What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 248 added, 147 removed, 549 unchanged (42% of the section changed)

9 unchanged sentences

Inventories 48,415 41,185

Restricted cash 1,920 —

Prepaid expenses and other current assets 17,577 13,210

26 unchanged sentences

shares issued and outstanding:

108,745,373 at March 29, 2026 and 105,030,947 at December 31, 2025

107,560,075 at June 28, 2026 and 105,030,947 at December 31, 2025

Additional paid-in capital 523,552 510,759

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income — 16

Accumulated deficit ( 365,134 ) ( 383,039 )

5 unchanged sentences

COMPREHENSIVE INCOME (LOSS)

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands, except per share data)

13 unchanged sentences

Total operating expenses 72,760 56,142 137,870 110,320

Income (loss) from operations 7,558 ( 1,451 )

Income from operations 2,456 1,933 10,014 482

Other income, net:

3 unchanged sentences

Total other income, net 1,004 937 8,738 2,055

Income (loss) before income taxes 15,292 ( 333 )

Provision for income taxes 415 502

Net income (loss) $ 14,877 $ ( 835 )

Earnings (loss) per share:

Income before income taxes 3,460 2,870 18,752 2,537

Provision (benefit) for income taxes 432 ( 254 ) 847 248

Net income $ 3,028 $ 3,124 $ 17,905 $ 2,289

Earnings per share:

Basic $ 0.03 $ 0.03 $ 0.17 $ 0.02

4 unchanged sentences

Comprehensive income (loss):

Net income (loss) $ 14,877 $ ( 835 )

Other comprehensive loss, net of tax ( 17 ) ( 29 )

Total comprehensive income (loss) $ 14,860 $ ( 864 )

Net income $ 3,028 $ 3,124 $ 17,905 $ 2,289

Other comprehensive income (loss), net of tax 1 ( 13 ) ( 16 ) ( 42 )

Total comprehensive income $ 3,029 $ 3,111 $ 17,889 $ 2,247

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

3 unchanged sentences

Beginning balances $ 527,565 $ 502,165 $ 510,864 $ 498,840

Stock-based compensation 10,986 13,115

Stock-based compensation expense 16,277 11,081 27,263 24,196

Settlement of liability classified restricted stock units — — 13,848 4,996

Issuance of common stock under stock-based compensation plans — 649

Issuance under stock-based compensation plans — 156 — 805

Issuance under employee stock purchase plan 1,955 1,475 1,955 1,475

Repurchases of common stock ( 22,138 ) ( 919 ) ( 30,271 ) ( 16,354 )

( 8,133 ) ( 15,435 )

Ending balances $ 523,659 $ 513,958 $ 523,659 $ 513,958

1 unchanged sentence

Beginning balances $ ( 368,162 ) $ ( 398,800 ) $ ( 383,039 ) $ ( 397,965 )

Net income (loss) 14,877 ( 835 )

Net income 3,028 3,124 17,905 2,289

Ending balances $ ( 365,134 ) $ ( 395,676 ) $ ( 365,134 ) $ ( 395,676 )

1 unchanged sentence

Beginning balances $ ( 1 ) $ 5 $ 16 $ 34

Other comprehensive loss, net of tax ( 17 ) ( 29 )

Other comprehensive income (loss), net of tax 1 ( 13 ) ( 16 ) ( 42 )

Ending balances $ — $ ( 8 ) $ — $ ( 8 )

3 unchanged sentences

Beginning balances 108,745 103,305 105,031 100,885

Issuance of common stock under stock-based compensation plans 4,286 3,817

Issuance under stock-based compensation plans 329 921 4,615 4,738

Issuance under employee stock purchase plan 187 155 187 155

Repurchases of common stock ( 1,701 ) ( 92 ) ( 2,273 ) ( 1,489 )

( 572 ) ( 1,397 )

Ending balances 107,560 104,289 107,560 104,289

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

2026 March 30,

Six Months Ended

2026 June 29,

(In thousands)

Cash flows from operating activities:

Net income (loss) $ 14,877 $ ( 835 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 17,905 $ 2,289

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation expense, net of amounts capitalized 41,444 31,995

4 unchanged sentences

Discount accretion on investments and other ( 249 ) ( 1,390 )

Changes in assets and liabilities, net of assets acquired:

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable, net ( 23,943 ) ( 4,188 )

9 unchanged sentences

Purchase of long-term investment — ( 12,500 )

Acquisition of business

Acquisitions of businesses, net of cash acquired ( 48,155 ) —

Proceeds from maturities of short-term investments 24,989 65,000

7 unchanged sentences

Net cash used in financing activities ( 28,321 ) ( 13,869 )

