Arlo Technologies, Inc. reported its financial results for the third quarter and the nine months ended September 29, 2024, showing notable revenue growth but continued operational losses. Total revenue for Q3 2024 reached $137.7 million, a 5.9% increase from $130.0 million in Q3 2023. For the nine-month period, revenue rose 9.3% to $389.3 million from $356.1 million in the prior year. This growth was driven by a significant increase in service revenue, which rose 21.2% in Q3 2024 to $61.9 million, compared to $51.0 million in Q3 2023. Conversely, product revenue decreased by 4.0% to $75.8 million in Q3 2024.
Despite the revenue increase, Arlo reported a net loss of $4.4 million for Q3 2024, compared to a loss of $1.1 million in Q3 2023. For the nine months, the net loss widened to $25.6 million from $22.7 million in the previous year. The company's gross profit for Q3 2024 was $48.4 million, up from $43.1 million in Q3 2023, reflecting a gross margin of 35.2%, compared to 33.2% in the prior year.
Operating expenses increased significantly, totaling $53.9 million for Q3 2024, up from $45.4 million in Q3 2023. This rise was attributed to higher personnel-related costs, particularly in stock-based compensation, as well as increased marketing expenditures. The company’s restructuring plan, initiated in November 2022, aimed to reduce costs and align operations with current economic conditions, with all related costs expected to be substantially incurred by Q4 2024.
As of September 29, 2024, Arlo's cash and cash equivalents stood at $77.0 million, an increase from $56.5 million at the end of 2023. Total current assets rose to $279.5 million from $250.5 million, while total assets increased to $312.4 million from $285.5 million. However, total stockholders’ equity decreased to $96.9 million from $103.3 million.
The company also reported a significant increase in annual recurring revenue (ARR), which reached $241.6 million, a 20.8% increase from the previous year. Cumulative paid subscribers grew by 70.4% to approximately 4.2 million, reflecting strong demand for its services.
Arlo's strategic focus includes managing liquidity amid ongoing market challenges, such as inflation and supply chain disruptions. The company is in the final stages of securing a new credit agreement with HSBC Bank USA, which will provide a revolving credit facility of $45 million.
About Arlo Technologies, Inc.
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