NETGEAR Inc (NTGR) 2025 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. (Operator Instructions)

女士們、先生們，感謝你們的支持。（操作員指示）

I would now like to turn the conference over to Erik Bylin. Please go ahead, sir.

現在我想將會議交給埃里克·拜林 (Erik Bylin)。先生，請繼續。

Thank you, operator. Good afternoon, and welcome to NETGEAR's first quarter of 2025 financial results conference call. Joining us from the company are Mr. CJ Prober, CEO; and Mr. Bryan Murray, CFO.

謝謝您，接線生。下午好，歡迎參加 NETGEAR 2025 年第一季財務業績電話會議。與我們一起參加會議的公司有執行長 CJ Prober 先生；以及財務長 Bryan Murray 先生。

The format of the call will start with commentary on the business provided by CJ, followed by a review of the financials for the first quarter and guidance for the second quarter provided by Bryan. We'll then have time for any questions. If you have not received a copy of today's press release, please visit NETGEAR's Investor Relations website at www.netgear.com.

電話會議的形式將以 CJ 對業務的評論開始，然後是 Bryan 對第一季財務狀況的回顧以及對第二季度的指導。然後我們會有時間回答任何問題。如果您尚未收到今天的新聞稿副本，請造訪 NETGEAR 的投資者關係網站：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 our 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，我們提醒您，今天的電話會議包含前瞻性陳述。前瞻性陳述包括有關我們預期收入、營業利潤率、稅費、費用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所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 on the most recent Form 10-K. 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.

欲了解更多信息，請參閱 NETGEAR 向美國證券交易委員會提交的定期文件中討論的風險因素，包括最新的 10-K 表格。我們在本次電話會議上所做的任何前瞻性陳述均基於今天的假設，除非法律要求，否則 NETGEAR 不承擔因新資訊或未來事件而更新這些陳述的義務。

In addition, several non-GAAP financial measures will be mentioned on this call. Reconciliation of the non-GAAP to GAAP measures can be found in today's press release on our Investor Relations website.

此外，本次電話會議也將提及幾個非公認會計準則財務指標。非公認會計準則與公認會計準則衡量標準的對帳可以在我們投資者關係網站上今天的新聞稿中找到。

At this time, I would now like to turn the call over to CJ.

現在，我想將電話轉給 CJ。

Thanks, Erik, and thank you all for joining our call. We had another great quarter, our transformation is gaining momentum, and we are well-positioned to navigate the current geopolitical situation given we don't manufacture in China, our products are currently exempt from tariffs, and we are a trusted US-based public company. I'll use my time today to expand on each of these three topics.

謝謝，艾瑞克，也感謝大家參加我們的電話會議。我們又度過了一個出色的季度，我們的轉型正在加速，而且由於我們不在中國生產，我們的產品目前免徵關稅，而且我們是一家值得信賴的美國上市公司，我們完全有能力應對當前的地緣政治局勢。我今天將利用我的時間來詳細討論這三個主題。

The team at NETGEAR produced another strong quarter, solidly outperforming our guidance for revenue and operating margin, led by better-than-expected contributions from our B2B division NETGEAR for Business. As we shared last quarter, we focused 2024 on understanding and addressing NETGEAR's foundational challenges.

NETGEAR 團隊又一個季度表現強勁，營收和營業利潤率遠超我們的預期，這主要得益於我們 B2B 部門 NETGEAR for Business 的貢獻好於預期。正如我們上個季度所分享的，2024 年我們的重點是了解和解決 NETGEAR 的基礎挑戰。

With great execution and agility demonstrated by the team, we entered 2025 as a realigned and reinvigorated organization that was much more focused on the best growth opportunities and capable of stronger execution on the operational front. Our 2024 enhancements enabled us to not only deliver improving results on the top and bottom line, but also set a clean table for us to launch into the next phase of our transformation.

憑藉團隊出色的執行力和敏捷性，我們以經過重新調整和煥發活力的組織姿態邁入 2025 年，更加專注於最佳增長機會，並能夠在運營方面有更強的執行力。我們 2024 年的改進不僅使我們在營收和利潤方面取得了進步，而且為我們進入下一階段的轉型奠定了基礎。

Looking to maximize our impact in 2025, we proactively launched a further reorganization in January to ensure we had fully adjusted our team's focus to unlock the value inherent in each business. These changes allowed us to free up cash to make bigger bets on what we increasingly see as great growth and profitability opportunities. Backed by a reorganized team and clear goals, our first quarter results are beginning to reflect the progress we've made thus far and the momentum building behind NETGEAR's transformation.

為了在 2025 年最大限度地發揮我們的影響力，我們在 1 月主動啟動了進一步的重組，以確保我們已充分調整團隊的重點，以釋放每個業務固有的價值。這些變化使我們能夠釋放現金，對我們日益視為巨大成長和獲利機會的領域進行更大的押注。在重組的團隊和明確的目標的支持下，我們的第一季業績開始反映出我們迄今為止所取得的進展以及 NETGEAR 轉型背後的動力。

We saw broad-based strength across multiple businesses, specifically with stronger than expected demand for our ProAV managed switches. With the team highly focused on delivering on our ProAV potential, we were able to improve our supply position for these highly differentiated products and deliver better performance for NFB. As a company, we combined a stronger NFB mix with better supply chain execution to produce non-GAAP gross margins of 35%, further underscoring the fact that having a cleaner, more tightly run channel is instrumental to expanding profitability.

