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Arlo Technologies (ARLO)
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Arlo Technologies (ARLO) AI Stock Analysis

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ARLO

Arlo Technologies

(NYSE:ARLO)

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Neutral 58 (OpenAI - 4o)
Rating:58Neutral
Price Target:
$17.50
▲(2.64% Upside)
Arlo Technologies' overall score is driven by strong service revenue growth and strategic partnerships, which are promising for future performance. However, ongoing profitability challenges, negative cash flow growth, and valuation concerns weigh heavily on the score. The technical indicators suggest neutral momentum, adding little to the stock's attractiveness.
Positive Factors
Service Revenue Growth
The strong growth in service revenue indicates a successful shift towards a services-first business model, providing a stable and recurring revenue stream that enhances financial stability and long-term profitability.
Strategic Partnership with ADT
The partnership with ADT, a major player in the security industry, is likely to expand Arlo's market reach and enhance its service offerings, providing a significant boost to future revenue and competitive positioning.
Subscription Growth
The substantial increase in paid subscriptions strengthens Arlo's recurring revenue model, ensuring a steady cash flow and enhancing customer retention, which is crucial for long-term growth and stability.
Negative Factors
Decline in Product Revenue
The decline in product revenue highlights challenges in maintaining hardware sales, which could impact overall revenue growth and necessitate increased reliance on service revenues.
Tariffs Impact
Tariff-related margin pressures can erode profitability, necessitating cost management strategies to mitigate impacts on the bottom line and maintain competitive pricing.
Negative Cash Flow Growth
Negative cash flow growth indicates potential liquidity challenges, limiting the company's ability to invest in growth opportunities and manage financial obligations effectively over the long term.

Arlo Technologies (ARLO) vs. SPDR S&P 500 ETF (SPY)

Arlo Technologies Business Overview & Revenue Model

Company DescriptionArlo Technologies, Inc., together with its subsidiaries, provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. It combines an intelligent cloud infrastructure and mobile app with various smart connected devices. The company offers Arlo essential indoor camera; Arlo Go 2 LTE/Wi-Fi security camera; Arlo Q and Arlo Q Plus, an indoor wired solution that allows users to monitor their surroundings; and Arlo Go, an LTE-enabled wire-free camera that provides untethered mobile security. It also provides Arlo Baby, a baby monitor with air quality and temperature sensors, motion and audio detection, and advanced night vision; Arlo Chime that pairs with the Arlo Video Doorbell to play a variety of ringtones or act as a siren; Arlo Ultra, an integrated spotlight and crystal-clear two-way audio with advanced noise cancellations camera; Arlo Pro 3, an integrated spotlight with color night vision camera; Arlo Video Doorbell delivers direct-to-mobile video calls and personalized alerts; Arlo Floodlight Camera, a wire-free variant LED camera, as well as Arlo Essential Spotlight; Arlo Ultra 2; Arlo Essential XL Spotlight; Arlo Essential Wire-Free Video Doorbell; and Arlo Pro 4 Wire-Free Spotlight. In addition, it provides Arlo accessories, such as charging accessories, device mounts, and device skins. Further, it offers Arlo app for iOS and Android devices that allow users to connect various devices; and Arlo Secure, with coverage for unlimited cameras and an enhanced emergency response solutions. The company offers its products through retailers, wholesale distributors, broadcast channels, wireless carriers, and security solution providers, as well as through its website. Arlo Technologies, Inc. was incorporated in 2018 and is headquartered in Carlsbad, California.
How the Company Makes MoneyArlo Technologies generates revenue through multiple streams, primarily from the sale of its hardware products, including security cameras and accessories. A significant portion of its income also comes from subscription services, which offer customers advanced features such as cloud storage, professional monitoring, and enhanced security options. These subscription plans, which include Arlo Smart, create a recurring revenue model that bolsters the company's financial stability. Additionally, Arlo has established partnerships with other technology and retail companies, expanding its market reach and enhancing its product offerings, further contributing to its earnings.

Arlo Technologies Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
Arlo Technologies reported a strong quarter with significant growth in service revenue and subscriptions, supported by strategic partnerships and a comprehensive product launch. However, challenges such as declining product revenue and tariff impacts were noted.
Q2-2025 Updates
Positive Updates
Record-Breaking Service Revenue
Service revenue reached $78 million, up 30% year-over-year, and now accounts for more than 60% of total revenue. Non-GAAP service gross margin increased to a record 85%.
Significant Growth in Subscriptions and ARR
Annual recurring revenue (ARR) hit $316 million, up 34%. 218,000 new paid subscriptions were added, bringing the total to 5.1 million.
Strong Financial Performance
Non-GAAP earnings per share increased to $0.17, up 70% year-over-year. Adjusted EBITDA rose to $18 million, up 82%, achieving an EBITDA margin of 14%.
Strategic Partnership with ADT
Arlo signed a strategic partnership with ADT, the largest security company in North America, expected to provide material upside to subscriptions and services revenue starting in 2026.
Comprehensive Product Launch
Arlo announced the largest product release in company history with over 100 new SKUs launching. The company is targeting 20%-30% camera unit growth for Q3 and Q4.
Negative Updates
Decline in Product Revenue
Product revenue for the period was $51.2 million, down compared to the prior year, primarily due to a decline in ASPs across the industry.
Tariffs Impact
Introduction of tariffs impacted product margins, representing a gross margin headwind of approximately 100 basis points in the period.
Reduction in International Revenue Contribution
Revenue contribution from international operations declined as a proportion of total revenue, primarily due to increased subscriptions and services revenue and seasonal stocking factors.
Company Guidance
In the second quarter of 2025, Arlo Technologies delivered impressive financial performance, with total revenue reaching $129 million, representing a sequential increase of over $10 million and a year-over-year increase. Service revenue was particularly strong at $78 million, up 30% year-over-year, and accounted for more than 60% of total revenue. Non-GAAP service gross margin achieved a record high of 85%, propelling non-GAAP earnings per share to $0.17, a 70% increase year-over-year, while GAAP earnings per share rose to $0.03 from a loss of $0.12 a year ago. The company's annual recurring revenue (ARR) increased to $316 million, up 34%, with adjusted EBITDA rising 82% to $18 million, achieving an EBITDA margin of 14%. Arlo's strategic shift towards a services-first business model was highlighted by the addition of 218,000 paid subscriptions, bringing the total to 5.1 million. This growth was supported by strong performance during Amazon Prime Day and the launch of Arlo Secure 6, which increased retail and direct subscriber monthly ARPU to over $15. Looking ahead, Arlo is targeting substantial camera unit growth of 20% to 30% year-over-year for both Q3 and Q4, with full-year 2025 service revenue now expected to reach $310 million and subscription and services gross margin projected to exceed 85%. The company also announced a strategic partnership with ADT, expected to significantly boost subscriptions and services revenue starting in 2026.

