Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37461 | |
Entity Registrant Name | ALARM.COM HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-4247032 | |
Entity Address, Address Line One | 8281 Greensboro Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Tysons | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | 877 | |
Local Phone Number | 389-4033 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | ALRM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 50,087,289 | |
Entity Central Index Key | 0001459200 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Revenue: | |||
Total revenue | $ 205,437 | $ 172,498 | |
Cost of revenue: | |||
Total cost of revenue | [1] | 90,087 | 65,762 |
Operating expenses: | |||
Sales and marketing | 23,192 | 18,999 | |
General and administrative | 23,994 | 22,882 | |
Research and development | 51,490 | 42,467 | |
Amortization and depreciation | 7,761 | 7,385 | |
Total operating expenses | 106,437 | 91,733 | |
Operating income | 8,913 | 15,003 | |
Interest expense | (784) | (3,368) | |
Interest income | 143 | 157 | |
Other income / (expense), net | 13 | (155) | |
Income before income taxes | 8,285 | 11,637 | |
Benefit from income taxes | (618) | (2,913) | |
Net income | 8,903 | 14,550 | |
Net loss attributable to redeemable noncontrolling interest | 176 | 280 | |
Net income attributable to common stockholders | $ 9,079 | $ 14,830 | |
Net income per share: | |||
Basic (in dollars per share) | $ 0.18 | $ 0.30 | |
Diluted (in dollars per share) | $ 0.18 | $ 0.29 | |
Weighted average common shares outstanding: | |||
Basic (in shares) | 50,206,179 | 49,561,887 | |
Diluted (in shares) | 55,170,781 | 51,739,461 | |
SaaS and license | |||
Revenue: | |||
Total revenue | $ 123,225 | $ 107,383 | |
Cost of revenue: | |||
Total cost of revenue | [1] | 16,894 | 15,156 |
Hardware and other | |||
Revenue: | |||
Total revenue | 82,212 | 65,115 | |
Cost of revenue: | |||
Total cost of revenue | [1] | $ 73,193 | $ 50,606 |
[1] | Exclusive of amortization and depreciation shown in operating expenses below. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 671,753 | $ 710,621 |
Accounts receivable, net of allowance for credit losses of $2,153 and $2,168, and net of allowance for product returns of $1,162 and $1,181 as of March 31, 2022 and December 31, 2021 respectively | 103,067 | 105,548 |
Inventory | 86,436 | 75,276 |
Other current assets, net of allowance for credit losses of $1 and $2 as of March 31, 2022 and December 31, 2021, respectively | 27,322 | 26,175 |
Total current assets | 888,578 | 917,620 |
Property and equipment, net | 39,969 | 41,713 |
Intangible assets, net | 86,831 | 91,406 |
Goodwill | 112,901 | 112,901 |
Deferred tax assets | 39,554 | 13,547 |
Operating lease right-of-use assets | 30,135 | 30,479 |
Other assets, net of allowance for credit losses of $1 and $78 as of March 31, 2022 and December 31, 2021, respectively | 26,822 | 24,349 |
Total assets | 1,224,790 | 1,232,015 |
Current liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 73,615 | 89,816 |
Accrued compensation | 17,560 | 23,495 |
Deferred revenue | 5,840 | 5,697 |
Operating lease liabilities | 10,454 | 10,331 |
Total current liabilities | 107,469 | 129,339 |
Deferred revenue | 9,779 | 9,140 |
Convertible senior notes, net | 488,024 | 425,345 |
Operating lease liabilities | 31,764 | 32,591 |
Other liabilities | 9,480 | 9,545 |
Total liabilities | 646,516 | 605,960 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 15,281 | 12,888 |
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized; 50,491,600 and 50,406,606 shares issued; and 49,990,324 and 50,259,453 shares outstanding as of March 31, 2022 and December 31, 2021, respectively | 505 | 504 |
Additional paid-in capital | 453,084 | 498,979 |
Treasury stock, at cost; 501,276 and 147,153 shares as of March 31, 2022 and December 31, 2021, respectively | (28,480) | (5,149) |
Retained earnings | 137,884 | 118,833 |
Total stockholders’ equity | 562,993 | 613,167 |
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ 1,224,790 | $ 1,232,015 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss | $ 2,153 | $ 2,168 |
Allowance for product returns | 1,162 | 1,181 |
Other assets, allowance for credit loss, current | 1 | 2 |
Other assets, allowance for credit loss | $ 1 | $ 78 |
Preferred stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 50,491,600 | 50,406,606 |
Common stock, shares outstanding (in shares) | 49,990,324 | 50,259,453 |
Treasury stock, shares repurchased (in shares) | 501,276 | 147,153 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows (used in) / from operating activities: | ||
Net income | $ 8,903 | $ 14,550 |
Adjustments to reconcile net income to net cash flows (used in) / from operating activities: | ||
Provision for credit losses on accounts receivable | 54 | 32 |
Reserve for product returns | 798 | 574 |
Recovery of credit losses on notes receivable | (78) | (11) |
Amortization on patents and tooling | 353 | 288 |
Amortization and depreciation | 7,761 | 7,385 |
Amortization of debt discount and debt issuance costs | 780 | 3,250 |
Amortization of operating leases | 2,473 | 2,338 |
Deferred income taxes | (10,650) | (3,178) |
Stock-based compensation | 12,110 | 7,888 |
Loss on early extinguishment of debt | 0 | 185 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,629 | (5,685) |
Inventory | (11,161) | (2,947) |
Other current and non-current assets | (3,225) | (1,734) |
Accounts payable, accrued expenses and other current liabilities | (21,450) | (220) |
Deferred revenue | 782 | 1,127 |
Operating lease liabilities | (2,975) | (2,772) |
Other liabilities | (65) | 162 |
Cash flows (used in) / from operating activities | (13,961) | 21,232 |
Cash flows used in investing activities: | ||
Additions to property and equipment | (2,171) | (4,069) |
Receipt of payments on notes receivable | 16 | 2 |
Purchase of investment in unconsolidated entity | 0 | (5,000) |
Cash flows used in investing activities | (2,155) | (9,067) |
Cash flows (used in) / from financing activities: | ||
Repayments of credit facility | 0 | (110,000) |
Proceeds from issuance of convertible senior notes | 0 | 500,000 |
Payments of debt issuance costs | 0 | (15,291) |
Payments of deferred consideration for business acquisitions | 0 | (150) |
Purchases of treasury stock | (23,331) | 0 |
Issuances of common stock from equity-based plans | 1,080 | 1,989 |
Cash flows (used in) / from financing activities | (22,251) | 376,548 |
Net (decrease) / increase in cash, cash equivalents and restricted cash | (38,367) | 388,713 |
Cash, cash equivalents and restricted cash at beginning of the period | 710,621 | 253,459 |
Cash, cash equivalents and restricted cash at end of the period | $ 672,254 | $ 642,172 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Mar. 31, 2021 |
Statement of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 671,753 | $ 642,172 |
Restricted cash included in other assets | 501 | 0 |
Total cash, cash equivalents and restricted cash | $ 672,254 | $ 642,172 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Impact of adoption | Preferred Stock | Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalImpact of adoption | Treasury Stock | Retained Earnings | Retained EarningsImpact of adoption |
Beginning balance at Dec. 31, 2020 | $ 10,691 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | 473 | ||||||||
Net income / (loss) attributable to common stockholders | (280) | ||||||||
Ending balance at Mar. 31, 2021 | 10,884 | ||||||||
Balance (in shares) at Dec. 31, 2020 | 0 | 49,631,000 | 147,000 | ||||||
Balance at Dec. 31, 2020 | 467,752 | $ 0 | $ 496 | $ 405,831 | $ (5,149) | $ 66,574 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 173,000 | ||||||||
Common stock issued in connection with equity-based plans | $ 1,989 | $ 2 | 1,987 | ||||||
Purchases of treasury stock (in shares) | 0 | ||||||||
Stock-based compensation expense | $ 7,888 | 7,888 | |||||||
Equity component of convertible senior notes, net | 56,515 | 56,515 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (473) | (473) | |||||||
Net income / (loss) attributable to common stockholders | 14,830 | 14,830 | |||||||
Balance (in shares) at Mar. 31, 2021 | 0 | 49,804,000 | 147,000 | ||||||
Balance at Mar. 31, 2021 | $ 548,501 | $ 0 | $ 498 | 471,748 | $ (5,149) | 81,404 | |||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | ||||||||
Beginning balance at Dec. 31, 2020 | $ 10,691 | ||||||||
Ending balance at Dec. 31, 2021 | 12,888 | ||||||||
Balance (in shares) at Dec. 31, 2020 | 0 | 49,631,000 | 147,000 | ||||||
Balance at Dec. 31, 2020 | 467,752 | $ 0 | $ 496 | 405,831 | $ (5,149) | 66,574 | |||
Balance (in shares) at Dec. 31, 2021 | 0 | 50,407,000 | 147,000 | ||||||
Balance at Dec. 31, 2021 | $ 613,167 | $ (46,543) | $ 0 | $ 504 | 498,979 | $ (56,515) | $ (5,149) | 118,833 | $ 9,972 |
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | $ 2,569 | ||||||||
Net income / (loss) attributable to common stockholders | (176) | ||||||||
Ending balance at Mar. 31, 2022 | 15,281 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued in connection with equity-based plans (in shares) | 85,000 | ||||||||
Common stock issued in connection with equity-based plans | $ 1,080 | $ 1 | 1,079 | ||||||
Purchases of treasury stock (in shares) | 354,123 | 354,000 | |||||||
Purchase of treasury stock | $ (23,331) | $ (23,331) | |||||||
Stock-based compensation expense | 12,110 | 12,110 | |||||||
Accretion adjustments of redeemable noncontrolling interest to redemption value | (2,569) | (2,569) | |||||||
Net income / (loss) attributable to common stockholders | 9,079 | 9,079 | |||||||
Balance (in shares) at Mar. 31, 2022 | 0 | 50,492,000 | 501,000 | ||||||
Balance at Mar. 31, 2022 | $ 562,993 | $ 0 | $ 505 | $ 453,084 | $ (28,480) | $ 137,884 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Alarm.com Holdings, Inc. (referred to herein as Alarm.com, the Company, or we) is the leading platform for the intelligently connected property. We offer a comprehensive suite of cloud-based solutions for the smart residential and commercial property , including interactive security, video monitoring, intelligent automation and energy management. Millions of property owners depend on our technology to intelligently secure, automate and manage their residential and commercial properties. Our solutions are delivered through an established network of over 10,900 trusted service provider partners, who are experts at selling, installing and supporting our solutions. We derive revenue from the sale of our cloud-based Software-as-a-Service, or SaaS, services, license fees, software, hardware, activation fees and other revenue. Our fiscal year ends on December 31. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2022, or the Annual Report. The condensed consolidated balance sheet as of December 31, 2021 was derived from our audited financial statements, but does not include all disclosures required by GAAP for annual financial statements. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented. However, the COVID-19 pandemic disrupted and may continue to disrupt our supply chain for an unknown period of time due to its impact on manufacturing, production and global transportation. The COVID-19 pandemic also disrupted and may intermittently continue to disrupt our sales channels due to restrictions imposed from time to time on our service providers’ ability to meet with residential and commercial property owners who use our solutions. In addition, the COVID-19 pandemic resulted in a global slowdown of economic activity, inflation, and a recession in the United States and the economic situation remains fluid as parts of the economy appear to be recovering while others continue to struggle. While vaccines have been approved for use in the United States and in many other countries, and vaccination efforts have been and are underway, it remains difficult to assess or predict the ultimate duration and economic impact of the COVID-19 pandemic due to a resurgence of COVID-19 and the emergence and severity of COVID-19 variants. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2022, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the COVID-19 pandemic and geopolitical tensions. Prolonged uncertainty with respect to COVID-19 could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions and judgments or revise the carrying value of our assets or liabilities. However, our estimates, judgments and assumptions are continually evaluated based on available information and experience and may change as new events occur and additional information is obtained. Because of the use of estimates inherent in the financial reporting process and in light of the continuing uncertainty arising from the COVID-19 pandemic, actual results could differ from those estimates and any such differences may be material. Estimates are used when accounting for revenue recognition, allowances for credit losses, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, the lease term and incremental borrowing rates for leases, stock-based compensation, income taxes, legal reserves, fair value of the debt component of convertible notes and goodwill and intangible assets. Comprehensive Income Our comprehensive income for the three months ended March 31, 2022 and 2021 was equal to our net income disclosed in the condensed consolidated statements of operations. Significant Accounting Policies Other than those disclosed herein, there have been no other material changes to our significant accounting policies during the three months ended March 31, 2022 from those disclosed in our Annual Report. Restricted Cash We consider all cash reserved for a specific use and not available for immediate or general business use to be restricted cash. As of March 31, 2022 we had a total of $0.5 million of restricted cash. We had no restricted cash as of December 31, 2021. As of March 31, 2022, all restricted cash was included in other assets. Recent Accounting Pronouncements Adopted On August 5, 2020, the Financial Accounting Standards Board, or FASB, issued ASU 2020-06, " Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ," or ASU 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The new guidance eliminates two of the three models in Subtopic 470-20 that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. The amendment in this update is effective for fiscal years beginning after December 15, 2021. We adopted ASU 2020-06 effective January 1, 2022, using a modified retrospective adoption method, which required us to record the initial effect of this guidance as a cumulative-effect adjustment to retained earnings on January 1, 2022. Upon adoption of ASU 2020-06, we recombined the liability and equity components of the convertible senior notes assuming that the instrument was accounted for as only a liability from inception to the date of adoption. We also recombined the liability and equity components of the debt issuance costs. The issuance costs are presented as a deduction from the outstanding principal balance of the convertible senior notes and are amortized to interest expense using the effective interest method over the contractual term of the convertible senior notes. We also removed the temporary difference between the book and tax treatment of the debt discount and adjusted the temporary difference between the book and tax treatment of the debt issuance costs of the convertible senior notes. The adoption resulted in the recording of the following increases / (decreases) on our condensed consolidated balance sheets (in thousands): Balance Sheet Caption As of January 1, 2022 Deferred tax assets $ 15,356 Additional paid-in capital (56,515) Convertible senior notes, net 61,899 Retained earnings 9,972 Our net income attributable to common stockholders increased $2.0 million during the three months ended March 31, 2022 as a result of adopting ASU 2020-06 On March 31, 2022, the FASB issued ASU 2022-02, " Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures " which includes requirements to disclose current period gross write-offs by year of origination for financing receivables. The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods with those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance over disclosing current period gross write-offs by year of origination for financial receivables should be applied prospectively. We adopted this guidance during the three months ended March 31, 2022 and there was no impact to the disclosures within the "Allowance for Credit Losses - Notes Receivable" section of Note 8 as there were no write-offs of notes receivable during the three months ended March 31, 2022. Not Yet Adopted On October 28, 2021, the FASB issued ASU 2021-08, " Business Combinations (Topic 606): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ," which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements, if the acquiree prepared financial statements in accordance with GAAP. The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update. We are currently assessing the impact this pronouncement may have on our condensed consolidated financial statements, which will be dependent on the nature and size of any potential future acquisitions. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Revenue Recognition We derive our revenue from three primary sources: the sale of cloud-based SaaS services on our integrated Alarm.com platform, the sale of licenses and services on our non-hosted software platform, or Software platform, and the sale of hardware products. We sell our platform and hardware solutions to service provider partners that resell our solutions and hardware to residential and commercial property owners, who are the service provider partners’ customers. Our subscribers consist of all of the properties maintained by those residential and commercial property owners to which we are delivering at least one of our solutions. We also sell our hardware to distributors who resell the hardware to service provider partners. We enter into contracts with our service provider partners that establish pricing for access to our platform solutions and for the sale of hardware. These service provider c ontracts typically have an initial term of one year, with subsequent renewal terms of one year. O ur service provider partners have indicated that they typically have three five service contracts with residential and commercial property owners who use our solutions. When determining the amount of consideration we expect to be entitled to for the sale of our hardware, we estimate the variable consideration associated with customer returns. We record a reserve against revenue for hardware returns based on historical returns. For the twelve months ended March 31, 2022 and 2021, our reserve against revenue for hardware returns was approximately 1% of hardware and other revenue. We evaluate our hardware reserve on a quarterly basis or if there is an indication of significant changes in return experience. Hist orically, our returns of hardware have not significantly differed from our estimated reserve. Additionally, we provide warranties related to the intended functionality of the products and services provided and those warranties typically allow for the return of hardware up to one year past the date of sale. We determined that these warranties are not separate performance obligations as they cannot be purchased separately and do not provide a service in addition to an assurance the hardware will function as expected. 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. Our hardware and other revenue also 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. Our perpetual licenses and licenses to our indoor gunshot detection solution provide a right to use intellectual property that is functional in nature and has significant stand-alone functionality. Accordingly, for licenses of functional intellectual property, revenue is recognized at the point-in-time when control has been transferred to the customer, which occurs once the software has been made available to the customer. 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. Our service provider partners use services on our platforms, such as support tools and applications, to assist in the installation of our solutions in subscriber properties. This installation marks the beginning of the service period on our platforms and, on occasion, we earn activation revenue for fees charged for this service. The activation fee is non-refundable, separately negotiated and specified in our contractual arrangements with our service provider partners and is charged to the service provider partner for each subscriber activated on our platforms. The decision whether to charge an activation fee is based in part on the expected number of subscribers to be added by our service provider partners and as a result, many of our largest service provider partners do not pay an activation fee. Activation fees are not offered on a stand-alone basis separate from our SaaS offering and are billed and received at the beginning of the arrangement. We record activation fees initially as deferred revenue and we recognize these fees ratably over the expected term of the subscribers’ account which we estimate is ten years based on our annual attrition rate. The portion of these activation fees included in current and long-term deferred revenue as of our balance sheet date represents the amounts that will be recognized ratably as revenue over the following twelve months, or longer as appropriate, until the ten-year expected term is complete. The balance of deferred revenue for activation fees was $5.8 million and $6.0 million as of March 31, 2022 and December 31, 2021, respectively, which combines current and long-term balances. SaaS and license revenue associated with our contracts is invoiced and revenue is recognized at an amount that corresponds directly with the value of the performance completed to date. Additionally, the consideration received from hardware sales corresponds directly with the stand-alone selling price of the hardware. As a result, we have elected to use the practical expedient related to the amount of transaction price allocated to the unsatisfied performance obligations and therefore, we have not disclosed the total remaining revenue expected to be recognized on all contracts or the expected period over which the remaining revenue would be recognized. Contract Assets At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each distinct promise to transfer a good or service, or bundle of goods or services. To identify the performance obligations, we consider all of the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. We record a contract asset when we satisfy a performance obligation by transferring a promised good or service. Contract assets can be conditional or unconditional depending on whether another performance obligation must be satisfied before payment can be received. We receive payments from our service provider partners based on the billing schedule established in our contracts. All of the accounts receivable presented in the condensed consolidated balance sheets represent unconditional rights to consideration. We do not have any assets from contracts containing conditional rights and we do not have any assets from satisfied performance obligations that have not been invoiced. We recognize an asset related to the costs incurred to obtain a contract only if we expect to recover those costs and we would not have incurred those costs if the contract had not been obtained. We recognize an asset from the costs incurred to fulfill a contract if the costs (i) are specifically identifiable to a contract, (ii) enhance resources that will be used in satisfying performance obligations in future and (iii) are expected to be recovered. Our contract assets consist of capitalized commission costs and upfront payments made to a customer. Based on the policy above, we capitalize a portion of our commission costs as an incremental cost of obtaining a contract. When calculating the incremental cost of obtaining a contract, we exclude any commission costs related to metrics that could be satisfied without obtaining a contract, including training-related metrics. We amortize our commission costs over a period of three years, which is consistent with the period over which the products and services related to the commission are transferred to the customer. The three-year period was determined based on our review of historical enhancements and upgrades to our products and services. We applied the portfolio approach to account for the amortization of contract costs for those contracts that have similar characteristics. Upfront payments made to a customer are capitalized and amortized over the expected period of benefit and are recorded as a reduction to revenue. The current portion of capitalized commission costs and upfront payments made to customers is included in other current assets within our condensed consolidated balance sheets. The non-current portion of capitalized commission costs and upfront payments made to customers is reflected in other assets within our condensed consolidated balance sheets. We review the capitalized costs for impairment at least annually. Impairment exists if the carrying amount of the asset recognized from contract costs exceeds the remaining amount of consideration we expect to receive in exchange for providing the goods and services to which such asset relates, less the costs that relate directly to providing those good and services and that have not been recognized as an expense. We did not record an impairment loss on our contract assets during the three months ended March 31, 2022 and 2021. The changes in our contract assets are as follows (in thousands): Three Months Ended 2022 2021 Beginning of period balance $ 4,520 $ 4,306 Commission costs and upfront payments to a customer capitalized in period 806 1,106 Amortization of contract assets (846) (809) End of period balance $ 4,480 $ 4,603 Contract Liabilities Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. All of the deferred revenue presented in the condensed consolidated balance sheets represents contract liabilities resulting from advance cash receipts from customers or amounts billed in advance to customers from the sale of services. Changes in deferred revenue are due to our performance under the contract as well as to cash received from new contracts for which services have not been provided. The changes in our contract liabilities are as follows (in thousands): Three Months Ended 2022 2021 Beginning of period balance $ 14,837 $ 12,529 Revenue deferred in period 3,990 3,801 Revenue recognized from amounts included in contract liabilities (3,208) (2,674) End of period balance $ 15,619 $ 13,656 The revenue recognized from amounts included in contract liabilities primarily relates to prepayment contracts with customers as well as payments of activation fees. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net The components of accounts receivable, net are as follows (in thousands): March 31, December 31, Accounts receivable $ 106,382 $ 108,897 Allowance for credit losses (2,153) (2,168) Allowance for product returns (1,162) (1,181) Accounts receivable, net $ 103,067 $ 105,548 For the three months ended March 31, 2022, we recorded a provision for credit losses on our accounts receivable of $0.1 million, as compared to less than $0.1 million for the same period in the prior year. For the three months ended March 31, 2022, we recorded a $0.8 million reserve for product returns in our hardware and other revenue, as compared to $0.6 million for the same period in the prior year. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. Allowance for Credit Losses - Accounts Receivable The allowance for credit losses is a valuation account that is deducted from the accounts receivable and notes receivable amortized cost basis (see Note 8) to present the net amount expected to be collected. We estimate the allowance balance by applying the loss-rate method using relevant available information from internal and external sources, including historical write-off activity, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in economic conditions, such as changes in unemployment rates. We use projected economic conditions over a period no more than twelve months based on data from external sources. For periods beyond the twelve-month reasonable and supportable forecast period, we revert to historical loss information immediately. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, we considered various risk characteristics, including the financial asset type, size and the historical or expected credit loss pattern. We identified the following two portfolio segments for our accounts receivable: (i) outstanding accounts receivable balances within Alarm.com and certain subsidiaries and (ii) outstanding accounts receivable balances within all other subsidiaries. There were no changes to our portfolio segments for our accounts receivable during the three months ended March 31, 2022, and no changes to our policies or practices that influenced our estimate of expected credit losses for accounts receivable. Additionally, there were no significant changes in the amount of accounts receivable write-offs during the three months ended March 31, 2022, as compared to historical periods other than a partial write-off of $0.7 million related to one of our distribution partners' outstanding balance during the three months ended March 31, 2021, upon the distributor being acquired by a third party. Expected credit losses are estimated over the contractual term of the financial assets and we adjust the term for expected prepayments when appropriate. For the three months ended March 31, 2022, we recorded a reduction of credit loss expense for accounts receivable and notes receivable of $0.1 million, as compared to less than $0.1 million for the same period in the prior year, which were recorded in general and administrative expense, in our condensed consolidated statements of operations. The contractual term excludes expected extensions, renewals and modifications because extension and renewal options are unconditionally cancelable by us. Write-offs of the amortized cost basis are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense. The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended Three Months Ended Alarm.com All Other Alarm.com All Other Beginning of period balance $ (2,035) $ (133) $ (4,442) $ (254) (Provision for) / recovery of expected credit losses (155) 101 (36) 4 Write-offs 68 1 808 8 End of period balance $ (2,122) $ (31) $ (3,670) $ (242) |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The components of inventory are as follows (in thousands): March 31, December 31, Raw materials $ 17,412 $ 15,823 Finished goods 69,024 59,453 Total inventory $ 86,436 $ 75,276 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On December 16, 2021, EnergyHub, Inc., one of our wholly-owned subsidiaries, acquired certain assets of an unrelated third party. Substantially all of the acquired assets consisted of developed technology. We believe the acquisition of the developed technology will continue to advance our load-shaping energy management solution allowing additional devices to participate in utility programs that reduce or shift power consumption during peak demand periods. In consideration for the purchase of the developed technology, we paid $4.2 million in cash in December 2021, with the remaining $0.9 million expected to be paid 18 months following the acquisition date, subject to offset for any indemnification obligations. Additionally, we incurred $0.2 million in direct transaction costs related to legal fees during 2021 that were capitalized as a component of the consideration transferred. The combined $5.3 million consideration related to developed technology was recorded as an intangible asset at the time of the asset acquisition and will be amortized on a straight-line basis over an estimated useful life of seven years. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The changes in goodwill by reportable segment are outlined below (in thousands): Alarm.com Other Total Balance as of January 1, 2022 $ 112,901 $ — $ 112,901 Goodwill acquired — — — Balance as of March 31, 2022 $ 112,901 $ — $ 112,901 There were no impairments of goodwill during the three months ended March 31, 2022 and 2021. The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Developed Trade Name Total Balance as of January 1, 2022 $ 59,426 $ 30,157 $ 1,823 $ 91,406 Amortization (2,976) (1,446) (153) (4,575) Balance as of March 31, 2022 $ 56,450 $ 28,711 $ 1,670 $ 86,831 We recorded $4.6 million of amortization related to our intangible assets for the three months ended March 31, 2022, as compared to $4.3 million for the same period in the prior year. There were no impairments of long-lived intangible assets during the three months ended March 31, 2022 and 2021. During the three months ended March 31, 2022 we wrote-off $0.7 million in fully amortized intangible assets in the Alarm.com segment that were acquired in 2014 related to customer relationships, developed technology, trade name and other intangible assets that no longer existed as of January 1, 2022. The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets (in thousands, except weighted-average remaining life): March 31, 2022 Gross Accumulated Net Weighted- Customer relationships $ 125,885 $ (69,435) $ 56,450 7.7 Developed technology 49,143 (20,432) 28,711 6.2 Trade name 3,787 (2,117) 1,670 2.9 Total intangible assets $ 178,815 $ (91,984) $ 86,831 7.1 December 31, 2021 Gross Impairment of Intangible Assets Accumulated Net Weighted- Customer relationships $ 126,093 $ (86) $ (66,581) $ 59,426 7.9 Developed technology 49,371 — (19,214) 30,157 6.5 Trade name 3,815 — (1,992) 1,823 3.1 Other 234 — (234) — 0.0 Total intangible assets $ 179,513 $ (86) $ (88,021) $ 91,406 7.4 |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Purchases of Patents and Patent Licenses From time to time, we enter into agreements to purchase patents or patent licenses. The carrying value, net of amortization, of our purchased patents and patent licenses was $2.0 million and $2.2 million as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, $0.5 million and $0.6 million of patent costs were included in other current assets and $1.5 million and $1.6 million of patent costs were included in other assets, respectively. We have $7.0 million of historical cost in purchased patents and patent licenses as of March 31, 2022. We are amortizing the patent costs over the estimated useful lives of the patents, which range from three years to 18 years. Patent amortization cost of $0.1 million was included in cost of SaaS and license revenue in our condensed consolidated statements of operations for each of the three months ended March 31, 2022 and 2021. Patent amortization cost of $0.1 million was included in amortization and depreciation in our condensed consolidated statements of operations for each of the three months ended March 31, 2022 and 2021. Loan to a Distribution Partner In June 2020, we amended an existing term loan with our distribution partner and also amended an existing subordinated credit agreement with the affiliated entity of the distribution partner. At the time of the amended term loan and subordinated credit agreement in June 2020, the outstanding balance of the term loan was $3.0 million and the outstanding balance of the subordinated credit agreement was $3.0 million. Under the amended terms, the distribution partner paid us $2.0 million in principal for the term loan on June 9, 2020 and the remaining $1.0 