我們看到多項業務都表現出廣泛優勢，特別是對我們的 ProAV 管理型交換器的需求強於預期。由於團隊高度專注於發揮我們的 ProAV 潛力，我們能夠改善這些高度差異化產品的供應地位，並為 NFB 提供更好的效能。作為一家公司，我們將更強大的 NFB 組合與更好的供應鏈執行相結合，實現了 35% 的非 GAAP 毛利率，進一步強調了擁有更清潔、更緊密運行的管道對於擴大盈利能力至關重要。

Coming off our January reorganization, our OpEx spend started the year on the light side, which combined with the strong revenue and gross margin, produced a strong beat on our operating margin. Underlying this performance and perhaps most importantly, we saw material year-over-year improvement in the contribution margin of all three businesses which helped us deliver positive non-GAAP EPS.

繼一月重組之後，我們年初的營運支出較為寬鬆，再加上強勁的收入和毛利率，使得我們的營業利潤率大幅提升。這一業績表現的基礎或許是，我們看到三項業務的貢獻利潤率同比都有顯著提高，這有助於我們實現正的非公認會計準則每股收益。

Bryan will provide more details on the results. The first quarter was great validation of why we see so much potential in our NFB segment. Our revenue was up over 15% from last year and with the strong gross margin, our contribution profit rose 78% year over year. The impetus for our reorganization in January was to further accelerate our investments in NFB and we're more excited than ever about the trajectory of this business. As I noted, the team did a great job navigating supply constraints to over deliver on our expectations for this segment.

布萊恩將提供有關結果的更多細節。第一季充分證明了我們為何認為 NFB 領域有如此大的潛力。我們的收入比去年增長了 15% 以上，由於毛利率較高，我們的貢獻利潤比去年同期增長了 78%。我們一月份進行重組的動力是為了進一步加快對 NFB 的投資，我們對這項業務的發展軌跡比以往任何時候都更加興奮。正如我所指出的，團隊在克服供應限制方面做得非常出色，超越了我們對這領域的期望。

We also were able to continue to add to our ecosystem of partners and exited the quarter with more than 400, including many new partners in the broadcast vertical, which we see as the next growth accelerant for ProAV. Most importantly, though, we were able to accelerate the insourcing of our software development capability by acquiring VAAG Systems which is a creator of cutting-edge embedded and cloud software solutions based in Chennai, India. This new team brings a wealth of industry expertise with experience from companies such as Qualcomm, HP, NXP, Cisco and MaxLinear, and will form the foundation of NETGEAR's new Chennai based Software Development Center. This new team will be focused on leveraging AI to greatly simplify networkings for small and medium enterprises. In addition to enabling us to deliver more innovative products to our customers on an accelerated timeline, the insourcing effort will allow us to do more with less given our move away from costly outsourced software development vendors.

我們還能夠繼續擴大我們的合作夥伴生態系統，本季結束時合作夥伴已超過 400 個，其中包括廣播垂直領域的許多新合作夥伴，我們認為這是 ProAV 的下一個成長加速器。但最重要的是，透過收購位於印度欽奈的尖端嵌入式和雲端軟體解決方案創造者 VAAG Systems，我們能夠加速軟體開發能力的內部採購。這個新團隊擁有豐富的行業專業知識，包括來自高通、惠普、恩智浦、思科和 MaxLinear 等公司的經驗，並將成為 NETGEAR 位於欽奈的新軟體開發中心的基礎。這個新團隊將專注於利用人工智慧大大簡化中小企業的網路。除了讓我們能夠在更快的時間內向客戶提供更多創新產品之外，由於我們擺脫了昂貴的外包軟體開發供應商，內部採購工作還能讓我們以更少的投入做更多的事情。

In our Mobile business, better than expected end user demand in the quarter enabled us to beat our expectations. We're still working to expand our product portfolio into a good-better-best lineup that we feel will better serve the market and improve growth and profitability. Encouragingly, our strategy for this segment is progressing well and we continue to expect these efforts to produce positive results through the rest of the year. In Home Networking, continuing the positive trend exiting Q4, we were able to gain market share sequentially in our two biggest markets, the US and Europe, even as the market remained highly competitive and contracted slightly year over year.

在我們的行動業務中，本季終端用戶需求優於預期，這讓我們超出了預期。我們仍在努力將我們的產品組合擴展為更好、最好的產品陣容，我們認為這將更好地服務市場並提高成長和獲利能力。令人鼓舞的是，我們針對這一領域的策略進展順利，我們繼續期待這些努力將在今年剩餘時間內產生積極成果。在家庭網路領域，我們延續了第四季以來的正面趨勢，儘管市場競爭仍然激烈且同比略有萎縮，但我們仍能在我們最大的兩個市場美國和歐洲連續獲得市場份額。

This is a great accomplishment and is a strong validation of our new strategy for this segment. Buoyed by a combination of better margins from more WiFi 7 offerings, lower cost inventory and right sized investments, we significantly lowered our contribution loss for this business as compared to the prior year period. Clearly, our efforts to deliver continued product releases along with steady improvement and hardening of our security offerings are working as we continue to expand our advantage as the most trusted brand in Home Networking. With regards to the geopolitical situation, while there is a lot of volatility and the macroenvironment remains uncertain, we are very well positioned to navigate through this successfully for a number of reasons. First, we do not manufacture products in China, which has been the biggest target of the new administration's tariff policies.

