NETGEAR Inc (NTGR) 2024 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. (Operator Instructions) I would now like to turn the conference over to Erik Bylin. Please go ahead, sir.

女士們先生們，謝謝你們的支持。（操作員指示）我現在想將會議轉交給 Erik Bylin。請繼續，先生。

Thank you. Good afternoon, and welcome to NETGEAR's Third Quarter of 2024 Financial Results Conference Call. Joining us from the company are Mr. C.J. Prober, CEO; and Mr. Bryan Murray, CFO. Format of the call will start with commentary on the business provided by CJ, followed by a review of the financials for the third quarter and guidance for the fourth quarter provided by Bryan.

謝謝。下午好，歡迎參加 NETGEAR 2024 年第三季財務業績電話會議。加入我們公司的還有執行長 C.J. Prober 先生；和財務長 Bryan Murray 先生。電話會議的形式將從 CJ 提供的商業評論開始，然後是 Bryan 提供的第三季財務狀況回顧和第四季度指導。

We'll then have time for any questions. If you've not received a copy of today's release, please visit NETGEAR's Investor Relations website at www.netgear.com.

然後我們將有時間回答任何問題。如果您尚未收到今天發布的副本，請造訪 NETGEAR 投資者關係網站 www.netgear.com。

Before we begin the formal remarks, we advise you that today's conference call contains forward-looking statements. Forward-looking statements include statements regarding expected revenue, operating margins, tax expense, expenses, and future business outlook. Actual results or trends could differ materially from those contemplated by these forward-looking statements.

在我們開始正式發言之前，我們建議您今天的電話會議包含前瞻性陳述。前瞻性陳述包括有關預期收入、營業利潤、稅費、開支和未來業務前景的陳述。實際結果或趨勢可能與這些前瞻性陳述預期的結果或趨勢有重大差異。

For more information, please refer to the risk factors discussed in NETGEAR's periodic filings with the SEC, including the most recent Form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today, and NETGEAR undertakes no obligation to update these statements as a result of new information or future events, except as required by law.

如需了解更多信息，請參閱 NETGEAR 向 SEC 定期提交的文件中討論的風險因素，包括最新的 10-Q 表。我們在本次電話會議中所做的任何前瞻性陳述均基於截至目前的假設，NETGEAR 不承擔因新資訊或未來事件而更新這些陳述的義務，除非法律要求。

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

此外，本次電話會議也將提及多項非公認會計準則財務指標。非公認會計原則與公認會計原則措施的調節可以在我們投資者關係網站上今天的新聞稿中找到。這時，我想把電話轉給CJ。

Good afternoon, and thanks for joining the call today. Today marks my nine-month anniversary with NETGEAR, and I'm thrilled with our progress and the speed at which we're executing on our transformation. Our focus remains on creating long-term shareholder value. I'm more confident than ever that we will transform NETGEAR into a growing and higher-margin business, generating increased cash flow that will reward our current shareholders and attract new investors along the way.

下午好，感謝您今天加入通話。今天是我加入 NETGEAR 九個月的周年紀念日，我對我們的進步和轉型的執行速度感到非常興奮。我們的重點仍然是創造長期股東價值。我比以往任何時候都更有信心，我們將把 NETGEAR 轉變為一家不斷增長、利潤率更高的企業，產生更多的現金流，從而回報我們現有的股東，並一路吸引新的投資者。

Today, I will cover the following three topics: first, highlights from Q3; second, an update on our transformation on the heels of our recently completed strategic planning process; and third, our capital allocation plan.

今天我主要講三個主題：一是第三季的亮點；其次，在我們最近完成的策略規劃過程之後，我們轉型的最新情況；第三，我們的資本配置計畫。

Q3 was an excellent quarter. We delivered above the revenue and operating income guidance that we increased in September. We were profitable, and we increased our cash balance by over $100 million through lowering our inventory and successfully defending our intellectual property. There are several factors that contributed to these strong results, and I'll highlight a few.

第三季是一個出色的季度。我們的收入和營業收入高於 9 月提高的預期。我們實現了盈利，並且透過降低庫存和成功捍衛我們的智慧財產權，我們的現金餘額增加了超過 1 億美元。有幾個因素促成了這些強勁的業績，我將重點放在其中幾個因素。

First, we acted aggressively to rebalance the business. After identifying channel stocking issues earlier this year, we implemented a successful destocking plan. That is behind us, and we're now matching sell-in with sell-through, which also brings the benefit of more linearity of our top line. I'm very proud of how the team worked with suppliers and customers to aggressively get this behind us.

首先，我們積極採取行動重新平衡業務。在今年稍早發現渠道庫存問題後，我們成功實施了去庫存計劃。這一切都已經過去了，我們現在正在將賣出與賣出相匹配，這也帶來了我們收入線更線性的好處。我對團隊如何與供應商和客戶合作並積極解決這個問題感到非常自豪。

Second, we're executing. We achieved a $27 million reduction in inventory in Q3 as we March towards our goal of reducing finished goods inventory to three months of supply by the end of the year. This more disciplined approach to inventory is driving improved demand and supply planning execution, and the team is stepping up to the challenge.

第二，我們正在執行。我們在第三季實現了庫存減少 2700 萬美元，因為我們正朝著年底將成品庫存減少到可供三個月供應的目標邁進。這種更嚴格的庫存方法正在推動需求和供應計劃執行的改進，團隊正在迎接挑戰。

Third, we are identifying exciting growth opportunities within NETGEAR. Our ProAV business had another record quarter, driven by strong growth in North America and APAC, enabling our overall NFB business to grow top line over 10% year-over-year and to return to historical levels on contribution margin.

第三，我們正在 NETGEAR 內部尋找令人興奮的成長機會。在北美和亞太地區強勁成長的推動下，我們的 ProAV 業務再創歷史新季度記錄，使我們的整體 NFB 業務收入同比增長超過 10%，並在貢獻利潤率方面恢復到歷史水平。

We increased the number of ProAV manufacturing partners to over 330, further improving the ease of use and reliability of our ProAV solutions. The deep integration we announced with HP Poly for their Poly Studio G62 system is a great example of our continued momentum with this vast and growing ecosystem. We strongly believe that this ProAV business is a gem that we can polish further and use as a driver of long-term revenue growth and cash flow generation.

