Loading...
•
Apr 02, 2023
NETGEAR Q1 2023 Earnings Report
NETGEAR's financial performance decreased in Q1 2023 due to inventory reduction by partners and macroeconomic environment.
Key Takeaways
NETGEAR reported a decrease in net revenue and operating margin for Q1 2023, impacted by inventory reduction by its largest Service Provider and e-commerce partners. Despite these challenges, SMB end user sales grew by double digits year over year, and premium CHP products outperformed the broader market. The company delivered a non-GAAP gross margin of 33.6%, representing a 540 basis points improvement year over year.
Q1 2023 net revenue was $180.9 million, a decrease of 14.1% from the prior-year quarter.
GAAP operating loss was $12.0 million, or (6.6)% of net revenue, improved from a loss of $58.5 million, or (27.8)% of net revenue, in the prior-year quarter.
Non-GAAP operating loss was $7.1 million, or (3.9)% of net revenue, improved from a loss of $9.3 million, or (4.4)% of net revenue, in the prior-year quarter.
Ended the quarter with 772,000 paid subscribers, with the company on pace to reach its full year target of 875,000 subscribers.
Revenue by Geographic Location
Forward Guidance
NETGEAR expects strong underlying demand in the SMB business and the premium portion of its CHP product portfolio. The company anticipates a similar revenue impact from channel partners optimizing inventory levels as experienced in the first quarter. Second quarter net revenue is expected to be in the range of $150 million to $165 million.
Positive Outlook
- Strong underlying demand in the SMB business
- Strong underlying demand in the premium portion of CHP product portfolio
- GAAP tax rate is expected to be approximately 11.0%
- Non-GAAP tax rate is expected to be 6.0%
- Optimize channel partner inventory levels.
Challenges Ahead
- Ongoing broad-based inflationary pressures
- Uncertain macroeconomic environment
- Revenue impact from channel partners optimizing inventory levels to be similar to Q1
- Second quarter GAAP operating margin to be in the range of (13.4)% to (10.4)%
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
Loading earnings performance data...
Loading earnings reaction data...