Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>ARLO spent the fourth quarter adjusting to a tough consumer environment with deep discounts to clear out channel inventory. </li>
<li>ARLO had already provided quarterly revenue guidance taking into consideration the discounting and promotions that would run during the quarter.</li>
<li>Paying subscriber count rising remains the value proposition in owning shares of ARLO. Quarterly adds closer to what ARLO has been achieving would be a positive for the stock. </li>
</ul>


ARLO spent the fourth quarter adjusting to a tough consumer environment with deep discounts to clear out channel inventory. 
ARLO had already provided quarterly revenue guidance taking into consideration the discounting and promotions that would run during the quarter.
Paying subscriber count rising remains the value proposition in owning shares of ARLO. Quarterly adds closer to what ARLO has been achieving would be a positive for the stock. 


<ul>
<li>ARLO affirmed the slowdown in consumer purchasing that began in September and is expecting the market to remain soft through the middle of 2023</li>
<li>While ARLO had reduced channel inventory in the second quarter, it had started to ship more product into the channel by the time there was a shift in the market</li>
<li>Number of paid subscribers continues to rise in Q3 with ARLO adding 195 thousand. ARLO is expecting paid subscriber growth to continue as the channel sells units to the consumer</li>
</ul>


ARLO affirmed the slowdown in consumer purchasing that began in September and is expecting the market to remain soft through the middle of 2023
While ARLO had reduced channel inventory in the second quarter, it had started to ship more product into the channel by the time there was a shift in the market
Number of paid subscribers continues to rise in Q3 with ARLO adding 195 thousand. ARLO is expecting paid subscriber growth to continue as the channel sells units to the consumer


ARLO: Service in a Tough Market, PT to $8

<ul>
<li>ARLO has the help of a product purchase agreement to smooth out lumpiness in consumer spending in the current macroenvironment</li>
<li>While ARLO is targeting a higher income consumer with products that are priced higher than competition, there is still a risk that could have played out in September.</li>
<li>Number of paid subscribers should continue to rise in the third quarter with possibility it could be materially higher than our forecast</li>
</ul>


ARLO has the help of a product purchase agreement to smooth out lumpiness in consumer spending in the current macroenvironment
While ARLO is targeting a higher income consumer with products that are priced higher than competition, there is still a risk that could have played out in September.
Number of paid subscribers should continue to rise in the third quarter with possibility it could be materially higher than our forecast


<ul>
<li>ARLO deciding to spend more on brand awareness this year has given reason for some investors to move to the sidelines</li>
<li>ARLO’s second quarter results were better than expected and we believe the third quarter has trended better than expected as well</li>
<li>The timing of switching CFOs was a surprise since five months prior ARLO had established its ad spending strategy.</li>
</ul>


ARLO deciding to spend more on brand awareness this year has given reason for some investors to move to the sidelines
ARLO’s second quarter results were better than expected and we believe the third quarter has trended better than expected as well
The timing of switching CFOs was a surprise since five months prior ARLO had established its ad spending strategy.


<ul>
<li>ARLO continues to demonstrate the strength of its paid subscription service by reporting its third straight quarter of non-GAAP net income.</li>
<li>ARLO’s ability to grow the number of paid subscribers each quarter has pushed the business to achieve annual recurring revenue (“ARR”) of $116.6 million</li>
<li>ARLO added 206 thousand paid subscribers in the second quarter. This was the second straight quarter where the number of net additions was over 200 thousand for the quarter</li>
</ul>


ARLO continues to demonstrate the strength of its paid subscription service by reporting its third straight quarter of non-GAAP net income.
ARLO’s ability to grow the number of paid subscribers each quarter has pushed the business to achieve annual recurring revenue (“ARR”) of $116.6 million
ARLO added 206 thousand paid subscribers in the second quarter. This was the second straight quarter where the number of net additions was over 200 thousand for the quarter


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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ARLO: Service in a Tough Market, PT to $8

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Recent decline in the stock price is aligned with the CFO leaving and ARLO guiding for net loss for 2H 2022. The current market environment does...

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ARLO: Capturing Paid Subscriber Growth

ARLO added over 200k paid subscribers and since quarter end has surpassed 1.5 million total paid subscribers. ARLO's effort to accelerate growth...

BWS Financial Inc

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