Arlo Technologies, Inc. (NYSE:ARLO) Q1 2024 Results Conference Call May 9, 2024 5:00 PM ET Company Participants Tahmin Clarke - Investor Relations Matthew McRae - Chief Executive Officer Kurt Binder - Chief Financial Officer Conference Call Participants Hamed Khorsand - BWS Financial Scott Searle - ROTH MKM Jacob Stephan - Lake Street Operator Ladies and gentlemen, thank you for standing by. At this time, all participants are on a listen only mode. Later we will conduct a question-and-answer session. [Opera ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38618 ARLO TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 38-4061754 (State or other jurisdict ...

NEWS RELEASE Arlo Reports First Quarter 2024 Results Record service revenue of $56.7 million, growing 29.0% year over year Annual recurring revenue (ARR) ended at $227.0 million, growing 24.3% year over year (1) (2) Record free cash flow (FCF) of $19.5 million with FCF margin of 15.7% GAAP net loss per share (EPS) of $(0.10); non-GAAP EPS of $0.09 Extended Verisure partnership for five additional years into 2029 Carlsbad, California - May 9, 2024 - Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home ...

Arlo received highest award honor within the Innovation of the Year, Consumer Products Industries category SAN JOSE, Calif., May 9, 2024 /PRNewswire/ -- Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security brand, proudly announces it has been named a Gold Stevie® Award winner in the Innovation of the Year - Consumer Products Industries category in The 22nd Annual American Business Awards®. As the only smart home security brand in the Consumer Products category to receive a Stevie Award, the ...

Arlo Technologies, Inc. (NYSE:ARLO) Q4 2023 Earnings Conference Call February 29, 2024 5:00 PM ET Company Participants Tahmin Clarke - Investor Relations Matthew McRae - Chief Executive Officer Kurt Binder - Chief Financial Officer Conference Call Participants Scott Searle - ROTH MKM Jacob Stephan - Lake Street Adam Tindle - Raymond James Anthony Stoss - Craig-Hallum Hamed Khorsand - BWS Financial Operator Good afternoon, ladies and gentlemen. Thank you for standing by. At this time, I would like to welcome ...

arlo « Investor Presentation Q1 2024 SAFE HARBOR DISCLOSURE This presentation contains forward-looking statements within the meaning o f the U.S. Private Securities Litigation Reform Act o f 1995. The words "anticipate," "expect," "believe," "will," "may," "should," "estimate," "project," "outlook," "forecast" o r other similar words are used to identify such forward-looking statements. However, the absence o f these words does not mean that the statements are not forward-looking. The forward-looking statem ...

Continued Subscription Growth Illustrates Success of Ongoing Innovation and Arlo's Robust Hardware and Software Solutions SAN JOSE, Calif., Feb. 29, 2024 /PRNewswire/ -- Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security brand, today announced its AI-powered subscription service has surpassed a milestone of 3 million paid accounts. Arlo's continued subscription growth illustrates the success of its ongoing innovations and a robust ecosystem of security solutions for home, business, and pers ...

SAN JOSE, Calif.--(BUSINESS WIRE)--Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security brand, today announced that Arlo management will present at the Raymond James Institutional Investors Conference in Orlando.   Event: Raymond James 45th Annual Institutional Investors Conference   Speakers: Matthew McRae, CEO, and Kurt Binder, CFO   Date: Tuesday, March 5, 2024   Time: 1:40 p.m. ET   Place: Orlando, FL The presentation will also be w ...

