Arlo (ARLO) 10-Q 27 Aug 18 2018 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jul. 01, 2018	Aug. 17, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	Arlo Technologies, Inc.
Entity Central Index Key	1,736,946
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jul. 1, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		74,247,250

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 133	$ 108
Accounts receivable, net	111,113	157,680
Inventories	123,195	82,952
Prepaid expenses and other current assets	6,573	3,018
Total current assets	241,014	243,758
Property and equipment, net	12,389	3,883
Intangibles, net	3,585	4,348
Goodwill	15,638	15,638
Other non-current assets	3,440	2,193
Total assets	276,066	269,820
Current liabilities:
Accounts payable	25,518	20,711
Deferred revenue	25,833	34,072
Accrued liabilities	96,486	76,097
Total current liabilities	147,837	130,880
Non-current deferred revenue	16,556	13,332
Non-current income taxes payable	230	189
Total liabilities	164,623	144,401
Commitments and contingencies (Note 8)
Equity:
Net parent investment	111,443	125,419
Total equity	111,443	125,419
Total liabilities and equity	$ 276,066	$ 269,820

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Income Statement [Abstract]
Revenue	$ 110,948	$ 79,194	$ 211,586	$ 140,997
Cost of revenue	82,654	62,482	154,239	107,932
Gross profit	28,294	16,712	57,347	33,065
Operating expenses:
Research and development	13,804	8,613	25,829	16,597
Sales and marketing	13,068	7,363	24,280	13,084
General and administrative	6,318	3,344	11,196	6,089
Separation expense	11,269	0	17,826	0
Total operating expenses	44,459	19,320	79,131	35,770
Loss from operations	(16,165)	(2,608)	(21,784)	(2,705)
Other income (expense), net	(1,369)	593	(794)	933
Loss before income taxes	(17,534)	(2,015)	(22,578)	(1,772)
Provision for income taxes	288	137	607	356
Net loss	$ (17,822)	$ (2,152)	$ (23,185)	$ (2,128)
Net loss per share:
Basic (in dollars per share)	$ (0.29)	$ (0.03)	$ (0.37)	$ (0.03)
Diluted (in dollars per share)	$ (0.29)	$ (0.03)	$ (0.37)	$ (0.03)
Weighted average shares used to compute net loss per share:
Basic (in shares)	62,500	62,500	62,500	62,500
Diluted (in shares)	62,500	62,500	62,500	62,500

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017
Cash flows from operating activities:
Net loss	$ (23,185)	$ (2,128)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,956	1,905
Stock-based compensation	1,899	1,352
Deferred income taxes	0	(132)
Changes in assets and liabilities:
Accounts receivable, net	47,395	4,322
Inventories	(40,620)	(22,610)
Prepaid expenses and other assets	(4,558)	461
Accounts payable	4,385	(8,511)
Deferred revenue	4,553	6,558
Accrued liabilities	5,396	2,731
Income taxes payable	41	488
Net cash used in operating activities	(2,738)	(15,564)
Cash flows from investing activities:
Purchases of property and equipment	(7,534)	(1,132)
Payments made in connection with business acquisition, net of cash acquired	0	(737)
Net cash used in investing activities	(7,534)	(1,869)
Cash flows from financing activities:
Net investment from parent	(10,297)	(17,254)
Net cash provided by financing activities	10,297	17,254
Net increase (decrease) in cash and cash equivalents	25	(179)
Cash and cash equivalents, at beginning of period	108	220
Cash and cash equivalents, at end of period	133	41
Non-cash investing activities:
Purchases and transfers of property and equipment	$ 2,166	$ 360

