arlo-20250330

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 March 30, 2025


☐			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)

5770 Fleet Street
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 103,400,957 as of May 2, 2025.


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	31
Item 4.	Controls and Procedures	31

PART II: OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35


	As of
	March 30, 2025		December 31, 2024
	(In thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	84,009	$	82,032
Short-term investments	69,097		69,419
Accounts receivable, net	46,054		57,332
Inventories	34,559		40,633
Prepaid expenses and other current assets	12,629		13,190
Total current assets	246,348		262,606
Property and equipment, net	7,194		4,765
Operating lease right-of-use assets, net	14,836		15,698
Goodwill	11,038		11,038
Long-term investment	12,500		—
Other non-current assets	4,655		4,293
Total assets	$	296,571	$	298,400
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	49,244	$	63,784
Deferred revenue	42,751		27,248
Accrued liabilities	81,367		85,730
Total current liabilities	173,362		176,762
Non-current operating lease liabilities	17,443		18,357
Other non-current liabilities	2,396		2,372
Total liabilities	193,201		197,491
Commitments and contingencies (Note 7)
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: 103,304,904 at March 30, 2025 and 100,885,158 at December 31, 2024	103		101
Additional paid-in capital	502,062		498,739
Accumulated other comprehensive income	5		34
Accumulated deficit	(398,800)		(397,965)
Total stockholders’ equity	103,370		100,909
Total liabilities and stockholders’ equity	$	296,571	$	298,400


	Three Months Ended
	March 30, 2025		March 31, 2024
	(In thousands, except per share data)
Revenue:
Subscriptions and services	$	68,849	$	56,707
Products	50,217		67,493
Total revenue	119,066		124,200
Cost of revenue:
Subscriptions and services	12,265		13,596
Products	54,074		63,224
Total cost of revenue	66,339		76,820
Gross profit	52,727		47,380

Operating expenses:
Research and development	16,165		20,793
Sales and marketing	20,203		17,370
General and administrative	17,785		19,348
Other operating expense	25		479
Total operating expenses	54,178		57,990

Loss from operations	(1,451)		(10,610)
Interest income, net	1,316		1,386
Other non-operating expense, net	(198)		(25)
Loss before income taxes	(333)		(9,249)
Provision for income taxes	502		395
Net loss	$	(835)	$	(9,644)

Net loss per share:
Basic and diluted	$	(0.01)	$	(0.10)

Weighted average shares used to compute net loss per share:
Basic and diluted	102,217		96,264


Comprehensive loss:
Net loss	$	(835)	$	(9,644)
Other comprehensive loss, net of tax	(29)		(40)
Total comprehensive loss	$	(864)	$	(9,684)


Contract Balances	Balance Sheet Location	March 30, 2025		December 31, 2024		$ change		% change
		(In thousands)
Accounts receivable, net	Accounts receivable, net	$	46,054	$	57,332	$	(11,278)	(19.7)	%
Contract liabilities current	Deferred revenue	$	42,751	$	27,248	$	15,503	56.9	%
Contract liabilities non-current	Other non-current liabilities	$	426	$	326	$	100	30.7	%


	Sales Incentives				Sales Returns
	Three Months Ended				Three Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
	(In thousands)				(In thousands)
Balance at the beginning of the period	$	29,846	$	26,110	$	10,560	$	16,553
Credits issued	(21,718)		(19,788)		(4,199)		(7,666)
Additions	20,250		14,997		1,796		2,220
Balance at the end of the period	$	28,378	$	21,319	$	8,157	$	11,107


	As of March 30, 2025								As of December 31, 2024
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
	(In thousands)
U.S. Treasuries	$	69,092	$	5	$	—	$	69,097	$	69,385	$	34	$	—	$	69,419


	Operating Lease Payments		Sublease Payments		Net
	(In thousands)
2025 (Remaining nine months)	$	3,456	$	(1,646)	$	1,810
2026	5,532		(2,066)		3,466
2027	5,537		(2,322)		3,215
2028	4,585		(2,392)		2,193
2029	2,712		(1,228)		1,484
Thereafter	3,616		—		3,616
Total future lease payments	$	25,438	$	(9,654)	$	15,784
Less: imputed interest	(4,176)
Present value of future minimum lease payments	$	21,262

Accrued liabilities	$	3,819
Non-current operating lease liabilities	17,443
Total lease liabilities	$	21,262


			Number of Shares
			(In thousands)
Shares available for grants as of December 31, 2024			3,356
Additional authorized shares			4,050
Granted			(3,293)
Forfeited / cancelled			8

