Slide 1: Q2 2023 Investor Presentation
Q2 2023 Investor Presentation
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are
Slide 3: Arlo is a service business with recurring customer relationships
Arlo is a service business with recurring customer relationships driving significant value at scale Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 4: A home burglary occurs every 30 seconds
A home Burglaries at Homes without burglary occurs home in the U.S. a security system every 30 seconds cause over are 300% more in the United $3 Billion in loss likely to be States(1) every year(1) burglarized(2) Fires affect Water leaks Annually, over 1,000 homes per impact 14,000 3 million older d
Slide 5: $53 Billion Global Home Security Market
Smart Camera Market(2) Global Home Security Market(1) Video Doorbell Market(3) ~$5 Billion $53 Billion $1.8 Billion (growing to $11.8 Billion by 2027) (growing to $2.8 Billion by 2025) (growing to $78 Billion by 2025) (1) MarketsandMarkets. https://www.reportlinker.com/p05495954/Home-Security-System
Slide 6: Arlo pioneered DIY Smart Security which consumers now prefer
Arlo pioneered DIY Smart Security which consumers now prefer over professionally installed solutions Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 7: Arlo Secure is the most advanced security service available
Arlo Secure is the most advanced security service available… up to 65% of our customers subscribe within 6 months of purchase E m e rg e n c y 2 4 /7 P ro M o n ito rin g S m a rt H o m e Response Live security experts Advanced smart home support One-tap request for help P e rs o n D e te c tio n R
Slide 8: Arlo's core is a global services platform delivering AI and security
256+ million videos uploaded per day More than Youtube 1390+ hours 103+ million of video uploaded AI-based per minute smart notifications More than per day Youtube Arlo’s core is a global services platform delivering high performance AI and security capabilities at scale 7.8+ billion 55+ petabytes A
Slide 9: Shift to service-first business model driving paid account growth
The shift to our new service- +55% YOY Growth first business model is driving 2, 289 strong growth in Paid Accounts 2,044 1,862 1,673 1,478 1,272 1,067 877 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Paid Accounts (in Thousands) Copyright 2023, Arlo Technologies Inc. All rights reserved. Paid ac
Slide 10: New pricing strategy driving expansion in Annual Recurring Revenue
Our new pricing strategy is +66% YOY Gr owth $193. 6 driving expansion in our $182.6 Annual Recurring Revenue $137.8 $125.4 $116.6 $101.3 $90.1 $80.4 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Annual Recurring Revenue ($ in Millions) ARR represents the amount of paid service revenue that we exp
Slide 11: Number of years to reach $100m in ARR
(2) Number of years to reach $100m in ARR (1) 1-5 years 6-10 years 11-15 years 16+ years Copyright 2023, Arlo Technologies Inc. All rights reserved. (1) Path to $100m of Top 140 SaaS Unicorn Businesses: “How Quickly Does a Startup Have to Grow?”" April 9, 2020, kimchihill.com/2020/04/09/path-to-100m
Slide 12: Paid account monthly churn among the best vs consumer subscription peers
7% Our paid account monthly churn is 6.9% amongst the best compared to 6% consumer subscription peers 6.0% 5% 4% 3% 3.5% 3.1% 2.4% 2% 2.0% 1% 1.1% 1.1% Arlo - New business model only, June 2023 Data Sources: Spotify - Dougshapiro Article “To Everything, Churn, Churn, Churn”. Hulu and Netflix – Hulu
Slide 13: Retail and direct paid accounts show outstanding services performance
Diving into retail and direct paid accounts(1) shows the outstanding performance of our services business $11.5 $700 Retail ARPU(2) Retail LTV(4) 88% $100 Retail Gross Margin(3) Retail CAC(5) (1) Retail and direct paid accounts does not include those from B2B or strategic accounts (2) Average monthl
Slide 14: Our designs and innovations are recognized as best-in-class
Our designs and innovations are recognized as best-in-class Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 15: Expansion into new categories has driven product diversification
IP Cameras Expansion into new categories has driven product diversification and growth for Arlo Services, Doorbell, 41% 42% Accessories, 34% Floodlight, Other 22% 2 01 9 2 02 0 2 02 1 2 02 2 Revenue Mix * Copyright 2023, Arlo Technologies Inc. All rights reserved. * Revenue mix by product category d
Slide 16: Arlo Safe is a new service for personal and family safety
Arlo Safe™ is a new service that enables personal and family safety while on the go Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 17: Arlo Secure is a professionally monitored security system
Arlo Secure™ is a professionally monitored security system with an innovative smart hub and ground-breaking multi-sensor Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 18: Arlo Pro 5S professional grade smart security camera
Arlo Pro 5S is the first professional grade smart security camera and integrates with our Security System • Tri-band connectivity delivers dual band wi-fi plus Arlo SecureLink™ for continuous security and better connectivity. • Backed by next-gen Arlo Secure App that features one-tap emergency respo
Slide 19: Rapid growth in Strategic Accounts driving revenue diversification
Other 84% Strategic Accounts Rapid growth in Strategic Accounts is driving meaningful 60% revenue diversification and 84% 46% Direct to Consumer * predictability 63% 45% 31% Retail/E-comm 2 01 9 2 02 0 2 02 1 2 02 2 Channel Mix Copyright 2023, Arlo Technologies Inc. All rights reserved. * Paid Servi
Slide 20: We reach customers through the largest consumer channels
We reach our customers through the largest consumer channels in the world Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 21: Arlo SmartCloud platform enables SaaS and B2B Strategic Accounts
The Arlo SmartCloud™ platform enables SaaS and B2B Strategic Accounts that create GTM partnerships Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 22: Investment in Arlo.com driving profitable transactions
Our investment in Arlo.com is driving highly profitable transactions and direct user engagement for Arlo Copyright 2023, Arlo Technologies Inc. All rights reserved.
Slide 23: Financials
arlo“ | Financials
Slide 24: Paid Accounts and ARR driving Service Revenue and Gross Margin growth
Rapid growth in Paid Accounts and ARR are driving Service Revenue growth and Gross Margin expansion $50. 3 75. 2% 73.5% $43.9 69.7% $38.3 66.7% 65.8% $35.4 65.4% $32.8 63.2% $29.9 $28.5 $27.0 59.5% Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Servic
Slide 25: Gross margin expansion and expense management accelerating profitability
Gross margin expansion and disciplined expense management is accelerating profitability $5.4 $3.5 $1.0 $1.2 $1.0 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 $(3.9) $(4.2) Non-GAAP Operating Profit/(Loss) ($ in Millions) $(7.3) Copyright 2023, Arlo Technologies Inc. All rights reserved. The most
Slide 26: Appendix – GAAP to non-GAAP Reconciliations
Appendix – GAAP to non-GAAP Reconciliations
Slide 27: Reconciliations of GAAP Measures to Non-GAAP Measures
Reconciliations of GAAP Measures to Non-GAAP Measures Gross Profit, In Thousands, except percentage data Three Months Ended October 3, December 31, April 3, July 3, October 2, December 31, April 2, July 2, 2021 2021 2022 2022 2022 2022 2023 2023 GAAP gross profit: Products $ 8,470 $ 13,920 $ 14,048
Slide 28: Reconciliations of GAAP Measures to Non-GAAP Measures
Reconciliations of GAAP Measures to Non-GAAP Measures Operating Income (Loss), In Thousands, except percentage data Three Months Ended October 3, December 31, April 3, July 3, October 2, December 31, April 2, July 2, 2021 2021 2022 2022 2022 2022 2023 2023 GAAP operating loss $ (15,615) $ (7,230) $
Slide 29: arlo“
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