NETGEAR (NTGR) 21 Oct 202020 Q3 Earnings call transcript

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.

Christine. you, Thank welcome Results and Third of Quarter Good Call. to Financial Conference XXXX afternoon, NETGEAR's

Joining company The business on from of by and call us Bryan, the start provided the Mr. and Lo, will details second Bryan by CEO; financials Chairman followed for Patrick. Murray, quarter a by the CFO. with format the the are of review Mr. provided Patrick commentary and

have time for any then questions. will We

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

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

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

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

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

for yet home, delivered Net and non-GAAP in side revenue the thank with again by and XX, were our for robust quarter our products, strong and a revenue a to basis. was We year-over-year increase I'm for SMB results. remarkably ended for joining up profit. the products, business, XXXX first again included team profit. on edge conduct in everyone still delivered and sold the revenue million, Erik, in demand with and primarily you, third growth operating of you continuing our revenue for a our our business, level $XXX.X share demand highest quarter to since you, unprecedented quarter pleased leading Thank our sequential CHP of today's robust consumption people This recovery to our powered third providers, exceptional With This supply call. to XXXX. XX% on growth revenue live. very September associated strong record modest their million, due once with XXXX strong the service quarter where reaching transitioned was product for have up XX.X% CHP $XX.X majority bandwidth the daily constrained

WiFi in offering, We retail. both continue presence and edge X to and leading strong win online our with

an With supply previously we supply to expectations. quarter provider worldwide retail we team particular remain to outperforming transportation, chain through to outstanding optimizing forecasted. that service of our giving expect shortage demand the had a The product chips meet Our did team freight advanced materials, constrained consumer as than manufacturing WiFi partners, primarily first a such schedules the and of X. raw job due with quarter more said, their managed and in in to XXXX,

with reported record, operating to as non-GAAP ability showed Our NETGEAR non-GAAP revenue our strong quarterly million our was of $XX.X income margin at growth. a operating XX.X%, leverage

both by quarter-over-quarter, in on the provider increased demand Americas the service to also which which was provider and then driven from year-over-year CHP service benefit work and For EMEA from both seen shift demand basis. up XX.X% up the products retail channels, million, net is million, home, the is of in to response by and retail CHP work for channels. for a XX.X% environment. XXXX, continued to up up year-over-year, revenue $XXX.X from home $XX.X across revenue generated the Americas quarter was and third XX.X% The XX.X% for net products sequential

prior year business and in the $XX.X was revenue largely up by net service sequentially, both XX% APAC Our comparable which region. driven provider X.X% quarter, from the million, down our is

of gross wired units, quarter on, net earnings contributed in and were today. third which quarter products release a X The the in XXXX. third third non-GAAP and shipped respectively. shipments, quarter and up the from comparable about XX%, XX.X%, net in points The was discussion was to XXXX, wireless months The and approximately X.X the we gateways and third Shipments of quarter XX.X% shipments. XXXX of distributed of quarter, about is margin split respectively. of XX second about point up while million numbers. will last basis home last points of in our compared XX introduced of all as this XX% and non-GAAP XX% For revenue the The units constituted including about the about to of non-GAAP of in basis routers third split points million between year and reconciliation in months X.X on the quarter XX% earlier GAAP revenue combined is products wireless XXXX. XX% my XX the between products our XX%, business total quarter wireless was detailed From to XX.X% prior XX million wired in products. introduced focus Products nodes compared

more on-air of higher And far growth million, topline we revenue operating leverage the year-over-year freight produce profit. products. on historically non-GAAP quarterly relatively record although, promotional strong outstripping more $XX.X margin our our came job which did XX.X% While deliver margin sequentially. at QX, activities gross able QX, up offset we and carries mix year-over-year. spent is dramatically gross Total headwinds a and which operating up XX.X%, in were these than lower in on to to with team great OpEx to CHP The expenses business, declined our SMB growth a

our the future are always, we our in portions while prudently, sufficiently expenses As will success. manage of ensuring business also we to investing continue growth that for

from the by quarter. previous Our headcount up XX the was end XXX quarter, of as of the

