25.1% Revenue Growth Year Over Year
More than 100% Paid Subscriber Growth Year Over Year
SAN JOSE, Calif.--(BUSINESS WIRE)--
Arlo Technologies, Inc. (NYSE: ARLO) today reported financial results
for the third quarter ended September 30, 2018.
Third Quarter 2018 Financial Highlights
(1)
-
Record revenue of $131.2 million, an increase of 25.1% year over year.
-
GAAP gross margin of 22.7%; non-GAAP gross margin of 23.1%.
-
GAAP net loss per diluted share of $0.19, non-GAAP net loss per
diluted share of $0.05.
“The team at Arlo delivered a strong first quarter as a public company,
reporting a record $131.2 million in revenue, for growth of 25.1%
year-over-year,” said Matthew McRae, Chief Executive Officer of Arlo
Technologies. “Arlo Pro 2, the latest generation of our
battery-operated, weather-resistant, Wi-Fi cameras, is leading our
growth, and we are excited to announce meaningful advancements to our
Smart subscription service today. Our differentiated products are
enabling us to rapidly expand our market footprint. We grew our
registered users by approximately 300,000 in the quarter, up 88%
year-over-year, and grew our paid subscribers by more than 100% year
over year. After our successful IPO, we are well positioned to invest in
product innovation and our go to market strategy to further strengthen
our leadership position in the market.”
|
|
Three months ended
|
|
|
September 30, 2018
|
|
July 1, 2018
(2)
|
|
October 1, 2017
(2)
|
|
|
(in thousands, except percentage and per share data)
|
Revenue
|
|
$
|
131,174
|
|
|
$
|
110,948
|
|
|
$
|
104,887
|
|
GAAP Gross Margin
|
|
22.7
|
%
|
|
25.5
|
%
|
|
27.0
|
%
|
Non-GAAP Gross Margin
|
|
23.1
|
%
|
|
26.2
|
%
|
|
27.6
|
%
|
GAAP Net Income (Loss) per Diluted Share
|
|
$
|
(0.19
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
0.10
|
|
Non-GAAP Net Income (Loss) per Diluted Share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.13
|
|
_________________________
|
(1) Reconciliation of financial measures computed on a GAAP
basis to financial measures computed on a non-GAAP basis are provided at
the end of this press release.
(2) Second quarter of 2018 and third quarter of 2017 are
based on carve-out financials whereas third quarter of 2018 are based on
standalone financials. Further detail regarding carve-out financials is
contained in our SEC filings, including our previously filed Form S-1
and related public offering prospectus, Standalone financials represents
our actual results for the period as a standalone public company.
Business Highlights
-
Record revenue of $131.2 million for Q3’18 led by sales of Arlo Pro 2
-
105% year over year paid subscriber growth
-
88% year over year registered user growth
-
Launched new wire-free, smart connected audio doorbell that pairs with
Arlo wire-free cameras
-
Announced all-new AI-powered detection features added to Arlo Smart
subscription service
Fourth Quarter 2018 Business Outlook
(1)
-
Revenues of $140 million to $155 million
-
GAAP gross margin between 12.4% and 14.4%, and non-GAAP gross margin
between 13.0% and 15.0%
-
GAAP operating margin between (18.1)% and (15.1)%, and non-GAAP
operating margin between (13.0)% to (10.0)%
-
GAAP and non-GAAP tax expense approximately $0.3 million
A reconciliation of our business outlook on a GAAP and non-GAAP basis is
provided in the following table:
|
|
Three months ending December 31, 2018
|
|
|
Gross Margin Rate
|
|
Operating Margin Rate
|
|
Tax Expense (in thousands)
|
GAAP
|
|
12.4% - 14.4%
|
|
(18.1)% - (15.1)%
|
|
$300
|
Estimated adjustments for (1):
|
|
|
|
|
|
|
Separation expense
|
|
__
|
|
(2.1)%
|
|
__
|
Stock-based compensation expense
|
|
0.3%
|
|
(2.7)%
|
|
__
|
Amortization of intangibles
|
|
0.3%
|
|
(0.3)%
|
|
__
|
Tax effects of non-GAAP adjustments
|
|
__
|
|
__
|
|
__
|
Non-GAAP
|
|
13.0% - 15.0%
|
|
(13.0)% - (10.0)%
|
|
$300
|
_________________________
|
(1) Business outlook does not include estimates for any
currently unknown income and expense items which, by their nature, could
arise late in a quarter, including: restructuring and other charges;
litigation reserves, net; acquisition-related charges; impairment
charges; discrete tax benefits or detriments relating to tax windfalls
or shortfalls from equity awards; and any additional impacts relating to
the implementation of U.S. tax reform. New material income and expense
items such as these could have a significant effect on our guidance and
future results.
