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Dec 31, 2022
NETGEAR Q4 2022 Earnings Report
Reported fourth quarter and full year 2022 results, with SMB business achieving record quarterly and annual revenue and subscriber base growing year over year.
Key Takeaways
NETGEAR reported Q4 2022 net revenue of $249.1 million, a decrease of 0.8% year-over-year. The SMB business delivered record quarterly and annual revenue, with Q4 surpassing $100 million, a 29.9% year-over-year growth. The company added 81,000 paid subscribers in the quarter, bringing the total to 747,000, a 27.9% year-over-year growth.
Fourth quarter net revenue decreased by 0.8% year-over-year to $249.1 million.
GAAP operating loss was $12.2 million, or (4.9)% of net revenue, compared to an operating income of $0.9 million in the prior year quarter.
Non-GAAP operating loss was $3.9 million, or (1.6)% of net revenue, compared to non-GAAP operating income of $6.9 million in the prior year quarter.
The company ended the quarter with 747,000 paid subscribers, a 27.9% increase year-over-year.
Revenue by Geographic Location
Forward Guidance
For the first quarter of 2023, NETGEAR expects net revenue to be in the range of $185 million to $200 million. GAAP operating margin is expected to be in the range of (4.7)% to (3.7)%, and non-GAAP operating margin is expected to be in the range of (2.0)% to (1.0)%.
Positive Outlook
- Strong underlying demand in the SMB business.
- Strong demand in the premium portion of CHP product portfolio.
- Improving supply in the SMB business, allowing for lower reliance on higher-cost air freight spend.
- Service provider customers improved their supply positions.
- GAAP tax rate is expected to be approximately 30.0%, and non-GAAP tax rate is expected to be 5.0%.
Challenges Ahead
- Expect a normal seasonal decline in the retail portion of CHP coming off the holiday period.
- Will continue to work with retail channel partners to optimize their inventory levels.
- Expect first quarter revenue from the service provider channel to decrease to approximately $25 million.
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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