Q4 net revenue of $182.4 million, and operating
margin above the high end of guidance Q4 annual recurring revenue
of almost $35 million, growing 25% year over year Q4 free cash flow
of $19.0 million - sixth consecutive quarter of cash generation Q1
2025 restructuring implemented from position of strength to fund
2025 investment opportunities Added $125 million in cash and
repurchased more than $33 million of stock in 2024
NETGEAR, Inc. (NASDAQ: NTGR), a global leader in intelligent
networking solutions for businesses, homes, and service providers,
today reported financial results for the fourth quarter and full
year ended December 31, 2024.
Q4 2024
- Net revenue of $182.4 million, down 3.3% from Q4 prior
year
- GAAP gross margin of 32.6%, down from 34.8% in Q4 prior year
Non-GAAP gross margin of 32.8%, down from 35.0% in Q4 prior
year
- GAAP operating income of $(15.1) million compared to $(2.9)
million from Q4 prior year Non-GAAP operating income of $(4.2)
million compared to $2.7 million from Q4 prior year
- GAAP EPS of $(0.31) compared to $(0.06) from Q4 prior year
Non-GAAP EPS of $(0.06) compared to $0.09 from Q4 prior year
- Cash and equivalents up $13.0 million from the prior quarter
(repurchased $10.7 million of stock )
2024 Fiscal Year
- Net revenue of $673.8 million, down 9.1% from the prior
year
- GAAP gross margin of 29.1%, down from 33.6% in the prior year
Non-GAAP gross margin of 29.3%, down from 33.9% in the prior
year
- GAAP operating income of $12.2 million compared to $(33.3)
million in the prior year Non-GAAP operating income of $(49.6)
million compared to $(9.9) million in the prior year
- GAAP EPS of $0.42 compared to $(3.57) in the prior year
Non-GAAP EPS $(0.91) compared to $(0.03) in the prior year
- Cash and equivalents ended at $408.7 million, up $125.0 million
from the prior year
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, commented, “Having recently
passed my one-year anniversary at NETGEAR, I’m thrilled with our
progress as we once again delivered revenue and operating margin
above the high end of guidance while driving dramatic shifts in our
operating model and focus on the customer. These results were
enabled by the proactive steps we took throughout the year to
improve our organization, operating model and strategy in pursuit
of long-term growth and profitability. In the last year, we
aggressively de-stocked our channel, dramatically lowered our
inventory, significantly increased our cash position, continued to
innovate with new product launches and software enhancements, and
added great new people to our world class team. Going forward, the
focus is on improving our software capabilities and driving
recurring revenue where we have a solid starting point at almost
$35 million annual recurring revenue as we exit 2024.”
Bryan Murray, Chief Financial Officer, added, “This marked the
sixth consecutive quarter of free cash flow generation, which came
in at $19.0 million, driven by DSOs reaching their lowest level in
over seven years with the improved linearity in the business
enabling us to match sell-in with sell-through. We exited the
quarter with nearly $409 million in cash, a sequential increase of
$13.0 million. Capital allocation remains a key focus for NETGEAR
and in Q4 we resumed our share repurchase program, repurchasing
approximately $10.7 million of our common stock. Importantly, to
maximize long-term shareholder value, we completed a restructuring
of the business, ultimately saving more than $20 million in annual
operating expenses that we are reinvesting into the business to
capitalize on our highest priority opportunities to expand revenue
and profitability.”
NETGEAR For Business (NFB) Segment Results
- Revenue was $80.8 million, up 14.9% year over year
- Non-GAAP gross margin was 43.9%, down 270 basis points year
over year
- Non-GAAP contribution margin was 19.7%, down 90 basis points
year over year
Mr. Prober continued, “For NFB, our leading ProAV products drove
another record quarter in end user sales while we added almost 50
new manufacturing partners and launched Engage 2.0, substantially
expanding our software capabilities in this product category. The
continuing strong performance of this business provides a great
foundation for our return to profitable growth.”
