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Sep 28, 2025
Arlo Q3 2025 Earnings Report
Arlo reported strong third quarter 2025 results, driven by accelerated growth in its services business and record gross margins.
Key Takeaways
Arlo Technologies delivered an outstanding third quarter, with annual recurring revenue (ARR) accelerating to $323.2 million, a 33.8% year-over-year increase. Subscriptions and services revenue reached a record $79.9 million, contributing significantly to total revenue. The company also achieved record GAAP and non-GAAP gross margins, along with strong adjusted EBITDA and EPS.
Annual Recurring Revenue (ARR) reached $323.2 million, growing 33.8% year over year.
Subscriptions and services revenue hit a record of $79.9 million, increasing 29.2% year over year and comprising 57.3% of total revenues.
GAAP gross margin was 40.5% and non-GAAP gross margin was 41.4%, both showing significant year-over-year improvements.
Adjusted EBITDA was $17.1 million with an adjusted EBITDA margin of 12.2%, while GAAP EPS was $0.07 and non-GAAP EPS was $0.16.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Arlo expects fourth quarter 2025 revenue to be between $131 million and $141 million, with non-GAAP diluted net income per share projected to be between $0.13 and $0.19.
Positive Outlook
- Anticipated revenue range of $131 million to $141 million for Q4 2025.
- Non-GAAP diluted net income per share expected to be between $0.13 and $0.19.
- The comprehensive launch of a refreshed product portfolio and Arlo Secure 6 AI-driven security platform positions the company for a successful holiday season.
- Expectations for additional subscriptions and services revenue growth heading into 2026.
- Management is confident in the company's strategic positioning for future growth.
Challenges Ahead
- GAAP diluted net income per share is projected to be lower, between $0.00 and $0.06.
- Business outlook does not include estimates for currently unknown income and expense items, which could significantly affect guidance.
- The global tariff environment remains uncertain, potentially increasing product costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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