What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 102 added, 81 removed, 182 unchanged (50% of the section changed)

17 unchanged sentences

Since the launch of our first product in December 2014, we have shipped over 36.1 million smart connected devices.

As of June 30, 2024, the Arlo platform had approximately 10.0 million cumulative registered accounts across more than 100 countries around the world coupled with approximately 4.0 million cumulative paid subscribers and annual recurring revenue of $235.0 million.

As of September 29, 2024, the Arlo platform had approximately 10.4 million cumulative registered accounts across more than 100 countries around the world coupled with approximately 4.2 million cumulative paid subscribers and annual recurring revenue of $241.6 million.

We conduct business across three geographic regions—(i) the Americas;

(ii) Europe, Middle-East and Africa (“EMEA”);

and (iii) Asia Pacific (“APAC”)—and we primarily generate revenue by selling devices through retail, wholesale distribution, wireless carrier channels, security solution providers, Arlo’s direct to consumer store and paid subscription services.

For the three months ended June 30, 2024 and July 2, 2023, we generated total revenue of $127.4 million and $115.1 million, respectively, and loss from operations was $12.8 million and $8.0 million, respectively.

For the six months ended June 30, 2024 and July 2, 2023, we generated total revenue of $251.6 million and $226.1 million, respectively, and loss from operations was $23.4 million and $22.2 million, respectively.

and (iii) Asia Pacific (“APAC”)—and we primarily generate revenue by selling devices through retail, wholesale distribution, security solution providers, Arlo’s direct to consumer store and paid subscription services.

For the three months ended September 29, 2024 and October 1, 2023, we generated total revenue of $137.7 million and $130.0 million, respectively, and loss from operations was $5.5 million and $2.3 million, respectively.

For the nine months ended September 29, 2024 and October 1, 2023, we generated total revenue of $389.3 million and $356.1 million, respectively, and loss from operations was $28.9 million and $24.4 million, respectively.

Our goal is to continue to develop innovative, world-class smart security solutions to expand and further monetize our current and future user and paid account bases.

7 unchanged sentences

Our key business metrics may be calculated in a manner different from the same key business metrics used by other companies.

We regularly review our processes for calculating these metrics, and from time to time we may discover inaccuracies in our metrics or make adjustments to better reflect our business or to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics.

We regularly review our processes for calculating these metrics, and from time to time we may discover a need to make adjustments to better reflect our business or to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics.

We believe that any such inaccuracies or adjustments are immaterial unless otherwise stated.

2024 % Change July 2,

September 29,

2024 % Change October 1,

(In thousands, except percentage data)

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_________________________

(1) The number of cumulative paid accounts as of June 30, 2024 included paid accounts managed by Verisure Sàrl (“Verisure”) in our EMEA region which are now onboarded with us.

(1) The number of cumulative paid accounts as of September 29, 2024 included paid accounts managed by Verisure Sàrl (“Verisure”) in our EMEA region which are now onboarded with us.

This does not have an impact to our financial statements and key business metrics other than our number of cumulative paid accounts.

(2) As described further below, in the first fiscal quarter of 2024, we changed the methodology on paid service revenue recognition from a mid-month convention to a daily recognition model.

As a result, ARR as of June 30, 2024 was calculated using the daily recognition model while ARR as of July 2, 2023 was calculated using our former methodology, the mid-month convention.

ARR as of July 2, 2023 calculated using the daily recognition model does not represent a material change from the mid-month convention over the same period.

As a result, ARR as of September 29, 2024 was calculated using the daily recognition model while ARR as of October 1, 2023 was calculated using our former methodology, the mid-month convention.

ARR as of October 1, 2023 calculated using the daily recognition model does not represent a material change from the mid-month convention over the same period.

Cumulative Registered Accounts .

13 unchanged sentences

Impact of Global Geopolitical, Economic and Business Conditions

During the six months ended June 30, 2024, we remained focused on the ongoing conflict in Ukraine, hostilities in the Middle-East, supply chain disruptions, the inflationary macro environment, fluctuating consumer confidence and rising interest rates by preserving our liquidity and managing our cash flow by taking preemptive action to enhance our ability to meet our short-term liquidity needs.

During the nine months ended September 29, 2024, we remained focused on the ongoing conflict in Ukraine, hostilities in the Middle-East, supply chain disruptions, the inflationary macro environment, fluctuating consumer confidence and high interest rates by preserving our liquidity and managing our cash flow by taking preemptive action to enhance our ability to meet our short-term liquidity needs.