這是一個偉大的成就，也是對我們針對這一領域的新策略的有力驗證。受更多 WiFi 7 產品帶來的更高利潤率、更低的庫存成本和適當規模的投資等因素的推動，與去年同期相比，我們大幅降低了該業務的貢獻損失。顯然，我們不斷推出新產品以及穩步改進和強化安全產品的努力正在發揮作用，因為我們將繼續擴大作為家庭網路領域最值得信賴的品牌的優勢。就地緣政治局勢而言，儘管存在很大波動且宏觀環境仍不確定，但由於多種原因，我們完全有能力成功應對這一局面。首先，我們不在中國生產產品，而中國是新政府關稅政策的最大目標。

Second, while this could obviously change, our products are currently almost completely exempt from tariffs. Unlike the 90-day hold on reciprocal tariffs, the tariff exemption that our products are part of is not time bound. Third, we have limited direct exposure to the DOGE cost cutting efforts. And in fact, the focus on driving down cost positions our high value, lower cost solutions quite well vis-a-vis our competition.

其次，雖然這種情況顯然可能會改變，但我們的產品目前幾乎完全免徵關稅。與 90 天的互惠關稅暫停不同，我們的產品所享有的關稅豁免不受時間限制。第三，我們對 DOGE 成本削減措施的直接影響有限。事實上，專注於降低成本使我們的高價值、低成本解決方案在與競爭對手的競爭中佔據了相當有利的地位。

Finally, our status as an independent US-based public company positions us well to continue to earn the trust of our consumers and benefit from any administrative action focused on our China based competition. In that regard, Bloomberg published an article this week reporting on an apparent DOJ criminal investigation into TP-Link. So to summarize, we had another quarter of great results, our transformation is working and the geopolitical winds are blowing in our favor.

最後，作為一家獨立的美國上市公司，我們有能力繼續贏得消費者的信任，並從針對我們在中國競爭的任何行政行動中受益。在這方面，彭博社本週發表了一篇文章，並報告了美國司法部對 TP-Link 進行的刑事調查。總而言之，我們又一個季度取得了出色的業績，我們的轉型正在發揮作用，地緣政治風向也對我們有利。

And with that, I'll hand it over to Bryan.

說完這些，我就把麥克風交給布萊恩。

Thank you, CJ, and thank you everyone for joining today's call. Thanks to the excellent execution of our team, we began the year with a strong start, delivering a fourth consecutive quarter where we exceeded the high end of our guidance range for revenue and non-GAAP operating margin. The first quarter's outperformance was driven mainly by strong performance in our higher margin NFB business segment which grew 15.4% year over year along with demand for our Mobile products coming in above our initial expectations. Following the accelerated destocking actions we took last year and our initiative to broaden our product portfolio in pursuit of a good-better-best strategy, we're continuing to see more predictable performance aligned to the market trends and improved linearity of channel execution. Our DSOs decreased again to 78 days, our best result in over seven years.

謝謝 CJ，也謝謝大家參加今天的電話會議。由於我們團隊的出色執行，我們以強勁的勢頭開啟了新的一年，連續第四個季度的收入和非公認會計準則營業利潤率均超過了預期範圍的上限。第一季度的優​​異表現主要得益於我們利潤率更高的 NFB 業務部門的強勁表現，該部門同比增長 15.4%，同時我們行動產品的需求也超出了我們最初的預期。繼去年我們採取加速去庫存行動和主動擴大產品組合以追求「好-更好-最好」策略之後，我們繼續看到與市場趨勢保持一致的更可預測的業績和通路執行的線性提高。我們的 DSO 再次減少至 78 天，這是七年多來的最佳成績。

End user demand for our ProAV managed switch products again grew in the double digits year over year and we saw penetration of our broader WiFi 7 portfolio pick up momentum for our Home Networking and Mobile businesses. The leanness and health of our channels and our ability to match sell-in with sell-through were a significant contributor to our success starting off the year.

最終用戶對我們的 ProAV 管理型交換器產品的需求再次同比增長兩位數，並且我們看到更廣泛的 WiFi 7 產品組合對我們的家庭網路和行動業務的滲透勢頭強勁。我們通路的精簡和健康以及我們匹配銷售量和銷售通過量的能力是我們今年年初成功的重要因素。

For the quarter ended March 30, 2025, revenue was above the high-end of our guidance range at $162.1 million, down 11.2% on a sequential basis largely due to seasonality in our Home Networking business and down 1.5% year over year. In Q1, we repurchased $7.5 million of our shares and experienced changes in working capital due to lower accruals leading to negative free cash flow of $10.1 million. We ended the quarter with nearly $392 million in cash and short term investments.

截至 2025 年 3 月 30 日的季度，收入高於我們指導範圍的高端，為 1.621 億美元，環比下降 11.2%，主要原因是家庭網路業務的季節性，年減 1.5%。在第一季度，我們回購了價值 750 萬美元的股票，並由於應計費用減少導致營運資本發生變化，從而導致自由現金流為負 1,010 萬美元。本季結束時，我們擁有近 3.92 億美元的現金和短期投資。

We delivered $79.2 million of revenue in the NFB segment for the first quarter, down 2% sequentially and up 15.4% year over year. Although, we continue to see supply constraints around certain managed switch products in our NFB business, the team executed well and was able to outperform our forecast for the quarter by working closely with key vendors to overcome these headwinds. We do believe that the supply challenge for this category will begin to ease as we exit Q2 and we should be in a healthier position as we enter the second half of the year. Revenue for the Mobile business in Q1 was $21.5 million, higher than our expectations, but down 25.3% year over year and down 10.9% sequentially. With additional new product introductions planned for release later this year, we expect the full benefits of our good-better-best strategy to build over time.

