NETGEAR® Reports Third Quarter 2024 Results
NETGEAR reported Q3 2024 net revenue of $182.9 million, exceeding guidance despite a 7.6% decrease year-over-year. The company achieved GAAP operating income of $95.8 million (52.4% of revenue) and non-GAAP operating income of $1.6 million (0.9% of revenue). Notable achievements include the fifth consecutive quarter of free cash flow generation and a $101.4 million increase in cash position to $395.7 million. The ProAV business reached record end-user sales, and inventory declined by $27.0 million. For Q4 2024, NETGEAR projects revenue between $160-175 million with expected margin pressure due to inventory reduction efforts and increased promotional activities.
NETGEAR ha riportato un fatturato netto per il terzo trimestre del 2024 di 182,9 milioni di dollari, superando le previsioni nonostante un decrease del 7,6% rispetto all'anno precedente. L'azienda ha raggiunto un reddito operativo GAAP di 95,8 milioni di dollari (52,4% del fatturato) e un reddito operativo non-GAAP di 1,6 milioni di dollari (0,9% del fatturato). Tra i risultati notevoli, vi è stata la generazione di flusso di cassa libero per il quinto trimestre consecutivo e un aumento della posizione di cassa di 101,4 milioni di dollari, portando il totale a 395,7 milioni di dollari. Il settore ProAV ha raggiunto vendite agli utenti finali da record, mentre le scorte sono diminuite di 27,0 milioni di dollari. Per il quarto trimestre del 2024, NETGEAR prevede un fatturato compreso tra 160 e 175 milioni di dollari, con una pressione sui margini attesa a causa degli sforzi di riduzione delle scorte e degli aumentati eventi promozionali.
NETGEAR reportó ingresos netos de 182,9 millones de dólares para el tercer trimestre de 2024, superando las expectativas a pesar de una disminución del 7,6% en comparación con el año anterior. La compañía logró un ingreso operativo GAAP de 95,8 millones de dólares (52,4% de los ingresos) y un ingreso operativo no-GAAP de 1,6 millones de dólares (0,9% de los ingresos). Logros notables incluyen el quinto trimestre consecutivo de generación de flujo de caja libre y un aumento de 101,4 millones de dólares en la posición de efectivo, alcanzando 395,7 millones de dólares. El negocio de ProAV llegó a ventas récord para los usuarios finales, y el inventario disminuyó en 27,0 millones de dólares. Para el cuarto trimestre de 2024, NETGEAR proyecta ingresos de entre 160 y 175 millones de dólares con una presión esperada sobre los márgenes debido a los esfuerzos de reducción de inventario y actividades promocionales incrementadas.
NETGEAR는 2024년 3분기 순 매출이 1억 8,290만 달러에 달하여, 전년 대비 7.6% 감소에도 불구하고 가이던스를 초과했다고 보고했습니다. 이 회사는 GAAP 운영 소득 9,580만 달러 (매출의 52.4%)과 비-GAAP 운영 소득 160만 달러 (매출의 0.9%)를 달성했습니다. 주목할 만한 성과로는 연속 다섯 분기째 발생한 자유 현금 흐름과 현금 보유가 3억 9,570만 달러로 1억 1,140만 달러 증가한 것이 있습니다. ProAV 사업부는 기기 사용자 판매에서 기록을 세웠고, 재고는 2,700만 달러 줄었습니다. 2024년 4분기에는 NETGEAR가 매출을 1억 6,000만에서 1억 7,500만 달러로 예상하며, 재고 감축 노력과 증가된 프로모션 활동으로 인한 마진 압박이 예상됩니다.
NETGEAR a annoncé un chiffre d'affaires net de 182,9 millions de dollars pour le troisième trimestre 2024, dépassant les prévisions malgré une baisse de 7,6 % par rapport à l'année précédente. La société a réalisé un résultat opérationnel GAAP de 95,8 millions de dollars (52,4 % du chiffre d'affaires) et un résultat opérationnel non-GAAP de 1,6 million de dollars (0,9 % du chiffre d'affaires). Parmi les réussites notables figurent le cinquième trimestre consécutif de génération de flux de trésorerie libre et une augmentation de 101,4 millions de dollars de la position de trésorerie, atteignant 395,7 millions de dollars. Le secteur ProAV a atteint des ventes record aux utilisateurs finaux, et les stocks ont diminué de 27,0 millions de dollars. Pour le quatrième trimestre 2024, NETGEAR prévoit un chiffre d'affaires compris entre 160 et 175 millions de dollars, avec une pression attendue sur les marges en raison des efforts de réduction des stocks et des activités promotionnelles accrues.