These actions include, but are not limited to, proactively managing working capital by closely monitoring customers’ credit and collections, renegotiating payment terms with third-party manufacturers and key suppliers, closely monitoring inventory levels and purchases against forecasted demand, reducing or eliminating non-essential spending, and subleasing or reducing excess office space.

We continue to monitor the situation and may, as necessary, reduce expenditures further, borrow under our revolving credit facility, or pursue other sources of capital that may include other forms of external financing in order to maintain our cash position and preserve financial flexibility in response to the uncertainty in the United States and global markets resulting from the ongoing conflict in Ukraine, hostilities in the Middle-East, supply chain disruptions, the inflationary macro environment, fluctuating consumer confidence and rising interest rates, current financial conditions within the banking industry, including the effects of recent failures of other financial institutions, and liquidity levels.

We continue to monitor the situation and may, as necessary, reduce expenditures further, borrow under our revolving credit facility, or pursue other sources of capital that may include other forms of external financing in order to maintain our cash position and preserve financial flexibility in response to the uncertainty in the United States and global markets resulting from the ongoing conflict in Ukraine, hostilities in the Middle-East, supply chain disruptions, the inflationary macro environment, fluctuating consumer confidence and high interest rates, current financial conditions within the banking industry, including the effects of recent failures of other financial institutions, and liquidity levels.

Results of Operations

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The following table sets forth, for the periods presented, the unaudited condensed consolidated statements of comprehensive loss data, which we derived from the accompanying unaudited condensed consolidated financial statements:

Three Months Ended Six Months Ended

2023 June 30,

Three Months Ended Nine Months Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

(In thousands, except percentage data)

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Net loss $ (4,439) (3.2) % $ (1,120) (0.9) % $ (25,643) (6.6) % $ (22,728) (6.4) %

Our gross revenue consists primarily of sales of devices and prepaid and paid subscription service revenue.

Our gross revenue consists primarily of sales of devices and paid subscription service revenue.

We generally recognize revenue from product sales at the time the product is shipped and transfer of control from us to the customer occurs.

Our paid subscription services relate to sales of subscription plans to our registered accounts.

Our paid subscription services are billed in advance of the start of the monthly subscription and revenue is recognized ratably over subscription period.

Our revenue consists of gross revenue, less customer rebates and other channel sales incentives, allowances for estimated sales returns, price protection, and net changes in deferred revenue.

2 unchanged sentences

and (iii) APAC—and generally base revenue by geographic region on the bill-to location of the customer.

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

7 unchanged sentences

Revenue by classification is as follows:

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

2 unchanged sentences

Total revenue $ 137,667 5.9 % $ 130,003 $ 389,314 9.3 % $ 356,083

Product revenue increased by $2.4 million, or 3.8%, and $2.9 million, or 2.2%, for the three and six months ended June 30, 2024 compared to the prior year periods, respectively, primarily driven by an increase in product shipments in EMEA due to stronger customer demand, partially offset by the decrease in product sales in the Americas and APAC due to seasonality and a reduction in average selling prices (“ASPs”) of our products as we increased promotional activities to stimulate household acquisition and subscriber growth.

The increase in product revenue was also attributable to lower sales returns which are partially offset by higher sales incentives that are deemed to be reductions of revenue.

Service revenue increased in all regions by $9.9 million, or 19.7%, and $22.7 million, or 24.1%, for the three and six months ended June 30, 2024 compared to the prior year periods, respectively, primarily due to a 73.9% increase in cumulative paid accounts.

Product revenue decreased by $3.2 million, or 4.0%, and $0.3 million, or 0.1%, for the three and nine months ended September 29, 2024 compared to the prior year periods, respectively, primarily driven by the decrease in product sales in the Americas and APAC due to seasonality and a reduction in average selling prices (“ASPs”) of our products as we increased promotional activities to stimulate household acquisition and subscriber growth.

The decline was partially offset by the increase in product shipments in EMEA due to stronger customer demand and the lower sales returns that are deemed to be reductions of revenue.

The decrease in product revenue for the nine months ended September 29, 2024 was also offset by the lower sales incentives that are deemed to be reductions of revenue.

Service revenue increased in all regions by $10.8 million, or 21.2%, and $33.5 million, or 23.1%, for the three and nine months ended September 29, 2024 compared to the prior year periods, respectively, primarily due to a 70.4% increase in cumulative paid accounts and continued increase in average revenue per user (“ARPU”) of retail subscriptions.