Connected Home Products (CHP) Segment Results
- Revenue was $101.6 million, down 14.2% year over year
- Non-GAAP gross margin was 23.9%, down 420 basis points year
over year
- Non-GAAP contribution margin was (1.3)%, down 740 basis points
year over year
Mr. Prober continued, “We’ve had a great reception to our
recently released WiFi 7 Orbi and Nighthawk products and we are
making progress in executing on our ‘good-better-best’ product
strategy, which we expect to help us reclaim market share in 2025.
Importantly, recurring revenue improved by 25% year over year, a
result of the targeted software investments we’ve made across both
businesses, including recent upgrades to our Armor offering.
Although the full benefits of NETGEAR’s revamped strategy will take
time to materialize completely, we’re focused on generating
long-term value for shareholders and remain confident in the
consumer market opportunity ahead of us as we progress through
2025.”
Business Outlook
Mr. Murray continued, “We expect to continue to see more
predictable performance that is aligned with the market for both of
our businesses now that both our destocking and inventory reduction
actions are completed. However, within NFB, although end user
demand for our ProAV line of managed switches remains strong, we
are facing lengthy lead times for supply, which will result in us
under shipping in Q1 and this is reflected in our muted top line
guidance. On the CHP side, we are seeing signs of market stability
and expect to experience normal seasonality in the retail portion
of this business. We expect revenue from the service provider
channel to be approximately $15 million in Q1, down on a sequential
basis. Accordingly, we expect first quarter net revenue to be in
the range of $145 million to $160 million. In the first quarter we
expect to maintain the gross margin performance experienced in the
recent fourth quarter, however with our seasonally lower topline we
expect our first quarter GAAP operating margin to be in the range
of (16.4)% to (13.4)%, and non-GAAP operating margin to be in the
range of (10.0)% to (7.0)%. 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 $0.5 million to $1.5
million for the first quarter of 2025.”
A reconciliation between the Business Outlook on a GAAP and
non-GAAP basis is provided in the following table:
Three months ending
March 30, 2025
(In millions, except for percentage
data)
Operating Margin Rate
Tax Expense (Benefit)
GAAP
(16.4)% - (13.4)%
$1.0 - $2.0
Estimated adjustments for1:
Stock-based compensation expense
4.0%
-
Restructuring and other charges
2.4%
-
Non-GAAP tax adjustments
-
$(2.5)
Non-GAAP
(10.0)% - (7.0)%
$(1.5) - $(0.5)
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 fourth quarter and full year results and
discuss management's expectations for the first quarter of 2025
today, Wednesday, February 5, 2025 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 USA, NETGEAR® (NASDAQ:
NTGR) is a global leader in innovative networking technologies for
businesses, homes, and service providers. NETGEAR delivers a wide
range of award-winning, intelligent solutions designed to unleash
the full potential of connectivity and power extraordinary
experiences. For businesses, NETGEAR offers reliable, easy-to-use,
high-performance networking solutions, including switches, routers,
access points, software, and AV over IP technologies, tailored to
meet the diverse needs of organizations of all sizes. NETGEAR’s
Connected Home products deliver advanced connectivity, powerful
performance, and enhanced security features right out of the box,
designed to keep families safe online, whether at home or on the
go. More information is available from the NETGEAR Press Room or by
calling (408) 907-8000. Connect with NETGEAR: Facebook, Instagram
and the NETGEAR blog at NETGEAR.com.
© 2025 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.
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 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 and gross
margin; creating long-term value for shareholders; positioning
NETGEAR for long term success; long-term potential and profitable
growth; continued end user demand for NETGEAR’s ProAV line of
managed switches; expectations regarding more predictable
performance that is aligned to the market; revenue from the service
provider channel; expectations regarding continuing market demand
for the NETGEAR’s products and services; and expectations regarding
expected tax benefits or tax expenses. 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 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 continue
to effect operating expense savings; changes in the level of
NETGEAR's cash resources and NETGEAR’s planned usage of such
resources; changes in NETGEAR’s stock price and developments in the
business that could increase NETGEAR’s cash needs; fluctuations in
foreign exchange rates; loss of services of key personnel may
affect NETGEAR’s ability to executive on business strategy
effectively; 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 II - Item 1A.