The Company and Basis of Presen

The Company and Basis of Presentation	6 Months Ended
	Jul. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Company and Basis of Presentation	The Company and Basis of Presentation The Company Arlo (“Arlo” or the “Company”) combines an intelligent cloud infrastructure and mobile app with a variety of smart connected devices that transform the way people experience the connected lifestyle. Its cloud-based platform creates a seamless, end-to-end connected lifestyle solution that provides users visibility, insight and a powerful means to help protect and connect with the people and things that matter most to them. Arlo enables users to monitor their environments and engage in real-time with their families and businesses from any location with a Wi-Fi or a cellular network internet connection. The Company conducts business across three geographic regions - Americas; Europe, Middle-East and Africa (“EMEA”); and Asia Pacific (“APAC”) - and primarily generates revenue by selling devices through retail channels, wholesale distribution and wireless carrier channels and paid subscription services through in-app purchases. On February 6, 2018, NETGEAR announced that its board of directors had unanimously approved the pursuit of a separation of its Arlo business from NETGEAR (the “Separation”) to be effected through an initial public offering (the “IPO”) of newly issued shares of the common stock of Arlo, then a wholly owned subsidiary of NETGEAR. Following a series of restructuring steps prior to the IPO of Arlo common stock, the Arlo business was transferred from NETGEAR to Arlo. On August 2, 2018, NETGEAR and Arlo announced the pricing of the IPO of 10,215,000 shares of Arlo’s common stock at a price to the public of $16.00 per share. The IPO closed on August 7, 2018. The underwriters exercised an option to purchase an additional 1,532,250 shares of Arlo’s common stock to cover over-allotments prior to the closing of the IPO. Total net proceeds of approximately $174.8 million were raised from the IPO after deducting underwriting discounts and commissions and before offering costs. Estimated offering costs amounted to approximately $7.4 million , a portion of which will be paid by NETGEAR. Arlo’s common stock is listed on the New York Stock Exchange under the ticker symbol “ARLO.” After the completion of the IPO, NETGEAR owns approximately 84.2% of the outstanding shares of Arlo’s common stock. Refer to Note 12, Subsequent Events , for details relating to the Company’s IPO and related transactions. NETGEAR has informed the Company that it currently intends, following the IPO and no earlier than the expiration or earlier termination of the 145-day lock-up period applicable to NETGEAR, to distribute the remaining shares of Arlo common stock held by NETGEAR to NETGEAR’s stockholders in a manner generally intended to qualify as tax-free to NETGEAR stockholders for U.S. federal income tax purposes (the “Distribution”). The Distribution is subject to market, tax and legal considerations, final approval by NETGEAR’s board of directors, and other customary requirements, and NETGEAR may abandon or change the structure of the Distribution if it determines, in its sole discretion, that the Distribution is not in the best interest of NETGEAR or its stockholders. Basis of Presentation The condensed combined financial statements of Arlo have been derived from the consolidated financial statements and accounting records of NETGEAR as if Arlo had operated on a stand-alone basis during the periods presented and were prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). Historically and during the periods presented, Arlo was reported as an operating segment within NETGEAR’s reportable segments and did not operate as a stand-alone company. Accordingly, NETGEAR historically reported the financial position and the related results of operations, cash flows, and changes in equity of Arlo as a component of NETGEAR’s consolidated financial statements. The condensed combined financial statements are presented as if Arlo had been carved out of NETGEAR for all periods presented. Prior to the completion of the IPO, certain assets and liabilities presented have been transferred to Arlo at carry-over (historical cost) basis. Arlo was historically funded as part of NETGEAR’s treasury program. Cash and cash equivalents were primarily centrally managed through bank accounts legally owned by NETGEAR. Accordingly, Cash and cash equivalents held by NETGEAR at the corporate level were not attributable to Arlo for any of the periods presented. Only cash amounts legally owned by entities dedicated to the Arlo business are reflected in the condensed combined balance sheets. Transfers of cash, both to and from NETGEAR’s treasury program, are reflected as a component of Net parent investment in the condensed combined balance sheets and as a financing activity on the accompanying condensed combined statements of cash flows. As the functional departments that make up Arlo were not historically held by a single legal entity, total Net parent investment is shown in lieu of equity in the condensed combined financial statements. Balances between Arlo and NETGEAR that were not historically cash settled are included in Net parent investment. Balances between Arlo and NETGEAR that were historically cash settled are included in Prepaid expenses and other current assets and Accrued liabilities on the condensed combined balance sheets. Net parent investment represents NETGEAR’s interest in the recorded assets of Arlo and represents the cumulative investment by NETGEAR in Arlo through the dates presented, inclusive of operating results. The operating results of Arlo have historically been disclosed as a reportable segment within the consolidated financial statements of NETGEAR enabling identification of directly attributable transactional information, functional departments, and headcount. The condensed combined balance sheets were primarily derived by reference to one, or a combination, of Arlo transaction-level information, functional department, or headcount. Revenue and Cost of revenue, with the exception of channel sales incentives, were derived from transactional information specific to Arlo products and services. Directly attributable operating expenses were derived from activities relating to Arlo functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from NETGEAR. The allocated costs for corporate functions included, but were not limited to, executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Arlo level. These costs were allocated on a basis of revenue, headcount, or other measures Arlo has determined as reasonable. Arlo employees also historically participated in NETGEAR’s stock-based incentive plans, in the form of restricted stock units (“RSUs”), stock options, and purchase rights issued pursuant to NETGEAR’s employee stock purchase plan. Stock-based compensation expense has been either directly reported by or allocated to Arlo based on the awards and terms previously granted to NETGEAR’s employees. The condensed combined statements of operations of the Company as presented reflect allocations of general corporate expenses from NETGEAR including expenses related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing, shared facilities and other shared services. These costs were allocated based on revenue, headcount, or other measures the Company has determined as reasonable. These allocations are primarily reflected within operating expenses in the condensed combined statements of operations. The amount of these allocations from NETGEAR was $16.8 million for the three months ended July 1, 2018, which included $5.1 million for research and development, $5.4 million for sales and marketing, and $6.3 million for general and administrative expense. Allocations amounted to $9.4 million for the three months ended July 2, 2017, which included $3.0 million for research and development, $3.0 million for sales and marketing, and $3.4 million for general and administrative expense. The amount of these allocations from NETGEAR was $30.6 million for the six months ended July 1, 2018, which included $9.4 million for research and development, $10.0 million for sales and marketing, and $11.2 million for general and administrative expense. Allocations amounted to $16.3 million for the six months ended July 2, 2017, which included $5.0 million for research and development, $5.2 million for sales and marketing, and $6.1 million for general and administrative expense. The management of Arlo believes the assumptions underlying the condensed combined financial statements, including the assumptions regarding the allocated expenses, reasonably reflect the utilization of services provided, or the benefit received by, Arlo during the periods presented. Nevertheless, the condensed combined financial statements may not be indicative of Arlo’s future performance and do not necessarily reflect Arlo's results of operations, financial position, and cash flows had Arlo been a stand-alone company during the periods presented. During the periods presented in the condensed combined financial statements, the operations of Arlo are included in the consolidated U.S. federal, and certain state and local and foreign income tax returns filed by NETGEAR, where applicable. Income tax expense and other income tax related information contained in the condensed combined financial statements are presented on a separate return basis as if Arlo had filed its own tax returns. The income taxes of Arlo as presented in the condensed combined financial statements may not be indicative of the income tax liabilities that Arlo will incur in the future. Additionally, certain tax attributes such as net operating losses or credit carryforwards are presented on a separate return basis, and accordingly, may differ in the future. In jurisdictions where Arlo has been included in the tax returns filed by NETGEAR, any income tax receivables resulting from the related income tax provisions have been reflected in the balance sheets within Net parent investment. These condensed combined financial statements and accompanying notes should be read in conjunction with the audited combined financial statements and accompanying notes for the year ended December 31, 2017 included in the prospectus filed with the SEC on August 6, 2018 (the “Prospectus”) pursuant to Rule 424(b) under the Securities Act of 1933, as amended. In the opinion of management, these condensed combined financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the condensed combined financial statements for interim periods. Fiscal periods The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31. Use of estimates The preparation of these condensed combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ materially from those estimates and operating results for the six months ended July 1, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018 or any future period.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies There have been no significant changes in the Company’s significant accounting policies from those disclosed in the Prospectus. Recent accounting pronouncements Emerging Growth Company Status As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, unless the Company otherwise irrevocably elects not to avail itself of this exemption. The Company did not make such an irrevocable election and chose to use this extended transition period under the JOBS Act. Thus, the effective dates discussed below reflect the delayed adoption dates applicable to private companies. Accounting Pronouncements Recently Adopted ASU 2014-09 In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). The revenue recognition requirements in Accounting Standards Codification Topic 605 (“ASC 605”), Revenue Recognition, is superseded by ASC 606. ASC 606 requires the recognition of revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance should be applied either retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application (modified retrospective method). The guidance is required to be adopted in the first fiscal quarter of 2019 and early adoption is permitted. On January 1, 2018, the Company adopted ASC 606 and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. Refer to Note 2, Revenue Recognition for further details. ASU 2016-16 In October 2016, the FASB issued ASU 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory” (Topic 740), which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. ASU 2016-16 is required to be adopted in the first fiscal quarter of 2019 with early adoption permitted. The Company elected to adopt the new standard on January 1, 2018 (when it became effective for public companies that are not emerging growth companies). There was no impact on the Company’s condensed combined financial position, results of operations, or cash flows as a result of the adoption. Accounting Pronouncements Not Yet Effective ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), which requires lessees to recognize on the balance sheets a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than 12 months. The liability will be equal to the present value of lease payments while the right-of-use asset will be based on the liability, subject to adjustment, such as for initial direct costs. In addition, ASU 2016-02 expands the disclosure requirements for lessees. Upon adoption, the Company will be required to record a lease asset and lease liability related to its operating leases. ASU 2016-02 will be applied using a modified retrospective transition method and is effective for the Company in the first fiscal quarter of 2020 (or the first fiscal quarter of 2019 should the Company cease to be classified as an EGC), with early adoption permitted. The Company does not expect to early adopt the new guidance. The Company has appointed a project team which is in the process of evaluating the impact the new standard will have on its condensed combined financial statements. The Company has identified the existing population of leases, including embedded leases, and is in the process of reviewing the identified lease contracts. In addition, the Company has selected lease accounting software to assist with the implementation. The Company expects to complete the impact assessment process by the end of fiscal year 2018 and to complete the adoption process, including adding procedures, implementing lease accounting software, and evaluating necessary disclosures, prior to the first fiscal quarter of 2019. ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. ASU 2016-13 is effective for the Company beginning in the first fiscal quarter of 2021 (or the first fiscal quarter of 2020 should the Company cease to be classified as an EGC), with early adoption permitted. The Company continues to assess the potential impact of the new guidance, but does not expect it to have a material impact on its financial position, results of operations, or cash flows. With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations, or cash flows.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jul. 01, 2018
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition Adoption of ASC 606 On January 1, 2018, the Company adopted ASC 606 and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of Net parent investment. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods (ASC 605). The adoption had an impact of ($3.1) million to the opening balance of Net parent investment. The adoption did not have a material impact to the nature and timing of the Company's revenues and cash flows. Refer to the tables below for the impacts of adopting ASC 606 on the Company’s balance sheet as of July 1, 2018 and statement of operations for the three and six months ended July 1, 2018. The majority of sales revenue continues to be recognized when control of the product transfers to a customer upon shipment or delivery. The primary impact of adopting ASC 606 relates to the establishment of liability estimates for channel rebates and discounts upon revenue recognition on the basis of customary business practice. Under ASC 606, the Company is required to account for rebates and discounts ahead of commitment date if customary business practice creates an implied expectation that such activities will occur in the future. The Company utilizes channel rebates and discounts to stimulate end user demand. Consequently, this change in guidance results in an adjustment to the statement of financial position to accelerate the recording of liabilities for yet to be committed channel marketing rebates and discounts upon adoption. Further, under ASC 606, deferred revenue balances are to be booked at an amount that reflects only the amounts expected to be received for future obligations. As such, an adjustment was made to allocate variable consideration to deferred revenue. Additionally, the balance sheet presentation of certain reserve balances previously shown net within Accounts receivable are now presented as refund liabilities within Accrued liabilities and deferrals for undelivered shipments with destination shipping terms are now removed from receivables and deferred revenue. The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed combined balance sheet for the fiscal year beginning January 1, 2018 as an adjustment to the opening balances: As of Adjustments As of December 31, January 1, (In thousands) Assets: Accounts receivable, net $ 157,680 $ 827 $ 158,507 Inventories $ 82,952 $ (377 ) $ 82,575 Other non-current assets $ 2,193 $ 244 $ 2,437 Liabilities: Accounts payable $ 20,711 $ (48 ) $ 20,663 Deferred revenue $ 34,072 $ (9,326 ) $ 24,746 Accrued liabilities $ 76,097 $ 13,370 $ 89,467 Non-current deferred revenue $ 13,332 $ (241 ) $ 13,091 Equity: Net parent investment $ 125,419 $ (3,061 ) $ 122,358 The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed combined balance sheet as of July 1, 2018: As reported Adjustments Balance without adoption of ASC 606 (In thousands) Assets Accounts receivable, net $ 111,113 $ (4,796 ) $ 106,317 Inventories $ 123,195 $ 347 $ 123,542 Other non-current assets $ 3,440 $ (280 ) $ 3,160 Liabilities: Accounts payable $ 25,518 $ 14 $ 25,532 Deferred revenue $ 25,833 $ 5,536 $ 31,369 Accrued liabilities $ 96,486 $ (16,422 ) $ 80,064 Non-current deferred revenue $ 16,556 $ 689 $ 17,245 Equity: Net parent investment $ 111,443 $ 5,454 $ 116,897 The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed combined statement of operations for the three and six months ended July 1, 2018: Three Months Ended Six Months Ended As reported Adjustments Balance without adoption of ASC 606 As reported Adjustments Balance without adoption of ASC 606 (In thousands) Revenue $ 110,948 $ 219 $ 111,167 $ 211,586 $ 2,459 $ 214,045 Cost of revenue $ 82,654 $ (37 ) $ 82,617 $ 154,239 $ 30 $ 154,269 Gross profit $ 28,294 $ 256 $ 28,550 $ 57,347 $ 2,429 $ 59,776 Provision for income taxes $ 288 $ 115 $ 403 $ 607 $ 36 $ 643 Net loss $ (17,822 ) $ 141 $ (17,681 ) $ (23,185 ) $ 2,393 $ (20,792 ) Revenue Recognition Accounting Policy Under ASC 606 Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of revenue comes from sales of hardware products to customers (retailers, distributors, and service providers). Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred goods. The Company sells subscription paid services to its end user customers where it provides customers access to its cloud services. Revenue for subscription sales is generally recognized on a ratable basis over the contract term, beginning on the date that the service is made available to the customers at the time of registration. The subscription contracts are generally 30 days or 12 months in length, billed in advance. All such service or support sales are typically recognized using an output measure of progress by looking at the time elapsed as the contracts generally provide the customer equal benefit throughout the contract period. In addition to selling paid subscriptions, the Company also sells services bundled with hardware products and accounts for these sales in line with the multiple performance obligations guidance. Revenue from all sales types is recognized at transaction price, the amount the Company expects to be entitled to in exchange for transferring goods or providing services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives, and price protection related to current period product revenue. The Company’s standard obligation to its direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. In determining estimates for future returns, management analyzes historical data, channel inventory levels, current economic trends, and changes in customer demand for the Company’s products. Sales incentives and price protection are determined based on a combination of the actual amounts committed and through estimating future expenditure based upon historical customary business practice. Typically variable consideration does not need to be constrained as estimates are based on predictive historical data or future commitments that are planned and controlled by the Company. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. Contracts with Multiple Performance Obligations Some of the Company’s contracts with customers contain multiple promised goods or services. Such contracts include hardware products with bundled services, various subscription services, and support. For these contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct. Performance obligations are determined to be considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The embedded software in most of the hardware products is not considered distinct and therefore the combined hardware and incidental software are treated as one performance obligation and recognized at the point in time when control of product transfers to the customer. Basic service that is included with certain hardware products is considered distinct and therefore the hardware and service are treated as separate performance obligations. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are generally determined based on the prices charged to customers or using an adjusted market assessment. For the Company, standalone selling price of the hardware is directly observable from add-on camera and base station sales. Standalone selling price of the service is estimated using an adjusted market approach. Revenue is then recognized for each distinct performance obligation as control is transferred to the customer. For the Company, the revenue attributable to hardware is recognized at shipping or delivery at the time control of the product transfers to the customer. The transaction price allocated to the service is recognized over the estimated useful life of the hardware, beginning when the customer is expected to activate their account. Useful life of the hardware is determined by industry norms, frequency of new model releases, and user history. Warranties Sales of hardware products regularly include warranties to end customers that cover bug fixes, minor updates such that the product continues to function according to published specifications in a dynamic environment, and phone support. These standard warranties are assurance type warranties and do not offer any services in addition to the assurance that the product will continue working as specified for one or more years. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, the expected cost of warranties is accrued as an expense in accordance with authoritative guidance. Shipping and Handling Shipping and handling fees billed to customers are included in Revenue. Shipping and handling costs associated with inbound freight are included in Cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in Revenue. Shipping and handling costs associated with outbound freight are included in Sales and marketing expenses. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with outbound freight totaled $0.9 million and $0.6 million for the three months ended July 1, 2018 and July 2, 2017, respectively, and $1.8 million and $1.1 million for the six months ended July 1, 2018 and July 2, 2017 , respectively. Transaction Price Allocated to the Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods and services for which customer purchase orders have been accepted and that are scheduled or in the process of being scheduled for shipment. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of July 1, 2018: 1 year 2 years Greater than 2 years Total (In thousands) Performance obligations $ 37,738 $ 10,194 $ 6,691 $ 54,623 Contract Costs Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. If the incremental costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. Deferred commissions are classified as non-current based on the original amortization period of over one year. As of July 1, 2018, deferred commissions were not significant. Contract Balances The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are classified as Deferred revenue on the condensed combined balance sheets. Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer. The following table reflects the changes in contract balances for the six months ended July 1, 2018: Balance Sheet Location July 1, 2018 January 1, 2018 (*) $ change % change (In thousands) Accounts receivable, net Accounts receivable, net $ 111,113 $ 158,507 $ (47,394 ) (29.9 )% Contract liabilities - current Deferred revenue $ 25,833 $ 24,746 $ 1,087 4.4 % Contract liabilities - non-current Non-current deferred revenue $ 16,556 $ 13,091 $ 3,465 26.5 % _________________________ * Includes the adjustments made to those contracts which were not completed at the date of ASC 606 adoption using the modified retrospective method. For the six months ended July 1, 2018, contract liabilities increased primarily as a result of increased sales of products containing multiple performance obligations, where cash payments are received or due in advance of satisfying the service related performance obligation. For the six months ended July 1, 2018, $22.1 million of revenue was deferred due to unsatisfied performance obligations, primarily relating to over time service revenue and $17.5 million of revenue was recognized for the satisfaction of performance obligations over time. $14.0 million of this recognized revenue was included in the contract liability balance at the beginning of the period. There were no significant changes in estimates during the period that would affect the contract balances. Disaggregation of Revenue The Company conducts business across three geographic regions: Americas, EMEA, and APAC. Sales and usage-based taxes are excluded from revenue. Refer to Note 10, Segment and Geographic Information , for revenue by geography.

