Alarm.com Reports Third Quarter 2020 Results

November 05, 2020

-- Third quarter SaaS and license revenue increased 17.9% year-over-year to $100.1 million --

-- Third quarter total revenue increased 24.2% year-over-year to $158.9 million --

-- Third quarter GAAP net income attributable to common stockholders of $36.1 million, compared to $17.7 million for the third quarter of 2019 --

-- Third quarter non-GAAP adjusted EBITDA increased 31.1% year-over-year to $34.5 million, compared to $26.3 million for the third quarter of 2019 --

TYSONS, Va.--(BUSINESS WIRE)-- 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, 2020. Alarm.com also provided its financial outlook for SaaS and license revenue for the fourth quarter of 2020 and increased its guidance for the full year of 2020.

“We are pleased to report strong results this quarter,” said Steve Trundle, President and CEO of Alarm.com. “Our more than 9,000 service provider partners have been able to operate very effectively around the challenges posed by the pandemic and have been successfully activating new subscribers with an increasing range of connected property services. Our team also delivered innovative new products that will enhance our service providers’ competitive position. While there continue to be challenges, we feel we are well positioned to manage through the uncertainty caused by the pandemic.”

Third Quarter 2020 Financial Results as Compared to Third Quarter 2019

  • SaaS and license revenue increased 17.9% to $100.1 million, compared to $84.9 million.
  • Total revenue increased 24.2% to $158.9 million, compared to $127.9 million.
  • GAAP net income attributable to common stockholders was $36.1 million, or $0.71 per diluted share, compared to $17.7 million, or $0.35 per diluted share.
  • Non-GAAP adjusted EBITDA increased to $34.5 million, compared to $26.3 million.
  • Non-GAAP adjusted net income attributable to common stockholders increased to $24.8 million, or $0.49 per diluted share, compared to $18.6 million or $0.37 per diluted share.

Balance Sheet and Cash Flow

  • Total cash and cash equivalents increased to $247.2 million as of September 30, 2020, compared to $119.6 million as of December 31, 2019.
  • For the quarter ended September 30, 2020, cash flows from operations was $18.6 million and free cash flow was $15.1 million, compared to cash flows from operations of $1.0 million and negative free cash flow of $4.0 million for the quarter ended September 30, 2019.

Recent Business Highlights

  • Launched Flex I/O: Flex I/O is a versatile, completely wireless device that extends security and awareness across a property and to assets in any location. The battery-powered device leverages LTE CAT-M capabilities to create new security applications that existing hub-connected sensors cannot address. It’s easily installed on a backyard gate, detached garage, remote storage unit, or tethered to other assets like a boat, tractor or lawn mower. The Flex I/O sensor seamlessly integrates with Alarm.com powered systems, acting as just another sensor in the system even though it may be physically located many miles away, and it triggers notifications to subscribers as well as video recordings when activity is detected, or an asset is moved.
  • EnergyHub Expands Customer Base: In an expanded partnership, National Grid will now manage commercial and industrial demand response programs through EnergyHub’s Mercury DERMS platform. With a single platform, NationalGrid can manage an expanding ecosystem of energy resources for both commercial and industrial and residential assets that includes in-home batteries and electric vehicles.

    EnergyHub also announced a new partnership with the Los Angeles Department of Water and Power, or LADWP, the largest municipal utility in the country, to manage their thermostat-based demand response program. The EnergyHub platform will allow LADWP to flexibly manage peak demand and contribute to addressing regional distribution constraints and climate goals.
  • Launched Smart Water Valve + Meter to Security Channel Service Providers: Smart Water Valve + Meter is part of a comprehensive water management solution that monitors usage and responds to a range of sensors to quickly protect properties from damage caused by water leaks and floods. The innovative new device enables an additional service plan. Developed by Building36 for its plumbing and HVAC service provider partners, Smart Water Valve + Meter is now also available for Alarm.com’s service providers.
  • Award Winning Technology: Alarm.com’s Smart Gateway won the IoT Evolution Product of the Year. Smart Gateway is a cloud-managed access point that provides a dedicated Wi-Fi network for Alarm.com video cameras, and is designed to significantly reduce support intensity for service providers.

