2 unchanged sentences
This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
−Removed: These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” “would” or the negative or plural of these words or similar expressions or variations and such forward-looking statements include, but are not limited to, statements with respect to the anticipated impact of the global economic uncertainty and financial market conditions caused by significant worldwide events, including public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine (collectively Macroeconomic Conditions) on our business, results of operations and financial condition, including on our hardware sales and our Software-as-a-Service, or SaaS, and license revenue growth rate;
+Added: These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” “would” or the negative or plural of these words or similar expressions or variations and such forward-looking statements include, but are not limited to, statements with respect to the anticipated impact of the global economic uncertainty and financial market conditions caused by significant worldwide events, including public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine (collectively, the Macroeconomic Conditions) on our business, results of operations and financial condition, including on our hardware sales and our Software-as-a-Service, or SaaS, and license revenue growth rate;
our business strategy, plans and objectives for future operations;
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The Alarm.com platform enables our service provider partners to deploy our interactive security, video monitoring, intelligent automation, access control, energy management and wellness solutions as stand-alone offerings or as combined solutions to address the needs of a broad range of customers.
−Removed: Highlights of Second Quarter Results
+Added: Highlights of Third Quarter Results
We primarily generate SaaS and license revenue, our largest source of revenue, through our service provider partners who resell our services and pay us monthly fees.
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We derive a portion of our revenue from licensing our intellectual property to third parties on a per customer basis.
−Removed: SaaS and license revenue represented 61% and 60% of our revenue during the three and six months ended June 30, 2022, respectively, as compared to 60% and 61% in the same periods in the prior year.
+Added: SaaS and license revenue represented 62% and 61% of our revenue during the three and nine months ended September 30, 2022, respectively, as compared to 61% in the same periods in the prior year.
We also generate SaaS and license revenue from monthly fees charged to service providers on a per subscriber basis for access to our non-hosted software platform, or Software platform.
The non-hosted software for interactive security, automation and related solutions is typically deployed and operated by the service provider in its own network operations center.
−Removed: Software license revenue represented 3% of our revenue during each of the three and six months ended June 30, 2022 as compared to 4% and 5% for the same periods in the prior year.
+Added: Software license revenue represented 3% of our revenue during each of the three and nine months ended September 30, 2022 as compared to 4% for the same periods in the prior year.
We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions.
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Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our gunshot detection solution in exchange for license fees.
−Removed: Hardware and other revenue represented 39% and 40% of our revenue during the three and six months ended June 30, 2022, respectively, as compared to 40% and 39% in the same periods in the prior year.
+Added: Hardware and other revenue represented 38% and 39% of our revenue during the three and nine months ended September 30, 2022, respectively, as compared to 39% in the same periods in the prior year.
We typically expect hardware and other revenue to fluctuate as a percentage of total revenue.
Highlights of our financial performance for the periods covered in this Quarterly Report include:
−Removed: • SaaS and license revenue increased 14% to $129.5 million during the three months ended June 30, 2022 from $113.2 million during the three months ended June 30, 2021.
−Removed: SaaS and license revenue increased 15% to $252.7 million in the six months ended June 30, 2022 from $220.6 million in the six months ended June 30, 2021.
−Removed: Included in SaaS and license revenue was software license revenue, which decreased to $6.8 million during the three months ended June 30, 2022 from $8.3 million during the three months ended June 30, 2021.
−Removed: Software license revenue decreased to $14.0 million in the six months ended June 30, 2022 from $17.0 million in the six months ended June 30, 2021.
−Removed: • Total revenue increased 13% to $212.8 million during the three months ended June 30, 2022 from $188.9 million during the three months ended June 30, 2021.
−Removed: Total revenue increased 16% to $418.3 million in the six months ended June 30, 2022 from $361.4 million in the six months ended June 30, 2021.
−Removed: • Net income decreased to $10.8 million during the three months ended June 30, 2022, as compared to $14.5 million during the three months ended June 30, 2021.
−Removed: Net income decreased to $19.7 million in the six months ended June 30, 2022, as compared to $29.0 million in the six months ended June 30, 2021.
−Removed: Net income attributable to common stockholders decreased to $10.8 million during the three months ended June 30, 2022, as compared to $14.7 million during the three months ended June 30, 2021.
−Removed: Net income attributable to common stockholders decreased to $19.9 million in the six months ended June 30, 2022, as compared to $29.6 million in the six months ended June 30, 2021.
−Removed: • Adjusted EBITDA, a non-GAAP measurement of operating performance, decreased to $37.1 million during the three months ended June 30, 2022 from $38.0 million during the three months ended June 30, 2021.
−Removed: Adjusted EBITDA decreased to $67.1 million in the six months ended June 30, 2022 from $73.6 million in the six months ended June 30, 2021.
−Removed: Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of Adjusted EBITDA (a non-GAAP measure) and a reconciliation of Adjusted EBITDA to net income, the most comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three and six months ended June 30, 2022 and 2021.
+Added: • SaaS and license revenue increased 13% to $133.1 million during the three months ended September 30, 2022 from $118.1 million during the three months ended September 30, 2021.
+Added: SaaS and license revenue increased 14% to $385.8 million in the nine months ended September 30, 2022 from $338.6 million in the nine months ended September 30, 2021.
+Added: Included in SaaS and license revenue was software license revenue, which decreased to $6.5 million during the three months ended September 30, 2022 from $7.9 million during the three months ended September 30, 2021.
+Added: Software license revenue decreased to $20.5 million in the nine months ended September 30, 2022 from $24.9 million in the nine months ended September 30, 2021.
+Added: • Total revenue increased 12% to $216.1 million during the three months ended September 30, 2022 from $192.3 million during the three months ended September 30, 2021.
+Added: Total revenue increased 15% to $634.4 million in the nine months ended September 30, 2022 from $553.7 million in the nine months ended September 30, 2021.
+Added: • Net income increased to $18.1 million during the three months ended September 30, 2022, as compared to $13.3 million during the three months ended September 30, 2021.
+Added: Net income decreased to $37.8 million in the nine months ended September 30, 2022, as compared to $42.3 million in the nine months ended September 30, 2021.
+Added: Net income attributable to common stockholders increased to $18.3 million during the three months ended September 30, 2022, as compared to $13.5 million during the three months ended September 30, 2021.
+Added: Net income attributable to common stockholders decreased to $38.3 million in the nine months ended September 30, 2022, as compared to $43.1 million in the nine months ended September 30, 2021.
+Added: • Adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $40.8 million during the three months ended September 30, 2022 from $37.6 million during the three months ended September 30, 2021.
+Added: Adjusted EBITDA decreased to $107.9 million in the nine months ended September 30, 2022 from $111.2 million in the nine months ended September 30, 2021.
+Added: Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of Adjusted EBITDA (a non-GAAP measure) and a reconciliation of Adjusted EBITDA to net income, the most comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three and nine months ended September 30, 2022 and 2021.
Recent Developments
−Removed: The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine (collectively Macroeconomic Conditions).
+Added: On September 23, 2022, Alarm.com Incorporated, one of our wholly-owned subsidiaries, acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., or Noonlight.
+Added: Noonlight provides a connected safety and event management software and services platform that enables new applications and provides enhanced emergency response capabilities.
+Added: We believe the acquisition of Noonlight will enhance our comprehensive suite of interactive cloud-based services and allow us to expand markets for emergency response services as well as accelerate innovation in those services.
+Added: In consideration for the purchase of 85% of the issued and outstanding shares of capital stock of Noonlight, we paid $31.9 million in cash on September 23, 2022, after deducting $1.5 million related to the settlement of an outstanding loan issued to Noonlight during May of 2022 and $4.9 million related to agreed holdback provisions.
+Added: Pursuant to the terms of the stock purchase agreement, following the preliminary determination of the working capital of Noonlight as of the closing date, the purchase price decreased by $0.2 million.
+Added: The purchase price allocation was not finalized as of the filing date of this Quarterly Report on Form 10-Q and is pending the final determination of the working capital adjustment as well as tax adjustments, including the assessment of any net operating losses acquired and the related limitations on any identified net operating losses.
+Added: On October 27, 2022, we filed a demand for arbitration of a dispute arising under the Patent Cross License agreement
+Added: between Alarm.com and Vivint, Inc., or Vivint, executed in November 2013.
+Added: Vivint notified us it will stop paying license fees to Alarm.com under the agreement.
