAP adjusted SaaS and license revenue and non-GAAP
adjusted SaaS and license revenue growth rate. 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 non-GAAP 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 most
directly 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 non-GAAP adjusted EBITDA and non-GAAP
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:
Interest expense: We record interest expense primarily 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. We exclude interest expense in calculating our non-GAAP
adjusted EBITDA. 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 related to the 2026 Notes as discussed below.
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 income taxes: We exclude the impact related to our
provision for income taxes from our non-GAAP adjusted EBITDA
calculation. We do not consider this tax adjustment to be part of
our ongoing results of operations.
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.
Depreciation expense: We record depreciation primarily for
investments in property and equipment. We exclude depreciation in
calculating non-GAAP 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 of debt issuance costs: We record amortization of
debt issuance costs related to the 2026 Notes as interest expense.
We exclude amortization of debt issuance costs 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.
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.
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.
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.
Vivint license revenue: We exclude Vivint license revenue from
our non-GAAP adjusted SaaS and license revenue and non-GAAP
adjusted SaaS and license revenue growth rate because we believe
that this exclusion will provide more meaningful information about
our financial performance on a comparable basis, given that we are
no longer recording Vivint license revenue effective beginning in
the fourth quarter of 2022. We filed a demand for arbitration on
October 27, 2022 following Vivint's notification to us indicating
that Vivint will stop paying us license fees under the Patent and
Cross License Agreement.
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, anticipated impact of Vivint’s refusal to pay license
fees and related legal actions, and the Company’s guidance for the
third quarter and full year of 2023 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:
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, geopolitical
upheaval, such as Russia’s incursion into Ukraine, supply chain
disruptions, interest rates and inflation (collectively,
Macroeconomic Conditions); impact of Macroeconomic Conditions and
their economic effects on demand for the Company's products; impact
of Vivint's refusal to pay license fees and related legal actions;
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; and 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 May 10, 2023 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 June 30, 2023. 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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue:
SaaS and license revenue
$
140,432
$
129,475
$
275,826
$
252,700
Hardware and other revenue
83,443
83,370
157,765
165,582
Total revenue
223,875
212,845
433,591
418,282
Cost of revenue(1):
Cost of SaaS and license revenue
21,576
18,688
41,159
35,582
Cost of hardware and other revenue
64,791
68,648
121,380
141,841
Total cost of revenue
86,367
87,336
162,539
177,423
Operating expenses:
Sales and marketing
23,772
22,933
50,417
46,125
General and administrative
28,799
29,309
57,298
53,303
Research and development
60,918
54,156
122,826
105,646
Amortization and depreciation
7,860
7,775
15,533
15,536
Total operating expenses
121,349
114,173
246,074
220,610
Operating income
16,159
11,336
24,978
20,249
Interest expense
(827
)
(785
)
(1,695
)
(1,569
)
Interest income
7,417
1,016
12,599
1,159
Other (expense) / income, net
(631
)
105
(779
)
118
Income before income taxes
22,118
11,672
35,103
19,957
Provision for income taxes
6,507
844
5,285
226
Net income
15,611
10,828
29,818
19,731
Net loss attributable to redeemable
noncontrolling interests
188
14
397
190
Net income attributable to common
stockholders
$
15,799
$
10,842
$
30,215
$
19,921
Per share information attributable to
common stockholders:
Net income per share:
Basic
$
0.32
$
0.22
$
0.61
$
0.40
Diluted
$
0.30
$
0.21
$
0.58
$
0.38
Weighted average common shares
outstanding:
Basic
49,859,615
49,931,689
49,723,012
50,068,176
Diluted
54,446,275
54,757,020
54,423,047
55,054,970
______________________________
(1) Exclusive of amortization and
depreciation shown in operating expenses below.
Stock-based compensation expense
included in operating expenses:
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Sales and marketing
$
892
$
1,440
$
1,924
$
2,498
General and administrative
3,468
3,947
6,613
7,182
Research and development
7,571
7,402
16,080
15,219
Total stock-based compensation expense
$
11,931
$
12,789
$
24,617
$
24,899
ALARM.COM HOLDINGS,
INC.
