Does Earnest Money Count Toward Closing For Early Ira Withdrawal?

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Arlo Technologies(ARLO 5.04%)
Q1 2022 Earnings Call
May 10, 2022, five:00 p.k. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Phone call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, give thanks you lot for continuing by. [Operator instructions] I would now like to turn the briefing over to Erik Bylin. Delight go ahead, sir.

Erik Bylin -- Investor Relations

Cheers, operator. Good afternoon, and welcome to Arlo Technologies commencement quarter of 2022 financial results conference phone call. Joining us from the visitor are Mr. Matthew McRae, CEO; and Mr.

Gordon Mattingly, CFO. The format of the call will start with an introduction and commentary on the business provided by Matt, followed by a review of the financials for the first quarter along with guidance for the 2nd quarter provided by Gordon. We'll and then take time for any questions. If you have not received a copy of today's press release, please visit Arlo's investor relations website at investor.arlo.com.

Earlier nosotros brainstorm the formal remarks, nosotros advise you that today'southward conference call contains forrard-looking statements. Forward-looking statements include statements regarding our potential futurity business, operating results and financial conditions, including descriptions of our revenue, gross margins, operating margins, earnings per share, tax rates, expenses, cash outlook, guidance for the 2d quarter of 2022. Transition to a services-first concern model, the commercial launch and momentum of new products and services, strategic objectives and initiatives, market expansion and future growth, the effect of our anticipated sensation campaign on future growth. Partnerships with Verisure and Calix, connected new product and service differentiation, supply chain challenges, transportation costs and the impact of the COVID-19 pandemic on our business, operating results and financial weather condition.

Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more data, please refer to the risk factors discussed in Arlo's periodic filings with the SEC, including the about recent almanac study on Grade 10-1000 and quarterly report on Course ten-Q. Whatsoever forward-looking statements that we make on this phone call are based on assumptions as of today, and Arlo undertakes no obligation to update these statements as a result of new information or time to come events. In addition, several non-GAAP financial measures volition be discussed on this call.

A reconciliation of the GAAP to non-GAAP measures can be establish in today's printing release on our Investor Relations website. At this time, I would at present like to turn the telephone call over to Matt.

Matt McRae -- Primary Executive Officer

Thanks, Erik, and thanks, anybody, for joining united states today on Arlo's first quarter 2022 earnings phone call. My comments volition be focused on our record-breaking results in Q1 and a summary of our growth drivers going frontwards. For more particular on our plans, please refer to Arlo'southward recent investor day presentation. Our transformation continues to produce results that outperformed Q1 expectations beyond all metrics.

Full revenue reached $124.8 1000000, upwardly 51% year over year and well higher up the pinnacle cease of our guidance. Service revenue reached $29.9 million, up 31% year over year and marked a record for the 11th consecutive quarter. Total paid accounts were up 132% year over twelvemonth with Arlo adding 205,000 paid accounts in the quarter, which represents an increment of viii% sequentially and lxxx% year over year. Our annualized recurring revenue, or ARR, accomplished a significant landmark by breaking through $100 million, exiting Q1 at $101 million and growing 74% year over year.

Equally a reminder, our ARR is the fastest growing and highest margin portion of our service acquirement and represents the annualized recurring service revenue we derive from our paid accounts. Despite the additional costs driven by the pandemic supply concatenation disruptions, we posted our highest ever non-GAAP gross turn a profit of $34.5 million and our second consecutive quarter of non-GAAP operating profit, outperforming the high terminate of our guidance for not-GAAP EPS, which came in at a profit of $0.01 per share. These infrequent Q1 results menses from the incredible transformation at Arlo and our focus on a services-outset strategy, where roughly two-thirds of our hardware buyers become subscribers. Every bit nosotros shared last quarter, the accounts we capture through domestic retail have an ARPU of $ix.35 per month, and when combined with our low earth-form churn metrics translates to an LTV of $550 per user based on Q421 data.

Looking ahead, Arlo is executing a new long-range plan as described at our almost recent Investor Day that focuses on iii chief areas of the business to drive revenue growth, margin expansion and through that shareholder value. Kickoff, while our all-time-in-grade products and services generate significant accolades, the No. 1 reason people don't buy Arlo products is because they have not heard of Arlo. We volition begin to invest in brand sensation in a targeted way, focused on new household formation and driving incremental subscriptions.