+Added: Vivint has paid the required license fees to Alarm.com since the agreement was executed in November 2013.
+Added: Alarm.com disputes Vivint's refusal of payment and is seeking continued payments of license fees in the arbitration, as well as interest and declaratory relief.
+Added: As a result of Vivint’s refusal to pay license fees under the agreement, beginning with the fourth quarter of 2022, we believe that quarterly SaaS and license revenue and total revenue will be impacted by approximately $6.0 million.
+Added: We also believe that quarterly earnings and cash flow will be impacted by the aforementioned $6.0 million, plus additional legal fees.
+Added: The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine (collectively, the Macroeconomic Conditions).
These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment.
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In response to the COVID-19 pandemic, we have taken precautionary measures intended to help protect our employees, service providers and subscribers, as well as the communities in which we participate, including enabling substantially all of our employees to partially work remotely.
−Removed: After evaluating the public health situation in the United States regarding COVID-19, including revised guidance from public health authorities, the rise in vaccinated individuals, and decline of hospitalizations due to COVID-19 in the six months ended June 30, 2022, as compared to 2020 and 2021, we recently have implemented a hybrid return to office plan that includes voluntary remote workdays and mandatory in-office workdays.
−Removed: The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2022, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions.
+Added: After evaluating the public health situation in the United States regarding COVID-19, including revised guidance from public health authorities, the rise in vaccinated individuals, and decline of hospitalizations due to COVID-19 in the nine months ended September 30, 2022, as compared to 2020 and 2021, we continue to follow our previously implemented hybrid return to office plan that includes voluntary remote workdays and mandatory in-office workdays.
+Added: The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2022, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions.
Prolonged uncertainty with respect to Macroeconomic Conditions could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.
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Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2022 2021 2022 2021
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Twelve Months Ended
+Added: September 30,
SaaS and license revenue renewal rate 94 % 96 %
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Adjusted EBITDA
−Removed: Adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other income / (expense), net, provision for / (benefit from) income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense and legal costs and settlement fees incurred in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
+Added: Adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other (expense) / income, net, provision for / (benefit from) income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense and legal costs and settlement fees incurred in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
We do not consider these items to be indicative of our core operating performance.
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We exclude interest expense in calculating Adjusted EBITDA because we believe that the exclusion of interest expense will provide for more meaningful information about our financial performance.
−Removed: We exclude interest income as well as certain activity within other income / (expense), net including gains, losses or impairments on investments and other assets as well as losses on the early extinguishment of the debt, when applicable, from Adjusted EBITDA because we do not consider it part of our ongoing results of operations.
+Added: We exclude interest income as well as certain activity within other (expense) / income, net including gains, losses or impairments on investments and other assets as well as losses on the early extinguishment of the debt, when applicable, from Adjusted EBITDA because we do not consider it part of our ongoing results of operations.
We exclude the impact related to our provision for / (benefit from) income taxes from Adjusted EBITDA because we do not consider this tax adjustment to be part of our ongoing results of operations.
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Adjusted EBITDA is not a measure calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
−Removed: Please see Non-GAAP Measures in this section for a discussion of the limitations of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measurement, for the three and six months ended June 30, 2022 and 2021.
+Added: Please see Non-GAAP Measures in this section for a discussion of the limitations of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measurement, for the three and nine months ended September 30, 2022 and 2021.
SaaS and License Revenue Renewal Rate
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Retained earnings 9,972
−Removed: Our net income attributable to common stockholders increased $2.0 million and $4.0 million during the three and six months ended June 30, 2022, respectively, as a result of adopting ASU 2020-06 due to no longer recording non-cash interest expense related to the amortization of the debt discount associated with the previous equity component of the 2026 Notes.
−Removed: Upon adoption of this guidance on January 1, 2022, we began using the if-converted method when calculating the dilutive impact of the 2026 Notes on net income per share, which required us to increase our diluted weighted average common shares outstanding by 3,396,950 shares for the three and six months ended June 30, 2022.
−Removed: The impact of ASU 2020-06 on net income attributable to common stockholders and weighted average diluted shares resulted in an increase to basic net income attributable to common stockholders of $0.04 and $0.08 per share and an increase to diluted net income attributable to common stockholders of $0.04 and $0.07 per share, during the three and six months ended June 30, 2022, respectively.
+Added: Our net income attributable to common stockholders increased $2.0 million and $6.0 million during the three and nine months ended September 30, 2022, respectively, as a result of adopting ASU 2020-06 due to no longer recording non-cash interest expense related to the amortization of the debt discount associated with the previous equity component of the 2026 Notes.
+Added: Upon adoption of this guidance on January 1, 2022, we began using the if-converted method when calculating the dilutive impact of the 2026 Notes on net income per share, which required us to increase our diluted weighted average common shares outstanding by 3,396,950 shares for the three and nine months ended September 30, 2022.
+Added: The impact of ASU 2020-06 on net income attributable to common stockholders and weighted average diluted shares resulted in an increase to basic net income attributable to common stockholders of $0.04 and $0.12 per share and an increase to diluted net income attributable to common stockholders of $0.03 and $0.10 per share, during the three and nine months ended September 30, 2022, respectively.
See Note 15 for details on the components of basic and diluted earnings per share.
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In addition, in certain markets, our EnergyHub subsidiary sells its demand response service for an annual service fee, with pricing based on the number of subscribers or amount of aggregate electricity demand made available for a utility’s or market’s control.
+Added: On October 27, 2022, we filed a demand for arbitration of a dispute arising under the Patent Cross License agreement between Alarm.com and Vivint executed in November 2013.
+Added: Vivint notified us it will stop paying license fees to Alarm.com under the agreement.
+Added: Vivint has paid the required license fees to Alarm.com since the agreement was executed in November 2013.
+Added: Alarm.com disputes Vivint's refusal of payment and is seeking continued payments of license fees in the arbitration, as well as interest and declaratory relief.
+Added: As a result of Vivint’s refusal to pay license fees under the agreement, beginning with the fourth quarter of 2022, we believe that quarterly SaaS and license revenue and total revenue will be impacted by approximately $6.0 million.
Software License Revenue .
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These emergency measures remain in place to varying degrees.
−Removed: We have seen and anticipate we may continue to see disruption to our hardware supply chain, including limited inventory availability, increased lead times, and shipping delays, due to the impact of COVID-19 on manufacturing, production and global transportation, as well as to our sales channels due to restrictions on our service providers’ ability to meet with residential and commercial property owners who use our solutions, reluctance of service providers and property owners to meet even where such restrictions have been lifted and general economic conditions.
+Added: We have seen and anticipate we may continue to see disruption to our hardware supply chain, including limited inventory availability, increased lead times, and shipping delays, due to the impact of COVID-19 on manufacturing, production and global transportation, as well as to our sales channels due to restrictions on our service providers’ ability to meet with residential and commercial property owners who use our solutions, reluctance of service providers and property owners to meet even where such restrictions have been lifted and general economic
It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions including, the path of the COVID-19 pandemic, the evolution of COVID-19 variants, or the emergence of other public health crises.
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Our costs of hardware revenue increased during the second half of 2021 primarily due to an increase in costs for freight shipments, including expedited shipping costs, as well as an increase in inventory component costs.
−Removed: We currently expect our hardware revenue margins to increase in 2022 as compared to the hardware revenue margins we experienced during the fourth quarter of 2021 and first quarter of 2022 as a result of price increases we have implemented on some of our products in 2022 to cover some of our increases in costs.
+Added: We currently expect our hardware revenue margins to increase in 2022 as compared to the hardware revenue margins we experienced during the fourth quarter of 2021 and first quarter of 2022 as a result of price increases we have implemented on some of our products during the first six months of 2022 to cover some of our increases in costs.
Operating Expenses
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We include stock-based compensation expense in connection with the grant of restricted stock units and other forms of equity compensation, including equity compensation with performance conditions, in the applicable operating expense category based on the respective equity award recipient’s function (sales and marketing, general and administrative or research and development).
−Removed: We grew from 1,421 employees as of June 30, 2021 to 1,606 employees as of June 30, 2022 and increased from 1,565 employees as of March 31, 2022, and we expect to continue to hire new employees to support the projected future growth of our business.
+Added: We grew from 1,482 employees as of September 30, 2021 to 1,699 employees as of September 30, 2022 and grew from 1,606 employees as of June 30, 2022, and we expect to continue to hire new employees to support the projected future growth of our business.
