Delaware | 000-50350 | 77-0419172 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
Exhibit Number | Description | |
• | Fourth quarter 2018 net revenue of $288.9 million, an increase of 5.4% from the comparable prior year quarter. |
◦ | Fourth quarter 2018 GAAP operating income of $17.4 million, or 6.0% of net revenue, as compared to $5.6 million, or 2.0% of net revenue, in the comparable prior year quarter. |
◦ | Fourth quarter 2018 non-GAAP operating income of $27.1 million, or 9.4% of net revenue, as compared to $12.6 million, or 4.6% of net revenue, in the comparable prior year quarter. |
• | Fourth quarter 2018 GAAP net income per diluted share from continuing operations of $0.03, as compared to net loss per diluted share from continuing operations of $1.33 in the comparable prior year quarter. |
◦ | Fourth quarter 2018 non-GAAP net income per diluted share from continuing operations of $0.68, as compared to $0.34 in the comparable prior year quarter. |
• | Fiscal 2018 net revenue of $1.06 billion, an increase of 1.9% from the prior year. |
• | Fiscal 2018 GAAP operating income of $38.7 million, or 3.7% of net revenue, as compared to $42.6 million, or 4.1% of net revenue in the prior year. |
◦ | Fiscal 2018 non-GAAP operating income of $76.3 million, or 7.2% of net revenue, as compared to $72.4 million, or 7.0% of net revenue, in the prior year. |
• | Fiscal 2018 GAAP net income per diluted share from continuing operations of $0.57, as compared to net loss per diluted share from continuing operations of $0.35 in 2017. |
◦ | Fiscal 2018 non-GAAP net income per diluted share from continuing operations of $1.94, as compared to $1.68 in 2017. |
• | The Company distributed its remaining 84.2% ownership of Arlo Technologies, Inc. on December 31, 2018. |
• | Business outlook1: Company expects first quarter of 2019 net revenue to be in the range of $235 million to $250 million, with GAAP operating margin in the range of 4.5% to 5.5% and non-GAAP operating margin in the range of 8.0% to 9.0%. |
Three months ending | ||||
March 30, 2019 | ||||
Operating Margin Rate | Tax Rate | |||
GAAP | 4.5% - 5.5% | 27.0% | ||
Estimated adjustments for1: | ||||
Amortization of intangibles | 0.9% | __ | ||
Stock-based compensation expense | 2.6% | __ | ||
Tax effects of non-GAAP adjustments | __ | (2.5)% | ||
Non-GAAP | 8.0% - 9.0% | 24.5% |
NETGEAR, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
As of | |||||||
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 201,047 | $ | 202,727 | |||
Short-term investments | 73,317 | 126,926 | |||||
Accounts receivable, net | 303,667 | 255,118 | |||||
Inventories | 243,871 | 162,942 | |||||
Prepaid expenses and other current assets | 35,997 | 24,826 | |||||
Current assets of discontinued operations | — | 243,125 | |||||
Total current assets | 857,899 | 1,015,664 | |||||
Property and equipment, net | 20,177 | 17,349 | |||||
Intangibles, net | 17,146 | 20,640 | |||||
Goodwill | 80,721 | 64,314 | |||||
Other non-current assets | 67,433 | 49,471 | |||||
Non-current assets of discontinued operations | — | 41,126 | |||||
Total assets | $ | 1,043,376 | $ | 1,208,564 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 139,748 | $ | 91,205 | |||
Accrued employee compensation | 31,666 | 24,520 | |||||
Other accrued liabilities | 199,472 | 149,821 | |||||
Deferred revenue | 11,086 | 21,212 | |||||
Income taxes payable | 2,020 | 7,015 | |||||
Current liabilities of discontinued operations | — | 130,663 | |||||
Total current liabilities | 383,992 | 424,436 | |||||
Non-current income taxes payable | 19,600 | 31,544 | |||||
Other non-current liabilities | 12,232 | 8,766 | |||||
Non-current liabilities of discontinued operations | — | 13,333 | |||||
Total liabilities | 415,824 | 478,079 | |||||
Stockholders’ equity: | |||||||
Common stock | 32 | 31 | |||||
Additional paid-in capital | 793,585 | 603,137 | |||||
Accumulated other comprehensive loss | (15 | ) | (851 | ) | |||
Retained earnings (losses) | (166,050 | ) | 128,168 | ||||
Total stockholders’ equity | 627,552 | 730,485 | |||||
Total liabilities and stockholders’ equity | $ | 1,043,376 | $ | 1,208,564 |
NETGEAR, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share and percentage data) |
(Unaudited) |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | |||||||||||||||
Net revenue | $ | 288,928 | $ | 269,411 | $ | 274,149 | $ | 1,058,816 | $ | 1,039,169 | |||||||||
Cost of revenue | 198,274 | 174,966 | 198,020 | 717,118 | 731,453 | ||||||||||||||
Gross profit | 90,654 | 94,445 | 76,129 | 341,698 | 307,716 | ||||||||||||||