Business Acquisition

Business Acquisition	6 Months Ended
	Jul. 01, 2018
Business Combinations [Abstract]
Business Acquisition	Business Acquisition Placemeter, Inc. On November 30, 2016 , the Company acquired Placemeter, a computer vision analytics company, for total purchase consideration of $9.6 million . The Company believes that Placemeter’s engineering talent will add substantial value to the Arlo smart security team, and that Placemeter’s proprietary computer vision algorithms will help to build leading video analytics solutions for the Arlo platform. The Company paid $8.8 million of the aggregate purchase price in the fourth fiscal quarter of 2016 and paid the remaining $0.8 million in the first fiscal quarter of 2017. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The allocation of the purchase price was as follows (in thousands): Cash and cash equivalents $ 8 Accounts receivable 11 Prepaid expenses and other current assets 130 Property and equipment 83 Intangibles 6,000 Goodwill 3,742 Accounts payable (40 ) Accrued liabilities (74 ) Deferred tax liabilities (308 ) Total purchase price $ 9,552 The $3.7 million of goodwill recorded on the acquisition of Placemeter is not deductible for U.S. federal or U.S. state income tax purposes. The goodwill recognized is primarily attributable to expected synergies resulting from the acquisition. In connection with the acquisition, the Company recorded $0.3 million of deferred tax liabilities net of deferred tax assets. The deferred tax liabilities were recorded for the book basis of intangible assets for which the Company has no tax basis. The deferred tax liabilities are reduced by the tax benefit of the net operating losses as of the date of the acquisition after consideration of limitations on their use under U.S. Internal Revenue Code section 382. The Company designated $5.5 million of the acquired intangibles as software technology and a further $0.2 million of the acquired intangibles as a video library database. The valuations were derived using the replacement cost method, with consideration given to the estimated time, investment and resources required to recreate the acquired intangibles. A discount rate of 15.0% was used in the valuation of each intangible. The acquired intangibles are being amortized over an estimated useful life of four years . The Company designated $0.3 million of the acquired intangibles as non-compete agreements. The value was calculated based on the present value of the future estimated cash flows derived from projections of future operations attributable to the non-compete agreements and discounted at 20.0% . The acquired agreements are being amortized over an estimated useful life of three years . Pro forma financial information The unaudited pro forma financial information in the table below summarizes the combined results of the Company’s operations and those of Placemeter for the periods shown as though the acquisition of Placemeter occurred as of January 1, 2016. The pro forma financial information for the periods presented includes the accounting effects of the business combination, including adjustments to acquisition-related costs, integration expenses and related tax effects of these adjustments, where applicable. This pro forma financial data is for informational purposes only, is subject to a number of estimates, assumptions and other uncertainties, and may not be indicative of the results of operations that would have been achieved if the acquisition had taken place at January 1, 2016. The unaudited pro forma financial information is as follows (in thousands): Year Ended December 31, 2016 Revenue $ 184,744 Net loss (18,258 )

Balance Sheet Components

Balance Sheet Components	6 Months Ended
	Jul. 01, 2018
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Balance Sheet Components Accounts receivable, net As of July 1, December 31, (In thousands) Gross accounts receivable $ 111,320 $ 164,157 Allowance for doubtful accounts (207 ) (207 ) Allowance for sales returns — * (5,868 ) Allowance for price protection — * (402 ) Total allowances (207 ) (6,477 ) Total accounts receivable, net $ 111,113 $ 157,680 _________________________ * Upon adoption of ASC 606, allowances for sales returns and price protection were reclassified to current liabilities as these reserve balances are considered refund liabilities. Refer to Note 3. Revenue Recognition , for additional information on the adoption impact. Property and equipment, net The condensed combined balance sheets include the property and equipment specifically identifiable to Arlo’s business. The components of property and equipment are as follows: As of July 1, December 31, (In thousands) Machinery and equipment $ 8,290 $ 6,067 Computer equipment 4,798 50 Software 2,791 180 Leasehold improvements 548 530 Furniture and fixtures 408 443 Total property and equipment, gross 16,835 7,270 Accumulated depreciation and amortization (4,446 ) (3,387 ) Total property and equipment, net $ 12,389 $ 3,883 Depreciation and amortization expense pertaining to property and equipment was $0.7 million and $1.2 million for the three and six months ended July 1, 2018 and $0.4 million and $0.8 million for the three and six months ended July 2, 2017 . Allocated depreciation expense from NETGEAR was $0.5 million and $1.2 million for the three and six months ended July 1, 2018 and $0.5 million and $0.9 million for the three and six months ended July 2, 2017 . The condensed combined statements of operations include both the depreciation expense directly identifiable as Arlo’s and allocated depreciation expense from NETGEAR. Refer to Note 1, The Company and Basis of Presentation , for detailed disclosures regarding the methodology used for corporate expense allocation. Intangibles, net As of July 1, 2018 As of December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 9,800 $ (6,477 ) $ 3,323 $ 9,800 $ (5,790 ) $ 4,010 Customer contracts and relationships 1,400 (1,400 ) — 1,400 (1,400 ) — Other 800 (538 ) 262 800 (462 ) 338 Total intangibles, net $ 12,000 $ (8,415 ) $ 3,585 $ 12,000 $ (7,652 ) $ 4,348 As of July 1, 2018 , the remaining weighted-average estimated useful life of intangibles was two years. Amortization of intangibles was $0.4 million and $0.8 million for the three and six months ended July 1, 2018 and $0.6 million and $1.2 million for the three and six months ended July 2, 2017 . As of July 1, 2018 , estimated amortization expense related to finite-lived intangibles for the remaining years was as follows (in thousands): 2018 (remaining six months) $ 762 2019 1,517 2020 1,306 Total estimated amortization expense $ 3,585 Goodwill In the year ended December 31, 2016, the Company acquired Placemeter. Refer to Note 4, Business Acquisition , for detailed disclosures. There was no change in the carrying amount of goodwill during the six months ended July 1, 2018 and the goodwill as of December 31, 2017 and July 1, 2018 was as follows (in thousands): As of December 31, 2017 $ 15,638 As of July 1, 2018 $ 15,638 Other non-current assets As of July 1, December 31, 2017 (In thousands) Non-current deferred income taxes $ 1,109 $ 865 Other 2,331 1,328 Total other non-current assets $ 3,440 $ 2,193 Accrued liabilities As of July 1, December 31, (In thousands) Sales and marketing $ 39,230 $ 31,613 Warranty obligation 3,487 * 31,756 Sales returns 26,581 * — Freight 2,704 3,862 Accrued employee compensation 6,038 3,184 Other 18,446 5,682 Total accrued liabilities $ 96,486 $ 76,097 _________________________ * Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return.

Net Income Per Share

Net Income Per Share	6 Months Ended
	Jul. 01, 2018
Earnings Per Share [Abstract]
Net Income Per Share	Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. The weighted average number of shares outstanding for the basic and diluted net income (loss) per share for the period is based on the number of shares of Arlo common stock outstanding on August 2, 2018, the effective date of the registration statement relating to the IPO (the “IPO Registration Statement”). On that date, the Company issued 62,499,000 shares of common stock to the Company’s sole stockholder of record, NETGEAR (after which NETGEAR held 62,500,000 shares of common stock, which represented all of the then issued and outstanding common stock). Potentially dilutive common shares, such as common shares issuable upon exercise of stock options, vesting of restricted stock awards, and issuances of shares under the Company’s 2018 Employee Stock Purchase Plan (the “2018 ESPP”) are typically reflected in the computation of diluted net income (loss) per share by application of the treasury stock method. For all periods presented, due to the net losses reported, these potentially dilutive securities were excluded from the computation of diluted net loss per share, since their effect would be anti-dilutive. Net loss per share for the three and six months ended July 1, 2018 and July 2, 2017 were as follows: Three Months Ended Six Months Ended July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 (In thousands, except per share data) Numerator: Net loss $ (17,822 ) $ (2,152 ) $ (23,185 ) $ (2,128 ) Denominator: Weighted average common shares - basic 62,500 62,500 62,500 62,500 Weighted average common shares - dilutive 62,500 62,500 62,500 62,500 Basic net loss per share $ (0.29 ) $ (0.03 ) $ (0.37 ) $ (0.03 ) Diluted net loss per share $ (0.29 ) $ (0.03 ) $ (0.37 ) $ (0.03 )

