Shares of Arlo Technologies (NYSE:ARLO) have popped today, up by 8% as of 11:50 a.m. EDT, after the company reported first-quarter earnings results. The smart-home device maker easily beat expectations and issued strong guidance.
Revenue in the first quarter came in at $57.9 million, topping the consensus estimate that called for $50.4 million in sales. That all led to a non-GAAP net loss of $35.3 million, or $0.47 per share. Analysts had been modeling for Arlo to lose $0.50 per share on an adjusted basis. Non-GAAP gross margin was 4.7%, and service revenue grew 37% to $11.3 million during the quarter thanks to paid subscribers nearly doubling to approximately 174,000.
CEO Matthew McRae said in a statement:
I am proud that our team achieved our operational and financial objectives while continuing our innovation momentum. In Q1, we exceeded guidance for all metrics, delivered 89% paid subscriber growth year over year, and maintained our market leadership position. Importantly, we have made strong progress with our channel and continue to expect an upward trajectory in our revenue through the rest of the year.
In terms of guidance for the second quarter, Arlo expects revenue of $75 million to $80 million, well above analysts' expectation of $71.4 million in sales. Non-GAAP gross margin is forecast to be 10% to 13%, with a non-GAAP net loss of $0.40 to $0.44 per share. The midpoint of that bottom-line forecast is slightly ahead of the $0.43 per share in adjusted losses that analysts are expecting.
On the conference call, CFO Christine Gorjanc also reaffirmed Arlo's full-year 2019 guidance that was provided in February. The company's 2019 forecast calls for revenue of $380 million to $420 million and a non-GAAP operating loss of $95 million to $105 million.