Investor Conference Call / Webcast Details
Arlo will review the third quarter of 2018 results and discuss
management’s expectations for the fourth quarter of 2018 today,
Thursday, October 25, 2018 at 4:30 p.m. ET (1:30 p.m. PT). The toll free
dial-in number for the live audio call is (866) 393-4306. The
international dial-in number for the live audio call is (734) 385-2616.
The conference ID for the call is 3077029. A live webcast of the
conference call will be available on Arlo’s Investor Relations website
at http://investor.arlo.com.
A replay of the call will be available via the web at http://investor.arlo.com.
About Arlo Technologies, Inc.
Arlo (NYSE: ARLO) is the award-winning, industry leader that is
transforming the way people experience the connected lifestyle. Arlo’s
deep expertise in product design, wireless connectivity, cloud
infrastructure and cutting-edge AI capabilities focuses on delivering a
seamless, smart home experience for Arlo users that is easy to setup and
interact with every day. Arlo’s cloud-based platform provides users with
visibility, insight and a powerful means to help protect and connect in
real-time with the people and things that matter most, from any location
with a Wi-Fi or a cellular connection. To date, Arlo has launched
several categories of award-winning smart connected devices, including
wire-free smart Wi-Fi and LTE-enabled cameras, advanced baby monitors
and smart security lights.
© 2018 Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks
and/or registered trademarks of Arlo Technologies, Inc. and/or certain
of its affiliates in the United States and/or other countries. Other
brand and product names are for identification purposes only and may be
trademarks or registered trademarks of their respective holder(s). The
information contained herein is subject to change without notice. Arlo
shall not be liable for technical or editorial errors or omissions
contained herein. All rights reserved.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995:
This press release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,”
“estimate,” “project,” “outlook,” “forecast” or other similar words are
used to identify such forward-looking statements. However, the absence
of these words does not mean that the statements are not
forward-looking. The forward-looking statements represent Arlo
Technologies, Inc.’s expectations or beliefs concerning future events
based on information available at the time such statements were made and
include statements regarding: the potential separation from NETGEAR;
Arlo’s future operating performance and financial condition, expected
revenue, GAAP and non-GAAP gross margins, operating margins and tax
expense; expectations regarding market expansion and future growth; and
plans to invest in product innovation. These statements are based on
management's current expectations and are subject to certain risks and
uncertainties, including the following: future demand for the Company's
products may be lower than anticipated; consumers may choose not to
adopt the Company's new product offerings or adopt competing products;
product performance may be adversely affected by real world operating
conditions; the Company may be unsuccessful or experience delays in
manufacturing and distributing its new and existing products;
telecommunications service providers may choose to slow their deployment
of the Company's products or utilize competing products; the Company may
be unable to collect receivables as they become due; the Company may
fail to manage costs, including the cost of developing new products and
manufacturing and distribution of its existing offerings; the Company
may fail to successfully continue to effect operating expense savings;
changes in the level of Arlo's cash resources and the Company's planned
usage of such resources; changes in the Company's stock price and
developments in the business that could increase the Company's cash
needs; fluctuations in foreign exchange rates; and the actions and
financial health of the Company's customers. Further, certain
forward-looking statements are based on assumptions as to future events
that may not prove to be accurate. Therefore, actual outcomes and
results may differ materially from what is expressed or forecast in such
forward-looking statements. Further information on potential risk
factors that could affect Arlo and its business are detailed in the
Company's periodic filings with the Securities and Exchange Commission,
including, but not limited to, those risks and uncertainties listed in
the section entitled “Part II - Item 1A. Risk Factors,” in the Company's
quarterly report on Form 10-Q for the fiscal quarter ended July 1, 2018,
filed with the Securities and Exchange Commission on August 27, 2018.