    Highlights, an animated summary of important activity in a subscribers’ home, won an ESX Innovation Award in the category of consumer mobile apps. Highlights complements Alarm.com’s video analytics service and enhances the overall user experience while increasing routine engagement with the Alarm.com mobile app.

    Wellcam™, the first smart home video solution designed to connect families and empower healthy, independent living, won New Product of the Year from Security Today. Wellcam helps families, medical professionals and others monitor the activity and well-being of loved ones or patients in both at-home or healthcare settings.

Financial Outlook

At this time, the general economic situation remains fluid and it remains challenging to predict the full scope and duration of the impacts of the COVID-19 pandemic. Alarm.com is providing guidance for the fourth quarter of 2020 and increasing its guidance for the full year of 2020 based upon what it currently sees in its markets.

For the fourth quarter of 2020:

  • SaaS and license revenue is expected to be in the range of $101.2 million to $101.4 million.

For the full year of 2020:

  • SaaS and license revenue is expected to be in the range of $389.0 million to $389.2 million.
  • Total revenue is expected to be in the range of $594.0 million to $604.2 million, which includes anticipated hardware and other revenue in the range of $205.0 million to $215.0 million.
  • Non-GAAP adjusted EBITDA is expected to be in the range of $113.0 million to $115.0 million.
  • Non-GAAP adjusted net income attributable to common stockholders is expected to be in the range of $80.0 million to $81.5 million, based on an estimated tax rate of 21.0%.
  • Based on an expected 51.0 million weighted average diluted shares outstanding, non-GAAP adjusted net income attributable to common stockholders is expected to be $1.57 to $1.60 per diluted share.

The 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 2020 financial results and its outlook for the fourth quarter and full year of 2020. A live audio webcast is scheduled to begin at 4:30 p.m. ET on November 5, 2020. To participate on the live call, analysts and investors should dial 866.588.3290 (U.S./Canada) or 262.558.6169 (International) at least ten minutes prior to the start time of the call. A telephonic replay of the call will be available through November 13, 2020 by dialing 855.859.2056 (U.S./Canada) or 404.537.3406 (International) and providing Conference ID: 6882929. Alarm.com will also offer a live and archived webcast of the conference call accessible on Alarm.com’s Investor Relations website at http://investors.alarm.com.

About Alarm.com Holdings, Inc.

Alarm.com is the leading platform for the intelligently connected property. Millions of consumers and businesses depend on Alarm.com's technology to manage and control their property from anywhere. Our platform integrates with a growing variety of Internet of Things (IoT) devices through our apps and interfaces. Our security, video, access control, intelligent automation, energy management, and wellness solutions are available through our network of thousands of professional service providers in North America and around the globe. Alarm.com's common stock is traded on Nasdaq under the ticker symbol ALRM. For more information, please visit www.alarm.com.

Non-GAAP Financial Measures

To supplement our consolidated selected financial data presented on a basis consistent with GAAP, this press release contains certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP adjusted income before income taxes, non-GAAP adjusted net income, non-GAAP adjusted income attributable to common stockholders before income taxes, non-GAAP adjusted net income attributable to common stockholders, non-GAAP adjusted net income attributable to common stockholders per share and free cash flow. We have included non-GAAP measures in this press release because they are financial, operating or liquidity measures used by our management to (i) understand and evaluate our core operating performance and trends and generate future operating plans, (ii) make strategic decisions regarding the allocation of capital and investments in initiatives that are focused on cultivating new markets for our solutions and (iii) provide useful information to management about the amount of cash generated by the business after necessary capital expenditures. We also use certain non-GAAP financial measures, including adjusted EBITDA, as performance measures under our executive bonus plan. Further, we believe that these non-GAAP measures of our financial results provide useful information to investors and others in understanding and evaluating our results of operations, business trends and financial condition. While we believe the use of these non-GAAP measures provides useful information to investors and management in analyzing our financial performance, non-GAAP measures have inherent limitations in that they do not reflect all of the amounts and transactions that are included in our financial statements prepared in accordance with GAAP. Non-GAAP measures do not serve as an alternative to GAAP nor do we consider our non-GAAP measures in isolation, accordingly we present non-GAAP financial measures only in connection with GAAP results. We urge investors to consider non-GAAP measures only in conjunction with our GAAP financials and to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release.