我們將 ProAV 製造合作夥伴的數量增加到 330 多個，進一步提高了 ProAV 解決方案的易用性和可靠性。我們宣布與 HP Poly 對其 Poly Studio G62 系統進行深度集成，這是我們在這個龐大且不斷發展的生態系統中持續發展勢頭的一個很好的例子。我們堅信，ProAV 業務是一顆寶石，我們可以進一步打磨，並將其用作長期收入成長和現金流產生的驅動力。

Fourth, we're innovating. We launched several exciting and market-leading products across both businesses this quarter. Our pull-forward launch of the M7 Pro, the industry's first mobile hotspot that combines 5G and Wi-Fi 7 was a key highlight in Q3. We also launched several Wi-Fi 7 home networking products that have been very well received by consumers and align with our strategy of expanding our addressable market. In fact, for most of the new product introductions, we're struggling to keep up with the demand.

第四，我們不斷創新。本季我們在兩個業務領域推出了幾款令人興奮且市場領先的產品。我們提前推出的業界首款結合 5G 和 Wi-Fi 7 的行動熱點 M7 Pro 是第三季的一大亮點。我們也推出了多款Wi-Fi 7家庭網路產品，這些產品深受消費者歡迎，符合我們擴大目標市場的策略。事實上，對於大多數新產品的推出，我們都在努力滿足需求。

Fifth, we are growing recurring revenue. This priority continues to make progress as we implement our strategy of simplifying our subscription offerings across our consumer and B2B businesses. We ended the quarter with approximately 555,000 recurring revenue subscribers, and we saw our recurring revenue grow 22% year-over-year.

第五，我們正在增加經常性收入。隨著我們實施簡化消費者和 B2B 業務訂閱服務的策略，這項優先事項將繼續取得進展。截至本季末，我們的經常性收入訂閱者數量約為 555,000 名，我們的經常性收入年增 22%。

Finally, we unlocked $100 million of additional cash. Our IP litigation resulted in a large settlement with TP-Link that will also lead to lower G&A expenses given the dismissal of several legal proceedings between us. So, overall, excellent work by our team to deliver such a great quarter. I'm truly enthusiastic about our direction going forward.

最後，我們釋放了 1 億美元的額外現金。我們的智慧財產權訴訟最終與 TP-Link 達成了大額和解，鑑於我們之間的幾項法律訴訟被駁回，這也將導致一般管理費用的降低。因此，總的來說，我們團隊的出色工作成就瞭如此出色的季度。我對我們未來的方向充滿熱情。

I'll now shift to my second topic, an update on our longer-term transformation efforts. In the spring of this year, after my global listening tour where I met with employees, customers, partners, and investors from around the world, we kicked off several interconnected work streams to define the future direction of NETGEAR.

現在我將轉向第二個主題，也就是我們長期轉型工作的最新情況。今年春天，在我的全球聆聽之旅與來自世界各地的員工、客戶、合作夥伴和投資者會面之後，我們啟動了幾個相互關聯的工作流程來定義 NETGEAR 的未來方向。

This ongoing work hit a major milestone earlier in the month and culminated in a new purpose and mission, a new set of values, and three-year strategic plans for each of our businesses. I'll touch on each of these briefly, and we look forward to a more in-depth discussion at an Investor Day we're planning for the first half of next year.

這項正在進行的工作在本月初達到了一個重要里程碑，並最終為我們每項業務制定了新的目標和使命、一套新的價值觀和三年戰略計劃。我將簡要討論其中的每一個，我們期待在我們計劃於明年上半年舉行的投資者日上進行更深入的討論。

NETGEAR's prior purpose and mission was to be the innovative leader in connecting the world to the Internet. This served the company well in the early days of the Internet where new product launches wowed customers with new ways of connecting to the world.

NETGEAR 的首要目標和使命是成為將世界連接到網路的創新領導者。這在互聯網的早期為該公司提供了很好的幫助，新產品的發布以連接世界的新方式讓客戶驚嘆不已。

Fast forward to today, and this mission has largely been accomplished. Our new purpose that will serve us for the next 30 years is to power extraordinary experiences. We do this today through our role in enabling professional sporting events, rock concerts, powering connectivity for schools in India, and enabling the best-in-class home gaming and streaming experiences. Enabling the extraordinary is our new North Star.

快進到今天，這項使命已基本完成。我們將在未來 30 年為我們服務的新目標是提供非凡的體驗。今天，我們透過支援專業體育賽事、搖滾音樂會、為印度學校提供連結以及提供一流的家庭遊戲和串流媒體體驗來實現這一目標。實現非凡是我們的新北極星。

Our new mission, which more specifically defines what we will do to realize this purpose, is to unleash the full potential of connectivity with intelligent solutions that delight and protect. Every word in this mission statement was chosen with care, though I'll just elaborate on a couple of critical points.

我們的新使命更具體地定義了我們將採取哪些措施來實現這一目標，即透過令人愉悅和保護的智慧解決方案釋放連接的全部潛力。這份使命宣言中的每一個字都是經過精心挑選的，儘管我只會詳細闡述幾個關鍵點。

First, intelligent solutions is capturing the importance of the role that software and AI play in delivering delightful experiences to our customers. NETGEAR's legacy is in delivering incredible devices. And as part of our transformation, our focus will be on delivering customer value via software and AI innovations.

首先，智慧解決方案體現了軟體和人工智慧在為客戶提供愉悅體驗方面所發揮的重要作用。NETGEAR 的傳統在於提供令人難以置信的設備。作為我們轉型的一部分，我們的重點將是透過軟體和人工智慧創新提供客戶價值。

Second, protect is a critical element of our mission. The cyber world is becoming increasingly unsafe, complex, and the battlefield upon which nation states are waging war, as is evidenced by the various typhoons launched by the PRC against the United States recently.

