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Alarm.com Reports Second Quarter 2021 Results

August 05, 2021

-- Second quarter total revenue increased 33.3% year-over-year to $188.9 million --

-- Second quarter SaaS and license revenue increased 18.3% year-over-year to $113.2 million --

-- Second quarter GAAP net income attributable to common stockholders decreased 13.2% year-over-year to $14.7 million, compared to $17.0 million for the second quarter of 2020 --

-- Second quarter non-GAAP adjusted EBITDA increased 30.1% year-over-year to $38.0 million, compared to $29.2 million for the second quarter of 2020 --

TYSONS, Va.--(BUSINESS WIRE)-- Alarm.com Holdings, Inc. (Nasdaq: ALRM), the leading platform for the intelligently connected property, today reported financial results for its second quarter ended June 30, 2021. Alarm.com also provided its financial outlook for SaaS and license revenue for the third quarter of 2021 and increased its guidance for the full year of 2021.

“We’re pleased to report solid results for the second quarter,” said Steve Trundle, President and CEO of Alarm.com. “Our service providers in North America continued to create new accounts with a rich set of advanced services such as video and video analytics for residential subscribers, and the small business and commercial market opportunities improved during the quarter.”

Second Quarter 2021 Financial Results as Compared to Second Quarter 2020

  • SaaS and license revenue increased 18.3% to $113.2 million, compared to $95.7 million.
  • Total revenue increased 33.3% to $188.9 million, compared to $141.6 million.
  • GAAP net income attributable to common stockholders decreased to $14.7 million, or $0.28 per diluted share, compared to $17.0 million, or $0.34 per diluted share.
  • Non-GAAP adjusted EBITDA(*) increased to $38.0 million, compared to $29.2 million.
  • Non-GAAP adjusted net income attributable to common stockholders(*) increased to $27.7 million, or $0.54 per diluted share, compared to $20.6 million or $0.41 per diluted share.

Balance Sheet and Cash Flow

  • Total cash and cash equivalents increased to $662.7 million as of June 30, 2021, compared to $253.5 million as of December 31, 2020. The increase in cash and cash equivalents was primarily due to the January 2021 issuance of $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026 in a private placement to qualified institutional buyers, resulting in proceeds of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs.
  • For the quarter ended June 30, 2021, cash flows from operations was $24.1 million and non-GAAP free cash flow(*) was $20.8 million, compared to cash flows from operations of $35.1 million and non-GAAP free cash flow of $31.8 million for the quarter ended June 30, 2020.

(*) Reconciliations of the non-GAAP measures are set forth at the end of this press release.

Recent Business Highlights

  • Launched Ambient Insights for Alarm Response to Enhance Professionally Monitored Security Services: Ambient Insights for Alarm Response leverages Alarm.com’s artificial intelligence and adaptive machine learning platform to evaluate alarm signals and provide an assessment of the likelihood that the subscriber will cancel the alarm. With these real-time insights, monitoring stations can dispatch police, fire or emergency medical services to properties faster and reduce dispatches for false alarms. Ambient Insights for Alarm Response complements the extensive capabilities provided by Alarm.com to subscribers and monitoring stations for reducing false alarms and enhancing the value of professional monitoring services.
  • Industry Award Recognitions for Innovation: Flex IO, Alarm.com’s LTE Category M, battery-powered sensor that can flexibly monitor properties and assets anywhere, won Smart Home Product of the Year from the Security Industry Association’s annual awards competition. Alarm.com also won two awards in the 2021 Electronic Security Expo Innovation Awards competition. Alarm.com’s new touchless doorbell won the Video Surveillance category for its advanced video analytics capabilities, and Flex IO won the Internet of Things category.
  • Introduced new capabilities for Smart Water Valve + Meter Solution: Alarm.com’s Smart Water Valve + Meter solution now provides more insights and awareness to help subscribers conserve water and protect their property from water-related damage. With the Alarm.com mobile app and web interface, property owners can monitor water usage over time and compare current usage to past periods and their average use. New freeze and winter plumbing alerts include a reminder to winterize external water supplies and notifications when both water and outdoor temperatures create a greater risk for frozen pipes. The notifications are triggered by local weather conditions and include links to helpful content and recommendations for protecting pipes and property from freezing temperatures.
  • Streamlined Support for Video and Automation Devices: Alarm.com’s Device Sync technology now enables monitoring stations to proactively address trouble conditions for connected devices. Participating monitoring stations can receive alerts when a device malfunctions or its batteries are low, and operators can then communicate to subscribers to remotely address the issue or schedule a service appointment with a technician if needed. Device Sync works with video cameras, smart thermostats, lights, locks and temperature sensors.