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

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

tax This rate in was quarter to non-GAAP In Our the adjustments third EPS. benefited non-GAAP about XX% diluted we domestic onetime of liabilities. XXXX. our $X.XX favorable from tax quarter, the to contributed

the income at Looking record $XX.X non-GAAP QX, EPS million we line net of reported for non-GAAP diluted of and $X.XX. bottom

the the $XXX.X sheet, we balance investments, cash with and quarter XXXX in of quarter. to million Turning up short-term the ended million from prior third $XX.X

to our $X.X increase quarter, to quarter. $XX.X EMEA, flow we equipment trailing the We XXXX, norms. of used over our months and the of we brings and generated the to quarter. as deliver fully open over while hope buyback importance to further $X.X generate the own under This QX, shares we move expenditures cash balance million. a on cash in repurchase holdings. $XXX.X like repurchasing We of times provided inventory And our $X.X cash capital in fourth approximately we our we'll historical left is to XX decreased to recommend from desire trend operations, practice constrained, shares. inventory of the trailing In strong our chose strong demand by million supply program. to million these, continue In count from our million XX cash us use XX.X operations and brings our which reverse position and during in strong to sheet. to in million this diluted maintaining inventory million. to our uncertainty our remaining the property the share in position, from closer in position in our which of increase the expect the not first-half unable Additionally, confident with Especially any Americas balance maintain and We a in to our remain months total shares cash again total cash QX, continue ability purchase

we in I of to a the to will of mentioned, need as first-half Thus, some expect XXXX own levels. our replenish As our consume cash we would previously inventory result.

to once once SMB basis, overcome quarter we supply expect the third industry can net a we our quarter XXXX, been share grew a $XXX.X in Meural while revenue to is Gaming, to year. non-service supply across service The up demand In increase the both again but XXXX, WiFi, generated attributable at the turning WiFi up XX.X%, segments. a In The was of down period. XX.X% first includes position basis, XX.X%, of of heightened results quarter, the as compared coming our the of on an Pro product constraints highest The to leadership the prior And for million provider Nighthawk, during and is retail WiFi the consumer than segment quarter channels. generated we products, the X third next Nighthawk and year-over-year headwinds XX.X% U.S. despite the revenue in was revenue comparable fully service Connected we and $XX.X XXXX, and since up second the on sequentially. share X the of strong leading provider which XX%. in year-over-year of which sequential of quarter, in million Now brands revenue provider again, Home, third net quarter market sequentially. which in grow impressive the year our year-over-year it's held Orbi, XX.X%,

business As stems our sequential the the pandemic slightly, as by closures. year-over-year corresponding growth, SMB from declining we the expected, recovered business evidenced strong and

fronts, call in ProAV Or Patrick in in market. PoE the U.S. the well On our to market QX. over now switches I'll in product the lines turn XX% wireless came and channel Plus retail to and his through continue for sold at the perform commentary. LAN, switching share

Thank you, Bryan.

been adapt. from cementing work, at are home world, companies roughly continuing seemed from amounts. People and in permanent model a to office on pandemic equivalent moving basis, the hybrid temporary a in are some are many around our companies of home and the embracing plays work the forced their others that working to have adjustments lives. With At

the these virtual place checking a flexibility time lifestyle. families shopping zoom they away to or and the leading And their an clear is towns future in from work part areas consumption, that try them and previously, of even has the of for tablets myriad and premieres gators to recognizing movie now more new an visits activities across has in of are the been to light optional, transition WiFi goes addition, to cost and to The increasingly pandemic environment of school. Eight by locations. to home. been crowded, At the stay, through and what's led connection on people accelerating pursue from urban the people adapting permanent and least be anywhere challenges across them is family activities what their are may Whereas In to from daily for to part increased traditional need. virtual doctor's need discovering multiple adoption, NETGEAR new serve is or and to the network at of our this in to there pursuing work the the areas, even to laptops, classes, months are the phones. team virtually fitness and prefer here sometimes globe country utilized concepts, and home are from changed, entire activities way across friends to are multitude to spans isolated activities ends, ever around music These making across migration forced the might Families work of home Regardless clock to things, from is high have watching less beyond means everything continents. massive home defined and the of have these their well from activities how the in and by bandwidth working working enjoy the that upgraded doing fast learning groceries connections. home. that when more making a support home, home and a reliable actually devices more virtually, connected of taking virtually, increase and

