NETGEAR, INC., 10-Q filed on 8/2/2024
Quarterly Report
v3.24.2.u1
Document And Entity Information - shares
 6 Months Ended
Jun. 30, 2024
Jul. 26, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Trading Symbol NTGR  
Entity Registrant Name NETGEAR, Inc.  
Entity Current Reporting Status Yes  
Entity Central Index Key 0001122904  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Smaller Reporting Company false  
Entity Shell Company false  
Entity Emerging Growth Company false  
Entity Tax Identification Number 77-0419172  
Entity File Number 000-50350  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 350 East Plumeria Drive  
Entity Address, City or Town San Jose  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 95134  
City Area Code (408)  
Local Phone Number 907-8000  
Security Exchange Name NASDAQ  
Title of 12(b) Security Common Stock, $0.001 par value  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Entity Common Stock, Shares Outstanding (In shares)   28,678,721
v3.24.2.u1
Unaudited Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 177,104 $ 176,717
Short-term investments 117,235 106,931
Accounts receivable, net of allowance for doubtful accounts of $417 and $338 as of June 30, 2024 and December 31, 2023, respectively 147,069 185,059
Inventories 188,936 248,851
Prepaid expenses and other current assets 27,228 30,421
Total current assets 657,572 747,979
Property and equipment, net 11,041 8,273
Operating lease right-of-use assets 33,394 37,285
Goodwill 36,279 36,279
Other non-current assets 15,800 17,326
Total assets 754,086 847,142
Current liabilities:    
Accounts payable 40,129 46,850
Accrued employee compensation 23,966 21,286
Other accrued liabilities 159,586 168,084
Deferred revenue 28,682 27,091
Income taxes payable 665 1,037
Total current liabilities 253,028 264,348
Non-current income taxes payable 8,076 12,695
Non-current operating lease liabilities 24,748 29,698
Other non-current liabilities 8,835 4,906
Total liabilities 294,687 311,647
Commitments and contingencies (Note 8)
Stockholders’ equity:    
Common stock 29 30
Additional paid-in capital 980,069 967,651
Accumulated other comprehensive income (loss) (104) 136
Accumulated deficit (520,595) (432,322)
Total stockholders’ equity 459,399 535,495
Total liabilities and stockholders’ equity $ 754,086 $ 847,142
v3.24.2.u1
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Accounts receivable, net of allowance for doubtful accounts of $417 and $338 as of June 30, 2024 and December 31, 2023, respectively $ 417 $ 338
v3.24.2.u1
Unaudited Condensed Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Income Statement [Abstract]        
Net revenue [1] $ 143,900 $ 173,413 $ 308,486 $ 354,321
Cost of revenue 112,077 119,113 228,426 239,639
Gross profit 31,823 54,300 80,060 114,682
Operating expenses:        
Research and development 19,851 20,831 40,078 42,965
Sales and marketing 29,757 32,482 60,286 66,361
General and administrative 19,186 16,536 37,253 32,772
Litigation reserves, net 8,200 0 8,230 0
Restructuring and other charges 1,688 2,229 2,720 2,337
Total operating expenses 78,682 72,078 148,567 144,435
Loss from operations (46,859) (17,778) (68,507) (29,753)
Other income, net [2] 2,713 7,999 5,563 9,405
Loss before income taxes (44,146) (9,779) (62,944) (20,348)
Provision for (benefit from) income taxes 1,029 (1,192) 881 (2,049)
Net loss $ (45,175) $ (8,587) $ (63,825) $ (18,299)
Net loss per share        
Basic $ (1.56) $ (0.29) $ (2.19) $ (0.63)
Diluted $ (1.56) $ (0.29) $ (2.19) $ (0.63)
Weighted average shares used to compute net loss per share:        
Basic 28,883 29,319 29,136 29,170
Diluted 28,883 29,319 29,136 29,170
[1] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
[2]
(1)
Amounts included gain/(loss), net from derivatives not designated as hedging instruments of $0.6 million and $2.1 million, for the three and six months ended June 30, 2024, respectively, and $1.0 million and $0.9 million, for the three and six months ended July 2, 2023, respectively, and gain/(loss), net from litigation settlements of $6.0 million for the three and six months ended July 2, 2023, respectively.
v3.24.2.u1
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Statement of Comprehensive Income [Abstract]        
Net loss $ (45,175) $ (8,587) $ (63,825) $ (18,299)
Other comprehensive income (loss), before tax:        
Change in unrealized gains and losses on derivatives (82) 109 (24) 574
Change in unrealized gains and losses on available-for-sale investments (53) (50) (219) 191
Other comprehensive income (loss), before tax (135) 59 (243) 765
Tax benefit (provision) related to derivatives 10 (12) 3 (71)
Tax provision related to available-for-sale investments 0 12 0 (47)
Other comprehensive income (loss), net of tax (125) 59 (240) 647
Comprehensive loss $ (45,300) $ (8,528) $ (64,065) $ (17,652)
v3.24.2.u1
Unaudited Condensed Consolidated Statements of Stockholder's Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Beginning balance at Dec. 31, 2022 $ 620,855 $ 29 $ 946,123 $ (535) $ (324,762)
Beginning balance (in shares) at Dec. 31, 2022   28,908,000      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Change in unrealized gains and losses on available-for-sale investments, net of tax 182     182  
Change in unrealized gains and losses on derivatives, net of tax 406     406  
Net loss (9,712)       (9,712)
Stock-based compensation 4,665   4,665    
Restricted stock unit withholdings (120)       (120)
Restricted stock unit withholdings (in shares)   (6,000)      
Issuance of common stock under stock-based compensation plans 2,286   2,286    
Issuance of common stock under stock-based compensation plans (in shares)   154,000      
Ending balance at Apr. 02, 2023 618,562 $ 29 953,074 53 (334,594)
Ending balance (in shares) at Apr. 02, 2023   29,056,000      
Beginning balance at Dec. 31, 2022 620,855 $ 29 946,123 (535) (324,762)
Beginning balance (in shares) at Dec. 31, 2022   28,908,000      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss $ (18,299)        
Restricted stock unit withholdings (in shares) (147,000)        
Ending balance at Jul. 02, 2023 $ 612,736 $ 29 957,761 112 (345,166)
Ending balance (in shares) at Jul. 02, 2023   29,400,000      
Beginning balance at Apr. 02, 2023 618,562 $ 29 953,074 53 (334,594)
Beginning balance (in shares) at Apr. 02, 2023   29,056,000      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Change in unrealized gains and losses on available-for-sale investments, net of tax (38)     (38)  
Change in unrealized gains and losses on derivatives, net of tax 97     97  
Net loss (8,587)       (8,587)
Stock-based compensation 4,687   4,687    
Restricted stock unit withholdings (1,985)       (1,985)
Restricted stock unit withholdings (in shares)   (141,000)      
Issuance of common stock under stock-based compensation plans (in shares)   485,000      
Ending balance at Jul. 02, 2023 612,736 $ 29 957,761 112 (345,166)
Ending balance (in shares) at Jul. 02, 2023   29,400,000      
Beginning balance at Dec. 31, 2023 535,495 $ 30 967,651 136 (432,322)
Beginning balance (in shares) at Dec. 31, 2023   29,616,000      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Change in unrealized gains and losses on available-for-sale investments, net of tax (166)     (166)  
Change in unrealized gains and losses on derivatives, net of tax 51     51  
Net loss (18,650)       (18,650)
Stock-based compensation 4,544   4,544    
Repurchase of common stock (11,444) $ (1)     (11,443)
Repurchase of common stock (in shares)   (783,000)      
Restricted stock unit withholdings (454)       (454)
Restricted stock unit withholdings (in shares)   (32,000)      
Issuance of common stock under stock-based compensation plans 1,986   1,986    
Issuance of common stock under stock-based compensation plans (in shares)   270,000      
Ending balance at Mar. 31, 2024 511,362 $ 29 974,181 21 (462,869)
Ending balance (in shares) at Mar. 31, 2024   29,071,000      
Beginning balance at Dec. 31, 2023 535,495 $ 30 967,651 136 (432,322)
Beginning balance (in shares) at Dec. 31, 2023   29,616,000      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss (63,825)        
Repurchase of common stock $ (21,400)        
Repurchase of common stock (in shares) (1,600,000)        
Restricted stock unit withholdings (in shares) (197,000)        
Ending balance at Jun. 30, 2024 $ 459,399 $ 29 980,069 (104) (520,595)
Ending balance (in shares) at Jun. 30, 2024   28,679,000      
Beginning balance at Mar. 31, 2024 511,362 $ 29 974,181 21 (462,869)
Beginning balance (in shares) at Mar. 31, 2024   29,071,000      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Change in unrealized gains and losses on available-for-sale investments, net of tax (53)     (53)  
Change in unrealized gains and losses on derivatives, net of tax (72)     (72)  
Net loss (45,175)       (45,175)
Stock-based compensation 5,888   5,888    
Repurchase of common stock (10,121) $ (1)     (10,120)
Repurchase of common stock (in shares)   (800,000)      
Restricted stock unit withholdings (2,431)       (2,431)
Restricted stock unit withholdings (in shares)   (165,000)      
Issuance of common stock under stock-based compensation plans 1 $ 1      
Issuance of common stock under stock-based compensation plans (in shares)   573,000      
Ending balance at Jun. 30, 2024 $ 459,399 $ 29 $ 980,069 $ (104) $ (520,595)
Ending balance (in shares) at Jun. 30, 2024   28,679,000      
v3.24.2.u1
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Cash flows from operating activities:    
Net loss $ (63,825) $ (18,299)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 3,048 3,866
Stock-based compensation 10,432 9,352
Gain on investments, net (1,985) (1,464)
Deferred income taxes 542 (7,839)
Provision for excess and obsolete inventory 2,954 1,531
Changes in assets and liabilities:    
Accounts receivable, net 37,991 97,989
Inventories 56,961 (26,401)
Prepaid expenses and other assets 3,866 962
Accounts payable (6,620) (49,747)
Accrued employee compensation 2,680 (1,870)
Other accrued liabilities (7,641) (37,200)
Deferred revenue 2,222 2,664
Income taxes payable (4,990) 988
Net cash provided by (used in) operating activities 35,635 (25,468)
Cash flows from investing activities:    
Purchases of short-term investments (67,998) (68,042)
Proceeds from maturities of short-term investments 60,000 55,006
Purchases of property and equipment (4,817) (1,599)
Purchases of long-term investments (90) (225)
Net cash used in investing activities (12,905) (14,860)
Cash flows from financing activities:    
Repurchases of common stock (21,444) 0
Restricted stock unit withholdings (2,885) (2,105)
Proceeds from issuance of common stock under employee stock purchase plan 1,986 2,286
Net cash provided by (used in) financing activities (22,343) 181
Net increase (decrease) in cash and cash equivalents 387 (40,147)
Cash and cash equivalents, at beginning of period 176,717 146,500
Cash and cash equivalents, at end of period 177,104 106,353
Non-cash investing and financing activities:    
Unpaid property and equipment $ 1,630 $ 1,031
v3.24.2.u1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jul. 02, 2023
Apr. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Pay vs Performance Disclosure            
Net Income (Loss) $ (45,175) $ (18,650) $ (8,587) $ (9,712) $ (63,825) $ (18,299)
v3.24.2.u1
The Company and Basis of Presentation
 6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
The Company and Basis of Presentation

Note 1. The Company and Basis of Presentation

NETGEAR, Inc. (“NETGEAR” or the “Company”) is a global company, incorporated in Delaware in January 1996. The Company turns ideas into innovative, high-performance and premium networking products that connect people, power businesses and advance the way we live. The Company is dedicated to delivering innovative and highly differentiated connected solutions ranging from easy-to-use premium WiFi solutions, security and support services to protect and enhance home networks, to switching and wireless solutions to augment business networks and audio and video over Ethernet for Pro AV applications. Its products and services are built on a variety of technologies such as wireless (WiFi and 4G/5G mobile), Ethernet and powerline, with a focus on reliability and ease-of-use. Additionally, the Company continually invests in research and development to create new technologies and services and to capitalize on technological inflection points and trends, such as WiFi 7, audio and video over Ethernet, and future technologies. Its product line consists of devices that create and extend wired and wireless networks, as well as services that complement and enhance the Company’s product line offerings. These products are available in multiple configurations to address the changing needs of the Company’s customers in each geographic region.

The Company sells networking products through multiple sales channels worldwide, including traditional retailers, online retailers, wholesale distributors, direct market resellers (“DMRs”), value-added resellers (“VARs”), broadband service providers and its direct online store at www.netgear.com.

The accompanying unaudited condensed consolidated financial statements include the accounts of NETGEAR, Inc. and its wholly owned subsidiaries. They have been prepared in accordance with established guidelines for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. The balance sheet dated December 31, 2023, has been derived from audited financial statements at such date. These unaudited condensed consolidated financial statements do not include all of the information and footnotes typically found in the audited consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments considered necessary to fairly state the Company's financial position, results of operations, comprehensive income (loss), stockholder's equity and cash flows for the periods indicated. These unaudited condensed consolidated financial statements should be read in conjunction with the notes to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report”).

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) the reported amounts of net revenue and expenses during the reported period. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances. As of the date of issuance of these condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ materially from those estimates and operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any future period.

 

 

Segment Recast
 

In the first fiscal quarter of 2024, resulting from certain segment structure changes, the Company revised its allocation method by allocating certain historically unallocated operating expenses to its individual operating segments. This change impacted Note 11, Segment Information. The prior-year segment financial information has been recast to conform to the current-year presentation. None of the changes impact previously reported consolidated net revenue, income (loss) from operations, net income (loss) per share, total assets, or stockholders’ equity.

v3.24.2.u1
Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

No material changes have been made to the Company’s significant accounting policies disclosed in Note 1, The Company and Summary of Significant Accounting Policies, in Part II, Item 8 “Financial Statements and Supplementary Data” in its Annual Report.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company for the year ended 2024 and early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect that the guidance will have material impacts on its financial position, results of operations or cash flows. The Company is evaluating the impact that the updated standard will have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 is effective for the Company for the year ended December 31, 2025 and early adoption is permitted. The guidance allows for adoption using either a prospective or retrospective transition method. The Company is evaluating the impact that the updated standard will have on its financial statement disclosures.