Gross margin | 31.4 | % | 35.1 | % | 27.8 | % | 32.3 | % | 29.6 | % | |||||||||
Operating expenses: | |||||||||||||||||||
Research and development | 19,143 | 20,136 | 19,397 | 82,416 | 71,893 | ||||||||||||||
Sales and marketing | 38,251 | 37,892 | 36,667 | 152,569 | 138,679 | ||||||||||||||
General and administrative | 14,454 | 16,184 | 14,385 | 64,857 | 54,346 | ||||||||||||||
Separation expense | 550 | 379 | — | 929 | — | ||||||||||||||
Restructuring and other charges | 830 | 1 | 19 | 2,198 | 97 | ||||||||||||||
Litigation reserves, net | 10 | — | 108 | 15 | 148 | ||||||||||||||
Total operating expenses | 73,238 | 74,592 | 70,576 | 302,984 | 265,163 | ||||||||||||||
Income from operations | 17,416 | 19,853 | 5,553 | 38,714 | 42,553 | ||||||||||||||
Operating margin | 6.0 | % | 7.4 | % | 2.0 | % | 3.7 | % | 4.1 | % | |||||||||
Interest income | 1,174 | 985 | 725 | 3,980 | 2,114 | ||||||||||||||
Other income (expense), net | 85 | 955 | 440 | 510 | 1,557 | ||||||||||||||
Income before income taxes | 18,675 | 21,793 | 6,718 | 43,204 | 46,224 | ||||||||||||||
Provision for income taxes | 17,548 | 5,483 | 48,496 | 24,216 | 57,357 | ||||||||||||||
Net income (loss) from continuing operations | 1,127 | 16,310 | (41,778 | ) | 18,988 | (11,133 | ) | ||||||||||||
Net income (loss) from discontinued operations, net of tax | (21,861 | ) | (7,160 | ) | 9,844 | (30,212 | ) | 30,569 | |||||||||||
Net income (loss) | (20,734 | ) | 9,150 | (31,934 | ) | (11,224 | ) | 19,436 | |||||||||||
Net loss attributable to non-controlling interest in discontinued operations | (7,786 | ) | (799 | ) | — | (8,585 | ) | — | |||||||||||
Net income (loss) attributable to NETGEAR, Inc. | $ | (12,948 | ) | $ | 9,949 | $ | (31,934 | ) | $ | (2,639 | ) | $ | 19,436 | ||||||
Net income (loss) per share - basic: | |||||||||||||||||||
Income (loss) from continuing operations attributable to NETGEAR, Inc. | $ | 0.04 | $ | 0.51 | $ | (1.33 | ) | $ | 0.60 | $ | (0.35 | ) | |||||||
Income (loss) from discontinued operations attributable to NETGEAR,Inc. | (0.45 | ) | (0.20 | ) | 0.31 | (0.68 | ) | 0.96 | |||||||||||
Net income (loss) per share attributable to NETGEAR, Inc. | $ | (0.41 | ) | $ | 0.31 | $ | (1.02 | ) | $ | (0.08 | ) | $ | 0.61 | ||||||
Net income (loss) per share - diluted: | |||||||||||||||||||
Income (loss) from continuing operations attributable to NETGEAR, Inc. | $ | 0.03 | $ | 0.49 | $ | (1.33 | ) | $ | 0.57 | $ | (0.35 | ) | |||||||
Income (loss) from discontinued operations attributable to NETGEAR,Inc. | (0.42 | ) | (0.19 | ) | 0.31 | (0.65 | ) | 0.96 | |||||||||||
Net income (loss) per share attributable to NETGEAR, Inc. | $ | (0.39 | ) | $ | 0.30 | $ | (1.02 | ) | $ | (0.08 | ) | $ | 0.61 | ||||||
Weighted average shares used to compute net income (loss) per share - Basic: | 31,604 | 31,802 | 31,379 | 31,626 | 32,097 | ||||||||||||||
Weighted average shares used to compute net income (loss) per share - Diluted | 32,803 | 32,974 | 31,379 | 33,137 | 32,097 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2018 | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | December 31, 2018 | |||||||||||||||
GAAP gross profit | $ | 90,654 | $ | 94,445 | $ | 80,280 | $ | 76,319 | $ | 341,698 | |||||||||
GAAP gross margin | 31.4 | % | 35.1 | % | 31.4 | % | 31.1 | % | 32.3 | % | |||||||||
Amortization of intangibles | 181 | 116 | 209 | 323 | 829 | ||||||||||||||
Stock-based compensation expense | 681 | 619 | 572 | 563 | 2,435 | ||||||||||||||
Non-GAAP gross profit | $ | 91,516 | $ | 95,180 | $ | 81,061 | $ | 77,205 | $ | 344,962 | |||||||||
Non-GAAP gross margin | 31.7 | % | 35.3 | % | 31.8 | % | 31.5 | % | 32.6 | % | |||||||||
GAAP research and development | $ | 19,143 | $ | 20,136 | $ | 21,946 | $ | 21,191 | $ | 82,416 | |||||||||
Stock-based compensation expense | (1,112 | ) | (1,037 | ) | (1,122 | ) | (1,012 | ) | (4,283 | ) | |||||||||
Non-GAAP research and development | $ | 18,031 | $ | 19,099 | $ | 20,824 | $ | 20,179 | $ | 78,133 | |||||||||
GAAP sales and marketing | $ | 38,251 | $ | 37,892 | $ | 38,552 | $ | 37,874 | $ | 152,569 | |||||||||
Amortization of intangibles | (1,831 | ) | (1,806 | ) | (1,757 | ) | (1,756 | ) | (7,150 | ) | |||||||||
Stock-based compensation expense | (1,904 | ) | (1,970 | ) | (2,188 | ) | (2,205 | ) | (8,267 | ) | |||||||||
Non-GAAP sales and marketing | $ | 34,516 | $ | 34,116 | $ | 34,607 | $ | 33,913 | $ | 137,152 | |||||||||
GAAP general and administrative | $ | 14,454 | $ | 16,184 | $ | 18,458 | $ | 15,761 | $ | 64,857 | |||||||||