We consider free cash flow to be a liquidity measure, which we define as cash flows from operating activities less purchases of property and equipment.

With respect to our expectations under “Financial Outlook” above, reconciliation of adjusted EBITDA and adjusted net income 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 (benefit) / expense and tax windfall adjustments can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted. We expect the above charges to have a significant and potentially highly variable impact on our future GAAP financial results.

We exclude one or more of the following items from non-GAAP financial and operating measures:

Stock-based compensation expense: We exclude stock-based compensation expense, which relates to stock options 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.

Secondary offering expense: We exclude secondary offering expense because we do not consider costs associated with the secondary offering to be indicative of our core operating performance and 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 and improves the comparability of our results to the results of other companies in our industry.

Litigation expense: We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes, particularly costs incurred in ongoing intellectual property litigation, to be indicative of our core operating performance. We do not adjust for ordinary course legal expenses, including those expenses resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

Acquisition-related (benefit) / 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 (benefit) / 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 (benefit) / expense and the effects of the transaction on our results of operations.

Depreciation expense: We record depreciation primarily for investments in property and equipment. We exclude depreciation in calculating adjusted EBITDA because we do not consider depreciation when we evaluate our ongoing business operations. For non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, we do not exclude depreciation.

Amortization expense: GAAP requires that operating expenses include the amortization of acquired intangible assets, which principally include acquired customer relationships, developed technology and trade names. We exclude amortization of intangibles from our non-GAAP financial measures because we do not consider amortization expense when we evaluate our ongoing business operations, nor do we factor amortization expense into our evaluation of potential acquisitions, or our measurement of the performance of those acquisitions. We believe that the exclusion of amortization expense enables the comparison of our performance to other companies in our industry as other companies may be more or less acquisitive than us and therefore, amortization expense may vary significantly by company based on their acquisition history.

Interest expense: We record interest expense primarily related to our debt facility. We exclude interest expense in calculating our adjusted EBITDA calculation. For non-GAAP adjusted net income, non-GAAP adjusted net income attributable to common stockholders and non-GAAP adjusted net income attributable to common stockholders per share, basic and diluted, we do not exclude interest expense.

Interest income and other income, net: We exclude interest income and other income, net from our non-GAAP financial measures because we do not consider it part of our ongoing results of operations.

Income taxes: We exclude the impact related to our provision for income taxes from our adjusted EBITDA calculation. We do not consider this tax adjustment to be part of our ongoing results of operations.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “designed,” “enable,” “ensure,” “expect,” “intend,” “will,” and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company’s positioning, the benefits of recently launched offerings, and the Company’s guidance for the fourth quarter and full year of 2020 described under “Financial Outlook” above and key assumptions related thereto. The events described in these forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: the Company's results and business operations may be negatively impacted by the COVID-19 pandemic, the Company’s actual operating results may differ significantly from any guidance provided, certain precautions the Company is taking due to the COVID-19 pandemic could harm its business, the Company’s quarterly results may fluctuate, downturns in general economic and market conditions, including due to the COVID-19 pandemic, may reduce demand, the reliability of the Company’s network operations centers, the Company’s ability to retain service provider partners and residential and commercial subscribers and sustain its growth rate, the Company’s ability to manage growth and execute on its business strategies, the effects of increased competition and evolving technologies, the Company’s ability to integrate acquired assets and businesses and to manage service provider partners, customers and employees, consumer demand for interactive security, video monitoring, intelligent automation, energy management and wellness solutions, the Company’s reliance on its service provider network to attract new customers and retain existing customers, the Company's dependence on its suppliers, the reliability of the Company’s hardware and wireless network suppliers and enhanced United States tax, tariff, import/export restrictions, or other trade barriers, particularly tariffs from China as well as other risks and uncertainties discussed in the “Risk Factors” section of the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 5, 2020 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, 2020. 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,

