What changed in this filing

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Item 1. Business

2023-03-07 compared with 2022-03-02 · 110 added, 142 removed, 152 unchanged (62% of the section changed)

Arlo Technologies, Inc.

(“we”, “Arlo” or the “Company”) combines an intelligent cloud infrastructure and mobile app with a variety of smart connected devices that is transforming the way people experience the connected lifestyle.

Arlo’s deep expertise in product design, wireless connectivity, cloud infrastructure and cutting-edge AI capabilities focuses on delivering a seamless, smart home experience for Arlo users that is easy to setup and interact with

(“we” or “Arlo”) combines an intelligent cloud infrastructure and mobile app with a variety of smart connected devices that are transforming the way people experience the connected lifestyle.

Our 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, we have launched several categories of award-winning smart connected devices, including wired and wire-free smart Wi-Fi and LTE-enabled cameras, audio and video doorbells, and floodlight cameras.

Since the launch of our first product in December 2014, we have shipped over 27.5 million smart connected devices.

As of December 31, 2022, the Arlo platform had approximately 7.2 million cumulative registered accounts across more than 100 countries around the world, 1.9 million of which were paid services subscribers.

In addition, Arlo’s broad compatibility allows the platform to seamlessly integrate with third-party internet-of-things (“IoT”) products and protocols, such as Amazon Alexa, Apple HomeKit, Apple TV, Google Assistant, IFTTT, Stringify and Samsung SmartThings.

Since the launch of our first product in December 2014, we have shipped over 22.9 million smart connected devices, and, as of December 31, 2021, our smart platform had approximately 6.1 million cumulative registered accounts across more than 100 countries around the world.

We plan to continue to introduce new smart connected devices to the Arlo platform both in cameras and new categories, increase the number of registered accounts on our platform, keep them highly engaged through our mobile app and generate incremental recurring revenue by offering them paid subscription services.

Our total addressable market consists of individuals and business owners who use connected devices to enhance their lives.

We plan to continue to introduce new smart connected devices to the Arlo platform both in cameras and other categories, increase the number of registered accounts on our platform, keep them highly engaged through our mobile app and generate incremental recurring revenue by offering them paid subscription services.

Our total addressable market consists of individuals and business owners who use connected devices to enhance their lives and businesses.

Outside of the home, we have seen adoption of our cellular-enabled products in a variety of use cases, such as neighborhood watch, construction site monitoring, wildlife and outdoor trail surveillance and event monitoring.

We believe the small business, government and direct home monitoring channels provide growth areas for us in addition to our retail and e-commerce presence.

In early 2020, we launched Arlo SmartCloud ("Arlo Smart") a Software as a Service (“SaaS”) solution to deliver scalable security cloud services for business.

With Arlo SmartCloud, we are extending our platform to partners to help innovate and deploy new opportunities beyond our own camera ecosystem.

In the third quarter of 2021, we introduced Arlo Secure, our new service plan with coverage for unlimited cameras and an enhanced Emergency Response solution.

Arlo Secure replaced Arlo Smart, our previous service plan.

Existing Arlo Smart customers are entitled to either retain their existing plans or upgrade to the new Arlo Secure plans of their choosing.

Our Software as a Service (“SaaS”) solution includes Arlo Secure, a service plan with coverage for unlimited cameras and an enhanced Emergency Response solution, Arlo Safe, a personal safety app with panic button accessory, and Arlo SmartCloud, a solution that delivers highly efficient and secure cloud services at scale.

We believe we are well-positioned to extend our current reach to the broader connected lifestyle market both within and beyond the home as we continue to launch new products and services within our connected lifestyle platform.

Arlo Secure is our service plan that provides advanced AI-based detection, DIY home security as well as professional monitoring, and an enhanced Emergency Response capability.

The premium services boast support for unlimited household security devices, along with advanced AI object detection, and smarter, more interactive notifications.

Additionally, the new 24/7, one-touch Emergency Response is available with the Secure Plus and Safe and Secure Pro plans, enabling Arlo users to directly dispatch first responders during an emergency for quicker action.

A trial period of Arlo Secure is provided with various Arlo camera, home security, and doorbell products.

The features of Arlo Secure subscriptions include:

• Emergency Response (Secure Plus plan) – With one touch, dispatch fire, police, or medical responders to the camera’s location.

If directed by the user, Arlo’s Emergency Response team can also provide critical location

information to responders en route to better prepare them, such as gate codes, medical conditions of family members, and pet details.

• 2K (Secure plan) and 4K (Secure Plus plan) Cloud-based Video Recording – View 30 days of recordings securely stored on Arlo’s SmartCloud platform, for ultimate peace of mind and protection even if the device is damaged or stolen in a break-in, storm or other physical incident.

• Unlimited Cameras – Users can enjoy Arlo Secure service for all cameras in their home with one all-encompassing plan and can add newly purchased Arlo cameras for no additional service charge.

• Advanced Object Detectio n – Arlo processes and filters 120 million events each day through advanced object detection backed by visual artificial intelligence, allowing for better recognition of people, packages, vehicles, and animals to add key context to notifications and reduce unwanted alerts.

