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See the "Non-GAAP Measures" section of Item 2.
−Removed: "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the three months ended March 31, 2023 and 2022.
+Added: "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of the limitations of non-GAAP adjusted EBITDA and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable GAAP measurement, for the three and six months ended June 30, 2023 and 2022.
Downturns in general economic and market conditions and reductions in spending may reduce demand for our platforms and solutions, which could harm our revenue, results of operations and cash flows.
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We have experienced significant growth and also have substantially expanded our operations in a short period of time.
−Removed: Our revenue increased from $502.4 million in 2019 to $842.6 million in 2022 and increased from $205.4 million for the three months ended March 31, 2022 to $209.7 million for the three months ended March 31, 2023.
+Added: Our revenue increased from $502.4 million in 2019 to $842.6 million in 2022 and increased from $418.3 million for the six months ended June 30, 2022 to $433.6 million for the six months ended June 30, 2023.
We do not expect to achieve similar growth rates in future periods.
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If we fail to manage the expansion of our operations and infrastructure effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately.
−Removed: We increased our number of full-time employees from 1,160 as of December 31, 2019 to 1,858 as of March 31, 2023, including 99 employees who manufacture hardware for our suite of IoT solutions .
+Added: We increased our number of full-time employees from 1,160 as of December 31, 2019 to 1,909 as of June 30, 2023, including 104 employees who manufacture hardware for our suite of IoT solutions .
Our growth has placed, and may continue to place, a significant strain on our managerial, administrative, operational, financial and other resources.
271 unchanged sentences
Any of these disruptions to our inventory and supply chain could have a material adverse effect on our business, financial condition, cash flows and results of operations.
−Removed: We have several large hardware suppliers from which we procure hardware on a purchase order basis, including three key suppliers that supplied products and components of our inventory which collectively represented 51% of our hardware revenue for the three months ended March 31, 2023 (32%, 13% and 6% of hardware revenue, respectively).
+Added: We have several large hardware suppliers from which we procure hardware on a purchase order basis, including three key suppliers that supplied products and components of our inventory which collectively represented 49% of our hardware revenue for the six months ended June 30, 2023 (26%, 13% and 10% of hardware revenue, respectively).
The failure of any of these key suppliers or their subcomponent suppliers to deliver product on time or at the contracted price would materially and adversely affect our business, financial condition, cash flows and results of operations.
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We believe part of our growth will continue to be driven by acquisitions of other companies or their technologies, assets and businesses.
−Removed: For example, on January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS, on September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., on October 21, 2019 , we acquired 85% of the issued and outstanding shares of capital stock of PC Open Incorporated, doing business as OpenEye, and on December 14, 2020 , we acquired Shooter Detection Systems, LLC.
+Added: For example, on April 21, 2023, we acquired certain assets of Vintra, on January 18, 2023, we acquired 100% of the issued and outstanding shares of capital stock of EBS, on September 23, 2022, we acquired 85% of the issued and outstanding shares of capital stock of Noonlight, Inc., on October 21, 2019 , we acquired 85% of the issued and outstanding shares of capital stock of PC Open Incorporated, doing business as OpenEye, and on December 14, 2020 , we acquired Shooter Detection Systems, LLC.
Additionally, on December 16, 2021, our EnergyHub subsidiary acquired certain assets of an unrelated third party.
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Moreover, the UK data protection regulator developed new SCCs for transferring personal data from the UK that were finalized in March 2022, and we will be required to execute the new UK SCCs with our current and future customers in the UK.
−Removed: Our transition from relying on the EU-U.S.
−Removed: Privacy Shield to adopting, implementing and complying with the new SCCs may slow down our contracting process and increase our legal and compliance costs (including an increase in exposure to substantial fines under EEA data protection laws, increasing requests from our customers for compliance-related product changes, as well as injunctions against processing or transferring personal data from the EEA), which could adversely affect our cash flows and financial condition.
+Added: In July 2023, the EU-U.S.
+Added: Privacy Shield was replaced by the Data Privacy Framework, or DPF, Program and we have been automatically enrolled in this program given our existing EU-U.S.Privacy Shield enrollment.
+Added: Our work adopting, implementing and complying with the changing legal landscape governing international data transfers slows down our contracting process and increases our legal and compliance costs (including an increase in exposure to substantial fines under EEA data protection laws, increasing requests from our customers for compliance-related product changes, as well as injunctions against processing or transferring personal data from the EEA), which could adversely affect our cash flows and financial condition.
SCCs with additional safeguards and obligations put in place by EEA data protection authorities or customers may impose new restrictions on our business and could affect our operations in the EEA.
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In the event of a breach of PHI that we hold, we may be subject to governmental fines, individual claims under state privacy laws governing personal health information, remediation expenses and/or harm to our reputation.
+Added: The use of health-related data is coming under increasing regulatory scrutiny in other ways.
+Added: states, such as Washington, Nevada, and Connecticut, have passed health privacy laws, which may increase the risk of regulatory actions or consumer class actions being brought against Alarm.com.
+Added: These laws may also increase our costs of doing business as well as legal costs, and slow down our contracting process.
+Added: Moreover, the FTC has brought a series of regulatory enforcement actions relating to companies’ use of health-related data, which may increase our regulatory risk.
Furthermore, if future changes to HIPAA or state privacy laws governing PHI expand the definition of PHI or put more restrictions on our ability to use, process and store PHI, then HIPAA compliance for our solutions as currently constituted may be costly both financially and in terms of administrative resources.
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Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of our intangible assets.
−Removed: As of March 31, 2023, we had $240.9 million of goodwill and identifiable intangible assets.
+Added: As of June 30, 2023, we had $241.8 million of goodwill and identifiable intangible assets.
Goodwill and other identifiable intangible assets are recorded at fair value on the date of acquisition.
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We anticipate our efforts to operate and continue to expand our business internationally will entail additional costs and risks as we establish our international offerings and develop relationships with service provider partners to market, sell, install, and support our platforms, solutions and brand in other countries.
−Removed: Revenue in countries outside of North America accounted for 4% and 2% of our total revenue for the three months ended March 31, 2023 and 2022.
+Added: Revenue in countries outside of North America accounted for 4% and 2% of our total revenue for the six months ended June 30, 2023 and 2022.
We have limited experience in selling our platforms and solutions in international markets outside of North America or in conforming to the local cultures, standards, or policies necessary to successfully compete in those markets, and we may be required to invest significant resources in order to do so.
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On November 11, 2021, President Biden signed into law the Secure Equipment Act of 2021 which requires the FCC to adopt rules clarifying that it will no longer review or approve any authorization application for equipment that poses an unacceptable risk to national security.
−Removed: If the final rule issued by the FCC restricts our ability to sell any of our existing inventory of products on the Covered List or applies retroactively to products already sold, this would likely adversely affect our business, financial condition, cash flows and results of operations.
+Added: On November 25, 2022, the FCC implemented this directive and adopted rules that prohibit future authorizations of equipment identified on the Covered List.
+Added: Although the rules apply to future authorizations of equipment, the FCC also adopted a Further Notice of Proposed Rulemaking seeking comment on future action related to existing authorizations.
+Added: If the FCC adopts rules that apply retroactively to products already sold, this would likely adversely affect our business, financial condition, cash flows and results of operations.
Our financial results may be adversely affected by changes in accounting principles applicable to us.
184 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.