NETGEAR meldete im dritten Quartal 2024 einen Nettoumsatz von 182,9 Millionen US-Dollar, was die Prognosen übertraf, obwohl ein Rückgang von 7,6 % im Jahresvergleich verzeichnet wurde. Das Unternehmen erzielte ein GAAP-Betriebsergebnis von 95,8 Millionen US-Dollar (52,4 % des Umsatzes) und ein nicht-GAAP-Betriebsergebnis von 1,6 Millionen US-Dollar (0,9 % des Umsatzes). Zu den bemerkenswerten Erfolgen zählt die fünfte aufeinanderfolgende Quartalsgenerierung von freiem Cashflow sowie ein Anstieg der liquiden Mittel um 101,4 Millionen US-Dollar auf insgesamt 395,7 Millionen US-Dollar. Das ProAV-Geschäft erreichte Rekordverkäufe an Endverbraucher, während der Inventarbestand um 27,0 Millionen US-Dollar sank. Für das vierte Quartal 2024 prognostiziert NETGEAR einen Umsatz zwischen 160 und 175 Millionen US-Dollar, wobei aufgrund der Bestandsreduzierungsmaßnahmen und erweiterten Verkaufsaktionen mit Margenbelastungen gerechnet wird.
- Revenue of $182.9 million exceeded guidance
- GAAP operating income of $95.8 million, representing 52.4% of revenue
- Cash position increased by $101.4 million to $395.7 million
- Fifth consecutive quarter of free cash flow generation
- ProAV business achieved record sales
- NFB topline grew over 10% year over year
- Inventory reduced by $27.0 million
- Revenue decreased 7.6% year-over-year
- Non-GAAP operating income declined to $1.6 million from $5.3 million YoY
- Q4 guidance indicates lower revenue of $160-175 million
- Expected negative operating margin for Q4 2024 (-12.4% to -9.4% GAAP)
- Higher transportation costs due to Red Sea shipping crisis
Insights
NETGEAR delivered mixed Q3 results with notable achievements and challenges.
- Cash position strengthened significantly to
$395.7M , up$101.4M QoQ - Inventory reduced by
$27M sequentially to under 4 months coverage - NFB segment grew
10% YoY with strong ProAV performance
However, Q4 guidance suggests challenges ahead with projected revenue of
The ProAV business segment shows promising momentum with record end-user sales and 30+ new manufacturing partnerships, indicating strong market positioning. However, broader market dynamics present mixed signals:
- Mobile division launched innovative M7 Pro with WiFi 7 capability, but service provider channel revenue expected to decline in Q4
- Red Sea shipping crisis impacting transportation costs
- Retail segment facing increased promotional pressure during holiday season
While operational improvements are evident in inventory management and cash generation, the projected negative operating margins for Q4 suggest ongoing market challenges. The company's transformation under new leadership shows progress but faces near-term headwinds.
Q3 net revenue of
Achieved GAAP and non-GAAP profitability, above the high end of guidance
Fifth consecutive quarter of free cash flow generation
Added more than
-
Third quarter 2024 net revenue of
, a decrease of$182.9 million 7.6% from the comparable prior-year quarter. -
Third quarter 2024 GAAP operating income of
, or$95.8 million 52.4% of net revenue, as compared to operating loss of , or (0.3)% of net revenue, in the comparable prior-year quarter.$0.6 million -
Third quarter 2024 non-GAAP operating income of
, or$1.6 million 0.9% of net revenue, as compared to non-GAAP operating income of , or$5.3 million 2.7% of net revenue, in the comparable prior-year quarter.
-
Third quarter 2024 non-GAAP operating income of
-
Third quarter 2024 GAAP net income per diluted share of
, as compared to net loss per diluted share of$2.90 in the comparable prior-year quarter.$2.87 -
Third quarter 2024 non-GAAP net income per diluted share of
, as compared to non-GAAP net income per diluted share of$0.17 in the comparable prior-year quarter.$0.23
-
Third quarter 2024 non-GAAP net income per diluted share of
-
Cash, cash equivalents and short-term investments ended at
, up$395.7 million from the previous quarter.$101.4 million
The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.
CJ Prober, Chief Executive Officer of NETGEAR, commented, "Today marks my nine-month anniversary with NETGEAR, and I am thrilled with our progress and the speed at which we are executing on our transformation. Q3 was an excellent quarter where we exceeded revenue and operating income guidance, achieved profitability, and increased our cash balance by over
Mr. Prober continued, “Our ProAV business had another record quarter in end user sales, and we added over 30 new manufacturing partners to strengthen our differentiation and software leadership in this category. We also launched several innovative products, including the M7 Pro, the industry’s first mobile hotspot that combines 5G and WIFI 7. With great executives joining the team and already driving positive early results, we are confident that we are positioning NETGEAR to fully capitalize on numerous market opportunities to generate long-term growth and profitability and we remain focused on creating long-term value for shareholders.”