Given these circumstances, you should not place undue reliance on these
forward-looking statements. Arlo undertakes no obligation to release
publicly any revisions to any forward-looking statements contained
herein to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Non-GAAP Financial Information:
To supplement our unaudited selected financial data presented on a
basis consistent with Generally Accepted Accounting Principles (“GAAP”),
we disclose certain non-GAAP financial measures that exclude certain
charges, including non-GAAP gross profit, non-GAAP gross margin,
non-GAAP research and development, non-GAAP sales and marketing,
non-GAAP general and administrative, non-GAAP total operating expenses,
non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP
other income (expense), net, non-GAAP net income(loss) and non-GAAP net
income (loss) per diluted share. These supplemental measures exclude
adjustments for separation expense, stock-based compensation expense,
amortization of intangibles restructuring and other charges, litigation
reserves, and the related tax effects. These non-GAAP measures are not
in accordance with or an alternative for GAAP, and may be different from
similarly-titled non-GAAP measures used by other companies. We believe
that these non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with our results of operations as
determined in accordance with GAAP and that these measures should only
be used to evaluate our results of operations in conjunction with the
corresponding GAAP measures. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the most directly comparable GAAP measures. We compensate
for the limitations of non-GAAP financial measures by relying upon GAAP
results to gain a complete picture of our performance.
In calculating non-GAAP financial measures, we exclude certain items
to facilitate a review of the comparability of our operating performance
on a period-to-period basis because such items are not, in our view,
related to our ongoing operational performance. We use non-GAAP measures
to evaluate the operating performance of our business, for comparison
with forecasts and strategic plans, and for benchmarking performance
externally against competitors. In addition, management’s incentive
compensation is determined using certain non-GAAP measures. Since we
find these measures to be useful, we believe that investors benefit from
seeing results “through the eyes” of management in addition to seeing
GAAP results. We believe that these non-GAAP measures, when read in
conjunction with our GAAP measures, provide useful information to
investors by offering:
-
the ability to make more meaningful period-to-period comparisons of
our on-going operating results;
-
the ability to better identify trends in our underlying business
and perform related trend analyses;
-
a better understanding of how management plans and measures our
underlying business; and
-
an easier way to compare our operating results against analyst
financial models and operating results of competitors that supplement
their GAAP results with non-GAAP financial measures.
The following are explanations of the adjustments that we incorporate
into non-GAAP measures, as well as the reasons for excluding them in the
reconciliations of these non-GAAP financial measures:
Separation expense consists of expenses that are related to the
planned separation of our business from NETGEAR. These consist primarily
of third-party consulting fees, legal fees, IT costs, employee bonuses
for services related to the separation, and other one-time expenses
incurred to complete the separation. We consider our operating results
without these charges when evaluating our ongoing performance and
forecasting our earnings trends, and therefore exclude such charges when
presenting non-GAAP financial measures. We believe that the assessment
of our operations excluding these costs is relevant to our assessment of
internal operations and comparisons to the performance of our
competitors.
Stock-based compensation expense consists of non-cash charges for the
estimated fair value of stock options, restricted stock units and shares
under the employee stock purchase plan granted to employees. We believe
that the exclusion of these charges provides for more accurate
comparisons of our operating results to peer companies due to the
varying available valuation methodologies, subjective assumptions and
the variety of award types. In addition, we believe it is useful to
investors to understand the specific impact stock-based compensation
expense has on our operating results.
Amortization of intangibles consists primarily of non-cash charges
that can be impacted by, among other things, the timing and magnitude of
acquisitions. We consider our operating results without these charges
when evaluating our ongoing performance and forecasting our earnings
trends, and therefore exclude such charges when presenting non-GAAP
financial measures. We believe that the assessment of our operations
excluding these costs is relevant to an assessment of our internal
operations and comparisons to our prior and future periods and to the
performance of our competitors.
Other items are the result of either unique or unplanned events,
including, when applicable: restructuring and other charges and
litigation reserves, net. It is difficult to predict the occurrence or
estimate the amount or timing of these items in advance. Although these
events are reflected in our GAAP financial statements, these unique
transactions may limit the comparability of our on-going operations with
prior and future periods. The amounts result from events that often
arise from unforeseen circumstances, which often occur outside of the
ordinary course of continuing operations. Therefore, the amounts do not
accurately reflect the underlying performance of our continuing business
operations for the period in which they are incurred.
Tax effects consist of the various above adjustments that we
incorporate into non-GAAP measures in order to provide a more meaningful
measure on non-GAAP net income. We also believe providing financial
information with and without the income tax effects relating to our
non-GAAP financial measures provides our management and users of the
financial statements with better clarity regarding the on-going
performance of our business.
