Arlo Technologies (ARLO) investor relations material

Executive summary

• Achieved record Q1 2026 revenue of $150.4 million, up 26.3% year-over-year, with non-GAAP EPS of $0.28, up 86% year-over-year, and GAAP net income of $15 million.

• Subscriptions and services revenue grew 31% year-over-year to $90.1 million, now nearly 60% of total revenue, with ARR reaching $357 million, up 29% year-over-year.

• Cumulative paid accounts surpassed 6 million, growing 22.6% year-over-year, with churn below 1%.

• Completed acquisition of Aloe Care Health to expand AI-powered aging-in-place and home healthcare services, targeting a market projected to exceed $300 billion by 2034.

• Board authorized a $50 million stock buyback program, with $8 million repurchased in Q1 2026.

Financial highlights

• Non-GAAP gross margin reached 50.1%, up 460 basis points year-over-year; GAAP gross margin was 48.3%.

• Adjusted EBITDA was $30.4 million, up 85% year-over-year, with a 20.2% margin.

• Free cash flow was $25.4 million, with a margin of 16.9%.

• Cash, equivalents, and short-term investments totaled $167.5 million, up $14.4 million year-over-year.

• Product revenue was $60.3 million, up 20% year-over-year, driven by international growth and strategic partner demand.

Outlook and guidance

• Q2 2026 revenue guidance: $145–$155 million; Q2 non-GAAP EPS: $0.17–$0.23.

• FY 2026 revenue guidance: $550–$580 million; FY non-GAAP EPS: $0.75–$0.85; service revenue expected at $375–$385 million.

• Targeting more than 20% service revenue growth in 2026 and 2027.

• Confident in achieving full-year 2026 guidance for subscriptions, total revenue, and EPS.

• Guidance includes estimated impacts of tariffs and excludes unknown items such as litigation reserves and discrete tax effects.