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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 and the war between Israel and Hamas, disruptions to global supply chains, rising interest rates, risk of recession and inflation (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;
+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, and geopolitical upheaval, such as Russia’s incursion into Ukraine and the conflict between Israel and regional adversaries, disruptions to global supply chains, rising interest rates, risk of recession and inflation (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;
continued enhancements of our platform and offerings;
−Removed: our future financial and business performance and the potential impact of trade policies and related tariffs on our cost of hardware revenue and hardware revenue margins.
+Added: the potential impact of trade policies and related tariffs on our cost of hardware revenue and hardware revenue margins;
+Added: and our future financial and business performance.
The events described in these forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements.
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Alarm.com is the leading platform for the intelligently connected property.
−Removed: Our cloud-based platform offers an expansive suite of IoT solutions a ddressing opportunities in the residential, multi-family, small business and enterprise commercial markets.
+Added: Our cloud-based platform offers an expansive suite of Internet of Things, or IoT, solutions a ddressing opportunities in the residential, multi-family, small business and enterprise commercial markets.
Alarm.com’s solutions include security, video and video analytics, energy management, access control, electric utility grid management, indoor gunshot detection, water management, health and wellness and data-rich emergency response.
During 2023, our platforms processed more than 325 billion data points generated by over 150 million connected devices.
−Removed: We believe that this scale of subscribers, connected devices and data operations makes us the leader in the connected property market.
+Added: We believe this scale of subscribers, connected devices and data operations makes us the leader in the connected property market.
Our solutions are delivered through an established network of trusted service providers, who are experts at selling, installing and supporting our solutions.
−Removed: The number of our service provider partners exceeded 11,000 as of December 31, 2022.
We primarily generate SaaS and license revenue through our service provider partners, who resell these services and pay us monthly fees.
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Our solutions are designed to make both residential and commercial properties safer, smarter and more efficient.
−Removed: Our technology platforms support all participants in what we refer to as the connected property market.
−Removed: This market includes the residential and commercial property owners who subscribe to our services, the hardware partners who manufacture devices that integrate with our platforms and the service provider partners who install and maintain our solutions.
+Added: Our technology platforms support property owners who subscribe to our services, the hardware partners who manufacture devices that integrate with our platforms and the service provider partners who install and maintain our solutions.
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 Third Quarter Results
+Added: Highlights of First 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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on a per customer basis.
−Removed: SaaS and license revenue represented 65% and 64% of our revenue during the three and nine months ended September 30, 2023, respectively, as compared to 62% and 61% in the same periods in the prior year.
+Added: SaaS and license revenue represented 67% of our revenue during the three months ended March 31, 2024, as compared to 65% in the same period 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 nine months ended September 30, 2023 and 2022.
−Removed: 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.
+Added: Software license revenue represented 2% of our revenue during the three months ended March 31, 2024, as compared to 3% in the same period in the prior year.
+Added: We also generate revenue from the sale of many types of hardware, including video cameras, video recorders, cellular radio modules, smart thermostats, image sensors, gunshot detection sensors and other peripherals, that enable our solutions.
Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee.
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 35% and 36% of our revenue during the three and nine months ended September 30, 2023, respectively, as compared to 38% and 39% in the same periods in the prior year.
+Added: Hardware and other revenue represented 33% of our revenue during the three months ended March 31, 2024, as compared to 35% in the same period 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 9% to $145.0 million during the three months ended September 30, 2023 from $133.1 million during the three months ended September 30, 2022.
−Removed: SaaS and license revenue increased 9% to $420.9 million in the nine months ended September 30, 2023 from $385.8 million in the nine months ended September 30, 2022.
−Removed: Included in SaaS and license revenue was software license revenue, which decreased to $5.7 million during the three months ended September 30, 2023 from $6.5 million during the three months ended September 30, 2022.
−Removed: Software license revenue decreased to $17.8 million in the nine months ended September 30, 2023 from $20.5 million in the nine months ended September 30, 2022.
−Removed: • Total revenue increased 3% to $221.9 million during the three months ended September 30, 2023 from $216.1 million during the three months ended September 30, 2022.
−Removed: Total revenue increased 3% to $655.4 million in the nine months ended September 30, 2023 from $634.4 million in the nine months ended September 30, 2022.
−Removed: • Net income increased to $19.4 million during the three months ended September 30, 2023, as compared to $18.1 million during the three months ended September 30, 2022.
−Removed: Net income increased to $49.2 million in the nine months ended September 30, 2023, as compared to $37.8 million in the nine months ended September 30, 2022.
−Removed: Net income attributable to common stockholders increased to $19.5 million during the three months ended September 30, 2023, as compared to $18.3 million during the three months ended September 30, 2022.
−Removed: Net income attributable to common stockholders increased to $49.7 million in the nine months ended September 30, 2023, as compared to $38.3 million in the nine months ended September 30, 2022.
−Removed: • Non-GAAP adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $41.4 million during the three months ended September 30, 2023 from $40.8 million during the three months ended September 30, 2022.
−Removed: Non-GAAP adjusted EBITDA increased to $108.4 million in the nine months ended September 30, 2023 from $107.9 million in the nine months ended September 30, 2022.
−Removed: Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of non-GAAP adjusted EBITDA (a non-GAAP measure) and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three and nine months ended September 30, 2023 and 2022.
+Added: • SaaS and license revenue increased 11% to $150.3 million during the three months ended March 31, 2024 from $135.4 million during the three months ended March 31, 2023.
+Added: Included in SaaS and license revenue was software license revenue, which decreased to $5.2 million during the three months ended March 31, 2024 from $6.2 million during the three months ended March 31, 2023.
+Added: • Total revenue increased 6% to $223.3 million during the three months ended March 31, 2024 from $209.7 million during the three months ended March 31, 2023.
+Added: • Net income increased to $23.4 million during the three months ended March 31, 2024, as compared to $14.2 million during the three months ended March 31, 2023.
+Added: Net income attributable to common stockholders increased to $23.6 million during the three months ended March 31, 2024, as compared to $14.4 million during the three months ended March 31, 2023.
+Added: • Non-GAAP adjusted EBITDA, a non-GAAP measurement of operating performance, increased to $37.0 million during the three months ended March 31, 2024 from $30.6 million during the three months ended March 31, 2023.
+Added: Please see Non-GAAP Measures below in this section of this Quarterly Report for a discussion of the limitations of non-GAAP adjusted EBITDA (a non-GAAP measure) and a reconciliation of non-GAAP adjusted EBITDA from net income, the most directly comparable measurement in accordance with accounting principles generally accepted in the United States, or GAAP, for the three months ended March 31, 2024 and 2023.
Recent Developments
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It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions.
−Removed: The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2023, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions.
+Added: The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2024, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the Macroeconomic Conditions.
Prolonged uncertainty with respect to the 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: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2023 2022 2023 2022
SaaS and license revenue $ 150,344 $ 135,394
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Twelve Months Ended
−Removed: September 30,
SaaS and license revenue renewal rate 94 % 93 %
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SaaS and license revenue is a GAAP measure that we use to measure our current performance and estimate our future performance.
