Arlo Technologies (NYSE:ARLO) Posts Earnings Results, Beats Expectations By $0.08 EPS

Key Points

• Arlo beat quarterly expectations: Adjusted EPS was $0.28 versus the $0.20 consensus, while revenue rose 20.5% year over year to $155.94 million, exceeding estimates.
• Management raised its 2026 outlook: Full-year revenue guidance increased to $580 million–$600 million and non-GAAP EPS guidance to $0.90–$1.00, supported by subscription growth, new products and partnerships.
• Key risks remain: Product gross margins are structurally negative because hardware promotions support subscriber acquisition, while the stock trades at roughly 57 times earnings and the CFO recently sold shares under a pre-arranged plan.

Arlo Technologies (NYSE:ARLO - Get Free Report) announced its earnings results on Thursday. The company reported $0.28 EPS for the quarter, topping the consensus estimate of $0.20 by $0.08, FiscalAI reports. Arlo Technologies had a net margin of 5.47% and a return on equity of 18.66%. The business had revenue of $155.94 million during the quarter, compared to analysts' expectations of $148.94 million. During the same quarter in the prior year, the company posted $0.17 earnings per share. The firm's revenue was up 20.5% on a year-over-year basis. Arlo Technologies updated its FY 2026 guidance to 0.900-1.000 EPS and its Q3 2026 guidance to 0.170-0.230 EPS.

Here are the key takeaways from Arlo Technologies' conference call:

• Q2 results set records, with total revenue of $155.9 million, up 21% year over year, service revenue of $93 million, adjusted EBITDA up 70% to $30.6 million, and non-GAAP EPS of $0.28.
• Paid accounts increased by nearly 300,000 to 6.3 million, while improving ARPU, lower churn, stronger renewals, and a 15% rise in account lifetime value to $967 supported subscription momentum.
• Arlo significantly raised its 2026 outlook to $580 million–$600 million in revenue and $0.90–$1.00 in non-GAAP EPS; management also expects Secure 7, a higher-priced subscription tier, and partnerships with ADT and Comcast to support future growth.
• Product gross margin remains structurally negative, at roughly negative mid- to high-single digits or potentially the teens, as Arlo uses hardware promotions to acquire subscribers; Q2 profitability also benefited from an $8 million tariff refund and Q3 is expected to receive another roughly $6 million refund.
• Management plans additional share repurchases after buying back more than $20 million of stock in Q2, while Aloe Care’s Home Helpers deployment and planned care and small-business market tests could create new growth opportunities in 2027.

Arlo Technologies Stock Down 3.1%

Shares of NYSE:ARLO traded down $0.49 during trading on Thursday, reaching $15.44. 1,259,744 shares of the company traded hands, compared to its average volume of 1,035,424. The company's 50 day moving average is $13.35 and its two-hundred day moving average is $13.45. The firm has a market capitalization of $1.68 billion, a PE ratio of 57.20 and a beta of 1.56. Arlo Technologies has a 52 week low of $11.05 and a 52 week high of $19.94.

Insider Transactions at Arlo Technologies

In related news, CFO Kurtis Joseph Binder sold 27,297 shares of Arlo Technologies stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $15.52, for a total value of $423,649.44. Following the transaction, the chief financial officer directly owned 442,110 shares of the company's stock, valued at $6,861,547.20. This trade represents a 5.82% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 122,775 shares of company stock worth $1,865,639 in the last 90 days. Corporate insiders own 2.90% of the company's stock.

Hedge Funds Weigh In On Arlo Technologies

A number of hedge funds have recently bought and sold shares of ARLO. Invesco Ltd. grew its holdings in Arlo Technologies by 27.7% in the fourth quarter. Invesco Ltd. now owns 452,697 shares of the company's stock worth $6,333,000 after purchasing an additional 98,269 shares during the period. Mackenzie Financial Corp raised its holdings in shares of Arlo Technologies by 17.4% during the fourth quarter. Mackenzie Financial Corp now owns 88,651 shares of the company's stock valued at $1,230,000 after purchasing an additional 13,167 shares during the period. XTX Topco Ltd acquired a new position in shares of Arlo Technologies during the fourth quarter valued at about $1,776,000. Susquehanna Fundamental Investments LLC boosted its position in shares of Arlo Technologies by 12.3% during the 4th quarter. Susquehanna Fundamental Investments LLC now owns 96,008 shares of the company's stock worth $1,343,000 after purchasing an additional 10,507 shares in the last quarter. Finally, Numerai GP LLC bought a new position in Arlo Technologies in the fourth quarter worth approximately $404,000. Institutional investors own 83.18% of the company's stock.

Analysts Set New Price Targets

Several research analysts have recently weighed in on ARLO shares. Weiss Ratings lowered shares of Arlo Technologies from a "hold (c)" rating to a "hold (c-)" rating in a research note on Monday. Piper Sandler assumed coverage on shares of Arlo Technologies in a research note on Sunday, July 26th. They issued an "overweight" rating and a $17.00 target price for the company. William Blair initiated coverage on Arlo Technologies in a report on Tuesday, July 7th. They set an "outperform" rating for the company. UBS Group set a $20.00 price target on Arlo Technologies in a report on Monday, May 18th. Finally, Oppenheimer initiated coverage on Arlo Technologies in a research report on Monday, May 18th. They set an "outperform" rating and a $20.00 price target on the stock. Six equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $20.67.

Trending Headlines about Arlo Technologies

Here are the key news stories impacting Arlo Technologies this week:

• Positive Sentiment: Q2 results beat estimates: Arlo reported adjusted earnings of $0.28 per share, above the $0.20 consensus and up from $0.17 a year earlier. Revenue increased 20.5% year over year to $155.94 million, exceeding estimates of $148.94 million. Arlo Technologies Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Management raised the outlook above Wall Street expectations: Third-quarter EPS guidance of $0.17–$0.23 and revenue guidance of $140 million–$150 million exceed consensus estimates of $0.14 and $133.2 million, respectively. Full-year 2026 EPS guidance of $0.90–$1.00 and revenue guidance of $580 million–$600 million also surpass consensus estimates of $0.71 and $565.7 million. This points to continued demand for Arlo’s smart-home security products and services.
• Neutral Sentiment: Profitability remains positive but relatively modest: Arlo reported a 5.47% net margin and an 18.66% return on equity. The earnings beat and higher guidance improve the fundamental picture, although the stock’s valuation remains elevated at roughly 57 times earnings based on the provided data. Arlo Technologies Earnings Report and Conference Call
• Negative Sentiment: CFO selling could pressure sentiment: CFO Kurtis Joseph Binder sold 27,297 shares for approximately $423,649 and another 13,971 shares for approximately $209,705. Both transactions were made under a pre-arranged Rule 10b5-1 plan, reducing their significance as a signal of deteriorating business prospects, but the sales may nevertheless encourage profit-taking.

Arlo Technologies Company Profile

Arlo Technologies, Inc NYSE: ARLO is a provider of smart home security products and services designed for residential and small business customers. The company offers a portfolio of wireless and Wi-Fi-enabled security cameras, video doorbells, smart lighting solutions, and associated accessories. Arlo integrates advanced video analytics, motion detection, cloud storage, and two-way audio capabilities to deliver end-to-end security and monitoring solutions accessible through mobile applications and web interfaces.

Founded as a division of Netgear, Inc in 2014 and spun off as an independent public company in 2018, Arlo Technologies has established a presence in North America, Europe, Australia and parts of Asia.

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