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Alarm.com Reports Third Quarter 2021 Results

November 04, 2021

-- Third quarter total revenue increased 21.1% year-over-year to $192.3 million --

-- Third quarter SaaS and license revenue increased 17.9% year-over-year to $118.1 million --

-- Third quarter GAAP net income attributable to common stockholders was $13.5 million, compared to $36.1 million for the third quarter of 2020 --

-- Third quarter non-GAAP adjusted EBITDA increased 8.9% year-over-year to $37.6 million, compared to $34.5 million for the third 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 third quarter ended September 30, 2021. Alarm.com also provided its financial outlook for SaaS and license revenue for the fourth quarter of 2021 and increased its guidance for the full year of 2021.

“We are pleased to report another quarter of solid results,” said Steve Trundle, President and CEO of Alarm.com. “During the third quarter, we saw continued momentum as our service provider partners successfully deployed the growing range of Alarm.com’s connected property solutions. The Alarm.com team also introduced innovative new technology, including video analytics capabilities, that will expand our opportunities in both the residential and commercial markets.”

Third Quarter 2021 Financial Results as Compared to Third Quarter 2020

  • SaaS and license revenue increased 17.9% to $118.1 million, compared to $100.1 million.
  • Total revenue increased 21.1% to $192.3 million, compared to $158.9 million.
  • GAAP net income attributable to common stockholders decreased to $13.5 million, or $0.26 per diluted share, compared to $36.1 million, or $0.71 per diluted share, primarily due to a gain of $24.7 million on the sale of an investment in one of our platform partners during the third quarter of 2020.
  • Non-GAAP adjusted EBITDA(*) increased to $37.6 million, compared to $34.5 million.
  • Non-GAAP adjusted net income attributable to common stockholders(*) increased to $27.4 million, or $0.53 per diluted share, compared to $24.8 million or $0.49 per diluted share.

Balance Sheet and Cash Flow

  • Total cash and cash equivalents increased to $700.3 million as of September 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 September 30, 2021, cash flows from operations was $37.9 million, compared to $18.6 million for the quarter ended September 30, 2020. For the quarter ended September 30, 2021, non-GAAP free cash flow(*) was $36.3 million, compared to $15.1 million for the quarter ended September 30, 2020.

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

Recent Business Highlights

  • Launched Perimeter Guard: Based on Alarm.com's advanced video analytics software, Perimeter Guard can proactively identify and engage would-be intruders before they can threaten physical property. Perimeter Guard enables certain outdoor video cameras to automatically respond to suspicious activity with audible alerts and flashing red LED lights to deter potential break-ins. Subscribers can target specific activity and areas of their property with loitering detection, directional tripwires and ground zones capabilities. Perimeter Guard is offered as an enhancement to Alarm.com’s video analytics services and supports residential and commercial subscribers.
  • Introduced Commercial Video Analytics: Business Activity Analytics significantly enhances Alarm.com’s commercial video offering with capabilities that can help improve and optimize business operations. Commercial subscribers can intelligently monitor a full range of customer and employee activity through occupancy tracking, people counting, queue monitoring, crowd gathering and heat mapping. Real-time notifications and powerful business intelligence reporting can help streamline customer flows, reduce wait times, measure the effectiveness of marketing campaigns and enforce occupancy and social distancing limits.
  • Released Pro-Series Commercial Video Cameras: Designed to commercial specifications, the Pro-Series line enables the full range of Alarm.com’s Business Activity Analytics and enhances the forensic image quality of recorded video. The cameras are compliant with National Defense Authorization Act and are available in a turret, bullet and dome form factor with 4-megapixel image sensor options and varifocal lenses. Whether a commercial customer needs to monitor a large area such as a parking lot, or a narrow hallway or a door, Pro-Series cameras can flexibly adjust to meet the robust coverage and image quality requirements of mid-market commercial installations.
  • Improving Service Provider Efficiency and Customer Experience: Alarm.com’s Partner Services Platform now provides a new Service Dashboard, a unified interface that displays key operational and customer experience indicators, including technician performance, system reliability and customer engagement metrics. Service managers can quickly identify and implement operational efficiencies through Alarm.com’s service provider tools, including the award-winning On Site Wrap Up capability and System Check tool.

Financial Outlook

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

For the fourth quarter of 2021:

  • SaaS and license revenue is expected to be in the range of $118.1 million to $118.3 million.

