Employee Benefit Plans

3 Months Ended

Mar. 29, 2026

Employee Benefit and Share-Based Payment Arrangement, Noncash Expense [Abstract]

We grant options and restricted stock units (“RSUs”) under the 2018 Equity Incentive Plan (the “2018 Plan”), under which awards may be granted to all employees. We also grant performance-based and market-based restricted stock units (“PSUs”) to our executive officers and other senior employees periodically. Award vesting periods for the 2018 Plan are generally three to five years. As of March 29, 2026, 3.3 million shares were available for future grants. Options may be granted for periods of up to 10 years or such shorter term as may be provided in the agreement and at prices no less than 100% of the fair market value of Arlo’s common stock on the date of grant. Options granted under the 2018 Plan generally vest over three to four years, the first tranche at the end of 12 months and the remaining shares underlying the option vesting monthly over the remaining years.

On January 23, 2026, we registered an aggregate of up to 4,200,189 shares of common stock under the 2018 Plan on a Registration Statement on Form S-8 pursuant to an “evergreen” provision contained in the 2018 Plan.

The following table sets forth the available shares for grants as of March 29, 2026:


			Number of Shares
			(In thousands)
Shares available for grants as of December 31, 2025			4,409
Additional authorized shares			4,200
Granted			(5,395)
Forfeited / expired / cancelled			105

Shares available for grants as of March 29, 2026			3,319

Employee stock purchase plan

We sponsor the ESPP for eligible employees. There were no ESPP purchases during either the three months ended March 29, 2026 or March 30, 2025. As of March 29, 2026, 3.1 million shares were available for issuance under the ESPP.

Option activity

We did not grant options during the three months ended March 29, 2026. Stock option activity during the three months ended March 29, 2026 was as follows:


	Number of Shares	Weighted Average Exercise Price Per Share
	(In thousands)	(In dollars)
Outstanding as of December 31, 2025	275	$	14.10
Granted	—	$	—
Exercised	—	$	—
Expired / cancelled	—	$	—
Outstanding as of March 29, 2026	275	$	14.10
Vested and exercisable as of March 29, 2026	275	$	14.10

RSU activity

RSU activity, exclusive of PSU activity, during the three months ended March 29, 2026 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
	(In thousands)	(In dollars)
Outstanding as of December 31, 2025	6,481	$	9.99
Granted	2,508	$	13.78
Vested	(2,352)	$	10.45
Forfeited / cancelled	(102)	$	12.66
Outstanding as of March 29, 2026	6,535	$	11.17

PSU activity

Our executive officers and other senior employees have been granted PSUs with some vesting occurring when performance conditions are met. The number of units earned and eligible to vest are determined based on the achievement of various performance conditions, including annual recurring revenue, cumulative paid accounts, subscriptions and services gross profit and gross margin, and the recipients’ continued services. At the end of each reporting period, we evaluate the probability of achieving the performance conditions and record the related stock-based compensation expense based on the estimated achievement over the service period.

PSU activity during the three months ended March 29, 2026 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
	(In thousands)	(In dollars)
Outstanding as of December 31, 2025	2,970	$	10.56
Granted	2,887	$	14.15
Vested	(1,934)	$	10.29
Forfeited / cancelled	(3)	$	8.28
Outstanding as of March 29, 2026	3,920	$	11.18

Stock-based compensation expense

The following table sets forth the stock-based compensation expense by line item on the unaudited condensed consolidated statements of operations and comprehensive income (loss):


	Three Months Ended
	March 29, 2026		March 30, 2025
	(In thousands)
Cost of revenue	$	1,374	$	1,117
Research and development	7,171		3,900
Sales and marketing	3,174		3,073
General and administrative	8,015		8,922
Stock-based compensation, net of amounts capitalized	$	19,734	$	17,012
Capitalized stock-based compensation	305		601
Total stock-based compensation	$	20,039	$	17,613

As of March 29, 2026, all outstanding options were fully vested, therefore, there was no unrecognized compensation cost related to stock options. As of March 29, 2026, $106.6 million of unrecognized compensation cost related to unvested RSUs and PSUs is expected to be recognized over a weighted-average period of 2.3 years.