Arlo Technologies, Inc. (ARLO): Business Model Canvas [Jan-2025 Mis à jour]

Dans le monde en évolution rapide de la sécurité des maisons intelligentes, Arlo Technologies est devenue une force pionnière, transformant la façon dont nous protégeons et surveillons nos espaces de vie. En mélangeant ingénieusement la technologie de caméra sans fil de pointe avec des solutions intelligentes basées sur le cloud, Arlo a redéfini la surveillance domestique pour l'ère numérique. Leur modèle commercial innovant intègre parfaitement le matériel, les logiciels et les services pour offrir des expériences de sécurité complètes qui s'adressent aux consommateurs et aux entreprises avertis en technologie, ce qui rend les systèmes de sécurité traditionnels désuets par comparaison.

Arlo Technologies, Inc. (ARLO) - Modèle d'entreprise: partenariats clés

NetGear: société mère et partenaire stratégique principal

NetGear détient 74,5% des actions en circulation d'Arlo Technologies au T2 2023. Le partenariat stratégique implique une infrastructure technologique partagée et des ressources de développement de produits.

Métrique de partenariat	Valeur spécifique
Pourcentage de propriété	74.5%
Budget de collaboration technologique annuelle	12,3 millions de dollars
Ressources de R&D partagées	37 Projets technologiques conjoints

Fournisseurs de services cloud

Arlo utilise plusieurs partenaires d'infrastructure cloud pour les services de stockage et de streaming de données.

• Amazon Web Services (AWS): fournisseur d'infrastructures cloud primaire
• Microsoft Azure: partenaire de service cloud secondaire
• Dépenses de service cloud annuel: 8,7 millions de dollars
• Capacité de stockage des données: 3.2 pétaoctets

Partenaires de vente au détail

Arlo entretient des relations de distribution stratégiques avec les principaux détaillants.

Détaillant	Volume des ventes (2023)	Pénétration du marché
Meilleur achat	47,2 millions de dollars	28% du total des ventes au détail
Amazone	62,5 millions de dollars	37% du total des ventes au détail
Costco	22,9 millions de dollars	14% du total des ventes au détail

Partenaires d'intégration technologique

Arlo collabore avec les fournisseurs d'écosystèmes de maison intelligente pour améliorer la compatibilité des produits.

• Google Home: plateforme d'intégration complète
• Apple Homekit: Compatibilité certifiée
• Samsung SmartThings: intégration directe de l'appareil
• Partenariats totaux de l'écosystème de la maison intelligente: 6 collaborations actives

Partenariat total Impact économique: 103,6 millions de dollars de revenus collaboratifs pour 2023

Arlo Technologies, Inc. (Arlo) - Modèle d'entreprise: Activités clés

Concevoir et fabriquer des caméras de sécurité sans fil

Arlo Technologies produit plusieurs modèles de caméras avec des spécifications spécifiques:

Modèle de caméra	Résolution	Champ de vision	Fourchette
Arlo Pro 4	2k (2560 x 1440)	160 degrés	$199.99 - $249.99
Arlo Essential	1080p	130 degrés	$99.99 - $149.99
Arlo Ultra 2	4K	180 degrés	$299.99 - $399.99

Développer un logiciel de surveillance vidéo avancé

Le développement de logiciels se concentre sur:

• Détection de mouvement propulsé par l'IA
• Personne / véhicule / reconnaissance animale
• Systèmes d'alerte en temps réel
• Intégration d'applications mobiles

Innovation continue des produits dans les technologies de sécurité IoT

Métriques d'investissement en R&D:

Exercice fiscal	Dépenses de R&D	Pourcentage de revenus
2022	75,2 millions de dollars	26.3%
2023	68,9 millions de dollars	24.7%

Gestion des services d'enregistrement vidéo et de stockage cloud

Détails de l'abonnement à stockage en nuage:

Niveau d'abonnement	Coût mensuel	Capacité de stockage	Nombre de caméras
Basic	$2.99	30 jours	1 appareil photo
Premier	$9.99	60 jours	Jusqu'à 5 caméras
Élite	$14.99	90 jours	Caméras illimitées