With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows.
v3.24.2.u1
Revenue
 6 Months Ended
Jun. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue

Note 3. Revenue

Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Transaction Price Allocated to the Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

The following table summarizes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of June 30, 2024:

 

(In thousands)

 

Less than 1 year

 

 

1 to 2 years

 

 

Beyond 2 years

 

 

Total

 

Performance obligations

 

$

63,534

 

 

$

3,084

 

 

$

2,589

 

 

$

69,207

 

 

Contract Balances

The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are mainly classified as Deferred revenue on the unaudited condensed consolidated balance sheets.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.

The following table reflects the contract balances:

 

(In thousands)

 

Balance Sheet Location

 

June 30, 2024

 

 

December 31, 2023

 

Accounts receivable, net

 

Accounts receivable, net

 

$

147,069

 

 

$

185,059

 

Contract liabilities – current

 

Deferred revenue

 

$

28,682

 

 

$

27,091

 

Contract liabilities – non-current

 

Other non-current liabilities

 

$

5,534

 

 

$

4,903

 

 

The difference in the balances of the Company’s contract assets and liabilities as of June 30, 2024 and December 31, 2023, primarily results from the timing difference between the Company’s performance and the customer’s payment.

During the six months ended June 30, 2024, $24.9 million of revenue was deferred primarily due to unsatisfied performance obligations for service contracts, $22.7 million of revenue was recognized for the satisfaction of performance obligations and $18.1 million of this recognized revenue was included in the contract liability balance at the beginning of the period.

There were no significant changes in estimates during the period that would affect the contract balances.

Disaggregation of Revenue

In the following tables, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”). The tables also include reconciliations of the disaggregated revenue by reportable segment. The Company operates and reports in two segments: Connected Home and NETGEAR for Business (formerly known as Small and Medium Business, or SMB). Sales and usage-based taxes are excluded from net revenue.

 

 

 

Three Months Ended

 

 

 

 

June 30, 2024

 

 

July 2, 2023

 

 

(In thousands)

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

 

Geographic regions (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

66,282

 

 

$

29,221

 

 

$

95,503

 

 

$

77,683

 

 

$

38,928

 

 

$

116,611

 

 

EMEA

 

 

8,958

 

 

 

18,397

 

 

 

27,355

 

 

 

11,317

 

 

 

24,844

 

 

 

36,161

 

 

APAC

 

 

8,793

 

 

 

12,249

 

 

 

21,042

 

 

 

9,406

 

 

 

11,235

 

 

 

20,641

 

 

Total

 

$

84,033

 

 

$

59,867

 

 

$

143,900

 

 

$

98,406

 

 

$

75,007

 

 

$

173,413

 

 

Sales channels:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service provider

 

$

19,732

 

 

$

202

 

 

$

19,934

 

 

$

24,916

 

 

$

18

 

 

$

24,934

 

 

Non-service provider

 

 

64,301

 

 

 

59,665

 

 

 

123,966

 

 

 

73,490

 

 

 

74,989

 

 

 

148,479

 

 

Total

 

$

84,033

 

 

$

59,867

 

 

$

143,900

 

 

$

98,406

 

 

$

75,007

 

 

$

173,413

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

July 2, 2023

 

(In thousands)

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

Geographic regions (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

144,277

 

 

$

61,154

 

 

$

205,431

 

 

$

161,684

 

 

$

76,849

 

 

$

238,533

 

EMEA

 

 

16,968

 

 

 

41,574

 

 

 

58,542

 

 

 

23,381

 

 

 

51,958

 

 

 

75,339

 

APAC

 

 

18,751

 

 

 

25,762

 

 

 

44,513

 

 

 

16,087

 

 

 

24,362

 

 

 

40,449

 

Total

 

$

179,996

 

 

$

128,490

 

 

$

308,486

 

 

$

201,152

 

 

$

153,169

 

 

$

354,321

 

Sales channels:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service provider

 

$

47,285

 

 

$

445

 

 

$

47,730

 

 

$

38,943

 

 

$

208

 

 

$

39,151

 

Non-service provider

 

 

132,711

 

 

 

128,045

 

 

 

260,756

 

 

 

162,209

 

 

 

152,961

 

 

 

315,170

 

Total

 

$

179,996

 

 

$

128,490

 

 

$

308,486

 

 

$

201,152

 

 

$

153,169

 

 

$

354,321

 

 

(1) No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
v3.24.2.u1
Balance Sheet Components
 6 Months Ended
Jun. 30, 2024
Balance Sheet Related Disclosures [Abstract]  
Balance Sheet Components

Note 4. Balance Sheet Components

Available-for-sale investments

Amortized cost and estimated fair market value of investments classified as available-for-sale, excluding cash equivalents, as of June 30, 2024 and December 31, 2023, were as follows:

 

 

 

June 30, 2024

 

(In thousands)

 

Amortized Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Estimated
Fair Value

 

U.S. treasury securities

 

$

108,341

 

 

$

—

 

 

$

(91

)

 

$

108,250

 

Corporate equity securities

 

 

262

 

 

 

—

 

 

 

—

 

 

 

262

 

Total

 

$

108,603

 

 

$

—

 

 

$

(91

)

 

$

108,512

 

 

 

 

December 31, 2023

 

(In thousands)

 

Amortized Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Estimated
Fair Value

 

U.S. treasury securities

 

$

98,326

 

 

$

128

 

 

$

—

 

 

$

98,454

 

Convertible debt

 

 

173

 

 

 

—

 

 

 

—

 

 

 

173

 

Total

 

$

98,499

 

 

$

128

 

 

$

—

 

 

$

98,627

 

 

The contractual maturities on the U.S. treasury securities as of June 30, 2024 are all due within one year. Accrued interest receivable as of June 30, 2024 was $0.5 million and was recorded within Prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet.

The following table summarizes investments classified as available-for-sale in a continuous unrealized loss position for which an allowance for credit losses was not recorded as of June 30, 2024 and December 31, 2023:

 

 

June 30, 2024

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Total

 

(In thousands)

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

U.S. treasury securities

$

108,250

 

 

$

(91

)

 

$

—

 

 

$

—

 

 

$

108,250

 

 

$

(91

)

Total

$

108,250

 

 

$

(91

)

 

$

—

 

 

$

—

 

 

$

108,250

 

 

$

(91

)

 

 

December 31, 2023

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Total

 

(In thousands)

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

U.S. treasury securities

$

98,454

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

98,454

 

 

$

—

 

Total

$

98,454

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

98,454

 

 

$

—

 

In the three and six months ended June 30, 2024 and July 2, 2023, no unrealized losses on available-for-sale securities were recognized in income. The Company does not intend to sell, and it is unlikely that it will be required to sell the investments in an unrealized loss position prior to their anticipated recovery. The investments are high-quality U.S. treasury securities and the decline in fair value is largely due to changes in interest rates and other market conditions with the fair value expected to recover as they reach maturity. There were no other-than-temporary impairments for these securities during the three and six months ended June 30, 2024 and July 2, 2023. Refer to Note 12, Fair Value Measurements, for detailed disclosures regarding fair value measurements.

Inventories

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Raw materials

 

$

21,748

 

 

$

19,955

 

Finished goods

 

 

167,188

 

 

 

228,896

 

Total

 

$

188,936

 

 

$

248,851

 

 

The Company records provisions for excess and obsolete inventory based on assumptions about future demand and market conditions and the amounts incurred were $1.9 million and $3.0 million for the three and six months ended June 30, 2024, respectively, and $0.4 million and $1.5 million for the three and six months ended July 2, 2023, respectively. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand.

 

Property and equipment, net

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Machinery and equipment

 

$

51,497

 

 

$

47,826

 

Furniture, fixtures, and leasehold improvements

 

 

19,641

 

 

 

18,205

 

Software

 

 

24,337

 

 

 

25,760

 

Computer equipment

 

 

5,336

 

 

 

5,458

 

Total property and equipment, gross

 

 

100,811

 

 

 

97,249

 

Accumulated depreciation

 

 

(89,770

)

 

 

(88,976

)

Total

 

$

11,041

 

 

$

8,273

 

 

Other non-current assets

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Non-current deferred income taxes

 

$

2,801

 

 

$

3,343

 

Long-term investments

 

 

8,336

 

 

 

8,367

 

Other

 

 

4,663

 

 

 

5,616

 

Total

 

$

15,800

 

 

$

17,326

 

 

Long-term equity investments

The Company’s long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities or corporate equity securities and investments in limited partnership funds. The changes in the carrying value of equity investments without readily determinable fair values were as follows:

 

 

Six months ended

 

 

(In thousands)

June 30, 2024

 

 

July 2, 2023

 

 

Carrying value as of the beginning of the period (1)

$

6,053

 

 

$

6,053

 

 

Carrying value as of the end of the period (1)

$

6,053

 

 

$

6,053

 

 

(1)
The balances excluded an investment in limited partnership funds of $2.3 million as of June 30, 2024, $1.8 million as of July 2, 2023, $2.3 million as of December 31, 2023, and $1.7 million as of December 31, 2022. Additionally, the balance excluded an investment in corporate equity securities of $0.3 million as of June 30, 2024, an investment in convertible debt securities of $0.2 million as of December 31, 2023, July 2, 2023, and December 31, 2022, respectively.

 

For such equity investments without readily determinable fair values still held on June 30, 2024, there were no cumulative downward adjustments for price changes and impairment and the cumulative upward adjustments for price changes was $0.3 million.

 

Other accrued liabilities

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Current operating lease liabilities

 

$

11,927

 

 

$

11,869

 

Sales and marketing

 

 

59,912

 

 

 

75,535

 

Warranty obligations

 

 

4,771

 

 

 

5,738

 

Sales returns(1)

 

 

31,478

 

 

 

34,824

 

Freight and duty

 

 

3,921

 

 

 

2,837

 

Other

 

 

47,577

 

 

 

37,281

 

Total

 

$

159,586

 

 

$

168,084

 

 

 

(1)
Inventory expected to be received from future sales returns amounted to $15.5 million and $16.9 million as of June 30, 2024 and December 31, 2023, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $8.9 million and $9.7 million as of June 30, 2024 and December 31, 2023, respectively.
v3.24.2.u1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

Note 5. Derivative Financial Instruments

The Company’s subsidiaries have material future cash flows related to revenue and expenses denominated in currencies other than the U.S. dollar, the Company’s functional currency worldwide. The Company executes currency forward contracts that typically mature in less than six months to mitigate its currency risk, in currencies including Australian dollars, British pounds, euros, Canadian dollars, and Japanese yen. The Company does not enter into derivatives transactions for trading or speculative purposes. The Company’s foreign currency forward contracts do not contain any credit-risk-related contingent features. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any individual counterparty.

The Company typically executes ten cash flow hedges per quarter with maturities under six months and with an average USD notional amount of approximately $5.0 million that are designated as cash flow hedges.

The Company enters into non-designated hedges that are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations. The Company adjusts its non-designated hedges monthly and typically executes about seven non-designated forwards per quarter with maturities less than three months and an average USD notional amount of approximately $3.0 million.

Fair Value of Derivative Instruments

The fair values of the Company’s derivative instruments and the line items on the unaudited condensed consolidated balance sheets to which they were recorded were summarized as follows:

 

 

 

Balance Sheet

 

 

 

 

 

 

 

Balance Sheet

 

 

 

 

 

 

(In thousands)

 

Location

 

June 30,
2024

 

 

December 31,
2023

 

 

Location

 

June 30,
2024

 

 

December 31,
2023

 

Derivatives not designated as hedging instruments

 

Prepaid expenses and other current assets

 

$

228

 

 

$

284

 

 

Other accrued liabilities

 

$

183

 

 

$

1,672

 

Derivatives designated as hedging instruments

 

Prepaid expenses and other current assets

 

 

7

 

 

 

7

 

 

Other accrued liabilities

 

 

30

 

 

 

19

 

Total

 

 

 

$

235

 

 

$

291

 

 

 

 

$

213

 

 

$

1,691

 

 

Refer to Note 12, Fair Value Measurements for detailed disclosures regarding fair value measurements. Refer to Note 9, Stockholders’ Equity, for details on the accumulated other comprehensive income (loss) activity related to derivatives and refer to Note 11, Segment Information, for details on gain/(loss), net pertaining to derivatives not designated as hedging instruments that were recognized in Other income (expenses), net.

v3.24.2.u1
Net Income (Loss) Per Share
 6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share

Note 6. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of Restricted Stock Units (“RSUs”) and performance shares, and issuances of shares under the Employee Stock Purchase Plan (the “ESPP”), which are reflected in diluted net income (loss) per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive.

Net income (loss) per share consisted of the following:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands, except per share data)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(45,175

)

 

$

(8,587

)

 

$

(63,825

)

 

$

(18,299

)

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares – basic

 

 

28,883

 

 

 

29,319

 

 

 

29,136

 

 

 

29,170

 

Weighted average common shares – dilutive

 

 

28,883

 

 

 

29,319

 

 

 

29,136

 

 

 

29,170

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

$

(1.56

)

 

$

(0.29

)

 

$

(2.19

)

 

$

(0.63

)

Diluted net income (loss) per share

 

$

(1.56

)

 

$

(0.29

)

 

$

(2.19

)

 

$

(0.63

)

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive employee stock-based awards, excluded

 

 

2,060

 

 

 

2,404

 

 

 

1,968

 

 

 

2,222

 
v3.24.2.u1
Income Taxes
 6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 7. Income Taxes

The income tax provision for the three and six months ended June 30, 2024 was $1.0 million, or an effective tax rate of (2.3)%, and $0.9 million, or an effective tax rate of (1.4)%, respectively. The income tax benefit for the three and six months ended July 2, 2023 was $1.2 million, or an effective tax rate of 12.2%, and $2.0 million, or an effective tax rate of 10.1%, respectively. The changes in taxes for the three and six months ended June 30, 2024, compared to the prior year period, were primarily due to the continued full valuation allowance on deferred tax assets for U.S. federal and state purposes that was established during the three months ended October 1, 2023. The Company evaluated the current results as of the period ended June 30, 2024, coupled with the expectations for the remainder of the year, and determined that it continues to not be more likely than not that the deferred tax assets would be realized, and accordingly, has recorded no benefit for the forecasted tax loss for the three and six months ended June 30, 2024. By comparison, for the three and six months ended July 2, 2023, tax benefits were recorded on the pre-tax loss since the valuation allowance on deferred tax assets had not yet been established.

The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The future foreign tax rate could be affected by changes in the composition in earnings in countries with tax rates differing from the U.S. federal rate. The Company is under examination in various U.S. and foreign jurisdictions.

