NTGR - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by. At this time, all participants are in 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.

Erik Bylin

Mike. you, Thank welcome conference and quarter XXXX of Good NETGEAR’s results call. financial afternoon, first

from Mr. Joining and Company the us are Mr. Murray, CEO; Patrick Bryan CFO. and Chairman Lo,

of questions. by provided by of with any followed call, time with we’ll business Format on and second Bryan. XXXX Bryan, have for and provided for of quarter a quarter by by the Patrick, review We’ll first then the the commentary start provided the details guidance financials off finish

If received Investor press website not you please at release, today’s have of copy a visit Relations NETGEAR’s www.netgear.com.

the we contains Before formal we conference today’s you call begin statements. remarks, advise that forward-looking

those Forward-looking operating outlook. contemplated margins, forward-looking statements statements. future revenue, trends business expected Actual and statements include tax results rates, from could by regarding these expenses or materially differ

please we risk Form of call most on the update in For factors new SEC, with obligation a no that future to recent are information these filings and on more as the statements to statements events. result discussed make the as forward-looking information, of periodic NETGEAR’s today, assumptions NETGEAR including undertakes based or this XX-K. Any refer

be the addition, on this of over Mr. I time, be to several the will GAAP like release turn non-GAAP our today’s in Bryan mentioned call to to website. non-GAAP measures reconciliation A In At this press call. financial Murray. can on found Relations measures Investor would now

Bryan Murray

our and call. as reported of joining out above setting Thank supply put full range business delivered both you, December target ease the the saw slightly. Erik, We achieve net constraints our today’s perform great the last We to year start at Day. just and for everyone, well, sides the guided at pace we you, a revenue to year, thank Analyst we

and the quarter by performance. levels. while the the XX, elongated our strong CHP ended SMB and revenue constraints for channel XXXX was freight in continuing Our times lowering expected than product up bring from first XX.X% significantly Net chip from growth fourth primarily the transportation quarter driven better suppliers in $XXX.X million, to navigated our around operations team spend retail March year-over-year,

Our momentum in across their businesses. quarter both offerings leading WiFi the X continued first

continue in the above million. basis on non-GAAP range well to work work-from-home improvement In with focus of delivering business, networking coupled to support This in trajectory SMB income points SMB do quarter, at the AV XXX fourth strong of higher a growth guidance the right basis range, XX.X% better translated of record products for growth. we business, first market our the XXXX expected generated we of an experienced we the year-over-year Additionally, the end continued upward performance a guidance $XX.X the non-GAAP first our top resulted operating from into our XXXX. than Relative and carries operating margins. to over our of XX.X%, XXX margin which points quarter over Pro quarter

e-commerce an improved business mix from we channel. margin saw higher the Additionally, coming of

three factors our previously, well to was operating to planned airfreight in All contributed on below able mentioned spend As above meaningfully team levels. non-GAAP expectations. operations coming margin lower our initial

spent the we in quarter. later originally on supply improved expected, arrived While much of airfreight the less than

in participation efforts, recruit seen opportunity market should do subscribers. the we which is driving across end only with position The strength our key increased allow share by quarter. quarter. well growth business. we some year-over-year to in result, even business, share globe further demand mesh inventory strength SMB as gains in an a our As market the as we we replenish premium assist in for channel geographies, We selectively our increase didn’t as in promotional solid led thus, double in more second with increase believe paid of in promotional products business could gains towards we have And in of CHP and and the experienced including solid from the into activities, promotional digit our quarter the to the the planned partners, the channel all our modest heading we’re delivered goal efforts

For net revenue quarter sequential year-over-year was $XXX.X was up on XXXX, which is million, down of $XX.X XX.X% million, and EMEA up XX.X% Americas and the X.X% revenue year-over-year the net which first down for a was XX.X% quarter-over-quarter. basis.