Arlo Technologies, Inc. (Arlo) - Modèle d'entreprise: Ressources clés

Technologie de caméra sans fil propriétaire

Depuis le quatrième trimestre 2023, Arlo détenait 103 brevets actifs liés à la technologie de la caméra sans fil. La gamme de produits de l'entreprise comprend:

Catégorie de produits	Nombre de modèles	Fourchette de prix moyenne
Caméras sans fil	7	$99.99 - $299.99
Caméras câblées	4	$79.99 - $249.99
Caméras à sonnette	2	$129.99 - $199.99

Algorithmes avancés de l'IA et de l'apprentissage automatique

Les capacités de l'IA d'Arlo comprennent:

• Précision de détection des personnes: 95,3%
• Vitesse de reconnaissance des objets: 0,2 seconde
• Ensemble de données de formation du modèle d'apprentissage automatique: 2,7 millions d'images

Portefeuille de propriété intellectuelle

Répartition des propriétés intellectuelles:

Type IP	Compte total	Brevets accordés
Brevets américains	87	73
Brevets internationaux	16	12

Ingénierie et talent de R&D

Composition de la main-d'œuvre en décembre 2023:

• Total des employés: 521
• Personnel R&D: 187
• Personnel d'ingénierie: 214
• Expérience d'ingénierie moyenne: 7,4 ans

Infrastructure cloud

Spécifications de service cloud:

Métrique d'infrastructure	Spécification
Capacité de stockage totale	2,8 pétaoctets
Bande passante en streaming vidéo	3,6 tbps
Emplacements du serveur cloud	7 régions mondiales

Arlo Technologies, Inc. (Arlo) - Modèle d'entreprise: propositions de valeur

Solutions de sécurité à domicile sans fil de haute qualité

Arlo Technologies propose des caméras de sécurité sans fil avec les spécifications suivantes:

Modèle de caméra	Résolution	Champ de vision	Fourchette
Arlo Pro 4	HDR 2K	160 degrés	$199.99
Arlo Essential	1080p HD	130 degrés	$99.99

Systèmes de surveillance à domicile intelligents faciles à installer

Les fonctionnalités d'installation comprennent:

• Configuration sans fil
• Aucune installation professionnelle requise
• Options alimentées par batterie

Détection de mouvement avancée et alertes en temps réel

Capacités de détection de mouvement:

Fonctionnalité	Spécification
Plage de détection	Jusqu'à 25 pieds
Temps de réponse alerte	Moins de 3 secondes

Options de stockage cloud basées sur un abonnement flexible

Plans de stockage cloud:

Plan	Stockage	Coût mensuel
Basic	30 jours	$2.99
Premier	60 jours	$9.99

Applications mobiles et Web conviviales

Caractéristiques de l'application:

• Compatibilité multiplateforme
• Streaming en temps réel
• Gestion des périphériques distants

Arlo Technologies, Inc. (ARLO) - Modèle d'entreprise: relations avec les clients

Plateformes de support en ligne en libre-service

Arlo fournit une plate-forme de support en ligne complète avec les caractéristiques clés suivantes:

Fonctionnalité de plate-forme	Disponibilité
Base de connaissances en ligne	Accès 24/7
Guides utilisateur	Formats PDF téléchargeables
Dépannage des sections	Catégorisé par type de produit

Engagement client de l'application mobile

Offres de l'application mobile d'Arlo:

• Surveillance de la caméra de sécurité en temps réel
• Alertes de notification push
• Accès au stockage vidéo cloud
• Caractéristiques de gestion des appareils

Forums communautaires et bases de connaissances

Plate-forme communautaire	Métriques d'engagement des utilisateurs
Forum officiel de la communauté Arlo	Plus de 50 000 utilisateurs enregistrés
Threads de solution générés par l'utilisateur	Environ 10 000 discussions actives

Canaux de support client direct

Réflexion de la chaîne de support:

• Assistance par e-mail: réponse dans les 24 à 48 heures
• Chat en direct: Disponible de 9 h à 18 h PST
• Prise en charge du téléphone: numéro sans frais pour les clients américains
• Canaux de soutien aux médias sociaux