其次，保護是我們使命的關鍵要素。網路世界正變得越來越不安全、複雜，成為民族國家發動戰爭的戰場，最近中華人民共和國對美國發動的各種颱風就是明證。

As an independent, US-based, publicly-traded company, NETGEAR is incredibly well positioned to be the trusted connectivity partner to consumers, service providers, and businesses. Delivering on this promise will require us to continue to innovate in the realm of security, so that a core part of our differentiation is the peace of mind we deliver to our customers.

作為一家總部位於美國的獨立上市公司，NETGEAR 非常有能力成為消費者、服務提供者和企業值得信賴的連結合作夥伴。兌現這項承諾需要我們在安全領域繼續創新，因此我們差異化的核心部分就是讓客戶安心無憂。

Moving on to our new values. We've defined the behaviours that will allow us to transform the business to deliver on our new purpose and mission. There are many great things about NETGEAR's culture that we will preserve, though this transformation will require us to think and act differently and our new values will enable that.

繼續我們的新價值觀。我們已經定義了一些行為，使我們能夠轉變業務以實現我們的新目標和使命。我們將保留 NETGEAR 文化中的許多偉大之處，儘管這種轉變將要求我們以不同的方式思考和行動，而我們的新價值觀將實現這一點。

We're integrating the new values into everything we do, for example, how we recruit, manage performance, innovate for our customers, and be responsible stewards of the business for our investors. I will save further details of the values for our upcoming Investor Day.

我們正在將新價值觀融入我們所做的一切中，例如，我們如何招募、管理績效、為客戶創新以及為投資者負責的業務管理者。我將為即將到來的投資者日保存更多有關價值的詳細資訊。

On the development of our three-year strategic plans, this was a first-of-its-kind strategic planning process for NETGEAR. Our new VP of Strategy and our teams across the company did an incredible job analysing the opportunity ahead, and we have clarity in the direction we are taking. I'll share three big takeaways for me coming out of this process.

在製定三年策略計畫方面，這是 NETGEAR 的首次策略規劃流程。我們的新任策略副總裁和整個公司的團隊在分析未來的機會方面做了令人難以置信的工作，我們對我們正在採取的方向很明確。我將分享這個過程中我的三大收穫。

First, I'm more confident than ever that the opportunity I saw before officially stepping into my role is fully achievable. I see a clear path to long-term growth, stronger growth in operating margins, and improved cash flow generation. We have a great foothold to begin with because NETGEAR is a recognized market leader with a brand that is synonymous with high quality and technology innovation across both our consumer and B2B businesses.

首先，我比以往任何時候都更有信心，我在正式上任之前看到的機會是完全可以實現的。我看到了一條清晰的長期成長之路、營業利潤的強勁成長以及現金流產生的改善。我們一開始就擁有良好的立足點，因為 NETGEAR 是公認的市場領導者，其品牌在我們的消費者和 B2B 業務中是高品質和技術創新的代名詞。

Second, our near-term plans to get there will involve directing our investments into the businesses that have the highest potential. Many of these opportunities lie on the NFB side, given this business is addressing large markets with significant potential to expand our market share and our recurring revenue businesses. NFB also has the added benefit of having stronger margins and greater profitability.

其次，我們實現這一目標的近期計劃將包括將投資引導至最具潛力的企業。其中許多機會都在 NFB 方面，因為該業務正在面向大型市場，具有擴大我們的市場份額和經常性收入業務的巨大潛力。NFB 還具有更高的利潤率和更高的盈利能力的額外好處。

Finally, as we stabilize our consumer business and further invigorate the growth of our NFB businesses, we see a path to growing overall NETGEAR revenue and expanding gross margins in 2025. We have work to do to finalize our 2025 plan. And as I mentioned earlier, we're excited to share more at an Investor Day we are planning for the first half of next year.

最後，隨著我們穩定消費者業務並進一步刺激 NFB 業務的成長，我們看到了 2025 年 NETGEAR 整體收入成長和毛利率擴大的道路。我們還有很多工作要做才能最終確定 2025 年計劃。正如我之前提到的，我們很高興能在我們計劃於明年上半年舉行的投資者日分享更多資訊。

My last point on our transformation is an update on our team. As I mentioned last quarter, we hired Pramod Badjate to lead our B2B business. Since then, we've hired Eric Law to lead our B2B sales team. Eric has an amazing pedigree with over 25 years of go-to-market experience, mostly at Cisco and Ruckus. We've also onboarded new B2B leaders in product management and user experience and are revamping our sales operations capabilities for our B2B business with the help of a long-time Palo Alto Networks executive.

關於我們轉型的最後一點是我們團隊的最新情況。正如我上季度提到的，我們聘請了 Pramod Badjate 來領導我們的 B2B 業務。從那時起，我們聘請了 Eric Law 來領導我們的 B2B 銷售團隊。Eric 擁有令人驚嘆的出身，擁有超過 25 年的市場推廣經驗，主要是在 Cisco 和 Ruckus 工作。我們還聘請了產品管理和用戶體驗的新 B2B 領導者，並在 Palo Alto Networks 長期高管的幫助下改進我們的 B2B 業務銷售營運能力。

All these executives are joining NETGEAR because they too see the attractive opportunity in front of us. And from NETGEAR's perspective, we expect this investment in human capital to deliver stronger products, incremental market share, and better financial results and cash generation.

所有這些高階主管都加入 NETGEAR，因為他們也看到了我們眼前的誘人機會。從 NETGEAR 的角度來看，我們預計這種人力資本投資將帶來更強大的產品、增加市場份額以及更好的財務表現和現金產生。

I'll now turn to our capital allocation plan. Our plan covers three areas: return of capital to shareholders, organic investments in the business, and potentially acquisitions. I'll briefly cover each of these. Since I joined early this year, we completed repurchases of about $10 million of our shares in each of the first two quarters, but we were mostly out of the market in Q3 given the confidential settlement negotiations with TP-Link. With an expanded repurchase authorization and an even stronger cash balance, you can expect us to be active in the market for our stock in Q4 post earnings, including during the restricted period.