• Smart Interactive Notifications – Users can take quicker action by responding to rich notifications or viewing an animated preview of a notification video through the lock screen on their smartphone.

• Smoke and CO Alarm Detection – Users can get notified when the camera hears a smoke or CO alarm triggered.

• Cloud-based Activity Zones – Users can reduce unwanted notifications by highlighting specific areas on their property where they want motion to be detected.

• Call a Friend – Users can instantly call a friend through the Arlo App from their notification screen with one tap.

• 24/7 Priority Support – Users get priority technical support through the in-app Help Center with omnichannel access to phone, chat, Community or self-help articles.

• 24/7 Professional Monitoring (Secure Pro plan) – Users have access to Live Security Experts who swiftly assist in an emergency, regardless of whether a user is home or away.

Through Emergency Response, live agents can access authorized camera video to verify emergencies, potentially reducing false alarms, expediting response from emergency personnel in a crisis.

In the fourth quarter of 2022, we announced an all-new personal safety app with a panic button accessory featuring one-tap, 24/7 Emergency Response, family safety, automatic crash detection and more.

Ideal for everyone from city dwellers walking home at night, to college students out with friends, teenagers walking to/from school, daily commuters, or even elderly family members, Arlo Safe is an all-encompassing 24/7 personal safety solution for ultimate peace of mind while on the go.

Features including 24/7 live agent emergency support, location sharing, family check-ins, and safety alerts provide on-the-go protection to keep the user safe in a time of need.

Working in tandem with the Arlo Safe app, the Arlo Safe button can be used to alert safety experts and rapidly send emergency responders to the user’s location anytime, day or night.

The features of Arlo Safe subscriptions include:

• One-Touch Emergency Response – Access live safety experts 24/7 to rapidly send fire, police, or medical responders directly to the user’s exact location.

• Family Safety – Never miss a moment with the ability to know where opt-in family members have been, see their current location, or send help directly to them in an emergency situation.

• Crash Detection and Response – Advanced impact detection can expedite emergency response in the event of a vehicle accident by sharing appropriate location and medical information with first responders.

Other services

Arlo SmartCloud is a SaaS solution to deliver scalable security cloud services for business.

Its comprehensive offering includes computer vision, multi-object detection, audio analysis, security services, scaled storage and numerous ecosystem integrations.

Arlo SmartCloud is a fully managed robust global platform of capabilities built for security, scalability, and reliability that can be deployed as part of advanced subscription services for hardware companies, automotive companies, service providers, insurance companies, home builders, smart communities, smart cities, traditional security companies, and other related verticals.

Our services also include certain development services provided to Verisure Sàrl (“Verisure”) under a Non-recurring Engineering (“NRE”) arrangement, including development of certain custom products specified by Verisure.

Smart Connected Devices

Released in 2021

Arlo Essential Indoor Camera , released in the first quarter of 2021, features 1080p HD video with enhanced night vision that allows users to capture important details day or night, a 130-degree diagonal field-of-view, motion and audio protection and full duplex audio for two-way conversations.

The Arlo Essential Indoor Camera’s unique automated privacy shield is a reassuring feature designed to ease privacy concerns around having a security camera indoors.

When the privacy shield is in the disarm mode, recording, motion and audio detection is disabled and won’t be enabled until the shield is opened by the user via the Arlo app.

Users can also signal the privacy shield to open automatically and begin recording by starting a live stream or changing the camera to arm mode.

This gives users the power to decide when their camera is monitoring a room and recording video/audio, and when it is not.

Arlo Essential Indoor Camera also has built-in siren and works compatibly with Amazon Alexa, Google Assistant and IFTTT for easy interaction, automation and control.

Arlo Go 2 LTE/Wi-Fi Security Camera , released in the fourth quarter of 2021, delivers smarter security for remote or hard-to-access locations and enables LTE and Wi-Fi connectivity for monitoring vacation homes, construction sites, commercial properties, trails and more.

Arlo Go 2 LTE/Wi-Fi Security Camera works with 4G cellular data plan to provide continuous connectivity and uninterrupted security and provides users with 100% wire-free setup, weather-resistant design, a swappable, rechargeable battery and the ability to connect to Wi-Fi when in range.

Users can view and record 1080p full HD video day and night, as well as capture important details with color night vision thanks to an integrated spotlight.

The two-way, full-duplex audio ensures clear communication with visitors, while a built-in siren can be triggered remotely or automatically to ward off intruders.

Arlo Go 2 is also equipped with GPS positioning to track the camera’s whereabouts, allowing users to locate multiple devices across an expansive area, or in the event of theft.

Released in Prior Years

Arlo Q and Arlo Q Plus , released in the fourth quarter of 2015, bring Arlo’s performance and design to an indoor wired solution that allows users to easily monitor their surroundings with 1080p HD video quality.

With two-way audio communication, users cannot only watch but also interact with their children, pets or other guests in their home or business.

Arlo Q and Arlo Q Plus also feature optional 24/7 recording on a subscription basis.

Arlo Q Plus includes the additional functionality of being powered-over-ethernet, which is common for business environments.

Arlo Go , released in the first quarter of 2017, is the world’s first commercially available LTE-enabled wire-free camera and provides untethered mobile security with support by major networks in key markets around the world, including AT&T and Verizon in the United States.