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

SaaS and license revenue

$

100,126

 

 

$

84,924

 

 

$

287,780

 

 

$

247,313

 

Hardware and other revenue

58,725

 

 

42,956

 

 

164,647

 

 

114,562

 

Total revenue

158,851

 

 

127,880

 

 

452,427

 

 

361,875

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of SaaS and license revenue

14,344

 

 

12,438

 

 

39,673

 

 

37,428

 

Cost of hardware and other revenue

46,839

 

 

35,085

 

 

128,495

 

 

93,601

 

Total cost of revenue

61,183

 

 

47,523

 

 

168,168

 

 

131,029

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

18,410

 

 

14,533

 

 

52,405

 

 

43,392

 

General and administrative

17,410

 

 

18,701

 

 

55,634

 

 

51,785

 

Research and development

36,914

 

 

29,461

 

 

113,280

 

 

84,375

 

Amortization and depreciation

6,878

 

 

5,467

 

 

20,023

 

 

15,833

 

Total operating expenses

79,612

 

 

68,162

 

 

241,342

 

 

195,385

 

Operating income

18,056

 

 

12,195

 

 

42,917

 

 

35,461

 

Interest expense

(556)

 

 

(715)

 

 

(2,069)

 

 

(2,322)

 

Interest income

118

 

 

2,703

 

 

734

 

 

4,317

 

Other income, net

24,753

 

 

6,380

 

 

24,910

 

 

6,468

 

Income before income taxes

42,371

 

 

20,563

 

 

66,492

 

 

43,924

 

Provision for income taxes

6,546

 

 

2,873

 

 

5,471

 

 

3,428

 

Net income

35,825

 

 

17,690

 

 

61,021

 

 

40,496

 

Net loss attributable to redeemable noncontrolling interest

259

 

 

 

 

865

 

 

 

Net income attributable to common stockholders

$

36,084

 

 

$

17,690

 

 

$

61,886

 

 

$

40,496

 

 

 

 

 

 

 

 

 

Per share information attributable to common stockholders:

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.74

 

 

$

0.36

 

 

$

1.27

 

 

$

0.84

 

Diluted

$

0.71

 

 

$

0.35

 

 

$

1.22

 

 

$

0.81

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

49,007,343

 

 

48,518,041

 

 

48,842,333

 

 

48,360,927

 

Diluted

50,979,679

 

 

50,152,807

 

 

50,673,752

 

 

50,238,409

 

 

 

 

 

 

 

 

 

Stock-based compensation expense included in operating expenses:

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Sales and marketing

$

734

 

 

$

534

 

 

$

2,263

 

 

$

1,385

 

General and administrative

2,154

 

 

1,714

 

 

6,033

 

 

4,762

 

Research and development

4,560

 

 

2,787

 

 

12,605

 

 

8,574

 

Total stock-based compensation expense

$

7,448

 

 

$

5,035

 

 

$

20,901

 

 

$

14,721

 

 
 

ALARM.COM HOLDINGS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

 

September 30,
2020

 

December 31,
2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

247,176

 

 

$

119,629

 

Accounts receivable, net of allowance for credit losses of $2,400 and $2,584, respectively, and net of allowance for product returns of $1,341 and $1,075, respectively

81,883

 

 

76,373

 

Inventory, net

40,199

 

 

34,168

 

Other current assets, net of allowance for credit losses of $30 and $16, respectively

17,854

 

 

13,504

 

Total current assets

387,112

 

 

243,674

 

Property and equipment, net

42,639

 

 

38,548

 

Intangible assets, net

91,384

 