Cost of Revenue

2 unchanged sentences

Service costs consist of costs attributable to the provision and maintenance of our cloud-based platform, including personnel, storage, security and computing, IT and facilities overhead.

Our cost of revenue as a percentage of revenue can vary based upon a number of factors, including those that may affect our revenue set forth above and factors that may affect our cost of revenue, including, without limitation, product mix, sales channel mix, registered accounts’ acceptance of paid subscription service offerings, and changes in our cost of goods sold due to fluctuations in prices paid for components, net of vendor rebates, cloud platform costs, warranty and

overhead costs, inbound freight and duty costs, and charges for excess or obsolete inventory.

goods sold due to fluctuations in prices paid for components, net of vendor rebates, cloud platform costs, warranty and overhead costs, inbound freight and duty costs, and charges for excess or obsolete inventory.

We outsource our manufacturing, warehousing, and distribution logistics.

1 unchanged sentence

We believe this outsourcing strategy allows us to better manage our product and service costs and gross margin and allows us to adapt to changing market dynamics and supply chain constraints.

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

3 unchanged sentences

Total cost of revenue $ 89,251 2.7 % $ 86,864 $ 246,664 4.6 % $ 235,869

Product cost of revenue increased 9.2% and 3.8% for the three and six months ended June 30, 2024, respectively, compared to the prior year periods, primarily due to an increase in product shipments, partially offset by decreases in product warranty reserves and inventory reserves.

Service cost of revenue increased 14.0% and 14.8% for the three and six months ended June 30, 2024, respectively, compared to the prior year periods, primarily due to service revenue growth as a result of the increase in cumulative paid accounts, partially offset by cost optimizations.

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Product cost of revenue increased by 2.0% and 3.3% for the three and nine months ended September 29, 2024, respectively, compared to the prior year periods, primarily due to a decrease in inventory net realizable value.

Service cost of revenue increased by 6.7% and 11.0% for the three and nine months ended September 29, 2024, respectively, compared to the prior year periods, primarily due to service revenue growth as a result of the increase in cumulative paid accounts, partially offset by cost optimizations.

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

7 unchanged sentences

Total gross margin 35.2 % 33.2 % 36.6 % 33.8 %

Product gross profit decreased $3.2 million and $1.9 million for the three and six months ended June 30, 2024, respectively, compared to the prior year periods, primarily driven by a reduction in the ASPs of our products as we increased promotional activities to stimulate household acquisition and subscriber growth.

The product gross profit decrease was partially offset by decreases in product warranty reserves and inventory reserves due to subsequent sale of the related inventory units.

Service gross profit increased $8.1 million and $19.1 million for the three and six months ended June 30, 2024, respectively, compared to the prior year periods, primarily due to service revenue growth in all regions as a result of increases in cumulative paid accounts and cost optimizations.

Product gross profit decreased by $4.7 million and $6.9 million for the three and nine months ended September 29, 2024, respectively, compared to the prior year periods, primarily driven by a reduction in the ASPs of our products as we increased promotional activities to stimulate household acquisition and subscriber growth and an increase in inventory reserves.

Service gross profit increased by $9.9 million and $29.3 million for the three and nine months ended September 29, 2024, respectively, compared to the prior year periods, primarily due to service revenue growth in all regions as a result of increases in cumulative paid accounts, continued increase in ARPU of retail subscriptions, and cost optimizations.

Operating Expenses

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We believe that innovation and technological leadership are critical to our future success, and we are committed to continuing a significant level of research and development to develop new technologies, products, and services, including our hardware devices, cloud-based software, AI-based algorithms, and machine learning capabilities.

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

Research and development expense $ 17,562 4.4 % $ 16,829 $ 57,916 11.0 % $ 52,197

Research and development expense increased by $1.9 million for the three months ended June 30, 2024 compared to the prior year period, primarily due to increases of $1.7 million in personnel-related expenses mainly from stock-based compensation and merit increases and $0.4 million in professional services.

Research and development expense increased by $5.0 million for the six months ended June 30, 2024 compared to the prior year period, primarily due to increases of $3.9 million in personnel-related expenses mainly from stock-based compensation and merit increases, $0.7 million in professional services, and $0.3 million in corporate IT and facilities overhead.

Research and development expense increased by $0.7 million for the three months ended September 29, 2024 compared to the prior year period, primarily due to an increase of $1.1 million in personnel-related expenses mainly from stock-based compensation and merit increases, partially offset by a decrease of $0.3 million in corporate IT and facilities overhead.

