Arlo Technologies (ARLO) Company Report

Arlo Technologies has transformed into a services-first company since its spin-off in 2018, now boasting over 5 million paid subscribers globally and annual recurring revenue exceeding $320 million. This strategic shift has led to an increase in blended gross margin from negative 20% to over 40% and made the company GAAP EPS positive.
The company recently completed its largest product refresh, launching 109 SKUs and shipping 800,000 units, which also resulted in a 20%-30% reduction in COGS for the new product line.
Arlo aims to grow its paid accounts from 5 million to 10 million, with 60% of this incremental growth expected from strategic partnerships. A significant partnership with ADT in the United States is anticipated to launch mid-next year, and Arlo expects to announce one or two more strategic accounts in the coming quarters.
The long-range plan targets $700 million in ARR. Despite the current average ARPU of $15.20, the company sees substantial future pricing power and growth opportunities, particularly as the security category is considered less discretionary by consumers.

Dec 9, 2025, 3:00 PM

Transcript

Arlo Technologies Discusses Services-First Transformation, Financial Improvements, and Growth Strategy

ARLO

Revenue Acceleration/Inflection

Product Launch

New Projects/Investments

Arlo Technologies has transformed into a services-first company since its 2018 spin-off, now boasting over five million paid subscribers and over $320 million in annual recurring revenue (ARR), with 60% of its revenues from paid accounts.
This strategic shift has significantly improved financial metrics, driving blended gross margin from negative 20% to over 40%, achieving positive operating income, and becoming GAAP EPS positive. Service gross margin now exceeds 90%.
The company recently completed its largest product refresh, launching 109 SKUs with 20%-30% lower COGS and shipping 800,000 units, while maintaining a low churn rate of 1%.
Arlo is expanding its market reach through mass market adoption, including a growing presence in Walmart, and is strategically positioned in the competitive landscape, expecting potential market share gains from federal actions against competitors.
Partnerships are a key growth driver, with 60% of the target 10 million subscribers expected to come from partners like Verisure and the newly announced ADT in the US, contributing to a long-range plan of $700 million in ARR and targeting 15%-25% service growth.

Dec 9, 2025, 3:00 PM

Transcript

Arlo Technologies Details Services-First Transformation and Growth Strategy

ARLO

Product Launch

Revenue Acceleration/Inflection

New Projects/Investments

Arlo Technologies has successfully transitioned to a services-first model, now boasting over 5 million paid subscribers and annual recurring revenue exceeding $320 million with 90+% service margins. This shift has driven a significant improvement in financial performance, including a blended gross margin increase from -20% to +40%, positive operating income, and GAAP EPS positive results.
The company recently executed its largest product refresh, launching 109 SKUs and shipping 800,000 units, which also achieved a 20%-30% reduction in COGS for the new product lines.
Arlo targets reaching 10 million subscribers and $700 million in annual recurring revenue (ARR), with 60% of this incremental subscriber growth anticipated from strategic partnerships such as Verisure and the upcoming ADT launch.
Consumer demand for security products remains strong, evidenced by a resilient market and the company's lowest churn rate in 3-4 years at 1%.

Dec 9, 2025, 3:00 PM

Transcript

Arlo Technologies Reports Record Q3 2025 Results and Provides Q4 Guidance

ARLO

Earnings

Guidance Update

Product Launch

Arlo Technologies reported a record-breaking Q3 2025, adding 281,000 paid accounts to reach 5.4 million total, with Annual Recurring Revenue (ARR) growing 34% year-over-year to $323 million.
Subscriptions and services revenue increased 29% year-over-year to $79.9 million, comprising 57% of total revenue, and service gross margin expanded 770 basis points to over 85%.
The company's largest product launch contributed to nearly 30% year-over-year unit sales growth in Q3 and a 20%-35% reduction in Bill of Materials (BOM) costs.
Adjusted EBITDA grew 50% year-over-year to $17 million, and GAAP earnings per share reached a record $0.07.
For Q4 2025, Arlo anticipates consolidated revenue between $131 million and $141 million, and non-GAAP net income per diluted share in the range of $0.13 to $0.19.

Nov 6, 2025, 10:00 PM

Transcript

Arlo Technologies Reports Strong Q3 2025 Results with Record Service Growth and Increased Profitability

ARLO

Earnings

Guidance Update

Product Launch

Arlo Technologies reported Q3 2025 total revenue of $139.5 million and GAAP earnings per share of $0.07.
The services business demonstrated significant growth, adding 281,000 paid accounts to reach 5.4 million and increasing Annual Recurring Revenue (ARR) to $323 million, up 34% year over year.
Profitability saw substantial improvement, with Adjusted EBITDA rising 50% year over year to $17.1 million and non-GAAP subscriptions and services gross margin reaching a record 85%.
The company executed its largest product launch, introducing new products with a 20-35% reduction in BOM costs and contributing to nearly 30% year-over-year unit sales growth in Q3.
For Q4 2025, Arlo anticipates consolidated revenue between $131 million and $141 million and non-GAAP net income per diluted share between $0.13 and $0.19.