The Company files income tax returns in the U.S. federal jurisdiction as well as various state, local, and foreign jurisdictions. Due to the uncertain nature of ongoing tax audits, the Company has recorded its liability for uncertain tax positions as part of its long-term liability as payments cannot be anticipated over the next twelve months. The existing tax positions of the Company continue to generate an increase in the liability for uncertain tax positions. The liability for uncertain tax positions may be reduced for liabilities that are settled with taxing authorities or on which the statute of limitations could expire without assessment from tax authorities. The possible reduction in liabilities for uncertain tax positions in multiple jurisdictions in the next twelve months is approximately $0.7 million excluding the interest, penalties and the effect of any related deferred tax assets or liabilities. The Company is currently under examination in various U.S. and foreign jurisdictions.

The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities

are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must then assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income. As of the period ended October 1, 2023, the Company determined that recovery of its U.S. federal and state deferred tax assets was no longer more likely than not and established a full valuation allowance on those net assets, based on evaluation of all available evidence, including actual and anticipated business results. Accordingly, the balance sheet net deferred tax assets from the U.S. federal and state jurisdictions reported in “Other Non-current Assets” were reduced after the effect of establishing the valuation allowance.
v3.24.2.u1
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 8. Commitments and Contingencies

Purchase Obligations

The Company has entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date. As of June 30, 2024, the Company had approximately $71.7 million, as compared to $42.6 million as of December 31, 2023, in short-term non-cancelable purchase commitments with suppliers or where the suppliers had procured unique materials and components upon receipts of the Company’s purchase orders. Due to an elongation of the time from order placement to production that occurred several years ago, the Company issued purchase orders to supply chain partners beyond contractual termination periods. As of June 30, 2024, $257.7 million of purchase orders beyond contractual termination periods remained outstanding. Consequently, the Company may incur expenses for materials and components, such as chipsets purchased by the supplier to fulfill the purchase order if the purchase order is cancelled. Expenses incurred in respect of cancelled purchase orders have historically not been significant relative to the original order value. For those orders not governed by master purchase agreements, the commitments are governed by the commercial terms on the Company’s purchase orders subject to acknowledgment from its suppliers. The Company establishes a loss liability for all products it does not expect to sell or orders it anticipates canceling for which it has committed purchases from suppliers. Such loss liability is included in Other accrued liabilities on the Company’s unaudited condensed consolidated balance sheets. Losses incurred in relation to purchase commitments, including unique materials and components, amounted to $5.1 million and $6.2 million for the three and six months ended June 30, 2024, respectively and $0.9 million and $1.4 million for the three and six months ended July 2, 2023, respectively.

Non-Trade Commitments

As of June 30, 2024, the Company had non-cancellable purchase commitments of $11.3 million pertaining to non-trade activities.

Warranty Obligations

Changes in the Company’s warranty obligations, which is included in Other accrued liabilities on the unaudited condensed consolidated balance sheets, were as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Balance as of beginning of the period

 

$

5,087

 

 

$

6,351

 

 

$

5,738

 

 

$

6,320

 

Provision for warranty liability made

 

 

800

 

 

 

1,260

 

 

 

1,408

 

 

 

2,677

 

Settlements made

 

 

(1,116

)

 

 

(1,394

)

 

 

(2,375

)

 

 

(2,780

)

Balance as of the end of the period

 

$

4,771

 

 

$

6,217

 

 

$

4,771

 

 

$

6,217

 

 

Litigation and Other Legal Matters

The Company is involved in disputes, litigation, and other legal actions, including, but not limited to, the matters described below. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, the Company accrues for the amount, or if a range, the Company accrues the low end of the range, only if there is not a better estimate than any other amount within the range, as a component of legal expense within litigation reserves, net. The Company monitors developments in these legal matters that could affect the estimate the Company had previously accrued. In relation to such matters, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its financial position within the next twelve months, or the outcome of these matters is currently not determinable. There are many uncertainties associated with any litigation, and these actions or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could have an adverse effect in future periods. If any of those events were to occur, the Company’s business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company’s estimates, which could result in the need to adjust the liability and record additional expenses.

Huawei v. NETGEAR Inc., NETGEAR Deutschland GmbH, and Exertis-Connect GmbH (at the Dusseldorf District Court, Germany)

On or around March of 2022, Huawei filed two patent infringement lawsuits at the District Court of Dusseldorf, Germany, against NETGEAR Inc., NETGEAR Deutschland GmbH, and Exertis-Connect GmbH, a third-party webstore selling NETGEAR products in Germany. Huawei asserted one EU patent in each suit, EP 3 337 077 B1 (“EP 077”) in case no. 08/22 and EP 3 143 741 B1 (EP 741) in case no. 09/22. In its complaints, Huawei alleged that the Company’s WiFi 6 products infringed the two patents, which Huawei further claimed are standard-essential patents. On or around February 9, 2023, the Federal Patent Court issued preliminary opinions finding both asserted patents invalid. The Company attended an oral hearing for both infringement cases on March 21, 2023 before the Dusseldorf District Court and the Court dismissed case no. 09/22 for the EP 741 and stayed case no. 08/22 for EP 077. Huawei is appealing the dismissal of case no. 09/22, and the deadline for the parties’ briefing is scheduled for November 22, 2024 with an oral hearing on March 6, 2025. On March 20, 2024, the Patent Court maintained the validity of EP 741, but with an amended claim. Case no. 08/22 (EP 077) remains stayed while the nullity action is ongoing. An oral hearing for the EP 077 nullity action is scheduled for December 12, 2024.

On or around May 10, 2022, the Company was served with two suits that Huawei filed before the Jinan Intermediate People’s Court of China asserting Patent Nos. ZL 201811536087.9 (case no. 407) and ZL 201810757332.2 (case no. 408) against the Company’s WiFi 6 products. The Company’s challenge of the Jinan Court’s jurisdiction in both cases was denied by the Supreme Court of China. The parties attended an evidentiary hearing for the cases on July 3, 2023. Licensing and technical hearings followed on July 24, 2023 and July 25, 2023. On or around June 12, 2024, the Jinan Court found that the Company Wi-Fi 6 products infringe Huawei’s two asserted Chinese patents. The Company appealed both cases to the Chinese Supreme Court on June 21, 2024.

Huawei v. NETGEAR Inc., NETGEAR Deutschland GmbH, and NETGEAR International Limited (at the Unified Patent Court - UPC)

On or around July 3, 2023, Huawei filed an infringement suit, asserting patent EP 3 611 989 (the ’989 Patent), against NETGEAR Inc., NETGEAR Deutschland GmbH, and NETGEAR International Limited at the Unified Patent Court (UPC) in Munich, Germany. The deadline for the parties to complete briefing was extended to July 3, 2024. An interim conference is scheduled for August 29, 2024, and oral hearing for October 30 and 31, 2024.

On or around December 11, 2023, Huawei filed a second UPC suit, asserting EP 3 678 321 (EP 321), against the Company. The Company submitted its Statement of Defense on April 18, 2024. The parties are awaiting a date from the Court for oral argument.

Huawei v. NETGEAR Inc., NETGEAR Deutschland GmbH, and NETGEAR International Limited (at the Munich District Court, Germany)

On May 17, 2024, Huawei filed a Complaint asserting EP 3 334 112 (EP 112) against the Company’s WiFi-6 products at the Munich District Court. The entities named in the suit are NETGEAR Inc, NETGEAR International, and NETGEAR Germany. The deadline for the parties to complete briefing is November 15, 2024 and the oral hearing is scheduled for December 19, 2024.

On July 10, 2024, Huawei filed a Complaint asserting EP 3 937 445 (EP 445) against the Company’s WiFi-6 products at the Munich District Court. The entities named in the suit are NETGEAR Inc, NETGEAR International, and NETGEAR Germany. The Company filed a Statement of Defense for NETGEAR Germany on July 10, 2024. The deadline for other entities’ Statement of Defense is due on October 11, 2024.

TP-Link v. NETGEAR (at the ITC and Northern District of California District Court)

On May 6, 2024, TP-Link sued the Company at the International Trade Commission (ITC), alleging that the Company’s Orbi and Nighthawk products (collectively, the “Accused Products”) infringe five of TP-Link’s patents: U.S. Pat. No. 7,636,550 entitled “System and Method for Determining Channel Quality in a Wireless Network,” U.S. Pat. No. 8,176,148 entitled “Method and System for Wireless Network Configuration,” U.S. Pat. No. 8,229,357 entitled “Method and System For a Portable Wireless Range,” U.S. Pat. No. 7,672,268 entitled “Systems and Methods for Implementing Double Wide Channels in a Communication System,” and U.S. Pat. No. 8,774,008 entitled “Real-Time Network Measurement” (collectively, the “Asserted Patents”). The ITC instituted the case on June 14, 2024 and the Company filed its Response on July 18, 2024.

On June 8, 2024, TP-Link filed a parallel lawsuit before the Northern District of California District Court alleging that the Company infringes the same Asserted Patents by the same Accused Products. This case is stayed pending outcome of the ITC case.

TP-Link v. NETGEAR (at the Northern District of California District Court)

On June 10, 2024, TP-Link filed a lawsuit against NETGEAR in the United States District Court Northern District of California alleging breach of contract. The Company recently obtained an Initial Determination at the ITC that TP Link’s products infringe on the Company’s U.S. Patent 7,936,714 (the ’714 Patent). TP-Link alleged, in its Complaint, that the ’714 Patent is a Standard Essential Patent (SEP) and by suing TP-Link for patent infringement, the Company breached its contractual obligation, as a member of Wi-Fi Alliance or WFA, to offer TP- Link (also a WFA member) a license to the ’714 Patent on reasonable and non-discriminatory (RAND) terms. The suit seeks a declaratory judgment from the Court that the Company is subject to RAND licensing obligations and damages. On June 18, 2024, TP-Link filed a motion for preliminary injunction seeking to enjoin the Company from enforcing an exclusion order from the ITC based on the ’714 patent. The Company’s opposition to the preliminary injunction is due August 1, 2024 and an oral hearing is scheduled for August 22, 2024. The Company’s response to the Complaint is due August 8, 2024.

The Company, at this time, is not able to reasonably estimate any financial impact to the Company resulting from these litigation matters.

The Company does not believe that it is reasonably possible that a material loss has been incurred for any of the matters disclosed above, and consequently has not established any loss provisions.

 

For the three and six months ended June 30, 2024, the Company recorded an $8.2 million litigation reserve relating to a contingent liability tied to a successful outcome of the ITC suit against TP-Link. The Company included the amount in Litigations reserves, net in the condensed consolidated statements of operations.
v3.24.2.u1
Stockholders' Equity
 6 Months Ended
Jun. 30, 2024
Stockholders' Equity Note [Abstract]  
Stockholders' Equity

Note 9. Stockholders’ Equity

Stock Repurchases

From time to time, the Company’s Board of Directors has authorized programs under which the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. Under the authorizations, the timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, such as levels of cash generation from operations, cash requirements for acquisitions and the price of the Company’s common stock. During the six months ended June 30, 2024, the Company repurchased and retired, reported based on trade date, approximately 1.6 million shares of common stock, at a cost of approximately $21.4 million under the repurchase authorization. The Company did not repurchase any shares of common stock during the six months ended July 2, 2023. As of June 30, 2024, approximately 0.9 million shares remained authorized for repurchase under the repurchase program. On July 16, 2024, the Board of Directors authorized management to repurchase up to 3.0 million shares of the Company’s outstanding common stock, incremental to the remaining shares under the Company’s previous repurchase program.

The Company repurchased, reported based on trade date, approximately 197,000 and 147,000 shares of common stock, at a cost of approximately $2.9 million and $2.1 million, during the six months ended June 30, 2024 and July 2, 2023, respectively, to administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs.

These shares were retired upon repurchase. The Company’s policy related to repurchases of its common stock is to charge the excess of cost over par value to retained earnings. All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Accumulated Other Comprehensive Income (Loss)

The following tables set forth the changes in accumulated other comprehensive income (loss) (“AOCI”) by component:

 

(In thousands)

 

Unrealized
gains (losses)
on available
-for-sale
investments

 

 

Unrealized
gains (losses)
on derivatives

 

 

Estimated tax
benefit (provision)

 

 

Total

 

Balance as of December 31, 2023

 

$

126

 

 

$

7

 

 

$

3

 

 

$

136

 

Other comprehensive income (loss) before reclassifications

 

 

(219

)

 

 

(186

)

 

 

37

 

 

 

(368

)

Less: Amount reclassified from accumulated other comprehensive income (loss)

 

 

—

 

 

 

(162

)

 

 

34

 

 

 

(128

)

Net current period other comprehensive income (loss)

 

 

(219

)

 

 

(24

)

 

 

3

 

 

 

(240

)

Balance as of June 30, 2024

 

$

(93

)

 

$

(17

)

 

$

6

 

 

$

(104

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Unrealized
gains (losses)
on available
-for-sale
investments

 

 

Unrealized
gains (losses)
on derivatives

 

 

Estimated tax
benefit (provision)

 

 

Total

 

Balance as of December 31, 2022

 

$

(322

)

 

$

(338

)

 

$

125

 

 

$

(535

)

Other comprehensive income (loss) before reclassifications

 

 

191

 

 

 

1,836

 

 

 

(383

)

 

 

1,644

 

Less: Amount reclassified from accumulated other comprehensive income (loss)

 

 

—

 

 

 

1,262

 

 

 

(265

)

 

 

997

 

Net current period other comprehensive income (loss)

 

 

191

 

 

 

574

 

 

 

(118

)

 

 

647

 

Balance as of July 2, 2023

 

$

(131

)

 

$

236

 

 

$

7

 

 

$

112

 

 

The following table provides details about significant amounts reclassified out of each component of AOCI:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Amount Reclassified from AOCI

 

 

 

 

 

 

 

 

 

 

 

 

Gains (losses) on cash flow hedge:

 

Foreign currency forward contracts

 

 

 

 

 

 

 

 

 

 

 

 

Affected line item in the statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

(130

)

 

$

762

 

 

$

(209

)

 

$

1,451

 

Cost of revenue

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

(2

)

Research and development

 

 

(1

)

 

 

(18

)

 

 

(2

)

 

 

(26

)

Sales and marketing

 

 

33

 

 

 

(59

)

 

 

42

 

 

 

(142

)

General and administrative

 

 

(1

)

 

 

(3

)

 

 

7

 

 

 

(19

)

Total before tax

 

 

(99

)

 

 

681

 

 

 

(162

)

 

 

1,262

 

Tax impact

 

 

21

 

 

 

(143

)

 

 

34

 

 

 

(265

)

Total, net of tax

 

$

(78

)

 

$

538

 

 

$

(128

)

 

$

997

 
v3.24.2.u1
Employee Benefit Plans
 6 Months Ended
Jun. 30, 2024
Employee Benefit and Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Employee Benefit Plans

Note 10. Employee Benefit Plans

The Company grants options, RSUs and performance units under the 2016 Incentive Plan (the “2016 Plan”), under which awards may be granted to all employees. Vesting periods under this plan are generally four years for options and RSUs and three years for performance shares. As of June 30, 2024, approximately 2.0 million shares were reserved for future grants under the 2016 Plan.