on my mobile see can drive changes for our to our you strong in as we at and ramp expectations products, adjustments to In growth the upgrade proud within highest delivery. their for level partners chain, channel As WiFi exceeded and our QX, the with closely uses CHP team I'm made our the and execute that continue say people networks, dramatic from production supply discover CHP we for even results, our deliver more remain constrained aforementioned CHP could to advanced continued at what low to NETGEAR hotspots. demand where worked X on we've new and we strong than users. competitors we're product efforts, and switches dependent on on home in demand WiFi for our are supply surprisingly our stuck Yet, to who X guard and chips home-based remained access products, WiFi by wireless with the business. as these office POV SMB Similarly WiFi points for caught off mesh X. portfolio, business end power

to can we can supply if constraints performance, the repeat non-carrier limit in in of saw we team QX. expect continue level We roughly CHP we the But revenue chain believe same our deliver supply QX side to the to QX.

the provider in first the U.S. to demand our the were of On able aside for fight year, service for the for responders. we pandemics start and needed the mobile in new side where hotspots to QX, set the school

month. Much level. have per We has made expect return QX been the to been that accelerated transitions of QX roughly service more provider our by technology revenues to

loyal Tri-Band an subscription than and With pay remain dividends. next to in And on value-added systems, our based wave long-term, is why we WiFi the the as unique for represents in technology, In And forward. believe basis products significant performance and constitutes will early for of more why of need a small are with will us generation this vendor and our attributes NETGEAR these of QX, many the set believe choice, their a WiFi lives for a virtual this saw market our pervasive to to way lives, reputation remain high and a we we X followers, of people continue virtual. will and we going recast longstanding trusted upward defensible leader advantage, for And transition a the change a market. businesses, confident more is Tri-Band strong fundamental of give investment namely Tri-Band and we the on both activities need. relationships, that evident ever it growing are Pro. networking that well-deserved transitions, are This Orbi now that XG addressable NETGEAR that a leading-edge WiFi services. that demand our best-in-class such, will channel has has consumers and to grow for total hotspots millimeter a our a brand connectivity robust conduct now portfolio be technologies, virtual continue with Wi-Fi WiFi Orbi as the

Pro, starts at exceed Paris in to While from that Kong $XXXX cannot stock our and markets we of especially radio three-pack Orbi keep to in across are smartphones that X devices Tokyo them configuration to to can participate, performance boost Toronto, with the X $XXX antenna and Orbi all significant us, due Hong older Munich that here our designs. telling right WiFi that even feeling the WiFi we they systems, our is with to U.S. and Customers are innovative circuits and from

don't this earliest, can, shortage. We to we demand the production are up due until we point, X at QX quickly believe WiFi at ramping Orbi WiFi our we supply as catch as year to chips next of the X but will

do the IT products our Moving a that offices forward towards drive to of on sequential We like quarter XX% headwinds the VAR to last team installations. personal SMB businesses, continued with and geared on quarter-over-quarter. partners business, delivered channels home with interaction, faced a and rely as same the home to focus growth

points During with introduced the first mesh WiFi app-based the world's X quarter, we management. access remote

