-- Third quarter SaaS and license revenue
increased to $145.0 million, compared to $133.1 million for
the third quarter of 2022 -- -- Third quarter GAAP net
income attributable to common stockholders increased to $19.5
million, compared to $18.3 million for the third quarter of 2022
-- -- Third quarter non-GAAP adjusted EBITDA increased to
$41.4 million, compared to $40.8 million for the third quarter of
2022 --
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, 2023. Alarm.com
also provided its financial outlook for SaaS and license revenue
for the fourth quarter of 2023 and increased its SaaS and license
revenue, non-GAAP adjusted EBITDA and non-GAAP adjusted net income
attributable to common stockholders guidance for the full year of
2023.
“We are pleased to report solid results in the quarter and
continued contributions from our various growth initiatives,” said
Steve Trundle, CEO of Alarm.com. “Our continued innovation in
cloud-based safety and security solutions will help drive growth
for our service providers and our business in global markets in the
years ahead.”
Third Quarter 2023 Financial Results as Compared to Third Quarter
2022
- SaaS and license revenue increased 8.9% to $145.0 million,
compared to $133.1 million.
- Total revenue increased 2.6% to $221.9 million, compared to
$216.1 million.
- GAAP net income attributable to common stockholders increased
to $19.5 million, or $0.37 per diluted share, compared to $18.3
million, or $0.35 per diluted share.
- Non-GAAP adjusted EBITDA(*) increased to $41.4 million,
compared to $40.8 million.
- Non-GAAP adjusted net income attributable to common
stockholders(*) increased to $30.6 million, or $0.56 per diluted
share, compared to $30.1 million or $0.55 per diluted share.
Balance Sheet and Cash
Flow
- Total cash and cash equivalents increased to $680.0 million as
of September 30, 2023, compared to $622.2 million as of December
31, 2022. During the nine months ended September 30, 2023, we
repurchased 239,540 shares of Alarm.com common stock at an average
price of $53.66, for $12.9 million.
- For the three and nine months ended September 30, 2023, cash
flows from operations was $62.8 million and $96.1 million,
respectively, compared to $10.2 million and $22.5 million for the
same periods in the prior year. For the three and nine months ended
September 30, 2023, non-GAAP free cash flow(*) was $60.9 million
and $90.7 million, respectively, compared to $8.4 million and
$(5.6) million for the same periods in the prior year.
(*) Reconciliations of the non-GAAP measures are set forth at
the end of this press release.
Recent Business
Highlights
- Significantly Enhanced Mobile App Brings Greater Focus on
Key Capabilities: Alarm.com’s recently upgraded mobile app
offers a more immersive and intuitive user experience while also
streamlining access to high-use capabilities such as live video
feeds and video clips. An upgraded activity feed allows subscribers
to scroll through a chronological view of activity at their
property that includes images from recorded video clips. Alarm.com
developed the new enhancements to give subscribers frictionless
access to high-value information and key commands that can drive
system engagement.
- Utilities Leveraging EnergyHub During Hot 2023 Summer:
EnergyHub Virtual Power Plants (VPPs) enabled peak load reduction
to help maintain grid stability across North America this summer.
EnergyHub’s utility clients called 38% more demand response events
compared to 2022 in order to shift 68 Gigawatt hours of energy
usage out of peak demand times.
- Launched In-App Property Panic: Alarm.com's video-only
subscribers can now initiate a signal to a central station in an
emergency directly from the Alarm.com mobile app to summon help to
their property. Video clips associated with an incident can also be
immediately shared with central station operators via Alarm.com’s
Visual Verification platform.
Financial Outlook
Alarm.com is providing its outlook for SaaS and license revenue
for the fourth quarter of 2023 and increasing its SaaS and license
revenue, non-GAAP adjusted EBITDA and non-GAAP adjusted net income
attributable to common stockholders guidance for the full year of
2023 based upon current management expectations.
For the fourth quarter of 2023:
- SaaS and license revenue is expected to be in the range of
$146.0 million to $146.2 million.
For the full year of 2023:
- SaaS and license revenue is expected to be in the range of
$566.9 million to $567.1 million.
- Total revenue is expected to be in the range of $878.9 million
to $881.1 million, which includes anticipated hardware and other
revenue in the range of $312.0 million to $314.0 million.
- Non-GAAP adjusted EBITDA is expected to be in the range of
$143.0 million to $144.0 million.