In February 2024, the Company’s Board of Directors approved 2024 Inducement Equity Incentive Plan (the “2024 Inducement Plan”), under which options, restricted stock awards, RSUs, stock appreciation rights, performance units, performance shares, and other stock or cash awards can be granted to personnel for positions of substantial responsibility. As of June 30, 2024, approximately 0.7 million shares were reserved for future grants under the 2024 Inducement Plan.

Additionally, the Company sponsors an Employee Stock Purchase Plan (the “ESPP”). The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six months. As of June 30, 2024, approximately 0.6 million shares were available for issuance under the ESPP.

Option Activity

Stock option activity was as follows:

 

(In thousands, except per share amounts)

 

Number of
Shares

 

 

Weighted Average Exercise Price Per Share

 

 

Outstanding as of December 31, 2023

 

 

866

 

 

$

30.70

 

 

Granted

 

 

—

 

 

$

—

 

 

Exercised

 

 

—

 

 

$

—

 

 

Cancelled

 

 

—

 

 

$

—

 

 

Expired

 

 

(19

)

 

$

19.41

 

 

Outstanding as of June 30, 2024

 

 

847

 

 

$

30.96

 

 

 

Time-Based RSU Activity

Time-based RSU activity was as follows:

 

(In thousands, except per share amounts)

 

Number
of Shares

 

 

Weighted Average Grant Date Fair Value Per Share

 

Outstanding as of December 31, 2023

 

 

1,567

 

 

$

22.83

 

Granted

 

 

1,463

 

 

$

14.34

 

Vested

 

 

(658

)

 

$

22.50

 

Cancelled

 

 

(126

)

 

$

20.86

 

Outstanding as of June 30, 2024

 

 

2,246

 

 

$

17.35

 

Performance-Based RSU Activity

Since 2020, the Company’s executive officers have been granted performance-based restricted stock units (“PSUs”) under the 2016 Plan and 2024 Inducement Plan with vesting occurring at the end of an approximately three-year period if performance conditions or market conditions are met. The number of PSUs earned and eligible to vest are determined based on achievement of the pre-determined performance conditions or market conditions and the recipients’ continued service with the Company. The number of PSUs to vest could range from 0% to 150% of the target shares granted. For the PSUs with performance conditions, at the end of each reporting period, the Company evaluates the probability of achieving the performance conditions and records the related stock-based compensation expense based on performance to date over the service period. For the PSUs with market conditions, the grant date fair value is determined using the Monte Carlo valuation method and the stock-based compensation expense is recognized straight line from the grant date to the vesting date.

In February 2024, the Company granted PSUs under the 2024 Inducement Plan to its newly-hired Chief Executive Officer with 1/3 of the target PSUs allocated to each tranche and vesting occurring at the end of each anniversary of the vesting commencement date over a three-year period. The number of PSUs to vest could range from 0% to 150% of the target shares granted and are determined based on achievement of the pre-determined market conditions and the recipients’ continued service with the Company. The grant date fair value was determined using the Monte Carlo valuation method. The stock-based compensation expense relating to PSUs with a market condition is recognized ratably from the service inception date to the vesting date for each tranche.

PSU activity was as follows:

(In thousands, except per share amounts)

 

Number
of Shares

 

 

Weighted Average Grant Date Fair Value Per Share

 

Outstanding as of December 31, 2023

 

 

417

 

 

$

24.76

 

Granted

 

 

575

 

 

$

20.25

 

Vested

 

 

—

 

 

$

—

 

Cancelled

 

 

(332

)

 

$

26.39

 

Outstanding as of June 30, 2024

 

 

660

 

 

$

20.01

 

Valuation and Expense Information

 

The following table sets forth the stock-based compensation expense resulting from stock options, RSUs (time-based and performance-based) and the ESPP included in the Company’s unaudited condensed consolidated statements of operations:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Cost of revenue

 

$

413

 

 

$

342

 

 

$

778

 

 

$

693

 

Research and development

 

 

844

 

 

 

1,144

 

 

 

1,542

 

 

 

2,209

 

Sales and marketing

 

 

1,235

 

 

 

1,397

 

 

 

2,472

 

 

 

2,828

 

General and administrative

 

 

3,396

 

 

 

1,804

 

 

 

5,640

 

 

 

3,622

 

Total

 

$

5,888

 

 

$

4,687

 

 

$

10,432

 

 

$

9,352

 

 

 

As of June 30, 2024, $45.3 million of unrecognized compensation cost related to unvested RSUs and performance shares expected to be recognized over a weighted-average period of 2.5 years.
v3.24.2.u1
Segment Information
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Segment Information

Note 11. Segment Information

Operating segments are components of an enterprise about which separate financial information is available and is evaluated quarterly by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company has identified its CEO as the CODM. The Company operates and reports in two segments: Connected Home and NETGEAR for Business:

•
Connected Home: Focuses on consumers and provides high-performance, dependable and easy-to-use premium WiFi internet networking solutions such as WiFi 6, WiFi 6E and WiFi 7 Tri-band and Quad-band mesh systems, and routers, 4G/5G mobile products, and subscription services that provide consumers a range of value-added services focused on performance, security, privacy, and premium support; and
•
NETGEAR for Business: Focuses on businesses and provides solutions for business networking, wireless local area network (“LAN”), audio and video over Ethernet for Pro AV applications, security and remote management providing enterprise-class functionality at an affordable price.

The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. The leadership team of each segment is focused on product and service development efforts, both from a product marketing and engineering standpoint, to service the unique needs of their customers.

 

The results of the reportable segments are derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including contribution income (loss). Segment contribution income (loss) includes all product line segment revenues less the related cost of sales, research and development and sales and marketing costs. Contribution income (loss) is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing and general and administrative expenses, amortization of intangibles, stock-based compensation expense, restructuring and other charges, litigation reserves, net, and other income (expenses), net.

Effective on January 1, 2024, resulting from certain segment structure changes, the Company revised its allocation method by allocating certain historically unallocated operating expenses to its individual operating segments. The prior-year segment financial information has been recast to conform to the current-year presentation. Financial information for each reportable segment and a reconciliation of segment contribution income (loss) to loss before income taxes is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

(In thousands, except percentage data)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Connected Home

 

$

84,033

 

 

$

98,406

 

 

$

179,996

 

 

$

201,152

 

 

NETGEAR for Business

 

 

59,867

 

 

 

75,007

 

 

 

128,490

 

 

 

153,169

 

 

Total net revenue

 

$

143,900

 

 

$

173,413

 

 

$

308,486

 

 

$

354,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Connected Home

 

$

(13,794

)

 

$

(5,373

)

 *

$

(19,934

)

 

$

(7,129

)

 *

Contribution margin

 

 

(16.4

)%

 

 

(5.5

)%

 *

 

(11.1

)%

 

 

(3.5

)%

 *

NETGEAR for Business

 

$

2,061

 

 

$

13,650

 

 *

$

11,965

 

 

$

27,707

 

 *

Contribution margin

 

 

3.4

 %

 

 

18.2

 %

 *

 

9.3

 %

 

 

18.1

 %

 *

Total segment contribution income

 

$

(11,733

)

 

$

8,277

 

 *

$

(7,969

)

 

$

20,578

 

 *

Corporate and unallocated costs

 

 

(19,350

)

 

 

(19,011

)

 *

 

(39,156

)

 

 

(38,385

)

 *

Amortization of intangibles

 

 

—

 

 

 

(128

)

 

 

—

 

 

 

(257

)

 

Stock-based compensation expense

 

 

(5,888

)

 

 

(4,687

)

 

 

(10,432

)

 

 

(9,352

)

 

Restructuring and other charges

 

 

(1,688

)

 

 

(2,229

)

 

 

(2,720

)

 

 

(2,337

)

 

Litigation reserves, net

 

 

(8,200

)

 

 

—

 

 

 

(8,230

)

 

 

—

 

 

Other income, net (1)

 

 

2,713

 

 

 

7,999

 

 

 

5,563

 

 

 

9,405

 

 

Loss before income taxes

 

$

(44,146

)

 

$

(9,779

)

 

$

(62,944

)

 

$

(20,348

)

 

 

 

(1)
Amounts included gain/(loss), net from derivatives not designated as hedging instruments of $0.6 million and $2.1 million, for the three and six months ended June 30, 2024, respectively, and $1.0 million and $0.9 million, for the three and six months ended July 2, 2023, respectively, and gain/(loss), net from litigation settlements of $6.0 million for the three and six months ended July 2, 2023, respectively.

* Financial information for each reportable segment in the prior year periods were recast to conform to the current reportable segment structure.

The CODM does not evaluate operating segments using discrete asset information.

Operations by Geographic Region

For reporting purposes, revenue is generally attributed to each geographic region based on the location of the customer.

The following table shows net revenue by geography:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

United States (U.S.)

 

$

92,794

 

 

$

112,961

 

 

$

200,083

 

 

$

230,759

 

Americas (excluding U.S.)

 

 

2,709

 

 

 

3,650

 

 

 

5,348

 

 

 

7,774

 

EMEA (1)

 

 

27,355

 

 

 

36,161

 

 

 

58,542

 

 

 

75,339

 

APAC (1)

 

 

21,042

 

 

 

20,641

 

 

 

44,513

 

 

 

40,449

 

Total net revenue

 

$

143,900

 

 

$

173,413

 

 

$

308,486

 

 

$

354,321

 

 

 

(1)
No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.

 

Long-lived assets by Geographic Region

The following table presents the Company’s long-lived assets located in geographic areas, which consist of property and equipment, net, and operating lease right-of-use assets:

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

United States (U.S.)

 

$

22,079

 

 

$

25,051

 

Canada

 

 

5,496

 

 

 

4,714

 

Americas (excluding U.S. and Canada)

 

 

52

 

 

 

68

 

EMEA

 

 

3,425

 

 

 

3,739

 

Singapore

 

 

5,648

 

 

 

6,218

 

APAC (excluding Singapore) (1)

 

 

7,735

 

 

 

5,768

 

Total

 

$

44,435

 

 

$

45,558

 

 

 

(1)
No individual country represented more than 10% of the Company’s total long-lived assets in the periods presented.
v3.24.2.u1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 12. Fair Value Measurements

The following tables summarize assets and liabilities measured at fair value on a recurring basis:

 

 

 

June 30, 2024

 

(In thousands)

 

Total

 

 

Quoted market
prices in active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

Assets:

 

 

 

 

 

 

 

 

 

Cash equivalents: money-market funds

 

$

29,385

 

 

$

29,385

 

 

$

—

 

Available-for-sale investments: U.S. treasury securities(1)

 

 

108,250

 

 

 

—

 

 

 

108,250

 

Trading securities: mutual funds(1)

 

 

8,722

 

 

 

8,722

 

 

 

—

 

Available-for-sale investments: corporate equity securities (1)

 

 

262

 

 

 

262

 

 

 

—

 

Foreign currency forward contracts(2)

 

 

235

 

 

—

 

 

 

235

 

Total assets measured at fair value

 

$

146,854

 

 

$

38,369

 

 

$

108,485

 

Liabilities:

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(3)

 

$

213

 

 

$

—

 

 

$

213

 

Total liabilities measured at fair value

 

$

213

 

 

$

—

 

 

$

213

 

 

 

 

 

December 31, 2023

 

(In thousands)

 

Total

 

 

Quoted market
prices in active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

Assets:

 

 

 

 

 

 

 

 

 

Cash equivalents: money-market funds

 

$

25,986

 

 

$

25,986

 

 

$

—

 

Available-for-sale investments: U.S. treasury securities(1)

 

 

98,454

 

 

 

—

 

 

 

98,454

 

Trading securities: mutual funds(1)

 

 

8,304

 

 

 

8,304

 

 

 

—

 

Available-for-sale investments: convertible debt securities(1)

 

 

173

 

 

 

—

 

 

 

173

 

Foreign currency forward contracts(2)

 

 

291

 

 

—

 

 

 

291

 

Total assets measured at fair value

 

$

133,208

 

 

$

34,290

 

 

$

98,918

 

Liabilities:

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(3)

 

$

1,691

 

 

$

—

 

 

$

1,691

 

Total liabilities measured at fair value

 

$

1,691

 

 

$

—

 

 

$

1,691

 

 

 

(1)
Included in Short-term investments on the Company’s unaudited condensed consolidated balance sheets.
(2)
Included in Prepaid expenses and other current assets on the Company’s unaudited condensed consolidated balance sheets.
(3)
Included in Other accrued liabilities on the Company's unaudited condensed consolidated balance sheets.

 

The Company’s investments in money-market funds, mutual funds and corporate equity securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company’s investments in U.S. treasury securities are classified within Level 2 of the fair value hierarchy because they are valued based on readily available pricing sources for comparable or identical instruments in less active markets. The Company’s investments in convertible debt securities issued by a publicly held company are classified within Level 2 of the fair value hierarchy as the fair value for the instrument approximates its cost based on the contractual terms of the arrangement. The Company’s foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that consider the contract terms as well as currency rates and counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such models. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A-/A3 or higher. The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities.
v3.24.2.u1
Restructuring and Other Charges
 6 Months Ended
Jun. 30, 2024
Restructuring Charges [Abstract]  
Restructuring and Other Charges

Note 13. Restructuring and Other Charges

 

The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The Company includes expenses related to restructuring and other charges in Other operating expenses (income), net in the condensed consolidated statements of operations. Accrued restructuring and other charges are classified within Accrued employee compensation and Other accrued liabilities on the condensed consolidated balance sheets.

 

Restructuring and other charges recognized in the three and six months ended June 30, 2024 and July 2, 2023, respectively, were primarily for severance, and other costs in relation to the reorganization of our business to better align the cost structure of the business with the areas to deliver long-term growth and expanding profitability or projected revenue levels. The liabilities as of June 30, 2024 are expected to be settled in 2024.

