8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 16, 2021

NETGEAR, INC.

(Exact name of Registrant as specified in its charter)

Delaware	000-50350	77-0419172
(State or other jurisdiction<br><br><br>of incorporation)	(Commission File Number)	(I.R.S. Employer<br><br><br>Identification Number)
350 East Plumeria Drive
---	---	---
San Jose,	CA	95134
(Address, including zip code, of principal executive offices)
(408)	907-8000
---	---
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
---	---	---
Title of each class	Trading symbol(s):	Name of each exchange on which registered
Common Stock, $0.001 par value	NTGR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	☐

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.   ☐

Item 2.02	Results of Operations and Financial Condition.

On July 21, 2021, NETGEAR, Inc. (the “Company” or “NETGEAR”) issued a press release announcing its financial results for its second fiscal quarter ended June 27, 2021, the text of which is furnished herewith as Exhibit 99.1.

The information furnished pursuant to this Item 2.02 and the exhibit to this Current Report are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information furnished pursuant to this Item 2.02 and the exhibit to this Current Report shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)  Director Resignation – No Disagreement with the Company

On July 16, 2021, Gregory J. Rossmann tendered his resignation to the Board of Directors (the “Board”) of the Company, such resignation to become effective on December 31, 2021. His decision to resign from the Board was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

(c) and (d)  Officer Appointment and Compensation; Director Appointment

On July 16, 2021, the Board appointed David J. Henry the Company’s President and General Manager of Connected Home Products and Services, and as a member of the Board, effective immediately.  Mr. Henry was not named, and as of the date hereof is not expected to be named, to any Board committees.

Mr. Henry, age 48, has served as the Company’s Senior Vice President of Connected Home Products and Services since January 2017. He has been with the Company since July 2004 and served as its Senior Vice President of Home Networking from January 2016 to December 2016, Vice President of Product Management of its retail business unit from March 2011 to January 2016 and as its Senior Director of Product Marketing from October 2010 to March 2011. Prior to NETGEAR, Mr. Henry was a senior product manager for the high technology vertical application at Siebel Systems (acquired by Oracle Corporation). His professional experience also includes business process and information technology consulting with Deloitte Consulting. Mr. Henry received a B.S. degree in Electrical Engineering, with an emphasis on Signal Processing, from the University of Washington and an M.B.A. from the Stanford Graduate School of Business.

In connection with his appointment as the Company’s President and General Manager of Connected Home Products and Services, Mr. Henry will receive an annual base salary of $522,268 and is eligible to receive an annual target bonus of 75% of his annual base salary. Mr. Henry will also continue to be eligible to participate in the Company’s equity compensation plans and employee benefit plans available to other employees of the Company.

There is no arrangement or understanding between Mr. Henry and any other person pursuant to which he was selected as an officer of the Company, and there are no family relationships between Mr. Henry and any of the Company’s directors or executive officers. There are no transactions to which the Company is a party and in which Mr. Henry has a direct or indirect material interest that would be required to be disclosed under Item 404(a) of Regulation S-K.

On July 21, 2021, the Company issued a press release announcing the promotion of Mr. Henry to its President and General Manager of Connected Home Products and Services and his appointment to the Board. The full text of the press release is attached hereto as Exhibit 99.2.

Item 9.01    Financial Statements and Exhibits.

(d)	Exhibits
Exhibit Number	Description
---	---
99.1	Press Release, Dated July 21, 2021
99.2	Press Release, Dated July 21, 2021
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  July 21, 2021

NETGEAR, INC.

By:	/s/ Bryan D. Murray
Bryan D. Murray
Chief Financial Officer

ntgr-ex991_6.htm

Exhibit 99.1

NEWS RELEASE

NETGEAR^®^ REPORTS SECOND QUARTER 2021 RESULTS

Second Quarter Revenue of $309 Million – 10.3% Growth Year over Year

Strong SMB Growth Year over Year Fueled by Reopening

Continued Market Share Gains in U.S. Retail WiFi Market

SAN JOSE, California – July 21, 2021 - NETGEAR, Inc. (NASDAQ: NTGR), a global networking company that delivers innovative networking and Internet connected products to consumers and businesses, today reported financial results for the second quarter ended June 27, 2021.