Stock-based compensation expense | (2,536 | ) | (2,492 | ) | (3,364 | ) | (3,084 | ) | (11,476 | ) | |||||||||
Non-GAAP general and administrative | $ | 11,918 | $ | 13,692 | $ | 15,094 | $ | 12,677 | $ | 53,381 | |||||||||
GAAP total operating expenses | $ | 73,238 | $ | 74,592 | $ | 80,337 | $ | 74,817 | $ | 302,984 | |||||||||
Amortization of intangibles | (1,831 | ) | (1,806 | ) | (1,757 | ) | (1,756 | ) | (7,150 | ) | |||||||||
Stock-based compensation expense | (5,552 | ) | (5,499 | ) | (6,674 | ) | (6,301 | ) | (24,026 | ) | |||||||||
Separation expense | (550 | ) | (379 | ) | — | $ | — | (929 | ) | ||||||||||
Restructuring and other charges | (830 | ) | (1 | ) | (1,376 | ) | 9 | (2,198 | ) | ||||||||||
Litigation reserves, net | (10 | ) | — | (5 | ) | — | (15 | ) | |||||||||||
Non-GAAP total operating expenses | $ | 64,465 | $ | 66,907 | $ | 70,525 | $ | 66,769 | $ | 268,666 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2018 | |||||||||||||||||||
(CONTINUED) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | December 31, 2018 | |||||||||||||||
GAAP operating income | $ | 17,416 | $ | 19,853 | $ | (57 | ) | $ | 1,502 | $ | 38,714 | ||||||||
GAAP operating margin | 6.0 | % | 7.4 | % | 0.0 | % | 0.6 | % | 3.7 | % | |||||||||
Amortization of intangibles | 2,012 | 1,922 | 1,966 | 2,079 | 7,979 | ||||||||||||||
Stock-based compensation expense | 6,233 | 6,118 | 7,246 | 6,864 | 26,461 | ||||||||||||||
Separation expense | 550 | 379 | — | — | 929 | ||||||||||||||
Restructuring and other charges | 830 | 1 | 1,376 | (9 | ) | 2,198 | |||||||||||||
Litigation reserves, net | 10 | — | 5 | — | 15 | ||||||||||||||
Non-GAAP operating income | $ | 27,051 | $ | 28,273 | $ | 10,536 | $ | 10,436 | $ | 76,296 | |||||||||
Non-GAAP operating margin | 9.4 | % | 10.5 | % | 4.1 | % | 4.3 | % | 7.2 | % | |||||||||
GAAP other income (expense), net | $ | 85 | $ | 955 | $ | 788 | $ | (1,318 | ) | $ | 510 | ||||||||
Gain on investments | (190 | ) | (349 | ) | — | — | (539 | ) | |||||||||||
Impairment charges to investments | — | — | — | 1,400 | 1,400 | ||||||||||||||
Non-GAAP other income (expense), net | $ | (105 | ) | $ | 606 | $ | 788 | $ | 82 | $ | 1,371 | ||||||||
GAAP net income from continuing operations | $ | 1,127 | $ | 16,310 | $ | 533 | $ | 1,018 | $ | 18,988 | |||||||||
Amortization of intangibles | 2,012 | 1,922 | 1,966 | 2,079 | 7,979 | ||||||||||||||
Stock-based compensation expense | 6,233 | 6,118 | 7,246 | 6,864 | 26,461 | ||||||||||||||
Separation expense | 550 | 379 | — | — | 929 | ||||||||||||||
Restructuring and other charges | 830 | 1 | 1,376 | (9 | ) | 2,198 | |||||||||||||
Litigation reserves, net | 10 | — | 5 | — | 15 | ||||||||||||||
Gain on investments | (190 | ) | (349 | ) | — | — | (539 | ) | |||||||||||
Impairment charges to investments | — | — | — | 1,400 | 1,400 | ||||||||||||||
Tax effects of above non-GAAP adjustments | 11,762 | (312 | ) | (1,546 | ) | (2,886 | ) | 7,018 | |||||||||||
Non-GAAP net income from continuing operations | $ | 22,334 | $ | 24,069 | $ | 9,580 | $ | 8,466 | $ | 64,449 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except per share data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2018 | |||||||||||||||||||
(CONTINUED) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | December 31, 2018 | |||||||||||||||
NET INCOME PER DILUTED SHARE: | |||||||||||||||||||
GAAP net income per diluted share from continuing operations | $ | 0.03 | $ | 0.49 | $ | 0.02 | $ | 0.03 | $ | 0.57 | |||||||||
Amortization of intangibles | 0.06 | 0.06 | 0.06 | 0.06 | 0.24 | ||||||||||||||
Stock-based compensation expense | 0.19 | 0.19 | 0.22 | 0.21 | 0.80 | ||||||||||||||
Separation expense | 0.02 | 0.01 | — | — | 0.03 | ||||||||||||||
Restructuring and other charges | 0.03 | 0.00 | 0.04 | 0.00 | 0.07 | ||||||||||||||
Litigation reserves, net | 0.00 | — | 0.00 | — | 0.00 | ||||||||||||||
Gain on investments | (0.01 | ) | (0.01 | ) | — | — | (0.02 | ) | |||||||||||
Impairment charges to investments | — | — | — | 0.04 | 0.04 | ||||||||||||||
Tax effects of above non-GAAP adjustments | 0.36 | (0.01 | ) | (0.05 | ) | (0.08 | ) | 0.21 | |||||||||||
Non-GAAP net income per diluted share from continuing operations | $ | 0.68 | $ | 0.73 | $ | 0.29 | $ | 0.26 | $ | 1.94 |
NETGEAR, INC. |
SUPPLEMENTAL FINANCIAL INFORMATION, FISCAL 2018 |
(In thousands, except per share data, DSO, inventory turns, weeks of channel inventory, headcount and percentage data) |
(Unaudited) |
Three Months Ended | |||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | ||||||||||||