 

The following table provides a summary of the activity related to accrued restructuring and other charges:

 

(In thousands)

 

Accrued Restructuring and Other Charges at December 31, 2023

 

 

Additions

 

 

Cash Payments

 

 

Adjustments

 

 

Accrued Restructuring and Other Charges at June 30, 2024

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee termination charges

 

$

257

 

 

$

2,504

 

 

$

(2,139

)

 

$

—

 

 

$

622

 

Lease contract termination and other charges

 

 

30

 

 

 

216

 

 

 

(86

)

 

 

(160

)

 

 

—

 

Total Restructuring and other charges

 

$

287

 

 

$

2,720

 

 

$

(2,225

)

 

$

(160

)

 

$

622

 

 

(In thousands)

 

Accrued Restructuring and Other Charges at December 31, 2022

 

 

Additions

 

 

Cash Payments

 

 

Adjustments

 

 

Accrued Restructuring and Other Charges at July 2, 2023

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee termination charges

 

$

1,912

 

 

$

2,396

 

 

$

(3,505

)

 

$

(37

)

 

$

766

 

Lease contract termination and other charges

 

 

—

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

7

 

Total Restructuring and other charges

 

$

1,912

 

 

$

2,403

 

 

$

(3,505

)

 

$

(37

)

 

$

773

 
v3.24.2.u1
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company for the year ended 2024 and early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect that the guidance will have material impacts on its financial position, results of operations or cash flows. The Company is evaluating the impact that the updated standard will have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 is effective for the Company for the year ended December 31, 2025 and early adoption is permitted. The guidance allows for adoption using either a prospective or retrospective transition method. The Company is evaluating the impact that the updated standard will have on its financial statement disclosures.

With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows.
Revenue Recognition

Transaction Price Allocated to the Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

Contract Balances

The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are mainly classified as Deferred revenue on the unaudited condensed consolidated balance sheets.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.
Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of Restricted Stock Units (“RSUs”) and performance shares, and issuances of shares under the Employee Stock Purchase Plan (the “ESPP”), which are reflected in diluted net income (loss) per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive.
Income taxes

The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities

are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must then assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income. As of the period ended October 1, 2023, the Company determined that recovery of its U.S. federal and state deferred tax assets was no longer more likely than not and established a full valuation allowance on those net assets, based on evaluation of all available evidence, including actual and anticipated business results. Accordingly, the balance sheet net deferred tax assets from the U.S. federal and state jurisdictions reported in “Other Non-current Assets” were reduced after the effect of establishing the valuation allowance.
Segment Recast

Segment Recast
 

In the first fiscal quarter of 2024, resulting from certain segment structure changes, the Company revised its allocation method by allocating certain historically unallocated operating expenses to its individual operating segments. This change impacted Note 11, Segment Information. The prior-year segment financial information has been recast to conform to the current-year presentation. None of the changes impact previously reported consolidated net revenue, income (loss) from operations, net income (loss) per share, total assets, or stockholders’ equity.

v3.24.2.u1
Revenue (Tables)
 6 Months Ended
Jun. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Remaining Performance Obligations

 

(In thousands)

 

Less than 1 year

 

 

1 to 2 years

 

 

Beyond 2 years

 

 

Total

 

Performance obligations

 

$

63,534

 

 

$

3,084

 

 

$

2,589

 

 

$

69,207

 

 
Schedule of Contract Balances

The following table reflects the contract balances:

 

(In thousands)

 

Balance Sheet Location

 

June 30, 2024

 

 

December 31, 2023

 

Accounts receivable, net

 

Accounts receivable, net

 

$

147,069

 

 

$

185,059

 

Contract liabilities – current

 

Deferred revenue

 

$

28,682

 

 

$

27,091

 

Contract liabilities – non-current

 

Other non-current liabilities

 

$

5,534

 

 

$

4,903

 
Schedule of Net Revenue Disaggregated by Geographical Region and Sales Channel

In the following tables, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”). The tables also include reconciliations of the disaggregated revenue by reportable segment. The Company operates and reports in two segments: Connected Home and NETGEAR for Business (formerly known as Small and Medium Business, or SMB). Sales and usage-based taxes are excluded from net revenue.

 

 

 

Three Months Ended

 

 

 

 

June 30, 2024

 

 

July 2, 2023

 

 

(In thousands)

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

 

Geographic regions (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

66,282

 

 

$

29,221

 

 

$

95,503

 

 

$

77,683

 

 

$

38,928

 

 

$

116,611

 

 

EMEA

 

 

8,958

 

 

 

18,397

 

 

 

27,355

 

 

 

11,317

 

 

 

24,844

 

 

 

36,161

 

 

APAC

 

 

8,793

 

 

 

12,249

 

 

 

21,042

 

 

 

9,406

 

 

 

11,235

 

 

 

20,641

 

 

Total

 

$

84,033

 

 

$

59,867

 

 

$

143,900

 

 

$

98,406

 

 

$

75,007

 

 

$

173,413

 

 

Sales channels:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service provider

 

$

19,732

 

 

$

202

 

 

$

19,934

 

 

$

24,916

 

 

$

18

 

 

$

24,934

 

 

Non-service provider

 

 

64,301

 

 

 

59,665

 

 

 

123,966

 

 

 

73,490

 

 

 

74,989

 

 

 

148,479

 

 

Total

 

$

84,033

 

 

$

59,867

 

 

$

143,900

 

 

$

98,406

 

 

$

75,007

 

 

$

173,413

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

July 2, 2023

 

(In thousands)

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

 

Connected
Home

 

 

NETGEAR for Business

 

 

Total

 

Geographic regions (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

144,277

 

 

$

61,154

 

 

$

205,431

 

 

$

161,684

 

 

$

76,849

 

 

$

238,533

 

EMEA

 

 

16,968

 

 

 

41,574

 

 

 

58,542

 

 

 

23,381

 

 

 

51,958

 

 

 

75,339

 

APAC

 

 

18,751

 

 

 

25,762

 

 

 

44,513

 

 

 

16,087

 

 

 

24,362

 

 

 

40,449

 

Total

 

$

179,996

 

 

$

128,490

 

 

$

308,486

 

 

$

201,152

 

 

$

153,169

 

 

$

354,321

 

Sales channels:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service provider

 

$

47,285

 

 

$

445

 

 

$

47,730

 

 

$

38,943

 

 

$

208

 

 

$

39,151

 

Non-service provider

 

 

132,711

 

 

 

128,045

 

 

 

260,756

 

 

 

162,209

 

 

 

152,961

 

 

 

315,170

 

Total

 

$

179,996

 

 

$

128,490

 

 

$

308,486

 

 

$

201,152

 

 

$

153,169

 

 

$

354,321

 

 

(1) No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
v3.24.2.u1
Balance Sheet Components (Tables)
 6 Months Ended
Jun. 30, 2024
Balance Sheet Related Disclosures [Abstract]  
Schedule of Amortized Cost and Estimated Fair Market Value of Investments Classified as Available-for-Sale Excluding Cash Equivalents

Amortized cost and estimated fair market value of investments classified as available-for-sale, excluding cash equivalents, as of June 30, 2024 and December 31, 2023, were as follows:

 

 

 

June 30, 2024

 

(In thousands)

 

Amortized Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Estimated
Fair Value

 

U.S. treasury securities

 

$

108,341

 

 

$

—

 

 

$

(91

)

 

$

108,250

 

Corporate equity securities

 

 

262

 

 

 

—

 

 

 

—

 

 

 

262

 

Total

 

$

108,603

 

 

$

—

 

 

$

(91

)

 

$

108,512

 

 

 

 

December 31, 2023

 

(In thousands)

 

Amortized Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Estimated
Fair Value

 

U.S. treasury securities

 

$

98,326

 

 

$

128

 

 

$

—

 

 

$

98,454

 

Convertible debt

 

 

173

 

 

 

—

 

 

 

—

 

 

 

173

 

Total

 

$

98,499

 

 

$

128

 

 

$

—

 

 

$

98,627

 

 
Schedule of Investments Classified as Available-for-Sale in Continuous Unrealized Loss Position

The following table summarizes investments classified as available-for-sale in a continuous unrealized loss position for which an allowance for credit losses was not recorded as of June 30, 2024 and December 31, 2023:

 

 

June 30, 2024

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Total

 

(In thousands)

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

U.S. treasury securities

$

108,250

 

 

$

(91

)

 

$

—

 

 

$

—

 

 

$

108,250

 

 

$

(91

)

Total

$

108,250

 

 

$

(91

)

 

$

—

 

 

$

—

 

 

$

108,250

 

 

$

(91

)

 

 

December 31, 2023

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Total

 

(In thousands)

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

 

Estimated Fair Market Value

 

 

Gross Unrealized Losses

 

U.S. treasury securities

$

98,454

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

98,454

 

 

$

—

 

Total

$

98,454

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

98,454

 

 

$

—

 
Schedule of Inventories

Inventories

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Raw materials

 

$

21,748

 

 

$

19,955

 

Finished goods

 

 

167,188

 

 

 

228,896

 

Total

 

$

188,936

 

 

$

248,851

 
Schedule of Property and Equipment, Net

Property and equipment, net

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Machinery and equipment

 

$

51,497

 

 

$

47,826

 

Furniture, fixtures, and leasehold improvements

 

 

19,641

 

 

 

18,205

 

Software

 

 

24,337

 

 

 

25,760

 

Computer equipment

 

 

5,336

 

 

 

5,458

 

Total property and equipment, gross

 

 

100,811

 

 

 

97,249

 

Accumulated depreciation

 

 

(89,770

)

 

 

(88,976

)

Total

 

$

11,041

 

 

$

8,273

 
Schedule of Other Non-Current Assets

Other non-current assets

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Non-current deferred income taxes

 

$

2,801

 

 

$

3,343

 

Long-term investments

 

 

8,336

 

 

 

8,367

 

Other

 

 

4,663

 

 

 

5,616

 

Total

 

$

15,800

 

 

$

17,326

 
Schedule of Changes in Carrying Value of Long-term Equity Investments

Long-term equity investments

The Company’s long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities or corporate equity securities and investments in limited partnership funds. The changes in the carrying value of equity investments without readily determinable fair values were as follows:

 

 

Six months ended

 

 

(In thousands)

June 30, 2024

 

 

July 2, 2023

 

 

Carrying value as of the beginning of the period (1)

$

6,053

 

 

$

6,053

 

 

Carrying value as of the end of the period (1)

$

6,053

 

 

$

6,053

 

 

The balances excluded an investment in limited partnership funds of $2.3 million as of June 30, 2024, $1.8 million as of July 2, 2023, $2.3 million as of December 31, 2023, and $1.7 million as of December 31, 2022. Additionally, the balance excluded an investment in corporate equity securities of $0.3 million as of June 30, 2024, an investment in convertible debt securities of $0.2 million as of December 31, 2023, July 2, 2023, and December 31, 2022, respectively.
Schedule of Other Accrued Liabilities

Other accrued liabilities

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

Current operating lease liabilities

 

$

11,927

 

 

$

11,869

 

Sales and marketing

 

 

59,912

 

 

 

75,535

 

Warranty obligations

 

 

4,771

 

 

 

5,738

 

Sales returns(1)

 

 

31,478

 

 

 

34,824

 

Freight and duty

 

 

3,921

 

 

 

2,837

 

Other

 

 

47,577

 

 

 

37,281

 

Total

 

$

159,586

 

 

$

168,084

 

 

 

(1)
Inventory expected to be received from future sales returns amounted to $15.5 million and $16.9 million as of June 30, 2024 and December 31, 2023, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $8.9 million and $9.7 million as of June 30, 2024 and December 31, 2023, respectively.
v3.24.2.u1
Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Fair Values of the Company's Derivative Instruments and the Line Items on the Unaudited Condensed Consolidated Balance Sheets

The fair values of the Company’s derivative instruments and the line items on the unaudited condensed consolidated balance sheets to which they were recorded were summarized as follows:

 

 

 

Balance Sheet

 

 

 

 

 

 

 

Balance Sheet

 

 

 

 

 

 

(In thousands)

 

Location

 

June 30,
2024

 

 

December 31,
2023

 

 

Location

 

June 30,
2024

 

 

December 31,
2023

 

Derivatives not designated as hedging instruments

 

Prepaid expenses and other current assets

 

$

228

 

 

$

284

 

 

Other accrued liabilities

 

$

183

 

 

$

1,672

 

Derivatives designated as hedging instruments

 

Prepaid expenses and other current assets

 

 

7

 

 

 

7

 

 

Other accrued liabilities

 

 

30

 

 

 

19

 

Total

 

 

 

$

235

 

 

$

291

 

 

 

 

$

213

 

 

$

1,691

 
v3.24.2.u1
Net Income (Loss) Per Share (Tables)
 6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Net Income (Loss) Per Share

Net income (loss) per share consisted of the following:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands, except per share data)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(45,175

)

 

$

(8,587

)

 

$

(63,825

)

 

$

(18,299

)

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares – basic

 

 

28,883

 

 

 

29,319

 

 

 

29,136

 

 

 

29,170

 

Weighted average common shares – dilutive

 

 

28,883

 

 

 

29,319

 

 

 

29,136

 

 

 

29,170

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

$

(1.56

)

 

$

(0.29

)

 

$

(2.19

)

 

$

(0.63

)

Diluted net income (loss) per share

 

$

(1.56

)

 

$

(0.29

)

 

$

(2.19

)

 

$

(0.63

)

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive employee stock-based awards, excluded

 

 

2,060

 

 

 

2,404

 

 

 

1,968

 

 

 

2,222

 
v3.24.2.u1
Commitments and Contingencies (Tables)
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Changes in Warranty Obligations

Changes in the Company’s warranty obligations, which is included in Other accrued liabilities on the unaudited condensed consolidated balance sheets, were as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Balance as of beginning of the period

 

$

5,087

 

 

$

6,351

 

 

$

5,738

 

 

$

6,320

 

Provision for warranty liability made

 

 

800

 

 

 

1,260

 

 

 

1,408

 

 

 

2,677

 

Settlements made

 

 

(1,116

)

 

 

(1,394

)

 

 

(2,375

)

 

 

(2,780

)

Balance as of the end of the period

 

$

4,771

 

 

$

6,217

 

 

$

4,771

 

 

$

6,217

 

 
v3.24.2.u1
Stockholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2024
Stockholders' Equity Note [Abstract]  
Schedule of Accumulated Other Comprehensive Income (loss)

The following tables set forth the changes in accumulated other comprehensive income (loss) (“AOCI”) by component:

 

(In thousands)

 

Unrealized
gains (losses)
on available
-for-sale
investments

 

 

Unrealized
gains (losses)
on derivatives

 

 

Estimated tax
benefit (provision)

 

 

Total

 

