NETGEAR® Reports Second Quarter 2026 Results

Revenue and operating margin above the high end of guidance

Enterprise segment grows 7.7% year over year and delivers all-time-high non-GAAP gross margin of 54.1%

ARR from subscription and services of approximately $42 million

Douglas Murray, enterprise networking and security veteran, joins Board of Directors

SAN JOSE, Calif.--(BUSINESS WIRE)-- NETGEAR, Inc. (NASDAQ: NTGR), a global leader in intelligent networking solutions designed to power extraordinary experiences, today reported financial results for the second quarter ended June 28, 2026.

Q2 2026

• Net revenue of $168.6 million, down 1.2% as compared to Q2 prior year

• GAAP gross margin of 40.2 %, up 270 basis points year over year

Non-GAAP gross margin of 41.4 %, up 360 basis points year over year

• GAAP operating income of $(8.4) million compared to $(9.5) million from Q2 prior year

Non-GAAP operating income of $4.0 million compared to $(1.2) million from Q2 prior year

• GAAP EPS of $(0.27) compared to $(0.22) from Q2 prior year

Non-GAAP EPS of $0.16 compared to $0.06 from Q2 prior year

The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.

CJ Prober, Chief Executive Officer, commented, “We delivered another strong quarter of disciplined execution and improved profitability, led by the continued momentum in our Enterprise business. Our growing Enterprise business now represents more than half of our topline and approximately 69% of our non-GAAP gross profit, so we remain encouraged that the investments here are driving the intended results. We are also pleased to welcome Douglas Murray to our Board of Directors, whose deep enterprise networking and security leadership over the past 30 years at companies like Juniper Networks, Extreme Networks and in his current role as CEO of Auvik, will be a tremendous asset. We remain well positioned to create long term value for shareholders by continuing to profitably scale our Enterprise business while preserving optionality for our Consumer business as the supply and regulatory landscape evolves.”

Bryan Murray, Chief Financial Officer, added, “Our second quarter results are another proof point of the second phase of our transformation, allowing NETGEAR to drive strong top and bottom-line performance even in the face of a difficult macroeconomic and supply environment. In concert with strong operational discipline, an improved revenue mix toward higher-margin Enterprise products and services allowed us to deliver topline and profitability above the high end of our guidance range. Continuing our opportunistic approach to stock repurchases, we repurchased $12.9 million of shares, bringing our total to over $116 million since the beginning of 2024, and we have approximately $75 million reserved in our current authorization. Additionally, we are pleased to share that, with our Enterprise revenue mix exceeding 50% each quarter this year, we have been able to update our SIC code to align with the other companies we are competing with in this market.”

Enterprise Segment Results

• Revenue was $89.0 million, up 7.7% year over year
• Non-GAAP gross margin was 54.1%, up 740 basis points year over year
• Non-GAAP contribution margin was 25.9%, up 660 basis points year over year

Mr. Prober continued, “Enterprise continued to strengthen its position as NETGEAR’s primary near-term growth engine, delivering another quarter of topline growth and an all-time high non-GAAP gross margin of more than 54%, reinforcing the progress we are making toward a higher-margin growth profile. Software is becoming an increasingly important differentiator, supported by our strategic acquisitions of VAAG, Exium and the source code for our managed switch portfolio. Despite supply chain headwinds, pricing actions helped preserve robust margins and contributed to an outstanding segment contribution margin of nearly 26%, our highest in over seven years. We also continued to expand our partner and customer ecosystem, surpassing 600 ProAV manufacturing partners, extending our presence in the broadcast and education verticals, and securing several significant customer wins. With the launches of Align and Insight 10.0, growing adoption of Engage, and new go-to-market leadership in APAC, NETGEAR remains well positioned to strengthen its competitive position and deliver continued profitable growth in Enterprise.”

Consumer Segment Results

• Revenue was $79.6 million, down 9.4% year over year
• Non-GAAP gross margin was 27.3%, down 210 basis points year over year
• Non-GAAP contribution margin was (2.2)%, down 590 basis points year over year

Mr. Prober continued, “In Consumer, we continued to execute our transformation with discipline, prioritizing gross profit in core home networking while managing the service provider business for value as we navigate the memory-cost environment. Although revenue remained constrained, the recurring revenue component of our home networking business continued to perform well, driving 15% year-over-year growth in annual recurring revenue. At the same time, the in-house software development capabilities we have built are reducing our reliance on outside partners and strengthening our ability to deliver differentiated products and services. With an experienced leadership team, a more efficient operating model, continued innovation and regulatory tailwinds, we remain optimistic about the long-term growth potential of our Consumer business.”

Business Outlook

Mr. Murray continued, “Within Enterprise, we expect continued growth led by the strong demand for our ProAV line of managed switches. On the Consumer side, while we have our broader product portfolio to address the market, we will continue to prioritize gross profit over revenue to mitigate the effect of the rising cost of memory. For Service Provider and related products, we expect revenue to be approximately $22 million, which would be a decline of approximately 19% as compared to the third quarter of 2025. Accordingly, we expect third quarter net revenue to be in the range of $165 million to $175 million. We continue to have visibility of cost impacts for the balance of the year due to the great progress in accessing supply directly from memory manufacturers. In the third quarter we expect the memory impact to continue to be nominal for our Enterprise business given the relatively higher ASPs and margins and the offset provided by our recent price increases. On the Consumer side we expect increased impact from these headwinds, despite mitigation from actions being taken with our channel partners. The memory cost challenge is expanding to other parts of the BOM, and we are also experiencing modest production delays given the tightening environment. All together, we are continuing to expect approximately 200 basis point headwind to our combined gross margin in the second half compared to the first half with the impact skewed to Q3 due to near-term supply constraints. Accordingly, we expect our third quarter GAAP operating margin to be in the range of (12.0)% to (9.0)%, and non-GAAP operating margin to be in the range of (3.0)% to 0.0%. Our GAAP tax expense is expected to be in the range of $0.5 million to $1.5 million, and our non-GAAP tax expense is expected to be in the range of $1.0 to $2.0 million for the third quarter of 2026.”

