Why Arlo Technologies (ARLO) Stock Is Up Today

What Happened?

Shares of smart security company Arlo (NYSE:ARLO) jumped 28.4% in the afternoon session after the company reported strong fourth-quarter 2025 financial results that surpassed expectations and provided an upbeat forecast. 

For the quarter, Arlo announced adjusted earnings of $0.22 per share, which was well ahead of the $0.16 analysts had predicted. Revenue also topped forecasts, coming in at $141.3 million, a 16.2% increase year on year. Adding to the positive news, Arlo provided strong guidance for the first quarter of 2026, projecting revenue of $140 million at the midpoint, which was significantly higher than market expectations. The results were strong across the board, with the company also beating expectations for adjusted EBITDA, and its operating margin turned positive compared to a loss in the year-ago quarter.

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What Is The Market Telling Us

Arlo Technologies’s shares are very volatile and have had 20 moves greater than 5% over the last year. But moves this big are rare even for Arlo Technologies and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 4 months ago when the stock dropped 10.8% on the news that the company reported mixed earnings. Arlo posted revenue of $139.5 million and adjusted earnings of $0.16 per share, surpassing Wall Street's forecasts. The company also guided for next quarter's earnings to be ahead of estimates. However, the positive results were not enough to impress investors. The negative reaction could be attributed to concerns over the company's cash generation, as its free cash flow margin declined to 10.7% from 12.6% in the same quarter last year. While the report was generally positive, this decline in cash profitability may have signaled to investors that underlying performance was not as strong as the headline numbers suggested.

Arlo Technologies is up 21.1% since the beginning of the year, but at $16.02 per share, it is still trading 17.6% below its 52-week high of $19.44 from October 2025. Investors who bought $1,000 worth of Arlo Technologies’s shares 5 years ago would now be looking at an investment worth $2,162.

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