我現在談談我們的資本配置計劃。我們的計劃涵蓋三個領域：股東資本回報、業務有機投資以及潛在收購。我將簡要介紹其中的每一個。自從我今年年初加入以來，我們在前兩個季度都完成了約 1000 萬美元的股票回購，但由於與 TP-Link 的秘密和解談判，我們在第三季度大部分退出了市場。隨著回購授權的擴大和現金餘額的增加，您可以預期我們將在第四季度財報發布後（包括在限制期內）活躍於我們的股票市場。

From an organic investment perspective, as I noted previously, we do plan to invest in our NFB business to further invigorate growth and drive margin expansion via software differentiation and recurring revenue. Some of this investment will be incremental OpEx and some will be pulled from slower growing parts of the business.

從有機投資的角度來看，正如我之前指出的，我們確實計劃投資 NFB 業務，以透過軟體差異化和經常性收入進一步刺激成長並推動利潤率擴張。其中一些投資將是增量營運支出，另一些將從業務成長較慢的部分撤出。

While our primary focus in 2025 will be on improving the performance of our core businesses, we will be investigating acquisition opportunities that could accelerate our transformation with a focus on our NFB business. The opportunities we could consider include software development capabilities that drive differentiation, margin expansion, and our recurring revenue; product adjacencies that are complementary to our current offering that would allow us to deliver a more integrated customer experience, leverage our brand or capitalize on our distribution footprint; or simply consolidation opportunities that are accretive to earnings.

雖然我們 2025 年的主要重點將是提高核心業務的業績，但我們將研究收購機會，以加速我們的轉型，並專注於我們的 NFB 業務。我們可以考慮的機會包括推動差異化、利潤擴張和經常性收入的軟體開發能力；與我們目前產品互補的產品鄰接，使我們能夠提供更全面的客戶體驗，利用我們的品牌或利用我們的分銷足跡；或只是增加收益的整合機會。

Having completed many acquisitions on both sides of the fence, my bar for M&A is very high, so we'll be extremely selective as we evaluate these opportunities.

在雙方完成了許多收購之後，我的併購門檻非常高，因此我們在評估這些機會時會非常有選擇性。

In closing, I want to thank the teams at NETGEAR for all the incredible work that is happening to delight our customers and deliver on the transformation. We had a great Q3. We've done much of the hard work to define the path forward. We have an amazing start to our transformation, and we're excited about delivering for shareholders as we power extraordinary experiences.

最後，我要感謝 NETGEAR 團隊所做的所有令人難以置信的工作，讓我們的客戶滿意並實現轉型。我們有一個很棒的第三季。我們已經做了很多艱苦的工作來確定前進的道路。我們的轉型有了一個驚人的開端，我們很高興能夠為股東提供非凡的體驗。

I'll now hand it over to Bryan and look forward to your questions during Q&A.

我現在將其交給 Bryan，並期待您在問答環節提出問題。

Thank you, CJ, and thank you, everyone, for joining today's call. We are once again pleased with the execution by our team this quarter in delivering both revenue and profitability above our guidance range, including a return to profitability. These outstanding results were driven by higher-than-expected service provider revenue, buoyed by the early launch of our new Nighthawk M7 Pro 5G Wi-Fi 7 mobile hotspot.

謝謝 CJ，也謝謝大家參加今天的電話會議。我們再次對我們團隊本季的執行力感到滿意，收入和盈利能力均高於我們的指導範圍，包括恢復盈利能力。這些出色的業績得益於高於預期的服務供應商收入，以及我們新的 Nighthawk M7 Pro 5G Wi-Fi 7 行動熱點的提前推出。

As a reminder, we took decisive action in the prior quarter to accelerate destocking of the channel to better position both sides of the business for more predictable performance aligned to the market trends and reduce volatility.

提醒一下，我們在上一季採取了果斷行動，加速通路去庫存，以便更好地定位業務雙方，以獲得更符合市場趨勢的可預測業績並減少波動。

We have already begun to see the benefits of this plan as evidenced by this quarter's results. We also saw the additional benefit of reduced DSOs, which came in at 88 days, our lowest level in over three years, due to the improved linearity with channel partners needing to maintain their lean inventory positions throughout the quarter.

我們已經開始看到該計劃的好處，本季的業績證明了這一點。我們還看到了減少 DSO 的額外好處，DSO 的周期為 88 天，這是我們三年多以來的最低水平，因為通路合作夥伴需要在整個季度保持精益庫存狀況的線性度得到改善。

Our more profitable NFB segment performed well against our expectations and once again delivered a record quarter in-market sales of our ProAV managed switch products. In CHP, we saw continued strength in premium products. We made further progress in expanding our product portfolio, addressing other segments of the market, and we were able to pull in the launch of our next-generation M7 Pro mobile hotspot.

我們利潤較高的 NFB 部門的表現超出了我們的預期，並再次實現了 ProAV 管理型交換器產品的創紀錄季度市場銷售。在熱電聯產方面，我們看到優質產品持續走強。我們在擴大產品組合、解決市場其他細分市場方面取得了進一步進展，並成功推出了下一代 M7 Pro 行動熱點。

While the CHP retail market size declined in the third quarter, the decline continued to slow in Q3 compared to earlier in the year. However, we do see the US retail market remaining quite promotional in part due to the holiday period.

儘管第三季熱電聯產零售市場規模有所下降，但與今年稍早相比，第三季的下降幅度繼續放緩。然而，我們確實看到美國零售市場仍然相當促銷，部分原因是假期期間。

For the quarter ended September 29, 2024, revenue was $182.9 million, up 27.1% on a sequential basis and down 7.6% year-over-year, above the high end of our guidance. In addition, by continuing to drive down our own inventory by $27 million in Q3 and reaching a settlement with TP-Link, we generated approximately $106 million in free cash flow and ended the quarter with nearly $396 million in cash and short-term investments.

截至 2024 年 9 月 29 日的季度，營收為 1.829 億美元，季增 27.1%，年減 7.6%，高於我們指導的上限。此外，透過在第三季度繼續減少我們自己的庫存2700 萬美元並與TP-Link 達成和解，我們產生了約1.06 億美元的自由現金流，並在本季度結束時獲得了近3.96 億美元的現金和短期投資。

After successfully putting the destocking behind us last quarter, we entered Q3 well positioned to match sell-in with sell-through with our channel partners. Consequentially, the NFB segment delivered $78.5 million in revenue for the third quarter, up 31.2% sequentially and up 11.4% year-over-year.

