On Nov. 5, Arlo Technologies (NYSE:ARLO) told investors that its security cameras are becoming a subscription business. That is mostly true. The harder question is whether the next leg of growth is as certain as management made it sound. Arlo sells cameras at a loss on purpose, then collects monthly fees at high margins. Subscription and services revenue hit a record $96.0 million, up 20%, and made up 64.4% of revenue, with non-GAAP services gross margin of 83.9%. GAAP, or Generally Accepted Accounting Principles, is the official accounting standard. Non-GAAP is management's adjusted version. Paid accounts reached 6.6 million, up 23%. That is a real, durable machine. The call's three claims, though, each come with a footnote.
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