NETGEAR posts 49 per cent revenue growth in Q2 2011

Press release
Published August 14th, 2011 - 11:11 GMT

NETGEAR, a worldwide provider of technologically advanced, branded networking and storage products, has revealed that net revenue for the first two quarters of 2011, which ended July 3, 2011, grew by 49 per cent, reaching a total value of USD 291.2 million. The figure shows a key increase from last year’s Q1-Q2 revenue of USD 195.0 million and Q1 2011 figure of USD 278.8 million. The leading company has also reported that the net revenues from the Middle East and North African (MENA) region and the European region has totalled to USD 110.331 million in the second quarter of 2011.

The increase in revenue was bolstered by the company’s launch of 17 products during the first half of 2011, strongly highlighting NETGEAR’s efforts to build product momentum. Notable new products include the compact WiFi repeater/booster for home use, the stackable 48 port Gigabit Smart Switch with 10Gig uplinks and the mini-travel router for the Asian market. The launch of these new products has not only given the company its desired product momentum but has also exceeded their expectations with the huge response generated from consumers. In fact, the second quarter of 2011 drove in triple digit revenue growth from service providers, which accounted for approximately 37 per cent of the NETGEAR’s total revenue for Q2 2011, as compared to the 16 per cent figure of 2010 and the 29 per cent figure posted in Q1 2011. This will also include revenue growth from the CNS division, which was acquired from Westell earlier this year. Further, NETGEAR’s service provider revenue during the second quarter also benefitted from a one-time USD 10 million order from a major service provider customer.

"We believe the third quarter 2011 will present sequential increase in market demand due to back to school for both our retail and commercial business units," said Richard Jonker, Managing Director for Emerging Markets, NETGEAR. “The vibrancy of the global IT market continues to fuel our determination to create more strategic and fully reliable networking and storage products for our diverse customer base. Our vision is to drive in more profit growth and expansion in the coming years, ably positioning ourselves as a major player in the networking and storage industry segments.”

NETGEAR’s net income, which was computed in accordance with GAAP, was USD 20.6 million or USD 0.54 per diluted share for the second quarter of this year. The figure shows an increase from 2010's Q2 GAAP net income of USD 10.5 million or USD 0.29 per diluted share and to GAAP net income of USD 21.2 million or USD 0.57 per diluted share for the first quarter of 2011. Gross margin on a non-GAAP basis during the second quarter of 2011 was 31.7 per cent as compared to 36.3 per cent posted during the same period in 2010 and 32.1 per cent in the first quarter of 2011. Non-GAAP operating margin was 11.9 per cent in the second quarter of 2011 as compared to 13.1 per cent in the second quarter of 2010 and 12.6 per cent in the first quarter of 2011. Non-GAAP net income was USD 0.65 per diluted share in Q2 2011 as compared to non-GAAP net income of USD 0.38 per diluted share during the same period last year and non-GAAP net income of USD0.65 per diluted share in the first three months of 2011.

“Amidst the global economic downturn, NETGEAR has ably proven itself in the IT market with its offer of a wide range of products that have been designed to meet the demands of large companies, SMEs and SOHOs. We take pride in being a company that has successfully merged culture with technology, a strong feature that has inspired us to expect more revenue growth in the next few years. The rollout of our new products during the first two quarters of 2011 has helped us consolidate our position in both the global and regional markets. Rest assured, we will live up to our reputation of being a strategic provider of world class high quality and fully reliable IT products for our rapidly growing consumer base,” concluded Ahmed Zeidan, Channel Sales Manager, NETGEAR Middle East.

Background Information

NETGEAR Middle East

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