−Removed: We believe that SaaS and license revenue is an indicator of the productivity of our existing service provider partner s and their ability to activate and maintain subscribers using our intelligently connected property solutions, our ability to add new service provider partners reselling our solutions, the demand for our intelligently connected property solutions and the pace at which the market for these solutions is growing.
+Added: We believe SaaS and license revenue is an indicator of the productivity of our existing service provider partner s and their ability to activate and maintain subscribers using our intelligently connected property solutions, our ability to add new service provider partners reselling our solutions, the demand for our intelligently connected property solutions and the pace at which the market for these solutions is growing.
Non-GAAP Adjusted EBITDA
−Removed: Non-GAAP 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 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: Non-GAAP adjusted EBITDA is a non-GAAP measure that represents our net income before interest expense, interest income, certain activity within other expense, net, provision for / (benefit from) income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received 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 record interest expense primarily related to our 2026 Notes.
−Removed: We exclude interest expense in calculating non-GAAP 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 and 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 debt, when applicable, from non-GAAP adjusted EBITDA because we do not consider it part of our ongoing results of operations.
−Removed: We exclude the impact related to our provision for income taxes from non-GAAP adjusted EBITDA because we do not consider this tax adjustment to be part of our ongoing results of operations.
+Added: We exclude interest expense in calculating non-GAAP adjusted EBITDA because we believe the exclusion of interest expense will provide for more meaningful information about our financial performance.
+Added: We exclude interest income and certain activity within other expense, net including gains, losses or impairments on investments and other assets, gains on settlement fees and losses on the early extinguishment of debt, when applicable, from non-GAAP adjusted EBITDA because we do not consider it part of our ongoing results of operations.
+Added: We exclude the impact related to our provision for / (benefit from) income taxes from non-GAAP adjusted EBITDA because we do not consider this tax adjustment to be part of our ongoing results of operations.
GAAP requires that operating expenses include the amortization of acquired intangible assets, which principally include acquired customer relationships, developed technology and trade names.
We exclude amortization of intangibles from non-GAAP adjusted EBITDA because we do not consider amortization expense when we evaluate our ongoing business operations, nor do we factor amortization expense into our evaluation of potential acquisitions, or our measurement of the performance of those acquisitions.
−Removed: We believe that the exclusion of amortization expense enables the comparison of our performance to other companies in our industry as other companies may be more or less acquisitive than us and therefore, amortization expense may vary significantly by company based on their acquisition history.
+Added: We believe the exclusion of amortization expense enables the comparison of our performance to other companies in our industry as other companies may be more or less acquisitive than we are, and therefore, amortization expense may vary significantly by company based on their acquisition history.
Although we exclude amortization of acquired intangible assets from non-GAAP adjusted EBITDA, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
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Additionally, the determination of stock-based compensation expense can be calculated using various methodologies and is dependent upon subjective assumptions and other factors that vary on a company-by-company basis.
−Removed: Therefore, we believe that excluding stock-based compensation expense from non-GAAP adjusted EBITDA improves the comparability of our results to the results of other companies in our industry.
+Added: Therefore, we believe excluding stock-based compensation expense from non-GAAP adjusted EBITDA improves the comparability of our results to the results of other companies in our industry.
Included in operating expenses are incremental costs directly related to business and asset acquisitions as well as changes in the fair value of contingent consideration liabilities, when applicable.
−Removed: We exclude acquisition-related expense from non-GAAP adjusted EBITDA because we believe that the exclusion of this expense allows us to better provide meaningful information about our operating performance, facilitates comparisons to our historical operating results, improves the comparability of our results to the results of other companies in our industry, and ultimately, we believe helps investors better understand the acquisition-related expense and the effects of the transaction on our results of operations.
−Removed: We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes, particularly costs incurred in ongoing intellectual property litigation, to be indicative of our core operating performance.
+Added: We exclude acquisition-related expense from non-GAAP adjusted EBITDA because we believe the exclusion of this expense allows us to better provide meaningful information about our operating performance, facilitates comparisons to our historical operating results, improves the comparability of our results to the results of other companies in our industry, and ultimately, we believe helps investors better understand the acquisition-related expense and the effects of the transaction on our results of operations.
+Added: We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred and received in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes, particularly costs incurred in ongoing intellectual property litigation, to be indicative of our core operating performance.
We do not adjust for ordinary course legal expenses, including those expenses resulting from maintaining and enforcing our intellectual property portfolio and license agreements.
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Non-GAAP 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 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 nine months ended September 30, 2023 and 2022.
+Added: Please see Non-GAAP Measures in this section 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, 2024 and 2023.
SaaS and License Revenue Renewal Rate
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We offer multiple service level packages for our platform solutions including a range of solutions and a range of a la carte add-ons for additional features.
−Removed: The fee paid by our service provider partners each month for the delivery of our solutions is
−Removed: based on the combination of packages and add-ons enabled for each subscriber.
+Added: The fee paid by our service provider partners each month for the delivery of our solutions is based on the combination of packages and add-ons enabled for each subscriber.
We utilize tiered pricing plans where our service provider partners may receive prospective pricing discounts driven by volume.
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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.
−Removed: 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.
−Removed: Vivint has stopped paying license fees to Alarm.com under the agreement.
−Removed: Vivint had been paying the required license fees to Alarm.com since the agreement was executed in November 2013.
−Removed: 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.
−Removed: As a result of Vivint’s refusal to pay license fees under the agreement, which began during the fourth quarter of 2022, SaaS and license revenue and total revenue will continue to be lowered by approximately $6.0 million on a quarterly basis.
−Removed: We also believe that quarterly earnings and cash flow will continue to be impacted by the aforementioned $6.0 million, plus additional legal fees.
Software License Revenue .
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Hardware and Other Revenue.
−Removed: We generate hardware and other revenue primarily from the sale of video cameras, video recorders and cellular radio modules that provide access to our cloud-based platforms and, to a lesser extent, the sale of other devices, including image sensors, gunshot detection sensors and peripherals.
+Added: We generate hardware and other revenue primarily from the sale of video cameras, video recorders, smart thermostats and cellular radio modules that provide access to our cloud-based platforms and, to a lesser extent, the sale of other devices, including image sensors, gunshot detection sensors and peripherals.
We primarily transfer hardware to our customers upon delivery to the customer, which corresponds with the time at which the customer obtains control of the hardware.
We record a reserve against revenue for hardware returns based on historical returns.
−Removed: Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our OpenEye video surveillance software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception.
−Removed: Additionally, our hardware and other revenue includes our revenue from Shooter Detection Systems related to the sale of licenses that provide our customers the right to use our indoor gunshot detection solution in exchange for license fees, which are generally paid at contract inception.
+Added: Our hardware and other revenue also includes our revenue from the sale of perpetual licenses that provide our customers in the commercial market the right to use our video surveillance software for an indefinite period of time in exchange for a one-time license fee.
+Added: Additionally, our hardware and other revenue includes our revenue from the sale of licenses that provide our customers the right to use our indoor gunshot detection solution in exchange for license fees.
Hardware and other revenue may also include activation fees charged to some of our service provider partners for activation of a new subscriber account on our platforms, as well as fees paid by service provider partners for our marketing services.