Income Taxes

Income Taxes	6 Months Ended
	Jul. 01, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The income tax provision for the three and six months ended July 1, 2018 , was $0.3 million , or an effective tax rate of (1.6)% , and $0.6 million , or an effective tax rate of (2.7)% , respectively. The income tax provision for the three and six months ended July 2, 2017 , was $0.1 million , or an effective tax rate of (6.8)% , and $0.4 million , or an effective tax rate of (20.1)% , respectively. During the three and six months ended July 1, 2018, the Company sustained higher book losses than the same periods in the prior year. Consistent with the prior year, the Company is unable to record tax benefit on these losses because of uncertainty of future profitability. The increase in tax expense for the three and six months ended July 1, 2018, compared to the three and six months ended July 2, 2017, resulted primarily from increased profits in various foreign jurisdictions. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act reduced the U.S. statutory rate from 35% to 21% effective as of January 1, 2018. In addition, certain new complex tax rules related to the taxation of foreign earnings (Global Intangible Low-Taxed Income, Foreign Derived Intangible Income and Base Erosion and Anti-abuse Tax) became effective as of January 1, 2018. The Company does not anticipate an increase in tax expense from the Tax Act during the current period due to current year losses and loss carryforwards, previously subject to a valuation allowance, that can offset this income. In addition to the corporate tax rate decrease, the changes resulting from Tax Act include, but are not limited to, the transition of U.S. international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings. The Company has calculated an estimate of the impact of the Tax Act in its year-end income tax provision in accordance with its understanding of the Tax Act and available guidance. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, the Company has determined that its computation of the transition tax on the mandatory deemed repatriation of foreign earnings was a reasonable provisional estimate at December 31, 2017. As further guidance is issued by Treasury, the Company may refine its computations to ensure earnings as required by the calculations are properly determined. Based on information available, the Company also reflected a provisional estimate of $2.9 million related to the transitional tax that was fully offset with tax attributes and therefore did not result in an income tax expense. The amounts reported as of December 31, 2017 are provisional based on the uncertainty discussed above. As the Company completes its analysis and prepares necessary data, and interprets any additional guidance, the Company will adjust its calculations and provisional amounts that the Company has recorded in its tax provision. Any such adjustments may materially impact the Company’s provision for income taxes in its financial statements. Additionally, as a result of the Tax Act, the Company has not completed its evaluation of its indefinite reinvestment assertion with regard to foreign earnings under ASC 740-30. As a result, deferred tax liabilities are provisional and may be increased or decreased during the period allowed under SAB 118. Any subsequent adjustment to any of these amounts will be recorded to tax expense or offset by available tax attributes during the measurement period provided under SAB 118. Further, no estimate can currently be made and no provisional amounts were recorded in the financial statements for the impact of the Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Act. The GILTI provision imposes taxes on foreign earnings in excess of a deemed return on tangible assets. This tax is effective for the Company after the end of the current fiscal year. However, the Company is evaluating whether deferred taxes should be recorded in relation to the GILTI provisions or if the tax should be recorded in the period in which it occurs. The Company may choose either method as an accounting policy election. The Company has not yet decided on the accounting policy related to GILTI and will only do so after completion of an analysis. If the Company decides to adopt an accounting policy to treat GILTI as a deferred adjustment the amounts will be recorded through deferred tax expense.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 01, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Leases In June 2018, the Company entered into several office lease agreements under non-cancelable operating leases with various expiration dates through December 2028 . The terms of certain of the Company’s facility leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. Purchase Obligations The Company has entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date. Orders are non-cancelable within 30 days prior to the expected shipment date. As of July 1, 2018 , the Company had approximately $46.7 million in non-cancelable purchase commitments with suppliers, respectively. The Company establishes a loss liability for all products it does not expect to sell for which it has committed purchases from suppliers. Such losses have not been material to date. From time to time the Company’s suppliers procure unique complex components on the Company’s behalf. If these components do not meet specified technical criteria or are defective, the Company should not be obligated to purchase the materials. Warranty Obligations Changes in the Company’s warranty liability, which is included in Accrued liabilities in the condensed combined balance sheets, were as follows: Three Months Ended Six Months Ended July 1, July 2, July 1, July 2, (In thousands) Balance at the beginning of the period $ 3,487 $ 17,600 $ 31,756 $ 15,949 Reclassified to sales returns upon adoption of ASC 606 — — (28,713 ) * — Provision for warranty obligation made during the period 189 10,857 822 20,184 Settlements made during the period (189 ) (10,457 ) (378 ) (18,133 ) Balance at the end of the period $ 3,487 $ 18,000 $ 3,487 $ 18,000 ________________________ * Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return. Legal Proceedings The Company is and, from time to time, may become, involved in legal proceedings or be subject to claims arising in the ordinary course of its business. The Company is not presently a party to any legal proceedings that in the opinion of its management, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows. Indemnification of Directors and Officers The Company, as permitted under Delaware law and in accordance with its bylaws, has agreed to indemnify its officers and directors for certain events or occurrences, subject to certain conditions, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that will enable it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the fair value of each indemnification agreement will be minimal. The Company had no liabilities recorded for these agreements as of July 1, 2018 . Indemnifications Prior to the Separation, the Company historically participated in NETGEAR’s sales agreements. In its sales agreements, NETGEAR typically agrees to indemnify its direct customers, distributors and resellers (the “Indemnified Parties”) for any expenses or liability resulting from claimed infringements by NETGEAR’s products of patents, trademarks or copyrights of third parties that are asserted against the Indemnified Parties, subject to customary carve-outs. The terms of these indemnification agreements are generally perpetual after execution of the agreement. The maximum amount of potential future indemnification is generally unlimited. From time to time, the Company receives requests for indemnity and may choose to assume the defense of such litigation asserted against the Indemnified Parties. The Company had no liabilities recorded for these agreements as of July 1, 2018 . In connection with the Separation, and after July 1, 2018, certain sales agreements were transferred to the Company, and the Company has replaced certain shared contracts, which include similar indemnification terms. In addition, pursuant to the master separation agreement and certain other agreements entered into with NETGEAR in connection with the Separation and the IPO, NETGEAR has agreed to indemnify the Company for certain liabilities. The master separation agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of its business with the Company and financial responsibility for the obligations and liabilities of NETGEAR’s business with NETGEAR. Under the intellectual property rights cross-license agreement entered into between the Company and NETGEAR, each party, in its capacity as a licensee, indemnifies the other party, in its capacity as a licensor, and its directors, officers, agents, successors and subsidiaries against any losses suffered by such indemnified party as a result of the indemnifying party’s practice of the intellectual property licensed to such indemnifying party under the intellectual property rights cross-license agreement. Also, under the tax matters agreement entered into between the Company and NETGEAR, each party is liable for, and indemnifies the other party and its subsidiaries from and against any liability for, taxes that are allocated to the indemnifying party under the tax matters agreement. In addition, the Company has agreed in the tax matters agreement that each party will generally be responsible for any taxes and related amounts imposed on it or NETGEAR as a result of the failure of the Distribution, together with certain related transactions, to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) and certain other relevant provisions of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant representations or covenants made by that party in the tax matters agreement. The transition services agreement generally provides that the applicable service recipient indemnifies the applicable service provider for liabilities that such service provider incurs arising from the provision of services other than liabilities arising from such service provider’s gross negligence, bad faith or willful misconduct or material breach of the transition services agreement, and that the applicable service provider indemnifies the applicable service recipient for liabilities that such service recipient incurs arising from such service provider’s gross negligence, bad faith or willful misconduct or material breach of the transition services agreement. Pursuant to the registration rights agreement, the Company has agreed to indemnify NETGEAR and its subsidiaries that hold registrable securities (and their directors, officers, agents and, if applicable, each other person who controls such holder under Section 15 of the Securities Act) registering shares pursuant to the registration rights agreement against certain losses, expenses and liabilities under the Securities Act, common law or otherwise. NETGEAR and its subsidiaries that hold registrable securities similarly indemnify the Company but such indemnification will be limited to an amount equal to the net proceeds received by such holder under the sale of registrable securities giving rise to the indemnification obligation. Refer to Note 12, Subsequent Events , for details relating to the Company’s IPO and related transactions. Employment Agreements NETGEAR has signed various employment agreements with the Company’s key executives pursuant to which, if their employment is terminated without cause, such employees are entitled to receive their base salary (and commission or bonus, as applicable) for up to 26 weeks. Such employees will also continue to have equity awards vest for up to a one -year period following such termination without cause. If a termination without cause or resignation for good reason occurs within one year of a change in control, certain key employees are entitled to up to two years acceleration of any unvested portion of his or her equity awards. The Company had no liabilities recorded for these agreements as of July 1, 2018 . In connection with the completion of the IPO, the Company entered into executive confirmatory employment offer letters and change in control and severance agreements with each of the Company’s key executives, which superseded and replaced any employment arrangements that such executives had previously entered into with NETGEAR. Refer to Note 12, Subsequent Events , for details relating to the Company’s IPO and related transactions. Environmental Regulation The Company is required to comply and is currently in compliance with the European Union (“EU”) and other Directives on the Restrictions of the use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”), Waste Electrical and Electronic Equipment (“WEEE”) requirements, Energy Using Product (“EuP”) requirements, the REACH Regulation, Packaging Directive and the Battery Directive. The Company is subject to various federal, state, local, and foreign environmental laws and regulations, including those governing the use, discharge, and disposal of hazardous substances in the ordinary course of its manufacturing process. The Company believes that its current manufacturing and other operations comply in all material respects with applicable environmental laws and regulations; however, it is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create an environmental liability with respect to its facilities, operations, or products.

Employee Benefit Plans

Employee Benefit Plans	6 Months Ended
	Jul. 01, 2018
Employee Benefits and Share-based Compensation, Noncash [Abstract]
Employee Benefit Plans	Employee Benefit Plans The Company’s employees have historically participated in NETGEAR’s various stock-based plans, which are described below and represent the portion of NETGEAR’s stock-based plans in which Arlo employees participated as of July 1, 2018. The Company’s condensed combined statements of income reflect compensation expense for these stock-based plans associated with the portion of NETGEAR’s plans in which Arlo employees participated. All references to shares in the tables below refer to shares of NETGEAR’s common stock and all references to stock prices in the tables below refer to the price of a share of NETGEAR’s common stock. On August 1, 2018, the Company reserved a total sum of (1) 7,500,000 shares of its common stock for issuance and (2) the number of shares of its common stock that may be issuable upon exercise or vesting of awards relating to NETGEAR common stock that may be converted into awards relating to the Company’s common stock upon the completion of the Distribution for issuance under the Company’s 2018 Equity Incentive Plan (the “2018 Equity Plan”) and 1,500,000 shares of its common stock for issuance under the 2018 ESPP, as applicable. Refer to Note 12, Subsequent Events , for details relating to the Company’s IPO and related transactions. 2003 Stock Plan The 2003 Stock Plan (the “2003 Plan”) was adopted by NETGEAR in April 2003 and provided for the granting of stock options to employees and consultants. The 2003 Plan expired in 2013 and outstanding awards under this plan remain subject to the terms and conditions of the 2003 Plan. 2006 Long-Term Incentive Plan The 2006 Long-Term Incentive Plan (the “2006 Plan”) was adopted by NETGEAR in April 2006 and provided for the granting of stock options, stock appreciation rights, restricted stock, performance awards and other stock awards, to eligible directors, employees and consultants. The 2006 Plan expired in 2016 by its terms. Outstanding awards under the 2006 Plan remain subject to the terms and conditions of the 2006 Plan. 2016 Equity Incentive Plan The 2016 Equity Incentive Plan (the “2016 Plan”) was adopted by NETGEAR in April 2016. The 2016 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible directors, employees and consultants. Award vesting periods for this plan are generally four years . Nonstatutory stock options (“NSO”) granted under the 2016 Plan may be granted to employees, directors and consultants. Options may be granted for periods of up to 10 years and at prices no less than the estimated fair value of NETGEAR’s common stock on the date of grant. Options granted under the 2016 Plan generally vest over four years, the first tranche at the end of 12 months and the remaining shares underlying the option vesting monthly over the remaining three years. The period over which RSUs granted under the 2016 Plan may fully vest is generally no less than three years. RSUs do not have the voting rights of NETGEAR’s common stock, and the shares underlying the RSUs are not considered issued and outstanding prior to settlement of the RSUs. Employee Stock Purchase Plan Under NETGEAR’s Employee Stock Purchase Plan (the “ESPP”), eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of NETGEAR’s common stock. The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six months. Option Activity Stock option activity for employees specifically identifiable to Arlo during the six months ended July 1, 2018 was as follows: Number of shares Weighted Average Exercise Price Per Share (In thousands) (In dollars) Outstanding as of December 31, 2017 78 $ 35.56 Granted 25 $ 70.15 Exercised (1 ) $ 35.03 Expired (2 ) $ 15.22 Other 3 $ 36.80 Outstanding as of July 1, 2018 103 $ 44.31 RSU Activity RSU activity for employees specifically identifiable to Arlo during the six months ended July 1, 2018 was as follows: Number of shares Weighted Average Grant Date Fair Value Per Share (In thousands) (In dollars) Outstanding as of December 31, 2017 132 $ 45.54 Granted 89 $ 67.17 Vested (35 ) $ 42.31 Cancelled (2 ) $ 45.30 Other (1 ) $ 52.85 Outstanding as of July 1, 2018 183 $ 56.56 Valuation and Expense Information The Company measures stock-based compensation at the grant date based on the estimated fair value of the award. Estimated compensation cost relating to RSUs is based on the closing fair market value of NETGEAR’s common stock on the date of grant. The fair value of options granted and the purchase rights granted under the ESPP is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. The estimated expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free interest rate of options granted and the purchase rights granted under the ESPP is based on the implied yield currently available on U.S. Treasury securities, with a remaining term commensurate with the estimated expected term. Expected volatility of options granted and the purchase rights granted under the ESPP is based on historical volatility over the most recent period commensurate with the estimated expected term. The following table sets forth the weighted average assumptions used to estimate the fair value of options granted and purchase rights granted under the ESPP during the three and six months ended July 1, 2018 and July 2, 2017 . Three Months Ended Six Months Ended Stock Options ESPP Stock Options ESPP July 1, July 2, July 1, July 2, July 1, July 2, July 1, July 2, Expected life (in years) NA 4.4 NA NA 4.4 4.4 0.5 0.5 Risk-free interest rate NA 1.65 % NA NA 2.32 % 1.65 % 1.81 % 0.66 % Expected volatility NA 31.6 % NA NA 30.9 % 31.6 % 37.1 % 27.6 % Dividend yield — — — — — — — — The weighted-average fair value of RSUs granted to employees specifically identifiable to Arlo for the six months ended July 1, 2018 and July 2, 2017 was $67.17 and $53.29 , respectively. The weighted-average estimated fair value of options granted to employees specifically identifiable to Arlo for the six months ended July 1, 2018 and July 2, 2017 was $20.63 and $12.25 per option share, respectively. The following table sets forth stock-based compensation expense for employees specifically identifiable to Arlo and allocated charges deemed attributable to Arlo operations resulting from RSUs, stock options, and the purchase rights under the ESPP included in the Company’s condensed combined statements of operations for periods indicated: Three Months Ended July 1, 2018 July 2, 2017 Direct Indirect Total Direct Indirect Total (In thousands) Cost of revenue $ 54 $ 293 $ 347 $ 25 $ 142 $ 167 Research and development 750 227 977 607 110 717 Sales and marketing 243 539 782 42 221 263 General and administrative — 1,146 1,146 — 594 594 Total stock-based compensation $ 1,047 $ 2,205 $ 3,252 $ 674 $ 1,067 $ 1,741 Six Months Ended July 1, 2018 July 2, 2017 Direct Indirect Total Direct Indirect Total (In thousands) Cost of revenue $ 100 $ 583 $ 683 $ 48 $ 251 $ 299 Research and development 1,314 396 1,710 1,231 193 1,424 Sales and marketing 485 969 1,454 73 347 420 General and administrative — 2,100 2,100 — 1,045 1,045 Total stock-based compensation $ 1,899 $ 4,048 $ 5,947 $ 1,352 $ 1,836 $ 3,188 The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years for options and the vesting term of three years for RSUs. As of July 1, 2018 , $0.8 million of unrecognized compensation cost related to stock options for employees specifically identifiable to Arlo was expected to be recognized over a weighted-average period of 2.9 years. $9.2 million of unrecognized compensation cost related to unvested RSUs for employees specifically identifiable to Arlo was expected to be recognized over a weighted-average period of 2.9 years. There was no cash received from stock option exercises and ESPP purchases by employees specifically identifiable to Arlo for the three months ended July 1, 2018. Cash received from stock option exercises and ESPP purchases by employees specifically identifiable to Arlo was $0.4 million for the six months ended July 1, 2018. Cash received from stock option exercises and ESPP purchases by employees specifically identifiable to Arlo was $0.1 million and $0.9 million for the three and six months ended July 2, 2017, respectively. Cash paid to administer the RSU withholdings relating to employees specifically identifiable to Arlo for the three and six months ended July 1, 2018 was $0.6 million and $0.8 million , respectively. Cash paid to administer the RSU withholdings relating to employees specifically identifiable to Arlo for the three and six months ended July 2, 2017 was $0.2 million and $0.4 million , respectively.