在上個季度成功消除庫存後，我們進入第三季度，處於有利地位，可以將銷售與通路合作夥伴的銷售相匹配。因此，NFB 部門第三季營收為 7,850 萬美元，季增 31.2%，年增 11.4%。

Led by our ProAV managed switch products, which once again saw end-user demand grow double digits year-over-year, momentum is clearly building behind NFB's growth trajectory, and we also continue to make progress with our strategic manufacturing partnerships.

在我們的 ProAV 管理型交換器產品的引領下，終端用戶需求再次實現兩位數同比增長，NFB 的成長軌跡顯然正在形成動力，而且我們的策略製造合作夥伴關係也繼續取得進展。

In Q3, the CHP business delivered net revenue of $104.3 million, down 18.1% on a year-over-year basis and up 24.1% sequentially, which benefited from the release of our latest M7 Pro mobile hotspots, which pulled into the quarter because of great execution by our team.

第三季度，CHP 業務實現淨收入 1.043 億美元，年減 18.1%，環比增長 24.1%，這得益於我們最新的 M7 Pro 移動熱點的發布，該熱點進入本季度是因為我們團隊的出色執行力。

Service provider revenue was $22.9 million, above our expectations and boosted by the earlier than originally anticipated launch. We saw our premium mesh products continue to outperform the broader market. Our recently introduced Nighthawk products that broaden our market reach are performing well and receiving warm customer reviews, a testament to the power of our brand and innovative technology.

服務提供者收入為 2,290 萬美元，高於我們的預期，並且由於比最初預期的發佈時間更早而得到提振。我們看到我們的優質網狀產品繼續跑贏大盤。我們最近推出的 Nighthawk 產品擴大了我們的市場範圍，表現良好，並獲得了熱烈的客戶評價，證明了我們品牌和創新技術的力量。

With our additional new product introductions planned for release through 2025, we expect the full benefits of this new strategy to build over time. We exited the third quarter with 555,000 recurring subscribers, and we generated $7.9 million in recurring service revenue in the quarter, a year-over-year increase of 22%.

我們計劃在 2025 年之前推出更多新產品，我們預計這項新策略的全部優勢將隨著時間的推移而逐漸顯現。截至第三季度，我們的經常性訂閱用戶數量為 555,000 名，本季的經常性服務收入為 790 萬美元，年增 22%。

We continue to see increased emphasis placed by consumers on cybersecurity protection, privacy, and premium support. As we noted last quarter, we are confident that the optimal strategy is to grow recurring subscribers, and that is our focus going forward.

我們繼續看到消費者越來越重視網路安全保護、隱私和高級支援。正如我們在上季度指出的那樣，我們相信最佳策略是增加經常訂閱者，這是我們未來的重點。

For the third quarter of 2024, net revenue for the Americas was $127.8 million, a decline of 9.4% year-over-year and up 33.8% on a sequential basis. EMEA net revenue was $32.8 million, a decrease of 8.1% year-over-year and up 19.9% quarter-over-quarter. Our APAC net revenue was $22.3 million, which is up 5.5% from the prior year comparable period and up 6% sequentially.

2024年第三季度，美洲地區淨收入為1.278億美元，年減9.4%，季增33.8%。歐洲、中東和非洲地區淨收入為 3,280 萬美元，年減 8.1%，季增 19.9%。我們的亞太地區淨收入為 2,230 萬美元，比上年同期成長 5.5%，比上一季成長 6%。

From this point on, my discussion points will focus on non-GAAP numbers. The reconciliation from GAAP to non-GAAP is detailed in our earnings release distributed earlier today. Non-GAAP gross margin in the third quarter of 2024 was 31.1%, down 390 basis points compared to 35% in the prior year comparable period and up 870 basis points compared to 22.4% in the second quarter of 2024.

從現在開始，我的討論點將集中在非公認會計原則數字上。我們今天稍早發布的財報中詳細介紹了從 GAAP 到非 GAAP 的調整。2024年第三季的非公認會計原則毛利率為31.1%，較上年同期的35%下降390個基點，較2024年第二季的22.4%上升870個基點。

This marks the first time this year we have achieved gross margins above 30% as we begin to benefit from improved mix of NFB products and the impact of aged inventory begins to lessen with our continued progress working down our [old] inventory.

這標誌著我們今年第一次實現了超過 30% 的毛利率，因為我們開始受益於 NFB 產品組合的改進，並且隨著我們在[舊]庫存方面的持續進展，老化庫存的影響開始減輕。

Compared to the prior year period, our profitability was impacted by higher cost of inventory and our use of air freight as we begin to operate at leaner inventory levels. Total Q3 non-GAAP operating expenses came in at $55.3 million, down 13.7% year-over-year and down 12.7% sequentially.

與去年同期相比，隨著我們開始以更精簡的庫存水準運營，我們的獲利能力受到庫存成本上升和空運使用的影響。第三季非 GAAP 營運支出總額為 5,530 萬美元，較去年同期下降 13.7%，季減 12.7%。

Non-GAAP operating expenses were lowered in the quarter by the $10.9 million legal fee adjustment from the TP-Link settlement to offset actual legal expenses incurred in prior quarters. Our headcount was 638 as of the end of the quarter, up from 622 in Q2.

由於 TP-Link 和解協議中 1,090 萬美元的法律費用調整抵消了前幾季產生的實際法律費用，本季度非公認會計準則營運費用有所下降。截至本季末，我們的員工人數為 638 人，高於第二季的 622 人。

We are currently refining our long-term strategy and looking to make investments, primarily in our NFB business. Some of this will be incremental and some will come from other areas of the business as we shift costs to the areas that will deliver long-term growth and expand profitability.

我們目前正在完善我們的長期策略並尋求投資，主要是我們的 NFB 業務。其中一些將是增量的，一些將來自業務的其他領域，因為我們將成本轉移到將實現長期成長和擴大獲利能力的領域。

Our non-GAAP R&D expense for the third quarter was 11% of net revenue as compared to 10.1% of net revenue in the prior year comparable period and 13.2% of net revenue in the second quarter of 2024. To continue our technology and product leadership, we are committed to continued investment in R&D.