Consolidated Balance
Sheets
(in thousands, except share
and per share data)
(unaudited)
June 30, 2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
627,041
$
622,165
Accounts receivable, net of allowance for
credit losses of $3,159 and $2,835, and net of allowance for
product returns of $2,146 and $1,551 as of June 30, 2023 and
December 31, 2022, respectively
123,285
124,283
Inventory
117,763
115,584
Other current assets, net of allowance for
credit losses of $0 as of June 30, 2023 and December 31, 2022
29,748
29,056
Total current assets
897,837
891,088
Property and equipment, net
56,832
57,172
Intangible assets, net
87,841
82,458
Goodwill
153,997
148,183
Deferred tax assets
121,207
84,185
Operating lease right-of-use assets
28,136
28,933
Other assets, net of allowance for credit
losses of $2 as of June 30, 2023 and December 31, 2022
36,870
37,356
Total assets
$
1,382,720
$
1,329,375
Liabilities, redeemable noncontrolling
interests and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
120,792
$
119,657
Accrued compensation
23,224
25,582
Deferred revenue
9,671
7,540
Operating lease liabilities
12,242
12,157
Total current liabilities
165,929
164,936
Deferred revenue
11,789
10,792
Convertible senior notes, net
491,940
490,370
Operating lease liabilities
25,452
27,380
Other liabilities
15,511
13,050
Total liabilities
710,621
706,528
Redeemable noncontrolling interests
27,868
23,988
Stockholders’ equity
Preferred stock, $0.001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of June 30, 2023 and December 31, 2022
—
—
Common stock, $0.01 par value, 300,000,000
shares authorized; 51,525,244 and 50,985,454 shares issued; and
49,858,244 and 49,452,709 shares outstanding as of June 30, 2023
and December 31, 2022, respectively
515
510
Additional paid-in capital
518,249
497,199
Treasury stock, at cost; 1,667,000 and
1,532,745 shares as of June 30, 2023 and December 31, 2022,
respectively
(90,719
)
(83,993
)
Accumulated other comprehensive income
828
—
Retained earnings
215,358
185,143
Total stockholders’ equity
644,231
598,859
Total liabilities, redeemable
noncontrolling interests and stockholders’ equity
$
1,382,720
$
1,329,375
ALARM.COM HOLDINGS,
INC.
Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
Six Months Ended June
30,
Cash flows from operating
activities:
2023
2022
Net income
$
29,818
$
19,731
Adjustments to reconcile net income to net
cash from operating activities:
Provision for credit losses on accounts
receivable
616
547
Reserve for product returns
2,498
1,715
Recovery of credit losses on notes
receivable
—
(78
)
Inventory write-down
1,181
—
Amortization on patents and tooling
637
701
Amortization and depreciation
15,533
15,536
Amortization of debt issuance costs
1,570
1,560
Amortization of operating leases
5,621
5,065
Deferred income taxes
(36,870
)
(22,734
)
Change in fair value of contingent
liability
27
—
Stock-based compensation
24,617
24,899
Gain on investment
—
(140
)
Changes in operating assets and
liabilities (net of business acquisitions):
Accounts receivable
(583
)
(4,970
)
Inventory
(523
)
(33,045
)
Other current and non-current assets
432
(2,485
)
Accounts payable, accrued expenses and
other current liabilities
(4,696
)
10,046
Deferred revenue
3,105
2,404
Operating lease liabilities
(6,796
)
(6,100
)
Other liabilities
(2,920
)
(394
)
Cash flows from operating activities
33,267
12,258
Cash flows used in investing
activities:
Business acquisition, net of cash
acquired
(9,696
)
—
Additions to property and equipment
(3,393
)
(26,302
)
Issuances of notes receivable
(300
)
(3,000
)
Receipt of payments on notes
receivable
28
32
Capitalized software development costs
(115
)
—
Purchase of investment in unconsolidated
entity
(200
)
—
Proceeds from sale of investment
—
140
Purchases of developed technology and
other assets
(5,915
)
—
Cash flows used in investing
activities
(19,591
)
(29,130
)
Cash flows used in financing
activities:
Payments of deferred consideration for
acquisitions
(1,655
)
—
Purchases of treasury stock, including
transaction costs
(6,726
)
(51,499
)
Purchases of redeemable noncontrolling
interest
(832
)
—
Payments of acquired debt
(389
)
—
Issuances of common stock from
equity-based plans
1,513
1,663
Cash flows used in financing
activities
(8,089
)
(49,836
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(124
)
—
Net increase / (decrease) in cash, cash
equivalents and restricted cash
5,463
(66,708
)
Cash, cash equivalents and restricted
cash at beginning of the period
622,879
710,621
Cash, cash equivalents and restricted
cash at end of the period
$
628,342
$
643,913
Reconciliation of cash, cash
equivalents and restricted cash:
Cash and cash equivalents
$
627,041
$
643,380
Restricted cash included in other current
assets and other assets
1,301
533
Total cash, cash equivalents and
restricted cash
$
628,342
$
643,913
ALARM.COM HOLDINGS,
INC.