Second, we are expanding our production portfolio to address new segments and new markets. We expect Arlo Safe volition launch in Q3 and provide personal protection for an private or entire family. And in Q4, we plan to launch our new innovative Security System that brings full sensor-based security functionality to our ecosystem of smart cameras. Both of these new segments provide meaning opportunities to drive new subscriptions and grow our ARPU.

And third, we will continue to broaden our routes to market place. Our nigh prominent example of this to date has been our Verisure relationship, which has been very successful, driving outsized growth in Europe and only looks more promising going forward. We also formed a partnership with Calix last year, in which Calix integrated Arlo services into their platform to broadband service providers effectually the country. Today, 29 broadband service providers are signed up, and we are excited to ramp this in the coming year.

As we execute these growth strategies and work to realize our new three- to five-year targets of 5 1000000 paid accounts, $300 million in ARR and double-digit operating margin, Arlo volition exhibit the same discipline that we demonstrated as we transformed our business. And with that, I would like to paw the phone call over to Gordon, who will provide more than insight into our fiscal functioning, operational details and outlook for the second quarter.

Gordon Mattingly -- Main Financial Officeholder

Thank y'all, Matt, and thank y'all, everyone, for joining us today. We delivered strong Q1 2022 financial results that exceeded our expectations, growing our revenue by 51.1% year over year and higher up the loftier end of our guidance, while growing non-GAAP gross profit sequentially and twelvemonth over year to a record for the company of $34.v meg. Our financial functioning for the quarter was over again underpinned by the successful execution of our services get-go concern model, leading to record levels of paid accounts. The Arlo squad navigated continuing tough supply conditions to exceed our expectations on revenue, while improving our year-over-year non-GAAP operating profitability by $4.1 meg and posting our 2nd consecutive quarter of non-GAAP operating profit.

And now moving on to the Q1 financial particular. Revenue came in at a first fiscal quarter record of $124.eight million, upward 51.i% year over year and down only 12.7% sequentially. The potent sequential revenue result conspicuously demonstrates how our aqueduct diversification and ARR growth are benefiting the business organization. Our service revenue for Q1 2022 was a record $29.ix million, up 5.ane% sequentially and 31.three% yr over year with our services commencement business organization model, fueling our growth.

While service revenue accounted for 24% of our Q1 2022 acquirement, it delivered 56.8% of our not-GAAP gross profit. Our service revenue besides includes $0.1 million of NRE services we are providing for Verisure, forth with associated costs, as compared with $1.one million in the fourth quarter of 2021. Product acquirement for Q1 2022 was $94.8 million, which was upwards 58.7% year over year and down 17.1% sequentially. Our yr-over-year product revenue growth was driven past connected strength from our Verisure relationship in Europe, coupled with growth in retail in Americas, where we were pleased to bring retail aqueduct inventory dorsum upward to more normal levels.

During the commencement quarter, nosotros shipped approximately 1 million devices, all of which were cameras. From this signal on, my discussion points will focus on non-GAAP numbers. A reconciliation from GAAP to not-GAAP is detailed in our earnings release distributed earlier today. Our not-GAAP gross profit for the first quarter of 2022 was up $7.8 1000000 yr over yr and up $1.8 million sequentially to $34.5 meg, which resulted in a non-GAAP gross margin of 27.6%, down from 32.iii% in Q1 2021 and up 4.seven percentage points from 22.9% in Q4 2021.

The $7.viii one thousand thousand twelvemonth-over-year improvement in non-GAAP gross profit included an improvement of $6.four meg from services and $1.iv 1000000 from products. The comeback in non-GAAP service gross profit was driven by growth in our ARR, coupled with toll optimization. The improvement in not-GAAP product gross turn a profit was driven by college revenue, more than than offsetting an incremental $3.3 meg of air freight expense due to COVID-xix-related supply chain challenges. Non-GAAP service gross margin came in at a record 65.4%, significantly up from 57.9% in Q1 2021 and an improvement on 63.2% in Q4 2021.

Non-GAAP product gross margin was 15.7%, down from 22.6% in Q1 2021, mainly due to a year-over-year increase of $3.iii 1000000 in air freight expense and up from 12.9% sequentially, helped by a $iii.ane 1000000 reduction in air freight expense. Total not-GAAP operating expenses were $33.4 million, upwards $4.iii million or 14.7% sequentially and up $3.7 1000000 or 12.iv% year over year as we invest in R&D ahead of our new product and service introductions and lay the background for our upcoming awareness campaign. Our full non-GAAP R&D expense for the third quarter was up $2.8 million sequentially at $fourteen.1 meg. Our headcount at the cease of Q1 with 358 employees compared to 353 in the prior quarter.