Net increase in cash and cash equivalents 6,196 1,977

Cash and cash equivalents at beginning of period

146,440 82,032

Cash and cash equivalents at end of period

$ 152,636 $ 84,009

Net decrease in cash and cash equivalents ( 43,138 ) ( 10,788 )

Cash, cash equivalents, and restricted cash, at beginning of period 146,440 82,032

Cash, cash equivalents, and restricted cash, at end of period $ 103,302 $ 71,244

Reconciliation of cash, cash equivalents, and restricted cash to Consolidated Balance Sheets

Cash and cash equivalents $ 101,382 $ 71,244

Restricted cash 1,920 —

Total cash, cash equivalents, and restricted cash $ 103,302 $ 71,244

Non-cash investing and financing activities:

1 unchanged sentence

Stock-based compensation expense capitalized for software development $ 778 $ 868

Stock repurchases included in accounts payable

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

26 unchanged sentences

Reclassification

Certain prior periods amounts have been reclassified to conform to the current period’s presentation.

Certain prior period amounts have been reclassified to conform to the current period’s presentation.

None of these reclassifications had a material impact to the unaudited condensed consolidated financial statements.

5 unchanged sentences

Management bases its estimates on various assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Actual results could differ materially from those estimates and operating results for the three months ended March 29, 2026 and are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any future period.

Actual results could differ materially from those estimates and operating results for the six months ended June 28, 2026 and are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any future period.

Significant Accounting Policies and Recent Accounting Pronouncements

Our significant accounting policies are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

During the three months ended March 29, 2026, there have been no significant changes to such policies except for the items below.

During the six months ended June 28, 2026, there have been no significant changes to such policies except for the items below.

Business combinations

18 unchanged sentences

Intangible assets acquired in a business combination are recorded at their estimated fair values at the acquisition date.

Intangible assets with finite lives are amortized on a straight-line basis over their estimated respective useful lives, which is based on our expected period of benefit, generally range from five to thirteen years .

Amortization expense is recorded as cost of revenue or general and administrative operating expense on our unaudited condensed consolidated statements of operations and comprehensive income (loss).

Intangible assets with finite lives are amortized on a straight-line basis over their estimated respective useful lives, which is based on our expected period of benefit generally ranging from five to thirteen years .

Amortization expense is recorded as cost of subscriptions and services revenue on our unaudited condensed consolidated statements of operations and comprehensive income (loss).

Intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate that the carrying value of assets may not be recoverable.

Accounting pronouncements recently adopted

During the three months ended March 29, 2026, we adopted Accounting Standards Update (“ASU”) No.

During the six months ended June 28, 2026, we adopted Accounting Standards Update (“ASU”) No.

2025-05, Credit Losses:

28 unchanged sentences

Contract balances

The following table reflects the changes in contract balances for the three months ended March 29, 2026:

The following table reflects the changes in contract balances for the six months ended June 28, 2026:

Contract Classification

Balance Sheet Classification

March 29, 2026 December 31, 2025 $ change % change

June 28, 2026 December 31, 2025 $ change % change

(In thousands)

3 unchanged sentences

Receivables increased primarily due to higher product and service sales.

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.

As of March 29, 2026, there were no contract assets.

For the three months ended March 29, 2026 and March 30, 2025, $ 21.4 million and $ 14.6 million, respectively, of the recognized revenue was included in deferred revenue at the beginning of the periods.

Contract liabilities increased primarily due to growth in subscriptions and services revenue driven by changes in consumer subscription plans, a shift toward additional annual prepaid subscriptions, and increases in cumulative paid accounts and subscription rates.

As of June 28, 2026, there were no contract assets.

For the six months ended June 28, 2026 and June 29, 2025, $ 29.5 million and $ 21.7 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 $ 54.6 million as of March 29, 2026 and $ 40.6 million as of December 31, 2025, substantially related to performance obligations classified as less than one year .

The total estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied and remaining was $ 54.0 million as of June 28, 2026 and $ 40.6 million as of December 31, 2025, 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 March 29, 2026, we had a backlog of $ 43.4 million which represents performance obligations that will be recognized as revenue once fulfilled, which is expected to occur over the next six months .