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Our cost of SaaS and license revenue also includes our cost of software license revenue, which primarily includes the payroll and payroll-related costs of the department dedicated to providing service exclusively to those service providers that host the Software platform.
−Removed: Our cost of hardware and other revenue primarily includes cost of raw materials, tooling, freight shipments and amounts paid to our third-party manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, video recorders and gunshot detection sensors, which we purchase from an original equipment manufacturer, and other devices.
+Added: As of March 31, 2024 and 2023, we had 75 and 99 employees who manufacture hardware for our suite of IoT solutions, respectively .
+Added: Our cost of hardware and other revenue primarily includes cost of raw materials, tooling, freight shipments and amounts paid to our third-party manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, video recorders, smart thermostats and gunshot detection sensors, which we purchase from an original equipment manufacturer, and other devices.
Cost of hardware and other revenue also includes material costs and labor cost related to our employees who manufacture hardware for our suite of IoT solutions .
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Tariffs have subjected certain Alarm.com products manufactured overseas to additional import duties of up to 25%.
−Removed: amount of the import tariff and the number of products subject to tariffs have changed numerous times based on action by the U.S.
+Added: The amount of the import tariff and the number of products subject to tariffs have changed numerous times based on action by the U.S.
Approximately one-fifth to one-half of the hardware products that we sell to our service provider partners are imported from China and could be subject to increased tariffs.
−Removed: While the additional import duties have resulted in an increase to our cost of hardware revenue, these import duties had a modest impact on hardware revenue margins.
+Added: While the additional import duties resulted in an increase to our cost of hardware revenue, these import duties had a modest impact on hardware revenue margins.
If tariffs are increased or are expanded to apply to more of our products, such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future.
We continue to monitor the changes in tariffs.
−Removed: 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 in 2023 to approximate the hardware revenue margins experienced during the third and fourth quarters of 2022 as opposed to the hardware revenue margins experienced during the fourth quarter of 2021 and first quarter of 2022 as a result of price increases we implemented on certain products during the first six months of 2022 to partially offset our increases in costs.
+Added: We currently expect our hardware revenue margins in 2024 to approximate the hardware revenue margins from 2023.
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 1,699 employees as of September 30, 2022 to 1,986 employees as of September 30, 2023, including 77 employees who manufacture hardware for our suite of IoT solutions, and grew from 1,909 employees as of June 30, 2023.
+Added: We grew from 1,858 employees as of March 31, 2023 to 2,002 employees as of March 31, 2024 , and grew from 1,989 employees as of December 31, 2023.
We expect to continue to hire new employees to support the projected future growth of our business.
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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 504 as of September 30, 2022 to 566 as of September 30, 2023 and increased from 553 as of June 30, 2023.
−Removed: We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally.
+Added: The number of employees in sales and marketing functions increased from 519 as of March 31, 2023 to 564 as of March 31, 2024 and decreased from 565 as of December 31, 2023.
+Added: We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally and we expect to increase our marketing expense in 2024 as compared to 2023.
We intend to increase the size of our sales force and our service provider partner support team to provide additional support to our existing service provider partner base to drive their productivity in selling our solutions as well as to enroll new service provider partners in North America and in international markets.
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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 214 as of September 30, 2022 to 227 as of September 30, 2023 and increased from 199 as of June 30, 2023.
+Added: The number of employees in general and administrative functions increased from 198 as of March 31, 2023 to 224 as of March 31, 2024 and decreased from 229 as of December 31, 2023.
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 as well as additional legal fees related to the dispute arising under the Patent Cross License Agreement between Alarm.com and Vivint.
+Added: While somewhat unpredictable, we also expect to continue to incur costs related to litigation involving intellectual property.
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 981 as of September 30, 2022 to 1,116 as of September 30, 2023 and increased from 1,053 as of June 30, 2023.
+Added: The number of employees in research and development functions increased from 1,042 as of March 31, 2023 to 1,139 as of March 31, 2024 and increased from 1,118 as of December 31, 2023.
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.
−Removed: We will also continue to invest in efforts to extend our platforms to adjacent markets and internationally to maintain our leadership position in the development of intelligently connected property technology, and continued
−Removed: enhancement of our Partner Services Platform, a comprehensive suite of enterprise-grade business management solutions for our service provider partners.
+Added: We will also continue to invest in efforts to extend our platforms to adjacent markets and internationally to maintain our leadership position in the development of intelligently connected property technology, and continued enhancement of our Partner Services Platform, a comprehensive suite of enterprise-grade business management solutions for our service provider partners.
Amortization and Depreciation .
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Interest income in 2024 will depend, in part, on our use of cash and fluctuations in interest rates.
−Removed: Other (Expense) / Income, Net
−Removed: Other (expense) / income, net primarily consists of non-operating and miscellaneous expense and income.
−Removed: Provision for Income Taxes
+Added: Other Expense, Net
+Added: Other expense, net primarily consists of non-operating and miscellaneous expense and income.
+Added: Provision for / (Benefit from) Income Taxes
We are subject to U.S.
2 unchanged sentences
As a result, we recognize tax liabilities based on estimates of whether additional taxes will be due.
−Removed: For the nine months ended September 30, 2023, our effective tax rate was below the 21.0% statutory rate primarily due to research and development tax credits claimed and the foreign derived intangible income deduction, partially offset by an unfavorable true-up adjustment of our 2022 income tax provision estimate associated with research and development tax credits, the impact of state taxes, foreign withholding taxes, other nondeductible expenses and a stock-based compensation tax shortfall.
+Added: For the three months ended March 31, 2024, our effective tax rate was below the 21.0% statutory rate primarily due to research and development tax credits claimed, the foreign derived intangible income deduction, the release of an unrecognized tax benefit liability due to the closure of the 2018 and 2019 Internal Revenue Service federal income tax return examination and tax windfall benefits from employee stock-based compensation, partially offset by the impact of state taxes, federal estimated tax payment interest expense and other nondeductible expenses.
We recognize stock-based compensation tax shortfalls and excess tax windfall benefits on a discrete basis during the quarter in which they occur, and we anticipate our effective tax rate will vary from quarter to quarter depending on our stock price as well as the vesting and exercises of various forms of equity compensation under our equity incentive plans each period, including restricted stock units and stock options.
Results of Operations
−Removed: The following table sets forth our unaudited selected condensed consolidated statements of operations and data as a percentage of revenue for the periods presented (in thousands, except percentages):
+Added: The following table sets forth our unaudited selected condensed consolidated statements of operations (in thousands) and data as a percentage of revenue for the periods presented:
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2023 2022 2023 2022
SaaS and license revenue $ 150,344 67 % $ 135,394 65 %
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Interest income 8,540 4 5,182 2
−Removed: Other (expense) / income, net (435) — (76) — (1,214) — 42 —
+Added: Other expense, net (318) — (148) —
Income before income taxes 26,151 12 12,985 6
−Removed: Provision for income taxes 3,972 2 246 — 9,257 1 472 —
+Added: Provision for / (benefit from) income taxes 2,747 2 (1,222) (1)
Net income $ 23,404 10 % $ 14,207 7 %
3 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2023 2022 2023 2022
Stock-based compensation expense data:
Cost of hardware and other revenue
−Removed: $ 3 $ — $ 3 $ —
Sales and marketing 755 1,032
4 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2023 2022 2023 2022
Components of cost of revenue as a percentage of revenue:
2 unchanged sentences
Total cost of revenue as a percentage of total revenue 34 % 36 %
−Removed: Comparison of the Three and Nine Months Ended September 30, 2023 to September 30, 2022
−Removed: The following tables in this section set forth our selected condensed consolidated statements of operations, data for the percentage change and data as a percentage of revenue for the periods presented (in thousands, except percentages):
+Added: Comparison of the Three Months Ended March 31, 2024 to March 31, 2023
+Added: 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 three months ended March 31, 2024 and March 31, 2023.