我們第三季的非 GAAP 研發費用佔淨收入的 11%，而去年同期佔淨收入的 10.1%，2024 年第二季佔淨收入的 13.2%。為了維持我們的技術和產品領先地位，我們致力於持續投資研發。

The improved leverage from having the destocking of our channel partners behind us and our new product introductions in the third quarter, combined with the offset of historical legal costs as a result of the TP-Link settlement, enabled us to deliver third quarter non-GAAP operating profit of $1.6 million with an operating margin of 0.9%, above the high end of our guidance range.

通路夥伴的去庫存以及第三季新產品的推出帶來了槓桿率的提高，加上TP-Link 和解帶來的歷史法律成本的抵消，使我們能夠實現第三季度的非公認會計原則( non-GAAP)營業利潤為 160 萬美元，營業利益率為 0.9%，高於我們指引範圍的上限。

This was down 180 basis points compared to the year ago period and up 2,250 basis points compared to the prior quarter. Our non-GAAP tax expense was $17,000 in third quarter of 2024. Looking at the bottom line for Q3, we reported non-GAAP net income of $5.1 million and non-GAAP diluted earnings per share of $0.17.

與去年同期相比下降 180 個基點，與上一季相比上升 2,250 個基點。2024 年第三季我們的非 GAAP 稅務費用為 17,000 美元。看看第三季的底線，我們公佈的非 GAAP 淨利潤為 510 萬美元，非 GAAP 攤薄後每股收益為 0.17 美元。

Turning to the balance sheet. We ended the third quarter of 2024 with $395.7 million in cash and short-term investments, up $101.4 million from the prior quarter and equating to $13.48 per share. The increase is largely due to the cash payment from the TP-Link's litigation settlement. However, even excluding the settlement impact, we delivered our fifth consecutive quarter of positive cash generation.

轉向資產負債表。截至 2024 年第三季末，我們的現金和短期投資為 3.957 億美元，比上一季增加 1.014 億美元，相當於每股 13.48 美元。這一增長主要是由於 TP-Link 訴訟和解支付的現金。然而，即使排除和解影響，我們也連續第五個季度實現了正現金產生。

We continued to convert our working capital into cash and made significant progress lowering our inventory in the quarter, which declined $27 million sequentially. During the quarter, $107.7 million of cash was provided by operations, which brings our total cash provided by operations over the trailing 12 months to $199.6 million. We used $1.7 million in purchase of property and equipment during the quarter, which brings our total cash used for capital expenditures over the trailing 12 months to $8.7 million.

我們繼續將營運資金轉換為現金，並在本季降低庫存方面取得了重大進展，庫存比上一季減少了 2,700 萬美元。本季度，營運提供了 1.077 億美元的現金，這使得過去 12 個月營運提供的現金總額達到 1.996 億美元。本季我們使用了 170 萬美元購買財產和設備，這使得我們過去 12 個月用於資本支出的現金總額達到 870 萬美元。

With the better-than-expected reduction of inventory in the third quarter, combined with seasonal terms with certain of our channel partners, we expect that in Q4, we will be in the range of using $10 million of cash to neutral, but still generating cash in the second half of the year even without the benefit of the legal settlement.

由於第三季度的庫存減少優於預期，再加上我們與某些通路合作夥伴的季節性條款，我們預計在第四季度，我們將使用 1000 萬美元的現金至中性，但仍能產生收入即使沒有法律和解的好處，下半年也能獲得現金。

In Q3, due to trading restrictions, we spent $1.5 million to repurchase approximately 99,000 shares of NETGEAR common stock at an average price of $14.92 per share. We have approximately 3.8 million shares reserved under current authorization. Since the beginning of 2020, we have spent $146.1 million to repurchase 5.8 million shares.

第三季度，由於交易限制，我們花了 150 萬美元以每股 14.92 美元的平均價格回購了約 99,000 股 NETGEAR 普通股。根據目前授權，我們預留了約 380 萬股。自2020年初以來，我們已花費1.461億美元回購580萬股股票。

We will be resuming our share repurchase program in Q4 during an open window, and we plan to enable opportunistic repurchasing during the restricted period as well. Our fully diluted share count is approximately 29.4 million shares as of the end of the third quarter.

我們將在第四季度的開放窗口期間恢復股票回購計劃，並計劃在限制期內進行機會性回購。截至第三季末，我們完全攤薄後的股票數量約為 2,940 萬股。

Now I'll cover our Q4 2024 outlook. As we experienced in the third quarter, we expect to continue to see more predictable performance that is aligned with the market for both of our businesses. Within NFB, we expect to experience continued growth led by our ProAV line of managed switches.

現在我將介紹 2024 年第四季的展望。正如我們在第三季所經歷的那樣，我們預計我們的兩項業務將繼續看到與市場一致的更可預測的業績。在 NFB 內部，我們預計將在 ProAV 託管交換器系列的引領下持續成長。

Within CHP, while we're seeing the signs of market recovery, we expect increased promotional activity within our retail business. After the launch of our M7 Pro mobile hotspot in Q3, we expect revenue from the service provider channel to be approximately $20 million in Q4, down slightly on a sequential basis.

在 CHP 內部，雖然我們看到市場復甦的跡象，但我們預計零售業務的促銷活動將會增加。在第三季推出 M7 Pro 行動熱點後，我們預計第四季度來自服務供應商管道的收入約為 2,000 萬美元，環比略有下降。

Accordingly, we expect fourth quarter net revenue to be in the range of $160 million to $175 million. We expect gross margins and operating margins to continue to be impacted by our inventory reduction efforts and higher-than-expected transportation costs due to a variety of factors, including the Red Sea shipping crisis. We also expect increased promotional activities within our CHP retail business due in part to the holiday period.