第一季度，NFB 部門的營收為 7,920 萬美元，季減 2%，較去年同期成長 15.4%。儘管我們仍然看到 NFB 業務中某些託管交換機產品的供應受限，但團隊表現良好，並且透過與主要供應商密切合作克服這些不利因素，我們能夠超越本季度的預測。我們確實相信，隨著第二季的結束，這個類別的供應挑戰將開始緩解，而進入下半年，我們的狀況應該會更加健康。第一季行動業務收入為 2,150 萬美元，高於我們的預期，但年減 25.3%，季減 10.9%。隨著今年稍後計劃推出更多新產品，我們預計我們的「好-更好-最好」策略的全部優勢將隨著時間的推移逐漸顯現。

In Q1, the Home Networking business delivered net revenue of $61.4 million, down 8.7% on a year-over-year basis and down 20.8% sequentially due to seasonality coming off the Q4 holiday period. Aided by the recently released WiFi 7 offerings that helped fill out our good-better-best strategy, we were able to continue the momentum we saw exiting the fourth quarter and gained share in this highly competitive market for the first time in nearly four years. We exited the first quarter with 559,000 recurring subscribers and generated $8.7 million in recurring service revenue in the quarter, a year-over-year increase of 19.3%. We continue to see increased emphasis placed by consumers on cybersecurity protection, privacy and premium support, further substantiating our belief that focusing on increasing our recurring subscriber base is the optimal strategy to add high margin revenue to the Home Networking business. From this point on, my discussion points will focus on non-GAAP numbers.

第一季度，家庭網路業務淨營收為 6,140 萬美元，年減 8.7%，環比下降 20.8%，原因是第四季度假期結束後出現了季節性變化。借助最近發布的 WiFi 7 產品，我們完善了「好-更好-最好」策略，得以延續第四季度的勢頭，並在近四年來首次在這個競爭激烈的市場中獲得份額。第一季結束時，我們擁有 559,000 名經常性訂閱用戶，並在本季度產生了 870 萬美元的經常性服務收入，年增 19.3%。我們繼續看到消費者越來越重視網路安全保護、隱私和優質支持，這進一步證實了我們的信念：專注於增加我們的經常性用戶群是為家庭網路業務增加高利潤收入的最佳策略。從現在開始，我的討論重點將集中在非 GAAP 數字上。

The reconciliation from GAAP to non-GAAP is detailed in our earnings release distributed earlier today. For the third consecutive quarter, non-GAAP gross margin was above 30% in the first quarter of 2025 coming in at 35%. This marked a 550-basis-point increase compared to 29.5% in the prior year comparable period and 220-basis-point increase compared to 32.8% in the fourth quarter of 2024.

我們今天早些時候發布的收益報告中詳細說明了從 GAAP 到非 GAAP 的調整。2025 年第一季非 GAAP 毛利率連續第三個季度超過 30%，達到 35%。與去年同期的 29.5% 相比，成長了 550 個基點；與 2024 年第四季的 32.8% 相比，成長了 220 個基點。

Compared to the prior year period, our profitability in the current period was aided by improved mix of our higher margin NFB business, as well as success in moving past older, higher cross inventory along with other benefits of operating with the channel inventory at leaner levels and improved forecasting and supply chain management. In addition to the margin expansion unlocked by our NFB products, we also continue to see improved product mix from our WiFi 7 lineup.

與去年同期相比，本期我們的盈利能力得益於利潤率更高的 NFB 業務組合的改善，以及成功擺脫老舊、交叉庫存較高的問題，同時還得益於以更精簡的水平運營渠道庫存以及改進的預測和供應鏈管理。除了我們的 NFB 產品帶來的利潤擴張之外，我們還看到 WiFi 7 產品線的產品組合不斷改善。

Drilling down to profitability of our three business segments. NFB gross margin was 46.3% up 440 basis points year over year. Mobile had the largest improvement in segment gross margin expansion up 730 basis points year over year to 24.6%. For the Home Networking segment, our improved mix of WiFi 7 products and moving into lower cost inventory improved our gross margin for this business by 190 basis points to 24.1%. The improved gross margin performance coupled with expense management propelled all three businesses to meaningful improvement contribution profitability as well.

深入了解我們三個業務部門的獲利能力。NFB 毛利率為 46.3%，較去年同期上升 440 個基點。行動業務部門毛利率增幅最大，較去年同期成長 730 個基點，達到 24.6%。對於家庭網路部門，我們改進了 WiFi 7 產品組合併轉向低成本庫存，使該業務的毛利率提高了 190 個基點，達到 24.1%。毛利率表現的改善加上費用管理也推動了三項業務的獲利貢獻率顯著提高。

Total Q1 non-GAAP operating expenses came in at $59.3 million, down 8.2% year over year and down 7.2% sequentially, below our expectations due to delays in our hiring plans, in part, from proceeding more cautiously during Q1 due to the uncertain tariff situation. Our headcount was 636 as at end of the quarter, down from 655 in Q4. As a reminder, in January we enacted a significant restructuring that drove cost reductions throughout the organization, impacting approximately 50 individuals and yielding a reduction in annual operating expenses of approximately $20 million or over 8% of our annual expense in 2024. We plan to redeploy these savings into opportunities that drive the greatest growth and profitability. While we got off to a slow start in Q1, we believe we can still achieve our hiring and investment goals for the year.