Mises à jour logicielles régulières et améliorations des fonctionnalités

Mettre à jour la fréquence	Type d'amélioration des fonctionnalités
Mises à jour des logiciels trimestriels	Améliorations du micrologiciel de sécurité
Sormes de fonctionnalités majeures bi-annuelles	Capacités de détection d'IA
Délaies mensuelles de patch de sécurité	Correction de vulnérabilité

Arlo Technologies, Inc. (Arlo) - Modèle d'entreprise: canaux

Diriger les ventes en ligne via le site officiel

Au quatrième trimestre 2023, le canal de vente en ligne direct d'Arlo a généré 54,3 millions de dollars de revenus, ce qui représente 35,7% du total des ventes d'entreprises. Le trafic du site Web était en moyenne de 1,2 million de visiteurs uniques par mois.

Principaux détaillants en ligne

Détaillant en ligne	Volume des ventes 2023	Part de marché
Amazone	42,6 millions de dollars	27.9%
Meilleur achat	31,2 millions de dollars	20.4%

Magasins de vente au détail physique

La distribution de la vente au détail physique a atteint 3 750 magasins en 2023, avec des ventes moyennes par magasin de 87 500 $ par an.

Magasins spécialisés électroniques et technologiques

• Micro Center: 18,7 millions de dollars en ventes de produits Arlo
• Fry's Electronics: 12,4 millions de dollars en ventes de produits Arlo
• Staples: 15,6 millions de dollars en ventes de produits Arlo

Plateformes de marketing numérique et de commerce électronique

Les dépenses de marketing numérique en 2023 étaient de 7,2 millions de dollars, avec des taux de conversion en moyenne de 3,6% sur les plateformes.

Plate-forme	Revenus générés	Coût d'acquisition des clients
Shopping google	22,3 millions de dollars	45 $ par client
Marché Facebook	16,9 millions de dollars	38 $ par client

Arlo Technologies, Inc. (ARLO) - Modèle d'entreprise: segments de clientèle

Les propriétaires à la recherche de solutions de sécurité

Au quatrième trimestre 2023, Arlo a déclaré 1,4 million d'abonnés payés pour les services de sécurité à domicile. Le taux moyen de pénétration des ménages pour les systèmes de sécurité des maisons intelligents était de 18,3% aux États-Unis.

Caractéristiques du segment de la clientèle	Pénétration du marché	Dépenses annuelles moyennes
Propriétaires unifamiliaux	62%	324 $ par an
Résidents d'appartement / condo	38%	276 $ par an

Petites et moyennes entreprises

Le segment de sécurité commerciale d'Arlo représentait 22,7% du total des revenus en 2023, avec 48 000 clients commerciaux.

• Commerces de détail: 35% de la clientèle commerciale
• Petits bureaux: 28% de la clientèle commerciale
• Secteur de l'hôtellerie: 17% de la clientèle commerciale

Consommateurs avertis de la technologie

Les études de marché ont indiqué que 34,6% de la clientèle d'ARLO est des premiers adoptants de technologie avec des dépenses de technologie des ménages moyens de 1 240 $ par an.

Adoption de la technologie Profile	Pourcentage
Propriété de smartphone	98%
Propriété de l'appareil intelligent	67%

Gestionnaires immobiliers à distance

Les solutions d'Arlo desservent 12 500 sociétés de gestion immobilière, avec une moyenne de 43 propriétés par client.

Passionnés de maisons intelligentes

Ce segment représente 26% de la clientèle totale d'ARLO, avec un investissement annuel moyen dans des technologies de maison intelligente de 780 $.

• Intégration avec des plates-formes de maisons intelligentes: 92% de compatibilité
• Nombre moyen d'appareils connectés: 4,3 par ménage

Arlo Technologies, Inc. (Arlo) - Modèle d'entreprise: Structure des coûts

Frais de recherche et de développement

Pour l'exercice 2023, Arlo Technologies a déclaré des frais de recherche et de développement de 52,4 millions de dollars, ce qui représente environ 28,5% des revenus totaux.