Reconciliation of Non-GAAP
Measures
(in thousands)
(unaudited)
Three Months Ended June
30,
Six Months Ended
June 30,
2023
2022
2023
2022
Non-GAAP adjusted EBITDA:
Net income
$
15,611
$
10,828
$
29,818
$
19,731
Adjustments:
Interest expense, interest income and
certain activity within other (expense) / income, net
(6,590
)
(371
)
(10,904
)
257
Provision for income taxes
6,507
844
5,285
226
Amortization and depreciation expense
7,860
7,775
15,533
15,536
Stock-based compensation expense
11,931
12,789
24,617
24,899
Acquisition-related expense
(199
)
—
580
—
Litigation expense
1,253
5,270
2,019
6,405
Total adjustments
20,762
26,307
37,130
47,323
Non-GAAP adjusted EBITDA
$
36,373
$
37,135
$
66,948
$
67,054
Three Months Ended June
30,
Six Months Ended
June 30,
2023
2022
2023
2022
Non-GAAP adjusted net income:
Net income, as reported
$
15,611
$
10,828
$
29,818
$
19,731
Provision for income taxes
6,507
844
5,285
226
Income before income taxes
22,118
11,672
35,103
19,957
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(7,417
)
(1,156
)
(12,599
)
(1,312
)
Amortization expense
5,048
4,635
9,886
9,277
Amortization of debt issuance costs
786
780
1,570
1,560
Stock-based compensation expense
11,931
12,789
24,617
24,899
Acquisition-related expense
(199
)
—
580
—
Litigation expense
1,253
5,270
2,019
6,405
Non-GAAP adjusted income before income
taxes
33,520
33,990
61,176
60,786
Income taxes 1
(7,039
)
(7,138
)
(12,847
)
(12,765
)
Non-GAAP adjusted net income
$
26,481
$
26,852
$
48,329
$
48,021
1 Income taxes are calculated using a rate
of 21.0% for each of the three and six months ended June 30, 2023
and 2022. The 21.0% effective tax rate for each of the three and
six months ended June 30, 2023 and 2022 excludes the income tax
effect on the non-GAAP adjustments and reflects 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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Non-GAAP adjusted net income
attributable to common stockholders:
Net income attributable to common
stockholders, as reported
$
15,799
$
10,842
$
30,215
$
19,921
Provision for income taxes
6,507
844
5,285
226
Income attributable to common stockholders
before income taxes
22,306
11,686
35,500
20,147
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(7,417
)
(1,156
)
(12,599
)
(1,312
)
Amortization expense
5,048
4,635
9,886
9,277
Amortization of debt issuance costs
786
780
1,570
1,560
Stock-based compensation expense
11,931
12,789
24,617
24,899
Acquisition-related expense
(199
)
—
580
—
Litigation expense
1,253
5,270
2,019
6,405
Non-GAAP adjusted income attributable to
common stockholders before income taxes
33,708
34,004
61,573
60,976
Income taxes 1
(7,078
)
(7,141
)
(12,930
)
(12,805
)
Non-GAAP adjusted net income
attributable to common stockholders
$
26,630
$
26,863
$
48,643
$
48,171
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Non-GAAP adjusted net income
attributable to common stockholders per share:
Net income attributable to common
stockholders per share - basic, as reported
$
0.32
$
0.22
$
0.61
$
0.40
Provision for income taxes
0.13
0.02
0.11
—
Income attributable to common stockholders
before income taxes
0.45
0.24
0.72
0.40
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(0.15
)
(0.03
)
(0.25
)
(0.03
)
Amortization expense
0.10
0.09
0.20
0.19
Amortization of debt issuance costs
0.02
0.02
0.03
0.03
Stock-based compensation expense
0.24
0.26
0.50
0.50
Acquisition-related expense
—
—
0.01
—
Litigation expense
0.03
0.11
0.04
0.13
Non-GAAP adjusted income attributable to
common stockholders before income taxes
0.69
0.69
1.25
1.22
Income taxes 1
(0.15
)
(0.15
)
(0.27
)
(0.26
)
Non-GAAP adjusted net income
attributable to common stockholders per share - basic
$
0.54
$
0.54
$
0.98
$
0.96
Non-GAAP adjusted net income
attributable to common stockholders per share - diluted
$
0.49
$
0.49
$
0.89
$
0.87
Weighted average common shares
outstanding:
Basic, as reported
49,859,615
49,931,689
49,723,012
50,068,176
Diluted, as reported
54,446,275
54,757,020
54,423,047
55,054,970
1 Income taxes are calculated using a rate
of 21.0% for each of the three and six months ended June 30, 2023
and 2022. The 21.0% effective tax rate for each of the three and
six months ended June 30, 2023 and 2022 excludes the income tax
effect on the non-GAAP adjustments and reflects the estimated
long-term corporate tax rate.
ALARM.COM HOLDINGS,
INC.
Reconciliation of Non-GAAP
Measures - continued
(in thousands)
(unaudited)
Three Months Ended June
30,
Six Months Ended
June 30,
2023
2022
2023
2022
Non-GAAP free cash flow:
Cash flows from operating activities
$
36,788
$
26,219
$
33,267
$
12,258
Additions to property and equipment
(995
)
(24,131
)
(3,393
)
(26,302
)
Non-GAAP free cash flow
$
35,793
$
2,088
$
29,874
$
(14,044
)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Non-GAAP adjusted SaaS and license
revenue:
SaaS and license revenue
$
140,432
$
129,475
$
275,826
$
252,700
License revenue from Vivint
—
(5,506
)
—
(10,866
)
Non-GAAP adjusted SaaS and license
revenue
$
140,432
$
123,969
$
275,826
$
241,834
Second Quarter 2023 as Compared to Second Quarter 2022:
Three Months Ended June
30, 2023
Six Months Ended June
30, 2023
SaaS and license revenue growth rate
8.5
%
9.2
%
Adjustment to SaaS and license revenue
growth rate for Vivint license revenue
4.8
4.9
Non-GAAP adjusted SaaS and license revenue
growth rate
13.3
%
14.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809324033/en/
Investor & Media Relations: Matthew Zartman Alarm.com
ir@alarm.com
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