Sales and Marketing Expense.
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Our sales and marketing teams engage in sales, account management, service provider partner support, advertising, promotion of our products and services and marketing.
−Removed: The number of employees in sales and marketing functions increased from 456 as of June 30, 2021 to 484 as of June 30, 2022 and increased from 478 as of March 31, 2022.
+Added: The number of employees in sales and marketing functions increased from 476 as of September 30, 2021 to 504 as of September 30, 2022 and increased from 484 as of June 30, 2022.
We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally.
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Also included in general and administrative expenses are credit losses and acquisition-related expenses, which consist primarily of legal, accounting and professional service fees directly related to acquisitions and valuation gains or losses on acquisition-related contingent liabilities.
−Removed: The number of employees in general and administrative functions increased from 173 as of June 30, 2021 to 203 as of June 30, 2022 and increased from 195 as of March 31, 2022.
+Added: The number of employees in general and administrative functions increased from 187 as of September 30, 2021 to 214 as of September 30, 2022 and increased from 203 as of June 30, 2022.
Excluding intellectual property litigation and acquisition-related expense, we expect general and administrative costs to increase prospectively as our business grows.
This includes cost increases related to human resources, accounting, finance, and legal personnel, additional external legal, audit fees and other expenses associated with regulations governing public companies.
−Removed: While somewhat unpredictable, we also expect to continue to incur costs related to litigation involving intellectual property.
+Added: While somewhat unpredictable, we also expect to continue to incur costs related to litigation involving intellectual property as well as additional legal fees related to the dispute arising under the Patent Cross License agreement between Alarm.com and Vivint.
See the section of this Quarterly Report titled "Legal Proceedings" for additional information regarding litigation matters.
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Also included are non-personnel costs such as consulting and professional fees paid to third-party development resources.
−Removed: The number of employees in research and development functions increased from 792 as of June 30, 2021 to 919 as of June 30, 2022 and increased from 892 as of March 31, 2022.
+Added: The number of employees in research and development functions increased from 819 as of September 30, 2021 to 981 as of September 30, 2022 and increased from 919 as of June 30, 2022.
Our research and development efforts are focused on innovating new features and enhancing the functionality of our platforms and the solutions we offer to our service provider partners and subscribers.
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Interest Income
−Removed: Interest income consists of interest income earned on our cash and cash equivalents and our notes receivable.
−Removed: Other Income / (Expense), Net
−Removed: Other income / (expense), net primarily consists of non-operating and miscellaneous expense and income, including a $0.1 million gain related to proceeds received from our initial investment in an installation partner during the three months ended June 30, 2022 and a $0.2 million loss on the early extinguishment of the 2017 Facility during the six months ended June 30, 2021.
+Added: Interest income consists of interest income earned on our cash and cash equivalents, our notes receivable and our restricted cash.
+Added: Other (Expense) / Income, Net
+Added: Other (expense) / income, net primarily consists of non-operating and miscellaneous expense and income, including a $0.1 million gain related to proceeds received from our initial investment in an installation partner during the nine months ended September 30, 2022 and a $0.2 million loss on the early extinguishment of the 2017 Facility during the nine months ended September 30, 2021.
Provision for / (Benefit from) Income Taxes
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Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2022 2021 2022 2021
18 unchanged sentences
Interest income 2,903 1 140 — 4,062 — 446 —
−Removed: Other income / (expense), net 105 — 32 — 118 — (123) —
+Added: Other (expense) / income, net (76) — 53 — 42 — (70) —
Income before income taxes 18,356 8 15,081 8 38,313 6 39,470 7
5 unchanged sentences
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2022 2021 2022 2021
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Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2022 2021 2022 2021
3 unchanged sentences
Total cost of revenue as a percentage of total revenue 40 % 42 % 41 % 40 %
−Removed: Comparison of the Three and Six Months Ended June 30, 2022 to June 30, 2021
+Added: Comparison of the Three and Nine Months Ended September 30, 2022 to September 30, 2021
The following tables in this section set forth our selected condensed consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the periods presented:
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
2 unchanged sentences
Total revenue $ 216,138 $ 192,324 12 % $ 634,420 $ 553,679 15 %
−Removed: The $24.0 million increase in total revenue for the three months ended June 30, 2022 as compared to the same period in the prior year was primarily the result of a $16.3 million, or 14%, increase in our SaaS and license revenue and a $7.7 million, or 10%, increase in our hardware and other revenue.
−Removed: Our software license revenue included within SaaS and license revenue decreased $1.5 million to $6.8 million during the three months ended June 30, 2022 as compared to $8.3 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform.
−Removed: The SaaS and license revenue for the Alarm.com segment increased $14.2 million for the three months ended June 30, 2022 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2021.
−Removed: The SaaS and license revenue for our Other segment increased $2.1 million for the three months ended June 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions.
−Removed: The increase in hardware and other revenue for the three months ended June 30, 2022 as compared to the same period in the prior year was primarily from the $7.0 million increase in hardware and other revenue, net of intersegment eliminations, for the Alarm.com segment due to price increases we have implemented on some of our products to cover some of our increases in costs.
−Removed: Hardware and other revenue, net of intersegment eliminations, in our Other segment increased $0.7 million, or 39%, for the three months ended June 30, 2022 as compared to the same period in the prior year, primarily due to an increase in sales related to our property management and heating, ventilation and air conditioning solutions.
−Removed: The $56.9 million increase in total revenue for the six months ended June 30, 2022 as compared to the same period in the prior year was primarily the result of a $32.1 million, or 15%, increase in our SaaS and license revenue and a $24.8 million, or 18%, increase in our hardware and other revenue.
−Removed: Our software license revenue included within SaaS and license revenue decreased $3.0 million to $14.0 million during the six months ended June 30, 2022, as compared to $17.0 million during the same period in the prior year, which decreased primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform.
−Removed: The SaaS and license revenue for the Alarm.com segment increased $28.3 million for the six months ended June 30, 2022 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2021.
−Removed: The SaaS and license revenue for our Other segment increased $3.8 million for the six months ended June 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions.
−Removed: The increase in hardware and other revenue for the six months ended June 30, 2022 as compared to the same period in the prior year was primarily from the $23.9 million increase in hardware and other revenue, net of intersegment eliminations, for the Alarm.com segment due to an increase in the volume of video cameras and video recorders sold as well as price increases we have implemented on some of our products to cover some of our increases in costs.
−Removed: Hardware and other revenue, net of intersegment eliminations, in our Other segment increased $0.9 million, or 24%, for the six months ended June 30, 2022 as compared to the same period in the prior year, primarily due to an increase in sales related to our property management solution.
+Added: The $23.8 million increase in total revenue for the three months ended September 30, 2022 as compared to the same period in the prior year was primarily the result of a $15.1 million, or 13%, increase in our SaaS and license revenue and a $8.7 million, or 12%, increase in our hardware and other revenue.
+Added: Our software license revenue included within SaaS and license revenue decreased $1.4 million to $6.5 million during the three months ended September 30, 2022 as compared to $7.9 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform.
+Added: The SaaS and license revenue for the Alarm.com segment increased $13.4 million for the three months ended September 30, 2022 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2021.
+Added: The SaaS and license revenue for our Other segment increased $1.7 million for the three months ended September 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions.
+Added: The increase in hardware and other revenue for the three months ended September 30, 2022 as compared to the same period in the prior year was primarily from the $8.8 million increase in hardware and other revenue, net of intersegment eliminations, for the Alarm.com segment due to an increase in the volume of video cameras and video recorders sold as well as price increases we have implemented on some of our products to cover some of our increases in costs.
+Added: Hardware and other revenue, net of intersegment eliminations, in our Other segment remained relatively consistent for the three months ended September 30, 2022 as compared to the same period in the prior year.
+Added: The $80.7 million increase in total revenue for the nine months ended September 30, 2022 as compared to the same period in the prior year was primarily the result of a $47.2 million, or 14%, increase in our SaaS and license revenue and a $33.5 million, or 16%, increase in our hardware and other revenue.
+Added: Our software license revenue included within SaaS and license revenue decreased $4.4 million to $20.5 million during the nine months ended September 30, 2022, as compared to $24.9 million during the same period in the prior year primarily due to the result of the continuing transition of customers from non-hosted software to our cloud based hosted platform.
