Revenue

6 Months Ended

Jun. 30, 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 June 30, 2024:

(In thousands)	Less than 1 year		1 to 2 years		Beyond 2 years		Total
Performance obligations	$	63,534	$	3,084	$	2,589	$	69,207

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	June 30, 2024		December 31, 2023
Accounts receivable, net	Accounts receivable, net	$	147,069	$	185,059
Contract liabilities – current	Deferred revenue	$	28,682	$	27,091
Contract liabilities – non-current	Other non-current liabilities	$	5,534	$	4,903

The difference in the balances of the Company’s contract assets and liabilities as of June 30, 2024 and December 31, 2023, primarily results from the timing difference between the Company’s performance and the customer’s payment.

During the six months ended June 30, 2024, $24.9 million of revenue was deferred primarily due to unsatisfied performance obligations for service contracts, $22.7 million of revenue was recognized for the satisfaction of performance obligations and $18.1 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: Connected Home and NETGEAR for Business (formerly known as Small and Medium Business, or SMB). Sales and usage-based taxes are excluded from net revenue.

	Three Months Ended
	June 30, 2024						July 2, 2023
(In thousands)	Connected Home		NETGEAR for Business		Total		Connected Home		NETGEAR for Business		Total
Geographic regions (1) :
Americas	$	66,282	$	29,221	$	95,503	$	77,683	$	38,928	$	116,611
EMEA		8,958		18,397		27,355		11,317		24,844		36,161
APAC		8,793		12,249		21,042		9,406		11,235		20,641
Total	$	84,033	$	59,867	$	143,900	$	98,406	$	75,007	$	173,413
Sales channels:
Service provider	$	19,732	$	202	$	19,934	$	24,916	$	18	$	24,934
Non-service provider		64,301		59,665		123,966		73,490		74,989		148,479
Total	$	84,033	$	59,867	$	143,900	$	98,406	$	75,007	$	173,413

	Six Months Ended
	June 30, 2024						July 2, 2023
(In thousands)	Connected Home		NETGEAR for Business		Total		Connected Home		NETGEAR for Business		Total
Geographic regions (1):
Americas	$	144,277	$	61,154	$	205,431	$	161,684	$	76,849	$	238,533
EMEA		16,968		41,574		58,542		23,381		51,958		75,339
APAC		18,751		25,762		44,513		16,087		24,362		40,449
Total	$	179,996	$	128,490	$	308,486	$	201,152	$	153,169	$	354,321
Sales channels:
Service provider	$	47,285	$	445	$	47,730	$	38,943	$	208	$	39,151
Non-service provider		132,711		128,045		260,756		162,209		152,961		315,170
Total	$	179,996	$	128,490	$	308,486	$	201,152	$	153,169	$	354,321

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