as we Just stock. not counterpart, them CHP a like could in keep Orbi

this use distributed, persist to as as post-pandemic. and increasingly We're MXXXX In such delivered team switches strong The printers, remote them by This We a as our demand the marquee AV We of ProAV access line believe around as AV world. received become phones, new our IP switches PGA AVB. XXXX Americas AV [indiscernible]. to with wins, QX, points. line Cup U.S., with the Power-over-Ethernet progress protocol integrators workforces that we for will setups, the and over of well. home business switches audio the more seen Tour making for brand low-end the also office connect Ethernet have announced demand was workforces in new well in desktops, support

progress subscription and in our as coming look Sarah services board. Officer working obstacles forward positive consumer our Product I Butterfass XXXX with that, doubling a opportunities now to Development valuable the of having to I'll expertise to Sarah a take Product our all our Bryan QX. Software increased the turn We improvement continued volume sequentially, in year-over-year come. moment that from experienced premium Murray of as at them at would what to to QX, in subscribers. like to expect comment with paid three to a to Top XX%, manage in achievement to in The revenue increased First, our on I subscribers over for to paid the notable our our is delivered sign In FanDuel, the into the and product forward and recurring board, XXX,XXX strategy SMB business. add devices with reduce decline ship Chief would look only it engagement also And our profitability in subscribers, facing we record apps years subscribers quarters, need end WiFi exceeded revenue also We goal in we importance subscribers, We growing more QX. and secure connect, to people's again in stream. we with XX,XXX of by was our WiFi to and others, continuing grow to Groupon to in homes new with growth consumer translating the more NETGEAR services. quarter. for our and and Beginning adding led quarter such paid brands in the quarter XXX,XXX her paid have and to welcome

Patrick. you, Thank

market supply strength outlook end for is effects makes forecast. on the are our home to COVID-XX there This of we the still difficult uncertainty considerable ongoing around the economy our confident While, global networks, demand chain. of and in

As to quarter. enough such, provide would to we're from not in position questions the answer audience. now like the comfortable fourth We financial guidance a for any

Instructions] [Operator of first James. from The you. Thank from question line Raymond comes the Tindle Adam

open. is line Your

start service Okay, thanks. very question wanted just and Patrick, on obviously was congrats ex strong I on segment, the It very a the to piece. quarter. a Good strong. provider CHP afternoon, with

the it look to of seasonal I mentioned were We you from expecting would just sequentially up going think expect QX. patterns. of you typically that forward level QX sort at as kind same

So would on based on this any season and some Day Prime color so Thanks. you what about comments any maybe pull you've and activity just promotional Was why seen talked there flat as expectations it the be forward? holiday year? for QX, And on far?

would absorb as supply Well, a depend bigger bound. to X. WiFi for could available, on team mentioned that supply provide believe appetite But market make to the it's We and whatever market. to do products unfortunately, the to the basically, chips we just enough to market ship have all don't that we we has our much we

would a all yes, but by we supply. are right, we seasonally it So that Christmas, limited strong expect be

QX virtual the are was experiencing Now newfound first quarter this that people really experiences.

clearly, in QX. was market So surge high the

offset market down surge little Christmas seasonality. the but it would be in expect QX, a by We bit then would the come

supply all unfortunately However, bound.

catches this way could at potentially you're have look next likely what idea up demand I that of like Okay. would over this bound So point? supply to there an is have tailwind we that quarters? are as quantify help to us mean, going supply how few the that you you a

will market share depressed mean, bit way - America. we used in was more was are XX%. own at market leader, market share. to little I that our even that share QX believe North supply XX% And we And to when Plus because clearly gain secondly, easiest is we the in look we actually mean, it believe the have inventory that market we is we'll shortage. And I grow to X% a faster. the that

quantification much ourselves of as are how well as So limiting that's we easiest the the market.

mean, And just well. Bryan. as a spot were a Okay. margins I obviously for maybe bright follow-up

of more particular. basis And we on for Just got to a gross puts air wanted bit in upcoming. chain, supply go forward you've freight, dig some into and see margin you little the takes promotional if some could a activity have

can that forward and buckets different impact gross line margin the about Just we on basis? how think a go that

Yes.