Balance as of December 31, 2023

 

$

126

 

 

$

7

 

 

$

3

 

 

$

136

 

Other comprehensive income (loss) before reclassifications

 

 

(219

)

 

 

(186

)

 

 

37

 

 

 

(368

)

Less: Amount reclassified from accumulated other comprehensive income (loss)

 

 

—

 

 

 

(162

)

 

 

34

 

 

 

(128

)

Net current period other comprehensive income (loss)

 

 

(219

)

 

 

(24

)

 

 

3

 

 

 

(240

)

Balance as of June 30, 2024

 

$

(93

)

 

$

(17

)

 

$

6

 

 

$

(104

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Unrealized
gains (losses)
on available
-for-sale
investments

 

 

Unrealized
gains (losses)
on derivatives

 

 

Estimated tax
benefit (provision)

 

 

Total

 

Balance as of December 31, 2022

 

$

(322

)

 

$

(338

)

 

$

125

 

 

$

(535

)

Other comprehensive income (loss) before reclassifications

 

 

191

 

 

 

1,836

 

 

 

(383

)

 

 

1,644

 

Less: Amount reclassified from accumulated other comprehensive income (loss)

 

 

—

 

 

 

1,262

 

 

 

(265

)

 

 

997

 

Net current period other comprehensive income (loss)

 

 

191

 

 

 

574

 

 

 

(118

)

 

 

647

 

Balance as of July 2, 2023

 

$

(131

)

 

$

236

 

 

$

7

 

 

$

112

 
Schedule of Reclassification out of AOCI

The following table provides details about significant amounts reclassified out of each component of AOCI:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Amount Reclassified from AOCI

 

 

 

 

 

 

 

 

 

 

 

 

Gains (losses) on cash flow hedge:

 

Foreign currency forward contracts

 

 

 

 

 

 

 

 

 

 

 

 

Affected line item in the statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

(130

)

 

$

762

 

 

$

(209

)

 

$

1,451

 

Cost of revenue

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

(2

)

Research and development

 

 

(1

)

 

 

(18

)

 

 

(2

)

 

 

(26

)

Sales and marketing

 

 

33

 

 

 

(59

)

 

 

42

 

 

 

(142

)

General and administrative

 

 

(1

)

 

 

(3

)

 

 

7

 

 

 

(19

)

Total before tax

 

 

(99

)

 

 

681

 

 

 

(162

)

 

 

1,262

 

Tax impact

 

 

21

 

 

 

(143

)

 

 

34

 

 

 

(265

)

Total, net of tax

 

$

(78

)

 

$

538

 

 

$

(128

)

 

$

997

 
v3.24.2.u1
Employee Benefit Plans (Tables)
 6 Months Ended
Jun. 30, 2024
Employee Benefit and Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Schedule of Stock Option Activity

Stock option activity was as follows:

 

(In thousands, except per share amounts)

 

Number of
Shares

 

 

Weighted Average Exercise Price Per Share

 

 

Outstanding as of December 31, 2023

 

 

866

 

 

$

30.70

 

 

Granted

 

 

—

 

 

$

—

 

 

Exercised

 

 

—

 

 

$

—

 

 

Cancelled

 

 

—

 

 

$

—

 

 

Expired

 

 

(19

)

 

$

19.41

 

 

Outstanding as of June 30, 2024

 

 

847

 

 

$

30.96

 

 

 
Schedule of Time-Based RSU Activity

Time-based RSU activity was as follows:

 

(In thousands, except per share amounts)

 

Number
of Shares

 

 

Weighted Average Grant Date Fair Value Per Share

 

Outstanding as of December 31, 2023

 

 

1,567

 

 

$

22.83

 

Granted

 

 

1,463

 

 

$

14.34

 

Vested

 

 

(658

)

 

$

22.50

 

Cancelled

 

 

(126

)

 

$

20.86

 

Outstanding as of June 30, 2024

 

 

2,246

 

 

$

17.35

 
Schedule of PSU Activity

PSU activity was as follows:

(In thousands, except per share amounts)

 

Number
of Shares

 

 

Weighted Average Grant Date Fair Value Per Share

 

Outstanding as of December 31, 2023

 

 

417

 

 

$

24.76

 

Granted

 

 

575

 

 

$

20.25

 

Vested

 

 

—

 

 

$

—

 

Cancelled

 

 

(332

)

 

$

26.39

 

Outstanding as of June 30, 2024

 

 

660

 

 

$

20.01

 
Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, RSUs, Time-Based and Performance-Based and the ESPP

Valuation and Expense Information

 

The following table sets forth the stock-based compensation expense resulting from stock options, RSUs (time-based and performance-based) and the ESPP included in the Company’s unaudited condensed consolidated statements of operations:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

Cost of revenue

 

$

413

 

 

$

342

 

 

$

778

 

 

$

693

 

Research and development

 

 

844

 

 

 

1,144

 

 

 

1,542

 

 

 

2,209

 

Sales and marketing

 

 

1,235

 

 

 

1,397

 

 

 

2,472

 

 

 

2,828

 

General and administrative

 

 

3,396

 

 

 

1,804

 

 

 

5,640

 

 

 

3,622

 

Total

 

$

5,888

 

 

$

4,687

 

 

$

10,432

 

 

$

9,352

 

 
v3.24.2.u1
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Schedule of Reportable Segments and Reconciliation of Segment Contribution Income (Loss) to Income (Loss) Before Income Taxes Financial information for each reportable segment and a reconciliation of segment contribution income (loss) to loss before income taxes is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

(In thousands, except percentage data)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Connected Home

 

$

84,033

 

 

$

98,406

 

 

$

179,996

 

 

$

201,152

 

 

NETGEAR for Business

 

 

59,867

 

 

 

75,007

 

 

 

128,490

 

 

 

153,169

 

 

Total net revenue

 

$

143,900

 

 

$

173,413

 

 

$

308,486

 

 

$

354,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Connected Home

 

$

(13,794

)

 

$

(5,373

)

 *

$

(19,934

)

 

$

(7,129

)

 *

Contribution margin

 

 

(16.4

)%

 

 

(5.5

)%

 *

 

(11.1

)%

 

 

(3.5

)%

 *

NETGEAR for Business

 

$

2,061

 

 

$

13,650

 

 *

$

11,965

 

 

$

27,707

 

 *

Contribution margin

 

 

3.4

 %

 

 

18.2

 %

 *

 

9.3

 %

 

 

18.1

 %

 *

Total segment contribution income

 

$

(11,733

)

 

$

8,277

 

 *

$

(7,969

)

 

$

20,578

 

 *

Corporate and unallocated costs

 

 

(19,350

)

 

 

(19,011

)

 *

 

(39,156

)

 

 

(38,385

)

 *

Amortization of intangibles

 

 

—

 

 

 

(128

)

 

 

—

 

 

 

(257

)

 

Stock-based compensation expense

 

 

(5,888

)

 

 

(4,687

)

 

 

(10,432

)

 

 

(9,352

)

 

Restructuring and other charges

 

 

(1,688

)

 

 

(2,229

)

 

 

(2,720

)

 

 

(2,337

)

 

Litigation reserves, net

 

 

(8,200

)

 

 

—

 

 

 

(8,230

)

 

 

—

 

 

Other income, net (1)

 

 

2,713

 

 

 

7,999

 

 

 

5,563

 

 

 

9,405

 

 

Loss before income taxes

 

$

(44,146

)

 

$

(9,779

)

 

$

(62,944

)

 

$

(20,348

)

 

 

 

(1)
Amounts included gain/(loss), net from derivatives not designated as hedging instruments of $0.6 million and $2.1 million, for the three and six months ended June 30, 2024, respectively, and $1.0 million and $0.9 million, for the three and six months ended July 2, 2023, respectively, and gain/(loss), net from litigation settlements of $6.0 million for the three and six months ended July 2, 2023, respectively.

* Financial information for each reportable segment in the prior year periods were recast to conform to the current reportable segment structure.
Schedule of Net Revenue by Geography

The following table shows net revenue by geography:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

June 30, 2024

 

 

July 2, 2023

 

 

June 30, 2024

 

 

July 2, 2023

 

United States (U.S.)

 

$

92,794

 

 

$

112,961

 

 

$

200,083

 

 

$

230,759

 

Americas (excluding U.S.)

 

 

2,709

 

 

 

3,650

 

 

 

5,348

 

 

 

7,774

 

EMEA (1)

 

 

27,355

 

 

 

36,161

 

 

 

58,542

 

 

 

75,339

 

APAC (1)

 

 

21,042

 

 

 

20,641

 

 

 

44,513

 

 

 

40,449

 

Total net revenue

 

$

143,900

 

 

$

173,413

 

 

$

308,486

 

 

$

354,321

 

 

 

(1)
No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
Schedule of Long-Lived Asset By Geographic Region

The following table presents the Company’s long-lived assets located in geographic areas, which consist of property and equipment, net, and operating lease right-of-use assets:

 

(In thousands)

 

June 30, 2024

 

 

December 31, 2023

 

United States (U.S.)

 

$

22,079

 

 

$

25,051

 

Canada

 

 

5,496

 

 

 

4,714

 

Americas (excluding U.S. and Canada)

 

 

52

 

 

 

68

 

EMEA

 

 

3,425

 

 

 

3,739

 

Singapore

 

 

5,648

 

 

 

6,218

 

APAC (excluding Singapore) (1)

 

 

7,735

 

 

 

5,768

 

Total

 

$

44,435

 

 

$

45,558

 

 

 

(1)
No individual country represented more than 10% of the Company’s total long-lived assets in the periods presented.
v3.24.2.u1
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize assets and liabilities measured at fair value on a recurring basis:

 

 

 

June 30, 2024

 

(In thousands)

 

Total

 

 

Quoted market
prices in active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

Assets:

 

 

 

 

 

 

 

 

 

Cash equivalents: money-market funds

 

$

29,385

 

 

$

29,385

 

 

$

—

 

Available-for-sale investments: U.S. treasury securities(1)

 

 

108,250

 

 

 

—

 

 

 

108,250

 

Trading securities: mutual funds(1)

 

 

8,722

 

 

 

8,722

 

 

 

—

 

Available-for-sale investments: corporate equity securities (1)

 

 

262

 

 

 

262

 

 

 

—

 

Foreign currency forward contracts(2)

 

 

235

 

 

—

 

 

 

235

 

Total assets measured at fair value

 

$

146,854

 

 

$

38,369

 

 

$

108,485

 

Liabilities:

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(3)

 

$

213

 

 

$

—

 

 

$

213

 

Total liabilities measured at fair value

 

$

213

 

 

$

—

 

 

$

213

 

 

 

 

 

December 31, 2023

 

(In thousands)

 

Total

 

 

Quoted market
prices in active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

Assets:

 

 

 

 

 

 

 

 

 

Cash equivalents: money-market funds

 

$

25,986

 

 

$

25,986

 

 

$

—

 

Available-for-sale investments: U.S. treasury securities(1)

 

 

98,454

 

 

 

—

 

 

 

98,454

 

Trading securities: mutual funds(1)

 

 

8,304

 

 

 

8,304

 

 

 

—

 

Available-for-sale investments: convertible debt securities(1)

 

 

173

 

 

 

—

 

 

 

173

 

Foreign currency forward contracts(2)

 

 

291

 

 

—

 

 

 

291

 

Total assets measured at fair value

 

$

133,208

 

 

$

34,290

 

 

$

98,918

 

Liabilities:

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(3)

 

$

1,691

 

 

$

—

 

 

$

1,691

 

Total liabilities measured at fair value

 

$

1,691

 

 

$

—

 

 

$

1,691

 

 

 

(1)
Included in Short-term investments on the Company’s unaudited condensed consolidated balance sheets.
(2)
Included in Prepaid expenses and other current assets on the Company’s unaudited condensed consolidated balance sheets.
(3)
Included in Other accrued liabilities on the Company's unaudited condensed consolidated balance sheets.
v3.24.2.u1
Restructuring and Other Charges (Tables)
 6 Months Ended
Jun. 30, 2024
Restructuring Charges [Abstract]  
Summary of Activity Related to Accrued Restructuring and Other Charges

The following table provides a summary of the activity related to accrued restructuring and other charges:

 

(In thousands)

 

Accrued Restructuring and Other Charges at December 31, 2023

 

 

Additions

 

 

Cash Payments

 

 

Adjustments

 

 

Accrued Restructuring and Other Charges at June 30, 2024

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee termination charges

 

$

257

 

 

$

2,504

 

 

$

(2,139

)

 

$

—

 

 

$

622

 

Lease contract termination and other charges

 

 

30

 

 

 

216

 

 

 

(86

)

 

 

(160

)

 

 

—

 

Total Restructuring and other charges

 

$

287

 

 

$

2,720

 

 

$

(2,225

)

 

$

(160

)

 

$

622

 

 

(In thousands)

 

Accrued Restructuring and Other Charges at December 31, 2022

 

 

Additions

 

 

Cash Payments

 

 

Adjustments

 

 

Accrued Restructuring and Other Charges at July 2, 2023

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee termination charges

 

$

1,912

 

 

$

2,396

 

 

$

(3,505

)

 

$

(37

)

 

$

766

 

Lease contract termination and other charges

 

 

—

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

7

 

Total Restructuring and other charges

 

$

1,912

 

 

$

2,403

 

 

$

(3,505

)

 

$

(37

)

 

