Benzinga | Jul 22, 2021 07:08AM EDT

Netgear Misses On Q2 Earnings, Issues Q3 Guidance Below Consensus

* Netgear Inc (NASDAQ:NTGR) reported second-quarter FY21 net revenue growth of 10.3% year-on-year to $308.8 million, missing the analyst consensus of $314.8 million.

* Connected Home revenue remained flat at around $230 million. SMB revenue rose 57.8% Y/Y to $78.9 million.

* The non-GAAP gross margin expanded 80 basis points to 30.4%.

* Non-GAAP operating margin expanded 110 basis points to 8.6%.

* Non-GAAP EPS of $0.66 missed the analyst consensus of $0.71.

* It held $335.3 million in cash and equivalents as of June 27, 2021.

* Netgear's conviction on premium WiFi to drive the growth of the consumer networking market and service subscriber base remains intact. It remains bullish on work from anywhere and hybrid work models.

* It anticipates the U.S. consumer networking market to grow 20% above pre-pandemic levels in the second half of this year.

* Netgear continues to regain market share in the U.S. consumer WiFi market, adding three points to end the quarter at 46%. It added 33,000 subscribers in the quarter and aimed for 650,000 subscribers by the end of the year.

* Outlook: Netgear sees Q3 revenue of $285 million - $300 million, below the analyst consensus of $346.38 million.

* It sees a non-GAAP operating margin of 5%-6%.

* Price action: NTGR shares traded lower by 14.9% at $31.55 in the premarket session on the last check Thursday.