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
SaaS and license revenue $ 150,344 $ 135,394 11 %
1 unchanged sentence
Total revenue $ 223,283 $ 209,716 6 %
−Removed: The $5.7 million increase in total revenue for the three months ended September 30, 2023 as compared to the same period in the prior year was primarily the result of a $11.9 million, or 9%, increase in our SaaS and license revenue, partially offset by a $6.2 million, or 7%, decrease in our hardware and other revenue.
−Removed: Our software license revenue included within SaaS and license revenue decreased $0.8 million to $5.7 million during the three months ended September 30, 2023 as compared to $6.5 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 $8.2 million for the three months ended September 30, 2023 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 2022.
−Removed: The increase in SaaS and license revenue for the Alarm.com segment was partially offset by $5.7 million in license revenue from Vivint during the three months ended September 30, 2022 that did not occur during the three months ended September 30, 2023.
−Removed: The SaaS and license revenue for our Other segment increased $3.7 million for the three months ended September 30, 2023 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 decrease in hardware and other revenue for the three months ended September 30, 2023 as compared to the same period in the prior year was primarily from the $5.9 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of cellular radio modules sold due to the shut down of 3G and CDMA wireless networks in 2022 by certain cellular carriers, as well as a decrease in the volume of video cameras and thermostats sold.
−Removed: Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $0.3 million for the three months ended September 30, 2023 as compared to the same period in the prior year primarily due to decreased sales related to our Heating, Ventilation and Air Conditioning solutions.
−Removed: The $21.0 million increase in total revenue for the nine months ended September 30, 2023 as compared to the same period in the prior year was primarily the result of a $35.0 million, or 9%, increase in our SaaS and license revenue, partially offset by a $14.0 million, or 6%, decrease in our hardware and other revenue.
−Removed: Our software license revenue included within SaaS and license revenue decreased $2.7 million to $17.8 million during the nine months ended September 30, 2023, as compared to $20.5 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 $27.1 million for the nine months ended September 30, 2023 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 2022.
−Removed: The increase in SaaS and license revenue for the Alarm.com segment was partially offset by $16.6 million in license revenue from Vivint during the nine months ended September 30, 2022 that did not occur during the nine months ended September 30, 2023.
−Removed: The SaaS and license revenue for our Other segment increased $7.9 million for the nine months ended September 30, 2023 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 as well as our property management solution.
−Removed: The decrease in hardware and other revenue for the nine months ended September 30, 2023 as compared to the same period in the prior year was primarily from the $12.6 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of cellular radio modules sold due to the shut down of 3G and CDMA wireless networks in 2022 by certain cellular carriers, as well as a decrease in the volume of video cameras and thermostats sold.
−Removed: Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $1.4 million for the nine months ended September 30, 2023 as compared to the same period in the prior year primarily due to decreased sales related to our property management and Heating, Ventilation and Air Conditioning solutions.
+Added: The $13.6 million increase in total revenue for the three months ended March 31, 2024 as compared to the same period in the prior year was primarily the result of a $15.0 million, or 11%, increase in our SaaS and license revenue, partially offset by a $1.4 million, or 2%, decrease in our hardware and other revenue.
+Added: Our software license revenue included within SaaS and license revenue decreased $1.0 million to $5.2 million during the three months ended March 31, 2024 as compared to $6.2 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 $12.2 million for the three months ended March 31, 2024 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 2023.
+Added: The SaaS and license revenue for our Other segment increased $2.7 million for the three months ended March 31, 2024 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 as well as our property management solution.
+Added: The decrease in hardware and other revenue for the three months ended March 31, 2024 as compared to the same period in the prior year was primarily from the $1.0 million decrease in hardware and other revenue, net of intersegment eliminations, in the Alarm.com segment arising from a decrease in the volume of thermostats sold.
+Added: Hardware and other revenue, net of intersegment eliminations, in our Other segment decreased $0.3 million for the three months ended March 31, 2024 as compared to the same period in the prior year primarily due to decreased sales related to our property management and Heating, Ventilation and Air Conditioning solutions.
Cost of Revenue
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
Cost of revenue (1)
5 unchanged sentences
(1) Excludes amortization and depreciation shown in operating expenses.
−Removed: The $4.2 million decrease in cost of revenue for the three months ended September 30, 2023 as compared to the same period in the prior year was the result of a $7.7 million, or 11%, decrease in cost of hardware and other revenue, partially offset by a $3.5 million, or 19%, 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 each of the three months ended September 30, 2023 and 2022.
−Removed: The cost of hardware and other revenue for the Alarm.com segment decreased $7.5 million during the three months ended September 30, 2023 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped, a decrease in inventory component costs and a decrease in costs for freight shipments.
−Removed: The cost of SaaS and license revenue for the Alarm.com segment increased $2.2 million during the three months ended September 30, 2023 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 hardware and other revenue for the Other segment decreased $0.2 million during the three months ended September 30, 2023 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped, a decrease in inventory component costs and a decrease in costs for freight shipments.
−Removed: The cost of SaaS and license revenue for the Other segment increased $1.3 million during the three months ended September 30, 2023 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 77% for the three months ended September 30, 2023 and 81% for the same period in the prior year.
−Removed: The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the three months ended September 30, 2023 as compared to the same period in the prior year is primarily due to a decrease in inventory component and freight shipment costs, price increases we implemented on certain products 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 15% for the three months ended September 30, 2023 and 14% for the same period in the prior year.
−Removed: Cost of software license revenue as a percentage of software license revenue was 2% for each of the three months ended September 30, 2023 and 2022.
−Removed: The $19.1 million decrease in cost of revenue for the nine months ended September 30, 2023 as compared to the same period in the prior year was the result of a $28.1 million, or 13%, decrease in cost of hardware and other revenue, partially offset by a $9.0 million, or 17%, increase in cost of SaaS and license revenue.
−Removed: Our cost of software license revenue included within cost of SaaS and license revenue was $0.4 million for each of the nine months ended September 30, 2023 and 2022.
−Removed: The cost of hardware and other revenue for the Alarm.com segment decreased $26.9 million during the nine months ended September 30, 2023 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped, a decrease in inventory component costs and a decrease in costs for freight shipments.
−Removed: The cost of SaaS and license revenue for the Alarm.com segment increased $6.5 million during the nine months ended September 30, 2023 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 hardware and other revenue for the Other segment decreased $1.2 million during the nine months ended September 30, 2023 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped, a decrease in inventory component costs and a decrease in costs for freight shipments.
