þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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For the fiscal year ended December 31, 2018
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|
or
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
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For the transition period from to
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Delaware
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77-0419172
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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350 East Plumeria Drive,
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95134
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San Jose, California
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(Zip Code)
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(Address of principal executive offices)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.001
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The Nasdaq Stock Market LLC
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(Nasdaq Global Select Market)
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PART I
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||
Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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Item 3.
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||
Item 4.
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||
PART II
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Item 5.
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||
Item 6.
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||
Item 7.
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||
Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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||
Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
|
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PART IV
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Item 15.
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Item 16.
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||
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•
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Broadband modems, which are devices that convert the broadband signals into Ethernet data that feeds Internet into homes and offices. We provide modems that connect to DOCSIS 3.x, xDSL, FTTx, and 4G/5G mobile;
|
•
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Wi-Fi Gateways, which are Wi-Fi routers with an integrated broadband modem, for broadband Internet access;
|
•
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Wi-Fi Hotspots, which create mobile Wi-Fi Internet access that utilizes 4G/5G mobile and 5G data networks for use on the go, and at home in place of traditional wired broadband, Internet access;
|
•
|
Wi-Fi routers and home Wi-Fi Systems, which create a local area network (LAN) for home or office computer, mobile and Smart Devices to connect and share a broadband Internet connection;
|
•
|
Wi-Fi range extenders, which extend the range of an existing Wi-Fi network to eliminate Wi-Fi dead spots;
|
•
|
Powerline adapters and bridges, which extend wired and Wi-Fi Internet connections to any AC outlet using existing electrical wiring;
|
•
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Wi-Fi network adapters, which enable computing devices to be connected to the network via Wi-Fi;
|
•
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Digital Canvasses, which enable users to display digital art and photos; and
|
•
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Value added service offerings such as technical support, parental controls and cybersecurity protection for consumers.
|
•
|
Ethernet switches, which are multiple port devices used to network computing devices and peripherals via Ethernet wiring;
|
•
|
Wireless controllers, access points and Wi-Fi systems, which are devices used to manage and control Wi-Fi on a campus or a facility providing Wi-Fi connections to smart phones, tablets, laptops and other computing devices;
|
•
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Unified storage, which delivers file and block based data into a single shared storage system, meeting the demands of small enterprises, education, hospitality and health markets through an easy-to-use interface for managing multiple storage protocols; and
|
•
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Internet security appliances, which provide internet access through capabilities such as firewalls and Virtual Private Networks (VPNs).
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•
|
within the consumer markets, companies such as ARRIS, ASUS, AVM, Linksys (owned by Foxconn), Devolo, D-Link, Eero (which recently agreed to be purchased by Amazon), Google, Samsung, Synology, Symantec, TP Link, and Western Digital;
|
•
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within the business markets, companies such as Allied Telesys, Barracuda, Buffalo, Cisco Systems, Dell, D-Link, Fortinet, Hewlett-Packard Enterprise, QNAP Systems, Seagate Technology, SonicWall, Synology, TP Link, Ubiquiti, WatchGuard and Western Digital; and
|
•
|
within the service provider markets, companies such as Actiontec, Airties, Arcadyan, ARRIS, ASUS, AVM, Compal Broadband, D-Link, Eero (which recently agreed to be purchased by Amazon), Franklin, Google, Hitron, Huawei, Novatel Wireless, Plume, Sagem, Sercomm, SMC Networks, TechniColor, TP-Link, Ubee, ZTE and ZyXEL.
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Name
|
Age
|
Position
|
|
Patrick C.S. Lo
|
62
|
|
Chairman and Chief Executive Officer
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Bryan D. Murray
|
44
|
|
Chief Financial Officer
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Michael F. Falcon
|
62
|
|
Chief Operations Officer
|
David J. Henry
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46
|
|
Senior Vice President, Connected Home Products and Services
|
Andrew W. Kim
|
48
|
|
Senior Vice President of Corporate Development, General Counsel and Corporate Secretary
|
John P. McHugh
|
58
|
|
Senior Vice President, SMB Products and Services
|
Mark G. Merrill
|
64
|
|
Chief Technology Officer
|
Tamesa T. Rogers
|
45
|
|
Senior Vice President, Human Resources
|
Michael A. Werdann
|
50
|
|
Senior Vice President of Worldwide Sales
|
Item 1A.
|
Risk Factors
|
•
|
changes in the pricing policies of or the introduction of new products by us or our competitors;
|
•
|
changes in U.S. and international tax and trade policy that adversely affect customs, tax or duty rates, such as the higher tariffs on products imported from China enacted by the current U.S. administration;
|
•
|
introductions of new technologies and changes in consumer preferences that result in either unanticipated or unexpectedly rapid product category shifts;
|
•
|
slow or negative growth in the networking product, personal computer, Internet infrastructure, smart home, home electronics and related technology markets, as well as decreased demand for Internet access;
|
•
|
seasonal shifts in end market demand for our products, particularly in our Connected Home business segment;
|
•
|
delays in the introduction of new products by us or market acceptance of these products;
|
•
|
unanticipated decreases or delays in purchases of our products by our significant traditional and online retail customers;
|
•
|
component supply constraints or sudden, unforeseen price increases from our vendors;
|
•
|
unanticipated increases in costs, including air freight, associated with shipping and delivery of our products;
|
•
|
discovery or exploitation of security vulnerabilities in our products, services or systems, leading to negative publicity, decreased demand or potential liability, including potential breach of our customers' data privacy or disruption of the continuous operation of our cloud infrastructure and our in-use products;
|
•
|
shift in overall product mix sales from higher to lower margin products, or from one business segment to another, that would adversely impact our margins;
|
•
|
foreign currency exchange rate fluctuations in the jurisdictions where we transact sales and expenditures in local currency;
|
•
|
the inability to maintain stable operations by our suppliers and other parties with which we have commercial relationships;
|
•
|
unfavorable level of inventory and turns;
|
•
|
changes in or consolidation of our sales channels and wholesale distributor relationships or failure to manage our sales channel inventory and warehousing requirements;
|
•
|
delay or failure to fulfill orders for our products on a timely basis;
|
•
|
delay or failure of our service provider customers to purchase at their historic volumes or at the volumes that they or we forecast;
|
•
|
changes in tax rates or adverse changes in tax laws that expose us to additional income tax liabilities;
|
•
|
operational disruptions, such as transportation delays or failure of our order processing system, particularly if they occur at the end of a fiscal quarter;
|
•
|
disruptions or delays related to our financial and enterprise resource planning systems;
|
•
|
our inability to accurately forecast product demand, resulting in increased inventory exposure;
|
•
|
allowance for doubtful accounts exposure with our existing retailers, distributors and other channel partners and new retailers, distributors and other channel partners, particularly as we expand into new international markets;
|
•
|
geopolitical disruption, including sudden changes in immigration policies, leading to disruption in our workforce or delay or even stoppage of our operations in manufacturing, transportation, technical support and research and development;
|
•
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terms of our contracts with customers or suppliers that cause us to incur additional expenses or assume additional liabilities;
|
•
|
an increase in price protection claims, redemptions of marketing rebates, product warranty and stock rotation returns or allowance for doubtful accounts;
|
•
|
litigation involving alleged patent infringement;
|
•
|
epidemic or widespread product failure, or unanticipated safety issues, in one or more of our products;
|
•
|
any changes in accounting rules, including the potential impact of our adoption of new revenue recognition standards;
|
•
|
challenges associated with integrating acquisitions that we make, or with realizing value from our strategic investments in other companies;
|
•
|
failure to effectively manage our third party customer support partners, which may result in customer complaints and/or harm to the NETGEAR brand;
|
•
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our inability to monitor and ensure compliance with our code of ethics, our anti-corruption compliance program and domestic and international anti-corruption laws and regulations, whether in relation to our employees or with our suppliers or customers;
|
•
|
labor unrest at facilities managed by our third-party manufacturers;
|
•
|
workplace or human rights violations in certain countries in which our third-party manufacturers or suppliers operate, which may affect the NETGEAR brand and negatively affect our products’ acceptance by consumers;
|
•
|
unanticipated shifts or declines in profit by geographical region that would adversely impact our tax rate;
|
•
|
our failure to implement and maintain the appropriate internal controls over financial reporting which may result in restatements of our financial statements; and
|
•
|
any changes in accounting rules.
|
•
|
actual or anticipated fluctuations in our operating results or our competitors' operating results;
|
•
|
actual or anticipated changes in the growth rate of the general networking sector, our growth rates or our competitors' growth rates;
|
•
|
conditions in the financial markets in general or changes in general economic conditions, including government efforts to stabilize currencies;
|
•
|
actual or anticipated changes in governmental regulation, including taxation and tariff policies;
|
•
|
interest rate or currency exchange rate fluctuations;
|
•
|
our ability to forecast or report accurate financial results; and
|
•
|
changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally.
|
•
|
loss of or delay in revenue and loss of market share;
|
•
|
negative publicity and damage to our reputation and brand;
|
•
|
a decline in the average selling price of our products;
|
•
|
adverse reactions in our sales channels, such as reduced shelf space, reduced online product visibility, or loss of sales channels; and
|
•
|
increased levels of product returns.
|
•
|
our reseller agreements generally do not require substantial minimum purchases;
|
•
|
our customers can stop purchasing and our resellers can stop marketing our products at any time; and
|
•
|
our reseller agreements generally are not exclusive.
|
•
|
unexpected increases in manufacturing and repair costs;
|
•
|
inability to control the quality and reliability of finished products;
|
•
|
inability to control delivery schedules;
|
•
|
potential liability for expenses incurred by third-party manufacturers in reliance on our forecasts that later prove to be inaccurate;
|
•
|
potential lack of adequate capacity to manufacture all or a part of the products we require; and
|
•
|
potential labor unrest affecting the ability of the third-party manufacturers to produce our products.
|
•
|
changes in tax laws or the regulatory environment;
|
•
|
changes in accounting and tax standards or practices;
|
•
|
changes in the composition of operating income by tax jurisdiction; and
|
•
|
our operating results before taxes.
|
•
|
exchange rate fluctuations;
|
•
|
political and economic instability, international terrorism and anti-American sentiment, particularly in emerging markets;
|
•
|
potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud;
|
•
|
preference for locally branded products, and laws and business practices favoring local competition;
|
•
|
changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws (including potential responses to the higher tariffs on certain imported products recently announced by the current U.S. administration);
|
•
|
potential consequences of, and uncertainty related to, the "Brexit" process in the United Kingdom, which could lead to additional expense and complexity in doing business there;
|
•
|
increased difficulty in managing inventory;
|
•
|
delayed revenue recognition;
|
•
|
less effective protection of intellectual property;
|
•
|
stringent consumer protection and product compliance regulations, including but not limited to the Restriction of Hazardous Substances directive, the Waste Electrical and Electronic Equipment directive and the European Ecodesign directive, or EuP, that are costly to comply with and may vary from country to country;
|
•
|
difficulties and costs of staffing and managing foreign operations; and
|
•
|
business difficulties, including potential bankruptcy or liquidation, of any of our worldwide third party logistics providers.
|
•
|
integrating the companies, assets, systems, products, sales channels and personnel that we acquire;
|
•
|
higher than anticipated acquisition and integration costs and expenses;
|
•
|
reliance on third parties to provide transition services for a period of time after closing to ensure an orderly transition of the business;
|
•
|
growing or maintaining revenues to justify the purchase price and the increased expenses associated with acquisitions;
|
•
|
entering into territories or markets with which we have limited or no prior experience;
|
•
|
establishing or maintaining business relationships with customers, vendors and suppliers who may be new to us;
|
•
|
overcoming the employee, customer, vendor and supplier turnover that may occur as a result of the acquisition;
|
•
|
disruption of, and demands on, our ongoing business as a result of integration activities including diversion of management's time and attention from running the day to day operations of our business;
|
•
|
inability to implement uniform standards, disclosure controls and procedures, internal controls over financial reporting and other procedures and policies in a timely manner;
|
•
|
inability to realize the anticipated benefits of or successfully integrate with our existing business the businesses, products, technologies or personnel that we acquire; and
|
•
|
potential post-closing disputes.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Period
|
|
Total Number of
Shares Purchased
(2)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
October 1, 2018 - October 28, 2018
|
|
267,533
|
|
|
$
|
56.07
|
|
|
267,533
|
|
|
1,484,884
|
|
October 29, 2018 - November 25, 2018
|
|
5,138
|
|
|
$
|
55.48
|
|
|
—
|
|
|
1,484,884
|
|
November 26, 2018 - December 31, 2018
|
|
3,879
|
|
|
$
|
51.04
|
|
|
—
|
|
|
1,484,884
|
|
Total
|
|
276,550
|
|
|
$
|
55.99
|
|
|
267,533
|
|
|
|
(1)
|
From time to time, our Board of Directors has authorized programs under which we may repurchase shares of our common stock, depending on market conditions, in the open market or through privately negotiated transactions. During the three months ended December 31, 2018, we repurchased and retired, reported based on trade date, approximately 0.3 million shares of common stock at a cost of $15.0 million under the Company's common stock repurchase program authorized by the Board of Directors.
|
(2)
|
During the three months ended December 31, 2018, we repurchased and retired, as reported on trade date, approximately 9,000 shares of common stock at a cost of $0.5 million to facilitate tax withholding for RSUs.
