Arlo Technologies (NYSE:ARLO) Announces Quarterly Earnings Results

Key Points

• Arlo beat Q3 expectations: Adjusted EPS was $0.24 versus $0.20 expected, while revenue reached $149.18 million, up 6.9% year over year.
• Recurring revenue grew strongly: Subscriptions and services revenue rose 20% to $96 million, and paid accounts increased 23% to 6.6 million.
• Q4 guidance points to a sequential slowdown: Arlo forecast revenue of $137 million–$147 million and adjusted EPS of $0.17–$0.23, below Q3 results.

Arlo Technologies (NYSE:ARLO - Get Free Report) released its quarterly earnings data on Thursday. The company reported $0.24 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.20 by $0.04, FiscalAI reports. The company had revenue of $149.18 million during the quarter, compared to the consensus estimate of $144.93 million. Arlo Technologies had a net margin of 5.20% and a return on equity of 17.29%. Arlo Technologies's revenue for the quarter was up 6.9% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.16 earnings per share.

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

• Subscriptions and services revenue rose 20% to $96 million, while paid accounts grew 23% to 6.6 million and ARR increased 14% to $370 million. Higher recurring-revenue mix helped lift non-GAAP gross margin by 760 basis points and adjusted EBITDA by 58% year over year.
• Management is targeting roughly 30% ARR growth in 2027, citing strategic-account expansion, Arlo Secure 7 and Aloe Care. It expects higher subscription tiers and increased service revenue per partner subscriber to help drive growth.
• Comcast integration remains on schedule for a mid-2027 launch and could become Arlo’s largest strategic partnership; ADT is also expanding its DIY offering. Management cautioned that new partnerships under discussion are more likely to contribute meaningfully in 2028.
• Fourth-quarter revenue guidance of $137 million to $147 million and non-GAAP EPS of $0.17 to $0.23 are below Q3’s $149.2 million and $0.24, respectively. Management expects subscriptions and services to make up more than 70% of Q4 revenue.
• Arlo reported gains in retail shelf space and multi-camera kit sales, which management says tend to generate more subscription sign-ups; multi-camera kit units rose 41% year over year during Amazon’s Prime event. The company also said early demand for its new solar camera is strong.

Arlo Technologies Stock Down 2.6%

NYSE:ARLO traded down $0.40 during midday trading on Thursday, reaching $14.82. The stock had a trading volume of 2,243,280 shares, compared to its average volume of 2,039,194. The stock has a market cap of $1.61 billion, a P/E ratio of 72.48 and a beta of 1.59. The firm has a fifty day simple moving average of $13.07 and a two-hundred day simple moving average of $13.39. Arlo Technologies has a 12-month low of $11.05 and a 12-month high of $17.76.

Analysts Set New Price Targets

Several research firms have recently weighed in on ARLO. Piper Sandler reduced their target price on Arlo Technologies from $18.00 to $16.00 and set an "overweight" rating for the company in a report on Tuesday, October 20th. Weiss Ratings reissued a "hold (c-)" rating on shares of Arlo Technologies in a report on Friday, October 30th. Finally, Wall Street Zen downgraded shares of Arlo Technologies from a "strong-buy" rating to a "buy" rating in a research report on Saturday, October 31st. Five equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to MarketBeat.com, Arlo Technologies has an average rating of "Moderate Buy" and an average target price of $20.20.

Arlo Technologies News Summary

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

• Positive Sentiment: Q3 adjusted earnings were $0.24 per share, topping the $0.20 consensus estimate and rising from $0.16 a year earlier. Revenue of $149.18 million also beat expectations of $144.93 million and grew 6.9% year over year. Arlo Reports Third Quarter 2026 Results
• Positive Sentiment: Management reported 20% growth in subscriptions and services revenue and adjusted EBITDA growth of more than 50% year over year, pointing to continued expansion in recurring revenue and profitability. Arlo Reports Third Quarter 2026 Results
• Neutral Sentiment: CFO Kurtis Binder sold 33,394 shares under a pre-arranged Rule 10b5-1 trading plan. The planned sale may draw investor attention, but it is less suggestive of a discretionary view on the stock; he retained 312,147 shares. SEC filing
• Negative Sentiment: Q4 guidance calls for adjusted EPS of $0.17–$0.23 and revenue of $137 million–$147 million. The revenue range implies a sequential decline from Q3’s $149.18 million, which may have tempered the market’s reaction to the earnings beat. Q4 revenue outlook

Insider Buying and Selling

In other news, CFO Kurtis Binder sold 83,211 shares of the firm's stock in a transaction on Monday, September 28th. The shares were sold at an average price of $12.44, for a total value of $1,035,144.84. Following the completion of the sale, the chief financial officer owned 358,899 shares in the company, valued at approximately $4,464,703.56. This trade represents a 18.82% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last ninety days, insiders have sold 129,963 shares of company stock worth $1,705,100. 2.90% of the stock is currently owned by corporate insiders.

About Arlo Technologies

Arlo Technologies, Inc is a smart home security company that develops connected devices and cloud-based services designed to help consumers monitor and protect their homes, businesses and other properties. Its product portfolio includes wire-free and wired security cameras, video doorbells, floodlight cameras, home security systems and related accessories.

Arlo's products typically connect through mobile applications and cloud services, providing features such as live video, motion detection, two-way audio, night vision and notifications.

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