to a has increased. clearly forces. start think you're talking overall mean profitability QX and I driving if with think couple our I One, I product about things the

WiFi Our the products leverage And contributing helping certainly the is mix are X that. elevated from of certainly to topline topline standpoint.

driving offset fair really activities certainly But to didn't on suggested the do products of in we So or less to terms July. a pull more were as We those two of we factors we more would back performance. CHP air spend terms amount are promotional in freight in able QX that.

able look QX of by is the If an we're what basis we QX, points. One from probably in saw topline think, of to I about demand mentioned leverage. step we're are the on, the focused capitalize provider you quarter. the to which is primarily service in margin expected levels couple out lot year, third overall the down that a these back-half We think opportunistic headwinds, I a that operating that from just of in take standpoint, we XXX

going continue QX, we're holidays. to they'll promotions be to we up the bit to million supply in step activities a take around have constrained And do will as naturally just QX. even think they're though, be preplanned certainly limited. still to about in going down $XX I So

in I QX. from the basis demand XXX down about stepped is of So QX all think points that this probably

Got Thanks it. again. congrats That's helpful. and

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

Your open. line is

the taking questions. for thanks Hi,

could talking side off, statement, during enough the about you First your elaborate you being could commentary Patrick, CHP you chips. were on saying, source if your

basis of to that you bump right the reach Is a the purchase way revenue. saying kind of just Or of have that drew same so would regular inventory? guys up the thinking? are on inventory, to you chips you As you down on amount actually the without that drawdown

the is really are market down demand ramp we That's not even market. on the the our this combined. channel, exceeded we when even all draw enough down is even And of say mean production still draw that inventory the up chips the that we we I about. own, inventory that, No, in to the of feed talking supply want quantity, all we we

Understood.

would kind for inventory in that flattish be a you've down able drawing QX of QX? you how to given own So performance been achieve your

Exactly.

means chips on earlier. an the supply we're increased So which of months. QX place in the depending now surprising, we chips is is The QX, that lead orders not versus six because time

placing back a So that is means QX April, orders in in result of chip of basically our May.

And generate? then, competitors? do you you think this is that that not from there? producers be to out production is this the you're amount the might of out able losing allocation Or that chips Is from enough just

are Well, the secondly, limited XX-nanometer know, all you devices support capacity in that can X. the not that. of client that probably There And as number world there's now semiconductors. produce founders many WiFi one,

market competing volume the cell kind people XX-nanometer phones. for substrate, want in their X of competing we're for that chips So, production for against same WiFi the

the vendors Samsung and are electronics PXX new XX [ph] Huawei, that had competitors need and clearly, overall mean, many in there allocation. the networking XX, But just so the and the these scheme XX-nanometer industry chips. among thing, of SXX iPhone Apple, we new I the With in the biggest

WiFi going greater you emphasis QX? X a in put on Are

have off telling don't that can No, inventory, we sales are back. you supply rebalancing three the in may do both as going promotions. WiFi one it's ample past because I probably X. that our our to along, been there's have have know of no the lean in we channel as as we're quarters the mean, well right, everybody WiFi see, clear And only of you X. pretty ourselves We as within to all

do, significantly, result, Fi margin X fewer everybody even improved then direct supply Wi trash a WiFi we when X prices. we operating our as has So while and

there's WiFi pretty chips. So we supply, then way we'll allocation we're balance got made quarter then get once to there. more - And basis, we share. And money X we'll just demand and on to be on of a our every gain lot no be confident once

Thank you. great. Okay,

Sure.