Source: Arlo-F
|
ARLO TECHNOLOGIES, INC.
|
|
UNAUDITED CONDENSED COMBINED AND CONSOLIDATED BALANCE SHEETS
|
|
|
|
As of
|
|
|
September 30,
|
|
December 31,
|
|
|
2018
|
|
2017
|
|
|
(in thousands)
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
148,073
|
|
|
$
|
108
|
|
Short-term investments
|
|
39,773
|
|
|
—
|
|
Accounts receivable, net
|
|
117,119
|
|
|
157,680
|
|
Receivables from NETGEAR
|
|
27,588
|
|
|
—
|
|
Inventories
|
|
132,479
|
|
|
82,952
|
|
Prepaid expenses and other current assets
|
|
9,529
|
|
|
3,018
|
|
Total current assets
|
|
474,561
|
|
|
243,758
|
|
Property and equipment, net
|
|
39,610
|
|
|
3,883
|
|
Intangibles, net
|
|
3,204
|
|
|
4,348
|
|
Goodwill
|
|
15,638
|
|
|
15,638
|
|
Other non-current assets
|
|
10,198
|
|
|
2,193
|
|
Total assets
|
|
$
|
543,211
|
|
|
$
|
269,820
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
49,947
|
|
|
$
|
20,711
|
|
Payables to NETGEAR
|
|
15,204
|
|
|
—
|
|
Deferred revenue
|
|
26,514
|
|
|
34,072
|
|
Accrued liabilities
|
|
104,519
|
|
|
76,097
|
|
Income tax payable
|
|
199
|
|
|
—
|
|
Total current liabilities
|
|
196,383
|
|
|
130,880
|
|
Non-current deferred revenue
|
|
19,392
|
|
|
13,332
|
|
Non-current financing lease obligation
|
|
20,639
|
|
|
—
|
|
Non-current income taxes payable
|
|
22
|
|
|
189
|
|
Other non-current liabilities
|
|
1,066
|
|
|
—
|
|
Total liabilities
|
|
237,502
|
|
|
144,401
|
|
Stockholders’ Equity:
|
|
|
|
|
Common stock
|
|
74
|
|
|
—
|
|
Additional paid-in capital
|
|
312,397
|
|
|
—
|
|
Accumulated other comprehensive income
|
|
14
|
|
|
—
|
|
Net parent investment
|
|
—
|
|
|
125,419
|
|
Accumulated deficit
|
|
(6,776
|
)
|
|
—
|
|
Total stockholders’ equity
|
|
305,709
|
|
|
125,419
|
|
Total liabilities and stockholders’ equity
|
|
$
|
543,211
|
|
|
$
|
269,820
|
|
|
ARLO TECHNOLOGIES, INC.
|
|
UNAUDITED CONDENSED COMBINED AND CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
July 1,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except percentage and per share data)
|
Revenue
|
|
$
|
131,174
|
|
|
$
|
110,948
|
|
|
$
|
104,887
|
|
|
$
|
342,760
|
|
|
$
|
245,884
|
|
Cost of revenue
|
|
101,427
|
|
|
82,654
|
|
|
76,535
|
|
|
255,666
|
|
|
184,467
|
|
Gross profit
|
|
29,747
|
|
|
28,294
|
|
|
28,352
|
|
|
87,094
|
|
|
61,417
|
|
Gross margin
|
|
22.7
|
%
|
|
25.5
|
%
|
|
27.0
|
%
|
|
25.4
|
%
|
|
25.0
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
16,100
|
|
|
13,804
|
|
|
8,289
|
|
|
41,929
|
|
|
24,886
|
|
Sales and marketing
|
|
12,843
|
|
|
13,068
|
|
|
9,983
|
|
|
37,123
|
|
|
23,067
|
|
General and administrative
|
|
8,357
|
|
|
6,318
|
|
|
4,337
|
|
|
19,553
|
|
|
10,426
|
|
Separation expense
|
|
5,823
|
|
|
11,269
|
|
|
—
|
|
|
23,649
|
|
|
—
|
|
Total operating expenses
|
|
43,123
|
|
|
44,459
|
|
|
22,609
|
|
|
122,254
|
|
|
58,379
|
|
Income (loss) from operations
|
|
(13,376
|
)
|
|
(16,165
|
)
|
|
5,743
|
|
|
(35,160
|
)
|
|
3,038
|
|
Operating margin
|
|
(10.2
|
)%
|
|
(14.6
|
)%
|
|
5.5
|
%
|
|
(10.3
|
)%
|
|
1.2
|
%
|
Interest income
|
|
503
|
|
|
—
|
|
|
—
|
|
|
503
|
|
|
—
|
|
Other income (expense), net
|
|
(129
|
)
|
|
(1,369
|
)
|
|
716
|
|
|
(923
|
)
|
|
1,649
|
|
Income (loss) before income taxes
|
|
(13,002
|
)
|
|
(17,534
|
)
|
|
6,459
|
|
|
(35,580
|
)
|
|
4,687
|
|
Provision for income taxes
|
|
223
|
|
|
288
|
|
|
445
|
