NETGEAR® Reports Second Quarter 2020 Results

NETGEAR, Inc. (NASDAQ: NTGR), a global networking company that delivers innovative networking and Internet connected products to consumers and businesses, today reported financial results for the second quarter ended June 28, 2020.

  • Second quarter 2020 net revenue of $280.1 million, an increase of 21.3% from the comparable prior year quarter.
  • Second quarter 2020 GAAP operating income of $8.9 million, or 3.2% of net revenue, as compared to operating income of $0.3 million, or 0.1% of net revenue, in the comparable prior year quarter.
    • Second quarter 2020 non-GAAP operating income of $21.0 million, or 7.5% of net revenue, as compared to $10.0 million, or 4.4% of net revenue in the comparable prior year quarter.
  • Second quarter 2020 GAAP net income per diluted share of $0.20, as compared to $0.03 in the comparable prior year quarter.
    • Second quarter 2020 non-GAAP net income per diluted share of $0.54, as compared to $0.28 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.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, “The NETGEAR team navigated challenging conditions to accommodate the robust end demand we saw during the quarter, all while working remotely. Driven by the CHP side of the business, we achieved revenue growth of 21% and more than doubled our operating profit over the prior year. The surge in demand that began in March continued throughout the entire quarter and resulted in strong growth in both the retail and service provider channels for the CHP business. The work-from-home transition taking place worldwide is driving the adoption of high performance WiFi at home as an indispensable necessity and, as the leader in WiFi 6 technology, we stand well positioned to enable this new reality. In conjunction with the increased penetration of high-end WiFi 6 mesh systems and routers into the market, we accelerated the acquisition of new service subscribers, particularly in cybersecurity protection and parental control services, growing our paid subscriber base 28% sequentially and putting us on a trajectory to exceed our goal of doubling our subscriber count in 2020.”

Mr. Lo continued, “As many employees continue to work from home today, companies are growing increasingly confident that their workforce can be productive remotely and are beginning to measure the positive aspects of remote work. This is driving a consensus that remote work will be a larger part of the landscape even as the pandemic eventually eases. As a result, we see strong demand for high performance home WiFi continuing to fuel our revenue growth at least through the rest of this year. While providing an unexpected tailwind for CHP, the pandemic has at the same time created a headwind for SMB. That said, our SMB business benefited from the opportunity to drive sales of more sophisticated home office setups, including low port count switches and commercial grade WiFi. Within SMB, we continue to see success in our ProAV business and expect it to grow during the next two quarters. Nevertheless, uncertainty still exists in our SMB business as reopening plans in some economies have stalled, or even taken steps backwards, as is the case in the United States. Unhindered by remote work, our teams continued to deliver important new products to the market, including another WiFi 6 Orbi mesh product and two new POE+ switches. Our 5G mobile hotspots shipped in material volume in Q2, and we see the expanded use of mobile hotspots continuing in the second half as people increasingly take to the road or seek more flexible WiFi solutions, and as more schools equip underprivileged students with hotspots to provide high speed WiFi access for remote learning.”

Bryan Murray, Chief Financial Officer of NETGEAR, added, “We had another quarter of strong cash flow, generating $63.2 million in cash from operations in the second quarter. Additionally, in Q2, we repurchased approximately 315,000 shares of common stock for $7.5 million. Although the full economic impact and duration of the current pandemic remain unclear, we believe we are well positioned to serve the demand trends we are currently seeing in the marketplace. Preserving strong liquidity and generating cash are paramount during these uncertain times, and we are confident in our ability to do so through the remainder of this year.”

Business Outlook

Mr. Murray continued, “While we are confident in the ongoing strength of end market demand for home networks, there is still considerable uncertainty around the slowing or reversals of re-openings, new waves of COVID-19 and by extension the speed of the economic recovery worldwide in the second half of 2020. This makes our most profitable business, SMB, difficult to forecast, and heightens the risk of supply chain disruption. Given this, we feel it is prudent to continue to suspend our practice of giving guidance for Q3 and full year 2020.”