Bryan Murray, Chief Financial Officer of NETGEAR, added, “We continued to execute on our plan to reduce our inventory, which declined by
Business Outlook
Mr. Murray continued, “As we experienced in the third quarter, we expect to continue to see more predictable performance that is aligned with the market for both of our businesses. Within NFB, we expect to experience continued growth led by our ProAV line of managed switches. While we are seeing the signs of market recovery in CHP, we expect increased promotional activity within our retail business due in part to the holiday period. As we were able to pull forward the launch of our M7 Pro mobile hotspot into the third quarter, we expect revenue from the service provider channel to be approximately
A reconciliation between the Business Outlook on a GAAP and non-GAAP basis is provided in the following table:
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Three months ending |
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December 31, 2024 |
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(In millions, except for percentage data) |
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Operating Margin Rate |
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Tax Expense (Benefit) |
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GAAP |
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(12.4)% - (9.4)% |
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|
||
Estimated adjustments for1: |
|
|
|
|
||
Stock-based compensation expense |
|
|
|
- |
||
Restructuring and other charges |
|
|
|
- |
||
Non-GAAP tax adjustments |
|
- |
|
|
||
Non-GAAP |
|
(8.0)% - (5.0)% |
|
|
1 |
|
Business outlook does not include estimates for any currently unknown income and expense items which, by their nature, could arise late in a quarter, including: litigation reserves, net; acquisition-related charges; impairment charges; restructuring and other charges and discrete tax benefits or detriments that cannot be forecasted (e.g., windfalls or shortfalls from equity awards or items related to the resolution of uncertain tax positions). New material income and expense items such as these could have a significant effect on our guidance and future GAAP results. |
Investor Conference Call / Webcast Details
NETGEAR will review the third quarter results and discuss management's expectations for the fourth quarter of 2024 today, Wednesday, October 30, 2024 at 5 p.m. ET (2 p.m. PT). The toll-free dial-in number for the live audio call is (888) 660-6392. The international dial-in number for the live audio call is (929) 203-0899. The conference ID for the call is 1030183. A live webcast of the conference call will be available on NETGEAR's Investor Relations website at http://investor.netgear.com. A replay of the call will be available via the web at http://investor.netgear.com.
About NETGEAR, Inc.
Founded in 1996 and headquartered in the
© 2024 NETGEAR, Inc. NETGEAR and the NETGEAR logo are trademarks or registered trademarks of NETGEAR, Inc. and its affiliates in
Source: NETGEAR-F
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:
This press release contains forward-looking statements within the meaning of the
Non-GAAP Financial Information:
To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles (“GAAP”), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP total operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP other income (expenses), net, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. These supplemental measures exclude adjustments for amortization of intangibles, stock-based compensation expense, intangibles impairment, restructuring and other charges, litigation reserves, net, gain/loss on investments, net, gain on litigation settlements, and adjust for effects related to non-GAAP tax adjustments. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.
In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by offering:
- the ability to make more meaningful period-to-period comparisons of our on-going operating results;
- the ability to better identify trends in our underlying business and perform related trend analyses;
- a better understanding of how management plans and measures our underlying business; and
- an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.
The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures:
Amortization of intangibles consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.
Stock-based compensation expense consists of non-cash charges for the estimated fair value of stock options, restricted stock units, performance shares and shares under the employee stock purchase plan granted to employees. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results.
Other items consist of certain items that are the result of either unique or unplanned events, including, when applicable: restructuring and other charges, litigation reserves, net, and gain/loss on investments, net. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred.
Non-GAAP tax adjustments consist of adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income (loss). We believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures, as well as adjustments for valuation allowances on deferred tax assets, provides our management and users of the financial statements with better clarity regarding both current period performance and the on-going performance of our business. Non-GAAP income tax expense (benefit) is computed on a current and deferred basis with non-GAAP income (loss) consistent with use of non-GAAP income (loss) as a performance measure. The Non-GAAP tax provision (benefit) is calculated by adjusting the GAAP tax provision (benefit) for the impact of the non-GAAP adjustments, with specific tax provisions such as state income tax and Base-erosion and Anti-Abuse Tax recomputed on a non-GAAP basis, as well as adjustments for valuation allowances on deferred tax assets. The tax valuation allowance is a non-cash adjustment primarily reflecting our expectations of, and assumptions as to, future operating results and applicable tax laws, that are not directly attributable to the current quarter’s operating performance. For interim periods, the non-GAAP income tax provision (benefit) is calculated based on the forecasted annual non-GAAP tax rate before discrete items and adjusted for interim discrete items.
Source: NETGEAR-F
-Financial Tables Attached-
NETGEAR, INC.
