Arlo Reports 138% Surge in Q4 EBITDA, Guides $550–580M 2026 Revenue
Arlo delivered Q4 adjusted EBITDA of $23.3m, up 138% year-over-year, with non-GAAP gross margin rising to 47.8% on $141m revenue and services making up 63% ($89m). Management set FY2026 revenue guidance of $550–580m with services exceeding 65% of sales and non-GAAP EPS of $0.75–0.85.
1. Q4 Financial Performance
Arlo posted Q4 revenue of $141 million with adjusted EBITDA of $23.3 million, a 138% year-over-year increase, driven by non-GAAP gross margin expansion to 47.8%. Product gross margin improved roughly 300 basis points to negative 14.4%, while services revenue reached $89 million or 63% of total sales.
2. SaaS Metrics and Unit Economics
Subscription unit economics strengthened with monthly churn at 1%, ARPU rising to $15.30 and lifetime value increasing to $917, yielding an LTV:CAC ratio of 4.0. Subscription and services gross margin expanded to approximately 84%, fueling margin growth across the business.
3. Full-Year 2025 Results and 2026 Guidance
For full-year 2025, Arlo achieved about $530 million in revenue and $74.7 million in adjusted EBITDA, while free cash flow climbed 38% to $66.9 million. Management outlined 2026 targets of $550–580 million in revenue with services over 65% of sales, non-GAAP EPS of $0.75–0.85 and a $50 million share buyback.
4. Strategic Partnerships and Product Launch
The company executed its largest product launch with over 109 SKUs and 800,000 units shipped in 60 days, and expanded strategic ties with ADT and Samsung SmartThings Safe Premium. Executives noted potential tariff headwinds and U.S. import restrictions could present market share opportunities.