第一季非公認會計準則總營運費用為 5,930 萬美元，年減 8.2%，環比下降 7.2%，低於我們的預期，原因是我們的招聘計劃被推遲，部分原因是由於不確定的關稅情況導致第一季我們採取了更加謹慎的行動。截至本季末，我們的員工人數為 636 人，低於第四季的 655 人。提醒一下，今年 1 月，我們進行了一項重大重組，推動了整個組織的成本削減，影響了大約 50 人，並減少了約 2000 萬美元的年度營運費用，佔 2024 年年度費用的 8% 以上。我們計劃將這些節省下來的資金重新投入到能夠帶來最大成長和獲利的機會中。儘管第一季開局緩慢，但我們相信我們仍然可以實現今年的招募和投資目標。

Our non-GAAP R&D expense for the first quarter was 10.9% of net revenue as compared to 11.9% of net revenue in the prior year comparable period and 10.5% of net revenue in the fourth quarter of 2024. To continue our technology and product leadership, we are committed to continued investment in R&D such as the opening of our Chennai-based Software Development Center that CJ referenced earlier. I'm pleased that we delivered profitability above the high-end of our guidance range, enabled by improved top-line leverage, led by our NFB and Mobile segments and compounded by greater efficiency in our channel execution and our expenses coming in lighter than we had projected. Our Q1 non-GAAP operating loss was $2.6 million resulting in a non-GAAP operating margin of negative 1.6%, an improvement of 810 basis points compared to the prior year period and an improvement of 70 basis points compared to the prior quarter. Our non-GAAP tax expense was $470,000 in the first quarter of 2025.

我們第一季的非公認會計準則研發費用佔淨收入的 10.9%，而去年同期為淨收入的 11.9%，2024 年第四季為淨收入的 10.5%。為了繼續保持我們的技術和產品領先地位，我們致力於持續投資研發，例如 CJ 先前提到的位於欽奈的軟體開發中心的開設。我很高興，我們的獲利能力超出了預期範圍的高端，這得益於 NFB 和行動部門推動的營收槓桿率的提高，以及通路執行效率的提高和費用低於預期。我們第一季的非公認會計準則營業虧損為 260 萬美元，導致非公認會計準則營業利潤率為負 1.6%，與去年同期相比改善了 810 個基點，與上一季相比改善了 70 個基點。2025 年第一季度，我們的非公認會計準則稅費為 470,000 美元。

Looking at the bottom line for Q1, we reported non-GAAP net income of approximately $460,000, resulting in non-GAAP earnings of $0.02 per share. Turning to the balance sheet, we ended the first quarter of 2025 with $391.9 million in cash and short term investments, down $16.8 million from the prior quarter and equating to $12.95 per share. During the quarter, $8.7 million of cash was used by operations which brings our total cash provided by operations over the trailing 12 months to $138.9 million. We used $1.4 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 $7.9 million. In Q1, we spent $7.5 million to repurchase approximately 254,000 shares of NETGEAR common stock at an average price of $29.55 per share.

從第一季的底線來看，我們報告的非 GAAP 淨收入約為 46 萬美元，導致非 GAAP 每股收益為 0.02 美元。談到資產負債表，我們在 2025 年第一季結束時擁有 3.919 億美元的現金和短期投資，比上一季減少 1,680 萬美元，相當於每股 12.95 美元。本季度，營運活動使用了 870 萬美元的現金，這使得我們過去 12 個月營運活動提供的現金總額達到 1.389 億美元。本季度，我們使用了 140 萬美元購買財產和設備，這使得過去 12 個月用於資本支出的現金總額達到 790 萬美元。第一季度，我們花費 750 萬美元以每股 29.55 美元的平均價格回購了約 254,000 股 NETGEAR 普通股。

We have approximately 3.1 million shares reserved in our current authorization and our fully diluted share count is approximately 30.2 million shares as of the end of the first quarter. We're committed to returning value to our shareholders and plan to continue to opportunistically repurchase shares in future periods. Now, I'll cover our outlook for Q2 2025. We expect to continue to see more predictable performance that is aligned with the market for all of our businesses. Within NFB, end user demand for our ProAV line of managed switches is expected to remain strong.

我們目前的授權中保留了大約 310 萬股，截至第一季末，我們的完全稀釋股數約為 3,020 萬股。我們致力於為股東帶來回報，並計劃在未來繼續適時回購股票。現在，我將介紹我們對 2025 年第二季的展望。我們期望繼續看到我們所有業務的與市場保持一致的更可預測的表現。在 NFB 內部，預計最終用戶對我們的 ProAV 系列管理型交換器的需求將保持強勁。

And although, we expect to continue to make improvements in our supply position, we expect to continue to chase supply throughout the quarter which may limit our ability to capture the full top-line potential of this growing business. On the Home Networking side, we are seeing signs of the benefit of our broader product portfolio to address the market and expect to experience normal seasonality in this business.

儘管我們預計將繼續改善我們的供應狀況，但我們預計整個季度將繼續追逐供應，這可能會限制我們充分發揮這一不斷增長的業務的營收潛力的能力。在家庭網路方面，我們看到了更廣泛的產品組合有利於滿足市場需求的跡象，並預計該業務將經歷正常的季節性。

On the Mobile side, we expect revenue to be in line with Q1 as we await our new product introductions to round out the portfolio later this year. Accordingly, we expect second quarter net revenue to be in the range of $155 million to $170 million. In the second quarter, we expect our gross margin to be in line or decrease slightly from the first quarter level and we expect to ramp our planned investments with focus on insourcing software development capabilities and enhancing our go-to-market capabilities supporting our NFB business.

在行動方面，我們預計收入將與第一季持平，因為我們正在等待今年稍後推出的新產品來完善產品組合。因此，我們預計第二季淨收入將在 1.55 億美元至 1.7 億美元之間。在第二季度，我們預計我們的毛利率將與第一季度水平持平或略有下降，並且我們預計將加大計劃投資，重點是內部採購軟體開發能力和增強支持 NFB 業務的市場進入能力。

Accordingly, we expect our second quarter GAAP operating margin to be in the range of negative 10.4% to negative 7.4% and non-GAAP operating margin to be in the range of negative 6.5% to negative 3.5%. Our GAAP tax expense is expected to be in the range of $0.5 million to $1.5 million and our non-GAAP tax expense is expected to be in the range of $1 million to $2 million for the second quarter of 2025. And with that we can now open it up for questions.

