Arlo Technologies Reports $510.9M Revenue with 4% Growth, Faces Net Loss of $30.5M

Arlo Technologies, Inc. reported a total revenue of $510.9 million for the fiscal year ending December 31, 2024, marking a 4% increase from $491.2 million in the previous year. The company's product revenue decreased by 7.6% to $267.9 million, primarily due to lower average selling prices and reduced sales in the Americas and Asia Pacific regions. In contrast, service revenue rose by 20.8% to $243 million, driven by a 63.5% increase in cumulative paid accounts, reflecting strong growth in subscription services. Despite the revenue growth, Arlo recorded a net loss of $30.5 million, compared to a loss of $22 million in 2023, attributed to increased operating expenses across research and development, sales and marketing, and general and administrative functions.

The company experienced significant operational changes, including a strategic partnership with Verisure Sàrl, which extended its supply agreement for another five years without minimum purchase obligations. This partnership accounted for 43.2% of Arlo's revenue in 2024. Additionally, Arlo's cumulative registered accounts reached approximately 10.8 million, with 4.6 million cumulative paid subscribers, contributing to an annual recurring revenue of $257.3 million. The company also reported a backlog of $33.5 million in performance obligations expected to be recognized as revenue in the next six months.

Arlo's workforce consisted of 360 full-time employees as of December 31, 2024, with a focus on enhancing its research and development capabilities to drive innovation in smart security solutions. The company plans to increase its investment in R&D and marketing to support product launches and expand its market presence. However, it faces challenges such as fluctuating demand, competition from larger firms, and reliance on a limited number of suppliers and manufacturers, which could impact its operational efficiency and market share.

Looking ahead, Arlo anticipates continued growth in its subscription services and aims to introduce new products to enhance its smart security platform. The company has entered into a new credit agreement with HSBC Bank USA, providing a revolving credit facility of up to $45 million, which it plans to use for working capital and general corporate purposes. Despite the positive outlook, Arlo acknowledges potential risks, including market competition, supply chain disruptions, and the need for ongoing innovation to meet consumer demands.