For the full year of 2021:

  • SaaS and license revenue is expected to be in the range of $456.7 million to $456.9 million.
  • Total revenue is expected to be in the range of $721.7 million to $731.9 million, which includes anticipated hardware and other revenue in the range of $265.0 million to $275.0 million.
  • Non-GAAP adjusted EBITDA is expected to be in the range of $138.0 million to $140.0 million.
  • Non-GAAP adjusted net income attributable to common stockholders is expected to be in the range of $97.3 million to $98.0 million, based on an estimated tax rate of 21.0%.
  • Based on an expected 52.1 million weighted average diluted shares outstanding, non-GAAP adjusted net income attributable to common stockholders is expected to be $1.87 to $1.88 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 2021 financial results and its outlook for the fourth quarter and full year of 2021. A live audio webcast is scheduled to begin at 4:30 p.m. ET on November 4, 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 November 11, 2021 by dialing 855.859.2056 (U.S./Canada) or 404.537.3406 (International) and providing Conference ID: 4968939. 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 provision for / (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 opportunities, positioning, the benefits of recently launched offerings, and the Company’s guidance for the fourth 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 August 5, 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 September 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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

SaaS and license revenue

$

118,059

 

 

$

100,126

 

 

$

338,628

 

 

$

287,780

 

Hardware and other revenue

 

74,265

 

 

 

58,725

 

 

 

215,051

 

 

 

164,647

 

Total revenue

 

192,324

 

 

 

158,851

 

 

 

553,679

 

 

 

452,427

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of SaaS and license revenue

 

17,425

 

 

 

14,344

 

 

 

49,782

 

 

 

39,673

 

Cost of hardware and other revenue

 

62,959

 

 

 

46,839

 

 

 

173,731

 

 

 

128,495

 

Total cost of revenue

 

80,384

 

 

 

61,183

 

 

 

223,513

 

 

 

168,168

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

22,557

 

 

 

18,410

 

 

 

62,085

 

 

 

52,405

 

General and administrative

 

18,689

 

 

 

17,410

 

 

 

64,839

 

 

 

55,634

 

Research and development

 

44,143

 

 

 

36,914

 

 

 

130,101

 

 

 

113,280

 

Amortization and depreciation

 

7,467

 

 

 

6,878

 

 

 

22,329

 

 

 

20,023

 

Total operating expenses

 

92,856

 

 

 

79,612

 

 

 

279,354

 

 

 

241,342

 

Operating income

 

19,084

 

 

 

18,056

 

 

 

50,812

 

 

 

42,917

 

Interest expense

 

(4,196

)

 

 

(556

)

 

 

(11,718

)

 

 

(2,069

)

Interest income

 

140

 

 

 

118

 

 

 

446

 

 

 

734

 

Other income / (expense), net

 

53

 

 

 

24,753

 

 

 

(70

)

 

 

24,910

 

Income before income taxes

 

15,081

 

 

 

42,371

 

 

 

39,470

 

 

 

66,492

 

Provision for / (benefit from) income taxes

 

1,787

 

 

 

6,546

 

 

 

(2,864

)

 

 

5,471

 

Net income

 

13,294

 

 

 

35,825

 

 

 

42,334

 

 

 

61,021

 

Net loss attributable to redeemable noncontrolling interest

 

244

 

 

 

259

 

 

 

779

 

 

 

865

 

Net income attributable to common stockholders

$

13,538

 

 

$

36,084

 

 

$

43,113

 

 

$

61,886

 

 

 

 

 

 

 

 

 

Per share information attributable to common stockholders:

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.27

 

 

$

0.74

 

 

$

0.87

 

 

$

1.27

 

Diluted

$

0.26

 

 

$

0.71

 

 

$

0.83

 

 

$

1.22

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

49,954,565

 

 

 

49,007,343

 

 

 

49,776,578

 

 

 

48,842,333

 

Diluted

 

51,836,239

 

 

 

50,979,679

 

 

 

51,879,061

 

 

 

50,673,752

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

Stock-based compensation expense included in operating expenses:

2021

 

2020

 

2021

 

2020

Sales and marketing

$

1,189

 

 

$

734

 

 

$

3,232

 

 

$

2,263

 

General and administrative

 

1,974

 

 

 

2,154

 

 

 

7,217

 

 

 

6,033

 

Research and development

 

6,255

 

 

 

4,560

 

 

 

16,913

 

 