|
Item 6.
|
Selected Financial Data
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Net revenue
|
|
$
|
1,058,816
|
|
|
$
|
1,039,169
|
|
|
$
|
1,143,445
|
|
|
$
|
1,211,813
|
|
|
$
|
1,372,388
|
|
Cost of revenue
(2)
|
|
717,118
|
|
|
731,453
|
|
|
769,543
|
|
|
860,437
|
|
|
974,870
|
|
|||||
Gross profit
|
|
341,698
|
|
|
307,716
|
|
|
373,902
|
|
|
351,376
|
|
|
397,518
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
(2)
|
|
82,416
|
|
|
71,893
|
|
|
70,904
|
|
|
77,356
|
|
|
85,420
|
|
|||||
Sales and marketing
(2)
|
|
152,569
|
|
|
138,679
|
|
|
139,591
|
|
|
142,013
|
|
|
155,278
|
|
|||||
General and administrative
(2)
|
|
64,857
|
|
|
54,346
|
|
|
53,996
|
|
|
45,237
|
|
|
46,552
|
|
|||||
Separation expense
|
|
929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring and other charges
|
|
2,198
|
|
|
97
|
|
|
3,841
|
|
|
6,359
|
|
|
2,209
|
|
|||||
Litigation reserves, net
|
|
15
|
|
|
148
|
|
|
73
|
|
|
(2,682
|
)
|
|
(1,011
|
)
|
|||||
Goodwill impairment charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,196
|
|
|||||
Total operating expenses
|
|
302,984
|
|
|
265,163
|
|
|
268,405
|
|
|
268,283
|
|
|
362,644
|
|
|||||
Income from operations
|
|
38,714
|
|
|
42,553
|
|
|
105,497
|
|
|
83,093
|
|
|
34,874
|
|
|||||
Interest income
|
|
3,980
|
|
|
2,114
|
|
|
1,164
|
|
|
295
|
|
|
253
|
|
|||||
Other income (expense), net
|
|
510
|
|
|
1,557
|
|
|
(166
|
)
|
|
(47
|
)
|
|
2,455
|
|
|||||
Income before income taxes
|
|
43,204
|
|
|
46,224
|
|
|
106,495
|
|
|
83,341
|
|
|
37,582
|
|
|||||
Provision for income taxes
|
|
25,878
|
|
|
57,357
|
|
|
36,183
|
|
|
35,946
|
|
|
26,463
|
|
|||||
Net income (loss) from continuing operations
|
|
17,326
|
|
|
(11,133
|
)
|
|
70,312
|
|
|
47,395
|
|
|
11,119
|
|
|||||
Net income (loss) from discontinued operations, net of tax
|
|
(35,655
|
)
|
|
30,569
|
|
|
5,539
|
|
|
1,189
|
|
|
(2,331
|
)
|
|||||
Net income (loss)
|
|
(18,329
|
)
|
|
19,436
|
|
|
75,851
|
|
|
48,584
|
|
|
8,788
|
|
|||||
Net loss attributable to non-controlling interest in discontinued operations
|
|
(9,167
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(9,162
|
)
|
|
$
|
19,436
|
|
|
$
|
75,851
|
|
|
$
|
48,584
|
|
|
$
|
8,788
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per share - basic:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
|
$
|
0.55
|
|
|
$
|
(0.35
|
)
|
|
$
|
2.15
|
|
|
$
|
1.43
|
|
|
$
|
0.31
|
|
Income (loss) from discontinued operations attributable to NETGEAR, Inc.
|
|
(0.84
|
)
|
|
0.96
|
|
|
0.17
|
|
|
0.04
|
|
|
(0.06
|
)
|
|||||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(0.29
|
)
|
|
$
|
0.61
|
|
|
$
|
2.32
|
|
|
$
|
1.47
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per share - diluted:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
|
$
|
0.52
|
|
|
$
|
(0.35
|
)
|
|
$
|
2.08
|
|
|
$
|
1.40
|
|
|
$
|
0.31
|
|
Income (loss) from discontinued operations attributable to NETGEAR, Inc.
|
|
(0.80
|
)
|
|
0.96
|
|
|
0.17
|
|
|
0.04
|
|
|
(0.07
|
)
|
|||||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(0.28
|
)
|
|
$
|
0.61
|
|
|
$
|
2.25
|
|
|
$
|
1.44
|
|
|
$
|
0.24
|
|
(1)
|
Information regarding calculation of per share data is described in Note 7,
Net Income Per Share
, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
|
(2)
|
Stock-based compensation expense was allocated as follows:
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Cost of revenue
|
|
$
|
2,435
|
|
|
$
|
1,406
|
|
|
$
|
1,473
|
|
|
$
|
1,566
|
|
|
$
|
2,037
|
|
Research and development
|
|
$
|
4,283
|
|
|
$
|
2,968
|
|
|
$
|
2,726
|
|
|
$
|
2,205
|
|
|
$
|
4,019
|
|
Sales and marketing
|
|
$
|
8,267
|
|
|
$
|
5,481
|
|
|
$
|
4,934
|
|
|
$
|
4,876
|
|
|
$
|
5,638
|
|
General and administrative
|
|
$
|
11,476
|
|
|
$
|
9,114
|
|
|
$
|
8,008
|
|
|
$
|
6,752
|
|
|
$
|
6,867
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Cash, cash equivalents and short-term investments
|
|
$
|
274,364
|
|
|
$
|
329,653
|
|
|
$
|
365,728
|
|
|
$
|
278,230
|
|
|
$
|
257,088
|
|
Working capital - continuing operations
|
|
$
|
473,907
|
|
|
$
|
478,766
|
|
|
$
|
551,228
|
|
|
$
|
475,365
|
|
|
$
|
517,967
|
|
Working capital - discontinued operations
|
|
—
|
|
|
112,462
|
|
|
54,904
|
|
|
30,006
|
|
|
882
|
|
|||||
Working capital
|
|
$
|
473,907
|
|
|
$
|
591,228
|
|
|
$
|
606,132
|
|
|
$
|
505,371
|
|
|
$
|
518,849
|
|
Total assets - continuing operations
|
|
$
|
1,043,376
|
|
|
$
|
924,313
|
|
|
$
|
1,009,946
|
|
|
$
|
957,743
|
|
|
$
|
1,014,162
|
|
Total assets - discontinued operations
|
|
—
|
|
|
284,251
|
|
|
174,510
|
|
|
92,826
|
|
|
34,525
|
|
|||||
Total assets
|
|
$
|
1,043,376
|
|
|
$
|
1,208,564
|
|
|
$
|
1,184,456
|
|
|
$
|
1,050,569
|
|
|
$
|
1,048,687
|
|
Total current liabilities - continuing operations
|
|
$
|
383,992
|
|
|
$
|
293,773
|
|
|
$
|
278,640
|
|
|
$
|
283,328
|
|
|
$
|
298,848
|
|
Total current liabilities - discontinued operations
|
|
—
|
|
|
130,663
|
|
|
78,013
|
|
|
32,444
|
|
|
5,268
|
|
|||||
Total current liabilities
|
|
$
|
383,992
|
|
|
$
|
424,436
|
|
|
$
|
356,653
|
|
|
$
|
315,772
|
|
|
$
|
304,116
|
|
Total non-current liabilities - continuing operations
|
|
$
|
31,832
|
|
|
$
|
40,310
|
|
|
$
|
23,986
|
|
|
$
|
23,032
|
|
|
$
|
22,965
|
|
Total non-current liabilities - discontinued operations
|
|
—
|
|
|
13,333
|
|
|
6,998
|
|
|
3,055
|
|
|
41
|
|
|||||
Total non-current liabilities
|
|
$
|
31,832
|
|
|
$
|
53,643
|
|
|
$
|
30,984
|
|
|
$
|
26,087
|
|
|
$
|
23,006
|
|
Total stockholders' equity
|
|
$
|
627,552
|
|
|
$
|
730,485
|
|
|
$
|
796,819
|
|
|
$
|
708,710
|
|
|
$
|
721,565
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(In thousands, except percentage data)
|
|||||||||||||||||||
Net revenue
|
$
|
1,058,816
|
|
|
100.0
|
%
|
|
$
|
1,039,169
|
|
|
100.0
|
%
|
|
$
|
1,143,445
|
|
|
100.0
|
%
|
Cost of revenue
|
717,118
|
|
|
67.7
|
%
|
|
731,453
|
|
|
70.4
|
%
|
|
769,543
|
|
|
67.3
|
%
|
|||
Gross profit
|
341,698
|
|
|
32.3
|
%
|
|
307,716
|
|
|
29.6
|
%
|
|
373,902
|
|
|
32.7
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
82,416
|
|
|
7.8
|
%
|
|
71,893
|
|
|
6.9
|
%
|
|
70,904
|
|
|
6.2
|
%
|
|||
Sales and marketing
|
152,569
|
|
|
14.4
|
%
|
|
138,679
|
|
|
13.4
|
%
|
|
139,591
|
|
|
12.3
|
%
|
|||
General and administrative
|
64,857
|
|
|
6.1
|
%
|
|
54,346
|
|
|
5.2
|
%
|
|
53,996
|
|
|
4.7
|
%
|
|||
Separation expense
|
929
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Restructuring and other charges
|
2,198
|
|
|
0.2
|
%
|
|
97
|
|
|
0.0
|
%
|
|
3,841
|
|
|
0.3
|
%
|
|||
Litigation reserves, net
|
15
|
|
|
0.0
|
%
|
|
148
|
|
|
0.0
|
%
|
|
73
|
|
|
0.0
|
%
|
|||
Total operating expenses
|
302,984
|
|
|
28.6
|
%
|
|
265,163
|
|
|
25.5
|
%
|
|
268,405
|
|
|
23.5
|
%
|
|||
Income from operations
|
38,714
|
|
|
3.7
|
%
|
|
42,553
|
|
|
4.1
|
%
|
|
105,497
|
|
|
9.2
|
%
|
|||
Interest income
|
3,980
|
|
|
0.4
|
%
|
|
2,114
|
|
|
0.2
|
%
|
|
1,164
|
|
|
0.1
|
%
|
|||
Other income (expense), net
|
510
|
|
|
0.0
|
%
|
|
1,557
|
|
|
0.1
|
%
|
|
(166
|
)
|
|
0.0
|
%
|
|||
Income before income taxes
|
43,204
|
|
|
4.1
|
%
|
|
46,224
|
|
|
4.4
|
%
|
|
106,495
|
|
|
9.3
|
%
|
|||
Provision for income taxes
|
25,878
|
|
|
2.5
|
%
|
|
57,357
|
|
|
5.5
|
%
|
|
36,183
|
|
|
3.2
|
%
|
|||
Net income (loss) from continuing operations
|
17,326
|
|
|
1.6
|
%
|
|
(11,133
|
)
|
|
(1.1
|
)%
|
|
70,312
|
|
|
6.1
|
%
|
|||
Net income (loss) from discontinued operations, net of tax
|
$
|
(35,655
|
)
|
|
(3.3
|
)%
|
|
$
|
30,569
|
|
|
3.0
|
%
|
|
$
|
5,539
|
|
|
0.5
|
%
|
Net income (loss)
|
(18,329
|
)
|
|
(1.7
|
)%
|
|
19,436
|
|
|
1.9
|
%
|
|
75,851
|
|
|
6.6
|
%
|
|||
Net loss attributable to non-controlling interest in discontinued operations
|
$
|
(9,167
|
)
|
|
(0.8
|
)%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(9,162
|
)
|
|
(0.9
|
)%
|
|
$
|
19,436
|
|
|
1.9
|
%
|
|
$
|
75,851
|
|
|
6.6
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
Americas
|
$
|
700,693
|
|
|
5.4
|
%
|
|
$
|
665,089
|
|
|
(9.5
|
)%
|
|
$
|
734,980
|
|
Percentage of net revenue
|
66.2
|
%
|
|
|
|
64.0
|
%
|
|
|
|
64.3
|
%
|
|||||
EMEA
|
$
|
207,599
|
|
|
5.3
|
%
|
|
$
|
197,074
|
|
|
(9.4
|
)%
|
|
$
|
217,554
|
|
Percentage of net revenue
|
19.6
|
%
|
|
|
|
