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Arlo Shares Surge 38% After Stock Market Debut

After debuting at a less than estimated $16, Arlo Technologies stock has soared 38% after its IPO with a focus on RMR generated from surveillance cameras.

After initially announcing its intentions to go public back in February, Arlo Technologies Inc. (NYSE: ARLO), finally made its debut on the stock market on Friday and surged a remarkable 33% on its first day of trading. At press time, the stock is continuing to rise, now up 38% from its IPO price.

Arlo, makers of home surveillance cameras, is a spinoff from Netgear (Nasdaq: NTGR). In its initial filing, the company reported it has shipped 7.5 million devices and has 1.9 million registered users, who stream 60 million videos per day on average. The company 37% of its users engage with the camera every day.

The IPO price for the stock was $16, which was below its price-range estimate, according to some stock watchers.

The big differentiator for Arlo is that it generates recurring monthly revenue (RMR). Users get a free trial period and then are converted to a paid subscription model that issues alerts to homeowners, with options to notify the police.

Currently, Arlo says the subscription revenue represents 8% of its total income, with the rest coming from hardware sales.

“In the future, we plan to continue to introduce new categories of devices and services that will connect to and complement the Arlo platform, and we expect that our operating results will be impacted by these releases,” the company said in its prospectus. “We also believe we can grow our subscription-based recurring revenue stream by improving current Arlo Smart service features and introducing new premium service features to our growing user base.”

In other smart home IPO news, high-end speaker maker Sonos (Nasdaq: SONOrecently announced it would be going public, with shares priced between $17 and $19.


Editor’s Note: This story first ran in Security Sales and Integration’s sister publication CE Pro.

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