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September 29, 2024 |
|
December 31, 2023 |
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|
|
|
|
|
|
|
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ASSETS |
|
|
|
|
|
|
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Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
273,767 |
|
|
$ |
176,717 |
|
Short-term investments |
|
|
121,965 |
|
|
|
106,931 |
|
Accounts receivable, net |
|
|
177,326 |
|
|
|
185,059 |
|
Inventories |
|
|
161,976 |
|
|
|
248,851 |
|
Prepaid expenses and other current assets |
|
|
34,302 |
|
|
|
30,421 |
|
Total current assets |
|
|
769,336 |
|
|
|
747,979 |
|
Property and equipment, net |
|
|
10,640 |
|
|
|
8,273 |
|
Operating lease right-of-use assets |
|
|
30,758 |
|
|
|
37,285 |
|
Goodwill |
|
|
36,279 |
|
|
|
36,279 |
|
Other non-current assets |
|
|
15,623 |
|
|
|
17,326 |
|
Total assets |
|
$ |
862,636 |
|
|
$ |
847,142 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
52,035 |
|
|
$ |
46,850 |
|
Accrued employee compensation |
|
|
19,964 |
|
|
|
21,286 |
|
Other accrued liabilities |
|
|
155,193 |
|
|
|
168,084 |
|
Deferred revenue |
|
|
29,596 |
|
|
|
27,091 |
|
Income taxes payable |
|
|
14,569 |
|
|
|
1,037 |
|
Total current liabilities |
|
|
271,357 |
|
|
|
264,348 |
|
Non-current income taxes payable |
|
|
8,510 |
|
|
|
12,695 |
|
Non-current operating lease liabilities |
|
|
22,016 |
|
|
|
29,698 |
|
Other non-current liabilities |
|
|
10,423 |
|
|
|
4,906 |
|
Total liabilities |
|
|
312,306 |
|
|
|
311,647 |
|
Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock |
|
|
29 |
|
|
|
30 |
|
Additional paid-in capital |
|
|
987,576 |
|
|
|
967,651 |
|
Accumulated other comprehensive income |
|
|
152 |
|
|
|
136 |
|
Accumulated deficit |
|
|
(437,427 |
) |
|
|
(432,322 |
) |
Total stockholders’ equity |
|
|
550,330 |
|
|
|
535,495 |
|
Total liabilities and stockholders’ equity |
|
$ |
862,636 |
|
|
$ |
847,142 |
|
NETGEAR, INC.
|
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Three Months Ended |
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Nine Months Ended |
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|
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
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|
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|
|
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|
|
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|
|||||
Net revenue |
|
$ |
182,854 |
|
|
$ |
143,900 |
|
|
$ |
197,845 |
|
|
$ |
491,340 |
|
|
$ |
552,166 |
|
Cost of revenue |
|
|
126,371 |
|
|
|
112,077 |
|
|
|
128,911 |
|
|
|
354,797 |
|
|
|
368,550 |
|
Gross profit |
|
|
56,483 |
|
|
|
31,823 |
|
|
|
68,934 |
|
|
|
136,543 |
|
|
|
183,616 |
|
Gross margin |
|
|
30.9 |
% |
|
|
22.1 |
% |
|
|
34.8 |
% |
|
|
27.8 |
% |
|
|
33.3 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Research and development |
|
|
20,905 |
|
|
|
19,851 |
|
|
|
20,738 |
|
|
|
60,983 |
|
|
|
63,703 |
|
Sales and marketing |
|
|
31,196 |
|
|
|
29,757 |
|
|
|
30,865 |
|
|
|
91,482 |
|
|
|
97,226 |
|
General and administrative |
|
|
8,357 |
|
|
|
19,186 |
|
|
|
16,364 |
|
|
|
45,610 |
|
|
|
49,136 |
|
Litigation reserves, net |
|
|
(100,855 |
) |
|
|
8,200 |
|
|
|
178 |
|
|
|
(92,625 |
) |
|
|
178 |
|
Restructuring and other charges |
|
|
1,072 |
|
|
|
1,688 |
|
|
|
366 |
|
|
|
3,792 |
|
|
|
2,703 |
|
Intangibles impairment |
|
|
— |
|
|
|
— |
|
|
|
1,071 |
|
|
|
— |
|
|
|
1,071 |
|
Total operating expenses |
|
|
(39,325 |
) |
|
|
78,682 |
|
|
|
69,582 |
|
|
|
109,242 |
|
|
|
214,017 |
|
Income (loss) from operations |
|
|
95,808 |
|
|
|
(46,859 |
) |
|
|
(648 |
) |
|
|
27,301 |
|
|
|
(30,401 |
) |
Operating margin |
|
|
52.4 |
% |
|
|
(32.6 |
)% |
|
|
(0.3 |
)% |
|
|
5.6 |
% |
|
|
(5.5 |
)% |
Other income, net |
|
|
3,485 |
|
|
|
2,713 |
|
|
|
2,280 |
|
|
|
9,048 |
|
|
|
11,685 |
|
Income (loss) before income taxes |
|
|
99,293 |
|
|
|
(44,146 |
) |
|
|
1,632 |
|
|
|
36,349 |
|
|
|
(18,716 |
) |
Provision for income taxes |
|
|
14,219 |
|
|
|
1,029 |
|
|
|
86,431 |
|
|
|
15,100 |
|
|
|
84,382 |
|
Net income (loss) |
|
$ |
85,074 |
|
|
$ |
(45,175 |
) |
|
$ |
(84,799 |
) |
|
$ |
21,249 |
|
|
$ |
(103,098 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
$ |
2.96 |
|
|
$ |
(1.56 |
) |
|
$ |
(2.87 |
) |
|
$ |
0.73 |
|
|
$ |
(3.52 |
) |
Diluted |
|
$ |
2.90 |
|
|
$ |
(1.56 |
) |
|
$ |
(2.87 |
) |
|
$ |
0.72 |
|
|
$ |
(3.52 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted average shares used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
|
28,705 |
|
|
|
28,883 |
|
|
|
29,524 |
|
|
|
28,992 |
|
|
|
29,266 |
|
Diluted |
|
|
29,364 |
|
|
|
28,883 |
|
|
|
29,524 |
|
|
|
29,389 |
|
|
|
29,266 |
|
NETGEAR, INC.
