NETGEAR Provides Preliminary First Quarter Financial Results

NETGEAR, Inc. (NASDAQ: NTGR) today reported certain preliminary financial results for its first fiscal quarter ended April 3, 2022. NETGEAR will announce full results for the first quarter on April 27, 2022.

NETGEAR currently expects net revenue for the first quarter of 2022 to be between $202 million and $212 million, compared to prior guidance of $225 million to $240 million for the first quarter of 2022. The U.S. consumer WiFi market, which had exited 2021 at approximately 15% above 2019 levels, declined in the first quarter of 2022, ending roughly flat to 2019 levels. The decline in market size negatively impacted the performance of our CHP business which saw a decline in revenue relative to our expectations earlier in the quarter. Despite SMB revenue performance meeting expectations, supply of components to our factories were severely disrupted in March due to COVID-induced lockdowns in Shenzhen, resulting in a meaningful lost opportunity to deliver higher SMB revenue in the quarter.

GAAP operating margin for the first quarter of 2022 is expected to be between (7.7)% and (6.7)%, compared to prior guidance of (1.5)% to (0.5)%. Non-GAAP operating margin for the first quarter of 2022 is expected to be between (5.3)% and (4.3)%, compared to prior guidance of 1% to 2%. The lower CHP revenue performance combined with a loss in top line leverage negatively impacted operating margin performance relative to our expectations earlier in the quarter.

A reconciliation between NETGEAR’s operating margin rate on a GAAP and non-GAAP basis is provided in the following table:

		Three months ended
		April 3, 2022
		Operating Margin Rate
GAAP		(7.7)% - (6.7)%
Estimated adjustments for1:
Stock-based compensation expense		2.3%