Financial Outlook

Alarm.com is providing its outlook for SaaS and license revenue for the third quarter of 2021 and increasing its guidance for the full year of 2021 based upon current management expectations.

For the third quarter of 2021:

  • SaaS and license revenue is expected to be in the range of $114.9 million to $115.1 million.

For the full year of 2021:

  • SaaS and license revenue is expected to be in the range of $452.3 million to $452.8 million.
  • Total revenue is expected to be in the range of $707.3 million to $717.8 million, which includes anticipated hardware and other revenue in the range of $255.0 million to $265.0 million.
  • Non-GAAP adjusted EBITDA is expected to be in the range of $133.0 million to $134.5 million.
  • Non-GAAP adjusted net income attributable to common stockholders is expected to be in the range of $93.0 million to $93.7 million, based on an estimated tax rate of 21.0%.
  • Based on an expected 52.4 million weighted average diluted shares outstanding, non-GAAP adjusted net income attributable to common stockholders is expected to be $1.77 to $1.79 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 second quarter 2021 financial results and its outlook for the third quarter and full year of 2021. A live audio webcast is scheduled to begin at 4:30 p.m. ET on August 5, 2021. 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 August 12, 2021 by dialing 855.859.2056 (U.S./Canada) or 404.537.3406 (International) and providing Conference ID: 4048159. 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 non-GAAP free cash flow. We have included non-GAAP measures in this press release because they are financial, operating or liquidity measures used by our management to (i) understand and evaluate our core operating performance and trends and generate future operating plans, (ii) make strategic decisions regarding the allocation of capital and investments in initiatives that are focused on cultivating new markets for our solutions and (iii) provide useful information to management about the amount of cash generated by the business after necessary capital expenditures. We also use adjusted EBITDA as a performance measure under our executive bonus plan. Further, we believe that these non-GAAP measures of our financial results provide useful information to investors and others in understanding and evaluating our results of operations, business trends and financial condition. While we believe the use of these non-GAAP measures provides useful information to investors and management in analyzing our financial performance, non-GAAP measures have inherent limitations in that they do not reflect all of the amounts and transactions that are included in our financial statements prepared in accordance with GAAP. Non-GAAP measures do not serve as an alternative to GAAP nor do we consider our non-GAAP measures in isolation, accordingly we present non-GAAP financial measures only in connection with GAAP results. We urge investors to consider non-GAAP measures only in conjunction with our GAAP financials and to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release.

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

With respect to our expectations under “Financial Outlook” above, reconciliation of adjusted EBITDA and adjusted net income attributable to common stockholders guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, non-ordinary course litigation expense, acquisition-related expense and tax windfall adjustments can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted. We expect the above charges to have a significant and potentially highly variable impact on our future GAAP financial results.

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

Stock-based compensation expense: We exclude stock-based compensation expense, which relates to 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 expense from our non-GAAP financial measures because we believe that the exclusion of this expense allows us to better provide meaningful information about our operating performance, facilitates comparisons to our historical operating results, improves the comparability of our results to the results of other companies in our industry, and ultimately, we believe helps investors better understand the acquisition-related expense and the effects of the transaction on our results of operations.

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

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

Amortization of debt discount and debt issuance costs: We record amortization of debt discount and debt issuance costs related to our convertible senior notes as interest expense. We exclude amortization of debt discount and 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.

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 other than the interest expense related to the amortization of debt discount and debt issuance costs related to our convertible senior notes as discussed above.