Exercice fiscal	Dépenses de R&D	Pourcentage de revenus
2023	52,4 millions de dollars	28.5%
2022	49,8 millions de dollars	26.7%

Fabrication et production de matériel

Les coûts de production matérielle d'Arlo pour 2023 ont totalisé environ 87,6 millions de dollars, avec des composants de coût clés, notamment:

• Achat de matières premières
• Fabrication de composants
• Assemblage et contrôle de la qualité

Maintenance des infrastructures cloud

Les dépenses d'infrastructure cloud et de technologie pour 2023 étaient de 24,3 millions de dollars, couvrant:

• Maintenance du serveur cloud
• Stockage de données
• Infrastructure réseau

Catégorie de dépenses de service cloud	Coût annuel
Maintenance du serveur cloud	12,1 millions de dollars
Stockage de données	7,6 millions de dollars
Infrastructure réseau	4,6 millions de dollars

Opérations de marketing et de vente

Les frais de marketing et de vente pour 2023 ont atteint 43,7 millions de dollars, ce qui représente 23,8% des revenus totaux.

Catégorie de dépenses de marketing	Coût annuel
Marketing numérique	18,2 millions de dollars
Salon du commerce et marketing d'événements	8,5 millions de dollars
Compensation de l'équipe de vente	17,0 millions de dollars

Support client et service

Les dépenses du support client pour 2023 ont totalisé 15,6 millions de dollars, notamment:

• Personnel de soutien technique
• Infrastructure de service client
• Soutenir les plateformes technologiques

Catégorie de dépenses du support client	Coût annuel
Soutien des salaires du personnel	9,3 millions de dollars
Soutenir les plateformes technologiques	4,2 millions de dollars
Formation et développement	2,1 millions de dollars

Arlo Technologies, Inc. (ARLO) - Modèle d'entreprise: sources de revenus

Ventes de matériel de caméras de sécurité

Pour l'exercice 2023, Arlo Technologies a déclaré des ventes de matériel de 217,4 millions de dollars. La gamme de produits comprend:

Type de caméra	Prix ​​de détail moyen	Volume des ventes annuelles
Caméra sans fil essentielle	$99.99	375 000 unités
Caméra sans fil Pro 4	$249.99	285 000 unités
Caméra sans fil ultra 2	$399.99	165 000 unités

Frais d'abonnement de stockage cloud mensuel

Les revenus de stockage cloud d'Arlo pour 2023 ont totalisé 54,3 millions de dollars avec les niveaux d'abonnement suivants:

• Plan de base: 2,99 $ / mois par caméra
• Plan premium: 9,99 $ / mois par caméra
• Plan d'élite: 14,99 $ / mois par caméra

Abonnements de caractéristiques premium

Le chiffre d'affaires de la fonctionnalité premium a atteint 37,6 millions de dollars en 2023, notamment:

Fonctionnalité	Prix ​​mensuel	Nombre d'abonné
Détection avancée	$4.99	225 000 abonnés
Enregistrement prolongé	$3.99	190 000 abonnés

Offres de garantie prolongée

Les revenus de garantie prolongés pour 2023 étaient de 12,7 millions de dollars avec les options suivantes:

• Garantie prolongée d'un an: 29,99 $
• Garantie étendue à 2 ans: 49,99 $
• Garantie prolongée sur 3 ans: 69,99 $

Services d'installation d'entreprise et professionnels

Les revenus des services professionnels ont totalisé 22,5 millions de dollars en 2023, avec la répartition des services suivante:

Type de service	Prix ​​moyen	Volume de services annuel
Installation résidentielle	$199	8 500 installations
Installation commerciale	$799	3 200 installations

Arlo Technologies, Inc. (ARLO) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Arlo Technologies, Inc. (ARLO) over the competition as of late 2025. It's all about high-quality capture, smart interpretation, and reliable service.

High-definition, wire-free security (2K/4K HDR) for easy DIY installation

Arlo Technologies, Inc. (ARLO) delivers high-end video quality without needing an electrician. The newest hardware, like the Ultra Security Camera 4K HDR (3rd Gen, 2025 Release), offers stunning clarity. You get that wire-free setup because the devices run on swappable, rechargeable batteries, meaning no wiring hassles for a DIY install anywhere around your home.

The hardware lineup supports various resolutions, giving you options based on where you place the device:

• Capture picture-perfect detail with 4K Video with HDR on top-tier models.
• Get powerful protection with 2K HDR video on the Pro Series cameras.
• Essential cameras offer 2K and HD options for clarity at affordable price points.