Risk Factors" in NETGEAR’s quarterly report on Form 10-Q for the
fiscal quarter ended September 29, 2024, filed with the Securities
and Exchange Commission on November 1, 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 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. Included in the non-GAAP tax
adjustments for the three and twelve months ended December 31, 2024
and December 31, 2023 are adjustments to tax expense (benefit)
related to differences between our prior forecasts and actual
results for the twelve months ended.
NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
December 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
286,444
$
176,717
Short-term investments
122,246
106,931
Accounts receivable, net
156,210
185,059
Inventories
162,539
248,851
Prepaid expenses and other current
assets
30,590
30,421
Total current assets
758,029
747,979
Property and equipment, net
11,288
8,273
Operating lease right-of-use assets
28,047
37,285
Goodwill
36,279
36,279
Other non-current assets
16,587
17,326
Total assets
$
850,230
$
847,142
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
58,481
$
46,850
Accrued employee compensation
23,290
21,286
Other accrued liabilities
148,078
168,084
Deferred revenue
30,261
27,091
Income taxes payable
9,973
1,037
Total current liabilities
270,083
264,348
Non-current income taxes payable
7,583
12,695
Non-current operating lease
liabilities
19,796
29,698
Other non-current liabilities
11,702
4,906
Total liabilities
309,164
311,647
Stockholders’ equity:
Common stock
29
30
Additional paid-in capital
997,912
967,651
Accumulated other comprehensive income
241
136
Accumulated deficit
(457,116
)
(432,322
)
Total stockholders’ equity
541,066
535,495
Total liabilities and stockholders’
equity
$
850,230
$
847,142
NETGEAR, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share and percentage data)
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Net revenue
$
182,419
$
182,854
$
188,674
$
673,759
$
740,840
Cost of revenue
123,035
126,371
123,038
477,832
491,588
Gross profit
59,384
56,483
65,636
195,927
249,252
Gross margin
32.6
%
30.9
%
34.8
%
29.1
%
33.6
%
Operating expenses:
Research and development
20,099
20,905
19,592
81,082
83,295
Sales and marketing
32,212
31,196
30,552
123,694
127,778
General and administrative
17,858
8,357
17,107
63,468
66,243
Litigation reserves, net
3,613
(100,855
)
—
(89,012
)
178
Restructuring and other charges
687
1,072
1,259
4,479
3,962
Intangibles impairment
—
—
—
—
1,071
Total operating expenses
74,469
(39,325
)
68,510
183,711
282,527
Income (loss) from operations
(15,085
)
95,808
(2,874
)
12,216
(33,275
)
Operating margin
(8.3
)%
52.4
%
(1.5
)%
1.8
%
(4.5
)%
Other income, net
3,624
3,485
2,454
12,672
14,139
(Loss) income before income taxes
(11,461
)
99,293
(420
)
24,888
(19,136
)
(Benefit from) provision for income
taxes
(2,575
)
14,219
1,249
12,525
85,631
Net (loss) income
$
(8,886
)
$
85,074
$
(1,669
)
$
12,363
$
(104,767
)
Net (loss) income per share:
Basic
$
(0.31
)
$
2.96
$
(0.06
)
$
0.43
$
(3.57
)
Diluted
$
(0.31
)
$
2.90
$
(0.06
)
$
0.42
$
(3.57
)
Weighted average shares used to compute
net (loss) income per share:
Basic
28,648
28,705
29,623
28,905
29,355
Diluted
28,648
29,364
29,623
29,683
29,355
NETGEAR, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended
December 31, 2024
December 31, 2023
Cash flows from operating
activities:
Net income (loss)
$
12,363
$
(104,767
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
6,514
7,161
Stock-based compensation
22,678
17,938
Gain on investments, net
(3,552
)
(3,226
)
Intangibles impairment
—
1,071
Deferred income taxes
1,001
82,319
Provision for excess and obsolete
inventory
6,064
3,168
Changes in assets and liabilities:
Accounts receivable, net
28,849
92,425
Inventories
80,248
47,595
Prepaid expenses and other assets
5,101
(3,189
)
Accounts payable
11,486
(38,947
)
Accrued employee compensation
2,004
(2,846
)
Other accrued liabilities
(15,152
)
(45,893
)
Deferred revenue
3,368
6,969
Income taxes payable
3,825
(2,925
)
Net cash provided by operating
activities
164,797
56,853
Cash flows from investing
activities:
Purchases of short-term investments
(137,228
)
(135,920
)
Proceeds from maturities of short-term
investments
120,290
115,006
Purchases of property and equipment
(8,994
)
(5,799
)
Purchases of long-term investments
(225
)
(720
)
Net cash used in investing activities
(26,157
)
(27,433
)
Cash flows from financing
activities:
Repurchases of common stock
(33,088
)
—
Restricted stock unit withholdings
(3,409
)
(2,793
)
Proceeds from exercise of stock
options
4,019
—
Proceeds from issuance of common stock
under employee stock purchase plan
3,565
3,590
Net cash (used in) provided by financing
activities
(28,913
)
797
Net increase in cash and cash
equivalents
109,727
30,217
Cash and cash equivalents, at beginning of
period
176,717
146,500
Cash and cash equivalents, at end of
period
$
286,444
$
176,717
NETGEAR, INC.
RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
(In thousands, except
percentage data)
(Unaudited)
STATEMENT OF OPERATIONS DATA:
Three Months Ended
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
GAAP gross profit
$
59,384
$
56,483
$
65,636
$
195,927
$
249,252
GAAP gross margin
32.6
%
30.9
%
34.8
%
29.1
%
33.6
%
Amortization of intangibles
—
—
—
—
257
Stock-based compensation expense
391
444
358
1,613
1,405
Non-GAAP gross profit
$
59,775
$
56,927
$
65,994
$
197,540
$
250,914
Non-GAAP gross margin
32.8
%
31.1
%
35.0
%
29.3
%
33.9
%
GAAP research and development
$
20,099
$
20,905
$
19,592
$
81,082
$
83,295
Stock-based compensation expense
(887
)
(868
)
(885
)
(3,297
)
(3,935
)
Non-GAAP research and development
$
19,212
$
20,037
$
18,707
$
77,785
$
79,360
GAAP sales and marketing
$
32,212
$
31,196
$
30,552
$
123,694
$
127,778
Stock-based compensation expense
(2,190
)
(1,520
)
(1,237
)
(6,182
)
(5,336
)
Non-GAAP sales and marketing
$
30,022
$
29,676
$
29,315
$
117,512
$
122,442
GAAP general and administrative
$
17,858
$
8,357
$
17,107
$
63,468
$
66,243
Stock-based compensation expense
(3,158
)
(2,788
)
(1,821
)
(11,586
)
(7,262
)
Non-GAAP general and administrative
$
14,700
$
5,569
$
15,286
$
51,882
$
58,981
GAAP total operating expenses
$
74,469
$
(39,325
)
$
68,510
$
183,711
$
282,527
Stock-based compensation expense
(6,235
)
(5,176
)
(3,943
)
(21,065
)
(16,533
)
Intangibles impairment
—
—
—
—
(1,071
)
Restructuring and other charges
(687
)
(1,072
)
(1,259
)
(4,479
)
(3,962
)
Litigation reserves, net
(3,613
)
100,855
—
89,012
(178
)
Non-GAAP total operating expenses
$
63,934
$
55,282
$
63,308
$
247,179
$
260,783
