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Arlo Technologies Inc (ARLO)
NYSE:ARLO
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Arlo Technologies
(NYSE:ARLO)
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Rating:59Neutral
Price Target:
$17.50
▼(-1.02% Downside)
Arlo Technologies' overall stock score reflects strong service revenue growth and strategic partnerships, which are positive indicators for future performance. However, ongoing profitability challenges, a negative P/E ratio, and mixed technical indicators weigh on the stock's attractiveness. The company's strategic shift and improved financial metrics in the latest earnings call provide some optimism, but caution is advised due to existing operational inefficiencies.
Positive Factors
Service Revenue Growth
The strong growth in service revenue indicates a successful shift towards a services-first business model, enhancing recurring revenue and financial stability.
Strategic Partnerships
The partnership with ADT, a major player in security, is likely to enhance market reach and drive future revenue growth, strengthening competitive positioning.
Subscription Growth
The significant increase in subscriptions boosts recurring revenue and indicates strong customer retention and product adoption, supporting long-term growth.
Negative Factors
Decline in Product Revenue
The decline in product revenue suggests challenges in maintaining hardware sales, which could impact overall revenue growth if not offset by service revenue.
Profitability Challenges
Ongoing profitability issues, indicated by negative margins, highlight operational inefficiencies that could hinder financial performance if not addressed.
Negative Cash Flow Growth
Negative cash flow growth suggests potential difficulties in sustaining cash generation, which could limit investment capacity and financial flexibility.
Arlo Technologies (ARLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.85B
Dividend YieldN/A
Average Volume (3M)1.20M
Price to Earnings (P/E)―
Beta (1Y)1.78
Revenue Growth-1.75%
EPS Growth68.19%
CountryUS
Employees360
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)0.17
Shares Outstanding104,370,650
10 Day Avg. Volume862,124
30 Day Avg. Volume1,197,661
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue3.38
Enterprise Value/Gross Profit8.41
Enterprise Value/Ebitda-250.12
Forecast
1Y Price Target
$22.38Price Target Upside26.58% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Arlo Technologies Business Overview & Revenue Model
Company DescriptionArlo Technologies, Inc. is a leading provider of smart home security products, specializing in wireless security cameras, video doorbells, and other connected devices that enhance home safety and security. Founded in 2014 and headquartered in San Jose, California, Arlo operates primarily in the consumer electronics sector, focusing on innovative technology solutions for both residential and commercial markets. The company's core offerings include high-definition video surveillance, smart alerts, and integration with various smart home ecosystems, making it a prominent player in the growing Internet of Things (IoT) space.
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
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.65
Positive
Balance Sheet
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.55
Neutral
Cash Flow
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.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 507.71M | 510.89M | 491.18M | 490.41M | 435.14M | 357.15M |
| Gross Profit | 204.07M | 187.50M | 167.56M | 136.03M | 108.03M | 55.39M |
| 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 Assets | 319.74M | 298.40M | 285.54M | 272.20M | 347.49M | 413.97M |
| Cash, Cash Equivalents and Short-Term Investments | 160.40M | 151.45M | 136.50M | 113.72M | 175.75M | 206.12M |
| Total Debt | 16.60M | 24.04M | 17.02M | 23.47M | 26.08M | 29.43M |
| Total Liabilities | 201.47M | 197.49M | 182.26M | 184.51M | 234.84M | 280.20M |
| Stockholders Equity | 118.27M | 100.91M | 103.28M | 87.69M | 112.65M | 133.77M |
Cash Flow | ||||||
| Free Cash Flow | 56.97M | 48.62M | 35.45M | -47.97M | -25.46M | -50.42M |
| Operating Cash Flow | 64.79M | 51.31M | 38.30M | -45.96M | -23.20M | -46.53M |
| Investing Cash Flow | -25.56M | 10.84M | -50.69M | -31.77M | 17.73M | -3.98M |
| Financing Cash Flow | -34.53M | -40.77M | -15.14M | -13.94M | -4.97M | -23.00K |
Arlo Technologies Technical Analysis
Positive
17.68
Price Trends
17.38
Positive
16.82
Positive
13.97
Positive
Market Momentum
0.02
Negative
54.25
Neutral
80.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARLO, the sentiment is Positive. The current price of 17.68 is above the 20-day moving average (MA) of 17.32, above the 50-day MA of 17.38, and above the 200-day MA of 13.97, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 80.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.55B | 36.58 | 24.98% | 1.23% | -3.81% | -11.48% | |
70 Outperform | $99.84M | 65.29 | -3.47% | ― | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $1.39B | ― | -71.94% | ― | 35.63% | -335.37% | |
59 Neutral | $1.85B | ― | -6.45% | ― | -1.75% | 68.19% | |
54 Neutral | $91.62M | ― | -1.79% | ― | 72.69% | 65.51% | |
44 Neutral | $65.48M | ― | -236.56% | ― | -6.61% | 40.20% |
* Industrials Sector Average
ARLO
Arlo Technologies
17.68
6.10
52.68%
SNT
Senstar Technologies
4.41
2.88
188.24%
NSSC
Napco Security Technologies
43.37
2.47
6.04%
EVLV
Evolv Technologies Holdings
8.08
3.78
87.91%
BAER
Bridger Aerospace Group Holdings
1.65
-1.50
-47.62%
KSCP
Knightscope Inc Class A
5.87
-5.23
-47.12%
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.