Cash, cash equivalents and short-term investments | $ | 274,364 | $ | 341,968 | $ | 355,489 | $ | 386,032 | |||||||
Cash, cash equivalents and short-term investments per diluted share | $ | 8.36 | $ | 10.37 | $ | 10.86 | $ | 11.82 | |||||||
Accounts receivable, net | $ | 303,667 | $ | 241,862 | $ | 232,770 | $ | 214,843 | |||||||
Days sales outstanding (DSO) | 97 | 82 | 83 | 80 | |||||||||||
Inventories | $ | 243,871 | $ | 198,037 | $ | 168,263 | $ | 162,497 | |||||||
Ending inventory turns | 3.3 | 3.5 | 4.2 | 4.2 | |||||||||||
Weeks of channel inventory: | |||||||||||||||
U.S. retail channel | 7.7 | 9.8 | 10.6 | 8.9 | |||||||||||
U.S. distribution channel | 5.2 | 4.1 | 4.3 | 4.2 | |||||||||||
EMEA distribution channel | 4.1 | 4.3 | 4.1 | 4.4 | |||||||||||
APAC distribution channel | 7.4 | 6.6 | 7.9 | 6.0 | |||||||||||
Deferred revenue (current and non-current) | $ | 11,865 | $ | 9,726 | $ | 5,577 | $ | 6,075 | |||||||
Headcount | 837 | 833 | 901 | 903 | |||||||||||
Non-GAAP diluted shares | 32,803 | 32,974 | 32,742 | 32,660 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | December 31, 2018 | |||||||||||||||||||||||||
Americas | $ | 190,335 | 66 | % | $ | 175,932 | 65 | % | $ | 174,414 | 68 | % | $ | 160,012 | 66 | % | $ | 700,693 | 66 | % | |||||||||
EMEA | 58,798 | 20 | % | 53,158 | 20 | % | 48,209 | 19 | % | 47,434 | 19 | % | 207,599 | 20 | % | ||||||||||||||
APAC | 39,795 | 14 | % | 40,321 | 15 | % | 32,653 | 13 | % | 37,755 | 15 | % | 150,524 | 14 | % | ||||||||||||||
Total | $ | 288,928 | 100 | % | $ | 269,411 | 100 | % | $ | 255,276 | 100 | % | $ | 245,201 | 100 | % | $ | 1,058,816 | 100 | % |
NETGEAR, INC. |
SEGMENT FINANCIAL INFORMATION, FISCAL 2018 |
(In thousands, except percentage data) |
(Unaudited) |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | December 31, 2018 | |||||||||||||||
Net revenue: | |||||||||||||||||||
Connected Home | $ | 215,638 | $ | 194,683 | $ | 186,424 | $ | 174,315 | $ | 771,060 | |||||||||
SMB | 73,290 | 74,728 | 68,852 | 70,886 | 287,756 | ||||||||||||||
Total net revenue | $ | 288,928 | $ | 269,411 | $ | 255,276 | $ | 245,201 | $ | 1,058,816 | |||||||||
Contribution income: | |||||||||||||||||||
Connected Home | $ | 29,118 | $ | 30,071 | $ | 20,939 | $ | 16,212 | $ | 96,340 | |||||||||
Connected Home contribution margin | 13.5 | % | 15.4 | % | 11.2 | % | 9.3 | % | 12.5 | % | |||||||||
SMB | $ | 18,392 | $ | 20,593 | $ | 14,635 | $ | 16,522 | $ | 70,142 | |||||||||
SMB contribution margin | 25.1 | % | 27.6 | % | 21.3 | % | 23.3 | % | 24.4 | % | |||||||||
Total segment contribution income | $ | 47,510 | $ | 50,664 | $ | 35,574 | $ | 32,734 | $ | 166,482 | |||||||||
Corporate and unallocated costs | (20,459 | ) | (22,391 | ) | (25,038 | ) | (22,298 | ) | (90,186 | ) | |||||||||
Amortization of intangibles (1) | (2,012 | ) | (1,922 | ) | (1,966 | ) | (2,079 | ) | (7,979 | ) | |||||||||
Stock-based compensation expense | (6,233 | ) | (6,118 | ) | (7,246 | ) | (6,864 | ) | (26,461 | ) | |||||||||
Separation expense | (550 | ) | (379 | ) | — | — | (929 | ) | |||||||||||
Restructuring and other charges | (830 | ) | (1 | ) | (1,376 | ) | 9 | (2,198 | ) | ||||||||||
Litigation reserves, net | (10 | ) | — | (5 | ) | — | (15 | ) | |||||||||||
Interest income | 1,174 | 985 | 1,073 | 748 | 3,980 | ||||||||||||||
Other income (expense), net | 85 | 955 | 788 | (1,318 | ) | 510 | |||||||||||||
Income before income taxes | $ | 18,675 | $ | 21,793 | $ | 1,804 | $ | 932 | $ | 43,204 |
(1) | Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2018 | September 30, 2018 | July 1, 2018 | April 1, 2018 | December 31, 2018 | |||||||||||||||
Connected Home | $ | 37,772 | $ | 30,769 | $ | 46,333 | $ | 41,797 | $ | 156,671 | |||||||||
SMB | 670 | 1,191 | 700 | 1,063 | 3,624 | ||||||||||||||
Total service provider net revenue | $ | 38,442 | $ | 31,960 | $ | 47,033 | $ | 42,860 | $ | 160,295 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2017 | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | December 31, 2017 | |||||||||||||||
GAAP gross profit | $ | 76,129 | $ | 76,096 | $ | 75,380 | $ | 80,111 | $ | 307,716 | |||||||||
GAAP gross margin | 27.8 | % | 30.2 | % | 30.0 | % | 30.6 | % | 29.6 | % | |||||||||
Amortization of intangibles | 323 | 471 | 808 | 2,036 | 3,638 | ||||||||||||||
Stock-based compensation expense | 347 | 331 | 401 | 327 | 1,406 | ||||||||||||||
Non-GAAP gross profit | $ | 76,799 | $ | 76,898 | $ | 76,589 | $ | 82,474 | $ | 312,760 | |||||||||
Non-GAAP gross margin | 28.0 | % | 30.5 | % | 30.4 | % | 31.6 | % | 30.1 | % | |||||||||