Subscription Services and Revenue Generation - The company has launched subscription services such as Arlo Secure, Arlo Total Security, and Arlo Safe, along with various smart security devices, aiming to increase the number of registered accounts and generate recurring revenue[20] - Future success is dependent on increasing sales of paid subscription services, which are critical for revenue growth[15] - The company relies heavily on increasing sales of its paid subscription services, with a potential decline in revenue and gross margin if sales of Arlo Secure, Arlo Total Security, and Arlo Safe services do not increase[135] Market and Competitive Landscape - The total addressable market includes individuals and businesses using smart security devices, with growth opportunities identified in small business, government, and direct home monitoring channels[21] - Arlo's competitive landscape includes major players like Amazon, Google, and Samsung, which may require the company to lower prices or increase marketing expenses[116] - Price competition is intense, with many competitors pricing products significantly below Arlo's costs, potentially leading to reduced margins[117] Product Offerings and Innovations - Arlo Secure offers advanced AI-based detection and 24/7 Emergency Response, supporting unlimited household security devices and providing enhanced safety features[22] - The Arlo Total Security service includes 24/7 professional monitoring and a unique multi-sensor capable of eight different sensing functions, enhancing home security solutions[27] - The company released the Arlo Essential Cameras and Doorbells (2nd Generation) in Q3 2023, featuring up to 2K video resolution and improved battery life[32] - The Arlo Pro 5S, launched in Q4 2022, features advanced 2K video resolution and tri-band connectivity, enhancing security and connectivity during power outages[34] - The company has significantly increased the rate of new product and service introductions, including new lines of cameras and security systems[112] Financial Performance and Risks - Arlo recorded a net loss of $22.0 million for the year ended December 31, 2023, with an accumulated deficit of $367.5 million[113] - As of December 31, 2023, Arlo's cash and cash equivalents and short-term investments totaled $136.5 million, generating free cash flow of $35.5 million for the year[114] - The company may require additional financing to meet long-term capital requirements, with no commitments currently in place for such financing[113][114] - The company anticipates fluctuations in quarterly and annual results, which may impact stock price volatility[12] Partnerships and Collaborations - The collaboration with Verisure provides exclusive marketing and distribution rights in Europe, but the success of this partnership is uncertain[14] - Arlo derived 33.5% of its revenue from security solution provider Verisure in 2023[42] - As of December 31, 2023, Verisure had fulfilled $469.8 million of its $500 million purchase commitment, with a backlog of $52.3 million expected to be recognized as revenue within the next twelve months[44] Manufacturing and Supply Chain - The company relies on a limited number of third-party manufacturers for its production, which poses risks to sales and market share if disruptions occur[11] - Manufacturing primarily occurs in the Asia Pacific region, especially Vietnam, where disruptions due to natural disasters or labor unrest could significantly impact production and costs[97] - The company does not maintain long-term contracts with its manufacturers, which could lead to operational disruptions if any primary manufacturer ceases to provide services[94] - The company has a rolling forecast system for demand, which is critical for managing supply chain requirements with third-party manufacturers[90] Research and Development - The company has a research and development team of 148 employees dedicated to innovating and enhancing smart security products[49] - There is a strong focus on research and development, with significant resources allocated to new product lines in smart security, including Arlo Secure services and wire-free smart Wi-Fi cameras[108] Compliance and Regulatory Risks - The company is subject to stringent data privacy and security laws, which could lead to regulatory investigations, fines, and reputational harm if not complied with[163] - The California Consumer Privacy Act (CCPA) allows for civil penalties of up to $7,500 per violation, impacting the company's financial results[166] - Noncompliance with the Payment Card Industry Data Security Standard (PCI DSS) can result in penalties ranging from $5,000 to $100,000 per month, affecting revenue and reputation[173] Workforce and Diversity - The company has seen a significant increase in the number of women in leadership roles, contributing to a more diverse workforce[70] - The company has integrated diversity, equity, and inclusion initiatives into its people strategy, aiming to create a truly inclusive workplace[76] - The company prioritizes open communication and collaboration to foster a respectful work environment, addressing concerns related to recruitment and compensation[68] Environmental and Social Responsibility - The company is committed to sustainable practices and compliance with environmental regulations, reflecting its focus on long-term success[64] - The company has established internal targets and timelines to improve its carbon footprint, aiming to enhance its ESG risk ratings further[67] - The company is committed to supporting marginalized communities through philanthropic initiatives and advocacy[71] Technology and Cybersecurity - Cybersecurity risks are a significant concern, with potential threats to sensitive information and business operations due to increased cyber-attacks[124] - The company relies on third parties for critical technology, and any disruption in these relationships could severely limit its ability to develop and sell products[204] International Operations and Market Risks - International sales accounted for 39% of overall revenue in 2023, down from 45% in 2022[208] - The company faces risks related to exchange rate fluctuations and political instability in international markets[208] - The U.S. Government has imposed increases of up to 25% in ad valorem duties on certain products imported from China, which may affect the company's revenue and operating results[191]

