Netgear ( NASDAQ: NTGR ) stock rose ~7% postmarket on Wednesday after the computer networking firm's Q3 revenue guidance and Q2 results topped Street estimates .
NTGR expects to report Q3 net revenue of $240M-$255M, well above consensus estimate of $231.76M.
The company projects Q3 revenue from the service provider channel to be ~$40M and SMB revenue to grow sequentially, driven by strong demand and improving supply.
"With some U.S. retail customers intending to shrink their inventory positions further, we expect to continue working with them in the coming quarter to optimize inventory levels," said CFO Bryan Murray.
NTGR expects Q3 adj. operating margin of 1.5-2.5% and adj. tax rate of 15%.
Q2 adj. EPS was -$0.19, while revenue declined 27.8% Y/Y to $223.2M.
"Strong execution by our team in navigating supply chain headwinds drove the outperformance, most notably for our ProAV managed switch, super premium WiFi mesh and 5G mobile hotspot products," said NTGR CEO Patrick Lo.
"... we expect this momentum to continue into H2 as demand remains robust and our supply situation continues to improve," he added.
NTGR's connected home segment revenue declined ~44% to $128.9M, but ended Q2 with 654K paid subscribers. NTGR is on track to reaching 750K subscribers by year-end.
SMB segment revenue grew 19.5% to $94.4M.
Shares of NTGR fell 32.2% YTD.
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Netgear stock rises postmarket as revenue guidance, results top estimates