−Removed: The cost of SaaS and license revenue for the Other segment increased $2.5 million during the nine months ended September 30, 2023 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 77% for the nine months ended September 30, 2023 and 84% for the same period in the prior year.
−Removed: The decrease in cost of hardware and other revenue as a percentage of hardware and other revenue for the nine months ended September 30, 2023 as compared to the same period in the prior year is primarily due to a decrease in inventory component and freight shipment costs, price increases we have implemented on some of our products 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 15% for the nine months ended September 30, 2023 and 14% for the same period in the prior year.
−Removed: Cost of software license revenue as a percentage of software license revenue was 2% for each of the nine months ended September 30, 2023 and 2022.
+Added: The $0.3 million increase in cost of revenue for the three months ended March 31, 2024 as compared to the same period in the prior year was the result of a $0.8 million, or 4%, increase in cost of SaaS and license revenue, partially offset by a $0.5 million, or 1%, decrease in cost of hardware and other revenue.
+Added: Our cost of software license revenue included within cost of SaaS and license revenue was $0.2 million for the three months ended March 31, 2024 as compared to $0.1 million during the same period in the prior year.
+Added: The cost of SaaS and license revenue for the Alarm.com segment increased $0.1 million during the three months ended March 31, 2024 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 hardware and other revenue for the Alarm.com segment decreased $0.2 million during the three months ended March 31, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped and a decrease in costs for freight shipments.
+Added: The cost of SaaS and license revenue for the Other segment increased $0.7 million during the three months ended March 31, 2024 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: The cost of hardware and other revenue for the Other segment decreased $0.3 million during the three months ended March 31, 2024 as compared to the same period in the prior year primarily due to a decrease in the number of hardware units shipped and a decrease in costs for freight shipments.
+Added: Cost of hardware and other revenue as a percentage of hardware and other revenue was 77% for the three months ended March 31, 2024 and 76% 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 three months ended March 31, 2024 as compared to the same period in the prior year is primarily 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 each of the three months ended March 31, 2024 and 2023.
+Added: Cost of software license revenue as a percentage of software license revenue was 3% for the three months ended March 31, 2024 and 2% for the same period in the prior year.
Sales and Marketing Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
Sales and marketing $ 25,454 $ 26,645 (4) %
% of total revenue 12 % 13 %
−Removed: The $0.8 million increase in sales and marketing expense for the three months ended September 30, 2023 as compared to the same period in the prior year was primarily due to a $1.6 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team and our service provider partner support team to support our growth, partially offset by a $1.2 million decrease in marketing expense, including advertising costs.
+Added: The $1.2 million decrease in sales and marketing expense for the three months ended March 31, 2024 as compared to the same period in the prior year was primarily due to a $1.4 million decrease in marketing expense and a $0.8 million decrease in personnel and related costs for our Alarm.com segment.
Personnel and related costs includes salary, benefits, stock-based compensation and travel expenses.
−Removed: Sales and marketing expense for our Alarm.com segment also increased by $0.2 million for the three months ended September 30, 2023 as compared to the same period in the prior year due to an increase in our expenses for external consultants.
−Removed: Sales and marketing expense from our Other segment increased $0.3 million for the three months ended September 30, 2023 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team.
−Removed: The $5.1 million increase in sales and marketing expense for the nine months ended September 30, 2023 as compared to the same period in the prior year was primarily due to a $6.1 million increase in personnel and related costs for our Alarm.com segment, attributable in part to increases in the headcount for our sales team and our service provider partner support team to support our growth, partially offset by a $3.1 million decrease in marketing expense, including advertising cost.
−Removed: Sales and marketing expense for our Alarm.com segment also increased by $0.8 million for the nine months ended September 30, 2023 as compared to the same period in the prior year due to an increase in our expenses for external consultants.
−Removed: Sales and marketing expense from our Other segment increased $1.0 million for the nine months ended September 30, 2023, 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.
−Removed: The overall number of employees in our sales and marketing teams increased from 504 as of September 30, 2022 to 566 as of September 30, 2023.
+Added: These decreases in sales and marketing expense for our Alarm.com segment were partially offset by a $0.1 million increase in our expenses for external consultants for the three months ended March 31, 2024 as compared to the same period in the prior year.
+Added: Sales and marketing expense from our Other segment increased $0.8 million for the three months ended March 31, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs, attributable in part to increases in the headcount for our sales team.
+Added: The overall number of employees in our sales and marketing teams increased from 519 as of March 31, 2023 to 564 as of March 31, 2024.
General and Administrative Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
General and administrative $ 29,296 $ 28,499 3 %
% of total revenue 13 % 14 %
−Removed: The $3.4 million increase in general and administrative expense for the three months ended September 30, 2023 as compared to the same period in the prior year was primarily due to a $3.3 million increase in legal costs for our Alarm.com segment related to intellectual property litigation.
−Removed: General and administrative expenses from our Other segment decreased by $0.4 million for the three months ended September 30, 2023 as compared to the same period in the prior year, primarily due to a decrease in personnel and related costs.
−Removed: The $7.4 million increase in general and administrative expense for the nine months ended September 30, 2023 as compared to the same period in the prior year was primarily due to a $3.0 million increase in personnel and related costs for our Alarm.com segment and a $1.9 million increase in our expenses for external consultants.
−Removed: Additionally, legal costs related to intellectual property litigation increased $1.1 million, rent expense increased $0.6 million, the provision for credit losses increased $0.4 million and insurance-related costs increased $0.4 million for our Alarm.com segment for the nine months ended September 30, 2023 as compared to the same period in the prior year.
−Removed: General and administrative expenses from our Other segment decreased by $1.3 million for the nine months ended September 30, 2023 as compared to the same period in the prior year, primarily due to a $0.8 million decrease in personnel and related costs and a $0.5 million decrease in the provision for credit losses.
−Removed: The overall number of employees in general and administrative functions increased from 214 as of September 30, 2022 to 227 as of September 30, 2023.
+Added: The $0.8 million increase in general and administrative expense for the three months ended March 31, 2024 as compared to the same period in the prior year was primarily due to a $4.0 million increase in the provision for credit losses related to a loan we provided to an affiliated entity of one of our distribution partners, partially offset by a $3.0 million decrease in legal costs for our Alarm.com segment related to intellectual property litigation.
+Added: General and administrative expenses from our Other segment decreased by $0.3 million for the three months ended March 31, 2024 as compared to the same period in the prior year, primarily due to a $0.5 million decrease in the provision for credit losses, partially offset by a $0.2 million increase in personnel and related costs.
+Added: The overall number of employees in general and administrative functions increased from 198 as of March 31, 2023 to 224 as of March 31, 2024.
Research and Development Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
Research and development $ 65,956 $ 61,908 7 %
% of total revenue 30 % 29 %
−Removed: The $5.4 million increase in research and development expense for the three months ended September 30, 2023 as compared to the same period in the prior year was primarily due to a $4.3 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 $0.5 million increase in our expenses for external consultants.