Shares available for grants as of March 30, 2025			4,121


	Number of Shares	Weighted Average Exercise Price Per Share
	(In thousands)	(In dollars)
Outstanding as of December 31, 2024	549	$	13.24
Granted	—	$	—
Exercised	(76)	$	8.54
Forfeited / cancelled	—	$	—
Expired	(130)	$	14.39
Outstanding as of March 30, 2025	343	$	13.85
Vested and exercisable as of March 30, 2025	343	$	13.85


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
	(In thousands)	(In dollars)
Outstanding as of December 31, 2024	7,112	$	7.76
Granted	1,593	$	11.37
Vested	(2,196)	$	7.92
Forfeited	(40)	$	7.77
Outstanding as of March 30, 2025	6,469	$	8.60


	Three Months Ended
	March 30, 2025		March 31, 2024
	(In thousands)
Total stockholders’ equity, beginning balances	$	100,909	$	103,276

Common stock:
Beginning balances	$	101	$	95
Issuance of common stock under stock-based compensation plans	3		3

Repurchase of common stock	(1)		—
Restricted stock unit withholdings	—		(1)
Ending balances	$	103	$	97

Additional paid-in capital:
Beginning balances	$	498,739	$	470,322
Stock-based compensation expense	13,115		13,224
Settlement of liability classified restricted stock units	4,996		6,903
Issuance of common stock under stock-based compensation plans	646		570

Repurchase of common stock	(15,434)		—
Restricted stock unit withholdings	—		(14,354)
Ending balances	$	502,062	$	476,665

Accumulated deficit:
Beginning balances	$	(397,965)	$	(367,461)
Net loss	(835)		(9,644)
Ending balances	$	(398,800)	$	(377,105)

Accumulated other comprehensive income:
Beginning balances	$	34	$	320
Other comprehensive loss, net of tax	(29)		(40)
Ending balances	$	5	$	280

Total stockholders’ equity, ending balances	$	103,370	$	99,937

Common stock shares:
Beginning balances	100,885		95,380
Issuance of common stock under stock-based compensation plans	3,817		3,221


	Three Months Ended
	March 30, 2025		March 31, 2024
	(In thousands)
Cash flows from operating activities:
Net loss	$	(835)	$	(9,644)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense	17,012		18,550
Depreciation and amortization	829		903
Allowance for credit losses and non-cash changes to reserves	416		(107)
Deferred income taxes	(155)		68
Discount accretion on investments and other	(657)		(792)
Changes in assets and liabilities:
Accounts receivable, net	11,287		8,978
Inventories	5,648		(6,275)
Prepaid expenses and other assets	354		(1,672)
Accounts payable	(14,983)		14,561
Deferred revenue	15,597		3,427
Accrued and other liabilities	(3,594)		(8,191)
Net cash provided by operating activities	30,919		19,806
Cash flows from investing activities:
Purchases of property and equipment	(2,803)		(356)
Purchases of short-term investments	(44,049)		(40,802)
Purchase of long-term investment	(12,500)		—
Proceeds from maturities of short-term investments	45,000		40,718
Net cash used in investing activities	(14,352)		(440)
Cash flows from financing activities:
Proceeds related to employee benefit plans	649		573
Repurchase of common stock	(15,239)		—
Restricted stock unit withholdings	—		(14,355)
Net cash used in financing activities	(14,590)		(13,782)
Net increase in cash, cash equivalents, and restricted cash	1,977		5,584
Cash, cash equivalents, and restricted cash, at beginning of period	82,032		60,653
Cash, cash equivalents, and restricted cash, at end of period	$	84,009	$	66,237
Reconciliation of cash, cash equivalents, and restricted cash to Unaudited Condensed Consolidated Balance Sheets
Cash and cash equivalents	$	84,009	$	62,054
Restricted cash	—		4,183
Total cash, cash equivalents, and restricted cash	$	84,009	$	66,237
Supplemental cash flow information:
Non-cash investing activities:


	As of
	March 30, 2025		December 31, 2024
	(In thousands)
Machinery and equipment	$	14,959	$	14,399
Software	19,774		16,918
Computer equipment	902		894
Leasehold improvements	2,898		3,302
Furniture and fixtures	2,015		1,839
Total property and equipment, gross	40,548		37,352
Accumulated depreciation	(33,354)		(32,587)
Total property and equipment, net	$	7,194	$	4,765

SEC Form 10-Q filed by Arlo Technologies Inc.