 

103,438

 

Goodwill

105,662

 

 

104,963

 

Deferred tax assets

20,749

 

 

19,137

 

Operating lease right-of-use assets

33,899

 

 

30,523

 

Other assets, net of allowance for credit losses of $66 and $0, respectively

16,600

 

 

17,516

 

Total assets

$

698,045

 

 

$

557,799

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and other current liabilities

$

50,029

 

 

$

48,727

 

Accrued compensation

18,918

 

 

16,342

 

Deferred revenue

4,411

 

 

3,043

 

Operating lease liabilities

9,470

 

 

7,683

 

Total current liabilities

82,828

 

 

75,795

 

Deferred revenue

8,461

 

 

7,455

 

Long-term debt

111,000

 

 

63,000

 

Operating lease liabilities

38,605

 

 

37,199

 

Other liabilities

7,724

 

 

7,489

 

Total liabilities

248,618

 

 

190,938

 

Redeemable noncontrolling interest

10,711

 

 

11,210

 

Stockholders’ equity

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020 and December 31, 2019

 

 

 

Common stock, $0.01 par value, 300,000,000 shares authorized; 49,256,397 and 48,700,963 shares issued; and 49,109,244 and 48,700,713 shares outstanding as of September 30, 2020 and December 31, 2019, respectively

493

 

 

487

 

Additional paid-in capital

392,765

 

 

365,627

 

Treasury stock, at cost; 147,153 and 0 shares as of September 30, 2020 and December 31, 2019, respectively

(5,149)

 

 

 

Retained earnings / (accumulated deficit)

50,607

 

 

(10,463)

 

Total stockholders’ equity

438,716

 

 

355,651

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

$

698,045

 

 

$

557,799

 

 
 

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Nine Months Ended
September 30,

Cash flows from operating activities:

2020

 

2019

Net income

$

61,021

 

 

$

40,496

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

Provision for / (recovery of) credit losses on accounts receivable

(237)

 

 

722

 

Reserve for product returns

1,491

 

 

(105)

 

Recovery of credit losses on notes receivable

(368)

 

 

(3,319)

 

Provision for excess and obsolete inventory

1,178

 

 

15

 

Amortization on patents and tooling

604

 

 

506

 

Amortization and depreciation

20,023

 

 

15,833

 

Amortization of debt issuance costs

81

 

 

81

 

Amortization of operating leases

6,562

 

 

5,570

 

Deferred income taxes

(1,480)

 

 

1,502

 

Change in fair value of contingent liability

(2,593)

 

 

 

Stock-based compensation

20,901

 

 

14,721

 

Gain on notes receivable

 

 

(6,931)

 

Acquired in-process research and development

3,297

 

 

850

 

Gain on sale of investment

(24,737)

 

 

 

Impairment of investment

 

 

605

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(7,131)

 

 

(16,004)

 

Inventory

(7,209)

 

 

1,997

 

Other current and non-current assets

(5,549)

 

 

(3,131)

 

Accounts payable, accrued expenses and other current liabilities

5,897

 

 

(22,457)

 

Deferred revenue

2,374

 

 

(1,153)

 

Operating lease liabilities

(7,427)

 

 

(6,139)

 

Other liabilities

(28)

 

 

188

 

Cash flows from operating activities

66,670

 

 

23,847

 

Cash flows from / (used in) investing activities:

 

 

 

Additions to property and equipment

(10,677)

 

 

(10,660)

 

Purchases of in-process research and development

(3,297)

 

 

(850)

 

Issuances or purchases of notes receivable

(600)

 

 

(26,074)

 

Receipt of payment on notes receivable

2,023

 

 

31,695

 

Proceeds from sale of investment

25,687

 

 

 

Purchases of patents and patent licenses

(900)

 

 

 

Cash flows from / (used in) investing activities

12,236

 

 

(5,889)

 

Cash flows from financing activities:

 

 

 

Proceeds from credit facility

50,000

 

 

 

