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Revenue
 9 Months Ended
Sep. 29, 2024
Revenue from Contract with Customer [Abstract]  
Revenue

Note 3. Revenue

Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Transaction Price Allocated to the Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

The following table summarizes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of September 29, 2024:

 

(In thousands)

 

Less than 1 year

 

 

1 to 2 years

 

 

Beyond 2 years

 

 

Total

 

Performance obligations

 

$

66,991

 

 

$

3,546

 

 

$

2,209

 

 

$

72,746

 

 

Contract Balances

The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are mainly classified as Deferred revenue on the unaudited condensed consolidated balance sheets.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.

The following table reflects the contract balances:

 

(In thousands)

 

Balance Sheet Location

 

September 29, 2024

 

 

December 31, 2023

 

Accounts receivable, net

 

Accounts receivable, net

 

$

177,326

 

 

$

185,059

 

Contract liabilities – current

 

Deferred revenue

 

$

29,596

 

 

$

27,091

 

Contract liabilities – non-current

 

Other non-current liabilities

 

$

5,472

 

 

$

4,903

 

 

The difference in the balances of the Company’s contract assets and liabilities as of September 29, 2024 and December 31, 2023, primarily results from the timing difference between the Company’s performance and the customer’s payment.

During the nine months ended September 29, 2024, $37.9 million of revenue was deferred primarily due to unsatisfied performance obligations for service contracts, $34.8 million of revenue was recognized for the satisfaction of performance obligations and $23.9 million of this recognized revenue was included in the contract liability balance at the beginning of the period.

There were no significant changes in estimates during the period that would affect the contract balances.

Disaggregation of Revenue

In the following tables, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”). The tables also include reconciliations of the disaggregated revenue by reportable segment. The Company operates and reports in two segments: NETGEAR for Business (formerly known as Small and Medium Business, or SMB) and Connected Home. Sales and usage-based taxes are excluded from net revenue.

 

 

 

Three Months Ended

 

 

 

 

September 29, 2024

 

 

October 1, 2023

 

 

(In thousands)

 

NETGEAR for Business

 

 

Connected
Home

 

 

Total

 

 

NETGEAR for Business

 

 

Connected
Home

 

 

Total

 

 

Geographic regions (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

42,035

 

 

$

85,717

 

 

$

127,752

 

 

$

36,323

 

 

$

104,695

 

 

$

141,018

 

 

EMEA

 

 

22,975

 

 

 

9,823

 

 

 

32,798

 

 

 

24,786

 

 

 

10,898

 

 

 

35,684

 

 

APAC

 

 

13,520

 

 

 

8,784

 

 

 

22,304

 

 

 

9,401

 

 

 

11,742

 

 

 

21,143

 

 

Total

 

$

78,530

 

 

$

104,324

 

 

$

182,854

 

 

$

70,510

 

 

$

127,335

 

 

$

197,845

 

 

Sales channels:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service provider

 

$

268

 

 

$

22,949

 

 

$

23,217

 

 

$

219

 

 

$

32,403

 

 

$

32,622

 

 

Non-service provider

 

 

78,262

 

 

 

81,375

 

 

 

159,637

 

 

 

70,291

 

 

 

94,932

 

 

 

165,223

 

 

Total

 

$

78,530

 

 

$

104,324

 

 

$

182,854

 

 

$

70,510

 

 

$

127,335

 

 

$

197,845

 

 

 

 

 

Nine Months Ended

 

 

 

September 29, 2024

 

 

October 1, 2023

 

(In thousands)

 

NETGEAR for Business

 

 

Connected
Home

 

 

Total

 

 

NETGEAR for Business

 

 

Connected
Home

 

 

Total

 

Geographic regions (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

103,189

 

 

$

229,994

 

 

$

333,183

 

 

$

113,172

 

 

$

266,379

 

 

$

379,551

 

EMEA

 

 

64,549

 

 

 

26,791

 

 

 

91,340

 

 

 

76,744

 

 

 

34,279

 

 

 

111,023

 

APAC

 

 

39,282

 

 

 

27,535

 

 

 

66,817

 

 

 

33,763

 

 

 

27,829

 

 

 

61,592

 

Total

 

$

207,020

 

 

$

284,320

 

 

$

491,340

 

 

$

223,679

 

 

$

328,487

 

 

$

552,166

 

Sales channels:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service provider

 

$

713

 

 

$

70,234

 

 

$

70,947

 

 

$

427

 

 

$

71,346

 

 

$

71,773

 

Non-service provider

 

 

206,307

 

 

 

214,086

 

 

 

420,393

 

 

 

223,252

 

 

 

257,141

 

 

 

480,393

 

Total

 

$

207,020

 

 

$

284,320

 

 

$

491,340

 

 

$

223,679

 

 

$

328,487

 

 

$

552,166

 

 

(1) No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.