Q1 net revenue of $164.6 million, above
midpoint of guidance
Q1 service revenue growth of 21.2% year over
year
Cashflow from operations of $17.2 million;
growth of 88.4% year over year
Repurchased approximately 783,000 shares of
common stock
Transformation Effort Underway
NETGEAR, Inc. (NASDAQ: NTGR), a global networking company that
delivers innovative networking and Internet connected products to
consumers and businesses, today reported preliminary financial
results for the first quarter ended March 31, 2024.
- First quarter 2024 net revenue of $164.6 million, a decrease of
9.0% from the comparable prior-year quarter.
- First quarter 2024 GAAP operating loss of $21.6 million, or
(13.2)% of net revenue, as compared to operating loss of $12.0
million, or (6.6)% of net revenue, in the comparable prior-year
quarter.
- First quarter 2024 non-GAAP operating loss of $16.0 million, or
(9.7)% of net revenue, as compared to non-GAAP operating loss of
$7.1 million, or (3.9)% of net revenue, in the comparable
prior-year quarter.
- First quarter 2024 GAAP net loss per diluted share of $0.63, as
compared to net loss per diluted share of $0.33 in the comparable
prior-year quarter.
- First quarter 2024 non-GAAP net loss per diluted share of
$0.28, as compared to non-GAAP net loss per diluted share of $0.19
in the comparable prior-year quarter.
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, “I am
pleased that we were able to deliver revenue within our guidance
range in the first quarter. However, the challenging macroeconomic
environment coupled with continued high inflation and interest
rates are pressuring our channel partners to drive inventory to
historical lows across both our consumer and B2B businesses. While
we have been working to bring down channel inventories, this higher
level of destocking, combined with a mix shift from our premium
consumer products to our service provider products and a slightly
more promotional retail market, unfavorably impacted our
profitability in the first quarter.”
“As we saw channel destocking come in higher than expected in
Q1, we developed a plan to expedite the remaining destocking in Q2.
While this creates a near-term challenge in terms of expected
financial results for Q2, it is the right action for the long-term
health of the business and clears the way for a stronger second
half of the year. Going forward, we will work to closely align sell
through with our revenue, which will allow us to become a more
predictable and profitable company in subsequent quarters. We will
also more aggressively lower our own inventory through the rest of
the year to reduce our working capital and generate cash.”
Mr. Prober continued, “After my first 90 days as CEO of NETGEAR,
which included an expansive global tour meeting dozens of
customers, partners and NETGEAR teams, I am sincerely excited about
our growth opportunities and plans for returning to profitability.
We remain fully committed to creating long-term value for our
shareholders and these decisive near-term strategy adjustments
enable this. We expect to emerge from Q2 with a solid foundation as
we formalize our long-term strategy and capital allocation
priorities throughout the rest of 2024.”
Bryan Murray, Chief Financial Officer of NETGEAR, added, “We
continued to make progress in reducing our own inventory levels,
which were down $37.6 million in the first quarter, and we continue
to drive towards our desired level of three months of supply. Our
cash and short-term investments increased $5.8 million sequentially
and we generated 88.4% greater cash from operations compared to the
first quarter of 2023 while also repurchasing approximately 783,000
shares of NETGEAR common stock.”
Business Outlook
Mr. Murray continued, “We expect to accelerate our way through
NFB and CHP destocking activities within the second quarter. We
expect this effort to represent a headwind of between $25 million
to $30 million to our Q2 topline, which is reflected in our
guidance. We believe taking this immediate action, as compared to
spreading it over multiple future quarters, will allow us to align
our revenue with our sell through and ultimately manage a more
efficient channel in future quarters. Revenue from the service
provider channel is expected to be approximately $15 million in the
second quarter as our partners await our next generation 5G mobile
hotspots expected to launch in the second half of the year.
Accordingly, we expect second quarter net revenue to be in the
range of $125 million to $140 million. As we continue to make
meaningful progress in reducing our own inventory levels, we will
be consuming higher cost inventory. We expect we will be back to
our historically normal inventory costs after we reach our target
inventory levels of three months. We are also taking more
aggressive action to consume some of our slower moving products in
an accelerated fashion which will put pressure on our Q2 margins.