|
|||||||
|
Nine Months Ended |
||||||
|
September 29, 2024 |
|
October 1, 2023 |
||||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income (loss) |
$ |
21,249 |
|
|
$ |
(103,098 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
4,761 |
|
|
|
5,491 |
|
Stock-based compensation |
|
16,052 |
|
|
|
13,637 |
|
Gain on investments, net |
|
(2,971 |
) |
|
|
(2,301 |
) |
Intangibles impairment |
|
— |
|
|
|
1,071 |
|
Deferred income taxes |
|
254 |
|
|
|
82,205 |
|
Provision for excess and obsolete inventory |
|
5,084 |
|
|
|
2,705 |
|
Changes in assets and liabilities: |
|
|
|
|
|
||
Accounts receivable, net |
|
7,733 |
|
|
|
76,585 |
|
Inventories |
|
81,790 |
|
|
|
15,990 |
|
Prepaid expenses and other assets |
|
3,146 |
|
|
|
(3,020 |
) |
Accounts payable |
|
4,727 |
|
|
|
(38,443 |
) |
Accrued employee compensation |
|
(1,322 |
) |
|
|
(4,952 |
) |
Other accrued liabilities |
|
(9,608 |
) |
|
|
(46,929 |
) |
Deferred revenue |
|
3,073 |
|
|
|
4,771 |
|
Income taxes payable |
|
9,347 |
|
|
|
(3,130 |
) |
Net cash provided by operating activities |
|
143,315 |
|
|
|
582 |
|
Cash flows from investing activities: |
|
|
|
|
|
||
Purchases of short-term investments |
|
(107,454 |
) |
|
|
(97,291 |
) |
Proceeds from maturities of short-term investments |
|
90,290 |
|
|
|
85,006 |
|
Purchases of property and equipment |
|
(6,502 |
) |
|
|
(3,601 |
) |
Purchases of long-term investments |
|
(225 |
) |
|
|
(585 |
) |
Net cash used in investing activities |
|
(23,891 |
) |
|
|
(16,471 |
) |
Cash flows from financing activities: |
|
|
|
|
|
||
Repurchases of common stock |
|
(22,917 |
) |
|
|
— |
|
Restricted stock unit withholdings |
|
(3,330 |
) |
|
|
(2,742 |
) |
Proceeds from exercise of stock options |
|
308 |
|
|
|
— |
|
Proceeds from issuance of common stock under employee stock purchase plan |
|
3,565 |
|
|
|
3,590 |
|
Net cash (used in) provided by financing activities |
|
(22,374 |
) |
|
|
848 |
|
Net increase (decrease) in cash and cash equivalents |
|
97,050 |
|
|
|
(15,041 |
) |
Cash and cash equivalents, at beginning of period |
|
176,717 |
|
|
|
146,500 |
|
Cash and cash equivalents, at end of period |
$ |
273,767 |
|
|
$ |
131,459 |
|
NETGEAR, INC.