As of June 28, 2026, we had a backlog of $ 40.0 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

8 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Three Months Ended

Sales incentives March 29,

2026 March 30,

Three Months Ended Six Months Ended

Sales incentives June 28,

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

4 unchanged sentences

Balance at the end of the period $ 26,301 $ 34,892 $ 26,301 $ 34,892

Three Months Ended

Sales returns March 29,

2026 March 30,

Three Months Ended Six Months Ended

Sales returns June 28,

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

2 unchanged sentences

( 2,985 ) ( 3,246 ) ( 5,774 ) ( 8,749 )

1,181 2,373 1,899 5,188

Balance at the end of the period $ 5,398 $ 8,090 $ 5,398 $ 8,090

3 unchanged sentences

The following table presents revenue disaggregated by geographic region.

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

3 unchanged sentences

Total $ 155,937 $ 129,405 $ 306,319 $ 248,471

For the three months ended March 29, 2026 and March 30, 2025, one customer accounted for 40 % and 36 % of the total revenue, respectively.

For the six months ended June 28, 2026 and June 29, 2025, one customer accounted for 40 % and 35 % of the total revenue, respectively.

No other customer accounted for 10% or greater of the total revenue.

As of March 29, 2026, one customer accounted for 60 %, and as of December 31, 2025, two customers accounted for 40 % and 17 % of the total accounts receivable, net.

As of June 28, 2026, one customer accounted for 60 %, and as of December 31, 2025, two customers accounted for 40 % and 17 % of the total accounts receivable, net.

No other customers accounted for 10% or greater of the total accounts receivable, net.

7 unchanged sentences

The transaction is accounted for as a business combination in accordance with ASC 805, Business Combinations .

As a result of the transaction, we obtained control of Canary by obtaining the ability to direct its ongoing operations and to receive substantially all of the economic benefits associated.

As a result of the transaction, we obtained control of Canary by obtaining the ability to direct its ongoing operations and to receive substantially all of the economic benefits associated with Canary.

As part of this transaction, we also entered into a Transitional Service Agreement with Canary and a Platform Transformation Agreement with Smartfrog & Canary Holdings, Inc.

1 unchanged sentence

We allocate the purchase consideration to the identifiable assets acquired and liabilities assumed in this business combination based on their acquisition-date fair values, which is determined using income and market-based valuation techniques that require significant judgments and assumptions, including projected revenue, profitability and cash flows.

Goodwill recognized through our business combinations represents the excess of the purchase price over the fair value of identifiable net assets and is primarily attributable to expected synergies and operational efficiencies and anticipated future economic benefits.

The resulting goodwill from the Canary acquisition is deductible for income tax purposes.

Goodwill recognized through the Canary acquisition represents the excess of the purchase price over the fair value of identifiable net assets and is primarily attributable to expected synergies and operational efficiencies and anticipated future economic benefits.

The resulting goodwill associated with Canary is deductible for income tax purposes.

The preliminary fair value estimates of the net assets acquired are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period, which is up to one year from the acquisition date.

4 unchanged sentences

Total purchase consideration $ 48,907

The purchase price allocation are as follows (in thousands):

The purchase price allocation is as follows (in thousands):

Assets acquired:

6 unchanged sentences

Fair value of assets acquired and liabilities assumed, net $ 48,907

During the three months ended March 29, 2026, we recorded $ 0.5 million acquisition-related costs, which are expensed when incurred and included in other operating expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

During the three months ended March 29, 2026, Canary’s results of operations are not material and are included within our unaudited condensed consolidated financial statements from an effective date of March 1, 2026.

The fair values and useful lives of identifiable intangible assets were as follows:

amount Estimated

(In thousands) (In years)

Customer relationship (1)

Proprietary technologies (2)

Trade names (3)

Total intangible assets $ 19,090

_________________________

(1) Customer relationship intangible assets were valued using the multi-period excess earnings method, which is the present value of the projected cash flows expected to be generated by the existing customer relationships, after deducting contributory asset charges representing a fair return on other assets required to generate those cash flows.

Key assumptions included discounted cash flow and estimated customer retention rates.

(2) Proprietary technologies intangible assets comprised of various developed technologies, which were valued using the relief-from-royalty method and the multi-period excess earnings method.

For the proprietary technology intangible asset valued using the relief-from-royalty method, which is based on the discounted cash flow savings accruing to the owner from not having to license the technology from a third party.

Key assumptions included attributable revenue, royalty rates, and technology obsolescence rates.

For the proprietary technology intangible asset valued using the multi-period excess earnings method, which is based on the discounted cash flows after deducting contributory asset charges representing a fair return on other assets required to generate those cash flows.

Key assumptions included attributable revenue, profitability, cash flows, and technology obsolescence rates.

