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SAN JOSE, Calif. - Arlo Technologies, Inc. (NYSE: ARLO), a smart home security company with annual revenue of $510.89 million and a market capitalization of $1.08 billion, has reached a new milestone with its AI-powered subscription service surpassing 5 million paid subscribers, the company reported today. This growth reflects a more than tenfold increase over the past five years, with the service now generating over $275 million in Annual Recurring Revenue (ARR). According to InvestingPro analysis, the company maintains a healthy gross profit margin of 36.7%.
The smart home security brand attributes its success to a combination of innovation, operational execution, and a focus on customer retention. Arlo’s average subscriber remains with the company for over seven years, and the firm boasts a low monthly churn rate in comparison to its consumer subscription peers. While InvestingPro data shows the company isn’t currently profitable, analysts expect positive earnings this year, with forecasted EPS of $0.62 for fiscal year 2025.
Matthew McRae, CEO of Arlo Technologies, stated, "Arlo’s unparalleled subscription growth and impressive customer retention rate is a testament to the power of our service business and the advanced AI capabilities helping us win and retain subscribers."
Arlo’s platform is known for its sophisticated AI capabilities, which include Arlo Intelligence, a smart security AI engine that processes video, audio, and environmental events to provide specific alerts and system triggers. This technology aims to enable faster responses to potential emergencies while minimizing unnecessary notifications.
Arlo’s range of products and services includes wire-free and LTE-enabled security cameras, video doorbells, floodlights, and security systems, all of which are managed through a cloud-based platform accessible from any location with Wi-Fi or cellular connectivity.
The company’s commitment to privacy and security is also emphasized, with Arlo implementing industry standards for data protection and offering users enhanced controls over their personal information.
This announcement is based on a press release statement and reflects the company’s performance and strategic positioning within the smart home security market. Trading at $10.40, the stock has shown strong momentum recently, though current valuations suggest it may be trading above Fair Value. Discover more insights and 8 additional ProTips about Arlo Technologies in the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Arlo Technologies reported its fourth-quarter and full-year 2024 financial results, showcasing a slight revenue beat at $121.6 million against a $121.2 million estimate, while meeting adjusted earnings per share (EPS) expectations of $0.10. Service revenue, a significant portion of Arlo’s total revenue, increased by 15% year-over-year to $64.1 million, with projections for this segment to exceed $300 million in 2025. Despite a minor miss in EPS forecasts, Arlo’s stock rose due to strong service revenue growth and strategic product innovations. The company anticipates first-quarter 2025 revenue between $114 million and $124 million, aligning with analyst expectations. Analyst Jacob Stephan from Lake Street noted Arlo’s slightly better-than-expected revenue and in-line EPS, maintaining a price target based on its service revenue growth potential. Arlo’s strategic partnerships, such as those with RapidSOS and Origin AI, are expected to enhance its market position. Additionally, Arlo is planning a significant product launch for the 2025 holiday season, which is anticipated to drive further growth.
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