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Arlo Reports Fourth Quarter and Full Year 2023 Results

Record fourth quarter service revenue of $55.9 million, growing 45.9% year over year

Record GAAP net earnings per diluted share (EPS) of $0.01 and record non-GAAP EPS of $0.11 in the fourth quarter

Annual recurring revenue (ARR) ended at $210.1 million, growing 52.5% year over year (1)

Full year service revenue of $201.2 million, growing 47.4% year over year

Full year free cash flow (FCF) of $35.5 million with FCF margin of 7.2% (2)

Full year GAAP net loss per share of $(0.24); record non-GAAP EPS of $0.28

CARLSBAD, Calif.–(BUSINESS WIRE)–Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security company, today reported financial results for the fourth quarter and full year ended December 31, 2023.

“Arlo finished the year strong with the largest product launch in our company history contributing to solid revenue growth of 14% and ARR growth of over 50% compared to Q4 of the prior year. This culminated in record non-GAAP earnings of $0.11 per share and our first ever profit on a GAAP basis,” said Matthew McRae, Chief Executive Officer of Arlo technologies. “The growth is even more impressive when looking at Arlo’s full year results with our annual service revenue growing 47% to more than $200 million and an $83 million increase in our free cash flow from the prior year. Arlo is clearly well positioned for success in 2024 as evidenced by our announcement that we crossed the 3 million subscribers milestone, substantially earlier than originally projected in our Long-Range Plan.”

Financial and Business Highlights

Q4 2023 Summary

  • Total revenue of $135.1 million, an increase of 14.0% year over year.
  • Record service revenue of $55.9 million, growing 45.9% year over year.
  • GAAP services gross margin of 73.9% and non-GAAP services gross margin of 74.4%.
  • GAAP gross profit of $47.3 million, an increase of 48.1% year over year; non-GAAP gross profit of $48.3 million, an increase of 45.6% year over year.
  • GAAP gross margin of 35.0%; non-GAAP gross margin of 35.8%.
  • Record GAAP net earnings per diluted share of $0.01; record non-GAAP earnings per diluted share of $0.11.
  • Cumulative paid accounts increased to 2.8 million, growing 51.1% year over year.
  • Ended the quarter with ARR(1) of $210.1 million, growing 52.5% year over year.

FY2023 Summary

  • Total revenue of $491.2 million, a slight increase year over year.
  • Record service revenue of $201.2 million, growing 47.4% year over year.
  • GAAP gross profit of $167.6 million, an increase of 23.2% year over year; non-GAAP gross profit of $171.7 million, an increase of 21.9% year over year.
  • GAAP gross margin of 34.1% up 640 basis points year over year; non-GAAP gross margin of 35.0% up 630 basis points year over year.
  • GAAP net loss per share – basic and diluted of $(0.24); non-GAAP net earnings per diluted share of $0.28.
  • Ended with cash and cash equivalents and short-term investments balance of $136.5 million, up $22.8 million year over year.

 

Three Months Ended

 

Twelve Months Ended

 

December 31,
2023

 

October 1,
2023

 

December 31,
2022

 

December 31,

2023

 

December 31,

2022

 

(In thousands, except percentage and per share data)

Revenue

$

135,093

 

 

$

130,003

 

 

$

118,527

 

 

$

491,176

 

 

$

490,414

 

GAAP Gross Margin

 

35.0

%

 

 

33.2

%

 

 

27.0

%

 

 

34.1

%

 

 

27.7

%

Non-GAAP Gross Margin (3)

 

35.8

%

 

 

34.0

%

 

 

28.0

%

 

 

35.0

%

 

 

28.7

%

GAAP Net Income (Loss) per Share – Basic and Diluted

$

0.01

 

 

$

(0.01

)

 

$

(0.25

)

 

$

(0.24

)

 

$

(0.65

)

Non-GAAP Net Income (Loss) per Share – Basic and Diluted (3)

$

0.11

 

 

$

0.09

 

 

$

(0.04

)

 

$

0.28

 

 

$

(0.07

)

_________________________

(1)

ARR is calculated by taking our recurring paid service revenue for the last calendar month in the fiscal quarter, multiplied by 12 months. Recurring paid service revenue represents the revenue we recognized from our paid accounts and excludes prepaid service revenue.

(2)

FCF is calculated as net cash provided by (used in) operating activities less capital expenditures. FCF margin is the FCF divided by revenue.