As a reminder, during the early on stages of the Verisure human relationship, nosotros agreed to provide them with transition services, which include training with Arlo employees, as well as systems costs and some outside service costs. We have included these costs in our normal operating expenses. The reimbursement from Verisure is included in other income and was approximately $0.four million during Q1. Our not-GAAP tax expense for the get-go quarter of 2022 was $0.two one thousand thousand.

In Q1, we posted a non-GAAP net profit per diluted share of $0.01, and much better than our guidance and a $0.04 comeback year over year. Nosotros ended the quarter with $145.5 million in greenbacks, cash equivalents and brusque-term investments, down $30.2 million sequentially and down $31.vi 1000000 year over year. The sequential reduction was driven by reductions in accounts payable in line with sequentially lower product purchases and deferred acquirement, in line with Verisure's prepaid product purchases. Q1 inventory flows at $37 meg, a decrease of $1.4 1000000 over Q4 2021, returns at eight.seven% equally compared to 10.v% last quarter and iii.four% a yr ago.

Our DSO came in at 58 days, up from 54 days a year agone and up from 50 days sequentially, with the increase driven by customer mix. Now turning to our outlook. We expect second quarter revenue to be in the range of $105 one thousand thousand to $115 million. We expect our GAAP net loss per diluted share to come up in betwixt $0.19 and $0.14 per share.

At present our non-GAAP internet loss of diluted shares come in between $0.08 and $0.03 per share. Our guidance includes approximately $ane.2 one thousand thousand of awareness spending as nosotros develop content and messaging ahead of starting our campaign in earnest in the third quarter, in line with what nosotros communicated in our analyst twenty-four hour period in March. In line with previous guidance, nosotros expect to stop the twelvemonth with $110 million to $120 million in cash, greenbacks equivalents and curt-term investments. And nosotros will continue to monitor our performance and prudently manage our operations to preserve our cash position.

And at present I'll open it up for questions.

Questions & Answers:

Operator

[Operator instructions] Your first question comes from the line of Catherine Huntley with Raymond James. Your line is open up.

Catherine Huntley -- Raymond James -- Analyst

Hey guys, congratulations on a great quarter. This is Catherine on for Adam.

Matt McRae -- Chief Executive Officer

Dandy. Thank you. Good to talk to y'all.

Catherine Huntley -- Raymond James -- Annotator

Tin can you talk about the weeks of channel inventory and how they're elevated globally? And could you mayhap speak to why we're seeing channel inventory increment while supply is still very tight? And how tin we retrieve about the financial impact of this normalizing?

Gordon Mattingly -- Chief Financial Officer

Yeah, sure. Looking at the aqueduct inventory, typically, permit's intermission information technology out into the relevant parts. So looking at Americas retail ended at just over xv weeks, we would typically target ten to xiv weeks of stock in the channel to exist a normal level for retail. So we're just a little bit higher up the target range, but non by much.

And quite frankly, nosotros're actually happy for it to be there. We did go stopped toward the end of the quarter, and the denominator in that adding is the last six weeks of sell-through. And then you're looking at a situation where inventory was filled toward the end of the quarter and the sell-through earlier that was slightly depressed due to shortage of inventory. So I retrieve that's the context you need for the Americas retail inventory.

Nosotros think information technology's actually a pretty normal level. And quite frankly, nosotros're quite pleased to have it at that level compared to where it has been. Then if we look at APAC, APAC distribution is a little bit on the loftier side, merely you demand to appreciate APAC distribution is a very relatively immaterial office of our business organisation. So from a dollar perspective, it's not very meaningful.

We're making a small destock in APAC in Q2, and that'due south already reflected in the guide, but it's certainly not material. And so overall, I recall we're pretty well-positioned from a channel inventory perspective, I don't encounter anything apropos there at all.

Catherine Huntley -- Raymond James -- Annotator

Perfect. Thank you so much for that color. And you've previously laid out your discretionary plan for make awareness and what you'll exist spending about $10 million per quarter. And you lot spoke about this on the tail terminate of the phone call.

What are the learnings and so far that you've had as you approach this investment given that it'due south coming up? And how tin can we remember about the timing and magnitude? What has inverse since the concluding call?

Matt McRae -- Master Executive Officer

Aye. Cracking question. Yep. So we're all the same committed to doing the spend that nosotros talked nigh at the Annotator Day.