+Added: The SaaS and license revenue for the Alarm.com segment increased $41.7 million for the nine months ended September 30, 2022 as compared to the same period in the prior year primarily due to growth in our subscriber base, including the revenue impact from subscribers we added in 2021.
+Added: The SaaS and license revenue for our Other segment increased $5.5 million for the nine months ended September 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions.
+Added: The increase in hardware and other revenue for the nine months ended September 30, 2022 as compared to the same period in the prior year was primarily from the $32.7 million increase in hardware and other revenue, net of intersegment eliminations, for the Alarm.com segment due to an increase in the volume of video cameras and video recorders sold as well as price increases we have implemented on some of our products to cover some of our increases in costs.
+Added: Hardware and other revenue, net of intersegment eliminations, in our Other segment increased $0.8 million, or 15%, for the nine months ended September 30, 2022 as compared to the same period in the prior year, primarily due to an increase in sales related to our property management solution.
Cost of Revenue
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
6 unchanged sentences
(1) Excludes amortization and depreciation shown in operating expenses.
−Removed: The $10.0 million increase in cost of revenue for the three months ended June 30, 2022 as compared to the same period in the prior year was the result of a $8.5 million, or 14%, increase in cost of hardware and other revenue and a $1.5 million, or 9%, increase in cost of SaaS and license revenue.
−Removed: Our cost of software license revenue included within cost of SaaS and license revenue was $0.1 million for the three months ended June 30, 2022 as compared to $0.3 million during the same period in the prior year.
−Removed: The cost of hardware and other revenue for the Alarm.com segment increased $7.8 million during the three months ended June 30, 2022 as compared to the same period in the prior year primarily due to an increase in costs for freight shipments and inventory component costs.
−Removed: The cost of SaaS and license revenue for the Alarm.com segment increased $0.8 million during the three months ended June 30, 2022 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
−Removed: The cost of SaaS and license revenue for the Other segment increased $0.7 million during the three months ended June 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.
−Removed: Cost of hardware and other revenue as a percentage of hardware and other revenue was 82% for the three months ended June 30, 2022 and 80% for the same period in the prior year.
−Removed: The increase in cost of hardware and other revenue as a percentage of hardware and other revenue for the three months ended June 30, 2022 as compared to the same period in the prior year is primarily due to the increase in costs for freight shipments and inventory component costs as well as a reflection of the mix of product sales during the periods.
−Removed: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for the three months ended June 30, 2022 as compared to 15% during the same period in the prior year.
−Removed: Cost of software license revenue as a percentage of software license revenue was 2% for the three months ended June 30, 2022 and 4% for the same period in the prior year.
−Removed: The $34.3 million increase in cost of revenue for the six months ended June 30, 2022 as compared to the same period in the prior year was the result of a $31.1 million, or 28%, increase in cost of hardware and other revenue and a $3.2 million, or 10%, increase in cost of SaaS and license revenue.
−Removed: Our cost of software license revenue included within cost of SaaS and license revenue was $0.3 million for the six months ended June 30, 2022 as compared to $0.7 million during the same period in the prior year.
−Removed: The cost of hardware and other revenue for the Alarm.com segment increased $30.4 million during the six months ended June 30, 2022 as compared to the same period in the prior year primarily due to an increase in the number of hardware units shipped and an increase in costs for freight shipments and inventory component costs.
−Removed: The cost of SaaS and license revenue for the Alarm.com segment increased $2.1 million during the six months ended June 30, 2022 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
−Removed: The cost of SaaS and license revenue for the Other segment increased $1.1 million during the six months ended June 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.
−Removed: Cost of hardware and other revenue as a percentage of hardware and other revenue was 86% for the six months ended June 30, 2022 and 79% for the same period in the prior year.
−Removed: The increase in cost of hardware and other revenue as a percentage of hardware and other revenue for the six months ended June 30, 2022 as compared to the same period in the prior year is primarily due to the increase in costs for freight shipments and inventory component costs as well as a reflection of the mix of product sales during the periods.
−Removed: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for the six months ended June 30, 2022 and 15% for the same period in the prior year.
−Removed: Cost of software license revenue as a percentage of software license revenue was 2% for the six months ended June 30, 2022 and 4% for the same period in the prior year.
+Added: The $5.2 million increase in cost of revenue for the three months ended September 30, 2022 as compared to the same period in the prior year was the result of a $4.2 million, or 7%, increase in cost of hardware and other revenue and a $1.0 million, or 6%, increase in cost of SaaS and license revenue.
+Added: Our cost of software license revenue included within cost of SaaS and license revenue was $0.1 million for the three months ended September 30, 2022 as compared to $0.3 million during the same period in the prior year.
+Added: The cost of hardware and other revenue for the Alarm.com segment increased $4.3 million during the three months ended September 30, 2022 as compared to the same period in the prior year primarily due to an increase in the number of hardware units shipped and an increase in inventory component costs.
+Added: The cost of SaaS and license revenue for the Alarm.com segment increased $0.4 million during the three months ended September 30, 2022 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
+Added: The cost of SaaS and license revenue for the Other segment increased $0.7 million during the three months ended September 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.
+Added: Cost of hardware and other revenue as a percentage of hardware and other revenue was 81% for the three months ended September 30, 2022 and 85% for the same period in the prior year.
+Added: The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the three months ended September 30, 2022 as compared to the same period in the prior year is primarily due to a decrease in costs for freight shipments, price increases we have implemented on some of our products as well as a reflection of the mix of product sales during the periods.
+Added: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for the three months ended September 30, 2022 as compared to 15% during the same period in the prior year.
+Added: Cost of software license revenue as a percentage of software license revenue was 2% for the three months ended September 30, 2022 and 4% for the same period in the prior year.
+Added: The $39.5 million increase in cost of revenue for the nine months ended September 30, 2022 as compared to the same period in the prior year was the result of a $35.3 million, or 20%, increase in cost of hardware and other revenue and a $4.2 million, or 9%, increase in cost of SaaS and license revenue.
+Added: Our cost of software license revenue included within cost of SaaS and license revenue was $0.4 million for the nine months ended September 30, 2022 as compared to $1.0 million during the same period in the prior year.
+Added: The cost of hardware and other revenue for the Alarm.com segment increased $34.8 million during the nine months ended September 30, 2022 as compared to the same period in the prior year primarily due to an increase in the number of hardware units shipped and an increase in costs for freight shipments and inventory component costs.
+Added: The cost of SaaS and license revenue for the Alarm.com segment increased $2.5 million during the nine months ended September 30, 2022 as compared to the same period in the prior year primarily due to the growth in our subscriber base, which drove a corresponding increase in amounts paid to wireless network providers.
+Added: The cost of SaaS and license revenue for the Other segment increased $1.7 million during the nine months ended September 30, 2022 as compared to the same period in the prior year primarily due to an increase in sales of our energy management and demand response solutions, which drove a corresponding increase in amounts paid to distributed energy resource providers.
+Added: Cost of hardware and other revenue as a percentage of hardware and other revenue was 84% for the nine months ended September 30, 2022 and 81% for the same period in the prior year.
+Added: The increase in cost of hardware and other revenue as a percentage of hardware and other revenue for the nine months ended September 30, 2022 as compared to the same period in the prior year is primarily due to the increase in costs for freight shipments and inventory component costs as well as a reflection of the mix of product sales during the periods.
+Added: Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 14% for the nine months ended September 30, 2022 and 15% for the same period in the prior year.
+Added: Cost of software license revenue as a percentage of software license revenue was 2% for the nine months ended September 30, 2022 and 4% for the same period in the prior year.
Sales and Marketing Expense
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue 11 % 12 % 11 % 11 %
−Removed: The $2.4 million increase in sales and marketing expense for the three months ended June 30, 2022 as compared to the same period in the prior year was primarily due to a $1.4 million increase in personnel and related costs for our Other segment, including salary, benefits, stock-based compensation and travel expense.
−Removed: The increase in personnel and related costs for our Other segment was due in part to increases in the headcount of our sales team to support our growth as well as an increase in stock-based compensation expense attributable to the termination of the subsidiary long-term incentive plan and concurrent grant of performance-based restricted stock units.
−Removed: Additionally, there was a $0.8 million increase in personnel and related costs for our Alarm.com segment due in part to an increase in employee headcount of our sales team to support our growth.