19.0
|
%
|
|
|
|
19.0
|
%
|
|||||
APAC
|
$
|
150,524
|
|
|
(15.0
|
)%
|
|
$
|
177,006
|
|
|
(7.3
|
)%
|
|
$
|
190,911
|
|
Percentage of net revenue
|
14.2
|
%
|
|
|
|
17.0
|
%
|
|
|
|
16.7
|
%
|
|||||
Total net revenue
|
$
|
1,058,816
|
|
|
1.9
|
%
|
|
$
|
1,039,169
|
|
|
(9.1
|
)%
|
|
$
|
1,143,445
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
Cost of revenue
|
$
|
717,118
|
|
|
(2.0
|
)%
|
|
$
|
731,453
|
|
|
(4.9
|
)%
|
|
$
|
769,543
|
|
Gross margin percentage
|
32.3
|
%
|
|
|
|
29.6
|
%
|
|
|
|
32.7
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
Research and development expense
|
$
|
82,416
|
|
|
14.6
|
%
|
|
$
|
71,893
|
|
|
1.4
|
%
|
|
$
|
70,904
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
Sales and marketing expense
|
$
|
152,569
|
|
|
10.0
|
%
|
|
$
|
138,679
|
|
|
(0.7
|
)%
|
|
$
|
139,591
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
General and administrative expense
|
$
|
64,857
|
|
|
19.3
|
%
|
|
$
|
54,346
|
|
|
0.6
|
%
|
|
$
|
53,996
|
|
|
Year Ended December 31,
|
|||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
|||||||
|
(In thousands, except percentage data)
|
|||||||||||||||
Restructuring and other charges
|
$
|
2,198
|
|
|
**
|
|
$
|
97
|
|
|
(97.5
|
)%
|
|
$
|
3,841
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
Interest income
|
$
|
3,980
|
|
|
88.3
|
%
|
|
$
|
2,114
|
|
|
81.6
|
%
|
|
$
|
1,164
|
|
Other income (expense), net
|
510
|
|
|
(67.2
|
)%
|
|
1,557
|
|
|
**
|
|
|
(166
|
)
|
|||
Total
|
$
|
4,490
|
|
|
22.3
|
%
|
|
$
|
3,671
|
|
|
**
|
|
|
$
|
998
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(In thousands, except percentage data)
|
||||||||||||||||
Provision for income taxes
|
$
|
25,878
|
|
|
(54.9
|
)%
|
|
$
|
57,357
|
|
|
58.5
|
%
|
|
$
|
36,183
|
|
Effective tax rate
|
59.9
|
%
|
|
|
|
124.1
|
%
|
|
|
|
34.0
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(in thousands, except percentage data)
|
||||||||||||||||
Net revenue
|
$
|
771,060
|
|
|
0.4
|
%
|
|
$
|
768,261
|
|
|
(9.3
|
)%
|
|
$
|
846,929
|
|
Percentage of net revenue
|
72.8
|
%
|
|
|
|
73.9
|
%
|
|
|
|
74.1
|
%
|
|||||
Contribution income
|
96,340
|
|
|
14.9
|
%
|
|
83,870
|
|
|
(39.7
|
)%
|
|
138,997
|
|
|||
Contribution margin
|
12.5
|
%
|
|
|
|
10.9
|
%
|
|
|
|
16.4
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
% Change
|
|
2017
|
|
% Change
|
|
2016
|
||||||||
|
(in thousands, except percentage data)
|
||||||||||||||||
Net revenue
|
$
|
287,756
|
|
|
6.2
|
%
|
|
$
|
270,908
|
|
|
(8.6
|
)%
|
|
$
|
296,516
|
|
Percentage of net revenue
|
27.2
|
%
|
|
|
|
26.1
|
%
|
|
|
|
25.9
|
%
|
|||||
Contribution income
|
70,142
|
|
|
9.8
|
%
|
|
63,865
|
|
|
(12.0
|
)%
|
|
72,539
|
|
|||
Contribution margin
|
24.4
|
%
|
|
|
|
23.6
|
%
|
|
|
|
24.5
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Continuing operating activities
|
$
|
(15,059
|
)
|
|
$
|
100,347
|
|
|
$
|
134,817
|
|
Continuing investing activities
|
28,174
|
|
|
(15,547
|
)
|
|
(39,211
|
)
|
|||
Continuing financing activities
|
(25,670
|
)
|
|
(105,304
|
)
|
|
(10,899
|
)
|
|||
Net increase (decrease) in cash and cash equivalents from discontinued operations
|
10,732
|
|
|
(17,094
|
)
|
|
(26,184
|
)
|
|||
Net cash increase (decrease)
|
$
|
(1,823
|
)
|
|
$
|
(37,598
|
)
|
|
$
|
58,523
|
|
|
Payments due by period
|
||||||||||||||||||
|
|
|
Less Than
|
|
1-3
|
|
3-5
|
|
More Than
|
||||||||||
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
5 Years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Purchase obligations
|
$
|
156,170
|
|
|
$
|
156,170
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
|
$
|
48,730
|
|
|
$
|
11,900
|
|
|
$
|
17,771
|
|
|
$
|
11,334
|
|
|
$
|
7,725
|
|
Other non-trade purchase commitments
|
17,366
|
|
|
$
|
1,575
|
|
|
$
|
3,390
|
|
|
$
|
3,738
|
|
|
$
|
8,663
|
|
|
Tax Act payables
|
6,549
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,549
|
|
|
|
$
|
228,815
|
|
|
$
|
169,645
|
|
|
$
|
21,161
|
|
|
$
|
15,072
|
|
|
$
|
22,937
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
As of
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
201,047
|
|
|
$
|
202,727
|
|
Short-term investments
|
73,317
|
|
|
126,926
|
|
||
Accounts receivable, net
|
303,667
|
|
|
255,118
|
|
||
Inventories
|
243,871
|
|
|
162,942
|
|
||
Prepaid expenses and other current assets
|
35,997
|
|
|
24,826
|
|
||
Current assets of discontinued operations
|
—
|
|
|
243,125
|
|
||
Total current assets
|
857,899
|
|
|
1,015,664
|
|
||
Property and equipment, net
|
20,177
|
|
|
17,349
|
|
||
Intangibles, net
|
17,146
|
|
|
20,640
|
|
||
Goodwill
|
80,721
|
|
|
64,314
|
|
||
Other non-current assets
|
67,433
|
|
|
49,471
|
|
||
Non-current assets of discontinued operations
|
—
|
|
|
41,126
|
|
||
Total assets
|
$
|
1,043,376
|
|
|
$
|
1,208,564
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
139,748
|
|
|
$
|
91,205
|
|
Accrued employee compensation
|
31,666
|
|
|
24,520
|
|
||
Other accrued liabilities
|
199,472
|
|
|
149,821
|
|
||
Deferred revenue
|
11,086
|
|
|
21,212
|
|
||
Income taxes payable
|
2,020
|
|
|
7,015
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
130,663
|
|
||
Total current liabilities
|
383,992
|
|
|
424,436
|
|
||
Non-current income taxes payable
|
19,600
|
|
|
31,544
|
|
||
Other non-current liabilities
|
12,232
|
|
|
8,766
|
|
||
Non-current liabilities of discontinued operations
|
—
|
|
|
13,333
|
|
||
Total liabilities
|
415,824
|
|
|
478,079
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: $0.001 par value; 5,000,000 shares authorized; none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock: $0.001 par value; 200,000,000 shares authorized; shares issued and outstanding: 31,562,358 and 31,319,578 as of December 31, 2018 and 2017, respectively
|
32
|
|
|
31
|
|
||
Additional paid-in capital
|
793,585
|
|
|
603,137
|
|
||
Accumulated other comprehensive loss
|
(15
|
)
|
|
(851
|
)
|
||
Retained earnings (losses)
|
(166,050
|
)
|
|
128,168
|
|
||
Total stockholders’ equity
|
627,552
|
|
|
730,485
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,043,376
|
|
|
$
|
1,208,564
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenue
|
|
$
|
1,058,816
|
|
|
$
|
1,039,169
|
|
|
$
|
1,143,445
|
|
Cost of revenue
|
|
717,118
|
|
|
731,453
|
|
|
769,543
|
|
|||
Gross profit
|
|
341,698
|
|
|
307,716
|
|
|
373,902
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Research and development
|
|
82,416
|
|
|
71,893
|
|
|
70,904
|
|
|||
Sales and marketing
|
|
152,569
|
|
|
138,679
|
|
|
139,591
|
|
|||
General and administrative
|
|
64,857
|
|
|
54,346
|
|
|
53,996
|
|
|||
Separation Expense
|
|
929
|
|
|
—
|
|
|
—
|
|
|||
Restructuring and other charges
|
|
2,198
|
|
|
97
|
|
|
3,841
|
|
|||
Litigation reserves, net
|
|
15
|
|
|
148
|
|
|
73
|
|
|||
Total operating expenses
|
|
302,984
|
|
|
265,163
|
|
|
268,405
|
|
|||
Income from operations
|
|
38,714
|
|
|
42,553
|
|
|
105,497
|
|
|||
Interest income
|
|
3,980
|
|
|
2,114
|
|
|
1,164
|
|
|||
Other income (expense), net
|
|
510
|
|
|
1,557
|
|
|
(166
|
)
|
|||
Income from continuing operations before income taxes
|
|
43,204
|
|
|
46,224
|
|
|
106,495
|
|
|||
Provision for income taxes
|
|
25,878
|
|
|
57,357
|
|
|
36,183
|
|
|||
Net income (loss) from continuing operations
|
|
17,326
|
|
|
(11,133
|
)
|
|
70,312
|
|
|||
Net income (loss) from discontinued operations, net of tax
|
|
(35,655
|
)
|
|
30,569
|
|
|
5,539
|
|
|||
Net income (loss)
|
|
$
|
(18,329
|
)
|
|
$
|
19,436
|
|
|
$
|
75,851
|
|
Net loss attributable to non-controlling interest in discontinued operations
|
|
(9,167
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(9,162
|
)
|
|
$
|
19,436
|
|
|
$
|
75,851
|
|
Net income (loss) per share - basic:
|
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
|
$
|
0.55
|
|
|
$
|
(0.35
|
)
|
|
$
|
2.15
|
|
Income (loss) from discontinued operations attributable to NETGEAR, Inc.
|
|
(0.84
|
)
|
|
0.96
|
|
|
0.17
|
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(0.29
|
)
|
|
$
|
0.61
|
|
|
$
|
2.32
|
|
Net income (loss) per share - diluted:
|
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
|
$
|
0.52
|
|
|
$
|
(0.35
|
)
|
|
$
|
2.08
|
|
Income (loss) from discontinued operations attributable to NETGEAR, Inc.
