arlo-20240929

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38618

ARLO TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Delaware		38-4061754
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2200 Faraday Ave.,	Suite #150
Carlsbad,	California	92008
(Address of principal executive offices)		(Zip Code)

(408) 890-3900

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

ARLO

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of outstanding shares of the registrant’s Common Stock, $0.001 par value, was 100,341,376 as of November 1, 2024.

Table of Contents

Arlo Technologies, Inc.

Form 10-Q

For the Quarterly Period Ended September 29, 2024

TABLE OF CONTENTS


PART I: FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Comprehensive Loss	4
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity	5
	Unaudited Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II: OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1.Financial Statements

ARLO TECHNOLOGIES, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	As of
	September 29, 2024		December 31, 2023
	(In thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	77,032	$	56,522
Short-term investments	69,542		79,974
Accounts receivable, net	68,567		65,360
Inventories	51,975		38,408
Prepaid expenses and other current assets	12,424		10,271
Total current assets	279,540		250,535
Property and equipment, net	4,436		4,761
Operating lease right-of-use assets, net	9,510		11,450
Goodwill	11,038		11,038
Restricted cash	3,654		4,131
Other non-current assets	4,197		3,623
Total assets	$	312,375	$	285,538
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	93,745	$	55,201
Deferred revenue	24,596		18,041
Accrued liabilities	78,933		88,209
Total current liabilities	197,274		161,451
Non-current operating lease liabilities	14,479		17,021
Other non-current liabilities	3,713		3,790
Total liabilities	215,466		182,262
Commitments and contingencies (Note 8)
Stockholders’ Equity:
Preferred stock: $0.001 par value; 50,000,000 shares authorized; none issued or outstanding	—		—
Common stock: $0.001 par value; 500,000,000 shares authorized; shares issued and outstanding: 100,321,524 at September 29, 2024 and 95,380,281 at December 31, 2023	100		95
Additional paid-in capital	489,677		470,322
Accumulated other comprehensive income	236		320
Accumulated deficit	(393,104)		(367,461)
Total stockholders’ equity	96,909		103,276
Total liabilities and stockholders’ equity	$	312,375	$	285,538

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

ARLO TECHNOLOGIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS


	Three Months Ended				Nine Months Ended
	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
	(In thousands, except per share data)
Revenue:
Products	$	75,784	$	78,961	$	210,463	$	210,770
Services	61,883		51,042		178,851		145,313
Total revenue	137,667		130,003		389,314		356,083
Cost of revenue:
Products	74,820		73,335		204,080		197,520
Services	14,431		13,529		42,584		38,349
Total cost of revenue	89,251		86,864		246,664		235,869
Gross profit	48,416		43,139		142,650		120,214

Operating expenses:
Research and development	17,562		16,829		57,916		52,197
Sales and marketing	17,832		15,863		52,900		48,137
General and administrative	17,052		12,460		57,830		43,089
Others	1,423		263		2,868		1,236
Total operating expenses	53,869		45,415		171,514		144,659

Loss from operations	(5,453)		(2,276)		(28,864)		(24,445)
Interest income, net	1,400		1,175		4,281		2,736
Other income (loss), net	(57)		10		(100)		23
Loss before income taxes	(4,110)		(1,091)		(24,683)		(21,686)
Provision for income taxes	329		29		960		1,042
Net loss	$	(4,439)	$	(1,120)	$	(25,643)	$	(22,728)

Net loss per share:
Basic and diluted	$	(0.04)	$	(0.01)	$	(0.26)	$	(0.25)

Weighted average shares used to compute net loss per share:
Basic and diluted	99,731		94,243		97,932		92,069


Comprehensive loss:
Net loss	$	(4,439)	$	(1,120)	$	(25,643)	$	(22,728)
Other comprehensive income (loss), net of tax	45		85		(84)		344
Total comprehensive loss	$	(4,394)	$	(1,035)	$	(25,727)	$	(22,384)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

ARLO TECHNOLOGIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Three Months Ended				Nine Months Ended
	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
	(In thousands)
Total stockholders’ equity, beginning balances	$	99,268	$	81,756	$	103,276	$	87,695

Common stock:
Beginning balances	$	98	$	94	$	95	$	89
Issuance of common stock under stock-based compensation plans	3		1		8		8

Restricted stock unit withholdings	(1)		(1)		(3)		(3)
Ending balances	$	100	$	94	$	100	$	94

Additional paid-in capital:
Beginning balances	$	487,644	$	448,543	$	470,322	$	433,138
Stock-based compensation expense	12,073		8,021		42,596		28,643
Settlement of liability classified restricted stock units	5,691		6,741		12,594		13,480
Issuance of common stock under stock-based compensation plans	4,730		681		5,413		3,667
Issuance of common stock under Employee Stock Purchase Plan	—		—		1,692		1,617
Restricted stock unit withholdings	(20,461)		(5,971)		(42,940)		(22,530)
Ending balances	$	489,677	$	458,015	$	489,677	$	458,015

Accumulated deficit:
Beginning balances	$	(388,665)	$	(367,033)	$	(367,461)	$	(345,425)
Net loss	(4,439)		(1,120)		(25,643)		(22,728)
Ending balances	$	(393,104)	$	(368,153)	$	(393,104)	$	(368,153)

Accumulated other comprehensive income:
Beginning balances	$	191	$	152	$	320	$	(107)
Other comprehensive income (loss), net of tax	45		85		(84)		344
Ending balances	$	236	$	237	$	236	$	237

Total stockholders’ equity, ending bala

SEC Form 10-Q filed by Arlo Technologies Inc.