Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>ARLO continued to grow the number of paid subscribers in Q4 2023 with the added tease of ARLO crossing 3 million paid subscribers in the first quarter of 2024</li>
<li>ARLO is focusing on a service first approach where service is subsidizing the cost of hardware</li>
<li>ARLO generated revenue of $135.1 million compared to our estimate of $135.5 million. Product mix was different than we had forecast</li>
</ul>


ARLO continued to grow the number of paid subscribers in Q4 2023 with the added tease of ARLO crossing 3 million paid subscribers in the first quarter of 2024
ARLO is focusing on a service first approach where service is subsidizing the cost of hardware
ARLO generated revenue of $135.1 million compared to our estimate of $135.5 million. Product mix was different than we had forecast


<ul>
<li>ARLO maintained a steady presence of inventory and pricing during the holiday shopping of the fourth quarter and now ARLO is scheduled to report Q4 results in February</li>
<li>ARLO introduced a line of Essential cameras at Wal-Mart, which we believe was a success and should contribute to fourth quarter 2023 revenue and first quarter 2024 net subscriber adds</li>
<li>ARLO ended the September quarter with approximately 2.5 million paid subscribers. We are projecting ARLO added 170 thousand paid subscribers in the fourth quarter</li>
</ul>


ARLO maintained a steady presence of inventory and pricing during the holiday shopping of the fourth quarter and now ARLO is scheduled to report Q4 results in February
ARLO introduced a line of Essential cameras at Wal-Mart, which we believe was a success and should contribute to fourth quarter 2023 revenue and first quarter 2024 net subscriber adds
ARLO ended the September quarter with approximately 2.5 million paid subscribers. We are projecting ARLO added 170 thousand paid subscribers in the fourth quarter


<ul>
<li>ARLO reported third quarter results underscoring the continued growth in paid subscribers leading the Company to another quarter of positive free cash flow.</li>
<li>ARLO has maintained its rate of quarterly net subscriber adds throughout 2023 and is poised to cross 3 million paid subscribers by the middle of 2024.</li>
<li>ARLO reported third quarter revenue of $130.0 million compared to our forecast of $127.5 million.</li>
</ul>


ARLO reported third quarter results underscoring the continued growth in paid subscribers leading the Company to another quarter of positive free cash flow.
ARLO has maintained its rate of quarterly net subscriber adds throughout 2023 and is poised to cross 3 million paid subscribers by the middle of 2024.
ARLO reported third quarter revenue of $130.0 million compared to our forecast of $127.5 million.


<ul>
<li>ARLO reporting better than expected third quarter results would rely on paid subscriber additions remaining on their current trajectory</li>
<li>The pause in ARLO’s stock price creates greater upside potential as ARLO demonstrates its ability to generate positive earnings and free cash flow with each passing quarter</li>
<li>ARLO has released a new line up of Essential cameras. ARLO had previously indicated it would update its Essentials cameras this year ahead of the holidays</li>
</ul>


ARLO reporting better than expected third quarter results would rely on paid subscriber additions remaining on their current trajectory
The pause in ARLO’s stock price creates greater upside potential as ARLO demonstrates its ability to generate positive earnings and free cash flow with each passing quarter
ARLO has released a new line up of Essential cameras. ARLO had previously indicated it would update its Essentials cameras this year ahead of the holidays


<ul>
<li>ARLO reported another quarter of net subscriber adds above expectations and putting the Company on a faster pace to achieve 3 million paying subscribers</li>
<li>At the end of the June quarter, ARLO had annualized recurring revenue of approximately $200 million even though hardware revenue has remained at levels not seen in two years</li>
<li>The recurring revenue model gave ARLO the ability to generate free cash flow in the Q2. This inflection point should solidify ARLO’s valuation on a recurring revenue basis</li>
</ul>


ARLO reported another quarter of net subscriber adds above expectations and putting the Company on a faster pace to achieve 3 million paying subscribers
At the end of the June quarter, ARLO had annualized recurring revenue of approximately $200 million even though hardware revenue has remained at levels not seen in two years
The recurring revenue model gave ARLO the ability to generate free cash flow in the Q2. This inflection point should solidify ARLO’s valuation on a recurring revenue basis


United States

Arlo Technologies, Inc. provides software solutions. The Company offers cloud-based platform with a variety of connected devices such as security cameras. Arlo Technologies serves customers in the United States.

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Arlo Technologies Inc (ARLO US)

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We believe our current forecast of 160 thousand new paying subscribers in the third quarter could be conservative. ARLO's new Essentials cameras...

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ARLO: Free Cash Flow Positive, PT to $17

ARLO generated positive free cash flow in the second quarter as the number of paid subscribers continues to increase. ARR is now approximately $200...

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