Yahoo Finance Arlo Technologies Inc (ARLO) Q1 2024 Earnings: Aligns with EPS Projections Amid Revenue Growth
Revenue: $124.2M, up 11.9% year-over-year, surpassing estimates of $123.3M.
Net Income: Reported a GAAP net loss of $(9.64M), with non-GAAP earnings per share of $0.09, meeting estimated earnings per share of $0.09.
Service Revenue: Achieved a record $56.7M, a 29.0% increase year-over-year.
Free Cash Flow: Reached a record $19.5M, with a free cash flow margin of 15.7%.
Annual Recurring Revenue (ARR): Ended at $227.0M, growing 24.3% year-over-year.
Gross Margin: Non-GAAP gross margin improved to 39.4% from 32.6% in the previous year.
Paid Accounts: Grew by 58.3% year-over-year to 3.2 million accounts.
On May 9, 2024, Arlo Technologies Inc (NYSE:ARLO), a leader in smart home security solutions, unveiled its financial results for the first quarter ended March 31, 2024, through its 8-K filing. The company reported a significant year-over-year growth in service revenue and annual recurring revenue (ARR), alongside a record-setting free cash flow.
Company Overview
Arlo Technologies Inc is renowned for its comprehensive range of security and video monitoring solutions designed for both homes and businesses. The company offers innovative products and services including smart Wi-Fi and LTE-enabled cameras, video doorbells, and floodlight cameras, as well as subscription services like Arlo Secure and Arlo Safe. Predominantly generating revenue in the United States, Arlo also has a market presence in Spain, Ireland, and other regions.
Financial Performance
Arlo reported a total revenue of $124.2 million for Q1 2024, marking an 11.9% increase from the previous year, primarily driven by a 29.0% growth in service revenue which reached $56.7 million. The company achieved a non-GAAP earnings per share (EPS) of $0.09, aligning with analyst estimates and improving from $0.01 year over year. However, it recorded a GAAP net loss per share of $(0.10).
The gross profit surged by 34.5% to $47.4 million, with GAAP and non-GAAP gross margins standing at 38.1% and 39.4%, respectively. This improvement reflects Arlo's enhanced operational efficiency and a strong service margin profile.
Operational Highlights and Future Outlook
Arlo's operational excellence was underscored by its record free cash flow of $19.5 million, representing a free cash flow margin of 15.7%. The company's ARR by the end of the quarter was $227.0 million, a 24.3% increase year over year. Additionally, Arlo extended its partnership with Verisure into 2029, promising sustained revenue from this collaboration.
Looking ahead to Q2 2024, Arlo projects GAAP revenue to be between $120 million and $130 million, with a non-GAAP EPS ranging from $0.06 to $0.12 after adjustments for stock-based compensation and other expenses.
Balance Sheet and Cash Flow Details
As of March 31, 2024, Arlo reported having $142.9 million in cash and cash equivalents and short-term investments, an increase from the previous year. The total assets were valued at $289.8 million. The company's robust financial position is further evidenced by its ability to increase cash reserves while continuing to invest in innovation and market expansion.
Analysis
Arlo's Q1 2024 results demonstrate a solid start to the year, characterized by strong revenue growth, particularly in service revenues, and significant improvements in free cash flow and profitability metrics. The alignment of non-GAAP EPS with analyst expectations and the record figures in key financial metrics reflect the company's successful execution of its strategic initiatives and operational adjustments. With the extended partnership with Verisure and ongoing innovations, Arlo is well-positioned to maintain its growth trajectory and enhance shareholder value.
For detailed financial tables and further information, refer to Arlo Technologies Inc's full earnings release and financial statements.
Explore the complete 8-K earnings release (here) from Arlo Technologies Inc for further details.
This article first appeared on GuruFocus.