million was transferred to the amended subordinated credit agreement with the affiliated entity of the distribution partner. As of March 31, 2022 and December 31, 2021, there was no remaining amount outstanding related to the amended term loan. The amended subordinated credit agreement with the affiliated entity of the distribution partner matures on September 9, 2025 and interest on the outstanding principal balance accrues at a rate of 9.0% per annum and is payable in kind. As of March 31, 2022 and December 31, 2021, $4.7 million and $4.6 million of the notes receivable balance related to the subordinated credit agreement was included in other assets in our condensed consolidated balance sheets, respectively. For the three months ended March 31, 2022, we recognized $0.6 million of revenue from the distribution partner associated with these loans, as compared to $0.7 million for the same period in the prior year. Loan to a Service Provider Partner In July 2020, we entered into a loan agreement with a service provider partner, under which we agreed to loan the service provider partner up to $2.5 million, collateralized by the assets of the service provider partner. Interest on the outstanding principal accrues at a rate per annum equal to 9.0% and monthly interest and principal payments began in April 2021. The maturity date of the loan is July 24, 2025. As of March 31, 2022 and December 31, 2021, $1.1 million and $1.2 million of principal was outstanding from the service provider partner under the loan agreement, respectively. For each of the three months ended March 31, 2022 and 2021, we recognized less than $0.1 million of revenue from the service provider partner associated with this loan. Investment in a Hardware Supplier In October 2018, we entered into a subordinate convertible promissory note with one of our hardware suppliers. In July 2019, we converted the outstanding notes receivable balance of $5.6 million into 9,520,832 shares of Series B preferred stock in the hardware supplier. We concluded that the $5.6 million equity investment, which is included in the Alarm.com segment, does not meet the criteria for consolidation and will be accounted for using the measurement alternative. Under the alternative, we measure investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments. As of March 31, 2022 and December 31, 2021, our investment in the hardware supplier was $5.6 million. Investment in a Technology Partner In December 2016, we paid $0.3 million for a convertible promissory note with a technology partner. In April 2018, the $0.3 million convertible promissory note converted into 135,135 shares of Series A-1 Preferred Stock. At the time of conversion, we determined there was no value related to the Series A-1 Preferred Stock. Based on observable price changes from orderly transactions for similar investments, we increased the amount of our investment by $0.7 million and recorded a gain within other income / (expense), net , in our consolidate d statements of operations during the year ended December 31, 2020. In February 2021, we paid $5.0 million in cash to purchase 1,000,000 shares of Series B-2 Preferred Stock from the same technology partner as part of a financing round that included other investors. The $5.0 million equity investment, which is included in the Alarm.com segment, does not meet the criteria for consolidation and is accounted for using the measurement alternative. Under the alternative, we measure investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments. As of March 31, 2022 and December 31, 2021, our investment in the technology partner was $5.7 million. Allowance for Credit Losses - Notes Receivable We identified the following two portfolio segments for our notes receivable: (i) loan receivables and (ii) hardware financing receivables. There were no changes to our portfolio segments for our notes receivable during the three months ended March 31, 2022, and no changes to our policies or practices involving the issuance of notes receivable, customer acquisitions or any other factors that influenced our estimate of expected credit losses for notes receivable. We do not accrue interest on notes receivable that are considered impaired or are 90 days or greater past due based on their contractual payment terms. Notes receivable that are 90 days or greater past due are placed on nonaccrual status. Notes receivable may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a note receivable has been placed on nonaccrual status, interest will be recognized when cash is received. A note receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and collection of all remaining contractual amounts due is reasonably assured. We have elected not to measure an allowance for credit losses for accrued interest receivables . We write-off any accrued interest on notes receivable that are considered impaired or are 90 days or greater past due based on their contractual payment terms by reversing interest income. The accrued interest receivable as of March 31, 2022 and December 31, 2021 was less than $0.1 million, and is reflected in other current assets within our condensed consolidated balance sheets and excluded from the amortized cost basis of the notes receivable . We did not write-off any accrued interest receivable during the three months ended March 31, 2022 and 2021. There were no purchases or sales of financial assets during the three months ended March 31, 2022 and 2021. There were no significant changes in the amount of note receivable write-offs during the three months ended March 31, 2022, as compared to historical periods. The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended Three Months Ended Loan Hardware Loan Hardware Beginning of period balance $ (79) $ (1) $ (73) $ (16) Recovery of expected credit losses 78 — — 11 Write-offs — — — — End of period balance $ (1) $ (1) $ (73) $ (5) We manage our notes receivables using delinquency as a key credit quality indicator. The following tables reflect the current and delinquent notes receivable by class of financing receivables and by year of origination (in thousands): March 31, 2022 Loan Receivables: 2022 2021 2020 2019 2018 Prior Total Current $ — $ — $ 1,137 $ 5 $ — $ 4,704 $ 5,846 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ — $ 1,137 $ 5 $ — $ 4,704 $ 5,846 Hardware Financing Receivables: Current $ — $ — $ — $ — $ — $ — $ — 30-59 days past due — — — 2 — — 2 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ — $ — $ 2 $ — $ — $ 2 December 31, 2021 Loan Receivables: 2021 2020 2019 2018 2017 Prior Total Current $ — $ 1,151 $ 7 $ — $ 4,602 $ — $ 5,760 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ 1,151 $ 7 $ — $ 4,602 $ — $ 5,760 Hardware Financing Receivables: Current $ — $ — $ 4 $ — $ — $ — $ 4 30-59 days past due — — 6 — — — 6 60-89 days past due — — 11 — — — 11 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ — $ 21 $ — $ — $ — $ 21 There were no notes receivables placed on nonaccrual status as of March 31, 2022 and December 31, 2021. During the three months ended March 31, 2022 and 2021, there was no interest income recognized related to notes receivables that were in nonaccrual status. As of March 31, 2022 and December 31, 2021, there were no notes receivables placed in nonaccrual status for which there was not a related allowance for credit losses. As of March 31, 2022 and December 31, 2021, there were no notes receivables that were 90 days or greater past due for which we continued to accrue interest income. Prepaid Expenses As of March 31, 2022 and December 31, 2021, $20.7 million and $17.7 million of prepaid expenses were included in other current assets, respectively, primarily related to long lead-time parts related to our inventory and software licenses. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables present our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis Assets: Level 1 Level 2 Level 3 Total Money market accounts as of March 31, 2022 $ 639,990 $ — $ — $ 639,990 Money market accounts as of December 31, 2021 679,278 — — 679,278 Liabilities: Subsidiary long-term incentive plan as of March 31, 2022 $ — $ — $ 3,104 $ 3,104 Subsidiary long-term incentive plan as of December 31, 2021 — — 3,351 3,351 The following table summarizes the change in fair value of the Level 3 liabilities for the subsidiary long-term incentive plan with significant unobservable inputs (in thousands): Three Months Ended 2022 2021 Beginning of period balance $ 3,351 $ 1,000 Changes in fair value included in earnings (247) 195 End of period balance $ 3,104 $ 1,195 As of March 31, 2022, $639.5 million of our money market accounts was included in cash and cash equivalents and $0.5 million was included in other assets in our condensed consolidated balance sheets. As of December 31, 2021, $679.3 million was included in cash and cash equivalents in our condensed consolidated balance sheets. Our money market assets are valued using quoted prices in active markets. See Note 12 for the carrying amount and estimated fair value of our convertible senior notes as of March 31, 2022. The liability for the subsidiary long-term incentive plan consists of the potential cash payment contingent upon meeting certain financial milestones related to the agreement established with certain employees of one of our subsidiaries. This incentive plan was established in November 2017 and the amount of compensation awarded to employees depends on the fair market value of the subsidiary, which is determined in part by the subsidiary’s projected financial results. We account for the subsidiary long-term incentive plan using fair value and establish liabilities for the future payments under the terms of the incentive plan based on estimating revenue, EBITDA and EBITDA margin of the subsidiary over the period of the incentive plan through the anticipated achievement of the milestones. We estimate the fair value of the liability by using a Monte Carlo simulation model which involves several Level 3 unobservable inputs. The significant unobservable inputs used in the valuation as of March 31, 2022 included a weighted average revenue volatility of 7.5% and a revenue risk adjustment of 2.6%. The revenue volatility was weighted using revenue volatility results from the subsidiary’s peer group as well as market transaction metrics. The revenue risk adjustment was calculated using capital structure allocations from the subsidiary’s peer group, market transaction metrics as well as United States Treasury yields. Selecting another revenue volatility or revenue risk adjustment within an acceptable range would not result in a significant change to the fair value of the subsidiary long-term incentive plan liability. At each reporting date until the incentives are paid or expire, we will remeasure the liability, using the same valuation approach and we will record any changes as increases or decreases to the applicable operating expense category based on the respective employee’s function (sales and marketing, general and administrative or research and development) as a cumulative adjustment. The remaining liability balances are included in other liabilities in our condensed consolidated balance sheets (see Note 11). We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. There were no transfers in or out of Level 3 during the three months ended March 31, 2022 and 2021. We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the three months ended March 31, 2022 and 2021. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases We lease office space, data centers and office equipment under non-cancelable operating leases with various expiration dates through 2027. In August 2014, we signed a lease for office space in Tysons, Virginia, where we relocated our headquarters to in February 2016. We have subsequently entered into amendments to this lease to provide us with additional office space. The lease term ends in 2026, includes a five-year renewal option and a cumulative tenant improvement allowance of $12.1 million. Supplemental information related to leases is presented in the table below (in thousands, except weighted-average term and discount rate): Three Months Ended 2022 2021 Operating lease cost $ 2,473 $ 2,338 Cash paid for amounts included in the measurement of operating lease liabilities 2,975 2,772 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 1,782 224 March 31, December 31, Weighted-average remaining lease term — operating leases 4.1 years 4.2 years Weighted-average discount rate — operating leases 3.6 % 3.6 % Maturities of lease liabilities are as follows (in thousands): Year Ended December 31, Operating Leases (1) Remainder of 2022 $ 8,815 2023 11,662 2024 10,107 2025 8,771 2026 5,112 2027 and thereafter 1,017 Total lease payments 45,484 Less: imputed interest (2) 3,266 Present value of lease liabilities $ 42,218 _______________ (1) Operating lease payments exclude $0.5 million of legally binding minimum lease payments for leases executed but not yet commenced and includes $1.0 million for options to extend lease terms that were reasonably certain of being exercised. (2) Imputed interest was calculated using the incremental borrowing rate applicable for each lease. We did not have any finance leases or subleases as of March 31, 2022 or December 31, 2021. Our lease agreements do not contain any material residual value guarantees, restrictive covenants or variable lease payments. Short-term lease costs were immaterial for the three months ended March 31, 2022 and 2021. |
Liabilities
Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Liabilities | Liabilities The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): March 31, December 31, Accounts payable $ 47,700 $ 64,751 Accrued expenses 13,179 19,894 Income taxes payable 7,794 — Other current liabilities 4,942 5,171 Accounts payable, accrued expenses and other current liabilities $ 73,615 $ 89,816 The components of other liabilities are as follows (in thousands): March 31, December 31, Holdback liability from asset acquisition $ 850 $ 850 Subsidiary long-term incentive plan 3,104 3,351 Other liabilities 5,526 5,344 Other liabilities $ 9,480 $ 9,545 |
Debt, Commitments and Contingen
Debt, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Debt, Commitments and Contingencies | Debt, Commitments and Contingencies The debt, commitments and contingencies described below would require us, or our subsidiaries, to make payments to third parties under certain circumstances. Convertible Senior Notes On January 20, 2021, we issued $500.0 million aggregate principal amount of 0% convertible senior notes due January 15, 2026 in a private placement to qualified institutional buyers, or the 2026 Notes. The terms of the 2026 Notes are governed by an Indenture, or the Indenture, by and between Alarm.com Holdings, Inc. and U.S. Bank National Association, as trustee. The 2026 Notes are senior unsecured obligations that do not bear regular interest and the principal amount of the 2026 Notes will not accrete. The 2026 Notes may bear special interest under specified circumstances related to our failure to comply with our reporting obligations under the Indenture. Special interest, if any, will be payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2021. We received proceeds from the issuance of the 2026 Notes of $484.3 million, net of $15.7 million of transaction fees and other debt issuance costs. We may not redeem the 2026 Notes prior to January 20, 2024. We may redeem for cash, all or any portion of the 2026 Notes, at our option, on or after January 20, 2024, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the 2026 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. No sinking fund is provided for the 2026 Notes. The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day; (2) during the five business day period immediately after any 10 consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2026 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2026 Notes on each such trading day; (3) if we call any or all of the 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2026 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as set forth in the Indenture. On or after August 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2026 Notes, holders of the 2026 Notes may convert all or any portion of their 2026 Notes at any time, regardless of the foregoing conditions. Upon conversion, we may satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. It is our current intent to settle the principal amount of the 2026 Notes with cash. The initial conversion rate for the 2026 Notes is 6.7939 shares of our common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of $147.19 per share of our common stock, subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date of the 2026 Notes or if we deliver a notice of redemption in respect of the 2026 Notes, we will, under certain circumstances, increase the conversion rate of the 2026 Notes for a holder who elects to convert its 2026 Notes (or any portion thereof) in connection with such a corporate event or convert its 2026 Notes called (or deemed called) for redemption during the related redemption period (as defined in the Indenture), as the case may be. If we undergo a fundamental change (as defined in the Indenture), subject to certain exceptions and except as described in the Indenture, holders may require us to repurchase for cash all or any portion of their 2026 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date. The Indenture includes customary covenants and sets forth certain events of default after which the 2026 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving us after which the 2026 Notes become automatically due and payable. We used some of the proceeds to repay the $110.0 million outstanding principal balance under our credit facility and also used some of the