from which prior sequentially. million, X.X% comparable $XX.X year was and revenue net was XX.X% down quarter the APAC Our up

today. XX% wired units, all quarter point our XXXX. wireless of XX% between combined products For between of in my split million contribute solutions. million respectively. contributed and Sequentially, With by to introduced should of and was XX%, up revenue including gross in which first airfreight, to this points products channels, further quarter will XX.X% of shipments, SMB share year-over-year comparable spending XXXX about earlier about which lower to XXX demand through lower the first XX.X% products all quarter non-GAAP of months in in the benefit prior GAAP the our wireless shipped on, improve going spend Shipments by the were The in first returns, XX From and consumers contributed paid mesh reconciliation is shipments. associated we net in XX split to margins The growth e-commerce points gross routers higher was selectively to product last compared from of months net supply, the introduced distributed the on increase basis quarter and compared business we market to led focus nodes The revenue our XXXX, first on mix margin higher million basis quarter premium home of margins. about released XXXX. and XXX The the and of products numbers. to and in up XX%, improving discussion driven first improved wireless for brings Products The gateways last plan quarter X.X about with which year was earnings improvement of fourth units XX.X%, as accelerate added approximately gains, XX% while wired about constituted points was products. non-GAAP of our promotional the detailed costs X.X non-GAAP subscribers. quarter revenue respectively. X.X is of for total XX% a and

levels. In by performance we which ahead. not a likely sequentially. is sea we’ve times the came XX.X% addition higher non-GAAP and believe as to quarters activities, operating the consequence, term of the And X QX X in promotional QX near down X.X% an cost up margin to seen transportation Total gross historical uptick year-over-year ‘XX in expenses repeat to $XX.X million, is in at times

spend. to continues environment team while proportionately adding operating challenging Our less navigate a

were to on revenue XX% result, growth. able a a year-over-year unlock As leverage considerable we

the portions As the so have always, our prudently also to our that they we manage succeed. expenses they growth of adequately we business need while fund resources ensuring

XXX paid Our business, of fund efficiencies. as offices subscription headcount consolidated the as of of business. APAC our in resources, was to investment some down the region gain the XXX in areas other end supporting such our will This as QX in quarter, cost the further we from of some

add deliver growth. we’ll We resources continue will headcount, future but that we manage our believe in to to areas invest

in expense are quarter net and year revenue X% service XXXX. was fourth revenue comparable technology the revenue continued to in first our of To in R&D Our period non-GAAP X.X% quarter investment leadership, net the net of the as continue and X.X% to we prior of subscription of for R&D. compared committed

tax the quarter of first was XX.X% in XXXX. non-GAAP Our

each we substantially QX, prior non-GAAP non-GAAP line for reported $XX.X bottom Looking period. than at higher the the and million income of of EPS year $X.XX, net diluted

Turning sheet. stock to quarter. position in to $XX.X million will $XXX.X were in from We and the prior our million million second first quarter. We levels. improve continue We quarter, inventory our strengthen incrementally also ended to the investments, position cash believe the up adding to short-term with the the quarter able XXXX our balance supply of $XX.X in

flow $X.X quarter, the purchase million. expenditures million operations and cash the to total trailing cash the generated provided during used property $XX.X XX total our in our months $XXX.X XX months over for $XX.X the million. of in which brings operations, During which cash brings from used We quarter, to from we over trailing equipment million capital

we plan own reestablish inventory to XXXX. carrying normal of highlighted, our levels previously in we As

expect by a As income to non-GAAP normal our in we fair we our to be a below ratio year a result, XXX% basis. in amount full net of conversion QX, ability continue as generate saw remain of on to confident XX% cash to we but

WiFi our solutions. sequentially. up gain fully segment by quarter, supply in year-over-year XX.X% quarter share the the as primarily generated of product strong quarter, $XX were much first we including products channel years. growth solution. retail the strong revenue on given XX.X% X.X% entering Nighthawk the for for two able first work-from-home Gaming a the to of In quarter, as strong points highest Home SMB net segment, which and turning count in executed in position for to second our of year-over-year quarter revenue position solutions, was channel quarter. past X and leadership quarterly driven well growth and consumer and in on the The basis will our generated the basis during expect on up was our the improved XXXX, by Nighthawk, market heightened for up regaining The well our WiFi, supply includes $XXX.X in switches exceptionally existing XX%, share SMB XX.X% we SMB our Meural is Orbi, is a the This WiFi year-over-year which continue in wireless for The segments. demand million sequentially. port to industry-leading business which results X X the brands, low for first the for we and Now, improve demand of to down the Pro net despite quarter, million driven the is revenue premium U.S. Connected headwinds The

we particularly also and AV of business, growth with at resuming venues. which performance signs offices of are year-over-year meaningful pleased business We see activities entertainment as our the experienced sports Pro

the in second came I’ll switches channel retail in turn his of Patrick now U.S. quarter Our after market commentary, I for XXXX. call provide for in XX% the share QX. guidance to at the will sold over which through

