Slide 1: Q3 2022 Investor Presentation
Q3 2022 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 driving significant value at scale
Arlo is a service business with recurring customer relationships driving significant value at scale Copyright 2022, 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
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 2022, 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 Emergency Response 24/7 Pro Monitoring Smart Home One-tap request for help Live security experts Advanced smart home support Person Detection Rich Notifications Activity Zone
Slide 8: Arlo's core is a global services platform delivering AI and security capabilities
219+ million videos uploaded per day More than Youtube 1300+ hours 75+ 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 3.9+ billion 30+ petabytes AP
Slide 9: Service-first business model is driving strong growth in Paid Accounts
+91% YOY Growth The shift to our new service-first 1,673 business model is driving strong 1,478 growth in Paid Accounts 1,272 1,067 877 695 549 435 356 298 255 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Paid Accounts (in Thousands) Total Net Paid Accounts, in Thousands. Paid A
Slide 10: Paid Accounts growth driving expansion in Annual Recurring Revenue
+56% YOY Rapid growth in our Paid Accounts $125.4 is driving meaningful expansion in $116.6 our Annual Recurring Revenue $101.3 $90.1 $80.4 $69.8 $58.2 $46.6 $39.6 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Annual Recurring Revenue ($ in Millions) *ARR represents the amount of paid servic
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 2022, 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 quarterly churn is among the best compared to consumer subscription peers
Our paid account quarterly churn is amongst the 5% best compared to consumer subscription peers 4.9% 4.8% New business model only, Q4 ‘21 4% 4.1% 4.0% 3.5% 3% 2.5% 2.8% 2.4% 2% 1% Data Sources Hulu & Netflix - Hubspot study “How Netflix Maintains Low Churn & High Customer Retention” Study. Spotify -
Slide 13: Retail and direct paid accounts show outstanding performance of services business
Diving into retail and direct paid accounts(1) shows the outstanding performance of our services business $9.35 81% 1.2% Retail ARPU(2) Retail Gross Margin(3) Retail Monthly Churn(4) (1) Retail and direct paid accounts does not include those from B2B or strategic accounts (2) Average monthly revenue
Slide 14: Our designs and innovations are recognized as best-in-class
Our designs and innovations are recognized as best-in-class Copyright 2022, Arlo Technologies Inc. All rights reserved.
Slide 15: Expansion into new categories has driven product diversification and growth
IP Cameras Expansion into new categories has driven product diversification and growth for Arlo 46% 36% Services, Doorbell, Floodlight, Other 22% 2019 2020 2021 Revenue Mix * Copyright 2022, Arlo Technologies Inc. All rights reserved. * Revenue mix by product category derived by applying gross shipm
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 2022, 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 2022, Arlo Technologies Inc. All rights reserved.
Slide 18: Arlo Pro 5S is the first 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 DTC & Strategic Accounts driving revenue diversification
Other 84% 84% Strategic Accounts Rapid growth in DTC & Strategic 60% Direct to Consumer * Accounts is driving meaningful 60% revenue diversification and 43% 46% predictability Retail/E-comm 2019 2020 2021 Channel Mix Copyright 2022, Arlo Technologies Inc. All rights reserved. * Paid Service revenue
Slide 20: We reach our customers through the largest consumer channels in the world
We reach our customers through the largest consumer channels in the world Copyright 2022, Arlo Technologies Inc. All rights reserved.
Slide 21: The Arlo SmartCloud platform enables SaaS and B2B Strategic Accounts
The Arlo SmartCloud™ platform enables SaaS and B2B Strategic Accounts that create GTM partnerships Copyright 2022, Arlo Technologies Inc. All rights reserved.
Slide 22: Our investment in Arlo.com is driving profitable transactions and direct engagement
Our investment in Arlo.com is driving highly profitable transactions and direct user engagement for Arlo Copyright 2022, Arlo Technologies Inc. All rights reserved.
Slide 23: Financials
arlo“ | Financials
Slide 24: Paid Accounts and ARR driving Service Revenue growth and Gross Margin expansion
Rapid growth in Paid Accounts and ARR are driving Service Revenue growth and Gross Margin expansion $35.4 $32.8 65.4% 65.8% 66.7% 63.2% $29.9 58.9% 58.9% 59.5% $28.5 57.9% $27.0 $25.3 48.7% $22.8 $21.6 $19.0 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1
Slide 25: Rapid growth in ARR driving revenue growth and gross profit expansion
Rapid growth in ARR and business diversification are driving meaningful revenue growth and gross profit expansion +52% +15% YOY $142.9 YOY $38.1 $128.2 $35.1 $124.8 $34.5 $119.0 $114.8 $32.7 $110.2 $111.1 $98.6 $27.5 $26.7 $25.7 $25.1 $82.6 $22.7 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22
Slide 26: Crossed over to non-GAAP operating profit in Q4'21
With gross profit expansion and disciplined expense management, we crossed over to non-GAAP operating profit in Q4’21 $4.6 Excluding Brand Awareness Expenses $3.5 $1.0 $1.0 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 $(3.1) $(4.3) $(4.2) $(6.5) $(7.3) $(8.5) Non-GAAP Operating Profit/(Loss
Slide 27: Appendix – GAAP to non-GAAP Reconciliations
Appendix – GAAP to non-GAAP Reconciliations
Slide 28: 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 September 27, December 31, March 28, October 3, December 31, July 3, October 2, June 28, 2021 April 3, 2022 2020 2020 2021 2021 2021 2022 2022 GAAP gross profit: Products $ 12,
Slide 29: 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 September 27, December 31, March 28, June 27, October 3, December 31, July 3, October 2, April 3, 2022 2020 2020 2021 2021 2021 2021 2022 2022 GAAP operating loss $
Slide 30: arlo“
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