Segment and Geographic Informat

Segment and Geographic Information	6 Months Ended
	Jul. 01, 2018
Segment Reporting [Abstract]
Segment and Geographic Information	Segment and Geographic Information Segment Information The Company operates as one operating and reportable segment. The Company has identified its CEO as the Chief Operating Decision Maker (“CODM”). The CODM reviews financial information presented on a combined basis for purposes of allocating resources and evaluating financial performance. Geographic Information The Company conducts business across three geographic regions: Americas, EMEA and APAC. Revenue consists of gross product shipments and service revenue, less allowances for estimated sales returns, price protection, end-user customer rebates and other channel sales incentives deemed to be a reduction of revenue per the authoritative guidance for revenue recognition, and net changes in deferred revenue. For reporting purposes, revenue by geography is generally based upon the ship-to location of the customer for device sales and device location for service sales. The following table shows revenue by geography for the periods indicated: Three Months Ended Six Months Ended July 1, July 2, July 1, July 2, (In thousands) United States (U.S.) $ 83,118 $ 65,246 $ 155,562 $ 107,977 Americas (excluding U.S.) 3,563 2,703 5,842 4,945 EMEA 19,390 8,881 38,656 20,229 APAC 4,877 2,364 11,526 $ 7,846 Total revenue $ 110,948 $ 79,194 $ 211,586 $ 140,997 The Company’s Property and equipment, net are located in the following geographic locations: As of July 1, December 31, (In thousands) United States (“U.S.”) $ 10,232 $ 2,053 Americas (excluding U.S.) 153 61 EMEA 200 1 China 1,742 1,702 APAC (excluding China) 62 66 Total property and equipment, net $ 12,389 $ 3,883

Related Party Transactions (Not

Related Party Transactions (Notes)	6 Months Ended
	Jul. 01, 2018
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Related Party Transactions Related party transactions and activities are conducted on terms equivalent to those that would prevail in an arm’s-length transaction where conditions of competitive, free-market dealing may exist. The related party transactions between Arlo and NETGEAR are settled in cash. The related party receivables are reflected in Prepaid expenses and other current assets, and the related party payables are reflected in Accrued liabilities on the condensed combined balance sheets. The related party receivables balance was $0.2 million as of July 1, 2018 and $0.1 million as of December 31, 2017. There was no related party payable as of July 1, 2018 or December 31, 2017. In connection with the IPO, on August 2, 2018, the Company entered into a master separation agreement, a transition services agreement, an intellectual property rights cross-license agreement, a tax matters agreement, an employee matters agreement, and a registration rights agreement, in each case with NETGEAR, which effect the Separation, provide a framework for the Company’s relationship with NETGEAR after the Separation and provide for the allocation between the Company and NETGEAR of NETGEAR’s assets, employees, liabilities and obligations (including its investments, property and employee benefits assets and liabilities) attributable to periods prior to, at and after the Separation. Refer to Note 12, Subsequent Events , for details relating to the Company’s IPO and related transactions. Allocation of Corporate Expenses The amount of corporate expense allocations from NETGEAR was $16.8 million for the three months ended July 1, 2018, which included $5.1 million for research and development, $5.4 million for sales and marketing, and $6.3 million for general and administrative expense. Allocations amounted to $9.4 million for the three months ended July 2, 2017, which included $3.0 million for research and development, $3.0 million for sales and marketing, and $3.4 million for general and administrative expense. The amount of these allocations from NETGEAR was $30.6 million for the six months ended July 1, 2018, which included $9.4 million for research and development, $10.0 million for sales and marketing, and $11.2 million for general and administrative expense. Corporate expense allocations amounted to $16.3 million for the six months ended July 2, 2017, which included $5.0 million for research and development, $5.2 million for sales and marketing, and $6.1 million for general and administrative expense. Refer to Note 1. The Company and Significant Accounting Policies , for details of the allocation methodology.

Subsequent Events (Notes)

Subsequent Events (Notes)	6 Months Ended
	Jul. 01, 2018
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On August 7, 2018, subsequent to the close of the Company’s second quarter ended July 1, 2018, the Company completed its IPO of 11,747,250 shares of common stock (including 1,532,250 shares of common stock pursuant to the underwriters’ option to purchase additional shares, which was exercised in full on August 3, 2018), at $16.00 per share, before underwriting discounts and commissions and estimated offering costs. Arlo’s shares began trading on the New York Stock Exchange under the ticker symbol “ARLO” on August 3, 2018. Total net proceeds of approximately $174.8 million were raised from the IPO after deducting underwriting discounts and commissions and before offering costs. Estimated offering costs amounted to approximately $7.4 million , a portion of which will be paid by NETGEAR. Prior to the IPO, the Company was a wholly owned subsidiary of NETGEAR and upon the closing of the IPO on August 7, 2018, NETGEAR owned approximately 84.2% of the shares of Arlo’s common stock after the underwriters exercised in full their option to purchase additional shares of Arlo’s common stock. In addition, in connection with the Separation and IPO: • On August 2, 2018, the Company amended and restated its Certificate of Incorporation to change the authorized capital stock to 500,000,000 shares of common stock and 50,000,000 shares of preferred stock, all with a par value of $0.001 per share. • On August 2, 2018, the Company issued 62,499,000 shares of common stock to the Company’s sole stockholder of record, NETGEAR (after which NETGEAR held 62,500,000 shares of common stock, which represented all of the then issued and outstanding common stock). The condensed combined financial statements as of July 1, 2018, included the effects of this issuance in the share and per share amounts as required by the authoritative guidance. • On August 1, 2018, the Company reserved 9,000,000 shares of the Company’s common stock for issuance under the Company’s 2018 Equity Plan and the 2018 ESPP. • The Company appointed executive officers and other key roles effective upon completion of the IPO on August 7, 2018. Effective as of August 2, 2018, the Company also entered into executive confirmatory letters and change in control severance agreements with each of its key executives as well as granted its initial option grants to the Company’s key executives. For further details regarding executive compensation, please refer to the Prospectus in the section titled “Executive Compensation.” On August 2, 2018, the Company and NETGEAR entered into a master separation agreement as well as various other agreements that govern the relationship between the Company and NETGEAR following the Separation, including a transition services agreement, tax matters agreement, employee matters agreement, intellectual property rights cross-license agreement, and registration rights agreement.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Recent accounting pronouncements	Recent accounting pronouncements Emerging Growth Company Status As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, unless the Company otherwise irrevocably elects not to avail itself of this exemption. The Company did not make such an irrevocable election and chose to use this extended transition period under the JOBS Act. Thus, the effective dates discussed below reflect the delayed adoption dates applicable to private companies. Accounting Pronouncements Recently Adopted ASU 2014-09 In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). The revenue recognition requirements in Accounting Standards Codification Topic 605 (“ASC 605”), Revenue Recognition, is superseded by ASC 606. ASC 606 requires the recognition of revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance should be applied either retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application (modified retrospective method). The guidance is required to be adopted in the first fiscal quarter of 2019 and early adoption is permitted. On January 1, 2018, the Company adopted ASC 606 and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. Refer to Note 2, Revenue Recognition for further details. ASU 2016-16 In October 2016, the FASB issued ASU 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory” (Topic 740), which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. ASU 2016-16 is required to be adopted in the first fiscal quarter of 2019 with early adoption permitted. The Company elected to adopt the new standard on January 1, 2018 (when it became effective for public companies that are not emerging growth companies). There was no impact on the Company’s condensed combined financial position, results of operations, or cash flows as a result of the adoption. Accounting Pronouncements Not Yet Effective ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), which requires lessees to recognize on the balance sheets a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than 12 months. The liability will be equal to the present value of lease payments while the right-of-use asset will be based on the liability, subject to adjustment, such as for initial direct costs. In addition, ASU 2016-02 expands the disclosure requirements for lessees. Upon adoption, the Company will be required to record a lease asset and lease liability related to its operating leases. ASU 2016-02 will be applied using a modified retrospective transition method and is effective for the Company in the first fiscal quarter of 2020 (or the first fiscal quarter of 2019 should the Company cease to be classified as an EGC), with early adoption permitted. The Company does not expect to early adopt the new guidance. The Company has appointed a project team which is in the process of evaluating the impact the new standard will have on its condensed combined financial statements. The Company has identified the existing population of leases, including embedded leases, and is in the process of reviewing the identified lease contracts. In addition, the Company has selected lease accounting software to assist with the implementation. The Company expects to complete the impact assessment process by the end of fiscal year 2018 and to complete the adoption process, including adding procedures, implementing lease accounting software, and evaluating necessary disclosures, prior to the first fiscal quarter of 2019. ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. ASU 2016-13 is effective for the Company beginning in the first fiscal quarter of 2021 (or the first fiscal quarter of 2020 should the Company cease to be classified as an EGC), with early adoption permitted. The Company continues to assess the potential impact of the new guidance, but does not expect it to have a material impact on its financial position, results of operations, or cash flows. With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations, or cash flows.
Revenue Recognition	Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of revenue comes from sales of hardware products to customers (retailers, distributors, and service providers). Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred goods. The Company sells subscription paid services to its end user customers where it provides customers access to its cloud services. Revenue for subscription sales is generally recognized on a ratable basis over the contract term, beginning on the date that the service is made available to the customers at the time of registration. The subscription contracts are generally 30 days or 12 months in length, billed in advance. All such service or support sales are typically recognized using an output measure of progress by looking at the time elapsed as the contracts generally provide the customer equal benefit throughout the contract period. In addition to selling paid subscriptions, the Company also sells services bundled with hardware products and accounts for these sales in line with the multiple performance obligations guidance. Revenue from all sales types is recognized at transaction price, the amount the Company expects to be entitled to in exchange for transferring goods or providing services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives, and price protection related to current period product revenue. The Company’s standard obligation to its direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. In determining estimates for future returns, management analyzes historical data, channel inventory levels, current economic trends, and changes in customer demand for the Company’s products. Sales incentives and price protection are determined based on a combination of the actual amounts committed and through estimating future expenditure based upon historical customary business practice. Typically variable consideration does not need to be constrained as estimates are based on predictive historical data or future commitments that are planned and controlled by the Company. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. Contracts with Multiple Performance Obligations Some of the Company’s contracts with customers contain multiple promised goods or services. Such contracts include hardware products with bundled services, various subscription services, and support. For these contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct. Performance obligations are determined to be considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The embedded software in most of the hardware products is not considered distinct and therefore the combined hardware and incidental software are treated as one performance obligation and recognized at the point in time when control of product transfers to the customer. Basic service that is included with certain hardware products is considered distinct and therefore the hardware and service are treated as separate performance obligations. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are generally determined based on the prices charged to customers or using an adjusted market assessment. For the Company, standalone selling price of the hardware is directly observable from add-on camera and base station sales. Standalone selling price of the service is estimated using an adjusted market approach. Revenue is then recognized for each distinct performance obligation as control is transferred to the customer. For the Company, the revenue attributable to hardware is recognized at shipping or delivery at the time control of the product transfers to the customer. The transaction price allocated to the service is recognized over the estimated useful life of the hardware, beginning when the customer is expected to activate their account. Useful life of the hardware is determined by industry norms, frequency of new model releases, and user history. Warranties Sales of hardware products regularly include warranties to end customers that cover bug fixes, minor updates such that the product continues to function according to published specifications in a dynamic environment, and phone support. These standard warranties are assurance type warranties and do not offer any services in addition to the assurance that the product will continue working as specified for one or more years. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, the expected cost of warranties is accrued as an expense in accordance with authoritative guidance. Shipping and Handling Shipping and handling fees billed to customers are included in Revenue. Shipping and handling costs associated with inbound freight are included in Cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in Revenue. Shipping and handling costs associated with outbound freight are included in Sales and marketing expenses. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with outbound freight totaled $0.9 million and $0.6 million for the three months ended July 1, 2018 and July 2, 2017, respectively, and $1.8 million and $1.1 million for the six months ended July 1, 2018 and July 2, 2017 , respectively. Transaction Price Allocated to the Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods and services for which customer purchase orders have been accepted and that are scheduled or in the process of being scheduled for shipment.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jul. 01, 2018
Revenue from Contract with Customer [Abstract]
Schedule of Impacts of Adopting ASC 606	The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed combined balance sheet for the fiscal year beginning January 1, 2018 as an adjustment to the opening balances: As of Adjustments As of December 31, January 1, (In thousands) Assets: Accounts receivable, net $ 157,680 $ 827 $ 158,507 Inventories $ 82,952 $ (377 ) $ 82,575 Other non-current assets $ 2,193 $ 244 $ 2,437 Liabilities: Accounts payable $ 20,711 $ (48 ) $ 20,663 Deferred revenue $ 34,072 $ (9,326 ) $ 24,746 Accrued liabilities $ 76,097 $ 13,370 $ 89,467 Non-current deferred revenue $ 13,332 $ (241 ) $ 13,091 Equity: Net parent investment $ 125,419 $ (3,061 ) $ 122,358 The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed combined balance sheet as of July 1, 2018: As reported Adjustments Balance without adoption of ASC 606 (In thousands) Assets Accounts receivable, net $ 111,113 $ (4,796 ) $ 106,317 Inventories $ 123,195 $ 347 $ 123,542 Other non-current assets $ 3,440 $ (280 ) $ 3,160 Liabilities: Accounts payable $ 25,518 $ 14 $ 25,532 Deferred revenue $ 25,833 $ 5,536 $ 31,369 Accrued liabilities $ 96,486 $ (16,422 ) $ 80,064 Non-current deferred revenue $ 16,556 $ 689 $ 17,245 Equity: Net parent investment $ 111,443 $ 5,454 $ 116,897 The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed combined statement of operations for the three and six months ended July 1, 2018: Three Months Ended Six Months Ended As reported Adjustments Balance without adoption of ASC 606 As reported Adjustments Balance without adoption of ASC 606 (In thousands) Revenue $ 110,948 $ 219 $ 111,167 $ 211,586 $ 2,459 $ 214,045 Cost of revenue $ 82,654 $ (37 ) $ 82,617 $ 154,239 $ 30 $ 154,269 Gross profit $ 28,294 $ 256 $ 28,550 $ 57,347 $ 2,429 $ 59,776 Provision for income taxes $ 288 $ 115 $ 403 $ 607 $ 36 $ 643 Net loss $ (17,822 ) $ 141 $ (17,681 ) $ (23,185 ) $ 2,393 $ (20,792 )
Schedule of Remaining Performance Obligations	The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of July 1, 2018: 1 year 2 years Greater than 2 years Total (In thousands) Performance obligations $ 37,738 $ 10,194 $ 6,691 $ 54,623
Schedule of Changes in Contract Balances	The following table reflects the changes in contract balances for the six months ended July 1, 2018: Balance Sheet Location July 1, 2018 January 1, 2018 (*) $ change % change (In thousands) Accounts receivable, net Accounts receivable, net $ 111,113 $ 158,507 $ (47,394 ) (29.9 )% Contract liabilities - current Deferred revenue $ 25,833 $ 24,746 $ 1,087 4.4 % Contract liabilities - non-current Non-current deferred revenue $ 16,556 $ 13,091 $ 3,465 26.5 % _________________________ * Includes the adjustments made to those contracts which were not completed at the date of ASC 606 adoption using the modified retrospective method.

