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):

October 21, 2020

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 October 21, 2020, NETGEAR, Inc. issued a press release announcing its financial results for its third fiscal quarter ended September 27, 2020, 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 9.01    Financial Statements and Exhibits.

(d)	Exhibits
Exhibit Number	Description
---	---
99.1	Press Release, Dated October 21, 2020
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:  October 21, 2020

NETGEAR, INC.

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

ntgr-ex991_6.htm

Exhibit 99.1

NEWS RELEASE

NETGEAR^®^ REPORTS THIRD QUARTER 2020 RESULTS

Revenue of $378 Million - 42% Growth Year over Year

Record Quarterly Earnings Per Share

Expects Strong Demand Trend to Continue into 2021

SAN JOSE, California – October 21, 2020 - 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 third quarter ended September 27, 2020.

•	Third quarter 2020 net revenue of $378.1 million, an increase of 42.2% from the comparable prior year quarter.
•	Third quarter 2020 GAAP operating income of $32.2 million, or 8.5% of net revenue, as compared to operating income of $12.1 million, or 4.5% of net revenue, in the comparable prior year quarter.
---	---
◦	Third quarter 2020 non-GAAP operating income of $41.4 million, or 10.9% of net revenue, as compared to $20.8 million, or 7.8% of net revenue in the comparable prior year quarter.
---	---
•	Third quarter 2020 GAAP net income per diluted share of $0.83, as compared to $0.39 in the comparable prior year quarter.
---	---
◦	Third quarter 2020 non-GAAP net income per diluted share of $1.13, as compared to $0.65 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, “The robust demand for WiFi that reliably covers the entire household continued in Q3 and signs point to this trend continuing well into next year.  We entered the quarter sharply focused on delivering to this demand and our team worked tightly with our supply chain and retail partners to produce outstanding results. In Q3 we grew revenue 42% year over year to $378 million.  With the elevated revenue level unlocking leverage in the business, the result was record earnings per share. As the pandemic persists, it is clear that families are adapting their lives to accommodate the need to pursue more of their daily activities virtually from home. This “more from home” transition is stretching well beyond work and school to include movie premieres, doctor visits, grocery shopping, fitness classes and visiting loved ones, and they now all require a whole home, fast and reliable WiFi connection. As the innovation and technology leader, NETGEAR is uniquely suited to help families seamlessly adjust to this new environment.”

Mr. Lo continued, “This trend naturally buoys the CHP side of the business, where our growth is strong across wireless routers and mesh systems and mobile hot spots. We continued to adapt our SMB offerings in Q3 to drive more sophisticated home office setups, including low port count switches and commercial grade WiFi, generating 23% sequential growth. In Q3 we added seventy six thousand subscribers for a total of three hundred and sixty nine thousand, and have already exceeded our full year goal of doubling our subscribers from the end of last year. We are poised to continue this momentum.”

Bryan Murray, Chief Financial Officer of NETGEAR, added, “We had another quarter of strong cash flow, generating $42.9 million in cash from operations in the third quarter. Preserving strong liquidity and generating cash are paramount during these uncertain times, and we are confident in our ability to do so in the near term. Although the full economic impact and duration of the current pandemic remain unclear, we believe we remain well positioned to serve the demand trends we are currently seeing in the marketplace.”

Page 1

Business Outlook

Mr. Murray continued, “We expect continued strength in our end market demand for home networks. With that said, new cases of COVID-19 have reaccelerated across many countries and there is still considerable uncertainty around the effects on many of our major markets. This makes our business difficult to forecast, and heightens the risk of supply chain disruption. Given this, we feel it is prudent to continue to suspend our practice of giving guidance for the fourth quarter of 2020.”

Investor Conference Call / Webcast Details

NETGEAR will review the third quarter results and discuss management's expectations for the fourth quarter of 2020 today, Wednesday, October 21, 2020 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 5065579. 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.

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. NETGEAR products are sold in approximately 24,000 retail locations around the globe, and through approximately 21,000 value-added resellers, as well as multiple major cable, mobile and wireline service providers around the world. The company's headquarters are in San Jose, Calif., with additional offices in approximately 20 countries. More information is available at http://investor.netgear.com or by calling (408) 907-8000. Connect with NETGEAR at http://twitter.com/NETGEAR and http://www.facebook.com/NETGEAR.