Accordingly, we expect our second quarter GAAP operating margin to
be in the range of (30.9)% to (27.9)%, and non-GAAP operating
margin to be in the range of (25.0)% to (22.0)%. Our GAAP tax
expense is expected to be in the range of $1.0 million to $2.0
million, and our non-GAAP tax benefit is expected to be in the
range of $7.0 million to $8.0 million for the second quarter of
2024.”
A reconciliation between the Business Outlook on a GAAP and
non-GAAP basis is provided in the following table:
Three months ending
June 30, 2024
(In millions, except for
percentage data)
Operating Margin
Rate
Tax Expense (Benefit)
GAAP
(30.9)% - (27.9)%
$1.0 - $2.0
Estimated adjustments for1:
Stock-based compensation expense
4.0%
-
Restructuring and other charges
1.9%
-
Non-GAAP tax adjustments
-
$(9.0)
Non-GAAP
(25.0)% - (22.0)%
$ (8.0) - $ (7.0)
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 first quarter results and discuss
management's expectations for the second quarter of 2024 today,
Wednesday, May 1, 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.
For more than 25 years, NETGEAR® (NASDAQ: NTGR) has been the
innovative leader in connecting the world to the internet with
advanced networking technologies for homes, businesses and service
providers around the world. As staying connected has become more
important than ever, NETGEAR delivers award-winning network
solutions for remote work, distance learning, ultra high def
streaming, online game play and more. To enable people to
collaborate and connect to a world of information and
entertainment, NETGEAR is dedicated to providing a range of
connected solutions. From ultra-premium Orbi Mesh WiFi systems and
high performance Nighthawk routers, to high-speed cable modems and
5G mobile wireless products to cloud-based subscription services
for network management and security, to smart networking products
and Video over Ethernet for Pro AV applications, NETGEAR keeps you
connected. NETGEAR is headquartered in San Jose, California. Learn
more on the NETGEAR Investor Page or by calling (408) 907-8000.
Connect with NETGEAR: Twitter, Facebook, Instagram, LinkedIn and
the NETGEAR blog at NETGEAR.com.
© 2024 NETGEAR, Inc. NETGEAR and the NETGEAR logo are trademarks
or registered trademarks of NETGEAR, Inc. and its affiliates in the
United States and/or other countries. Other brand and product names
are trademarks or registered trademarks of their respective
holders. The information contained herein is subject to change
without notice. NETGEAR shall not be liable for technical or
editorial errors or omissions contained herein. All rights
reserved.
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 U.S. Private Securities Litigation Reform Act of
1995. The words “anticipate,” “expect,” “believe,” “will,” “may,”
“should,” “estimate,” “project,” “outlook,” “forecast” or other
similar words are used to identify such forward-looking statements.
However, the absence of these words does not mean that the
statements are not forward-looking. The forward-looking statements
represent NETGEAR, Inc.’s expectations or beliefs concerning future
events based on information available at the time such statements
were made and include statements regarding: NETGEAR’s future
operating performance and financial condition, including
expectations regarding growth, revenue, operating margin, gross
margin, continued profitability and cash generation; creating
long-term value for shareholders; NETGEAR’s plan to closely align
end sales with revenue and expected efficiency, predictability and
profitability; NETGEAR’s desired level of inventory supply;
NETGEAR’s expected launch of next generation 5G mobile hotspots;
expectations regarding continuing market demand for the NETGEAR’s
products and services, including NFB and CHP products and
subscription services, and NETGEAR’s ability to respond to this
demand; NETGEAR’s strategic adjustments, long-term strategy and
capital allocation priorities; expectations regarding the mix of
NETGEAR’s products and services; expectations regarding accelerated
destocking and its impact to NETGEAR’s financials; expectations
regarding growth opportunities and plans for returning to
profitability expectations regarding inventory management,
inventory levels and inventory costs and its impact to long term
revenue, margin expansion and cash generation; expectations
regarding expected tax rates or tax expenses; expectations
regarding seasonal shifts in market demand; and expectations
regarding NETGEAR's subscription services and service revenue.