Business Acquisition (Tables)

Business Acquisition (Tables)	6 Months Ended
	Jul. 01, 2018
Business Combinations [Abstract]
Schedule of Allocation of Purchase Price	The allocation of the purchase price was as follows (in thousands): Cash and cash equivalents $ 8 Accounts receivable 11 Prepaid expenses and other current assets 130 Property and equipment 83 Intangibles 6,000 Goodwill 3,742 Accounts payable (40 ) Accrued liabilities (74 ) Deferred tax liabilities (308 ) Total purchase price $ 9,552
Schedule of Pro Forma Information	The unaudited pro forma financial information is as follows (in thousands): Year Ended December 31, 2016 Revenue $ 184,744 Net loss (18,258 )

Balance Sheet Components (Table

Balance Sheet Components (Tables)	6 Months Ended
	Jul. 01, 2018
Balance Sheet Related Disclosures [Abstract]
Schedule of Accounts Receivable, Net	Accounts receivable, net As of July 1, December 31, (In thousands) Gross accounts receivable $ 111,320 $ 164,157 Allowance for doubtful accounts (207 ) (207 ) Allowance for sales returns — * (5,868 ) Allowance for price protection — * (402 ) Total allowances (207 ) (6,477 ) Total accounts receivable, net $ 111,113 $ 157,680 _________________________ * Upon adoption of ASC 606, allowances for sales returns and price protection were reclassified to current liabilities as these reserve balances are considered refund liabilities. Refer to Note 3. Revenue Recognition , for additional information on the adoption impact.
Schedule of Property and Equipment, Net	Property and equipment, net The condensed combined balance sheets include the property and equipment specifically identifiable to Arlo’s business. The components of property and equipment are as follows: As of July 1, December 31, (In thousands) Machinery and equipment $ 8,290 $ 6,067 Computer equipment 4,798 50 Software 2,791 180 Leasehold improvements 548 530 Furniture and fixtures 408 443 Total property and equipment, gross 16,835 7,270 Accumulated depreciation and amortization (4,446 ) (3,387 ) Total property and equipment, net $ 12,389 $ 3,883
Schedule of Intangibles, Net	Intangibles, net As of July 1, 2018 As of December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 9,800 $ (6,477 ) $ 3,323 $ 9,800 $ (5,790 ) $ 4,010 Customer contracts and relationships 1,400 (1,400 ) — 1,400 (1,400 ) — Other 800 (538 ) 262 800 (462 ) 338 Total intangibles, net $ 12,000 $ (8,415 ) $ 3,585 $ 12,000 $ (7,652 ) $ 4,348
Schedule of Estimated Amortization Expense Related to Intangibles	As of July 1, 2018 , estimated amortization expense related to finite-lived intangibles for the remaining years was as follows (in thousands): 2018 (remaining six months) $ 762 2019 1,517 2020 1,306 Total estimated amortization expense $ 3,585
Schedule of Goodwill	Goodwill In the year ended December 31, 2016, the Company acquired Placemeter. Refer to Note 4, Business Acquisition , for detailed disclosures. There was no change in the carrying amount of goodwill during the six months ended July 1, 2018 and the goodwill as of December 31, 2017 and July 1, 2018 was as follows (in thousands): As of December 31, 2017 $ 15,638 As of July 1, 2018 $ 15,638
Schedule of Other Non-Current Assets	Other non-current assets As of July 1, December 31, 2017 (In thousands) Non-current deferred income taxes $ 1,109 $ 865 Other 2,331 1,328 Total other non-current assets $ 3,440 $ 2,193
Schedule of Other Accrued Liabilities	Accrued liabilities As of July 1, December 31, (In thousands) Sales and marketing $ 39,230 $ 31,613 Warranty obligation 3,487 * 31,756 Sales returns 26,581 * — Freight 2,704 3,862 Accrued employee compensation 6,038 3,184 Other 18,446 5,682 Total accrued liabilities $ 96,486 $ 76,097 _________________________ * Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return.

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
	Jul. 01, 2018
Earnings Per Share [Abstract]
Schedule of Net Income Per Share	Net loss per share for the three and six months ended July 1, 2018 and July 2, 2017 were as follows: Three Months Ended Six Months Ended July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 (In thousands, except per share data) Numerator: Net loss $ (17,822 ) $ (2,152 ) $ (23,185 ) $ (2,128 ) Denominator: Weighted average common shares - basic 62,500 62,500 62,500 62,500 Weighted average common shares - dilutive 62,500 62,500 62,500 62,500 Basic net loss per share $ (0.29 ) $ (0.03 ) $ (0.37 ) $ (0.03 ) Diluted net loss per share $ (0.29 ) $ (0.03 ) $ (0.37 ) $ (0.03 )

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jul. 01, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of Changes in Warranty Obligation	Warranty Obligations Changes in the Company’s warranty liability, which is included in Accrued liabilities in the condensed combined balance sheets, were as follows: Three Months Ended Six Months Ended July 1, July 2, July 1, July 2, (In thousands) Balance at the beginning of the period $ 3,487 $ 17,600 $ 31,756 $ 15,949 Reclassified to sales returns upon adoption of ASC 606 — — (28,713 ) * — Provision for warranty obligation made during the period 189 10,857 822 20,184 Settlements made during the period (189 ) (10,457 ) (378 ) (18,133 ) Balance at the end of the period $ 3,487 $ 18,000 $ 3,487 $ 18,000 ________________________ * Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return.

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)	6 Months Ended
	Jul. 01, 2018
Employee Benefits and Share-based Compensation, Noncash [Abstract]
Schedule of Stock Option Activity	Option Activity Stock option activity for employees specifically identifiable to Arlo during the six months ended July 1, 2018 was as follows: Number of shares Weighted Average Exercise Price Per Share (In thousands) (In dollars) Outstanding as of December 31, 2017 78 $ 35.56 Granted 25 $ 70.15 Exercised (1 ) $ 35.03 Expired (2 ) $ 15.22 Other 3 $ 36.80 Outstanding as of July 1, 2018 103 $ 44.31
Schedule of RSU Activity	RSU Activity RSU activity for employees specifically identifiable to Arlo during the six months ended July 1, 2018 was as follows: Number of shares Weighted Average Grant Date Fair Value Per Share (In thousands) (In dollars) Outstanding as of December 31, 2017 132 $ 45.54 Granted 89 $ 67.17 Vested (35 ) $ 42.31 Cancelled (2 ) $ 45.30 Other (1 ) $ 52.85 Outstanding as of July 1, 2018 183 $ 56.56
Schedule of Weighted Average Assumptions	The following table sets forth the weighted average assumptions used to estimate the fair value of options granted and purchase rights granted under the ESPP during the three and six months ended July 1, 2018 and July 2, 2017 . Three Months Ended Six Months Ended Stock Options ESPP Stock Options ESPP July 1, July 2, July 1, July 2, July 1, July 2, July 1, July 2, Expected life (in years) NA 4.4 NA NA 4.4 4.4 0.5 0.5 Risk-free interest rate NA 1.65 % NA NA 2.32 % 1.65 % 1.81 % 0.66 % Expected volatility NA 31.6 % NA NA 30.9 % 31.6 % 37.1 % 27.6 % Dividend yield — — — — — — — —
Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, Restricted Stock Awards, and the Employee Stock Purchase Plan	The following table sets forth stock-based compensation expense for employees specifically identifiable to Arlo and allocated charges deemed attributable to Arlo operations resulting from RSUs, stock options, and the purchase rights under the ESPP included in the Company’s condensed combined statements of operations for periods indicated: Three Months Ended July 1, 2018 July 2, 2017 Direct Indirect Total Direct Indirect Total (In thousands) Cost of revenue $ 54 $ 293 $ 347 $ 25 $ 142 $ 167 Research and development 750 227 977 607 110 717 Sales and marketing 243 539 782 42 221 263 General and administrative — 1,146 1,146 — 594 594 Total stock-based compensation $ 1,047 $ 2,205 $ 3,252 $ 674 $ 1,067 $ 1,741 Six Months Ended July 1, 2018 July 2, 2017 Direct Indirect Total Direct Indirect Total (In thousands) Cost of revenue $ 100 $ 583 $ 683 $ 48 $ 251 $ 299 Research and development 1,314 396 1,710 1,231 193 1,424 Sales and marketing 485 969 1,454 73 347 420 General and administrative — 2,100 2,100 — 1,045 1,045 Total stock-based compensation $ 1,899 $ 4,048 $ 5,947 $ 1,352 $ 1,836 $ 3,188

