Arlo Technologies Reports Q3 2025 Revenue of $139.5M and Return to Profitability

Arlo Technologies, Inc. reported its financial results for the third quarter of 2025, revealing a total revenue of $139.5 million, a slight increase of 1.4% from $137.7 million in the same period last year. For the nine months ending September 28, 2025, revenue totaled $388.0 million, down marginally from $389.3 million in the prior year. The company achieved a net income of $6.9 million for the quarter, compared to a net loss of $4.4 million in the same quarter of 2024. This marks a significant turnaround in profitability, with net income for the nine-month period reaching $9.2 million, a recovery from a loss of $25.6 million in the previous year.

The increase in revenue was primarily driven by a 29.2% rise in subscriptions and services revenue, which reached $79.9 million, attributed to a 27.4% increase in cumulative paid accounts and a higher average revenue per user. However, product sales declined by 21.4% to $59.6 million, largely due to reduced average selling prices and lower sales in the EMEA region, influenced by shipment timing from a major customer. The company’s gross profit for the quarter was $56.5 million, reflecting a gross margin of 40.5%, up from 35.2% in the prior year.

Arlo's operational metrics showed positive trends, with cumulative registered accounts increasing by 13.6% to approximately 11.8 million, and cumulative paid accounts rising by 27.4% to 5.4 million. The annual recurring revenue (ARR) also grew by 33.8% to $323.2 million. The company continues to focus on expanding its user base and enhancing its subscription services, which are critical for future growth. As of September 28, 2025, Arlo had cash and cash equivalents of $86.0 million, alongside short-term investments of $79.5 million, providing a solid liquidity position.

Strategically, Arlo has made significant investments in research and development, with expenses in this area totaling $18.1 million for the quarter, reflecting a commitment to innovation and product development. The company also reported a gain of $4.1 million from an early lease termination, which positively impacted its financial results. Looking ahead, Arlo plans to continue investing in marketing and product development to drive demand and expand its market presence, while also managing costs effectively to improve profitability.

In summary, Arlo Technologies has demonstrated a notable recovery in its financial performance, with increased revenues from subscriptions and a return to profitability. The company is well-positioned to capitalize on its growing user base and recurring revenue model, while continuing to innovate in the competitive smart security market.