Research and development expense increased by $5.7 million for the nine months ended September 29, 2024 compared to the prior year period, primarily due to increases of $5.0 million in personnel-related expenses mainly from stock-based compensation and merit increases, and $0.6 million in professional services.

Sales and Marketing

1 unchanged sentence

We expect our sales and marketing expense to increase in the future as we invest in marketing to drive demand for our products and services.

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

Sales and marketing expense $ 17,832 12.4 % $ 15,863 $ 52,900 9.9 % $ 48,137

Sales and marketing expense increased $0.8 million for the three months ended June 30, 2024 compared to the prior year period, primarily due to increases of $0.7 million in personnel-related expenses mainly from stock-based compensation and merit increases, $0.4 million in professional services as a result of continued investment in customer experience improvements across customer care and engineering, and $0.3 million in credit card processing fees as a result of increases in Arlo.com store sales and paid subscriber accounts, partially offset by a decrease of $0.4 million in freight-out expenses.

Sales and marketing expense increased $2.8 million for the six months ended June 30, 2024 compared to the prior year period, primarily due to increases of $1.6 million in personnel-related expenses mainly from stock-based compensation and merit increases, $1.4 million in professional services as a result of continued investment in customer

experience improvements across customer care and engineering, and $0.5 million in credit card processing fees as a result of increases in Arlo.com store sales and paid subscriber accounts, partially offset by a decrease of $0.6 million in freight-out expenses.

Sales and marketing expense increased by $2.0 million for the three months ended September 29, 2024 compared to the prior year period, primarily due to increases of $1.6 million in marketing expenditures, $0.5 million in personnel-related expenses mainly from stock-based compensation and merit increases, $0.3 million in professional services as a result of continued investment in customer experience improvements across customer care and engineering, and $0.3 million in credit card processing fees as a result of increases in paid subscriber accounts, partially offset by a decrease of $0.6 million in freight-out expenses.

Sales and marketing expense increased by $4.8 million for the nine months ended September 29, 2024 compared to the prior year period, primarily due to increases of $2.1 million in personnel-related expenses mainly from stock-based compensation and merit increases, $2.0 million in marketing expenditures, $1.1 million in professional services as a result

of continued investment in customer experience improvements across customer care and engineering, and $0.8 million in credit card processing fees as a result of increases in paid subscriber accounts, partially offset by a decrease of $1.1 million in freight-out expenses.

General and Administrative

1 unchanged sentence

We expect our general and administrative expense to fluctuate as a percentage of our revenue in future periods based on fluctuations in our revenue and the timing of such expense.

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

General and administrative expense $ 17,052 36.9 % $ 12,460 $ 57,830 34.2 % $ 43,089

General and administrative expense increased $6.4 million for the three months ended June 30, 2024 compared to the prior year period, primarily due to increases of $5.4 million in personnel-related expenses mainly from stock-based compensation due to the achievement of performance-based awards target and $0.9 million in professional services.

General and administrative expense increased $10.1 million for the six months ended June 30, 2024 compared to the prior year period, primarily due to increases of $7.3 million in personnel-related expenses mainly from stock-based compensation due to the achievement of performance-based awards target and $2.8 million in professional services.

Others include restructuring charges, which consist of severance costs, office exit expense, and other exit expense associated with the abandonment of certain lease contracts and cancellation of contractual services arrangements with certain suppliers, and separation expense, which consists primarily of costs of legal and professional services.

General and administrative expense increased by $4.6 million for the three months ended September 29, 2024 compared to the prior year period, primarily due to increases of $3.9 million in personnel-related expenses mainly from stock-based compensation and merit increases, and $0.5 million in legal and other professional services.

General and administrative expense increased by $14.7 million for the nine months ended September 29, 2024 compared to the prior year period, primarily due to increases of $11.1 million in personnel-related expenses mainly from stock-based compensation due to the achievement of certain performance-based equity awards target and $3.3 million in legal and professional services.

Others also include the write-off of deferred financing and separation related expenses, which consist primarily of costs of legal and professional services.

Interest Income, Net and Other Income (Loss), Net

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

3 unchanged sentences

**Percentage change not meaningful.

Interest income, net increased for the three and six months ended June 30, 2024 compared to the prior year periods, primarily due to the increase in our short-term investments as well as higher interest rates.

Interest income, net increased for the three and nine months ended September 29, 2024 compared to the prior year periods, primarily due to the increase in our cash and cash equivalents and short-term investments as well as higher interest rates.