And only as a reminder, it'due south a relatively minor defined spend from an amount perspective, just as well from a time perspective. So the last six months of the yr, we're doing that $twenty 1000000 spend like you architected -- articulated just in your question. And then await at those results at the end of the year going into next year to determine where we want to adjust that going frontward. The ultimate metric from the spend will be incremental paid accounts, right, that are driving the LTV and the shareholder value in the company.

So we're committed to this well-divers and kind of disciplined spend in the second one-half. Every bit we've been planning it, there hasn't been a lot of changes. Nosotros are looking for changes in the media landscape. We are looking for some of that equally we'll become into -- closer to the spend, which is going to be in Q3, every bit Gordon articulated.

But right at present, there hasn't been any changes since the Annotator Day, and we're looking forward to not just executing that spend, just sharing the results of that at the end of the year.

Catherine Huntley -- Raymond James -- Annotator

Neat. It's always a pleasure and go on up the neat piece of work.

Matt McRae -- Main Executive Officer

Thank you very much.

Gordon Mattingly -- Main Fiscal Officeholder

Thank you lot.

Operator

Your next question comes from the line of Hamed Khorsand with BWS Financial. Your line is open up.

Hamed Khorsand -- BWS Fiscal -- Annotator

Hi. I just want to know about the paid users. The amount -- the growth that you saw this quarter, does that include anything from your partners, Verisure or the 29 broadband service providers?

Matt McRae -- Primary Executive Officer

Yeah. So it is across, only a lot of those gains are plain from the retail holiday season, right? Yous know we take a xc-24-hour interval free trial. And then a lot of the paid or POS that we run across that comes from the holiday menses, those accounts tend to become paid accounts in the Q1. And then you lot're seeing some of that, manifestly, growth is coming from retail, coming on the 90-day post trial after purchases in the vacation period.

And we've seen a growth in Verisure. We've mentioned that the custom camera is starting to ramp and you're seeing that in some of the results from a revenue mix perspective. And as you know, some of the directly business organisation that nosotros do with Verisure is a one to one on paid accounts. I would say those are the two primary areas of growth and paid accounts.

We are starting to see Calix ramp, simply I think that will take longer before it's really material in the paid accounts. Nosotros did share on the call that we now have 29 BSPs or broadband service providers that are at present agile at least from an onboarding perspective through Calix. Nosotros expect that number to continue to ramp. And then I recollect the contribution from Calix volition be afterward in the twelvemonth going into the following year as a lot of these strategic accounts kind of take a while to ramp.

Hamed Khorsand -- BWS Financial -- Analyst

And is the contribution from Verisure something like a pace-up every quarter? Or is it going to be lumpy?

Matt McRae -- Chief Executive Officeholder

It'south a niggling bit more than steady is what nosotros come across from Verisure because while the retail paid accounts will, at some point, follow some seasonality like we were talking about, right? A lot of hardware sold in Q4 will drive paid accounts in Q1, and you'll see some seasonality in at to the lowest degree the growth on paid accounts from a normal retail concern. Verisure'due south direct business, which is beginning to ramp especially with the custom camera nosotros launched last year, will be a picayune flake more steady quarter over quarter because it doesn't really adhere to the normal promotional periods you would encounter in a traditional consumer channel. I don't think we've seen a huge touch of that however, but that's an result, I call back nosotros'll see as we keep to ramp the direct business with Verisure over fourth dimension.

Hamed Khorsand -- BWS Financial -- Analyst

OK. And I didn't hear you say this in the script, but are you still at a 50% conversion rate for hardware?

Matt McRae -- Main Executive Officer

Yep. So those numbers really haven't changed. And then the -- nosotros take 2 metrics that I think we've shared in the past. I is that initial conversion rate, which is what y'all're talking near, which is right virtually 50%, and that's really a measure of how many people have signed up in the gratis trial and the 30 days post of that gratuitous trial expiring.

So that start 120 days from the hardware activation, that's 50%. And so we've shared what we call the half dozen-month cohort and we count that every bit an attach rate. And so what we've washed is we follow the dissimilar populations beyond our different products and channels and everything, and those are all consistent too, roughly around what we shared in the script, roughly that 65%, almost two-thirds of hardware purchasers vi months later on in a cohort analysis are attached to service at that fourth dimension. So we do still accept -- it rises from 50% to that 65% over some additional time as some people are signing up after that initial conversion catamenia.

Hamed Khorsand -- BWS Financial -- Analyst

OK. Great. Cheers.

Matt McRae -- Principal Executive Officer

You're welcome.

Operator

Your side by side question comes from the line of Jeff Osborne with Cowen and Co. Your line is open.