Its IP65-rated weather-resistant design, 720p HD video quality, two-way audio and battery-powered operation allow small business owners, construction sites, outdoor enthusiasts and anyone in need of a truly mobile solution to virtually be at any location, anytime, and maintain monitoring capabilities.

Arlo Baby , released in the second quarter of 2017, combines performance and convenience with smart features that give added peace of mind for parents and caregivers.

With 1080p HD video quality, air quality and temperature sensors, motion and audio detection, and advanced night vision, parents can be alerted to movement and changes in their child’s environment, and they can also remotely engage with their child using Arlo’s two-way audio feature, play music or custom recordings or even turn on Arlo Baby’s multi-colored night light to soothe their child to sleep.

Parents can also easily move Arlo Baby, powered by its rechargeable batteries or by an electrical outlet, to different rooms.

Arlo Chime, released in the third quarter of 2018 and designed to plug into any standard wall outlet and pairs with the Arlo Video Doorbell to play a variety of ringtones or act as a siren, and even contains a silent mode for those times when users don’t want to be bothered.

The Arlo Chime runs on two standard AA batteries which can last up to an entire year based on normal usage and features a weather-resistant exterior finish.

For added ease and versatility, users also have the option to connect with their existing door chimes without needing to install any additional hardware or wiring.

Arlo Ultra, released in the first quarter of 2019 and designed with advanced 4K high dynamic range ("HDR") video quality with color night vision, wire-free setup, a 180-degree diagonal field-of-view, an integrated spotlight and crystal-clear two-way audio with advanced noise cancellations, Arlo Ultra delivers ultimate peace of mind for anyone looking to monitor their home or business.

Users will experience enhanced detail and clarity and are able to zoom in on video clips to uncover details such as license plate and clothing.

Arlo Ultra delivers one of the widest viewing angles in the wire-free security camera industry.

Ultra is paired with a new Arlo SmartHub that functions as the nucleus of the smart home and engineered with Arlo RF, a proprietary two-way audio frequency technology.

Arlo Pro 3, released in the third quarter of 2019 and designed to provide home and small business owners with a high-performance, simple, wire-free security solution, Arlo Pro 3 features 2K resolution with HDR, an integrated spotlight with color night vision and a super-wide 160-degree field of view.

Engineered to work indoors or outdoors, Arlo Pro 3 offers advanced image quality for DIY security that anyone can easily install in minutes and monitor from anywhere using the Arlo app.

Arlo Pro 3 also includes a new Arlo SmartHub that securely manages network traffic to the camera in addition to enhancing power and Wi-Fi performance for better range and battery life.

Arlo Video Doorbell, released in the fourth quarter of 2019 and designed to capture what traditional video doorbells can’t, the new smart entry solution boasts an industry-leading vertical field-of-view, allowing users to get a bigger, more precise picture of their front porch.

Arlo Home Security System, released in the fourth quarter of 2022, is a first-of-its-kind, all-in-one multi-sensor capable of eight different sensing functions.

The system, which is managed through the redesigned Arlo Secure App, pairs with Arlo's new 24/7 Professional Monitoring service, granting one-tap access to highly trained Security Experts who monitor and respond to emergency situations.

Able to be placed anywhere, from walls to windows and doors, to under sinks and water heaters, the simple-to-install wireless multi-sensor can detect motion, door/window openings and tilt, water leaks, freezing temperatures, lighting changes and T3/T4 smoke/CO alarm audio sirens.

Arlo Pro 5S , released in the fourth quarter of 2022, is an all-new Pro 5S 2K Security Camera.

The latest addition to the award-winning Pro series, Pro 5S boasts tri-band connectivity - operating off dual-band Wi-Fi and Arlo SecureLink technology.

Pro 5S is backed by the redesigned Arlo Secure App which features an all-new, highly intuitive interface that streamlines access to critical tools like Emergency Response.

Since Pro 5S operates on the lowest power band when in sleep mode, users will appreciate significant battery life improvements.

Additionally, tri-band connectivity provides longer Wi-Fi range, and mitigates RF interference and active jamming attempts while maximizing picture quality.

Pro 5S seamlessly pairs with other SecureLink devices for continuous security and connectivity, even during power and internet outages.

Arlo Go 2 , released in the second quarter of 2022, is designed for monitoring remote areas, large properties, construction sites, vacation homes, boat or RV slips and hard-to-access areas.

Go 2 works with a 4G LTE cellular data plan to provide continuous connectivity and uninterrupted security.

Arlo Go 2 features a 100% wire-free, weather-resistant design, swappable, rechargeable battery and the ability to directly connect to Wi-Fi, when in range.

Users can view and record 1080p full HD video day and night, capturing important details with color night vision thanks to an integrated spotlight.

Two-way, full-duplex audio ensures clear communication with visitors, while a built-in siren can be triggered remotely or automatically to ward off intruders.

Additionally, Arlo Go 2 is equipped with GPS positioning to track the camera’s whereabouts, allowing users to locate devices across an expansive area, or in the event of theft.

