0001736946-26-000031
SEC filingArlo Technologies, Inc. reported total revenue of $529.3 million for fiscal year 2025, achieving net income of $14.9 million and comprehensive income of $14.9 million. The company generated $232.8 million in gross profit with a gross margin of 44.0%, while operating income was $6.1 million. Key financial drivers included strong operating cash flow of $78.7 million and net cash provided by investing activities of $27.8 million, partially offset by $42.1 million used in financing activities primarily for stock repurchases. The balance sheet shows total assets of $310.5 million with $146.4 million in cash and equivalents, total liabilities of $182.7 million, and stockholders' equity of $127.8 million. The company's strategic focus on subscription services like Arlo Secure, Arlo Total Security, and Arlo Safe, along with new product launches in 2025, positions it for continued growth in the smart security market.
Arlo Technologies reported total revenue of $529.3 million for fiscal year 2025, with net income of $14.9 million and comprehensive income of $14.9 million. The company achieved gross profit of $232.8 million and operating income of $6.1 million. Total operating expenses were $226.8 million, comprising research and development ($73.7 million), sales and marketing ($84.8 million), general and administrative ($66.1 million), and other operating expense (-$2.2 million). Other income contributed $9.6 million, including $4.1 million from gain on early lease termination and $5.5 million in net interest income. Income before taxes was $15.7 million with an effective income tax expense of $741,000. The company ended the year with total assets of $310.5 million and stockholders' equity of $127.8 million.
The company's total revenue of $529.3 million reflects its diversified smart security platform encompassing subscription services and product sales. Key subscription services include Arlo Secure (advanced AI-based detection and emergency response), Arlo Total Security (24/7 professional monitoring with security hardware), and Arlo Safe (personal safety service). The company launched several new products in 2025, including Arlo Essential cameras and doorbells (refreshed in Q4 2025), Arlo Pro 6 (released in Q4 2025), and Arlo Ultra 3 (released in Q4 2025). Verisure, the exclusive distributor in Europe, accounted for 32% of total revenue, with a backlog of $46.3 million expected to be recognized over the next six months. The company entered a partnership agreement with ADT in June 2025 to expand subscriptions and services revenue, though no revenue was recognized from this partnership in 2025.
Gross profit was $232.8 million on total revenue of $529.3 million, representing a gross margin of 44.0%. Total cost of revenue was $296.5 million. Operating income of $6.1 million resulted in an operating margin of 1.2%. The company's cost structure shows significant investment in research and development ($73.7 million), sales and marketing ($84.8 million), and general and administrative expenses ($66.1 million). Other operating expense showed a credit of $2.2 million. The company's profitability was supported by other income of $9.6 million, which included non-operating items such as gain on early lease termination ($4.1 million) and interest income ($5.5 million).
Net cash provided by operating activities was $78.7 million, driven by net income of $14.9 million adjusted for non-cash items including stock-based compensation expense ($62.3 million), depreciation and amortization ($3.9 million), and changes in working capital. Investing activities provided net cash of $27.8 million, primarily from proceeds from maturities of short-term investments ($165.0 million) offset by purchases of short-term investments ($112.9 million), property and equipment ($11.8 million), and long-term investment ($12.5 million). Financing activities used $42.1 million, mainly for repurchase of common stock ($45.6 million) partially offset by proceeds related to employee benefit plans ($3.5 million). The balance sheet shows total assets of $310.5 million including current assets of $260.5 million (cash and equivalents $146.4 million, accounts receivable $39.7 million, inventories $41.2 million). Total liabilities were $182.7 million with current liabilities of $172.3 million (accounts payable $42.8 million, deferred revenue $37.1 million, accrued liabilities $92.4 million). Stockholders' equity was $127.8 million with accumulated deficit of -$383.0 million.
The company's strategic priorities focus on expanding its smart security platform through new product introductions and subscription service growth. Management plans to continue introducing new smart security devices, increase registered accounts on the platform, and generate incremental recurring revenue through paid subscription services. The company sees growth opportunities in small business, government, and direct home monitoring channels in addition to retail and e-commerce. Key risk factors include intense competition from companies with greater resources, potential need to lower prices or increase marketing expenses, and dependence on strategic partners like Verisure (32% of revenue). The company maintains 186 research and development employees and continues to invest in innovation, holding 146 issued U.S. patents and 107 international patents as of December 31, 2025.