$

773

 
v3.24.2.u1
Revenue (Schedule of Remaining Performance Obligations) (Details)
$ in Thousands
Jun. 30, 2024
USD ($)
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Performance obligations, amount $ 69,207
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01  
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Performance obligations, amount $ 63,534
Performance obligations, period 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-07-01  
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Performance obligations, amount $ 3,084
Performance obligations, period 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-07-01  
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Performance obligations, amount $ 2,589
Performance obligations, period 1 year
v3.24.2.u1
Revenue (Schedule of Remaining Performance Obligations) (Details 1)
$ in Thousands
Jun. 30, 2024
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Performance obligations, amount $ 69,207
v3.24.2.u1
Revenue (Schedule of Contract Balances) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]    
Accounts receivable, net $ 147,069 $ 185,059
Contract liabilities - current 28,682 27,091
Contract liabilities - non-current $ 5,534 $ 4,903
v3.24.2.u1
Revenue (Narrative) (Details)
$ in Millions
 6 Months Ended
Jun. 30, 2024
USD ($)
Region
Segment
Revenue from Contract with Customer [Abstract]  
Revenue deferred due to unsatisfied performance obligations $ 24.9
Revenue recognized for satisfaction of performance obligations 22.7
Contract with Customer, Liability Included In Beginning Balance, Revenue Recognized $ 18.1
Number of geographic regions in which the Company conducts business | Region 3
Number of operating segments | Segment 2
Number of reportable segments | Segment 2
v3.24.2.u1
Revenue (Schedule of Net Revenue Disaggregated by Geographical Region and Sales Channel) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Disaggregation of Revenue [Line Items]        
Total net revenue [1] $ 143,900 $ 173,413 $ 308,486 $ 354,321
Service provider        
Disaggregation of Revenue [Line Items]        
Total net revenue 19,934 24,934 47,730 39,151
Non-service provider        
Disaggregation of Revenue [Line Items]        
Total net revenue 123,966 148,479 260,756 315,170
Connected Home        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 84,033 98,406 179,996 201,152
Connected Home | Service provider        
Disaggregation of Revenue [Line Items]        
Total net revenue 19,732 24,916 47,285 38,943
Connected Home | Non-service provider        
Disaggregation of Revenue [Line Items]        
Total net revenue 64,301 73,490 132,711 162,209
NETGEAR for Business        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 59,867 75,007 128,490 153,169
NETGEAR for Business | Service provider        
Disaggregation of Revenue [Line Items]        
Total net revenue 202 18 445 208
NETGEAR for Business | Non-service provider        
Disaggregation of Revenue [Line Items]        
Total net revenue 59,665 74,989 128,045 152,961
Americas        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 95,503 116,611 205,431 238,533
Americas | Connected Home        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 66,282 77,683 144,277 161,684
Americas | NETGEAR for Business        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 29,221 38,928 61,154 76,849
EMEA        
Disaggregation of Revenue [Line Items]        
Total net revenue [1],[2] 27,355 36,161 58,542 75,339
EMEA | Connected Home        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 8,958 11,317 16,968 23,381
EMEA | NETGEAR for Business        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 18,397 24,844 41,574 51,958
APAC        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 21,042 20,641 44,513 40,449
APAC | Connected Home        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] 8,793 9,406 18,751 16,087
APAC | NETGEAR for Business        
Disaggregation of Revenue [Line Items]        
Total net revenue [1] $ 12,249 $ 11,235 $ 25,762 $ 24,362
[1] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
[2] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
v3.24.2.u1
Revenue (Schedule of Net Revenue Disaggregated by Geographical Region and Sales Channel) (Parenthetical) (Details) - Maximum
 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Disaggregation of Revenue [Line Items]    
Percentage of net revenue 10.00%  
EMEA    
Disaggregation of Revenue [Line Items]    
Percentage of net revenue 10.00% 10.00%
v3.24.2.u1
Balance Sheet Components (Schedule of Amortized Cost and Estimated Fair Market Value of Investments Classified as Available-for-Sale Excluding Cash Equivalents) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost $ 108,603 $ 98,499
Unrealized Gains 0 128
Unrealized Losses (91) 0
Estimated Fair Value 108,512 98,627
U.S. Treasury Securities    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost 108,341 98,326
Unrealized Gains 0 128
Unrealized Losses (91) 0
Estimated Fair Value 108,250 98,454
Corporate Equity Securities    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost 262  
Unrealized Gains 0  
Unrealized Losses 0  
Estimated Fair Value $ 262  
Convertible debt securities    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost   173
Unrealized Gains   0
Unrealized Losses   0
Estimated Fair Value   $ 173
v3.24.2.u1
Balance Sheet Components (Schedule of Amortized Cost and Estimated Fair Market Value of Investments Classified as Available-for-Sale Excluding Cash Equivalents) (Parentheticals) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Schedule Of Available For Sale Securities [Line Items]    
Short-term investments $ 117,235 $ 106,931
Other non-current assets $ 15,800 $ 17,326
v3.24.2.u1
Balance Sheet Components (Narrative) (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Balance Sheet Related Disclosures [Line Items]        
Accrued interest receivable $ 500,000   $ 500,000  
Unrealized losses on available-for-sale securities 0 $ 0 0 $ 0
Other-than-temporary impairments 0 0 0 0
Provisions for excess and obsolete inventory 1,900,000 $ 400,000 2,954,000 $ 1,531,000
Equity securities without readily determinable fair value, cumulative downward adjustments for price change and impairment loss 0   0  
Cumulative upward adjustments for price changes $ 300,000   $ 300,000  
v3.24.2.u1
Balance Sheet Components (Schedule of Investments Classified as Available-for-Sale in Continuous Unrealized Loss Position) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Schedule Of Investment Income Reported Amounts By Category [Line Items]    
Estimated Fair Market Value, Less Than 12 Months $ 108,250 $ 98,454
Gross Unrealized Losses, Less Than 12 Months (91) 0
Estimated Fair Market Value, 12 Months or Longer 0 0
Gross Unrealized Losses, 12 Months or Longer 0 0
Estimated Fair Market Value, Total 108,250 98,454
Gross Unrealized Losses, Total (91) 0
U.S. Treasury Securities    
Schedule Of Investment Income Reported Amounts By Category [Line Items]    
Estimated Fair Market Value, Less Than 12 Months 108,250 98,454
Gross Unrealized Losses, Less Than 12 Months (91) 0
Estimated Fair Market Value, 12 Months or Longer 0 0
Gross Unrealized Losses, 12 Months or Longer 0 0
Estimated Fair Market Value, Total 108,250 98,454
Gross Unrealized Losses, Total $ (91) $ 0
v3.24.2.u1
Balance Sheet Components (Schedule of Inventories) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]    
Raw materials $ 21,748 $ 19,955
Finished goods 167,188 228,896
Total $ 188,936 $ 248,851
v3.24.2.u1
Balance Sheet Components (Schedule of Property and Equipment, Net) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Total property and equipment, gross $ 100,811 $ 97,249
Accumulated depreciation (89,770) (88,976)
Total 11,041 8,273
Machinery and equipment    
Total property and equipment, gross 51,497 47,826
Furniture, fixtures and leasehold improvements    
Total property and equipment, gross 19,641 18,205
Software    
Total property and equipment, gross 24,337 25,760
Computer equipment    
Total property and equipment, gross $ 5,336 $ 5,458
v3.24.2.u1
Balance Sheet Components (Schedule of Other Non-Current Assets) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]    
Non-current deferred income taxes $ 2,801 $ 3,343
Long-term investments 8,336 8,367
Other 4,663 5,616
Total $ 15,800 $ 17,326
v3.24.2.u1
Balance Sheet Components (Schedule of Changes in Carrying Value of Long-term Equity Investments) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Jul. 02, 2023
Balance Sheet Related Disclosures [Abstract]      
Beginning Balance [1] $ 6,053 $ 6,053 $ 6,053
Ending Balance [1] $ 6,053 $ 6,053 $ 6,053
[1] The balances excluded an investment in limited partnership funds of $2.3 million as of June 30, 2024, $1.8 million as of July 2, 2023, $2.3 million as of December 31, 2023, and $1.7 million as of December 31, 2022. Additionally, the balance excluded an investment in corporate equity securities of $0.3 million as of June 30, 2024, an investment in convertible debt securities of $0.2 million as of December 31, 2023, July 2, 2023, and December 31, 2022, respectively.
v3.24.2.u1
Balance Sheet Components (Schedule of Changes in Carrying Value of Long-term Equity Investments) (Parentheticals) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Jul. 02, 2023
Dec. 31, 2022
Balance Sheet Related Disclosures [Line Items]        
Equity investments $ 8,336 $ 8,367    
Limited partnership funds        
Balance Sheet Related Disclosures [Line Items]        
Equity investments 2,300 2,300 $ 1,800 $ 1,700
Corporate Equity Securities        
Balance Sheet Related Disclosures [Line Items]        
Equity investments $ 300      
Convertible debt securities        
Balance Sheet Related Disclosures [Line Items]        
Equity investments   $ 200 $ 200 $ 200
v3.24.2.u1
Balance Sheet Components (Schedule of Other Accrued Liabilities) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]    
Current operating lease liabilities $ 11,927 $ 11,869
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Total Total
Sales and marketing $ 59,912 $ 75,535
Warranty obligations 4,771 5,738
Sales returns [1] 31,478 34,824
Freight and duty 3,921 2,837
Other 47,577 37,281
Total $ 159,586 $ 168,084
[1] Inventory expected to be received from future sales returns amounted to $15.5 million and $16.9 million as of June 30, 2024 and December 31, 2023, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $8.9 million and $9.7 million as of June 30, 2024 and December 31, 2023, respectively.
v3.24.2.u1
Balance Sheet Components (Schedule of Other Accrued Liabilities) (Parentheticals) (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]    
Inventory expected to be received from future sales returns $ 15.5 $ 16.9
Provisions to write down expected returned inventory to net realizable value $ 8.9 $ 9.7
v3.24.2.u1
Derivative Financial Instruments (Narrative) (Details) - Foreign currency forward contracts
$ in Millions
 6 Months Ended
Jun. 30, 2024
USD ($)
Derivative_instrument
Derivatives not designated as hedging instruments  
Derivative [Line Items]  
Approximate number of derivatives per quarter | Derivative_instrument 7
Notional amount | $ $ 3.0
Cash Flow Hedges  
Derivative [Line Items]  
Approximate number of derivatives per quarter | Derivative_instrument 10
Notional amount | $ $ 5.0
Maximum  
Derivative [Line Items]  
Term of derivative contracts 6 months
Maximum | Derivatives not designated as hedging instruments  
Derivative [Line Items]  
Term of derivative contracts 3 months
Maximum | Cash Flow Hedges  
Derivative [Line Items]  
Term of derivative contracts 6 months
v3.24.2.u1
Derivative Financial Instruments (Schedule of Fair Values of the Company's Derivative Instruments and the Line Items on the Unaudited Condensed Consolidated Balance Sheets) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Derivatives, Fair Value [Line Items]    
Gross Amounts of recognized assets $ 235 $ 291
Gross Amounts of recognized liabilities 213 1,691
Prepaid expenses and other current assets | Derivatives not designated as hedging instruments    
Derivatives, Fair Value [Line Items]    
Gross Amounts of recognized assets 228 284
Prepaid expenses and other current assets | Derivatives designated as hedging instruments    
Derivatives, Fair Value [Line Items]    
Gross Amounts of recognized assets 7 7
Other accrued liabilities | Derivatives not designated as hedging instruments    
Derivatives, Fair Value [Line Items]    
Gross Amounts of recognized liabilities 183 1,672
Other accrued liabilities | Derivatives designated as hedging instruments    
Derivatives, Fair Value [Line Items]    
Gross Amounts of recognized liabilities $ 30 $ 19
v3.24.2.u1
Net Income (Loss) Per Share (Schedule of Net Income (Loss) Per Share) (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Numerator:        
Net loss $ (45,175) $ (8,587) $ (63,825) $ (18,299)
Denominator:        
Weighted average common shares - basic 28,883 29,319 29,136 29,170
Weighted average common shares - dilutive 28,883 29,319 29,136 29,170
Basic net income (loss) per share $ (1.56) $ (0.29) $ (2.19) $ (0.63)
Diluted net income (loss) per share $ (1.56) $ (0.29) $ (2.19) $ (0.63)
Anti-dilutive employee stock-based awards, excluded 2,060 2,404 1,968 2,222
v3.24.2.u1
Income Taxes (Narrative) (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Schedule Of Income Taxes [Line Items]        
Tax impact $ 1,029,000 $ (1,192,000) $ 881,000 $ (2,049,000)
Effective tax rate (2.30%) 12.20% (1.40%) 10.10%
Benefit for forecasted tax loss     $ 0  
Possible reduction in liabilities for uncertain tax positions $ 700,000   $ 700,000  
v3.24.2.u1
Commitments and Contingencies (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
USD ($)
Claim
Jul. 02, 2023
USD ($)
Jun. 30, 2024
USD ($)
Patent
Claim
Jul. 02, 2023
USD ($)
Dec. 31, 2023
USD ($)
Loss Contingencies [Line Items]          
Non-cancelable purchase commitments with suppliers $ 71,700   $ 71,700   $ 42,600
Additional purchase orders beyond contractual termination periods 257,700   257,700    
Losses incurred related to purchase commitments $ 5,100 $ 900 $ 6,200 $ 1,400  
Number of existing cases and proceedings that the Company currently believes are liking to have a material adverse effect on its financial position | claim | Claim 0   0    
The future length the Company currently considered regarding existing cases and proceedings that are likely to have a material adverse effect on it (in months)     12 months    
Litigation reserves, net $ 8,200 $ 0 $ 8,230 $ 0  
46 to 60 Days          
Loss Contingencies [Line Items]          
Percentage of cancelable orders 50.00%   50.00%    
46 to 60 Days | Minimum          
Loss Contingencies [Line Items]          
Required notice period prior to expected shipment date     46 days    
46 to 60 Days | Maximum          
Loss Contingencies [Line Items]          
Required notice period prior to expected shipment date     60 days    
31 to 45 Days          
Loss Contingencies [Line Items]          
Percentage of cancelable orders 25.00%   25.00%    
31 to 45 Days | Minimum          
Loss Contingencies [Line Items]          
Required notice period prior to expected shipment date     31 days    
31 to 45 Days | Maximum          
Loss Contingencies [Line Items]          
Required notice period prior to expected shipment date     45 days    
Non- Trade          
Loss Contingencies [Line Items]          
Long-term, non-cancellable purchase commitments $ 11,300   $ 11,300    
Huawei v. NETGEAR Inc.          
Loss Contingencies [Line Items]          
Number of patent infringement cases | Patent     2    
Number of patents | Patent     2    
v3.24.2.u1
Commitments and Contingencies (Schedule of Changes in Warranty Obligations) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Movement in Standard Product Warranty Accrual [Roll Forward]        
Balance as of beginning of the period $ 5,087 $ 6,351 $ 5,738 $ 6,320
Provision for warranty liability made 800 1,260 1,408 2,677
Settlements made (1,116) (1,394) (2,375) (2,780)
Balance as of the end of the period $ 4,771 $ 6,217 $ 4,771 $ 6,217
v3.24.2.u1
Stockholders' Equity (Narrative) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2024
Jul. 02, 2023
Jul. 16, 2024
Class of Stock [Line Items]          
Shares remaining authorized for repurchase (in shares) 900,000   900,000    
Stock repurchased (in shares)     1,600,000    
Cost of stock repurchased $ 10,121 $ 11,444 $ 21,400    
RSU withholdings (in shares)     197,000 147,000  
RSU withholdings     $ 2,885 $ 2,105  
Maximum | Subsequent Event          
Class of Stock [Line Items]          
Number of shares of common stock authorized to repurchase         3,000,000
v3.24.2.u1
Stockholders' Equity (Schedule of Changes in Accumulated Other Comprehensive Income (loss) by Component) (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Estimated tax benefit (provision)    
Beginning balance $ 3 $ 125
Other comprehensive income (loss) before reclassifications 37 (383)
Less: Amount reclassified from accumulated other comprehensive income (loss) 34 (265)
Net current period other comprehensive income (loss) 3 (118)
Ending balance 6 7
AOCI, after tax    
Beginning balance 535,495 620,855
Other comprehensive income (loss) before reclassifications (368) 1,644
Less: Amount reclassified from accumulated other comprehensive income (loss) (128) 997
Net current period other comprehensive income (loss) (240) 647
Ending balance 459,399 612,736
Unrealized gains (losses) on available-for-sale investments    
AOCI, before tax    
Beginning balance 126 (322)
Other comprehensive income (loss) before reclassifications (219) 191
Less: Amount reclassified from accumulated other comprehensive income (loss) 0 0
Net current period other comprehensive income (loss) (219) 191
Ending balance (93) (131)
Unrealized gains (losses) on derivatives    
AOCI, before tax    
Beginning balance 7 (338)
Other comprehensive income (loss) before reclassifications (186) 1,836
Less: Amount reclassified from accumulated other comprehensive income (loss) (162) 1,262
Net current period other comprehensive income (loss) (24) 574
Ending balance (17) 236
AOCI    
AOCI, after tax    
Beginning balance 136 (535)
Ending balance $ (104) $ 112
v3.24.2.u1
Stockholders' Equity (Schedule of Reclassifications out of AOCI) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]        
Net revenue [1] $ 143,900 $ 173,413 $ 308,486 $ 354,321
Cost of revenue 112,077 119,113 228,426 239,639
Research and development 19,851 20,831 40,078 42,965
Sales and marketing 29,757 32,482 60,286 66,361
General and administrative 19,186 16,536 37,253 32,772
Tax impact (1,029) 1,192 (881) 2,049
Total, net of tax (45,175) (8,587) (63,825) (18,299)
Amount Reclassified from AOCI        
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]        
Net revenue (130) 762 (209) 1,451
Cost of revenue 0 (1) 0 (2)
Research and development (1) (18) (2) (26)
Sales and marketing 33 (59) 42 (142)
General and administrative (1) (3) 7 (19)
Total before tax (99) 681 (162) 1,262
Tax impact 21 (143) 34 (265)
Total, net of tax $ (78) $ 538 $ (128) $ 997
[1] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
v3.24.2.u1
Employee Benefit Plans (Narrative) (Details)
shares in Millions, $ in Millions
 6 Months Ended
Jun. 30, 2024
USD ($)
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Total unrecognized compensation | $ $ 45.3
Weighted-average period of recognition of stock based compensation 2 years 6 months
2016 Incentive Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Number of shares reserved for future grant (in shares) 2.0
2024 Inducement Equity Incentive Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Number of shares reserved for future grant (in shares) 0.7
Employee Stock Purchase Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Number of shares reserved for future grant (in shares) 0.6
Purchase percentage of stock at fair market value (in percentage) 85.00%
Options and RSUs  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting term 4 years
Performance Shares  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting term 3 years
Performance Shares | 2024 Inducement Equity Incentive Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting term 3 years
Performance Shares | 2024 Inducement Equity Incentive Plan | Minimum  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Percentage vest of performance shares 0.00%
Performance Shares | 2024 Inducement Equity Incentive Plan | Maximum  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Percentage vest of performance shares 150.00%
Performance Shares | 2016 Plan and 2024 Inducement Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting term 3 years
Performance Shares | 2016 Plan and 2024 Inducement Plan | Minimum  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Percentage vest of performance shares 0.00%
Performance Shares | 2016 Plan and 2024 Inducement Plan | Maximum  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Percentage vest of performance shares 150.00%
v3.24.2.u1
Employee Benefit Plans (Schedule of Stock Option Activity) (Details) - Employee Stock Option
shares in Thousands
 6 Months Ended
Jun. 30, 2024
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]  
Number of shares, beginning balance (in shares) | shares 866
Number of shares, granted (in shares) | shares 0
Number of shares, exercised (in shares) | shares 0
Number of shares, cancelled (in shares) | shares 0
Number of shares, expired (in shares) | shares (19)
Number of shares, ending balance (in shares) | shares 847
Beginning balance (in dollars per share) | $ / shares $ 30.70
Granted (in dollars per share) | $ / shares 0
Exercised (in dollars per share) | $ / shares 0
Cancelled (in dollars per share) | $ / shares 0
Expired (in dollars per share) | $ / shares 19.41
Ending balance (in dollars per share) | $ / shares $ 30.96
v3.24.2.u1
Employee Benefit Plans (Schedule of Time-Based RSU Activity) (Details) - Time-Based RSU
shares in Thousands
 6 Months Ended
Jun. 30, 2024
$ / shares
shares
Number of Shares  
Beginning balance (in shares) | shares 1,567
Granted (in shares) | shares 1,463
Vested (in shares) | shares (658)
Cancelled (in shares) | shares (126)
Ending balance (in shares) | shares 2,246
Weighted Average Grant Date Fair Value Per Share  
Beginning Balance (in dollars per share) | $ / shares $ 22.83
Granted (in dollars per share) | $ / shares 14.34
Vested (in dollars per share) | $ / shares 22.50
Cancelled (in dollars per share) | $ / shares 20.86
Ending Balance (in dollars per share) | $ / shares $ 17.35
v3.24.2.u1
Employee Benefit Plans (Schedule of Performance Shares Activity) (Details) - Performance Shares
shares in Thousands
 6 Months Ended
Jun. 30, 2024
$ / shares
shares
Number of Shares  
Beginning balance (in shares) | shares 417
Granted (in shares) | shares 575
Vested (in shares) | shares 0
Cancelled (in shares) | shares (332)
Ending balance (in shares) | shares 660
Weighted Average Grant Date Fair Value Per Share  
Beginning Balance (in dollars per share) | $ / shares $ 24.76
Granted (in dollars per share) | $ / shares 20.25
Vested (in dollars per share) | $ / shares 0
Cancelled (in dollars per share) | $ / shares 26.39
Ending Balance (in dollars per share) | $ / shares $ 20.01
v3.24.2.u1
Employee Benefit Plans (Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, RSUs, Time-Based and Performance-Based and the ESPP) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Total stock-based compensation $ 5,888 $ 4,687 $ 10,432 $ 9,352
Cost of revenue        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Total stock-based compensation 413 342 778 693
Research and development        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Total stock-based compensation 844 1,144 1,542 2,209
Sales and marketing        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Total stock-based compensation 1,235 1,397 2,472 2,828
General and administrative        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Total stock-based compensation $ 3,396 $ 1,804 $ 5,640 $ 3,622
v3.24.2.u1
Segment Information (Narrative) (Details)
 6 Months Ended
Jun. 30, 2024
Segment
Segment Reporting [Abstract]  
Number of operating segments 2
Number of reportable segments 2
v3.24.2.u1
Segment Information (Schedule of Reportable Segments and Reconciliation of Segment Contribution Income (Loss) to Income (Loss) Before Income Taxes) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Segment Reporting Information [Line Items]        
Total net revenue [1] $ 143,900 $ 173,413 $ 308,486 $ 354,321
Total segment contribution income (11,733) 8,277 [2] (7,969) 20,578 [2]
Corporate and unallocated costs (19,350) (19,011) [2] (39,156) (38,385) [2]
Amortization of intangibles 0 (128) 0 (257)
Stock-based compensation expense (5,888) (4,687) (10,432) (9,352)
Restructuring and other charges (1,688) (2,229) (2,720) (2,337)
Litigation reserves, net (8,200) 0 (8,230) 0
Other income, net [3] 2,713 7,999 5,563 9,405
Loss before income taxes (44,146) (9,779) (62,944) (20,348)
Connected Home        
Segment Reporting Information [Line Items]        
Total net revenue [1] 84,033 98,406 179,996 201,152
Total segment contribution income $ (13,794) $ (5,373) [2] $ (19,934) $ (7,129) [2]
Segment contribution margin (16.40%) (5.50%) [2] (11.10%) (3.50%) [2]
NETGEAR for Business        
Segment Reporting Information [Line Items]        
Total net revenue [1] $ 59,867 $ 75,007 $ 128,490 $ 153,169
Total segment contribution income $ 2,061 $ 13,650 [2] $ 11,965 $ 27,707 [2]
Segment contribution margin 3.40% 18.20% [2] 9.30% 18.10% [2]
[1] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
[2]

