NETGEAR, Inc. reported a decline in revenue for the third quarter of fiscal 2024, with net revenue of $182.9 million, down 7.6% from $197.8 million in the same period last year. For the nine months ended September 29, 2024, total revenue was $491.3 million, an 11.0% decrease from $552.2 million in the prior year. The Connected Home segment experienced a significant drop in revenue, attributed to market contraction and reduced demand, while the NETGEAR for Business segment saw a revenue increase of 11.4% to $78.5 million, driven by improved inventory management and higher sales of Pro AV managed switches.
Gross profit for the third quarter was $56.5 million, representing a gross margin of 30.9%, down from 34.8% in the previous year. The decline in gross margin was primarily due to increased freight and inventory costs, although a higher mix of NETGEAR for Business products partially offset this impact. Operating expenses decreased significantly to $39.3 million from $69.6 million, leading to a substantial increase in income from operations to $95.8 million, compared to a loss of $0.6 million in the prior year.
Net income for the third quarter was $85.1 million, a turnaround from a net loss of $84.8 million in the same quarter last year. This improvement was bolstered by a $92.7 million contra-expense from a litigation settlement with TP-Link. For the nine months ended September 29, 2024, net income was $21.2 million, compared to a net loss of $103.1 million in the prior year.
Cash and cash equivalents increased to $273.8 million as of September 29, 2024, up from $176.7 million at the end of 2023. The company reported net cash provided by operating activities of $143.3 million for the nine months, a significant increase from $0.6 million in the same period last year.
Strategically, NETGEAR has focused on premium product offerings, including WiFi 7 products, and has shifted resources towards the development of high-margin products. The company has also authorized a stock repurchase program, allowing for the repurchase of up to 3.0 million shares, with approximately 1.7 million shares repurchased at a cost of $22.9 million during the nine months ended September 29, 2024.
Overall, NETGEAR's performance reflects a complex landscape of revenue challenges, strategic shifts towards premium products, and significant improvements in profitability driven by operational efficiencies and litigation settlements.
About NETGEAR, INC.
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