(3) Trade names intangible assets were valued using the relief from royalty method, which is the discounted cash flow savings accruing to the owner by virtue of the fact that the owner is not required to license the trade names from a third party.

Key assumptions included attributable revenue expected from the trade names, royalty rates, and assumed asset life.

During the six months ended June 28, 2026, we recorded $ 0.8 million acquisition-related costs, which are expensed when incurred and included in other operating expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

During the six months ended June 28, 2026, Canary’s results of operations are not material and are included within our unaudited condensed consolidated financial statements from an effective date of March 1, 2026.

The effect of this business combination was not material to our financial results.

Therefore, the actual and pro-forma results of operations subsequent to the acquisition date to March 29, 2026 have not been presented.

Therefore, the actual and pro-forma results of operations from the acquisition date to June 28, 2026 have not been presented.

Aloe Care Health, Inc.

2 unchanged sentences

The transaction is intended to accelerate the expansion of our AI-powered services for aging-in-place care in collaboration with health providers, patients and their families.

The transaction is accounted for as a business combination in accordance with ASC 805, Business Combinations .

As a result of the transaction, we obtained control of Aloe Care by obtaining the ability to direct its ongoing operations and to receive substantially all of the economic benefits associated with Aloe Care.

Under the Merger Agreement, we acquired 100 % of the outstanding equity interests of Aloe Care in exchange for (i) $ 15.0 million of cash consideration paid at closing;

and (ii) contingent earnout of up to $ 25.0 million, payable, at our option, in cash, shares of our common stock, or a combination of cash and shares, subject to the terms of the Merger Agreement.

The transaction will be accounted for as a business combination in accordance with ASC 805, Business Combinations .

During the three months ended March 29, 2026, we recorded $ 0.8 million acquisition-related costs, which are expensed when incurred and included in other operating expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The initial accounting for this business combination is incomplete at the date of this filing as a result of limited time between the acquisition date and the filing date.

Accordingly, certain disclosures required under ASC 805, Business Combinations , including the preliminary fair values of assets acquired and liabilities assumed, pre-acquisition contingencies and any residual goodwill have not been provided.

We are in the process of gathering the necessary information to complete the accounting for the transaction.

Such information will be included in our Quarterly Report on Form 10-Q for the quarter ending on June 28, 2026.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

techniques that require significant judgments and assumptions, including projected revenue, profitability and cash flows.

Goodwill recognized through the Aloe Care acquisition represents the excess of the purchase price over the fair value of identifiable net assets and is primarily attributable to expected synergies and operational efficiencies and anticipated future economic benefits.

The resulting goodwill associated with Aloe Care is not deductible for income tax purposes.

The acquired intangible assets will be amortized over their estimated useful lives.

The acquisition date fair value of the consideration transferred consisted of the following (in thousands):

Cash paid at close (1)

Earnout contingent consideration (2)

Total purchase consideration $ 19,482

_________________________

(1) Cash paid at close does not include the acquisition-related costs which are expensed when incurred and are not purchase consideration.

(2) The earnout was accounted for as contingent consideration at fair value and was valued using a Monte Carlo simulation model, applying a revenue discount rate of 6.3 % to the projected revenue inputs and a discount rate of 7.75 % to present value the resulting payment as of the acquisition date.

The fair value measurement was based on significant inputs not observable in the market, including projected revenue, probability, and the timing of achieving the earnout targets.

The purchase price allocation is as follows (in thousands):

Assets acquired:

Restricted cash (1)

Inventories 2,455

Other acquired assets 433

Intangible assets 7,840

Goodwill 8,992

Total assets acquired $ 21,667

Liabilities assumed:

Accounts payable $ 1,960

Other assumed liabilities 225

Total liabilities assumed $ 2,185

Fair value of assets acquired and liabilities assumed, net $ 19,482

_________________________

(1) Restricted cash is in escrow funds to secure post-acquisition indemnification obligations and working capital adjustments.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The fair values and useful lives of identifiable intangible assets were as follows:

amount Estimated

(In thousands) (In years)

Customer relationship (1)

Proprietary technologies (2)

Trade names (3)

Total intangible assets $ 7,840

_________________________

(1) Customer relationship intangible assets were valued using the distributor method, which is the present value of the after-tax cash flows expected to be generated by the existing customer relationships, after reduction by an estimated fair rate of return on contributory assets required to generate the customer relationship revenues.

Key assumptions included the discount rate, estimated customer retention rates, and the selected distributor profit margin derived from guideline public distributor companies.

(2) Proprietary technologies intangible assets were valued using the multi-period excess earnings method based on the discounted cash flows and technology obsolescence rate.