* Financial information for each reportable segment in the prior year periods were recast to conform to the current reportable segment structure.
[3]
(1)
Amounts included gain/(loss), net from derivatives not designated as hedging instruments of $0.6 million and $2.1 million, for the three and six months ended June 30, 2024, respectively, and $1.0 million and $0.9 million, for the three and six months ended July 2, 2023, respectively, and gain/(loss), net from litigation settlements of $6.0 million for the three and six months ended July 2, 2023, respectively.
v3.24.2.u1
Segment Information (Schedule of Reportable Segments and Reconciliation of Segment Contribution Income (Loss) to Income (Loss) Before Income Taxes) (Parenthetical) (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Segment Reporting [Abstract]        
Gain/(loss), net from derivatives not designated as hedging instruments $ 0.6 $ 1.0 $ 2.1 $ 0.9
Amount from litigation settlements   $ 6.0   $ 6.0
v3.24.2.u1
Segment Information (Schedule of Net Revenue by Geographic Areas) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Jun. 30, 2024
Jul. 02, 2023
Segment Reporting Information [Line Items]        
Total net revenue [1] $ 143,900 $ 173,413 $ 308,486 $ 354,321
United States (U.S.)        
Segment Reporting Information [Line Items]        
Total net revenue 92,794 112,961 200,083 230,759
Americas (excluding U.S.)        
Segment Reporting Information [Line Items]        
Total net revenue 2,709 3,650 5,348 7,774
EMEA        
Segment Reporting Information [Line Items]        
Total net revenue [1],[2] 27,355 36,161 58,542 75,339
APAC        
Segment Reporting Information [Line Items]        
Total net revenue [2] $ 21,042 $ 20,641 $ 44,513 $ 40,449
[1] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
[2] No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
v3.24.2.u1
Segment Information (Schedule of Net Revenue by Geographic Areas) (Parenthetical) (Details) - Maximum
 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Revenues From External Customers And Long Lived Assets [Line Items]    
Percentage of net revenue 10.00%  
EMEA    
Revenues From External Customers And Long Lived Assets [Line Items]    
Percentage of net revenue 10.00% 10.00%
APAC    
Revenues From External Customers And Long Lived Assets [Line Items]    
Percentage of net revenue 10.00% 10.00%
v3.24.2.u1
Segment Information (Schedule of Long-Lived Asset by Geographic Region) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total $ 44,435 $ 45,558
United States (U.S.)    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 22,079 25,051
Canada    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 5,496 4,714
Americas (excluding U.S. and Canada)    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 52 68
EMEA    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 3,425 3,739
Singapore    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 5,648 6,218
APAC (excluding Singapore)    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total [1] $ 7,735 $ 5,768
[1] No individual country represented more than 10% of the Company’s total long-lived assets in the periods presented.
v3.24.2.u1
Segment Information (Schedule of Long-Lived Asset by Geographic Region) (Parenthetical) (Details)
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Maximum | APAC (excluding Singapore)    
Revenues From External Customers And Long Lived Assets [Line Items]    
Percentage of total long-lived assets owned 10.00% 10.00%
v3.24.2.u1
Fair Value Measurements (Summary of Valuation of Company's Financial Instruments by Various Levels) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value $ 146,854 $ 133,208
Liabilities measured at fair value 213 1,691
Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value 38,369 34,290
Liabilities measured at fair value 0 0
Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value 108,485 98,918
Liabilities measured at fair value 213 1,691
Cash Equivalents    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value 29,385 25,986
Cash Equivalents | Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value 29,385 25,986
Cash Equivalents | Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value 0 0
Trading securities    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 8,722 8,304
Trading securities | Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 8,722 8,304
Trading securities | Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 0 0
Available-for-sale Investments | U.S. Treasury Securities    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 108,250 98,454
Available-for-sale Investments | U.S. Treasury Securities | Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 0 0
Available-for-sale Investments | U.S. Treasury Securities | Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 108,250 98,454
Available For Sale Investments Convertible Debt Securities    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 262 173
Available For Sale Investments Convertible Debt Securities | Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1]   0
Available For Sale Investments Convertible Debt Securities | Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1]   173
Available For Sale Investments Corporate Equity Securities | Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 262  
Available For Sale Investments Corporate Equity Securities | Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [1] 0  
Foreign currency forward contracts    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [2] 235 291
Liabilities measured at fair value [3] 213 1,691
Foreign currency forward contracts | Quoted market prices in active markets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [2] 0 0
Liabilities measured at fair value [3] 0 0
Foreign currency forward contracts | Significant other observable inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Assets measured at fair value [2] 235 291
Liabilities measured at fair value [3] $ 213 $ 1,691
[1] Included in Short-term investments on the Company’s unaudited condensed consolidated balance sheets.
[2] Included in Prepaid expenses and other current assets on the Company’s unaudited condensed consolidated balance sheets.
[3] Included in Other accrued liabilities on the Company's unaudited condensed consolidated balance sheets.
v3.24.2.u1
Fair Value Measurements (Summary of Valuation of Company's Financial Instruments by Various Levels) (Parenthetical) (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Short-term investments $ 117,235 $ 106,931
Other non-current assets $ 15,800 $ 17,326
v3.24.2.u1
Restructuring and Other Charges (Summary of Activity Related to Accrued Restructuring and Other Charges ) (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jul. 02, 2023
Restructuring Cost and Reserve [Line Items]    
Beginning balance $ 287 $ 1,912
Additions 2,720 2,403
Cash payments (2,225) (3,505)
Adjustments (160) (37)
Ending balance 622 773
Employee Termination Charges    
Restructuring Cost and Reserve [Line Items]    
Beginning balance 257 1,912
Additions 2,504 2,396
Cash payments (2,139) (3,505)
Adjustments 0 (37)
Ending balance 622 766
Lease Contract Termination and Other Charges    
Restructuring Cost and Reserve [Line Items]    
Beginning balance 30 0
Additions 216 7
Cash payments (86) 0
Adjustments (160) 0
Ending balance $ 0 $ 7