|
|
(0.80
|
)
|
|
0.96
|
|
|
0.17
|
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(0.28
|
)
|
|
$
|
0.61
|
|
|
$
|
2.25
|
|
Weighted average shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
31,626
|
|
|
32,097
|
|
|
32,758
|
|
|||
Diluted
|
|
33,137
|
|
|
32,097
|
|
|
33,728
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
|
$
|
(18,329
|
)
|
|
$
|
19,436
|
|
|
$
|
75,851
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
||||||
Unrealized gains (losses) on derivative instruments
|
|
834
|
|
|
(3,068
|
)
|
|
2,187
|
|
|||
Unrealized gains (losses) on available-for-sale securities
|
|
128
|
|
|
(115
|
)
|
|
33
|
|
|||
Other comprehensive income (loss), before tax
|
|
962
|
|
|
(3,183
|
)
|
|
2,220
|
|
|||
Tax benefit (provision) related to derivative instruments
|
|
(76
|
)
|
|
352
|
|
|
(273
|
)
|
|||
Tax benefit (provision) related to available-for-sale securities
|
|
(50
|
)
|
|
42
|
|
|
(12
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
836
|
|
|
(2,789
|
)
|
|
1,935
|
|
|||
Comprehensive income (loss)
|
|
(17,493
|
)
|
|
16,647
|
|
|
77,786
|
|
|||
Comprehensive loss attributable to non-controlling interest, net of tax
|
|
(9,165
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(8,328
|
)
|
|
$
|
16,647
|
|
|
$
|
77,786
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings (Losses)
|
|
Non-controlling Interest
|
|
Total
|
|||||||||||||
Balance as of December 31, 2015
|
32,601
|
|
|
$
|
33
|
|
|
$
|
513,047
|
|
|
$
|
3
|
|
|
$
|
195,627
|
|
|
$
|
—
|
|
|
$
|
708,710
|
|
Change in unrealized gains and losses on available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Change in unrealized gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1,914
|
|
|
—
|
|
|
—
|
|
|
1,914
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,851
|
|
|
—
|
|
|
75,851
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
19,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,180
|
|
||||||
Repurchases of common stock
|
(894
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(38,251
|
)
|
|
—
|
|
|
(38,252
|
)
|
||||||
Restricted stock unit withholdings
|
(105
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,686
|
)
|
|
—
|
|
|
(4,686
|
)
|
||||||
Issuance of common stock under stock-based compensation plans
|
1,356
|
|
|
1
|
|
|
31,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,627
|
|
||||||
Income tax impact associated with stock option exercises
|
—
|
|
|
—
|
|
|
2,454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,454
|
|
||||||
Balance as of December 31, 2016
|
32,958
|
|
|
$
|
33
|
|
|
$
|
566,307
|
|
|
$
|
1,938
|
|
|
$
|
228,541
|
|
|
$
|
—
|
|
|
$
|
796,819
|
|
Change in unrealized gains and losses on available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||||
Change in unrealized gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,716
|
)
|
|
—
|
|
|
—
|
|
|
(2,716
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,436
|
|
|
—
|
|
|
19,436
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
|
|
22,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,147
|
|
|||||||
Repurchases of common stock
|
(2,378
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(113,159
|
)
|
|
—
|
|
|
(113,161
|
)
|
||||||
Restricted stock unit withholdings
|
(135
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,415
|
)
|
|
—
|
|
|
(6,415
|
)
|
||||||
Issuance of common stock under stock-based compensation plans
|
875
|
|
|
—
|
|
|
14,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,356
|
|
||||||
Cumulative-effect adjustment from adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
327
|
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
92
|
|
||||||
Balance as of December 31, 2017
|
31,320
|
|
|
$
|
31
|
|
|
$
|
603,137
|
|
|
$
|
(851
|
)
|
|
$
|
128,168
|
|
|
$
|
—
|
|
|
$
|
730,485
|
|
Adoption of ASU 2014-09 (ASC 606 Rev Rec), ASU 2016-16, and ASU 2018-02, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,593
|
|
|
—
|
|
|
8,593
|
|
||||||
Change in unrealized gains and losses on available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||||
Change in unrealized gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
758
|
|
|
—
|
|
|
—
|
|
|
758
|
|
||||||
Net loss attributable to NETGEAR, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,162
|
)
|
|
—
|
|
|
(9,162
|
)
|
||||||
Net loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,167
|
)
|
|
(9,167
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
31,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,966
|
|
||||||
Stock-based compensation expense for Arlo's shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
942
|
|
|
942
|
|
||||||
Sale of Arlo's common stock
|
—
|
|
|
—
|
|
|
146,088
|
|
|
—
|
|
|
—
|
|
|
24,158
|
|
|
170,246
|
|
||||||
Repurchases of common stock
|
(473
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,000
|
)
|
|
—
|
|
|
(30,000
|
)
|
||||||
Restricted stock unit withholdings
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,065
|
)
|
|
—
|
|
|
(8,065
|
)
|
||||||
Issuance of common stock under stock-based compensation plans
|
853
|
|
|
1
|
|
|
12,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,395
|
|
||||||
Distribution of Arlo
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255,584
|
)
|
|
(15,933
|
)
|
|
(271,517
|
)
|
||||||
December 31, 2018
|
31,562
|
|
|
$
|
32
|
|
|
$
|
793,585
|
|
|
$
|
(15
|
)
|
|
$
|
(166,050
|
)
|
|
$
|
—
|
|
|
$
|
627,552
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(18,329
|
)
|
|
$
|
19,436
|
|
|
$
|
75,851
|
|
Net (income) loss from discontinued operations
|
35,655
|
|
|
(30,569
|
)
|
|
(5,539
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
18,851
|
|
|
22,529
|
|
|
29,932
|
|
|||
Purchase premium amortization/discount accretion on investments, net
|
(745
|
)
|
|
46
|
|
|
167
|
|
|||
Stock-based compensation
|
26,461
|
|
|
18,969
|
|
|
17,141
|
|
|||
Income tax impact associated with stock option exercises
|
—
|
|
|
—
|
|
|
2,160
|
|
|||
Gains /charges related to long-term investments
|
861
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
2,459
|
|
|
21,119
|
|
|
869
|
|
|||
Changes in assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(43,055
|
)
|
|
(23,121
|
)
|
|
23,132
|
|
|||
Inventories
|
(82,160
|
)
|
|
37,202
|
|
|
(12,648
|
)
|
|||
Prepaid expenses and other assets
|
(12,114
|
)
|
|
4,604
|
|
|
8,691
|
|
|||
Accounts payable
|
45,503
|
|
|
(432
|
)
|
|
9,816
|
|
|||
Accrued employee compensation
|
7,145
|
|
|
(5,278
|
)
|
|
3,701
|
|
|||
Other accrued liabilities
|
15,589
|
|
|
15,109
|
|
|
(17,766
|
)
|
|||
Deferred revenue
|
5,759
|
|
|
2,440
|
|
|
(4,560
|
)
|
|||
Income taxes payable
|
(16,939
|
)
|
|
18,293
|
|
|
3,870
|
|
|||
Net cash provided by (used in) continuing operating activities
|
(15,059
|
)
|
|
100,347
|
|
|
134,817
|
|
|||
Net cash used in discontinued operating activities
|
(88,152
|
)
|
|
(12,823
|
)
|
|
(16,636
|
)
|
|||
Net cash provided by (used in) operating activities
|
(103,211
|
)
|
|
87,524
|
|
|
118,181
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of short-term investments
|
(81,814
|
)
|
|
(136,556
|
)
|
|
(144,271
|
)
|
|||
Proceeds from maturities of short-term investments
|
137,058
|
|
|
135,549
|
|
|
115,291
|
|
|||
Purchases of property and equipment
|
(12,251
|
)
|
|
(10,140
|
)
|
|
(10,231
|
)
|
|||
Purchases of long-term investments
|
(1,091
|
)
|
|
(4,400
|
)
|
|
—
|
|
|||
Proceeds from sale of long-term investments
|
624
|
|
|
—
|
|
|
—
|
|
|||
Payments made in connection with business acquisitions, net of cash acquired
|
(14,352
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) continuing investing activities
|
28,174
|
|
|
(15,547
|
)
|
|
(39,211
|
)
|
|||
Net cash used in discontinued investing activities
|
(71,363
|
)
|
|
(4,271
|
)
|
|
(9,548
|
)
|
|||
Net cash used in investing activities
|
(43,189
|
)
|
|
(19,818
|
)
|
|
(48,759
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repurchases of common stock
|
(30,000
|
)
|
|
(113,161
|
)
|
|
(38,252
|
)
|
|||
Restricted stock unit withholdings
|
(8,065
|
)
|
|
(6,415
|
)
|
|
(4,686
|
)
|
|||
Proceeds from exercise of stock options
|
6,841
|
|
|
9,508
|
|
|
28,147
|
|
|||
Proceeds from issuance of common stock under employee stock purchase plan
|
5,554
|
|
|
4,764
|
|
|
3,892
|
|
|||
Net cash used in continuing financing activities
|
(25,670
|
)
|
|
(105,304
|
)
|
|
(10,899
|
)
|
|||
Net cash provided by discontinued financing activities
|
170,247
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
144,577
|
|
|
(105,304
|
)
|
|
(10,899
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(1,823
|
)
|
|
(37,598
|
)
|
|
58,523
|
|
|||
Cash and cash equivalents, at beginning of year
|
202,870
|
|
|
240,468
|
|
|
181,945
|
|
|||
Cash and cash equivalents, at end of year
|
$
|
201,047
|
|
|
$
|
202,870
|
|
|
$
|
240,468
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
23,220
|
|
|
$
|
32,090
|
|
|
$
|
35,149
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Additions to property and equipment included in accounts payable and other accrued liabilities
|
$
|
2,604
|
|
|
$
|
638
|
|
|
$
|
744
|
|
Estimated fair value of contingent consideration in connection with business acquisition in other accrued liabilities
|
$
|
5,953
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Computer equipment
|
2 years
|
Furniture and fixtures
|
5 years
|
Software
|
2-5 years
|
Machinery and equipment
|
2-3 years
|
Leasehold improvements
|
Shorter of the lease term or 5 years
|
|
As of
|
|
Adjustments
|
|
As of
|
||||||
|
December 31,
2017 |
|
|
January 1,
2018 |
|||||||
|
(In thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
255,118
|
|
|
$
|
5,286
|
|
|
$
|
260,404
|
|
Inventories
|
$
|
162,942
|
|
|
$
|
(1,991
|
)
|
|
$
|
160,951
|
|
Current assets of discontinued operations
|
$
|
243,125
|
|
|
$
|
450
|
|
|
$
|
243,575
|
|
Total current assets
|
$
|
1,015,664
|
|
|
$
|
3,745
|
|
|
$
|
1,019,409
|
|
Other non-current assets
|
$
|
49,471
|
|
|
$
|
2,904
|
|
|
$
|
52,375
|
|
Non-current assets of discontinued operations
|
$
|
41,126
|
|
|
$
|
1,440
|
|
|
$
|
42,566
|
|
Total assets
|
$
|
1,208,564
|
|
|
$
|
8,089
|
|
|
$
|
1,216,653
|
|
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
91,205
|
|
|
$
|
(108
|
)
|
|
$
|
91,097
|
|
Other accrued liabilities
|
$
|
149,821
|
|
|
$
|
32,110
|
|
|
$
|
181,931
|
|
Deferred revenue
|
$
|
21,212
|
|
|
$
|
(15,855
|
)
|
|
$
|
5,357
|
|
Income taxes payable
|
$
|
7,015
|
|
|
$
|
55
|
|
|
$
|
7,070
|
|
Current liabilities of discontinued operations
|
$
|
130,663
|
|
|
$
|
4,666
|
|
|
$
|
135,329
|
|
Total current liabilities
|
$
|
424,436
|
|
|
$
|
20,868
|
|
|
$
|
445,304
|
|
Other non-current liabilities
|
$
|
8,766
|
|
|
$
|
(35
|
)
|
|
$
|
8,731
|
|
Non-current liabilities of discontinued operations
|
$
|
13,333
|
|
|
$
|
(241
|
)
|
|
$
|
13,092
|
|
Total liabilities
|
$
|
478,079
|
|
|
$
|
20,592
|
|
|
$
|
498,671
|
|
Stockholders’ equity:
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
128,168
|
|
|
$
|
(12,503
|
)
|
|
$
|
115,665
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
As reported
|
|
Adjustments
|
|
Balance without adoption of ASC 606
|
||||||
|
(In thousands)
|
||||||||||
Net revenue
|
$
|
1,058,816
|
|
|
$
|
2,247
|
|
|
$
|
1,061,063
|
|
Cost of revenue
|
$
|
717,118
|
|
|
$
|
(252
|
)
|
|
$
|
716,866
|
|
Gross profit
|
$
|
341,698
|
|
|
$
|
2,499
|
|
|
$
|
344,197
|
|
Provision for income taxes
|
$
|
25,878
|
|
|
$
|
(2,536
|
)
|
|
$
|
23,342
|
|
Net income from continuing operations
|
$
|
17,326
|
|
|
$
|
5,035
|
|
|
$
|
22,361
|
|
Net loss from discontinued operations, net of tax
|
$
|
(35,655
|
)
|
|
$
|
5,721
|
|
|
$
|
(29,934
|
)
|
Net loss
|
$
|
(18,329
|
)
|
|
$
|
10,756
|
|
|
$
|
(7,573
|
)
|
Net loss attributable to non-controlling interest in discontinued operations
|
(9,167
|
)
|
|
598
|
|
|
(8,569
|
)
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(9,162
|
)
|
|
$
|
10,158
|
|
|
$
|
996
|
|
|
|
1 year
|
|
2 years
|
|
Greater than 2 years
|
|
Total
|
||||||||
|
(In thousands)
|
|||||||||||||||
Performance obligations
|
|
$
|
53,945
|
|
|
$
|
923
|
|
|
$
|
904
|
|
|
$
|
55,772
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
(*)
|
|
2016
(*)
|
||||||||||||||||||||||||||||||
|
Connected Home
|
|
SMB
|
|
Total
|
|
Connected Home
|
|
SMB
|
|
Total
|
|
Connected Home
|
|
SMB
|
|
Total
|
||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Geographic regions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Americas
|
$
|
576,476
|
|
|
$
|
124,217
|
|
|
$
|
700,693
|
|
|
$
|
547,314
|
|
|
$
|
117,775
|
|
|
$
|
665,089
|
|
|
$
|
595,606
|
|
|
$
|
139,374
|
|
|
$
|
734,980
|
|
EMEA
|
97,979
|
|
|
109,620
|
|
|
207,599
|
|
|
93,438
|
|
|
103,636
|
|
|
197,074
|
|
|
110,941
|
|
|
106,613
|
|
|
217,554
|
|
|||||||||
APAC
|
96,605
|
|
|
53,919
|
|
|
150,524
|
|
|
127,509
|
|
|
49,497
|
|
|
177,006
|
|
|
140,382
|
|
|
50,529
|
|
|
190,911
|
|
|||||||||
Total net revenue
|
$
|
771,060
|
|
|
$
|
287,756
|
|
|
$
|
1,058,816
|
|
|
$
|
768,261
|
|
|
$
|
270,908
|
|
|
$
|
1,039,169
|
|
|
$
|
846,929
|
|
|
$
|
296,516
|
|
|
$
|
1,143,445
|
|
Sales channels:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service provider
|
$
|
156,671
|
|
|
$
|
3,624