•	Second quarter 2021 net revenue of $308.8 million, an increase of 10.3% from the comparable prior year quarter.
•	Second quarter 2021 GAAP operating income of $21.5 million, or 7.0% of net revenue, as compared to $8.9 million, or 3.2% of net revenue, in the comparable prior year quarter.
---	---
◦	Second quarter 2021 non-GAAP operating income of $26.5 million, or 8.6% of net revenue, as compared to $21.0 million, or 7.5% of net revenue, in the comparable prior year quarter.
---	---
•	Second quarter 2021 GAAP net income per diluted share of $0.57, as compared to $0.20 in the comparable prior year quarter.
---	---
◦	Second quarter 2021 non-GAAP net income per diluted share of $0.66, as compared to $0.54 in the comparable prior year quarter.
---	---

The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, “Second quarter revenue came in at $308.8 million, representing 10.3% topline growth year over year. Worldwide supply chain constraints, however, such as component shortages, increased freight costs and transit times, and factory closures due to COVID-19, led to a perfect storm of factors that held back our revenue number and saw us fall short of our operating margin goals.  As we continue to navigate through this rapidly changing environment, our long-term thesis that premium WiFi will drive the growth of the consumer networking market and our service subscriber base remains intact. With vaccination rates rising and businesses reopening, work from anywhere and hybrid work models are here to stay and we anticipate that the U.S. consumer networking market will grow 20% above pre-pandemic levels in the second half of this year. Meanwhile, demand for our SMB products rebounded strongly in the second quarter as businesses reopened post-COVID. Despite supply constraints, SMB net revenue grew approximately 58% year over year.”

Mr. Lo continued, “We continue to regain market share in the U.S. consumer WiFi market, adding three points to end the quarter at 46%. In addition, we added 33,000 subscribers in the quarter and remain confident in our ability to achieve our goal of 650,000 subscribers by the end of the year. We also launched our smart parental controls service on select Nighthawk WiFi routers in Q2, with plans to roll it out across our WiFi 6 Orbi line in the third quarter.  These are important milestones as we build our recurring subscription services business. Finally, I’m delighted to welcome David Henry to the NETGEAR Board of Directors and would like to congratulate him on his promotion to President and General Manager of Connected Home Products and Services.”

Bryan Murray, Chief Financial Officer of NETGEAR, added, “During the second quarter of 2021, we repurchased approximately 654,000 shares of common stock for $25.0 million. With a meaningful portion of our targeted inventory position established, we plan to continue to opportunistically repurchase shares in future quarters.”

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Business Outlook

Mr. Murray continued, “With hindsight, the first half of 2021 saw the U.S. consumer networking market grow 40% over the same period in 2019. While a very strong showing, this turned out to be 10% below our expectations. As such, we plan to proactively work with our channel partners to optimize their inventory levels in the third quarter. Looking ahead to the second half of 2021, we expect the market growth to moderate further to approximately 20% above second half 2019 levels. We also expect SMB to continue to be supply-bound, and thus expect our third quarter net revenue to be in the range of $285 million to $300 million. With reduced leverage from our topline, our GAAP operating margin for the third quarter is expected to be in the range of 2.1% to 3.1%, and non-GAAP operating margin is expected to be in the range of 5.0% to 6.0%. Our GAAP tax rate is expected to be approximately 27.5%, and our non-GAAP tax rate is expected to be 24.5% for the third quarter of 2021. While we are confident in our ability to provide guidance at this time, we do so with the caveat that, while conditions are improving, considerable uncertainty remains in the market due to the COVID-19 pandemic and, should unforeseen events occur, in particular challenges related to closure of our manufacturing partners operations or transportation delays into any of our regional distribution centers, our actual results could differ from the foregoing guidance.”

