Netgear, Inc. · NASDAQ:NTGR
Netgear — Q3 2022 Earnings Presentation
40 slides from Netgear's earnings presentation, Oct 26, 2022
Slide 1: Investor Overview October 2022
INVESTOR OVERVIEW OCTOBER 2022
Slide 2: Safe Harbor Disclosure
SAFE HARBOR DISCLOSURE This presentation 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
Slide 3: Q3'22 Highlights
Q3’22 HIGHLIGHTS Quarterly Revenue Of $249.6 Million 42% Share In U.S. Retail WiFi Market1 21% Y/Y Growth In SMB for Record Revenue 22.2 Million Registered Users Worldwide 15.5 Million Registered App Users Worldwide 666,000 Service Subscribers 1The NPD Group/Weekly Retail Tracking Service, U.S., Gat
Slide 4: Our Mission
OUR MISSION Be the innovative leader in connecting the world to the internet.
Slide 5: Technologies and Applications
TECHNOLOGIES A P P L I C AT I O N S Life revolves Quad-band Mesh around the Sports & Events internet AV over IP Whole Home WiFi Virtual experiences displace physical experiences 5G - mmWave Video Conferencing All enabled by PoE++ leading edge WiFi First Responders and Ethernet technologies WiFi 6 /
Slide 6: Connected Home Products & Technology
CONNECTED HOME PRODUCTS & TECHNOLOGY
Slide 7: Premium WiFi Demand
The pandemic has led to an expanding segment of premium WiFi for a perfect at home WiFi experience for work and play.
Slide 8: WiFi Leadership in Every Category
W I F I 6 L E A D E R S H I P I N E V E R Y S I N G L E C AT E G O R Y BEST MESH NETWORK MESH ROUTER RANGE EXTENDER CABLE
Slide 9: Orbi Offerings in the Premium Mesh Segment
NETGEAR MESH OFFERINGS IN THE PREMIUM MESH SEGMENT $1000+ $500+ $300-$500
Slide 10: WiFi 6E Stands Alone
Introducing W I F I 6 E S TA N D S A L O N E Maximize your speed with an exclusive 6GHz band available only with WiFi 6E 200% more Spectrum 4x more channels Less legacy WiFi traffic Less interference, lower latency
Slide 11: Introducing Orbi Quad-Band WiFi 6E Mesh System
INTRODUCING ORBI QUAD -BAND WIFI 6E MESH SYSTEM The world’s most powerful WiFi system - Industry’s first quad-band WiFi 6E mesh system - New 6GHz band for faster WiFi, 2X the capacity of 5GHz - Combined WiFi speeds up to 10.8Gbs* - 10 Gigabit WAN Port for blazing fast Internet plans up to 10Gbps Bes
Slide 12: 860 Series
OUR FASTEST, MOST ADVANCED WIFI 6 MESH SYSTEM 860 Series • NEW: 10 Gig internet port unleashes the fastest download speeds of today & tomorrow • NEW: Upgraded, patented antenna design boosts WiFi coverage and performance by 20% over previous generation‡, ideal for iPhones and Windows 10 PCs • Patent
Slide 13: Premium WiFi
PREMIUM WIFI T H E B E S T M U LT I - G I G A B I T W I F I . E V E RY W H E R E .
Slide 14: Orbi Series Unrivalled Performance
ORBI 9 SERIES UNRIVALLED PERFORMANCE Elite mesh kit delivers mega speeds, maximum coverage “The Netgear Orbi RBKE963 is a stellar (albeit quite expensive) three-piece Wi-Fi 6E mesh system that harnesses the 6GHz band to offer some of the fastest throughput speeds we’ve ever seen.” “Of all the mesh r
Slide 15: NETGEAR Direct
NETGEAR DIRECT– CURATED PREMIUM BRAND EXPERIENCE Exclusive destination to engage with premium customers Rich content, product selectors, concierge service
Slide 16: Value Added Subscription Services
VA L U E A D D E D S U B S C R I P T I O N S E R V I C E S SECURITY PRIVACY SUPPORT
Slide 17: Protects Connected Devices
PROTECTS CONNECTED DEVICES TRADITIONAL ANTI-VIRUS ONLY PROTECTS PERSONAL DEVICES
Slide 18: NETGEAR Armor
NETGEAR ARM OR • Subscription $99.99/year • Advanced security on your NETGEAR router • Detect and block cyber threats • Such as phishing, malicious URLs and privacy attacks • Unlimited device protection • Bitdefender VPN for secure internet browsing1 • Blocks attempts to send credit card or other se
Slide 19: Smart Parental Controls
S M A R T PA R E N TA L C O N T R O L S • Subscription $69.99/year • Managing the family’s internet time has never been easier • Create healthy internet habits • Schedule off time and give positive rewards • Manage profiles, devices and content • Monitor online activity at home or away (WiFi or LTE)
Slide 20: 5G Mobile Hotspot Connectivity
4 G LT E / 5 G M O B I L E H O T S P O T - C O N N E C T I V I T Y A N Y W H E R E , A N Y T I M E WORK FROM ANYWHERE FIRST RESPONDERS M O B I L E H E A LT H C A R E MOBILE SERVICE RV USERS CONSTRUCTI ON SITE R U R A L L O C AT I O N BUSINESS TRAVEL – SECURE CONNECT U LT R A - FA S T 5 G
