Arlo Technologies (ARLO) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 and full-year 2025 results, with total revenue of $530 million and service revenue of $316 million, representing 60% of total revenue and 30% year-over-year growth.

• Q4 service revenue reached $89 million, up 39% year-over-year, and annual recurring revenue (ARR) grew 28% to $330 million, with paid accounts up 24% to 5.7 million.

• Strategic partnerships with Samsung, Comcast, and ADT announced, expected to drive future growth and market expansion.

• Major product refresh with 109 SKUs launched, driving strong retail and direct channel performance and nearly doubling shelf share at Walmart.

• Non-GAAP EPS for Q4 was $0.22, up 120% year-over-year; full-year non-GAAP EPS was $0.70, exceeding guidance.

Financial highlights

• Q4 EBITDA was $23.3 million, up 138% year-over-year; full-year adjusted EBITDA reached $75 million, up 85%, with a margin of 14%.

• Non-GAAP gross margin for Q4 was 47.8%, up over 1,000 basis points year-over-year; services gross margin reached 84%.

• Free cash flow for 2025 was $66.9 million, up 38% year-over-year, with a margin of 12.6%.

• Ended 2025 with $166 million in cash and equivalents, after $45.5 million in share repurchases and a $12.8 million investment in Origin Wireless.

• Full-year gross profit reached $239 million, up 24% year-over-year; gross margin improved to 45.8% in Q4.

Outlook and guidance

• 2026 consolidated revenue expected between $550 million and $580 million, with service revenue of $375 million–$385 million (over 65% of total).

• Non-GAAP net income per share for 2026 projected at $0.75–$0.85.

• Q1 2026 revenue guidance is $135 million–$145 million, with non-GAAP EPS of $0.17–$0.23.

• Product gross margins expected to rebound in 2026, with continued strong services margins (84–85%).

• Targeting more than 20% service revenue growth in 2026, with ARR and ARPU expansion initiatives.