Provision for Income Taxes

Three Months Ended Six Months Ended

2024 % Change July 2,

2023 June 30,

2024 % Change July 2,

Three Months Ended Nine Months Ended

September 29,

2024 % Change October 1,

2023 September 29,

2024 % Change October 1,

(In thousands, except percentage data)

1 unchanged sentence

Effective tax rate (8.0) % (2.7) % (3.9) % (4.8) %

The effective tax rate for the three and six months ended June 30, 2024 was lower than the U.S.

The effective tax rate for the three and nine months ended September 29, 2024 was lower than the U.S.

federal income tax rate due to a lower effective tax rate on foreign earnings and valuation allowance on our net U.S.

1 unchanged sentence

Liquidity and Capital Resources

As of June 30, 2024, our cash and cash equivalents and short-term investments totaled $144.0 million and we had unused borrowing capacity of $6.2 million based on the terms and conditions of our revolving credit facility.

As of September 29, 2024, our cash and cash equivalents and short-term investments totaled $146.6 million.

We have a history of losses and may incur operating and net losses in the future.

As of June 30, 2024, our accumulated deficit was $388.7 million.

As of September 29, 2024, our accumulated deficit was $393.1 million.

Historically, we have funded our principal business activities through cash flows generated from operations and available cash on hand.

Our current revolving credit facility with Bank of America, N.A.

matured on October 27, 2024.

We are in the final stage of entering into a new credit agreement and a security agreement with HSBC Bank USA, N.A, for a three-year revolving credit facility of $45.0 million with an uncommitted accordion feature of $30.0 million.

Material Cash Requirements

4 unchanged sentences

Our future liquidity and cash requirements may vary from those currently planned and will depend on numerous factors, including the introduction of new products, the growth in our service revenue, the ability to increase our gross margin dollars, as well as cost optimization initiatives and controls over our operating expenditures.

As we grow our installed base and related cost structure, there will be a need for additional working capital, hence, we increased our subscription rates effective February 3, 2023.

As we grow our installed base and related cost structure, there will be a need for additional working capital, hence, we may increase our product and subscription rates in the future.

Leases and Contractual Commitments

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Commitments and Contingencies in the Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report for further information about our operating leases, purchase obligations, and legal contingencies.

Six Months Ended

Nine Months Ended

September 29,

2024 October 1,

(In thousands)

1 unchanged sentence

$ 44,634 $ 30,367

Net cash used in investing activities (268) (33,150)

Net cash provided by (used in) investing activities

11,229 (46,094)

Net cash used in financing activities (35,830) (17,240)

2 unchanged sentences

Operating activities

Net cash provided by operating activities increased by $3.4 million for the six months ended June 30, 2024 compared to the prior year period, primarily due to improved profitability offset by unfavorable working capital movements as a result of increased inventory purchases, partially offset by higher trade payable balances due to the timing of payments.

Net cash provided by operating activities increased by $14.3 million for the nine months ended September 29, 2024 compared to the prior year period, primarily due to favorable working capital movements as the results of (i) higher accounts payable balances mainly due to timing of the payments and increased marketing expenditures for new products launch and upcoming holiday sales;

and (ii) higher accounts receivable balances due to the growth of sales, offset by increased inventory purchases.

Investing activities

Net cash used in investing activities decreased by $32.9 million for the six months ended June 30, 2024 compared to the prior year period, primarily due to lower net purchases of short-term investments and lower purchases of property and equipment.

Net cash provided by (used in) investing activities increased by $57.3 million for the nine months ended September 29, 2024 compared to the prior year period, primarily due to higher proceeds from maturities of short-term investments.

Financing activities

Net cash used in financing activities increased by $8.2 million for the six months ended June 30, 2024 compared to the prior year period, primarily due to the increase in withholding tax from restricted stock unit releases and lower proceeds related to employee benefit plans.

Net cash used in financing activities increased by $18.6 million for the nine months ended September 29, 2024 compared to the prior year period, primarily due to the increase in withholding tax from RSU releases, offset by higher proceeds related to employee benefit plans.

Critical Accounting Policies and Estimates

For a complete description of what we believe to be the critical accounting policies and estimates used in the preparation of our Unaudited Condensed Consolidated Financial Statements, refer to our Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2024, other than as discussed in Note 2.

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 29, 2024, other than as discussed in Note 2.

Significant Accounting Policies and Recent Accounting Pronouncements, in the Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report.

Quantitative and Qualitative Disclosures About Market Risk

During the six months ended June 30, 2024, there were no material changes to our market risk disclosures as set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the nine months ended September 29, 2024, there were no material changes to our market risk disclosures as set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2023.

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis