Arlo Technologies Inc (ARLO) 2025 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Tahmin Clarke. Please go ahead, sir.

女士們、先生們，感謝你們的支持。此時，所有參與者都處於只聽模式。稍後我們將進行問答環節。（操作員指示）現在我想將會議交給 Tahmin Clarke。先生，請繼續。

Thank you, operator. Good afternoon and welcome to Arlo Technologies first quarter of 2025 financial results conference call. Joining us from the company are Mr. Matthew Mcrae, CEO; and Mr. Kurt Binder, COO and CFO.

謝謝您，接線生。下午好，歡迎參加 Arlo Technologies 2025 年第一季財務業績電話會議。與我們一起參加會議的公司有執行長 Matthew Mcrae 先生；以及營運長兼財務長 Kurt Binder 先生。

If you have not received a copy of today's release, please visit Arlo's Investor Relations website at investor.arlo.com. Before we begin the formal remarks, we advise you that today's conference call contains forward-looking statements.

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。在我們開始正式發言之前，我們提醒您，今天的電話會議包含前瞻性陳述。

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 margin, guidance for the second quarter of 2025, the long range plan targets, the rate and timing of our paid subscriber growth. The transition to a services first business model, the commercial launch and momentum of new products and services, the timing and impact of tariffs, strategic objectives and initiatives, market expansion and future growth.

前瞻性陳述包括有關我們潛在未來業務、經營業績和財務狀況的陳述，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、自由現金流利潤率、2025 年第二季度指引、長期計劃目標、付費用戶增長速度和時間的描述。向服務優先商業模式的轉變、新產品和服務的商業推出和發展勢頭、關稅的時間和影響、策略目標和舉措、市場擴張和未來成長。

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 macroeconomic conditions on our business, operating results, and financial conditions.

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夥伴的合作夥伴關係、持續的新產品和服務差異化，以及一般宏觀經濟條件對我們的業務、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 statements. For more information, please refer to the risk factors discussed in Arlo's periodic filings with the SEC, including our annual report on Form 10-K and our most recent quarterly report on Form 10-Q filed earlier today.

實際結果或趨勢可能與這些前瞻性陳述所預期的結果或趨勢有重大差異。欲了解更多信息，請參閱 Arlo 向美國證券交易委員會提交的定期文件中討論的風險因素，包括我們今天早些時候提交的 10-K 表年度報告和最新的 10-Q 表季度報告。

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.

我們在本次電話會議上所做的任何前瞻性陳述均基於今天的假設，Arlo 不承擔因新資訊或未來事件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.

此外，本次電話會議也將討論幾個非公認會計準則財務指標。您可以在我們投資者關係網站上今天的新聞稿中找到 GAAP 與非 GAAP 指標的對帳表。

At this time, I would now like to turn the call over to Matt.

現在，我想將電話轉給馬特。

Thank you, Tommen, and thank you everyone for joining us today on Arlo's first-quarter 2025 earnings call.

謝謝你，Tommen，也謝謝大家今天參加 Arlo 2025 年第一季財報電話會議。

In Q1, Arlo added 298,000 subscribers in the quarter and ended Q1 with $4.9 million paid accounts, which is a 51% increase year over year. Average revenue per user, or ARPU rose to a record $13.48 propelled by the continued success of Arlo Secure 5 and our new service plans.

第一季度，Arlo 新增了 298,000 名用戶，第一季結束時付費帳戶總額為 490 萬美元，年增 51%。受 Arlo Secure 5 和我們新服務計劃的持續成功推動，每用戶平均收入 (ARPU) 升至創紀錄的 13.48 美元。

This resulted in subscriptions and services revenue of $69 million for the quarter, and our annual recurring revenue grew to $276 million both up over 20% year over year and new records for our low.

這使得本季的訂閱和服務收入達到 6,900 萬美元，我們的年度經常性收入成長至 2.76 億美元，年成長超過 20%，創下了新低。

This acceleration of Arlo's subscription and services business is the clear driver for our outstanding Q1 financial results. Our non-GAAP services gross margin of 83% is up 600 basis points from last year and contributed to our record-free cash flow of $28 million and earnings per share of $0.15, which is also a record for our low.

Arlo 訂閱和服務業務的加速發展顯然是我們第一季財務表現優異的推動力。我們的非公認會計準則服務毛利率為 83%，比去年同期上升了 600 個基點，並貢獻了我們創紀錄的 2800 萬美元自由現金流和每股 0.15 美元的收益，這也是我們的最低紀錄。

And we expect the strength in our subscriptions and services business will continue in Q2 and throughout 2025. We expect strong growth in subscribers and additional ARPU expansion as the benefits of our new Arlo Secure 5 plans penetrate our user base and read through in our results. In fact, for the first five weeks of Q2, we have not seen any drop off in demand across our channels and have already hit a key service milestone.

我們預計訂閱和服務業務的強勁表現將在第二季以及整個 2025 年持續下去。隨著我們新的 Arlo Secure 5 計劃的優勢滲透到我們的用戶群並體現在我們的業績中，我們預計用戶數量將強勁增長，ARPU 也將進一步擴大。事實上，在第二季的前五週，我們各個通路的需求並沒有出現任何下降，並且已經達到了一個關鍵的服務里程碑。

Today we announced we surpassed 5 million subscribers, which is ahead of our 2025 forecast and more than two years early compared to our original long range plan.

今天我們宣布我們的用戶數量已超過 500 萬，這超出了我們 2025 年的預測，並且比我們最初的長期計劃提前了兩年多。

This is a significant milestone for the company and shows the incredible pace of growth for our subscriptions and services business as we execute towards our new long range plan of 10 million subscribers, and we don't believe the current tariff environment will slow down this strong start to the year.

這對公司來說是一個重要的里程碑，表明我們的訂閱和服務業務在執行 1000 萬用戶的新長期計劃時以驚人的速度增長，我們相信當前的資費環境不會減緩今年強勁的開局。

First, it is important to remember that Arlo is a subscription and services company at its core. Less than 25% of our total revenue comes from hardware devices we import into the United States. So there would be minimal impact to our consolidated gross margins said another way, the majority of our revenue and nearly all of our profit is not directly impacted by the announced tariffs.

首先，重要的是要記住，Arlo 的核心是一家訂閱和服務公司。我們總收入的不到 25% 來自進口到美國的硬體設備。因此，這對我們的綜合毛利率的影響微乎其微，換句話說，我們的大部分收入和幾乎所有利潤都不會受到宣布的關稅的直接影響。

Second, we assume Arlo will be operating under the 10% blanket tariff regime for the duration of Q2, and given Arlo's subscriptions and service the strategy, I view it as a small increase in our customer acquisition cost that we will execute and optimize around to continue our growth of subscribers that generate a lifetime value of nearly $700. We don't have any plans to increase prices at this time and are beginning to see competitors struggle, which may provide incremental opportunities to capture share.

其次，我們假設 Arlo 將在第二季度期間按照 10% 的統一關稅制度運營，並且考慮到 Arlo 的訂閱和服務策略，我認為這只會略微增加我們的客戶獲取成本，我們將圍繞這一成本進行執行和優化，以繼續增加產生近 700 美元終身價值的用戶。我們目前沒有任何提高價格的計劃，並且開始看到競爭對手陷入困境，這可能會提供逐步搶佔市場份額的機會。

And while the second half of the year remains uncertain, we have modeled the effective tariff rate at or near the current 10% rate, and based on this, we are confident in reaffirming our full year guidance. We still expect our 2025 results will make us a rule of 40 company, and Arlo will exit the year with more than $300 million in ARR.

儘管下半年仍存在不確定性，但我們已經將有效關稅稅率模擬為當前 10% 或接近 10%，基於此，我們有信心重申全年指引。我們仍然預計，2025 年的業績將使我們成為 40 強公司之一，而 Arlo 在今年年底的 ARR 將超過 3 億美元。

This places Arlo in a small elite, and shrinking class of public staff companies with this level of performance. These are unprecedented times which could produce additional macroeconomic impacts, but my goal with the preceding commentary is to continue Arlo's tradition of transparent and open communication.

這使得 Arlo 成為少數精英公司之一，並且擁有這種業績水平的公共員工公司群體正在縮小。這是前所未有的時期，可能會產生額外的宏觀經濟影響，但我發表上述評論的目的是為了延續 Arlo 透明和開放溝通的傳統。

Given our track record of success, disciplined execution, and strategic agility, I believe the current conditions and volatility favors Arlo and may present the company with new opportunities for growth.

鑑於我們成功的記錄、嚴格的執行和策略敏捷性，我相信當前的條件和波動性對 Arlo 有利，並可能為公司帶來新的成長機會。

As a reminder, Arlo is planning its largest product launch in company history for the 2025 holiday season, with over 100 new SKUs launching into our channel. These new products will substantially extend our technology differentiation and achieve a 20% to 35% cost reduction, which puts us in a great position to not only mitigate any tariff impact but also win incremental opportunities to capture share in Q4 and 2026.

提醒一下，Arlo 計劃在 2025 年假期季節推出公司史上最大規模的產品，屆時將有超過 100 個新 SKU 進入我們的通路。這些新產品將大大擴展我們的技術差異化，並實現 20% 至 35% 的成本降低，這使我們處於有利地位，不僅可以減輕任何關稅影響，而且還能贏得在第四季度和 2026 年搶佔市場份額的增量機會。

On the last call, I gave a sneak peek of our plans for Arlo Secure 6, which includes exciting new Arlo intelligence features that substantially expand the capabilities and user experience of our subscription service. Given the success of our development program, some of these advanced features will be rolled out this month, including advanced AI and audio event descriptions, fire detection, event searching across our expanded 60 days of storage, and new AI audio detection such as glass break, screaming, gunshots, and barking dogs.

在上次電話會議中，我透露了我們對 Arlo Secure 6 的計劃，其中包括令人興奮的全新 Arlo 智慧功能，可大大擴展我們的訂閱服務的功能和用戶體驗。鑑於我們開發計劃的成功，其中一些高級功能將於本月推出，包括高級 AI 和音頻事件描述、火災探測、在擴展的 60 天存儲空間內進行事件搜索，以及新的 AI 音頻檢測，例如玻璃破碎、尖叫聲、槍聲和狗叫聲。

In addition, Arlo will be rolling out phase one of our advertising strategy this quarter, which will be focused on using our ad platform to promote Arlo's service subscription tiers and device upgrades.

此外，Arlo 將於本季推出我們的廣告策略的第一階段，該策略將專注於利用我們的廣告平台來推廣 Arlo 的服務訂閱層和設備升級。

Early testing has shown this is a powerful tool to extend the long-term value of our users and increase conversion to subscriptions. We believe these launches continue our momentum and set Arlo up for a successful second half of 2025.

早期測試表明，這是一個強大的工具，可以延長用戶的長期價值並提高訂閱轉換率。我們相信，這些產品的發布將延續我們的發展勢頭，並為 Arlo 在 2025 年下半年取得成功奠定基礎。

Arlo is executing extremely well and delivering strong growth across our key metrics as we put the pieces in place for continued success throughout the year.

隨著我們為全年的持續成功做好準備，Arlo 的表現非常出色，並在關鍵指標上實現了強勁成長。

And now I'll turn it over to Kurt for a more detailed review of our Q1 result.

現在我將把話題交給 Kurt，讓他更詳細地回顧我們的第一季業績。

Thank you, Matt, and thank you everyone for joining us today.

謝謝你，馬特，也謝謝大家今天加入我們。

We delivered strong financial results during the quarter, continuing the significant operational momentum that we gained in 2024. I will start by sharing some financial details, then provide an overview of the business for the first quarter and finish by providing our outlook for the second quarter.

我們在本季取得了強勁的財務業績，延續了 2024 年的顯著營運動能。我將首先分享一些財務細節，然後概述第一季的業務，最後提供對第二季的展望。

Entering 2025 as truly a subscription and services first business, our install base of subscribers continued its strong growth trajectory, coming in at $4.9 million paid accounts. Which was up 51% year to year.

進入 2025 年，作為一家真正以訂閱和服務為先的企業，我們的用戶安裝群繼續保持強勁的成長軌跡，付費帳戶金額達到 490 萬美元。較去年同期成長51%。

Our Q1 paid account increase still reflects some catch up of the Verisure for subscribers, but we were able to generate healthy new paid subscriber growth in the 170,000 to 190,000 range, a trend that we expect to continue in the future.

我們第一季付費帳戶的成長仍然反映了 Verisure 用戶數量的追趕，但我們能夠實現 170,000 至 190,000 範圍內的健康新付費用戶成長，我們預計這一趨勢將在未來持續下去。

The momentum behind our paid subscribers translated into another record quarter of subscriptions and services revenue, which came in at $68.8 million, a 21% increase over the same period last year. The strong services revenue performance was driven in part by growth in the overall paid subscriber base but was primarily related to higher levels of ARPU which grew 7% sequentially and 15% year over year to $13.48.

我們付費用戶的成長動能轉化為訂閱和服務收入再創紀錄的季度，達到 6,880 萬美元，比去年同期成長 21%。強勁的服務收入表現部分得益於整體付費用戶群的成長，但主要與更高的 ARPU 水平有關，ARPU 環比增長 7%，同比增長 15%，達到 13.48 美元。

We are seeing ARPU accelerate as a result of the momentum from our new customers selecting our premium rate plans as well as the overall simplification of our plan structures.

由於新客戶選擇我們的高級套餐以及我們計劃結構的整體簡化，我們看到 ARPU 正在加速成長。

Our annual recurring revenue was $276 million also up more than 20% over the same period last year.

我們的年度經常性收入為 2.76 億美元，比去年同期成長了 20% 以上。

The strength of our subscription and services revenue as well as our ARR generated strong top line revenue performance and contributed to Arlo's record profitability, which I will discuss later.

我們的訂閱和服務收入以及 ARR 的強勁成長產生了強勁的營收表現，並為 Arlo 創紀錄的獲利能力做出了貢獻，我將在稍後討論這一點。

Total revenue for the first quarter of 2025 came in at $119 million down slightly from the prior year period. Importantly, subscription and services revenue represented about 58% of total revenue, up from 46% in the same period last year.

2025 年第一季的總營收為 1.19 億美元，較去年同期略有下降。重要的是，訂閱和服務收入約佔總收入的 58%，高於去年同期的 46%。

The sizable shift in revenue composition from one-time device revenue to recurring services revenue reflects the momentum that we gained in our transition to a subscription and services driven business. And the results are clearly proving out the long term sustainability of our operating model.

收入構成從一次性設備收入到經常性服務收入的大幅轉變反映了我們在向訂閱和服務驅動業務轉型過程中所獲得的動力。結果清楚地證明了我們的營運模式的長期可持續性。

Product revenue for the period was $50.2 million down in comparison to the prior year and resulting principally from the decline in ASPs that has been prevalent across the entire industry. We continue to leverage our products to bring customers into the Arlo ecosystem through point of sale volume.

本期間產品收入與前一年相比下降了 5,020 萬美元，主要原因是整個產業普遍存在的平均銷售價格下降。我們將繼續利用我們的產品，透過銷售點數量將客戶帶入 Arlo 生態系統。

With the success of this approach evidenced by the total number of shipments.

總出貨量證明了這個方法的成功。

In Q1, we shipped a total of 1.1 million devices worldwide, which was in line with the shipment volume of the prior year period after withstanding a challenging economic environment. The more customers that are brought in through our product funnel, the more we can convert into paid subscriptions, which generates significant lifetime value for the company while insulating us from the volatility created by external factors.

第一季度，我們在全球共出貨110萬台設備，在經歷了充滿挑戰的經濟環境後，與去年同期的出貨量持平。透過我們的產品管道吸引的客戶越多，我們就能將更多的客戶轉化為付費訂閱，這為公司創造了巨大的終身價值，同時使我們免受外部因素造成的波動的影響。

As our subscriptions and services business scales to become a larger component of our total business, we are seeing the contribution of our international customers slightly decline. As a result, in the first quarter, our international customers generated approximately $51 million or 43% of our total revenue, down from $70 million or 56% of total revenue in the prior year quarter.

隨著我們的訂閱和服務業務規模不斷擴大，成為我們整體業務的更大組成部分，我們看到國際客戶的貢獻略有下降。因此，第一季度，我們的國際客戶創造了約 5,100 萬美元或總收入的 43%，低於去年同期的 7,000 萬美元或總收入的 56%。

In the Emir region, erasure continues to be the driver of our international revenue and remains an outstanding partner, driving both product sales and supporting investments in innovation. 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, which was distributed earlier today.

在埃米爾地區，擦除繼續成為我們國際收入的驅動力，並且仍然是我們出色的合作夥伴，推動產品銷售並支持創新投資。從現在開始，我的討論將集中在非 GAAP 數據。我們今天稍早發布的收益報告中詳細說明了從 GAAP 數據到非 GAAP 數據的調整。

Our non-GAAP subscriptions and services gross margin was 83.1%, a new record and up over 600 basis points year to year, driven by an increasing portion of our subscriptions and services revenue generated from premium plans with higher ARPU as well as a decrease in the cost of serving our subscribers.

我們的非公認會計準則訂閱和服務毛利率為 83.1%，創下新高，同比增長超過 600 個基點，這得益於來自更高 ARPU 的高級計劃的訂閱和服務收入佔比不斷增加，以及服務用戶的成本下降。

Product gross margins remain slightly negative in the period as we continued our promotional activity to ensure we remain competitive across all customer price segments, including at the sub $50 dollar market level.

由於我們持續進行促銷活動以確保我們在所有客戶價格區間（包括低於 50 美元的市場水平）保持競爭力，因此本期間產品毛利率仍略為負值。

The product margins did rebound from Q4 levels as we were not as aggressive with the promotional activity that we use to support the holiday season.

由於我們在假期季節促銷活動上沒有那麼積極，產品利潤率確實從第四季度的水平有所反彈。

Even with gross product margins at the current level, we were able to expand our total non-GAAP gross margins to 46%, up a remarkable 800 basis points sequentially, and 600 basis points year over year.

即使毛利率處於當前水平，我們也能夠將非 GAAP 總毛利率擴大至 46%，比上一季顯著增長 800 個基點，比去年同期增長 600 個基點。

This result illustrates the impact of our subscription and services strategy on the profitability of our business.

這一結果說明了我們的訂閱和服務策略對業務獲利能力的影響。

Our planned device portfolio refresh in the second half of this year will further enhance our competitive position and allow us to continue using our products as a customer acquisition tool, even in a declining ASP environment.

我們計劃在今年下半年更新設備組合，這將進一步增強我們的競爭地位，並使我們能夠繼續使用我們的產品作為客戶獲取工具，即使在平均售價下降的環境下也是如此。

Total non-GAAP operating expenses for the first quarter were $38.3 million down from $40.3 million in the same period last year, and demonstrating strong cost discipline.

第一季非公認會計準則總營運費用為 3,830 萬美元，低於去年同期的 4,030 萬美元，體現出強大的成本控制能力。

The year over year decline is primarily driven by a $3.6 million dollar reduction in research and development costs as we invested a bit more heavily in our Arlo Secure 5 last year.

年比下降的主要原因是，由於去年我們在 Arlo Secure 5 上投入了更多資金，研發成本減少了 360 萬美元。

We will ramp up additional investment related to Arlo Secure 6 later this year, which will result in our operating expense level increasing slightly throughout the year. As part of our evolution to a best in class A company, we are now reporting adjusted EBITDA financial figure which is consistently disclosed by consumer subscription businesses in our peer group.

我們將在今年稍後增加與 Arlo Secure 6 相關的額外投資，這將導致我們全年的營運費用水準略有增加。作為我們向一流 A 公司轉型的一部分，我們現在報告調整後的 EBITDA 財務數據，該數據由我們同行中的消費者訂閱業務一致披露。

During the quarter, our adjusted EBITDA was $16.4 million in the period, about 76% year to year. Adjusted EBITDA was driven by the strong performance of the subscriptions and services business as well as our discipline focus on cost containment.

本季度，我們的調整後 EBITDA 為 1,640 萬美元，年增約 76%。調整後的 EBITDA 受到訂閱和服務業務的強勁表現以及我們對成本控制的嚴格關注的推動。

Further, we posted non-GAAP net income of $16.5 million another record that translates into non-GAAP net income per diluter share of $0.15 and thereby exceeding the consensus figure of $0.12 for the quarter.

此外，我們公佈的非公認會計準則淨收入為 1,650 萬美元，創下另一項紀錄，這意味著每股非公認會計準則淨收入為 0.15 美元，從而超過了本季 0.12 美元的普遍預期。

Regarding our balance sheet and liquidity position, we ended the quarter with $153.1 million in available cash equivalents, and short-term investments.

關於我們的資產負債表和流動性狀況，本季末我們擁有 1.531 億美元的可用現金等價物和短期投資。

This balance is up $10 million since March of 2024 after considering the $12.5 million investment in Origin Wireless and the $15 million we invested in our share repurchase program.

考慮到對 Origin Wireless 的 1,250 萬美元投資和我們在股票回購計劃中投資的 1,500 萬美元，這一餘額自 2024 年 3 月以來增加了 1,000 萬美元。

The leverage in our operating model continues to be evident as we generated record free cash flow of $28 million during the quarter, representing a free cash flow margin of almost 24%.

我們的營運模式中的槓桿作用繼續顯現，因為我們在本季度創造了創紀錄的 2,800 萬美元的自由現金流，代表著自由現金流利潤率接近 24%。

Our free cash flow was up an astounding 45% over the same period last year, driven by increased profitability and strong work in capital management. Our Q1 accounts receivable balance was $46 million at quarter end, with DSOs at 34 days, down from 41 days last year.

由於獲利能力的提高和資本管理的有力推進，我們的自由現金流比去年同期增長了驚人的 45%。截至季末，我們的第一季應收帳款餘額為 4,600 萬美元，應收帳款週轉天數為 34 天，低於去年的 41 天。

Our Q1 inventory balance was $35 million down from $45 million level last year. Inventory turns were 6.3 times, up from 5.7 times last year, as we focused on maximizing the use of our inventory on hand to minimize the potential impact of tariffs on our product gross margins.

我們第一季的庫存餘額為 3500 萬美元，低於去年的 4500 萬美元。庫存週轉率為 6.3 次，高於去年的 5.7 次，因為我們專注於最大限度地利用現有庫存，以最大限度地減少關稅對我們產品毛利率的潛在影響。

As Matt mentioned, we are refreshing our entire portfolio of devices in the second half of the year, which will result in a 20% to 35% reduction in bomb costs, thereby providing an effective tool to combat both the regulatory and competitive environment.

正如馬特所提到的，我們將在今年下半年更新我們的整個設備組合，這將使炸彈成本降低 20% 至 35%，從而提供有效的工具來應對監管和競爭環境。

Now turning to our outlook. Looking at our financial results, Arlo continues to perform well despite operating in a volatile macroeconomic environment.

現在轉向我們的展望。從我們的財務表現來看，儘管宏觀經濟環境動盪，Arlo 仍然表現良好。

We have scaled our subscriptions and services business to a level that dictates the profitability of the entire business, and we are well positioned to compete in a market defined by promotional activity and discounting. We expect to deliver these strong operational results throughout 2025, especially as we expand our relationships with strategic partners and extend our technology and platform advantage later this year.

我們已經將訂閱和服務業務擴展到決定整個業務盈利能力的水平，並且我們在以促銷活動和折扣為特徵的市場中處於有利地位。我們預計在 2025 年全年都將取得強勁的營運業績，尤其是在我們在今年稍後擴大與策略合作夥伴的關係並擴展我們的技術和平台優勢的情況下。

As everyone is experiencing, there is uncertainty around the potential impact of tariffs, not only on our business, but in the global economy. We are working closely with our suppliers, customers, and in-country trade experts to examine the range of potential outcomes and have developed strategic plans to account for varying scenarios.

正如每個人都經歷的那樣，關稅的潛在影響存在不確定性，不僅對我們的業務，而且對全球經濟也是如此。我們正在與供應商、客戶和國內貿易專家密切合作，研究各種潛在結果，並制定了應對各種情況的策略計劃。

Our current assumptions include existing tariff rates remaining in place, with the impact being felt in product gross margins for products shipped into the United States. As previously discussed, we do expect a 20% to 35% decline in our product costs as we roll out our new device portfolio in the second half of the year.

我們目前的假設包括現有的關稅稅率保持不變，其影響將體現在運往美國的產品的毛利率上。正如之前所討論的，隨著我們在今年下半年推出新的設備組合，我們預計產品成本將下降 20% 至 35%。

More importantly, driven by the resilience of our subscriptions and services business, we expect to achieve the full year financial outlook we gave last quarter, both on subscriptions and services revenue and margins, as well as total revenue and EPS. Further, our outlook for the second quarter assumes a continuation of current market conditions with ASPs across the industry continuing to decline.

更重要的是，在我們的訂閱和服務業務的強勁成長的推動下，我們預計將實現上個季度給出的全年財務展望，包括訂閱和服務收入和利潤率，以及總收入和每股盈餘。此外，我們對第二季的展望假設當前市場狀況將持續，整個產業的平均銷售價格將繼續下降。

We are expecting total revenue in the range of $119 million to $129 million and non-GAAP net income per dilutive share in the range of $0.11 to $0.17.

我們預計總收入將在 1.19 億美元至 1.29 億美元之間，非 GAAP 每股淨收益將在 0.11 美元至 0.17 美元之間。

Now, I will open it up for questions.

現在，我將開始回答大家的提問。

(Operator Instructions)

（操作員指示）

Jacob Stephan, Lake Street.

雅各‧史蒂芬 (Jacob Stephan)，湖街。

Hey guys, appreciate you taking my questions. Congrats on the quarter. Maybe just to start, I'll kind of ask the tariff question in a different way. Are you thinking about any sort of inventory stocking kind of ahead of July third from which my perspective is that tariffs will be reinstated on on Vietnam.

嘿夥計們，感謝你們回答我的問題。恭喜本季取得佳績。也許只是為了開始，我會以不同的方式詢問關稅問題。您是否考慮在 7 月 3 日之前進行任何形式的庫存儲備，我的觀點是，屆時將對越南恢復徵收關稅。

Well, we've been looking at our inventory levels for the past several months. If you look at actually how we ended up the first quarter, I think we did a fantastic job of sort of leveling out our inventory on our balance sheet, but actually pushing some of that inventory in the channel. And so now we're focused on making sure that between now and the first week of July we capitalize on the available time we have to have sufficient inventory tariff-free, or at least with a 10% tariff available for us to ship.

嗯，過去幾個月我們一直在關注我們的庫存水準。如果你看看我們第一季的實際表現，我認為我們在平衡資產負債表上的庫存方面做得非常出色，但實際上我們在通路中推動了部分庫存。因此，現在我們的重點是確保從現在到 7 月的第一周，我們能夠充分利用可用時間，擁有足夠的免稅庫存，或至少有 10% 的關稅可供我們運輸。

There's a whole host of different things that are going into that. Right now we're monitoring inventory levels almost weekly. We're in conversations with our suppliers on every evening and we feel like we've got a good plan to attack it, as we've indicated in our our remarks earlier. I mean we feel great that.

其中涉及大量不同的事情。目前我們幾乎每週都會監控庫存水準。我們每天晚上都會與供應商進行對話，我們覺得我們已經有一個很好的計劃來解決這個問題，正如我們之前在評論中所指出的那樣。我的意思是我們感覺很棒。

As a subscription and services business, the majority of our revenue coming from services as well as the revenue that is being generated through product that is shipped to the near are exempt from the tariffs. So we're in a pretty good position all in all. So, but yeah, it's top of mind for us, Jacob. We're constantly looking and working with our supply partners and in-country trade experts to ensure we're optimizing the situation to our to our advantage.

作為訂閱和服務業務，我們的大部分收入來自服務以及透過運送到附近的產品產生的收入均免徵關稅。所以整體來說我們處於非常有利的地位。所以，是的，這是我們最關心的問題，雅各。我們一直在尋找並與我們的供應合作夥伴和國內貿易專家合作，以確保我們能夠優化對我們有利的局面。

Awesome, and maybe just to go a little bit deeper on, what that means for kind of the second half, in the product refresh, do you.

太棒了，也許只是為了更深入地了解一下，這對於下半年的產品更新意味著什麼，你知道嗎？

Expect that you know the products will be, able to be shipped before kind of that July time frame or obviously I know that they're they're going to be a lower price to you but does that give you enough time or will you have to bear some of the tariffs on that?

預計您知道產品將能夠在 7 月之前發貨，或者顯然我知道它們會給您一個較低的價格，但這是否給您足夠的時間，或者您是否必須承擔部分關稅？

Yeah, so here's what we know. We're under, the 10% regime until July 8, actually, and then we expect, obviously a lot of discussions to happen. We know, as we do a lot of manufacturing in Vietnam, some in Indonesia.

是的，這就是我們所知道的。實際上，直到 7 月 8 日，我們都處於 10% 的製度之下，然後我們預計顯然會發生很多討論。我們知道，我們在越南做了很多製造業務，還有一些在印尼做。

Vietnam was actually working with the White House administration over the weekend, over this past weekend. And so I think what we're going to see, similar to what we actually saw announced with the UK this morning, I think the idea and the prevailing thought is that there's going to be deals done between now and the July time frame. So we really look at it in two different buckets. One is we're assuming we're going to stay under this 10% regime until July 8. It could be less than that, but what we've shown is we're able to execute with these tariffs and look at it as a small increase in cap.

上週末，越南實際上正在與白宮政府合作。因此，我認為我們將會看到類似於我們今天早上在英國宣布的協議，我認為現在和現在普遍的想法是，從現在到 7 月之間將會達成協議。所以我們其實是從兩個不同的角度來看這個問題。一是我們假設我們將維持這 10% 的製度直到 7 月 8 日。實際數字可能低於這個數字，但我們已經證明，我們能夠執行這些關稅，並將其視為上限的小幅增加。

With a focus on continuing to drive subscription and like I said in the prepared remarks, with LTV of $700 so being a services business insulates us from, the tariffs that will happen on our hardware business. And again, like we mentioned, it's less than 25% of our business being affected. Then I look at the second bucket, which is where your question is, which is what happens after July 8. Again, we think it's more likely than not there will be deals done with the areas that we do manufacturing. Those are underway. We don't know that. But if you couple that with the fact that our launch of these products, which most of them will not be produced before July 8, so most of the production for the holiday period will happen after July 8th, given that those have a 20% to 35% COGS reduction.

我們的重點是繼續推動訂閱，正如我在準備好的演講中所說的那樣，由於 LTV 為 700 美元，因此作為一家服務企業，我們可以免受硬體業務關稅的影響。再次強調，正如我們所提到的，受影響的業務不到 25%。然後我看第二個桶，這就是你的問題所在，也就是 7 月 8 日之後會發生什麼。再次，我們認為很有可能在我們進行製造的地區達成交易。這些正在進行中。我們不知道。但如果再加上我們推出這些產品的事實，其中大多數產品不會在 7 月 8 日之前生產，那麼假期期間的大部分生產將在 7 月 8 日之後進行，因為這些產品的 COGS 減少了 20% 到 35%。

What it means is maybe some of the ASPs you would see in the second half might not be as low as we were planning, but still pretty aggressive to drive the $300 million of ARR or service revenue that we want to hit before the end of the year. So I think we're in a really good spot that the launch of this product is perfectly timed for the holiday and it can absorb the tariff and or if tariffs deals come in lower than that 10% plus, 20% to 35%, we'll be able to actually drop ESPs and be more competitive in the market. So that's how we're looking at the situation today.

這意味著，您在下半年看到的一些 ASP 可能不會像我們計劃的那麼低，但仍然相當積極，可以推動我們在今年年底前達到的 3 億美元的 ARR 或服務收入。因此，我認為我們處於一個非常好的位置，這款產品的推出恰逢假期，它可以吸收關稅，或者如果關稅協議低於 10% 以上，20% 到 35%，我們將能夠真正降低 ESP 並在市場上更具競爭力。這就是我們今天看待局勢的方式。

There's a July 8 and before, and we think we're really well positioned. You saw our guidance on Q2, and we think service will continue to accelerate. In fact, we're starting to see some opportunities, as I mentioned in the channel, as some of our competitors who may be hardware only or more hardware focused or struggling to bring product in. And then there's the post July 8 where it's early, but we're modeling, a very similar tariff regime of what we're doing today knowing that we've got big cost declines coming, and I think we're going to be very competitive in the second half.

7 月 8 日或之前有活動，我們認為我們處於非常有利的位置。您看到了我們對第二季的指導，我們認為服務將繼續加速。事實上，正如我在頻道中提到的那樣，我們開始看到一些機會，因為我們的一些競爭對手可能只專注於硬件，或者更注重硬件，或者難以推出產品。然後是 7 月 8 日之後，雖然還為時過早，但我們正在模擬一個與我們今天非常相似的關稅制度，因為我們知道成本將大幅下降，我認為我們在下半年將非常有競爭力。

Okay, got it that's very helpful. Maybe if I could just ask one more quick one on the ad platform obviously it sounds like, that's about to be launched here, but maybe, for my interpretation it was going to be geared more towards advertisers and, kind of larger brands, but it sounds like it's it's going to be more promoting, upgrades and subscriptions, upgrade to products can you just kind of walk me through that a little bit?

好的，明白了，這非常有幫助。也許我可以再問一個關於廣告平台的快速問題，顯然聽起來它即將在這裡推出，但也許，根據我的理解，它將更多地面向廣告商和更大的品牌，但聽起來它將更多地推廣、升級和訂閱，升級到產品，你能稍微給我講一下嗎？

Yeah.

是的。

Yeah, so in our beta testing, as we talked about it last year when we said we'd go into beta testing in Q1. Obviously, we tested third party ads and we actually tested our own what we call house ads, so ads for the services and maybe discounts on hardware for Arlo, and we actually saw a really strong reaction conversion and click through on the Arlo ads. So what we're doing in phase one is we're going to roll out and actually started on May first, so we've already rolled the ad platform out and we're going to specific cohorts and we're starting to pitch Arlo services.

是的，在我們的 Beta 測試中，正如我們去年所說的那樣，我們將在第一季進行 Beta 測試。顯然，我們測試了第三方廣告，實際上我們也測試了我們自己的所謂的內部廣告，也就是針對服務的廣告，也許是 Arlo 硬體的折扣，我們實際上看到了 Arlo 廣告的強烈反應轉換和點擊率。因此，我們在第一階段所做的就是推出並實際於 5 月 1 日開始，因此我們已經推出了廣告平台，我們將針對特定群體，開始推銷 Arlo 服務。

Phase 2 could be opened up to third party, but I think the return on investment and what we saw in the beta testing as far as list on conversion.

階段 2 可能會向第三方開放，但我認為投資回報以及我們在 Beta 測試中看到的轉換清單。

Was strong enough that we think the right first step for this ad platform is actually to advertise our own services and hardware to the, active users that we have across the world.

我們認為，這個廣告平台的正確第一步實際上是向全球活躍用戶宣傳我們自己的服務和硬體。

Okay, well I appreciate it. Good luck going forward here guys.

好的，我很感激。祝大家未來一切順利。

Thank you.

謝謝。

Logan Katzman, Raymond James.

羅根卡茲曼、雷蒙詹姆斯。

Hey guys, thanks for taking our question. This is Logan on for Adam. Just want to start on the international side. Europe was a little bit weaker, down 30% year over year. Just wanted to see if you guys could touch on, a little bit more in a little bit more detail the drivers of that, and then I think you guys said that there was, still some Ver catch up, in your subs.

嘿夥計們，感謝你們回答我們的問題。這是洛根 (Logan) 代替亞當 (Adam)。只是想從國際面開始。歐洲稍弱一些，年減了 30%。只是想看看你們是否能更詳細地談談其中的驅動因素，然後我認為你們說過，在你們的字幕中仍然有一些 Ver 追趕。

Can you size that impact and then thoughts on when the very sure catch up, should be done.

您能否評估一下這種影響，然後思考何時才能真正趕上。

Yeah sure let me touch on the. The results from Verisure on the revenue. So you know with with Verisure there's a couple of things that are in play. First off is we've seen over the five years or so of our relationship that they kind of have a destocking stocking timeline associated with their their their ordering and supply chain. And if you go back in '20 the previous year, we were in more of a stocking coming into. 2025, so the inventory levels, I think, were a bit higher in 2024 as we came in the first quarter of 2025.

是的，當然讓我談談。Verisure 的收入結果。因此，您知道，使用 Verisure 時，有幾件事正在發揮作用。首先，我們在我們合作的五年左右的時間裡發現，他們有一個與他們的訂購和供應鏈相關的去庫存時間表。如果你回顧 20 世紀 20 年代的前一年，你會發現我們進入的時候情況更糟。 2025 年，所以我認為，隨著我們進入 2025 年第一季度，2024 年的庫存水準會略高一些。

So that was the first thing. The second thing is that Chinese New Year in this early 2025 was pulled forward. And so as a result of that we were working with their supply chain probably back in, I would say September October time frame to make sure that we were able to order the product and deliver it towards the end of Q4 so that they had enough going into.

這就是第一件事。第二件事是，2025 年年初的中國新年被提前了。因此，我們可能正在與他們的供應鏈合作，我想說是 9 月到 10 月的時間框架，以確保我們能夠訂購產品並在第四季度末交付，以便他們有足夠的投入。

The first quarter and didn't get jammed up on the accelerated timeline around Chinese New Year. And then the last thing is there was a regulatory guidance that came out regarding USB-C requirements in Europe. They required a switch over to make sure that, consumer electronics companies were normalizing the connector points for all of the.

第一季並沒有受到農曆新年期間加速時間表的影響。最後一點是，歐洲已經發布了有關 USB-C 要求的監管指南。他們需要進行切換以確保消費性電子公司能夠規範所有連接點。

Electronics out there and as a result of that particular changeover, we work with them to make sure that they had adequate inventory for purposes of their, the retail business and that was done again in Q4 which did impact Q1 of this year. But I would say to you the relationship is still very strong. The demand is very strong with them as it stands right now, and we're looking forward to having another good year with with Verasure in 2025.

電子產品市場，由於這一特殊的轉變，我們與他們合作，以確保他們有足夠的庫存用於零售業務，並且這項工作在第四季度再次完成，這確實對今年第一季產生了影響。但我想說的是，我們之間的關係仍然非常牢固。目前，它們的需求非常強勁，我們期待 2025 年與 Verasure 再創輝煌。

On the ketchup, just to answer the second part of your question on the ketchup, Kurt mentioned it in the prepared remarks. We had nearly 300,000 ads. If you back out the ketchup, we believe it was right in that 170 to 190 that we've been guiding the street. We think this is the last quarter of the ketchup. We don't often know we haven't seen anything pull through in the first five weeks of the quarter, but what we're seeing so far is batch processing that looks like it's the normal batch processing. A for ads that are going into their south region, which is the area that had the firmware issue that caused some of the stuff to have have the ketchup. So we did about 300,000. Nor would have been right between 170 and 190 right on plan, and we think this is the last quarter that we'll see that catch up effect.

關於番茄醬，我只想回答你關於番茄醬問題的第二部分，庫爾特在準備好的演講中提到了這一點。我們有近30萬則廣告。如果你放棄番茄醬，我們相信它就在我們一直引導的 170 到 190 之間。我們認為這是番茄醬的最後四分之一。我們通常不知道在本季度的前五週內我們沒有看到任何進展，但到目前為止我們看到的批次看起來像是正常的批次。A 代表進入其南部地區的廣告，該地區存在韌體問題，導致部分商品中含有番茄醬。所以我們做了大約30萬個。也不會按照計劃正好在 170 到 190 之間，我們認為這是我們將看到追趕效應的最後一個季度。

Great, thank you. That's super helpful, and then, this is the second quarter that product gross margin was negative, and understand that the new devices are coming in at a lower cost to produce, but at least until those come in, do you expect a negative gross margin, for product to hold? I understand you guys don't necessarily guide directly to it, but any high level thoughts, would be greatly appreciated.

太好了，謝謝。這非常有幫助，然後，這是第二季度產品毛利率為負，並且了解新設備的生產成本較低，但至少在這些設備上市之前，您是否預計產品的毛利率會為負？我知道你們不一定會直接指導這一點，但任何高層次的想法都會受到極大的讚賞。

Thank you.

謝謝。

Yeah, thanks for that question. I guess what I wanted to do is start with highlighting what happened with our combined gross margins. If you look at our combined gross margins, they actually grew quite nicely, quarter over quarter and year over year. If you look at quarter over quarter, we were up 800 basis points on our combined gross margins, and year over year we were up 600 basis points, even taking into consideration that Q4 and this Q1, we were slightly negative on the product gross margin.

是的，謝謝你的提問。我想先強調一下我們的綜合毛利率發生了什麼變化。如果你看一下我們的綜合毛利率，你會發現它其實是逐季、逐年成長的。如果按季度來看，我們的綜合毛利率上升了 800 個基點，而按年則上升了 600 個基點，即使考慮到第四季度和第一季度，我們的產品毛利率還是略為負值。

So I just emphasize that point because that is critical to understanding our strategy that we are comfortable using the device and the hardware as our cost of customer acquisition. And when we look at what's happening from whether it's a competitive dynamic or regulatory scenario, we still plan to use hardware as that customer acquisition tool.

所以我只是強調這一點，因為這對於理解我們的策略至關重要，我們樂於使用設備和硬體作為客戶獲取成本。當我們從競爭動態或監管情境來觀察正在發生的事情時，我們仍然計劃使用硬體作為客戶獲取工具。

So yes, we had negative gross margins in Q1. We'll evaluate the. Conditions to determine how we want to play out Q2 and frankly for the remainder of the year, but we're confident that we will show that our combined gross margins have the potential to continue to grow over time and we're pretty pleased by that because it shows kind of substantiates the overall effectiveness of our strategy that we're rolling out.

是的，我們第一季的毛利率為負。我們將進行評估。條件決定了我們如何度過第二季度以及坦率地說度過今年剩餘時間，但我們有信心，我們將證明我們的綜合毛利率有可能隨著時間的推移而繼續增長，我們對此感到非常高興，因為它證實了我們正在推出的戰略的整體有效性。

Understood thank you.

明白了謝謝。

Thank you.

謝謝。

(Operator Instructions)

（操作員指示）

Scott Searle, Roth Capital.

羅斯資本的斯科特·塞爾。

Hey.

嘿。

Good afternoon. Thanks for taking my questions. Nice job on the quarter. Hey, Kurt, just quickly to clarify your comments on product gross margins, it sounds like you get the 25% to 30% cost down on the 36 platforms that starts to ramp up.

午安.感謝您回答我的問題。本季表現不錯。嘿，Kurt，我只是想快速澄清一下你對產品毛利率的評論，聽起來你在開始增加的 36 個平台上的成本降低了 25% 到 30%。

So is the plan to continue to push with negative gross margins in the fourth quarter and into 2026 or to be determined on that front and Matt, just to clarify in terms of some of your comments in competitive landscape.

那麼，計劃是在第四季和 2026 年繼續推行負毛利率，還是在這方面有待確定？馬特，只是想澄清一下你在競爭格局上的一些評論。

And the impact on tariffs, what percentage of your competitors right now are really in that position of struggling with Chinese manufacturing and what kind of share shifts are you seeing, in the first several impacts first several weeks of impacts with that in line?

至於關稅的影響，目前有多少比例的競爭對手真正處於與中國製造業抗衡的境地，在最初幾週的影響下，您看到了什麼樣的份額變化？

Yeah, maybe I'll go first and then Kurt can comment back on the product was margin. Yeah, I would say pretty much every competitor you see in our segment is manufacturing in Asia. And the difference is, I mean, if you put China aside, the differences then country to country are relatively small. So I would say all of those companies that are not in China, they're in other areas of Asia doing manufacturing are in a similar boat, and I will tell you there are a couple, I won't name them, but there are a couple.

是的，也許我會先走，然後 Kurt 可以評論一下產品的利潤。是的，我想說，我們所在領域的幾乎所有競爭對手都在亞洲製造。我的意思是，如果把中國放在一邊，那麼各國之間的差異相對較小。所以我想說，所有不在中國、在亞洲其他地區進行製造的公司都面臨類似的情況，我會告訴你有幾家公司，我不會說出它們的名字，但確實有幾家。

That are that have relatively high volume that are in China obviously scrambling to get out because the tariff against China is actually so much higher than the others. I think the bigger impact is really is that competitor.

那些在中國數量相對較大的產品顯然爭相出口，因為針對中國的關稅實際上比其他國家高得多。我認為，真正的更大影響是競爭對手。

Do they have a robust and successful services business? To me that's a bigger difference because even in your question around product gross margin. Right, as Arlo, we're really a software and services business, right, subscription revenue business, and we use hardware as part of our cost of acquisition and acquisition of that customer, right? So it insulates us so much from what's happening in tariffs because it's just a little bit more ca, right? But we're still getting customers that are worth nearly $700 of long term value.

他們的服務業務是否強勁且成功？對我來說，這是一個更大的差異，因為即使在您關於產品毛利率的問題中。是的，作為 Arlo，我們實際上是一家軟體和服務公司，對吧，訂閱收入公司，我們將硬體作為收購成本和客戶收購的一部分，對吧？所以它使我們與關稅的影響相差甚遠，因為它只是稍微有點ca，對嗎？但我們仍然擁有價值近 700 美元的長期客戶。

So when I look at the market and the competitive set, what I can tell you is nearly 50% of the unit volume. It is likely to be hardware or hardware focused competitors and that's where we're seeing some of them start to falter, we're getting messages from our retail partners like, hey, do you guys have access inventory? We're we're believing we're not going to get the inventory from some of our other other vendors that are on the shelf. And in fact we've seen some POs that have come in early as an example.

因此，當我觀察市場和競爭對手時，我可以告訴你的是，單位產量接近 50%。這可能是硬體或專注於硬體的競爭對手，而我們看到其中一些競爭對手開始動搖，我們從零售合作夥伴那裡得到消息，例如，嘿，你們有庫存嗎？我們相信我們不會從其他一些供應商那裡獲得庫存。事實上，我們已經看到一些早期出現的採購訂單作為例子。

So I think we're seeing the of if you are a hardware company only, the tariffs hit you immediately. They go straight to the profitability of the company. They hit you completely on gross margin, which is your total gross margin as well, and it's really difficult to bring in product and be able to justify that in any way and still have any profitability of the company as a software services company, it's a small impact on our business and we think it's manageable. We're we're managing it through our strategy and obviously our services first. We're working very closely with our supply chain partners, to push some of the costs in there. We're optimizing in other ways and for us again, the way I see it is there may be, we don't know, but there may be a small increase in cap, our customer acquisition cost.

所以我認為，如果你只是一家硬體公司，關稅就會立即對你造成影響。它們直接影響到公司的獲利能力。它們完全影響你的毛利率，也就是你的總毛利率，而且很難引入產品，並且能夠以任何方式證明這一點，同時仍然保持公司作為軟體服務公司的盈利能力，這對我們的業務影響很小，我們認為這是可控的。我們首先透過我們的策略和我們的服務來管理它。我們正在與我們的供應鏈合作夥伴密切合作，以降低部分成本。我們正在以其他方式進行優化，對我們來說，我認為可能會有，我們不知道，但我們的客戶獲取成本可能會略有增加。

But I believe there's as much opportunity for us to stick the foot on the gas spill, capture share going forward, and actually exit the year on everything that we got at the beginning of the year from. Now you asked about our share. I can tell you that through Q1 and through the first five weeks of Q2, we have captured share nearly every week over week over week in all of our key accounts.

但我相信，我們同樣有機會控制天然氣外洩，在未來奪取市場份額，並在年底實現年初所取得的一切成果。現在您詢問我們的份額。我可以告訴你，透過第一季和第二季的前五週，我們幾乎每週都在所有主要客戶中佔據份額。

And so I think some of that was coming out with our Literature 5 and some of our pricing in Q1, which you can see was relatively aggressive. And then as we get into the tariff regime, I think we're better situated than most of our competitors and our expectation is we'll continue to capture share.

因此，我認為其中一些是在我們的文獻 5 中出現的，並且我們在第一季的一些定價是相對激進的。然後，當我們進入關稅制度時，我認為我們比大多數競爭對手處於更有利的地位，我們期望我們將繼續佔領市場份額。

Yes, Scott, and then in terms of the response on the product growth margin, let me just highlight that as we've mentioned in the past, our approach to the pricing on the product is more around driving POS, point of sale volume. And the whole concept there is we can continue to grow POS quarter after quarter. It means that we're filling our funnel with plenty of households, active households that we believe we can convert, and our conversion rates still are actually trending very favorably and that is a great thing. So what we're doing is using that.

是的，斯科特，然後就產品增長幅度的反應而言，讓我強調一下，正如我們過去提到的那樣，我們對產品定價的方法更多地是為了推動 POS，即銷售點的銷量。整個概念就是我們可以逐季度持續成長 POS。這意味著我們的管道中充滿了大量的家庭，我們相信這些活躍的家庭是可以轉化的，而且我們的轉換率實際上仍然呈現非常良好的趨勢，這是一件好事。所以我們正在做的就是利用這一點。

Pricing on the product and the margins associated with it as that lever or that tool to ensure that the funnel is full and giving us that opportunity to convert households. The great thing is we're proving out to everyone that even in those scenarios where product gross margins may go negative. It's okay because when you look at the growing margin on our services at 83% plus and you combine that with the product gross margins of where they are right now, the combined gross margins are accelerating very nicely and so we're extremely pleased with the way things have actually rolled out. Here the last couple of quarters and we tend to be very aggressive on our promotional planning and then in parallel with that we're going to do everything possible, as Matt mentioned, to roll out this 20% to 35% cost reduction on the bomb to help us with these regulatory matters as well as to be competitive with our promotions.

產品定價和與之相關的利潤率作為槓桿或工具，以確保漏斗充滿，並為我們提供轉換家庭的機會。最棒的是，我們正在向所有人證明，即使在產品毛利率可能為負的情況下。沒關係，因為當你看到我們服務的利潤率增長 83% 以上，並將其與當前的產品毛利率結合起來時，綜合毛利率正在加速增長，因此我們對事情的實際進展感到非常滿意。在過去的幾個季度中，我們傾向於非常積極地進行促銷計劃，與此同時，正如馬特所提到的那樣，我們將盡一切可能將炸彈成本降低 20% 至 35%，以幫助我們解決這些監管問題，並使我們的促銷活動具有競爭力。

Okay, thank you. And if I could just Matt on the pricing of Secure 6, I'm not sure if we heard it, but should we assume premium pricing on that, or will it just be monetized in other ways like ads and otherwise that you had been addressing and any thoughts on other strategic partners with insurance or some of the other categories there? What's what's going on? How do we expect that to roll out over the next couple of quarters? Thanks.

好的，謝謝。我能不能請 Matt 談談 Secure 6 的定價，我不確定我們是否聽說過，但我們是否應該假設它的溢價定價，或者它是否只是通過廣告等其他方式貨幣化，您一直在討論這一點，您對保險或其他類別的其他戰略合作夥伴有什麼想法？到底發生什麼事了？我們預計這項措施在接下來的幾季將如何實施？謝謝。

Yeah, good question. So we made the changes with Arlo Secure 5 where we launched the platform in late Q3, early Q4, and we started seeing ARU increase. We saw a mix up to premium plans. Then our second step was to change the structure of our plans. Now we did that in January and most of that fed through in February, so there's a partial impact. On the Q1 results we'll see a bigger impact as we go forward on the business, but that also is growing ARPU and mixing people up to the plans. The changes we made in January were planned because we knew Arlo Secure 6 was coming. So the plans that you see today and the pricing you see today. Where we've really reduced the plans to just two options, and they were the two most premium options that we had prior is really our secure secure six plans.

是的，好問題。因此，我們對 Arlo Secure 5 進行了改進，並在第三季末、第四季初推出了該平台，我們開始看到 ARU 增加。我們看到了混合的高級計劃。我們的第二步是改變計劃的結構。我們在一月就這麼做了，但大部分影響在二月就顯現出來了，所以產生了部分影響。隨著業務的推進，我們將看到第一季業績受到更大影響，但這也會增加 ARPU 並讓人們參與計劃。我們在一月份做出的改變都是有計劃的，因為我們知道 Arlo Secure 6 即將推出。因此，您今天看到的計劃和價格。我們實際上已將計劃精簡為僅兩個選項，它們是我們之前擁有的兩個最優質的選項，實際上是我們的安全六個計劃。

We just made that plan adjustment a quarter before rolling out. Now normally our Arlo Secure 6 would roll out in Q3 time frame. That's our normal timeframe kind of annualized time frame for rolling out our Secure 6. The testing and the development has gone so well, and I will tell you that the event scene descriptions and some of the more advanced AI capabilities are so strong from a user experience perspective we decided to actually roll them out early and so those are starting to roll out throughout May and we're excited to kind of tell that story and let users actually experience our secure 6 early. And then you'll see additional features actually roll out later in the year, but the plans that we had set in January were in anticipation of our Secure 6. So I think we're in a really good spot there. And what was the second part of the question?