Interest income and other income / (expense), net: We exclude interest income and other income / (expense), 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 benefit from income taxes from our adjusted EBITDA calculation. We do not consider this tax adjustment to be part of our ongoing results of operations.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “designed,” “enable,” “ensure,” “expect,” “intend,” “will,” and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company’s positioning, the benefits of recently launched offerings, and the Company’s guidance for the third quarter and full year of 2021 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 May 4, 2021 and other subsequent filings the Company makes with the Securities and Exchange Commission from time to time, including its Form 10-Q for the quarter ended June 30, 2021. In addition, the forward-looking statements included in this press release represent the Company’s views and expectations as of the date hereof and are based on information currently available to the Company. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so except as required by law. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof.




 

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)




 

 

Three Months Ended
June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

SaaS and license revenue

$

113,186

 

 

$

95,704

 

 

$

220,569

 

 

$

187,654

 

Hardware and other revenue

75,671

 

 

45,933

 

 

140,786

 

 

105,922

 

Total revenue

188,857

 

 

141,637

 

 

361,355

 

 

293,576

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of SaaS and license revenue

17,201

 

 

13,001

 

 

32,357

 

 

25,329

 

Cost of hardware and other revenue

60,166

 

 

36,004

 

 

110,772

 

 

81,656

 

Total cost of revenue

77,367

 

 

49,005

 

 

143,129

 

 

106,985

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

20,529

 

 

16,920

 

 

39,528

 

 

33,995

 

General and administrative

23,268

 

 

17,359

 

 

46,150

 

 

38,224

 

Research and development

43,491

 

 

36,636

 

 

85,958

 

 

76,366

 

Amortization and depreciation

7,477

 

 

6,723

 

 

14,862

 

 

13,145

 

Total operating expenses

94,765

 

 

77,638

 

 

186,498

 

 

161,730

 

Operating income

16,725

 

 

14,994

 

 

31,728

 

 

24,861

 

Interest expense

(4,154

)

 

(868

)

 

(7,522

)

 

(1,513

)

Interest income

149

 

 

157

 

 

306

 

 

616

 

Other income / (expense), net

32

 

 

65

 

 

(123

)

 

157

 

Income before income taxes

12,752

 

 

14,348

 

 

24,389

 

 

24,121

 

Benefit from income taxes

(1,738

)

 

(2,277

)

 

(4,651

)

 

(1,075

)

Net income

14,490

 

 

16,625

 

 

29,040

 

 

25,196

 

Net loss attributable to redeemable noncontrolling interest

255

 

 

370

 

 

535

 

 

606

 

Net income attributable to common stockholders

$

14,745

 

 

$

16,995

 

 

$

29,575

 

 

$

25,802

 

 

 

 

 

 

 

 

 

Per share information attributable to common stockholders:

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.30

 

 

$

0.35

 

 

$

0.60

 

 

$

0.53

 

Diluted

$

0.28

 

 

$

0.34

 

 

$

0.57

 

 

$

0.51

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

49,808,969

 

 

48,792,280

 

 

49,686,110

 

 

48,758,922

 

Diluted

51,754,392

 

 

50,551,632

 

 

51,789,943

 

 

50,443,526

 

 

 

 

 

 

 

 

 

Stock-based compensation expense included in operating expenses:

Three Months Ended
June 30,

 

Six Months Ended

June 30,

2021

 

2020

 

2021

 

2020

Sales and marketing

$

1,235

 

 

$

772

 

 

$

2,043

 

 

$

1,529

 

General and administrative

3,163

 

 

2,097

 

 

5,243

 

 

3,879

 

Research and development

5,658

 

 

4,226

 

 

10,658

 

 

8,045

 

Total stock-based compensation expense

$

10,056

 

 

$

7,095

 

 

$

17,944

 

 

$

13,453

 
















 



 

ALARM.COM HOLDINGS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)




 

 

June 30,
2021

 

December 31,
2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

662,682

 

 

$

253,459

 