因此，我們預計第二季 GAAP 營業利潤率將在負 10.4% 至負 7.4% 之間，非 GAAP 營業利潤率將在負 6.5% 至負 3.5% 之間。預計 2025 年第二季的 GAAP 稅費將在 50 萬美元至 150 萬美元之間，非 GAAP 稅費將在 100 萬美元至 200 萬美元之間。現在我們可以開始提問了。

Adam Tindle, Raymond James.

亞當廷德爾、雷蒙詹姆斯。

Congrats on the much better than expected results. CJ, I just maybe wanted to start on competitive dynamics. You mentioned no manufacturing in China. You're a trusted US company.

恭喜你取得了比預期更好的結果。CJ，我可能只是想從競爭動態開始。您提到中國沒有製造業。你們是一家值得信賴的美國公司。

How are those things impacting competitive dynamics in your core market? And if you could maybe rope in some of the TP-Link stuff. I know you mentioned a couple things in the prepared remarks, but if you could maybe double click on what you're waiting for there and some of the timelines?

這些因素如何影響您核心市場的競爭動態？也許您可以加入一些 TP-Link 產品。我知道您在準備好的評論中提到了幾件事，但是您是否可以雙擊您在那裡等待的內容和一些時間表？

Yes. Adam, good questions. So, competitively, the tariff landscape has worked out in our favor. Currently, there's been a lot of volatility there. But because we don't manufacture in China, and some of our competitors do, we benefit from the fact that we have the tariff exemption that doesn't apply to some of the China tariffs.

是的。亞當，好問題。因此，從競爭角度來看，關稅情勢對我們有利。目前，那裡的局勢非常動盪。但由於我們不在中國生產，而我們的一些競爭對手卻在中國生產，因此我們受益於不適用於部分中國關稅的關稅豁免。

I would say that benefit is somewhat limited, because if you look at our competitive mix and the numbers that competitors that manufacture in China, it's very much a mix. And people have figured out a way to avoid paying those tariffs, rightly or wrongly. But on the broader point around kind of our posture as a trusted US-based public company, there's obviously been a bunch of developments on the TP-Link side of things since our last call. So there's a big congressional hearing that I don't think was intended to focus on TP-Link, but that ended up being the focus of the conversation there with some fairly impassioned perspectives on the right action to be taken.

我想說這種好處是有限的，因為如果你看看我們的競爭組合以及在中國製造的競爭對手的數量，你會發現這是一個非常複雜的組合。人們已經找到了避免支付這些關稅的方法，無論正確與否。但從我們作為一家值得信賴的美國上市公司的立場來看，自從我們上次通話以來，TP-Link 方面顯然已經取得了一系列進展。因此，我認為國會舉行了一次大型聽證會，其重點並非 TP-Link，但最終這卻成為了討論的焦點，與會者對應採取的正確行動發表了一些相當激烈的看法。

And then a couple of Bloomberg articles dropped over the last month or so. One was kind of debunking the position that's being taken there that they've separated the companies and are now a US-based company. And the other was revealing the fact that there's a DOJ investigation, that's a criminal investigation focused on their pricing practices.

大約在過去一個月裡，彭博社發表了幾篇文章。其中一個說法是，他們已經將兩家公司分拆，現在是一家美國公司。另一件事是揭露司法部正在進行調查的事實，這是一項針對其定價行為的刑事調查。

So I would say, to summarize it on the tariffs, some competitive benefit there. But the real benefit is that we're not subject to the tariffs and so, we're moving full speed ahead with our strategy and transformation. And then, preparing if tariffs were to reemerge for us in terms of cost sharing with our partners, and potential price increases.

所以我想說，總結一下關稅，那裡有一些競爭優勢。但真正的好處是我們不受關稅影響，因此，我們正在全速推進我們的策略和轉型。然後，如果關稅再次出現，我們將與合作夥伴分攤成本，並做好可能的價格上漲的準備。

Got it. And maybe a good way to dovetail to Bryan. How should we think about revenue for the rest of the year? If you can maybe just provide a little bit more color. I look at the all the things going on that CJ talked about, it sounds like, a lot of tailwinds.

知道了。這或許是與布萊恩相契合的一個好方法。我們該如何考慮今年剩餘時間的收入？如果您可以提供更多一點顏色的話。我看了 CJ 談到的所有正在發生的事情，聽起來有很多順風。

Your Q2 guidance is showing double-digit growth year over year. Granted a little bit of an easier comparison, so not getting ahead of ourselves too much on that. But it does look like some acceleration in growth and just wanted to see if you could double click on how you're thinking about revenue for the rest of year?

您第二季的預期顯示年增兩位數。當然，這是一個比較容易的比較，所以我們不要在這方面想得太遠。但它確實看起來像是成長有所加速，只是想看看您是否可以雙擊一下您對今年剩餘時間的收入有何看法？

Sure, yes. I guess, you already kind of hit on it. The comp, obviously, with Q2 last year, as you recall was an aggressive action to clean up the channel, and so the comp is, is a bit easier in Q2. If I look to the three businesses, you know, if I start with NFB, there's not really a seasonal pattern to that business. We've got great momentum.

