DIAGNOSIS App permissions on your phone are blocking the microphone. This is the most common cause, especially after a phone OS update.
FIX On your phone, go to system Settings > Apps > Arlo > Permissions. Ensure the 'Microphone' permission is toggled ON. Then, force-close the Arlo app and reopen it. The mic icon should now be white, not grey.
IF THAT DIDN'T WORK The camera's built-in microphone may be disabled in the settings. In the Arlo app, go to the camera's Device Settings > Audio Settings. Ensure 'Microphone' is enabled. Also, check that 'Privacy Mode' is not active.
HEADS UP Two-way audio only works in Live View, not during playback of recordings. There is a slight delay. Speak clearly and pause for a second after pressing the talk button. Windy conditions will make your voice hard to hear on the other end.