Accounts receivable, net of allowance for credit losses of $3,573 and $4,696, respectively, and net of allowance for product returns of $1,344 and $1,480, respectively

92,612

 

 

83,326

 

Inventory

59,611

 

 

44,281

 

Other current assets, net of allowance for credit losses of $5 and $17, respectively

22,886

 

 

16,348

 

Total current assets

837,791

 

 

397,414

 

Property and equipment, net

44,481

 

 

44,796

 

Intangible assets, net

94,737

 

 

103,259

 

Goodwill

112,901

 

 

112,838

 

Deferred tax assets

12,049

 

 

21,692

 

Operating lease right-of-use assets

30,581

 

 

33,455

 

Other assets, net of allowance for credit losses of $73 and $72, respectively

24,251

 

 

18,233

 

Total assets

$

1,156,791

 

 

$

731,687

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and other current liabilities

$

68,138

 

 

$

53,927

 

Accrued compensation

19,531

 

 

22,307

 

Deferred revenue

6,301

 

 

4,037

 

Operating lease liabilities

10,132

 

 

9,973

 

Total current liabilities

104,102

 

 

90,244

 

Deferred revenue

8,718

 

 

8,492

 

Convertible senior notes, net

416,921

 

 

 

Long-term debt

 

 

110,000

 

Operating lease liabilities

33,691

 

 

37,697

 

Other liabilities

8,550

 

 

6,811

 

Total liabilities

571,982

 

 

253,244

 

Redeemable noncontrolling interest

11,372

 

 

10,691

 

Stockholders’ equity

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2021 and December 31, 2020

 

 

 

Common stock, $0.01 par value, 300,000,000 shares authorized; 50,040,853 and 49,630,773 shares issued; and 49,893,700 and 49,483,620 shares outstanding as of June 30, 2021 and December 31, 2020, respectively

500

 

 

496

 

Additional paid-in capital

481,937

 

 

405,831

 

Treasury stock, at cost; 147,153 shares as of June 30, 2021 and December 31, 2020

(5,149

)

 

(5,149

)

Retained earnings

96,149

 

 

66,574

 

Total stockholders’ equity

573,437

 

 

467,752

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

$

1,156,791

 

 

$

731,687

 








 

 

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


 

Six Months Ended
June 30,

Cash flows from operating activities:

2021

 

2020

Net income

$

29,040

 

 

$

25,196

 

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

 

 

 

Provision for credit losses on accounts receivable

150

 

 

965

 

Reserve for product returns

1,129

 

 

1,000

 

Recovery of credit losses on notes receivable

(11

)

 

(382

)

Amortization on patents and tooling

603

 

 

401

 

Amortization and depreciation

14,862

 

 

13,145

 

Amortization of debt discount and debt issuance costs

7,399

 

 

54

 

Amortization of operating leases

4,695

 

 

4,234

 

Deferred income taxes

(7,143

)

 

(2,526

)

Change in fair value of contingent liability

 

 

(2,289

)

Stock-based compensation

17,944

 

 

13,453

 

Acquired in-process research and development

 

 

3,297

 

Loss on early extinguishment of debt

185

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(10,565

)

 

(2,549

)

Inventory

(15,330

)

 

(16,238

)

Other current and non-current assets

(8,131

)

 

(3,270

)

Accounts payable, accrued expenses and other current liabilities

13,403

 

 

17,332

 

Deferred revenue

2,490

 

 

1,039

 

Operating lease liabilities

(5,677

)

 

(4,728

)

Other liabilities

265

 

 

(86

)

Cash flows from operating activities

45,308

 

 

48,048

 

Cash flows used in investing activities:

 

 

 

Additions to property and equipment

(7,381

)

 

(7,116

)

Purchases of in-process research and development

 

 

(3,297

)

Receipt of payments on notes receivable

5

 

 

2,007

 

Purchase of investment in unconsolidated entity

(5,000

)

 

 

Purchases of patents and patent licenses

 

 

(900

)

Cash flows used in investing activities

(12,376

)

 

(9,306

)

Cash flows from financing activities:

 

 

 

Proceeds from credit facility

 

 

50,000

 

Repayments of credit facility

(110,000

)

 

(1,000

)

Proceeds from issuance of convertible senior notes

500,000

 

 

 

Payments of debt issuance costs

(15,698

)

 

 

Payments of deferred consideration for business acquisitions

(878

)

 

(819

)

Purchases of treasury stock

 

 

(5,149

)

Issuances of common stock from equity-based plans

2,867

 

 

4,424

 

Cash flows from financing activities

376,291

 

 

47,456

 

Net increase in cash and cash equivalents

409,223

 

 

86,198

 

Cash and cash equivalents at beginning of the period

253,459

 

 

119,629

 

Cash and cash equivalents at end of the period

$

662,682

 

 

$

205,827

 








 



 

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures

(in thousands)

(unaudited)




 

Three Months Ended
June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Adjusted EBITDA:

 

 

 

 

 

 

 

Net income

$

14,490

 

 

$

16,625

 

 

$

29,040

 

 

$

25,196

 

Adjustments:

 

 

 

 

 

 

 

Interest expense, interest income and other income / (expense), net

3,973

 

 

646

 

 

7,339

 

 

740

 

Benefit from income taxes

(1,738

)

 

(2,277

)

 

(4,651

)

 

(1,075

)

Amortization and depreciation expense

7,477

 

 

6,723

 

 

14,862

 

 

13,145

 

Stock-based compensation expense

10,056

 

 

7,095

 

 

17,944

 

 

13,453

 

Secondary offering expense

 

 

543

 

 

 

 

543

 

Acquisition-related (benefit) / expense

 

 

(1,708

)

 

29

 

 

2,348

 

Litigation expense

3,748

 

 

1,563

 

 

9,049

 

 

4,049

 

Total adjustments

23,516

 

 

12,585

 

 

44,572

 

 

33,203

 

Adjusted EBITDA

$

38,006

 

 

$

29,210

 

 

$

73,612

 

 

$

58,399

 

 

 

 

 

 

 

 

 

Adjusted net income:

 

 

 

 

 

 

 

Net income, as reported

$

14,490

 

 

$

16,625

 

 

$

29,040

 

 

$

25,196

 

Benefit from income taxes

(1,738

)

 

(2,277

)

 

(4,651

)

 

(1,075

)

Income before income taxes

12,752

 

 

14,348

 

 

24,389

 

 

24,121

 

Adjustments:

 

 

 

 

 

 

 

Less: interest income and other income / (expense), net

(181

)

 

(222

)

 

(183

)

 

(773

)

Amortization expense

4,329

 

 

4,083

 

 

8,658

 

 

8,125

 

Amortization of debt discount and debt issuance costs

4,150

 

 

 

 

7,394

 

 

 

Stock-based compensation expense

10,056

 

 

7,095

 

 

17,944

 

 

13,453

 

Secondary offering expense

 

 

543

 

 

 

 

543

 

Acquisition-related (benefit) / expense

 

 

(1,708

)

 

29

 

 

2,348

 

Litigation expense

3,748

 

 

1,563

 

 

9,049

 

 

4,049

 

Non-GAAP adjusted income before income taxes

34,854

 

 

25,702

 

 

67,280

 

 

51,866

 

Income taxes 1

(7,320

)

 

(5,398

)

 

(14,129

)

 

(10,892

)

Non-GAAP adjusted net income

$

27,534

 

 

$

20,304

 

 

$

53,151

 

 

$

40,974

 
















 

1 Income taxes are calculated using a rate of 21.0% for each of the three and six months ended June 30, 2021 and 2020. The 21.0% effective tax rate for each of the three and six months ended June 30, 2021 and 2020 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
June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Adjusted net income attributable to common stockholders:

 

 

 

 

 

 

 

Net income attributable to common stockholders, as reported

$

14,745

 

 

$

16,995

 

 

$

29,575

 

 

$

25,802

 

Benefit from income taxes

(1,738

)

 

(2,277

)

 

(4,651

)

