NASDAQ$NTGR

NETGEAR Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported fourth quarter and full year 2022 results, with SMB business achieving record quarterly and annual revenue and subscriber base growing year over year.

NETGEAR reported Q4 2022 net revenue of $249.1 million, a decrease of 0.8% year-over-year. The SMB business delivered record quarterly and annual revenue, with Q4 surpassing $100 million, a 29.9% year-over-year growth. The company added 81,000 paid subscribers in the quarter, bringing the total to 747,000, a 27.9% year-over-year growth.

  • Fourth quarter net revenue decreased by 0.8% year-over-year to $249.1 million.
  • GAAP operating loss was $12.2 million, or (4.9)% of net revenue, compared to an operating income of $0.9 million in the prior year quarter.
  • Non-GAAP operating loss was $3.9 million, or (1.6)% of net revenue, compared to non-GAAP operating income of $6.9 million in the prior year quarter.
  • The company ended the quarter with 747,000 paid subscribers, a 27.9% increase year-over-year.

Headline financials

Total Revenue

$249M

Previous: $251M-0.8%
EPS (adj)

-$0.03

Previous: $0.27-111.1%
Capital Expenditures

$1.62M

Previous: $2.95M-44.9%
Free Cash Flow

-$6.56M

Previous: $973K-773.9%
Net Income

-$6.04M

Previous: -$991K-509.9%
Operating Income

-$12.2M

Previous: $851K-1531.0%
Gross Profit

$61.7M

Previous: $74.7M-17.4%
Cash & Equivalents

$147M

Previous: $264M-44.5%
Total Assets

$1.02B

Previous: $1.08B-5.4%
Stock-Based Comp

$4.47M

Previous: $5.92M-24.6%

Revenue & EPS history

NETGEAR · Revenue · Quarterly

$249M

Q4 2022-0.8%vs Q4 2021
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Forward guidance

For the first quarter of 2023, NETGEAR expects net revenue to be in the range of $185 million to $200 million. GAAP operating margin is expected to be in the range of (4.7)% to (3.7)%, and non-GAAP operating margin is expected to be in the range of (2.0)% to (1.0)%.

Tailwinds

  • Strong underlying demand in the SMB business.
  • Strong demand in the premium portion of CHP product portfolio.
  • Improving supply in the SMB business, allowing for lower reliance on higher-cost air freight spend.
  • Service provider customers improved their supply positions.
  • GAAP tax rate is expected to be approximately 30.0%, and non-GAAP tax rate is expected to be 5.0%.

Headwinds

  • Expect a normal seasonal decline in the retail portion of CHP coming off the holiday period.
  • Will continue to work with retail channel partners to optimize their inventory levels.
  • Expect first quarter revenue from the service provider channel to decrease to approximately $25 million.
  • Considerable uncertainty remains in the market due to the COVID-19 pandemic.
  • Supply chain conditions continuing to remain challenged.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

-0.9%

Avg return

Earnings day

-1.9%

Avg return

5 days after

-3.7%

Avg return

30 days after

38%

25 / 65 earnings

Positive

+30.6%

Q3 2015

Best reaction

-20.3%

Q1 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-2.2%-1.0%+0.3%
Q4 2025-1.5%+2.2%+0.5%
Q3 2025+1.1%-11.4%-21.3%
Q1 2025+16.1%+13.9%+21.6%
Q4 2024+1.3%+9.8%-17.2%
Q3 2024+7.2%+13.4%+20.4%
Q2 2024+2.5%-9.0%+1.2%
Q1 2024-20.3%-18.4%-6.6%
Q4 2023-7.8%-2.7%+3.3%
Q3 2023+14.1%+14.6%+18.9%
Q2 2023-2.1%-4.2%-10.5%
Q1 2023-13.1%-13.9%-16.4%
Q4 2022-3.3%-2.3%-8.8%
Q3 2022-10.0%-9.7%-11.3%
Q2 2022+26.0%+31.0%+21.0%
Q1 2022-0.0%-1.1%-12.4%
Q4 2021+1.4%-5.1%-5.2%
Q3 2021-4.0%-5.7%-15.7%
Q2 2021-9.0%-6.2%-4.5%
Q1 2021-2.5%+3.2%+1.9%
Q4 2020-7.9%-3.5%-11.3%
Q3 2020-1.8%-5.6%-13.4%
Q2 2020+5.4%+0.1%+11.2%
Q1 2020-7.9%-3.2%+7.6%
Q4 2019-4.1%-10.5%-27.7%
Q3 2019-18.5%-14.5%-21.9%
Q2 2019+23.4%+24.3%+21.2%
Q1 2019-15.6%-11.3%-26.1%
Q4 2018-3.8%-0.5%-10.9%
Q3 2018-1.6%-2.2%-4.0%
Q2 2018-13.3%-8.6%-7.2%
Q1 2018-14.1%-11.2%-3.1%
Q4 2017-13.7%-11.0%-11.5%
Q3 2017-4.5%-5.4%+0.0%
Q2 2017+10.9%+7.8%+6.9%
Q1 2017-12.3%-10.8%-19.7%
Q4 2016-6.6%-5.1%-7.3%
Q3 2016-5.8%-5.5%-1.9%
Q2 2016+6.0%+6.9%+15.5%
Q1 2016+11.6%
Q4 2015-3.4%
Q3 2015+30.6%
Q2 2015+17.1%
Q1 2015-9.5%
Q4 2014-9.6%
Q3 2014+4.3%
Q2 2014-7.6%
Q1 2014-5.8%
Q4 2013+4.9%
Q3 2013-8.9%
Q2 2013-9.0%
Q1 2013+2.6%
Q4 2012-9.9%
Q3 2012-4.4%
Q2 2012+2.8%
Q1 2011-0.8%
Q1 2012+16.0%
Q4 2011-1.2%
Q4 2009-1.2%
Q1 2010-1.2%
Q3 2010+1.8%
Q3 2011+1.8%
Q4 2010+3.3%
Q2 2011+3.3%
Q2 2010+3.3%

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