A reconciliation between the Business Outlook on a GAAP and non-GAAP basis is provided in the following table:

	Three months ending
	October 3, 2021
	Operating Margin<br><br><br>Rate	Tax Rate
GAAP	2.1% - 3.1%	27.5%
Estimated adjustments for^1^:
Amortization of intangibles	0.1%	-
Stock-based compensation expense	2.6%	-
Restructuring and other charges	0.2%	-
Non-GAAP tax adjustments	-	(3.0)%
Non-GAAP	5.0% - 6.0%	24.5%

^1^Business outlook does not include estimates for any currently unknown income and expense items which, by their nature, could arise late in a quarter, including: litigation reserves, net; acquisition-related charges; impairment charges; restructuring and other charges and discrete tax benefits or detriments that cannot be forecasted (e.g., windfalls or shortfalls from equity awards or items related to the resolution of uncertain tax positions). New material income and expense items such as these could have a significant effect on our guidance and future GAAP results.

Investor Conference Call / Webcast Details

NETGEAR will review the second quarter results and discuss management's expectations for the third quarter of 2021 today, Wednesday, July 21, 2021 at 5 p.m. ET (2 p.m. PT). The toll free dial-in number for the live audio call is (844) 709-2008. The international dial-in number for the live audio call is (647) 253-8663. The conference ID for the call is 9796754. A live webcast of the conference call will be available on NETGEAR's Investor Relations website at http://investor.netgear.com. A replay of the call will be available via the web at http://investor.netgear.com.

About NETGEAR, Inc.

For more than 25 years, NETGEAR® (NASDAQ: NTGR) has been the innovative leader in connecting the world to the internet with advanced networking technologies for homes, businesses and service providers around the world. As staying connected has become more important than ever, NETGEAR delivers award-winning network solutions for remote work, distance learning, ultra high def streaming, online game play and more. To enable people to collaborate and connect to a world of information and entertainment, NETGEAR is dedicated to providing a range of connected solutions. From ultra-premium Orbi Mesh WiFi systems and high performance Nighthawk routers, to high-speed cable modems and 5G mobile wireless products to cloud-based subscription services for network management and security, to smart networking products and Video over Ethernet for Pro AV applications, NETGEAR keeps you connected. NETGEAR is headquartered in San Jose, California. Learn more on the NETGEAR Investor Page or by calling (408) 907-8000. Connect with NETGEAR: Twitter, Facebook, Instagram, LinkedIn and the NETGEAR blog at NETGEAR.com.

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© 2021 NETGEAR, Inc. NETGEAR and the NETGEAR logo are trademarks or registered trademarks of NETGEAR, Inc. and its affiliates in the United States and/or other countries. Other brand and product names are trademarks or registered trademarks of their respective holders.  The information contained herein is subject to change without notice. NETGEAR shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Contact:

NETGEAR Investor Relations

Erik Bylin

investors@netgear.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent NETGEAR, Inc.’s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding: NETGEAR’s future operating performance and financial condition, including expectations regarding continued profitability and cash generation; expectations regarding continuing market demand for the Company’s products and the Company’s ability to respond to this demand; the timing, distribution, sales momentum and market acceptance of recent and anticipated new product introductions that position the Company for growth and market share gain; expectations regarding supply constraints; expectations regarding the ability to participate in promotional activities leading to further market share gains; expectations regarding expected tax rates; and expectations regarding NETGEAR's paid subscriber base growth. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: uncertainty surrounding the duration and impact of the global COVID-19 pandemic, including with respect to the Company’s supply chain and potential disruptions in the Company’s transportation network, including with respect to the Company’s distribution centers; future demand for the Company's products may be lower than anticipated; the Company may be unsuccessful, or experience delays, in manufacturing and distributing its new and existing products; consumers may choose not to adopt the Company's new product offerings or adopt competing products; the Company may be unable to continue to grow its number of registered users, its number of registered app users and/or its paid subscriber base; product performance may be adversely affected by real world operating conditions; the Company may fail to manage costs, including the cost of air freight and ocean freight and the cost of developing new products and manufacturing and distribution of its existing offerings; the Company may fail to successfully manage channel inventory levels; the Company may fail to successfully continue to effect operating expense savings; changes in the level of NETGEAR's cash resources and the Company's planned usage of such resources, including potential repurchases of the Company’s common stock; changes in the Company's stock price and developments in the business that could increase the Company's cash needs; fluctuations in foreign exchange rates; and the actions and financial health of the Company's customers, including the Company’s ability to collect receivables as they become due. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect NETGEAR and its business are detailed in the Company's periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Part II - Item 1A. Risk Factors” in the Company's quarterly report on Form 10-Q for the fiscal quarter ended March 28, 2021, filed with the Securities and Exchange Commission on April 30, 2021. Given these circumstances, you should not place undue reliance on these forward-looking statements. NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Non-GAAP Financial Information:

To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles (“GAAP”), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP other operating expenses, net, non-GAAP total operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP other income (expense), net, non-GAAP net income and non-GAAP net income per diluted share. These supplemental measures exclude adjustments for amortization of intangibles, stock-based compensation expense, change in fair value of contingent consideration, restructuring and other charges, litigation reserves, net, gain/loss on investments, net, and adjust for effects related to non-GAAP tax adjustments. These non-GAAP

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measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by offering:

•	the ability to make more meaningful period-to-period comparisons of our on-going operating results;
•	the ability to better identify trends in our underlying business and perform related trend analyses;
---	---
•	a better understanding of how management plans and measures our underlying business; and
---	---
•	an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.
---	---

The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures:

Amortization of intangibles consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.

Stock-based compensation expense consists of non-cash charges for the estimated fair value of stock options, restricted stock units, performance shares and shares under the employee stock purchase plan granted to employees. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results.

Other items consist of certain items that are the result of either unique or unplanned events, including, when applicable: change in fair value of contingent consideration, restructuring and other charges, litigation reserves, net, and gain/loss on investments, net. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred.

Non-GAAP tax adjustments consist of adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income. We also believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures provides our management and users of the financial statements with better clarity regarding the on-going performance of our business.

Source: NETGEAR-F

-Financial Tables Attached-

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NETGEAR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	As of
	June 27,<br><br><br>2021			December 31,<br><br><br>2020
ASSETS
Current assets:
Cash and cash equivalents	$	328,941		$	346,460
Short-term investments		6,378			6,858
Accounts receivable, net		290,598			337,052
Inventories		251,764			172,112
Prepaid expenses and other current assets		34,110			30,696
Total current assets		911,791			893,178
Property and equipment, net		14,217			16,080
Operating lease right-of-use assets, net		25,798			29,411
Intangibles, net		2,184			3,899
Goodwill		80,721			80,721
Other non-current assets		77,496			82,750
Total assets	$	1,112,207		$	1,106,039
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	70,381		$	90,902
Accrued employee compensation		32,729			35,020
Other accrued liabilities		222,903			218,375
Deferred revenue		15,620			13,458
Income taxes payable		1,719			7,318
Total current liabilities		343,352			365,073
Non-current income taxes payable		20,370			19,174
Non-current operating lease liabilities		21,887			25,512
Other non-current liabilities		3,598			6,896
Total liabilities		389,207			416,655
Stockholders’ equity:
Common stock		31			30
Additional paid-in capital		906,327			882,709
Accumulated other comprehensive income (loss)		82			(35	)
Accumulated deficit		(183,440	)		(193,320	)
Total stockholders’ equity		723,000			689,384
Total liabilities and stockholders’ equity	$	1,112,207		$	1,106,039

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NETGEAR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share and percentage data)

(Unaudited)

	Three Months Ended									Six Months Ended
	June 27,<br><br><br>2021			March 28,<br><br><br>2021			June 28,<br><br><br>2020			June 27,<br><br><br>2021			June 28,<br><br><br>2020
Net revenue	$	308,811		$	317,925		$	280,052		$	626,736		$	510,015
Cost of revenue		215,455			206,984			198,751			422,439			362,473
Gross profit		93,356			110,941			81,301			204,297			147,542
Gross margin		30.2	%		34.9	%		29.0	%		32.6	%		28.9	%
Operating expenses:
Research and development		22,586			23,829			21,144			46,415			40,883
Sales and marketing		35,740			37,815			34,384			73,555			67,415
General and administrative		15,623			15,405			15,481			31,028			28,615
Other operating expenses (income), net		(2,097	)		2,565			1,425			468			1,093
Total operating expenses		71,852			79,614			72,434			151,466			138,006
Income from operations		21,504			31,327			8,867			52,831			9,536
Operating margin		7.0	%		9.9	%		3.2	%		8.4	%		1.9	%
Interest income		3			10			49			13			311
Other income (expense), net		696			(562	)		314			134			(4,272	)
Income before income taxes		22,203			30,775			9,230			52,978			5,575
Provision for income taxes		4,369			7,815			3,247			12,184			3,765
Net income	$	17,834		$	22,960		$	5,983		$	40,794		$	1,810
Net income per share:
Basic	$	0.58		$	0.75		$	0.20		$	1.33		$	0.06
Diluted	$	0.57		$	0.72		$	0.20		$	1.29		$	0.06
Weighted average shares used to compute net income per share:
Basic		30,574			30,665			29,617			30,614			29,608
Diluted		31,464			31,814			30,070			31,648			30,079

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NETGEAR, INC.

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except percentage data)

(Unaudited)

STATEMENT OF OPERATIONS DATA:

	Three Months Ended									Six Months Ended
	June 27,<br><br><br>2021			March 28,<br><br><br>2021			June 28,<br><br><br>2020			June 27,<br><br><br>2021			June 28,<br><br><br>2020
GAAP gross profit	$	93,356		$	110,941		$	81,301		$	204,297		$	147,542
GAAP gross margin		30.2	%		34.9	%		29.0	%		32.6	%		28.9	%
Amortization of intangibles		178			179			179			357			357
Stock-based compensation expense		362			834			1,501			1,196			2,206
Non-GAAP gross profit	$	93,896		$	111,954		$	82,981		$	205,850		$	150,105
Non-GAAP gross margin		30.4	%		35.2	%		29.6	%		32.8	%		29.4	%
GAAP research and development	$	22,586		$	23,829		$	21,144		$	46,415		$	40,883
Stock-based compensation expense		(1,272	)		(1,146	)		(1,707	)		(2,418	)		(2,741	)
Non-GAAP research and development	$	21,314		$	22,683		$	19,437		$	43,997		$	38,142
GAAP sales and marketing	$	35,740		$	37,815		$	34,384		$	73,555		$	67,415
Amortization of intangibles		—			(1,266	)		(1,340	)		(1,266	)		(2,681	)
Stock-based compensation expense		(1,953	)		(1,780	)		(1,890	)		(3,733	)		(3,669	)
Non-GAAP sales and marketing	$	33,787		$	34,769		$	31,154		$	68,556		$	61,065
GAAP general and administrative	$	15,623		$	15,405		$	15,481		$	31,028		$	28,615
Stock-based compensation expense		(3,315	)		(3,200	)		(4,074	)		(6,515	)		(6,892	)
Non-GAAP general and administrative	$	12,308		$	12,205		$	11,407		$	24,513		$	21,723
GAAP other operating expenses (income), net	$	(2,097	)	$	2,565		$	1,425		$	468		$	1,093
Change in fair value of contingent consideration		3,003			—			(311	)		3,003			(89	)
Restructuring and other charges		(886	)		(2,270	)		(1,117	)		(3,156	)		(982	)
Litigation reserves, net		(20	)		(295	)		3			(315	)		(22	)
Non-GAAP other operating expenses, net	$	—		$	—		$	—		$	—		$	—

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NETGEAR, INC.

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)

(In thousands, except percentage data)

(Unaudited)

STATEMENT OF OPERATIONS DATA (CONTINUED):

	Three Months Ended									Six Months Ended
	June 27,<br><br><br>2021			March 28,<br><br><br>2021			June 28,<br><br><br>2020			June 27,<br><br><br>2021			June 28,<br><br><br>2020
GAAP total operating expenses	$	71,852		$	79,614		$	72,434		$	151,466		$	138,006
Amortization of intangibles		—			(1,266	)		(1,340	)		(1,266	)		(2,681	)
Stock-based compensation expense		(6,540	)		(6,126	)		(7,671	)		(12,666	)		(13,302	)
Change in fair value of contingent consideration		3,003			—			(311	)		3,003			(89	)
Restructuring and other charges		(886	)		(2,270	)		(1,117	)		(3,156	)		(982	)
Litigation reserves, net		(20	)		(295	)		3			(315	)		(22	)
Non-GAAP total operating expenses	$	67,409		$	69,657		$	61,998		$	137,066		$	120,930
GAAP operating income	$	21,504		$	31,327		$	8,867		$	52,831		$	9,536
GAAP operating margin		7.0	%		9.9	%		3.2	%		8.4	%		1.9	%
Amortization of intangibles		178			1,445			1,519			1,623			3,038
Stock-based compensation expense		6,902			6,960			9,172			13,862			15,508
Change in fair value of contingent consideration		(3,003	)		—			311			(3,003	)		89
Restructuring and other charges		886			2,270			1,117			3,156			982
Litigation reserves, net		20			295			(3	)		315			22
Non-GAAP operating income	$	26,487		$	42,297		$	20,983		$	68,784		$	29,175
Non-GAAP operating margin		8.6	%		13.3	%		7.5	%		11.0	%		5.7	%
GAAP other income (expense), net	$	696		$	(562	)	$	314		$	134		$	(4,272	)
Gain/loss on investments, net		(41	)		49			—			8			4,530
Non-GAAP other income (expense), net	$	655		$	(513	)	$	314		$	142		$	258

Page 8

NETGEAR, INC.

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)

(In thousands, except per share data)

(Unaudited)

STATEMENT OF OPERATIONS DATA (CONTINUED):

	Three Months Ended									Six Months Ended
	June 27,<br><br><br>2021			March 28,<br><br><br>2021			June 28,<br><br><br>2020			June 27,<br><br><br>2021			June 28,<br><br><br>2020
GAAP net income	$	17,834		$	22,960		$	5,983		$	40,794		$	1,810
Amortization of intangibles		178			1,445			1,519			1,623			3,038
Stock-based compensation expense		6,902			6,960			9,172			13,862			15,508
Change in fair value of contingent consideration		(3,003	)		—			311			(3,003	)		89
Restructuring and other charges		886			2,270			1,117			3,156			982
Litigation reserves, net		20			295			(3	)		315			22
Gain/loss on investments, net		(41	)		49			—			8			4,530
Non-GAAP tax adjustments		(1,971	)		(2,416	)		(1,778	)		(4,387	)		(3,289	)
Non-GAAP net income	$	20,805		$	31,563		$	16,321		$	52,368		$	22,690
NET INCOME PER DILUTED SHARE:
GAAP net income per diluted share	$	0.57		$	0.72		$	0.20		$	1.29		$	0.06
Amortization of intangibles		0.01			0.05			0.05			0.05			0.10
Stock-based compensation expense		0.22			0.22			0.31			0.44			0.52
Change in fair value of contingent consideration		(0.10	)		—			0.01			(0.09	)	0.00
Restructuring and other charges		0.03			0.07			0.04			0.10			0.03
Litigation reserves, net	0.00				0.01		(0.00)				0.01		0.00
Gain/loss on investments, net	(0.00)			0.00				—		0.00				0.15
Non-GAAP tax adjustments		(0.07	)		(0.08	)		(0.07	)		(0.15	)		(0.11	)
Non-GAAP net income per diluted share	$	0.66		$	0.99		$	0.54		$	1.65		$	0.75

Page 9

NETGEAR, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands, except per share data, DSO, inventory turns, weeks of channel inventory, headcount and percentage data)

(Unaudited)

	Three Months Ended
	June 27,<br><br><br>2021		March 28,<br><br><br>2021		December 31,<br><br><br>2020		September 27,<br><br><br>2020		June 28,<br><br><br>2020
Cash, cash equivalents and short-term investments	$	335,319	$	370,656	$	353,318	$	306,818	$	258,552
Cash, cash equivalents and short-term investments per diluted share	$	10.66	$	11.65	$	11.31	$	9.98	$	8.60
Accounts receivable, net	$	290,598	$	312,922	$	337,052	$	340,004	$	277,490
Days sales outstanding (DSO)		86		86		87		82		90
Inventories	$	251,764	$	215,705	$	172,112	$	144,302	$	150,585
Ending inventory turns		3.4		3.8		5.9		7.3		5.3
Weeks of channel inventory:
U.S. retail channel		12.9		11.8		8.6		5.7		6.4
U.S. distribution channel		3.4		3.6		4.9		2.8		4.2
EMEA distribution channel		7.8		4.9		5.7		6.8		4.7
APAC distribution channel		11.5		7.6		8.2		10.1		11.9
Deferred revenue (current and non-current)	$	18,482	$	18,116	$	16,623	$	13,813	$	10,792
Headcount		769		775		818		803		788
Non-GAAP diluted shares		31,464		31,814		31,235		30,741		30,070

NET REVENUE BY GEOGRAPHY

	Three Months Ended												Six Months Ended
	June 27,<br><br><br>2021				March 28,<br><br><br>2021				June 28,<br><br><br>2020				June 27,<br><br><br>2021				June 28,<br><br><br>2020
Americas	$	212,634	69	%	$	219,150	69	%	$	202,246	72	%	$	431,784	69	%	$	360,436	70	%
EMEA		61,772	20	%		61,090	19	%		48,359	17	%		122,862	20	%		90,507	18	%
APAC		34,405	11	%		37,685	12	%		29,447	11	%		72,090	11	%		59,072	12	%
Total	$	308,811	100	%	$	317,925	100	%	$	280,052	100	%	$	626,736	100	%	$	510,015	100	%

Page 10

NETGEAR, INC.

SUPPLEMENTAL FINANCIAL INFORMATION (CONTINUED)

(In thousands)

(Unaudited)

NET REVENUE BY SEGMENT

	Three Months Ended						Six Months Ended
	June 27,<br><br><br>2021		March 28,<br><br><br>2021		June 28,<br><br><br>2020		June 27,<br><br><br>2021		June 28,<br><br><br>2020
Connected Home	$	229,863	$	240,918	$	230,017	$	470,781	$	394,680
SMB		78,948		77,007		50,035		155,955		115,335
Total net revenue	$	308,811	$	317,925	$	280,052	$	626,736	$	510,015

SERVICE PROVIDER NET REVENUE

	Three Months Ended						Six Months Ended
	June 27,<br><br><br>2021		March 28,<br><br><br>2021		June 28,<br><br><br>2020		June 27,<br><br><br>2021		June 28,<br><br><br>2020
Connected Home	$	35,391	$	22,238	$	44,152	$	57,629	$	70,839
SMB		522		799		871		1,321		1,668
Total service provider net revenue	$	35,913	$	23,037	$	45,023	$	58,950	$	72,507

