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Arlo Technologies (ARLO) Q4 Earnings Top Estimates, Revenues Up

·4 min read

Arlo Technologies ARLO reported fourth-quarter 2021 non-GAAP earnings of 4 cents per share, which beat the Zacks Consensus Estimate of a loss of 3 cents. The company had reported a non-GAAP loss per share of 8 cents in the prior-year quarter.

Revenues of $142.9 million beat the Zacks Consensus Estimate by 5.2% and increased 24.4% year over year.

Arlo Technologies, Inc. Price, Consensus and EPS Surprise

Arlo Technologies, Inc. Price, Consensus and EPS Surprise
Arlo Technologies, Inc. Price, Consensus and EPS Surprise

Arlo Technologies, Inc. price-consensus-eps-surprise-chart | Arlo Technologies, Inc. Quote

Top-Line Details

Product revenues (80.1% of total revenues) increased 22.6% year over year to $114.4 million.

Revenues from services (19.9% of total revenues) rose 32% year over year to $28.5 million.

Revenue from Americas (56.2% of revenues) declined 13% on a year-over-year basis to $80.4 million.

Europe, Middle East, and Africa (EMEA) revenues (37.5% of revenues) increased 250.4% year over year to $53.6 million.

Asia-Pacific (APAC) revenues (6.2% of revenues) increased 24.1% year over year to $8.9 million.

Arlo added a record of 190,000 paid accounts in the reported quarter, witnessing a sequential increase of 4.4% and a year-over-year increase of 140.5%.

Operating Details

Non-GAAP gross profit from products came in at $14.7 million, up 12.7% year over year. Non-GAAP gross profit from services increased 41.7% year over year to $18 million. In the reported quarter, total non-GAAP gross profit reached $32.7 million, up 27% year over year.

Gross margin on a non-GAAP basis in the reported quarter was 22.9%, up 50 basis points (bps) year over year.

Products gross margin was 12.8%, down 110 bps year over year. Services gross margin was 63.2%, up 430 bps from the year-ago quarter’s levels.

General & administrative expenses dropped 6.6% year over year to $6.9 million. Sales and marketing expenses declined 11% to $11 million. Additionally, research and development expenses declined 9.8% year over year to $11.3 million.

Arlo’s non-GAAP operating income was $3.5 million against a loss of $6.5 million reported in the year-ago quarter.

Balance Sheet & Cash Flow

Total cash and cash equivalents as of Dec 31, 2021, were $175.7 million with no debt compared with $166.1 million as of Oct 3, 2021

Guidance

For first-quarter fiscal 2022, Arlo expects revenues between $110 million and $120 million. Services revenues are estimated in the $10.5-$11.5 million band.

The company expects a non-GAAP net loss between $0.06 and $0.00 per share.

Zacks Rank & Stocks to Consider

Currently, Arlo carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Computer and Technology sector are Model N MODN, LivePerson LPSN and Paycor HCM PYCR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Model N has an Earnings ESP of +5.0% and a Zacks Rank #2.

MODN is down 42.7% in the past year against the Zacks Internet - Software industry’s decline of 42.7% and the Computer and Technology sector’s rise of 1.8% in the past year.

LivePerson has an Earnings ESP of +4.69% and a Zacks Rank #2.

LPSN is down 63.9% in the past year compared with the Zacks Internet – Services industry’s rise of 8% and the Computer and Technology sector’s increase of 1.8%.

Paycor HCM has an Earnings ESP of +9.82% and a Zacks Rank #2.

PYCR is up 8.6% in the past year compared with the Zacks Internet – Software industry’s decline of 47.1% and the Computer and Technology sector’s rise of 1.8%.


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