 

12,605

 

Total stock-based compensation expense

$

9,418

 

 

$

7,448

 

 

$

27,362

 

 

$

20,901

 

 
 

ALARM.COM HOLDINGS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

 

September 30,

2021

 

December 31,

2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

700,307

 

 

$

253,459

 

Accounts receivable, net of allowance for credit losses of $3,158 and $4,696, respectively, and net of allowance for product returns of $1,025 and $1,480, respectively

 

90,624

 

 

 

83,326

 

Inventory

 

56,526

 

 

 

44,281

 

Other current assets, net of allowance for credit losses of $3 and $17, respectively

 

23,310

 

 

 

16,348

 

Total current assets

 

870,767

 

 

 

397,414

 

Property and equipment, net

 

42,412

 

 

 

44,796

 

Intangible assets, net

 

90,476

 

 

 

103,259

 

Goodwill

 

112,901

 

 

 

112,838

 

Deferred tax assets

 

11,430

 

 

 

21,692

 

Operating lease right-of-use assets

 

29,911

 

 

 

33,455

 

Other assets, net of allowance for credit losses of $76 and $72, respectively

 

23,857

 

 

 

18,233

 

Total assets

$

1,181,754

 

 

$

731,687

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and other current liabilities

$

62,966

 

 

$

53,927

 

Accrued compensation

 

21,442

 

 

 

22,307

 

Deferred revenue

 

7,037

 

 

 

4,037

 

Operating lease liabilities

 

10,242

 

 

 

9,973

 

Total current liabilities

 

101,687

 

 

 

90,244

 

Deferred revenue

 

9,040

 

 

 

8,492

 

Convertible senior notes, net

 

421,112

 

 

 

 

Long-term debt

 

 

 

 

110,000

 

Operating lease liabilities

 

32,322

 

 

 

37,697

 

Other liabilities

 

8,530

 

 

 

6,811

 

Total liabilities

 

572,691

 

 

 

253,244

 

Redeemable noncontrolling interest

 

11,889

 

 

 

10,691

 

Stockholders’ equity

 

 

 

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

 

 

 

 

 

Common stock, $0.01 par value, 300,000,000 shares authorized; 50,174,272 and 49,630,773 shares issued; and 50,027,119 and 49,483,620 shares outstanding as of September 30, 2021 and December 31, 2020, respectively

 

501

 

 

 

496

 

Additional paid-in capital

 

492,135

 

 

 

405,831

 

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

 

(5,149

)

 

 

(5,149

)

Retained earnings

 

109,687

 

 

 

66,574

 

Total stockholders’ equity

 

597,174

 

 

 

467,752

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

$

1,181,754

 

 

$

731,687

 

 
 

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Nine Months Ended

September 30,

Cash flows from operating activities:

2021

 

2020

Net income

$

42,334

 

 

$

61,021

 

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

 

 

 

Recovery of credit losses on accounts receivable

 

(238

)

 

 

(237

)

Reserve for product returns

 

1,628

 

 

 

1,491

 

Recovery of credit losses on notes receivable

 

(10

)

 

 

(368

)

Provision for excess and obsolete inventory

 

374

 

 

 

1,178

 

Amortization on patents and tooling

 

947

 

 

 

604

 

Amortization and depreciation

 

22,329

 

 

 

20,023

 

Amortization of debt discount and debt issuance costs

 

11,590

 

 

 

81

 

Amortization of operating leases

 

7,173

 

 

 

6,562

 

Deferred income taxes

 

(5,918

)

 

 

(1,480

)

Change in fair value of contingent liability

 

 

 

 

(2,593

)

Stock-based compensation

 

27,362

 

 

 

20,901

 

Acquired in-process research and development

 

 

 

 

3,297

 

Gain on sale of investment

 

 

 

 

(24,737

)

Loss on early extinguishment of debt

 

185

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(8,689

)

 

 

(7,131

)

Inventory

 

(12,619

)

 

 

(7,209

)

Other current and non-current assets

 

(8,368

)

 

 

(5,549

)

Accounts payable, accrued expenses and other current liabilities

 

10,672

 

 

 

5,897

 

Deferred revenue

 

3,548

 

 

 

2,374

 

Operating lease liabilities

 

(8,745

)

 

 

(7,427

)

Other liabilities

 

(361

)

 

 

(28

)

Cash flows from operating activities

 

83,194

 

 

 

66,670

 

