Template FEB 2012 · 2017-08-30 · Represents approximate “real life” speeds achievable,...
Transcript of Template FEB 2012 · 2017-08-30 · Represents approximate “real life” speeds achievable,...
Corporate Overview April 27, 2016
Safe Harbor Disclosure
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Specifically, forward-looking statements within the meaning of the Safe Harbor include statements concerning: future revenue growth,
increased profitability and increasing average sales prices of products; projections on market growth for IP cameras and mobile hotspots;
future market opportunities for the Internet of Things in homes; projections on LTE product performance; service provider growth
opportunities; projections of DOCSIS 3.1 internet speeds; NETGEAR's products and technology and their expected performance
characteristics, specifications and specific uses; and anticipated new product offerings and features. These statements are based on
management's current expectations and are subject to certain risks and uncertainties, including, without limitation, the following: future
demand for NETGEAR's products may be lower than anticipated; consumers may choose not to adopt NETGEAR's new product offerings
or adopt competing products; the actual price, performance and ease of use of NETGEAR products may not meet the price, performance
and ease of use requirements of customers; product performance may be adversely affected by real world operating conditions; new cyber
threats may challenge the effectiveness of features in NETGEAR's products; the ability of NETGEAR to market and sell its products and
technology, the impact and pricing of competing products, and the introduction of alternative technological solutions; NETGEAR may be
unsuccessful or experience delays in manufacturing and distributing its new and existing products; telecommunications service providers
may choose to slow their deployment of NETGEAR's products or utilize competing products; NETGEAR may be unable to collect
receivables as they become due; and NETGEAR may fail to manage costs. Further, certain forward-looking statements are based on
assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what
is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect NETGEAR and
its business are detailed in the Company's periodic filings with the Securities and Exchange Commission, including, but not limited to, those
risks and uncertainties listed in the section entitled “Part I - Item 1A. Risk Factors,” pages 10 through 30, in the Company's annual report on
Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission on February 19, 2016.
NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events
or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
All product and company names herein are or may be trademarks of their respective owners. This presentation may reference wireless
signal rates. Maximum wireless signal rate derived from IEEE Standard 802.11 specifications. Actual data throughput will vary.
Mission: Be the innovative leader
in connecting the world to the Internet.
4
#1 Global Brand and Distribution Biggest Competitive Advantage
62% 21%
17%
Geographic net revenue breakdown for 1Q16
WORLDWIDE:
28,000 retail outlets
31,000 VARs
Growth by Design
RETAIL
SERVICE
PROVIDERS COMMERCIAL
Smart Homes
Next Generation Service Providers
The 21st
Century SMB
6
Smart Homes
Whole Home WiFi Coverage- Nighthawk Routers
$199
Nighthawk
Dual Band, 3x3, 11ac
$249
Nighthawk X4S
Dual Band, 160MHz, MU-MIMO
$299
Nighthawk X6
Tri-Band, 11ac
$399
Nighthawk X8
Tri-Band, Wave 2, MU-MIMO, 11ac
Introducing the Nighthawk X8 Powerful enough for increasing 4K video streaming and gaming
9
5.0
GHz
5.0
GHz
2.4
GHz
2.16Gbps
1.0Gbps
2.16Gbps
• AC5300 WiFi - 1000 + 2166 + 2166 Mbps
• Tri-band, Quad-stream
• Wave2 WiFi, MU-MIMO
• 1.4GHz dual core processor
• Industry’s 1st Active Antennas
• 6 Gigabit Ethernet LAN ports
• Dual Port Aggregation
Every Angle Covered – Arlo Cameras
• Wire-Free
• 720p HD
Video
• Wired
• 1080p HD Video
• 24/7 Continuous
Video Recording
• PoE
• 1080p HD Video
• SD Card Local Recording
$159.99
$219.99
Arlo™
Arlo Q™
$249.99
Arlo Q Plus™
Weatherproof Built-in Day and
Night Vision High Definition
100% Mobile Advanced
Rules Engine
The Arlo Smart Home Security Camera The World’s First 100% Wire-free, HD IP Camera
11
Introducing Arlo Q Plus The smart 1080p HD camera that simplifies security for your business
Power Over Ethernet Power the camera and connect to your network with a single cable
SD card Slot For local recording and backup for Internet interruptions
IP Camera Market – US Retail (@ cash ring, $ Millions)
Source: NPD and
NETGEAR
$0
$100
$200
$300
$400
$500
$600
2014 2015 2016 2017
IP Camera @ cash ring
Our Role in the Smart Home Today
Enhanced by NETGEAR Genie® software
Next Generation Service Providers
Represents approximate “real life” speeds achievable, (higher speeds can be achieved in a lab setting).