Arlo Technologies Financial Statement Overview

Summary
Arlo Technologies shows robust revenue growth and improved cash flow management, but persistent net losses and negative profit margins remain challenges. The strong balance sheet and improving debt metrics provide a stable foundation for future growth.
Income Statement
65
Positive
Arlo Technologies has shown consistent revenue growth over the years, with improvements in gross profit margins, despite persistent net losses. The TTM data indicates a slight decline in revenue compared to the previous annual period and negative EBIT and EBITDA margins. While the company is making strides in reducing its EBIT and EBITDA losses, the net profit margin remains negative, indicating ongoing challenges in achieving profitability.
Balance Sheet
55
Neutral
The company maintains a strong equity base with a debt-to-equity ratio that has improved over time, suggesting a low reliance on debt financing. The equity ratio is stable, reflecting a solid financial position despite the negative net income. Return on equity remains negative due to ongoing net losses, but the reduction in total liabilities over time is a positive indicator of financial stability.
Cash Flow
60
Neutral
Arlo Technologies has shown significant improvement in cash flow management, with a positive free cash flow and operating cash flow in the TTM period. The operating cash flow to net income ratio is strong, indicating efficient cash conversion despite net losses. The free cash flow to net income ratio is also positive, reflecting effective capital expenditure management and operational efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue507.71M510.89M491.18M490.41M435.14M357.15M
Gross Profit204.07M187.50M167.56M136.03M108.03M55.39M
EBITDA-6.86M-31.69M-20.24M-50.88M-45.05M-94.66M
Net Income-7.01M-30.50M-22.04M-56.63M-56.03M-101.25M
Balance Sheet
Total Assets319.74M298.40M285.54M272.20M347.49M413.97M
Cash, Cash Equivalents and Short-Term Investments160.40M151.45M136.50M113.72M175.75M206.12M
Total Debt16.60M24.04M17.02M23.47M26.08M29.43M
Total Liabilities201.47M197.49M182.26M184.51M234.84M280.20M
Stockholders Equity118.27M100.91M103.28M87.69M112.65M133.77M
Cash Flow
Free Cash Flow56.97M48.62M35.45M-47.97M-25.46M-50.42M
Operating Cash Flow64.79M51.31M38.30M-45.96M-23.20M-46.53M
Investing Cash Flow-25.56M10.84M-50.69M-31.77M17.73M-3.98M
Financing Cash Flow-34.53M-40.77M-15.14M-13.94M-4.97M-23.00K

Arlo Technologies Technical Analysis

Technical Analysis Sentiment
Negative
Last Price17.05
Price Trends
50DMA
17.08
Negative
100DMA
16.08
Positive
200DMA
13.58
Positive
Market Momentum
MACD
0.20
Positive
RSI
44.50
Neutral
STOCH
51.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARLO, the sentiment is Negative. The current price of 17.05 is below the 20-day moving average (MA) of 17.82, below the 50-day MA of 17.08, and above the 200-day MA of 13.58, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 44.50 is Neutral, neither overbought nor oversold. The STOCH value of 51.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARLO.

Arlo Technologies Risk Analysis

Arlo Technologies disclosed 56 risk factors in its most recent earnings report. Arlo Technologies reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Arlo Technologies Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
1.55B36.2825.74%1.22%-3.81%-11.48%
70
Outperform
111.73M7.00%
61
Neutral
1.42B-15.06-45.91%35.63%-335.37%
58
Neutral
$1.94B-6.45%-1.75%68.19%
58
Neutral
98.84M-3.07-1.72%72.69%65.51%
44
Neutral
58.15M-0.61-205.74%-6.61%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ARLO
Arlo Technologies
17.05
5.08
42.44%
SNT
Senstar Technologies
4.79
3.19
199.38%
NSSC
Napco Security Technologies
43.42
2.78
6.84%
EVLV
Evolv Technologies Holdings
8.25
4.12
99.76%
BAER
Bridger Aerospace Group Holdings
1.78
-0.53
-22.94%
KSCP
Knightscope Inc Class A
5.71
-1.08
-15.91%

Arlo Technologies Corporate Events

Executive/Board ChangesShareholder Meetings
Arlo Technologies Holds Annual Stockholders Meeting
Neutral
Jun 25, 2025

On June 20, 2025, Arlo Technologies held its Annual Meeting of Stockholders where key decisions were made. Stockholders elected Ralph Faison and Jocelyn Carter-Miller as Class I directors to serve until 2028, ratified Deloitte & Touche LLP as the independent registered public accounting firm for 2025, and approved the compensation of named executive officers.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 25, 2025