當然，是的。我想，您已經有點明白了。顯然，與去年第二季度相比，正如您記得的那樣，我們採取了積極的行動來清理管道，因此第二季度的比較要容易一些。如果我看這三項業務，你知道，如果我從 NFB 開始，那麼這項業務實際上並沒有季節性模式。我們擁有強大的發展動能。

Keep referring to the double-digit end user momentum on the ProAV side of things. Deliver 15% growth in Q1 on the top line. We are still going to face some supply challenges in Q2, but we think those will largely alleviate as we start to exit Q2. So we are kind of constrained a bit in Q2. As we go into the back half of the year and get an easing in the supply, we certainly think that growth momentum we're seeing on ProAV will just continue.

繼續參考 ProAV 方面的兩位數最終用戶成長動能。第一季營業額實現 15% 的成長。我們在第二季仍將面臨一些供應挑戰，但我們認為，隨著第二季的結束，這些挑戰將大大緩解。因此我們在第二季度受到了一些限制。隨著我們進入下半年並且供應有所緩解，我們當然認為 ProAV 的成長勢頭將會持續下去。

And you're probably thinking about something like a mid-single digit sequential growth profile once we start to bring that supply in. And it will be, progressive as we go through Q3, but we think we'll be in a good shape for the second half of the year. Home Networking, at this point we see it operating at kind of normal seasonal patterns. Q2 typically is relatively flat to Q1. And then as you go into the back half of the year, Q3 is usually an uptick in the low to mid-teens percentage increase.

一旦我們開始引入供應，您可能會想到中等個位數的連續成長概況。隨著我們進入第三季度，這一情況將會不斷改善，但我們認為下半年我們的狀態會很好。家庭網絡，目前我們看到它按照正常的季節性模式運作。Q2 通常與 Q1 相對持平。然後，當進入下半年時，第三季的百分比增幅通常處於低至十幾個百分點的上升趨勢。

And then Q4, would be kind of flat to up mid-single digits in Q4 seasonally speaking. Mobile, I think we've talked about this a couple of cycles now that, the level you saw in Q1 is likely the level we expect to see for most of this year certainly through Q3. And as we get into Q4, we've got some products that we're working on that will broaden that portfolio. Mobile is a little bit behind, where Home Networking business is in terms of broadening that portfolio in the good-better-best strategy. But we do feel good about where those efforts are going into Q4.

然後，從季節性角度來看，第四季的銷售額將持平至中個位數成長。移動，我想我們已經討論了幾個週期，您在第一季度看到的水平很可能就是我們預計在今年大部分時間到第三季度都會看到的水平。隨著進入第四季度，我們正在開發一些產品，以擴大我們的產品組合。行動業務稍微落後，而家庭網路業務則在好-更好-最佳策略中擴大產品組合。但我們對這些努力在第四季的進展感到滿意。

So those are kind of the trends, I think, that you would expect to see. And of course what we've said in terms of we expect double-digit growth for NFB that all this still holds true.

所以我認為這些都是你所期望看到的趨勢。當然，我們所說的我們預計 NFB 將實現兩位數成長，這一切仍然成立。

Maybe just on the point of margins. Obviously, gross margin was very, very strong in Q1, in particular. If you could first touch on the sustainability of gross margin at sort of this mid-30s level. And then, also walk through the trajectory of operating margin from here. You've got the further reorg in January.

或許只是關於邊際的問題。顯然，第一季的毛利率尤其非常高。如果您能先談談毛利率在 35% 左右的可持續性嗎？然後，從這裡開始回顧一下營業利潤率的軌跡。一月份你們進行了進一步的重組。

It sounds like a good portion, or maybe all of it is going to be reinvested. I'm just trying to figure out, should we think about sustaining gross margin at these levels, and what does that mean for the walk of operating margins for rest of year?

這聽起來像是很大一部分，或者可能全部都將被再投資。我只是想知道，我們是否應該考慮維持這些水準的毛利率，這對今年剩餘時間的營業利潤率意味著什麼？

Yes, I'll start with the gross margin piece. I definitely believe that gross margin is sustainable given the current mix trends. Like, the growth trajectory of NFB is really what's lifting the Q1 performance. We expect that to be sustainable. We've kind of moved past some of the aged inventory challenges that we had last year, and the aggressive actions we took to clean that up in 2024.

是的，我將從毛利率部分開始。我堅信，考慮到目前的組合趨勢，毛利率是可持續的。就像，NFB 的成長軌跡確實提升了第一季的業績。我們期望這是可持續的。我們基本上已經擺脫了去年遇到的一些庫存積壓問題，並在 2024 年採取了積極的措施來清理這些庫存。

So we're seeing that benefit. That should continue as we go forward. Q2, in particular, we're going to spend some on air freight. As I touched on the supply challenges that we still have during the quarter, we're going to supplement that with air freight. But that should start to diminish as we get into the back half of the year. So again, I think keeping those -- that mix of business and the trajectory NFB is on those the current gross margin level is sustainable.

所以我們看到了這種好處。隨著我們不斷前進，這種情況應該會繼續下去。特別是在第二季度，我們將在空運上花費一些資金。正如我談到我們在本季度仍然面臨的供應挑戰時，我們將透過空運來補充。但隨著進入下半年，這種情況應該會開始減少。因此，我再次認為，保持這些業務組合和 NFB 的發展軌跡，目前的毛利率水準是可持續的。

From an operating margin standpoint, you could see in the Q2 guidance, we are going to start to ramp our investments. We were a little bit slow out of the gates in Q1, obviously, getting the full benefit of the restructuring actions given we took those actions pretty early. But we are moving forward in terms of the investments that we plan for the year, and those will build as the year progresses.

