Netgear Inc. (NASDAQ:NTGR) Q1 2018 Earnings Conference Call - Final Transcript

Apr 25, 2018 • 05:00 pm ET


Netgear Inc. (NASDAQ:NTGR) Q1 2018 Earnings Conference Call - Final Transcript


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Good evening. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the NETGEAR First Quarter 2018 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

Thank you. Christopher Genualdi, Director of Investor Relations. You may begin the conference.

Christopher Genualdi

Thank you, operator. Good afternoon. And welcome to NETGEAR's first quarter 2018 financial results conference call. Joining us from the Company are Mr. Patrick Lo, Chairman and CEO; and Ms. Christine Gorjanc, CFO. The format of the call will start with a review of the financials for the first quarter provided by Christine, followed by details and commentary on the business provided by Patrick, and finish with second quarter of 2018 guidance provided by Christine. 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-K. 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 Ms. Christine Gorjanc.

Christine Gorjanc

Thank you, Chris, and thank you, everyone, for joining today's call. Results for the first quarter of 2018 came in at the high end of our guidance, driven by the success of our Orbi lines, the new Nighthawk Pro Gaming Router, Arlo Pro 2 and our SMB switching lines. Overall, NETGEAR net revenue for the first quarter ended April 1, 2018, was $345 million, which is up 6.6% on a year-over-year basis and down 13.1% on a sequential basis. The sequential decline is the result of Q1's seasonality as consumer spending slows following the holiday season.

NETGEAR net revenue by geography once again reflects continued strength in North America and the EMEA regions. Net revenue for the Americas was $233.6 million, which is up 10.4% year-over-year and down 15.1% on a sequential basis. EMEA net revenue was $66.6 million, which is up 14% year-over-year and down 14.7% quarter-over-quarter. Our APAC net revenue was $44.7 million for the first quarter of 2018, which is down 16.5% from the prior year comparable quarter and up 1.9% quarter-over-quarter.

For the first quarter of