Cash flows (used in) / from investing activities:

 

 

 

Additions to property and equipment

 

(8,939

)

 

 

(10,677

)

Purchases of in-process research and development

 

 

 

 

(3,297

)

Issuances of notes receivable

 

 

 

 

(600

)

Receipt of payments on notes receivable

 

42

 

 

 

2,023

 

Purchase of investment in unconsolidated entity

 

(5,000

)

 

 

 

Proceeds from sale of investment

 

 

 

 

25,687

 

Purchases of patents and patent licenses

 

 

 

 

(900

)

Cash flows (used in) / from investing activities

 

(13,897

)

 

 

12,236

 

Cash flows from financing activities:

 

 

 

Proceeds from credit facility

 

 

 

 

50,000

 

Repayments of credit facility

 

(110,000

)

 

 

(2,000

)

Proceeds from issuance of convertible senior notes

 

500,000

 

 

 

 

Payments of debt issuance costs

 

(15,698

)

 

 

 

Payments of deferred consideration for business acquisitions

 

(1,160

)

 

 

(819

)

Purchases of treasury stock

 

 

 

 

(5,149

)

Issuances of common stock from equity-based plans

 

4,409

 

 

 

6,609

 

Cash flows from financing activities

 

377,551

 

 

 

48,641

 

Net increase in cash and cash equivalents

 

446,848

 

 

 

127,547

 

Cash and cash equivalents at beginning of the period

 

253,459

 

 

 

119,629

 

Cash and cash equivalents at end of the period

$

700,307

 

 

$

247,176

 

 
 

ALARM.COM HOLDINGS, INC.

Reconciliation of Non-GAAP Measures

(in thousands)

(unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Adjusted EBITDA:

 

 

 

 

 

 

 

Net income

$

13,294

 

 

$

35,825

 

 

$

42,334

 

 

$

61,021

 

Adjustments:

 

 

 

 

 

 

 

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

 

4,003

 

 

 

(24,315

)

 

 

11,342

 

 

 

(23,575

)

Provision for / (benefit from) income taxes

 

1,787

 

 

 

6,546

 

 

 

(2,864

)

 

 

5,471

 

Amortization and depreciation expense

 

7,467

 

 

 

6,878

 

 

 

22,329

 

 

 

20,023

 

Stock-based compensation expense

 

9,418

 

 

 

7,448

 

 

 

27,362

 

 

 

20,901

 

Secondary offering expense

 

 

 

 

 

 

 

 

 

 

543

 

Acquisition-related (benefit) / expense

 

 

 

 

(304

)

 

 

29

 

 

 

2,044

 

Litigation expense

 

1,609

 

 

 

2,418

 

 

 

10,658

 

 

 

6,467

 

Total adjustments

 

24,284

 

 

 

(1,329

)

 

 

68,856

 

 

 

31,874

 

Adjusted EBITDA

$

37,578

 

 

$

34,496

 

 

$

111,190

 

 

$

92,895

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Adjusted net income:

 

 

 

 

 

 

 

Net income, as reported

$

13,294

 

 

$

35,825

 

 

$

42,334

 

 

$

61,021

 

Provision for / (benefit from) income taxes

 

1,787

 

 

 

6,546

 

 

 

(2,864

)

 

 

5,471

 

Income before income taxes

 

15,081

 

 

 

42,371

 

 

 

39,470

 

 

 

66,492

 

Adjustments:

 

 

 

 

 

 

 

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

 

(193

)

 

 

(24,871

)

 

 

(376

)

 

 

(25,644

)

Amortization expense

 

4,329

 

 

 

4,084

 

 

 

12,987

 

 

 

12,209

 

Amortization of debt discount and debt issuance costs

 

4,191

 

 

 

 

 

 

11,584

 

 

 

 

Stock-based compensation expense

 

9,418

 

 

 

7,448

 

 

 

27,362

 

 

 

20,901

 

Secondary offering expense

 

 

 

 

 

 

 

 

 

 

543

 

Acquisition-related (benefit) / expense

 

 

 

 

(304

)

 

 

29

 

 

 

2,044

 

Litigation expense

 

1,609

 

 

 

2,418

 

 

 

10,658

 

 

 

6,467

 

Non-GAAP adjusted income before income taxes

 

34,435

 

 

 

31,146

 

 

 

101,714

 

 

 

83,012

 

Income taxes 1

 

(7,231

)