−Removed: The $6.6 million increase in sales and marketing expense for the six months ended June 30, 2022 as compared to the same period in the prior year was primarily due to a $3.2 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth.
−Removed: Additionally, the increase in sales and marketing expense for the six months ended June 30, 2022 as compared to the same period in the prior year was due to a $1.5 million increase in marketing conference costs for our Alarm.com segment.
−Removed: Sales and marketing expense from our Other segment increased $2.0 million for the six months ended June 30, 2022, as compared to the same period in the prior year, primarily due to increases in personnel and related costs, attributable in part to increases in the headcount for our sales team and the termination of the subsidiary long-term incentive plan and concurrent grant of performance-based restricted stock units.
−Removed: The number of employees in sales and marketing functions increased from 456 as of June 30, 2021 to 484 as of June 30, 2022.
+Added: The $0.5 million increase in sales and marketing expense for the three months ended September 30, 2022 as compared to the same period in the prior year was primarily due to a $1.1 million increase in personnel and related costs for our Other segment, including salary, benefits, stock-based compensation and travel expense as well as a $0.2 million increase in marketing expense, including marketing conference costs.
+Added: The increase in personnel and related costs for our Other segment was due in part to increases in the headcount of our sales team to support our growth.
+Added: Additionally, there was a $0.6 million increase in personnel and related costs for our Alarm.com segment due in part to an increase in employee headcount of our sales team to support our growth as well as a $0.2 million increase in our expenses for external consultants.
+Added: These increases in sales and marketing expense were partially offset by a $1.7 million decrease in marketing expense for our Alarm.com segment, including advertising and marketing conference costs.
+Added: The $7.1 million increase in sales and marketing expense for the nine months ended September 30, 2022 as compared to the same period in the prior year was primarily due to a $3.9 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team to support our growth.
+Added: Sales and marketing expense from our Other segment increased $3.2 million for the nine months ended September 30, 2022, as compared to the same period in the prior year, primarily due to increases in personnel and related costs, attributable in part to increases in the headcount for our sales team and the termination of the subsidiary long-term incentive plan and concurrent grant of performance-based restricted stock units.
+Added: The number of employees in sales and marketing functions increased from 476 as of September 30, 2021 to 504 as of September 30, 2022.
General and Administrative Expense
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue 13 % 9 % 13 % 12 %
−Removed: The $6.0 million increase in general and administrative expense for the three months ended June 30, 2022 as compared to the same period in the prior year was primarily due to a $2.2 million increase in legal costs related to intellectual property litigation.
−Removed: Additionally, personnel and related costs for our Alarm.com segment increased $0.8 million due in part to an increase in employee headcount to support our operational growth.
−Removed: Further, there was a $0.3 million increase in rent expense as well as a $0.3 million increase in the provision for credit losses for our Alarm.com segment for the three months ended June 30, 2022 as compared to a $0.1 million decrease in the provision for credit losses for our Alarm.com segment during the same period in the period year.
−Removed: General and administrative expenses from our Other segment increased by $1.1 million for the three months ended June 30, 2022 as compared to the same period in the prior year, primarily due to a $1.0 million increase in personnel and related costs due in part to increases in employee headcount as well as an increase in stock-based compensation expense attributable to the termination of the subsidiary long-term incentive plan and concurrent grant of performance-based restricted stock units.
−Removed: The $7.2 million increase in general and administrative expense for the six months ended June 30, 2022 as compared to the same period in the prior year was primarily due to a $2.8 million increase in personnel and related costs for our Alarm.com segment due in part to increases in the headcount to support our operational growth and a $0.6 million increase in recruiting related costs.
−Removed: Additionally, legal costs related to intellectual property litigation increased $0.4 million and rent expense increased $0.3 million for the six months ended June 30, 2022 as compared to the same period in the prior year within our Alarm.com segment.
−Removed: General and administrative expenses from our Other segment increased by $1.8 million for the six months ended June 30, 2022 as compared to the same period in the prior year, primarily due to a $1.3 million increase in personnel and related costs and a $0.4 million increase in the provision for credit losses.
−Removed: The number of employees in general and administrative functions increased from 173 as of June 30, 2021 to 203 as of June 30, 2022.
+Added: The $9.3 million increase in general and administrative expense for the three months ended September 30, 2022 as compared to the same period in the prior year was primarily due to a $2.8 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in employee headcount to support our operational growth.
+Added: Additionally, there was a $1.7 million increase in legal costs related to intellectual property litigation.
+Added: Further, there was a $0.5 million increase in the provision for credit losses for our Alarm.com segment for the three months ended September 30, 2022 as compared to a $0.4 million decrease in the provision for credit losses for our Alarm.com segment during the same period in the period year.
+Added: General and administrative expenses from our Other segment increased by $2.1 million for the three months ended September 30, 2022 as compared to the same period in the prior year, primarily due to a $1.5 million increase in personnel and related costs as well as a $0.5 million increase in the provision for credit losses for the three months ended September 30, 2022.
+Added: The $16.5 million increase in general and administrative expense for the nine months ended September 30, 2022 as compared to the same period in the prior year was primarily due to a $5.6 million increase in personnel and related costs for our Alarm.com segment due in part to increases in the headcount to support our operational growth.
+Added: Additionally, legal costs related to intellectual property litigation increased $2.1 million, recruiting costs increased $0.6 million and rent expense increased $0.5 million for the nine months ended September 30, 2022 as compared to the same period in the prior year within our Alarm.com segment.
+Added: General and administrative expenses from our Other segment increased by $3.9 million for the nine months ended September 30, 2022 as compared to the same period in the prior year, primarily due to a $2.8 million increase in personnel and related costs and a $0.8 million increase in the provision for credit losses.
+Added: The number of employees in general and administrative functions increased from 187 as of September 30, 2021 to 214 as of September 30, 2022.
Research and Development Expense
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue 26 % 23 % 25 % 24 %
−Removed: The $10.7 million increase in research and development expense for the three months ended June 30, 2022 as compared to the same period in the prior year was primarily due to a $7.2 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $0.8 million increase in our expenses for external consultants.
−Removed: Research and development expense from our Other segment increased by $1.4 million for the three months ended June 30, 2022 as compared to the same period in the prior year, primarily due to a $1.7 million increase in personnel and related costs, partially offset by a $0.3 million decrease in expenses for external consultants.
−Removed: The $19.7 million increase in research and development expense for the six months ended June 30, 2022 as compared to the same period in the prior year was primarily due to a $14.3 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $1.3 million increase in our expenses for external consultants.
−Removed: Research and development expense from our Other segment increased by $2.7 million for the six months ended June 30, 2022 as compared to the same period in the prior year due to an increase in personnel and related costs.
−Removed: The number of employees in research and development functions increased from 792 as of June 30, 2021 to 919 as of June 30, 2022.
+Added: The $11.4 million increase in research and development expense for the three months ended September 30, 2022 as compared to the same period in the prior year was primarily due to a $8.5 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $0.6 million increase in our expenses for external consultants.
+Added: Research and development expense from our Other segment increased by $1.1 million for the three months ended September 30, 2022 as compared to the same period in the prior year, primarily due to a $1.4 million increase in personnel and related costs, partially offset by a $0.4 million decrease in expenses for external consultants.
+Added: The $31.1 million increase in research and development expense for the nine months ended September 30, 2022 as compared to the same period in the prior year was primarily due to a $22.8 million increase in personnel and related costs for our Alarm.com segment, attributable in part to an increase in headcount of employees in research and development functions as well as a $1.9 million increase in our expenses for external consultants.
+Added: Research and development expense from our Other segment increased by $3.9 million for the nine months ended September 30, 2022 as compared to the same period in the prior year due to an increase in personnel and related costs.
+Added: The number of employees in research and development functions increased from 819 as of September 30, 2021 to 981 as of September 30, 2022.
Amortization and Depreciation
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue 3 % 4 % 4 % 4 %
−Removed: Amortization and depreciation increased $0.3 million and $0.7 million for the three and six months ended June 30, 2022, respectively, as compared to the same periods in the prior year, primarily due to the intangible assets that were acquired in connection with the purchase of certain assets of an unrelated third party by EnergyHub, Inc., one of our wholly-owned subsidiaries, on December 16, 2021 as well as the intangible assets that were acquired in connection with our acquisition of Shooter Detection Systems, LLC on December 14, 2020.