|
|
830
|
|
|
801
|
|
Net income (loss)
|
|
$
|
(13,225
|
)
|
|
$
|
(17,822
|
)
|
|
$
|
6,014
|
|
|
$
|
(36,410
|
)
|
|
$
|
3,886
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.19
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.06
|
|
Diluted
|
|
$
|
(0.19
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
69,600
|
|
|
62,500
|
|
|
62,500
|
|
|
64,867
|
|
|
62,500
|
|
Diluted
|
|
69,600
|
|
|
62,500
|
|
|
62,500
|
|
|
64,867
|
|
|
62,500
|
|
|
ARLO TECHNOLOGIES, INC.
|
|
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
|
|
STATEMENT OF OPERATIONS DATA:
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
July 1,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except percentage data)
|
GAAP gross profit
|
|
$
|
29,747
|
|
|
$
|
28,294
|
|
|
$
|
28,352
|
|
|
$
|
87,094
|
|
|
$
|
61,417
|
|
GAAP gross margin
|
|
22.7
|
%
|
|
25.5
|
%
|
|
27.0
|
%
|
|
25.4
|
%
|
|
25.0
|
%
|
Stock-based compensation expense
|
|
236
|
|
|
347
|
|
|
194
|
|
|
919
|
|
|
493
|
|
Amortization of intangibles
|
|
$
|
381
|
|
|
$
|
381
|
|
|
$
|
381
|
|
|
$
|
1,144
|
|
|
$
|
1,522
|
|
Non-GAAP gross profit
|
|
$
|
30,364
|
|
|
$
|
29,022
|
|
|
$
|
28,927
|
|
|
$
|
89,157
|
|
|
$
|
63,432
|
|
Non-GAAP gross margin
|
|
23.1
|
%
|
|
26.2
|
%
|
|
27.6
|
%
|
|
26.0
|
%
|
|
25.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
$
|
16,100
|
|
|
$
|
13,804
|
|
|
$
|
8,289
|
|
|
$
|
41,929
|
|
|
$
|
24,886
|
|
Stock-based compensation expense
|
|
(872
|
)
|
|
(977
|
)
|
|
(439
|
)
|
|
(2,582
|
)
|
|
(1,863
|
)
|
Non-GAAP research and development
|
|
$
|
15,228
|
|
|
$
|
12,827
|
|
|
$
|
7,850
|
|
|
$
|
39,347
|
|
|
$
|
23,023
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
$
|
12,843
|
|
|
$
|
13,068
|
|
|
$
|
9,983
|
|
|
$
|
37,123
|
|
|
$
|
23,067
|
|
Stock-based compensation expense
|
|
(754
|
)
|
|
(782
|
)
|
|
(397
|
)
|
|
(2,208
|
)
|
|
(817
|
)
|
Amortization of intangibles
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
Non-GAAP sales and marketing
|
|
$
|
12,089
|
|
|
$
|
12,286
|
|
|
$
|
9,586
|
|
|
$
|
34,915
|
|
|
$
|
22,220
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
$
|
8,357
|
|
|
$
|
6,318
|
|
|
$
|
4,337
|
|
|
$
|
19,553
|
|
|
$
|
10,426
|
|
Stock-based compensation expense
|
|
(1,575
|
)
|
|
(1,146
|
)
|
|
(723
|
)
|
|
(3,675
|
)
|
|
(1,768
|
)
|
Restructuring and other charges
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
Litigation reserves, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
Non-GAAP general and administrative
|
|
$
|
6,782
|
|
|
$
|
5,098
|
|
|
$
|
3,614
|
|
|
$
|
15,804
|
|
|
$
|
8,630
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total operating expenses
|
|
$
|
43,123
|
|
|
$
|
44,459
|
|
|
$
|
22,609
|
|
|
$
|
122,254
|
|
|
$
|
58,379
|
|
Separation expense
|
|
(5,823
|
)
|
|
(11,269
|
)
|
|
—
|
|
|
(23,649
|
)
|
|
—
|
|
Stock-based compensation expense
|
|
(3,201
|
)
|
|
(2,905
|
)
|
|
(1,559
|
)
|
|
(8,465
|
)
|
|
(4,448
|
)
|
Amortization of intangibles
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
Restructuring and other charges
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
Litigation reserves, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
Non-GAAP total operating expenses
|
|
$
|
34,099
|
|
|
$
|
30,211
|
|
|
$
|
21,050
|
|
|
$
|
90,066
|
|
|
$
|
53,873
|
|
|
ARLO TECHNOLOGIES, INC.