 

 

(6,541

)

 

 

(21,360

)

 

 

(17,433

)

Non-GAAP adjusted net income

$

27,204

 

 

$

24,605

 

 

$

80,354

 

 

$

65,579

 

 

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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Adjusted net income attributable to common stockholders:

 

 

 

 

 

 

 

Net income attributable to common stockholders, as reported

$

13,538

 

 

$

36,084

 

 

$

43,113

 

 

$

61,886

 

Provision for / (benefit from) income taxes

 

1,787

 

 

 

6,546

 

 

 

(2,864

)

 

 

5,471

 

Income attributable to common stockholders before income taxes

 

15,325

 

 

 

42,630

 

 

 

40,249

 

 

 

67,357

 

Adjustments:

 

 

 

 

 

 

 

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

 

(193

)

 

 

(24,871

)

 

 

(376

)

 

 

(25,644

)

Amortization expense

 

4,329

 

 

 

4,084

 

 

 

12,987

 

 

 

12,209

 

Amortization of debt discount and debt issuance costs

 

4,191

 

 

 

 

 

 

11,584

 

 

 

 

Stock-based compensation expense

 

9,418

 

 

 

7,448

 

 

 

27,362

 

 

 

20,901

 

Secondary offering expense

 

 

 

 

 

 

 

 

 

 

543

 

Acquisition-related (benefit) / expense

 

 

 

 

(304

)

 

 

29

 

 

 

2,044

 

Litigation expense

 

1,609

 

 

 

2,418

 

 

 

10,658

 

 

 

6,467

 

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

 

34,679

 

 

 

31,405

 

 

 

102,493

 

 

 

83,877

 

Income taxes 1

 

(7,283

)

 

 

(6,595

)

 

 

(21,524

)

 

 

(17,614

)

Non-GAAP adjusted net income attributable to common stockholders

$

27,396

 

 

$

24,810

 

 

$

80,969

 

 

$

66,263

 

 
 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 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

$

0.27

 

 

$

0.74

 

 

$

0.87

 

 

$

1.27

 

Provision for / (benefit from) income taxes

 

0.04

 

 

 

0.13

 

 

 

(0.06

)

 

 

0.11

 

Income attributable to common stockholders before income taxes

 

0.31

 

 

 

0.87

 

 

 

0.81

 

 

 

1.38

 

Adjustments:

 

 

 

 

 

 

 

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

 

 

 

 

(0.51

)

 

 

 

 

 

(0.52

)

Amortization expense

 

0.09

 

 

 

0.09

 

 

 

0.26

 

 

 

0.25

 

Amortization of debt discount and debt issuance costs

 

0.08

 

 

 

 

 

 

0.23

 

 

 

 

Stock-based compensation expense

 

0.19

 

 

 

0.15

 

 

 

0.55

 

 

 

0.43

 

Secondary offering expense

 

 

 

 

 

 

 

 

 

 

0.01

 

Acquisition-related (benefit) / expense

 

 

 

 

(0.01

)

 

 

 

 

 

0.04

 

Litigation expense

 

0.03

 

 

 

0.05

 

 

 

0.21

 

 

 

0.13

 

Non-GAAP adjusted income before income taxes

 

0.70

 

 

 

0.64

 

 

 

2.06

 

 

 

1.72

 

Income taxes 1

 

(0.15

)

 

 

(0.13

)

 

 

(0.43

)

 

 

(0.36

)

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

$

0.55

 

 

$

0.51

 

 

$

1.63

 

 

$

1.36

 

 

 

 

 

 

 

 

 

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

$

0.53

 

 

$

0.49

 

 

$

1.56

 

 

$

1.31

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic, as reported

 

49,954,565

 

 

 

49,007,343

 

 

 

49,776,578

 

 

 

48,842,333

 

Diluted, as reported

 

51,836,239

 

 

 

50,979,679

 

 

 

51,879,061

 

 

 

50,673,752

 

 

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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Non-GAAP free cash flow:

 

 

 

 

 

 

 

Cash flows from operating activities

$

37,886

 

 

$

18,622

 

 

$

83,194

 

 

$

66,670

 

Additions to property and equipment

 

(1,558

)

 

 

(3,561

)

 

 

(8,939

)

 

 

(10,677

)

Non-GAAP free cash flow

$

36,328

 

 

$

15,061

 

 

$

74,255

 

 

$

55,993

 

 

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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