NETGEAR Provides Preliminary Fourth Quarter Financial Results

NETGEAR, Inc., (NASDAQ: NTGR), today reported certain preliminary financial results for its fourth fiscal quarter ended December 31, 2023. NETGEAR will announce full results for the fourth quarter on February 7, 2024.

NETGEAR currently expects net revenue for the fourth quarter of 2023 to be between $179 million and $189 million, compared to prior guidance of $175 million to $190 million for the fourth quarter of 2023. The Company continued to experience strong underlying demand in the premium portion of its CHP product portfolio, riding on the success of its Orbi WiFi 7 launch which continued through the holiday season. The Company is also encouraged that its retail channel partners maintained their inventory positions as expected. The Company continued to work with its SMB channel partners to optimize their inventory carrying levels. The uncertain macro environment created by high interest rates, geopolitical tensions, and stagnant GDP growth in certain markets continued to weigh on the Company’s SMB business as expected.

GAAP operating margin for the fourth quarter of 2023 is expected to be between (3.0)% and (1.5)%, compared to prior guidance of (4.4)% to (1.4)%. Non-GAAP operating margin for the fourth quarter of 2023 is expected to be between 0% and 1.5%, compared to prior guidance of (2.0)% to 1.0%. The increased mix of the Company’s premium products within its CHP business, coupled with SMB revenues, which carry higher margins, remaining in line with Q3 performance, positively impacted the Company’s operating margin performance relative to its expectations last October. Additionally, the GAAP tax expense is expected to be in the range of $1 million to $2 million, which is in line with the prior guidance, and the non-GAAP tax expense is expected to be in the range of $1.5 million to $2.5 million, compared to prior guidance of $0 to $1 million for the fourth quarter of 2023.

A reconciliation between each of NETGEAR’s operating margin rate and NETGEAR's tax expense, on a GAAP and non-GAAP basis is provided in the following table:

		Three months ending
		December 31, 2023
(in millions, except for percentage data)		Operating Margin Rate		Tax Expense