Diagnosis
The microphone on the camera might be partially blocked, or more commonly, the audio stream is being compressed too much due to a poor WiFi connection.
How to Fix It
First, check the physical microphone port. It's a tiny hole near the lens. Use a can of compressed air (from a distance, gently) or a dry toothpick to clear any dust or lint. Then, test the audio with the camera placed right next to your router to rule out network issues.
If That Didn't Work
Try disabling the "Noise Cancellation" feature in the camera's audio settings in the Arlo app. It can sometimes over-correct and muffle all sound. Also, make sure you haven't accidentally enabled "Privacy Mode," which mutes the microphone.
Heads Up
The speaker in the camera isn't powerful. If you're trying to listen through a phone or tablet in a noisy environment, use headphones. The audio quality is highly dependent on your upload speed from the camera's location.