Arlo Technologies (ARLO) has wrapped up FY 2025 with fourth quarter revenue of US$141.3 million and basic EPS of US$0.05, alongside net income of US$5.8 million that extends its recent move into profit over the last year. Over the past six quarters, the company has reported quarterly revenue ranging from US$119.1 million to US$141.3 million, while EPS has shifted from a quarterly loss of about US$0.05 in late 2024 to positive territory through 2025, resulting in trailing twelve month EPS of US$0.14. For investors, the latest results indicate a business that is now generating positive earnings, with margins that appear more robust than just a few reporting periods ago.

See our full analysis for Arlo Technologies.

With the headline numbers set, the next step is to see how this earnings profile compares with the key narratives driving sentiment around Arlo Technologies and to consider whether the story on growth and risk requires a reassessment.

Profit swings across the last six quarters

• Across the last six quarters, net income moved from a loss of US$4.9 million in Q4 2024 to profit of US$5.8 million in Q4 2025, with the trailing twelve month net income at US$14.9 million on US$529.3 million of revenue.
• Consensus narrative points to growing premium services and a larger subscriber base as key earnings drivers, and the move from quarterly losses in late 2024 to four consecutive profitable quarters in 2025 tests that view:
  • Record subscriber additions and higher priced AI driven service tiers are cited as reasons for stronger margins, which is consistent with the shift from trailing twelve month losses of US$30.5 million in Q4 2024 to a trailing profit of US$14.9 million in Q4 2025.
  • At the same time, concerns about hardware price pressure and heavier reliance on services matter because total revenue over the last twelve months, at US$529.3 million, is only modestly above the US$510.9 million level seen in the prior trailing period.

7.6% revenue growth versus US market

• Revenue growth over the last year is cited at 7.6% per year, compared with a referenced 11.4% per year for the broader US market, so top line expansion is running below that benchmark even as profitability improves.
• Supporters who focus on recurring services argue that subscriber and ARPU trends can offset slower revenue growth, and the reported figures offer a mixed check on that bullish angle:
  • The trailing twelve month shift from a US$21.7 million loss in Q1 2025 to a US$14.9 million profit in Q4 2025 suggests margin improvement even though aggregate revenue over those periods stayed around the US$506 million to US$529.3 million range.
  • However, with revenue growth below the 11.4% US market benchmark, the bullish case that services alone can carry long term expansion has to be weighed against the relatively modest reported top line growth rate.

On a run of improving profitability but slower headline growth, it is worth seeing how other companies with similar earnings profiles are being priced through a stock screener like the 51 high quality undervalued stocks.

High P/E and one off gain in the mix

• The stock trades on a trailing P/E of 108.8x, compared with 27.7x for the US Electronic industry and 62.9x for peers. The trailing twelve month profit includes a US$4.1 million one off gain that affects how clean that P/E ratio is.
• Skeptics highlight valuation and earnings quality as key pressure points, and the current numbers provide several concrete checks on that bearish narrative:
  • A DCF fair value of about US$26.00 and an analyst price target of US$21.50 both sit above the current share price of US$14.90, which runs against the idea that the market is uniformly too optimistic at today’s level.
  • At the same time, the combination of a 108.8x trailing P/E and a US$4.1 million non recurring gain in the last twelve months gives critics a clear basis to question how much of the recent profitability should be treated as repeatable.

Whether skeptical about the current multiple or assessing whether the premium is justified by future growth assumptions, you can see how the cautious case is built out in more detail in the 🐻 Arlo Technologies Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Arlo Technologies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With sentiment split between improving profits and questions about valuation, it makes sense to review the data yourself and decide what really matters. To balance the optimism around earnings with the concerns flagged by other investors, take a closer look at the 4 key rewards and 2 important warning signs.

See What Else Is Out There

Arlo Technologies is profitable but carries a very high 108.8x P/E on modest 7.6% revenue growth and a trailing profit that includes a US$4.1 million one off gain.

If you are uneasy about paying up for that kind of valuation and earnings quality, compare it against stocks screened as 51 high quality undervalued stocks to see which businesses offer stronger value right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.