proceeds to pay accrued interest, fees and expenses related to our credit facility (see the section titled "2017 Facility" below). We are using the remaining net proceeds from the issuance of the 2026 Notes for working capital and other general corporate purposes, which may include acquisitions or strategic investments in complementary businesses or technologies. As discussed in Note 2, we adopted ASU 2020-06, " Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity " effective January 1, 2022, using a modified retrospective adoption method. Prior to the adoption of the standard, the 2026 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that did not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2026 Notes. The equity component was recorded in additional paid-in capital and was not remeasured as it continued to meet the conditions for equity classification. The debt discount for conversion option, debt issuance costs and net carrying amount of the equity component was $77.2 million, $2.4 million and $74.8 million, respectively, as of December 31, 2021. The excess of the principal amount of the liability component over its carrying amount was amortized to interest expense over the contractual term of the 2026 Notes at an effective interest rate of 4.0%. Prior to the adoption of ASU 2020-06, the difference between the book and tax treatment of the debt discount and debt issuance costs of the 2026 Notes resulted in a difference between the carrying amount and tax basis of the 2026 Notes. This taxable temporary difference resulted in the recognition of a $18.3 million net deferred tax liability which was recorded as an adjustment to additional paid-in capital during the three months ended March 31, 2021. Upon adoption of ASU 2020-06 on January 1, 2022, we recombined the liability and equity components of the 2026 Notes assuming that the instrument was accounted for as only a liability from inception to the date of adoption. We also recombined the liability and equity components of the debt issuance costs. The issuance costs are presented as a deduction from the outstanding principal balance of the 2026 Notes and are amortized to interest expense using the effective interest method over the contractual term of the 2026 Notes at a rate of 0.6%. Upon adoption of ASU 2020-06 on January 1, 2022, we also removed the temporary difference between the book and tax treatment of the debt discount and adjusted the temporary difference between the book and tax treatment of the debt issuance costs of the 2026 Notes. As of March 31, 2022 and December 31, 2021, the fair value of our 2026 Notes was $427.7 million and $452.5 million, respectively. The fair value was determined based on the quoted price of the 2026 Notes in an inactive market on the last traded day of the quarter and has been classified as Level 2 in the fair value hierarchy. Based on the closing price of our common stock of $66.46 on the last trading day of the quarter, the if-converted value of the 2026 Notes did not exceed the principal amount of $500.0 million as of March 31, 2022. The net carrying amount of the liability component of the 2026 Notes is as follows (in thousands): March 31, December 31, Principal $ 500,000 $ 500,000 Unamortized debt discount — (63,520) Unamortized debt issuance costs (11,976) (11,135) Net carrying amount $ 488,024 $ 425,345 Interest expense related to the 2026 Notes is as follows (in thousands): Three Months Ended 2022 2021 Amortization of debt discount $ — $ 2,812 Amortization of debt issuance costs 780 432 Total interest expense $ 780 $ 3,244 2017 Facility On October 6, 2017, we entered into a $125.0 million senior secured revolving credit facility, or the 2017 Facility, with Silicon Valley Bank, or SVB, as administrative agent, PNC Bank, National Association, as documentation agent, and a syndicate of lenders. Upon entry into the 2017 Facility, we borrowed $72.0 million, which was used to repay the previously outstanding balance under our previous credit facility. The 2017 Facility was set to mature in October 2022 and included an option to further increase the borrowing capacity to $175.0 million with the consent of the lenders. Costs incurred in connection with the 2017 Facility were capitalized and were being amortized as interest expense over the term of the 2017 Facility. The 2017 Facility was secured by substantially all of our assets, including our intellectual property. On March 25, 2020, we borrowed $50.0 million under the 2017 Facility as a precautionary measure in order to provide financial flexibility in light of current uncertainty in the financial markets resulting from the COVID-19 pandemic. On January 20, 2021, we repaid the entire outstanding principal balance of $110.0 million of the 2017 Facility with proceeds from the 2026 Notes. The 2017 Facility was terminated on January 20, 2021 and we recognized an extinguishment loss of $0.2 million in other income / (expense), net in our condensed consolidated statements of operations during the three months ended March 31, 2021 for previously capitalized debt issuance costs related to the 2017 Facility that were unamortized at the time of the termination of the 2017 Facility. The outstanding principal balance on the 2017 Facility accrued interest at a rate equal to, at our option, either (1) LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the highest of (a) the Wall Street Journal prime rate, (b) the Federal Funds rate plus 0.50%, or (c) LIBOR plus 1.00% plus an applicable margin based on our consolidated leverage ratio. During 2021, until the termination of the 2017 Facility on January 20, 2021, we elected for the outstanding principal balance to accrue interest at LIBOR plus 1.50%, LIBOR plus 1.75%, LIBOR plus 2.00%, and LIBOR plus 2.50% when our consolidated leverage ratio is less than 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, greater than or equal to 2.00:1.00 but less than 3.00:1.00 and greater than or equal to 3.00:1.00, respectively. The 2017 Facility also carried an unused line commitment fee of 0.20%. The carrying value of the 2017 Facility was zero as of March 31, 2022 and December 31, 2021. Commitments and Contingencies Indemnification Agreements We have various agreements that may obligate us to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business. Although we cannot predict the maximum potential amount of future payments that may become due under these indemnification agreements, we do not believe any potential liability that might arise from such indemnity provisions is probable or material. Legal Proceedings On June 2, 2015, Vivint, Inc., or Vivint, filed a lawsuit against us in U.S. District Court, District of Utah, alleging that our technology directly and indirectly infringes six patents that Vivint purchased. Vivint is seeking permanent injunctions, enhanced damages and attorneys' fees. We answered the complaint on July 23, 2015. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question. In 2017 and 2019, the U.S. Patent Trial and Appeal Board, or PTAB, issued final written decisions in inter partes reviews finding all or some of the claims in five of the asserted patents unpatentable. These decisions were affirmed on appeal. Discovery closed on October 29, 2021. Vivint has moved for partial summary judgment and Alarm.com has moved for summary judgment; both motions are pending decision. No trial date has been set. Should Vivint prevail in proving Alarm.com infringes one or more of its patent claims, we could be required to pay damages of Vivint’s lost profits and/or a reasonable royalty for sales of our solution. Since all remaining patent claims in the litigation have expired, Vivint shall not be entitled to injunctive relief as a remedy in this matter. While we believe we have valid defenses to Vivint’s claims, any of these outcomes could result in a material adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. On January 10, 2022, EcoFactor, Inc., or EcoFactor, filed a lawsuit against us in U.S. District Court, District of Oregon, alleging Alarm.com’s products and services directly and indirectly infringe five U.S. patents owned by EcoFactor. EcoFactor is seeking permanent injunctions, enhanced damages and attorneys' fees. We moved to dismiss the case for failure to state a claim on March 28, 2022. EcoFactor had previously asserted two of the same patents against us in an October 2019 complaint with the U.S. International Trade Commission, or ITC. In July 2021, the ITC found in favor of Alarm.com. EcoFactor appealed the decision but withdrew its appeal in December 2021. Two of the other three asserted patents are currently in ex parte reexamination proceedings at the PTO, and all claims of the third were found unpatentable by the PTAB in inter partes review on April 18, 2022. Also on April 18, 2022, the district court stayed the case at the request of the parties pending the disposition of other proceedings involving the asserted patents, including the reexamination proceedings. Should EcoFactor prevail in its lawsuit we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. While we believe we have valid defenses to EcoFactor’s claims, the outcome of these legal claims cannot be predicted with certainty and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. On July 22, 2021, Causam Enterprises, Inc., or Causam, filed a lawsuit against us in U.S. District Court, Western District of Texas, alleging that Alarm.com’s smart thermostats infringe four U.S. patents owned by Causam. Causam is seeking preliminary and permanent injunctions, enhanced damages and attorneys’ fees. We have not yet responded to the complaint. On September 3, 2021, the court issued an order staying the lawsuit until the ITC investigation described below is finally resolved. On July 28, 2021, Causam filed a complaint with the ITC naming Alarm.com Incorporated, Alarm.com Holdings, Inc., and EnergyHub, Inc., among others, as proposed respondents. The complaint alleges infringement of the same four patents Causam asserted in district court. Causam is seeking a permanent limited exclusion order and permanent cease and desist order. On August 27, 2021, the ITC instituted an investigation into Causam’s allegations naming Alarm.com Incorporated, Alarm.com Holdings, Inc., EnergyHub Inc. and others as respondents. We answered the complaint on October 4, 2021. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question. The administrative law judge presiding over the hearing has scheduled an evidentiary hearing in the investigation to begin on June 29, 2022. The target date for completion of the investigation is March 16, 2023. Should Causam prevail in an ITC investigation, Alarm.com thermostats manufactured abroad could be excluded from importation into the United States. Should Causam prevail in its district court lawsuit we could be required to pay damages and/or a reasonable royalty for sales of our solution, we could be enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us, and we could be required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. While we believe we have valid defenses to Causam’s claims, the outcome of these legal claims cannot be predicted with certainty, and any of these outcomes could result in an adverse effect on our business. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. In addition to the matters described above, we may be required to provide indemnification to certain of our service provider partners for certain claims regarding our solutions. For example, we are incurring costs associated with the indemnification of our service provider ADT, LLC in ongoing patent infringement suits. On February 25, 2021, Vivint filed a lawsuit against ADT LLC a/k/a ADT LLC of Delaware d/b/a ADT Security Services in U.S. District Court, District of Utah, alleging that ADT Pulse, Control, and Blue each infringe one or more patents owned by Vivint. Vivint is seeking damages and attorneys’ fees. Vivint filed a second amended complaint on March 8, 2022. ADT answered the second amended complaint on March 22, 2022 and asserted defenses based on non-infringement and invalidity of all five asserted patents. The case is currently in discovery, and no trial date has been set. Two of the asserted patents are under inter partes review at the PTAB, and ADT has filed petitions for inter partes review for the three other asserted patents for which decisions on institution are pending. ADT moved to stay the case pending the outcome of the inter partes reviews on March 9, 2022. The motion remains pending. Should Vivint prevail on the claims that one or more elements of ADT’s products infringe, we could be required to indemnify ADT for damages in the form of a reasonable royalty or ADT could be enjoined from making, using and selling our solution if a license or other right to continue selling our technology is not made available or we are unable to design around such patents, and required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. The outcome of these legal claims cannot be predicted with certainty. We believe there are valid defenses to the claims made by Vivint. Based on currently available information, we have determined a loss is not probable or reasonably estimable at this time. We may also be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Other than the preceding matters, we are not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible or probable of having a material adverse effect on our financial position, results of operations or cash flows. We reserve for contingent liabilities based on ASC 450, " Contingencies ," when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, we will not incur material costs. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stock Repurchase Program On December 3, 2020, our board of directors authorized a stock repurchase program, under which we are authorized to purchase up to an aggregate of $100.0 million of our outstanding common stock during the three-year period ending December 3, 2023. During the three months ended March 31, 2022, we repurchased 354,123 shares of our common stock under this program for $23.3 million, which includes applicable commissions and fees. No shares of our common stock were repurchased under this program during the three months ended March 31, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is included in the following line items in the condensed consolidated statements of operations (in thousands): Three Months Ended 2022 2021 Sales and marketing $ 1,058 $ 808 General and administrative 3,235 2,080 Research and development 7,817 5,000 Total stock-based compensation expense $ 12,110 $ 7,888 The following table summarizes the components of non-cash stock-based compensation expense (in thousands): Three Months Ended 2022 2021 Stock options and assumed options $ 778 $ 617 Restricted stock units 11,284 7,224 Employee stock purchase plan 48 47 Total stock-based compensation expense $ 12,110 $ 7,888 Tax windfall benefit from stock-based awards $ 529 $ 2,560 We granted no stock options pursuant to our 2015 Equity Incentive Plan, or the 2015 Plan, during the three months ended March 31, 2022 and March 31, 2021. There were 14,020 stock options exercised during the three months ended March 31, 2022, as compared to 73,175 stock options for the same period in the prior year. There was an aggregate of 156,543 restricted stock units without performance conditions granted to certain of our employees, during the three months ended March 31, 2022, as compared to an aggregate of 127,216 restricted stock units without performance conditions for the same period in the prior year. There was an aggregate of 71,934 restricted stock units with performance conditions granted to certain of our employees during the three months ended March 31, 2022, as compared to no restricted stock units with performance conditions for the same period in the prior year. There were 57,497 restricted stock units without performance conditions that vested during the three months ended March 31, 2022, as compared to 69,370 restricted stock units without performance conditions vested during the same period in the prior year. There were no restricted stock units with performance conditions that vested during the three months ended March 31, 2022, as compared to 20,000 restricted stock units with performance conditions for the same period in the prior year. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and Diluted Earnings Per Share The components of basic and diluted earnings per share are as follows (in thousands, except share and per share amounts): Three Months Ended Numerator: 2022 2021 Net income $ 8,903 $ 14,550 Net loss attributable to redeemable noncontrolling interest 176 280 Net income attributable to common stockholders - basic (A) 9,079 14,830 Add back interest expense, net of tax, attributable to convertible senior notes 586 — Net income attributable to common stockholders - diluted (B) $ 9,665 $ 14,830 Denominator: Weighted average common shares outstanding — basic (C) 50,206,179 49,561,887 Dilutive effect of convertible senior notes, stock options and restricted stock units 4,964,602 2,177,574 Weighted average common shares outstanding — diluted (D) 55,170,781 51,739,461 Net income per share: Basic (A/C) $ 0.18 $ 0.30 Diluted (B/D) $ 0.18 $ 0.29 The following securities have been excluded from the calculation of diluted weighted average common shares outstanding as the inclusion of these securities would have an anti-dilutive effect: Three Months Ended 2022 2021 Stock options 172,500 — Restricted stock units 320,352 125,191 Our redeemable noncontrolling interest relates to our 85% equity ownership interest in OpenEye. The OpenEye stockholder agreement contains a put option that gives the minority OpenEye stockholders the right to sell their OpenEye shares to us based on the fair value of the shares. The OpenEye stockholder agreement also contains a call option that gives us the right to purchase the remaining OpenEye shares from the minority OpenEye stockholders based on the fair value of the shares. The put and call options can each be exercised beginning in the first quarter of 2023. This redeemable noncontrolling interest is considered temporary equity and we report it between liabilities and stockholders’ equity in the condensed consolidated balance sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is recorded in the condensed consolidated statements of operations. Prior to the adoption of ASU 2020-06, since we expected to settle the principal amount on our outstanding 2026 Notes in cash and any excess in cash or shares of our common stock, we used the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread had a dilutive impact on diluted net income per share of common stock when the average market price of our common stock for a given period exceeded the conversion price of $147.19 per share for the 2026 Notes. Based on the initial conversion price and the average market price of our common stock for the three months ended March 31, 2021, there was no dilutive effect of the 2026 Notes on our earnings per share during the three months ended March 31, 2021. ASU 2020-06 |