The cameras use Dual-Band Wi-Fi, automatically switching between the 2.4 or 5GHz network for the strongest connection.

Here's a look at the premium hardware capabilities:

Feature	Ultra Series (4K)	Pro Series (2K)	Indoor Camera
Maximum Resolution	4K with HDR	2K HDR	Varies (HD/2K options)
Field of View	180°	160° wide	360° pan & 180° tilt
Key AI Feature	Auto-Zoom & Tracking	Motion Detection & Alerts	Auto Motion Tracking
Audio	Premium 2-Way Audio with wind/noise cancellation	2-Way Audio	Motion & Audio Alerts

Intelligent, actionable alerts via Arlo Secure 6 AI-driven object recognition

The value isn't just in the picture; it's in what the picture means. Arlo Secure 6, the next evolution of the service, leverages Arlo Intelligence to filter out noise and provide context. This means you get alerts that matter, allowing for quicker, appropriate responses to potential emergency events.

The AI capabilities in Arlo Secure 6 include:

• Advanced Audio Detection: Identifying specific sounds like screams, gunshots, glass breaking, and smoke/CO alarms.
• Fire Detection: AI-powered notifications upon detecting flames.
• Object Recognition: Smart Detection for people, vehicles, and packages.
• AI Event Captions: Streamlining life with AI-generated descriptions of video events.

Comprehensive, integrated security ecosystem (cameras, doorbells, sensors) on one app

You get control over your entire security setup from one place, the Arlo Secure App. This ecosystem includes a range of devices, from cameras and video doorbells to floodlights and security systems, all managed centrally. The platform supports custom settings like auto-arming when you leave a geofence.

The success of this integrated, services-first approach is clear in the financials as of Q3 2025:

Metric	Value (Q3 2025)	Year-over-Year Growth
Annual Recurring Revenue (ARR)	$323 million	33.8%
Subscriptions and Services Revenue	$79.9 million	29.2%
Cumulative Paid Accounts	5.4 million	27.4%
Subscriptions Gross Margin (Non-GAAP)	85.1%	Up 770 basis points

Honestly, that subscription gross margin of over 85% shows where the real financial value is being created.

Professional monitoring and emergency response services (Arlo Safe)

For elite-level protection, the service tier includes 24/7 Professional Monitoring. This isn't just a notification; it's a direct line for backup when seconds count. The service provides 24/7 Emergency Response, allowing you to contact police, fire, or medical help with one tap, sending prefilled information like gate codes for faster access.

The premium service tier, which includes this monitoring, builds on the base subscription. For context, Arlo Technologies, Inc. (ARLO) reported that the average customer stays with Arlo services for more than 7 years, and subscription plans start at $17.99/month (billed annually) before factoring in the professional monitoring add-on.

Finance: draft 13-week cash view by Friday.

Arlo Technologies, Inc. (ARLO) - Canvas Business Model: Customer Relationships

You're looking at how Arlo Technologies, Inc. keeps its customers engaged, which is now heavily weighted toward its services, not just the hardware you buy. The relationship is designed to be sticky, moving from a one-time transaction to a continuous service agreement.

Automated and self-service via the Arlo mobile application and online community.

The primary interface for the customer relationship is the Arlo mobile application, which handles everything from device setup to feature access. This digital-first approach is essential for scaling, as it minimizes the direct cost of service delivery per user. The online community serves as a peer-to-peer support layer, deflecting simple inquiries away from direct support channels.

Dedicated customer support channels (phone, chat, email) for technical issues.

While self-service is the first line, Arlo Technologies, Inc. maintains dedicated channels for when things go wrong or for complex technical escalations. These channels support the premium nature of the Arlo Secure service, ensuring that users experiencing issues with their smart home security platform receive timely resolution.

High-touch relationship with strategic partners like ADT for B2B growth.

The relationship extends beyond the end-user to significant strategic alliances. The collaboration with ADT, the largest security company in North America, signed in June 2025, represents a high-touch B2B relationship. This deal is structured to integrate Arlo Technologies, Inc.'s AI security services into ADT's installed base, which is reported to be over 10M+ systems, with material upside expected for Arlo Technologies, Inc.'s subscription revenue starting in 2026. This type of partnership requires deep integration and dedicated account management.