Patrick Lo

Bryan. you, Thank

from progress XXXX, are As seeing progress recovery through we the of we pandemic. world’s slow the the

continents prevalent are from high and becoming remain other in cases states. many variants New

growth venues spending reopening year, the end difficult more of plans federal are planning tunnel. It adjusted for surprisingly people technological to home. and from is progress towards steering and and quickly clear reopening, dialed multiple one albeit the accelerated that pandemic activities sports unprecedented at and entertainment has of state back at offices, light business and years XXXX capacity. into and small plans large, vaccine a Businesses, rollout signs a accelerated point However, to of the with off of and time

to However, spearheaded growth premium high-speed enable patio segment necessity. a transition, the in home the entire WiFi, This this has become by covers connectivity and internet the that yard reliable, home rapid even highly with mesh or X WiFi architecture, everything from market. spurred do NETGEAR fuel every tri-band be and of pioneered to houses home continues cover need reliable for which leader corner and the the to internet home. These large solutions in and supply that to the work the of families

continues these grow these period. comparable of the WiFi the quickly, value-added in we on premium X% in XX% rising in for X see connected. all the prices, activities and people benefits the demand a in year and QX long has WiFi highest their would the of tri-band and see a first and strong help leading-edge $XXX setup no clearly prior we from controls have demands, we MKXX, and control satellite from system This the retails most This shipping of QX, mesh Tri-Band and the Given our the among the the has prospect loyal market. with bands. to XX% Last like announced the different settings and that mesh and those products at SSID slowdown Nighthawk The it we to margins represented the who mesh in highest QX is in satisfies WiFi as more U.S. for real-time innovative category products use services, to WiFi, quarter, the of the kits. it QoS system, Nighthawk our model following started router brand home garners devices our attaching market keep segment our desire for the needs which Nighthawk consumers anticipated Tri-Band two healthiest WiFi continues meet put such it QX. deliver NETGEAR base. the The demanding performance. Nighthawk to in MKXX in This

the Equally and available of enabling Tri-Band RAXEXXX the seeing market in market with a meaningful rental speeds in high-quality now provide and which a X product purchasing from speeds rate CAXXX. performance we this today. retail have XE XE of uploads from X.X DOCSIS The in us of U.S., WiFi households competitor demand in X WiFi the cable CHP operators. WiFi we avoiding pleased to WiFi WiFi thus speeds the QX introduce are X.X operators XX% gives this have match, of DOCSIS cable the internet to price our quite the the fees X multitude downloads reception about of $XXX. video also built one total multiple technology There are gigabits while all-in-one is and We is a combining category and the and The the products monthly power benefits router WiFi X the Last possess subscribing multi-gigabit substantial Nighthawk of speed from WiFi which product at entry-level they of of strong important to and side, the modems product With yet the routers cable a least, is our product. that the X-K second on of subscription cable but customers home, in gateway, U.S. not launched ultra-premium across option introduction gaming. devices one an attach to we as cable cable with of for WiFi only the share. category, services debuted

performance an subscriber building share. bodes in paid in channel, picture for the with the improving QX us This paid QX. continue regaining build from XXX,XXX opportunity to ended the with the supply we As we to see our in we second in quarter U.S. on acquisition, subscribers make to enter progress that market well

goal the we year track We are about and of we’re on long-term by end, impact meet profitability our to our subscribers XXX,XXX excited that have on business.

offerings the our Gartner our service that Additionally, in the Controls with Smart we’ll second this earlier quarter service CES at improve on Parental rollout of accolades year.

features gaming of the bring progress our make those with the for loving of business. share Following router to that service online plan market Orbi of that, we continue Tri-Band SMB second the gaming in I’m happy a half to WiFi we this our to great our through also systems. customers year offering premium very X to lineup

low solutions PoE with environments. with to businesses count meet fixed Our demand switches home continue best-in-class working equip WiFi sophisticated efforts offices as strong to configurable transition in functional flexible highly port to

opportunity, and to strengthen to Additionally, with opening is switching businesses our accelerating. on differentiation. is capacity. we switching benefit better Pro to navigating COVID-related to which AV includes challenges sports seeing of capitalize venues so, are and added reopening more and line, This continue at the economies improve, intend beginning investing business entry sophisticated We entertainment these our in of this and levels to areas do also

complex install and video overall seamlessly AV and manage. specific line highest audio AV digital signals. make to provide switches and in higher user offerings tailored expand switch easy wattage, releases the our deployments deliver AV the while XXXX These recent successful presets quality product interfaces, Our Pro are AV transporting highly and to

obstacles Bryan lies And Murray We’re foundation both I’ll excited with it base. and supply our the quarter. for turn on ahead, given further for and and over tailwinds market to driving businesses the in what opportunities improving coming with subscriber solid comment opportunities share outlook, a our gain that, increasing across to the