Key assumptions included attributable revenue, profitability, cash flows, and technology obsolescence rates.

Key assumptions included attributable revenue expected from the trade names, royalty rates, and assumed asset life.

During the six months ended June 28, 2026, we recorded $ 2.2 million acquisition-related costs, which are expensed when incurred and included in other operating expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

During the six months ended June 28, 2026, Aloe Care’s results of operations are not material and are included within our unaudited condensed consolidated financial statements from an effective date of April 16, 2026.

The effect of this business combination was not material to our financial results.

Therefore, the actual and pro-forma results of operations from the acquisition date to June 28, 2026 have not been presented.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Balance Sheet Components

Short-term investments

As of March 29, 2026 As of December 31, 2025

As of June 28, 2026 As of December 31, 2025

Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value

15 unchanged sentences

Depreciation and amortization expense pertaining to property and equipment are as follows:

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

5 unchanged sentences

Total depreciation and amortization $ 1,711 $ 858 $ 3,408 $ 1,687

We have determined that no event occurred or circumstances changed during the three months ended March 29, 2026 that would more likely than not reduce the fair value of goodwill below the carrying amount.

There was no accumulated goodwill impairment recognized as of March 29, 2026.

We have determined that no event occurred or circumstances changed during the six months ended June 28, 2026 that would more likely than not reduce the fair value of goodwill below the carrying amount.

There was no accumulated goodwill impairment recognized as of June 28, 2026.

ARLO TECHNOLOGIES, INC.

1 unchanged sentence

Intangible assets, net

Intangible assets acquired through business combination as of March 29, 2026 were as follows:

Gross carrying amount Weighted-average remaining useful lives

Intangible assets acquired through business combinations as of June 28, 2026 were as follows:

Gross carrying amount Accumulated amortization Net carrying amount Weighted-average remaining amortization periods

(In thousands)

4 unchanged sentences

Total intangible assets $ 26,930 $ ( 1,217 ) $ 25,713

Amortization of intangible assets resulting from business combination for the month of March 2026 since the acquisition date was de-minimis.

There were no intangible assets impairment recognized as of March 29, 2026.

The expected future amortization expense for intangible assets as of March 29, 2026 was as follows (in thousands):

2026 (Remaining nine months) $ 1,512

Amortization of intangible assets resulting from business combinations during the three and six months ended June 28, 2026 was $ 1.2 million and $ 1.2 million, respectively.

There were no accumulated intangible assets impairment recognized as of June 28, 2026.

The expected future amortization expense for intangible assets as of June 28, 2026 was as follows (in thousands):

2026 (Remaining six months) $ 1,879

Thereafter 11,822

14 unchanged sentences

Fair Value Measurements

The following table summarizes assets measured at fair value on a recurring basis:

Fair value on a recurring basis

2026 December 31,

13 unchanged sentences

Our short-term investments in cash equivalents and marketable securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.

As of March 29, 2026 and December 31, 2025, assets and liabilities measured as Level 2 fair value were not material.

As of June 28, 2026 and December 31, 2025, assets and liabilities measured as Level 2 fair value were not material and there were no financial assets measured as Level 3 fair value.

Earnout contingent consideration recognized through the Aloe Care acquisition is measured at the fair value on a recurring basis and is classified within Level 3 of the fair value hierarchy because the measurement requires the use of significant unobservable inputs.

The fair value of the earnout contingent consideration was estimated using income and market-based valuation techniques and discounted to present value.

Significant unobservable inputs used in the valuation include projected revenue, profitability, cash flows, and the discount rate.

Changes in these assumptions could result in a significantly higher or lower fair value measurement.

The contingent consideration liability was $ 5.4 million as of June 28, 2026 and was included in other non-current liabilities on the unaudited condensed consolidated balance sheets.

Changes in the fair value of the contingent consideration liability will be recognized in other operating expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

During the six months ended June 28, 2026, there was no fair value adjustment related to the earnout contingent consideration.

Fair value on a non-recurring basis

Our non-financial assets, such as property and equipment, goodwill, and intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.

Sale of long-term investment

During the three months ended March 29, 2026, we sold our investment in connection with a privately held company’s acquisition by a public company.

During the first fiscal quarter of 2026, we sold our investment in connection with a privately held company’s acquisition by a public company.

This investment was accounted for as an equity security without a readily determinable fair value and was measured at cost, less impairment, adjusted for observable price changes in orderly transactions for the identical or similar investment in the same issuer in accordance with ASC 321, Investments-Equity Securities .