GAAP research and development | $ | 19,397 | $ | 17,958 | $ | 17,840 | $ | 16,698 | $ | 71,893 | |||||||||
Stock-based compensation expense | (764 | ) | (743 | ) | (766 | ) | (695 | ) | (2,968 | ) | |||||||||
Non-GAAP research and development | $ | 18,633 | $ | 17,215 | $ | 17,074 | $ | 16,003 | $ | 68,925 | |||||||||
GAAP sales and marketing | $ | 36,667 | $ | 34,405 | $ | 32,532 | $ | 35,075 | $ | 138,679 | |||||||||
Amortization of intangibles | (1,756 | ) | (1,756 | ) | (1,757 | ) | (1,756 | ) | (7,025 | ) | |||||||||
Stock-based compensation expense | (1,438 | ) | (1,464 | ) | (1,374 | ) | (1,205 | ) | (5,481 | ) | |||||||||
Non-GAAP sales and marketing | $ | 33,473 | $ | 31,185 | $ | 29,401 | $ | 32,114 | $ | 126,173 | |||||||||
GAAP general and administrative | $ | 14,385 | $ | 14,120 | $ | 12,725 | $ | 13,116 | $ | 54,346 | |||||||||
Stock-based compensation expense | (2,339 | ) | (2,349 | ) | (2,323 | ) | (2,103 | ) | (9,114 | ) | |||||||||
Non-GAAP general and administrative | $ | 12,046 | $ | 11,771 | $ | 10,402 | $ | 11,013 | $ | 45,232 | |||||||||
GAAP total operating expenses | $ | 70,576 | $ | 66,517 | $ | 63,144 | $ | 64,926 | $ | 265,163 | |||||||||
Amortization of intangibles | (1,756 | ) | (1,756 | ) | (1,757 | ) | (1,756 | ) | (7,025 | ) | |||||||||
Stock-based compensation expense | (4,541 | ) | (4,556 | ) | (4,463 | ) | (4,003 | ) | (17,563 | ) | |||||||||
Restructuring and other charges | (19 | ) | (19 | ) | (22 | ) | (37 | ) | (97 | ) | |||||||||
Litigation reserves, net | (108 | ) | (15 | ) | (25 | ) | — | (148 | ) | ||||||||||
Non-GAAP total operating expenses | $ | 64,152 | $ | 60,171 | $ | 56,877 | $ | 59,130 | $ | 240,330 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2017 | |||||||||||||||||||
(CONTINUED) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | December 31, 2017 | |||||||||||||||
GAAP operating income | $ | 5,553 | $ | 9,579 | $ | 12,236 | $ | 15,185 | $ | 42,553 | |||||||||
GAAP operating margin | 2.0 | % | 3.8 | % | 4.9 | % | 5.8 | % | 4.1 | % | |||||||||
Amortization of intangibles | 2,079 | 2,227 | 2,565 | 3,792 | 10,663 | ||||||||||||||
Stock-based compensation expense | 4,888 | 4,887 | 4,864 | 4,330 | 18,969 | ||||||||||||||
Restructuring and other charges | 19 | 19 | 22 | 37 | 97 | ||||||||||||||
Litigation reserves, net | 108 | 15 | 25 | — | 148 | ||||||||||||||
Non-GAAP operating income | $ | 12,647 | $ | 16,727 | $ | 19,712 | $ | 23,344 | $ | 72,430 | |||||||||
Non-GAAP operating margin | 4.6 | % | 6.6 | % | 7.8 | % | 8.9 | % | 7.0 | % | |||||||||
GAAP net income (loss) from continuing operations | $ | (41,778 | ) | $ | 9,624 | $ | 9,989 | $ | 11,032 | $ | (11,133 | ) | |||||||
Amortization of intangibles | 2,079 | 2,227 | 2,565 | 3,792 | 10,663 | ||||||||||||||
Stock-based compensation expense | 4,888 | 4,887 | 4,864 | 4,330 | 18,969 | ||||||||||||||
Restructuring and other charges | 19 | 19 | 22 | 37 | 97 | ||||||||||||||
Litigation reserves, net | 108 | 15 | 25 | — | 148 | ||||||||||||||
Tax effects of above non-GAAP adjustments | 45,814 | (2,321 | ) | (3,274 | ) | (3,483 | ) | 36,736 | |||||||||||
Non-GAAP net income from continuing operations | $ | 11,130 | $ | 14,451 | $ | 14,191 | $ | 15,708 | $ | 55,480 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2017 | |||||||||||||||||||
(CONTINUED) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | December 31, 2017 | |||||||||||||||
NET INCOME (LOSS) PER DILUTED SHARE: | |||||||||||||||||||
GAAP net income (loss) per diluted share from continuing operations | $ | (1.33 | ) | $ | 0.30 | $ | 0.30 | $ | 0.32 | $ | (0.35 | ) | |||||||
Amortization of intangibles | 0.06 | 0.07 | 0.08 | 0.11 | 0.32 | ||||||||||||||
Stock-based compensation expense | 0.15 | 0.15 | 0.15 | 0.13 | 0.57 | ||||||||||||||
Restructuring and other charges | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
Litigation reserves, net | 0.00 | 0.00 | 0.00 | — | 0.00 | ||||||||||||||
Tax effects of above non-GAAP adjustments | 1.42 | (0.07 | ) | (0.10 | ) | (0.10 | ) | 1.11 | |||||||||||
Non-GAAP net income per diluted share from continuing operations* | $ | 0.34 | $ | 0.45 | $ | 0.43 | $ | 0.46 | $ | 1.68 | |||||||||
Shares used in computing GAAP net income (loss) per diluted share | 31,379 | 32,393 | 33,116 | 34,136 | 32,097 | ||||||||||||||
Shares used in computing non-GAAP net income per diluted share | 32,270 | 32,393 | 33,116 | 34,136 | 33,044 |
NETGEAR, INC. |
SUPPLEMENTAL FINANCIAL INFORMATION, FISCAL 2017 |
(In thousands, except per share data, DSO, inventory turns, weeks of channel inventory, headcount and percentage data) |