Arlo Video Doorbell , released in the fourth quarter of 2019, is designed to capture what traditional video doorbells cannot, and boasts an industry-leading vertical field-of-view, allowing users to get a bigger, more precise picture of their front porch.

The Arlo Video Doorbell captures footage in a square aspect ratio to allow users to fully view packages on the ground, or visitors from head to toe.

It also offers features such as HD resolution image quality along with clear, two-way audio for users to simultaneously see and speak to visitors.

Unlike conventional doorbell cameras, the Arlo Video Doorbell delivers direct-to-mobile video calls and personalized alerts when packages, people, vehicles, or animals are detected, allowing for users to quickly reply or take action provided they are an Arlo Smart subscriber or in a trial period.

The Arlo Video Doorbell connects to an existing mechanical or digital chime for simple installation and continuous power.

Arlo Floodlight Camera, released in the first quarter of 2020 and is the first wire-free floodlight camera on the market.

Arlo Floodlight Camera , released in the first quarter of 2020, is the first wire-free floodlight camera on the market.

The floodlight camera brings powerful LEDs, an integrated 2K HDR camera, 160-degree field of view, two-way audio, custom lighting configurations and a built-in siren to any home or small business.

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The floodlight camera also offers three different light patterns – constant, flashing, and pulsating – which users can control manually on-demand or via automation rules.

Arlo Essential Spotlight, released in the second quarter of 2020 and designed with an industry-leading, 180-degree viewing angle with a square, 1:1 aspect ratio that ensures users can see packages on the ground or visitors from head-to-toe on their mobile devices.

Arlo Essential Spotlight features HD video resolution combined with direct-to-mobile video calls, clear, two-way audio, an integrated spotlight with color night vision, built in siren and personalized alerts that allow users to quickly reply to guests or take action.

Able to connect directly to Wi-Fi, the latest solution can be powered by its rechargeable battery or be hardwired for continuous charging.

Arlo Ultra 2, released in the second quarter of 2020 and designed to deliver an enhanced user experience with improved range, building on advanced features such as 4K video with HDR, an ultra-wide, 180-degree field of view, auto zoom and tracking on moving object with clarity and detail, color night vision allowing you to see video in color rather than traditional black and white, built-in siren that automatically triggered by motion or audio, or manually triggered via the Arlo App and more.

Arlo Ultra 2, released in the second quarter of 2020, is designed to deliver an enhanced user experience with improved range, building on advanced features such as 4K video with HDR, an ultra-wide, 180-degree field of view, auto zoom and tracking on moving objects with clarity and detail, color night vision allowing the user to see video in color rather than traditional black and white, built-in siren that is automatically triggered by motion or audio, or manually triggered via the Arlo App and more.

Arlo Ultra 2 works with Amazon Alexa, Google Assistant, Apple Homekit, and IFTTT for easy interaction, automation and control.

Arlo Essential XL Spotlight , released in the third quarter of 2020 and which features an integrated, wire-free, extended-life battery that works for up to one year on one charge, an integrated spotlight with color night vision, HD video, two-way audio, motion detection alerts and a built-in siren.

A direct to a Wi-Fi connection enables the Arlo Essential XL Spotlight camera to function as a stand-alone home security solution without the need for a separate Arlo SmartHub or Base Station.

Arlo Essential Wire-Free Video Doorbell, released in the third quarter of 2020, features an easy-to-install, wire-free, battery-powered design.

Arlo Essential , released in the third quarter of 2020, features an integrated, wire-free, extended-life battery that works for up to one year on one charge, an integrated spotlight with color night vision, HD video, two-way audio, motion detection alerts and a built-in siren.

A direct Wi-Fi connection enables the Arlo Essential XL Spotlight camera to function as a stand-alone home security solution without the need for a separate Arlo SmartHub or Base Station.

Arlo Essential Video Doorbell , released in the third quarter of 2020, features an easy-to-install, wire-free, battery-powered design.

Arlo’s latest front-entry solution – which joins a robust ecosystem of home security products and services – captures what conventional video doorbells can’t.

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Able to connect directly to Wi-Fi, the latest solution can be powered by its rechargeable battery or be hardwired for continuous charging.

Arlo Pro 4 Wire-Free Spotlight, released in the fourth quarter of 2020 and designed with weather resistance, wide 160-degree field of view, 2K video resolution with HDR, and six-month battery life.

Arlo Pro 4 , released in the fourth quarter of 2020, is designed with weather resistance, wide 160-degree field of view, 2K video resolution with HDR, and up to a six-month battery life.

Pro 4 also includes two-way audio, built-in siren, and integrated spotlight.

The updated Pro 4 has the ability to connect directly to home Wi-Fi networks without the need for a dedicated Arlo SmartHub or Base Station, which allows the camera to work as a standalone system for easier installation and setup.

Arlo Essential Indoor , released in the first quarter of 2021, features 1080p HD video with enhanced night vision that allows users to capture important details day or night, a 130-degree diagonal field-of-view, motion and audio protection and full duplex audio for two-way conversations.

The Arlo Essential Indoor Camera’s unique automated privacy shield is a reassuring feature designed to ease privacy concerns around having a security camera indoors.

When the privacy shield is in the disarm mode, recording, motion and audio detection is disabled and won’t be enabled until the shield is opened by the user via the Arlo app.