Nov 6, 2025, 10:00 PM

Transcript

Arlo Reports Record Q3 2025 Results Driven by SaaS Growth and Product Launch

ARLO

Earnings

Product Launch

Guidance Update

Arlo reported strong Q3 2025 financial results, with GAAP earnings per share of $0.07 and adjusted EBITDA up 50% year over year to $17 million.
The SaaS business continued its growth, adding 281,000 paid accounts to reach a total of 5.4 million, driving annual recurring revenue (ARR) to $323 million, a 34% increase year over year. Service gross margin expanded 770 basis points to over 85%.
The company executed its largest product launch in history, contributing to nearly 30% year-over-year unit sales growth in Q3, with new platforms offering a 20-35% reduction in BOM costs.
For Q4 2025, Arlo expects consolidated revenue between $131 million and $141 million and non-GAAP net income per diluted share in the range of $0.13 to $0.19.
Strategic partnerships, including Verisure and ADT, are anticipated to drive significant future growth, with 60% of incremental growth towards long-range targets expected from these accounts.

Nov 6, 2025, 10:00 PM

Transcript

Arlo Technologies Announces Third Quarter 2025 Results and Fourth Quarter 2025 Outlook

ARLO

Earnings

Guidance Update

Revenue Acceleration/Inflection

Arlo Technologies reported record GAAP earnings per share (EPS) of $0.07 and non-GAAP EPS of $0.16 for the third quarter ended September 28, 2025.
Annual recurring revenue (ARR) grew 33.8% year over year to $323 million.
Subscriptions and services revenue reached a record $79.9 million, an increase of 29.2% year over year, representing 57.3% of total revenues.
Adjusted EBITDA for the quarter was $17.1 million, with an adjusted EBITDA margin of 12.2%.
For the fourth quarter of 2025, the company anticipates GAAP revenue between $131 million and $141 million, and non-GAAP diluted net income per share between $0.13 and $0.19.

Nov 6, 2025, 9:29 PM

8-K

Arlo Technologies Reports Third Quarter 2025 Results

ARLO

Earnings

Guidance Update

Revenue Acceleration/Inflection

Arlo Technologies reported record GAAP earnings per share (EPS) of $0.07 and non-GAAP EPS of $0.16 for the third quarter ended September 28, 2025.
Annual recurring revenue (ARR) grew 33.8% year over year to $323.2 million in Q3 2025.
Subscriptions and services revenue reached a record $79.9 million, up 29.2% year over year, representing 57.3% of total revenues.
The company achieved a record non-GAAP subscriptions and services gross margin of 85.1%, an increase of 770 basis points year over year.
For the fourth quarter of 2025, Arlo projects GAAP revenue between $131 million and $141 million and non-GAAP diluted EPS between $0.13 and $0.19.

Nov 6, 2025, 9:05 PM

Press Release

Arlo Technologies Discusses Strategic Transition and Growth Targets

ARLO

Guidance Update

Product Launch

Revenue Acceleration/Inflection

Arlo Technologies has successfully transitioned to a services business, currently at $316 million ARR and 5 million+ paid subscribers, with long-term goals of $700 million ARR and 10 million paid subscribers by 2028-2029, aiming for 25%+ operating margin (currently 13%).
The company anticipates 60% of incremental subscriber growth to come from strategic accounts (B2B2C), with the remaining 40% from traditional retail and direct channels.
Arlo is launching a major hardware refresh in October 2025, which is expected to reduce COGS by 20%-30% and expand product lines.
The company has demonstrated strong pricing power, increasing ARPU by over 50% to over $15 (from $8-$9) without impacting churn, with service gross margin at 85%.
Arlo maintains a strong LTV/CAC ratio of over 3 (LTV $840, CAC over $200), with strategic accounts having effectively zero customer acquisition cost.

Sep 10, 2025, 6:30 PM

Transcript

Arlo Technologies Discusses Services Transition and Future Growth

ARLO

Revenue Acceleration/Inflection

Product Launch

New Projects/Investments

Arlo Technologies is undergoing a significant transition to a services business, reporting $316 million ARR and over 5 million paid subscribers. The company aims to reach 10 million paid subscribers and $700 million ARR well before 2030, with an operating margin goal of over 25%.
The strategy to achieve subscriber growth involves 60% of incremental subscribers coming from strategic B2B2C accounts (e.g., ADT, Verisure) and 40% from retail and direct channels.
A major hardware refresh is currently shipping to retail for an October launch, expected to reduce COGS by 20% to 30%. The company also continuously updates its service offerings, with Arlo Secure 6 launched and Secure 7 planned for next year, focusing on AI capabilities.
Arlo has increased its Average Revenue Per User (ARPU) to over $15 from $8-$9, with no impact on churn. The service gross margin has risen to 85% , and the monthly subscriber churn rate is approximately 1%.