NETGEAR, Inc.

Ladies and gentlemen, thank you for standing by. At this time, all participants are in listen-only mode. Later, we will conduct a Q&A session. At that time, if you have a question, you will need to press the star 1 on your push button phone. I would now like to turn the conference over to Eric Violet. Please go ahead, sir.

Thank you, operator. Good afternoon, and welcome to Netgear's third quarter of 2025 Financial Results Conference Call. Joining us for 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 third quarter and guidance for the fourth 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 www.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, gross and operating margins, expenses, tax 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-GAAP financial measures will be mentioned on this call. The reconciliation of the non-GAAP to GAAP 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. We are pleased to share that our team delivered another really strong quarter. Over the past year and a half, Netgear has embarked on the first phase of a dramatic and comprehensive transformation, and the results of everyone's efforts and diligence are coming to fruition. While the seeds of our investment are only beginning to bear fruit in terms of top-line expansion, Our team's operational acumen is unlocking new ways for us to efficiently capitalize on the opportunities in front of us. We are sincerely excited about the foundation we've built and are confident that our transformation positions us exceedingly well to deliver long-term profitability and shareholder value creation. This quarter's results mark the sixth quarter in a row where Netgear has exceeded our revenue and non-GAAP operating margin guidance. The supply chain team kept the pedal to the floor to drive material improvement in our supply position for our managed switches, allowing us to grow revenue for our enterprise segment almost 16% year over year. As a great sign of our strength in this category, ProAV units and ASPs were each up materially year over year. contributing to a strong improvement in gross margin, operating margin, and net profitability. We came into this year hoping to improve our gross margin from 2024, while sharing that we felt that achieving profitability for the year was unlikely. We're now thrilled to share that not only are we expecting to be non-GAAP profitable for the year, but we expect to deliver non-GAAP positive EPS in each quarter this year. While our focus remains on making the investments needed to drive our transformation and enable long-term profitable growth, this near-term profitability milestone is a sign our efforts are paying off. In Q3, our profitability resulted from a big improvement in each segment. We once again delivered positive contribution margin and significantly improved gross margin for each business. An increased mix from enterprise which delivered an all-time high segment gross margin of over 50%, led to another record high non-GAAP gross margin for the company of 39.6%, surpassing the record from last quarter by 180 basis points. This enabled us to deliver positive non-GAAP operating income, well above guidance, and non-GAAP EPS of 12 cents. We were also extremely successful on the capital allocation front, repurchasing $20 million of our common stock at an average price of $24.55 per share on the quarter. We plan to continue to opportunistically return capital to shareholders via share repurchases at a minimum to offset dilution. Before moving on to updates for our business segments, we're excited to share a couple of important updates on our transformation that will allow us to continue to evolve how we position our products and services in the market. First, we launched our new website yesterday, and we encourage you all to check that out. This has been in the works for over a year and reflects our new branding that will serve to more clearly distinguish our consumer and commercial businesses. A key part of this change involves renaming our commercial business from Netgear for Business to Netgear Enterprise. This is a reflection of the fact that we're delivering reliable, enterprise-grade solutions to large customers that include Fortune 500 companies and mission-critical events like the G7 Summit, not to mention many different global Tier 1 music and sporting events. Second, starting in Q4, we'll be reporting on two segments, Netgear Enterprise and Netgear Consumer. As we've shared over the past several quarters, our mobile products serve both of these end customers, and the go-forward product strategy is to drive stronger integration of our mobile products into our app and subscription service for consumers on the one hand, and into our cloud management and security platform for our enterprise customers on the other. Mobile, of course, remains an important strategic capability that we will leverage to expand both our consumer and enterprise businesses. Brian will share more details on this in his section. With that context, I'll move on to the business segment updates. Our enterprise segment again led the way in driving our great results, and we continue to see double-digit demand growth for our best-in-class ProAV managed switches. The Netgear team successfully navigated supply chain headwinds to accelerate supply and start to