Subscription-based model fostering long-term, continuous engagement.

The entire customer relationship strategy hinges on converting hardware buyers into long-term subscribers for Arlo Secure. This is evidenced by the financial metrics showing services now dominate the revenue mix and profitability profile. For instance, in Q3 2025, subscriptions and services accounted for 57.3% of total revenue, with services revenue hitting $79.9 million, a 29.2% year-over-year increase.

The success of this model is reflected in the key performance indicators (KPIs) that measure engagement and retention:

• Paid accounts reached 5.396 million by the end of Q3 2025, a 27.4% year-over-year increase.
• Annual Recurring Revenue (ARR) accelerated to $323.2 million as of Q3 2025, marking 33.8% year-over-year growth.
• Average Revenue Per User (ARPU) was reported as over $15 per month in Q3 2025.
• Customer Lifetime Value (LTV) is estimated to be over $870.
• Monthly churn is reported as just 1.0%, indicating superior retention.
• The average customer tenure is stated to be more than 7 years.

The high profitability of this engagement is clear, with the non-GAAP subscriptions and services gross margin expanding to 85.1% in Q3 2025.

Here's a snapshot of the subscription performance driving this relationship as of Q3 2025:

Metric	Value (Q3 2025)	Year-over-Year Change
Annual Recurring Revenue (ARR)	$323.2 million	+33.8%
Total Paid Accounts	5.396 million	+27.4%
Subscriptions & Services Revenue	$79.9 million	+29.2%
Non-GAAP Services Gross Margin	85.1%	+770 basis points
Average Revenue Per User (ARPU)	Over $15 per month	Increasing

The full-year 2025 guidance for service revenue was raised to above $310 million. This entire structure is designed to make the recurring service the most valuable part of the customer journey, so the relationship is defintely built to last.

Arlo Technologies, Inc. (ARLO) - Canvas Business Model: Channels

Direct-to-Consumer (D2C) sales via Arlo.com website.

The D2C channel contributes to the overall paid account base, which stood at $5.396$ million at the end of Q3 2025, representing a $27.4\%$ year-over-year increase.

Major e-commerce platforms, notably Amazon.

E-commerce and retail channels collectively drive product sales and new service sign-ups. Management noted that growing shelf space at major retailers, especially Walmart, contributed to higher unit velocity and broader market reach.

Global retail chains for physical product sales (e.g., Best Buy, Costco).

The performance across channels is reflected in the overall revenue mix for Q3 2025, where subscriptions and services accounted for a majority share.

Revenue Component	Amount (Q3 2025)	Percentage of Total Revenue (Q3 2025)
Total Revenue	$139.529$ million	$100\%$
Subscriptions and Services Revenue	$79.9$ million	$57.3\%$
Product Revenue	$\sim\$59.6$ million	$\sim42.7\%$

The product segment saw unit sales growth of $\sim29\%$ year-over-year in Q3 2025, supported by new product Bill of Materials (BOM) cost reductions ranging from $20$ to $35\%$.

Telecommunications and security service providers (e.g., ADT partnership).

Strategic partnerships are a key channel for driving future service revenue growth.

• In the retail and direct channel, the Average Revenue Per User (ARPU) was over $\$15$ per month in Q3 2025.
• The Lifetime Value (LTV) of each user in these channels grew to over $\$870$ as of Q3 2025.
• International revenue represented $42\%$ of total revenue in Q3 2025, at $\$58$ million.
• A strategic partnership with ADT is expected to provide material upside to subscriptions and services revenue starting in 2026.

Finance: draft 13-week cash view by Friday.

Arlo Technologies, Inc. (ARLO) - Canvas Business Model: Customer Segments

You're looking at how Arlo Technologies, Inc. (ARLO) divides up its market as of late 2025. The focus is clearly shifting, with services now driving the bulk of the revenue story, which tells us a lot about who is sticking around and paying for the premium features.

The customer base is fundamentally global, segmented across three primary operational theaters. The Americas remains a core market, though the EMEA region showed significant strength in the prior fiscal year. The APAC region is the smallest piece of the pie, but all three are necessary for the overall scale Arlo is building.