These statements are based on management's current expectations and
are subject to certain risks and uncertainties, including the
following: future demand for NETGEAR’s products and services may be
lower than anticipated; NETGEAR may be unsuccessful, or experience
delays, in manufacturing and distributing its new and existing
products and services; consumers may choose not to adopt NETGEAR’s
new product and services offerings or adopt competing products and
services; NETGEAR may be unable to continue to grow its number of
registered users, its number of registered app users and/or its
paid subscriber base and service revenue; product performance may
be adversely affected by real world operating conditions; NETGEAR
may fail to manage costs, including the cost of key components, the
cost of air freight and ocean freight, and the cost of developing
new products and manufacturing and distribution of its existing
offerings; NETGEAR may fail to successfully manage channel
inventory levels; NETGEAR may fail to successfully continue to
effect operating expense savings; changes in the level of NETGEAR's
cash resources and NETGEAR’s planned usage of such resources,
including potential repurchases of NETGEAR’s common stock; changes
in NETGEAR’s stock price and developments in the business that
could increase NETGEAR’s cash needs; fluctuations in foreign
exchange rates; and the actions and financial health of NETGEAR’s
customers, including NETGEAR’s ability to collect receivables as
they become due. Further, certain forward-looking statements are
based on assumptions as to future events that may not prove to be
accurate. Therefore, actual outcomes and results may differ
materially from what is expressed or forecast in such
forward-looking statements. Further information on potential risk
factors that could affect NETGEAR and its business are detailed in
NETGEAR’s periodic filings with the Securities and Exchange
Commission, including, but not limited to, those risks and
uncertainties listed in the section entitled "Part I - Item 1A.
Risk Factors" in NETGEAR’s annual report on Form 10-K for the
fiscal year ended December 31, 2023, filed with the Securities and
Exchange Commission on February 16, 2024. Given these
circumstances, you should not place undue reliance on these
forward-looking statements. NETGEAR undertakes no obligation to
release publicly any revisions to any forward-looking statements
contained herein to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events, except
as required by law.
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 other
operating expenses, net, 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, restructuring and
other charges, litigation reserves, net, gain/loss on investments,
net, 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.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
172,656
$
176,717
Short-term investments
116,765
106,931
Accounts receivable, net
172,771
185,059
Inventories
211,270
248,851
Prepaid expenses and other current
assets
30,178
30,421
Total current assets
703,640
747,979
Property and equipment, net
9,353
8,273
Operating lease right-of-use assets
34,713
37,285
Goodwill
36,279
36,279
Other non-current assets
17,294
17,326
Total assets
$
801,279
$
847,142
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
38,451
$
46,850
Accrued employee compensation
22,193
21,286
Other accrued liabilities
154,567
168,084
Deferred revenue
28,393
27,091
Income taxes payable
713
1,037
Total current liabilities
244,317
264,348
Non-current income taxes payable
11,885
12,695
Non-current operating lease
liabilities
26,742
29,698
Other non-current liabilities
6,973
4,906
Total liabilities
289,917
311,647
Stockholders’ equity:
Common stock
29
30
Additional paid-in capital
974,181
967,651
Accumulated other comprehensive income
21
136
Accumulated deficit
(462,869
)
(432,322
)
Total stockholders’ equity
511,362
535,495
Total liabilities and stockholders’
equity
$
801,279
$