2 unchanged sentences

Our Chief Executive Officer served on the board of directors of the privately held company and, as a result, the investee is considered a related party and the sale of our investment is a related party transaction.

As of March 29, 2026, there were no financial assets measured at fair value on a recurring basis within Level 3 fair value measurements.

ARLO TECHNOLOGIES, INC.

3 unchanged sentences

The Credit Agreement provides for a three-year revolving credit facility (the “Credit Facility”) of up to $ 45.0 million that matures on November 14, 2027, which also includes a $ 10.0 million sublimit for the issuance thereunder of letters of credit.

As of March 29, 2026, we had unused borrowing capacity of $ 45.0 million based on the terms and conditions of the Credit Agreement.

As of June 28, 2026, we had unused borrowing capacity of $ 45.0 million based on the terms and conditions of the Credit Agreement.

In addition, the Credit Agreement includes an uncommitted accordion feature that allows us to, from time to time, request an increase to the aggregate revolving loan commitments by up to an additional $ 30.0 million in the aggregate, subject to the satisfaction of certain conditions.

7 unchanged sentences

both covenants being tested quarterly on a trailing four consecutive fiscal quarter basis.

As of March 29, 2026, we were in compliance with all the covenants under the Credit Agreement.

No amount had been drawn under the Credit Facility as of March 29, 2026.

As of June 28, 2026, we were in compliance with all the covenants under the Credit Agreement.

No amount had been drawn under the Credit Facility as of June 28, 2026.

Commitments and Contingencies

3 unchanged sentences

The terms of certain leases provide for rental payments on a graduated scale.

Gross lease expense was $ 0.8 million and $ 1.4 million for the three months ended March 29, 2026 and March 30, 2025, respectively.

Gross lease expense was $ 0.8 million and $ 1.6 million for the three and six months ended June 28, 2026, respectively, and $ 1.4 million and $ 2.8 million for the three and six months ended June 29, 2025, respectively.

Supplemental cash flow information related to operating leases is as follows:

Three Months Ended

2026 March 30,

Six Months Ended

2026 June 29,

(In thousands)

9 unchanged sentences

Weighted-average discount rate 7.81 % 7.68 %

The future minimum undiscounted lease payments under operating leases for each of the next five years and thereafter as of March 29, 2026 were as follows:

2026 (Remaining nine months) $ 1,922

The future minimum undiscounted lease payments under operating leases for each of the next five years and thereafter as of June 28, 2026 were as follows (in thousands):

2026 (remaining six months) $ 1,278

Thereafter 2,622

9 unchanged sentences

Orders are non-cancelable within 30 days prior to the expected shipment date.

As of March 29, 2026, we had $ 35.6 million in non-cancelable purchase commitments with suppliers which is expected to be paid over the next twelve months .

As of March 29, 2026, an additional $ 29.9 million of purchase orders beyond contractual termination periods have been issued to supply chain partners in anticipation of demand requirements.

As of June 28, 2026, we had $ 37.4 million in non-cancelable purchase commitments with suppliers which is expected to be paid over the next twelve months .

As of June 28, 2026, an additional $ 32.8 million of purchase orders beyond contractual termination periods have been issued to supply chain partners in anticipation of demand requirements.

Consequently, we may incur expenses for the materials and components, such as chipsets already purchased by the supplier to fulfill our orders if the purchase order is cancelled.

Expenses incurred have historically not been material relative to the original order value.

Tariff matters

government has implemented tariff measures affecting a broad range of imported materials, and these measures have been subject to change.

We are actively monitoring the changes in global trade policy and the effects they may have on our business and broader macroeconomic environment.

Given the uncertainty surrounding global markets as a result of the fluid U.S.

tariff policy, we do not have clarity at this point over the potential medium to long term impacts our business may face.

We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.

As of March 29, 2026, we have not recorded any receivables for potential tariff refunds or derecognition of tariff liabilities.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Tariff refunds

On February 20, 2026, the U.S.

Supreme Court ruled that certain of the tariffs imposed in fiscal 2025 under the International Emergency Economic Powers Act (“IEEPA”) were unlawful.

The ruling did not address potential refunds;

however, on March 4, 2026, the U.S.

Court of International Trade ordered U.S.

Customs and Border Protection (“CBP”) to begin refunding all tariffs imposed under IEEPA.

On April 20, 2026, the CBP launched a process for submitting IEEPA refund claims and subsequently, we submitted refund claims.

We applied a gain contingency model in accordance with ASC 450, Contingencies, and account for refunds when the amounts are collected as a reduction of cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Additionally, interest associated with refunds is accounted for as interest income on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

For the three months ended June 28, 2026, we received and recognized tariff refunds of $ 8.0 million and interest income of $ 0.2 million.

