Arlo Technologies, Inc (NASDAQ:ARLO) Q3 2019 Earnings Conference Call - Final Transcript
Nov 07, 2019 • 05:00 pm ET
Ladies and gentlemen, thank you for standing by. [Operator instructions]
I would now like to turn the conference over to Erik Bylin. Please go ahead, sir.
Thank you, Akesha. Good afternoon and welcome to Arlo Technologies' third quarter of 2019 financial results conference call. Joining us from the company are Mr. Matthew McRae, CEO; and Ms. Christine Gorjanc, CFO. The format of the call will start with an introduction and commentary on the business provided by Matt, followed by a review of the financials for the third quarter, along with guidance provided by Christine. We'll then have time for any questions. If you have not received a copy of today's press release, please visit Arlo's investor relations website at www.arlo.com.
Before we begin the formal remarks, we advise you that today's conference call contains forward-looking statements. Forward-looking statements include statements regarding expected revenue, gross margins, operating margins, tax rates, expenses, future cash outlook, continued new product and service differentiation and future business outlook. Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more information, please refer to the risk factors discussed in Arlo's periodic filings with the SEC, including the most recent annual report on Form 10-K and quarterly report on Form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today, and Arlo undertakes no obligation to update these statements as a result of new information or future events. In addition, several non-GAAP financial measures will be mentioned on the call. A reconciliation of the non-GAAP to GAAP measures can be found in today's press release on our Investor Relations website.
And at this time, I would now like to turn the call over to Matt.
Thank you, Erik, and thank you, everyone, for joining us today on Arlo's third quarter 2019 earnings call. We have a lot to cover today in what was outstanding quarter for the company from an execution perspective. Christine and I will walk you through the major elements, including financial results for the quarter, our definitive agreements with Verisure, launch of Arlo Pro 3, announcement of our first Video Doorbell, implementation of a comprehensive restructuring plan and the closing of a $40 million line of credit.
Let's start by talking through some highlights for the quarter. In Q3, we achieved $106.1 million in revenue, above the high end of our guidance for the quarter. Services revenue was $11.8 million, which represents a year-over-year growth of 20% and a new record for the company. We added about 294,000 registered users to the Arlo platform in Q3 to reach a total of nearly 3.7 million total registered users, up 48% year-over-year. More importantly, our paid subscriber base continues to grow at a faster pace and reached approximately 211,000 users, up more than 69% from a year ago. As a reminder, this growth does not include Arlo Ultra and now Arlo Pro 3 customers buying products with our new services business model that includes unlimited