|
||||||||||||||||||||
STATEMENT OF OPERATIONS DATA: |
||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP gross profit |
|
$ |
56,483 |
|
|
$ |
31,823 |
|
|
$ |
68,934 |
|
|
$ |
136,543 |
|
|
$ |
183,616 |
|
GAAP gross margin |
|
|
30.9 |
% |
|
|
22.1 |
% |
|
|
34.8 |
% |
|
|
27.8 |
% |
|
|
33.3 |
% |
Amortization of intangibles |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
257 |
|
Stock-based compensation expense |
|
|
444 |
|
|
|
413 |
|
|
|
354 |
|
|
|
1,222 |
|
|
|
1,047 |
|
Non-GAAP gross profit |
|
$ |
56,927 |
|
|
$ |
32,236 |
|
|
$ |
69,288 |
|
|
$ |
137,765 |
|
|
$ |
184,920 |
|
Non-GAAP gross margin |
|
|
31.1 |
% |
|
|
22.4 |
% |
|
|
35.0 |
% |
|
|
28.0 |
% |
|
|
33.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP research and development |
|
$ |
20,905 |
|
|
$ |
19,851 |
|
|
$ |
20,738 |
|
|
$ |
60,983 |
|
|
$ |
63,703 |
|
Stock-based compensation expense |
|
|
(868 |
) |
|
|
(844 |
) |
|
|
(841 |
) |
|
|
(2,410 |
) |
|
|
(3,050 |
) |
Non-GAAP research and development |
|
$ |
20,037 |
|
|
$ |
19,007 |
|
|
$ |
19,897 |
|
|
$ |
58,573 |
|
|
$ |
60,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP sales and marketing |
|
$ |
31,196 |
|
|
$ |
29,757 |
|
|
$ |
30,865 |
|
|
$ |
91,482 |
|
|
$ |
97,226 |
|
Stock-based compensation expense |
|
|
(1,520 |
) |
|
|
(1,235 |
) |
|
|
(1,271 |
) |
|
|
(3,992 |
) |
|
|
(4,099 |
) |
Non-GAAP sales and marketing |
|
$ |
29,676 |
|
|
$ |
28,522 |
|
|
$ |
29,594 |
|
|
$ |
87,490 |
|
|
$ |
93,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP general and administrative |
|
$ |
8,357 |
|
|
$ |
19,186 |
|
|
$ |
16,364 |
|
|
$ |
45,610 |
|
|
$ |
49,136 |
|
Stock-based compensation expense |
|
|
(2,788 |
) |
|
|
(3,396 |
) |
|
|
(1,819 |
) |
|
|
(8,428 |
) |
|
|
(5,441 |
) |
Non-GAAP general and administrative |
|
$ |
5,569 |
|
|
$ |
15,790 |
|
|
$ |
14,545 |
|
|
$ |
37,182 |
|
|
$ |
43,695 |
|
NETGEAR, INC.
|
||||||||||||||||||||
STATEMENT OF OPERATIONS DATA (CONTINUED): |
||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP total operating expenses |
|
$ |
(39,325 |
) |
|
$ |
78,682 |
|
|
$ |
69,582 |
|
|
$ |
109,242 |
|
|
$ |
214,017 |
|
Stock-based compensation expense |
|
|
(5,176 |
) |
|
|
(5,475 |
) |
|
|
(3,931 |
) |
|
|
(14,830 |
) |
|
|
(12,590 |
) |
Intangibles impairment |
|
|
— |
|
|
|
— |
|
|
|
(1,071 |
) |
|
|
— |
|
|
|
(1,071 |
) |
Restructuring and other charges |
|
|
(1,072 |
) |
|
|
(1,688 |
) |
|
|
(366 |
) |
|
|
(3,792 |
) |
|
|
(2,703 |
) |
Litigation reserves, net |
|
|
100,855 |
|
|
|
(8,200 |
) |
|
|
(178 |
) |
|
|
92,625 |
|
|
|
(178 |
) |
Non-GAAP total operating expenses |
|
$ |
55,282 |
|
|
$ |
63,319 |
|
|
$ |
64,036 |
|
|
$ |
183,245 |
|
|
$ |
197,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP operating income (loss) |
|
$ |
95,808 |
|
|
$ |
(46,859 |
) |
|
$ |
(648 |
) |
|
$ |
27,301 |
|
|
$ |
(30,401 |
) |
GAAP operating margin |
|
|
52.4 |
% |
|
|
(32.6 |
)% |
|
|
(0.3 |
)% |
|
|
5.6 |
% |
|
|
(5.5 |
)% |
Amortization of intangibles |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
257 |
|
Stock-based compensation expense |
|
|
5,620 |
|
|
|
5,888 |
|
|
|
4,285 |
|
|
|
16,052 |
|
|
|
13,637 |
|
Intangibles impairment |
|
|
— |
|
|
|
— |
|
|
|
1,071 |
|
|
|
— |
|
|
|
1,071 |
|
Restructuring and other charges |
|
|
1,072 |
|
|
|
1,688 |
|
|
|
366 |
|
|
|
3,792 |
|
|
|
2,703 |
|
Litigation reserves, net |
|
|
(100,855 |
) |
|
|
8,200 |
|
|
|
178 |
|
|
|
(92,625 |
) |
|
|
178 |
|
Non-GAAP operating income (loss) |
|
$ |
1,645 |
|
|
$ |
(31,083 |
) |
|
$ |
5,252 |
|
|
$ |
(45,480 |
) |
|
$ |
(12,555 |
) |
Non-GAAP operating margin |
|
|
0.9 |
% |
|
|
(21.6 |
)% |
|
|
2.7 |
% |
|
|
(9.3 |
)% |
|
|
(2.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP other income, net |
|
$ |
3,485 |
|
|
$ |
2,713 |
|
|
$ |
2,280 |
|
|
$ |
9,048 |
|
|
$ |
11,685 |
|
Gain/loss on investments, net |
|
|
(49 |
) |
|
|
(69 |
) |
|
|
(14 |
) |
|
|
(17 |
) |
|
|
16 |
|
Gain on litigation settlements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,000 |
) |
Non-GAAP other income, net |
|
$ |
3,436 |
|
|
$ |
2,644 |
|
|
$ |
2,266 |
|
|
$ |
9,031 |
|
|
$ |
5,701 |
|
NETGEAR, INC.