+Added: Amortization and depreciation increased $0.1 million and $0.8 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in the prior year, primarily due to the intangible assets that were acquired in connection with the purchase of certain assets of an unrelated third party by EnergyHub, Inc., one of our wholly-owned subsidiaries, on December 16, 2021 as well as the intangible assets that were acquired in connection with our acquisition of Shooter Detection Systems, LLC on December 14, 2020.
Interest Expense
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue — % (2) % — % (2) %
−Removed: Interest expense decreased $3.4 million and $6.0 million for the three and six months ended June 30, 2022, respectively, as compared to the same periods in the prior year, primarily due to the adoption of ASU 2020-06, which eliminated the non-cash interest expense related to the amortization of the debt discount associated with the equity component for 2026 Notes issued on January 20, 2021.
+Added: Interest expense decreased $3.4 million and $9.4 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in the prior year, primarily due to the adoption of ASU 2020-06, which eliminated the non-cash interest expense related to the amortization of the debt discount associated with the equity component for 2026 Notes issued on January 20, 2021.
Interest Income
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue 1 % — % — % — %
−Removed: Interest income increased $0.9 million for each of the three and six months ended June 30, 2022 as compared to the same periods in the prior year, primarily due to increases in interest rates during the three and six months ended June 30, 2022.
−Removed: Other Income / (Expense), Net
+Added: Interest income increased $2.8 million and $3.6 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in the prior year, primarily due to an increase in interest income earned on cash and cash equivalents during the three and nine months ended September 30, 2022.
+Added: Other (Expense) / Income, Net
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
−Removed: Other income / (expense), net $ 105 $ 32 228 % $ 118 $ (123) (196) %
+Added: Other (expense) / income, net $ (76) $ 53 (243) % $ 42 $ (70) (160) %
% of total revenue — % — % — % — %
−Removed: Other income / (expense), net increased $0.1 million and $0.2 million for the three and six months ended June 30, 2022, respectively, as compared to the same periods in the prior year, primarily due to a $0.1 million gain related to proceeds received from our initial investment in an installation partner during the three months ended June 30, 2022, which did not occur during the three months ended June 30, 2021 as well as the $0.2 million loss on the early extinguishment of the 2017 Facility during the six months ended June 30, 2021, which did not occur during the six months ended June 30, 2022.
+Added: Other (expense) / income, net remained relatively consistent for each of the three and nine months ended September 30, 2022 as compared to the same periods in the prior year.
+Added: Included in other (expense) / income, net, during the nine months ended September 30, 2022 was a $0.1 million gain related to proceeds received from our initial investment in an installation partner.
+Added: Included in other (expense) / income, net, during the nine months ended September 30, 2021 was a $0.2 million loss on the early extinguishment of the 2017 Facility.
Provision for / (Benefit from) Income Taxes
Three Months Ended
−Removed: Change Six Months Ended
+Added: September 30, %
+Added: Change Nine Months Ended
+Added: September 30, %
2022 2021 2022 2021
1 unchanged sentence
% of total revenue — % 1 % — % (1) %
−Removed: The provision for / (benefit from) income taxes increased $2.6 million and $4.9 million for the three and six months ended June 30, 2022, respectively, as compared to the same periods in the prior year.
−Removed: Our effective tax rate was 7.2% and 1.1% for the three and six months ended June 30, 2022, respectively, as compared to (13.6)% and (19.1)% for the same periods in the prior year.
−Removed: The increase in the provision for / (benefit from) income taxes for the three and six months ended June 30, 2022 was primarily due to decreased tax windfall benefits from employee stock-based payment transactions during the three and six months ended June 30, 2022, as compared to the same periods in the prior year.
+Added: The provision for income taxes decreased $1.5 million and increased $3.3 million for the three and nine months ended September 30, 2022, respectively, as compared to the same periods in the prior year.
+Added: Our effective tax rate was 1.3% and 1.2% for the three and nine months ended September 30, 2022, respectively, as compared to 11.8% and (7.3)% for the same periods in the prior year.
+Added: The decrease in the provision for income taxes for the three months ended September 30, 2022 as compared to the same period in the prior year was primarily due to an increase in the research and development tax credit, while the increase in the provision for income taxes for the nine months ended September 30, 2022 as compared to the same period in the prior year was primarily due to decreased tax windfall benefits from employee stock-based payment transactions.
Segment Information
1 unchanged sentence
Alarm.com and Other.
−Removed: Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that c ontributed 94% and 95% of our revenue, net of intersegment eliminations, for the three and six months ended June 30, 2022, respectively, as compared to 95% for the same periods in the prior year.
+Added: Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that c ontributed 94% of our revenue, net of intersegment eliminations, for each of the three and nine months ended September 30, 2022, as compared to 94% and 95% for the same periods in the prior year.
Our Other segment is focused on researching, developing and offering residential and commercial automation solutions and energy management products and services in adjacent markets.
The consolidated subsidiaries that make up our Other segment are in the investment stage and have incurred significant operating expenses relative to their revenue.
−Removed: Our Alarm.com segment increased from 1,297 employees as of June 30, 2021 to 1,447 employees as of June 30, 2022 and increased from 1,418 employees as of March 31, 2022 .
−Removed: Our Other segment increased from 124 employees as of June 30, 2021 to 159 employees as of June 30, 2022 and increased from 147 employees as of March 31, 2022 .
+Added: Our Alarm.com segment increased from 1,353 employees as of September 30, 2021 to 1,540 employees as of September 30, 2022 and increased from 1,447 employees as of June 30, 2022 .
+Added: Our Other segment increased from 129 employees as of September 30, 2021 to 159 employees as of September 30, 2022, which was consistent with the number of employees as of June 30, 2022 .
Inter-segment revenue includes sales of hardware between our segments.
1 unchanged sentence
Three Months Ended
+Added: September 30,
SaaS and license revenue Hardware and other revenue
6 unchanged sentences
Total $ 133,126 $ 83,012 $ 114,236 $ 118,059 $ 74,265 $ 92,856
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
SaaS and license revenue Hardware and other revenue
6 unchanged sentences
Total $ 385,826 $ 248,594 $ 334,846 $ 338,628 $ 215,051 $ 279,354
−Removed: Our SaaS and license revenue for the Alarm.com segment included software license revenue of $6.9 million and $14.0 million for the three and six months ended June 30, 2022, respectively, as compared to $8.3 million and $17.0 million for the
−Removed: same periods in the prior year.
−Removed: There was no software license revenue recorded for the Other segment during the three and six months ended June 30, 2022 and 2021.
+Added: Our SaaS and license revenue for the Alarm.com segment included software license revenue of $6.5 million and $20.5 million for the three and nine months ended September 30, 2022, respectively, as compared to $7.9 million and $24.9 million for the same periods in the prior year.
+Added: There was no software license revenue recorded for the Other segment during the three and nine months ended September 30, 2022 and 2021.
Critical Accounting Estimates
20 unchanged sentences
Beginning upon the first grant of options in 2022, the expected term for options granted is estimated using our historical experience, including information related to options we have granted.
+Added: Business Combinations
+Added: We are required to allocate the purchase price of acquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values.
+Added: This valuation contains uncertainties and requires management to apply significant judgment in estimating the fair value of long-lived and intangible assets acquired, which involves the use of significant estimates and assumptions.
+Added: Significant estimates and assumptions in valuing intangible assets include estimates about future expected cash flows, discount rates and obsolescence factors related to acquired developed technology.
+Added: We did not make any material changes to the underlying assumptions used as of the acquisition date to calculate the purchase price of the acquisition of Noonlight during the three months ended September 30, 2022.
+Added: We do not expect any material changes in the near term to the underlying assumptions used to calculate purchase price of the acquisition of Noonlight during the three months ended September 30, 2022.
+Added: However, if changes in these assumptions occur, and, should those changes be significant, they could have a material impact on our purchase price allocation for the acquisition of Noonlight.
Recent Accounting Pronouncements
3 unchanged sentences
The following table summarizes our cash and cash equivalents, accounts receivable, net and working capital, for the periods indicated (in thousands):
−Removed: June 30, 2022 December 31, 2021
+Added: September 30, 2022 December 31, 2021
Cash and cash equivalents $ 621,347 $ 710,621
2 unchanged sentences
We define working capital as current assets minus current liabilities.
−Removed: Our cash and cash equivalents as of June 30, 2022 are available for working capital purposes.
