Netgear Inc (NTGR) Reports Q3 2023 Earnings
Netgear Inc (NASDAQ:NTGR) reported Q3 2023 net revenue of $197.8 million, a decrease of 20.7% YoY.
The company's GAAP operating loss was $0.6 million, an improvement from the $2.2 million loss in Q3 2022.
Netgear's non-GAAP operating income stood at $5.3 million, compared to $1.8 million in the same period last year.
The company's paid subscribers grew by 26.7% YoY, reaching 844,000.
Netgear Inc (NASDAQ:NTGR), a global networking company, released its financial results for the third quarter ended October 1, 2023, on October 25, 2023. The company reported a net revenue of $197.8 million, surpassing the high end of its guidance. However, this represents a 20.7% decrease from the comparable prior-year quarter. The GAAP operating loss was $0.6 million, or (0.3)% of net revenue, compared to a loss of $2.2 million, or (0.9)% of net revenue, in Q3 2022. On a non-GAAP basis, the operating income was $5.3 million, or 2.7% of net revenue, compared to $1.8 million, or 0.7% of net revenue, in the same period last year.
Financial Highlights
Netgear's Q3 2023 GAAP net loss per diluted share was $2.87, compared to net income per diluted share of $0.10 in Q3 2022. On a non-GAAP basis, the net income per diluted share was $0.23, compared to $0.21 in the same period last year. The company also reported a significant growth in its paid subscribers, reaching 844,000, a 26.7% increase year over year.
Management Commentary
Patrick Lo, Chairman and Chief Executive Officer of Netgear Inc (NASDAQ:NTGR), commented on the results, stating
Im very pleased with our performance in the third quarter, as NETGEAR delivered results that exceeded our guidance ranges for both the top and bottom lines."
He attributed the strong performance to the demand for their premium CHP products in both retail and service provider channels.
Business Outlook
For the fourth quarter, the company expects net revenue to be in the range of $175 million to $190 million. The GAAP operating margin is projected to be between (4.4)% and (1.4)%, and the non-GAAP operating margin is expected to be between (2.0)% and 1.0%. The GAAP tax expense is anticipated to be between $1 million and $2 million, while the non-GAAP tax expense is expected to be between $0 and $1 million.
Financial Tables
The company's balance sheet as of October 1, 2023, showed total assets of $842.5 million, with current assets accounting for $740.6 million. The total liabilities stood at $309.7 million, with current liabilities amounting to $259.9 million. The company's stockholders' equity was $532.8 million.
Company Performance Analysis
Despite the decrease in net revenue, Netgear Inc (NASDAQ:NTGR) managed to reduce its GAAP operating loss and increase its non-GAAP operating income. The growth in paid subscribers indicates a positive trend in the company's customer base. However, the company's GAAP net loss per diluted share highlights the need for improved profitability. The company's outlook for the fourth quarter suggests a cautious approach, considering the current economic environment.
Explore the complete 8-K earnings release (here) from Netgear Inc for further details.
This article first appeared on GuruFocus.
