Arlo Technologies, Inc.

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. At that time, if you have a question, you will need to press the star 1 on your push-button phone. I would now like to turn the conference over to Eric Bilen. Please go ahead, sir.

Thank you, operator. Good afternoon, and welcome to Arlo Technologies' fourth quarter and full year 2022 financial results conference call. Joining us from the company are Mr. Matthew McCray, CEO, and Mr. Kurt Bender, 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 fourth quarter and full year, along with guidance for the first quarter and full year provided by Kurt. We'll then have time for any questions. 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. 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, tax rates, expenses, cash outlook, guidance for the first quarter and full year 2023, transition to a service-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, continued new product and service differentiation, supply chain challenges, transportation costs, and the impact of the COVID-19 pandemic on our business, operating results, and financial conditions. Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more information, please refer to the risk factors discussed in Arlo's periodic filings with the SEC, including the most recent annual report on Form 10-K and quarterly report on Form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today, and Arlo undertakes no obligation to update these statements as a result of new information or future events. In addition, several non-GAAP financial measures will be 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.

Thank you, Eric, and thank you, everyone, for joining us today on Arlo's fourth quarter and full year 2022 earnings call. Despite softening consumer demand and tightening retail inventory levels, Arlo delivered a solid fourth quarter with both revenue and non-GAAP net loss per share above the high end of our guidance. Revenue was $118.5 million, which was down year over year, but non-GAAP gross profit rose 2% year over year. Our strong pace of subscriber growth continued with Arlo adding over 189,000 paid accounts in the quarter. This fueled our annual recurring revenue growth, which was up 53 percent year over year to $138 million, and non-GAAP service gross margin reached 70 percent, both records for Arlo.