Arlo Adopts Stock Repurchase Program

Rhea-AI Summary

Arlo Technologies, Inc. (NYSE: ARLO) has announced a $50 million stock repurchase program approved by its Board of Directors. The program, set to run through December 31, 2026, allows for open market purchases of Arlo's common stock. CEO Matthew McRae cited the company's improving profitability, increasing cash position, and belief in upside potential as reasons for the initiative. The repurchases will be conducted in compliance with Rule 10b-18 of the Securities Exchange Act of 1934.

This move is part of Arlo's broader capital allocation strategy aimed at maximizing shareholder return. The company, known for its smart home security solutions, emphasizes its commitment to user privacy and data protection alongside its mission to provide peace of mind through advanced security technologies.

Positive

• Board approval of $50 million stock repurchase program
• Improving profitability and increasing cash position
• Potential for maximizing shareholder return
• Program flexibility with open market purchases through 2026

Negative

• None.

Insights

Financial Analyst

Arlo's announcement of a $50 million stock repurchase program is a significant development for investors. This move signals management's confidence in the company's financial health and future prospects. Key points to consider:

• The program extends through 2026, providing a long-term commitment to shareholder value.
• It reflects improving profitability and an increasing cash position, indicating positive financial trends.
• The repurchase amount represents about 4.3% of Arlo's current market cap, which is substantial.

This strategy can potentially boost earnings per share and stock price by reducing the number of outstanding shares. However, investors should also consider whether this capital could be better used for growth initiatives or R&D. The program's flexibility allows Arlo to adjust based on market conditions, which is prudent. Overall, this move suggests management sees the stock as undervalued and is taking action to address it.

Market Research Analyst

Arlo's stock repurchase program reflects broader trends in the smart home security market. The company's focus on AI and CV-powered analytics aligns with increasing demand for advanced security solutions. Key market insights:

• The global smart home security market is projected to grow significantly, driven by increasing awareness and technological advancements.
• Arlo's diverse product portfolio, including cameras, doorbells and subscription services, positions it well in this expanding market.
• The company's emphasis on user privacy and data protection addresses growing consumer concerns in the IoT space.

This repurchase program, combined with Arlo's market position, suggests confidence in their competitive stance. However, investors should monitor how this capital allocation affects Arlo's ability to innovate and maintain market share in a rapidly evolving industry.

CARLSBAD, Calif.--(BUSINESS WIRE)-- Arlo Technologies, Inc. (NYSE: ARLO), a leading smart home security company, today announced that its Board of Directors has approved the repurchase of up to an aggregate of $50 million of shares of its common stock through open market purchases in a manner deemed to be in the best interests of the company and its stockholders.

“Given Arlo’s improving profitability, increasing cash position, and our belief in the upside potential as we execute our long-range plan, our Board has authorized a share repurchase program of up to $50 million through December 31, 2026. This program serves as one pillar of our capital allocation plan I described to investors on our last earnings call and is designed by Arlo to maximize shareholder return over time,” said Matthew McRae, Chief Executive Officer of Arlo Technologies.

The repurchase of up to an aggregate of $50 million of shares of Arlo’s common stock will be effected through open market purchases in a manner deemed to be in the best interests of the company and its stockholders, considering the economic cost and prevailing market conditions, including the relative trading prices and volumes of Arlo’s common stock. The repurchases are expected to be effected pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The repurchase program is expected to continue through December 31, 2026 unless extended or shortened by the Board of Directors.

About Arlo Technologies, Inc.

Arlo is an award-winning, industry leader that is transforming the ways in which people can protect everything that matters to them with advanced home, business, and personal security solutions. Arlo’s deep expertise in AI- and CV-powered analytics, cloud services, user experience and product design, and innovative wireless and RF connectivity enables the delivery of a seamless, smart security experience for Arlo users that is easy to set up and interact with every day. Arlo’s cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. To date, Arlo has launched several categories of award-winning connected devices, software and services. These include wire-free, smart Wi-Fi and LTE-enabled security cameras, video doorbells, floodlights, security system, and Arlo's subscription services: Arlo Secure, and Arlo Safe.

With a mission to bring users peace of mind, Arlo is as passionate about protecting user privacy as it is about safeguarding homes and families. Arlo is committed to implementing industry standards for data protection designed to keep users’ personal information private and in their control. Arlo does not monetize personal data, provides enhanced controls for user data, supports privacy legislation, keeps user data safely secure, and puts security at the forefront of company culture.

© 2024 Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks and/or registered trademarks of Arlo Technologies, Inc. and/or certain of its affiliates in the United States and/or other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s). The information contained herein is subject to change without notice. Arlo shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 for Arlo Technologies, Inc.:

This press release 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 used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent our expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding the number and dollar amount of shares, if any, that ultimately will be repurchased by Arlo; the timing of any repurchases under the repurchase program; potential benefits of the stock repurchase program; statements about Arlo’s profitability, cash position, or upside potential and others. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for our products may be lower than anticipated, including due to inflation, fluctuating consumer confidence, banking failures and rising interest rates; we may be unsuccessful in developing and expanding our sales and marketing capabilities; we may not be able to increase sales of our paid subscription services; consumers may choose not to adopt our new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; we may be unsuccessful or experience delays in manufacturing and distributing our new and existing products; and we may fail to manage costs and cost saving initiatives, the cost of developing new products and manufacturing and distribution of our existing offerings. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect our business are detailed in our periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Risk Factors” in the most recently filed Annual Report and Quarterly Report filed with the Securities and Exchange Commission (the “SEC”) and subsequent filings with the SEC. Given these circumstances, you should not place undue reliance on these forward-looking statements. We undertake no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Source: Arlo-F

View source version on businesswire.com: https://www.businesswire.com/news/home/20240924835150/en/

Arlo Investor Relations

Tahmin Clarke

investors@arlo.com

Source: Arlo Technologies, Inc.

FAQ

What is the size of Arlo's stock repurchase program?

Arlo Technologies (NYSE: ARLO) has announced a stock repurchase program of up to $50 million.

When does Arlo's stock repurchase program end?

The stock repurchase program is expected to continue through December 31, 2026, unless extended or shortened by the Board of Directors.

Why did Arlo implement a stock repurchase program?

Arlo implemented the program due to improving profitability, increasing cash position, and belief in upside potential as they execute their long-range plan. It's designed to maximize shareholder return over time.

How will Arlo conduct the stock repurchases?

Arlo will conduct the repurchases through open market purchases, in compliance with Rule 10b-18 of the Securities Exchange Act of 1934, considering economic cost and prevailing market conditions.