|
||||||||||||||||||||
STATEMENT OF OPERATIONS DATA (CONTINUED): |
||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP net income (loss) |
|
$ |
85,074 |
|
|
$ |
(45,175 |
) |
|
$ |
(84,799 |
) |
|
$ |
21,249 |
|
|
$ |
(103,098 |
) |
Amortization of intangibles |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
257 |
|
Stock-based compensation expense |
|
|
5,620 |
|
|
|
5,888 |
|
|
|
4,285 |
|
|
|
16,052 |
|
|
|
13,637 |
|
Intangibles impairment |
|
|
— |
|
|
|
— |
|
|
|
1,071 |
|
|
|
— |
|
|
|
1,071 |
|
Restructuring and other charges |
|
|
1,072 |
|
|
|
1,688 |
|
|
|
366 |
|
|
|
3,792 |
|
|
|
2,703 |
|
Litigation reserves, net |
|
|
(100,855 |
) |
|
|
8,200 |
|
|
|
178 |
|
|
|
(92,625 |
) |
|
|
178 |
|
Gain/loss on investments, net |
|
|
(49 |
) |
|
|
(69 |
) |
|
|
(14 |
) |
|
|
(17 |
) |
|
|
16 |
|
Gain on litigation settlements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,000 |
) |
Non-GAAP tax adjustments |
|
|
14,203 |
|
|
|
8,025 |
|
|
|
85,781 |
|
|
|
26,816 |
|
|
|
87,724 |
|
Non-GAAP net income (loss) |
|
$ |
5,065 |
|
|
$ |
(21,443 |
) |
|
$ |
6,868 |
|
|
$ |
(24,733 |
) |
|
$ |
(3,512 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
NET INCOME (LOSS) PER DILUTED SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP net income (loss) per diluted share |
|
$ |
2.90 |
|
|
$ |
(1.56 |
) |
|
$ |
(2.87 |
) |
|
$ |
0.72 |
|
|
$ |
(3.52 |
) |
Amortization of intangibles |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Stock-based compensation expense |
|
|
0.19 |
|
|
|
0.20 |
|
|
|
0.14 |
|
|
|
0.55 |
|
|
|
0.47 |
|
Intangibles impairment |
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
|
|
0.04 |
|
Restructuring and other charges |
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.01 |
|
|
|
0.13 |
|
|
|
0.09 |
|
Litigation reserves, net |
|
|
(3.43 |
) |
|
|
0.28 |
|
|
|
0.01 |
|
|
|
(3.19 |
) |
|
|
0.01 |
|
Gain/loss on investments, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on litigation settlements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.21 |
) |
Non-GAAP tax adjustments |
|
|
0.47 |
|
|
|
0.28 |
|
|
|
2.90 |
|
|
|
0.94 |
|
|
|
2.99 |
|
Non-GAAP net income (loss) per diluted share 1 |
|
$ |
0.17 |
|
|
$ |
(0.74 |
) |
|
$ |
0.23 |
|
|
$ |
(0.85 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares used in computing GAAP net income (loss) per diluted share |
|
|
29,364 |
|
|
|
28,883 |
|
|
|
29,524 |
|
|
|
29,389 |
|
|
|
29,266 |
|
Shares used in computing non-GAAP net income (loss) per diluted share |
|
|
29,364 |
|
|
|
28,883 |
|
|
|
29,581 |
|
|
|
28,992 |
|
|
|
29,266 |
|
1 |
|
The per share reconciliation of GAAP to non-GAAP may not aggregate due to both calculations utilizing a different share basis. The net loss per diluted share calculation uses a lower share count as it excludes potentially dilutive shares included in the net income per diluted share calculation. |
NETGEAR, INC.