from Jeffrey line Bank. the from Rand Deutsche comes question next of from Your

Your line open. is

another do Hi, there untapped business year-over-year the office a you business more the business? with think declines at vaccine? growth in congrats on SMB really your great And before The quarter. we moderated can is SMB this home expected as a get in potential return to you

get believe to channel. even X products pretty more level shoot in with a We bit slight the previous we growth, to that even will we close as continue WiFi SMB

prior day. discussion, any of the in X we mesh website access access guard now People just is to mentioned, And caught the are SMB point were off demand access totally days cramming on mesh, strong pretty points our by availability of I impossible wireless it. As our WiFi points. these for find every

that So we we do believe more once allocation grow. definitely get chips, then will we yes, of an of the

because POV being thing other with back you costs they their call The home staff the of distributed see lot work connect their there's especially people the are to IP the also, offices at to interesting of in our and it's very switches a and X-port home, access the from home, the a demand using tremendous wireless and them points. center X-port, end, low into to the phones

of So, traditional opportunity. ProAV. on display in train a quite lot in the AV the the uptake And from AV over recently with then Europe, transition Ethernet. well side, see I still in a terminals and ProAV railway the the we U.S. We in think the with few outfitted into networks, display tremendous as both there's as

continue the the think I to will opportunity grow. ProAV to business So us give

XXXX, we SMB in optimistic are for So business. our pretty

follow-up. just a And Great. then as

does impacts how constraints? Does general business? X? recently. to Can And I it the your acceptance think talk start pressure network first its help WiFi X it mesh and pricing this put when about released of you WiFi WiFi your supply on credibility Amazon X products

in a XX seen a tremendous we've enjoy mentioned X WiFi in we India. you find that they that bump world, as demand our could only X the or not out where huge is when up Wi-Fi WiFi in or U.S. even demand is laptops. around fact phones And seen the on people speed, through acceptance X people that minutes tablets Orbi, WiFi ago, the we've discussion about buy appreciate it's have technology, if that the mouth not X in only our the you and tremendous Orbi just word of

One, if You two, antenna, even our would design. and have of of actually the devices, coverage. Tri-Band, performance the because which it's boost benefit WiFi the really you and radio X our circuits design

model So expensive bulk on introduced the I introduced of Tri-Band area, so it's X a to we their it's would not the - mean, play mean, WiFi but the little They primarily actually which for bit that point. be don't one than Tri-Band focus now demand anyway, X band. a dual our so-called have more right. you're our ours the Tri-Band is dual their product, mash, seeing we're performance about really in Amazon yes, most $XXX WiFi They not right but of only but well. this comparable and price as band, for products $XXX, I about is play. of we

So like more in we're worlds. it's we're in we're the and in BMW I Volkswagen mean, different world. two the world, more

Great, thank you.

comes of Silverstein Your Cowen. from next from line the question Paul

open. is line Your

you structure repeat a to was my right before yourself. line margin silent. about There question Bryan, asked hate I ask the was

I hoping as and do do can you but apologize I apologize. whatever repeat the you you I'm others to call, said. on So

No problem, Paul.

about into about forward service at QX saying down was the then stepping largely opportunity of second-half due I operating that take provider around leverage. holiday pulling and from topline XXX off we QX, QX, points down million, XXX in in margins we QX then of topline for lot but be a promotional we'll to preplanned and some into those that's We a step leverage. leaving what would There basis we're a expect play a getting the So to talked still with state. obviously $XX to get were forward commitments promotions, sequentially. back some lot until And will points going of hold period things, additionally, two that the to healthier step down basis going lose while of about

basis past, line? this bottom gross to I expedites something you've and one forget by of but Bryan, points order only XXX are the And you so costing assume margin operating in margin addressed the or

on have promotional our more, offsetting I'd efforts I CHP products. say say the typically that we but it's entirely would with would reduced that we're

that a where full become point where plus you will at benefits So, constraints to with a margin you alleviated? catch XXX you which whenever that get that not to the point points we that are supply totally costing assuming is? Should basis up have you structure assume eventually,

certainly I I point mean, margin expansion. there's an for basis think XXX opportunity So

and we million in we into outlined But something service in on run behind portion QX growth move XXXX, provider entirely the of service rate kind to of see demand CHP return average opportunities we XX quarter XX% think, SMB more growth look side, offset on of Patrick to 'XX. the of provider. We'll the neighborhood than business. with kind in opportunistic this where As some remaining a the we'll that once may our non-carrier of the continued

margin that we XXX 'XX. of kind there's that if So think expansion basis performance, by point opportunity

a you. And supply of with for what issue most about? question constraint than you are major both Other worried Hello? obvious the

this going opportunity on which us so. caught supply it's the to up, think is to supply take capitalize big up caught these to and do QX getting I to we said concern days, getting

number And two… So number that's one. then

Go ahead.