© 2020 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

Page 2

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; 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; 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 developing new products and manufacturing and distribution of its existing offerings; 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 June 28, 2020, filed with the Securities and Exchange Commission on July 31, 2020. 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, separation expense, change in fair value of contingent consideration, restructuring and other charges, litigation reserves, net, gain/loss on investments, net, and the related tax effects. These non-GAAP 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;
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Page 3

•	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 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: separation expense, 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.

Tax effects consist of the various above 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-

Page 4

NETGEAR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	As of
	September 27,<br><br><br>2020			December 31,<br><br><br>2019
ASSETS
Current assets:
Cash and cash equivalents	$	300,492		$	190,208
Short-term investments		6,326			5,499
Accounts receivable, net		340,004			277,168
Inventories		144,302			235,489
Prepaid expenses and other current assets		31,588			35,745
Total current assets		822,712			744,109
Property and equipment, net		15,313			17,683
Operating lease right-of-use assets, net		31,181			28,917
Intangibles, net		5,390			10,104
Goodwill		80,721			80,721
Other non-current assets		72,954			74,279
Total assets	$	1,028,271		$	955,813
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	87,747		$	80,531
Accrued employee compensation		29,772			20,024
Other accrued liabilities		196,297			189,547
Deferred revenue		10,883			6,450
Income taxes payable		1,299			1,839
Total current liabilities		325,998			298,391
Non-current income taxes payable		18,290			15,307
Non-current operating lease liabilities		27,395			25,434
Other non-current liabilities		10,321			7,988
Total liabilities		382,004			347,120
Stockholders’ equity:
Common stock		30			30
Additional paid-in capital		868,985			831,365
Accumulated other comprehensive income (loss)		(112	)		21
Accumulated deficit		(222,636	)		(222,723	)
Total stockholders’ equity		646,267			608,693
Total liabilities and stockholders’ equity	$	1,028,271		$	955,813

Page 5

NETGEAR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share and percentage data)

(Unaudited)

	Three Months Ended									Nine Months Ended
	September 27,<br><br><br>2020			June 28,<br><br><br>2020			September 29,<br><br><br>2019			September 27,<br><br><br>2020			September 29,<br><br><br>2019
Net revenue	$	378,114		$	280,052		$	265,858		$	888,129		$	745,792
Cost of revenue		264,620			198,751			188,666			627,093			521,147
Gross profit		113,494			81,301			77,192			261,036			224,645
Gross margin		30.0	%		29.0	%		29.0	%		29.4	%		30.1	%
Operating expenses:
Research and development		24,529			21,144			19,537			65,412			57,183
Sales and marketing		39,794			34,384			33,491			107,209			103,887
General and administrative		16,467			15,481			11,887			45,082			35,467
Other operating expenses, net		538			1,425			212			1,631			1,709
Total operating expenses		81,328			72,434			65,127			219,334			198,246
Income from operations		32,166			8,867			12,065			41,702			26,399
Operating margin		8.5	%		3.2	%		4.5	%		4.7	%		3.5	%
Interest income		98			49			639			409			2,122
Other income (expense), net		(515	)		314			(403	)		(4,787	)		425
Income before income taxes		31,749			9,230			12,301			37,324			28,946
Provision (benefit) for income taxes		6,214			3,247			(228	)		9,979			2,735
Net income	$	25,535		$	5,983		$	12,529		$	27,345		$	26,211
Net income per share:
Basic	$	0.85		$	0.20		$	0.41		$	0.92		$	0.84
Diluted	$	0.83		$	0.20		$	0.39		$	0.90		$	0.81
Weighted average shares used to compute net income per share:
Basic		30,037			29,617			30,933			29,746			31,221
Diluted		30,741			30,070			31,819			30,341			32,327

Page 6

NETGEAR, INC.

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except percentage data)

(Unaudited)

STATEMENT OF OPERATIONS DATA:

	Three Months Ended									Nine Months Ended
	September 27,<br><br><br>2020			June 28,<br><br><br>2020			September 29,<br><br><br>2019			September 27,<br><br><br>2020			September 29,<br><br><br>2019
GAAP gross profit	$	113,494		$	81,301		$	77,192		$	261,036		$	224,645
GAAP gross margin		30.0	%		29.0	%		29.0	%		29.4	%		30.1	%
Amortization of intangibles		179			179			179			536			536
Stock-based compensation expense		923			1,501			706			3,129			2,129
Non-GAAP gross profit	$	114,596		$	82,981		$	78,077		$	264,701		$	227,310
Non-GAAP gross margin		30.3	%		29.6	%		29.4	%		29.8	%		30.5	%
GAAP research and development	$	24,529		$	21,144		$	19,537		$	65,412		$	57,183
Stock-based compensation expense		(1,138	)		(1,707	)		(1,496	)		(3,879	)		(3,976	)
Non-GAAP research and development	$	23,391		$	19,437		$	18,041		$	61,533		$	53,207
GAAP sales and marketing	$	39,794		$	34,384		$	33,491		$	107,209		$	103,887
Amortization of intangibles		(1,291	)		(1,340	)		(1,341	)		(3,972	)		(4,676	)
Stock-based compensation expense		(1,927	)		(1,890	)		(2,097	)		(5,596	)		(6,223	)
Non-GAAP sales and marketing	$	36,576		$	31,154		$	30,053		$	97,641		$	92,988
GAAP general and administrative	$	16,467		$	15,481		$	11,887		$	45,082		$	35,467
Stock-based compensation expense		(3,230	)		(4,074	)		(2,687	)		(10,122	)		(7,855	)
Non-GAAP general and administrative	$	13,237		$	11,407		$	9,200		$	34,960		$	27,612
GAAP other operating expenses, net	$	538		$	1,425		$	212		$	1,631		$	1,709
Separation expense		—			—			—			—			(264	)
Change in fair value of contingent consideration		(187	)		(311	)		(199	)		(276	)		(199	)
Restructuring and other charges		(329	)		(1,117	)		77			(1,311	)		(1,146	)
Litigation reserves, net		(22	)		3			(90	)		(44	)		(100	)
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									Nine Months Ended
	September 27,<br><br><br>2020			June 28,<br><br><br>2020			September 29,<br><br><br>2019			September 27,<br><br><br>2020			September 29,<br><br><br>2019
GAAP total operating expenses	$	81,328		$	72,434		$	65,127		$	219,334		$	198,246
Amortization of intangibles		(1,291	)		(1,340	)		(1,341	)		(3,972	)		(4,676	)
Stock-based compensation expense		(6,295	)		(7,671	)		(6,280	)		(19,597	)		(18,054	)
Separation expense		—			—			—			—			(264	)
Change in fair value of contingent consideration		(187	)		(311	)		(199	)		(276	)		(199	)
Restructuring and other charges		(329	)		(1,117	)		77			(1,311	)		(1,146	)
Litigation reserves, net		(22	)		3			(90	)		(44	)		(100	)
Non-GAAP total operating expenses	$	73,204		$	61,998		$	57,294		$	194,134		$	173,807
GAAP operating income	$	32,166		$	8,867		$	12,065		$	41,702		$	26,399
GAAP operating margin		8.5	%		3.2	%		4.5	%		4.7	%		3.5	%
Amortization of intangibles		1,470			1,519			1,520			4,508			5,212
Stock-based compensation expense		7,218			9,172			6,986			22,726			20,183
Separation expense		—			—			—			—			264
Change in fair value of contingent consideration		187			311			199			276			199
Restructuring and other charges		329			1,117			(77	)		1,311			1,146
Litigation reserves, net		22			(3	)		90			44			100
Non-GAAP operating income	$	41,392		$	20,983		$	20,783		$	70,567		$	53,503
Non-GAAP operating margin		10.9	%		7.5	%		7.8	%		7.9	%		7.2	%
GAAP other income (expense), net	$	(515	)	$	314		$	(403	)	$	(4,787	)	$	425
Gain/loss on investments, net		842			—			223			5,372			223
Non-GAAP other income (expense), net	$	327		$	314		$	(180	)	$	585		$	648