Users can also signal the privacy shield to open automatically and begin recording by starting a live stream or changing the camera to arm mode.

This gives users the power to decide when their camera is monitoring a room and recording video/audio, and when it is not.

Arlo Essential Indoor Camera also has built-in siren and works compatibly with Amazon Alexa, Google Assistant and IFTTT for easy interaction, automation and control.

Arlo Go 2 LTE/Wi-Fi Security Camera works with 4G cellular data plans to provide continuous connectivity and uninterrupted security and provides users with 100% wire-free setup, weather-resistant design, a swappable, rechargeable battery and the ability to connect to Wi-Fi when in range.

Users can view and record 1080p full HD video day and night, as well as capture important details with color night vision thanks to an integrated spotlight.

The two-way, full-duplex audio ensures clear communication with visitors, while a built-in siren can be triggered remotely or automatically to ward off intruders.

Arlo Go 2 is also equipped with GPS positioning to track the camera’s whereabouts, allowing users to locate multiple devices across an expansive area, or in the event of theft.

Arlo Accessories

Arlo Charging Accessories are designed to offer additional convenient ways to keep Arlo wire-free cameras up and running even longer.

Charging Accessories are designed to offer additional convenient ways to keep Arlo wire-free cameras up and running even longer.

With the Arlo Charging Station, users can charge up to two Arlo Pro, Arlo Pro 2 or Arlo Go batteries with fast-charging technology so there is always a battery ready to go.

For those looking to eliminate battery swaps entirely, the mountable and weather-resistant Arlo Solar Panel connects to various Arlo cameras to keep batteries charged with just a few hours of direct sunlight.

Arlo Mounts feature innovative designs that allow users to mount their cameras outdoors or indoors, on ceilings or countertops.

Mounts feature innovative designs that allow users to mount their cameras outdoors or indoors, on ceilings or countertops.

The Arlo Quadpod is a flexible mount featuring four legs crafted from flexible stainless steel and silicone that allows users to mount their camera even in challenging spots such as tree branches or metal poles.

Arlo Skins allow Arlo owners to customize their Arlo cameras to blend into their environments or add a pop of personality.

Popular with outdoor enthusiasts, Arlo Camouflage and Ghillie skins are ultraviolet and water-resistant and made of durable silicone material for easy slip-on, slip-off convenience.

The Arlo app, available for iOS and Android devices, is designed to provide our users with an easy-to-use, flexible, mobile-first experience that connects our users to the people and things that matter most to them.

Our proprietary AI-based capabilities generate relevant and actionable real-time notifications, which enable users to live stream video or contact emergency services through the app notifications when Arlo devices detect motion or sound.

The Arlo app also enables users to view their library of video clips and share them via text, email or social networks, and varies depending on the types of service plans that the user has.

The app has four main screens:

devices, library, mode, and setting:

• The Devices screen provides a quick at-a-glance dashboard of the user’s devices linked to their account, with valuable status icons like device battery life, and actionable buttons to live stream from their Arlo camera, call e911, activate a siren, or access the device’s settings.

• The Library screen delivers a timeline view of recorded video clips in the user’s Arlo Smart account, with additional tagging of clips that contain subject matter identified by Arlo Smart’s AI- and CV-based object detection, such as person, package, vehicle or even animal.

• The Mode screen enables users to quickly Arm or Disarm their Arlo system.

• The Settings screen provides access to additional device or account level information and features, including customization of Arlo Smart notifications and detection capabilities.

In the third quarter of 2021, we introduced Arlo Secure, our new service plan with coverage for unlimited cameras and an enhanced Emergency Response solution.

Arlo Secure replaced Arlo Smart, our previous service plan.

Existing Arlo Smart customers are entitled to either retain their existing plans or upgrade to the new Arlo Secure plan of their choosing.

The premium services boast support for unlimited household security devices, along with advanced AI object detection, and smarter, more interactive notifications.

Additionally, the new 24/7, one-touch Emergency Response is available with the Secure Plus plan, enabling Arlo users to directly dispatch first responders during an emergency for quicker action.

A three-month free trial period of Arlo Secure is provided with various Arlo camera and doorbell products.

The features of the Arlo Secure subscriptions include:

• Emergency Response (Arlo Secure Plus) – With one touch, dispatch fire, police, or medical responders to the camera’s location.

If directed by the user, Arlo’s Emergency Response team can also provide critical location information to responders en route to better prepare them, such as gate codes, medical conditions of family members, and pet details.

• 2K (Arlo Secure) and 4K (Arlo Secure Plus) Cloud-based Video Recording – View 30 days of recordings securely stored on Arlo’s SmartCloud platform, for ultimate peace of mind and protection even if the device is damaged or stolen in a break-in, storm or other physical incident.

• Unlimited Cameras – Users can enjoy Arlo Secure service for all cameras in their home with one all-encompassing plan.

Add new Arlo cameras for no additional charge.

• Advanced Object Detectio n – Arlo processes and filters 50 million events each day through advanced object detection backed by visual artificial intelligence, allowing for better recognition of people, packages, vehicles, and animals to add key context to notifications and reduce unwanted alerts.

