Investor Overview October 2020
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Investor Overview
October 2020
SAFE HARBOR DISCLOSURE This presentation 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. All product and company names herein are or may be trademarks of their respective owners.
Q3’20 HIGHLIGHTS Quarterly Revenue Of $378.1 Million 44% Share in U.S. Retail WiFi Market1 49% Share in U.S. Retail Switch Market2 16 Million Registered Users Worldwide 7.7 Million Registered App Users Worldwide 369,000 Service Subscribers 1 TheNPD Group, Inc., U.S. Weekly Retail Tracking Service, Networking Devices: Gateways, Range Extenders and Routers; Cellular ready technology: exclude 3G, 4G, 5G, Dual Band 3G/4G, LTE; Network Connectivity: exclude DSL and Powerline; Wireless; based on dollar sales, June 28, 2020 - Sept. 26, 2020. 2The NPD Group, Inc., U.S. Weekly Retail Tracking Service, Networking Devices, Switches, based on dollar sales, June 28, 2020 - Sept. 26, 2020.
O U R M I S S I O N
Be the innovative leader in
connecting the world to the internet.
Life revolves
around the
Internet
10 Gig
Tri-band Mesh Virtual 10/100Gig/MultiGig
experiences
displace
Sharing Moments Pro AV
physical
experiences
WiFi 6 Mesh APs
5G - mmWave
All enabled by
leading edge
Lag-free Gaming WiFi and Home Offices
Ethernet
WiFi 6 technologies PoE+/u
Connected Home PRODUCTS AND TECHNOLOGY
UNCOMPROMISED WIFI THROUGHOUT THE HOME
WORK LEARN STREAM
GAME EXERCISE SHOP
S TAY C O N N E C T E D SOCIALIZE VIDEO CONFERENCING
ORBI MESH WIFI NETGEAR Orbi WiFi 6 AX6000 Review: The Best Mesh Router Performance - You Get What You Pay For “Quite simply, the Orbi 6 was streets ahead and it’s the fastest mesh system I’ve ever used. It also has the widest and highest quality coverage I’ve seen” Unparalleled performance for every size home
W I F I 6 L E A D E R S H I P I N E V E R Y S I N G L E C AT E G O R Y
MESH RANGE
ROUTER CABLE
EXTENDER
S U P P L E M E N T E D W I T H N E TG E A R VA LU E A D D E D S E R V I C E S
S M A R T PA R E N TA L C O N T R O L S • Subscription $69.99/year • Managing the family’s Internet time has never been easier • Create healthy internet habits • Schedule off time and give positive rewards • Manage profiles, devices and content • Monitor online activity at home or away (WiFi or LTE) • Notifications to Orbi App
NE TGEAR ARMOR • Subscription $69.99/year • Advanced security on your NETGEAR router • Detect and block cyber threats • Such as phishing, malicious URLs and privacy attacks • Unlimited device protection • BitDefender VPN for secure internet browsing • Notifications to Orbi or Nighthawk App
4G/5G WIFI HOTSPOT
CONNECTIVITY ANYWHERE, ANYTIME
ONLINE LEARNING FIRST RESPONDERS M O B I L E H E A LT H C A R E
MOBILE SERVICE RV USERS CONSTRUCTION SITE
R U R A L L O C AT I O N BUSINESS TRAVEL – SECURE CONNECT U LT R A - FA S T 5 GMOBILE & FIXED WIRELESS
Better WiFi.
Anywhere.
Extending High Speed Internet Anywhere, Anytime
• Areas underserved by wired Internet • Nighthawk M5 5G mmWave/Sub6 Mobile Router
• Temporary or on-demand internet solution • Orbi 4G LTE Advanced WiFi Mesh
• 5G, LTE Advanced & WiFi 6 • Nighthawk LTE WiFi RouterENHANCED ONLINE GAMING EXPERIENCE
NETGEAR Differentiation Cloud gaming needs low latency WiFi
Gaming server selection $4.5B
Game specific QoS Cloud Gaming WiFi 6 is key to success in gaming
Spending by 2024*
Real time ping monitoring
*“5G and New Services Will Push Cloud Gaming Market to US$4.5 Billion and 42 Million Active Cloud Gaming Users By 2024,” ABI Research, 11/13/2019MEURAL WIFI PHOTO FRAME
STAY CONNECTED WITH FAMILY, EVEN WHEN APART
Share life’s moments, instantly.
