ARLO Q4 Earnings and Revenues Beat Estimates, Both Rise Y/Y

Arlo Technologies ARLO reported fourth-quarter 2025 non-GAAP earnings of 22 cents per share, which surpassed the Zacks Consensus Estimate by 37.50% and increased 120% year over year.

Arlo Technologies' revenues climbed 16.2% year over year to $141.3 million, beating the Zacks Consensus Estimate by 4.24%.

Revenues in the Americas (73.5% of total revenues) were $103.9 million, up 47.8% year over year. Revenues in EMEA (22.4% of total revenues) were $31.6 million in the reported quarter, down 29.6% year over year. APAC revenues (4.1% of total revenues) decreased 9.6% year over year to $5.8 million.

ARLO shares have surged 3.61% at the time of writing this article.

Top-Line Details of ARLO

Subscriptions and services revenues (63.3% of total revenues) increased 39.4% year over year to $89.4 million. Product revenues (36.7% of total revenues) decreased 9.6% year over year to $51.9 million.

Annual recurring revenues climbed 28.4% year over year to $330.5 million.

ARLO’s Operating Details

In the fourth quarter, Arlo Technologies’ non-GAAP gross margin expanded 1,030 basis points year over year to 47.8%

Research and development expenses, as a percentage of revenues, increased 220 bps year over year to 14.8%. Sales and marketing expenses, as a percentage of revenues, fell 80 bps year over year to 16.3%.

General and administrative expenses, as a percentage of revenues, increased 20 bps year over year to 12%.

Operating expenses, as a percentage of revenues, expanded 120 bps year over year to 43%.

The operating margin expanded 830 bps on a year-over-year basis to 3.3%.

ARLO’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, cash and cash equivalents plus short-term investments were $166.4 million, up from $165.5 million at the end of the third quarter of 2025.

During the fourth quarter of 2025, cash generated through operating activities was $19.8 million, and free cash flow was $17.9 million.

ARLO Initiates 1Q26 and FY26 Outlook

For the first quarter of 2026, total revenues are estimated to be in the range of $135-$145 million. 

Non-GAAP earnings are estimated to be between 17 cents and 23 cents per share.

For 2026, Arlo Technologies anticipates service revenues between $375 million and $385 million and total revenues in the range of $550 million to $580 million.

Non-GAAP earnings are estimated to be between 75 cents and 85 cents per share.

Zacks Rank and Stocks to Consider

Currently, ARLO carries a Zacks Rank #3 (Hold).

Micron Technology MU, MongoDB MDB, and Credo Technology Group CRDO are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.

Micron Technology shares have gained 343.8% in the past 12 months. This Zacks Rank #1 (Strong Buy) company is scheduled to release second-quarter 2026 results on March 18. You can see the complete list of today’s Zacks #1 Rank stocks here.

MongoDB shares have returned 25.8% in the past 12 months. MDB is scheduled to release its fourth-quarter 2026 results on March 2. The company currently sports a Zacks Rank #1.  
 
Credo Technology Group shares have gained 107.4% in the past 12 months. CRDO is set to report its third-quarter fiscal 2026 results on March 2. The company currently sports a Zacks Rank #1.
 

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This article originally published on Zacks Investment Research (zacks.com).

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