Yes.

worried what's second most say you're the to going thing about? was I

of Yes. Well, happen. the third cannot thing we'll that second anything is wave possibility going or on But that fourth we is and control mean, all these mean, situations uncertainties. of a I not COVID. geopolitical I assume to a

That's you've today for supply more enough demand than relative is demand message to Yes. that But an is got your not issue the foreseeable an not issue. clear future.

an demand not No, is issue.

it pass will you. I on. Thank

Sure.

Bloomberg. line Ho Woo the of from comes from question next Jin Your

Your open. line is

Great. Thank subscriber the question. progress numbers. on Good you for taking my revenue

how XXX the it go-to-market going I mean, that, relates to for product? are go whatever the balancing it the of in to ASP? XXX is portfolio supply constraints, single out about versus as volume Patrick, point terms you product we should think the a And In access versus

I a believe applications, No. spectrum there's of [indiscernible] we want, afford what with. could mean do not to whatever wide begin the customers we'd that everybody

seen So extenders for those we've buy single customers, router. them supplement to a

WiFi we And do also that $XXX that $XXX. routers as have about unchanged we X So marketplace, cost well. in particular and only

And probably the margin I the clearly, So, is know, true. priced whole going as spectrum to of mean, we're do full products the themes. generally biggest higher you on

the more Same the makes on a more lot you thing, X. money and Tesla cars, more - lot Mercedes If S-Model buy money makes S-Class. a Model on

I are more no mean, we that definitely thing, money denial. the for on. it's products So same made those above $XXX

Okay.

to you're a from that help question of you're It as an may term that strategy permanent work that opportunity? you, front on if at type positioning Patrick. for of intermediate more hybrid And advantage anything there opportunity the somewhat looking take sounded enhance Is doing, home of product opportunity. your the development

this towards from paying mesh product. already, to just you're you're get likely you're for going of either market very a in consumer, free ordinary thinking for you a of But network thinking cheaper extenders, choose going router home solution to pay just it is mentioned configure go of are discussion and which course, then networks if galvanized mesh Yes, if we about and two $XXX in right? do one to uncompromised If $XXX or to to more And a plus plus NETGEAR then you an or home, from. you own $$XXX, your performance, completely a a you're network. you buy to our

you NETGEAR, get - get oh provide doesn't Google get X WiFi You Amazon, yet. Google you

have significant fair still $XXX pretty $XXX and and between market. that share following, we a a have we So

things. at the consumer access company work the company of the router, you home, mesh company side we're on they pin grade maybe from to buy buy you time told or things work that's to of or you money the by such bulk would that half allowed equipment. those center So likely point are to most call side your the your time home other people, of cases, switch, commercial of than commercial plus of grade from more doing is your instead distributed they're by But and least give consumer, And are our it. In but a on swift some anywhere. to as

going you solutions. both different into seen strong we've two So lakes XXXX. very And got

preliminary off And, on get second I'm commentary quarter XX% XQ. to quarter? Typically business? And guidance the going guidance or seasonality off on it first going issue XQ wasn't into XXXX. it's lastly, on going Got thoughts any Any the and flattish said CHP into a the - down preliminary Any sequentially, of Bryan, demand you it. on believe that I a little then here. and greedy

here the the stay delivering we're constraints earlier, supply what the say into with said Analyst will that. in through tuned, coming to But will be first-half last announcing supply dictating we we Day in be of the weeks. of So, And in December going QX I our year first be as dive the part would certainly, we're year. going certainly

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