Repayments of credit facility

(2,000)

 

 

(3,000)

 

Payments of deferred consideration for business acquisitions

(819)

 

 

 

Purchases of treasury stock

(5,149)

 

 

 

Issuances of common stock from equity-based plans

6,609

 

 

3,304

 

Cash flows from financing activities

48,641

 

 

304

 

Net increase in cash and cash equivalents

127,547

 

 

18,262

 

Cash and cash equivalents at beginning of the period

119,629

 

 

146,061

 

Cash and cash equivalents at end of the period

$

247,176

 

 

$

164,323

 

 
 

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures

(in thousands)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Adjusted EBITDA:

 

 

 

 

 

 

 

Net income

$

35,825

 

 

$

17,690

 

 

$

61,021

 

 

$

40,496

 

Adjustments:

 

 

 

 

 

 

 

Interest expense, interest income and other income, net

(24,315)

 

 

(8,368)

 

 

(23,575)

 

 

(8,463)

 

Provision for income taxes

6,546

 

 

2,873

 

 

5,471

 

 

3,428

 

Amortization and depreciation expense

6,878

 

 

5,467

 

 

20,023

 

 

15,833

 

Stock-based compensation expense

7,448

 

 

5,035

 

 

20,901

 

 

14,721

 

Secondary offering expense

 

 

 

 

543

 

 

 

Acquisition-related (benefit) / expense

(304)

 

 

1,590

 

 

2,044

 

 

1,590

 

Litigation expense

2,418

 

 

2,033

 

 

6,467

 

 

10,682

 

Total adjustments

(1,329)

 

 

8,630

 

 

31,874

 

 

37,791

 

Adjusted EBITDA

$

34,496

 

 

$

26,320

 

 

$

92,895

 

 

$

78,287

 

 

 

 

 

 

 

 

 

Adjusted net income:

 

 

 

 

 

 

 

Net income, as reported

$

35,825

 

 

$

17,690

 

 

$

61,021

 

 

$

40,496

 

Provision for income taxes

6,546

 

 

2,873

 

 

5,471

 

 

3,428

 

Income before income taxes

42,371

 

 

20,563

 

 

66,492

 

 

43,924

 

Adjustments:

 

 

 

 

 

 

 

Less: interest income and other income, net

(24,871)

 

 

(9,083)

 

 

(25,644)

 

 

(10,785)

 

Amortization expense

4,084

 

 

3,404

 

 

12,209

 

 

10,338

 

Stock-based compensation expense

7,448

 

 

5,035

 

 

20,901

 

 

14,721

 

Secondary offering expense

 

 

 

 

543

 

 

 

Acquisition-related (benefit) / expense

(304)

 

 

1,590

 

 

2,044

 

 

1,590

 

Litigation expense

2,418

 

 

2,033

 

 

6,467

 

 

10,682

 

Non-GAAP adjusted income before income taxes

31,146

 

 

23,542

 

 

83,012

 

 

70,470

 

Income taxes 1

(6,541)

 

 

(4,944)

 

 

(17,433)

 

 

(14,799)

 

Non-GAAP adjusted net income

$

24,605

 

 

$

18,598

 

 

$

65,579

 

 

$

55,671

 

 

1 Income taxes are calculated using a rate of 21.0% for each of the three and nine months ended September 30, 2020 and 2019. The 21.0% effective tax rate for each of the three and nine months ended September 30, 2020 and 2019 exclude the income tax effect on the non-GAAP adjustments and reflect the estimated long-term corporate tax rate.

