IP security camera maker Arlo Technologies, Inc. (NYSE: ARLO) reported solid Q4 revenues and subscriber growth, but the company is expecting revenues to fall dramatically in 2019. The news sent the company stock price in freefall, down 44 percent in early trading.
For Q4 2018, Arlo reported revenues of $129.3 million, an increase of 3.6 percent year over year. Total 2018 revenue was $472 million, an increase of 27.3 percent year over year.
For 2019, the company is predicting lower annual revenues of $380 million to $420 million, a potential drop of more than 19 percent, and well below what some analysts were predicting, which was in the $600M+ range. Arlo’s 2019 revenue predictions equate out to an operating loss between $118.7 million and $128.7 million.
That news has sent Arlo’s stock down $7.57/share to start the day to $4.25 in early trading on February 6.
“2018 was a transformational year for Arlo. We maintained our dominant leadership position in the connected camera market, executed an IPO that allowed us to run as an independent company with a healthy balance sheet, and grew revenue by more than 27 percent,” says Matthew McRae, CEO of Arlo Technologies.
“However, we saw the market growth slow significantly late in 2018 which led to channel inventory buildup and both of these factors will affect our growth expectations for 2019.”
“Beyond market dynamics, I am focused on our continuing execution and innovation. Our leading products have maintained a market leadership position through all of 2018. Additionally, we recently announced two new leading-edge products that were extremely well-received at CES,” McRae says.
“With continued market leadership and innovative product releases, I am confident that Arlo will return to growth.”
Other highlights from Arlo’s financial report include an 84.6 percent growth in monthly subscribers for camera image storage fees to 144,000 subscribers.
- An addition of approximately 350,000 registered users to the Arlo platform, bringing the total number of registered users with Arlo 2.85 million.
- The launch of its new wire-free, smart connected audio doorbell that pairs with Arlo wire-free cameras
- Announced the Arlo Security System for the IoT smart home market, which features an all-in-one Multi-Sensor that can instantly communicate any threats for homeowners to take immediate action