NYSE$ARLO

Arlo Technologies Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Delivered revenue and earnings above guidance, fueled by subscription business growth and strong gross margin.

Arlo Technologies reported a strong start to 2023 with revenue and earnings exceeding guidance. The company's performance was driven by its subscription business, which achieved record revenue and gross margin. Arlo delivered non-GAAP operating income of $1.2 million and produced free cash flow of $9 million.

  • Q1 total revenue reached $111.0 million, reflecting an 11.0% decrease year-over-year.
  • Service revenue hit a record $43.9 million in Q1, marking a 46.8% increase year-over-year.
  • ARR ended the quarter at $182.6 million, demonstrating an 80.2% growth year-over-year.
  • Arlo added 182,000 paid accounts in Q1, bringing the total cumulative paid accounts to over 2.0 million, a 60.7% increase year-over-year.

Headline financials

Total Revenue

$111M

Previous: $125M-11.0%
EPS (adj)

$0.01

Previous: $0.01+0.0%
Paid Accounts

2.0M

Previous: 1.3M+60.7%
FCF Margin

8.5%

No prior period
Capital Expenditures

-$923K

Previous: -$298K-209.7%
Free Cash Flow

-$15.2M

Previous: -$8.78M-72.8%
Net Income

-$14.2M

Previous: -$8.48M-68.0%
Operating Income

-$14.1M

Previous: -$8.67M-63.1%
Gross Profit

$35.2M

Previous: $33.6M+4.9%
Cash & Equivalents

$67M

Previous: $101M-33.7%
Total Assets

$257M

Previous: $312M-17.5%
Stock-Based Comp

$14.6M

Previous: $9.59M+52.2%

Revenue & EPS history

Arlo · Revenue · Quarterly

$111M

Q1 2023-11%vs Q1 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Arlo · $67.1M total across 1 segment · Q1 2023

  • Products
    $67.1M-29.3%

Forward guidance

For the second quarter of 2023, Arlo expects GAAP revenue to be between $105 million and $115 million, with a GAAP net loss per share between $(0.15) and $(0.09). Non-GAAP revenue is also projected to be between $105 million and $115 million, with non-GAAP earnings per diluted share between $0.01 and $0.07.

Tailwinds

  • Revenue between $105 million and $115 million (GAAP and non-GAAP)
  • Non-GAAP earnings per diluted share between $0.01 and $0.07

Headwinds

  • GAAP net loss per share between $(0.15) and $(0.09)

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+0.4%

Avg return

Earnings day

-1.4%

Avg return

5 days after

-2.5%

Avg return

30 days after

49%

17 / 35 earnings

Positive

+48.1%

Q4 2022

Best reaction

-46.2%

Q4 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.5%-11.1%-12.2%
Q4 2025+26.8%+21.9%+9.1%
Q3 2025-12.3%-8.0%-14.3%
Q1 2025+16.9%+29.1%+57.7%
Q3 2024+1.3%-0.4%+8.1%
Q2 2024-10.7%-8.8%-13.6%
Q1 2024-19.6%-19.5%-5.8%
Q4 2023+18.8%+9.7%+27.0%
Q3 2023-9.8%-3.7%+3.1%
Q2 2023+7.3%+1.2%+2.6%
Q1 2023+26.2%+29.3%+27.8%
Q4 2022+48.1%+55.0%+80.1%
Q3 2022-29.6%-17.4%-27.3%
Q2 2022+1.7%-5.1%-23.4%
Q1 2022-5.3%-3.4%+1.9%
Q4 2021+20.6%+16.1%-4.5%
Q3 2021+11.5%+11.7%+33.1%
Q2 2021-2.6%-1.8%+1.6%
Q1 2021+8.6%+1.3%+9.7%
Q4 2020+6.2%-1.7%+3.0%
Q3 2020+6.8%+2.3%+50.0%
Q2 2020+22.1%+15.2%+2.1%
Q1 2020-10.8%-13.9%-3.5%
Q4 2019+17.3%-3.8%-48.4%
Q3 2019-16.2%-13.6%-3.2%
Q2 2019-21.5%-21.5%-16.9%
Q1 2019+5.6%+3.8%-7.6%
Q4 2016-1.7%+1.5%+0.7%
Q4 2018-46.2%-49.0%-39.2%
Q3 2017-6.7%-0.9%-13.0%
Q3 2018-9.6%-10.4%-11.9%
Q2 2018-8.1%-13.1%-40.4%
Q4 2017-8.1%-13.1%-40.4%
Q2 2017-8.1%-13.1%-40.4%
Q1 2018-8.1%-13.1%-40.4%
Q1 2017

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