Friday Dec 02, 2022

Netgear (NTGR) Q4 2021 Earnings Call Transcript – Motley Fool


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Q4 2021 Earnings Call
Feb 02, 2022, 5:00 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Ladies and gentlemen, thank you for standing by, and welcome to NETGEAR’s fourth quarter 2021 conference call. [Operator instructions]. I would now like to turn the conference over to Erik Bylin. Please go ahead, sir.

Erik Bylin — Investor Relations

Thank you, operator. Good afternoon, and welcome to NETGEAR’s fourth quarter and full year 2021 financial results conference call. Joining us from the company are Mr. Patrick Lo, chairman and CEO; Mr.

Bryan Murray, CFO. The format of the call will start with a review of the financials for the fourth quarter and full year provided by Bryan, followed by details and commentary on the business provided by Patrick, and we’ll finish with first quarter of 2022 guidance provided by Bryan. We will 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

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 — Chief Financial Officer

Thank you, Erik, and thank you, everyone, for joining today’s call. Net revenue for the quarter ended December 31, 2021, was $251.2 million, down 31.6% year over year and within our guidance range. We were able to achieve non-GAAP operating margin of 2.7%, above the midpoint of our guidance range despite the difficult global supply chain conditions that persisted in the quarter. Although demand for our higher-margin SMB products remain quite strong, we were limited in our ability to meet the demand due to broad supply chain challenges exacerbated by a temporary factory closure caused by the omicron variant.

On the CHP side, I’m pleased to share that our planned channel inventory optimization efforts were materially completed in the fourth quarter. For the full year of 2021, NETGEAR net revenues were $1.17 billion, down 6.9% compared to the year ended December 31, 2020. Our efforts in the past year to refocus our products toward the higher ASP premium segments of the market and momentum in both ProAV and our SMB wireless offerings helped deliver revenue at 17% above pre-pandemic levels. In addition, the CHP consumer WiFi market seems to have stabilized at 15% above 2019 levels.

As we execute on our strategy to shift our portion of the U.S. consumer WiFi market toward the premium end, we remain confident that the trends we …….


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