因此，我們預計第四季淨收入將在 1.6 億美元至 1.75 億美元之間。我們預計毛利率和營業利潤率將繼續受到我們的庫存削減努力以及由於紅海航運危機等多種因素導致的高於預期的運輸成本的影響。我們也預計，部分由於假期期間，我們的熱電聯產零售業務中的促銷活動將會增加。

Accordingly, we expect our fourth quarter GAAP operating margin to be in the range of negative 12.4% to negative 9.4%, and non-GAAP operating margin to be in the range of negative 8% to negative 5%. Our GAAP tax benefit is expected to be in the range of $2 million to $3 million, and our non-GAAP tax benefit is expected to be in the range of $0 to $1 million for the fourth quarter of 2024.

因此，我們預計第四季度 GAAP 營業利潤率將在負 12.4% 至負 9.4% 範圍內，非 GAAP 營業利潤率將在負 8% 至負 5% 範圍內。2024 年第四季度，我們的 GAAP 稅收優惠預計為 200 萬至 300 萬美元，非 GAAP 稅收優惠預計為 0 至 100 萬美元。

And with that, we can now open up for questions.

至此，我們現在可以提出問題了。

(Operator Instructions) Adam Tindle, Raymond James.

（操作員說明）Adam Tindle、Raymond James。

CJ, I just wanted to start -- congrats on the TP-Link settlement -- an update on what's potentially to come from this. I think there's still some legislation out there, some national security concerns. Maybe just remind investors of the potential impact from here and things that are still potentially on the docket.

CJ，我只是想開始——恭喜 TP-Link 和解——更新這件事可能帶來的結果。我認為仍然存在一些立法，一些國家安全問題。也許只是提醒投資者這裡的潛在影響以及仍然可能在議程上的事情。

And Bryan, related to this on the TP-Link settlement, maybe you could follow up just at a high level, as we look at the income statement, particularly this quarter, what are the one-timers that we shouldn't be repeating versus what's more permanent.

Bryan，與 TP-Link 和解協議相關的問題，也許您可以在較高層面上進行跟進，當我們查看損益表時，特別是本季度，我們不應該重複哪些一次性交易？永久。

And I'm mainly looking at non-GAAP gross margin and operating margin. For example, non-GAAP G&A came down from 16% to 6%. Does that stay down there? So if you could just walk us through any one-timers in the quarter versus what is more permanent.

我主要關注非公認會計準則毛利率和營業利潤率。例如，非 GAAP G&A 從 16% 降至 6%。那還留在下面嗎？因此，您能否向我們介紹本季的一次性事件與更持久的事件。

Adam, I'll take the first part of that. So not at all related to our settlement, but as you referenced, there is and continues to be a lot of government activity around networking equipment from foreign adversarial countries. And as you probably noticed, there's a bit of a fever pitch with the election approaching around cyberattacks involving the PRC using botnets enabled by home networking -- home and small business networking equipment.

亞當，我先講第一部分。因此，與我們的和解完全無關，但正如您所提到的，圍繞著外國敵對國家的網路設備，政府正在進行並將繼續進行大量活動。正如您可能注意到的那樣，隨著選舉的臨近，涉及中華人民共和國的網路攻擊出現了一些狂熱，這些攻擊使用的是家庭網路（家庭和小型企業網路設備）啟用的殭屍網路。

And so, the big development since our last earnings was the Select Committee for China sent the Department of Commerce a letter, very strongly worded letter, mentioning kind of the this is their quote, glaring security issue and significant national security threat that the TP-Link poses.

因此，自我們上次財報以來的重大進展是，中國特別委員會向商務部發送了一封措辭非常強硬的信函，其中提到了這是他們的引述、明顯的安全問題和重大的國家安全威脅，TP -連結姿勢。

And so, that was quite a development. And that group at the Department of Commerce is the same group that banned Kaspersky, the software security company from Russia. So we're following this closely. And there's a number of other developments relating to the ROUTERS Act, which is targeting a similar thing, and that's made its way through the House already. It's in the Senate. Obviously, with the election, I think all these types of things slow down a little bit. So it will be interesting to see, and we're watching closely what happens after next week.

所以，這是一個很大的進步。美國商務部的這個小組與禁止俄羅斯軟體安全公司卡巴斯基的小組是同一個小組。所以我們正在密切關注此事。還有許多與路由器法案相關的其他進展，該法案的目標是類似的事情，並且已經在眾議院獲得通過。這是在參議院。顯然，隨著選舉，我認為所有這些類型的事情都會放緩一些。所以這將會很有趣，我們正在密切關注下週之後會發生什麼。

And Adam, to your question on the onetime items that are in the non-GAAP earnings for the quarter with regards to the TP-Link settlement, it's actually fairly straightforward and may be easy to see in the 8-K that we put out there. But effectively, it's really about $11 million as a contra expense item that would have offset G&A in the quarter.

Adam，對於您關於本季非 GAAP 收益中與 TP-Link 和解相關的一次性項目的問題，這實際上相當簡單，並且在我們發布的 8-K 中可能很容易看出。但實際上，這實際上是大約 1100 萬美元的備抵費用項目，可以抵消本季度的一般管理費用。

And that was a recovery for all the past legal fees. They're all prior period legal fees associated with pursuing those actions against TP-Link. And so, on a normalized basis, you could just add that $11 million back in and get to an established baseline of OpEx.

這是過去所有法律費用的補償。這些都是與對 TP-Link 採取這些行動相關的前期法律費用。因此，在標準化的基礎上，您只需添加 1100 萬美元即可達到既定的營運支出基準。

And I want to talk about the windfall of cash here and, CJ, the capital allocation priorities. I guess I want to pick on the organic investment piece of this first. As we see here based on the Q4 guidance, a more of a normalized quarter. We're not quite at sustainable breakeven on the non-GAAP operating line here in this model just yet.

我想談談這裡的現金意外之財，以及 CJ 的資本配置優先事項。我想我想先選擇有機投資部分。正如我們根據第四季度指引所看到的，這更像是一個正常化的季度。在這個模型中，我們的非公認會計準則營運線尚未完全實現永續損益平衡。

So I want to better understand how you're thinking about potential further investments in the model given the current operating structure of the business and what that would do in time to breakeven on the non-GAAP operating income line.

