ARLO Earnings Prediction
The chart below shows how ARLO performed 10 days before and after its earnings report, based on data from the past quarters. Typically, ARLO sees a -1.45% change in stock price 10 days leading up to the earnings, and a +4.40% change 10 days following the report. On the earnings day itself, the stock moves by +0.12%. This data can give you a slight idea of what to expect for the next quarter's release.
ARLO Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
121.57M
-10.01%
-11.69%
Gross Margin
36.90%
5.28%
4.92%
Operating Margin
-4.56%
1472.41%
55.63%
Net Margin
-4.00%
-884.31%
24.22%
EPS
-0.05
-600.00%
25.00%
No Data Available
ARLO Earnings Analysis
Arlo Technologies Inc Corporation (ARLO.N) Earnings Conference Call
Positive
Subscriber Growth and Revenue: Arlo has nearly 11 million registered accounts and over 4.5 million paid subscribers, generating over $250 million in annual recurring revenue, growing faster than 20% year-over-year.
High Gross Margin Efficiency: The company achieved a gross margin on service revenue above 80% and has a lifetime value to customer acquisition cost (LTV to CAC) ratio of four, indicating efficient sales and strong returns for shareholders.
Subscription Business Growth: Registered accounts have more than doubled and paid subscriptions have grown more than tenfold in the last five years, showcasing exceptional growth in their subscription business.
Service Revenue Increase: Arlo's service revenue for 2024 was $243 million, representing a 21% year-over-year increase, and service revenue comprised 53% of total revenue in Q4 2024.
Non-GAAP Operating Profit Surge: The company reported a non-GAAP operating profit of $37.9 million for 2024, a 52% increase from the previous year, demonstrating strong operational performance.
Free Cash Flow Growth: Arlo's free cash flow reached $48.6 million in 2024, reflecting a 37% year-over-year growth, indicating improved profitability and cash management.
Financial Stability Highlight: The company has a strong balance sheet with $151.5 million in cash and short-term investments, up $15 million year-over-year, underscoring financial stability.
Customer Retention Insights: Arlo's churn rate is between 1.1% and 1.3%, with customers staying for an average of over seven years, indicating high customer retention and satisfaction.
Camera Lineup Refresh: The company plans to refresh nearly every camera in its lineup in 2025, marking the largest device launch in its history, which is expected to drive growth.
Emergency Response Enhancement: Arlo's partnership with RapidSOS will enhance emergency response capabilities, improving user safety and potentially expanding their market reach.
Negative
Product Revenue Decline: Product revenue for the full year of 2024 was $268 million, down by $22.1 million compared to the prior year.
Promotional Impact on Margins: In Q4, the promotional activities across all retail channels were aggressive, which decreased the ASPs for our devices and attributed to a decline in our overall product gross margins.
Customer Acquisition Cost Increase: The cost of customer acquisition, or CAC, increased from $100 in the prior year to $200 in 2024.
Subscriber Growth Slowdown: We believe that substantially all of the Verisure catch up related to firmware upgrades are completed, indicating a potential slowdown in subscriber growth.
CAC Increase Strategy: The increase in CAC was driven by our intentional strategy to reduce ASPs and use our products to drive household formation, which may not be sustainable long-term.
Revenue Decline Concerns: Despite the growth in paid accounts, the overall product revenue decline raises concerns about the sustainability of the growth strategy.
ARLO FAQs
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ARLO Earning Call Sentiment
Arlo Technologies, Inc. (ARLO) Q4 2024 Earnings Call Transcript
ARLO.N
-1.23%Positive
The earnings call highlights strong financial performance, with significant growth in ARR, service revenue, and improved gross margins. The Q&A section provides clarity on future strategies, including a $300 million service revenue target and strategic partnerships. Despite some uncertainties in product revenue growth, the overall sentiment is positive, supported by optimistic guidance and robust financial metrics. Given the company's small market cap, the stock price is likely to react positively, falling within the 2% to 8% range over the next two weeks.
