Arlo(US:ARLO)2025-05-08 20:08Financial Performance - Record subscriptions and services revenue of $68.8 million, growing 21.4% year over year, accounting for 57.8% of total revenues[6] - Annual recurring revenue (ARR) ended at $276.4 million, growing 21.8% year over year[6] - Record non-GAAP subscriptions and services gross margin of 83.1%, an increase of 640 basis points year over year[6] - GAAP net loss per share of $(0.01) and record non-GAAP net income per share of $0.15[6] - Free cash flow of $28.1 million, up 44.6% year over year, with a free cash flow margin of 23.6%[6] - Total revenue for the three months ended March 30, 2025, was $119.066 million, a decrease of 2% from $121.572 million in the previous quarter and a decrease of 4% from $124.200 million in the same quarter last year[27] - Subscription and services revenue increased to $68.849 million, up 7% from $64.147 million in the previous quarter and up 21% from $56.707 million year-over-year[27] - The net loss for the three months ended March 30, 2025, was $835,000, significantly improved from a net loss of $4.861 million in the previous quarter and $9.644 million in the same quarter last year[27] - Non-GAAP net income for the same period was $16,474,000, up from $10,415,000 in the previous quarter and $9,536,000 year-over-year[33] - Adjusted EBITDA of $16.4 million, up 76.1% year over year, with an adjusted EBITDA margin of 13.8%[6] - Adjusted EBITDA for the period was $16.415 million, with an adjusted EBITDA margin of 13.8%, compared to 8.0% in the previous quarter and 7.5% in the same quarter last year[31] Cash Flow and Assets - Free cash flow for the three months ended March 30, 2025, was $28,116,000, representing a free cash flow margin of 23.6%, compared to 4.6% in the previous quarter and 15.7% a year ago[33] - Cash and cash equivalents at the end of the period were $84.009 million, an increase from $82.032 million at the beginning of the period[29] - Total current assets decreased to $246.348 million from $262.606 million at the end of the previous quarter[25] - Total liabilities decreased to $193.201 million from $197.491 million at the end of the previous quarter[25] Customer Metrics - Cumulative paid accounts increased to 4.9 million, growing 51.4% year over year[6] - Cumulative registered accounts reached 10,930,000 as of March 30, 2025, an increase from 10,823,000 in the previous quarter and 9,173,000 a year ago[36] - Annual recurring revenue (ARR) was $276,357,000 for the three months ended March 30, 2025, compared to $257,332,000 in the previous quarter and $226,968,000 a year ago[36] Operational Efficiency - Gross profit for the period was $52.727 million, resulting in a gross margin of 44.3%, compared to 36.9% in the previous quarter and 38.1% in the same quarter last year[27] - Days sales outstanding improved to 34 days as of March 30, 2025, down from 44 days in the previous quarter and 41 days a year ago[36] - Inventory turns were 6.3 for the three months ended March 30, 2025, compared to 6.4 in the previous quarter and 5.7 a year ago[36] - Deferred revenue increased to $43,177,000 as of March 30, 2025, up from $27,551,000 in the previous quarter and $21,540,000 a year ago[36] Research and Development - Research and development expenses for the period were $16.165 million, up from $15.267 million in the previous quarter[27] Future Outlook - Business outlook for Q2 2025 projects revenue between $119 million and $129 million, with non-GAAP net income per share estimated between $0.11 and $0.17[8] - Announced the launch of Arlo Secure 6.0, featuring new AI-powered innovations[6] Capital Allocation - Capital allocation program included a share buyback of $15.2 million and an investment in Origin Wireless of $12.5 million[6] Headcount - Headcount as of March 30, 2025, was 369, an increase from 360 in the previous quarter and a decrease from 373 a year ago[36]