NETGEAR, Inc.

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. At that time, if you have a question, you will need to press the star one on your push button phone. I would now like to turn this conference over to Mr. Eric Bieland. Please go ahead, sir.

Thank you, operator. Good afternoon and welcome to NETGEAR's second quarter of 2025 Financial Results Conference Call. Joining us from the company are Mr. C.J. Prober, CEO, and Mr. Brian Murray, CFO. The format of the call will start with commentary on the business provided by C.J., followed by a review of the financials for the second quarter in guidance for the third quarter provided by Brian. We'll then have time for any questions. If you have not received a copy of today's release, please visit NETGEAR's investor relations website at .netgear.com. Before we begin the formal remarks, we advise you that today's conference call contains forward-looking statements. Forward-looking statements include statements regarding expected revenue, operating margins, tax expense, expenses, and future business outlook. Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more information, please refer to the risk factors discussed in NETGEAR's periodic filings with the SEC, including the most recent form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today. And NETGEAR undertakes no obligation to update these statements as a result of new information or future events, except as required by law. In addition, several non-GAP financial measures will be mentioned on this call. Reconciliation of the non-GAP to GAP measures can be found in today's press release on our investor relations website. At this time, I would now like to turn the call over to CJ.

Thanks, Eric, and thank you all for joining our call. We're very pleased to report that Q2 was another great quarter for NETGEAR, with results much better than anticipated, including historically high gross margins and another quarter of non-GAP profitability the team simply delivered. Even more importantly, our transformation to deliver long-term shareholder value via profitable growth is progressing as planned, and we continue to execute well against our newly formed long-term strategy. Today, I'll review our second quarter financial highlights, give an update on each of our three business units, and cover a couple of macro points that are top of mind. In Q2, we outperformed our guidance on both the top and bottom line. Despite ProAV supply constraints that limited shipments, net revenue came in at $170.5 million. Above the high end of our outlook, and we delivered non-GAP gross margins of .8% an all-time high for the company. We also outperformed our non-GAP operating margin guidance and delivered non-GAP profitability for a second quarter in a row. This performance reflects continued progress in our transformation journey. A year removed from the major channel restocking we executed in Q2 of 2024, our tighter operational discipline is paying dividends. We've streamlined inventory, stabilized DSOs at their lowest level in nearly eight years, and realigned our supply chain to support leaner, more resilient execution. Nowhere is this transformation more evident than in the profitability of our three business units. Last quarter, we shared that each business unit improved its year over year contribution margin by over 400 basis points. This quarter, we're excited to share that we've achieved positive contribution margins across each business. This milestone is even more impressive considering the varied opportunities and challenges within each segment, and it serves as a great testament to the progress we're making in driving focused execution. Most importantly though, these efforts have cemented a foundation of improved profitability, and now we are framing our growth plans for the second phase of our transformation. Onto the business updates. NFB led the way again this quarter with revenue up 38% year over year and up more than 4% sequentially. NFB's gross margin reached 46.7%, representing an increase of 1300 basis points year over year and 40 basis points sequentially. As we continue to scale this business, and it becomes a larger percentage of our revenue, we will continue to benefit from the higher gross and contribution margin profile it brings to our consolidated P&L. ProAV remade a steadfast growth engine for NFB with strong double digit year over year sell through gross across all geographies. Despite entering the quarter supply constraint, great execution by the team allowed us to exceed our shipment target for Q2 and deliver 14% sequential revenue growth for ProAV. Even with the strong growth and market demand for our highly differentiated products resulted in a considerable increase in our sales backlog during the quarter. While we prefer to be capitalizing on the full potential of this business, it is great to see our investments unlock substantial growth opportunities. We're diligently working to improve supply and we expect to begin to burn down our sales backlogging Q3 and establish safety stock in the first quarter of 2026. Further demonstrating our market leadership in ProAV, we also won multiple industry awards at NAB and Infocomm and expanded our AV manufacturing partner base to approximately 460. The customer deployments on the AV side of our business continue to include large Fortune 500 organizations and high profile events and productions. For example, we recently completed commercial deployments at Fortune 500 companies like CBRE, Applied Materials, Global Foundries and Cary Ireland, and also powered the G7 Conference in Canada, President Macron's Bastille Day celebration in France, and Marilyn Manson's concert tour to name a few fun examples. We also launched our new AV professional services group this quarter. This launch marks an important expansion of our enterprise value proposition. Our onsite engineering assistance service embeds seasoned NICGEAR engineers directly into customer deployments, offering pre-event validation, live day support, and post-event analysis, de-risking complex AV over IP projects, and delivering peace of mind for mission critical use cases. With a full catalog of modular service offerings and development, we're building a scalable, service-led player on top of our hardware and software foundation to drive long-term customer success and higher margin revenue. On the IT side of NFV, we're building a complete network and security solution for SMEs and MSPs to address an opportunity with huge potential where we currently only have a small share of the market. Our acquisition of XCM gives us a proprietary SASE platform to integrate directly into our cloud management service in-site. This will enable us to offer what we believe to be the industry's first fully integrated networking and cloud security solution purpose-built for small and medium-sized enterprises. Combined with our in-house software team in Chennai, which was accelerated by the Vogue AquaHire, we've substantially advanced our plan to in-source software development and make software a core capability and even more of a differentiator for NFV. Our home networking business had a great quarter up and down the P&L, surpassing our expectations for top line, gross margin, and contribution profit. Despite the stiff competition that remains in the market, this business is unequivocally benefiting from a broadening product portfolio, the leaner operational footprint, and getting past some of the older inventory issues. These levers translated to strong sequential results, revenue growth of 10%, 540 basis point increasing gross margin, and 750 basis point improvement in profitability. We've had success at the mid and high end of the market, and yesterday, our streamlined execution enabled us to launch our new Orbi370 offering. The latest and perhaps most important addition to building out our good, better, best strategy, the Orbi370 leverages the deep expertise Nikkei brings at the high end on performance and security and a more accessible price point. This combination makes the 370 ideal for households that need the extended coverage of a mess system, but don't require the advanced performance of our top of the line model. This latest release rounds out our offering as our most affordable Wi-Fi 7 mesh system to date, further expanding the Nikkei brand to the bigger part of the market and positioning us for additional success in home networking. Most importantly, we're pleased to have Jonathan Oakes officially join as Senior Vice President and General Manager of our home networking business. Jonathan is the latest addition to our newly formed executive leadership team and brings deep experience in consumer technology with a strong track record of driving execution and innovation at scale at leading brands like Fitbit, Google, and Amazon. Since joining a couple of months ago, he's made an immediate impact by sharpening our strategic focus, accelerating the launch of Orbi370 and setting the groundwork to enhance our product roadmap, subscription offerings, and channel execution. Under his leadership, we're confident home networking is on a strong trajectory to drive profitable growth. In our mobile segment, we saw strong retail performance and grew our EMEA-based service provider business substantially by launching six new products across four customers. That said, sales with our large US-based service provider customer were weaker than expected and the overall revenue for this business was below our expectation for the quarter. Despite the revenue shortfall, we significantly exceeded our gross margin expectations at over 29% and were able to deliver positive contribution margin for the mobile business in the quarter. As we continue to make progress launching new products that align with our good, better, best product strategy, we expect to drive top-line improvement for this business. The underlying demand for cellular connectivity continues to grow in both the consumer and B2B markets, given the need for reliable cellular connectivity and the performance improvements enabled by 5G. We remain on track with the execution of our mobile product strategy and are bullish about the long-term prospects of this business. On the macro front, we're pleased to report that despite various machinations on tariffs, nothing has changed for NICGEAR and the vast majority of our products remain completely exempt from tariffs. Further, the fact that we do not manufacture in China provides a clear benefit if trade tensions do indeed escalate. Additionally, we remain more confident than ever that our status as a US-based independent public company positions us well in the complicated geopolitical landscape. NICGEAR is exactly the type of company that consumers, enterprises, and governments can trust. For example, this quarter on the home networking front, we were awarded several retail placements at the Navy Exchange Stores and Army and Air Force Exchange Service Stores. Furthermore, continuing reports of the escalating cyber threat posed by the PRC and scrutiny faced by Chinese-backed competitors strengthens our optimism that these tailwinds will not abate. In closing, our team notched another excellent quarter. We delivered strong quarter results up and down the P&L with all-time record gross margins and non-GAAP profitability being two of the most important proof points. Additionally, we were highly successful on the capital allocation front with the XCM acquisition and $7.5 million in share buybacks. I've been with NICGEAR for a year and a half now and cannot be more pleased with not only the way the team has come together, but also how they've approached and succeeded at the vast transformations we've already undertaken. We brought in new talent to lead key areas and elevated internal leaders and others. We've enabled these leaders to succeed through the creation of three distinct business units. This has given a sharper focus, accountability, and a path to greater growth and profitability. Each business has clear objectives and dedicated resources to execute its strategy as we build out the next phase of our transformation. With phase two of our transformation already underway, I want to encourage everyone listening to join us at our Investor Day on November 17 in New York. We'll share more detail on the plans for each business and how we expect to deliver on our purpose of powering extraordinary experiences while creating long-term value for shareholders. With that, I'll hand it over to Brian to walk through the financials.