|
|
|
$
|
160,295
|
|
|
$
|
190,186
|
|
|
$
|
3,268
|
|
|
$
|
193,454
|
|
|
$
|
249,980
|
|
|
$
|
4,175
|
|
|
$
|
254,155
|
|
Non-service provider
|
614,389
|
|
|
284,132
|
|
|
898,521
|
|
|
578,075
|
|
|
267,640
|
|
|
845,715
|
|
|
596,949
|
|
|
292,341
|
|
|
889,290
|
|
|||||||||
Total net revenue
|
$
|
771,060
|
|
|
$
|
287,756
|
|
|
$
|
1,058,816
|
|
|
$
|
768,261
|
|
|
$
|
270,908
|
|
|
$
|
1,039,169
|
|
|
$
|
846,929
|
|
|
$
|
296,516
|
|
|
$
|
1,143,445
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Net revenues
|
$
|
464,649
|
|
|
$
|
367,751
|
|
|
$
|
184,853
|
|
Cost of net revenues
|
372,843
|
|
|
279,425
|
|
|
146,570
|
|
|||
Gross profit
|
91,806
|
|
|
88,326
|
|
|
38,283
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
48,696
|
|
|
22,710
|
|
|
18,463
|
|
|||
Sales and marketing
|
39,713
|
|
|
19,490
|
|
|
10,764
|
|
|||
General and administrative
|
17,762
|
|
|
691
|
|
|
487
|
|
|||
Separation expense
|
31,583
|
|
|
1,384
|
|
|
—
|
|
|||
Restructuring and other charges
|
—
|
|
|
—
|
|
|
40
|
|
|||
Litigation reserves, net
|
—
|
|
|
28
|
|
|
—
|
|
|||
Total operating expenses
|
137,754
|
|
|
44,303
|
|
|
29,754
|
|
|||
Income (loss) from operations of discontinued operations
|
(45,948
|
)
|
|
44,023
|
|
|
8,529
|
|
|||
Interest income
|
1,239
|
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
(41
|
)
|
|
467
|
|
|
45
|
|
|||
Income (loss) from discontinued operations before income taxes
|
(44,750
|
)
|
|
44,490
|
|
|
8,574
|
|
|||
Provision (benefit) for income taxes
|
(9,095
|
)
|
|
13,921
|
|
|
3,035
|
|
|||
Income (loss) from discontinued operations, net of tax
|
$
|
(35,655
|
)
|
|
$
|
30,569
|
|
|
$
|
5,539
|
|
|
As of December 31,
|
||
|
2017
|
||
|
(In thousands)
|
||
Carrying amounts of assets included as part of discontinued operations
|
|
||
Cash and cash equivalents
|
$
|
143
|
|
Accounts receivable, net
|
157,680
|
|
|
Inventories
|
82,952
|
|
|
Prepaid expenses and other current assets
|
2,350
|
|
|
Current assets classified as discontinued operations
|
243,125
|
|
|
Property and equipment, net
|
3,311
|
|
|
Intangibles, net
|
4,348
|
|
|
Goodwill
|
21,149
|
|
|
Other non-current assets
|
12,318
|
|
|
Non-current assets classified as discontinued operations
|
41,126
|
|
|
Total assets classified as discontinued operations on the consolidated balance sheet
|
$
|
284,251
|
|
|
|
||
Carrying amounts of liabilities included as part of discontinued operations:
|
|
||
Accounts payable
|
$
|
20,711
|
|
Accrued employee compensation
|
3,231
|
|
|
Other accrued liabilities
|
72,649
|
|
|
Deferred revenue
|
34,072
|
|
|
Current liabilities classified as discontinued operations
|
130,663
|
|
|
Other non-current liabilities
|
13,333
|
|
|
Non-current liabilities classified as discontinued operations
|
13,333
|
|
|
Total liabilities classified as discontinued operations on the consolidated balance sheet
|
$
|
143,996
|
|
Cash and cash equivalents
|
$
|
20
|
|
Accounts receivable
|
209
|
|
|
Inventories
|
760
|
|
|
Prepaid expenses and other current assets
|
500
|
|
|
Property and equipment
|
16
|
|
|
Intangibles
|
4,800
|
|
|
Non-current deferred income taxes
|
815
|
|
|
Goodwill
|
16,407
|
|
|
Accounts payable
|
(1,317
|
)
|
|
Other accrued liabilities
|
(35
|
)
|
|
Total purchase price
|
$
|
22,175
|
|
|
As of
|
||||||||||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Cost
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Cost
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
U.S. treasuries
|
$
|
70,330
|
|
|
$
|
1
|
|
|
$
|
(17
|
)
|
|
$
|
70,314
|
|
|
$
|
124,816
|
|
|
$
|
—
|
|
|
$
|
(146
|
)
|
|
$
|
124,670
|
|
Certificates of deposits
|
149
|
|
|
—
|
|
|
—
|
|
|
149
|
|
|
162
|
|
|
—
|
|
|
—
|
|
|
162
|
|
||||||||
Total
|
$
|
70,479
|
|
|
$
|
1
|
|
|
$
|
(17
|
)
|
|
$
|
70,463
|
|
|
$
|
124,978
|
|
|
$
|
—
|
|
|
$
|
(146
|
)
|
|
$
|
124,832
|
|
|
As of
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Gross accounts receivable
|
$
|
304,921
|
|
|
$
|
273,734
|
|
Allowance for doubtful accounts
|
(1,254
|
)
|
|
(1,050
|
)
|
||
Allowance for sales returns
|
—
|
|
*
|
(14,321
|
)
|
||
Allowance for price protection
|
—
|
|
*
|
(3,245
|
)
|
||
Total allowances
|
(1,254
|
)
|
|
(18,616
|
)
|
||
Total accounts receivable, net
|
$
|
303,667
|
|
|
$
|
255,118
|
|
|
As of
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
3,427
|
|
|
$
|
4,465
|
|
Finished goods
|
240,444
|
|
|
158,477
|
|
||
Total inventories
|
$
|
243,871
|
|
|
$
|
162,942
|
|
|
As of
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Computer equipment
|
$
|
9,205
|
|
|
$
|
10,065
|
|
Furniture, fixtures and leasehold improvements
|
18,286
|
|
|
21,464
|
|
||
Software
|
28,065
|
|
|
28,817
|
|
||
Machinery and equipment
|
60,552
|
|
|
56,423
|
|
||
Total property and equipment, gross
|
116,108
|
|
|
116,769
|
|
||
Accumulated depreciation and amortization
|
(95,931
|
)
|
|
(99,420
|
)
|
||
Total property and equipment, net
|
$
|
20,177
|
|
|
$
|
17,349
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Technology
|
$
|
59,799
|
|
|
$
|
(56,978
|
)
|
|
$
|
2,821
|
|
|
$
|
56,799
|
|
|
$
|
(56,383
|
)
|
|
$
|
416
|
|
Customer contracts and relationships
|
56,800
|
|
|
(44,280
|
)
|
|
12,520
|
|
|
56,200
|
|
|
(37,130
|
)
|
|
19,070
|
|
||||||
Other
|
10,345
|
|
|
(8,540
|
)
|
|
1,805
|
|
|
9,145
|
|
|
(7,991
|
)
|
|
1,154
|
|
||||||
Total intangibles, net
|
126,944
|
|
|
(109,798
|
)
|
|
17,146
|
|
|
$
|
122,144
|
|
|
$
|
(101,504
|
)
|
|
$
|
20,640
|
|
2019
|
$
|
7,042
|
|
2020
|
6,205
|
|
|
2021
|
2,044
|
|
|
2022
|
527
|
|
|
2023
|
514
|
|
|
Thereafter
|
814
|
|
|
Total estimated amortization expense
|
$
|
17,146
|
|
|
Connected Home
|
|
SMB
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
As of January 1, 2017
|
$
|
28,035
|
|
|
$
|
36,279
|
|
|
$
|
64,314
|
|
As of December 31, 2017
|
28,035
|
|
|
36,279
|
|
|
64,314
|
|
|||
Goodwill from acquisition of Meural
|
16,407
|
|
|
—
|
|
|
16,407
|
|
|||
As of December 31, 2018
|
$
|
44,442
|
|
|
$
|
36,279
|
|
|
$
|
80,721
|
|
|
As of
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Non-current deferred income taxes
|
$
|
57,557
|
|
|
$
|
38,293
|
|
Other
|
9,876
|
|
|
11,178
|
|
||
Total other non-current assets
|
$
|
67,433
|
|
|
$
|
49,471
|
|
|
As of
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Sales and marketing
|
$
|
91,548
|
|
|
$
|
64,540
|
|
Warranty obligation
|
14,412
|
|
*
|
44,068
|
|
||
Sales returns
|
46,318
|
|
*
|
—
|
|
||
Freight and duty
|
10,586
|
|
|
6,705
|
|
||
Other
|
36,608
|
|
|
34,508
|
|
||
Total other accrued liabilities
|
$
|
199,472
|
|
|
$
|
149,821
|
|
Derivative Assets
|
|
Balance Sheets
Location
|
|
December 31,
|
|
Balance Sheets
Location
|
|
December 31,
|
||||||||||||
2018
|
|
2017
|
2018
|
|
2017
|
|||||||||||||||
|
|
(In thousands)
|
|
|
|
(In thousands)
|
||||||||||||||
Derivative contracts not designated as hedging instruments
|
|
Prepaid expenses and other current assets
|
|
$
|
784
|
|
|
$
|
1,314
|
|
|
Other accrued liabilities
|
|
$
|
331
|
|
|
$
|
7,128
|
|
Derivative contracts designated as hedging instruments
|
|
Prepaid expenses and other current assets
|
|
2
|
|
|
485
|
|
|
Other accrued liabilities
|
|
37
|
|
|
1,064
|
|
||||
Total
|
|
|
|
$
|
786
|
|
|
$
|
1,799
|
|
|
|
|
$
|
368
|
|
|
$
|
8,192
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
Gross Amounts Not Offset on the Consolidated Balance Sheets
|
|
|
||||||||||||||
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset on the Consolidated Balance Sheets
|
|
Net Amounts Of Assets Presented on the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
|||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||
Bank of America
|
|
$
|
323
|
|
|
$
|
—
|
|
|
$
|
323
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
259
|
|
Wells Fargo
|
|
463
|
|
|
—
|
|
|
463
|
|
|
(298
|
)
|
|
—
|
|
|
165
|
|
||||||
Total
|
|
$
|
786
|
|
|
$
|
—
|
|
|
$
|
786
|
|
|
$
|
(362
|
)
|
|
$
|
—
|
|
|
$
|
424
|
|
As of December 31, 2017
|
|
|
|
|
|
|
|
Gross Amounts Not Offset on the Consolidated Balance Sheets
|
|
|
||||||||||||||
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset on the Consolidated Balance Sheets
|
|
Net Amounts Of Assets Presented on the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
|||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||
Bank of America
|
|
$
|
1,664
|
|
|
$
|
—
|
|
|
$
|
1,664
|
|
|
$
|
(1,664
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Wells Fargo
|
|
135
|
|
|
—
|
|
|
135
|
|
|
(135
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
1,799
|
|
|
$
|
—
|
|
|
$
|
1,799
|
|
|
$
|
(1,799
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
Gross Amounts Not Offset on the Consolidated Balance Sheets
|
|
|
||||||||||||||
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset on the Consolidated Balance Sheets
|
|
Net Amounts Of Liabilities Presented on the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
|||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||
Bank of America
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
J.P. Morgan Chase
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Wells Fargo
|
|
298
|
|
|
—
|
|
|
298
|
|
|
(298
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
368
|
|
|
$
|
(362
|
)
|
|
$
|
—
|
|
|
$
|
6
|
|
As of December 31, 2017
|
|
|
|
|
|
|
|
Gross Amounts Not Offset on the Consolidated Balance Sheets
|
|
|
||||||||||||||
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset on the Consolidated Balance Sheets
|
|
Net Amounts Of Liabilities Presented on the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
|||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||
Bank of America
|
|
$
|
7,815
|
|
|
$
|
—
|
|
|
$
|
7,815
|
|
|
$
|
(1,664
|
)
|
|
$
|
—
|
|
|
$
|
6,151
|
|
Wells Fargo
|
|
377
|
|
|
—
|
|
|
377
|
|
|
(135
|
)
|
|
—
|
|
|
242
|
|
||||||
Total
|
|
$
|
8,192
|
|
|
$
|
—
|
|
|
$
|
8,192
|
|
|
$
|
(1,799
|
)
|
|
$
|
—
|
|
|
$
|
6,393
|
|
|
|
Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges
|
||||||||||||||||||
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Net revenue
|
|
Cost of revenue
|
|
Research and development
|
|
Sales and marketing
|
|
General and administrative
|
|||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Statements of operations
|
|
$
|
1,058,816
|
|
|
$
|
717,118
|
|
|
$
|
82,416
|
|
|
$
|
152,569
|
|
|
$
|
64,857
|
|
Gains (losses) on cash flow hedge
|
|
$
|
665
|
|
|
$
|
(9
|
)
|
|
$
|
83
|
|
|
$
|
(102
|
)
|
|
$
|
(53
|
)
|
|
|
Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges
|
||||||||||||||||||
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Net revenue
|
|
Cost of revenue
|
|
Research and development
|
|
Sales and marketing
|
|
General and administrative
|
|||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Statements of operations
|
|
$
|
1,039,169
|
|
|
$
|
731,453
|
|
|
$
|
71,893
|
|
|
$
|
138,679
|
|
|
$
|
54,346
|
|
Gains (losses) on cash flow hedge
|
|
$
|
(5,786
|
)
|
|
$
|
18
|
|
|
$
|
130
|
|
|
$
|
788
|
|
|
$
|
133
|
|
|
|
Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges
|
||||||||||||||||||
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Net revenue
|
|
Cost of revenue
|
|
Research and development
|
|
Sales and marketing
|
|
General and administrative
|
|||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Statements of operations
|
|
$
|
1,143,445
|
|
|
$
|
769,543
|
|
|
$
|
70,904
|
|
|
$
|
139,591
|
|
|
$
|
53,996
|
|
Gains (losses) on cash flow hedge
|
|
$
|
850
|
|
|
$
|
(6
|
)
|
|
$
|
(55
|
)
|
|
$
|
(189
|
)
|
|
$
|
(30
|
)
|
Derivatives Designated as
Hedging Instruments
|
|
Year Ended December 31, 2018
|
||||||||
|
Gains (Losses)
Recognized in
OCI -
Effective
Portion
|
|
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
|
|
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion
(1)
|
|||||
|
|
(In thousands)
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
$
|
1,416
|
|
|
Net revenue
|
|
$
|
665
|
|
Foreign currency forward contracts
|
|
—
|
|
|
Cost of revenue
|
|
(9
|
)
|
||
Foreign currency forward contracts
|
|
—
|
|
|
Research and development
|
|
83
|
|
||
Foreign currency forward contracts
|
|
—
|
|
|
Sales and marketing
|
|
(102
|
)
|
||
Foreign currency forward contracts
|
|
—
|
|
|
General and administrative
|
|
(53
|
)
|
||
Total
|
|
$
|
1,416
|
|
|
|
|
$
|
584
|
|
Derivatives Designated as
Hedging Instruments
|
|
Year Ended December 31, 2017
|
||||||||
|
Gains (Losses)
Recognized in
OCI -
Effective
Portion
|
|
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
|
|
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion
(1)
|
|||||
|
|
(In thousands)
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
$
|
(7,785
|
)
|
|
Net revenue
|
|
$
|
(5,786
|
)
|
Foreign currency forward contracts
|
|
—
|
|
|
Cost of revenue
|
|
18
|
|
||
Foreign currency forward contracts
|
|
—
|
|
|
Research and development
|
|
130
|
|
||
Foreign currency forward contracts
|
|
—
|
|
|
Sales and marketing
|
|
788
|
|
||
Foreign currency forward contracts
|
|
—
|
|
|
General and administrative
|
|
133
|
|
||
Total
|
|
$
|
(7,785
|
)
|
|
|
|
$
|
(4,717
|
)
|
(1)
|
Refer to Note 11,
Stockholders' Equity
, which summarizes the accumulated other comprehensive income activity related to derivatives.