- Non-GAAP adjusted net income attributable to common
stockholders is expected to be in the range of $103.5 million to
$105.0 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 $1.90 to $1.92 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 third
quarter 2023 financial results and its outlook for the fourth
quarter and full year of 2023. A live audio webcast is scheduled to
begin at 4:30 p.m. ET on November 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://edge.media-server.com/mmc/p/xsuvnt4d/. 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
fourth 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 and the war
between Israel and Hamas, 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
August 9, 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 September 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue:
SaaS and license revenue
$
145,027
$
133,126
$
420,853
$
385,826
Hardware and other revenue
76,827
83,012
234,592
248,594
Total revenue
221,854
216,138
655,445
634,420
Cost of revenue(1):
Cost of SaaS and license revenue
21,917
18,437
63,076
54,019
Cost of hardware and other revenue
59,488
67,149
180,868
208,990
Total cost of revenue
81,405
85,586
243,944
263,009
Operating expenses:
Sales and marketing
23,861
23,057
74,278
69,182
General and administrative
31,455
28,011
88,753
81,314
Research and development
61,014
55,581
183,840
161,227
Amortization and depreciation
7,948
7,587
23,481
23,123
Total operating expenses
124,278
114,236
370,352
334,846
Operating income
16,171
16,316
41,149
36,565
Interest expense
(906
)
(787
)
(2,601
)
(2,356
)
Interest income
8,493
2,903
21,092
4,062
Other (expense) / income, net
(435
)
(76
)
(1,214
)
42
Income before income taxes
23,323
18,356
58,426
38,313
Provision for income taxes
3,972
246
9,257
472
Net income
19,351
18,110
49,169
37,841
Net loss attributable to redeemable
noncontrolling interests
173
222
570
412
Net income attributable to common
stockholders
$
19,524
$
18,332
$
49,739
$
38,253
Per share information attributable to
common stockholders:
Net income per share:
Basic
$
0.39
$
0.37
$
1.00
$
0.77
Diluted
$
0.37
$
0.35
$
0.94
$
0.73
Weighted average common shares
outstanding:
Basic
49,917,533
49,791,465
49,782,571
49,974,925
Diluted
54,778,793
54,832,528
54,588,826
54,988,020
______________________________
(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,
2023
2022
2023
2022
Cost of hardware and other revenue
$
3
$
—
$
3
$
—
Sales and marketing
854
983
2,778
3,481
General and administrative
3,260
3,953
9,873
11,135
Research and development
7,689
8,218
23,769
23,437
Total stock-based compensation expense
$
11,806
$
13,154
$
36,423
$
38,053
ALARM.COM HOLDINGS,
INC.
Consolidated Balance
Sheets
(in thousands, except share
and per share data)
(unaudited)
September 30,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
679,969
$
622,165
Accounts receivable, net of allowance for
credit losses of $3,856 and $2,835, and net of allowance for
product returns of $2,175 and $1,551 as of September 30, 2023 and
December 31, 2022, respectively
110,267
124,283
Inventory
114,248
115,584
Other current assets, net of allowance for
credit losses of $0 as of September 30, 2023 and December 31,
2022
26,685
29,056
Total current assets
931,169
891,088
Property and equipment, net
55,862
57,172
Intangible assets, net
82,498
82,458
Goodwill
153,847
148,183
Deferred tax assets
126,800
84,185
Operating lease right-of-use assets
26,840
28,933
Other assets, net of allowance for credit
losses of $2 as of September 30, 2023 and December 31, 2022
34,481
37,356
Total assets
$
1,411,497
$
1,329,375
Liabilities, redeemable noncontrolling
interests and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
122,552
$
119,657
Accrued compensation
26,491
25,582
Deferred revenue
10,336
7,540
Operating lease liabilities
12,538
12,157
Total current liabilities
171,917
164,936
Deferred revenue
12,503
10,792
Convertible senior notes, net
492,727
490,370
Operating lease liabilities
23,245
27,380
Other liabilities
13,065
13,050
Total liabilities
713,457
706,528
Redeemable noncontrolling interests
30,342
23,988
Stockholders’ equity
Preferred stock, $0.001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of September 30, 2023 and December 31, 2022
—
—
Common stock, $0.01 par value, 300,000,000
shares authorized; 51,687,998 and 50,985,454 shares issued; and
49,915,713 and 49,452,709 shares outstanding as of September 30,
2023 and December 31, 2022, respectively
517
510
Additional paid-in capital
529,070
497,199
Treasury stock, at cost; 1,772,285 and
1,532,745 shares as of September 30, 2023 and December 31, 2022,
respectively
(96,847
)
(83,993
)
Accumulated other comprehensive income
76
—
Retained earnings
234,882
185,143
Total stockholders’ equity
667,698
598,859
Total liabilities, redeemable
noncontrolling interests and stockholders’ equity
$
1,411,497
$
1,329,375
ALARM.COM HOLDINGS,
INC.
Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
September 30,
Cash flows from operating
activities:
2023
2022
Net income
$
49,169
$
37,841
Adjustments to reconcile net income to net
cash from operating activities:
Provision for credit losses on accounts
receivable
1,422
1,606
Reserve for product returns
2,979
3,721
Recovery of credit losses on notes
receivable
—
(77
)
Inventory write-down
1,181
—
Amortization on patents and tooling
965
1,037
Amortization and depreciation
23,481
23,123
Amortization of debt issuance costs
2,357
2,342
Amortization of operating leases
8,540
7,767
Deferred income taxes
(42,612
)
(42,566
)
Change in fair value of contingent
liability
23
—
Stock-based compensation
36,423
38,053
Gain on investment
—
(140
)
Changes in operating assets and
liabilities (net of business acquisitions):
Accounts receivable
11,048
(18,321
)
Inventory
2,750
(37,043
)
Other current and non-current assets
6,423
(7,443
)
Accounts payable, accrued expenses and
other current liabilities
371
17,803
Deferred revenue
4,507
3,531
Operating lease liabilities
(10,329
)
(9,390
)
Other liabilities
(2,605
)
611
Cash flows from operating activities
96,093
22,455
Cash flows used in investing
activities:
Business acquisition, net of cash
acquired
(9,696
)
(31,730
)
Additions to property and equipment
(5,349
)
(28,084
)
Issuances of notes receivable
(300
)
(3,000
)
Receipt of payments on notes
receivable
40
49
Capitalized software development costs
(315
)
—
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
(21,735
)
(62,625
)
Cash flows used in financing
activities:
Payments of deferred consideration for
acquisitions
(1,672
)
—
Purchases of treasury stock, including
transaction costs
(12,854
)
(51,866
)
Purchases of redeemable noncontrolling
interest
(832
)
—
Payments of acquired debt
(3,016
)
—
Issuances of common stock from
equity-based plans
3,129
3,391
Cash flows used in financing
activities
(15,245
)
(48,475
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(57
)
—
Net increase / (decrease) in cash, cash
equivalents and restricted cash
59,056
(88,645
)
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
$
681,935
$
621,976
Reconciliation of cash, cash
equivalents and restricted cash:
Cash and cash equivalents
$
679,969
$
621,347
Restricted cash included in other current
assets and other assets
1,966
629
Total cash, cash equivalents and
restricted cash
$
681,935
$
621,976
ALARM.COM HOLDINGS,
INC.
Reconciliation of Non-GAAP
Measures
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Non-GAAP adjusted EBITDA:
Net income
$
19,351
$
18,110
$
49,169
$
37,841
Adjustments:
Interest expense, interest income and
certain activity within other (expense) / income, net
(7,587
)
(2,116
)
(18,491
)
(1,859
)
Provision for income taxes
3,972
246
9,257
472
Amortization and depreciation expense
7,948
7,587
23,481
23,123
Stock-based compensation expense
11,806
13,154
36,423
38,053
Acquisition-related expense
(4
)
728
576
728
Litigation expense
5,949
3,131
7,968
9,536
Total adjustments
22,084
22,730
59,214
70,053
Non-GAAP adjusted EBITDA
$
41,435
$
40,840
$
108,383
$
107,894
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Non-GAAP adjusted net income:
Net income, as reported
$
19,351
$
18,110
$
49,169
$
37,841
Provision for income taxes
3,972
246
9,257
472
Income before income taxes
23,323
18,356
58,426
38,313
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(8,493
)
(2,903
)
(21,092
)
(4,215
)
Amortization expense
5,190
4,647
15,076
13,924
Amortization of debt issuance costs
787
782
2,357
2,342
Stock-based compensation expense
11,806
13,154
36,423
38,053
Acquisition-related expense
(4
)
728
576
728
Litigation expense
5,949
3,131
7,968
9,536
Non-GAAP adjusted income before income
taxes
38,558
37,895
99,734
98,681
Income taxes 1
(8,097
)