Subsequent to June 28, 2026, we received and recognized tariff refunds of $ 6.3 million and interest income of $ 0.2 million.

We have received substantially all tariff refunds as of the date the financial statements were issued.

Litigation and other legal matters

13 unchanged sentences

The maximum potential amount of future payments we could be required to make under these indemnification agreements is, in many cases, unlimited.

As of March 29, 2026 and December 31, 2025, we have not incurred any material costs as a result of such indemnification obligations and we are not currently aware of any indemnification claims.

As of June 28, 2026 and December 31, 2025, we have not incurred any material costs as a result of such indemnification obligations and we are not currently aware of any indemnification claims.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Employee Benefit Plans

2 unchanged sentences

Award vesting periods for the 2018 Plan are generally three to five years .

As of March 29, 2026, 3.3 million shares were available for future grants.

As of June 28, 2026, 2.9 million shares were available for future grants.

Options may be granted for periods of up to 10 years or such shorter term as may be provided in the agreement and at prices no less than 100 % of the fair market value of Arlo’s common stock on the date of grant.

1 unchanged sentence

On January 23, 2026, we registered an aggregate of up to 4,200,189 shares of common stock under the 2018 Plan on a Registration Statement on Form S-8 pursuant to an “evergreen” provision contained in the 2018 Plan.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table sets forth the available shares for grants as of March 29, 2026:

The following table sets forth the available shares for grants as of June 28, 2026:

Number of Shares

4 unchanged sentences

Forfeited / expired / cancelled 209

Shares available for grants as of March 29, 2026

Shares available for grants as of June 28, 2026

Employee stock purchase plan

We sponsor the ESPP for eligible employees.

There were no ESPP purchases during either the three months ended March 29, 2026 or March 30, 2025.

As of March 29, 2026, 3.1 million shares were available for issuance under the ESPP.

We sponsor the ESPP for eligible employees, under which, employees purchased 187 thousand shares and 155 thousand shares during the six months ended June 28, 2026 and June 29, 2025, respectively.

As of June 28, 2026, 3.0 million shares were available for issuance under the ESPP.

Option activity

We did not grant options during the three months ended March 29, 2026.

Stock option activity during the three months ended March 29, 2026 was as follows:

We did not grant options during the six months ended June 28, 2026.

Stock option activity during the six months ended June 28, 2026 was as follows:

Number of Shares Weighted Average Exercise Price Per Share

4 unchanged sentences

Expired / cancelled — $ —

Outstanding as of March 29, 2026

Vested and exercisable as of March 29, 2026

RSU activity, exclusive of PSU activity, during the three months ended March 29, 2026 was as follows:

Outstanding as of June 28, 2026

Vested and exercisable as of June 28, 2026

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RSU activity, exclusive of PSU activity, during the six months ended June 28, 2026 was as follows:

Number of Shares Weighted Average Grant Date Fair Value Per Share

4 unchanged sentences

Forfeited / cancelled ( 206 ) $ 13.06

Outstanding as of March 29, 2026

Outstanding as of June 28, 2026

6,656 $ 11.41

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Our executive officers and other senior employees have been granted PSUs with some vesting occurring when performance conditions are met.

1 unchanged sentence

At the end of each reporting period, we evaluate the probability of achieving the performance conditions and record the related stock-based compensation expense based on the estimated achievement over the service period.

PSU activity during the three months ended March 29, 2026 was as follows:

PSU activity during the six months ended June 28, 2026 was as follows:

Number of Shares Weighted Average Grant Date Fair Value Per Share

5 unchanged sentences

Forfeited / cancelled ( 3 ) $ 8.28

Outstanding as of March 29, 2026

Outstanding as of June 28, 2026

3,920 $ 11.72

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stock-based compensation expense

The following table sets forth the stock-based compensation expense by line item on the unaudited condensed consolidated statements of operations and comprehensive income (loss):

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

6 unchanged sentences

Total stock-based compensation $ 22,182 $ 15,250 $ 42,222 $ 32,863

As of March 29, 2026, all outstanding options were fully vested, therefore, there was no unrecognized compensation cost related to stock options.

As of March 29, 2026, $ 106.6 million of unrecognized compensation cost related to unvested RSUs and PSUs is expected to be recognized over a weighted-average period of 2.3 years.

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The provision for income taxes for the three months ended March 29, 2026 was $ 0.4 million or an effective tax rate of 2.7 % .