(3)

Reconciliation of financial measures computed on a GAAP basis to the most directly comparable financial measures computed on a non-GAAP basis is provided at the end of this press release.

First Quarter 2024 Business Outlook (4)

A reconciliation of our business outlook on a GAAP and non-GAAP basis is provided in the following table:

 

Three Months Ended March 31, 2024

 

Revenue

 

Net Income (Loss)

per Diluted Share

 

(In millions, except per share data)

GAAP

$117 – $127

 

$(0.08) – $(0.02)

Estimated adjustment for stock-based compensation and other expense

 

0.13

Non-GAAP

$117 – $127

 

$0.05 – $0.11

_________________________

(4)

Business outlook does not include estimates for any currently unknown income and expense items which, by their nature, could arise late in a quarter, including: litigation reserves, net; impairment charges; discrete tax benefits or detriments relating to tax windfalls or shortfalls from equity awards; and any additional impacts relating to the implementation of U.S. tax reform. New material income and expense items such as these could have a significant effect on our guidance and future results.

Investor Conference Call / Webcast Details

Arlo will review the fourth quarter and full-year 2023 results, discuss management’s expectations for the first quarter and full-year 2024, and discuss new long-range plan targets today, Thursday, February 29, 2024 at 5:00 p.m. ET (2:00 p.m. PT). To view the accompanying presentation a live webcast of the conference call will be available on Arlo’s Investor Relations website at https://investor.arlo.com. The toll-free dial-in number for the live audio call is (888) 660-6387. The international dial-in number for the live audio call is +1 (929) 203-1909. The conference ID for the call is 7749064. A replay of the call will be available via the web at https://investor.arlo.com.

About Arlo Technologies, Inc.

Arlo is an award-winning, industry leader that is transforming the ways in which people can protect everything that matters to them with advanced home, business, and personal security solutions. Arlo’s deep expertise in AI- and CV-powered analytics, cloud services, user experience and product design, and innovative wireless and RF connectivity enables the delivery of a seamless, smart security experience for Arlo users that is easy to set up and interact with every day. Arlo’s cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. To date, Arlo has launched several categories of award-winning connected devices, software and services. These include wire-free, smart Wi-Fi and LTE-enabled security cameras, video doorbells, floodlights, security system, and Arlo’s subscription services: Arlo Secure, and Arlo Safe.

With a mission to bring users peace of mind, Arlo is as passionate about protecting user privacy as it is about safeguarding homes and families. Arlo is committed to implementing industry standards for data protection designed to keep users’ personal information private and in their control. Arlo does not monetize personal data, provides enhanced controls for user data, supports privacy legislation, keeps user data safely secure, and puts security at the forefront of company culture.

© 2024 Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks and/or registered trademarks of Arlo Technologies, Inc. and/or certain of its affiliates in the United States and/or other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s). The information contained herein is subject to change without notice. Arlo shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 for Arlo Technologies, Inc.:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent our expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding our potential future business, operating performance and financial condition, including descriptions of our expected revenue and profitability (and related timing), GAAP and non-GAAP gross margins, operating margins, tax rates, expenses, cash outlook, free cash flow and free cash flow margins; the ability of our subscription services and security product portfolio to position us for a successful 2024; strategic objectives and initiatives; the recurring revenue business model; expectations regarding market expansion and future growth; and others. These statements are based on management’s current expectations and are subject to certain risks and uncertainties, including the following: future demand for our products may be lower than anticipated, including due to inflation, fluctuating consumer confidence, banking failures and rising interest rates; we may be unsuccessful in developing and expanding our sales and marketing capabilities; we may not be able to increase sales of our paid subscription services; consumers may choose not to adopt our new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; we may be unsuccessful or experience delays in manufacturing and distributing our new and existing products; we may fail to manage costs and cost saving initiatives, the cost of developing new products and manufacturing and distribution of our existing offerings. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect our business are detailed in our periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Risk Factors” in the most recently filed Annual Report and Quarterly Report filed with the Securities and Exchange Commission (the “SEC”) and subsequent filings with the SEC. Given these circumstances, you should not place undue reliance on these forward-looking statements. We undertake no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information:

To supplement our unaudited selected financial data presented on a basis consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP total operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP other income (expenses), net, non-GAAP provision for income taxes, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. These supplemental measures exclude adjustments for stock-based compensation expense, restructuring charges, impairment charges, separation expense, amortization of development of software cost, litigation reserves, net, employee retention credit and the related tax effects. In addition, we use free cash flow as non-GAAP measure when assessing the sources of liquidity, capital resources, and quality of earnings. We believe that free cash flow (usage) is helpful in understanding our capital requirements and provides an additional means to reflect the cash flow trends in our business. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP measures, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of our on-going operating results;
  • the ability to better identify trends in our underlying business and perform related trend analyses;
  • a better understanding of how management plans and measures our underlying business; and
  • an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of stock options, performance-based stock options, restricted stock units (RSU), performance-based restricted stock units, shares under the employee stock purchase plan granted to employees and employees’ annual bonus in RSU form. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results.