(Unaudited) |
Three Months Ended | |||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | ||||||||||||
Cash, cash equivalents and short-term investments | $ | 329,653 | $ | 372,580 | $ | 305,455 | $ | 361,083 | |||||||
Cash, cash equivalents and short-term investments per diluted share | $ | 10.22 | $ | 11.50 | $ | 9.22 | $ | 10.58 | |||||||
Accounts receivable, net | $ | 255,118 | $ | 201,458 | $ | 227,068 | $ | 204,053 | |||||||
Days sales outstanding (DSO) | 85 | 73 | 82 | 72 | |||||||||||
Inventories | $ | 162,942 | $ | 173,896 | $ | 193,446 | $ | 200,530 | |||||||
Ending inventory turns | 4.9 | 4.0 | 3.6 | 3.6 | |||||||||||
Weeks of channel inventory: | |||||||||||||||
U.S. retail channel | 7.4 | 10.1 | 8.2 | 7.8 | |||||||||||
U.S. distribution channel | 5.0 | 6.3 | 4.3 | 5.6 | |||||||||||
EMEA distribution channel | 6.0 | 5.3 | 4.7 | 4.7 | |||||||||||
APAC distribution channel | 5.0 | 6.1 | 7.0 | 5.8 | |||||||||||
Deferred revenue (current and non-current) | $ | 21,995 | $ | 17,750 | $ | 14,923 | $ | 14,860 | |||||||
Headcount | 901 | 884 | 861 | 856 | |||||||||||
Non-GAAP diluted shares | 32,270 | 32,393 | 33,116 | 34,136 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | December 31, 2017 | |||||||||||||||||||||||||
Americas | $ | 176,880 | 64 | % | $ | 160,405 | 64 | % | $ | 159,730 | 64 | % | $ | 168,074 | 65 | % | $ | 665,089 | 64 | % | |||||||||
EMEA | 59,207 | 22 | % | 46,491 | 18 | % | 45,800 | 18 | % | 45,576 | 17 | % | 197,074 | 19 | % | ||||||||||||||
APAC | 38,062 | 14 | % | 45,054 | 18 | % | 46,155 | 18 | % | 47,735 | 18 | % | 177,006 | 17 | % | ||||||||||||||
Total | $ | 274,149 | 100 | % | $ | 251,950 | 100 | % | $ | 251,685 | 100 | % | $ | 261,385 | 100 | % | $ | 1,039,169 | 100 | % |
NETGEAR, INC. |
SEGMENT FINANCIAL INFORMATION, FISCAL 2017 |
(In thousands, except percentage data) |
(Unaudited) |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | December 31, 2017 | |||||||||||||||
Net revenue: | |||||||||||||||||||
Connected Home | $ | 203,548 | $ | 187,270 | $ | 183,701 | $ | 193,742 | $ | 768,261 | |||||||||
SMB | 70,601 | 64,680 | 67,984 | 67,643 | 270,908 | ||||||||||||||
Total net revenue | $ | 274,149 | $ | 251,950 | $ | 251,685 | $ | 261,385 | $ | 1,039,169 | |||||||||
Contribution income: | |||||||||||||||||||
Connected Home | $ | 17,035 | $ | 22,087 | $ | 19,654 | $ | 25,094 | $ | 83,870 | |||||||||
Connected Home contribution margin | 8.4 | % | 11.8 | % | 10.7 | % | 13.0 | % | 10.9 | % | |||||||||
SMB | $ | 15,975 | $ | 13,778 | $ | 17,435 | $ | 16,677 | $ | 63,865 | |||||||||
SMB contribution margin | 22.6 | % | 21.3 | % | 25.6 | % | 24.7 | % | 23.6 | % | |||||||||
Total segment contribution income | $ | 33,010 | $ | 35,865 | $ | 37,089 | $ | 41,771 | $ | 147,735 | |||||||||
Corporate and unallocated costs | (20,363 | ) | (19,138 | ) | (17,377 | ) | (18,427 | ) | (75,305 | ) | |||||||||
Amortization of intangibles (1) | (2,079 | ) | (2,227 | ) | (2,565 | ) | (3,792 | ) | (10,663 | ) | |||||||||
Stock-based compensation expense | (4,888 | ) | (4,887 | ) | (4,864 | ) | (4,330 | ) | (18,969 | ) | |||||||||
Restructuring and other charges | (19 | ) | (19 | ) | (22 | ) | (37 | ) | (97 | ) | |||||||||
Litigation reserves, net | (108 | ) | (15 | ) | (25 | ) | — | (148 | ) | ||||||||||
Interest income | 725 | 502 | 482 | 405 | 2,114 | ||||||||||||||
Other income (expense), net | 440 | 493 | 332 | 292 | 1,557 | ||||||||||||||
Income before income taxes | $ | 6,718 | $ | 10,574 | $ | 13,050 | $ | 15,882 | $ | 46,224 |
(1) | Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2017 | October 1, 2017 | July 2, 2017 | April 2, 2017 | December 31, 2017 | |||||||||||||||
Connected Home | $ | 43,877 | $ | 44,631 | $ | 48,485 | $ | 53,193 | $ | 190,186 | |||||||||
SMB | 776 | 1,114 | 588 | 790 | 3,268 | ||||||||||||||
Total service provider net revenue | $ | 44,653 | $ | 45,745 | $ | 49,073 | $ | 53,983 | $ | 193,454 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2016 | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | December 31, 2016 | |||||||||||||||
GAAP gross profit | $ | 98,398 | $ | 92,149 | $ | 86,897 | $ | 96,458 | $ | 373,902 | |||||||||
GAAP gross margin | 33.6 | % | 31.6 | % | 31.9 | % | 33.7 | % | 32.7 | % | |||||||||
Amortization of intangibles | 2,084 | 2,084 | 2,084 | 2,084 | 8,336 | ||||||||||||||
Stock-based compensation expense | 316 | 364 | 403 | 390 | 1,473 | ||||||||||||||
Non-GAAP gross profit | $ | 100,798 | $ | 94,597 | $ | 89,384 | $ | 98,932 | $ | 383,711 | |||||||||
Non-GAAP gross margin | 34.4 | % | 32.4 | % | 32.8 | % | 34.6 | % | 33.6 | % | |||||||||