因此，我想更深入了解您如何考慮在當前業務營運結構的情況下對該模型進行潛在的進一步投資，以及如何及時實現非公認會計準則營業收入線的損益平衡。

Yes. No, great question. So maybe just I can reiterate some of the things we mentioned on the call, just from top line down. So we had a nice growth in NFB this past quarter. So we're excited about that. We see an opportunity to strengthen the performance of that business. And so, overall, we're expecting top line growth.

是的。不，很好的問題。因此，也許我可以從頭到尾重申我們在電話會議中提到的一些事情。因此，我們在上個季度 NFB 實現了良好的成長。所以我們對此感到興奮。我們看到了增強該業務績效的機會。因此，總的來說，我們預期收入會成長。

Next year, we also see opportunities to expand gross margins for the year. And part of that's due to the increasing mix of NFB. Part of it's tied to all the work that we're doing around clearing out legacy products and matching finished goods inventory with demands, and there's even some additional upside there as hopefully this freight situation resolves itself.

明年，我們也看到了擴大全年毛利率的機會。部分原因是 NFB 組合的不斷增加。其中一部分與我們圍繞清理遺留產品和將成品庫存與需求相匹配所做的所有工作有關，甚至還有一些額外的好處，希望這種貨運情況能夠自行解決。

And then as it relates to OpEx, we're taking a really close look at our spending across the Board because as we look at our businesses and where to invest, we want as much of that investment to come from just reallocating spend and investments. We do expect, though, to make some incremental investments on top of that reallocation next year, and we're not expecting to be profitable for the year in 2025.

然後，由於與營運支出相關，我們正在非常仔細地審視我們的全面支出，因為當我們審視我們的業務和投資地點時，我們希望盡可能多的投資來自重新分配支出和投資。不過，我們確實預計在明年重新分配的基礎上進行一些增量投資，並且我們預計 2025 年不會實現盈利。

We see a clear path to get there, but we remain really focused on driving long-term growth. We're not ready to put a stake in the ground as to what quarter we're going to turn breakeven or profitable, but I'm very confident that we are going to get there. And part of the plan is just really setting us up for -- we see a lot of growth opportunities, particularly on the NFB side, and making sure that we're set up to capture those.

我們看到了實現這一目標的明確道路，但我們仍然真正專注於推動長期成長。我們還沒有準備好確定我們將在哪個季度實現盈虧平衡或獲利，但我非常有信心我們能夠實現這一目標。該計劃的一部分是讓我們真正做好準備——我們看到了許多成長機會，特別是在 NFB 方面，並確保我們準備好抓住這些機會。

And on capital allocation, broadly, it was helpful that you outlined the buckets, and this might be a tough question to answer. But if I look at the balance sheet, I think you're at about $400 million of cash. I think you previously alluded to somewhere around $150 million needed to run the business, and wanted to confirm that's still the view.

從廣義上講，在資本配置方面，您概述了各個類別是有幫助的，但這可能是一個很難回答的問題。但如果我看一下資產負債表，我認為你的現金約為 4 億美元。我想您之前提到過經營該業務需要大約 1.5 億美元，並且想確認這仍然是您的觀點。

And if so, that leaves us with around $250 million of excess cash here. If we could just understand how you're thinking about the general weighting between those three categories, the share repurchase or returning cash to shareholders, organic investment, and M&A at this point and just make sure that I'm understanding the excess cash correctly.

如果是這樣，我們就剩下大約 2.5 億美元的多餘現金。如果我們能理解您此時如何考慮這三個類別之間的一般權重，即股票回購或向股東返還現金、有機投資和併購，並確保我正確理解了多餘的現金。

Yes. Great question. So the one qualification I'll make to the $150 million of working capital requirements is if there were to be a big shift, regulatory shift, addressing some of the topics you asked about at the outset, that would require more working capital than we've outlined there and quite a bit more. And so, we don't want -- we'd obviously want to be in a position to capitalize on that.

是的。很好的問題。因此，我對 1.5 億美元營運資金要求的一個限定是，如果要進行重大轉變、監管轉變，解決您一開始就提出的一些主題，那將需要比我們更多的營運資金。了，還有更多。因此，我們不希望——我們顯然希望能夠利用這一點。

But then putting that aside, if you just look at our priorities, we're definitely looking to return capital to shareholders. So we're expecting this quarter to repurchase more shares on a dollar basis than we did in the prior few quarters. And that's an important priority for us. We think that if you look at returning capital to shareholders is a much more significant portion of our cash than the organic investments we're planning.

但拋開這一點，如果你看看我們的優先事項，我們肯定會尋求向股東返還資本。因此，我們預計本季以美元計算回購的股票將比前幾季回購的股票更多。這對我們來說是一個重要的優先事項。我們認為，如果你考慮一下，向股東返還資本，這在我們的現金中所佔的比例比我們計劃的有機投資要大得多。

On the M&A side, as I said, our number one priority is to get the business back to profitable growth and addressing the opportunities in our core businesses. However, we are going to evaluate opportunities, the ones that I outlined as examples. But that's obviously very one-off and speculative at this stage. We're really focused on getting the business turned around. And so, hopefully, that framing helps put it more into context.

在併購方面，正如我所說，我們的首要任務是讓業務恢復獲利成長並抓住我們核心業務的機會。然而，我們將評估機會，即我作為示例概述的機會。但在現階段，這顯然是非常一次性的和投機性的。我們真正專注於扭轉業務。因此，希望這個框架有助於將其更多地結合到背景中。

At this time, there are no further questions. I would now hand today's call back over to CJ Prober, CEO, for closing remarks.

目前，沒有其他問題了。現在，我將把今天的電話會議轉交給執行長 CJ Prober，讓其結束語。

Well, thanks for joining, and we really appreciate the support of our global team partners, customers, and our investors and look forward to continuing the open communication on our transformation. And on that note, Bryan, and I we're planning to join Adam at the RJ Conference in New York in December. So whoever is there, we look forward to seeing you.

好的，感謝您的加入，我們非常感謝我們的全球團隊合作夥伴、客戶和投資者的支持，並期待繼續就我們的轉型進行公開溝通。關於這一點，布萊恩和我計劃與 Adam 一起參加 12 月在紐約舉行的 RJ 會議。因此，無論誰在那裡，我們都期待見到您。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。