NETGEAR, Inc. (NASDAQ:NTGR) Q2 2022 Earnings Conference Call July 27, 2022 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

Adam Tindle – Raymond James

Hamed Khorsand – BWS Financial

Jared Jungjohann – Cowen and Company

Paul Silverstein – Cowen

Operator

Ladies and gentlemen, thank you for standing by. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [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 2022 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 details and commentary on the business, provided by Patrick and finish with third quarter of 2022 guidance provided by Bryan. We’ll then have time for any questions. If you’ve 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 statements 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. Net revenue for the quarter in the July 3, 2022 was $223.2 million, which was above the high end of our guidance range up 6% sequentially and down 27.7% year-over-year.

Strong operational execution by the team unlocked incremental supply, which drove the higher than expected performance. This included incremental supply of our ProAV managed switch products, which powder [ph] SMB business to a record quarterly top line. In our CHP business, we continue to see double-digit growth in our super premium WiFi mesh products, as well as our 5G mobile hotspots. Both of which were aided by improved supply in the quarter. The 5G mobile hotspot supply improvement in particular enabled us to deliver higher revenue from our service provider customers than initially expected.