GAAP research and development | $ | 18,465 | $ | 17,224 | $ | 17,171 | $ | 18,044 | $ | 70,904 | |||||||||
Stock-based compensation expense | (712 | ) | (750 | ) | (735 | ) | (529 | ) | (2,726 | ) | |||||||||
Non-GAAP research and development | $ | 17,753 | $ | 16,474 | $ | 16,436 | $ | 17,515 | $ | 68,178 | |||||||||
GAAP sales and marketing | $ | 35,840 | $ | 34,153 | $ | 34,195 | $ | 35,403 | $ | 139,591 | |||||||||
Amortization of intangibles | (1,756 | ) | (1,756 | ) | (1,757 | ) | (1,756 | ) | (7,025 | ) | |||||||||
Stock-based compensation expense | (1,194 | ) | (1,263 | ) | (1,307 | ) | (1,170 | ) | (4,934 | ) | |||||||||
Non-GAAP sales and marketing | $ | 32,890 | $ | 31,134 | $ | 31,131 | $ | 32,477 | $ | 127,632 | |||||||||
GAAP general and administrative | $ | 14,107 | $ | 14,070 | $ | 12,989 | $ | 12,830 | $ | 53,996 | |||||||||
Stock-based compensation expense | (1,976 | ) | (2,040 | ) | (2,095 | ) | (1,897 | ) | (8,008 | ) | |||||||||
Non-GAAP general and administrative | $ | 12,131 | $ | 12,030 | $ | 10,894 | $ | 10,933 | $ | 45,988 | |||||||||
GAAP total operating expenses | $ | 68,448 | $ | 65,334 | $ | 65,658 | $ | 68,965 | $ | 268,405 | |||||||||
Amortization of intangibles | (1,756 | ) | (1,756 | ) | (1,757 | ) | (1,756 | ) | (7,025 | ) | |||||||||
Stock-based compensation expense | (3,882 | ) | (4,053 | ) | (4,137 | ) | (3,596 | ) | (15,668 | ) | |||||||||
Restructuring and other charges | (21 | ) | 126 | (1,268 | ) | (2,678 | ) | (3,841 | ) | ||||||||||
Litigation reserves, net | (15 | ) | (13 | ) | (35 | ) | (10 | ) | (73 | ) | |||||||||
Non-GAAP total operating expenses | $ | 62,774 | $ | 59,638 | $ | 58,461 | $ | 60,925 | $ | 241,798 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2016 | |||||||||||||||||||
(CONTINUED) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | December 31, 2016 | |||||||||||||||
GAAP operating income | $ | 29,950 | $ | 26,815 | $ | 21,239 | $ | 27,493 | $ | 105,497 | |||||||||
GAAP operating margin | 10.2 | % | 9.2 | % | 7.8 | % | 9.6 | % | 9.2 | % | |||||||||
Amortization of intangibles | 3,840 | 3,840 | 3,841 | 3,840 | 15,361 | ||||||||||||||
Stock-based compensation expense | 4,198 | 4,417 | 4,540 | 3,986 | 17,141 | ||||||||||||||
Restructuring and other charges | 21 | (126 | ) | 1,268 | 2,678 | 3,841 | |||||||||||||
Litigation reserves, net | 15 | 13 | 35 | 10 | 73 | ||||||||||||||
Non-GAAP operating income | $ | 38,024 | $ | 34,959 | $ | 30,923 | $ | 38,007 | $ | 141,913 | |||||||||
Non-GAAP operating margin | 13.0 | % | 12.0 | % | 11.4 | % | 13.3 | % | 12.4 | % | |||||||||
GAAP other income (expense), net | $ | 383 | $ | 110 | $ | (338 | ) | $ | (321 | ) | $ | (166 | ) | ||||||
Gain on litigation settlements | — | — | — | (5 | ) | (5 | ) | ||||||||||||
Loss pertaining to investments | — | 68 | 479 | — | 547 | ||||||||||||||
Non-GAAP other income (expense), net | $ | 383 | $ | 178 | $ | 141 | $ | (326 | ) | $ | 376 | ||||||||
GAAP net income from continuing operations | $ | 20,050 | $ | 19,154 | $ | 13,277 | $ | 17,831 | $ | 70,312 | |||||||||
Amortization of intangibles | 3,840 | 3,840 | 3,841 | 3,840 | 15,361 | ||||||||||||||
Stock-based compensation expense | 4,198 | 4,417 | 4,540 | 3,986 | 17,141 | ||||||||||||||
Restructuring and other charges | 21 | (126 | ) | 1,268 | 2,678 | 3,841 | |||||||||||||
Litigation reserves, net | 15 | 13 | 35 | 10 | 73 | ||||||||||||||
Gain on litigation settlements | — | — | — | (5 | ) | (5 | ) | ||||||||||||
Loss pertaining to investments | — | 68 | 479 | — | 547 | ||||||||||||||
Tax effects of above non-GAAP adjustments | (1,049 | ) | (4,014 | ) | (2,776 | ) | (2,953 | ) | (10,792 | ) | |||||||||
Non-GAAP net income from continuing operations | $ | 27,075 | $ | 23,352 | $ | 20,664 | $ | 25,387 | $ | 96,478 |
NETGEAR, INC. |
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES |
(In thousands, except percentage data) |
(Unaudited) |
STATEMENT OF OPERATIONS DATA, FISCAL 2016 | |||||||||||||||||||
(CONTINUED): | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | December 31, 2016 | |||||||||||||||
NET INCOME PER DILUTED SHARE: | |||||||||||||||||||
GAAP net income per diluted share from continuing operations | $ | 0.59 | $ | 0.56 | $ | 0.40 | $ | 0.54 | $ | 2.08 | |||||||||
Amortization of intangibles | 0.11 | 0.11 | 0.11 | 0.12 | 0.46 | ||||||||||||||
Stock-based compensation expense | 0.12 | 0.13 | 0.14 | 0.12 | 0.51 | ||||||||||||||
Restructuring and other charges | 0.00 | 0.00 | 0.04 | 0.08 | 0.11 | ||||||||||||||