GAAP operating (loss) income
$
(15,085
)
$
95,808
$
(2,874
)
$
12,216
$
(33,275
)
GAAP operating margin
(8.3
)%
52.4
%
(1.5
)%
1.8
%
(4.5
)%
Amortization of intangibles
—
—
—
—
257
Stock-based compensation expense
6,626
5,620
4,301
22,678
17,938
Intangibles impairment
—
—
—
—
1,071
Restructuring and other charges
687
1,072
1,259
4,479
3,962
Litigation reserves, net
3,613
(100,855
)
—
(89,012
)
178
Non-GAAP operating (loss) income
$
(4,159
)
$
1,645
$
2,686
$
(49,639
)
$
(9,869
)
Non-GAAP operating margin
(2.3
)%
0.9
%
1.4
%
(7.4
)%
(1.3
)%
GAAP other income, net
$
3,624
$
3,485
$
2,454
$
12,672
$
14,139
Gain/loss on investments, net
110
(49
)
(8
)
93
8
Gain on litigation settlements
—
—
—
—
(6,000
)
Non-GAAP other income, net
$
3,734
$
3,436
$
2,446
$
12,765
$
8,147
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
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
GAAP net (loss) income
$
(8,886
)
$
85,074
$
(1,669
)
$
12,363
$
(104,767
)
Amortization of intangibles
—
—
—
—
257
Stock-based compensation expense
6,626
5,620
4,301
22,678
17,938
Intangibles impairment
—
—
—
—
1,071
Restructuring and other charges
687
1,072
1,259
4,479
3,962
Litigation reserves, net
3,613
(100,855
)
—
(89,012
)
178
Gain/loss on investments, net
110
(49
)
(8
)
93
8
Gain on litigation settlements
—
—
—
—
(6,000
)
Non-GAAP tax adjustments
(3,761
)
14,203
(1,138
)
23,055
86,586
Non-GAAP net income (loss)
$
(1,611
)
$
5,065
$
2,745
$
(26,344
)
$
(767
)
NET INCOME (LOSS) PER DILUTED
SHARE:
GAAP net (loss) income per diluted
share
$
(0.31
)
$
2.90
$
(0.06
)
$
0.42
$
(3.57
)
Amortization of intangibles
—
—
—
—
0.01
Stock-based compensation expense
0.23
0.19
0.14
0.78
0.61
Intangibles impairment
—
—
—
—
0.04
Restructuring and other charges
0.02
0.04
0.04
0.15
0.13
Litigation reserves, net
0.13
(3.43
)
—
(3.08
)
0.01
Gain/loss on investments, net
—
—
—
—
—
Gain on litigation settlements
—
—
—
—
(0.20
)
Non-GAAP tax adjustments
(0.13
)
0.47
(0.03
)
0.82
2.94
Non-GAAP net income (loss) per diluted
share 1
$
(0.06
)
$
0.17
$
0.09
$
(0.91
)
$
(0.03
)
Shares used in computing GAAP net (loss)
income per diluted share
28,648
29,364
29,623
29,683
29,355
Shares used in computing non-GAAP net
income (loss) per diluted share
28,648
29,364
29,683
28,905
29,355
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.
SUPPLEMENTAL FINANCIAL
INFORMATION
(In thousands, except per
share data, DSO, inventory turns, weeks of channel inventory,
headcount and percentage data)
(Unaudited)
Three Months Ended
December 31, 2024
September 29, 2024
June 30, 2024
March 31, 2024
December 31, 2023
Cash, cash equivalents and short-term
investments
$
408,690
$
395,732
$
294,339
$
289,421
$
283,648
Cash, cash equivalents and short-term
investments per diluted share
$
14.27
$
13.48
$
10.19
$
9.85
$
9.56
Accounts receivable, net
$
156,210
$
177,326
$
147,069
$
172,771
$
185,059
Days sales outstanding (DSO)
80
88
93
96
89
Inventories
$
162,539
$
161,976
$
188,936
$
211,270
$
248,851
Ending inventory turns
3.0
3.1
2.4
2.2
2.0
Weeks of channel inventory:
U.S. retail channel
9.7
9.5
9.5
11.2
10.8
U.S. distribution channel
3.3
2.4
2.8
4.0
7.9
EMEA distribution channel
4.8
5.3
5.2
5.9
6.4
APAC distribution channel
10.0
9.5
8.3
8.0
10.0
Deferred revenue (current and
non-current)
$
35,362
$
35,068
$
34,216
$
33,714
$
31,994
