NETGEAR® Reports Fourth Quarter and Full Year 2025 Results

Enterprise segment delivers another quarter of double-digit revenue growth year over year

Q4 operating margin above the high end of guidance

Q4 record high GAAP gross margin of 40.4% & non-GAAP gross margin of 41.2%

Repurchased $50 million of shares of common stock in 2025

NETGEAR, Inc. (NASDAQ:NTGR), a global leader in intelligent networking solutions designed to power extraordinary experiences, today reported financial results for the fourth quarter and full year ended December 31, 2025.

Q4 2025

• Net revenue of $182.5 million, flat as compared to Q4 prior year

• GAAP gross margin of 40.4%, up 780 basis points from 32.6% in Q4 prior year
  
  Non-GAAP gross margin of 41.2%, up 840 basis points from 32.8% in Q4 prior year

• GAAP operating income of $(4.7) million compared to $(15.1) million from Q4 prior year
  
  Non-GAAP operating income of $5.9 million compared to $(4.2) million from Q4 prior year

• GAAP EPS of $(0.02) compared to $(0.31) from Q4 prior year
  
  Non-GAAP EPS of $0.26 compared to $(0.06) from Q4 prior year

2025 Fiscal Year

• Net revenue of $699.6 million, up 3.8% from the prior year
  
  

• GAAP gross margin of 38.0%, up from 29.1% in the prior year
  
  Non-GAAP gross margin of 38.5%, up from 29.3% in the prior year

• GAAP operating income of $(34.2) million compared to $12.2 million in the prior year
  
  Non-GAAP operating income of $5.9 million compared to $(49.6) million in the prior year

• GAAP EPS of $(0.63) compared to $0.42 in the prior year
  
  Non-GAAP EPS $0.44 compared to $(0.91) in the prior year

For context, in Q3 2024 NETGEAR settled a significant legal dispute for over $100 million resulting in higher-than-normal GAAP operating income and EPS for that 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 exited 2025 with a strong fourth quarter that underscored the momentum we've built across the business, delivering the first year of revenue growth in five years and a 920 basis point increase in our non-GAAP gross margin compared to the prior year. It's clear that our transformation is enabling streamlined execution and disciplined focus in pursuit of our highest growth opportunities. This culminated in revenue at the high end of our guidance and record quarterly non-GAAP gross margin of 41.2% for the quarter. Driven by continued strength in our higher margin Enterprise business and coupled with improved mix and cost performance in our Consumer business, NETGEAR has fundamentally changed its profitability profile while investing for long-term growth. We delivered non-GAAP profit every quarter of the year, surpassing our expectations. As we embark on 2026, we are focused on building on this momentum by continuing to invest in our highest-growth opportunities, driving further software-led innovation, deepening partner engagements, and expanding the value we deliver to customers. With a strengthened balance sheet and resilient margins, we believe NETGEAR is well positioned to deliver long-term value creation."

Bryan Murray, Chief Financial Officer, added, "Our fourth quarter results highlight the strength of our financial execution and the breadth of the improvements we've made across the business over the past two years. We have a leaner operating model and we are seeing our optimized execution translate to the bottom line. With strong free cash flow, we ended the quarter with $323 million in cash and short-term investments even after repurchasing $15 million of shares, positioning us well to deliver long-term shareholder value as we enter 2026."

Enterprise Segment Results

• Revenue was $89.4 million, up 10.6% year over year
• Non-GAAP gross margin was 51.4%, up 750 basis points year over year
• Non-GAAP contribution margin was 22.9%, up 320 basis points year over year

Mr. Prober continued, "Enterprise again delivered robust year-over-year performance, as demonstrated by solid revenue growth and substantial margin improvement even in the face of supply headwinds, powered by strong end user demand for our ProAV solutions. Over the past year, we have made significant progress in developing our software offerings to further our differentiation in the market with several acquisitions and the founding of our Chennai software development center. In addition, we introduced the industry's only all-in-one SASE and hybrid firewall platform, launched an AV professional services team and Partner Success Program, and added more than 150 partners to our AV ecosystem in the year. These actions have strengthened the trajectory of the Enterprise business and further solidified our leadership position in the AV industry and, with an improving supply position entering the year, we are well-positioned for profitable growth within this business."

Consumer Segment Results

• Revenue was $93.1 million, down 8.4% year over year
• Non-GAAP gross margin was 31.4%, up 750 basis points year over year
• Non-GAAP contribution margin was 5.4%, up 670 basis points year over year

Mr. Prober continued, "In Consumer, we again saw the benefits of our refreshed product portfolio as we execute on our ‘good-better-best' product strategy. Our WiFi 7 routers and mesh systems performed well and continue to garner accolades while helping to generate sequential share gains in key retail channels worldwide. When excluding sales to Service Providers and associated products, which were down approximately 30% year on year, the core Consumer business grew 1.6% in the quarter as compared to the prior year period. During the fourth quarter we also rolled out a new website and branding, bolstering the growth of our direct-to-consumer channels while helping to widen the funnel for our strategic subscription offerings. Led by our Armor security offering, we closed out the year with more than $40 million in annual recurring revenue. While the overall market remained competitive, our portfolio's breadth and pricing discipline helped us defend share and improve overall segment margins. With additional improvements to our subscription offerings planned for 2026 and the launch of our eSim-enabled M7 mobile hotspot, we remain focused on further expanding our non-device revenue streams."

Business Outlook

Within Enterprise, end user demand for our ProAV line of managed switches is expected to remain strong and we have made progress on improving our supply position for these products. On the Consumer side, while we have our broader product portfolio to address the market, we are seeing softening market demand to start the quarter, which could be attributable to broader pricing pressures from electronics makers dealing with the rising cost of memory. For Service Provider and related products, we expect revenue to be around $20 million in part tied to the latest government shutdown, which would be a decline of approximately 35% as compared to the first quarter of 2025. Accordingly, we expect first quarter net revenue to be in the range of $145 million to $160 million. In the first quarter we expect our operating expenses to be slightly reduced from the prior quarter, aided by a small transformation-driven restructuring, with the savings being redeployed to further accelerate our transformation later in the year. Additionally, we expect a slight headwind to our gross margins of around 100 bps mainly related to the rising cost of memory. Accordingly we expect our first quarter GAAP operating margin to be in the range of (16.3)% to (13.3)%, and non-GAAP operating margin to be in the range of (6.0)% to (3.0)%. Our GAAP tax is expected to be in the range of $1 million to $2 million, and our non-GAAP tax expense is expected to be in the range of $300,000 to $1.3 million for the first 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 fourth quarter and full year results and discuss management's expectations for the first quarter of 2026 today, Wednesday, February 4, 2026 at 5 p.m. ET (2 p.m. PT). The toll-free dial-in number for the live audio call is (888) 660-6392. The international dial-in number for the live audio call is (929) 203-0899. The conference ID for the call is 1030183. 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 organizations of all sizes. NETGEAR's Consumer products deliver advanced connectivity, powerful performance, and enhanced security features right out of the box, designed to keep families safe online, whether at home or on the go. More information is available from the NETGEAR Press Room or by calling (408) 907-8000. Connect with NETGEAR: Facebook, Instagram and the NETGEAR blog at NETGEAR.com.

© 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 September 28, 2025, filed with the Securities and Exchange Commission on October 31, 2025. 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. 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. Included in the non-GAAP tax adjustments for the three and twelve months ended December 31, 2025 and December 31, 2024 are adjustments to tax expense (benefit) related to differences between our prior forecasts and actual results for the twelve months ended.