Litigation reserves, net | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
Gain on litigation settlements | — | — | — | 0.00 | 0.00 | ||||||||||||||
Loss pertaining to investments | — | 0.00 | 0.01 | — | 0.02 | ||||||||||||||
Tax effects of above non-GAAP adjustments | (0.02 | ) | (0.11 | ) | (0.08 | ) | (0.10 | ) | (0.32 | ) | |||||||||
Non-GAAP net income per diluted share from continuing operations | $ | 0.80 | $ | 0.69 | $ | 0.62 | $ | 0.76 | $ | 2.86 |
NETGEAR, INC. |
SUPPLEMENTAL FINANCIAL INFORMATION, FISCAL 2016 |
(In thousands, except per share data, DSO, inventory turns, weeks of channel inventory, headcount and percentage data) |
(Unaudited) |
Three Months Ended | |||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | ||||||||||||
Cash, cash equivalents and short-term investments | $ | 365,728 | $ | 402,991 | $ | 352,647 | $ | 333,270 | |||||||
Cash, cash equivalents and short-term investments per diluted share | $ | 10.78 | $ | 11.88 | $ | 10.53 | $ | 10.02 | |||||||
Accounts receivable, net | $ | 231,997 | $ | 196,134 | $ | 196,971 | $ | 197,222 | |||||||
Days sales outstanding (DSO) | 71 | 61 | 66 | 65 | |||||||||||
Inventories | $ | 200,144 | $ | 186,352 | $ | 179,538 | $ | 182,486 | |||||||
Ending inventory turns | 3.9 | 4.3 | 4.1 | 4.2 | |||||||||||
Weeks of channel inventory: | |||||||||||||||
U.S. retail channel | 6.3 | 8.8 | 9.1 | 8.6 | |||||||||||
U.S. distribution channel | 7.2 | 4.4 | 5.0 | 5.5 | |||||||||||
EMEA distribution channel | 4.9 | 4.2 | 3.7 | 4.5 | |||||||||||
APAC distribution channel | 7.4 | 4.4 | 6.6 | 6.3 | |||||||||||
Deferred revenue (current and non-current) | $ | 19,554 | $ | 14,378 | $ | 19,657 | $ | 19,487 | |||||||
Headcount | 877 | 881 | 866 | 877 | |||||||||||
Non-GAAP diluted shares | 33,925 | 33,913 | 33,493 | 33,269 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | December 31, 2016 | |||||||||||||||||||||||||
Americas | $ | 190,259 | 64 | % | $ | 188,441 | 64 | % | $ | 180,021 | 66 | % | $ | 176,259 | 61 | % | $ | 734,980 | 64 | % | |||||||||
EMEA | 60,298 | 21 | % | 51,909 | 18 | % | 45,806 | 17 | % | 59,541 | 21 | % | 217,554 | 19 | % | ||||||||||||||
APAC | 42,584 | 15 | % | 51,578 | 18 | % | 46,378 | 17 | % | 50,371 | 18 | % | 190,911 | 17 | % | ||||||||||||||
Total | $ | 293,141 | 100 | % | $ | 291,928 | 100 | % | $ | 272,205 | 100 | % | $ | 286,171 | 100 | % | $ | 1,143,445 | 100 | % |
NETGEAR, INC. |
SEGMENT FINANCIAL INFORMATION, FISCAL 2016 |
(In thousands, except percentage data) |
(Unaudited) |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | December 31, 2016 | |||||||||||||||
Net revenue: | |||||||||||||||||||
Connected Home | $ | 215,597 | $ | 218,323 | $ | 197,293 | $ | 215,716 | $ | 846,929 | |||||||||
SMB | 77,544 | 73,605 | 74,912 | 70,455 | 296,516 | ||||||||||||||
Total net revenue | $ | 293,141 | $ | 291,928 | $ | 272,205 | $ | 286,171 | $ | 1,143,445 | |||||||||
Contribution income: | |||||||||||||||||||
Connected Home | $ | 36,670 | $ | 34,305 | $ | 28,945 | $ | 39,077 | $ | 138,997 | |||||||||
Connected Home contribution margin | 17.0 | % | 15.7 | % | 14.7 | % | 18.1 | % | 16.4 | % | |||||||||
SMB | $ | 19,770 | $ | 18,444 | $ | 18,598 | $ | 15,727 | $ | 72,539 | |||||||||
SMB contribution margin | 25.5 | % | 25.1 | % | 24.8 | % | 22.3 | % | 24.5 | % | |||||||||
Total segment contribution income | $ | 56,440 | $ | 52,749 | $ | 47,543 | $ | 54,804 | $ | 211,536 | |||||||||
Corporate and unallocated costs | (18,416 | ) | (17,790 | ) | (16,620 | ) | (16,797 | ) | (69,623 | ) | |||||||||
Amortization of intangibles (1) | (3,840 | ) | (3,840 | ) | (3,841 | ) | (3,840 | ) | (15,361 | ) | |||||||||
Stock-based compensation expense | (4,198 | ) | (4,417 | ) | (4,540 | ) | (3,986 | ) | (17,141 | ) | |||||||||
Restructuring and other charges | (21 | ) | 126 | (1,268 | ) | (2,678 | ) | (3,841 | ) | ||||||||||
Litigation reserves, net | (15 | ) | (13 | ) | (35 | ) | (10 | ) | (73 | ) | |||||||||
Interest income | 360 | 291 | 280 | 233 | 1,164 | ||||||||||||||
Other income (expense), net | 383 | 110 | (338 | ) | (321 | ) | (166 | ) | |||||||||||
Income before income taxes | $ | 30,693 | $ | 27,216 | $ | 21,181 | $ | 27,405 | $ | 106,495 |
(1) | Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, 2016 | October 2, 2016 | July 3, 2016 | April 3, 2016 | December 31, 2016 | |||||||||||||||
Connected Home | $ | 45,730 | $ | 66,042 | $ | 61,356 | $ | 76,852 | $ | 249,980 | |||||||||
SMB | 686 | 1,295 | 746 | 1,448 | 4,175 | ||||||||||||||
Total service provider net revenue | $ | 46,416 | $ | 67,337 | $ | 62,102 | $ | 78,300 | $ | 254,155 |