+Added: Our cash and cash equivalents as of September 30, 2022 are available for working capital purposes.
We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short term, highly liquid investments that limit the risk of principal loss;
−Removed: therefore, our cash and cash equivalents are held in demand deposit accounts that generate very low returns.
+Added: therefore, our cash and cash equivalents as of September 30, 2022 are held in demand deposit accounts that generate very low returns.
Liquidity and Capital Resources
−Removed: As of June 30, 2022, we had $643.4 million in cash and cash equivalents.
+Added: As of September 30, 2022, we had $621.3 million in cash and cash equivalents.
We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents.
3 unchanged sentences
Upon completion of due diligence in April 2022, we paid an additional deposit of $0.1 million in order to close the land purchase and paid the remaining $21.4 million during the second quarter of 2022 for the land purchase.
−Removed: In May 2022, we entered into a loan agreement with a technology company, under which we agreed to loan the technology company $1.5 million, collateralized by the assets of the technology company.
−Removed: Interest on the outstanding principal accrues at a rate per annum equal to 7.0% and interest and principal payments are due on the maturity date of the loan, which is expected to be during the third quarter of 2022.
In June 2022, we entered into a convertible promissory note with a technology partner, under which we agreed to loan the technology partner $1.5 million.
1 unchanged sentence
Interest and principal payments are due on the maturity date of the loan, which is June 27, 2029, unless the loan is converted prior to the maturity date, which may occur upon a qualified financing event, as defined in the convertible promissory note, upon a sale of the technology partner or upon our election on the maturity date of the loan.
+Added: On September 23, 2022, Alarm.com Incorporated acquired 85% of the issued and outstanding shares of capital stock of Noonlight.
+Added: In consideration for the purchase of 85% of the issued and outstanding shares of capital stock of Noonlight, we paid $31.9 million in cash on September 23, 2022, after deducting $1.5 million related to the settlement of an outstanding loan issued to Noonlight during May of 2022 and $4.9 million related to agreed holdback provisions.
+Added: Pursuant to the terms of the stock purchase agreement, following the preliminary determination of the working capital of Noonlight as of the closing date, the purchase price decreased by $0.2 million.
+Added: The working capital adjustment is expected to be finalized by the first quarter of 2023 and $0.1 million of the holdback is expected to be paid to the stockholders of Noonlight at that time.
+Added: The remaining amount of the holdback of $4.6 million is expected to be paid to the stockholders of Noonlight by the end of the first quarter of 2024, subject to off set for any indemnification obligations.
+Added: On October 27, 2022, we filed a demand for arbitration of a dispute arising under the Patent Cross License agreement between Alarm.com and Vivint executed in November 2013.
+Added: Vivint notified us it will stop paying license fees to Alarm.com under the agreement.
+Added: Vivint has paid the required license fees to Alarm.com since the agreement was executed in November 2013.
+Added: Alarm.com disputes Vivint's refusal of payment and is seeking continued payments of license fees in the arbitration, as well as interest and declaratory relief.
+Added: As a result of Vivint’s refusal to pay license fees under the agreement, beginning with the fourth quarter of 2022, we believe that quarterly cash flows from operating activities will be impacted by approximately $6.0 million, plus additional legal fees.
Beginning in 2022, the Tax Cuts and Jobs Act of 2017, or TCJA, eliminated the option to immediately deduct research and development expenditures in the year incurred pursuant to Internal Revenue Code Section 174, or Section 174.
−Removed: The amended provision under Section 174 requires taxpayers to capitalize and amortize these expenditures over five years for research performed in the U.S.
+Added: As currently in effect, Section 174 requires taxpayers to capitalize and amortize these expenditures over five years for research performed in the U.S.
and over 15 years for research performed outside the U.S.
−Removed: While it is possible that Congress may defer, modify or repeal this provision, potentially with retroactive effect, we have no assurance that this provision will be deferred, modified or repealed.
−Removed: If this provision is not deferred, modified or repealed with retroactive effect to January 1, 2022, we estimate it would significantly increase our cash taxes payable and reduce our cash flow from operating activities in 2022.
+Added: While there are ongoing discussions that Congress may defer, modify or repeal this provision, potentially with retroactive effect, we have no assurance that this provision will be deferred, modified or repealed.
+Added: If this provision is not deferred, modified or repealed with retroactive effect to January 1, 2022, we estimate it would significantly increase our cash taxes payable and reduce our cash flow from operating activities in 2022 in the estimated range of $35.0 million to $45.0 million.
+Added: This estimate is based on the limited information that is currently available and is subject to change.
We do not expect the amended provision under Section 174 to impact our tax rate, our results of operations or our Adjusted EBITDA.
−Removed: The actual impact on 2022 cash flow from operating activities will depend on whether and when we make a payment and if this provision is deferred, modified or repealed by Congress, including if retroactively, and the amount of research and development expenses paid or incurred in 2022, among other factors.
−Removed: While the largest impact will be to cash flow from operating activities, the impact would continue over the five-year amortization period, but would decrease over the period and is expected to be immaterial in year six.
+Added: The actual impact on 2022 cash flow from operating activities will depend on whether and when we make an associated tax payment and if this provision is deferred, modified or repealed by Congress, including if retroactively, and the amount of research and development expenses paid or incurred in 2022, among other factors.
+Added: While the largest impact will be to cash flow from operating activities, the impact would continue over the five-year amortization period, but would decrease over that period and is expected to be immaterial beginning in year six.
We believe our existing cash and cash equivalents and our future cash flows from operating activities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months.
−Removed: Over the final six months of fiscal year 2022, we expect our capital expenditures to be between $4.0 million and $7.0 million, primarily related to the purchases of computer software and equipment as well as the continued build out of our leased and owned office space.
+Added: Over the final three months of fiscal year 2022, we expect our capital expenditures to be between $1.0 million and $3.0 million, primarily related to the continued build out of our leased and owned office space as well as the purchases of computer software and equipment.
Maturities of lease liabilities for our various office, data center and equipment leases are as follows:
6 unchanged sentences
Material Cash Requirements
−Removed: As of June 30, 2022, there were no material changes in our cash requirements from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.
+Added: As of September 30, 2022, there were no material changes in our cash requirements from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.
Convertible Senior Notes
25 unchanged sentences
On October 6, 2017, we entered into a $125.0 million senior secured revolving credit facility, or the 2017 Facility, with Silicon Valley Bank, or SVB, as administrative agent, PNC Bank, National Association, as documentation agent, and a syndicate of lenders.
−Removed: Upon entry into the 2017 Facility, we borrowed $72.0 million, which was used to repay the previously outstanding
−Removed: balance under our previous credit facility.
+Added: Upon entry into the 2017 Facility, we borrowed $72.0 million, which was used to repay the previously outstanding balance under our previous credit facility.
The 2017 Facility was set to mature in October 2022 and included an option to further increase the borrowing capacity to $175.0 million with the consent of the lenders.
3 unchanged sentences
On January 20, 2021, we repaid the entire outstanding principal balance of $110.0 million of the 2017 Facility with proceeds from the 2026 Notes and the 2017 Facility was terminated.
−Removed: We recognized an extinguishment loss of $0.2 million in other income / (expense), net in our condensed consolidated statements of operations during the six months ended June 30, 2021 for previously capitalized debt issuance costs related to the 2017 Facility that were unamortized at the time of the termination of the 2017 Facility.
+Added: We recognized an extinguishment loss of $0.2 million in other (expense) / income, net in our condensed consolidated statements of operations during the nine months ended September 30, 2021 for previously capitalized debt issuance costs related to the 2017 Facility that were unamortized at the time of the termination of the 2017 Facility.
The outstanding principal balance on the 2017 Facility accrued interest at a rate equal to, at our option, either (1) LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the highest of (a) the Wall Street Journal prime rate, (b) the Federal Funds rate plus 0.50%, or (c) LIBOR plus 1.00% plus an applicable margin based on our consolidated leverage ratio.
1 unchanged sentence
The 2017 Facility also carried an unused line commitment fee of 0.20%.
−Removed: The carrying value of the 2017 Facility was zero as of June 30, 2022 and December 31, 2021.
+Added: The carrying value of the 2017 Facility was zero as of September 30, 2022 and December 31, 2021.
Sources of Liquidity
6 unchanged sentences
The 2026 Notes are discussed in more detail above under “Convertible Senior Notes.”
−Removed: We did not declare or pay dividends during the three and six months ended June 30, 2022 or 2021.
