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.
(Photo credit: Arlo)
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: SONO) recently 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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About the Author
Jason Knott
Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at [email protected]
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