Significant Service Providers
Significant Service Providers | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Significant Service Providers | Significant Service Providers During each of the three months ended March 31, 2022 and 2021, our 10 largest revenue service provider partners accounted for 50% of our consolidated revenue. One of our service provider partners within the Alarm.com segment individually represented greater than 15% but not more than 20% of our revenue for the three months ended March 31, 2022 and 2021. One service provider partner in the Alarm.com segment represented more than 10% of accounts receivable as of March 31, 2022 and December 31, 2021. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For purposes of interim reporting, our annual effective income tax rate is estimated in accordance with ASC 740-270, "Interim Reporting." This rate is applied to the pre-tax book income of the entities expected to be benefited during the year. Discrete items that impact the tax provision are recorded in the period incurred. For the three months ended March 31, 2022, we recorded a benefit from income taxes of $0.6 million, resulting in an effective income tax rate of (7.5)%. For the three months ended March 31, 2021, we recorded a benefit from income taxes of $2.9 million resulting in an effective income tax rate of (25.0)%. Our effective tax rates were below the statutory rate primarily due to research and development tax credits claimed, tax windfall benefits from employee stock-based payment transactions and foreign derived intangible income deductions, partially offset by the impact of state taxes, foreign withholding taxes and other nondeductible expenses. We recognize a valuation allowance if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Due to the uncertainty of realization of certain deferred tax assets acquired in 2017 related to our Canadian net operating losses and research and development tax credits, we established a valuation allowance of $0.3 million during the second quarter of 2019, which remained at $0.3 million as of March 31, 2022 and December 31, 2021. During 2020, we established a valuation allowance of $1.3 million for state research and development tax credit carryforwards, which increased to $1.9 million as of December 31, 2021 and remained at $1.9 million as of March 31, 2022. We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. We recorded an increase to the unrecognized tax benefits liability of $0.6 million primarily for research and development tax credits claimed during the three months ended March 31, 2022. We recorded an increase to the unrecognized tax benefits liability of $0.5 million for research and development tax credits claimed during the three months ended March 31, 2021. Our tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in our tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. On October 13, 2021, the Internal Revenue Service commenced an examination of our federal income tax return for 2018, which is ongoing. The anticipated completion date of the Internal Revenue Service examination cannot be estimated at this time. As of March 31, 2022 and December 31, 2021, we accrued $0.2 million of total interest expense related to unrecognized tax benefits. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have two reportable segments: • Alarm.com segment • Other segment Our chief operating decision maker is our chief executive officer. Management determined the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Our Alarm.com segment represents our cloud-based and Software platforms for the intelligently connected property and related solutions that contributed 95% of our revenue, net of intersegment eliminations, for each of the three months ended March 31, 2022 and 2021. Our Other segment is focused on researching, developing and offering residential and commercial automation solutions and energy management products and services in adjacent markets. Inter-segment revenue includes sales of hardware between our segments. Management evaluates the performance of its segments and allocates resources to them based on operating income / (loss) as compared to prior periods and current performance levels. The reportable segment operational data is presented in the tables below (in thousands): Three Months Ended March 31, 2022 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 115,348 $ 7,877 $ — $ — $ 123,225 Hardware and other revenue 81,221 2,304 (899) (414) 82,212 Total revenue 196,569 10,181 (899) (414) 205,437 Operating income / (loss) 12,754 (4,004) 185 (22) 8,913 Three Months Ended March 31, 2021 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 101,263 $ 6,120 $ — $ — $ 107,383 Hardware and other revenue 64,269 2,017 (905) (266) 65,115 Total revenue 165,532 8,137 (905) (266) 172,498 Operating income / (loss) 17,707 (2,853) 153 (4) 15,003 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Assets as of March 31, 2022 $ 1,265,081 $ 35,395 $ (75,719) $ 33 $ 1,224,790 Assets as of December 31, 2021 1,264,416 37,198 (69,595) (4) 1,232,015 Our SaaS and license revenue for the Alarm.com segment included software license revenue of $7.1 million for the three months ended March 31, 2022, as compared to $8.7 million for the same period in the prior year. There was no software license revenue recorded for the Other segment during the three months ended March 31, 2022 and 2021. Depreciation and amortization expense was $7.5 million for the Alarm.com segment for the three months ended March 31, 2022, as compared to $7.3 million for the same period in the prior year. Depreciation and amortization expense was $0.3 million for the Other segment for the three months ended March 31, 2022, as compared to $0.1 million for the same period in the prior year. Additions to property and equipment were $1.6 million for the Alarm.com segment for the three months ended March 31, 2022, as compared to $3.5 million for the same period in the prior year. Additions to property and equipment were $0.1 million for the Other segment for the three months ended March 31, 2022, as compared to less than $0.1 million for the same period in the prior year. We derived substantially all revenue from North America for the three months ended March 31, 2022 and 2021. Substantially all of our long-lived assets were in North America as of March 31, 2022 and December 31, 2021. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Installation Partner Our installation partner in which we have a 48.2% ownership interest performs installation services for security service providers and also provides installation services for us and certain of our subsidiaries. We account for this investment using the equity method. As of March 31, 2022 and December 31, 2021, our investment balance in our installation partner was zero. During the three months ended March 31, 2022, we recorded less than $0.1 million and of cost of hardware and other revenue in connection with this installation partner, as compared to $0.1 million for the same period in the prior year. As of March 31, 2022 and December 31, 2021, the accounts payable balance to our installation partner was zero and less than $0.1 million. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2022, or the Annual Report. The condensed consolidated balance sheet as of December 31, 2021 was derived from our audited financial statements, but does not include all disclosures required by GAAP for annual financial statements. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented. However, the COVID-19 pandemic disrupted and may continue to disrupt our supply chain for an unknown period of time due to its impact on manufacturing, production and global transportation. The COVID-19 pandemic also disrupted and may intermittently continue to disrupt our sales channels due to restrictions imposed from time to time on our service providers’ ability to meet with residential and commercial property owners who use our solutions. In addition, the COVID-19 pandemic resulted in a global slowdown of economic activity, inflation, and a recession in the United States and the economic situation remains fluid as parts of the economy appear to be recovering while others continue to struggle. While vaccines have been approved for use in the United States and in many other countries, and vaccination efforts have been and are underway, it remains difficult to assess or predict the ultimate duration and economic impact of the COVID-19 pandemic due to a resurgence of COVID-19 and the emergence and severity of COVID-19 variants. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that can be expected for our entire fiscal year ending December 31, 2022, which is increasingly true in periods of extreme uncertainty, such as the uncertainty caused by the COVID-19 pandemic and geopolitical tensions. Prolonged uncertainty with respect to COVID-19 could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions and judgments or revise the carrying value of our assets or liabilities. However, our estimates, judgments and assumptions are continually evaluated based on available information and experience and may change as new events occur and additional information is obtained. Because of the use of estimates inherent in the financial reporting process and in light of the continuing uncertainty arising from the COVID-19 pandemic, actual results could differ from those estimates and any such differences may be material. Estimates are used when accounting for revenue recognition, allowances for credit losses, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, the lease term and incremental borrowing rates for leases, stock-based compensation, income taxes, legal reserves, fair value of the debt component of convertible notes and goodwill and intangible assets. |
Restricted Cash | Restricted CashWe consider all cash reserved for a specific use and not available for immediate or general business use to be restricted cash. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted On August 5, 2020, the Financial Accounting Standards Board, or FASB, issued ASU 2020-06, " Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ," or ASU 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The new guidance eliminates two of the three models in Subtopic 470-20 that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. The amendment in this update is effective for fiscal years beginning after December 15, 2021. We adopted ASU 2020-06 effective January 1, 2022, using a modified retrospective adoption method, which required us to record the initial effect of this guidance as a cumulative-effect adjustment to retained earnings on January 1, 2022. Upon adoption of ASU 2020-06, we recombined the liability and equity components of the convertible senior notes assuming that the instrument was accounted for as only a liability from inception to the date of adoption. We also recombined the liability and equity components of the debt issuance costs. The issuance costs are presented as a deduction from the outstanding principal balance of the convertible senior notes and are amortized to interest expense using the effective interest method over the contractual term of the convertible senior notes. We also removed the temporary difference between the book and tax treatment of the debt discount and adjusted the temporary difference between the book and tax treatment of the debt issuance costs of the convertible senior notes. The adoption resulted in the recording of the following increases / (decreases) on our condensed consolidated balance sheets (in thousands): Balance Sheet Caption As of January 1, 2022 Deferred tax assets $ 15,356 Additional paid-in capital (56,515) Convertible senior notes, net 61,899 Retained earnings 9,972 Our net income attributable to common stockholders increased $2.0 million during the three months ended March 31, 2022 as a result of adopting ASU 2020-06 On March 31, 2022, the FASB issued ASU 2022-02, " Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures " which includes requirements to disclose current period gross write-offs by year of origination for financing receivables. The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods with those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance over disclosing current period gross write-offs by year of origination for financial receivables should be applied prospectively. We adopted this guidance during the three months ended March 31, 2022 and there was no impact to the disclosures within the "Allowance for Credit Losses - Notes Receivable" section of Note 8 as there were no write-offs of notes receivable during the three months ended March 31, 2022. Not Yet Adopted On October 28, 2021, the FASB issued ASU 2021-08, " Business Combinations (Topic 606): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ," which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements, if the acquiree prepared financial statements in accordance with GAAP. The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update. We are currently assessing the impact this pronouncement may have on our condensed consolidated financial statements, which will be dependent on the nature and size of any potential future acquisitions. |
Revenue Recognition | Revenue Recognition We derive our revenue from three primary sources: the sale of cloud-based SaaS services on our integrated Alarm.com platform, the sale of licenses and services on our non-hosted software platform, or Software platform, and the sale of hardware products. We sell our platform and hardware solutions to service provider partners that resell our solutions and hardware to residential and commercial property owners, who are the service provider partners’ customers. Our subscribers consist of all of the properties maintained by those residential and commercial property owners to which we are delivering at least one of our solutions. We also sell our hardware to distributors who resell the hardware to service provider partners. We enter into contracts with our service provider partners that establish pricing for access to our platform solutions and for the sale of hardware. These service provider c ontracts typically have an initial term of one year, with subsequent renewal terms of one year. O ur service provider partners have indicated that they typically have three five service contracts with residential and commercial property owners who use our solutions. When determining the amount of consideration we expect to be entitled to for the sale of our hardware, we estimate the variable consideration associated with customer returns. We record a reserve against revenue for hardware returns based on historical returns. For the twelve months ended March 31, 2022 and 2021, our reserve against revenue for hardware returns was approximately 1% of hardware and other revenue. We evaluate our hardware reserve on a quarterly basis or if there is an indication of significant changes in return experience. Hist orically, our returns of hardware have not significantly differed from our estimated reserve. Additionally, we provide warranties related to the intended functionality of the products and services provided and those warranties typically allow for the return of hardware up to one year past the date of sale. We determined that these warranties are not separate performance obligations as they cannot be purchased separately and do not provide a service in addition to an assurance the hardware will function as expected. 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. Our hardware and other revenue also 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. Our perpetual licenses and licenses to our indoor gunshot detection solution provide a right to use intellectual property that is functional in nature and has significant stand-alone functionality. Accordingly, for licenses of functional intellectual property, revenue is recognized at the point-in-time when control has been transferred to the customer, which occurs once the software has been made available to the customer. 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. Our service provider partners use services on our platforms, such as support tools and applications, to assist in the installation of our solutions in subscriber properties. This installation marks the beginning of the service period on our platforms and, on occasion, we earn activation revenue for fees charged for this service. The activation fee is non-refundable, separately negotiated and specified in our contractual arrangements with our service provider partners and is charged to the service provider partner for |