Other non-GAAP items are the result of either unique or unplanned events, including, when applicable: restructuring charges, impairment charges, separation expense, amortization of development of software cost, litigation reserves, net and employee retention credit. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred.

Source: Arlo-F

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

As of December 31,

 

2023

 

2022

 

(In thousands, except share and per share data)

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

56,522

 

 

$

84,024

 

Short-term investments

 

79,974

 

 

 

29,700

 

Accounts receivable, net

 

65,360

 

 

 

65,960

 

Inventories

 

38,408

 

 

 

46,554

 

Prepaid expenses and other current assets

 

10,271

 

 

 

6,544

 

Total current assets

 

250,535

 

 

 

232,782

 

Property and equipment, net

 

4,761

 

 

 

7,336

 

Operating lease right-of-use assets, net

 

11,450

 

 

 

12,809

 

Goodwill

 

11,038

 

 

 

11,038

 

Restricted cash

 

4,131

 

 

 

4,155

 

Other non-current assets

 

3,623

 

 

 

4,081

 

Total assets

$

285,538

 

 

$

272,201

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

55,201

 

 

$

52,132

 

Deferred revenue

 

18,041

 

 

 

11,291

 

Accrued liabilities

 

88,209

 

 

 

98,855

 

Total current liabilities

 

161,451

 

 

 

162,278

 

Non-current operating lease liabilities

 

17,021

 

 

 

19,279

 

Other non-current liabilities

 

3,790

 

 

 

2,949

 

Total liabilities

 

182,262

 

 

 

184,506

 

Commitments and contingencies

 

 

 

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: 95,380,281 at December 31, 2023 and 88,887,139 at December 31, 2022

 

95

 

 

 

89

 

Additional paid-in capital

 

470,322

 

 

 

433,138

 

Accumulated other comprehensive income (loss)

 

320

 

 

 

(107

)

Accumulated deficit

 

(367,461

)

 

 

(345,425

)

Total stockholders’ equity

 

103,276

 

 

 

87,695

 

Total liabilities and stockholders’ equity

$

285,538

 

 

$

272,201

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

 

Twelve Months Ended

 

December 31,
2023

 

October 1,
2023

 

December 31,
2022

 

December 31,
2023

 

December 31,
2022

 

(In thousands, except percentage and per share data)

Revenue:

 

 

 

 

 

 

 

 

 

Products

$

79,168

 

 

$

78,961

 

 

$

80,199

 

 

$

289,938

 

 

$

353,935

 

Services

 

55,925

 

 

 

51,042

 

 

 

38,328

 

 

 

201,238

 

 

 

136,479

 

Total revenue

 

135,093

 

 

 

130,003

 

 

 

118,527

 

 

 

491,176

 

 

 

490,414

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Products

 

73,143

 

 

 

73,335

 

 

 

74,700

 

 

 

270,663

 

 

 

308,692

 

Services

 

14,601

 

 

 

13,529

 

 

 

11,857

 

 

 

52,950

 

 

 

45,687

 

Total cost of revenue

 

87,744

 

 

 

86,864

 

 

 

86,557

 

 

 

323,613

 

 

 

354,379

 

Gross profit

 

47,349

 

 

 

43,139

 

 

 

31,970

 

 

 

167,563

 

 

 

136,035

 

Gross margin

 

35.0

%

 

 

33.2

%

 

 

27.0

%

 

 

34.1

%

 

 

27.7

%

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

16,450

 

 

 

16,829

 

 

 

14,457

 

 

 

68,647

 

 

 

64,709

 

Sales and marketing

 

18,004

 

 

 

15,863

 

 

 

20,214

 

 

 

66,141

 

 

 

70,081

 

General and administrative

 

13,282

 

 

 

12,460

 

 

 

17,909

 

 