Bryan Murray

Thank you, Patrick.

to the X% to for operating to operating to is XX%. million. in the is GAAP the And range be second revenue range be X.X%. million margin to expected in range of expected quarter net $XXX to of of margin Our in non-GAAP the expected X.X% be $XXX

opportunity back As do channel us channel events drive levels, to and our acquisition. progresses market selectively turn present with expect grow sales healthy QX key including we an will inventory to in our partners, subscriber promotions on, to continue to to participation allowing share paid of some

QX will their X level, cost to airfreight costs times see at transport the normal rate. to sea X stay while Additionally, rising we

for GAAP quarter is second to XXXX. expected be rate be our the XX.X% expected XX%, of Our and tax to rate is approximately tax non-GAAP

transportation any differ particular, our could would occur, are to with uncertainty we unforeseen results actual confident that While from provide to at the caveat remains our events this the of time, from regional questions in related market to COVID-XX answer pandemic the considerable our we so foregoing delays in centers, into should and, We guidance. due do to like ability audience. distribution in the now any the guidance

Operator

Instructions] from Please [Operator comes of first Deutsche from the go question Jeffrey line Your ahead. Rand Bank.

Jeffrey Rand

taking for Thanks Hi. question. the

being remaining With activities? more chip the running participating in activities discuss still more relatively you thought quarter. in global the demand just can promotional for tight You talked supply about and process strong, second promotional

Patrick Lo

Yes.

have share, have our we actually we like we lock with As and momentum steps regain to would continue partners. that be said in to also to the channel

gain channel partners our share. to which QX, paid our to really to momentum this gaining for base a us continue shares, to would we So, opportune of the course, to with of some us. we the very for to that is activities try like And going. And have seasonally is believe in is promotional have planned and a long-term the most for increase importance keep benefit weaker continue good time a subscribers, to the to work installed

the last subscribers when is two the recruit We reason product, at driving years decision. why opportune time new to have a install that’s found point the the out they our over that most service and

Jeffrey Rand

approach we business the be open? offices the less more continues are partially follow-up, people by my the trajectory SMB home return setting how about to global as traditional economy up or to as you office? offset that thinking just Will And of as your

Patrick Lo

so. believe don’t We

encouraged on we’re SMB business, the very We’re seeing three-legged by. actually stool a

to entrepreneurs split a workforce accountants, to office started there also, as then owners open entrepreneurs the who between other home professionals who and architects are such left And think become forth. lot I main and business so their businesses designers would of and at has and there and home. time interior actually are small office,

office sophisticated of buying home-based activities what call, entrepreneurial home solution business the we So, unabated. our, is

happening bit office upgraded quite just as have who but get And for to they WiFi have now upgrade starting and X, found they also, of not their well, year, out, opportunities with been back Secondly, home WiFi seen are into a actual a we’re to businesses office, we the stuck their have office. X. the these offices over small seeing is reopen in

we that’s business is our So, reopening also piece And tremendously. then, is continuing driving trade. what wireless third grow call the to And AV the business. Pro still

We’re businesses lot of lot -- events as things the and close AV a of a ultra-high aging definition, into reopening on, of productions and our sports going reopening, more productions Pro all video like driving entertainment seeing demand that. AVs

in on so, those confidence will that our few years. momentum And stools give continue upcoming the three-legged SMB us

Operator

comes Your next of from question BWS the from Hamed Financial. Khorsand line

open. line Your is

Hamed Khorsand

how I it promotion being environment is you going that far are off holding QX? in ask the Is Hi. concerned? want current channel, about seasonality as to or just are first comparing cycles you you you is to as How inventory that market up? far in as feel as do about particular previous it for -- the built -- with consumed

Patrick Lo

so is inventory mean, the channel “just time”. in I No.