−Removed: Research and development expense from our Other segment increased by $0.9 million for the three months ended September 30, 2023 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs.
−Removed: The $22.6 million increase in research and development expense for the nine months ended September 30, 2023 as compared to the same period in the prior year was primarily due to a $17.7 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 $1.5 million increase in our expenses for external consultants.
−Removed: Research and development expense from our Other segment increased by $3.2 million for the nine months ended September 30, 2023 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs.
−Removed: The overall number of employees in research and development functions increased from 981 as of September 30, 2022 to 1,116 as of September 30, 2023.
+Added: The $4.0 million increase in research and development expense for the three months ended March 31, 2024 as compared to the same period in the prior year was primarily due to a $2.5 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 $0.8 million increase in our expenses for external consultants.
+Added: Research and development expense from our Other segment increased by $1.0 million for the three months ended March 31, 2024 as compared to the same period in the prior year, primarily due to an increase in personnel and related costs.
+Added: The overall number of employees in research and development functions increased from 1,042 as of March 31, 2023 to 1,139 as of March 31, 2024.
Amortization and Depreciation
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
Amortization and depreciation $ 7,337 $ 7,673 (4) %
% of total revenue 3 % 4 %
−Removed: Amortization and depreciation increased $0.4 million for each of the three and nine months ended September 30, 2023 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 EBS Spółka z ograniczoną odpowiedzialnością, or EBS, on January 18, 2023.
+Added: Amortization and depreciation decreased $0.3 million for each of the three months ended March 31, 2024 as compared to the same period in the prior year, primarily due to changes in amortization expense related to the intangible assets we previously acquired.
Interest Expense
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
Interest expense $ (796) $ (868) (8) %
% of total revenue — % — %
−Removed: Interest expense increased $0.1 million and $0.2 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in the prior year, primarily due to the interest expense incurred on the assumed debt from the acquisition of EBS on January 18, 2023.
+Added: Interest expense remained relatively consistent for the three months ended March 31, 2024, as compared to the same period in the prior year.
Interest Income
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
Interest income $ 8,540 $ 5,182 65 %
% of total revenue 4 % 2 %
−Removed: Interest income increased $5.6 million and $17.0 million for the three and nine months ended September 30, 2023, 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 from higher interest rates during the three and nine months ended September 30, 2023.
−Removed: Other (Expense) / Income, Net
+Added: Interest income increased $3.4 million for the three months ended March 31, 2024, as compared to the same period in the prior year, primarily due to an increase in interest income earned on cash and cash equivalents from higher interest rates and higher amounts of cash and cash equivalents.
+Added: The increase in interest income was partially offset by a $0.5 million reduction to interest income for the reversal of payable in kind interest associated with a subordinated credit agreement with an affiliated entity of one of our distribution partners during the three months ended March 31, 2024, which did not occur during the three months ended March 31, 2023.
+Added: Other Expense, Net
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
−Removed: Other (expense) / income, net $ (435) $ (76) 472 % $ (1,214) $ 42 (2,990) %
+Added: Other expense, net $ (318) $ (148) 115 %
% of total revenue — % — %
−Removed: Other (expense) / income, net increased $0.4 million and $1.3 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in the prior year, primarily due to an increase in non-operating and miscellaneous expenses.
−Removed: Provision for Income Taxes
+Added: Other expense, net increased $0.2 million for the three months ended March 31, 2024, as compared to the same period in the prior year, primarily due to an increase in non-operating and miscellaneous expenses.
+Added: Provision for / (Benefit from) Income Taxes
Three Months Ended
−Removed: September 30, %
−Removed: Change Nine Months Ended
−Removed: September 30, %
−Removed: 2023 2022 2023 2022
−Removed: Provision for income taxes $ 3,972 $ 246 1,515 % $ 9,257 $ 472 1,861 %
+Added: Provision for / (benefit from) income taxes $ 2,747 $ (1,222) (325) %
% of total revenue 2 % (1) %
−Removed: The provision for income taxes increased $3.7 million and $8.8 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in the prior year.
−Removed: Our effective tax rate was 17.0% and 15.8% for the three and nine months ended September 30, 2023, respectively, as compared to 1.3% and 1.2% for the same periods in the prior year.
−Removed: The increase in the provision for income taxes for the three and nine months ended September 30, 2023 as compared to the same periods in the prior year was primarily due to an increase in income before income taxes, foreign withholding taxes and a stock-based compensation tax shortfall.
−Removed: Additionally, the increase in the provision for income taxes for the nine months ended September 30, 2023 as compared to the same period in the prior year was due to an unfavorable true-up adjustment of our 2022 income tax provision estimate associated with research and development tax credits recorded during the second quarter of 2023.
+Added: The provision for income taxes increased $4.0 million for the three months ended March 31, 2024, as compared to the same period in the prior year.
+Added: Our effective tax rate was 10.5% for the three months ended March 31, 2024, as compared to (9.4)% for the same period in the prior year.
+Added: The increase in the provision for income taxes for the three months ended March 31, 2024 as
+Added: compared to the same period in the prior year was primarily due to an increase in income before income taxes and a decrease in the estimated research and development tax credits.
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 93% and 94% of our revenue, net of intersegment eliminations, for the three and nine months ended September 30, 2023, respectively, as compared to 94% 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 the three months ended March 31, 2024, as compared to 95% for the same period 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 1,540 employees as of September 30, 2022 to 1,778 employees as of September 30, 2023 and increased from 1,712 employees as of June 30, 2023.
−Removed: Our Other segment increased from 159 employees as of September 30, 2022 to 208 employees as of September 30, 2023 and increased from 197 employees as of June 30, 2023 .
+Added: Our Alarm.com segment increased from 1,672 employees as of March 31, 2023 to 1,780 employees as of March 31, 2024 and increased from 1,776 employees as of December 31, 2023.
+Added: Our Other segment increased from 186 employees as of March 31, 2023 to 222 employees as of March 31, 2024 and increased from 213 employees as of December 31, 2023 .
Inter-segment revenue includes sales of hardware between our segments.
1 unchanged sentence
Three Months Ended
−Removed: September 30,
SaaS and license revenue Hardware and other revenue
6 unchanged sentences
Total $ 150,344 $ 72,939 $ 128,043 $ 135,394 $ 74,322 $ 124,725
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: SaaS and license revenue Hardware and other revenue
−Removed: Operating expenses SaaS and license revenue Hardware and other revenue
−Removed: Operating expenses
−Removed: Alarm.com $ 384,116 $ 232,464 $ 333,684 $ 357,031 $ 245,679 $ 301,049
−Removed: Other 36,737 5,263 37,028 28,795 6,834 34,157
−Removed: Intersegment Alarm.com — (2,678) (360) — (3,302) (360)
−Removed: Intersegment Other — (457) — — (617) —
−Removed: Total $ 420,853 $ 234,592 $ 370,352 $ 385,826 $ 248,594 $ 334,846
−Removed: Our SaaS and license revenue for the Alarm.com segment included software license revenue of $5.7 million and $17.8 million for the three and nine months ended September 30, 2023, respectively, as compared to $6.5 million and $20.5 million for the same periods in the prior year.