 

(1,075

)

Income attributable to common stockholders before income taxes

13,007

 

 

14,718

 

 

24,924

 

 

24,727

 

Adjustments:

 

 

 

 

 

 

 

Less: interest income and other income / (expense), net

(181

)

 

(222

)

 

(183

)

 

(773

)

Amortization expense

4,329

 

 

4,083

 

 

8,658

 

 

8,125

 

Amortization of debt discount and debt issuance costs

4,150

 

 

 

 

7,394

 

 

 

Stock-based compensation expense

10,056

 

 

7,095

 

 

17,944

 

 

13,453

 

Secondary offering expense

 

 

543

 

 

 

 

543

 

Acquisition-related (benefit) / expense

 

 

(1,708

)

 

29

 

 

2,348

 

Litigation expense

3,748

 

 

1,563

 

 

9,049

 

 

4,049

 

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

35,109

 

 

26,072

 

 

67,815

 

 

52,472

 

Income taxes 1

(7,373

)

 

(5,475

)

 

(14,241

)

 

(11,019

)

Non-GAAP adjusted net income attributable to common stockholders

$

27,736

 

 

$

20,597

 

 

$

53,574

 

 

$

41,453

 

 

Three Months Ended
June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Adjusted net income attributable to common stockholders per share:

 

 

 

 

 

 

 

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

$

0.30

 

 

$

0.35

 

 

$

0.60

 

 

$

0.53

 

Benefit from income taxes

 

(0.03

)

 

 

(0.05

)

 

 

(0.09

)

 

 

(0.02

)

Income attributable to common stockholders before income taxes

 

0.27

 

 

 

0.30

 

 

 

0.51

 

 

 

0.51

 

Adjustments:

 

 

 

 

 

 

 

Less: interest income and other income / (expense), net

 

 

 

 

 

 

 

 

 

 

(0.02

)

Amortization expense

 

0.08

 

 

 

0.08

 

 

 

0.17

 

 

 

0.17

 

Amortization of debt discount and debt issuance costs

 

0.08

 

 

 

 

 

 

0.15

 

 

 

 

Stock-based compensation expense

 

0.20

 

 

 

0.15

 

 

 

0.36

 

 

 

0.28

 

Secondary offering expense

 

 

 

 

0.01

 

 

 

 

 

 

0.01

 

Acquisition-related (benefit) / expense

 

 

 

 

(0.04

)

 

 

 

 

 

0.05

 

Litigation expense

 

0.08

 

 

 

0.03

 

 

 

0.18

 

 

 

0.08

 

Non-GAAP adjusted income before income taxes

 

0.71

 

 

 

0.53

 

 

 

1.37

 

 

 

1.08

 

Income taxes 1

 

(0.15

)

 

 

(0.11

)

 

 

(0.29

)

 

 

(0.23

)

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

$

0.56

 

 

$

0.42

 

 

$

1.08

 

 

$

0.85

 

 

 

 

 

 

 

 

 

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

$

0.54

 

 

$

0.41

 

 

$

1.03

 

 

$

0.82

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic, as reported

 

49,808,969

 

 

 

48,792,280

 

 

 

49,686,110

 

 

 

48,758,922

 

Diluted, as reported

 

51,754,392

 

 

 

50,551,632

 

 

 

51,789,943

 

 

 

50,443,526

 












 

1 Income taxes are calculated using a rate of 21.0% for each of the three and six months ended June 30, 2021 and 2020. The 21.0% effective tax rate for each of the three and six months ended June 30, 2021 and 2020 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
June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Non-GAAP free cash flow:

 

 

 

 

 

 

 

Cash flows from operating activities

$

24,076

 

 

$

35,148

 

 

$

45,308

 

 

$

48,048

 

Additions to property and equipment

(3,312

)

 

(3,397

)

 

(7,381

)

 

(7,116

)

Non-GAAP free cash flow

$

20,764

 

 

$

31,751

 

 

$

37,927

 

 

$

40,932

 

 

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

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

Source: Alarm.com Holdings, Inc.

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