Arlo Technologies stock jumped on Friday after the home security camera maker beat Wall Street's targets in the second quarter.
The Carlsbad, Calif.-based company late Thursday said it earned an adjusted 17 cents a share on sales of $129.4 million in the June quarter. Analysts polled by FactSet had expected earnings of 15 cents a share on sales of $123.5 million. On a year-over-year basis, Arlo earnings increased 70% while sales advanced 2%.
Arlo ended the quarter with annual recurring revenue of $315.7 million, up 34% year over year.
"The launch of our new AI platform, Arlo Secure 6, earlier this year is driving growth in our subscriptions business and propelling the company to record financial results," Chief Executive Matthew McRae said in a news release. "This subscription momentum coupled with our holiday product launches and announcement of ADT as a strategic partner positions Arlo for continuing success."
Arlo signed a partnership with ADT, the largest security company in North America, in June. It expects the alliance to result in material increases in subscriptions and revenue starting in 2026.
For the current quarter, Arlo expects to earn an adjusted 15 cents a share on sales of $138 million. In the third quarter last year, Arlo earned an adjusted 11 cents a share on sales of $137.7 million.
Arlo Stock Gets Price-Target Hike
On the stock market today, Arlo stock rose 1.7% to close at 16.71. Earlier in the regular session Friday, Arlo stock surged as much as 17% to 19.25.
Raymond James analyst Adam Tindle on Friday reiterated his outperform rating on Arlo stock and raised his price target to 22 from 15. Tindle highlighted Arlo's growing services business and improved gross profit margins.
Arlo stock has an IBD Composite Rating of 90 out of 99, according to IBD Stock Checkup.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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