Arlo Technologies (ARLO) investor relations material

Executive summary

• Achieved record Q2 2026 revenue of $156 million, up 21% year-over-year, with service revenue at $93 million, and adjusted EBITDA of $31 million, both exceeding guidance.

• Cumulative paid accounts grew 23% year-over-year to 6.3 million, with ARR up 16% to $365 million.

• Non-GAAP EPS was $0.28, including a $0.07 benefit from an $8 million tariff refund; GAAP EPS was $0.03.

• Net income for Q2 was $3.0 million, with non-GAAP net income at $31.1 million.

• Two acquisitions (Canary Connect and Aloe Care Health) expanded AI-driven smart home and health services.

Financial highlights

• Subscriptions and services revenue reached $93 million, up 19% year-over-year, representing 60% of total revenue.

• Product revenue was $62.9 million, up 23% year-over-year, driven by international growth and retail channel strength.

• GAAP gross margin was 48.2%, non-GAAP gross margin 50.6%, both up year-over-year, aided by $8 million in tariff refunds.

• Free cash flow for the first half was $33.9 million (11% margin); cash and equivalents at quarter-end were $141 million.

• Adjusted EBITDA margin reached 20%.

Outlook and guidance

• Q3 2026 revenue expected between $140–$150 million; non-GAAP EPS forecasted at $0.17–$0.23.

• Full-year 2026 revenue guidance raised to $580–$600 million, with non-GAAP EPS of $0.90–$1.00.

• ARR growth targeted at 20% for the year, supported by new product launches and higher-tier subscription offerings.

• Guidance includes expected tariff refund, to be reinvested in growth initiatives.

• Existing liquidity expected to be sufficient for at least the next 12 months.