|
|
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(CONTINUED)
|
|
STATEMENT OF OPERATIONS DATA (CONTINUED):
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
July 1,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except percentage data)
|
GAAP operating income (loss)
|
|
$
|
(13,376
|
)
|
|
$
|
(16,165
|
)
|
|
$
|
5,743
|
|
|
$
|
(35,160
|
)
|
|
$
|
3,038
|
|
GAAP operating margin
|
|
(10.2
|
)%
|
|
(14.6
|
)%
|
|
5.5
|
%
|
|
(10.3
|
)%
|
|
1.2
|
%
|
Separation expense
|
|
5,823
|
|
|
11,269
|
|
|
—
|
|
|
23,649
|
|
|
—
|
|
Stock-based compensation expense
|
|
3,437
|
|
|
3,252
|
|
|
1,753
|
|
|
9,384
|
|
|
4,941
|
|
Amortization of intangibles
|
|
381
|
|
|
381
|
|
|
381
|
|
|
1,144
|
|
|
1,552
|
|
Restructuring and other charges
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
|
—
|
|
Litigation reserves, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
Non-GAAP operating income (loss)
|
|
$
|
(3,735
|
)
|
|
$
|
(1,189
|
)
|
|
$
|
7,877
|
|
|
$
|
(909
|
)
|
|
$
|
9,559
|
|
Non-GAAP operating margin
|
|
(2.8
|
)%
|
|
(1.1
|
)%
|
|
7.5
|
%
|
|
(0.3
|
)%
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(13,225
|
)
|
|
$
|
(17,822
|
)
|
|
$
|
6,014
|
|
|
$
|
(36,410
|
)
|
|
$
|
3,886
|
|
Separation expense
|
|
5,823
|
|
|
11,269
|
|
|
—
|
|
|
23,649
|
|
|
—
|
|
Stock-based compensation expense
|
|
3,437
|
|
|
3,252
|
|
|
1,753
|
|
|
9,384
|
|
|
4,941
|
|
Amortization of intangibles
|
|
381
|
|
|
381
|
|
|
381
|
|
|
1,144
|
|
|
1,552
|
|
Restructuring and other charges
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
|
—
|
|
Litigation reserves, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
Tax effects of above non-GAAP adjustments
|
|
223
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
—
|
|
Non-GAAP net income (loss)
|
|
$
|
(3,361
|
)
|
|
$
|
(2,846
|
)
|
|
$
|
8,148
|
|
|
$
|
(1,936
|
)
|
|
$
|
10,407
|
|
|
ARLO TECHNOLOGIES, INC.