• Smoke and CO Alarm Detection – Get notified when the camera hears a smoke or CO alarm triggered.

• Cloud-based Activity Zones – Users can reduce unwanted notifications by highlighting specific areas on their property where they want motion to be detected.

• Call a Friend – Customers can instantly call a friend through the Arlo App from their notification screen with one tap.

• 24/7 Priority Support – Subscribers get priority technical support through the in-app Help Center with omni-channel access to phone, chat, Community or self-help articles.

Our paid services subscriber base has grown from over 230,000 paid accounts as of December 31, 2019 to about 1,067,000 as of December 31, 2021.

In addition, some of our older camera products come with a prepaid service that provides users with rolling seven-day cloud video storage, the ability to connect up to five cameras and 90 days of customer support.

In January 2020, we launched Arlo SmartCloud, a SaaS solution to deliver scalable security cloud services for business.

Its comprehensive offering includes computer vision, multi-object detection, audio analysis, security services, scaled storage and numerous ecosystem integrations.

Our services also include certain development services provided to Verisure under a Non-recurring Engineering arrangement as part of the disposal of our commercial operations in Europe in the fourth quarter of 2019.

Refer to the " Agreements with Verisure " section below for details.

Sales Channels

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Our largest retailer is Best Buy and its affiliates.

For the year ended December 31, 2021, we derived 13.0% of our revenue from Best Buy and its affiliates, which is the only retailer that accounted for 10% or greater of our revenue in 2021.

Wholesale Distributors .

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Broadcast Channels .

We also sell our products through TV shopping networks such as HSN.

We also sell our products through TV shopping networks such as HSN and QVC.

Wireless Carriers .

We supply our products to major wireless carriers around the world, including AT&T, Verizon, Telstra and Vodafone.

We supply our products to major wireless carriers around the world, including AT&T, T-Mobile, Verizon, Telstra and Vodafone.

This sales channel is and will continue to be the key route-to-market for our current portable LTE-enabled camera and any future cellular-enabled connected lifestyle devices.

Security Solution Providers .

We sell our products and services to security solution providers, including Verisure, from which we derived 30.8% of our revenue, and Securitas Security Services USA, Inc.

We sell our products and services to security solution providers, including Verisure, from which we derived 40.1% of our revenue in 2022.

In the third quarter of 2019, we launched our online direct to consumer store to sell our products directly to our customers.

We also sell most of our services, such as Arlo Smart and Arlo Secure, directly to consumers.

We also sell our services, such as Arlo Secure and Arlo Safe, directly to consumers.

Agreements with Verisure

On November 4, 2019, we concurrently entered into an Asset Purchase Agreement (the “Purchase Agreement”) and Supply Agreement (the “Supply Agreement” and together with the Purchase Agreement, the “Verisure Agreements”) with Verisure.

Verisure is a leading European provider of professionally monitored security systems with 24/7 response services to both residential and small business customers.

The Verisure Agreements created a strategic partnership that leverages both the Company and Verisure’s capabilities to create incremental scale to address the ever-growing demand for residential and commercial security.

The strategic partnership will combine our innovative connected cameras and cloud services platform with Verisure’s professionally monitored security solutions to provide a new level of smart security for European customers.

The Purchase Agreement provided that, upon the terms and subject to the conditions set forth in the Purchase Agreement, we transferred, sold and assigned to Verisure certain assets (the "Assets") related to our commercial operations in Europe (the "Business") to Verisure for $50.0 million in cash plus additional cash for certain inventory.

The Purchase Agreement contains customary representations and warranties regarding Verisure, the Business and the Assets, indemnification provisions, termination rights and other customary provisions.

Further, we agreed not to engage in any business that competes with the Business for a period of three years.

Pursuant to the terms and subject to the conditions set forth in the Supply Agreement, Verisure is the exclusive distributor of our products in Europe for all channels, and will non-exclusively distribute our products through its direct channels globally in connection with Verisure’s security business.

Verisure is the exclusive distributor of our products in Europe for all retail channels and direct channels in connection with Verisure’s security business.

During the five-year period commencing January 1, 2020, Verisure has an aggregate purchase commitment of $500.0 million.

As of December 31, 2021, $160.1 million of the purchase commitment has been fulfilled.

On December 30, 2019, Verisure prepaid $20.0 million for product purchases in fiscal 2020 and on December 21, 2020, Verisure prepaid $40.0 million for product purchases in fiscal 2021 and fiscal 2022.

The Supply Agreement also provides for certain development services to Verisure under the Non-recurring Engineering ("NRE") arrangement, including development of certain custom products specified by Verisure, in exchange for an aggregate of $10.0 million, payable in installments upon meeting certain development milestones.

In the second fiscal quarter of 2020, an additional $3.5 million was added to the contract price as a result of a modification to Verisure's specification for an Outdoor Custom Camera being developed.

As part of the Purchase Agreement, we also entered into a Transition Services Agreement with Verisure ("Verisure TSA") to assist Verisure with the transition of the Company’s European commercial operations.

These transition services primarily include IT support and other services, including sales and marketing, operations and supply chain, finance, legal, and human resources.

As compensation for these transition services, we will be reimbursed by Verisure based on actual direct costs plus allocation of overhead.