 
 

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures - continued

(in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Adjusted net income attributable to common stockholders:

 

 

 

 

 

 

 

Net income attributable to common stockholders, as reported

$

36,084

 

 

$

17,690

 

 

$

61,886

 

 

$

40,496

 

Provision for income taxes

6,546

 

 

2,873

 

 

5,471

 

 

3,428

 

Income attributable to common stockholders before income taxes

42,630

 

 

20,563

 

 

67,357

 

 

43,924

 

Adjustments:

 

 

 

 

 

 

 

Less: interest income and other income, net

(24,871)

 

 

(9,083)

 

 

(25,644)

 

 

(10,785)

 

Amortization expense

4,084

 

 

3,404

 

 

12,209

 

 

10,338

 

Stock-based compensation expense

7,448

 

 

5,035

 

 

20,901

 

 

14,721

 

Secondary offering expense

 

 

 

 

543

 

 

 

Acquisition-related (benefit) / expense

(304)

 

 

1,590

 

 

2,044

 

 

1,590

 

Litigation expense

2,418

 

 

2,033

 

 

6,467

 

 

10,682

 

Non-GAAP adjusted income attributable to common stockholders before income taxes

31,405

 

 

23,542

 

 

83,877

 

 

70,470

 

Income taxes 1

(6,595)

 

 

(4,944)

 

 

(17,614)

 

 

(14,799)

 

Non-GAAP adjusted net income attributable to common stockholders

$

24,810

 

 

$

18,598

 

 

$

66,263

 

 

$

55,671

 

 
 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Adjusted net income attributable to common stockholders per share:

 

 

 

 

 

 

 

Net income attributable to common stockholders per share - basic, as reported

$

0.74

 

 

$

0.36

 

 

$

1.27

 

 

$

0.84

 

Provision for income taxes

0.13

 

 

0.06

 

 

0.11

 

 

0.08

 

Income attributable to common stockholders before income taxes

0.87

 

 

0.42

 

 

1.38

 

 

0.92

 

Adjustments:

 

 

 

 

 

 

 

Less: interest income and other income, net

(0.51)

 

 

(0.18)

 

 

(0.52)

 

 

(0.22)

 

Amortization expense

0.09

 

 

0.07

 

 

0.25

 

 

0.21

 

Stock-based compensation expense

0.15

 

 

0.10

 

 

0.43

 

 

0.30

 

Secondary offering expense

 

 

 

 

0.01

 

 

 

Acquisition-related (benefit) / expense

(0.01)

 

 

0.03

 

 

0.04

 

 

0.03

 

Litigation expense

0.05

 

 

0.04

 

 

0.13

 

 

0.22

 

Non-GAAP adjusted income before income taxes

0.64

 

 

0.48

 

 

1.72

 

 

1.46

 

Income taxes 1

(0.13)

 

 

(0.10)

 

 

(0.36)

 

 

(0.31)

 

Non-GAAP adjusted net income attributable to common stockholders per share - basic

$

0.51

 

 

$

0.38

 

 

$

1.36

 

 

$

1.15

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted net income attributable to common stockholders per share - diluted

$

0.49

 

 

$

0.37

 

 

$

1.31

 

 

$

1.11

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic, as reported

49,007,343

 

 

48,518,041

 

 

48,842,333

 

 

48,360,927

 

Diluted, as reported

50,979,679

 

 

50,152,807

 

 

50,673,752

 

 

50,238,409

 

 

1 Income taxes are calculated using a rate of 21.0% for each of the three and nine months ended September 30, 2020 and 2019. The 21.0% effective tax rate for each of the three and nine months ended September 30, 2020 and 2019 exclude the income tax effect on the non-GAAP adjustments and reflect the estimated long-term corporate tax rate.

 
 

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures - continued

(in thousands)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Free cash flow:

 

 

 

 

 

 

 

Cash flows from operating activities

$

18,622

 

 

$

980

 

 

$

66,670

 

 

$

23,847

 

Additions to property and equipment

(3,561)

 

 

(4,952)

 

 

(10,677)

 

 

(10,660)

 

Non-GAAP free cash flow

$

15,061

 

 

$

(3,972)

 

 

$

55,993

 

 

$

13,187

 

 

Investor Relations:
David Trone
Alarm.com
dtrone@alarm.com

Media Relations:
Matthew Zartman
Alarm.com
mzartman@alarm.com

Source: Alarm.com Holdings, Inc.