Netgear Inc. (NASDAQ:NTGR) Q3 2019 Earnings Conference Call - Final Transcript
Oct 23, 2019 • 05:00 pm ET
Ladies and gentlemen, thank you for standing by. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Erik Bylin. Please go ahead, sir.
Thank you, Angela. Good afternoon and welcome to NETGEAR's third quarter of 2019 financial results conference call. Joining us from the company are Mr. Patrick Lo, Chairman and CEO; and Mr. Bryan Murray, CFO. Format of the call will start with a review of the financials for the third quarter provided by Bryan followed by details and commentary on the business provided by Patrick and finish with fourth quarter of 2019 guidance provided by Bryan. We'll then have time for questions.
If you have not received a copy of today's press release, please visit NETGEAR's Investor Relations website at investor.netgear.com. 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-Q.
Any forward-looking statements that we make on this call are based on the 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 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 Mr. Bryan Murray.
Thank you, Eric, and thank you, everyone, for joining today's call. The third quarter presented us with some unexpected challenges. Entering September when we typically see increased demand in Europe after the normal summer recess, we instead saw heightened uncertainty due to Brexit and the possible start of a German recession. Because of this, September sales in Europe came in below our expectations.
In addition, APAC was hampered by a sudden economic downturn in the China Hong Kong region due to the escalating trade war and the unstable sociopolitical situation in Hong Kong. However, on the domestic front, the home WiFi market in North America appears to have stabilized with indications that the market was down year-over-year about the same level we saw in Q2 or 4.5%. At the same time, we continue to execute on our robust pipeline of new products to extend our market leadership in introducing WiFi 6 technologies in Q3.
Entering the quarter we had three products continue WiFi 6 technology. We ended the quarter with seven, including the all-important WiFi 6 Orbi Mesh, the world's only WiFi 6 mesh system. Overall, NETGEAR net revenue for the third quarter ended September 29th, 2019 was $265.9 million, which came in at the low end