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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									Nine Months Ended
	September 27,<br><br><br>2020			June 28,<br><br><br>2020			September 29,<br><br><br>2019			September 27,<br><br><br>2020			September 29,<br><br><br>2019
GAAP net income	$	25,535		$	5,983		$	12,529		$	27,345		$	26,211
Amortization of intangibles		1,470			1,519			1,520			4,508			5,212
Stock-based compensation expense		7,218			9,172			6,986			22,726			20,183
Separation expense		—			—			—			—			264
Change in fair value of contingent consideration		187			311			199			276			199
Restructuring and other charges		329			1,117			(77	)		1,311			1,146
Litigation reserves, net		22			(3	)		90			44			100
Gain/loss on investments, net		842			—			223			5,372			223
Tax effects of above non-GAAP adjustments		(912	)		(1,778	)		(725	)		(4,201	)		(4,138	)
Non-GAAP net income	$	34,691		$	16,321		$	20,745		$	57,381		$	49,400
NET INCOME PER DILUTED SHARE:
GAAP net income per diluted share	$	0.83		$	0.20		$	0.39		$	0.90		$	0.81
Amortization of intangibles		0.05			0.05			0.05			0.15			0.16
Stock-based compensation expense		0.23			0.31			0.22			0.75			0.62
Separation expense		—			—			—			—			0.01
Change in fair value of contingent consideration		0.01			0.01			0.01			0.01		0.00
Restructuring and other charges		0.01			0.04		(0.00)				0.04			0.04
Litigation reserves, net	0.00			(0.00)			0.00			0.00			0.00
Gain/loss on investments, net		0.03			—			0.01			0.18			0.01
Tax effects of above non-GAAP adjustments		(0.03	)		(0.07	)		(0.03	)		(0.14	)		(0.12	)
Non-GAAP net income per diluted share	$	1.13		$	0.54		$	0.65		$	1.89		$	1.53

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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
	September 27,<br><br><br>2020		June 28,<br><br><br>2020		March 29,<br><br><br>2020		December 31,<br><br><br>2019		September 29,<br><br><br>2019
Cash, cash equivalents and short-term investments	$	306,818	$	258,552	$	209,714	$	195,707	$	171,917
Cash, cash equivalents and short-term investments per diluted share	$	9.98	$	8.60	$	6.98	$	6.35	$	5.40
Accounts receivable, net	$	340,004	$	277,490	$	257,582	$	277,168	$	248,070
Days sales outstanding (DSO)		82		90		100		102		85
Inventories	$	144,302	$	150,585	$	180,602	$	235,489	$	275,584
Ending inventory turns		7.3		5.3		3.6		3.1		2.7
Weeks of channel inventory:
U.S. retail channel		5.7		6.4		7.0		8.0		8.6
U.S. distribution channel		2.8		4.2		5.7		4.5		5.4
EMEA distribution channel		6.8		4.7		6.7		5.9		5.8
APAC distribution channel		10.1		11.9		8.3		9.6		7.8
Deferred revenue (current and non-current)	$	13,813	$	10,792	$	8,963	$	8,511	$	7,712
Headcount		803		788		797		809		802
Non-GAAP diluted shares		30,741		30,070		30,045		30,800		31,819

NET REVENUE BY GEOGRAPHY

	Three Months Ended												Nine Months Ended
	September 27, 2020				June 28,<br><br><br>2020				September 29, 2019				September 27, 2020				September 29, 2019
Americas	$	277,891	73	%	$	202,246	72	%	$	178,679	67	%	$	638,327	72	%	$	483,878	65	%
EMEA		63,705	17	%		48,359	17	%		49,554	19	%		154,212	17	%		149,608	20	%
APAC		36,518	10	%		29,447	11	%		37,625	14	%		95,590	11	%		112,306	15	%
Total	$	378,114	100	%	$	280,052	100	%	$	265,858	100	%	$	888,129	100	%	$	745,792	100	%

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NETGEAR, INC.

SUPPLEMENTAL FINANCIAL INFORMATION (CONTINUED)

(In thousands)

(Unaudited)

NET REVENUE BY SEGMENT

	Three Months Ended						Nine Months Ended
	September 27,<br><br><br>2020		June 28,<br><br><br>2020		September 29,<br><br><br>2019		September 27,<br><br><br>2020		September 29,<br><br><br>2019
Connected Home	$	316,739	$	230,017	$	190,672	$	711,419	$	527,532
SMB		61,375		50,035		75,186		176,710		218,260
Total net revenue	$	378,114	$	280,052	$	265,858	$	888,129	$	745,792

SERVICE PROVIDER NET REVENUE

	Three Months Ended						Nine Months Ended
	September 27,<br><br><br>2020		June 28,<br><br><br>2020		September 29,<br><br><br>2019		September 27,<br><br><br>2020		September 29,<br><br><br>2019
Connected Home	$	73,343	$	44,152	$	35,482	$	144,182	$	99,201
SMB		712		871		972		2,380		3,370
Total service provider net revenue	$	74,055	$	45,023	$	36,454	$	146,562	$	102,571

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