ARLO · Arlo Technologies, Inc.

Arlo Technologies delivered exceptional Q1 2026 results, driven by robust growth in its high-margin subscriptions and services segment, which reached a record $90.1 million, up 30.9% year over year and comprising 59.9% of total revenue. This momentum propelled ARR to $356.9 million, up 29.2% YoY, supported by cumulative paid accounts surpassing 6 million, a 22.6% increase and a key milestone toward the company's long-range target of 10 million. Gross margins expanded significantly, with GAAP at a record 48.3% (up 400 basis points YoY) and non-GAAP at 50.1% (up 460 basis points), reflecting operational excellence and a favorable product mix. Profitability accelerated sharply, as adjusted EBITDA hit $30.4 million (up 85.3% YoY) with a 20.2% margin, and non-GAAP EPS reached a record $0.28. CEO Matthew McRae highlighted sustained momentum and confidence in capital allocation, evidenced by the $8 million stock repurchase under a new $50 million program and a $6.4 million gain from selling the Origin Wireless investment. Strategically, the acquisition of Aloe Care Health in April positions Arlo to expand AI-powered services into aging-in-place care, complementing core smart home security growth. For Q2, management guides revenue to $145-155 million and non-GAAP EPS to $0.17-0.23, signaling continued strength amid tariff uncertainties. These results underscore Arlo's transition to durable, profitable growth via subscriptions and inorganic opportunities.