|
Derivatives Designated as
Hedging Instruments
|
|
Year Ended December 31, 2016
|
||||||||
|
Gains (Losses)
Recognized in
OCI -
Effective
Portion
|
|
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
|
|
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion
(1)
|
|||||
|
|
(In thousands)
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
$
|
2,757
|
|
|
Net revenue
|
|
$
|
850
|
|
Foreign currency forward contracts
|
|
—
|
|
|
Cost of revenue
|
|
(6
|
)
|
||
Foreign currency forward contracts
|
|
—
|
|
|
Research and development
|
|
(55
|
)
|
||
Foreign currency forward contracts
|
|
—
|
|
|
Sales and marketing
|
|
(189
|
)
|
||
Foreign currency forward contracts
|
|
—
|
|
|
General and administrative
|
|
(30
|
)
|
||
Total
|
|
$
|
2,757
|
|
|
|
|
$
|
570
|
|
(1)
|
Refer to Note 11,
Stockholders' Equity
, which summarizes the accumulated other comprehensive income activity related to derivatives.
|
|
|
|
|
Year ended December 31,
|
||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
Location of Gains (Losses)
Recognized in Income on Derivative
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
(In thousands)
|
||||||||||
Foreign currency forward contracts
|
|
Other income (expense), net
|
|
$
|
3,870
|
|
|
$
|
(5,085
|
)
|
|
$
|
3,280
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(In thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations
|
|
$
|
17,326
|
|
|
$
|
(11,133
|
)
|
|
$
|
70,312
|
|
Net income (loss) from discontinued operations
|
|
(35,655
|
)
|
|
30,569
|
|
|
5,539
|
|
|||
Net income (loss)
|
|
(18,329
|
)
|
|
19,436
|
|
|
75,851
|
|
|||
Less: Net loss attributable to non-controlling interest in discontinued operations
|
|
(9,167
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(9,162
|
)
|
|
$
|
19,436
|
|
|
$
|
75,851
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average common shares - basic
|
|
31,626
|
|
|
32,097
|
|
|
32,758
|
|
|||
Potentially dilutive common share equivalent
|
|
1,511
|
|
|
—
|
|
|
970
|
|
|||
Weighted average common shares - dilutive
|
|
33,137
|
|
|
32,097
|
|
|
33,728
|
|
|||
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations
|
|
$
|
0.55
|
|
|
$
|
(0.35
|
)
|
|
$
|
2.15
|
|
Net income (loss) from discontinued operations attributable to NETGEAR, Inc.
|
|
(0.84
|
)
|
|
0.96
|
|
|
0.17
|
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(0.29
|
)
|
|
$
|
0.61
|
|
|
$
|
2.32
|
|
|
|
|
|
|
|
|
||||||
Diluted net income (loss) per share
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations
|
|
$
|
0.52
|
|
|
$
|
(0.35
|
)
|
|
$
|
2.08
|
|
Net income (loss) from discontinued operations attributable to NETGEAR, Inc.
|
|
(0.80
|
)
|
|
0.96
|
|
|
0.17
|
|
|||
Net income (loss) attributable to NETGEAR, Inc.
|
|
$
|
(0.28
|
)
|
|
$
|
0.61
|
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
||||||
Anti-dilutive employee stock-based awards, excluded
|
|
815
|
|
|
279
|
|
|
258
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Foreign currency transaction gain (loss), net
|
$
|
(2,675
|
)
|
|
$
|
5,292
|
|
|
$
|
(3,323
|
)
|
Foreign currency contract gain (loss), net
|
3,968
|
|
|
(3,879
|
)
|
|
3,597
|
|
|||
Other
|
(783
|
)
|
|
144
|
|
|
(440
|
)
|
|||
Total
|
$
|
510
|
|
|
$
|
1,557
|
|
|
$
|
(166
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
United States
|
$
|
32,237
|
|
|
$
|
36,461
|
|
|
$
|
89,877
|
|
International
|
10,967
|
|
|
9,763
|
|
|
16,618
|
|
|||
Total
|
$
|
43,204
|
|
|
$
|
46,224
|
|
|
$
|
106,495
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Accruals and allowances
|
$
|
20,765
|
|
|
$
|
16,629
|
|
Net operating loss carryforwards
|
1,673
|
|
|
50
|
|
||
Stock-based compensation
|
5,734
|
|
|
5,634
|
|
||
Deferred rent
|
1,296
|
|
|
1,977
|
|
||
Deferred revenue
|
1,100
|
|
|
1,459
|
|
||
Tax credit carryforwards
|
1,661
|
|
|
974
|
|
||
Acquired intangibles
|
31,902
|
|
|
15,598
|
|
||
Depreciation and amortization
|
866
|
|
|
904
|
|
||
Total deferred tax assets
|
64,997
|
|
|
43,225
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Other
|
(706
|
)
|
|
(362
|
)
|
||
Total deferred tax liabilities
|
(706
|
)
|
|
(362
|
)
|
||
|
|
|
|
||||
Valuation Allowance
(1)
|
(6,734
|
)
|
|
(4,570
|
)
|
||
Net deferred tax assets
|
$
|
57,557
|
|
|
$
|
38,293
|
|
(1)
|
Valuation allowance is presented gross. The valuation allowance net of the federal tax effect is
$5.4 million
and
$3.6 million
for the years ended December 31,
2018
and
2017
, respectively.
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Tax at federal statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State, net of federal benefit
|
1.5
|
%
|
|
1.0
|
%
|
|
1.8
|
%
|
Impact of international operations
|
1.9
|
%
|
|
(8.8
|
)%
|
|
(2.8
|
)%
|
Stock-based compensation
|
(0.3
|
)%
|
|
(3.9
|
)%
|
|
1.2
|
%
|
Tax credits
|
(2.6
|
)%
|
|
(2.0
|
)%
|
|
(0.9
|
)%
|
Valuation allowance
|
1.4
|
%
|
|
—
|
%
|
|
—
|
%
|
Impact of the Tax Act
|
(15.4
|
)%
|
|
104.6
|
%
|
|
—
|
%
|
Write-off of future tax benefits related to Arlo
|
52.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Others
|
0.2
|
%
|
|
(1.8
|
)%
|
|
(0.3
|
)%
|
Provision for income taxes
|
59.9
|
%
|
|
124.1
|
%
|
|
34.0
|
%
|
|
Federal, State, and Foreign Tax
|
||
|
(In thousands)
|
||
Balance as of December 31, 2015
|
$
|
12,830
|
|
Additions based on tax positions related to the current year
|
1,523
|
|
|
Additions for tax positions of prior years
|
45
|
|
|
Reductions for tax positions of prior years
|
(237
|
)
|
|
Reductions due to lapse of applicable statutes
|
(627
|
)
|
|
Adjustments due to foreign exchange rate movement
|
(569
|
)
|
|
Balance as of December 31, 2016
|
12,965
|
|
|
Additions based on tax positions related to the current year
|
938
|
|
|
Additions for tax positions of prior years
|
32
|
|
|
Reductions for tax positions of prior years
|
(1,477
|
)
|
|
Reductions due to lapse of applicable statutes
|
(899
|
)
|
|
Adjustments due to foreign exchange rate movement
|
1,008
|
|
|
Balance as of December 31, 2017
|
$
|
12,567
|
|
Additions based on tax positions related to the current year
|
637
|
|
|
Additions for tax positions of prior years
|
280
|
|
|
Reductions for tax positions of prior years
|
(116
|
)
|
|
Reductions due to lapse of applicable statutes
|
(999
|
)
|
|
Adjustments due to foreign exchange rate movement
|
(386
|
)
|
|
Balance as of December 31, 2018
|
$
|
11,983
|
|
2019
|
$
|
11,900
|
|
2020
|
9,986
|
|
|
2021
|
7,785
|
|
|
2022
|
6,856
|
|
|
2023
|
4,478
|
|
|
Thereafter
|
7,725
|
|
|
Total future minimum lease payments
|
$
|
48,730
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Balance at the beginning of the year
|
$
|
44,068
|
|
|
$
|
42,571
|
|
|
$
|
50,216
|
|
Reclassified to sales returns upon adoption of ASC 606
|
(29,147
|
)
|
*
|
—
|
|
|
—
|
|
|||
Provision for warranty obligations made during the year
|
12,783
|
|
|
91,384
|
|
|
86,610
|
|
|||
Settlements made during the year
|
(13,292
|
)
|
|
(89,887
|
)
|
|
(94,255
|
)
|
|||
Balance at the end of year
|
$
|
14,412
|
|
|
$
|
44,068
|
|
|
$
|
42,571
|
|
|
Unrealized gains (losses) on available-for-sale securities
|
|
Unrealized gains (losses) on derivatives
|
|
Estimated tax benefit (provision)
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of December 31, 2015
|
$
|
(64
|
)
|
|
$
|
43
|
|
|
$
|
24
|
|
|
$
|
3
|
|
Other comprehensive income (loss) before reclassifications
|
33
|
|
|
3,007
|
|
|
(572
|
)
|
|
2,468
|
|
||||
Less: Amount reclassified from accumulated other comprehensive income
|
—
|
|
|
820
|
|
|
(287
|
)
|
|
533
|
|
||||
Net current period other comprehensive income (loss)
|
33
|
|
|
2,187
|
|
|
(285
|
)
|
|
1,935
|
|
||||
Balance as of December 31, 2016
|
$
|
(31
|
)
|
|
$
|
2,230
|
|
|
$
|
(261
|
)
|
|
$
|
1,938
|
|
Other comprehensive income (loss) before reclassifications
|
(115
|
)
|
|
(10,692
|
)
|
|
3,062
|
|
|
(7,745
|
)
|
||||
Less: Amount reclassified from accumulated other comprehensive income
|
—
|
|
|
(7,624
|
)
|
|
2,668
|
|
|
(4,956
|
)
|
||||
Net current period other comprehensive income (loss)
|
(115
|
)
|
|
(3,068
|
)
|
|
394
|
|
|
(2,789
|
)
|
||||
Balance as of December 31, 2017
|
$
|
(146
|
)
|
|
$
|
(838
|
)
|
|
$
|
133
|
|
|
$
|
(851
|
)
|
Other comprehensive income (loss) before reclassifications
|
128
|
|
|
1,422
|
|
|
(249
|
)
|
|
1,301
|
|
||||
Less: Amount reclassified from accumulated other comprehensive income
|
—
|
|
|
588
|
|
|
(123
|
)
|
|
465
|
|
||||
Net current period other comprehensive income (loss)
|
128
|
|
|
834
|
|
|
(126
|
)
|
|
836
|
|
||||
Distribution of Arlo
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
||||
Balance as of December 31, 2018
|
$
|
(18
|
)
|
|
$
|
(8
|
)
|
|
$
|
11
|
|
|
$
|
(15
|
)
|
|
|
Year Ended December 31,
|
||||||||||||||||
Details about Accumulated Other Comprehensive Income Components
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
|
Amount Reclassified from AOCI
|
|
Affected Line Item in the Statements of Operations
|
|
Amount Reclassified from AOCI
|
|
Affected Line Item in the Statements of Operations
|
|
Amount Reclassified from AOCI
|
|
Affected Line Item in the Statements of Operations
|
|||||||
|
|
(In thousands)
|
||||||||||||||||
Gains (losses) on cash flow hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
665
|
|
|
Net revenue
|
|
$
|
(5,786
|
)
|
|
Net revenue
|
|
$
|
850
|
|
|
Net revenue
|
Foreign currency forward contracts
|
|
(9
|
)
|
|
Cost of revenue
|
|
18
|
|
|
Cost of revenue
|
|
(6
|
)
|
|
Cost of revenue
|
|||
Foreign currency forward contracts
|
|
83
|
|
|
Research and development
|
|
130
|
|
|
Research and development
|
|
(55
|
)
|
|
Research and development
|
|||
Foreign currency forward contracts
|
|
(102
|
)
|
|
Sales and marketing
|
|
788
|
|
|
Sales and marketing
|
|
(189
|
)
|
|
Sales and marketing
|
|||
Foreign currency forward contracts
|
|
(53
|
)
|
|
General and administrative
|
|
133
|
|
|
General and administrative
|
|
(30
|
)
|
|
General and administrative
|
|||
Total, from continuing operations before income taxes
|
|
584
|
|
|
Total from continuing operations before tax
|
|
(4,717
|
)
|
|
Total from continuing operations before tax
|
|
570
|
|
|
Total from continuing operations before tax
|
|||
Tax impact from continuing operations
|
|
(123
|
)
|
|
Tax impact from continuing operations
|
|
1,651
|
|
|
Tax impact from continuing operations
|
|
(200
|
)
|
|
Tax impact from continuing operations
|
|||
Total, from continuing operations net of tax
|
|
461
|
|
|
Total, from continuing operations net of tax
|
|
(3,066
|
)
|
|
Total, from continuing operations net of tax
|
|
370
|
|
|
Total, from continuing operations net of tax
|
|||
Total, from discontinued operations net of tax
|
|
4
|
|
|
Total, from discontinued operations net of tax
|
|
(1,890
|
)
|
|
Total, from discontinued operations net of tax
|
|
163
|
|
|
Total, from discontinued operations net of tax
|
|||
Total, net of tax
|
|
$
|
465
|
|
|
|
|
$
|
(4,956
|
)
|
|
|
|
$
|
533
|
|
|
|
|
Number of
Shares
|
|
Weighted Average
Exercise Price Per
Share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(In thousands)
|
|
(In dollars)
|
|
(In years)
|
|
(In thousands)
|
|||||
Outstanding as of December 31, 2017
1
|
1,879
|
|
|
$
|
34.08
|
|
|
|
|
|
||
Granted
1
|
378
|
|
|
69.70
|
|
|
|
|
|
|||
Exercised
1
|
(289
|
)
|
|
23.76
|
|
|
|
|
|
|||
Expired
1
|
(6
|
)
|
|
21.45
|
|
|
|
|
|
|||
Equitable adjustment - options granted
2
|
1,969
|
|
|
25.30
|
|
|
|
|
|
|||
Equitable adjustment - options cancelled
2
|
(1,962
|
)
|
|
42.50
|
|
|
|
|
|
|||
Outstanding as of December 31, 2018
|
1,969
|
|
|
$
|
25.30
|
|
|
6.29
|
|
$
|
17,338
|
|
|
|
|
|
|
|
|
|
|||||
As of December 31, 2018
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest
|
1,969
|
|
|
$
|
25.30
|
|
|
6.29
|
|
$
|
17,338
|
|
Exercisable Options
|
1,230
|
|
|
$
|
20.53
|
|
|
4.94
|
|
$
|
14,511
|
|
(1)
|
Weighted average exercise price was calculated using exercise price prior to the Distribution.
|
|
Options Outstanding
|
|
Options Exercisable
|
|
||||||||||||
Range of Exercise Prices
|
Shares
Outstanding
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
Shares
Exercisable
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
||||||
|
(In thousands)
|
|
(In years)
|
|
(In dollars)
|
|
(In thousands)
|
|
(In dollars)
|
|
||||||
$7.28 - $19.32
|
512
|
|
|
5.05
|
|
$
|
18.47
|
|
|
479
|
|
|
$
|
18.46
|
|
|
$19.33 - $20.98
|
418
|
|
|
3.12
|
|
20.04
|
|
|
417
|
|
|
20.04
|
|
|
||
$21.86 - $25.37
|
633
|
|
|
7.58
|
|
24.36
|
|
|
328
|
|
|
24.00
|
|
|
||
$29.23 - $38.32
|
50
|
|
|
9.27
|
|
34.68
|
|
|
6
|
|
|
29.23
|
|
|
||
$41.67 - $41.67
|
356
|
|
|
9.07
|
|
41.67
|
|
|
—
|
|
|
—
|
|
|
||
$7.28 - $41.67
|
1,969
|
|
|
6.29
|
|
$
|
25.30
|
|
|
1,230
|
|
|
$
|
20.53
|
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date Fair Value Per
Share
|
|||
|
(In thousands)
|
|
(In dollars)
|
|||
Outstanding as of December 31, 2017
1
|
1,130
|
|
|
$
|
43.22
|
|
Granted
1
|
971
|
|
|
67.78
|
|
|
Vested
1
|
(439
|
)
|
|
41.24
|
|
|
Cancelled
1
|
(89
|
)
|
|
55.66
|
|
|
Equitable adjustment - granted
2
|
1,627
|
|
|
34.31
|
|
|
Equitable adjustment - cancelled
2
|
(1,573
|
)
|
|
$
|
58.23
|
|
Outstanding as of December 31, 2018
|
1,627
|
|
|
$
|
34.31
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Stock Options
|
|
ESPP
|
||||||||||||||
Expected life (in years)
|
4.4
|
|
|
4.4
|
|
|
4.4
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
Risk-free interest rate
|
2.36
|
%
|
|
1.66
|
%
|
|
1.28
|
%
|
|
2.00
|
%
|
|
0.93
|
%
|
|
0.43
|
%
|
Expected volatility
|
31.1
|
%
|
|
31.6
|
%
|
|
35.4
|
%
|
|
37.9
|
%
|
|
29.7
|
%
|
|
38.3
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Cost of revenue
|
$
|
2,435
|
|
|
$
|
1,406
|
|
|
$
|
1,473
|
|
Research and development
|
4,283
|
|
|
2,968
|
|
|
2,726
|
|
|||
Sales and marketing
|
8,267
|
|
|
5,481
|
|
|
4,934
|
|
|||
General and administrative
|
11,476
|
|
|
9,114
|
|
|
8,008
|
|
|||
Total
|
$
|
26,461
|
|
|
$
|
18,969
|
|
|
$
|
17,141
|
|
•
|
Connected Home: Focused on consumers and consists of high-performance, dependable and easy-to-use 4G/5G mobile, Wi-Fi internet networking solutions and smart devices such as Orbi Voice smart speakers and Meural digital canvas; and
|
•
|
SMB: Focused on small and medium-sized businesses and consists of business networking, storage, wireless LAN and security solutions that bring enterprise-class functionality to small and medium-sized businesses at an affordable price.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands, except percentage data)
|
||||||||||
Net revenue:
|
|
|
|
|
|
||||||
Connected Home
|
771,060
|
|
|
768,261
|
|
|
846,929
|
|
|||
SMB
|
287,756
|
|
|
270,908
|
|
|
296,516
|
|
|||
Total net revenue
|
$
|
1,058,816
|
|
|
$
|
1,039,169
|
|
|
$
|
1,143,445
|
|
Contribution income:
|
|
|
|
|
|
||||||
Connected Home
|
96,340
|
|
|
83,870
|
|
|
138,997
|
|
|||
Connected Home contribution margin
|
12.5
|
%
|
|
10.9
|
%
|
|
16.4
|
%
|
|||
SMB
|
70,142
|
|
|
63,865
|
|
|
72,539
|
|
|||
SMB contribution margin
|
24.4
|
%
|
|
23.6
|
%
|
|
24.5
|
%
|
|||
Total segment contribution income
|
166,482
|
|
|
147,735
|
|
|
211,536
|
|
|||
Corporate and unallocated costs
|
(90,186
|
)
|
|
(75,305
|
)
|
|
(69,623
|
)
|
|||
Amortization of intangibles
(1)
|
(7,979
|
)
|
|
(10,663
|
)
|
|
(15,361
|
)
|
|||
Stock-based compensation expense
|
(26,461
|
)
|
|
(18,969
|
)
|
|
(17,141
|
)
|
|||
Separation expenses
|
(929
|
)
|
|
—
|
|
|
—
|
|
|||
Restructuring and other charges
|
(2,198
|
)
|
|
(97
|
)
|
|
(3,841
|
)
|
|||
Litigation reserves, net
|
(15
|
)
|
|
(148
|
)
|
|
(73
|
)
|
|||
Interest income
|
3,980
|
|
|
2,114
|
|
|
1,164
|
|
|||
Other income (expense), net
|
510
|
|
|
1,557
|
|
|
(166
|
)
|
|||
Income before income taxes
|
$
|
43,204
|
|
|
$
|
46,224
|
|
|
$
|
106,495
|
|
(1)
|
Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Connected Home
|
156,671
|
|
|
190,186
|
|
|
249,980
|
|
|||
SMB
|
3,624
|
|
|
3,268
|
|
|
4,175
|
|
|||
Total service provider net revenue
|
$
|
160,295
|
|
|
$
|
193,454
|
|
|
$
|
254,155
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
United States (U.S.)
|
$
|
686,145
|
|
|
$
|
648,152
|
|
|
$
|
713,178
|
|
Americas (excluding U.S.)
|
14,548
|
|
|
16,937
|
|
|
21,802
|
|
|||
EMEA
|
207,599
|
|
|
197,074
|
|
|
217,554
|
|
|||
APAC
|
150,524
|
|
|
177,006
|
|
|
190,911
|
|
|||
Total net revenue
|
$
|
1,058,816
|
|
|
$
|
1,039,169
|
|
|
$
|
1,143,445
|
|
|
As of
|
||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
|
(In thousands)
|
||||||||||
United States
|
$
|
4,993
|
|
|
$
|
7,735
|
|
|
$
|
9,274
|
|
Canada
|
4,359
|
|
|
1,745
|
|
|
2,745
|
|
|||
EMEA
|
95
|
|
|
140
|
|
|
206
|
|
|||
China
|
7,652
|
|
|
5,130
|
|
|
4,218
|
|
|||
APAC (excluding China)
|
3,078
|
|
|
2,599
|
|
|
1,704
|
|
|||
Total property and equipment, net
|
$
|
20,177
|
|
|
$
|
17,349
|
|
|
$
|
18,147
|
|
|
As of December 31, 2018
|
||||||||||||||
|
Total
|
|
Quoted market
prices in active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents: money-market funds
|
$
|
22,573
|
|
|
$
|
22,573
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale debt investments: U.S. treasuries
(1)
|
70,314
|
|
|
—
|
|
|
70,314
|
|
|
—
|
|
||||
Available-for-sale investments: certificates of deposit
(1)
|
149
|
|
|
—
|
|
|
149
|
|
|
—
|
|
||||
Trading securities: mutual funds
(1)
|
2,854
|
|
|
2,854
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts
(2)
|
786
|
|
|
—
|
|
|
786
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
96,676
|
|
|
$
|
25,427
|
|
|
$
|
71,249
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
(3)
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
368
|
|
|
$
|
—
|
|
Contingent consideration
(4)
|
5,953
|
|
|
—
|
|
|
—
|
|
|
5,953
|
|
||||
Total liabilities measured at fair value
|
$
|
6,321
|
|
|
$
|
—
|
|
|
$
|
368
|
|
|
$
|
5,953
|
|
(1)
|
Included in Short-term investments on the Company's consolidated balance sheets.
|
(2)
|
Included in Prepaid expenses and other current assets on the Company's consolidated balance sheets.
|
(3)
|
Included in Other accrued liabilities on the Company's consolidated balance sheets.
|
(4)
|
Included in Other non-current accrued liabilities on the Company’s consolidated balance sheets. The contingent consideration represents the estimated fair value of the additional variable cash consideration payable in connection with the acquisition of Meural that is contingent upon the achievement of certain technical and service revenue milestones. Refer to Note 4,
Business Acquisition
, regarding detailed disclosures on the determination of fair value of the contingent consideration.
|
|
As of December 31, 2017
|
||||||||||||||
|
Total
|
|
Quoted market
prices in active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents: money-market funds
|
$
|
12,606
|
|
|
$
|
12,606
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale debt investments: U.S. treasuries
(1)
|
124,670
|
|
|
—
|
|
|
124,670
|
|
|
—
|
|
||||
Available-for-sale investments: certificates of deposit
(1)
|
162
|
|
|
—
|
|
|
162
|
|
|
—
|
|
||||
Trading securities: mutual funds
(1)
|
2,094
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts
(2)
|
1,799
|
|
|
—
|
|
|
1,799
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
141,331
|
|
|
$
|
14,700
|
|
|
$
|
126,631
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
(3)
|
$
|
8,192
|
|
|
$
|
—
|
|
|
$
|
8,192
|
|
|
$
|
—
|
|
Total liabilities measured at fair value
|
$
|
8,192
|
|
|
$
|
—
|
|
|
$
|
8,192
|
|
|
$
|
—
|
|
(1)
|
Included in Short-term investments on the Company's consolidated balance sheets.
|
(2)
|
Included in Prepaid expenses and other current assets on the Company's consolidated balance sheets.
|
(3)
|
Included in Other accrued liabilities on the Company's consolidated balance sheets.
