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what it is
Arlo sells security cameras, doorbells, and monitoring plans to 39.7 million shipped devices.
how it gets paid
Last year Arlo Technologies made $529M in revenue. Arlo Secure subscriptions was the main engine at $0.06B, or 45% of sales.
what just happened
Arlo posted $141M of quarterly revenue and $0.22 non-GAAP EPS.
At a glance
B+ balance sheet — decent shape, but not bulletproof
45/100 earnings predictability — expect surprises
109.2x trailing p/e — you're paying up for this one
11.7% return on capital — nothing to write home about
$0.14 fy2025 eps est
xvary composite: 49/100 — below average
What they do
Arlo sells security cameras, doorbells, and monitoring plans to 39.7 million shipped devices.
Arlo has shipped 39.7 million smart devices. That gives you a huge installed base, which means homes already wired for Arlo gear. The cloud platform is the glue. Cloud platform → software that stores video and sends alerts → you get paid after the camera sale.
How they make money
$529M
annual revenue
Arlo Secure subscriptions
$0.06B
+30.0%
Security cameras
$0.05B
0.5%
Video doorbells & floodlights
$0.02B
0.0%
Accessories & other
$0.01B
0.0%
The products that matter
connected security hardware
Wireless Security Cameras
$317M · about 60% of revenue shown
it's still the larger business at $317M even after a 5% decline. this gets customers into the platform, but it is no longer the part investors are paying up for.
hardware base
subscriptions and cloud monitoring
Arlo Secure Plans
$212M · +30% growth
this $212M business grew 30%. in human-speak, the camera is the one-time sale and the plan is the part Wall Street wants to pretend is software.
growth engine
entry-point device category
Video Doorbells
included in product revenue
the page does not break out doorbell revenue separately. that is thin, but the strategic point is clear: every extra device is another chance to attach a paid plan.
attach opportunity
Key numbers
$141M
TTM revenue
That is the whole business over 12 months. It is small enough that one weak year changes the story fast.
109.2x
trailing P/E
You are paying 109 years of earnings for one year of profit. That is a high bar for a company with a 2.3% margin.
2.3%
operating margin
This says Arlo keeps 2.3 cents of operating profit from each sales dollar. One bad quarter can erase that fast.
11.7%
return on capital
That is decent use of capital, but it is not strong enough to make the valuation look cheap.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 4 — safer than 20% of stocks
- price stability 15 / 100
- long-term debt $7M (0% of capital)
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for ARLO right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Arlo posted $141M of quarterly revenue and $0.22 of non-GAAP EPS.
Revenue was up 206% vs. prior year. EPS was up 33% vs. prior year. The gross margin figure came in at n/a in the source data.
$141M
revenue
$0.08
eps
n/a
gross margin
the number that mattered
$141M was the quarter number that mattered because it showed Arlo can grow revenue while expanding services margins to 84%.
source: company earnings report, 2026
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What could go wrong
The top threat here is subscription deceleration inside a premium multiple. ARLO can live with soft hardware demand for a while. It has a much harder time keeping a 109.2x earnings multiple if Services stops being the one fast-growing piece.
med
Services slow and the multiple does the falling for you
The stock trades at 109.2x trailing earnings. Service revenue grew 30% while product revenue fell 5%. If that spread narrows, investors stop treating ARLO like an emerging subscription story and start treating it like a hardware name with thin margins.
That rerating risk matters because current profitability is only 2.3% at the operating line. There is not much earnings support underneath the story.
med
Recurring revenue only works if customers keep paying
Service revenue is already $212M. At that size, churn is no longer a background metric. It is the business model. If customers buy the device and skip the subscription later, the valuation loses the part investors like most.
You would feel that in both growth and sentiment. A smaller recurring layer makes the stock look a lot more like a camera company again.
med
A 2.3% operating margin leaves almost no room for mistakes
Low debt helps, but thin margins still make the income statement fragile. Pricing pressure, support costs, or weaker product demand do not need to be dramatic to hit earnings when the operating margin starts at 2.3%.
This is why the margin line matters as much as the revenue line. More subscriptions are useful only if they show up in profits.
The three numbers that decide the story are 30% service growth, -5% product growth, and 2.3% operating margin. If the first one slows and the third one does not improve, 109.2x earnings gets hard to defend in a hurry.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
service revenue growth
30% is the number that matters. If that starts looking ordinary, the stock stops getting treated like an emerging subscription platform.
calendar
Q1 2026 earnings
Expected May 6, 2026. You want proof that Services is still carrying the mix shift and that margin improvement is not stuck at 2.3%.
trend
hardware decline versus subscription growth
Product revenue fell 5% while Services grew 30%. Same company. Same period. If that gap closes the wrong way, the thesis weakens fast.
risk
buyback optics
The $50M repurchase plan can help sentiment. It does not rescue the stock if subscription growth slows or margins stay stuck near 2.3%.
Analyst rankings
earnings predictability
45 / 100
Earnings are harder to model than the average stock. In human-speak, ARLO gets punished or rewarded hard when a quarter breaks the expected pattern.
risk rank
4
Risk rank 4 means this sits on the riskier side of the coverage universe. In human-speak, you are buying execution and sentiment, not stability.
source: institutional data
Institutional activity
institutional ownership data for ARLO is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$15
current price
n/a
target midpoint · n/a from current
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