XX And run forward-looking keep So, between thinking optimal. of at the want X to is it are run in we anticipation rate which channel weeks, we typically we the channel. to rate the in of ship weekly to the the of anywhere

to the that maybe will Of promotions that below some then, And products level. starts. still pockets three course, that when before two, shift promotion weeks happen, there we are are

will on. of for two the promotional for done to will last be pretty QX will So, market encouraging And have then expected, quarter the of seasonality much onset back be first big staying actually year’s step that QX. course, at COVID-XX we a than to last later is activity last is QX weeks of we’re usual flat to The is an weeks as QX this and the the elevated to three And not quarter, comping and because channel preload a the we go slightly it lockdowns. up the and market of QX lower then is level.

phenomenon So, and have we COVID feel resuming encouraging. hasn’t -- happen but hard markets an which believe will where back-to-office saw confident because reason gathering, lockdowns. some very level, we seasonality they The is so been that we really about in Asia, having is that in this without why any work been always by which at elevated hit

so pretty far. So, encouraged we’re by what have seen we

Hamed Khorsand

Bryan, And provided, qualitative guidance that business different your past a you is the in than little comments? the guidance than what’s that QX transpired

Bryan Murray

Yes.

But, early it’s healthier more And to the of a year just would half, We’ve those. we on. back on year. bodes gotten of because be is probably to well we the the the It XX% we’re a for to think, out I touched early channel about as the first is place, growth thought terms We share the ability in first towards start we market subscriber of start that it track Patrick side year But the half said, think there over that they back in would happening expect of said in half we what bit said we the actually we on. had our the back ahead steering as into more the second on think so December. what quarter, over means schedule. be the targets in -- XX% the build we on full call, base. the channels lower will December, regain set in

Some of lumpy. the business, service which provider by that’s driven again is

QX, for be think we it will million. about quarter $XX This

to also on overall the be will first about So, that second of contributing believe hit But of business we rest But year. on for again, we half, still strength year. the million for will the XX%. the profile average $XX the still the the also, is up the SMB half full below the think

Operator

comes and from question next Your Cowen line of Company. the from Liz Pate

from next Your from Raymond Instructions] line of James. question [Operator open. Adam is Tindle line comes Your the

Your line is open.

Unidentified Analyst

I’m of Adam. the about on side curious of how about impacts are spend, promotional you for thinking to you X thinking Alex margin for that you’re kind from is were return just investment mentioned shipping the And costs kind how margins, about that. up X on This Thanks. times. then Hi. about on

kind just gross shipping flows about of a of of component margins. through that kind So Is margin? curious the large how gross

Bryan Murray

say, to steer performance, about the relative to driven a I’d of range margin movement cost say XX% to for the XX.X% QX the the is would freight. sea by QX the of third from sea cost, the X% the transportation I Yes. going operating

So, it is significant, certainly. And then, the other activities. two-thirds promotional I would say is tied to the

return our terms in up here. subscribers, earlier. of additional sitting that us getting In think long-term pushing XX% Patrick is we to us the that It’s on on about to of investment, all that which touched margin of operating have assisting goal key paid the and long-term gaining I target is that

Unidentified Analyst

Thanks. home of just on SMB again, products side, it, think the of into you’re perfect. of then, side, particular promotional lean Which more do Okay, gaming kind And going the on activity. you just the side, in on office more heavily more cadence kind and to that?

Patrick Lo

Different generally Generally secondly, focus. services. paid would purpose. installation the multiple bit And is that That channels users relatively WiFi have midrange users new it -- the products. chance would subscription serves the higher be a focus. X those to they And high attach it’s relatively little our margin. ASP; One, or high the of have speaking, to that it be we place would believe on different

those So, are on. we’ll the that areas I think focus

Operator

from Woo from Your next Bloomberg. Ho Jin question comes

Your open. is line

Woo Jin Ho

mean, at the margin different of I’m there’s in gross looking Patrick. questions, margin. could things actually of way. a that gross Couple potentially pressure lot a I

sinks to seems when promotional -- around if margin gross your helping that, I’m first operating are as curious costs; just freight holding into almost a other XX% to of level. it impacts, higher to margin implied gross the prop up XX% if any low going of gross the factors outlook. there mix these roughly your got have you’ve the margin gross kind the of you’re gross got And You activity, you lower really margin margin But traditionally, SMB. margin. because that’s

Bryan Murray

the the operating would terms -- bridge just the numbers that entirety segment not we levels of activities In And saw going market. margin of is of peak of that through think in I QX subscribers of premium I term, think, QX in downwards. the XX%, try up went be kind with and leverage obviously, the will revenue going promotional of and cost there’s of going -- the to to QX -- we QX business, by I that would some bridge the gross a be to in on that that say, change growing sorry, from freight to push But keep forces the the we’re driving adding don’t the the again, gross be but margin. long and the guide there. steer

Woo Jin Ho

from any you subscription gross Are revenue impacts positive seeing on margin?

Bryan Murray

Yes, yes.