Slide 21: Mobile Nighthawk M6 Pro
MOBILE NIGHTHAWK M6 PRO INDUSTRY’S FIRST 5G + WiFi 6E MOBILE HOTSPOT ROUTER • Secure WiFi and 5G connectivity - at home, at work or anywhere on-the-go • World’s first hotspot using Qualcomm SDX62 and SDX65 chipsets • With mmWave, M6 Pro delivers the fastest 5G speeds on global Service Provider Partn
Slide 22: Meural Premium Display
M E U R A L P R E M I U M D I S P L AY F O R N F Ts A N D D I G I TA L A R T Premium Digital Canvas for NFT display “MCII is one of the most beautiful ways of bringing art into your home without actually going through a dealer or learning how to paint.” Mumbot >3M+ followers Old art, new art, NFT cr
Slide 23: Premium WiFi and Subscriptions Alignment
C H P CGHRPOSW T RT AT H SETGRYAT E G Y Premium WiFi 6 and World class direct to consumer Subscription services align with 5G devices experience premium segment
Slide 24: SMB Segment Products & Technology
SMB SEGMENT PRODUCTS & TECHNOLOGY
Slide 25: Small Business & Home Office Solutions
SMALL BUSINESS & HOME OFFICE SOLUTION S – BOOMING DEMAND WiFi 6, secure, mesh capable Simple to set up Easy network management
Slide 26: Leading the SMB WiFi Transition
LEADING THE SMB WIFI TRANSITION BUSINESS ORBI PRO INSIGHT MANAGED a ESSENTIALS MESH SYSTEMS ACCESS POINTS
Slide 27: Insight Pro Network Management
I N S I G H T & I N S I G H T P R O - E A S Y N E T W O R K M A N A G E M E N T, L O C A L & R E M O T E SCREENSHOT DIY MANAGED SERVICE PROVIDERS BUSINESS VPN $5 per year per device $15 per year per device Secure one-step VPN
Slide 28: Switches Engineered for AV over IP
SWITCHES ENGINEERED FOR AV OVER IP O U T - OF -THE - BOX S U P P ORT FO R E V E RY N E T WORK ED AV S O LU T ION
Slide 29: Ever-Expanding AV Applications
EVER-EXPANDING AV APPLICATIONS MOBILE VIDEO STREAMING FOR NEWS DIGITAL UMPIRING OF SPORTING EVENTS HIGH-END HOME AUTOMATION DATA VISUALIZATION FOR SPORTING VIRTUAL PRODUCTION / DIGITAL SIGNAGE FOR RETAIL & TRANSPORTATION AND OTHER EVENTS DIGITAL GREEN SCREEN CORPORATE OFFICE HYBRID WORK UPDATES LIVE
Slide 30: SMB Growth Strategy
S M B G R O W T H S T R AT E G Y Pro WiFi Access Points Pro AV Switches AV
Slide 31: Financials
FINANCIALS
Slide 32: Quarterly Net Revenue
Q U A R T E R LY N E T R E V E N U E (Net Revenue, $ Millions) $400 $350 $367 $300 $318 $309 $290 $250 $251 $250 $200 $223 $211 $150 $100 $50 $0 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
Slide 33: Segment Performance
SEGMENT PERFORMANCE (Net Revenue, $ Millions) CONNECTED HOME SMB 350.000 100 90 300.000 80 250.000 70 60 200.000 50 150.000 40 100.000 30 20 50.000 10 0.000 0 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Retail Service Provider
Slide 34: Regional Performance
REGIONAL PERFORMANCE (Net Revenue, $ Millions) AMERICAS EMEA A PAC 300 80 80 70 70 250 60 60 200 50 50 150 40 40 30 30 100 20 20 50 10 10 0 0 0 4Q201Q212Q213Q214Q211Q222Q223Q22 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q201Q212Q213Q214Q211Q222Q223Q22
Slide 35: Operating Margin
O P E R AT I N G M A R G I N (Non-GAAP, % Of Revenue) 15% 13% 13.3% 11% 11.0% 9% 8.6% 7% 6.7% 5% 3% 2.7% 0.7% 1% -1% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 -1.9% -3% -4.4% -5%
Slide 36: Earnings Per Share
EARNINGS PER SHARE (Non-GAAP, $ Per Share)
Slide 37: Cash Balance
CASH BALANCE (Cash, Cash Equivalents And Short-Term Investments, $ Millions) $400 $350 $371 $353 $335 $300 $292 $250 $272 $264 $250 $233 $200 $150 $100 $50 $0 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
Slide 38: Appendix
APPENDIX NETGEAR’
Slide 39: Reconciliations of GAAP Measures to Non-GAAP Measures
NETGEAR, INC. RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (In thousands, except percentage data) (Unaudited) Three Months Ended December 31, March 28, June 27, October 3, December 31, April 3, July 3, October 2, 2020 2021 2021 2021 2021 2022 2022 2022 GAAP operating income (loss) $ 33,842
Slide 40: Net Income (Loss) per Diluted Share Reconciliation
NET INCOME (LOSS) PER DILUTED SHARE: GAAP net income (loss) per diluted share Amortization of intangibles Stock-based compensation expense Change in fair value of contingent consideration Goodwill impairment Restructuring and other charges Litigation reserves, net Gain/loss on investments, net Non-G