The provision for income taxes for the three months ended March 30, 2025 was $ 0.5 million or an effective tax rate of ( 150.8 )%.

Provision for income taxes decreased for the three months ended March 29, 2026, compared to the prior year period, primarily due to the elimination of the mandatory capitalization of research and development expenses, resulting in higher current deductions, lower taxable income and a reduced income tax provision.

The lower effective tax rate for the three months ended March 29, 2026, compared to the U.S.

As of June 28, 2026, all outstanding options were fully vested, therefore, there was no unrecognized compensation cost related to stock options.

As of June 28, 2026, $ 92.9 million of unrecognized compensation cost related to unvested RSUs and PSUs is expected to be recognized over a weighted-average period of 2.3 years.

The provision for income taxes for the three and six months ended June 28, 2026 was $ 0.4 million and $ 0.8 million, respectively, or an effective tax rate of 12.5 % and 4.5 %, respectively.

The provision (benefit) for income taxes for the three and six months ended June 29, 2025 was $( 0.3 ) million and $ 0.2 million, respectively, or an effective tax rate of ( 8.9 )% and 9.8 %, respectively.

Provision for income taxes increased for the three and six months ended June 28, 2026 compared to the prior year periods, primarily due to higher pre-tax income in the current periods and the prior year three-month period’s income tax benefit.

The lower effective tax rate for the six months ended June 28, 2026, compared to the U.S.

federal statutory rate, is primarily driven by lower tax rate on foreign earnings and valuation allowance on our net U.S.

2 unchanged sentences

A valuation allowance is maintained when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

As of March 29, 2026, we continue to maintain a full valuation allowance against our deferred tax assets at both federal and state levels.

As of June 28, 2026, we continue to maintain a full valuation allowance against our deferred tax assets at both federal and state levels.

In making this determination, we considered all available positive and negative evidence, with greater weight given to objectively verifiable evidence.

3 unchanged sentences

Based on the totality of evidence, we concluded that it is not more-likely-than-not that the deferred tax assets will be realized.

Accordingly, a full valuation allowance has been maintained as of March 29, 2026.

Accordingly, a full valuation allowance has been maintained as of June 28, 2026.

There is a reasonable possibility that within the next few quarters, sufficient positive evidence will become available to reach a conclusion that all or a significant portion of the valuation allowance against our U.S.

net deferred tax assets would no longer be required.

Earnings (Loss) Per Share

Three Months Ended

2026 March 30,

ARLO TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Earnings Per Share

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands, except per share data)

Net income (loss) $ 14,877 $ ( 835 )

Net income $ 3,028 $ 3,124 $ 17,905 $ 2,289

Weighted-average common shares outstanding - basic 108,123 103,885 107,569 103,060

1 unchanged sentence

Weighted-average common shares outstanding - diluted 110,819 108,061 111,094 107,692

Earnings (loss) per share - basic $ 0.14 $ ( 0.01 )

Earnings (loss) per share - diluted $ 0.13 $ ( 0.01 )

Earnings per share - basic $ 0.03 $ 0.03 $ 0.17 $ 0.02

Earnings per share - diluted $ 0.03 $ 0.03 $ 0.16 $ 0.02

Anti-dilutive employee stock-based awards, excluded 603 331 500 514

8 unchanged sentences

The CODM is regularly provided with not only the consolidated expenses on our unaudited condensed consolidated statements of operations and comprehensive income (loss), but also the significant segment expenses and other segment items as below:

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

11 unchanged sentences

Gain on sale of long-term investment

— — ( 6,423 ) —

Interest expense 286 84 345 170

Provision for income taxes 415 502

Provision (benefit) for income taxes 432 ( 254 ) 847 248

Segment net income (loss) $ 3,028 $ 3,124 $ 17,905 $ 2,289

11 unchanged sentences

The following table presents revenue by geographic area.

Three Months Ended

2026 March 30,

Three Months Ended Six Months Ended

2026 June 29,

2025 June 28,

2026 June 29,

(In thousands)

18 unchanged sentences

Shares may be repurchased through open market purchases or privately negotiated transactions, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

During the three months ended March 29, 2026, we repurchased and subsequently retired 0.6 million shares of Arlo common stock for an aggregate repurchase amount of $ 8.0 million.

As of March 29, 2026, $ 42.0 million remained available and authorized for future repurchases.

During the six months ended June 28, 2026, we repurchased and subsequently retired 2.3 million shares of Arlo common stock for an aggregate repurchase amount of $ 29.9 million.

As of June 28, 2026, $ 20.1 million remained available and authorized for future repurchases.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements