Netgear 2005 Annual Report Download - page 5

NETGEAR recognized by Deloitte’s
“Technology Fast 50”
NETGEAR opens its new,
cutting edge wireless R&D lab
NETGEAR surpasses the $200 million
mark, as revenues total $237.3M
NETGEAR is recognized as one of
the top privately-owned technology
companies by the Silicon Valley/
San Jose Business Journal
ProSafe line of networking solutions
is launched with a focus on the needs
of small to medium businesses
“Platinum” family of home networking
products is launched with a focus on
the unique needs of consumers
$200M $300M
NETGEAR approaches the $300 million
mark, as revenues total $299.3M
NETGEAR successfully completes its
Initial Public Offering and is listed
on the NASDAQ National Market
under the ticker symbol NTGR
First broadband service provider product
is customized, certified and shipped
to Time Warner Cable
NETGEAR expands into emerging
markets including China, India,
Russia and Eastern Europe
Fast Company names NETGEAR among
Top 10 public telecom and networking
companies in its first quarterly
Innovation Scorecard report
For the first time, NETGEAR international
sales surpass U.S. sales
51:49
2001 2002 2003 2004
8 9
and innovation pipeline, with revenue growing to $449.6 million, up 17% from 2004. We continued to deliver
margin expansion with gross margins increasing to 33.7% from 32.1% and operating margin growing to 11.6%
from 9.2% year on year. By the end of 2005, the company’s cash on hand, including cash, cash equivalents, and
short-term investments, increased to $173.2 million, up from $141.7 million in 2004.
Looking forward, as broadband adoption increases and wireless penetration rises NETGEAR’s addressable
market continues to grow in our areas of technology expertise including wired and wireless networking. Additional
opportunities are also emerging with new categories of products based on entirely new networking applications for
consumers and small to medium business, such as Voice-over-Internet-Protocol (VoIP) and multimedia (TV, stereos)
integration to the Internet.
NETGEAR’s core Ethernet capabilities have expanded from 10 to 100 to Gigabit speeds, with 10 Gig speeds
to be offered in 2006 to small and medium businesses. NETGEAR was one of the first to offer Powerline products
turning any power outlet into a network connection. Now with the development of speeds capable of supporting
multiple HD (High Definition) streams simultaneously, NETGEAR will be the first to meet future customer demands.
In wireless, the emergence of wide area wireless technologies such as FLASH-OFDM, UMTS TD-CDMA, and WiMax
provides an additional technology platform to build upon. WiFi performance continues from .11b to .11g moving
to the future of .11n, offering the faster speeds and further ranges to support the next generation of wireless appli-
cations, including voice and video. NETGEAR will be at the forefront of this transition and plans to accrue the first
to market benefits that come from a leadership position.
dominant leadership position in the smart switch category, a category created by NETGEAR in 2003. Since then,
more customers have chosen NETGEAR ProSafe Smart Switches than all other competitors combined in what has
become the fastest growing category of switches in the market.
For broadband service providers, NETGEAR expanded on its strength in international markets with the introduc-
tion of the RangeMax version of its award winning ADSL2+ modem router/gateway. NETGEAR also introduced the
industry first Mobile Broadband Router integrating broadband connectivity via wireless FLASH-OFDM, UMTS TD-
CDMA, or in the future WiMax, with WiFi and Ethernet. This groundbreaking new product category enables mobile
operators around the world to enhance their service offering for mobile, portable, or stationary broadband access.
Geographically, 2005 saw the continued expansion of NETGEAR’s international presence, from about half of sales
the year prior to 56% of revenue. Unlike competitors who have staked their success predominantly on the US market,
NETGEAR is also strongly positioned in the fast growing international markets, providing the best foundation to capital-
ize on this tremendous growth opportunity. With expansion into China, India, Russia, and Eastern Europe, NETGEAR
is prepared for the future in these huge, under-penetrated markets as broadband adoption continues worldwide.
NETGEAR is now recognized around the world for stylish and innovative products that consumers want to buy
and reliable solutions that business can trust. With a combination of award winning design and quality engineer-
ing, NETGEAR is able to deliver innovations that are easy to use. Built on a legacy of technology and reliability,
NETGEAR is known as a premium brand at prices affordable enough for consumers and small to medium business.
NETGEAR delivered financial results during the year reflecting our brand momentum, geographic strength,