(7,958
)
(20,944
)
(20,723
)
Non-GAAP adjusted net income
$
30,461
$
29,937
$
78,790
$
77,958
1 Income taxes are calculated using a rate
of 21.0% for each of the three and nine months ended September 30,
2023 and 2022. The 21.0% effective tax rate for each of the three
and nine months ended September 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Non-GAAP adjusted net income
attributable to common stockholders:
Net income attributable to common
stockholders, as reported
$
19,524
$
18,332
$
49,739
$
38,253
Provision for income taxes
3,972
246
9,257
472
Income attributable to common stockholders
before income taxes
23,496
18,578
58,996
38,725
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(8,493
)
(2,903
)
(21,092
)
(4,215
)
Amortization expense
5,190
4,647
15,076
13,924
Amortization of debt issuance costs
787
782
2,357
2,342
Stock-based compensation expense
11,806
13,154
36,423
38,053
Acquisition-related expense
(4
)
728
576
728
Litigation expense
5,949
3,131
7,968
9,536
Non-GAAP adjusted income attributable to
common stockholders before income taxes
38,731
38,117
100,304
99,093
Income taxes 1
(8,134
)
(8,005
)
(21,064
)
(20,810
)
Non-GAAP adjusted net income
attributable to common stockholders
$
30,597
$
30,112
$
79,240
$
78,283
Three Months Ended
September 30,
Nine Months Ended
September 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
$
0.39
$
0.37
$
1.00
$
0.77
Provision for income taxes
0.08
—
0.19
0.01
Income attributable to common stockholders
before income taxes
0.47
0.37
1.19
0.78
Adjustments:
Less: interest income and certain activity
within other (expense) / income, net
(0.17
)
(0.06
)
(0.42
)
(0.08
)
Amortization expense
0.10
0.09
0.30
0.28
Amortization of debt issuance costs
0.02
0.02
0.05
0.05
Stock-based compensation expense
0.23
0.27
0.73
0.76
Acquisition-related expense
—
0.01
0.01
0.01
Litigation expense
0.12
0.06
0.16
0.19
Non-GAAP adjusted income attributable to
common stockholders before income taxes
0.77
0.76
2.02
1.99
Income taxes 1
(0.16
)
(0.16
)
(0.43
)
(0.42
)
Non-GAAP adjusted net income
attributable to common stockholders per share - basic
$
0.61
$
0.60
$
1.59
$
1.57
Non-GAAP adjusted net income
attributable to common stockholders per share - diluted
$
0.56
$
0.55
$
1.45
$
1.42
Weighted average common shares
outstanding:
Basic, as reported
49,917,533
49,791,465
49,782,571
49,974,925
Diluted, as reported
54,778,793
54,832,528
54,588,826
54,988,020
1 Income taxes are calculated using a rate
of 21.0% for each of the three and nine months ended September 30,
2023 and 2022. The 21.0% effective tax rate for each of the three
and nine months ended September 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
September 30,
Nine Months Ended September
30,
2023
2022
2023
2022
Non-GAAP free cash flow:
Cash flows from operating activities
$
62,826
$
10,197
$
96,093
$
22,455
Additions to property and equipment
(1,956
)
(1,782
)
(5,349
)
(28,084
)
Non-GAAP free cash flow
$
60,870
$
8,415
$
90,744
$
(5,629
)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Non-GAAP adjusted SaaS and license
revenue:
SaaS and license revenue
$
145,027
$
133,126
$
420,853
$
385,826
License revenue from Vivint
—
(5,765
)
—
(16,631
)
Non-GAAP adjusted SaaS and license
revenue
$
145,027
$
127,361
$
420,853
$
369,195
Third Quarter 2023 as Compared to Third Quarter 2022:
Three Months Ended
September 30, 2023
Nine Months Ended
September 30, 2023
SaaS and license revenue growth rate
8.9
%
9.1
%
Adjustment to SaaS and license revenue
growth rate for Vivint license revenue
5.0
4.9
Non-GAAP adjusted SaaS and license revenue
growth rate
13.9
%
14.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109067064/en/
Investor & Media Relations: Matthew Zartman Alarm.com
ir@alarm.com
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