Investor Conference Call / Webcast Details

NETGEAR will review the second quarter results and discuss management's expectations for the third quarter of 2020 today, Wednesday, July 22, 2020 at 5 p.m. ET (2 p.m. PT). The toll free dial-in number for the live audio call is (844) 709-2008. The international dial-in number for the live audio call is (647) 253-8663. The conference ID for the call is 1778426. 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.

NETGEAR (NASDAQ: NTGR) has pioneered advanced networking technologies for homes, businesses, and service providers around the world since 1996 and leads the industry with a broad range of award-winning products designed to simplify and improve people’s lives. By enabling people to collaborate and connect to a world of information and entertainment, NETGEAR is dedicated to delivering innovative and advanced connected solutions ranging from mobile and cloud-based services for enhanced control and security, to smart networking products, video over Ethernet for Pro AV applications, easy-to-use WiFi solutions and performance gaming routers to enhance online game play. NETGEAR products are sold in approximately 25,000 retail locations around the globe, and through approximately 19,000 value-added resellers, as well as multiple major cable, mobile and wireline service providers around the world. The company's headquarters are in San Jose, Calif., with additional offices in approximately 20 countries. More information is available at http://investor.netgear.com or by calling (408) 907-8000. Connect with NETGEAR at http://twitter.com/NETGEAR and http://www.facebook.com/NETGEAR.

© 2020 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 continued profitability and cash generation; expectations regarding the timing, distribution, sales momentum and market acceptance of recent and anticipated new product introductions that position the Company for growth and market share gain; and expectations regarding NETGEAR's paid subscriber base growth, registered users and registered app users and their effect on NETGEAR's paid subscriber base. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: uncertainty surrounding the duration and impact of the global COVID-19 pandemic; future demand for the Company's products may be lower than anticipated; consumers may choose not to adopt the Company's new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; the Company may be unsuccessful or experience delays in manufacturing and distributing its new and existing products; telecommunications service providers may choose to slow their deployment of the Company's products or utilize competing products; the Company may be unable to grow its number of registered users and/or registered app users; the Company may be unable to grow its paid subscriber base; the Company may be unable to collect receivables as they become due; the Company may fail to manage costs, including the cost of developing new products and manufacturing and distribution of its existing offerings; the Company may fail to successfully continue to effect operating expense savings; changes in the level of NETGEAR's cash resources and the Company's planned usage of such resources, including potential repurchases of the Company’s common stock; changes in the Company's stock price and developments in the business that could increase the Company's cash needs; fluctuations in foreign exchange rates; and the actions and financial health of the Company's customers. 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 the Company'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 the Company's quarterly report on Form 10-Q for the fiscal quarter ended March 29, 2020, filed with the Securities and Exchange Commission on May 1, 2020. 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, non-GAAP operating margin, Non-GAAP other income (expense), net, non-GAAP net income and non-GAAP net income per diluted share. These supplemental measures exclude adjustments for amortization of intangibles, stock-based compensation expense, separation expense, change in fair value of contingent consideration, restructuring and other charges, litigation reserves, net, gain/loss on investments, net, and the related tax effects. 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 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: separation expense, change in fair value of contingent consideration, 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.

Tax effects consist of the various above adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income. We also believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures provides our management and users of the financial statements with better clarity regarding the on-going performance of our business.

Source: NETGEAR-F

NETGEAR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

As of

June 28,
2020

December 31,
2019

ASSETS

Current assets:

Cash and cash equivalents

$

252,633

$

190,208

Short-term investments

5,919

5,499

Accounts receivable, net

277,490

277,168

Inventories

150,585

235,489

Prepaid expenses and other current assets

34,655

35,745

Total current assets

721,282

744,109

Property and equipment, net

15,536

17,683

Operating lease right-of-use assets, net

31,774

28,917

Intangibles, net

6,915

10,104

Goodwill

80,721

80,721

Other non-current assets

72,743

74,279

Total assets

$

928,971

$

955,813

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

76,086

$

80,531

Accrued employee compensation

22,793

20,024

Other accrued liabilities

163,079

189,547

Deferred revenue

8,171

6,450

Income taxes payable

805

1,839

Total current liabilities

270,934

298,391

Non-current income taxes payable

15,505

15,307

Non-current operating lease liabilities

27,749

25,434

Other non-current liabilities

8,637

7,988

Total liabilities

322,825

347,120

Stockholders’ equity:

Common stock

30

30

Additional paid-in capital

853,137

831,365

Accumulated other comprehensive income

7

21

Accumulated deficit

(247,028

)

(222,723

)

Total stockholders’ equity

606,146

608,693

Total liabilities and stockholders’ equity

$

928,971

$

955,813

NETGEAR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share and percentage data)

(Unaudited)

Three Months Ended

Six Months Ended

June 28,
2020

March 29,
2020

June 30,
2019

June 28,
2020

June 30,
2019

Net revenue

$

280,052

$

229,963

$

230,852

$

510,015

$

479,934

Cost of revenue

198,751

163,722

165,407

362,473

332,481

Gross profit

81,301

66,241

65,445

147,542

147,453

Gross margin

29.0

%

28.8

%

28.3

%

28.9

%

30.7

%

Operating expenses:

Research and development

21,144

19,739

18,814

40,883

37,646

Sales and marketing

34,384

33,031

34,541

67,415

70,396

General and administrative

15,481

13,134

10,463

28,615

23,580

Other operating expenses (income), net

1,425

(332

)

1,301

1,093

1,497

Total operating expenses

72,434

65,572

65,119

138,006

133,119

Income from operations

8,867

669

326

9,536

14,334

Operating margin

3.2

%

0.3

%

0.1

%

1.9

%

3.0

%

Interest income, net

49

262

782

311

1,483

Other income (expense), net

314

(4,586

)

487

(4,272

)

828

Income (loss) before income taxes

9,230

(3,655

)

1,595

5,575

16,645

Provision for income taxes

3,247

518

756

3,765

2,963

Net income (loss)

$

5,983

$

(4,173

)

$

839

$

1,810

$

13,682

Net income (loss) per share:

Basic

$

0.20

$

(0.14

)

$

0.03

$

0.06

$

0.44

Diluted

$

0.20

$

(0.14

)

$

0.03

$

0.06

$

0.42

Weighted average shares used to compute net income (loss) per share:

Basic

29,617

29,583

31,246

29,608

31,365

Diluted

30,070

29,583

32,112

30,079

32,518

NETGEAR, INC.

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except percentage data)

(Unaudited)

STATEMENT OF OPERATIONS DATA:

 

Three Months Ended

Six Months Ended

June 28,
2020

March 29,
2020

June 30,
2019

June 28,
2020

June 30,
2019

GAAP gross profit

$

81,301

$

66,241

$

65,445

$

147,542

$

147,453

GAAP gross margin

29.0

%

28.8

%

28.3

%

28.9

%

30.7

%

Amortization of intangibles

179

178

178

357

357

Stock-based compensation expense

1,501

705

755

2,206

1,423

Non-GAAP gross profit

$

82,981

$

67,124

$

66,378

$

150,105

$

149,233

Non-GAAP gross margin

29.6

%

29.2

%

28.8

%

29.4

%

31.1

%

GAAP research and development

$

21,144

$

19,739

$

18,814

$

40,883

$

37,646

Stock-based compensation expense

(1,707

)

(1,034

)

(1,288

)

(2,741

)

(2,480

)

Non-GAAP research and development

$

19,437

$

18,705

$

17,526

$

38,142

$

35,166

GAAP sales and marketing

$

34,384

$

33,031

$

34,541

$

67,415

$

70,396

Amortization of intangibles

(1,340

)

(1,341

)

(1,504

)

(2,681

)

(3,335

)

Stock-based compensation expense

(1,890

)

(1,779

)

(2,085

)