Page 11

ntgr-ex992_151.htm

Exhibit 99.2

NEWS RELEASE

NETGEAR APPOINTS DAVID J. HENRY TO BOARD OF DIRECTORS; PROMOTES TO PRESIDENT & GM OF CONNECTED HOME PRODUCTS AND SERVICES; GREGORY ROSSMANN TO TRANSITION OFF BOARD

San Jose, Calif. – July 21, 2021 – NETGEAR®, Inc. (NASDAQ: NTGR), the leading provider of award-winning connected products designed to simplify and improve people's lives, today announced it has appointed David J. Henry to join the company’s board of directors. The company also announced his promotion to President & GM of Connected Home Products and Services, where he will continue his leadership and management of NETGEAR’s comprehensive suite of products including the industry leading Orbi, Nighthawk, Nighthawk Pro Gaming, and Meural brands. David joined NETGEAR in 2004 as product line manager for WiFi routers and worked his way up through the organization to where he now leads the company’s connected home products and services business and is responsible for overseeing product management, product marketing, engineering and user experience.

David’s promotion and appointment to the board comes at a time when NETGEAR is more focused than ever on delivering premium networking products and services to its entire ecosystem of customers.  As a new member of the board, David will leverage his valuable experience in products, apps and services to drive NETGEAR’s strategy of delivering higher value added paid subscription services and accelerating the growth of the premium WiFi segment that NETGEAR created.

“I have had the pleasure of working alongside David and watching him grow for the past seventeen years in his time at NETGEAR, and I am thrilled to announce his well-deserved promotion to President & GM of Connected Home Products and Services and appointment to the Board, which I know will help take NETGEAR to new levels of innovation and growth,” said Patrick Lo, chairman and chief executive officer of NETGEAR. “As we celebrate the 25^th^ anniversary of NETGEAR and continue to look for innovative ways to deliver the best in connected products and services to our customers, we are excited for the perspective he brings to our board, and the diverse leadership our entire Board delivers. This is an exciting time for us at NETGEAR and we look forward to continuing to deliver premium WiFi experiences for our customers around the world.”

After nearly twenty years of distinguished service to the company, Gregory J. Rossmann, NETGEAR’s longest tenured board member, has announced that he will be stepping down from the board and transitioning to his next professional role effective December 31, 2021.  “After close to two decades of service to NETGEAR, which included helping guide the company through such transformative transactions as the acquisition of Sierra Wireless’ Aircard business and the acquisition of and subsequent IPO and spin-off of Arlo, we thank Greg for his tremendous contributions to the company and wish him all the best in his new role.  We will miss his wisdom and guidance immensely,” said Mr. Lo.

About NETGEAR, Inc.

NETGEAR® (NASDAQ: NTGR) has pioneered advanced networking technologies for homes, businesses, and service providers around the world since 1996 and leads the industry with a broad range of award-winning products designed to simplify and improve people's lives. By enabling people to collaborate and connect to a world of information and entertainment, NETGEAR is dedicated to delivering innovative and advanced connected solutions ranging from mobile and cloud-based services for enhanced control and security, to smart networking products, video over Ethernet for Pro AV applications, easy-to-use WiFi solutions and performance gaming routers to enhance online game play. The company is headquartered out of San Jose, Calif. with offices located around the globe. More information is available from the NETGEAR Investor Page or by calling (408) 907-8000. Connect with NETGEAR: Twitter, Facebook, Instagram and the NETGEAR blog at NETGEAR.com.

Source: NETGEAR-G

NETGEAR Investor Relations Erik Bylin investors@netgear.com

U.S. Media Contact:

PressRelations@NETGEAR.com

NETGEAR@AccesstheAgency.com

U.S. Sales Inquiries: (408) 907-8000, sales@netgear.com