Arlo Technologies (ARLO) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 6.9% to $149.177M; subscriptions and services reached a record $96.032M, up 20.1%, offsetting lower product revenue.

• ARR was $369.9M, up 14.5%, and paid accounts grew 23.1% to 6.643M; adjusted EBITDA rose 57.6% to $26.922M.

Financial highlights

• Q3 revenue was $149.177M versus $139.5M; 9M revenue was $455.5M, up 17.4% YoY.

• Subscriptions and services revenue was $96.032M, up 20.1%, with $1.7M of NRE revenue; product revenue was $53.145M, down 10.8%.

• Q3 GAAP gross margin was 46.5% versus 40.5%; non-GAAP gross margin was 49.0% versus 41.4%, including tariff refunds.

• Adjusted EBITDA was $26.922M, up 57.6%, with an 18.0% margin; non-GAAP diluted EPS was $0.24, while GAAP net income was $0.862M and diluted EPS was $0.01.

• YTD free cash flow was $50.6M with an 11.1% margin; quarter-end cash, cash equivalents and short-term investments totaled $144.0M.

Outlook and guidance

• Q4 2026 revenue guidance is $137M–$147M; non-GAAP EPS guidance is $0.17–$0.23 and GAAP diluted EPS guidance is $(0.03)–$0.03.

• FY 2026 guidance is $592M–$602M revenue, $375M–$385M service revenue and $0.97–$1.03 non-GAAP EPS; service revenue growth target is more than 20% in 2026+.

• 2027 ARR growth target is ~30%, driven mainly by strategic accounts, Arlo Secure 7 and Aloe Care; it excludes material contribution from unannounced partners.

• Comcast integration remains on schedule for mid-2027, with a phased rollout and fuller-year impact more likely in 2028; new partner contributions may also wait until 2028.

• Long-range plan targets 10M accounts, $700M revenue and 25% margin substantially early; R&D and sales and marketing investment are expected to rise.