(3,669

)

(4,126

)

Non-GAAP sales and marketing

$

31,154

$

29,911

$

30,952

$

61,065

$

62,935

GAAP general and administrative

$

15,481

$

13,134

$

10,463

$

28,615

$

23,580

Stock-based compensation expense

(4,074

)

(2,818

)

(2,611

)

(6,892

)

(5,168

)

Non-GAAP general and administrative

$

11,407

$

10,316

$

7,852

$

21,723

$

18,412

GAAP other operating expenses (income), net

$

1,425

$

(332

)

$

1,301

$

1,093

$

1,497

Separation expense

(264

)

Change in fair value of contingent consideration

(311

)

222

(89

)

Restructuring and other charges

(1,117

)

135

(1,291

)

(982

)

(1,223

)

Litigation reserves, net

3

(25

)

(10

)

(22

)

(10

)

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

Six Months Ended

June 28,
2020

March 29,
2020

June 30,
2019

June 28,
2020

June 30,
2019

GAAP total operating expenses

$

72,434

$

65,572

$

65,119

$

138,006

$

133,119

Amortization of intangibles

(1,340

)

(1,341

)

(1,504

)

(2,681

)

(3,335

)

Stock-based compensation expense

(7,671

)

(5,631

)

(5,984

)

(13,302

)

(11,774

)

Separation expense

(264

)

Change in fair value of contingent consideration

(311

)

222

(89

)

Restructuring and other charges

(1,117

)

135

(1,291

)

(982

)

(1,223

)

Litigation reserves, net

3

(25

)

(10

)

(22

)

(10

)

Non-GAAP total operating expenses

$

61,998

$

58,932

$

56,330

$

120,930

$

116,513

GAAP operating income

$

8,867

$

669

$

326

$

9,536

$

14,334

GAAP operating margin

3.2

%

0.3

%

0.1

%

1.9

%

3.0

%

Amortization of intangibles

1,519

1,519

1,682

3,038

3,692

Stock-based compensation expense

9,172

6,336

6,739

15,508

13,197

Separation expense

264

Change in fair value of contingent consideration

311

(222

)

89

Restructuring and other charges

1,117

(135

)

1,291

982

1,223

Litigation reserves, net

(3

)

25

10

22

10

Non-GAAP operating income

$

20,983

$

8,192

$

10,048

$

29,175

$

32,720

Non-GAAP operating margin

7.5

%

3.6

%

4.4

%

5.7

%

6.8

%

GAAP other income (expense), net

$

314

$

(4,586

)

$

487

$

(4,272

)

$

828

Gain/loss on investments, net

4,530

4,530

Non-GAAP other income (expense), net

$

314

$

(56

)

$

487

$

258

$

828

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

Six Months Ended

June 28,
2020

March 29,
2020

June 30,
2019

June 28,
2020

June 30,
2019

GAAP net income (loss)

$

5,983

$

(4,173

)

$

839

$

1,810

$

13,682

Amortization of intangibles

1,519

1,519

1,682

3,038

3,692

Stock-based compensation expense

9,172

6,336

6,739

15,508

13,197

Separation expense

264

Change in fair value of contingent consideration

311

(222

)

89

Restructuring and other charges

1,117

(135

)

1,291

982

1,223

Litigation reserves, net

(3

)

25

10

22

10

Gain/loss on investments, net

4,530

4,530

Tax effects of above non-GAAP adjustments

(1,778

)

(1,511

)

(1,707

)

(3,289

)

(3,413

)

Non-GAAP net income

$

16,321

$

6,369

$

8,854

$

22,690

$

28,655

NET INCOME (LOSS) PER DILUTED SHARE:

GAAP net income (loss) per diluted share

$

0.20

$

(0.14

)

$

0.03

$

0.06

$

0.42

Amortization of intangibles

0.05

0.05

0.05

0.10

0.11

Stock-based compensation expense

0.31

0.21

0.21

0.52

0.41

Separation expense

0.01

Change in fair value of contingent consideration

0.01

(0.01

)