Jeff Osborne -- Cowen and Company -- Annotator

Yeah, skilful afternoon, guys. A couple of questions. I was wondering if yous could sort of post mortem diagnose where the upside came from in the quarter relative to your initial expectations. I heard two rationale on the call.

One was the supply chain management and so also U.S. retail aqueduct. I wasn't certain if both of those were the source of upside or one versus the other.

Gordon Mattingly -- Main Financial Officer

Yeah, it's a combination. I think y'all nailed it pretty well there. We were able to get a little scrap more supply than what we're expecting at the time of the guide. That definitely helped.

And as we talked most earlier, we were able to get some additional inventory, very welcome inventory into the U.S. retail channel in particular, which was also not something that nosotros had visibility into at the time nosotros guided. So it'south really those two things, but largely simply tied to supply availability.

Jeff Osborne -- Cowen and Company -- Analyst

Got information technology. And then Gordon, how does -- has annihilation inverse in the last four to five weeks with the lockdown in Red china and some of the components that get back and forth in Communist china to Southeast Asia to be made in packages? I'chiliad merely curious what the COVID shutdown in Communist china does to the ever aging battle of supply chain management for you folks in the manufacture more broadly.

Gordon Mattingly -- Chief Financial Officer

Yeah. Well, it certainly doesn't make it easier, for certain. We plain manufacture, as you know, in Vietnam and Batam and we do have components obviously being manufactured -- express components manufactured in Shanghai. I would say we've seen a trivial bit of affect there.

Not a big amount. The touch we've seen has been reflected in the guide, anyway. I interesting 1 that we practice see is congestion actually crossing the border from China into Vietnam. That's definitely stepped up in lite of lockdowns as an additional that nosotros face and we're just looking at alternative routes to get those components into Vietnam.

But other than that, we haven't seen much of a downside so far. I say and so far. Simply on the bright side we are seeing some nice reductions in air freight rates, we're seeing some nice reductions in bounding main freight rates. We're actually seeing depression transit times from Vietnam for example to the U.S.

Those have come downwards from kind of pandemic heights of seventy-day transit times down to something more than like 50 days, which is welcome news. So that part of it, heading in the right management and yes, you rightly said the lockdowns in China are having a slightly negative effect.

Jeff Osborne -- Cowen and Company -- Annotator

Got it. And the last question I had was the helpful chart showing the DIY market share growth over the past three years in the deck. I was wondering within the DIY camera market and security market, what you felt your share has been over the past three years. If y'all could sort of give some helpful metrics there.

Matt McRae -- Master Executive Officeholder

Yeah, it's changed and it's hard to practise an apples-to-apples comparison because some of the key market studies that really present that from a third-party perception, like NPD actually inverse the fashion that they calculated them. And they started bringing in FirstParty.com and another things that are reported by some, but not by others goes up and down based on promotional timing, both our promotional timing simply also the promotional timing of our competitors. I haven't seen a lot of real large movements recently. We did run into a decline in market share dorsum in that time flow.

And that was expected and kind of congenital in. We decided to focus on the customers' market segments, toll segments and channels that nosotros're going to deliver who are actually just selling hardware and it was not a high propensity to subscribe to service after the hardware purchase. So we saw that initial decline so had kind of laid into a relatively consistent share over the last couple of fourth dimension periods. And so I haven't seen any existent big movement.

We haven't seen a lot of movements in the market in general from competitive behavior or anything else.

Jeff Osborne -- Cowen and Company -- Analyst

Thanks. Appreciate the thoughts. That's all I had.

Operator

Your next question comes from the line of Mark Argento with Lake Street Upper-case letter. Your line is open.

Mark Argento -- Lake Street Upper-case letter Markets -- Analyst

Hey, good afternoon, guys. Only a couple of quick ones. Offset, on gross margins, beat our numbers nicely or estimates. And do you anticipate simply kind of given the current environment, you're going to be able to maintain kind of that 26%, 27% level going forward? Any thoughts effectually kind of the tendency at that place?

Gordon Mattingly -- Chief Financial Officer

Hey Mark, it's Gordon here. I would expect at it separately breaking it out between service revenue and product revenue. And I think the guidance we've already given on both those stays in place. On service revenue, we've guided 60% to 65%.

We still stick to that. It was squeamish to come in slightly above that in Q1. Nosotros did benefit in Q1 a piddling bit from mix benefit just with the Verisure NRE beingness a slightly lower proportion of the mix but we stick to the guidance we've given 60% to 65% on the service gross margin. And on the production side of things, depression to mid-teens is where we run across it probably downwardly -- ticking downwardly a piffling bit from where we were at in Q1 and Q2.