|
|
Employee termination charges
|
|
Lease contract termination and other charges
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance as of December 31, 2015
|
$
|
13
|
|
|
$
|
1,253
|
|
|
$
|
1,266
|
|
Additions
(1)
|
3,086
|
|
|
629
|
|
|
3,715
|
|
|||
Cash payments
|
(2,902
|
)
|
|
(480
|
)
|
|
(3,382
|
)
|
|||
Adjustments
|
(191
|
)
|
|
—
|
|
|
(191
|
)
|
|||
Balance as of December 31, 2016
|
6
|
|
|
1,402
|
|
|
1,408
|
|
|||
Additions
|
—
|
|
|
97
|
|
|
97
|
|
|||
Cash payments
|
—
|
|
|
(370
|
)
|
|
(370
|
)
|
|||
Balance as of December 31, 2017
|
6
|
|
|
1,129
|
|
|
1,135
|
|
|||
Additions
|
1,789
|
|
|
464
|
|
|
2,253
|
|
|||
Cash payments
|
(1,010
|
)
|
|
(1,403
|
)
|
|
(2,413
|
)
|
|||
Adjustments
|
(10
|
)
|
|
(45
|
)
|
|
(55
|
)
|
|||
Balance as of December 31, 2018
|
$
|
775
|
|
|
$
|
145
|
|
|
$
|
920
|
|
(1)
|
Total restructuring and other charges recognized in the Company's consolidated statements of operations for the year ended December 31, 2016 included non-cash charges and adjustments, net of
$0.3 million
. This amount has been excluded from the table above.
|
|
December 31,
2018 |
September 30,
2018 |
July 1,
2018 |
April 1,
2018 |
||||||||
Net revenue
|
$
|
288,928
|
|
$
|
269,411
|
|
$
|
255,276
|
|
$
|
245,201
|
|
Gross profit
|
$
|
90,654
|
|
$
|
94,445
|
|
$
|
80,280
|
|
$
|
76,319
|
|
Provision for income taxes
|
$
|
19,210
|
|
$
|
5,483
|
|
$
|
1,271
|
|
$
|
(86
|
)
|
Net income (loss) from continuing operations
|
$
|
(535
|
)
|
$
|
16,310
|
|
$
|
533
|
|
$
|
1,018
|
|
Net income (loss)
|
$
|
(27,839
|
)
|
$
|
9,150
|
|
$
|
(5,230
|
)
|
$
|
5,590
|
|
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(19,471
|
)
|
$
|
9,949
|
|
$
|
(5,230
|
)
|
$
|
5,590
|
|
Net income (loss) per share - basic:
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.02
|
)
|
$
|
0.51
|
|
$
|
0.02
|
|
$
|
0.03
|
|
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(0.62
|
)
|
$
|
0.31
|
|
$
|
(0.17
|
)
|
$
|
0.18
|
|
Net income (loss) per share - diluted:
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
(0.02
|
)
|
$
|
0.49
|
|
$
|
0.02
|
|
$
|
0.03
|
|
Net income (loss) per share attributable to NETGEAR, Inc.
|
$
|
(0.62
|
)
|
$
|
0.30
|
|
$
|
(0.16
|
)
|
$
|
0.17
|
|
|
|
|
|
|
||||||||
|
December 31,
2017 |
October 1,
2017 |
July 2,
2017 |
April 2,
2017 |
||||||||
Net revenue
|
$
|
274,149
|
|
$
|
251,950
|
|
$
|
251,685
|
|
$
|
261,385
|
|
Gross profit
|
$
|
76,129
|
|
$
|
76,096
|
|
$
|
75,380
|
|
$
|
80,111
|
|
Provision for income taxes
|
$
|
48,496
|
|
$
|
950
|
|
$
|
3,061
|
|
$
|
4,850
|
|
Net income (loss) from continuing operations
|
$
|
(41,778
|
)
|
$
|
9,624
|
|
$
|
9,989
|
|
$
|
11,032
|
|
Net income (loss)
|
$
|
(31,934
|
)
|
$
|
20,794
|
|
$
|
14,582
|
|
$
|
15,994
|
|
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(31,934
|
)
|
$
|
20,794
|
|
$
|
14,582
|
|
$
|
15,994
|
|
Net income (loss) per share - basic:
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
(1.33
|
)
|
$
|
0.30
|
|
$
|
0.31
|
|
$
|
0.33
|
|
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(1.02
|
)
|
$
|
0.66
|
|
$
|
0.45
|
|
$
|
0.49
|
|
Net income (loss) per share - diluted:
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
(1.33
|
)
|
$
|
0.30
|
|
$
|
0.30
|
|
$
|
0.32
|
|
Net income (loss) attributable to NETGEAR, Inc.
|
$
|
(1.02
|
)
|
$
|
0.64
|
|
$
|
0.44
|
|
$
|
0.47
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
Consolidated Statements of Operations for the three years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Income for the three years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the three years ended December 31, 2018, 2017 and 2016
|
|
Notes to Consolidated Financial Statements
|
|
Quarterly Financial Data (unaudited)
|
|
Page
|
Schedule II—Valuation and Qualifying Accounts
|
|
Balance at
Beginning
of Year
|
|
Other
|
|
Additions
|
|
Deductions
|
|
Balance
at End of
Year
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2018
|
$
|
1,050
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
154
|
|
|
$
|
1,254
|
|
Year ended December 31, 2017
|
1,049
|
|
|
—
|
|
|
99
|
|
|
(98
|
)
|
|
1,050
|
|
|||||
Year ended December 31, 2016
|
1,049
|
|
|
—
|
|
|
60
|
|
|
(60
|
)
|
|
1,049
|
|
|||||
Allowance for sales returns:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2018
|
$
|
14,321
|
|
|
$
|
(14,321
|
)
|
**
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Year ended December 31, 2017
|
10,602
|
|
|
—
|
|
|
26,419
|
|
|
(22,700
|
)
|
|
14,321
|
|
|||||
Year ended December 31, 2016
|
14,298
|
|
|
—
|
|
|
19,892
|
|
|
(23,588
|
)
|
|
10,602
|
|
|||||
Allowance for price protection:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2018
|
$
|
3,245
|
|
|
$
|
(3,245
|
)
|
**
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Year ended December 31, 2017
|
4,185
|
|
|
—
|
|
|
7,149
|
|
|
(8,089
|
)
|
|
3,245
|
|
|||||
Year ended December 31, 2016
|
2,107
|
|
|
—
|
|
|
11,728
|
|
|
(9,650
|
)
|
|
4,185
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Filed Herewith
|
|
|
10-K
|
|
2/26/2013
|
|
10.35
|
|
|
||
|
|
10-Q
|
|
8/4/2017
|
|
3.1
|
|
|
||
|
|
8-K
|
|
4/20/2018
|
|
3.2
|
|
|
||
|
|
S-1/A
|
|
7/14/2003
|
|
4.1
|
|
|
||
|
|
S-1
|
|
4/10/2003
|
|
10.1
|
|
|
||
|
|
10-K
|
|
2/26/2013
|
|
10.3
|
|
|
||
|
|
S-8
|
|
5/31/2018
|
|
99.1
|
|
|
||
|
|
S-8
|
|
6/3/2016
|
|
99.2
|
|
|
||
|
|
S-8
|
|
6/6/2014
|
|
4.3
|
|
|
||
|
|
8-K
|
|
4/5/2013
|
|
10.1
|
|
|
||
|
|
DEF14A
|
|
4/16/2013
|
|
Appendix A
|
|
|
||
|
|
S-1/A
|
|
4/21/2003
|
|
10.25
|
|
|
||
|
|
S-1/A
|
|
4/21/2003
|
|
10.26
|
|
|
||
|
|
S-1/A
|
|
4/21/2003
|
|
10.27
|
|
|
||
|
|
8-K
|
|
9/27/2007
|
|
10.1
|
|
|
||
|
|
10-Q
|
|
5/9/2008
|
|
10.1
|
|
|
||
|
|
10-K
|
|
2/19/2016
|
|
10.11B
|
|
|
||
|
|
S-1
|
|
4/10/2003
|
|
10.5
|
|
|
||
|
|
10-K
|
|
3/4/2009
|
|
10.51
|
|
|
||
|
|
S-1
|
|
4/10/2003
|
|
10.8
|
|
|
||
|
|
10-K
|
|
3/4/2009
|
|
10.52
|
|
|
||
|
|
S-1
|
|
4/10/2003
|
|
10.10
|
|
|
||
|
|
10-K
|
|
3/4/2009
|
|
10.49
|
|
|
||
|
|
10-Q
|
|
5/6/2014
|
|
10.1
|
|
|
||
|
|
8-K
|
|
7/11/2013
|
|
10.1
|
|
|
||
|
|
10-K
|
|
3/4/2009
|
|
10.54
|
|
|
||
|
|
10-K
|
|
2/19/2016
|
|
10.21
|
|
|
||
|
|
10-K
|
|
2/24/2017
|
|
10.19
|
|
|
||
|
|
10-Q
|
|
11/2/2018
|
|
10.1*
|
|
|
||
|
|
10-Q
|
|
11/2/2018
|
|
10.2*
|
|
|
||
|
|
8-K
|
|
8/7/2018
|
|
10.1
|
|
|
||
|
|
8-K
|
|
8/7/2018
|
|
10.2
|
|
|
||
|
|
8-K
|
|
8/7/2018
|
|
10.3
|
|
|
||
|
|
8-K
|
|
8/7/2018
|
|
10.4
|
|
|
Item 16.
|
Form 10-K Summary
|
|
NETGEAR, INC.
|
|
By: /s/ PATRICK C.S. LO
|
|
Patrick C.S. Lo
|
|
Chairman of the Board and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ PATRICK C.S. LO
|
|
Chairman of the Board and Chief Executive Officer
|
|
February 22, 2019
|
Patrick C.S. Lo
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/S/ BRYAN D. MURRAY
|
|
Chief Financial Officer
|
|
February 22, 2019
|
Bryan D. Murray
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/S/ JEF T. GRAHAM
|
|
Director
|
|
February 22, 2019
|
Jef T. Graham
|
|
|
|
|
|
|
|
|
|
/S/ BRADLEY L. MAIORINO
|
|
Director
|
|
February 22, 2019
|
Bradley L. Maiorino
|
|
|
|
|
|
|
|
|
|
/S/ GREGORY J. ROSSMANN
|
|
Director
|
|
February 22, 2019
|
Gregory J. Rossmann
|
|
|
|
|
|
|
|
|
|
/S/ BARBARA V. SCHERER
|
|
Director
|
|
February 22, 2019
|
Barbara V. Scherer
|
|
|
|
|
|
|
|
|
|
/S/ JULIE A. SHIMER
|
|
Director
|
|
February 22, 2019
|
Julie A. Shimer
|
|
|
|
|
|
|
|
|
|
/S/ THOMAS H. WAECHTER
|
|
Director
|
|
February 22, 2019
|
Thomas H. Waechter
|
|
|
|
|
NETGEAR, INC.
|
|
INFRANT TECHNOLOGIES LLC
|
|
NETGEAR (Beijing) Trading Co. Ltd.
|
|
SKIPJAM CORP
|
|
NETGEAR INTERNATIONAL, INC.
|
|
NETGEAR AUSTRIA GMBH
|
|
NETGEAR Belgium BVBA
|
|
NETGEAR DEUTSCHLAND GMBH
|
|
NETGEAR FRANCE SAS
|
|
NETGEAR HOLDINGS LTD (IRELAND)
|
|
NETGEAR INTERNATIONAL LTD
|
|
NETGEAR ASIA PTE. LIMITED (SINGAPORE BRANCH)
|
|
NETGEAR HONG KONG LIMITED
|
|
NETGEAR NEW ZEALAND
|
|
NETGEAR POLAND SP ZOO
|
|
NETGEAR SWITZERLAND GMBH
|
|
NETGEAR U.K. LTD
|
|
Netgear (Beijing) Network Technology Co., Ltd
|
|
Netgear Australia Pty Ltd.
|
|
NTGR CYPRUS LTD
|
|
NETGEAR JAPAN GK
|
|
NETGEAR NETHERLANDS B.V.
|
|
NETGEAR TAIWAN CO LTD
|
|
NETGEAR TECHNOLOGIES PRIVATE LIMITED (INDIA)
|
|
Netgear Denmark ApS
|
|
NETGEAR MEXICO S. DE R.L.
|
|
Netgear Asia Holdings Ltd.
|
|
Netgear Research India Pvt. Ltd.
|
|
Netgear Canada Ltd.
|
|
NETGEAR RUSSIA LLC
|
|
Meural, Inc.
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of NETGEAR, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
|
/s/ PATRICK C.S. LO
|
|
Patrick C.S. Lo
|
|
Chairman and
|
|
Chief Executive Officer
|
|
NETGEAR, Inc.
|
1.
|
I have reviewed this Annual Report on Form 10-K of NETGEAR, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
|
/s/ BRYAN D. MURRAY
|
|
Bryan D. Murray
|
|
Chief Financial Officer
|
|
NETGEAR, Inc.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
|
/s/ PATRICK C.S. LO
|
|
|
Patrick C.S. Lo
|
|
|
Chairman and
|
|
|
Chief Executive Officer
|
|
|
NETGEAR, Inc.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
|
/s/ BRYAN D. MURRAY
|
|
|
Bryan D. Murray
|
|
|
Chief Financial Officer
|
|
|
NETGEAR, Inc.
|