Netgear reported better-than-expected third quarter earnings as home offices were upgraded with the latest Wifi routers, workers built out home audio and visual systems for video conferencing and small businesses became more savvy about networks.
The company reported third quarter revenue of $378.1 million, up 42.2% from a year ago. Net income for the third quarter was 83 cents a share with non-GAAP earnings of $1.13 a share.
Wall Street analysts were modeling non-GAAP earnings of 66 cents a share on revenue of $313.5 billion.
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Netgear is benefiting from the remote work trend amid the COVID-19 pandemic. Logitech also posted strong results due to home office upgrades. And Zoom, the poster child of the work-from-home movement, delivered strong growth and outlined plans to expand its ecosystem with native third-party apps.
Patrick Lo, CEO of Netgear, said demand was "robust" for gear that provides Wifi that covers the entire house. Lo added:
As the pandemic persists, it is clear that families are adapting their lives to accommodate the need to pursue more of their daily activities virtually from home. This "more from home" transition is stretching well beyond work and school to include movie premieres, doctor visits, grocery shopping, fitness classes and visiting loved ones, and they now all require a whole home, fast and reliable WiFi connection.
Meanwhile, SMBs are upgrading with low port count switches and commercial grade Wifi.
Netgear noted that it may face supply chain issues as the COVID-19 pandemic persists, but strong demand is likely to continue well into 2021.