Contract Assets and Contract Liabilities | Contract Assets At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each distinct promise to transfer a good or service, or bundle of goods or services. To identify the performance obligations, we consider all of the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. We record a contract asset when we satisfy a performance obligation by transferring a promised good or service. Contract assets can be conditional or unconditional depending on whether another performance obligation must be satisfied before payment can be received. We receive payments from our service provider partners based on the billing schedule established in our contracts. All of the accounts receivable presented in the condensed consolidated balance sheets represent unconditional rights to consideration. We do not have any assets from contracts containing conditional rights and we do not have any assets from satisfied performance obligations that have not been invoiced. We recognize an asset related to the costs incurred to obtain a contract only if we expect to recover those costs and we would not have incurred those costs if the contract had not been obtained. We recognize an asset from the costs incurred to fulfill a contract if the costs (i) are specifically identifiable to a contract, (ii) enhance resources that will be used in satisfying performance obligations in future and (iii) are expected to be recovered. Our contract assets consist of capitalized commission costs and upfront payments made to a customer. Based on the policy above, we capitalize a portion of our commission costs as an incremental cost of obtaining a contract. When calculating the incremental cost of obtaining a contract, we exclude any commission costs related to metrics that could be satisfied without obtaining a contract, including training-related metrics. We amortize our commission costs over a period of three years, which is consistent with the period over which the products and services related to the commission are transferred to the customer. The three-year period was determined based on our review of historical enhancements and upgrades to our products and services. We applied the portfolio approach to account for the amortization of contract costs for those contracts that have similar characteristics. Upfront payments made to a customer are capitalized and amortized over the expected period of benefit and are recorded as a reduction to revenue. Contract Liabilities Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. All of the deferred revenue presented in the condensed consolidated balance sheets represents contract liabilities resulting from advance cash receipts from customers or amounts billed in advance to customers from the sale of services. Changes in deferred revenue are due to our performance under the contract as well as to cash received from new contracts for which services have not been provided. |
Allowance for Credit Losses - Accounts Receivable and Notes Receivable | Allowance for Credit Losses - Accounts Receivable The allowance for credit losses is a valuation account that is deducted from the accounts receivable and notes receivable amortized cost basis (see Note 8) to present the net amount expected to be collected. We estimate the allowance balance by applying the loss-rate method using relevant available information from internal and external sources, including historical write-off activity, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in economic conditions, such as changes in unemployment rates. We use projected economic conditions over a period no more than twelve months based on data from external sources. For periods beyond the twelve-month reasonable and supportable forecast period, we revert to historical loss information immediately. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, we considered various risk characteristics, including the financial asset type, size and the historical or expected credit loss pattern. We identified the following two portfolio segments for our accounts receivable: (i) outstanding accounts receivable balances within Alarm.com and certain subsidiaries and (ii) outstanding accounts receivable balances within all other subsidiaries. There were no changes to our portfolio segments for our accounts receivable during the three months ended March 31, 2022, and no changes to our policies or practices that influenced our estimate of expected credit losses for accounts receivable. Additionally, there were no significant changes in the amount of accounts receivable write-offs during the three months ended March 31, 2022, as compared to historical periods other than a partial write-off of $0.7 million related to one of our distribution partners' outstanding balance during the three months ended March 31, 2021, upon the distributor being acquired by a third party. Expected credit losses are estimated over the contractual term of the financial assets and we adjust the term for expected prepayments when appropriate. For the three months ended March 31, 2022, we recorded a reduction of credit loss expense for accounts receivable and notes receivable of $0.1 million, as compared to less than $0.1 million for the same period in the prior year, which were recorded in general and administrative expense, in our condensed consolidated statements of operations. The contractual term excludes expected extensions, renewals and modifications because extension and renewal options are unconditionally cancelable by us. Write-offs of the amortized cost basis are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense. We do not accrue interest on notes receivable that are considered impaired or are 90 days or greater past due based on their contractual payment terms. Notes receivable that are 90 days or greater past due are placed on nonaccrual status. Notes receivable may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a note receivable has been placed on nonaccrual status, interest will be recognized when cash is received. A note receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and collection of all remaining contractual amounts due is reasonably assured. We have elected not to measure an allowance for credit losses for accrued interest receivables . |
Income Taxes | We recognize a valuation allowance if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Due to the uncertainty of realization of certain deferred tax assets acquired in 2017 related to our Canadian net operating losses and research and development tax credits, we established a valuation allowance of $0.3 million during the second quarter of 2019, which remained at $0.3 million as of March 31, 2022 and December 31, 2021. During 2020, we established a valuation allowance of $1.3 million for state research and development tax credit carryforwards, which increased to $1.9 million as of December 31, 2021 and remained at $1.9 million as of March 31, 2022.We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Accounting Standards Update | The adoption resulted in the recording of the following increases / (decreases) on our condensed consolidated balance sheets (in thousands): Balance Sheet Caption As of January 1, 2022 Deferred tax assets $ 15,356 Additional paid-in capital (56,515) Convertible senior notes, net 61,899 Retained earnings 9,972 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Contract Liabilities | The changes in our contract assets are as follows (in thousands): Three Months Ended 2022 2021 Beginning of period balance $ 4,520 $ 4,306 Commission costs and upfront payments to a customer capitalized in period 806 1,106 Amortization of contract assets (846) (809) End of period balance $ 4,480 $ 4,603 The changes in our contract liabilities are as follows (in thousands): Three Months Ended 2022 2021 Beginning of period balance $ 14,837 $ 12,529 Revenue deferred in period 3,990 3,801 Revenue recognized from amounts included in contract liabilities (3,208) (2,674) End of period balance $ 15,619 $ 13,656 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Components of Accounts Receivable | The components of accounts receivable, net are as follows (in thousands): March 31, December 31, Accounts receivable $ 106,382 $ 108,897 Allowance for credit losses (2,153) (2,168) Allowance for product returns (1,162) (1,181) Accounts receivable, net $ 103,067 $ 105,548 |
Schedule of Changes in Allowance for Credit Losses for Accounts Receivable | The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended Three Months Ended Alarm.com All Other Alarm.com All Other Beginning of period balance $ (2,035) $ (133) $ (4,442) $ (254) (Provision for) / recovery of expected credit losses (155) 101 (36) 4 Write-offs 68 1 808 8 End of period balance $ (2,122) $ (31) $ (3,670) $ (242) The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended Three Months Ended Loan Hardware Loan Hardware Beginning of period balance $ (79) $ (1) $ (73) $ (16) Recovery of expected credit losses 78 — — 11 Write-offs — — — — End of period balance $ (1) $ (1) $ (73) $ (5) |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory are as follows (in thousands): March 31, December 31, Raw materials $ 17,412 $ 15,823 Finished goods 69,024 59,453 Total inventory $ 86,436 $ 75,276 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in goodwill by reportable segment are outlined below (in thousands): Alarm.com Other Total Balance as of January 1, 2022 $ 112,901 $ — $ 112,901 Goodwill acquired — — — Balance as of March 31, 2022 $ 112,901 $ — $ 112,901 |
Schedule of Intangible Assets | The following table reflects changes in the net carrying amount of the components of intangible assets (in thousands): Customer Developed Trade Name Total Balance as of January 1, 2022 $ 59,426 $ 30,157 $ 1,823 $ 91,406 Amortization (2,976) (1,446) (153) (4,575) Balance as of March 31, 2022 $ 56,450 $ 28,711 $ 1,670 $ 86,831 The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets (in thousands, except weighted-average remaining life): March 31, 2022 Gross Accumulated Net Weighted- Customer relationships $ 125,885 $ (69,435) $ 56,450 7.7 Developed technology 49,143 (20,432) 28,711 6.2 Trade name 3,787 (2,117) 1,670 2.9 Total intangible assets $ 178,815 $ (91,984) $ 86,831 7.1 December 31, 2021 Gross Impairment of Intangible Assets Accumulated Net Weighted- Customer relationships $ 126,093 $ (86) $ (66,581) $ 59,426 7.9 Developed technology 49,371 — (19,214) 30,157 6.5 Trade name 3,815 — (1,992) 1,823 3.1 Other 234 — (234) — 0.0 Total intangible assets $ 179,513 $ (86) $ (88,021) $ 91,406 7.4 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Changes in Allowance for Credit Losses for Accounts Receivable | The changes in our allowance for credit losses for accounts receivable are as follows (in thousands): Three Months Ended Three Months Ended Alarm.com All Other Alarm.com All Other Beginning of period balance $ (2,035) $ (133) $ (4,442) $ (254) (Provision for) / recovery of expected credit losses (155) 101 (36) 4 Write-offs 68 1 808 8 End of period balance $ (2,122) $ (31) $ (3,670) $ (242) The changes in our allowance for credit losses for notes receivable are as follows (in thousands): Three Months Ended Three Months Ended Loan Hardware Loan Hardware Beginning of period balance $ (79) $ (1) $ (73) $ (16) Recovery of expected credit losses 78 — — 11 Write-offs — — — — End of period balance $ (1) $ (1) $ (73) $ (5) |
Schedule of Financing Receivable Credit Quality Indicators | We manage our notes receivables using delinquency as a key credit quality indicator. The following tables reflect the current and delinquent notes receivable by class of financing receivables and by year of origination (in thousands): March 31, 2022 Loan Receivables: 2022 2021 2020 2019 2018 Prior Total Current $ — $ — $ 1,137 $ 5 $ — $ 4,704 $ 5,846 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ — $ 1,137 $ 5 $ — $ 4,704 $ 5,846 Hardware Financing Receivables: Current $ — $ — $ — $ — $ — $ — $ — 30-59 days past due — — — 2 — — 2 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ — $ — $ 2 $ — $ — $ 2 December 31, 2021 Loan Receivables: 2021 2020 2019 2018 2017 Prior Total Current $ — $ 1,151 $ 7 $ — $ 4,602 $ — $ 5,760 30-59 days past due — — — — — — — 60-89 days past due — — — — — — — 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ 1,151 $ 7 $ — $ 4,602 $ — $ 5,760 Hardware Financing Receivables: Current $ — $ — $ 4 $ — $ — $ — $ 4 30-59 days past due — — 6 — — — 6 60-89 days past due — — 11 — — — 11 90-119 days past due — — — — — — — 120+ days past due — — — — — — — Total $ — $ — $ 21 $ — $ — $ — $ 21 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present our assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurements on a Recurring Basis Assets: Level 1 Level 2 Level 3 Total Money market accounts as of March 31, 2022 $ 639,990 $ — $ — $ 639,990 Money market accounts as of December 31, 2021 679,278 — — 679,278 Liabilities: Subsidiary long-term incentive plan as of March 31, 2022 $ — $ — $ 3,104 $ 3,104 Subsidiary long-term incentive plan as of December 31, 2021 — — 3,351 3,351 |
Summary of Fair Value of Level 3 Liability | The following table summarizes the change in fair value of the Level 3 liabilities for the subsidiary long-term incentive plan with significant unobservable inputs (in thousands): Three Months Ended 2022 2021 Beginning of period balance $ 3,351 $ 1,000 Changes in fair value included in earnings (247) 195 End of period balance $ 3,104 $ 1,195 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Supplemental Information Related to Leases | Supplemental information related to leases is presented in the table below (in thousands, except weighted-average term and discount rate): Three Months Ended 2022 2021 Operating lease cost $ 2,473 $ 2,338 Cash paid for amounts included in the measurement of operating lease liabilities 2,975 2,772 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 1,782 224 March 31, December 31, Weighted-average remaining lease term — operating leases 4.1 years 4.2 years Weighted-average discount rate — operating leases 3.6 % 3.6 % |
Maturities of Lease Liabilities | Maturities of lease liabilities are as follows (in thousands): Year Ended December 31, Operating Leases (1) Remainder of 2022 $ 8,815 2023 11,662 2024 10,107 2025 8,771 2026 5,112 2027 and thereafter 1,017 Total lease payments 45,484 Less: imputed interest (2) 3,266 Present value of lease liabilities $ 42,218 _______________ (1) Operating lease payments exclude $0.5 million of legally binding minimum lease payments for leases executed but not yet commenced and includes $1.0 million for options to extend lease terms that were reasonably certain of being exercised. (2) Imputed interest was calculated using the incremental borrowing rate applicable for each lease. |
Liabilities (Tables)
Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities | The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): March 31, December 31, Accounts payable $ 47,700 $ 64,751 Accrued expenses 13,179 19,894 Income taxes payable 7,794 — Other current liabilities 4,942 5,171 Accounts payable, accrued expenses and other current liabilities $ 73,615 $ 89,816 The components of other liabilities are as follows (in thousands): March 31, December 31, Holdback liability from asset acquisition $ 850 $ 850 Subsidiary long-term incentive plan 3,104 3,351 Other liabilities 5,526 5,344 Other liabilities $ 9,480 $ 9,545 |
Debt, Commitments and Conting_2
Debt, Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Carrying Values of Debt | The net carrying amount of the liability component of the 2026 Notes is as follows (in thousands): March 31, December 31, Principal $ 500,000 $ 500,000 Unamortized debt discount — (63,520) Unamortized debt issuance costs (11,976) (11,135) Net carrying amount $ 488,024 $ 425,345 Interest expense related to the 2026 Notes is as follows (in thousands): Three Months Ended 2022 2021 Amortization of debt discount $ — $ 2,812 Amortization of debt issuance costs 780 432 Total interest expense $ 780 $ 3,244 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense is included in the following line items in the condensed consolidated statements of operations (in thousands): Three Months Ended 2022 2021 Sales and marketing $ 1,058 $ 808 General and administrative 3,235 2,080 Research and development 7,817 5,000 Total stock-based compensation expense $ 12,110 $ 7,888 The following table summarizes the components of non-cash stock-based compensation expense (in thousands): Three Months Ended 2022 2021 Stock options and assumed options $ 778 $ 617 Restricted stock units 11,284 7,224 Employee stock purchase plan 48 47 Total stock-based compensation expense $ 12,110 $ 7,888 Tax windfall benefit from stock-based awards $ 529 $ 2,560 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted EPS | The components of basic and diluted earnings per share are as follows (in thousands, except share and per share amounts): Three Months Ended Numerator: 2022 2021 Net income $ 8,903 $ 14,550 Net loss attributable to redeemable noncontrolling interest 176 280 Net income attributable to common stockholders - basic (A) 9,079 14,830 Add back interest expense, net of tax, attributable to convertible senior notes 586 — Net income attributable to common stockholders - diluted (B) $ 9,665 $ 14,830 Denominator: Weighted average common shares outstanding — basic (C) 50,206,179 49,561,887 Dilutive effect of convertible senior notes, stock options and restricted stock units 4,964,602 2,177,574 Weighted average common shares outstanding — diluted (D) 55,170,781 51,739,461 Net income per share: Basic (A/C) $ 0.18 $ 0.30 Diluted (B/D) $ 0.18 $ 0.29 |
Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect | The following securities have been excluded from the calculation of diluted weighted average common shares outstanding as the inclusion of these securities would have an anti-dilutive effect: Three Months Ended 2022 2021 Stock options 172,500 — Restricted stock units 320,352 125,191 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Operational Data | The reportable segment operational data is presented in the tables below (in thousands): Three Months Ended March 31, 2022 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 115,348 $ 7,877 $ — $ — $ 123,225 Hardware and other revenue 81,221 2,304 (899) (414) 82,212 Total revenue 196,569 10,181 (899) (414) 205,437 Operating income / (loss) 12,754 (4,004) 185 (22) 8,913 Three Months Ended March 31, 2021 Alarm.com Other Intersegment Alarm.com Intersegment Other Total SaaS and license revenue $ 101,263 $ 6,120 $ — $ — $ 107,383 Hardware and other revenue 64,269 2,017 (905) (266) 65,115 Total revenue 165,532 8,137 (905) (266) 172,498 Operating income / (loss) 17,707 (2,853) 153 (4) 15,003 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Assets as of March 31, 2022 $ 1,265,081 $ 35,395 $ (75,719) $ 33 $ 1,224,790 Assets as of December 31, 2021 1,264,416 37,198 (69,595) (4) 1,232,015 |
Organization (Details)
Organization (Details) | Mar. 31, 2022service_provider |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of trusted service providers (more than) | 10,900 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restricted cash | $ 500,000 | $ 0 | |
Net income attributable to common stockholders | $ 9,079,000 | $ 14,830,000 | |
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | Accounting Standards Update 2020-06 [Member] | |
Dilutive effect of convertible senior notes, stock options and restricted stock units (in shares) | 4,964,602 | 2,177,574 | |
Basic earnings per share (in dollars per share) | $ 0.18 | $ 0.30 | |
Diluted earnings per share (in dollars per share) | $ 0.18 | $ 0.29 | |
Convertible Senior Notes due 2026 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Dilutive effect of convertible senior notes, stock options and restricted stock units (in shares) | 3,396,950 | ||
Impact of adoption | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net income attributable to common stockholders | $ 2,000,000 | ||
Basic earnings per share (in dollars per share) | $ 0.04 | ||
Diluted earnings per share (in dollars per share) | $ 0.04 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Accounting Standards Update (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional paid-in capital | $ 453,084 | $ 498,979 | |
Convertible senior notes, net | 488,024 | 425,345 | |
Retained earnings | $ 137,884 | $ 118,833 | |
Impact of adoption | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax assets | $ 15,356 | ||
Additional paid-in capital | (56,515) | ||
Convertible senior notes, net | 61,899 | ||
Retained earnings | $ 9,972 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2022USD ($)numberOfSources | Mar. 31, 2021USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | ||||||
Sources of revenue | numberOfSources | 3 | |||||
Return period | 1 year | |||||
Deferred revenue | $ 15,619,000 | $ 13,656,000 | $ 15,619,000 | $ 13,656,000 | $ 14,837,000 | $ 12,529,000 |
Amortization period | 3 years | 3 years | ||||
Contract asset, impairment loss | $ 0 | $ 0 | ||||
Hardware and other | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Reserve for hardware returns | 1.00% | 1.00% | ||||
Activation Fees | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Deferred revenue | $ 5,800,000 | $ 5,800,000 | $ 6,000,000 | |||
Activation Fees | Maximum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Deferred revenue recognition period | 10 years | |||||
Activation Fees | Minimum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Deferred revenue recognition period | 12 months |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | 3 Months Ended |
Mar. 31, 2022 | |
Hardware and other | |
Disaggregation of Revenue [Line Items] | |
Term of contract | 1 year |
Renewal term | 1 year |
SaaS and license | Minimum | |
Disaggregation of Revenue [Line Items] | |
Term of contract | 3 years |
SaaS and license | Maximum | |
Disaggregation of Revenue [Line Items] | |
Term of contract | 5 years |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Change in Contract Asset Balance | ||
Beginning of period balance | $ 4,520 | $ 4,306 |
Commission costs and upfront payments to a customer capitalized in period | 806 | 1,106 |
Amortization of contract assets | (846) | (809) |
End of period balance | 4,480 | 4,603 |
Change In Contract With Customer, Liability [Roll Forward] | ||
Beginning of period balance | 14,837 | 12,529 |
Revenue deferred in period | 3,990 | 3,801 |
Revenue recognized from amounts included in contract liabilities | (3,208) | (2,674) |
End of period balance | $ 15,619 | $ 13,656 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable | $ 106,382 | $ 108,897 |
Allowance for credit losses | (2,153) | (2,168) |
Allowance for product returns | (1,162) | (1,181) |
Accounts receivable, net | $ 103,067 | $ 105,548 |
Accounts Receivable, Net - Narr
Accounts Receivable, Net - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Provision for expected credit losses | $ 54,000 | $ 32,000 |
Reserve for product returns | 798,000 | 574,000 |
Credit loss expense (reversal) for accounts and notes receivable | (100,000) | (100,000) |
Less than | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Provision for expected credit losses | 100,000 | |
Distribution Partner Acquired By Third Party | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Write-offs | 0 | 700,000 |
Hardware and other revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reserve for product returns | $ 800,000 | $ 600,000 |
Accounts Receivable, Net - Sc_2
Accounts Receivable, Net - Schedule of Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning of period balance | $ (2,168) | |
(Provision for) / recovery of expected credit losses | (54) | $ (32) |
End of period balance | (2,153) | |
Alarm.com and Certain Subsidiaries | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning of period balance | (2,035) | (4,442) |
(Provision for) / recovery of expected credit losses | (155) | (36) |
Write-offs | 68 | 808 |
End of period balance | (2,122) | (3,670) |
All Other Subsidiaries | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning of period balance | (133) | (254) |
(Provision for) / recovery of expected credit losses | 101 | 4 |
Write-offs | 1 | 8 |
End of period balance | $ (31) | $ (242) |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 17,412 | $ 15,823 |
Finished goods | 69,024 | 59,453 |
Total inventory | $ 86,436 | $ 75,276 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - Developed Technology - USD ($) $ in Millions | 1 Months Ended | 18 Months Ended |
Dec. 31, 2021 | Jun. 16, 2023 | |
Business Acquisition [Line Items] | ||
Payments to acquire developed technology | $ 4.2 | |
Expected payment period | 18 months | |
Transaction costs | $ 0.2 | |
Asset acquisition consideration | $ 5.3 | |
Weighted-average estimated useful life of intangible assets acquired | 7 years | |
Forecast | ||
Business Acquisition [Line Items] | ||
Payments to acquire developed technology | $ 0.9 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 112,901 |
Goodwill acquired | 0 |
Ending balance | 112,901 |
Alarm.com | |
Goodwill [Roll Forward] | |
Beginning balance | 112,901 |
Goodwill acquired | 0 |
Ending balance | 112,901 |
Other | |
Goodwill [Roll Forward] | |
Beginning balance | 0 |
Goodwill acquired | 0 |
Ending balance | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill impairment | $ 0 | $ 0 |
Amortization | 4,575,000 | 4,300,000 |
Impairment of long-lived assets | 0 | $ 0 |
Alarm.com | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets written off | $ 700,000 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Schedule of Net Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | $ 91,406 | |
Amortization | (4,575) | $ (4,300) |
Ending balance | 86,831 | |
Customer Relationships | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | 59,426 | |
Amortization | (2,976) | |
Ending balance | 56,450 | |
Developed Technology | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | 30,157 | |
Amortization | (1,446) | |
Ending balance | 28,711 | |
Trade Name | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | 1,823 | |
Amortization | (153) | |
Ending balance | $ 1,670 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Weighted Average Remaining Life and Carrying Value of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 178,815 | $ 179,513 |
Impairment of Intangible Assets | (86) | |
Accumulated Amortization | (91,984) | (88,021) |
Net Carrying Value | $ 86,831 | $ 91,406 |
Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 7 years 1 month 6 days | 7 years 4 months 24 days |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 125,885 | $ 126,093 |
Impairment of Intangible Assets | (86) | |
Accumulated Amortization | (69,435) | (66,581) |
Net Carrying Value | $ 56,450 | $ 59,426 |
Customer Relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 7 years 8 months 12 days | 7 years 10 months 24 days |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 49,143 | $ 49,371 |
Impairment of Intangible Assets | 0 | |
Accumulated Amortization | (20,432) | (19,214) |
Net Carrying Value | $ 28,711 | $ 30,157 |
Developed Technology | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 6 years 2 months 12 days | 6 years 6 months |
Trade Name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,787 | $ 3,815 |
Impairment of Intangible Assets | 0 | |
Accumulated Amortization | (2,117) | (1,992) |
Net Carrying Value | $ 1,670 | $ 1,823 |
Trade Name | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 2 years 10 months 24 days | 3 years 1 month 6 days |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 234 | |
Impairment of Intangible Assets | 0 | |
Accumulated Amortization | (234) | |
Net Carrying Value | $ 0 | |
Other | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 0 years |
Other Assets - Patent Licenses
Other Assets - Patent Licenses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | $ 86,831 | $ 91,406 | |
Finite-lived intangible assets, gross | 178,815 | 179,513 | |
Amortization on patents and tooling | 353 | $ 288 | |
Patent Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | 2,000 | 2,200 | |
Finite-lived intangible assets, gross | 7,000 | ||
Patent Licenses | Cost of SaaS and License Revenue | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization on patents and tooling | 100 | 100 | |
Patent Licenses | Amortization and depreciation expense | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization on patents and tooling | $ 100 | $ 100 | |
Patent Licenses | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 3 years | ||
Patent Licenses | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 18 years | ||
Other Current Assets | Patent Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | $ 500 | 600 | |
Other Assets | Patent Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived, intangible assets, net | $ 1,500 | $ 1,600 |
Other Assets - Loan to a Distri
Other Assets - Loan to a Distribution Partner (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jun. 30, 2020 | Jun. 09, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Revenue from distribution partners | $ 205,437,000 | $ 172,498,000 | |||
Distribution Partner Two | Term Loan | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivable, noncurrent | $ 3,000,000 | ||||
Annual principal repayment on loan | $ 2,000,000 | ||||
Distribution Partner Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivable, noncurrent | $ 3,000,000 | ||||
Loan receivable, current | $ 1,000,000 | ||||
Debt instrument, interest rate | 9.00% | ||||
Distribution Partners Two and Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Revenue from distribution partners | $ 600,000 | $ 700,000 | |||
Other Current Assets | Distribution Partner Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivable, current | 0 | $ 0 | |||
Other Assets | Distribution Partner Three | Loan Receivables | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivable, noncurrent | $ 4,700,000 | $ 4,600,000 |
Other Assets - Loan to a Servic
Other Assets - Loan to a Service Provider Partner (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jul. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total revenue | $ 205,437 | $ 172,498 | ||
Service Provider | Loan Receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable, maximum available | $ 2,500 | |||
Debt instrument, interest rate | 9.00% | |||
Loan balance | 1,100 | $ 1,200 | ||
Total revenue | $ 100 | $ 100 |
Other Assets - Investment in a
Other Assets - Investment in a Hardware Supplier (Details) - Hardware Supplier - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Conversion of outstanding notes receivable | $ 5.6 | $ 5.6 | $ 5.6 |
Conversion of outstanding notes receivable (in shares) | 9,520,832 |
Other Assets - Investment in _2
Other Assets - Investment in a Technology Partner (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 28, 2021 | Apr. 30, 2018 | Dec. 31, 2016 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Cash purchase of shares | $ 0 | $ 5,000 | |||||
Series A-1 Preferred Stock | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Shares issued during period, conversion (in shares) | 135,135 | ||||||
Technology Partner | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Cash purchase of shares | $ 5,000 | $ 300 | |||||
Converted debt amount | $ 300 | ||||||
Investment | $ 5,700 | $ 5,700 | |||||
Technology Partner | Series A-1 Preferred Stock | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Gain on sale | $ 700 | ||||||
Technology Partner | Series B-2 Preferred Stock | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Shares purchased (in shares) | 1,000,000 |
Other Assets - Allowance For Cr
Other Assets - Allowance For Credit Losses Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)portfolioSegment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Financing Receivable, Nonaccrual [Line Items] | |||
Number of portfolio segments | portfolioSegment | 2 | ||
Interest income recognized for notes receivables in nonaccrual status | $ 0 | $ 0 | |
Prepaid expense | 20,700,000 | $ 17,700,000 | |
Other Current Assets | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Interest receivable less than | 100,000 | 100,000 | |
Notes Receivable | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Amortized cost of nonaccrual notes receivable | 0 | 0 | |
Nonaccrual notes receivable without related allowance for credit loss | 0 | 0 | |
Notes receivable 90 days or more past due still accruing | $ 0 | $ 0 |
Other Assets - Schedule of Note
Other Assets - Schedule of Notes Receivable Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Recovery of expected credit losses | $ 78 | $ 11 |
Loan Receivables | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning of period balance | (79) | (73) |
Recovery of expected credit losses | 78 | 0 |
Write-offs | 0 | 0 |
End of period balance | (1) | (73) |
Hardware Financing Receivables | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning of period balance | (1) | (16) |
Recovery of expected credit losses | 0 | 11 |
Write-offs | 0 | 0 |
End of period balance | $ (1) | $ (5) |
Other Assets - Credit Quality I
Other Assets - Credit Quality Indicators (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Loan Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | $ 0 | $ 0 |
Originated one year before fiscal year | 0 | 1,151 |
Originated two years before fiscal year | 1,137 | 7 |
Originated three years before fiscal year | 5 | 0 |
Originated four years before fiscal year | 0 | 4,602 |
Prior | 4,704 | 0 |
Total | 5,846 | 5,760 |
Hardware Financing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 21 |
Originated three years before fiscal year | 2 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 2 | 21 |
Current | Loan Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 1,151 |
Originated two years before fiscal year | 1,137 | 7 |
Originated three years before fiscal year | 5 | 0 |
Originated four years before fiscal year | 0 | 4,602 |
Prior | 4,704 | 0 |
Total | 5,846 | 5,760 |
Current | Hardware Financing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 4 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 4 |
30-59 days past due | Loan Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
30-59 days past due | Hardware Financing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 6 |
Originated three years before fiscal year | 2 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 2 | 6 |
60-89 days past due | Loan Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
60-89 days past due | Hardware Financing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 11 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 11 |
90-119 days past due | Loan Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
90-119 days past due | Hardware Financing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
120+ days past due | Loan Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | 0 | 0 |
120+ days past due | Hardware Financing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Originated current fiscal year | 0 | 0 |
Originated one year before fiscal year | 0 | 0 |
Originated two years before fiscal year | 0 | 0 |
Originated three years before fiscal year | 0 | 0 |
Originated four years before fiscal year | 0 | 0 |
Prior | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | $ 639,990 | $ 679,278 |
Subsidiary long-term incentive plan | 3,104 | 3,351 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 639,990 | 679,278 |
Subsidiary long-term incentive plan | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 0 | 0 |
