Arlo Stock Falls While Beating Investor Expectations Q3 2022

***** **** **** ********'* ************ *** both ******* *** ******/****, *** ***** declined ******* ** ****** */***, * heavy ****, ********** ***** ***** *******.

** ** ******** **** ****,**** *** ******* ** ****, ***** ** ***** **** *** market ** *** ***** **** *** totally **** **** ******** **** ** one ************** ******** ** ** ****** ******* than ****.

** **** *********, ****'* ******* *** dropped ***** $* *** ***** ****** rebounding ******** ** ***** ****** -**% for *** ***:

**** **** *** ***** ********** ******** the **** *******, ** ** ***** down **% ** *** **** ****:

***, **** *** ******** *********** ********. Inside **** ******** ****, ** ******* Arlo's ****** *** **** *** ******** signal ***** *** ******* ***** ************ consumer ******.

Problems - *********

**** *** ***** ***** ************* ****** conditions ****** *** ****** ** *********, saying:

**** *** *** ** ** [*.*., September ****], ** ******* ** *** a ***** ** ******** ********, ***** broad-based ************ *********, ******* **** *** threat ** ********* *** ********* ******** demand ********-****.

**** * ****** ****** *******, *** retail ******** *** ****** ** ******** promotions *** ***** *********.

***** **** **** ***** ******** ******** was ***** ****, **** **** ********* enough ** ************ **** **:

** ******* ** *****, *** ******** campaign. ** ** *********, *** ******* awareness ***** *** * **** *********** to ******* *** **** ******* ****** over *** ******** ********** *** ****.

*******, ******* ******** ****** *** ******* impressions *** * ********* **** ** consideration ** *** ***** *** *****, the ********** ** *** ******** ** this ****** ***** ** ********* ** effectively ******* *** ******** *** ******** and *** ** *** *****. ** this ***** ** ****** ************, ***** we *** *** ****** ****** ** a **** ******** *** ****** **********.

********, **** **** ** ********* *********** expenses:

** **** ****-******* ***** ** ***** run **** ** ******* ***** ** OpEx ** ****** ** *** ********** to ******** *** **** ********* ****** of *** **** ****** *** ******* our ****-***** **** ** *** **** efficient *** *********** ******.

*********** ********, ********** ******** ** ******* and ******* ******, ** * **** concern, ** ** ******* ***** ** this ****.

*** ******** ****** **** ***** *** reducing ******* ********* *** ************* ***** to *** ********:

** **** ****** ******* ********* ****** will ********, ****** ** **** ******** over ****** ***** ******* *** ******** us ** ******* ******* *** ******* in *** ****** **** ** ***** cost ** ***** ****.

Positives - *** *******

** *** ******** ****, *** ******* is ******* ** ** * ******* paying *********** *** ** *** ** over $***, ********* ** ****** ****** that ** *** ******:

*'* ********* ** ******** **** **** now *** **** **** *.* ******* total **** ******** **** ** *** way ** *** * ******* ******. And *** ********** ********* ******* ** ARR ******** ** **** ** * rapid ****, ******* ** ** $*** million, ** **% ****-****-**** *** ******** towards *** $*** ******* ******.

********, ***** ******** ******** *** ***** margins ** **% ** *** **** year.

****, **** ****** ******* *** ****** of **** ******** **** **** ****, though **** **** ** ************ ******* over *******:

****, **** ** ****** ****** ******* and ***** ** ** * **** home ******** ******** ********* * ******* ******** ****** ********:

************, **** **** ************ ****, ***** **** ********:

**** *** ***** **** ********** * specific ******** **** ******** ******* *** services ** ********** ****** ** ****** where **** *** **** * *****-********* app.

**** **** *** ******** ***********, ********* a *****-** **** *** ****** ******* and ****** ******** ** ***** ********** to *** ** **** ****** ****** member. **** **** ** ********* *** download *** ** *** ***** *** Google *** ****** *** * ***-****** service ****** ** ********* *** ** Best ***.

** ****** *** ***** *************, ***** *****.*** ******** ********, ****** ** ** *** **** if ** ** ******** ** ********* or ***** *** ********.

********, **** **** ********* ***** ***** which **** ***** ** ********** **** than ***, ******** ****** ***** **** is ** *** ** ** **% range:

***** *** *** ***** *** **** significantly **** *** **** *** *****, Arlo *** *********** **** **** ********* sales ****** ** ******** *** ******* its ********* ********:

*** *******, **** ***** ******'* ******** as ****** "********* **** ******** ** more **** ***,*** ********** ******* ***** direct ******* ** *** **** ** months."

*******, ******* ******** ***** **** **** roughly **** *** *** ******** * years:

** ********, *** *** ***** * months ** ****, ******* ******* *** been ** **%:

**** *** *** ** **** ** maintain **** ****** **** ** **, given ***** *** ********* ** ****** demand.

Costs ********

** **** *********, *********** ***** *** a ******* *** *** *******. **** overall ******* ****** ***** **** ******* barriers, *** ******* ****** ****** **** out ** *** **** ****.

**** ****, *** ******* *** * gross ****** ** $*** ******* ****** operational ******** ** $*** *******, **** the ********* ********:

• ******* ***** **** * ****** ** just ~**%, ********** *** *********** ** the ******** ****** *** ****'* ********* of ********* **** ******* *****.
• ******** ***** **** * **% ****** and * ***** ****** ** ~$** million. ******* **** ** ******* ****'* best ****** *** ****** *** ******* profitable *******.
• ********* ******** *** ********** **** ******** to *** *** ******* ** ******** and *** *** ******* ******* ****** rate, ******* ******* ***** ******* *&*, sales *** *********, *** *&*.

Valuation **********

**** *** ** ********** ********* ** just ~$*** ******* (****** *** ** $300+ ******* - ~$*** ******* **** and *********** ** ****), ***** ** relatively ***, **** ** *****'* ******* market *** * ******* **** * $100+ ******* *** ******* *** ****.

****** ********* *****, **** **** **** challenges ** *** ******** ****** ** very ***********, ********* **** **** *** has ****** ********* ********* **** **** upmarket ** **** ***** * ***** of ********* *** **** *** **** (though **** **** ** *** ******** on ******* *** ************ **** ** compensate *** *** ****-**** ***** ******* on ********).

** ***** ** ** ********** **** Arlo *** ****** *** ****** ** even ****** *** *********** ******** *** eventually ****** * ********** *******, ****** how *** *** ******* *** **** get ** ************* ** ********, ***** the ******* *********** ****** ** *****.