Netgear Misses On Q2 Earnings, Issues Q3 Guidance Below Consensus

Netgear Inc NTGR reported second-quarter FY21 net revenue growth of 10.3% year-on-year to $308.8 million, missing the analyst consensus of $314.8 million.
Connected Home revenue remained flat at around $230 million. SMB revenue rose 57.8% Y/Y to $78.9 million.
The non-GAAP gross margin expanded 80 basis points to 30.4%.
Non-GAAP operating margin expanded 110 basis points to 8.6%.
Non-GAAP EPS of $0.66 missed the analyst consensus of $0.71.
It held $335.3 million in cash and equivalents as of June 27, 2021.
Netgear's conviction on premium WiFi to drive the growth of the consumer networking market and service subscriber base remains intact. It remains bullish on work from anywhere and hybrid work models.
It anticipates the U.S. consumer networking market to grow 20% above pre-pandemic levels in the second half of this year.
Netgear continues to regain market share in the U.S. consumer WiFi market, adding three points to end the quarter at 46%. It added 33,000 subscribers in the quarter and aimed for 650,000 subscribers by the end of the year.
Outlook: Netgear sees Q3 revenue of $285 million - $300 million, below the analyst consensus of $346.38 million.
It sees a non-GAAP operating margin of 5%-6%.
Price action: NTGR shares traded lower by 14.9% at $31.55 in the premarket session on the last check Thursday.

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