Arlo Technologies Inc (ARLO) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. (Operator Instructions) And I would now like to turn the conference over to Tahmin Clarke. Please go ahead, sir.

女士們先生們，謝謝你們的支持。（操作員指示）我現在想將會議轉交給塔明·克拉克。請繼續，先生。

Thank you, operator. Good afternoon, and welcome to Arlo Technologies' second quarter 2024 financial results conference call. Joining us from the company are Mr. Matthew McRae, CEO; and Mr. Kurt Binder, COO and 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 second quarter, along with guidance for the third quarter provided by Kurt, we will then take questions. If you have not received a copy of today's release, please visit Arlo's Investor Relations website at investor.arlo.com.

謝謝你，接線生。下午好，歡迎參加 Arlo Technologies 2024 年第二季財務業績電話會議。加入我們公司的還有執行長 Matthew McRae 先生；營運長兼財務長 Kurt Binder 先生。電話會議的形式將首先由馬特提供對業務的介紹和評論，然後是對第二季度財務狀況的回顧，以及庫爾特提供的第三季度的指導，然後我們將回答問題。如果您尚未收到今天發布的副本，請造訪 Arlo 的投資者關係網站 Investor.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 our potential future business operating results and financial condition, including descriptions of our revenue, gross margins, operating margins, earnings per share, expenses, cash outlook, free cash flow and free cash flow margin, guidance for the third quarter of 2024, our long-range plan targets, the rate and timing of paid subscriber growth, the transition to a services first business model, the commercial launch and momentum of new products and services, strategic objectives and initiatives, market expansion and future growth, the effect of our brand awareness campaign on future growth, partnerships with various market leaders and strategic collaborators, continued new product and service differentiation and the impact of general macro economic conditions on our business, operating results and financial condition.

在我們開始正式發言之前，我們建議您今天的電話會議包含前瞻性陳述。前瞻性陳述包括我們未來潛在業務經營成果和財務狀況的陳述，包括對我們的收入、毛利率、營業利潤率、每股收益、費用、現金前景、自由現金流和自由現金流利潤率的描述、第三季的指導到2024 年季度，我們的長期計畫目標、付費用戶成長的速度和時間、向服務優先業務模式的過渡、新產品和服務的商業發布和勢頭、戰略目標和舉措、市場擴張和未來成長，我們的品牌知名度活動對未來成長的影響，與各個市場領導者和策略合作夥伴的合作關係，持續的新產品和服務差異化以及總體宏觀經濟狀況對我們的業務、經營業績和財務狀況的影響。

Actual results or trends could differ materially from those contemplated by these forward-looking statement. 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 for future events.

實際結果或趨勢可能與這些前瞻性聲明中預期的結果或趨勢有重大差異。如需了解更多信息，請參閱 Arlo 向 SEC 定期提交的文件中討論的風險因素，包括最新的 10-K 表年度報告和 10-Q 表季度報告。我們在本次電話會議中所做的任何前瞻性陳述均基於截至目前的假設，Arlo 不承擔因未來事件的新資訊而更新這些陳述的義務。

In addition, several non-GAAP financial measures will be discussed on this call. A reconciliation of the GAAP to non-GAAP measures can be found in today's press release on our Investor Relations website. At this time, I would now like to turn the call over to Matt.

此外，本次電話會議也將討論多項非公認會計準則財務指標。公認會計原則與非公認會計原則措施的調節可以在我們投資者關係網站上今天的新聞稿中找到。現在，我想把電話轉給馬特。

Thank you, Tom, and thank you, everyone, for joining us today on Arlo's second quarter 2024 earnings call. Once again, Arlo executed well in a tough environment to deliver another truly outstanding quarter. Total revenue came in at $127 million, up 11% year over year. And our annual recurring revenue or ARR was up over 21% year over year to reach $235 million.

謝謝湯姆，也謝謝大家今天參加我們的 Arlo 2024 年第二季財報電話會議。Arlo 在艱難的環境中表現出色，再次實現了另一個真正出色的季度。總收入為 1.27 億美元，年增 11%。我們的年度經常性收入 (ARR) 年成長超過 21%，達到 2.35 億美元。

Argo also recently hit 4 million paid accounts for an increase of 74% year over year. Our average revenue per user or ARPU for retail and direct paid accounts grew to $12 a new record for Arlo on the back of small increase on single camera pricing and an overall mix shift to higher tier service plans. Based on this strong performance, Arlo delivered non-GAAP earnings per share of $0.10 in Q2, which brings the earnings per share for the first half to $0.19, up an incredible 171% year over year.

Argo 最近也達到了 400 萬個付費帳戶，年增 74%。由於單一攝影機定價小幅上漲以及整體組合轉向更高級別的服務計劃，我們的零售和直接付費帳戶的每用戶平均收入 (ARPU) 增長至 12 美元，創下 Arlo 的新紀錄。基於這一強勁表現，Arlo 在第二季度實現非 GAAP 每股收益 0.10 美元，這使得上半年每股收益達到 0.19 美元，同比增長 171%，令人難以置信。

Shortly, Kurt will walk you through our results in greater detail, but these highlights illustrate the power of our business model and our accelerating trajectory towards our long-range targets of 10 million paid accounts, $700 million in ARR and over 25% operating margins.

很快，Kurt 將向您詳細介紹我們的業績，但這些亮點說明了我們業務模式的力量，以及我們加速實現 1000 萬付費帳戶、7 億美元 ARR 和超過 25% 營業利潤率長期目標的軌跡。

A huge congratulations to the entire Arlo team, and thank you for the focus on the execution of the business. It is a pleasure to work with such a dedicated team that cares so deeply about bringing the best security experience to our customers.

衷心祝賀整個 Arlo 團隊，並感謝你們對業務執行的關注。很高興與這樣一個專注的團隊合作，他們非常關心為我們的客戶帶來最好的安全體驗。

We now find ourselves at the midpoint of the year with a big holiday season ahead of us, I thought I would provide some commentary on the trends we are seeing in our expectations for the balance of 2024. Across our channels, we see the consumer is under some pressure, which often results in a step down in the price segment of the initial hardware purchase.

現在我們正處於今年年中，即將迎來一個重要的假期季節，我想我應該對我們在 2024 年剩餘時間的預期中看到的趨勢提供一些評論。在我們的各個管道中，我們看到消費者面臨一些壓力，這通常會導致最初購買硬體的價格部分下降。

Arlo anticipated this environment with our pricing strategy, where we brought down our initial hardware margin, but raised our service pricing, which has driven an expansion of ARR and profitability. This decision has sustained our household formation and coupled with the tailwind in the security segment, delivered excellent conversion and low churn rates in our subscription business.

Arlo 透過我們的定價策略預測了這種環境，我們降低了最初的硬體利潤，但提高了服務定價，這推動了 ARR 和獲利能力的擴大。這項決定維持了我們的家庭組建，再加上安全領域的順風，為我們的訂閱業務帶來了出色的轉換率和低流失率。

Looking ahead to the holiday season, Arlo has worked closely with our channel partners to create an aggressive promotional calendar. The essential to product line is the right product at the right time to drive additional household adoption and address the category shift to mass market. Our current read is the second half of 2024 is going to look very similar to the second half of 2023. And Arlo is extremely well positioned to repeat our success and continue to drive new paid accounts.

展望假期，愛洛與我們的通路合作夥伴密切合作，並制定了積極的促銷日曆。產品線的關鍵是在正確的時間提供正確的產品，以推動更多家庭採用並解決類別向大眾市場的轉變。我們目前的預測是 2024 年下半年將與 2023 年下半年非常相似。Arlo 處於非常有利的位置，可以重複我們的成功並繼續推動新的付費帳戶。

Switching to our strategic partner channel, I mentioned on our last earnings call that interest and engagement in this area has increased substantially. That remains the case. As you know, we recently renewed our successful partnership with Verisure for another five years. This collaboration has driven strong growth across the European region, and after a recent joint strategic planning session, we see opportunities to grow that relationship even further.

轉向我們的策略夥伴管道，我在上次財報電話會議上提到，人們對該領域的興趣和參與度大幅增加。情況仍然如此。如您所知，我們最近與 Verisure 成功合作關係又續簽了五年。這種合作推動了整個歐洲地區的強勁成長，在最近的聯合戰略規劃會議之後，我們看到了進一步發展這種關係的機會。

Arlo also announced a strategic partnership with Allstate to bring additional security and protection options to both of our customer bases. There is a natural fit between Arlo in the insurance industry. As we look at the full spectrum of services, a customer can benefit from in the broader safety and security space. This is our initial foray into the InsureTech segment, but you will see more activity from us in the future, including additional rollouts with all states as our full partnership unfolds.

Arlo 也宣布與 Allstate 建立策略合作夥伴關係，為我們的兩個客戶群帶來額外的安全和保護選項。Arlo 與保險業有著天然的契合度。當我們審視全方位的服務時，客戶可以從更廣泛的安全和安保領域中受益。這是我們首次涉足保險科技領域，但您將來會看到我們更多的活動，包括隨著我們全面合作夥伴關係的展開，與所有州進行更多的推廣。

This resurgence of activity reaches beyond Verisure and Allstates. There are other major entities looking to partner with Arlo across several verticals, including smart security, insurance and telecom. We expect a significant portion of our growth toward our long-range targets to come from future strategic partnerships and plan to bring additional engagements to fruition over the next two to three years.

這種活動的復甦超出了 Verisure 和 Allstates 的範圍。還有其他主要實體希望在多個垂直領域與 Arlo 合作，包括智慧安全、保險和電信。我們預計，我們實現長期目標的成長的很大一部分將來自未來的策略合作夥伴關係，並計劃在未來兩到三年內實現更多合作。

And now I would like to provide a detailed update on Arlo's capital allocation planning. Our consistent and increasing levels of success will continue to generate substantial resources for Arlo to deploy on our journey towards the long range targets we established earlier this year. Since the fourth quarter of last year, we have leveraged the broad experience and knowledge of our board's strategic committee to explore and analyze numerous options to drive additional shareholder value.

現在我想提供有關 Arlo 資本配置計劃的詳細最新資訊。我們不斷取得的成功將繼續為 Arlo 帶來大量資源，以便在我們實現今年早些時候制定的長期目標的過程中進行部署。自去年第四季以來，我們利用董事會策略委員會的廣泛經驗和知識來探索和分析眾多選擇，以推動額外的股東價值。

First is the area of organic investment in our business. The team's Arlo have been developing truly groundbreaking technologies that will continue to extend our lead in the smart security industry and deliver new user experiences in our core markets segment. I'm convinced, now more than ever that another wave of innovation is beginning and Arlo will continue to set the pace like we did when we launched our first camera nearly 10 years ago.

首先是我們業務的有機投資領域。該團隊的 Arlo 一直在開發真正突破性的技術，這些技術將繼續擴大我們在智慧安防產業的領先地位，並在我們的核心市場領域提供新的用戶體驗。我現在比以往任何時候都更加確信，另一波創新浪潮正在開始，Arlo 將繼續引領步伐，就像我們近 10 年前推出第一台相機時一樣。

The first marker on our three-year roadmap will be the Arlo secure five platform, which we announced earlier this year. It will deliver several major service enhancements and industry-first features, including custom private AI models to drive amazing smart security user experiences. And we are already beginning work on Arlo secure six, which we will talk more about sometime next year.

我們三年路線圖上的第一個標誌將是我們今年稍早宣布的 Arlo secure 5 平台。它將提供多項主要的服務增強功能和領先業界的功能，包括客製化私有人工智慧模型，以推動令人驚嘆的智慧安全用戶體驗。我們已經開始開發 Arlo secure 6，我們將在明年某個時候詳細討論這個問題。

Arlo has also defined and have started development of a three year device road map that will solidify our leadership position in several key security segments. This will include key refreshes of existing product lines across the company, but also the design and development of a new DIY secured concept that we believe will revolutionize the security market segments once again.

Arlo 還制定並開始製定三年設備路線圖，這將鞏固我們在幾個關鍵安全領域的領導地位。這將包括整個公司現有產品線的關鍵更新，還包括設計和開發新的 DIY 安全概念，我們相信這將再次徹底改變安全細分市場。

We are targeting a 2026 or early 2027 launch, and I am genuinely excited about the impact it will have on our industry. And finally, Arlo will be increasing our investment and focus on enhancing our customer experience. Execution against these initiatives is more important than ever as our category as the mass market phase, which started with our hugely successful holiday selling season with Walmart in the fourth quarter of last year.

我們的目標是在 2026 年或 2027 年初推出，我對它將對我們行業產生的影響感到由衷的興奮。最後，Arlo 將增加我們的投資並專注於增強我們的客戶體驗。作為大眾市場階段，執行這些措施比以往任何時候都更加重要，這一階段是從去年第四季我們與沃爾瑪合作取得巨大成功的假期銷售季開始的。

Our user community is broadening quickly, and our ability to support and maintain these customers has an enormous ROI for the business. In the future, Arlo may include upper funnel, marketing and brand awareness spending when the market conditions and consumer sentiment will result in a better outcome. But at this time, our assessment of the general market conditions does not provide the return we are looking for yet.

我們的用戶社群正在迅速擴大，我們支持和維護這些客戶的能力為企業帶來了巨大的投資回報。未來，當市場狀況和消費者情緒會帶來更好的結果時，Arlo 可能會包括上層漏斗、行銷和品牌知名度支出。但目前，我們對整體市場狀況的評估尚未提供我們所尋求的回報。

The second major area of our capital allocation plan is external investments for acquisitions. We are actively filtering and evaluating potential transactions that would accelerate our execution towards our long-range targets. The prospective opportunities tend to fall into two major buckets. The first bucket is something new to Arlo, a new technology and new product line, a new channel, or another area that is not part of our current core business.

我們資本配置計劃的第二個主要領域是外部投資收購。我們正在積極篩選和評估潛在交易，這將加速我們實現長期目標的執行。潛在的機會往往分為兩大類。第一個桶子是Arlo的新事物，新技術和新產品線，新通路，或不屬於我們目前核心業務的其他領域。

The second bucket represents possible path to market consolidation, potentially acquiring an entity in our core markets that could accelerate market expansion. In general, it is clear that some level of inorganic investment could drive additional growth for Arlo, and it is likely that you'll see the company take actions along this path in the next 12 to 18 months. Irrespective of the opportunity we pursue, we will remain disciplined in our approach, assess the risks of such transactions and ensure that our path to our long-range targets is not compromised.

第二個桶代表了市場整合的可能途徑，有可能收購我們核心市場中的一個實體，從而加速市場擴張。總的來說，很明顯，一定程度的無機投資可以推動 Arlo 的額外成長，您很可能會看到該公司在未來 12 到 18 個月內沿著這條道路採取行動。無論我們追求什麼機會，我們都將保持嚴格的方法，評估此類交易的風險，並確保我們實現長期目標的道路不會受到損害。

The third and final area of our capital allocation discussion is around the direct shareholder return of capital such as stock repurchase. This approach is under active consideration, albeit at a lower priority given the potential massive return from the other areas of our capital allocation plan. However, given the trajectory of the business, we will continue to explore at the right time to execute such a program as we progress on our long-range plan.

我們資本配置討論的第三個也是最後一個領域是圍繞股票回購等直接股東資本回報。我們正在積極考慮這種方法，儘管考慮到我們資本配置計劃其他領域的潛在巨額回報，這種方法的優先順序較低。然而，考慮到業務的發展軌跡，隨著我們長期計劃的進展，我們將繼續探索在適當的時間執行這樣的計劃。

Our low capital allocation plan represents a new vector of shareholder value creation enabled through the monumental success in our business transformation. Market conditions may change, which may cause us to alter or update our thinking around the best path forward together. But you have heard and my commitment to remain transparent and open in our communication around the strategic direction of the company.

我們的低資本配置計劃代表了透過我們業務轉型的巨大成功實現的股東價值所創造的新載體。市場狀況可能會發生變化，這可能會導致我們改變或更新我們對共同前進的最佳路徑的思考。但您已經聽到了，我也承諾在圍繞公司策略方向的溝通中保持透明和開放。

And now I'll turn it over to Kurt for a more in-depth review of these Q2 results.

現在我將把它交給 Kurt，讓他對第二季的結果進行更深入的審查。

Thank you, Matt, and thank you, everyone, for joining us today. I will start by sharing some financial details and provide an overview of the business for Q2 2024. Total revenue for the second quarter of 2024 came in at $127.4 million, up 11% over the prior year period. In the quarter, service revenue represented about 47% of total revenue, up from 44% in the same period last year and quickly approaching the 50% threshold.

謝謝馬特，也謝謝大家今天加入我們。我將首先分享一些財務細節，並概述 2024 年第二季的業務。2024 年第二季總營收為 1.274 億美元，比去年同期成長 11%。本季度，服務收入佔總營收約47%，高於去年同期的44%，並迅速逼近50%的門檻。

This shift in our growing recurring revenue base reflects the continued momentum that we have gained in our transformation to a services first business. Our installed base of subscribers continued its strong growth trajectory as we reached just under 4 million paid accounts by the end of Q2, an increase of approximately 745,000 paid accounts in the quarter.

我們不斷成長的經常性收入基礎的這種轉變反映了我們在向服務第一業務轉型過程中獲得的持續動力。我們的訂閱用戶群持續保持強勁的成長勢頭，到第二季末我們的付費帳戶數量接近 400 萬，本季付費帳戶數量增加了約 745,000 個。

The significant increase in paid accounts reflects a substantial catch-up in the very short subscribers as discussed on previous calls. We continue to believe that the catch-up will be largely complete by next quarter. Further, our paid account additions exclusive of this catch-up adjustment remains in the range of 150,000 to 190,000 subscribers that we expect to generate on a quarterly basis.

付費帳戶的顯著增加反映了先前電話會議中討論的非常短的訂戶的大幅追趕。我們仍然相信，到下個季度，追趕將基本完成。此外，我們預計每季新增的付費帳戶數量仍將維持在 15 萬至 19 萬名訂閱者之間。

Service revenue for Q2 was another record at $60.3 million for a 20% increase over the same period last year. The strong service revenue performance was driven in large part by the growth in our overall paid account base and to a lesser extent a small price increase in our single camera plans and some migration of subscribers to higher price plans.

第二季的服務收入再創新高，達到 6,030 萬美元，比去年同期成長 20%。強勁的服務收入表現在很大程度上是由於我們整體付費帳戶基數的增長以及我們的單攝像頭計劃的小幅價格上漲以及一些訂戶轉向更高價格的計劃推動的。

Our annual recurring revenue at June 30, was $235 million, up more than 20% over the same period last year. I want to highlight the strength of our services revenue and ARR, which helped deliver strong top line revenue performance and contributed to Arlo generating non-GAAP operating profit of $9.2 million in the quarter, a 70% improvement over the prior year period. Even more impressive is that the non-GAAP operating profit for the first half of 2024 grew by 166% when compared to the same period last year.

截至 6 月 30 日，我們的年度經常性收入為 2.35 億美元，比去年同期成長 20% 以上。我想強調我們服務收入和 ARR 的實力，這有助於實現強勁的營收業績，並幫助 Arlo 在本季度實現 920 萬美元的非 GAAP 營業利潤，比去年同期增長 70%。更令人印象深刻的是，2024年上半年的非美國通用會計準則營業利潤與去年同期相比成長了166%。

Product revenue for Q2 was $67.2 million, which was in line with our first quarter level and up about $2.4 million or 3.8% when compared to the product revenue generated in the same period last year. During the quarter, we shipped a total of 1.3 million devices worldwide compared to 954,000 in the prior year period. Product revenue at these levels was driven by higher unit volume, partially offset by a decline in average selling prices or ASPs. Over the past year, we have deliberately reduced the ASPs for our devices to successfully drive household formation and service revenue growth, and we will continue to do so as we approach the 2024 holiday season.

第二季的產品收入為 6,720 萬美元，與第一季的水平一致，與去年同期的產品收入相比增長約 240 萬美元，即 3.8%。本季度，我們在全球總共售出了 130 萬台設備，而去年同期為 954,000 台。這些水準的產品收入是由單位銷售增加所推動的，但部分被平均售價或平均售價的下降所抵消。在過去的一年裡，我們刻意降低了設備的平​​均售價，以成功推動家庭組建和服務收入增長，並且在 2024 年假期臨近時我們將繼續這樣做。

Our investment in our low cost Essential 2 camera lineup has enabled us to remain competitive in uncertain economic times while helping us to expand into the mass market segment of home security. The solid top line growth and exceptional profitability is driven by the conversion of our customers from a singular product purchase to participation and a service offering that generates a strong value proposition for our customers.

我們對低成本 Essential 2 攝影機系列的投資使我們能夠在不確定的經濟時期保持競爭力，同時幫助我們擴展到家庭安全的大眾市場領域。穩健的營收成長和卓越的獲利能力是由我們的客戶從單一產品購買轉變為參與和提供為客戶帶來強大價值主張的服務所推動的。

As we look to the remainder of 2024, we expect product gross margins to remain in the low to mid single digit range as we partner with major retailers like Walmart to deliver incremental paid subscribers into our services business. As we participate in the mass market adoption of smart security, we will continue to use our product ASPs as a lever to ensure that we secure incremental market share.

展望 2024 年剩餘時間，我們預期產品毛利率將維持在中低個位數範圍內，因為我們與沃爾瑪等主要零售商合作，為我們的服務業務提供增量付費用戶。隨著我們參與智慧安全的大眾市場採用，我們將繼續使用我們的產品平均售價作為槓桿，以確保我們獲得增量市場份額。

In the quarter, approximately $64.1 million or 50% of our total revenue was generated from our international customers. On a year-over-year basis, international revenue was up significantly from the $37 million level for 32% of total revenue in the prior year period. Verisure continues to be an outstanding partner for us, especially considering we renewed our contract with them last quarter, and we are grateful for their strategic collaboration in the near and long term.

本季度，約 6,410 萬美元（即我們總收入的 50%）來自我們的國際客戶。與去年同期相比，國際營收從 3,700 萬美元的水準大幅成長，佔去年同期總營收的 32%。Verisure 仍然是我們傑出的合作夥伴，特別是考慮到我們上季度與他們續簽了合同，我們感謝他們的近期和長期戰略合作。

From this point on my discussion will focus on non-GAAP numbers. The reconciliation from GAAP to non-GAAP figures is detailed in our earnings release distributed earlier today. Our non-GAAP gross profit for the second quarter was $48.3 million, up $5.3 million or 12% year over year. This resulted in a non-GAAP gross margin of 38% in the quarter.

從現在開始，我的討論將集中在非公認會計原則數字上。我們今天稍早發布的財報中詳細介紹了 GAAP 與非 GAAP 數據的調整。我們第二季的非 GAAP 毛利為 4,830 萬美元，較去年同期成長 530 萬美元，即 12%。這使得該季度的非 GAAP 毛利率達到 38%。

The year-over-year increase in non-GAAP gross profit was primarily attributable to the continued expansion of our services business and associated gross margin improvement, which was partially offset by lower product gross margins. Non-GAAP service gross margin for the quarter was 76.4%, up from approximately 75.2% in the same period last year.

非公認會計準則毛利的同比增長主要歸因於我們的服務業務的持續擴張和相關毛利率的提高，但部分被產品毛利率的下降所抵消。本季非 GAAP 服務毛利率為 76.4%，高於去年同期的約 75.2%。

The improvement in non-GAAP service gross profit was driven by growth in our total paid subscriptions and cost optimization. Non-gaap product gross margin for the quarter was 3.4%, and 5.7% for the first half of 2024, which is in line with the guidance that we provided earlier in the year. With that said, we expect to continue our aggressive approach to hardware pricing to drive incremental unit volume, coupled with new household formation to support our services business.

非公認會計原則服務毛利的改善是由我們付費訂閱總數的成長和成本優化所推動的。本季非 GAAP 產品毛利率為 3.4%，2024 年上半年為 5.7%，與我們今年稍早提供的指引一致。話雖如此，我們預計將繼續採用積極的硬體定價方法，以推動增量銷售，並結合新家庭的形成來支持我們的服務業務。

Total non-GAAP operating expenses for the second quarter were $39.1 million down from $40.3 million reported in the first quarter, but up from $37.5 million in the same period last year. The year-over-year increase is primarily related to a slight increase in headcount and related compensation expense. We expect the organic investment that Matt described earlier as part of our capital allocation plan to increase operating expenses by a nominal amount to our original guidance range, starting in the second half of this year and continuing throughout 2025.

第二季非 GAAP 營運支出總額為 3,910 萬美元，低於第一季報告的 4,030 萬美元，但高於去年同期的 3,750 萬美元。年比成長主要與員工人數和相關薪酬費用略有增加有關。我們預計馬特之前描述的有機投資是我們資本配置計劃的一部分，從今年下半年開始一直持續到 2025 年，營運費用將名義上增加到我們最初的指導範圍。

In Q2, we posted non-GAAP net income of $10.5 million, which translates into non-GAAP net income per diluted share of $0.10. Our non-GAAP net income for the first half of 2024 was $20 million, up almost 180% over the same period last year, showing the tremendous operating leverage in our business model.

第二季度，我們公佈的非 GAAP 淨利潤為 1,050 萬美元，換算成非 GAAP 攤薄後每股淨利為 0.10 美元。我們 2024 年上半年的非 GAAP 淨利潤為 2,000 萬美元，比去年同期成長近 180%，顯示了我們業務模式中巨大的營運槓桿。

Regarding our balance sheet and liquidity position, we ended the quarter with $144 million in available cash, cash equivalents and short-term investments. This balance was up more than $20 million since June of 2023. Further, we generated $25.6 million in free cash flow in the first half of this year, which represents free cash flow margin of 10% during that period, a solid improvement over the same period last year, driven by increased profitability and enhanced working capital management.

關於我們的資產負債表和流動性狀況，本季末我們的可用現金、現金等價物和短期投資為 1.44 億美元。自 2023 年 6 月以來，這一餘額增加了超過 2,000 萬美元。此外，今年上半年我們產生了2,560 萬美元的自由現金流，這意味著該期間的自由現金流利潤率為10%，在盈利能力提高和營運資本管理加強的推動下，比去年同期有了顯著改善。

Our Q2 accounts receivable balance was $61.7 million at quarter end, with DSOs at 44 days and in line with the same period last year. Our Q2 inventory balance was $45.2 million, up $6.8 million from Q4 2023 levels. Inventory turns were 5.8 times and in line with our expectations as we continued to optimize our inventory levels in an effort to minimize our spend on freight costs.

截至季末，我們第二季的應收帳款餘額為 6,170 萬美元，DSO 週期為 44 天，與去年同期持平。我們第二季的庫存餘額為 4,520 萬美元，比 2023 年第四季的水準增加了 680 萬美元。庫存週轉率為 5.8 倍，符合我們的預期，因為我們繼續優化庫存水平，並努力最大限度地減少貨運成本支出。

Now turning to our outlook. We expect third quarter revenue for 2024 to be in the range of $132 million to $142 million. And our non-GAAP net income per diluted share to be between $0.08 and $0.14 per share. Consumer sentiment still remains a bit uncertain with most buyers looking for heavily discounted or promotional offers before making their purchase decisions. Given our low cost essential to camera product portfolio, we are able to comfortably meet the needs of these customers who demand innovative feature-rich solutions at an affordable price point.

現在轉向我們的展望。我們預計 2024 年第三季營收將在 1.32 億至 1.42 億美元之間。我們的非 GAAP 每股攤薄淨利潤將在每股 0.08 美元至 0.14 美元之間。消費者情緒仍然有點不確定，大多數買家在做出購買決定之前都會尋求大幅折扣或促銷優惠。鑑於我們的低成本對相機產品組合至關重要，我們能夠以實惠的價格輕鬆滿足這些需要功能豐富的創新解決方案的客戶的需求。

Further, we are committed to supporting our critical retail partnerships, which we believe will help us drive higher levels of market share for our brands and ultimately generate high-quality paid account growth for our services business. We reiterate that service revenue is forecasted to grow at approximately 20% over last year, thereby becoming a much larger portion of our overall revenue and profitability mix. And we continue to expect non-GAAP service gross margins to be at or slightly above 75% for 2024.

此外，我們致力於支持我們重要的零售合作夥伴關係，我們相信這將幫助我們提高品牌的市場份額，並最終為我們的服務業務帶來高品質的付費帳戶成長。我們重申，服務收入預計將比去年增長約 20%，從而在我們的整體收入和盈利組合中佔據更大的比例。我們繼續預期 2024 年非 GAAP 服務毛利率將達到或略高於 75%。

And now I will open it up for questions.

現在我將開放提問。

(Operator Instructions)

（操作員說明）

Jacob Stephan, Lake Street.

雅各史蒂芬，湖街。

Hey, guys. Thanks for taking my question. Congrats on the quarter. Maybe just starting out, you guys have talked a lot about kind of the potential for offering ads on the Arlo secure five platform, but it sounds like you’re already working on Arlo Secure six. So I’m just kind of curious, is this the ad server, is that an Arlo secure five or is that a secure six kind of project at this point?

嘿，夥計們。感謝您提出我的問題。恭喜本季。也許剛開始，你們已經談論了很多在 Arlo secure 5 平台上提供廣告的潛力，但聽起來你們已經在 Arlo Secure 6 上工作了。所以我只是有點好奇，這是廣告伺服器，是 Arlo 安全五類專案還是安全六類專案？

Yeah. Great question. It’s in parallel to the actual official releases. So we’re on track, as we mentioned on the last call, to test the add capability and the add serving in Q4 of this year, before the end of the year, and probably going into part of next year as we collect data around that. And then we’ll be able to update investors and the market around a timing of an eventual rollout or if and when that makes sense to actually deploy into the field in a wider view. But it’s in a parallel track, all the capabilities are built into Arlo secure five for testing, and then we can roll it out at a future date pending the performance of the rollout.

是的。很好的問題。它與實際的官方版本並行。因此，正如我們在上次電話會議中提到的，我們正在按計劃在今年第四季度、年底之前測試添加功能和添加服務，並可能在明年部分時間收集數據圍繞那個。然後，我們將能夠向投資者和市場通報最終推出的時間，或者是否以及何時有意義，以更廣泛的視角實際部署到該領域。但它處於並行軌道，所有功能都內建在 Arlo secure 5 中進行測試，然後我們可以在未來的某個日期將其推出，具體取決於推出的性能。

Okay. Got it. That’s helpful. And then maybe just around kind of promotional activity heading into the holiday season here and this year we kind of saw Walmart double down on the Walmart Day sale. We saw one in the earlier part of July here and we have one in the fall. But maybe if you could kind of help us think about what’s the potential with Walmart here in terms of Arlo?

好的。知道了。這很有幫助。然後，也許只是在進入假期期間進行促銷活動，今年我們看到沃爾瑪在沃爾瑪日促銷上雙倍降價。我們在七月初在這裡看到了一次，在秋天也看到了一次。但也許您可以幫助我們思考沃爾瑪在 Arlo 方面的潛力是什麼？

Yeah. I think it’s going to look a lot like last year in some ways. So as you know, most of our promotional activity for the second half, and obviously, most of that’s in Q4, gets locked down in roughly the April, May timeframe in the planning sessions with them. Obviously, discussions start earlier than that. So we already know exactly what’s going to happen both from an Arlo perspective across the various channels, but some indication of what’s going to happen on a competitive set as well, as we go in.

是的。我認為今年在某些方面與去年非常相似。如您所知，我們下半年的大部分促銷活動，顯然，其中大部分是在第四季度，在與他們的計劃會議中大約鎖定在四月、五月的時間範圍內。顯然，討論開始得更早。因此，我們已經確切地知道從 Arlo 的角度來看，各個管道會發生什麼，而且當我們進入時，也知道在競爭環境中會發生什麼。

And so the best I can tell you right now is I think you’re going to see Walmart be a significant partner for Arlo again and that’s part of what we mean when we say this holiday season is probably going to look a lot like last holiday season, because we’re seeing a lot of similar dynamics in the competitive set, the offerings, kind of the promotional areas, same timing. And we know that Arlo, did a great job executing through that holiday period and generated a lot of incremental households for future subscribers. So that’s really the plan, and that’s what we’re seeing as far as the roll-up into the holiday season this year.

因此，我現在能告訴您的最好消息是，我認為您將看到沃爾瑪再次成為 Arlo 的重要合作夥伴，這就是我們所說的這個假期可能會看起來很精彩的部分原因。假期，因為我們在競爭環境、產品、促銷領域以及相同的時間中看到了許多類似的動態。我們知道，Arlo 在假期期間表現出色，並為未來的訂閱者帶來了大量增量家庭。這就是我們真正的計劃，也是我們今年假期所看到的。

Got it. Maybe just one last one. You talked about kind of the single camera plan, the price increase there. Maybe if you could just give us a sense on what percentage price increase that was, that’d be helpful?

知道了。也許只是最後一張。您談到了單攝像頭計劃，那裡的價格上漲。如果您能讓我們了解價格上漲的百分比，也許會有所幫助？

Yeah. It was about 15%, 20%. It depends on if you’re talking annual or single cam. It can be as high as like 30% if it’s on the monthly plan. And that was done just on the single cam plan, if you remember we described that on the last call in the middle of kind of Q1. So you’re seeing a little bit of a full quarter of effect, but I would tell you, single cam plan is not our most popular plan by far.

是的。大約是15%、20%。這取決於您是在談論年度攝影機還是單攝影機。如果按月規劃的話，費用可能高達 30%。如果您還記得我們在第一季中間的最後一次通話中描述過的話，那麼這只是在單凸輪計劃上完成的。所以你看到的是整個季度的一點點效果，但我想告訴你，單鏡頭計劃並不是我們迄今為止最受歡迎的計劃。

So it is a relatively small impact when you look at ARPU. The other impact, obviously, is what we talked about in the script around seeing just an overall mixed shift in the tiers. So we are seeing interest in more capabilities and people kind of mixing up in our plan. And so those both together is what allowed Arlo to hit a record level of $12 of ARPU for our retail and direct paid accounts this quarter.

因此，從 ARPU 來看，影響相對較小。顯然，另一個影響是我們在腳本中所討論的，即看到層級的整體混合變化。因此，我們看到對更多能力和人員的興趣在我們的計劃中有所混合。因此，這兩個因素加在一起，使得 Arlo 本季的零售和直接付費帳戶 ARPU 達到了創紀錄的 12 美元。

Yeah. Okay. Awesome. I appreciate you guys and all the comments. I’ll hop back in queue.

是的。好的。驚人的。我感謝你們和所有的評論。我會跳回隊列。

Yeah, you're welcome.

是的，不客氣。

Mark Cash, Raymond James.

馬克卡什，雷蒙德詹姆斯。

All right. Thanks. This is Mark on for Adam. Now if I could start with you, understanding the consumer environment is challenging, but it’s sort of a sale of two geos in this quarter. So could you talk about trends being seen in the Americas and the strategy timeline to accelerate growth here? And then in EMEA, really strong. So how much of that is Verisure contribution and catch up and what is left to catch up there? Thank you.

好的。謝謝。這是亞當的馬克。現在，如果我可以從你開始，了解消費者環境是具有挑戰性的，但這有點像本季出售兩個地理區域。那麼您能談談美洲的趨勢以及加速這裡成長的策略時間表嗎？然後在歐洲、中東和非洲地區，真的很強大。那麼，其中有多少是 Verisure 的貢獻和追趕，還有哪些可以趕上呢？謝謝。

Yeah. Let me tackle that in a couple of sections. So one on the Verisure side, the catch up you’re seeing is really just the numerical number of paid accounts of cameras that have been previously installed in people’s homes but haven’t been really incrementing on the number. So that’s the catch up we’re doing there. It really doesn’t have an impact on the finances of the company. It really is just us, correcting some of the issues they had in their firmware in the South region and making sure those are being counted properly.

是的。讓我分成幾個部分來解決這個問題。因此，在 Verisure 方面，您所看到的增長實際上只是以前安裝在人們家中的攝影機付費帳戶的數量，但數量並未真正增加。這就是我們正在做的事情。它確實不會對公司的財務產生影響。這確實只是我們，糾正他們在南部地區韌體中存在的一些問題，並確保這些問題得到正確計算。

Kurt mentioned on the call, we expect most of the catch up to be done in the following quarter, so in Q3, and then we’ll be on a kind of our normal run rate where you’ll be able to correlate actual paid account ads with service revenue increase more one to one because we don’t have the divergence of some catch up that’s happening on the paid account.

庫爾特在電話中提到，我們預計大部分追趕工作將在下個季度完成，因此在第三季度，然後我們將採用正常的運行速度，您將能夠將實際的運行速度與付費帳戶廣告與服務收入的增加更加一對一，因為我們不存在付費帳戶上發生的某些追趕的差異。

Part of what you’re seeing from Verisure is some strength, I think, in the relationship and in the region in Europe, but some of it is also, if you remember them bringing down their inventory towards the end of last year and kind of starting this year relatively dry and trying to build up inventory as they continue to deploy Verisure Security systems in their direct channel.

我認為，你從 Verisure 看到的部分是在雙方關係和歐洲地區的一些優勢，但如果你還記得他們在去年年底降低了庫存，那麼其中也有一些優勢。因為他們繼續在其直接管道中部署Verisure Security 系統。

So this was expected. We kind of mentioned that we expected Verisure to be strong in Q1 and Q2 as they’re building back up their inventory after kind of winding it down last year. So that’s what you’re seeing in the international front and what you’re seeing from Verisure in particular. In the US, like I said, I think this holiday season is going to look a lot like last holiday season. The consumers are -- there is some headwind from a consumer, but there is some offset. We know that consumers feel less safe in general and there’s a bit of a tailwind just in the Security segment in general.

所以這是預料之中的。我們提到，我們預計 Verisure 在第一季和第二季表現強勁，因為他們在去年減少庫存後正在恢復庫存。這就是您在國際領域看到的情況，尤其是從 Verisure 看到的情況。在美國，就像我說的，我認為這個假期看起來會很像上一個假期。消費者－消費者存在一些阻力，但也有一些抵銷作用。我們知道，消費者整體上感覺不太安全，而且整體而言，安全領域存在一些順風車。

And so, we’re benefiting from that while we do see a little bit of headwind coming from just macroeconomic conditions in the United States. Those are somewhat offsetting, and again we predicted that this was going to be the environment that we were probably walking into in the second half and we adjusted our pricing strategies to match. So again, our expectation is that we will gain good amount of households in the Americas going into the second half, which will often lead to additional subscribers late Q4, but really spilling into Q1 time frame.

因此，我們正在從中受益，同時我們確實看到美國宏觀經濟狀況帶來了一些阻力。這些在一定程度上抵消了，我們再次預測這將是我們下半年可能遇到的環境，並調整了我們的定價策略以匹配。因此，我們的預期是，進入下半年，我們將在美洲獲得大量家庭，這通常會導致第四季末增加訂戶，但實際上會蔓延到第一季的時間範圍內。

So that’s kind of the commentary there. We’re a little bit ahead of what’s going to happen in 2025. But I think for at least the first half, I think, again, our first inclination would be that the consumer sentiment stuff may continue into the first part of next year and then we’ll take a better look at it as we start to wind down this year and start to do our annual operating plan for 2025.

這就是那裡的評論。我們比 2025 年將要發生的事情稍微提前了一點。但我認為至少在上半年，我們的第一個反應是消費者情緒可能會持續到明年上半年，然後我們會在開始時更好地審視它。

Okay. Very helpful. Thank you. And I appreciate you guys going through the capital allocation plan. That was great. If I could switch to Kurt and ask, really appreciate the color you gave on product risk margin expectations in the second half. But kind of two questions here is, one is, I was wondering if you could get some thoughts on how this year’s Prime event went for Arlo.

好的。非常有幫助。謝謝。我感謝你們完成資本分配計畫。那很棒。如果我可以轉向庫爾特問，我真的很欣賞你對下半年產品風險邊際預期的看法。但這裡有兩個問題，一是，我想知道您是否能對 Arlo 今年的 Prime 活動有一些想法。

I mean, kind of not related, but if my math is correct, based on like the 20% service growth commentary you gave, it seems like services would be in the 45%, 46% of sales in the second half. So I was just kind of curious when you’re expecting services to become a larger portion of the mix.

我的意思是，有點不相關，但如果我的數學是正確的，根據您給出的 20% 服務成長評論，服務似乎將佔下半年銷售額的 45%、46%。因此，我只是有點好奇，當你期望服務在其中佔據更大的比例時。

Yeah. Maybe I’ll take the commentary on the Prime Day first and then Kurt can kind of talk about service revenue mix across the company. Prime Day went pretty much as planned. We saw, I think a good amount of activity. It was basically sales were pretty much on what we were expecting across the Board. We're kind of -- we’re curious about what the October, it’s not called Prime Day. I think it’s called Amazon Deal Days or something like that. That happens in October as a ramp up.

是的。也許我會先聽聽 Prime Day 的評論，然後庫爾特可以談談整個公司的服務收入組合。黃金日幾乎按計劃進行。我認為我們看到了很多活動。基本上，銷售額基本上符合我們的全面預期。我們有點好奇十月是什麼，它不叫黃金日。我認為它被稱為“亞馬遜優惠日”或類似的名稱。這種情況發生在 10 月份，隨著產量的增加。

So I would say, again, what we’re seeing from the promotional activities across our channels, including Prime Day, is landing almost exactly where we’re expecting and that’s why you see the predictability, both in our revenue, but also, obviously, in the paid accounts going forward. So a lot of it looks like a repeat from last year and I think that’s because we’re dealing with similar market conditions.

因此，我想說，我們從包括 Prime Day 在內的各個管道的促銷活動中看到的情況幾乎完全符合我們的預期，這就是為什麼您會看到我們的收入具有可預測性，但顯然，在未來的付費帳戶中也是如此。因此，很多事情看起來都是去年的重演，我認為這是因為我們正在應對類似的市場條件。

Yeah. And as related to your question regarding mix, when we communicated back, I think in the early part of May, we had indicated that for the full year, we thought the mix of service revenue to our total consolidated revenue would be somewhere in the range of 46% to 47% for this 2024. We feel really good about that guidance. Actually as we mentioned then, we feel very confident that the 20% growth trajectory in our services business is spot on. We think we could be a bit closer to 47% of the total mix when we end the year, just as we were this past quarter. So we feel like we’re trending appropriately.

是的。至於你關於混合的問題，當我們回覆時，我想在五月初，我們已經表示，對於全年來說，我們認為服務收入與我們合併總收入的混合將在以下範圍內到2024 年，這一數字將由46% 增至47%。我們對這項指導感到非常滿意。事實上，正如我們當時所提到的，我們非常有信心，我們的服務業務 20% 的成長軌跡是正確的。我們認為，到今年年底，我們的佔比可能會接近 47%，就像上個季度一樣。所以我們覺得我們的趨勢是適當的。

As it relates to a little bit further out, certainly, our target is to get to us over 50%, and I know we’ve had some discussion on that in the past and we think that that’s within the near-term. Let’s just say within the next year to two, we think we can be there. So I think we’re trending quite nice relative to our initial expectations and the annual guidance we gave back in May.

因為它涉及更遠的一點，當然，我們的目標是達到 50% 以上，我知道我們過去對此進行過一些討論，我們認為這在不久的將來會實現。假設在未來一到兩年內，我們認為我們可以實現這一目標。因此，我認為相對於我們最初的預期和我們 5 月給出的年度指導，我們的趨勢相當不錯。

Great. Thanks so much. I'll pass it on.

偉大的。非常感謝。我會把它傳遞下去。

You're welcome.

不客氣。

Scott Searle, Roth Capital.

史考特·塞爾，羅斯資本。

Hey. Good afternoon. Thanks for taking my questions. Nice job on the quarter, guys. Hey, Kurt, maybe just to dive in quickly on the gross margin front. You’ve articulated that, look you’re going to keep your pedal -- your foot on the pedal here in terms of driving sales to drive basically the recurring revenue on the back end.

嘿。午安.感謝您回答我的問題。夥計們，本季乾得不錯。嘿，庫爾特，也許只是為了快速了解毛利率。你已經明確表達了這一點，看你要保持你的踏板——在推動銷售方面，你的腳踩在踏板上，基本上推動了後端的經常性收入。

But the second quarter gross margins, I think, were an all-time low for you guys at 3% or so adjusted for non-GAAP charges, et cetera. Is that the level that we should be thinking about in the second half of this year or do you get a little bit more aggressive than that? And then, similarly, kind of extrapolating that into 2025, is this the new norm or is there a little bit of an aberration in the June quarter?

但我認為，第二季的毛利率對你們來說是歷史最低水平，根據非 GAAP 費用等調整後為 3% 左右。這是我們今年下半年應該考慮的水平嗎？然後，類似地，推斷到 2025 年，這是新常態還是 6 月季度存在一點異常？

Right. Hey, Scott. Thanks for the question. So yeah, just to sort of set the record straight, this past quarter we did on a non-GAAP basis for product gross margin about 3.4%. And actually, for the six-month period, that put us at about 5.7% for the first half. And as we’ve mentioned in the past, we have felt that it would make sense at the right time to take our product gross margins to the mid-single digits, essentially 5% to 7%, which is where we are right now.

正確的。嘿，斯科特。謝謝你的提問。所以，是的，為了澄清事實，上個季度我們在非 GAAP 基礎上的產品毛利率約為 3.4%。事實上，在這六個月期間，我們上半年的成長率約為 5.7%。正如我們過去提到的，我們認為在適當的時候將我們的產品毛利率提高到中個位數，基本上是 5% 到 7%，這就是我們現在的水平。

We expect that, given the, I would say, muted kind of consumer environment we’re in right now, that we would continue for the second half at around that mid-single-digit range of about 5%. So I guess the point, Scott, yeah, you should expect us to be very promotional and ultimately hit our targeted guidance around that 5% to 6% for product gross margin for the remainder of the year.

我們預計，鑑於我們現在所處的消費環境低迷，下半年我們將繼續保持在 5% 左右的中個位數範圍內。所以我猜想重點是，斯科特，是的，你應該期望我們會大力促銷，並最終達到今年剩餘時間內產品毛利率 5% 至 6% 左右的目標指導。

Okay. Great. Very helpful. And Matt, exciting to see the all-state announcement and you guys stepping into the InsureTech market. I’m wondering if you could start to help us understand the opportunity within that market, how we’ll start to see the evolution of that relationship into more recurring revenue opportunities going forward and what other opportunities there are in the pipeline within InsureTech? Because I think it’s a relatively greenfield opportunity. I think SimpliSafe has got a couple of relationships there, but for the most part these potential partners out there or unoccupied with existing solutions.

好的。偉大的。非常有幫助。馬特，很高興看到全州的公告以及你們進入保險科技市場。我想知道您是否可以開始幫助我們了解該市場的機會，我們將如何開始看到這種關係演變為未來更多的經常性收入機會，以及 InsureTech 內部還有哪些機會？因為我認為這是一個相對全新的機會。我認為 SimpliSafe 已經在那裡建立了一些關係，但大多數情況下，這些潛在的合作夥伴都在那裡或沒有關注現有的解決方案。

Yeah. You’re absolutely right, Scott. It’s something we’re very excited about. It’s a market that takes time to form, I’ll just tell you that. These are big entities whose entire life’s work is mitigating risk and understanding risk portfolios and things like that. So it does take some time, but it’s also an opportunity once you get started, there’s actually tremendous value there.

是的。你完全正確，斯科特。這是我們非常興奮的事情。我只是告訴你，這是一個需要時間形成的市場。這些都是大型實體，其一生的工作就是降低風險和了解創投組合等。所以這確實需要一些時間，但一旦開始，這也是一個機會，實際上有巨大的價值。

And so what you see us doing now is what I would say some transactional benefits to both companies. So us selling all-state protection plans on our website. You may see something, a little bit of vice versa on the other side soon as well. And that’s really working with our customer bases and doing cross-offerings into those customer bases to provide kind of a wider set.

所以你看到我們現在所做的就是我所說的話為兩家公司帶來一些交易利益。因此，我們在我們的網站上銷售全州保護計劃。你可能很快就會在另一邊看到一些東西，反之亦然。這實際上是與我們的客戶群合作，並向這些客戶群提供交叉產品，以提供更廣泛的客戶群。

When I step back and I look at the market segment. And I mentioned this on the call, there’s such a natural fit. Arlo exists in this world to be able to help you detect, notify you and potentially mitigate some of the damage that may be happening in your life, whether that’s theft or fire or smoke or water leaks or some of these items. And the insurance industry exists to make sure you’re okay if something does happen, and backstop you with financial help if you do have those damages.

當我退後一步，審視細分市場。我在電話中提到了這一點，這是非常自然的契合。Arlo 存在於這個世界，能夠幫助您偵測、通知您並可能減輕您生活中可能發生的一些損害，無論是盜竊、火災、煙霧、漏水還是其中一些物品。保險業的存在是為了確保您在發生某些事情時一切安好，並在您確實遭受這些損失時為您提供財務援助。

So when you look at that breadth of experience, right, that kind of whole gamut of experience, having both of those together is really then providing the entire user experience from top to bottom, from being able to detect an issue and mitigate it and everything else, but also be able to backstop you if something does happen in your life that you can’t control.

因此，當你看到這種廣泛的體驗時，對吧，那種全方位的體驗，將兩者結合在一起實際上可以提供從上到下的整個用戶體驗，從能夠檢測問題並緩解問題等等等除此之外，如果您的生活中確實發生了您無法控制的事情，您也能夠為您提供支持。

So there is this natural set of consumer offering where both of these really do click together in a really natural way. I think what you’ll see in the space is moving from some of these kind of tactical engagements and rollouts of specific offers to maybe more strategic offers where you see potentially products on both sides being offered together. So home insurance with home security in a more integral and integrated way to provide a single user experience.

因此，有一套自然的消費者產品，其中兩者確實以非常自然的方式結合在一起。我認為您將在該領域看到的情況正在從某些戰術性的接觸和特定產品的推出轉向可能更具戰略性的產品，您會看到雙方潛在的產品一起提供。因此，家庭保險與家庭安全以更完整和整合的方式提供單一使用者體驗。

And that may blossom even further in the future where we may see home insurance companies take a more active role in the space because if they are able to deploy technologies and services that mitigate damage, it fundamentally changes their finances and their risk tables and everything else. So it’s them taking not just a passive role by running some numbers and cutting a check if something goes wrong on you based on some broad demographic, but actually taking much more granular data and an active role in potentially detecting and mitigating the damage in the first place.

未來這種情況可能會進一步發展，我們可能會看到家庭保險公司在該領域發揮更積極的作用，因為如果他們能夠部署減輕損害的技術和服務，就會從根本上改變他們的財務狀況、風險表和其他一切。因此，他們不僅僅扮演被動角色，透過運行一些數字並根據廣泛的人口統計來檢查您是否出現問題，而是實際上獲取更精細的數據，並在潛在檢測和減輕損害方面發揮積極作用。

So I do believe this is the beginning of a revolution in the home insurance space. Similar to some of the beginnings you’re starting to see in the driver space with driver safety scores and things like that, completely changing how insurance companies quote, engage and provide insurance for drivers for car, automobile drivers and the like.

所以我確實相信這是家庭保險領域革命的開始。類似於您開始在駕駛員領域看到的一些開端，包括駕駛員安全評分等，徹底改變了保險公司為汽車駕駛員、汽車駕駛員等報價、參與和提供保險的方式。

So that gives you a little bit of it. I mean, again, I think we’re barely in the first inning of what this is, but we’ve now got a great partner, one of the top brands in the home insurance space. And I’ll think you’ll see more activity of this rolling forward and this could become a significant part of our business as we look towards the rest of our long-range plan.

所以這給了你一點點。我的意思是，我認為我們才剛剛進入這一切的第一局，但我們現在有了一個偉大的合作夥伴，家庭保險領域的頂級品牌之一。我認為您會看到更多此類活動的推進，當我們展望長期計劃的其餘部分時，這可能會成為我們業務的重要組成部分。

Matt, given that this is the first inning, this probably isn’t a fair question, but it sounds like you’re engaged in talking to other parties out there within InsureTech. I’m wondering if there’s a bogey that you’re thinking about in terms of the number of relationships you’d like to have looking 12 months or 18 months out.

馬特，鑑於這是第一局，這可能不是一個公平的問題，但聽起來您正在與 InsureTech 內部的其他各方進行交談。我想知道您在考慮 12 個月或 18 個月後的關係數量方面是否存在一個禁忌。

And then to lump onto the unfair questions. If you look at the size of the opportunity, if we start looking down into late 2025, 2026, what’s going to constitute success in terms of strategic relationships like this, like outside of Verisure, what this could represent in terms of your recurring services revenue stream? Thanks.

然後再談一些不公平的問題。如果你看看機會的大小，如果我們開始展望 2025 年末、2026 年，什麼將構成像 Verisure 之外這樣的戰略關係方面的成功，這對你來說意味著什麼？謝謝。

Yeah. No, I love unfair questions. Yeah. I think there’s a lot of activity just starting in the general space. I would tell you, Arlo, we’re very much concentrated on Allstate right now, because there is -- I think a shared vision in what happens in this space. But what we see is when things do get announced or when things get rolling, some of these industries move in packs and they kind of move together as they start to discover that someone may have an advantage in a certain space.

是的。不，我喜歡不公平的問題。是的。我認為在一般領域有很多活動剛開始。我想告訴你，阿洛，我們現在非常專注於好事達，因為我認為在這個領域發生的事情有一個共同的願景。但我們看到的是，當事情確實宣布或事情開始發展時，其中一些行業會集體行動，當它們開始發現某人可能在某個領域具有優勢時，它們就會一起行動。

So I do think there’s a broader opportunity in general. Right now Arlo is really focused on executing Allstate and expanding that relationship in some really innovative ways for consumers of both companies, and so that’s a -- it’s a bit of an answer to your question, at least at this point. But I think a focused approach initially to drive the solution and learn from that on both sides is probably the first stage and then the second stage is expansion potentially.

所以我確實認為總體上存在更廣泛的機會。目前，Arlo 真正專注於執行 Allstate 並以一些真正創新的方式為兩家公司的消費者擴展這種關係，因此，這可以算是您問題的一個回答，至少在這一點上是這樣。但我認為，第一階段可能是最初推動解決方案並從中學習的集中方法，然後是潛在的擴展。

As far as where does this -- how do we provide a metric or a measure of success as we kind of get into maybe the second half of our long-range plan, like 2027 or something like that. I think the first thing we would look at is, how many homes were we able to address through this incremental channel. And I would hope by that point, we’re looking at hundreds of thousands, if not maybe even a million homes that have been able to be addressed through the InsureTech channel, in particular, and incremental to the growth that we’re seeing in retail and some of our other strategic accounts.

至於這在哪裡——當我們進入長期計劃的後半部分時，例如 2027 年或類似的事情，我們如何提供成功的指標或衡量標準。我認為我們首先要考慮的是，我們能夠透過這個增量管道解決多少家庭的問題。我希望到那時，我們正在關注數十萬，甚至可能是一百萬個家庭，這些家庭已經能夠透過保險科技管道得到解決，特別是，並逐步促進我們的成長。戰略客戶中看到。

So that’s kind of how we would measure initially. We drive a lot of our success and even measurements internally on how many people have we’ve been able to keep safe. And to us that’s a household that’s actually active in being a paid account.

這就是我們最初衡量的方式。我們在很大程度上推動了我們的成功，甚至在內部衡量我們能夠保證多少人的安全。對我們來說，這是一個實際上活躍於付費帳戶的家庭。

Great. Thanks so much. Very helpful and great job on the quarter.

偉大的。非常感謝。本季度的工作非常有幫助且出色。

Thank you, Scott.

謝謝你，斯科特。

Hamed Khorsand, BWS Financial.

Hamed Khorsand，BWS Financial。

Hi. So my first question was, are you seeing any changes as far as your major retail partners is concerned, as far as the composition of who’s important?

你好。所以我的第一個問題是，就您的主要零售合作夥伴而言，就重要的人員組成而言，您是否看到任何變化？

Not major. I mean, what I would say is, we’ve described this over the previous, I would say maybe three quarters or four quarters, is as the market is starting to shift into more of a mass market product segment, there is a natural transition of at least the pie chart. All potential retailers can grow, but you’ll see retailers like a Walmart, as an example, start to take a bigger portion of the pie as the awareness of the product segment, awareness of the solution becomes a little bit broader.

不是主要的。我的意思是，我想說的是，我們在之前已經描述過這一點，我想說可能是三個季度或四個季度，隨著市場開始轉向更多的大眾市場產品領域，自然會出現這種情況。所有潛在的零售商都可以成長，但你會看到像沃爾瑪這樣的零售商，隨著產品領域的意識、解決方案的意識變得更廣泛，開始佔據更大的份額。

And you’ll remember we said we kind of took a bet last year that we thought that kind of mass market adoption at the beginning of that phase was going to start last year. That’s what triggered some of the discussions with Walmart and then the ultimate promotion we did with them in Q4 that was very successful. And I think that promotion and that success in Q4 proved that mass market is starting not only to us, but also to Walmart, maybe some other channel partners.

你會記得我們去年說過，我們認為去年這個階段開始時的大眾市場採用將會開始。這引發了與沃爾瑪的一些討論，然後我們在第四季度與他們進行了非常成功的最終促銷。我認為第四季度的促銷和成功證明大眾市場不僅對我們來說正在開始，而且對沃爾瑪，也許還有其他一些通路合作夥伴也是如此。

So in an initial technology journey in the market you’ll see a Best Buy or others have a significant portion of the share because it’s a new technology. It needs a consultative sale, needs a lot of description behind it. It’s a certain demographic of people looking at it because it’s brand new. And then as that technology matures and becomes more a mass market phenomenon from an awareness perspective, you’ll start to see the Walmarts then start to catch up and start to gain share.

因此，在市場的最初技術之旅中，您會看到百思買或其他公司擁有很大一部分份額，因為它是一項新技術。它需要諮詢銷售，背後需要大量的描述。這是特定人群關注它的原因，因為它是全新的。然後，隨著該技術的成熟，從意識的角度來看，它已成為一種大眾市場現象，您將開始看到沃爾瑪開始迎頭趕上並開始獲得份額。

So long-winded answer to your question is we are seeing a little bit more growth on a relative basis in more of the mass market channels because of this transition of the product segment becoming a little bit more mass market.

對你的問題的冗長回答是，由於產品領域的轉變變得更加大眾市場，我們看到更多大眾市場管道的相對基礎上有更多的成長。

Okay. And then what was the reason behind expanding the range in your commentary about what your organic subscriber additions are per quarter? In this quarter, you said 150,000 to 190,000. Previous quarters, you had said it’s 170,000 to 190,000.

好的。那麼，您在評論中擴大每季有機訂閱用戶增量的範圍的原因是什麼？這季你說15萬到19萬。前幾個季度，您說過是 170,000 到 190,000。

Yeah. It’s some of that seasonality. So you’ll see more often a little bit higher in Q1 after the holiday season and then a little bit more in Q4. So we’re kind of widening the range a little bit in Q2. But I don’t think anything’s really changed in the business. So it’s 160,000, 170,000 to 190,000. We’ll get a much better read on that after the catch-up is done on Verisure next quarter. But there’s nothing fundamental in the business has changed and that’s not what we’re trying to communicate.

是的。這在一定程度上是季節性的。因此，您通常會在假期結束後看到第一季的價格上漲一點，然後第四季的價格會上漲一點。因此，我們在第二季度稍微擴大了範圍。但我認為這個行業並沒有任何真正的改變。所以是 160,000、170,000 到 190,000。下個季度 Verisure 上的追趕完成後，我們將對此有更好的了解。但業務並沒有任何根本性變化，這也不是我們想要傳達的內容。

Okay. And my other question was, are you going into the holiday season with just the Essentials 2 product just like last year or will there be an updated product?

好的。我的另一個問題是，您會像去年一樣只使用 Essentials 2 產品進入假期，還是會有更新的產品？

Typically, our products are every other year. So we launched Essential 2 right before the holiday season. I mean, it really landed in October of last year and so we’re leaning back into that platform this year as well and it’s the right product, like I said, at the right time. Now, obviously, as we work through quarter-by-quarter and the volume picks up as it has over the last couple of quarters after our launch, we’re able to get additional price concessions from the supply chain as we go through. So our cost basis for that product is not the same as last year, but the product assortment is going to be very similar to last year.

通常，我們的產品每隔一年一次。因此，我們在假期前推出了 Essential 2。我的意思是，它確實是在去年 10 月落地的，所以我們今年也將回歸該平台，正如我所說，它是在正確的時間推出的正確產品。現在，顯然，隨著我們逐季度地開展工作，並且銷量在推出後的最後幾個季度中有所回升，我們能夠在整個過程中從供應鏈獲得額外的價格優惠。因此，我們該產品的成本基礎與去年不同，但產品種類將與去年非常相似。

Okay. Thank you.

好的。謝謝。

You're welcome.

不客氣。

There are no further questions waiting at this time. I would like to turn the call back over to the presenters.

目前沒有其他問題等待。我想將電話轉回給演示者。

Thank you, everyone, for joining us on the call today. We look forward to executing the quarter and speaking it into in 90 days.

謝謝大家今天加入我們的電話會議。我們期待執行本季並在 90 天內進行討論。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。