Alarm.com Holdings, Inc. 10-Q

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS (a) Recent Sales of Unregistered Securities On May 31, 2024, we issued $500.0 million aggregate principal amount of 2.25% convertible senior notes due June 1, 2029 in a private placement to qualified institutional buyers, or the 2029 Notes, in a private offering pursuant to Rule 144A under the Securities Act. The offer and sale of the 2029 Notes to the initial purchasers for the 2029 Notes was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. We relied on this exemption from registration based in part on representations made by the initial purchasers, including that such initial purchasers would only offer, sell or deliver the 2029 Notes to persons whom they reasonably believe to be qualified institutional buyers within the meaning of Rule 144A under the Securities Act. For more information related to the 2029 Notes, see Note 12 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q as well as our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 31, 2024, which is incorporated by reference herein. (c) Issuer Purchases of Equity Securities 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. On May 24, 2024, our board of directors authorized the repurchase of our common stock in connection with the issuance of the 2029 Notes, the cancellation of the balance under the stock repurchase program ending February 23, 2025 and also authorized a stock repurchase program, effective May 31, 2024, 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 May 31, 2026. We utilize our stock repurchase program in an effort to return surplus cash to stockholders efficiently. Our board of directors determines repurchase program amounts through an analysis of projected capital needs to sustain growth as well as to meet other investing and financing criteria. In determining whether to authorize repurchases and the size of the repurchase program, our board of directors considers whether we have funds legally available to repurchase shares of common stock and various alternative uses for our cash and cash equivalents. The stock repurchase program is designed to enable us to make both opportunistic repurchases based on market conditions at management’s discretion and consistent repurchases over time. Stock repurchases may be made through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, block trades and by any combination of the foregoing. Our Insider Trading and Trading Window Policy prohibits our directors, officers and other employees from trading in Alarm.com securities while they are aware of material nonpublic information about Alarm.com, which would include unannounced material stock repurchase plans. The prohibition does not apply to trades made pursuant to a Rule 10b5-1 trading plan. The following table contains information relating to the repurchases of our common stock made by us and the approximate dollar value of shares that may yet be purchased under our stock repurchase program during the three months ended June 30, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as a Part of a Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program April 1 to April 30, 2024 — $ — — $ 72,701,660 May 1 to May 31, 2024 1,117,068 67.14 1,117,068 100,000,000 June 1 to June 30, 2024 — — — 100,000,000 Total 1,117,068 $ 67.14 1,117,068 We withhold shares of common stock in connection with the vesting of restricted stock unit awards issued to employees to satisfy applicable tax withholding requirements. These withheld shares are not issued or considered common stock repurchases under our stock repurchase program and therefore, are excluded from our repurchase activity. 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. When applicable, the excise tax will be included as part of the cost basis of shares acquired and is presented within stockholders’ equity in the condensed consolidated balance sheets and will be excluded from amounts presented above. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. 81 ITEM 4. MINE SAFETY DISCLOSURES Not applicable.