+Added: We did not declare or pay dividends during the three and nine months ended September 30, 2022 or 2021.
We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future.
3 unchanged sentences
On December 3, 2020, our board of directors authorized a stock repurchase program, under which we are authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the three-year period ending December 3, 2023.
−Removed: During the three and six months ended June 30, 2022, we repurchased 480,531 and 834,654 shares of our common stock under this program for $28.2 million and $51.5 million, respectively, which includes applicable commissions and fees.
−Removed: No shares of our common stock were repurchased under this program during the three and six months ended June 30, 2021.
+Added: During the three and nine months ended September 30, 2022, we repurchased 5,595 and 840,249 shares of our common stock under this program for $0.4 million and $51.9 million, respectively, which includes applicable commissions and fees.
+Added: No shares of our common stock were repurchased under this program during the three and nine months ended September 30, 2021.
Historical Cash Flows
The following table sets forth our cash flows for the periods indicated (in thousands):
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
Cash flows from operating activities $ 22,455 $ 83,194
3 unchanged sentences
Cash flows from operating activities have typically been generated from our net income and by changes in our operating assets and liabilities, particularly from accounts receivable and inventory, adjusted for non-cash expense items such as amortization and depreciation, deferred income taxes and stock-based compensation.
−Removed: For the six months ended June 30, 2022, cash flows from operating activities were $12.3 million, compared to $45.3 million for the same period in the prior year.
+Added: For the nine months ended September 30, 2022, cash flows from operating activities were $22.5 million, compared to $83.2 million for the same period in the prior year.
This $60.7 million decrease in cash flows from operating activities was due to a $30.5 million decrease in non-cash and other reconciling items, a $25.7 million decrease in cash from operating assets and liabilities and a $4.5 million decrease in net income.
−Removed: The $12.7 million decrease in non-cash and other reconciling items was primarily due to a $15.6 million change in deferred income taxes, resulting from an increase in estimated taxable income pursuant to the requirements under Section 174 of the Internal Revenue Code during the six months ended June 30, 2022, as compared to the same period in the prior year.
−Removed: The decrease in non-cash and other reconciling items during the six months ended June 30, 2022 as compared to the same period in the prior year was also due to a $5.8 million decrease in amortization of the debt discount related to the adoption of ASU 2020-06 for the 2026 Notes.
−Removed: These decreases in non-cash and other reconciling items were partially offset by a $7.0 million increase in stock-based compensation resulting from additional grants of restricted stock units during the six months ended June 30, 2022.
−Removed: The $11.0 million decrease in cash from operating assets and liabilities was primarily due to a $17.7 million change in inventory resulting from an increase in purchased inventory as we seek to reduce risks and uncertainties in our supply chain as well as differences in the timing of disbursements and the collection of receipts during the six months ended June 30, 2022 as compared to the same period in the prior year.
+Added: The $30.5 million decrease in non-cash and other reconciling items was primarily due to a $36.6 million change in deferred income taxes, which was driven by an increase in estimated taxable income pursuant to the capitalization requirements under Section 174 of the Internal Revenue Code during the nine months ended September 30, 2022, as compared to the same period in the prior year.
+Added: The decrease in non-cash and other reconciling items during the nine months ended September 30, 2022 as compared to the same period in the prior year was also due to a $9.2 million decrease in amortization of the debt discount related to the adoption of ASU 2020-06 for the 2026 Notes.
+Added: These decreases in non-cash and other reconciling items were partially offset by a $10.7 million increase in stock-based compensation resulting from additional grants of restricted stock units during the nine months ended September 30, 2022 as well as an increase in the changes to the provision for credit losses and reserve for product returns of $3.9 million during the nine months ended September 30, 2022 as compared to the same period in the prior year.
+Added: The $25.7 million decrease in cash from operating assets and liabilities was primarily due to a $24.4 million change in inventory resulting from an increase in purchased inventory as we seek to reduce risks and uncertainties in our supply chain as well as differences in the timing of disbursements and the collection of receipts during the nine months ended September 30, 2022 as compared to the same period in the prior year.
Investing Activities
1 unchanged sentence
Our capital expenditures have primarily been for general business use, including leasehold improvements as we have expanded our office space to accommodate our growth in headcount, computer equipment used internally and expansion of our network operations centers.
−Removed: For the six months ended June 30, 2022, our cash flows used in investing activities was $29.1 million, as compared to $12.4 million for the same period in the prior year.
−Removed: The $16.7 million increase in cash flows used in investing activities was primarily due to the $21.8 million paid for the land purchase as well as the issuance of notes receivable totaling $3.0 million during the six months ended June 30, 2022, which did not occur during the six months ended June 30, 2021.
−Removed: The increase in cash flows used in investing activities was partially offset by the $5.0 million used to purchase 1,000,000 shares of Series B-2 Preferred Stock from one of our technology partners during the six months ended June 30, 2021, which did not occur during the six months ended June 30, 2022.
+Added: For the nine months ended September 30, 2022, our cash flows used in investing activities was $62.6 million, as compared to $13.9 million for the same period in the prior year.
+Added: The $48.7 million increase in cash flows used in investing activities was primarily due to the $31.9 million paid to purchase 85% of the issued and outstanding shares of capital stock of Noonlight and the $21.8 million paid for developable land during the nine months ended September 30, 2022, which did not occur during the nine months ended September 30, 2021.
+Added: The increase in cash flows used in investing activities was partially offset by the $5.0 million used to purchase 1,000,000 shares of Series B-2 Preferred Stock from one of our technology partners during the nine months ended September 30, 2021, which did not occur during the nine months ended September 30, 2022.
Financing Activities
1 unchanged sentence
Cash used in financing activities typically includes repurchases of common stock and repayments of debt.
−Removed: For the six months ended June 30, 2022, cash flows used in financing activities was $49.8 million, compared to cash flows from financing activities of $376.3 million for the same period in the prior year.
−Removed: The $426.1 million decrease in cash flows from financing activities was primarily due to $484.3 million in proceeds from the issuance of the 2026 Notes, net of issuance costs paid during the six months ended June 30, 2021 that did not occur during six months ended June 30, 2022.
−Removed: The decrease in cash flows from financing activities was also due to the repurchase of 834,654 shares of our common stock for $51.5 million during the six months ended June 30, 2022 that did not occur during the same period in the prior year.
−Removed: These decreases in cash flows from financing activities were partially offset by the repayment of $110.0 million to terminate the 2017 Facility during the six months ended June 30, 2021 that did not occur during six months ended June 30, 2022.
+Added: For the nine months ended September 30, 2022, cash flows used in financing activities was $48.5 million, compared to cash flows from financing activities of $377.6 million for the same period in the prior year.
+Added: The $426.0 million decrease in cash flows from financing activities was primarily due to $484.3 million in proceeds from the issuance of the 2026 Notes, net of issuance costs paid during the nine months ended September 30, 2021 that did not occur during nine months ended September 30, 2022.
+Added: The decrease in cash flows from financing activities was also due to the repurchase of 840,249 shares of our common stock for $51.9 million during the nine months ended September 30, 2022 that did not occur during the same period in the prior year.
+Added: These decreases in cash flows from financing activities were partially offset by the repayment of $110.0 million to terminate the 2017 Facility during the nine months ended September 30, 2021 that did not occur during nine months ended September 30, 2022.
Non-GAAP Measures
−Removed: We define Adjusted EBITDA as our net income before interest expense, interest income, certain activity within other income / (expense), net, provision for / (benefit from) income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense and legal costs and settlement fees incurred in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
+Added: We define Adjusted EBITDA as our net income before interest expense, interest income, certain activity within other (expense) / income, net, provision for / (benefit from) income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense and legal costs and settlement fees incurred in connection with non-ordinary course litigation and other disputes, particularly costs involved in ongoing intellectual property litigation.
We do not consider these items to be indicative of our core operating performance.
17 unchanged sentences
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2022 2021 2022 2021
1 unchanged sentence
Net income $ 18,110 $ 13,294 $ 37,841 $ 42,334
−Removed: Interest expense, interest income and certain activity within other income / (expense), net (371) 3,973 257 7,339
+Added: Interest expense, interest income and certain activity within other (expense) / income, net (2,116) 4,003 (1,859) 11,342
Provision for / (benefit from) income taxes 246 1,787 472 (2,864)
6 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.