Arlo Pivots to SaaS

By Zach Segal, Published Jun 18, 2021, 08:50am EDT

Arlo's stock price has fallen 70% since its 2018 IPO but the company says it has "pivoted to become services-focused" and "is not the same company it was a year ago".

IPVM Image

In the mid-2010s Netgear Arlo burst onto the scene as an early entrant in totally wire-free cameras. Now, facing significant competition, the company is aiming to build a subscription business.

Inside this note, IPVM examines:

  • Arlo Financials
  • Verisure European Deal
  • Valuation, 65% Drop from IPO
  • Transition to SaaS
  • Biggest Customers/Channels
  • Geographic Breakdown
  • Competition

**********: ****** **** ***************** ****-**** **********.

2020 **********

****'* ******* *** *******, net **** *********, *** gross ******, ****** **** poor, *** ******** ** 2020.

  • **** *************** ** $*** ******* in ****, **** *% from **** *** **** 23% **** ***** **** revenue ** $*** ******* (the *******'* **** ****** level).
  • ***** ****** ******** ** 16% **** **% ***, both ****** *** **** low *** ************ ** networking *************.
  • *** **** *** ******** to $*** ******* ** 2020, ** **% ***

IPVM Image

Headcount ******* ****

**** ******** *** ********* in ******* **** ************, **** **** *** at *** *** ** 2020.

Q1 **** ******* ** **% **** ******** ****/******

**** ********** **** ******* ** $83 *******, ** **% YoY. ******** *** **** were **** *** **** grew ***%, ***** **** say*** ****** ** **** with ******** (********* ******):

*** ****-****-**** ******* ******* growth *** ********* ****** by ******** ** ****** from *** ******** ************

IPVM Image

Geographic ***** **** ** *****

************* ***** *********** **% of **** ***** ** Q1 ****, ** **% YoY ****** ** ***** deal **** ********/**** ******.** ** ****, ****** the ******** ****, **** international ***** *********** **% of ***** *****, ** 2 ********** ****** **** 2019 *** * ****** from ****.

Verisure (********* ******) ****

**** **** ********* ************ rights ** ****** ************ ** **** *** $50 ******* *** $*** million ** ********** ******* revenue **** * *****.******** *********** **% ** Arlo's ******* ** ** 2021 ** ** ********** points ***.

Q1 **** ***** ****** ** ** ******, *** **** *******

**** **************** ******, ********* *** loss ***, *** ********* operating **** **** ****.

  • ******* ***** ****** ********* to **% ** ** 2021 **** *% ** Q1 ****
  • ***** ****** *** ******** of **% ** ** 2021 **** **% ** Q1 ****
  • ***** ****** *** ******** of **% ** ** 2021 **** -*% ** Q1 ****
  • *** **** ********* ** $10 ******* ** **** vs **** $** ******* in ** ****
  • ******** *** ********* **** flows ** -$** ********* ****** -$** ******* ** Q1 ****

**** ***** ** **** with $*** ******* ** cash *** **** ***********, down $** ******* **** Dec **, ****.

$600 ******* *********; **** **% **** **** ***

****** ****** ** $*** million ($*.** * *****) which ** **% **** than *** ******* ***** ($22) ***** ****'* **** IPO. *** ******* ** ****** at *.** **** ******* and *.** **** ********/********* revenue.

IPVM Image

***/***********

**** ****** $*** ******* in ***** **** *** along **** $** ******* from ******* ** *** same **** *** $** million ** ** **** from ***** ******** ****. They **** ************* ******* ** $*** million *** $*** ******* in **** *** **** equivalents ** ** ** 2021.

SaaS **********

**** **** **** **** "pivoted" ******* * ***** on ******* ********* ************ revenue **** ******** *******:

*******, **** ** *** the **** ******* ** was * **** ***. In **** ** ************ pivoted ** ****** ********-******* to ****** * **** predictable, **** ********** ******** and *** ****** ** results *** ******* ***** of *** ********.

Service ******* ** **% ***; **% ** ***** **** *******

**** ******** $** ******* in ******** ******* ** 2020, ** **% **** 2019 *** **% ***** 2018. ** ********, **** product ******* ** $*** million ** **** **% YoY *** **** **% since ****. ******** **** up **% ** ****'* 2020 *******, ** **** 13% ** ****.