847,142
NETGEAR, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share and percentage data)
(Unaudited)
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
Net revenue
$
164,586
$
188,674
$
180,908
Cost of revenue
116,349
123,038
120,526
Gross profit
48,237
65,636
60,382
Gross margin
29.3
%
34.8
%
33.4
%
Operating expenses:
Research and development
20,227
19,592
22,134
Sales and marketing
30,529
30,552
33,879
General and administrative
18,067
17,107
16,236
Other operating expenses, net
1,062
1,259
108
Total operating expenses
69,885
68,510
72,357
Loss from operations
(21,648
)
(2,874
)
(11,975
)
Operating margin
(13.2
)%
(1.5
)%
(6.6
)%
Other income, net
2,850
2,454
1,406
Loss before income taxes
(18,798
)
(420
)
(10,569
)
Provision for (benefit from) income
taxes
(148
)
1,249
(857
)
Net loss
$
(18,650
)
$
(1,669
)
$
(9,712
)
Net loss per share:
Basic
$
(0.63
)
$
(0.06
)
$
(0.33
)
Diluted
$
(0.63
)
$
(0.06
)
$
(0.33
)
Weighted average shares used to compute
net loss per share:
Basic
29,395
29,623
29,040
Diluted
29,395
29,623
29,040
NETGEAR, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2024
April 2, 2023
Cash flows from operating
activities:
Net loss
$
(18,650
)
$
(9,712
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
1,488
2,011
Stock-based compensation
4,544
4,665
Gain/loss on investments, net
(883
)
(663
)
Deferred income taxes
84
(4,629
)
Provision for excess and obsolete
inventory
1,132
1,174
Changes in assets and liabilities:
Accounts receivable, net
12,288
84,945
Inventories
36,449
(38,747
)
Prepaid expenses and other assets
367
(1,778
)
Accounts payable
(8,516
)
(5,922
)
Accrued employee compensation
907
(2,425
)
Other accrued liabilities
(12,605
)
(23,665
)
Deferred revenue
1,719
1,609
Income taxes payable
(1,134
)
2,259
Net cash provided by operating
activities
17,190
9,122
Cash flows from investing
activities:
Purchases of short-term investments
(38,829
)
(38,733
)
Proceeds from maturities of short-term
investments
30,000
25,006
Purchases of property and equipment
(2,510
)
(870
)
Net cash used in investing activities
(11,339
)
(14,597
)
Cash flows from financing
activities:
Repurchases of common stock
(11,444
)
—
Restricted stock unit withholdings
(454
)
(120
)
Proceeds from issuance of common stock
under employee stock purchase plan
1,986
2,286
Net cash provided by (used in) financing
activities
(9,912
)
2,166
Net decrease in cash and cash
equivalents
(4,061
)
(3,309
)
Cash and cash equivalents, at beginning of
period
176,717
146,500
Cash and cash equivalents, at end of
period
$
172,656
$
143,191
NETGEAR, INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
(In thousands, except
percentage data)
(Unaudited)
STATEMENT OF OPERATIONS DATA:
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
GAAP gross profit
$
48,237
$
65,636
$
60,382
GAAP gross margin
29.3
%
34.8
%
33.4
%
Amortization of intangibles
—
—
129
Stock-based compensation expense
365
358
351
Non-GAAP gross profit
$
48,602
$
65,994
$
60,862
Non-GAAP gross margin
29.5
%
35.0
%
33.6
%
GAAP research and development
$
20,227
$
19,592
$
22,134
Stock-based compensation expense
(698
)
(885
)
(1,065
)
Non-GAAP research and development
$
19,529
$
18,707
$
21,069
GAAP sales and marketing
$
30,529
$
30,552
$
33,879
Stock-based compensation expense
(1,237
)
(1,237
)
(1,431
)
Non-GAAP sales and marketing
$
29,292
$
29,315
$
32,448
GAAP general and administrative
$
18,067
$
17,107
$
16,236
Stock-based compensation expense
(2,244
)
(1,821
)
(1,818
)
Non-GAAP general and administrative
$
15,823
$
15,286
$
14,418
GAAP other operating expenses, net
$
1,062
$
1,259
$
108
Restructuring and other charges
(1,032
)
(1,259
)
(108
)
Litigation reserves, net
(30
)
—
—
Non-GAAP other operating expenses, net
$
—
$
—
$
—
NETGEAR, INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
(In thousands, except
percentage data)
(Unaudited)
STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
GAAP total operating expenses
$
69,885
$
68,510
$
72,357