As of December 31, 2022, $336.7 million of the purchase commitment has been fulfilled with a backlog of $97.9 million.

In December 2020, Verisure prepaid $40.0 million for product purchases in fiscal 2021 and fiscal 2022.

The Supply Agreement also provides for certain development services to Verisure under the NRE arrangement, including development of certain custom products specified by Verisure.

We believe we are well-positioned to compete within the broader connected lifestyle market, both within and beyond the home as we continue to launch new product lines and services within our smart platform.

However, our market is highly competitive and evolving, and we expect competition to increase in the future.

We believe the principal competitive factors impacting the market for our products include price, service offerings, functionality, brand, technology, design, distribution channels and customer service.

We believe that we compete favorably in these areas on the basis of our market leadership position in the U.S.

consumer network connected camera systems market, best-in-class technology, direct relationship with users and user engagement, trusted Arlo platform, strong Arlo brand and channel partners and deep strategic partnerships with key suppliers, such as Cypress Semiconductor Co., OmniVision Technologies Inc.

We believe the principal competitive factors impacting the market for our products and services include price, service offerings, functionality, brand, technology, design, distribution channels and customer service.

We believe that we compete favorably in these areas on the basis of our market position in the U.S.

consumer network connected camera systems market, best-in-class technology, direct relationship with users and user engagement, trusted Arlo platform, strong Arlo brand and channel partners and deep strategic partnerships with key suppliers, such as Infineon Technologies AG, OmniVision Technologies Inc.

and Qualcomm Incorporated.

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telecom service providers, such as AT&T and Comcast;

and smaller point product companies.

and other companies, such as Eufy and Wyze.

Many of our existing and potential competitors have longer operating histories, greater name recognition and substantially greater financial, technical, sales, marketing and other resources than we do.

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The groundbreaking nature of the product, first launched in December 2014, gathered critical acclaim and market success.

Our research and development team has taken this same approach to all of our subsequent product releases, constantly innovating to stay ahead of the competition.

Our research and development team has taken this same approach to all of our subsequent product releases, constantly innovating to stay competitive.

As of December 31, 2022, our research and development staff consisted of 133 employees, located in our offices worldwide, and was comprised of front-end and back-end software engineers, radio frequency engineers, electrical engineers, mechanical engineers, system test engineers, computer vision scientists and data analysis engineers, UX and industrial design engineers and mobile app developers.

We also engage and contract with certain third parties, such as ITS Partner LLC, e-Infochips Ltd., and Elinext Software Ltd.

on research and development.

We intend to continue to invest in research and development to expand our platform and capabilities in the future.

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While all of our products are primarily designed in North America, we currently outsource manufacturing to Foxconn Cloud Network Technology Singapore Pte.

Ltd., Pegatron Corporation, and Wistron NeWeb Corporation, which are all headquartered in Asia.

Ltd., Pegatron Corporation, and Chicony Electronics Co., Ltd., which are all headquartered in Asia.

Although we do not have any long-term purchase contracts, we have executed master product supply agreements with these manufacturers, which typically provide indemnification for intellectual property infringement, epidemic failure clauses, agreed-upon price concessions, division of each party’s intellectual property and product quality requirements.

As we expand our product portfolio, we continue to explore new potential manufacturing

partners that may provide us with competitive advantages on technology and cost.

Since we outsource our manufacturing, we have the flexibility and ability to adapt to market changes, product supply and component pricing while keeping our costs low.

As we expand our product portfolio, we continue to explore new potential manufacturing partners that may provide us with competitive advantages on technology and cost.

Since we outsource our manufacturing,

we have the flexibility and ability to adapt to market changes, product supply and component pricing while keeping our costs low.

In addition to their responsibility for the manufacturing of our products, our manufacturers typically purchase all necessary parts and materials to produce finished goods.

To maintain quality standards for our suppliers, we have established our own product quality organization based in Vietnam, Hong Kong, Taiwan, Indonesia, and mainland China, which is responsible for auditing and inspecting process and product quality on the premises of our manufacturers.

To maintain quality standards for our suppliers, we have established our own product quality organization based in Vietnam, Hong Kong, Taiwan, and Indonesia, which is responsible for auditing and inspecting process and product quality on the premises of our manufacturers.

Our strategic relationships with our manufacturers are an important component of our ability to introduce new products and grow our business.

We focus on driving alignment of our product roadmaps with our manufacturers and determining what we can do collectively to reduce costs across the supply chain.

Our operations teams based in the United States, Hong Kong, Taiwan, Vietnam, Indonesia and mainland China coordinate with our manufacturers’ engineering, manufacturing and quality control personnel to develop the requisite manufacturing processes, quality checks and testing and general oversight of the manufacturing activities.

Our operations teams based in the United States, Hong Kong, Taiwan, Vietnam, and Indonesia coordinate with our manufacturers’ engineering, manufacturing and quality control personnel to develop the requisite manufacturing processes, quality checks and testing and general oversight of the manufacturing activities.

We believe this model has enabled us to quickly and efficiently deliver high-quality and innovative products, while enabling us to minimize costs and manage inventory.