我們在推出該計劃前一個季度就對其進行了調整。現在我們的 Arlo Secure 6 通常會在第三季推出。這是我們推出 Secure 6 的正常時間範圍，也就是年度時間範圍。測試和開發進展順利，我可以告訴你，從用戶體驗的角度來看，事件場景描述和一些更先進的人工智慧功能非常強大，我們決定提前推出它們，所以它們將在整個 5 月份開始推出，我們很高興能夠講述這個故事，讓用戶真正提前體驗到我們安全的 6。然後您會看到其他功能實際上在今年稍後推出，但我們在一月份制定的計劃是為了迎接我們的 Secure 6。所以我認為我們現在處於一個非常好的位置。那麼問題的第二部分是什麼呢？

Oh, just an update on insurance and strategic partners in that area. Oh.

哦，只是關於該地區的保險和戰略合作夥伴的最新消息。哦。

Partnerships, yeah, sorry, strategic accounts, yes, so they're progressing well, as I said on the last call that I think there's probably one or two that we're really focused on. I think one just missed the missed the finish line, and there's something we'll talk about relatively soon. And then I expect to have another one maybe in the second half. So and I believe these will be, sizable good partnerships that we're very excited about and ones that we've been in work for, six months plus. Those will come to fruition this year and have some impact, I believe this year in the second half, and then a material impact as we look at 2026.

合作夥伴關係，是的，抱歉，戰略客戶，是的，所以它們進展順利，正如我在上次電話會議上所說的那樣，我認為可能有一兩個是我們真正關注的。我認為有人剛剛錯過了終點線，我們很快就會談論一些事情。然後我預計也許下半年還會有另一個。所以我相信這將是相當大的良好合作夥伴關係，我們對此感到非常興奮，而且我們已經為此努力了六個多月。這些將在今年實現並產生一些影響，我相信是在今年下半年，然後在 2026 年產生實質影響。

Thanks so much.

非常感謝。

Hamed Khorsand, BWS Financial.

Hamed Khorsand，BWS Financial。

Hi, so I just wanted to understand, given the dynamics of what's happening on your RR line, is that the increase coming because you're selling, you raise prices, or is that coming because of a natural increase from the retail channel?

你好，所以我只是想了解一下，考慮到你們 RR 系列的動態，銷售成長是因為你們在銷售、提高價格，還是因為零售通路的自然成長？

Yeah, so if you're looking at ARPU, we're kind of, I think there's a couple of facts. So one, when we launched Arlo Secure 5 in late Q3 early Q4 of last year, we saw a mix to the more premium plans, and that started to bring our crew from roughly 11 and change over 12 and change. The and then the plan changes we made in January where we got rid of our basic plan and really just have plus and premium additionally is driving up AU as well. So I think some of it is the feature sets, the rollout of Arlo Secure 5, and we're looking to build on that momentum with Arlo Secure 6 and some of that is through all the data we collected post Arlo Secure 5, we've re-architected the plans and simplified the plans. And that's also driving our poo up. Now to give you the latest numbers, we, I said our the Secure 5 took us from roughly $11 to $12 and changed as we exited out.

是的，所以如果你看 ARPU，我們會發現，我認為有幾個事實。因此，當我們在去年第三季末第四季初推出 Arlo Secure 5 時，我們看到了更高級計劃的組合，這開始使我們的團隊人數從大約 11 人增加到 12 人。然後，我們在一月份對計劃進行了修改，取消了基本計劃，只提供升級版和高級版，這也提高了 AU。所以我認為其中一些是功能集，Arlo Secure 5 的推出，我們希望透過 Arlo Secure 6 延續這一勢頭，其中一些是透過我們在 Arlo Secure 5 之後收集的所有數據，我們重新設計了計劃並簡化了計劃。這也會導致我們的糞便上升。現在向你們提供最新的數據，我說我們的 Secure 5 將我們從大約 11 美元帶到了 12 美元，並且在我們退出時發生了變化。

We are now above 13, right, and actually I think headed towards $14 and I mentioned on the last call when we look at and just take a snapshot of new subscribers coming in fresh, the ARPU is closer to 17. So that's what gives us the confidence that Arlo will continue to expand through the year as we continue to roll out our Arlo Secure 6 and the new plan structure through 2025 going into 2026. So kind of 11 to 12 last year we're roughly at 1,350 around right now, and we think that will continue to expand going forward, driving not only service revenue but profitability.

我們現在已經超過了 13 美元，實際上我認為會朝著 14 美元的方向發展，我在上次電話會議上提到，當我們查看並拍攝新用戶的快照時，ARPU 接近 17。因此，我們有信心，隨著我們繼續推出 Arlo Secure 6 和新的計劃結構（從 2025 年到 2026 年），Arlo 將在今年繼續擴張。去年大約是 11 到 12 家，現在大約是 1,350 家，我們認為未來這個數字還將繼續擴大，不僅會推動服務收入，還會推動獲利能力。

Great thank you.

非常感謝。

(Operator Instructions)

（操作員指示）

Rian Bisson, Craig-Hallum Capital Group

克雷格-哈勒姆資本集團（Craig-Hallum Capital Group）的里安·比森（Rian Bisson）

Hey guys, it's Ryan on for Tony Stos. Most of my questions have been asked already, but I just wanted to, get an update, see what you guys are seeing now, it's good that, ours going up, service revenues are going up. What are you seeing in terms of churn and conversion rates? Any changes there, maybe even positively?

嘿，大家好，我是 Ryan，代替 Tony Stos。我的大部分問題已經被問過了，但我只是想了解一下最新情況，看看你們現在看到了什麼，這很好，我們的服務收入正在增加。就客戶流失率和轉換率而言，您看到了什麼？那裡有任何變化嗎？甚至是正面的改變嗎？

Yeah, great question. So we're seeing basically improvements or inline performance across all metrics. When we make changes in our service plans, now whether that's a structure change or a price increase, right, and our structure change was effectively a price increase, and that's what you're seeing pull through, often we'll see a spike in churn. And we did see a little spike in turn very similar to what we saw a year ago when we changed single plan pricing and two years ago when we did a larger plan price increase.

是的，很好的問題。因此，我們看到所有指標基本上都有所改善或內聯性能。當我們對服務計劃進行更改時，無論是結構變化還是價格上漲，對吧，我們的結構變化實際上就是價格上漲，這就是您所看到的，我們經常會看到客戶流失率激增。我們確實看到了小幅上漲，與一年前我們改變單一計劃定價時以及兩年前我們進行更大計劃價格上漲時看到的情況非常相似。

What I can tell you now is that that has actually returned to the norm and is continuing to improve. So the behavior we've seen through the plan changes is exactly as predicted. In fact, we have, a churn steering committee, an action group here, and we think we can actually improve it. Even more as we go forward, but churn is exactly where we wanted to return right back to baseline is continuing to improve. Conversion looks great across all the different cohorts. Service revenues going up. Arlo's going up, and you saw us also expand profitability on the service from a service gross margin perspective. So I would tell you ev1ery metric of our services business has a green light behind it, and we think it'll continue to improve through the year.

我現在可以告訴你的是，這種情況實際上已經恢復正常，並且正在繼續改善。因此，我們透過計劃變化所看到的行為與預測完全一致。事實上，我們有一個客戶流失指導委員會，一個行動小組，我們認為我們實際上可以改進它。隨著我們不斷前進，流失率也不斷提高，我們想要回到基準。所有不同群體的轉換率看起來都很棒。服務收入不斷增加。Arlo 的銷售量正在上升，從服務毛利率的角度來看，我們也擴大了服務的獲利能力。所以我想告訴你們，我們服務業務的每個指標都得到了綠燈亮起，而且我們認為它在今年會繼續改善。

All right, great. Thanks guys.

好的，太好了。謝謝大家。

And congrats on the results.

並對所取得的成果表示祝賀。

Thank you.

謝謝。

Thank you for your question. That concludes today's conference call. You may now disconnect your line.

感謝您的提問。今天的電話會議到此結束。現在您可以斷開線路了。