NETGEAR, Inc. (NASDAQ:NTGR) Q2 2023 Earnings Conference Call July 26, 2023 5:00 PM ET

Company Participants

Erik Bylin – Investor Relations

Bryan Murray – Chief Financial Officer

Patrick Lo – Chairman and Chief Executive Officer

Conference Call Participants

Hamed Khorsand – BWS Financial

Operator

Ladies and gentlemen, thank you for standing by. At this time all participants are in a listen-only mode. [Operator Instructions]

I’d now like to turn the conference over to Erik Bylin. Please go ahead, sir.

Erik Bylin

Thank you, David. Good afternoon, and welcome to NETGEAR’s Second Quarter of 2023 Financial Results Conference Call. Joining us from the company are Mr. Patrick Lo, Chairman and CEO; and Mr. Bryan Murray, CFO.

The format of the call will start with a review of the financials for the second quarter provided by Bryan, followed by a detailed commentary on the business provided by Patrick, and finish with third quarter of 2023 guidance provided by Bryan. We’ll then have time for any questions. If you have not received a copy of today’s release, please visit NETGEAR’s Investor Relations website at www.netgear.com.

Before we begin the formal remarks, we advise you that today’s conference call contains forward-looking statements. Forward-looking statements include statements regarding expected revenue, operating margins, tax rates, expenses and future business outlook. Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more information, please refer to the risk factors discussed in NETGEAR’s periodic filings with the SEC, including the most recent Form 10-Q.

Any forward-looking statements that we make on this call are based on assumptions as of today, and NETGEAR undertakes no obligation to update these as a result of new information or future events. In addition, several non-GAAP financial measures will be mentioned on this call. A reconciliation of the non-GAAP to GAAP measures can be found in today’s press release on our Investor Relations website.

At this time, I would now like to turn the call over to Mr. Bryan Murray.

Bryan Murray

Thank you, Erik, and thank you, everyone, for joining today’s call. We are pleased by the execution of our team this quarter as we delivered net revenue above the high end of our guidance range. For the quarter ended July 2, 2023, revenue was $173.4 million, down 22.3% year-over-year and down 4.1% on a sequential basis. Enabled by increased demand, our largest service provider partner outperformed our original expectations. In the retail portion of our CHP business, our premium products, which consist of our Orbi 8 and Orbi 9 Tri-Band and Quad-Band WiFi mesh products, and 5G mobile hotspots once again outperformed the broader market, with worldwide sales to end users growing year-over-year and sequentially.