−Removed: There was no software license revenue recorded for the Other segment during the three and nine months ended September 30, 2023 and 2022.
+Added: Our SaaS and license revenue for the Alarm.com segment included software license revenue of $5.2 million for the three months ended March 31, 2024, as compared to $6.2 million for the same period in the prior year.
+Added: There was no software license revenue recorded for the Other segment during the three months ended March 31, 2024 and 2023.
Critical Accounting Estimates
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Except as disclosed in Note 2 of our notes to the condensed consolidated financial statements, there were no other material changes to our use of estimates or other critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 22, 2024.
+Added: Recent Accounting Pronouncements
+Added: See Note 2 of our condensed consolidated financial statements for information related to recently issued accounting standards.
Liquidity and Capital Resources
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The following table summarizes our cash and cash equivalents, accounts receivable, net and working capital, for the periods indicated (in thousands):
−Removed: September 30, 2023 December 31, 2022
+Added: March 31, 2024 December 31, 2023
Cash and cash equivalents $ 747,877 $ 696,983
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We define working capital as current assets minus current liabilities.
−Removed: Our cash and cash equivalents as of September 30, 2023 are available for working capital purposes.
+Added: Our cash and cash equivalents as of March 31, 2024 are available for working capital purposes.
Our investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification and maturities of our investments to preserve capital, maintain liquidity and limit the amount of credit risk exposure.
−Removed: As of September 30, 2023, our cash and cash equivalents were primarily held in money market accounts.
+Added: As of March 31, 2024, our cash and cash equivalents were primarily held in money market accounts.
Liquidity and Capital Resources
−Removed: As of September 30, 2023, we had $680.0 million in cash and cash equivalents.
+Added: As of March 31, 2024, we had $747.9 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.
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We mitigate the risk of loss for our cash and cash equivalents by depositing funds with a number of reputable financial institutions and monitoring risk profiles and investment strategies of money market funds.
−Removed: 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.
−Removed: Vivint has stopped paying license fees to Alarm.com under the agreement.
−Removed: Vivint had been paying the required license fees to Alarm.com since the agreement was executed in November 2013.
−Removed: 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.
−Removed: As a result of Vivint’s refusal to pay license fees under the agreement, which began during the fourth quarter of 2022, cash flows from operating activities will continue to be lowered by approximately $6.0 million on a quarterly basis, plus additional legal fees.
−Removed: Beginning in 2022, the Tax Cuts and Jobs Act of 2017 amended Internal Revenue Code Section 174, or Section 174, to eliminate the option to immediately deduct research and development expenditures in the year incurred, requiring these expenditures to be capitalized and amortized.
+Added: Beginning in 2022, the Tax Cuts and Jobs Act of 2017 amended Internal Revenue Code Section 174, or Section 174, to eliminate the option to immediately deduct research and development expenditures in the year incurred, requiring these expenditures to be capitalized and amortized over five years for domestic expenditures and over 15 years for foreign expenditures.
While we calculated the 2022 federal and state cash tax increase from Section 174 to be $38.1 million, we did not pay this additional cash tax liability as part of our 2022 estimated tax payments due to the possible deferral, modification or repeal of Section 174.
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The increased 2022 state tax liability was paid in April 2023 in the amount of $7.5 million.
+Added: We calculated the 2023 federal and state cash tax increase from Section 174 to be $43.5 million, which we paid in April 2024.
The Section 174 impact on 2024 cash flows from operating activities will depend on, among other factors, our 2024 operating results and the level of 2024 research and development activity.
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This estimate is based on the limited information that is currently available and is subject to change.
−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 that period and is expected to be immaterial beginning in year six.
+Added: While the largest impact will be to cash flow from operating activities, the impact for domestic research and development expenditures would continue over the five-year amortization period, but would decrease over that period and is expected to be immaterial beginning in year six.
+Added: On January 31, 2024, the U.S.
+Added: House of Representatives passed H.R.
+Added: 7024, which, among other provisions, would retroactively change the effective date of the requirement to capitalize Section 174 domestic research and development expenditures from January 1, 2022 to January 1, 2026.
+Added: Foreign research and development expenditures would continue to be capitalized and amortized over 15 years as of January 1, 2022.
+Added: If the bill is passed by the Senate and signed into law by the President as currently drafted, the bill would allow us to receive a partial refund of the 2022 and 2023 Section 174 federal income tax paid, the amount and timing of which cannot be estimated at this time.
+Added: Any state impact would depend on the relevant individual state laws.
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 three months of fiscal year 2023, we expect our capital expenditure requirements to be between $1.0 million and $2.0 million, primarily related to purchases of computer software and equipment as well as the continued build out of our leased and owned office space.
−Removed: Maturities of lease liabilities for our various office, data center and equipment leases as of September 30, 2023 are as follows:
+Added: Over the final nine months of fiscal year 2024, we expect our capital expenditure requirements to be between $4.0 million and $6.0 million, primarily related to the continued build out of our leased and owned office space as well as purchases of computer software and equipment.
+Added: Maturities of lease liabilities for our various office, data center and equipment leases as of March 31, 2024 are as follows:
$10.6 million for the remainder of 2024, $12.5 million in 2025, $7.8 million in 2026, $2.5 million in 2027, $1.8 million in 2028 and $1.9 million in 2029 and thereafter.
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As the impact of the Macroeconomic Conditions on the economy and our operations evolves, we will continue to assess our liquidity needs.
−Removed: To the extent our cash and cash equivalents and cash flows from operating activities are insufficient to fund our future activities, we may need to borrow additional funds or raise funds from public or private equity or debt financings.
+Added: To the extent our cash and cash equivalents
+Added: and cash flows from operating activities are insufficient to fund our future activities, we may need to borrow additional funds or raise funds from public or private equity or debt financings.
If we raise additional funds through the incurrence of indebtedness, such indebtedness would likely have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations.
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Material Cash Requirements
−Removed: As of September 30, 2023, 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 March 31, 2024, 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.
Sources of Liquidity
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The 2026 Notes are discussed in more detail above in Note 12 to the condensed consolidated financial statements.
−Removed: We did not declare or pay dividends during the three and nine months ended September 30, 2023 or 2022.
+Added: We did not declare or pay dividends during the three months ended March 31, 2024 or 2023.
We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future.
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Stock Repurchase Programs
−Removed: On December 3, 2020, our board of directors authorized a stock repurchase program, under which we were 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: No shares of our common stock were repurchased under this program during the three and nine months ended September 30, 2023.
−Removed: 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.
−Removed: On February 15, 2023, our board of directors authorized the cancellation of the balance under the stock repurchase program ending December 3, 2023 and also authorized a stock repurchase program, effective February 23, 2023, under which we are authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025.
−Removed: During the three and nine months ended September 30, 2023, 105,285 and 239,540 shares of our common stock were repurchased under this program for $6.2 million and $12.9 million, respectively, which includes applicable commissions and fees.
+Added: On February 15, 2023, our board of directors authorized a stock repurchase program, effective February 23, 2023, under which we are authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the two-year period ending February 23, 2025.
+Added: During the three months ended March 31, 2024 and 2023, no shares of our common stock were repurchased under this program.