Our products are manufactured and packaged for retail sale by our manufacturers mostly in Vietnam and Indonesia, with minimal manufacturers in China, and shipped to our logistics hubs located in the United States, Hong Kong and Australia.

Our products are manufactured and packaged for retail sale by our manufacturers mostly in Vietnam, Thailand, and Indonesia, and shipped to our logistics hubs located in the United States, Hong Kong, and Australia.

Our operations team coordinates with our manufacturers to ensure that the shipment of our products from the manufacturers to these logistics hubs meets customer demand.

In November 2022, we announced a restructuring plan to reduce our cost structure to better align the operational needs of the business.

As a result, we have ceased operations of our Hong Kong office during the fourth quarter of 2022.

Our marketing programs are focused on building global brand awareness, increasing product adoption and driving sales.

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We provide customer care to Arlo users globally through a variety of communication channels, including phone, chat, email, social media and our Arlo Community, as well as self-guided resources such as knowledge-base articles, how-to videos and technical documentation on our website.

We believe that providing timely, responsive customer support and educational content to our users helps foster an ongoing engagement that builds loyalty to our brand and also enables Arlo to understand user needs as they evolve.

The online Arlo Community in particular serves as an efficient and engaging platform through which we can deliver customer care and receive feedback from users.

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In order to best serve our users globally, we manage and continually adjust our resources worldwide through a mixture of permanent employees and subcontracted, outsourced resources.

As our installed base continues to grow in new geographies, new categories and technologies, we will continue to focus on building a scalable support infrastructure that enables our users to engage with us through the channel that is most convenient and efficient for their needs.

As our installed base continues to grow in new geographies, categories and technologies, we will continue to focus on building a scalable support infrastructure that enables our users to engage with us through the channel that is most convenient and efficient for their needs.

Arlo Cloud Engineering Operations

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Therefore, timely and effective product introductions are critical to our results of operations.

Our backlog consists of products for which customer purchase orders have been received and that are scheduled or in the process of being scheduled for shipment.

As of December 31, 2021, we had a backlog of $4.4 million, compared to $5.7 million as of December 31, 2020 and $5.4 million as of December 31, 2019.

As we typically fulfill orders received within a relatively short period after receipt, our revenue in any fiscal year depends primarily upon orders booked and the availability of supply of our products in that year.

In addition, most of our backlog is subject to rescheduling or cancellation with minimal penalties.

As a result, our backlog as of any particular date may not be an indicator of revenue for any succeeding period.

Similarly, there is a lack of meaningful correlation between year-over-year changes in backlog as compared with year-over-year changes in revenue.

Accordingly, we do not believe that backlog information is material to an understanding of our overall business, and backlog as of any particular date should not be considered a reliable indicator of our ability to achieve any particular level of revenue or financial performance.

Intellectual Property

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We currently have seven registered trademarks and three pending trademark applications in the United States, as well as 62 registered trademarks and 43 pending trademark applications outside of the United States.

We currently hold trademark registrations for “ARLO” in ten countries:

the United States, Australia, Brazil, Canada, Chile, China, Japan, Mexico, Peru, and Trinidad and Tobago, as well as the World Intellectual Property Organization .

We currently hold trademark registrations for “ARLO” in 13 countries:

the United States, Argentina, Australia, Brazil, Canada, Chile, China, Japan, Mexico, New Zealand, Peru, Singapore, and Trinidad and Tobago, as well as the World Intellectual Property Organization .

For more information, see “ Risk Factors-Risks Related to Our Business-If we are unable to secure and protect our intellectual property rights, our ability to compete could be harmed .”

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• Create and share strategic inclusion and diversity plans with our board of directors as a way to prioritize diversity and inclusion and to drive accountability in our organization.

For the second year running, we are partnering with the GEM Consortium ("GEM").

For the third year running, we are partnering with the GEM Consortium (“GEM”).

GEM connects highly qualified students from underrepresented groups to STEM graduate programs with much-needed financial support that is often the deciding factor in pursuing graduate education.

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These events provide a platform for dialogue and an opportunity for every employee to learn, discuss, and appreciate differences between colleagues as we grow to drive greater inclusion at Arlo and truly reflect the customers we serve.

COVID-19 and Employee Safety

During the COVID-19 pandemic, our primary focus has been on the safety and well-being of our employees and their families.

Our global pandemic efforts include implementing early and continuous updates to our health and safety policies and processes, migrating all but a limited number of our global workforce to work remotely while local and state governments have imposed shelter-in-place orders in the United States and around the world.

We are focused on providing our team with the resources that they need to meet the needs of our customers and deliver new innovations to the markets we serve, despite challenges introduced by the COVID-19 pandemic.

As the pandemic continues, the health and well-being of our workforce remains our top priority while we ensure productivity while working from home.

Employee Safety, Health and Well-being

We look to safeguard the safety, health and well-being of all of our employees.

We have managed the continuing impact of COVID-19, including continuous updates to our health and safety policies and processes and migrating all but a limited number of our global workforce to work remotely.

We are focused on providing our team with the resources that they need to meet the needs of our customers and deliver new innovations to the markets we serve.

The health and well-being of our workforce remains our top priority while we ensure productivity while working from home.

What changed 10-K

Item 1. Business