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Mar 28, 2021
NETGEAR Q1 2021 Earnings Report
NETGEAR's first quarter 2021 results were reported, showing strong revenue growth and record non-GAAP operating profit.
Key Takeaways
NETGEAR reported a strong first quarter with revenue of $317.9 million, a 38.3% increase year-over-year. The company achieved a record non-GAAP operating profit of $42.3 million. Strong demand across both the SMB and CHP businesses drove the positive results.
NETGEAR's Q1 revenue reached $317.9 million, a 38.3% increase year-over-year.
The company delivered a record non-GAAP operating profit of $42.3 million, with a non-GAAP operating margin of 13.3%.
SMB business saw strong sequential growth of 8.5% and year-over-year growth of 17.9% due to the reopening of economies worldwide.
NETGEAR added 44,000 subscribers to its recurring subscription services, ending the quarter with 481,000 subscribers.
Revenue by Geographic Location
Forward Guidance
NETGEAR expects Q2 2021 net revenue to be in the range of $305 million to $320 million. GAAP operating margin is expected to be in the range of 6.5% to 7.5%, and non-GAAP operating margin is expected to be in the range of 9.0% to 10.0%.
Positive Outlook
- Supply constraints are expected to ease.
- Company expects to selectively participate in promotional activities planned by some key channel partners, which will steer us towards further share gains.
- GAAP tax rate is expected to be approximately 27%.
- Non-GAAP tax rate is expected to be 24.5%.
- Company has a healthier inventory position in the channel.
Challenges Ahead
- Considerable uncertainty remains in the market due to the COVID-19 pandemic.
- Challenges related to transportation delays into any of regional distribution centers.
- Costs for sea freight have increased meaningfully.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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