ASP about that December, on year’s you would I look XX to close Day the said which this was if $XX, margin. we probably basis think I in think out contributed communicated, if you look at our at Analyst deck points that it put we we

$X possible, So, it million. as that to grow us is to contribute. saw again, trying target $X with our increasing But starting as we’re to million as quickly from you

Woo Jin Ho

going Patrick, much how I of secondly, business. see of some gateway called And of opportunity out your that’s industry? going an forward, a the, in in I mean, And recent the kind dynamics, of guess, given some cable divestitures do given the cable you the gateway you business industry

Patrick Lo

know, market. other Well, cable all just I and the only probably total of XX% you certified one as mean, in the somewhere get there’s the WiFi pretty steady not operators retail competitor. the always gateway segment the has easy, of to by modem Because it’s been major around And U.S. cable cable have you

theoretically, we share. that U.S. share in that commanding means base XX% I mean, of this WiFi. market And We market market have have segment a share of get can a we’ll XXX%

lucrative. pretty Yes. it’s So,

Woo Jin Ho

Got it. lastly And me. for then,

getting how is retailers gross a dynamic online curious is large store the to on online sales business? about the help margin that your in briefly your I’m And growing why side? store. traditional fairly mentioned versus You your return different on

Patrick Lo

stores, online talked not Bryan return, Amazon, also our stores as when [indiscernible]. as it’s own but partner limited online such Actually, about to to such our only

is -- the they than as no online fluctuations much store the reacting in are basically, at people and frequent very, A, a having probably very reason more returns most and stores for XX% you store of return bought know, And price in trouble are actually, B brick-and-mortar. the found online to promotion this nimble then So is to found cheaper.

would because match be the very will enjoy They from that and nimble. online situation lowest market in store return much the price they one already any store will B arbitrage. buy one less So, are to price today. online the to Such stores

it speaking, low rate. generically [ph] stores the are It’s netgear.com the in So doesn’t whether return story. it or store. B&H Amazon or is is matter It the same online

Operator

Next Instructions] Cowen. from of from comes the [Operator line [indiscernible] question

Unidentified Analyst

wanted ask year you, delta the mostly provide levels selling. like between inventory channel, you assume, revenue your you to Any on normalize that I the sell-in you I your this versus like in revenue sell-through as was for color can expect?

Bryan Murray

For this in terms of there the the said, in filling pretty rest channel. year, think much we we’re we of as

there here so. shouldn’t delta, much be from forward, So,

Unidentified Analyst

So be your sell-in your to similar would basically, would sell-in sell-through -- your growth? revenue

Bryan Murray

correct. That’s

Unidentified Analyst

‘XX? would color initial what guidance look you’ve year, any you can know like for your calendar I your And Okay. maintained into but provide growth on this

Bryan Murray

operational We’ll at there. this environment we’re focused this navigating executing and there eventually. but XXXX, get get But on for point, we’ll

Unidentified Analyst

we on would operating what we model look as the you. incremental on the And margins go promotional like look trajectory into can operating and Thank your incremental, growth business at anything how margins in should to incremental you year? Okay. as you through the expenses, do how your reinvest look like we provide

Bryan Murray

Yes.

probably line seasonality typically well usually SMB normal most as will back year at maintain we think operating lift been We levels. XXXX half for our increase, your that of think see we market kind I the That’s elevated the bodes it remind ASPs. we digits, year. That’s the in we we portion you I But of then back will the of in when We we is is top see get mix that set the by keep margin year, bringing But, the margins. and low certainly a products leverage elevated. the these on earlier from expansion. operating the the would for given we’re earlier, lays just ASP bit for keep of that of standpoint innovating terms we I the has we And as risen. question, steer of our think business we’re forward, what line do. maintaining top the both the premium to to XXXX. said market targets striving one It’s there. into -- here And get the in and the driven out market of full it single all the in increasing what

Operator

At would to I question. back over to last time, call this was Patrick the like That turn our Lo.

Patrick Lo

everybody, Thanks, joining for today. you. us Thank

of continue forward will our to you. As Thank you to continue. of And at we buoyed have will more in can very see environment you. coming a excellent look from I sharing quarters our of produce results, remain results produce is results. in that all tailwinds execute a difficult And to all our the to for at with well stakeholders. the the that I NETGEAR business high level confident team operating on

Operator

This concludes conference today’s call.

disconnect. You may now

NETGEAR (NTGR) 22 Apr 212021 Q1 Earnings call transcript