Headcount
655
638
622
628
635
Non-GAAP diluted shares
28,648
29,364
28,883
29,395
29,683
NET REVENUE BY GEOGRAPHY
Three Months Ended
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Americas
$122,857
67%
$127,752
70%
$124,798
66%
$456,040
68%
$504,349
68%
EMEA
35,920
20%
32,798
18%
37,899
20%
127,260
19%
148,922
20%
APAC
23,642
13%
22,304
12%
25,977
14%
90,459
13%
87,569
12%
Total
$182,419
100%
$182,854
100%
$188,674
100%
$673,759
100%
$740,840
100%
NETGEAR, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION (CONTINUED)
(In thousands)
(Unaudited)
NET REVENUE BY SEGMENT
Three Months Ended
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
NETGEAR for Business
$
80,792
$
78,530
$
70,296
$
287,812
$
293,975
Connected Home
101,627
104,324
118,378
385,947
446,865
Total net revenue
$
182,419
$
182,854
$
188,674
$
673,759
$
740,840
SERVICE PROVIDER NET REVENUE
Three Months Ended
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
NETGEAR for Business
$
264
$
268
$
152
$
977
$
579
Connected Home
19,801
22,949
27,313
90,035
98,659
Total service provider net revenue
$
20,065
$
23,217
$
27,465
$
91,012
$
99,238
NETGEAR, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION (CONTINUED)
(In thousands)
(Unaudited)
SEGMENT DATA:
Three Months Ended
Twelve Months Ended
December 31, 2024
September 29, 2024
December 31, 2023
December 31, 2024
December 31, 2023
(In thousands, except percentage
data)
NETGEAR for Business
Connected Home
Total
NETGEAR for Business
Connected Home
Total
NETGEAR for Business
Connected Home
Total
NETGEAR for Business
Connected Home
Total
NETGEAR for Business
Connected Home
Total
Net revenue
$
80,792
$
101,627
$
182,419
$
78,530
$
104,324
$
182,854
$
70,296
$
118,378
$
188,674
$
287,812
$
385,947
$
673,759
$
293,975
$
446,865
$
740,840
Cost of revenue
45,354
77,290
122,644
43,436
82,491
125,927
37,519
85,162
122,681
168,399
307,820
476,219
163,083
326,843
489,926
Gross profit
35,438
24,337
59,775
35,094
21,833
56,927
32,777
33,216
65,993
119,413
78,127
197,540
130,892
120,022
250,914
Gross margin
43.9
%
23.9
%
32.8
%
44.7
%
20.9
%
31.1
%
46.6
%
28.1
%
35.0
%
41.5
%
20.2
%
29.3
%
44.5
%
26.9
%
33.9
%
Contribution income (loss)
15,907
(1,297
)
14,610
16,133
(4,780
)
11,353
14,511
*
7,209
*
21,720
*
44,005
(26,011
)
17,994
56,765
*
9,545
*
66,310
*
Contribution margin
19.7
%
(1.3
)%
8.0
%
20.5
%
(4.6
)%
6.2
%
20.6
%
*
6.1
%
*
11.5
%
*
15.3
%
(6.7
)%
2.7
%
19.3
%
*
2.1
%
*
9.0
%
*
Corporate and unallocated costs
(18,769
)
(9,708
)
(19,034
)
*
(67,633
)
(76,179
)
*
Amortization of intangibles
—
—
—
—
(257
)
Stock-based compensation expense
(6,626
)
(5,620
)
(4,301
)
(22,678
)
(17,938
)
Intangibles impairment
—
—
—
—
(1,071
)
Restructuring and other charges
(687
)
(1,072
)
(1,259
)
(4,479
)
(3,962
)
Litigation reserves, net
(3,613
)
100,855
—
89,012
(178
)
Other income, net
3,624
3,485
2,454
12,672
14,139
Loss before income taxes
$
(11,461
)
$
99,293
$
(420
)
$
24,888
$
(19,136
)
_______________________
* Financial information for each
reportable segment in the prior year periods were recast to conform
to the current reportable segment structure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250205238534/en/
NETGEAR Investor Relations Erik Bylin investors@netgear.com
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