Subsidiary long-term incentive plan | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market accounts | 0 | 0 |
Subsidiary long-term incentive plan | $ 3,104 | $ 3,351 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Level 3 Subsidiary Unit Awards and Contingent Consideration (Details) - Contingent Consideration Liability From Acquisitions - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period balance | $ 3,351 | $ 1,000 |
Changes in fair value included in earnings | (247) | 195 |
End of period balance | $ 3,104 | $ 1,195 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | $ 671,753,000 | $ 642,172,000 | $ 710,621,000 |
Other assets | 26,822,000 | 24,349,000 | |
Other-than-temporary impairments | 0 | $ 0 | |
Money Market Accounts | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 639,500,000 | $ 679,300,000 | |
Other assets | $ 500,000 | ||
Revenue Volatility | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Liabilities measurement input | 0.075 | ||
Revenue Risk Adjustment | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Liabilities measurement input | 0.026 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Available leasehold tenant improvement allowance | $ 12,100,000 | |
Finance leases | 0 | $ 0 |
Subleases | $ 0 | $ 0 |
Five Year Renewal Option | ||
Lessee, Lease, Description [Line Items] | ||
Lease renewal term | 5 years |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 2,473 | $ 2,338 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 2,975 | 2,772 | |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,782 | $ 224 | |
Weighted-average remaining lease term — operating leases | 4 years 1 month 6 days | 4 years 2 months 12 days | |
Weighted-average discount rate — operating leases | 3.60% | 3.60% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Maturities of Lease Liabilities Under Topic 842 | |
Remainder of 2022 | $ 8,815 |
2023 | 11,662 |
2024 | 10,107 |
2025 | 8,771 |
2026 | 5,112 |
2027 and thereafter | 1,017 |
Total lease payments | 45,484 |
Less: imputed interest | 3,266 |
Present value of lease liabilities | 42,218 |
Legally binding minimum lease payments on leases not yet commenced | 500 |
Amount for options to extend lease | $ 1,000 |
Liabilities - Components of Acc
Liabilities - Components of Accounts Payable, Accrued Expenses, and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 47,700 | $ 64,751 |
Accrued expenses | 13,179 | 19,894 |
Income taxes payable | 7,794 | 0 |
Other current liabilities | 4,942 | 5,171 |
Accounts payable, accrued expenses and other current liabilities | $ 73,615 | $ 89,816 |
Liabilities - Other Liabilities
Liabilities - Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Holdback liability from asset acquisition | $ 850 | $ 850 |
Subsidiary long-term incentive plan | 3,104 | 3,351 |
Other liabilities | 5,526 | 5,344 |
Other liabilities | $ 9,480 | $ 9,545 |
Debt, Commitments and Conting_3
Debt, Commitments and Contingencies - Convertible Senior Notes (Details) | Jan. 20, 2021USD ($)day$ / shares | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021USD ($) | Jan. 01, 2022 | Dec. 31, 2021USD ($) | Oct. 06, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Proceeds from convertible debt | $ 0 | $ 500,000,000 | ||||
Share price (in dollars per share) | $ / shares | $ 66.46 | |||||
Convertible Senior Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from convertible debt | $ 484,300,000 | |||||
Debt issuance costs | $ 15,700,000 | |||||
Debt instrument, redemption price, percentage | 100.00% | |||||
Conversion ratio | 6.7939 | |||||
Conversion price (in dollars per share) | $ / shares | $ 147.19 | |||||
Debt discount for conversion option | $ 77,200,000 | |||||
Debt issuance costs | 2,400,000 | |||||
Net carrying value | 74,800,000 | |||||
Debt discount and debt issuance cost deferred tax liability | $ 18,300,000 | |||||
Convertible Senior Notes due 2026 | Redemption period one | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 100.00% | |||||
Threshold percentage stock price trigger | 130.00% | |||||
Trading days threshold | day | 20 | |||||
Consecutive trading days threshold | day | 30 | |||||
Convertible Senior Notes due 2026 | Redemption period two | ||||||
Debt Instrument [Line Items] | ||||||
Threshold percentage stock price trigger | 130.00% | |||||
Trading days threshold | day | 20 | |||||
Consecutive trading days threshold | day | 30 | |||||
Number of business days | day | 5 | |||||
Number of consecutive trading days | day | 10 | |||||
Percentage of last reported sale price threshold | 98.00% | |||||
Senior Notes | Convertible Senior Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 500,000,000 | |||||
Debt instrument, interest rate | 0.00% | |||||
Effective interest rate | 4.00% | 0.60% | ||||
Debt instrument, fair value | $ 427,700,000 | 452,500,000 | ||||
Revolving Credit Facility | Line of Credit | 2017 Facility | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 110,000,000 | $ 0 | $ 0 | $ 72,000,000 |
Debt, Commitments and Conting_4
Debt, Commitments and Contingencies - Carrying Amount of Liability Component (Details) - Convertible Senior Notes due 2026 - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Principal | $ 500,000 | $ 500,000 |
Unamortized debt discount | 0 | (63,520) |
Unamortized debt issuance costs | (11,976) | (11,135) |
Net carrying amount | $ 488,024 | $ 425,345 |
Debt, Commitments and Conting_5
Debt, Commitments and Contingencies - Summary of Interest Expense (Details) - Convertible Senior Notes due 2026 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Amortization of debt discount | $ 0 | $ 2,812 |
Amortization of debt issuance costs | 780 | 432 |
Total interest expense | $ 780 | $ 3,244 |
Debt, Commitments and Conting_6
Debt, Commitments and Contingencies - 2017 Facility (Details) - USD ($) | Jan. 20, 2021 | Mar. 25, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Oct. 06, 2017 |
Debt Instrument [Line Items] | ||||||
Repayments of lines of credit | $ 0 | $ 110,000,000 | ||||
Loss on early extinguishment of debt | 0 | 185,000 | ||||
Revolving Credit Facility | 2017 Facility | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from credit facility | $ 50,000,000 | |||||
Repayments of lines of credit | $ 110,000,000 | |||||
Loss on early extinguishment of debt | $ 200,000 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Current borrowing capacity | $ 125,000,000 | |||||
Long-term debt | $ 110,000,000 | $ 0 | $ 0 | 72,000,000 | ||
Maximum borrowing capacity | $ 175,000,000 | |||||
Unused line commitment fee (percentage) | 0.20% | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | Federal Funds Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (percent) | 0.50% | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (percent) | 1.00% | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Scenario One, Leverage Ratio | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate terms, leverage ratio | 1 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Scenario Two, Leverage Ratio | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate terms, leverage ratio | 1 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Scenario Two, Leverage Ratio | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate terms, leverage ratio | 2 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Scenario Three, Leverage Ratio | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate terms, leverage ratio | 2 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Scenario Three, Leverage Ratio | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate terms, leverage ratio | 3 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Scenario Four, Leverage Ratio | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate terms, leverage ratio | 3 | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Less than 1.00 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (percent) | 1.50% | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Greater than or equal to 1.00 but less than 2.00 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (percent) | 1.75% | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Greater Than Or Equal To 2.00 But Less Than 3.00 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (percent) | 2.00% | |||||
Revolving Credit Facility | 2017 Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | Greater Than Or Equal To 3.00 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (percent) | 2.50% |
Debt, Commitments and Conting_7
Debt, Commitments and Contingencies - Legal Proceedings (Details) - Pending Litigation - numberOfPatents | Mar. 22, 2022 | Jan. 10, 2022 | Jul. 28, 2021 | Jul. 22, 2021 | Feb. 25, 2021 | Jun. 02, 2015 | Oct. 31, 2019 | Mar. 31, 2022 | Dec. 31, 2019 |
Vivint, Inc. vs. Alarm.com Holdings, Inc | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents allegedly infringed upon by the company | 6 | ||||||||
Number of patents found to be unpatentable | 5 | ||||||||
Number of patents allegedly infringed by elements in solution | 1 | ||||||||
EcoFactor, Inc. vs. Alarm.com Holdings, Inc. | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents allegedly infringed upon by the company | 5 | 2 | |||||||
Number of patents under ex parte reexamination | 2 | ||||||||
Number of patents under reexamination | 3 | ||||||||
Causam Enterprises, Inc vs Alarm.com Holdings, Inc | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents allegedly infringed upon by the company | 4 | ||||||||
Causam Enterprises, Inc vs Alarm.com Holdings, Inc and EnergyHub, Inc | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents allegedly infringed upon by the company | 4 | ||||||||
Vivint, Inc vs ADT LLC | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents allegedly infringed upon by the company | 5 | ||||||||
Patents under inter partes review | 2 | ||||||||
Patents pending a decision after review | 3 | ||||||||
Vivint, Inc vs ADT LLC | Minimum | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents allegedly infringed upon by the company | 1 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Dec. 03, 2020 | Mar. 31, 2022 | Mar. 31, 2021 |
Equity [Abstract] | |||
Authorized repurchase amount | $ 100,000,000 | ||
Stock repurchase program, period | 3 years | ||
Purchases of treasury stock (in shares) | 354,123 | 0 | |
Purchases of treasury stock | $ 23,331,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 12,110 | $ 7,888 |
Tax windfall benefit from stock-based awards | 529 | 2,560 |
Stock options and assumed options | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 778 | 617 |
Restricted stock units | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 11,284 | 7,224 |
Employee stock purchase plan | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 48 | 47 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 1,058 | 808 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 3,235 | 2,080 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 7,817 | $ 5,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock options and assumed options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options exercised (in shares) | 14,020 | 73,175 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted (in shares) | 156,543 | 127,216 |
Restricted stock units vested (in shares) | 57,497 | 69,370 |
Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted (in shares) | 71,934 | 0 |
Restricted stock units vested (in shares) | 0 | 20,000 |
2015 Equity Incentive Plan | Stock options and assumed options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted (in shares) | 0 | 0 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income | $ 8,903 | $ 14,550 |
Net loss attributable to redeemable noncontrolling interest | 176 | 280 |
Net income attributable to common stockholders | 9,079 | 14,830 |
Add back interest expense, net of tax, attributable to convertible senior notes | 586 | 0 |
Net income attributable to common stockholders - diluted | $ 9,665 | $ 14,830 |
Weighted average common shares outstanding - basic (in shares) | 50,206,179 | 49,561,887 |
Dilutive effect of convertible senior notes, stock options and restricted stock units (in shares) | 4,964,602 | 2,177,574 |
Weighted average common shares outstanding - diluted (in shares) | 55,170,781 | 51,739,461 |
Weighted average common shares outstanding — diluted | ||
Basic (in dollars per share) | $ 0.18 | $ 0.30 |
Diluted (in dollars per share) | $ 0.18 | $ 0.29 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jan. 20, 2021 | Oct. 21, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | Accounting Standards Update 2020-06 [Member] | |||
Dilutive effect of convertible senior notes (in shares) | 4,964,602 | 2,177,574 | |||
Debt issuance cost amortization included | $ 586,000 | $ 0 | |||
Convertible Senior Notes due 2026 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Conversion price (in dollars per share) | $ 147.19 | ||||
Dilutive effect | $ 0 | ||||
Dilutive effect of convertible senior notes (in shares) | 3,396,950 | ||||
Stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 172,500 | 0 | |||
Restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 320,352 | 125,191 | |||
OpenEye | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Percentage of business acquired | 85.00% |
Significant Service Providers (
Significant Service Providers (Details) - Service Provider Concentration Risk - Revenue | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Ten Largest Service Providers | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 50.00% | 50.00% |
Minimum | Service Provider A | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 15.00% | 15.00% |
Maximum | Service Provider A | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 20.00% | 20.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||||
Benefit from income taxes | $ 618 | $ 2,913 | |||
Effective income tax rate (percent) | (7.50%) | (25.00%) | |||
Accrued interest and penalties related to unrecognized tax benefits | $ 200 | $ 200 | |||
Existing Net Operating Loss, Canadian Subsidiary | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits | $ 300 | ||||
Valuation allowance | 300 | 300 | |||
State Research Tax Credit Carryforward | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits | $ 1,300 | ||||
Valuation allowance | 1,900 | $ 1,900 | |||
Research Tax Credit Carryforward | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized tax benefits | $ 600 | $ 500 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Total revenue | $ 205,437,000 | $ 172,498,000 | |
Operating income / (loss) | 8,913,000 | 15,003,000 | |
Total Assets | 1,224,790,000 | $ 1,232,015,000 | |
Amortization and depreciation | 7,761,000 | 7,385,000 | |
Additions to property and equipment | 2,171,000 | 4,069,000 | |
Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Amortization and depreciation | 7,500,000 | 7,300,000 | |
Additions to property and equipment | 1,600,000 | 3,500,000 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Amortization and depreciation | 300,000 | 100,000 | |
Additions to property and equipment | 100,000 | 100,000 | |
Operating Segments | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 196,569,000 | 165,532,000 | |
Operating income / (loss) | 12,754,000 | 17,707,000 | |
Total Assets | 1,265,081,000 | 1,264,416,000 | |
Operating Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 10,181,000 | 8,137,000 | |
Operating income / (loss) | (4,004,000) | (2,853,000) | |
Total Assets | 35,395,000 | 37,198,000 | |
Intersegment Eliminations | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | (899,000) | (905,000) | |
Operating income / (loss) | 185,000 | 153,000 | |
Total Assets | (75,719,000) | (69,595,000) | |
Intersegment Eliminations | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | (414,000) | (266,000) | |
Operating income / (loss) | (22,000) | $ (4,000) | |
Total Assets | $ 33,000 | $ (4,000) | |
Segment Concentration Risk | Revenue | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 95.00% | 95.00% | |
SaaS and license revenue | |||
Segment Reporting Information [Line Items] | |||
Total revenue | $ 123,225,000 | $ 107,383,000 | |
SaaS and license revenue | Operating Segments | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 115,348,000 | 101,263,000 | |
SaaS and license revenue | Operating Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 7,877,000 | 6,120,000 | |
SaaS and license revenue | Intersegment Eliminations | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 0 | 0 | |
SaaS and license revenue | Intersegment Eliminations | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 0 | 0 | |
Hardware and other revenue | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 82,212,000 | 65,115,000 | |
Hardware and other revenue | Operating Segments | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 81,221,000 | 64,269,000 | |
Hardware and other revenue | Operating Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 2,304,000 | 2,017,000 | |
Hardware and other revenue | Intersegment Eliminations | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | (899,000) | (905,000) | |
Hardware and other revenue | Intersegment Eliminations | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | (414,000) | (266,000) | |
Software license revenue | Alarm.com | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 7,100,000 | 8,700,000 | |
Software license revenue | Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - Installation Partner - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Ownership percentage in equity method investment | 48.20% | ||
Equity investment in installation partner | $ 0 | $ 0 | |
Equity Method Investee | |||
Related Party Transaction [Line Items] | |||
Accounts payable to related party (less than) | 0 | $ 100,000 | |
Equity Method Investee | Cost of Hardware and Other Revenue | |||
Related Party Transaction [Line Items] | |||
Expenses incurred from related party | $ 100,000 | $ 100,000 |