DOCSIS 3.1 Internet Speeds Achievable 1Mbps Upto 300 Mbps >1Gbps
0
200
400
600
800
1000
1200
1998 2002 2006 (4x4) 2010 (8x4) 2014 (16x4) 2015 (24x8) 2016
Cable Internet Speeds
Speed in Mbps
>3x
Improvement
NETGEAR is one of
the first vendors to
receive Cablelabs
certification for a
DOCSIS 3.1 product.
NETGEAR is working
with the nation’s
largest service
provider to get the
product certified and
available in the retail
market.
NETGEAR is a leader
in retail cable modem
router market.
World’s First 4x4 11ac vDSL Voice Gateway
• Powerful dual-core 1GHz processor
• 1x Ethernet redundant Gbit WAN Input
• 4x Ethernet Gbit output
• WiFi speeds up to 2.8Gbps*
• 2x USB3.0 Host ports (1 front, 1 rear)
• 2x FXS Voice ports
• 1x FXO Voice port
• CAT-iq 2.0 DECT base station for Voice and
HMA
• 4G / 3G Wireless Dongle Support for fall back
• VPN Support
LTE-Advanced is the Game-Changer S
pe
ed (
Mb
ps)
18
Introducing the AirCard 815S Mobile Hotspot
+ Tough: Protects against splashes (IP65), dust, multiple shocks/drops (MIL810G)
+ High-Performance: Supports 4G LTE Advanced (LTE Cat 9), Dual-Band 2.4/5 GHz WiFi
+ Long-Lasting: Up to 22 hours of battery life
+ Powerful: Charges your smartphone battery
+ Secure: Offers Guest WiFi, Content filtering, VPN support & more
+ Global Compatibility: Travel internationally on 4G, 3G, & 2G
+ Easy: Connects up to 15 WiFi devices, 2.4” touchscreen with a dedicated home and back button
+ Convenient: Secure WiFi on-the-go, available on your terms, lendable
THE NETGEAR DIFFERENCE
• “Life-proofed” with IP65 (water splash/dust
proof) and MIL810G (drop/shock proof)
support
• Battery boosting of smartphones and
portable devices via BatteryBoost
• Dual-band 2.4/5GHz Wi-Fi
• Guest WiFi network and WiFi offloading
$0
$1
$2
$3
$4
$5
$6
2014 2015 2016 2017 2018 2019
Bill
ion
s
Mobile WiFi Router Worldwide Revenue
3G Technologies 4G LTE (up to 100Mbps DL) 4G LTE Advanced (over 100Mbps DL)
Mobile Hotspot Market
NETGEAR Leadership
First to market experience
Leading operator partnership
Superior software content
Full channel and geographic coverage
20
21st Century SMBs
A Leader in SMB Networking
22
Enterprise technologies to SMBs
Award Winning
Click Switches
11ac
WLAN
10Gig, PoE,
Web Managed
Switching
Full
channel
coverage
Lowest total
cost of
ownership
Leader in
HW and SW
technologies
Best
customer
experience
Transition to 21st Century SMB Network A Hybrid Cloud & Access Network Architecture
We can scale to larger SMBs with multiple branch access networks
Internet
Virtualization
Cloud Computing
Mobility/Wireless/BYOD
IP Convergence
(voice, video and data)
Public Cloud
Big Data Center
Private Cloud
Data Center
Access Networks
Hybrid Cloud
ProSAFE® 28-port 10-Gigabit Smart
Managed Switch XS728T • Revolutionary low cost per port making 10GE
connectivity available to a new class of customer
• Advanced QoS (Quality of Service) with L2/L3/L4 awareness and 8 priority queues including Q-in-Q
• Static Routing (both IPv4 and IPv6), Private VLAN, and Dynamic VLAN assignment
Smart IT, Not Big IT
Quadmode AP
WAC720 and WAC730
• PoE, 11ac WiFi up to 1.8Gbps
• 4 modes: standalone, ensemble management, cloud management, and controller management
• No need to change HW growing up from mode to mode, unique in industry
ReadyNAS 3138