Merely I think the low to mid-teens on the production side of things is where nosotros run into information technology panning out. So not vastly different to what the actual results you saw in Q1, that'due south the guidance nosotros've given for the year.

Marker Argento -- Lake Street Capital Markets -- Analyst

Not bad. That'southward helpful. And then, Matt, you had mentioned the 29 ESPs by the Calix relationship. Equally you lot launch boosted products, in particular, the total security suite, are those going to become through the channel besides? How do you retrieve almost products and so channel distribution?

Matt McRae -- Chief Executive Officer

Yeah. It's a dandy question. I mean similar the Calix human relationship, it's a very positive one. And I recollect we've mentioned in the by that we experience information technology's helping u.s.a. accomplish households that are probably underserved from some of our channels.

These are -- tend to be more rural or smaller areas of the country that may not have a Best Buy or Costco nearby merely as an example. And then what I can say is Calix and Arlo, we've done a pretty deep integration on the back. It's one of the reasons why the ramp takes a lilliputian while. In that location'south a lot of technical integration on the dorsum.

And so we look at the products and boosted services every bit a layer on top of that and a slap-up fashion to kind of leverage the work that's been washed on the initial integration. So the cameras, as you know, are rolling out, and that'south what we're kind of talking about different DSPs that are signing upwardly. And terminal quarter, I think nosotros mentioned it at the Investor 24-hour interval, we did announce that Calix is too committed to rolling our security system. And then that will be longer because there is an boosted integration that needs to happen.

So we didn't release a date yet. Just they are committed, and we are committed with them to deploy the security system in addition to our cameras over time. And that'south what's great almost some of these partnerships is they're typically not focused on a unmarried product. They're focused on a longer-term relationship that cuts beyond products, especially after you've washed the kind of deeper platform integration work.

So they've kind of paid dividends over fourth dimension. And we're going to run into that with Calix over the next year or so.

Mark Argento -- Lake Street Majuscule Markets -- Analyst

Neat. And then just one terminal one. In terms of supply chain, and I know component availability is nevertheless an result broadly. Simply any business organisation that yous're not going to exist able to become the security products out by the second half of this twelvemonth? Or you got some conviction that y'all can source what y'all need?

Matt McRae -- Master Executive Officer

Aye. So just on a general level, I retrieve Gordon did a great job kind of breaking down where nosotros see freight because that's office of this likewise. So from a freight perspective, we are seeing improvements. And we're seeing that, equally Gordon mentioned, both in cost and in time for delivery, right? Actual transit time of coming into united states.

And so that's actually helping us because when the transit time is shorter that means component purchasing tin happen afterwards, which actually helps on the component side when things are short. And that'south why I bring that upward. Components, you're correct. Absolutely.

Components are still relatively tight. It's not across the board. It'due south kind of hit and miss in different areas. We've been forecasting the security system from a component level perspective for quite a while.

I recollect nosotros've mentioned on the Investor Twenty-four hour period and one of the questions where we tend to have our forecasting at a component level most out 50 weeks to requite our component suppliers a lot of visibility. And we take done that on the security system as well. So at this time, we're confident that we've got the supply that we demand to launch the production in Q4 and accept already forecasted Q1 and Q2 into the organisation also.

Marking Argento -- Lake Street Capital Markets -- Analyst

Great. Thank you, guys.

Matt McRae -- Principal Executive Officer

Hey, yous're welcome.

Gordon Mattingly -- Chief Financial Officer

Thank you.

Operator

In that location are no further questions. I'll turn the call back to Matthew McRae for closing remarks.

Matt McRae -- Primary Executive Officeholder

Cheers, operator. I'd similar to just take a moment to thank all of the teams at Arlo. I know a lot of them listen in for the hard work to deliver such an amazing effect for Q1. We're at the outset of our new long-range plan that we described last quarter and Q1 was an absolutely outstanding start.

So give thanks yous to the team, and cheers for everyone joining the telephone call today.

Operator

[Operator signoff]

Duration: 34 minutes

Telephone call participants:

Erik Bylin -- Investor Relations

Matt McRae -- Master Executive Officer

Gordon Mattingly -- Chief Fiscal Officeholder

Catherine Huntley -- Raymond James -- Analyst

Hamed Khorsand -- BWS Financial -- Analyst

Jeff Osborne -- Cowen and Visitor -- Analyst

Mark Argento -- Lake Street Capital Markets -- Analyst

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