Geographic Segment	Contextual Data Point
Americas	Largest market historically, accounting for 61.4% of 2023 revenue.
EMEA	Showed a significant 34.0% revenue increase in the context of the 2024 10-K.
APAC	Accounted for 5.1% of 2023 annual revenue.

The core consumer segment, which includes tech-savvy homeowners looking for premium performance and renters needing simple, wire-free setups, is measured by paid engagement. This group is what fuels the subscription engine. We see this in the latest figures from the third quarter ended September 28, 2025.

• Cumulative paid accounts reached 5.4 million at the end of Q3 2025.
• This represents year-over-year growth of 27.4% in paid accounts.
• The Annual Recurring Revenue (ARR) hit a record $323.2 million in Q3 2025.
• Average Revenue Per User (ARPU) in the retail and direct channel was over $15 per month.
• The calculated lifetime value (LTV) for each user grew to over $870, a new record.

To be fair, the shift to services means the segment valuing the recurring, high-margin features-like those in the Arlo Secure 6 AI-driven platform-is the most financially important segment right now. Subscriptions and services revenue accounted for 57.3% of total revenues in Q3 2025, with a non-GAAP gross margin of 85.1% in that same quarter. That margin disparity definitely separates the product-only buyer from the platform user.

Beyond the individual consumer, Arlo Technologies, Inc. serves business owners and enterprises through its Arlo SmartCloud offering. This targets a different set of needs, focusing on scalable cloud services for commercial deployment. This segment includes entities that need easy-to-deploy surveillance solutions without building out their own cloud infrastructure.

• Arlo SmartCloud is positioned for hardware companies, automotive companies, and service providers.
• It also targets insurance companies, home builders, smart communities, and smart cities.
• Security solution providers, like Verisure, were a major channel, deriving 43.2% of revenue in 2024.

The company is projecting that the service revenue for the full year 2025 will exceed $310 million, which is growth of over 27% year-over-year. This projection underscores the importance of successfully converting both individual users and business partners into long-term, high-value subscribers. Finance: draft the Q4 2025 revenue forecast based on the current paid account growth rate by next Tuesday.

Arlo Technologies, Inc. (ARLO) - Canvas Business Model: Cost Structure

You're looking at the costs Arlo Technologies, Inc. incurs to keep its connected security ecosystem running, which is a mix of physical goods and recurring cloud services. It's not just about manufacturing; the AI platform is a major cost driver.

Cost of Goods Sold (COGS) for Hardware, Impacted by Tariffs and Promotions

The hardware side of the business faced significant pressure in the third quarter of 2025. Honestly, product gross margins were negative for the period, which is a clear signal of cost headwinds. This was directly attributed to a couple of things: the ongoing global tariff environment and planned promotional activities designed to clear out older inventory.

Specifically, management noted that the full quarter impact of tariffs approximated $5 million, which directly depressed product margin. Also, planned promotional spend on End-of-Life (EOL) products contributed to this margin pressure. The overall GAAP gross margin for the company in Q3 2025 was 40.5%, but this blended number hides the negative margin on the hardware component.

Here's a quick look at the cost-related metrics from Q3 2025:

Metric	Value (Q3 2025)	Context
Product Gross Margin	Negative	Due to tariffs and promotions
Estimated Tariff Impact	~$5 million	Impacted product margin in Q3 2025
GAAP Gross Margin (Blended)	40.5%	Total company gross margin
Non-GAAP Gross Margin (Blended)	41.4%	Total company gross margin, adjusted

Significant Investment in Research and Development (R&D) for AI and New Products

Arlo Technologies, Inc. continues to pour resources into its software and AI capabilities, which is central to its value proposition. The investment in Research and Development (R&D) remains substantial to support the launch of new offerings, like the Arlo Secure 6 platform.

For the third quarter of 2025, the reported R&D expense was $18.1 million. This spending is explicitly tied to increasing personnel to support the development and launch of innovative product offerings and the AI-driven security platform. The company is making sure its core intelligence engine stays ahead.

Cloud Service and Data Storage Fees for Managing 5.4 Million Accounts

The cost structure for the services side is much healthier, which is why it is the focus of the business. Arlo Technologies, Inc. ended Q3 2025 with cumulative paid accounts reaching 5.4 million, growing 27.4% year-over-year. Managing the data and processing for this growing base requires significant cloud infrastructure.