• Powerful Rack Mount Business Network Storage
• Intel Quad Core 2.4GHz CPU, 4 drive bays, up to 32 TB
• Certified for VMWare vSphere 6 24
Wi-Fi in K-12
Wi-Fi in Assisted Living
Wi-Fi in Hospitality
Cloud Management
NETGEAR’s WLAN Solutions
1 “Winning Customers’ Hearts Starts With a Great Guest WiFi Service”, Forrester, June 2013, Hotels.com 2014
1
The Next Step Forward in Ease-of-Use
Moving to the Cloud • Seamless evolution from standalone to cloud managed
• First to deliver quad mode access points
More software aware • Evolving management for SMBs
• Full lifecycle experience
• Self defining networks
26
Financial Update
Quarterly Net Revenue Trend (Net Revenue, $ Millions)
$349 $338
$353 $353
$309 $289
$342 $361
$310
$0
$50
$100
$150
$200
$250
$300
$350
$400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2014 2015 2016
Service Provider
$118 $111
$131 $148
$121 $132
$164
$198
$158
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
$220
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Segment Performance (Net Revenue, $ Millions)
$79 $75
$72 $79
$73
$63 $65 $64 $68
$0
$20
$40
$60
$80
$100
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
$152 $151 $150
$126 $115
$94
$113
$99
$84
$0
$20
$40
$60
$80
$100
$120
$140
$160
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Retail
Commercial
2014 2015
2014 2015 2016 2014 2015 2016
2016
Regional Net Revenue Performance (Net revenue, $ Millions)
$48 $50 $51 $52
$46 $48 $44
$42
$52
$0
$10
$20
$30
$40
$50
$60
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
$195 $188 $194 $195
$174 $172
$220 $232
$194
$0
$40
$80
$120
$160
$200
$240
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Americas
$107 $100
$108 $106
$89
$68 $78
$87
$65
$0
$20
$40
$60
$80
$100
$120
$140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
EMEA
APAC 2014 2015 2016 2014 2015 2016
2014 2015 2016
Operating Margin (Non-GAAP, % of Revenue)
9.7% 10.1%
10.6% 10.1%
9.2%
7.1%
10.3% 10.8%
11.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Operating Margin
2014 2015
31
2016
$0.59 $0.58
$0.72
$0.65
$0.46
$0.29
$0.67
$0.83
$0.74
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
$ per Share
Earnings Per Share Trend (Non-GAAP, $ per Share)
2014 2015
32
2016
Impressive Cash Generation
33
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
FY '12 FY '13 FY '14 FY '15
$s U
SD
$
s U
SD
, M
illio
ns
FCF FCF per share
Cash Balance (Cash, Cash Equivalents and ST Investments, $ Millions)
$240 $243 $243
$257 $247
$213
$264
$278
$333
$0
$50
$100
$150
$200
$250
$300
$350
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16
Cash Balance34
Return of Capital
35
25.0
27.0
29.0
31.0
33.0
35.0
37.0
39.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
FY '12 FY '13 FY '14 FY '15
Sh
are
s, M
illion
s $
US
D,
Mil
lio
ns
Share Repurchase FCF Common Stock Outstanding
Investment Highlights
Exciting New Market Opportunities
• Smart Homes – Nighthawk and Arlo
• 21st Century SMBs – 10G/PoE Switches, WLAN and Storage
• Next Generation Service Providers – LTE-A, DOCSIS 3.1, vDSL, Fiber
Global Brand & Distribution Network Second To None
• With 28,000 Retail Outlets and 31,000 Value Added Resellers Worldwide
Industry Leading Wireless Expertise
• For both WiFi and LTE
Strong Balance Sheet
• Debt free, strong cash flow