A reconciliation between the Business Outlook on a GAAP and non-GAAP basis is provided in the following table:

Investor Conference Call / Webcast Details

NETGEAR will review the second quarter results and discuss management's expectations for the third quarter of 2026 today, Thursday, August 6, 2026 at 5 p.m. ET (2 p.m. PT). The toll-free dial-in number for the live audio call is (833) 461-5787. The international dial-in number for the live audio call is (585) 542-9983. The conference ID for the call is 839 828 152. A live webcast of the conference call will be available on NETGEAR's Investor Relations website at http://investor.netgear.com. A replay of the call will be available via the web at http://investor.netgear.com.

About NETGEAR, Inc.

Founded in 1996 and headquartered in the USA, NETGEAR® (NASDAQ: NTGR) is a global leader in innovative networking technologies for businesses, homes, and service providers. NETGEAR delivers a wide range of award-winning, intelligent solutions designed to unleash the full potential of connectivity and power extraordinary experiences. For businesses, NETGEAR offers reliable, easy-to-use, high-performance networking solutions, including switches, routers, access points, software, and AV over IP technologies, tailored to meet the diverse needs of small and medium enterprises.

© 2026 NETGEAR, Inc. NETGEAR and the NETGEAR logo are trademarks or registered trademarks of NETGEAR, Inc. and its affiliates in the United States and/or other countries. Other brand and product names are trademarks or registered trademarks of their respective holders. The information contained herein is subject to change without notice. NETGEAR shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Source: NETGEAR-F

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent NETGEAR, Inc.’s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding: NETGEAR’s future operating performance and financial condition, including expectations regarding growth, revenue, operating margin and gross margin; creating long-term value for shareholders; positioning NETGEAR for long term success; long-term potential and profitable growth; continued end user demand for NETGEAR’s ProAV line of managed switches; revenue from the service provider channel; expectations regarding continuing market demand for the NETGEAR’s products and services; and expectations regarding expected tax benefits or tax expenses. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for NETGEAR’s products and services may be lower than anticipated; NETGEAR may be unsuccessful, or experience delays, in manufacturing and distributing its new and existing products and services; consumers may choose not to adopt NETGEAR’s new product and services offerings or adopt competing products and services; NETGEAR may fail to manage costs, including the cost of key components, the cost of air freight and ocean freight, and the cost of developing new products and manufacturing and distribution of its existing offerings; NETGEAR may fail to successfully continue to effect operating expense savings; changes in the level of NETGEAR's cash resources and NETGEAR’s planned usage of such resources; changes in NETGEAR’s stock price and developments in the business that could increase NETGEAR’s cash needs; fluctuations in foreign exchange rates; loss of services of key personnel may affect NETGEAR’s ability to executive on business strategy effectively; and the actions and financial health of NETGEAR’s customers, including NETGEAR’s ability to collect receivables as they become due. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect NETGEAR and its business are detailed in NETGEAR’s periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled "Part II - Item 1A. Risk Factors" in NETGEAR’s quarterly report on Form 10-Q for the fiscal quarter ended March 29, 2026, filed with the Securities and Exchange Commission on May 1, 2026. Given these circumstances, you should not place undue reliance on these forward-looking statements. NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Non-GAAP Financial Information:

To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles (“GAAP”), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP total operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP other income (expenses), net, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share, as well as segment gross profit, segment gross margin, segment operating expenses (consisting of segment research and development, and sales and marketing), segment contribution income (loss) and segment contribution margin. These supplemental measures exclude adjustments for amortization of intangible assets, stock-based compensation expense, acquisition related expenses, restructuring and other charges, litigation reserves, net, gain/loss on investments and others, and adjust for effects related to non-GAAP tax adjustments. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by offering:

• the ability to make more meaningful period-to-period comparisons of our on-going operating results;
• the ability to better identify trends in our underlying business and perform related trend analyses;
• a better understanding of how management plans and measures our underlying business; and
• an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures:

Amortization of intangible assets consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors.

Stock-based compensation expense consists of non-cash charges for the estimated fair value of restricted stock units and shares under the employee stock purchase plan granted to employees. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results.

Other items consist of certain items that are the result of either unique or unplanned events, including, when applicable: acquisition related expenses, restructuring and other charges, litigation reserves, net, and gain/loss on investments and others. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred.

Non-GAAP tax adjustments consist of adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income (loss). We believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures, as well as adjustments for valuation allowances on deferred tax assets, provides our management and users of the financial statements with better clarity regarding both current period performance and the on-going performance of our business. Non-GAAP income tax expense (benefit) is computed on a current and deferred basis with non-GAAP income (loss) consistent with use of non-GAAP income (loss) as a performance measure. The Non-GAAP tax provision (benefit) is calculated by adjusting the GAAP tax provision (benefit) for the impact of the non-GAAP adjustments, with specific tax provisions such as state income tax and Base-erosion and Anti-Abuse Tax recomputed on a non-GAAP basis, as well as adjustments for valuation allowances on deferred tax assets. The tax valuation allowance is a non-cash adjustment primarily reflecting our expectations of, and assumptions as to, future operating results and applicable tax laws, that are not directly attributable to the current quarter’s operating performance. For interim periods, the non-GAAP income tax provision (benefit) is calculated based on the forecasted annual non-GAAP tax rate before discrete items and adjusted for interim discrete items.