IPVM Image

Conversion ** **** ***********

**** ********** **********, *** new *********, *** ********* to **% (** **** through ** ****) **** their ******** **** ** 5%. **** ******* **** storage, ******** ***** ****-***** period ** ** **** from **, ***** **** premium *********, *** ******** their ******** ** **** of **** *****. ** particular, **** ******* *** an ********** **** ** their ********** ******** *** fundamentally ******* ****** *** paid ********.

Total **** ******** ** ***% ***

**** ******* ***,*** **** accounts ** ** ****, up ***% ***. *** 10% ** ***** ******** (550,000/5.3 *******) *** ****, up **** *% ** 2020.

IPVM Image

Services ***** ****** ******

******** ***** ******* *** higher **** ******* ******* for ****, *** ********* operating ******** ****** *** shift ** ******** ** 2020. ******** ***** ******* have **** **-** ********** points ****** **** ******* margin *** **** ***** 2018, *** *** ***** to * ****** ********** of ******* **** ******** has *** ** * 60% *** ******** ** gross ****** ** **% in **** **** **% in ****. *******, ********* expenses ********* ** ****** in ****** ** **% leading ** ******* ******.

IPVM Image

Revenue ********* ** ******* *********

** ** ****, ****** 50% ** ****'* ******* came **** **** ***, Verisure, *** ****** *** in ** **** **% came **** ******, ********, Best ***, *** ******. This ************* ** ******* means ***** ********* **** the ******** ** ********* better ***** *** **** interruption **** *** **** have * ***** ****** on ****’* *******.

IPVM Image

***********

**** ***** *********** **** a ******* ** ********* with ***** ********* ****** *******. **** specifically ********* “****** (***** and ****), ****** (****), Swann, ***** ***, ****, Foxconn *********** (******), *******, D-Link, *** ******” ** their ******* ***********. ****'* cameras *** ****** ** the ****** *** ** consumer *******,$*** ** ********. $**-$*** ***** ************ **************** ****** ** *** lower ***, ******** ** $3 * ***** **. $3-$10 * *****. **** performed ******* ** ****’***** ******** ****** ********.

*******

*** *** ******** ** whether **** *** ******** to **** *** ******* a ************ ******** ******* the **** *** ******** gross ******* *** ******* hardware ***********. **** **** not ****** *** ******* company ********* ***** * few ***** *** *** if **** *** ******* a *****-******* ******* ************ business, *** ***** ***** be * ****** *******.

Comments (2)

****, **** ******! *** observations:

(*) * ** ******* how **** ******** ** what **** ***** ** is ****** ** **. In *** **** **** or ***, **** *** marketed **** ** *** corresponding ************ ******* *** overall **** *** ********* pivoted ** ******** * broad-based *********** ********** / wholesaler. **** **** ***** that * ************ ***** is *** ****** ******?

(*) *** **** ***** a *****-******* ******* ****** subscription ******** *** ******* it? *** *** ******* revenue ********* ** ******? Will **** ***** *** or **** *** ******* lead ** ** ******* threat *** *** ******** of *** ********?

Agree
Disagree
Informative
Unhelpful
Funny

**** ********* **** ****** did** ******* ****. ****** **** understandably ****** **** **** keeps ********* *** ******** and *** ******* ** issues **** ***** **** or ******* ******* ****. Here's **** ** **** on *** *****:

* **** **** ** say **** ***** ****** only + ********* *** margin ** *** * sustainable ********. ** **** to ********* *** ******* portfolio. **** *** **** shortages ***** ** ***** now ** ** **** had *******, ** ***** probably *** ******* ** a *******. ** **** continue ** ********* **** multiple ******* ********** ** that ** *** ******* all **** ***** **** term. 👍

* *** * *** Arlo ******* ** **** for ******* ********. **** is *** *** ********, at ***. **** ***'* even **** * *** to ******** ********. **** used ** ***** **** at *****, *** ******* that * **** ***. Their ******* ** ** bad, * ******'* **** consider **** *** **** use.

Agree
Disagree
Informative
Unhelpful
Funny
Read this IPVM report for free.

This article is part of IPVM's 7,264 reports and 968 tests and is only available to subscribers. To get a one-time preview of our work, enter your work email to access the full article.

Already a subscriber? Login here | Join now
Loading Related Reports