|
|
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(CONTINUED)
|
|
STATEMENT OF OPERATIONS DATA (CONTINUED):
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
July 1,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except per share data)
|
NET INCOME (LOSS) PER DILUTED SHARE:
|
|
|
|
|
|
|
|
|
GAAP net income (loss) per diluted share
|
|
$
|
(0.19
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.06
|
|
Separation expense
|
|
0.08
|
|
|
0.18
|
|
|
—
|
|
|
0.36
|
|
|
—
|
|
Stock-based compensation expense
|
|
0.05
|
|
|
0.05
|
|
|
0.03
|
|
|
0.15
|
|
|
0.09
|
|
Amortization of intangibles
|
|
0.01
|
|
|
0.01
|
|
|
0.00
|
|
|
0.02
|
|
|
0.02
|
|
Restructuring and other charges
|
|
—
|
|
|
0.00
|
|
|
—
|
|
|
0.00
|
|
|
—
|
|
Litigation reserves, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.00
|
|
Tax effects of above non-GAAP adjustments
|
|
0.00
|
|
|
—
|
|
|
—
|
|
|
0.00
|
|
|
—
|
|
Non-GAAP net income (loss) per diluted share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.13
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing GAAP net income (loss) per diluted share
|
|
69,600
|
|
|
62,250
|
|
|
62,250
|
|
|
64,867
|
|
|
62,250
|
|
Shares used in computing non-GAAP net income (loss) per diluted share
|
|
69,600
|
|
|
62,250
|
|
|
62,250
|
|
|
64,867
|
|
|
62,250
|
|
|
ARLO TECHNOLOGIES, INC.
|
|
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
|
Three Months Ended
|
|
|
September 30,
|
|
July 1,
|
|
April 2,
|
|
December 31,
|
|
October 1,
|
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
|
(in thousands, except per share data)
|
Cash, cash equivalents and short-term investments
|
|
$
|
187,846
|
|
$
|
133
|
|
$
|
178
|
|
$
|
108
|
|
$
|
179
|
Cash, cash equivalents and short-term investments per diluted share
|
|
$
|
2.70
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
$
|
117,119
|
|
$
|
111,113
|
|
$
|
102,259
|
|
$
|
157,680
|
|
$
|
94,134
|
Days sales outstanding
|
|
81
|
|
91
|
|
92
|
|
115
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
$
|
132,479
|
|
$
|
123,195
|
|
$
|
103,849
|
|
$
|
82,952
|
|
$
|
75,182
|
Ending inventory turns
|
|
3.1
|
|
2.7
|
|
2.8
|
|
4.6
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
Weeks of channel inventory:
|
|
|
|
|
|
|
|
|
|
|
U.S. retail channel
|
|
12.6
|
|
9.5
|
|
8.9
|
|
5.6
|
|
12.7
|
U.S. distribution channel
|
|
9.1
|
|
3.9
|
|
4.2
|
|
2.5
|
|
22.8
|
EMEA distribution channel
|
|
4.4
|
|
3.6
|
|
9.2
|
|
5.2
|
|
7.0
|
APAC distribution channel
|
|
9.2
|
|
17.4
|
|
7.9
|
|
14.8
|
|
6.2
|
|
|
|
|
|
|
|
|
|
|
|
Deferred revenue (current and non-current)
|
|
$
|
45,906
|
|
$
|
42,389
|
|
$
|
40,420
|
|
$
|
47,404
|
|
$
|
37,306
|
|
|
|
|
|
|
|
|
|
|
|
Headcount
|
|
344
|
|
153
|
|
144
|
|
124
|
|
114
|
Non-GAAP diluted shares
|
|
69,600
|
|
62,250
|
|
62,250
|
|
62,250
|
|
62,250
|
|
REVENUE BY GEOGRAPHY
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
July 1,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except percentage data)
|
Americas
|
|
$
|
112,849
|
|
86
|
%
|
|
$
|
86,681
|
|
79
|
%
|
|
$
|
82,434
|
|
78
|
%
|
|
$
|
274,253
|
|
80
|
%
|
|
$
|
195,356
|
|
80
|
%
|
EMEA
|
|
11,760
|
|
9
|
%
|
|
19,390
|
|
17
|
%
|
|
17,433
|
|
17
|
%
|
|
50,416
|
|
15
|
%
|
|
37,662
|
|
15
|
%
|
APAC
|
|
6,565
|
|
5
|
%
|
|
4,877
|
|
4
|
%
|
|
5,020
|
|
5
|
%
|
|
18,091
|
|
5
|
%
|
|
12,866
|
|
5
|
%
|
Total
|
|
$
|
131,174
|
|
100
|
%
|
|
$
|
110,948
|
|
100
|
%
|
|
$
|
104,887
|
|
100
|
%
|
|
$
|
342,760
|
|
100
|
%
|
|
$
|
245,884
|
|
100
|
%
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181025005867/en/
Arlo Investor Relations
Erik Bylin, 510-315-1004
investors@arlo.com
Source: Arlo Technologies, Inc.