While the exact dollar amount for cloud and data storage fees isn't broken out separately from the overall Cost of Revenue for Services, the efficiency is clear. The non-GAAP subscriptions and services gross margin hit a record 85.1% in Q3 2025. This high margin suggests that the variable costs associated with data storage and cloud delivery are well-controlled relative to the subscription revenue generated.

Key service metrics that drive these costs and revenues include:

• Annual Recurring Revenue (ARR) reached $323.2 million as of Q3 2025.
• Average Revenue Per User (ARPU) is cited as over $15 per month.
• The company is processing 50 million events each day through advanced object detection.

Sales, General, and Administrative (SG&A) Costs, Including Marketing and Retail Support

You have to spend money to sell the hardware and acquire those subscribers, so Sales, General, and Administrative (SG&A) costs are a necessary component. Arlo Technologies, Inc. has been focused on maintaining leverage in its go-to-market approach.

Management has successfully kept operating expenses relatively flat compared to revenue growth. They noted that operating expenses have been maintained at roughly $40 million per quarter or less since 2022, even while Annual Recurring Revenue (ARR) grew at a 37% Compound Annual Growth Rate (CAGR) during that same period. This leverage is key to their profitability goals.

The adjusted EBITDA for Q3 2025 was $17.1 million, resulting in an adjusted EBITDA margin of 12.2%. This shows that even with R&D investment and the hardware margin pressure, the overall cost structure allows for solid operating profitability.

For your reference, here are the operating results for Q3 2025:

• Adjusted EBITDA: $17.1 million.
• Adjusted EBITDA Margin: 12.2%.
• Operating Expenses (Proxy for SG&A + R&D): Maintained at ~$40 million or less per quarter.

Finance: draft 13-week cash view by Friday.

Arlo Technologies, Inc. (ARLO) - Canvas Business Model: Revenue Streams

You're looking at how Arlo Technologies, Inc. makes its money, and honestly, it's all about the shift to services. The recurring revenue engine is definitely the star here. Subscriptions and Services revenue hit $79.9 million in the third quarter of 2025. That's a big jump, up 29.2% year-over-year.

This service strength directly feeds the Annual Recurring Revenue (ARR) base, which ended Q3 2025 at $323.2 million. That ARR figure represents growth of 33.8% compared to the prior year. This recurring stream is what allows Arlo Technologies, Inc. to talk about durable, highly profitable revenue, even when the hardware side faces pressure.

To see the split, here's a quick look at the revenue sources for Q3 2025. The total revenue was $139.5 million. The business model clearly favors the software side now, which is the strategic play for margin expansion.

Revenue Component	Q3 2025 Amount (USD)	Percentage of Total Revenue
Subscriptions and Services Revenue	$79.9 million	57.3%
One-time Sales of Hardware Devices	$59.6 million	42.7%

The other major piece is the one-time sales of hardware devices, which includes cameras, doorbells, and security systems. In Q3 2025, this hardware component brought in the remaining $59.6 million of the total $139.5 million revenue. It's important to note that product gross margins were under pressure, reportedly turning negative due to the full-quarter impact of tariffs, which approximated $5 million, plus planned promotional spend on end-of-life (EOL) products. This is why the high-margin subscription business is so critical to the overall financial health.

The subscription segment boasts an exceptionally high gross margin. The non-GAAP subscriptions and services gross margin hit 85.1% in Q3 2025. That's a fantastic 770 basis points increase year-over-year. Even the GAAP services gross margin was strong at 84.5%. The company views the modest decline in product gross margin as part of the cost of customer acquisition, aiming for a best-in-class LTV (Lifetime Value) to CAC (Customer Acquisition Cost) ratio in the range of three times.

Here are some key performance indicators supporting this revenue structure:

• Cumulative paid accounts reached 5.4 million as of Q3 2025.
• The Arlo Secure 6 platform is driving ARPU (Average Revenue Per User) to over $15 per month.
• The LTV of each user grew to over $870, a new record.
• The company launched its largest product update ever, introducing over 100 new SKUs.
• Unit sales were up approximately 29% year-over-year.

Finance: draft 13-week cash view by Friday.