 

56,371

 

 

 

55,932

 

Others

 

71

 

 

 

263

 

 

 

1,815

 

 

 

1,307

 

 

 

2,192

 

Total operating expenses

 

47,807

 

 

 

45,415

 

 

 

54,395

 

 

 

192,466

 

 

 

192,914

 

Loss from operations

 

(458

)

 

 

(2,276

)

 

 

(22,425

)

 

 

(24,903

)

 

 

(56,879

)

Operating margin

 

(0.3

)%

 

 

(1.8

)%

 

 

(18.9

)%

 

 

(5.1

)%

 

 

(11.6

)%

Interest income, net

 

1,199

 

 

 

1,175

 

 

 

512

 

 

 

3,935

 

 

 

926

 

Other income (loss), net

 

84

 

 

 

10

 

 

 

(12

)

 

 

107

 

 

 

302

 

Income (loss) before income taxes

 

825

 

 

 

(1,091

)

 

 

(21,925

)

 

 

(20,861

)

 

 

(55,651

)

Provision for income taxes

 

133

 

 

 

29

 

 

 

230

 

 

 

1,175

 

 

 

975

 

Net income (loss)

$

692

 

 

$

(1,120

)

 

$

(22,155

)

 

$

(22,036

)

 

$

(56,626

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.01

 

 

$

(0.01

)

 

$

(0.25

)

 

$

(0.24

)

 

$

(0.65

)

Diluted

$

0.01

 

 

$

(0.01

)

 

$

(0.25

)

 

$

(0.24

)

 

$

(0.65

)

Weighted average shares used to compute net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

94,819

 

 

 

94,243

 

 

 

88,743

 

 

 

92,754

 

 

 

87,173

 

Diluted

 

101,938

 

 

 

94,243

 

 

 

88,743

 

 

 

92,754

 

 

 

87,173

 

ARLO TECHNOLOGIES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended December 31,

 

2023

 

2022

 

(In thousands)

Cash flows from operating activities:

 

 

 

Net loss

$

(22,036

)

 

$

(56,626

)

Adjustments to reconcile net loss to net cash provided by (used in)

operating activities:

 

 

 

Stock-based compensation expense

 

47,948

 

 

 

48,476

 

Depreciation and amortization

 

4,661

 

 

 

4,768

 

Allowance for credit losses and inventory reserves

 

279

 

 

 

(190

)

Deferred income taxes

 

112

 

 

 

181

 

Others

 

(2,005

)

 

 

24

 

Changes in assets and liabilities:

 

 

 

Accounts receivable, net

 

690

 

 

 

13,517

 

Inventories

 

7,777

 

 

 

(7,887

)

Prepaid expenses and other assets

 

(1,498

)

 

 

3,427

 

Accounts payable

 

3,723

 

 

 

(32,520

)

Deferred revenue

 

6,610

 

 

 

(19,281

)

Accrued and other liabilities

 

(7,959

)

 

 

149

 

Net cash provided by (used in) operating activities

 

38,302

 

 

 

(45,962

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(2,847

)

 

 

(2,010

)

Purchases of short-term investments

 

(149,870

)

 

 

(69,305

)

Proceeds from maturities of short-term investments

 

102,031

 

 

 

39,542

 

Net cash used in investing activities

 

(50,686

)

 

 

(31,773

)

Cash flows from financing activities:

 

 

 

Proceeds related to employee benefit plans

 

8,493

 

 

 

4,260

 

Restricted stock unit withholdings

 

(23,635

)

 

 

(18,202

)

Net cash used in financing activities

 

(15,142

)

 

 

(13,942

)

Net decrease in cash, cash equivalents and restricted cash

 

(27,526

)

 

 

(91,677

)

Cash, cash equivalents and restricted cash, at beginning of period

 

88,179

 

 

 

179,856

 

Cash, cash equivalents and restricted cash, at end of period

$

60,653

 

 

$

88,179

 

 

 

 

 

Non-cash investing activities:

 

 

 

Purchases of property and equipment included in accounts payable and accrued liabilities

$

189

 

 

$

946

 

Supplemental cash flow information:

 

 

 

Cash paid for income taxes, net

$

1,196

 

 

$

415

 

ARLO TECHNOLOGIES, INC.