Segment and Geographic Inform24

Segment and Geographic Information (Tables)	6 Months Ended
	Jul. 01, 2018
Segment Reporting [Abstract]
Schedule of Net Revenue by Geography	The following table shows revenue by geography for the periods indicated: Three Months Ended Six Months Ended July 1, July 2, July 1, July 2, (In thousands) United States (U.S.) $ 83,118 $ 65,246 $ 155,562 $ 107,977 Americas (excluding U.S.) 3,563 2,703 5,842 4,945 EMEA 19,390 8,881 38,656 20,229 APAC 4,877 2,364 11,526 $ 7,846 Total revenue $ 110,948 $ 79,194 $ 211,586 $ 140,997
Schedule of Long-Lived Asset By Geographic Areas	The Company’s Property and equipment, net are located in the following geographic locations: As of July 1, December 31, (In thousands) United States (“U.S.”) $ 10,232 $ 2,053 Americas (excluding U.S.) 153 61 EMEA 200 1 China 1,742 1,702 APAC (excluding China) 62 66 Total property and equipment, net $ 12,389 $ 3,883

The Company and Basis of Pres25

The Company and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions	Aug. 07, 2018	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Aug. 02, 2018
Related Party Transaction [Line Items]
Allocated expense from Parent		$ 16.8	$ 9.4	$ 30.6	$ 16.3
Additional Shares Issued on IPO [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Common Stock, Shares, Issued	1,532,250
IPO [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Common Stock, Shares, Issued	11,747,250					10,215,000
Sale of Stock, Price Per Share						$ 16
Proceeds from Issuance Initial Public Offering	$ 174.8
Payments for Initial Public Offering	$ 7.4
Sale of Stock, Percentage of Ownership after Transaction	84.20%
Research and Development Expense [Member]
Related Party Transaction [Line Items]
Allocated expense from Parent		5.1	3	9.4	5
Selling and Marketing Expense [Member]
Related Party Transaction [Line Items]
Allocated expense from Parent		5.4	3	10	5.2
General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Allocated expense from Parent		$ 6.3	$ 3.4	$ 11.2	$ 6.1

Revenue Recognition (Balance Sh

Revenue Recognition (Balance Sheet Impact) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net	$ 111,113	$ 158,507	$ 157,680
Inventories	123,195	82,575	82,952
Other non-current assets	3,440	2,437	2,193
Liabilities:
Accounts payable	25,518	20,663	20,711
Deferred revenue	25,833	24,746	34,072
Accrued liabilities	96,486	89,467	76,097
Non-current deferred revenue	16,556	13,091	13,332
Equity:
Net parent investment	111,443	122,358	$ 125,419
Adjustments | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net	(4,796)	827
Inventories	347	(377)
Other non-current assets	(280)	244
Liabilities:
Accounts payable	14	(48)
Deferred revenue	5,536	(9,326)
Accrued liabilities	(16,422)	13,370
Non-current deferred revenue	689	(241)
Equity:
Net parent investment	5,454	$ (3,061)
Balance without adoption of ASC 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net	106,317
Inventories	123,542
Other non-current assets	3,160
Liabilities:
Accounts payable	25,532
Deferred revenue	31,369
Accrued liabilities	80,064
Non-current deferred revenue	17,245
Equity:
Net parent investment	$ 116,897

Revenue Recognition (Income Sta

Revenue Recognition (Income Statement Impact) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	$ 110,948	$ 79,194	$ 211,586	$ 140,997
Cost of revenue	82,654	62,482	154,239	107,932
Gross profit	28,294	16,712	57,347	33,065
Provision for income taxes	288	137	607	356
Net income	(17,822)	$ (2,152)	(23,185)	$ (2,128)
Adjustments | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	219		2,459
Cost of revenue	(37)		30
Gross profit	256		2,429
Provision for income taxes	115		36
Net income	141		2,393
Balance without adoption of ASC 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	111,167		214,045
Cost of revenue	82,617		154,269
Gross profit	28,550		59,776
Provision for income taxes	403		643
Net income	$ (17,681)		$ (20,792)

Revenue Recognition (Narrative)

Revenue Recognition (Narrative) (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 01, 2018USD ($)	Jul. 02, 2017USD ($)	Jul. 01, 2018USD ($)region	Jul. 02, 2017USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Shipping, Handling and Transportation Costs	$ 0.9	$ 0.6	$ 1.8	$ 1.1
Revenue deferred due to unsatisfied performance obligations			22.1
Revenue recognized for satisfaction of performance obligations over time			17.5
Recognized revenue that was included in contract liability balance at beginning of period			$ 14
Number of geographic regions in which the Company conducts business | region			3
Number of operating segments			1
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
General length of subscription contracts			30 days
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
General length of subscription contracts			12 months

Revenue Recognition (Schedule o

Revenue Recognition (Schedule of Remaining Performance Obligations) (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2018USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 37,738
Remaining performance obligations, expected timing of satisfaction	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 10,194
Remaining performance obligations, expected timing of satisfaction	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 6,691
Remaining performance obligations, expected timing of satisfaction
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 54,623
Remaining performance obligations, expected timing of satisfaction

Revenue Recognition (Schedule30

Revenue Recognition (Schedule of Changes in Contract Balances and Impacts of Entries to Adopt ASC 606) (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2018USD ($)
Accounts receivable, net
Beginning balance	$ 158,507	[1]
$ change	$ (47,394)
% change	(29.90%)
Ending balance	$ 111,113
Contract liabilities - current
Beginning balance	24,746	[1]
$ change	$ 1,087
% change	4.40%
Ending balance	$ 25,833
Contract liabilities - non-current
Beginning balance	13,091	[1]
$ change	$ 3,465
% change	26.50%
Ending balance	$ 16,556
[1]	Includes the adjustments made to those contracts which were not completed at the date of ASC 606 adoption using the modified retrospective method.

Business Acquisition (Narrative

Business Acquisition (Narrative) (Details) - USD ($)	Nov. 30, 2016	Jul. 01, 2018	Jul. 02, 2017	Apr. 02, 2017	Dec. 31, 2016	Jul. 01, 2018	Jul. 02, 2017	Dec. 31, 2016	Dec. 31, 2017
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenue		$ 110,948,000	$ 79,194,000			$ 211,586,000	$ 140,997,000
Net loss		(17,534,000)	$ (2,015,000)			(22,578,000)	$ (1,772,000)
Business Acquisition [Line Items]
Goodwill		$ 15,638,000				$ 15,638,000			$ 15,638,000
Acquired intangible assets, estimated useful life						2 years
Pro Forma [Member]
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenue								$ 184,744,000
Net loss								$ (18,258,000)
Placemeter
Business Acquisition [Line Items]
Total purchase price	$ 9,600,000
Purchase price, cash paid				$ 800,000	$ 8,800,000
Goodwill	3,742,000
Deferred tax liabilities	308,000
Intangibles	6,000,000
Placemeter | Technology
Business Acquisition [Line Items]
Intangibles	$ 5,500,000
Discount rate used to calculate present value of future cash flows	15.00%
Acquired intangible assets, estimated useful life	4 years
Placemeter | Database
Business Acquisition [Line Items]
Intangibles	$ 200,000
Discount rate used to calculate present value of future cash flows	15.00%
Acquired intangible assets, estimated useful life	4 years
Placemeter | Non-compete Agreements
Business Acquisition [Line Items]
Intangibles	$ 300,000
Discount rate used to calculate present value of future cash flows	20.00%
Acquired intangible assets, estimated useful life	3 years
Placemeter | U.S. Federal
Business Acquisition [Line Items]
Goodwill deductible for income tax purposes	$ 0
Placemeter | U.S. State
Business Acquisition [Line Items]
Goodwill deductible for income tax purposes	$ 0

Business Acquisition (Schedule

Business Acquisition (Schedule of Allocation of Purchase Price) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017	Nov. 30, 2016
Business Acquisition [Line Items]
Goodwill	$ 15,638	$ 15,638
Placemeter
Business Acquisition [Line Items]
Cash and cash equivalents			$ 8
Accounts receivable			11
Prepaid expenses and other current assets			130
Property and equipment			83
Intangibles			6,000
Goodwill			3,742
Accounts payable			(40)
Accrued liabilities			(74)
Deferred tax liabilities			(308)
Total purchase price			$ 9,552

Balance Sheet Components (Sched

Balance Sheet Components (Schedule of Accounts Receivable and Related Allowances) (Details) - USD ($) $ in Thousands	Jul. 01, 2018		Jan. 01, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross accounts receivable	$ 111,320			$ 164,157
Total allowances	(207)			(6,477)
Total accounts receivable, net	111,113		$ 158,507	157,680
Allowance for doubtful accounts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total allowances	(207)			(207)
Allowance for sales returns
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total allowances	0	[1]		(5,868)
Allowance for price protection
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total allowances	$ 0	[1]		$ (402)
[1]	Upon adoption of ASC 606, allowances for sales returns and price protection were reclassified to current liabilities as these reserve balances are considered refund liabilities. Refer to Note 3. Revenue Recognition, for additional information on the adoption impact.

Balance Sheet Components (Sch34

Balance Sheet Components (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Total property and equipment, gross	$ 16,835	$ 7,270
Accumulated depreciation and amortization	(4,446)	(3,387)
Total property and equipment, net	12,389	3,883
Machinery and Equipment [Member]
Total property and equipment, gross	8,290	6,067
Computer Equipment [Member]
Total property and equipment, gross	4,798	50
Software
Total property and equipment, gross	2,791	180
Leasehold Improvements
Total property and equipment, gross	548	530
Furniture and fixtures
Total property and equipment, gross	$ 408	$ 443

Balance Sheet Components (Prope

Balance Sheet Components (Property and Equipment, Other Information) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Balance Sheet Related Disclosures [Abstract]
Depreciation expense	$ 0.7	$ 0.4	$ 1.2	$ 0.8
Depreciation expense allocated from NETGEAR	$ 0.5	$ 0.5	$ 1.2	$ 0.9

Balance Sheet Components (Sch36

Balance Sheet Components (Schedule of Intangibles, Net) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Intangible Assets [Line Items]
Gross	$ 12,000	$ 12,000
Accumulated Amortization	(8,415)	(7,652)
Net	3,585	4,348
Technology
Intangible Assets [Line Items]
Gross	9,800	9,800
Accumulated Amortization	(6,477)	(5,790)
Net	3,323	4,010
Customer contracts and relationships
Intangible Assets [Line Items]
Gross	1,400	1,400
Accumulated Amortization	(1,400)	(1,400)
Net	0	0
Other
Intangible Assets [Line Items]
Gross	800	800
Accumulated Amortization	(538)	(462)
Net	$ 262	$ 338

Balance Sheet Components (Intan

Balance Sheet Components (Intangibles, Other Information) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangibles	$ 0.4	$ 0.6	$ 0.8	$ 1.2
Acquired intangible assets, estimated useful life			2 years

Balance Sheet Components (Sch38

Balance Sheet Components (Schedule of Estimated Amortization Expense Related to Intangibles) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]
2018 (remaining six months)	$ 762
2,019	1,517
2,020	1,306
Net	$ 3,585	$ 4,348

Balance Sheet Components Balanc

Balance Sheet Components Balance Sheet Components, (Schedule of Goodwill) (Details) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Goodwill [Line Items]
Goodwill	$ 15,638	$ 15,638

Balance Sheet Components (Sch40

Balance Sheet Components (Schedule of Other Non-Current Assets) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Jan. 01, 2018	Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Non-current deferred income taxes	$ 1,109		$ 865
Other	2,331		1,328
Total other non-current assets	$ 3,440	$ 2,437	$ 2,193

Balance Sheet Components (Sch41

Balance Sheet Components (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jul. 01, 2018		Jul. 02, 2017	Jul. 01, 2018		Jul. 02, 2017	Jan. 01, 2018	Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Sales and marketing	$ 39,230			$ 39,230				$ 31,613
Warranty obligation	3,487	[1]		3,487	[1]			31,756
Sales returns	26,581	[1]		26,581	[1]			0
Freight	2,704			2,704				3,862
Deferred revenue	6,038			6,038				3,184
Other	18,446			18,446				5,682
Total accrued liabilities	96,486			96,486			$ 89,467	$ 76,097
Reclassified to sales returns upon adoption of ASC 606	$ 0		$ 0	$ 28,713	[2]	$ 0
[1]	Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return.
[2]	Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return.