As of January 1, 2023, we are subject to a 1.0% excise tax on the value of net corporate stock repurchases under the Inflation Reduction Act of 2022.
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The following table sets forth our cash flows for the periods indicated (in thousands):
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: Cash flows from operating activities $ 96,093 $ 22,455
+Added: Three Months Ended
+Added: Cash flows from / (used in) operating activities $ 49,853 $ (3,521)
Cash flows used in investing activities (3,961) (12,943)
−Removed: Cash flows used in financing activities (15,245) (48,475)
+Added: Cash flows from financing activities 6,356 842
Operating Activities
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 nine months ended September 30, 2023, cash flows from operating activities were $96.1 million, compared to $22.5 million for the same period in the prior year.
−Removed: This $73.6 million increase in cash flows from operating activities was due to a $62.4 million increase in cash from operating assets and liabilities and a $11.3 million increase in net income, partially offset by a $0.1 million decrease in non-cash and other reconciling items.
−Removed: The $62.4 million increase in cash from operating assets and liabilities was primarily due to a $39.8 million change in inventory resulting from a decrease in purchased inventory following prior year purchase activity 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, 2023 as compared to the same period in the prior year.
−Removed: The $0.1 million decrease in non-cash and other reconciling items was primarily due to a $1.6 million decrease in stock-based compensation during the nine months ended September 30, 2023 as compared to the same period in the prior year, partially offset by a $1.2 million inventory write-down during the nine months ended September 30, 2023, which did not occur during the nine months ended September 30, 2022.
+Added: For the three months ended March 31, 2024, cash flows from operating activities were $49.9 million, compared to cash flows used in operating activities of $3.5 million for the same period in the prior year.
+Added: This $53.4 million increase in cash flows from operating activities was due to a $28.6 million increase in cash from operating assets and liabilities, a $15.6 million increase in non-cash and other reconciling items and a $9.2 million increase in net income.
+Added: The $28.6 million increase in cash from operating assets and liabilities was primarily due to differences in the timing of disbursements and the collection of receipts as well as a $10.0 million change in inventory resulting from a decrease in purchased inventory during the three months ended March 31, 2024 as compared to the same period in the prior year.
+Added: The $15.6 million increase in non-cash and other reconciling items was primarily due to a $13.5 million change in deferred income taxes, which was primarily driven by the capitalization and amortization of research and development expenditures under Section 174, as well as an increase in the provision for credit losses on notes receivable related to a loan we provided to an affiliated entity of one of our distribution partners.
+Added: These increases in non-cash and other reconciling items were partially offset by a $1.4 million
+Added: decrease in stock-based compensation during the three months ended March 31, 2024 as compared to the same period in the prior year.
Investing Activities
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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 nine months ended September 30, 2023, cash flows used in investing activities were $21.7 million, compared to $62.6 million for the same period in the prior year.
−Removed: The $40.9 million decrease 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, Inc., during the nine months ended September 30, 2022 and $21.8 million purchase of developable land during the nine months ended September 30, 2022, which did not occur during the nine months ended September 30, 2023, as well as a $2.7 million decrease in the issuance of notes receivable during the nine months ended September 30, 2023 as compared to the same period in the prior year.
−Removed: The decrease in cash flows used in investing activities was partially offset by $9.7 million paid to purchase 100% of the issued and outstanding shares of capital stock of EBS, net of cash acquired, and the $5.9 million paid to purchase certain assets from Vintra, including direct transaction costs, during the nine months ended September 30, 2023, which did not occur during the nine months ended September 30, 2022.
+Added: For the three months ended March 31, 2024, cash flows used in investing activities were $4.0 million, compared to $12.9 million for the same period in the prior year.
+Added: The $8.9 million decrease in cash flows used in investing activities was primarily due to $9.7 million paid to purchase 100% of the issued and outstanding shares of capital stock of EBS, net of cash acquired, during the three months ended March 31, 2023, which did not occur during the three months ended March 31, 2024.
+Added: The decrease in cash flows used in investing activities was partially offset by a $0.7 million increase in purchases of equipment as well as a $0.2 million increase in the issuance of notes receivable during the three months ended March 31, 2024 as compared to the same period in the prior year.
Financing Activities
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Cash used in financing activities typically includes repurchases of common stock and repayments of debt.
−Removed: For the nine months ended September 30, 2023, cash flows used in financing activities were $15.2 million, compared to $48.5 million for the same period in the prior year.
−Removed: The $33.3 million decrease in cash flows used in financing activities was primarily due to the $39.0 million decrease in purchases of shares of our common stock during the nine months ended September 30, 2023 as compared to the same period in the prior year, partially offset by $3.0 million in debt payments related to the debt assumed in the acquisition of EBS as well as $1.7 million paid for holdback provisions from prior business combinations and asset acquisitions during the nine months ended September 30, 2023, which did not occur during the nine months ended September 30, 2022.
+Added: For the three months ended March 31, 2024, cash flows from financing activities were $6.4 million, compared to $0.8 million for the same period in the prior year.
+Added: The $5.6 million increase in cash flows from financing activities was primarily due to a $5.0 million increase in the issuance of common stock during the three months ended March 31, 2024, as compared to the same period in the prior year.
+Added: The increase in cash flows from financing activities was also due to the $0.5 million in debt payments related to the debt assumed in the acquisition of EBS during the three months ended March 31, 2023, which did not occur during the three months ended March 31, 2024.
Non-GAAP Measures
−Removed: We define non-GAAP adjusted EBITDA as our net income before interest expense, interest income, certain activity within other (expense) / income, net, provision for 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 non-GAAP adjusted EBITDA as our net income before interest expense, interest income, certain activity within other expense, net, provision for / (benefit from) income taxes, amortization and depreciation expense, stock-based compensation expense, acquisition-related expense, legal costs and settlement fees incurred and received 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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Further, we believe the exclusion of certain expenses in calculating non-GAAP adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis and, in the case of exclusion of acquisition-related expense and certain historical legal expenses, excludes items that we do not consider to be indicative of our core operating performance.
−Removed: Accordingly, we believe that non-GAAP adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
+Added: Accordingly, we believe non-GAAP adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Our use of non-GAAP adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP.
4 unchanged sentences
(d) non-GAAP adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
−Removed: and (e) other
−Removed: companies, including companies in our industry, may calculate non-GAAP adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.
+Added: and (e) other companies, including companies in our industry, may calculate non-GAAP adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.
Because of these and other limitations, you should consider non-GAAP adjusted EBITDA alongside our other GAAP-based financial performance measures, net income and our other GAAP financial results.
1 unchanged sentence
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2023 2022 2023 2022
Non-GAAP adjusted EBITDA:
Net income $ 23,404 $ 14,207
−Removed: Interest expense, interest income and certain activity within other (expense) / income, net (7,587) (2,116) (18,491) (1,859)
−Removed: Provision for income taxes 3,972 246 9,257 472
+Added: Interest expense, interest income and certain activity within other expense, net (7,744) (4,314)
+Added: Provision for / (benefit from) income taxes 2,747 (1,222)
Amortization and depreciation expense 7,337 7,673
5 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.