0.00

Restructuring and other charges

0.04

(0.00)

0.04

0.03

0.04

Litigation reserves, net

(0.00)

0.00

0.00

0.00

0.00

Gain/loss on investments, net

0.15

0.15

Tax effects of above non-GAAP adjustments

(0.07

)

(0.05

)

(0.05

)

(0.11

)

(0.11

)

Non-GAAP net income per diluted share 1

$

0.54

$

0.21

$

0.28

$

0.75

$

0.88

Shares used in computing GAAP net income (loss) per diluted share

30,070

29,583

32,112

30,079

32,518

Shares used in computing non-GAAP net income per diluted share

30,070

30,045

32,112

30,079

32,518

1 The per share reconciliation of GAAP to non-GAAP may not aggregate due to both calculations utilizing a different share basis. The GAAP net loss per diluted share calculation uses a lower share count as it excludes potentially dilutive shares included in the non-GAAP 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

June 28,
2020

March 29,
2020

December 31,
2019

September 29,
2019

June 30,
2019

Cash, cash equivalents and short-term investments

$

258,552

$

209,714

$

195,707

$

171,917

$

218,311

Cash, cash equivalents and short-term investments per diluted share

$

8.60

$

6.98

$

6.35

$

5.40

$

6.80

Accounts receivable, net

$

277,490

$

257,582

$

277,168

$

248,070

$

238,635

Days sales outstanding (DSO)

90

100

102

85

94

Inventories

$

150,585

$

180,602

$

235,489

$

275,584

$

276,316

Ending inventory turns

5.3

3.6

3.1

2.7

2.4

Weeks of channel inventory:

U.S. retail channel

6.4

7.0

8.0

8.6

10.6

U.S. distribution channel

4.2

5.7

4.5

5.4

5.5

EMEA distribution channel

4.7

6.7

5.9

5.8

4.6

APAC distribution channel

11.9

8.3

9.6

7.8

7.4

Deferred revenue (current and non-current)

$

10,792

$

8,963

$

8,511

$

7,712

$

12,047

Headcount

788

797

809

802

824

Non-GAAP diluted shares

30,070

30,045

30,800

31,819

32,112

NET REVENUE BY GEOGRAPHY

Three Months Ended

Six Months Ended

June 28, 2020

March 29, 2020

June 30, 2019

June 28, 2020

June 30, 2019

Americas

$

202,246

72

%

$

158,190

69

%

$

157,170

68

%

$

360,436

70

%

$

305,199

63

%

EMEA

48,359

17

%

42,148

18

%

43,091

19

%

90,507

18

%

100,054

21

%

APAC

29,447

11

%

29,625

13

%

30,591

13

%

59,072

12

%

74,681

16

%

Total

$

280,052

100

%

$

229,963

100

%

$

230,852

100

%

$

510,015

100

%

$

479,934

100

%

NETGEAR, INC.

SUPPLEMENTAL FINANCIAL INFORMATION (CONTINUED)

(In thousands)

(Unaudited)

NET REVENUE BY SEGMENT

Three Months Ended

Six Months Ended

June 28,
2020

March 29,
2020

June 30,
2019

June 28,
2020

June 30,
2019

Connected Home

$

230,017

$

164,663

$

167,495

$

394,680

$

336,860

SMB

50,035

65,300

63,357

115,335

143,074

Total net revenue

$

280,052

$

229,963

$

230,852

$

510,015

$

479,934

SERVICE PROVIDER NET REVENUE

Three Months Ended

Six Months Ended

June 28,
2020

March 29,
2020

June 30,
2019

June 28,
2020

June 30,
2019

Connected Home

$

44,152

$

26,687

$

26,901

$

70,839

$

63,719

SMB

871

797

922

1,668

2,398

Total service provider net revenue

$

45,023

$

27,484

$

27,823

$

72,507

$

66,117

Contacts:

NETGEAR Investor Relations
Erik Bylin
investors@netgear.com

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