Stock-based compensation expense
(4,179
)
(3,943
)
(4,314
)
Restructuring and other charges
(1,032
)
(1,259
)
(108
)
Litigation reserves, net
(30
)
—
—
Non-GAAP total operating expenses
$
64,644
$
63,308
$
67,935
GAAP operating loss
$
(21,648
)
$
(2,874
)
$
(11,975
)
GAAP operating margin
(13.2
)%
(1.5
)%
(6.6
)%
Amortization of intangibles
—
—
129
Stock-based compensation expense
4,544
4,301
4,665
Restructuring and other charges
1,032
1,259
108
Litigation reserves, net
30
—
—
Non-GAAP operating income (loss)
$
(16,042
)
$
2,686
$
(7,073
)
Non-GAAP operating margin
(9.7
)%
1.4
%
(3.9
)%
GAAP other income, net
$
2,850
$
2,454
$
1,406
Gain/loss on investments, net
101
(8
)
11
Non-GAAP other income, net
$
2,951
$
2,446
$
1,417
NETGEAR, INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES (CONTINUED)
(In thousands, except per
share data)
(Unaudited)
STATEMENT OF OPERATIONS DATA
(CONTINUED):
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
GAAP net loss
$
(18,650
)
$
(1,669
)
$
(9,712
)
Amortization of intangibles
—
—
129
Stock-based compensation expense
4,544
4,301
4,665
Restructuring and other charges
1,032
1,259
108
Litigation reserves, net
30
—
—
Gain/loss on investments, net
101
(8
)
11
Non-GAAP tax adjustments
4,588
(1,138
)
(838
)
Non-GAAP net income (loss)
$
(8,355
)
$
2,745
$
(5,637
)
NET INCOME (LOSS) PER DILUTED
SHARE:
GAAP net loss per diluted share
$
(0.63
)
$
(0.06
)
$
(0.33
)
Amortization of intangibles
—
—
—
Stock-based compensation expense
0.15
0.14
0.16
Restructuring and other charges
0.04
0.04
—
Litigation reserves, net
—
—
—
Gain/loss on investments, net
—
—
—
Non-GAAP tax adjustments
0.16
(0.03
)
(0.02
)
Non-GAAP net income (loss) per diluted
share
$
(0.28
)
$
0.09
$
(0.19
)
Shares used in computing GAAP net loss per
diluted share
29,395
29,623
29,040
Shares used in computing non-GAAP net
income (loss) per diluted share
29,395
29,683
29,040
NETGEAR, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION
(In thousands, except per
share data, DSO, inventory turns, weeks of channel inventory,
headcount and percentage data)
(Unaudited)
Three Months Ended
March 31,
2024
December 31,
2023
October 1,
2023
July 2,
2023
April 2,
2023
Cash, cash equivalents and short-term
investments
$
289,421
$
283,648
$
228,045
$
202,836
$
239,210
Cash, cash equivalents and short-term
investments per diluted share
$
9.85
$
9.56
$
7.71
$
6.92
$
8.24
Accounts receivable, net
$
172,771
$
185,059
$
200,900
$
179,496
$
192,540
Days sales outstanding (DSO)
96
89
92
94
98
Inventories
$
211,270
$
248,851
$
280,918
$
324,483
$
337,187
Ending inventory turns
2.2
2.0
1.8
1.5
1.4
Weeks of channel inventory:
U.S. retail channel
11.2
10.8
11.8
12.0
12.7
U.S. distribution channel
4.0
7.9
5.8
5.1
4.4
EMEA distribution channel
5.9
6.4
7.4
6.9
8.5
APAC distribution channel
8.0
10.0
13.1
12.4
14.0
Deferred revenue (current and
non-current)
$
33,714
$
31,994
$
29,796
$
27,689
$
26,634
Headcount
628
635
644
653
702
Non-GAAP diluted shares
29,395
29,683
29,581
29,319
29,040
NET REVENUE BY GEOGRAPHY
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
Americas
$109,928
67%
$124,798
66%
$121,922
67%
EMEA
31,187
19%
37,899
20%
39,178
22%
APAC
23,471
14%
25,977
14%
19,808
11%
Total
$164,586
100%
$188,674
100%
$180,908
100%
NETGEAR, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION (CONTINUED)
(In thousands)
(Unaudited)
NET REVENUE BY SEGMENT
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
Connected Home
$
95,963
$
118,378
$
102,746
NETGEAR for Business
68,623
70,296
78,162
Total net revenue
$
164,586
$
188,674
$
180,908
SERVICE PROVIDER NET REVENUE
Three Months Ended
March 31, 2024
December 31, 2023
April 2, 2023
Connected Home
$
27,553
$
27,313
$
14,027
NETGEAR for Business
243
152
190
Total service provider net revenue
$
27,796
$
27,465
$
14,217
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501764421/en/
NETGEAR Investor Relations Erik Bylin investors@netgear.com
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