lower our backlog, leading to outperformance in the quarter. While we still believe we'll return to an optimal inventory position in the first quarter, the 16% sequential growth of our managed switch revenue in Q3 reflects better supply and strong end-user demand for these products. We're already a clear leader in the ProAV space and continue to expand our advantages and round out our value proposition by relentlessly growing our ecosystem, notably reaching 500 AV partners this quarter. Further, the AV professional services that launched in the second quarter have garnered positive early traction with Blue Chip customers and will be an integral part of expanding our enterprise value proposition and non-device revenue going forward. Essential to achieving this goal is our constant drive to innovate in ways that will improve our differentiation across products, pricing, and partners. Much of our headcount growth remains in enterprise as we're building out our software development capabilities. Our new team in Chennai, which is roughly cost neutral due to a simultaneous reduction in outsourced software development capacity, allows us to improve our efficiency, quality, and competitive differentiation. With this new and growing team, we're making great strides in improving our device firmware, cloud management, and security software offerings. We're also in the process of greatly improving the user experience, and in the coming months, we will be integrating networking and security in a manner that will lead to a unique offering in the industry. We plan to offer networking and security with enterprise-grade reliability delivered by a simple user experience at an affordable price that will make this platform purpose-built for managed service providers and small to medium enterprises. And as a first step to addressing cybersecurity in our target market, earlier this month, we announced a tailored security solution for SMEs based on technology obtained via the acquisition of Exium earlier this year. This exciting new unified solution is the industry's only all-in-one SASE and hybrid firewall platform designed specifically for SMEs and the MSPs that support them. We can now secure remote workers as well as the on-premise networks and combine advanced threat protection, AI-powered zero trust network access, web gateway security, SD-WAN, and firewall capabilities in a single user-friendly platform. The investments we've made in the enterprise business are clearly beginning to deliver both financial and operational benefits. While we continue to have success in hiring key leaders, For the enterprise sales team, we're starting to expand the list of marquee customers we serve. In the most recent quarter, we closed material deals with a Fortune 10 global retailer, Boeing, the South African Parliament, University of Wales, and Fox Sports, to name a few. Moving on to home networking. While the retail market remains highly competitive, we're continuing to make inroads with our good, better, best strategy. Sequential top-line growth came in at roughly 8%, and we once again delivered positive contribution margin in the quarter. Key enablers to this success are the broadening product portfolio, strength in our higher margin D2C channel, leaner operational execution, and growing annual recurring revenue, which reached $37.9 million in the quarter and grew 17.2% year over year. Our Orbi 370 mesh product that launched in the quarter is gaining momentum in the market and outperformed our expectations. This is our most affordable Wi-Fi 7 mesh system to date and offers high-end performance and security at an accessible price point, benefits that are clearly resonating with customers. We remain confident in the long-term growth potential of the home networking business and notably saw share growth in Wi-Fi 7 routers and mesh systems in Q3. pointing to Netgear's expanding sphere of influence in this part of the market. The mobile segment delivered on our modest top-line expectations, and with strong demand for our high-end offering, we achieved record non-gap gross margins of 31% for this business. Although the service provider channel remains highly competitive, we continue to add new channel partners. For example, we'll be launching the M7 Pro with O2 in the UK this quarter, We also have exciting new products coming to market for this segment over the coming months that will expand our addressable market. Over the long term, we expect our strategic capability in delivering mobile products to benefit our consumer and enterprise segments by offering differentiated experiences that are integrated closely with our broader solution for these end markets. So, in summary, this quarter was marked by solid execution, And these results underscore the impact of our strategic transformation in building a healthier, more resilient business for the long term. We remain well positioned to be the trusted domestic supplier across our range of products, a true differentiator in this market, and remain almost completely exempt from tariffs. We're focusing on the right areas, growing our higher margin segments, driving operational efficiency, and delivering value to our customers. and it's showing in our financial performance thus far while setting the stage for renewed growth in 2026. With that, I'll turn it over to Brian.