Revenue Performance - Record fourth quarter service revenue of $55.9 million, growing 45.9% year over year[1] - Total revenue for Q4 2023 was $135.1 million, an increase of 14.0% year over year[2] - Annual recurring revenue (ARR) ended at $210.1 million, growing 52.5% year over year[2] - Full year service revenue reached $201.2 million, growing 47.4% year over year[3] - Total revenue for the year ended December 31, 2023, was $491.176 million, a slight increase from $490.414 million in 2022[22] - Total revenue for the three months ended December 31, 2023, was $135,093,000, representing a 3% increase from $130,003,000 in the previous quarter[34] Profitability Metrics - GAAP net loss per share for the full year was $(0.24), while record non-GAAP EPS was $0.28[3] - Gross profit for the year was $167.563 million, resulting in a gross margin of 34.1%, compared to 27.7% in the previous year[22] - GAAP total gross profit for Q4 2023 was $47,349,000, up from $43,139,000 in Q4 2022, representing an increase of 5% year-over-year[27] - Non-GAAP gross profit for services in Q4 2023 was $41,620,000, compared to $37,810,000 in Q4 2022, reflecting a growth of 7.5%[27] - Non-GAAP net income for the twelve months ended December 31, 2023, was $27,824,000, an improvement from a loss of $5,876,000 in the previous year[32] Cash Flow and Liquidity - Full year free cash flow (FCF) was $35.5 million, with a FCF margin of 7.2%[1] - Cash and cash equivalents decreased to $60.653 million at the end of 2023, down from $88.179 million at the end of 2022[25] - Cash, cash equivalents, and short-term investments as of December 31, 2023, totaled $136,496,000, an increase from $126,049,000 in the previous quarter[33] - Free cash flow usage margin for the twelve months ended December 31, 2023, was 7.2%, compared to a margin of (9.8)% in the previous year[32] Subscriber and Account Growth - Cumulative paid accounts increased to 2.8 million, growing 51.1% year over year[2] - The company crossed the 3 million subscribers milestone earlier than projected[2] - Cumulative registered accounts reached 8,652,000 as of December 31, 2023, up from 8,193,000 in the previous quarter[33] Expenses and Liabilities - Operating expenses for the year were $192.466 million, consistent with $192.914 million in 2022[22] - Research and development expenses for the year were $68.647 million, up from $64.709 million in 2022[22] - The company’s total liabilities decreased to $182.262 million from $184.506 million in 2022[20] Future Outlook - First quarter 2024 revenue outlook is estimated between $117 million and $127 million[6] Other Financial Metrics - GAAP gross margin for Q4 was 35.0%, up from 33.2% in the previous quarter[4] - Non-GAAP gross margin for services reached 74.4% in Q4 2023, slightly up from 74.1% in Q3 2023[27] - GAAP income tax rate for Q4 2023 was 16.1%, compared to a negative rate of (2.7)% in Q3 2023[29] - Total GAAP operating expenses for the full year 2023 were $192,466,000, nearly flat compared to $192,914,000 in 2022[29] - GAAP operating loss narrowed to $(458,000) in Q4 2023 from $(2,276,000) in Q3 2023[29] - Non-GAAP operating income for Q4 2023 was $9,861,000, compared to $8,426,000 in Q3 2023, indicating a sequential increase of 17%[29] - The company reported a net loss of $22.036 million for the year, an improvement from a net loss of $56.626 million in 2022[25] - The company’s accounts receivable decreased slightly to $65.360 million from $65.960 million in the previous year[20] - Inventory turns improved to 7.6 for the three months ended December 31, 2023, compared to 5.5 in the previous quarter[33] - Deferred revenue (current and non-current) as of December 31, 2023, was $18,114,000, an increase from $17,706,000 in the previous quarter[33] - The Americas accounted for 64.2% of total revenue for the three months ended December 31, 2023, up from 61.5% in the previous quarter[34]