5 Insightful Analyst Questions From Arlo Technologies's Q1 Earnings Call

Arlo’s first quarter results were well received by the market, reflecting operational strength in its transition toward a services-centric business model. Management attributed performance to rapid subscriber growth and higher average revenue per user, both driven by the continued adoption of Arlo Secure 5 and premium service plans. CEO Matthew McRae highlighted that the company added 298,000 paid subscribers and saw annual recurring revenue climb to $276 million. He noted, “This acceleration of Arlo’s subscription and services business is the clear driver for our outstanding Q1 financial results.”

Is now the time to buy ARLO? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Arlo Technologies’s Q1 Earnings Call

• Jacob Stephan (Lake Street) asked about inventory strategy ahead of potential tariff changes. CEO Matthew McRae explained that Arlo is closely monitoring inventory and expects minimal margin impact due to the services-heavy revenue mix.
• Logan Katzman (Raymond James) questioned the drivers behind international revenue softness, particularly in Europe. CFO Kurt Binder cited partner inventory cycles, regulatory shifts, and timing issues around Chinese New Year.
• Scott Searle (ROTH Capital) probed the outlook for product gross margins given cost reductions and ongoing promotions. Management emphasized that negative margins are acceptable as hardware is used primarily for customer acquisition.
• Scott Searle (ROTH Capital) also asked about the competitive landscape under new tariffs. McRae noted that hardware-focused competitors are more exposed, and Arlo is seeing early signs of market share gains.
• Hamed Khorsand (BWS Financial) inquired about ARPU growth drivers. McRae attributed increases to user migration toward premium plans and recent plan simplifications, with further gains expected as new features are introduced.

Catalysts in Upcoming Quarters

In future quarters, our team will watch (1) the pace and quality of subscriber growth as Arlo Secure 6 features launch, (2) the impact of the device portfolio refresh on hardware margins and competitive positioning, and (3) the effectiveness of the new advertising strategy in boosting service conversions. The realization of planned strategic partnerships will also be a key milestone for 2025 and beyond.

Arlo Technologies currently trades at $17.37, up from $10.66 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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