Arlo Technologies, Inc. reported a total revenue of $529.3 million for the fiscal year ending December 31, 2025, marking a 3.6% increase from $510.9 million in the previous year. The growth was primarily driven by a significant rise in subscription and services revenue, which increased by 30.2% to $316.4 million, attributed to a 23.7% increase in cumulative paid accounts and a rise in average revenue per user. Conversely, product revenue decreased by 20.5% to $212.9 million, largely due to reduced average selling prices and timing issues with shipments from a major customer in the EMEA region.
The company achieved a net income of $14.9 million, a notable recovery from a net loss of $30.5 million in 2024. This turnaround was supported by a gross profit of $232.8 million, representing a gross margin of 44.0%, up from 36.7% the previous year. The improvement in gross profit was driven by cost optimizations in the subscription services segment, despite challenges in the product segment due to increased freight costs and tariffs.
Arlo's operational metrics showed positive trends, with cumulative registered accounts reaching approximately 12.1 million, a 12.2% increase year-over-year, and cumulative paid accounts rising to 5.7 million, a 23.7% increase. The company also reported annual recurring revenue of $330.5 million, reflecting a 28.4% increase from the prior year. These metrics indicate strong customer engagement and growth in subscription services, which are critical for Arlo's long-term strategy.
Strategically, Arlo has focused on expanding its product offerings and enhancing its subscription services. The company has launched several new products, including advanced security cameras and home security systems, and has entered into partnerships to leverage broader distribution channels. Notably, Arlo's collaboration with Verisure, which accounted for 32% of total revenue, has been extended through November 2029, providing a stable revenue stream. The company also plans to increase its investment in research and development to drive innovation and maintain competitive advantages in the smart security market.
Looking ahead, Arlo anticipates continued growth in subscription services and product sales, although it acknowledges potential challenges from market competition and economic conditions. The company has indicated that it may require additional financing to support its growth initiatives, given its accumulated deficit of $383 million as of December 31, 2025. Overall, Arlo remains focused on enhancing its product portfolio and expanding its market presence while navigating the complexities of the evolving smart security landscape.
About Arlo Technologies, Inc.
Arlo Technologies, Inc. designs and sells smart security devices and subscription services for home, business, and personal safety. Its product portfolio includes Wi-Fi and LTE-enabled cameras, video doorbells, floodlight cameras, and multi-sensor security systems, supported by AI-powered cloud-based monitoring and analytics. Serving consumers, small businesses, and security providers globally, Arlo integrates with major IoT platforms, offering scalable, user-friendly security solutions through retail, wholesale, and direct channels.
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