Netgear sees Q3 non-GAAP operating margin (11%)-(8%)

The company said, “We have completed our destocking actions for both the NFB and CHP businesses in the second quarter and expect to see more predictable performance that is aligned to the market. However, while we anticipate less volatility from shifting channel inventory levels, participating more significantly in the broader CHP market and growing our NFB business momentum will take time to execute fully. We anticipate revenue from the service provider channel to be approximately $15 million in the third quarter as our partners prepare to launch our next generation 5G mobile hotspots early in the fourth quarter. Accordingly, we expect third quarter net revenue to be in the range of $160 million to $175 million, up 16% sequentially at the midpoint. We expect gross margins and operating margins to continue to be impacted by our inventory reduction efforts and higher than expected transportation costs due to a variety of factors, including the Red Sea shipping crisis. Accordingly, we expect our third quarter GAAP operating margin to be in the range of (15.3)% to (12.3)%, and non-GAAP operating margin to be in the range of (11.0)% to (8.0)%. Our GAAP tax expense is expected to be in the range of $1.0 million to $2.0 million, and our non-GAAP tax benefit is expected to be in the range of $1.5 million to $2.5 million for the third quarter of 2024.”