Arlo Technologies (ARLO)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -23,411 | -23,869 | -26,145 | -21,373 | -24,903 | -45,442 | -57,606 | -60,919 | -55,451 | -41,079 | -41,571 | -46,329 | -49,075 | -58,109 | -61,061 | -75,214 | -104,908 | -121,910 | -136,029 | -140,602 |
| Interest expense (ttm) | US$ in thousands | 0 | 726 | 726 | 1,561 | 2,287 | 2,073 | 2,363 | 1,657 | 936 | 439 | 150 | 24 | 43 | 70 | 143 | 291 | 802 | 1,356 | 1,878 | 2,439 |
| Interest coverage | — | -32.88 | -36.01 | -13.69 | -10.89 | -21.92 | -24.38 | -36.76 | -59.24 | -93.57 | -277.14 | -1,930.38 | -1,141.28 | -830.13 | -427.00 | -258.47 | -130.81 | -89.90 | -72.43 | -57.65 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-23,411K ÷ $0K
= —
Arlo Technologies' interest coverage ratio has displayed a consistently negative trend over the past few years. The ratio indicates the company's ability to cover its interest expenses with its operating income. A negative interest coverage ratio suggests that the company's operating income is insufficient to cover its interest payments.
The interest coverage ratio deteriorated from a low level of -57.65 as of March 31, 2020, to an even lower level of -1,141.28 as of December 31, 2021, before showing some improvement to -10.89 as of December 31, 2023. Despite the slight improvement, the company's interest coverage remains significantly below an acceptable level.
This declining trend in the interest coverage ratio may raise concerns about Arlo Technologies' financial stability and ability to meet its debt obligations in the long run. Investors and creditors typically prefer companies with higher interest coverage ratios, as it indicates a lower risk of default on interest payments.
It is essential for Arlo Technologies to closely monitor and manage its interest expenses while focusing on improving its operating income to enhance its interest coverage ratio and overall financial health.
Peer comparison
Dec 31, 2024