從營業利益率的角度來看，您可以在第二季指引中看到，我們將開始增加投資。我們在第一季起步有點慢，顯然，由於我們很早就採取了重組行動，所以我們獲得了重組行動的全部好處。但我們正在按照今年的計劃推進投資，這些投資將隨著時間的推移而增加。

I still think you're probably to getting to an operating margin, above breakeven, you're probably looking to get to top line to nearly $200 million is probably that tipping point for us. But the investments in OpEx will build, as you can see in the Q2 guidance.

我仍然認為，您可能會達到營業利潤率，高於盈虧平衡點，您可能希望達到近 2 億美元的營業收入，這可能是我們的轉捩點。但正如您在第二季指引中所看到的，營運支出的投資將會增加。

Does that mean operating margin then would be further challenged in Q3 and Q4 from this minus 5% midpoint in Q2? Or because of the leverage in the model, does Q2 maybe represent the low point on operating margin?

這是否意味著營業利潤率將從第二季中點減去 5% 開始在第三季和第四季面臨進一步的挑戰？或者由於模型中的槓桿作用，第二季是否可能代表營業利潤率的低點？

Yes, the latter. As we talked about, the kind of seasonality in the business with the lift that you would expect in the second half of the year, that would certainly help from a top-line leverage standpoint.

是的，後者。正如我們所討論的，預計下半年業務會出現季節性成長，從營收槓桿的角度來看，這肯定會有所幫助。

And then last one from me, the VAAG acquisition, CJ maybe if you could just touch on strategic rationale on that. And also any color on the size of that deal. And Bryan, if you could maybe just wrap that point by talking about expectations on free cash flow for the year?

最後我想談談 VAAG 收購，CJ，您能否談談這方面的策略原理？以及該交易規模的任何顏色。布萊恩，您能否透過談論今年自由現金流的預期來總結這一點？

Yes. So as you'll recall, Adam, we recast our purpose as a company to power extraordinary experiences a couple quarters ago. And in order to do that we need to deliver great software. In order to deliver great software, we need great software teams. And so, we've been pursuing our transformation of insourcing our software development capability.

是的。亞當，你應該還記得，幾個季度前，我們重新制定了公司的目標，以提供非凡的體驗。為了做到這一點，我們需要提供優秀的軟體。為了提供優秀的軟體，我們需要優秀的軟體團隊。因此，我們一直在尋求將軟體開發能力內部化轉型。

Pramod who leads the NFB business identified Chennai as a perfect location given the networking talent there. We're going down the path of, kind of build, hire, open an office, build an office. And the VAAG team presented itself. These are people that had worked with Pramod in the past, very well known, very well respected in the networking industry. They were early in their journey at VAAG.

領導 NFB 業務的 Pramod 認為欽奈是一個完美的地點，因為那裡擁有豐富的網路人才。我們正在走這樣的道路：建造、招募、開設辦公室、建造辦公室。VAAG 團隊也出席了這場活動。這些人過去曾與 Pramod 合作過，在網路產業中非常有名，非常受人尊敬。他們在 VAAG 的旅程才剛開始。

And they were just excited about what we're doing here, and they wanted to join NETGEAR, and be part of the transformation and be part of leading the software development, team building, and capability building for Pramod. And so, we got lucky on top of bringing this team on Board.

他們對我們在這裡所做的事情感到非常興奮，他們希望加入 NETGEAR，成為轉型的一部分，並成為領導 Pramod 軟體開發、團隊建立和能力建設的一部分。所以，我們很幸運能擁有這個團隊。

There was another Chennai-based kind of wireless office that was shut down. We were able to cherry pick the top engineers from that group, and so we're really well positioned. And the best part about this is it comes with an overall lower cost profile.

另一家位於欽奈的無線辦公室也被關閉了。我們能夠從這個群體中挑選出頂尖的工程師，因此我們處於非常有利的位置。而其最大的優點是它的整體成本較低。

So there is some transition costs as we insource from the expensive outsourced developers. But overall, we'll be able to do more with less as I said in our opening remarks. And it's just a great foundation of a team to build off of. It was very much an acqui hire, and even then much more on the higher side of an acqui hire. But it was just a win, win all round. So we're excited to welcome that team.

因此，當我們從昂貴的外包開發商那裡採購時，會產生一些過渡成本。但總的來說，正如我在開場白中所說的那樣，我們可以用更少的資源做更多的事情。這對於團隊的建立來說是一個很好的基礎。這在很大程度上是一種收購，甚至可以說是收購的高端形式。但這是一場勝利，全面的勝利。因此，我們很高興歡迎這個團隊。

And on the free cash flow, we still expect that we'll, over the long-term, over the full year would be in the range of 85% to 100% of non-GAAP net income is the rate that we would correlate from a free cash flow standpoint. In Q1, we saw a little bit of swings from working capital with regards to liabilities coming down off the back of the seasonal trend with regards to revenue. But over the full year, we would expect in that range.

就自由現金流而言，我們仍然預計，從長期來看，全年非 GAAP 淨收入將在 85% 至 100% 之間，這是我們從自由現金流角度計算的比率。在第一季度，我們看到，由於收入呈現季節性趨勢，營運資本與負債出現了一些波動。但我們預計全年都會處於這個範圍內。

There are no further questions at this time. I would now like to turn the conference back over to Mr. CJ Prober for closing remarks.

目前沒有其他問題。現在我想將會議交還給 CJ Prober 先生，請他致閉幕詞。

Yes, I just want to thank the Global NETGEAR team for driving the progress that we're seeing on the transformation, and delivering another great quarter.

是的，我只想感謝全球 NETGEAR 團隊推動我們在轉型中看到的進展，並帶來另一個偉大的季度。

This concludes today's conference. You may now disconnect your lines. Thank you for your participation.

今天的會議到此結束。現在您可以斷開線路了。感謝您的參與。