|
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
September 29, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
October 1, 2023 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash, cash equivalents and short-term investments |
|
$ |
395,732 |
|
|
$ |
294,339 |
|
|
$ |
289,421 |
|
|
$ |
283,648 |
|
|
$ |
228,045 |
|
Cash, cash equivalents and short-term investments per diluted share |
|
$ |
13.48 |
|
|
$ |
10.19 |
|
|
$ |
9.85 |
|
|
$ |
9.56 |
|
|
$ |
7.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts receivable, net |
|
$ |
177,326 |
|
|
$ |
147,069 |
|
|
$ |
172,771 |
|
|
$ |
185,059 |
|
|
$ |
200,900 |
|
Days sales outstanding (DSO) |
|
|
88 |
|
|
|
93 |
|
|
|
96 |
|
|
|
89 |
|
|
|
92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Inventories |
|
$ |
161,976 |
|
|
$ |
188,936 |
|
|
$ |
211,270 |
|
|
$ |
248,851 |
|
|
$ |
280,918 |
|
Ending inventory turns |
|
|
3.1 |
|
|
|
2.4 |
|
|
|
2.2 |
|
|
|
2.0 |
|
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weeks of channel inventory: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
9.5 |
|
|
|
9.5 |
|
|
|
11.2 |
|
|
|
10.8 |
|
|
|
11.8 |
|
|
|
|
2.4 |
|
|
|
2.8 |
|
|
|
4.0 |
|
|
|
7.9 |
|
|
|
5.8 |
|
EMEA distribution channel |
|
|
5.3 |
|
|
|
5.2 |
|
|
|
5.9 |
|
|
|
6.4 |
|
|
|
7.4 |
|
APAC distribution channel |
|
|
9.5 |
|
|
|
8.3 |
|
|
|
8.0 |
|
|
|
10.0 |
|
|
|
13.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deferred revenue (current and non-current) |
|
$ |
35,068 |
|
|
$ |
34,216 |
|
|
$ |
33,714 |
|
|
$ |
31,994 |
|
|
$ |
29,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Headcount |
|
|
638 |
|
|
|
622 |
|
|
|
628 |
|
|
|
635 |
|
|
|
644 |
|
Non-GAAP diluted shares |
|
|
29,364 |
|
|
|
28,883 |
|
|
|
29,395 |
|
|
|
29,683 |
|
|
|
29,581 |
|
NET REVENUE BY GEOGRAPHY |
||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||
|
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
127,752 |
|
70 |
% |
|
$ |
95,503 |
|
66 |
% |
|
$ |
141,018 |
|
71 |
% |
|
$ |
333,183 |
|
67 |
% |
|
$ |
379,551 |
|
69 |
% |
EMEA |
|
|
32,798 |
|
18 |
% |
|
|
27,355 |
|
19 |
% |
|
|
35,684 |
|
18 |
% |
|
|
91,340 |
|
19 |
% |
|
|
111,023 |
|
20 |
% |
APAC |
|
|
22,304 |
|
12 |
% |
|
|
21,042 |
|
15 |
% |
|
|
21,143 |
|
11 |
% |
|
|
66,817 |
|
14 |
% |
|
|
61,592 |
|
11 |
% |
Total |
|
$ |
182,854 |
|
100 |
% |
|
$ |
143,900 |
|
100 |
% |
|
$ |
197,845 |
|
100 |
% |
|
$ |
491,340 |
|
100 |
% |
|
$ |
552,166 |
|
100 |
% |
NETGEAR, INC.
|
|||||||||||||||||||
NET REVENUE BY SEGMENT |
|||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
NETGEAR for Business |
$ |
78,530 |
|
|
$ |
59,867 |
|
|
$ |
70,510 |
|
|
$ |
207,020 |
|
|
$ |
223,679 |
|
Connected Home |
|
104,324 |
|
|
|
84,033 |
|
|
|
127,335 |
|
|
|
284,320 |
|
|
|
328,487 |
|
Total net revenue |
$ |
182,854 |
|
|
$ |
143,900 |
|
|
$ |
197,845 |
|
|
$ |
491,340 |
|
|
$ |
552,166 |
|
SERVICE PROVIDER NET REVENUE |
|||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
September 29, 2024 |
|
June 30, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
NETGEAR for Business |
$ |
268 |
|
|
$ |
202 |
|
|
$ |
219 |
|
|
$ |
713 |
|
|
$ |
427 |
|
Connected Home |
|
22,949 |
|
|
|
19,732 |
|
|
|
32,403 |
|
|
|
70,234 |
|
|
|
71,346 |
|
Total service provider net revenue |
$ |
23,217 |
|
|
$ |
19,934 |
|
|
$ |
32,622 |
|
|
$ |
70,947 |
|
|
$ |
71,773 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030206080/en/
NETGEAR Investor Relations
Erik Bylin
investors@netgear.com
Source: NETGEAR, Inc.
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