NETGEAR, Inc. reported a net revenue of $673.8 million for the fiscal year ending December 31, 2024, a decrease of 9.1% compared to $740.8 million in 2023. The decline was primarily driven by a $60.9 million drop in the Connected Home segment, attributed to market contraction and reduced retail channel sales. The NETGEAR for Business segment also saw a decrease of $6.2 million, largely due to inventory optimization efforts with channel partners. Despite the overall revenue decline, the company noted strong demand for its Pro AV product line, which experienced double-digit growth in end market sales.
The company's gross profit for 2024 was $195.9 million, resulting in a gross margin of 29.1%, down from 33.6% in the previous year. This decline was mainly due to increased costs associated with inventory, freight, and higher expenses related to excess and obsolete inventory. However, operating income improved to $12.2 million, a significant recovery from a loss of $33.3 million in 2023, primarily due to a $92.7 million contra-expense from a litigation settlement with TP-Link.
In terms of strategic developments, NETGEAR announced a restructuring in early 2025, separating its Connected Home segment into two distinct segments: Mobile and Home Networking. This change aims to enhance operational focus and financial management. The company also continues to invest in research and development, particularly in areas such as WiFi 7 technology and audio/video over Ethernet, to capitalize on emerging market opportunities.
Operationally, NETGEAR's total employee count stood at 655 as of December 31, 2024, with a significant portion dedicated to research and development. The company reported a notable increase in cash and cash equivalents, totaling $286.4 million, up from $176.7 million in 2023. Looking ahead, NETGEAR anticipates improved performance in 2025, driven by a more predictable market environment and continued demand for its premium product offerings, despite facing challenges such as lengthy lead times for supply in the first quarter of 2025.
Overall, NETGEAR's financial performance reflects a challenging year marked by market contractions and strategic adjustments, but the company remains optimistic about future growth and profitability as it adapts to evolving market conditions and consumer demands.
About NETGEAR, INC.
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