Net Income Per Share (Schedule

Net Income Per Share (Schedule of Net Income Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	Aug. 02, 2018	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Aug. 02, 2018
Numerator:
Net loss		$ (17,822)	$ (2,152)	$ (23,185)	$ (2,128)
Denominator:
Weighted average common shares - basic (in shares)		62,500,000	62,500,000	62,500,000	62,500,000
Weighted average common shares - dilutive (in shares)		62,500,000	62,500,000	62,500,000	62,500,000
Basic net income per share (in dollars per share)		$ (0.29)	$ (0.03)	$ (0.37)	$ (0.03)
Diluted net income per share (in dollars per share)		$ (0.29)	$ (0.03)	$ (0.37)	$ (0.03)
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, Stock Splits	62,499,000					62,500,000

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 288	$ 137	$ 607	$ 356
Effective tax rate	(1.60%)	(6.80%)	(2.70%)	(20.10%)
Provisional estimate for transition tax					$ 2,900

Commitments and Contingencies44

Commitments and Contingencies (Details)	6 Months Ended
	Jul. 01, 2018USD ($)
Loss Contingencies [Line Items]
Lease expiration date	Dec. 31, 2028
Number of days for non-cancellation of purchase obligations prior to expected shipment date	30 days
Non-cancelable purchase commitments with suppliers	$ 46,700,000
Liabilities recorded for director and officer indemnification agreements	0
Liabilities recorded for customers, distributors, and resellers indemnification agreements	$ 0
Continued vesting period after termination without cause (in years)	1 year
Liabilities for executive's employment agreements	$ 0
Chief Executive Officer
Loss Contingencies [Line Items]
Number of weeks for which salary is payable upon termination of employment without cause (in days)	365 days
Number of years after change of control to trigger full accelerated vest of unvested portion of stock options (in years)	1 year
Chief Operations Officer
Loss Contingencies [Line Items]
Number of weeks for which salary is payable upon termination of employment without cause (in days)	273 days
Other Key Executives
Loss Contingencies [Line Items]
Number of weeks for which salary is payable upon termination of employment without cause (in days)	182 days
Maximum number of years covered by accelerated vest for other key executives if term without cause is within one year of change in control (in years)	2 years
46 to 60 Days
Loss Contingencies [Line Items]
Percentage of cancelable orders	50.00%
31 to 45 Days
Loss Contingencies [Line Items]
Percentage of cancelable orders	25.00%
Minimum | 46 to 60 Days
Loss Contingencies [Line Items]
Required notice period prior to expected shipment date	46 days
Minimum | 31 to 45 Days
Loss Contingencies [Line Items]
Required notice period prior to expected shipment date	31 days
Maximum | 46 to 60 Days
Loss Contingencies [Line Items]
Required notice period prior to expected shipment date	60 days
Maximum | 31 to 45 Days
Loss Contingencies [Line Items]
Required notice period prior to expected shipment date	45 days

Commitments and Contingencies45

Commitments and Contingencies (Schedule of Changes in Warranty Obligation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018		Jul. 02, 2017
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at the beginning of the period	$ 3,487	$ 17,600	$ 31,756		$ 15,949
Reclassified to sales returns upon adoption of ASC 606	0	0	(28,713)	[1]	0
Provision for warranty obligation made during the period	189	10,857	822		20,184
Settlements made during the period	(189)	(10,457)	(378)		(18,133)
Balance at the end of the period	$ 3,487	$ 18,000	$ 3,487		$ 18,000
[1]	Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return.

Employee Benefit Plans (Narrati

Employee Benefit Plans (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Aug. 02, 2018	Aug. 01, 2018
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance						9,000,000
Common Stock, Par or Stated Value Per Share					$ 0.001
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from exercise of stock options		$ 100,000		$ 900,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Weighted Average Grant Date Fair Value			$ 20.63	$ 12.25
Total unrecognized compensation	$ 800,000		$ 800,000
Weighted-average period of recognition of stock based compensation			2 years 10 months 8 days
Proceeds from exercise of stock options	0		$ 400,000
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs, Weighted Average Grant Date Fair Value			$ 67.17	$ 53.29
Total unrecognized compensation	9,200,000		$ 9,200,000
Weighted-average period of recognition of stock based compensation			2 years 10 months 30 days
Restricted stock unit withholdings	$ 600,000	$ 200,000	$ 800,000	$ 400,000
2018 Plan | ESPP | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance						1,500,000
2018 Plan | RSUs | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance						7,500,000
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, vesting term (in years)			4 years
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of fair market value on ESPP			85.00%
General duration of each offering period			6 months
ESPP | ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum percentage of compensation contributed by employees	10.00%		10.00%

Employee Benefit Plans (Schedul

Employee Benefit Plans (Schedule of Stock Option Activity) (Details) - Stock Options shares in Thousands	6 Months Ended
	Jul. 01, 2018$ / sharesshares
Number of shares
Beginning balance (in shares) | shares	78
Granted (in shares) | shares	25
Exercised (in shares) | shares	(1)
Expired (in shares) | shares	(2)
Other (in shares) | shares	3
Ending balance (in shares) | shares	103
Weighted Average Exercise Price Per Share
Beginning balance (in dollars per share) | $ / shares	$ 35.56
Granted (in dollars per share) | $ / shares	70.15
Exercised (in dollars per share) | $ / shares	35.03
Expired (in dollars per share) | $ / shares	15.22
Other (in dollars per share) | $ / shares	36.80
Ending balance (in dollars per share) | $ / shares	$ 44.31

Employee Benefit Plans (Sched48

Employee Benefit Plans (Schedule of RSU Activity) (Details) - RSUs - $ / shares shares in Thousands	6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017
Number of shares
Beginning balance (in shares)	132
Granted (in shares)	89
Vested (in shares)	(35)
Cancelled (in shares)	(2)
Other (in shares)	(1)
Ending balance (in shares)	183
Weighted Average Grant Date Fair Value Per Share
Beginning Balance (in dollars per share)	$ 45.54
Granted (in dollars per share)	67.17	$ 53.29
Vested (in dollars per share)	42.31
Cancelled (in dollars per share)	45.30
Other (in dollars per share)	52.85
Ending Balance (in dollars per share)	$ 56.56

Employee Benefit Plans (Sched49

Employee Benefit Plans (Schedule of Valuation and Expense Information) (Details)	3 Months Ended	6 Months Ended
	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	4 years 5 months	4 years 5 months	4 years 5 months
Risk-free interest rate	1.65%	2.32%	1.65%
Expected volatility	31.60%	30.90%	31.60%
Dividend yield	0.00%	0.00%	0.00%
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)		6 months	6 months
Risk-free interest rate		1.81%	0.66%
Expected volatility		37.10%	27.60%
Dividend yield		0.00%	0.00%

Employee Benefit Plans (Sched50

Employee Benefit Plans (Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, Restricted Stock Awards, and the Employee Stock Purchase Plan) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 3,252	$ 1,741	$ 5,947	$ 3,188
Arlo direct [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	1,047	674	1,899	1,352
Netgear indirect [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	2,205	1,067	4,048	1,836
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	347	167	683	299
Cost of revenue | Arlo direct [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	54	25	100	48
Cost of revenue | Netgear indirect [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	293	142	583	251
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	977	717	1,710	1,424
Research and Development Expense [Member] | Arlo direct [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	750	607	1,314	1,231
Research and Development Expense [Member] | Netgear indirect [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	227	110	396	193
Selling and Marketing Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	782	263	1,454	420
Selling and Marketing Expense [Member] | Arlo direct [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	243	42	485	73
Selling and Marketing Expense [Member] | Netgear indirect [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	539	221	969	347
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	1,146	594	2,100	1,045
General and Administrative Expense [Member] | Arlo direct [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	0	0	0	0
General and Administrative Expense [Member] | Netgear indirect [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 1,146	$ 594	$ 2,100	$ 1,045

Segment and Geographic Inform51

Segment and Geographic Information (Narrative) (Details)	6 Months Ended
	Jul. 01, 2018region
Segment Reporting [Abstract]
Number of operating segments	1
Number of geographic regions in which the Company conducts business	3

Segment Information (Schedule o

Segment Information (Schedule of Net Revenue by Geographic Areas) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Segment Reporting Information [Line Items]
Revenue	$ 110,948	$ 79,194	$ 211,586	$ 140,997
United States (U.S.)
Segment Reporting Information [Line Items]
Revenue	83,118	65,246	155,562	107,977
Americas (excluding U.S.)
Segment Reporting Information [Line Items]
Revenue	3,563	2,703	5,842	4,945
EMEA
Segment Reporting Information [Line Items]
Revenue	19,390	8,881	38,656	20,229
Asia Pacific
Segment Reporting Information [Line Items]
Revenue	$ 4,877	$ 2,364	$ 11,526	$ 7,846

Segment Information (Schedule53

Segment Information (Schedule of Long-Lived Asset by Geographic Areas) (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Long-Lived Assets [Line Items]
Total property and equipment, net	$ 12,389	$ 3,883
United States (U.S.)
Long-Lived Assets [Line Items]
Total property and equipment, net	10,232	2,053
Americas (excluding U.S.)
Long-Lived Assets [Line Items]
Total property and equipment, net	153	61
EMEA
Long-Lived Assets [Line Items]
Total property and equipment, net	200	1
China
Long-Lived Assets [Line Items]
Total property and equipment, net	1,742	1,702
APAC (excluding China)
Long-Lived Assets [Line Items]
Total property and equipment, net	$ 62	$ 66

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Related party receivables	$ 200		$ 200		$ 100
Related party payables	0		0		$ 0
Allocated expense from Parent	16,800	$ 9,400	30,600	$ 16,300
Research and Development Expense [Member]
Related Party Transaction [Line Items]
Allocated expense from Parent	5,100	3,000	9,400	5,000
Selling and Marketing Expense [Member]
Related Party Transaction [Line Items]
Allocated expense from Parent	5,400	3,000	10,000	5,200
General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Allocated expense from Parent	$ 6,300	$ 3,400	$ 11,200	$ 6,100

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions	Aug. 07, 2018	Aug. 02, 2018	Aug. 02, 2018	Aug. 01, 2018
Subsequent Event [Line Items]
Common Stock, Shares Authorized		500,000,000	500,000,000
Preferred Stock, Shares Authorized		50,000,000	50,000,000
Common Stock, Par or Stated Value Per Share		$ 0.001	$ 0.001
Stock Issued During Period, Shares, Stock Splits		62,499,000	62,500,000
Common Stock, Capital Shares Reserved for Future Issuance				9,000,000
Additional Shares Issued on IPO [Member]
Subsequent Event [Line Items]
Common Stock, Shares, Issued	1,532,250
IPO [Member]
Subsequent Event [Line Items]
Common Stock, Shares, Issued	11,747,250	10,215,000	10,215,000
Sale of Stock, Price Per Share		$ 16	$ 16
Proceeds from Issuance Initial Public Offering	$ 174.8
Payments for Initial Public Offering	$ 7.4
Sale of Stock, Percentage of Ownership after Transaction	84.20%