SHARE PHOTOS WITH FAMILY & FRIENDS ON CONNECTED MEURAL FRAMES AROUND THE WORLD
New 15” Frame Available online and in Best Buy Auto sync from phone to frameCHP STRATEGY Up ASP To Expand TAM Capitalize On New Virtual World Sell Subscription To Expand OM%
SMB Segment PRODUCTS AND TECHNOLOGY
H I S T O R Y O F I N N O V AT I O N I N S M B
Switches Fully Designed
Half Width 16-port for AV over IP
First DIY WiFi Mesh PoE+ ProAV Switch
Solution for Business 2020
First App Managed
2020
First 10G Smart Access Point 2019
2019
First Smart Switch 2018
Switch 2017
2017 High-Performance
2017
2014 WiFi 6 Mesh
2011 100G Core Switch Access Points
2010
2003 ProAV 48/96
First Fully Autonomous 10G Switch
Flexible Mounting Cloud Management
First Lightly Managed Click Switch Switch
Plus SwitchSMALL BUSINESS & HOME OFFICE SOLUTIONS – BOOMING DEMAND High performance, secure WiFi Simple to set up Easy network management
NETGEAR SOHO SOLUTIONS
SCREENSHOT
WiFi 6 Mesh & Mesh Access Points Business Routers & VLAN PoE switches Insight Remote ManagementINSIGHT & INSIGHT PRO
EASY NETWORK MANAGEMENT, LOCAL & REMOTE
SCREENSHOT
DIY Managed Service Providers
$5 per year per device $15 per year per deviceP R O A V A P P L I C AT I O N S VIDEO CONFERENCING E D U C AT I O N LUXURY RESIDENTIAL D I S TA N T M E D I C A L S U R G E R I E S SMALL & MOBILE EVENTS COMMAND & CONTROL CENTERS GREEN SCREEN REPLACEMENT S TA G E S B A C K D R O P S TRANSPORT TERMINALS
SMB STRATEGY Capitalize Home Office Demand Catch The Pro AV Revolution Grow Insight Subscription
Financials 25
Quarterly Net Revenue
(Net Revenue, $ Millions)
$400
$378
$350
$300
$289
$280
$250 $266
$249 $253
$231 $230
$200
*
$150
$100
$50
$0
4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20Segment Performance
(Net Revenue, $ Millions)
CONNECTED HOME SMB
350 100
90
300
80
250 70
60
200
50
150
40
100 30
20
50
10
0 0
4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Retail Service ProviderRegional Performance
(Net Revenue, $ Millions)
AMERICAS EMEA A PA C
300 70 80
60 70
250
60
50
200
50
40
150 40
30
30
100
20
20
50 10 10
0 0 0
4Q181Q192Q193Q194Q191Q202Q203Q20 4Q181Q192Q193Q194Q191Q202Q203Q20 4Q181Q192Q193Q194Q191Q202Q203Q20Operating Margin
(Non-GAAP, % of Revenue)
12%
10.9%
10%
9.4%
9.1%
8%
7.8%
7.5%
6%
4% 4.4% 4.4%
3.6%
2%
0%
4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20Earnings Per Share
(Non-GAAP, $ per Share)
$1.20
$1.13
$1.00
$0.80
$0.60 $0.68
$0.65
$0.60
$0.54
$0.40
$0.34
$0.20 $0.28
$0.21
$0.00
4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20Cash Balance
(Cash, Cash Equivalents and Short-Term Investments, $ Millions)
$350
$300
$307
$274
$250 $259
$200 $213 $218 * $210
$196
$150 $172
$100
$50
$0
4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
31You can also read
