Arlo Technologies, Inc.ARLO
Arlo Technologies, Inc. Revenue Disclosure
Revenue
Contract balances
The following table reflects the changes in contract balances for the year ended December 31, 2025:
| Contract Classification | Balance Sheet Classification | December 31, 2025 | December 31, 2024 | $ change | % change | |||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||
| Receivables | Accounts receivable, net | $ | 39,666 | $ | 57,332 | $ | (17,666) | (30.8) | % | |||||||||||||||||||||||
| Contract liabilities, current | Deferred revenue | $ | 37,139 | $ | 27,248 | $ | 9,891 | 36.3 | % | |||||||||||||||||||||||
| Contract liabilities, non-current | Other non-current liabilities | $ | 1,476 | $ | 326 | $ | 1,150 | 352.8 | % | |||||||||||||||||||||||
Receivables decreased primarily due to strong collections coupled with lower product sales to our retail customers in the fourth quarter of 2025. Contract liabilities increased primarily due to increases in subscriptions and services revenue as a result of changes in consumer subscription plans and a shift to additional annual prepaid subscriptions, as well as increases in cumulative paid accounts and rates of subscriptions. For the years ended December 31, 2025, 2024, and 2023, $27.0 million, $17.9 million, and $11.3 million, respectively, of the recognized revenue was included in deferred revenue at the beginning of the periods. There were no significant changes in estimates during the periods that would affect the contract balances.
Remaining performance obligations
The total estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied and remaining was $40.6 million and $29.5 million as of December 31, 2025 and 2024, respectively, substantially related to performance obligations classified as less than one year.
Under the Supply Agreement with Verisure Sàrl (“Verisure”), our largest customer, a performance obligation is not deemed to exist until we receive and accept Verisure’s purchase order. As of December 31, 2025, we had a backlog of $46.3 million which represents performance obligations that will be recognized as revenue once fulfilled, which is expected to occur over the next six months.
Variable consideration
Revenue from all sales is recognized at transaction price, the amount we expect to be entitled to in exchange for providing services or transferring goods. Transaction price is calculated as selling price net of variable consideration which includes estimates for sales incentives and sales returns related to current period products revenue. Sales incentives are determined based on a combination of the actual amounts committed and estimated future expenditure based upon historical customary business practice. Sales returns are estimated by analyzing certain factors, including historical sales and returns data, channel inventory levels, current economic trends, and changes in customer demand for our products. Variable consideration estimates are based on predictive historical data or future commitments that we plan and control. However, we continue to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. The following tables provide activities related to sales incentives and sales returns that are recognized as contra-revenue.
| Sales Incentives | Sales Returns | ||||||||||||||||||||||
| As of December 31, | As of December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||||||||||
| Balance at the beginning of the period | $ | 29,846 | $ | 26,110 | $ | 33,233 | $ | 11,651 | $ | 17,058 | $ | 18,656 | |||||||||||
| Credits issued | (106,467) | (84,224) | (89,400) | (16,356) | (23,768) | (32,748) | |||||||||||||||||
| Additions | 105,745 | 87,960 | 82,277 | 13,978 | 18,361 | 31,150 | |||||||||||||||||
| Balance at the end of the period | $ | 29,124 | $ | 29,846 | $ | 26,110 | $ | 9,273 | $ | 11,651 | $ | 17,058 | |||||||||||
Disaggregation of revenue
We disaggregate our revenue into three geographic regions: the Americas, EMEA, and APAC, where we conduct our business. The following table presents revenue disaggregated by geographic region.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Americas | $ | 339,740 | $ | 266,075 | $ | 301,418 | |||||||||||
| EMEA | 167,400 | 220,821 | 164,750 | ||||||||||||||
| APAC | 22,157 | 23,990 | 25,008 | ||||||||||||||
| Total | $ | 529,297 | $ | 510,886 | $ | 491,176 | |||||||||||
Related party transaction
In December 2025, we entered into an amendment to the Partnership, License and Supply Agreement with our strategic partner, in which our CEO is a member of the board of directors. This amendment is in the ordinary course of our business as we provide non-recurring engineering services (“NRE”) to commercially develop and productize Arlo cameras with our strategic partner’s IP license. For the year ended December 31, 2025, we have recognized $4.1 million in NRE as subscriptions and services revenue on the consolidated statements of operations and comprehensive income (loss).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 7, 2023 | |
| 2021 | Mar 2, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 22, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.