 

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

 

UNAUDITED STATEMENT OF OPERATIONS DATA:

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

December 31,
2023

 

October 1,
2023

 

December 31,
2022

 

December 31,
2023

 

December 31,
2022

 

(In thousands, except percentage data)

GAAP gross profit:

 

 

 

 

 

 

 

 

 

Products

$

6,025

 

 

$

5,626

 

 

$

5,499

 

 

$

19,275

 

 

$

45,243

 

Services

 

41,324

 

 

 

37,513

 

 

 

26,471

 

 

 

148,288

 

 

 

90,792

 

Total GAAP gross profit

 

47,349

 

 

 

43,139

 

 

 

31,970

 

 

 

167,563

 

 

 

136,035

 

GAAP gross margin:

 

 

 

 

 

 

 

 

 

Products

 

7.6

%

 

 

7.1

%

 

 

6.9

%

 

 

6.6

%

 

 

12.8

%

Services

 

73.9

%

 

 

73.5

%

 

 

69.1

%

 

 

73.7

%

 

 

66.5

%

Total GAAP gross margin

 

35.0

%

 

 

33.2

%

 

 

27.0

%

 

 

34.1

%

 

 

27.7

%

Stock-based compensation expense – Products

 

692

 

 

 

723

 

 

 

1,001

 

 

 

3,175

 

 

 

4,136

 

Stock-based compensation expense – Services

 

145

 

 

 

145

 

 

 

230

 

 

 

358

 

 

 

705

 

Amortization of development of software cost – Services

 

151

 

 

 

152

 

 

 

 

 

 

605

 

 

 

 

Non-GAAP gross profit:

 

 

 

 

 

 

 

 

 

Products

 

6,717

 

 

 

6,349

 

 

 

6,500

 

 

 

22,450

 

 

 

49,379

 

Services

 

41,620

 

 

 

37,810

 

 

 

26,701

 

 

 

149,251

 

 

 

91,497

 

Total Non-GAAP gross profit

$

48,337

 

 

$

44,159

 

 

$

33,201

 

 

$

171,701

 

 

$

140,876

 

Non-GAAP gross margin:

 

 

 

 

 

 

 

 

 

Products

 

8.5

%

 

 

8.0

%

 

 

8.1

%

 

 

7.7

%

 

 

14.0

%

Services

 

74.4

%

 

 

74.1

%

 

 

69.7

%

 

 

74.2

%

 

 

67.0

%

Total Non-GAAP gross margin

 

35.8

%

 

 

34.0

%

 

 

28.0

%

 

 

35.0

%

 

 

28.7

%

 

 

 

 

 

 

 

 

 

 

GAAP research and development

$

16,450

 

 

$

16,829

 

 

$

14,457

 

 

$

68,647

 

 

$

64,709

 

Stock-based compensation expense

 

(2,631

)

 

 

(2,847

)

 

 

(3,715

)

 

 

(12,700

)

 

 

(12,317

)

Non-GAAP research and development

$

13,819

 

 

$

13,982

 

 

$

10,742

 

 

$

55,947

 

 

$

52,392

 

Percentage of revenue

 

10.2

%

 

 

10.8

%

 

 

9.1

%

 

 

11.4

%

 

 

10.7

%

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

18,004

 

 

$

15,863

 

 

$

20,214

 

 

$

66,141

 

 

$

70,081

 

Stock-based compensation expense

 

(1,283

)

 

 

(1,224

)

 

 

(1,731

)

 

 

(5,899

)

 

 

(6,290

)

Non-GAAP sales and marketing

$

16,721

 

 

$

14,639

 

 

$

18,483

 

 

$

60,242

 

 

$

63,791

 

Percentage of revenue

 

12.4

%

 

 

11.3

%

 

 

15.6

%

 

 

12.3

%

 

 

13.0

%

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

13,282

 

 

$

12,460

 

 

$

17,909

 

 

$

56,371

 

 

$

55,932

 

Stock-based compensation expense

 

(5,346

)

 

 

(5,348

)

 

 

(10,012

)

 

 

(25,816

)

 

 

(25,028

)

Litigation reserves, net

 

 

 

 

 

 

 

(30

)

 

 

 

 

 

(147

)

Non-GAAP general and administrative

$

7,936

 

 

$

7,112

 

 

$

7,867

 

 

$

30,555

 

 

$

30,757

 

Percentage of revenue

 

5.9

%

 

 

5.5

%

 

 

6.6

%

 

 

6.2

%

 

 

6.3

%

Contacts

Arlo Investor Relations

Tahmin Clarke

investors@arlo.com

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