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NTGR beat Q2 estimates with non-GAAP EPS of $0.06 and revenues of $170.5M.
NFB revenues jumped 38% on strong ProAV demand, though supply constraints remain concerning.
Home Networking grew 13.1% y/y, aided by portfolio expansion and improved operations.
NETGEAR, Inc. (NTGR - Free Report) reported second-quarter 2025 non-GAAP earnings per share of 6 cents, beating the Zacks Consensus Estimate of a loss of 16 cents. The company incurred a non-GAAP loss of 74 cents per share in the year-ago quarter.
NETGEAR generated net revenues of $170.5 million, beating the consensus estimate by 5.3%. The figure also surpassed the company’s guidance of $155-$170 million. Revenues rose 18.5% on a year-over-year basis and 5.2% sequentially. The company revealed that the successful channel destocking plan in 2024 and operational discipline drove the results.
NTGR generated $9 million of recurring services revenues in the reported quarter. It now has 559,000 recurring subscribers. In the second quarter, NTGR acquired Exium to add security specifically designed for small and medium enterprises to its NETGEAR for Business (“NFB”) portfolio.
NETGEAR is now reporting revenues under three segments, NFB, Mobile and Home networking.
NTGR noted that within the NFB segment, it continues to witness lengthy lead times for supply, though demand for its ProAV line of managed switches remains robust. This is likely to restrict the realization of the full revenue potential of this segment. The Home Networking segment will benefit from an expanded product portfolio. Mobile segment revenues are expected to be in line with the second quarter. Net revenues for the third quarter are predicted between $165 million and $180 million.
Image Source: Zacks Investment Research
The company’s shares gained 4.4% in yesterday’s after-market trading session. In the past year, shares of NTGR have skyrocketed 50.1% compared with the Computer-Networking industry’s growth of 43%.
NETGEAR’s Q2 in Details
Driven by the ongoing momentum for ProAV managed switch products (up double-digit year-over-year across all geographic regions), revenues from the NFB segment jumped 38% year over year to $82.6 million. NTGR continues to witness supply constraints around certain managed switch products, leading to constrained revenue expectations for the same in the second half.
However, NTGR is carrying a higher backlog for ProAV Managed Switch products despite the challenged supply, but anticipates gradual improvement through the first quarter of 2026.
Due to weaker-than-expected service provider sales, the Mobile segment’s revenues of $20.4 million fell 16.1% year over year and 5% sequentially. The company remains focused on executing its ‘good-better-best' strategy with product launches scheduled for later in the year.
Home Networking business revenues jumped 13.1% on a year-over-year basis and 10% sequentially to $67.5 million. A favorable product mix stemming from the expansion of the product portfolio, improved operational footprint and progress in selling old inventory acted as major catalysts.
Our estimates for NFB, Mobile and Home Networking stood at $76.9 million, $63.6 million and $21.5 million, respectively.
The gross margin performance gained from improved mix of the higher-margin NFB business, better sales returns and associated costs, and selling the older, higher cost inventory.
The adjusted gross margin increased year over year to 37.8% from 22.4%. NFB gross margin came in at 46.7% compared with 33.7% reported in the prior year quarter.
The non-GAAP operating loss was $1.2 million against an operating income of $31.1 million in the year-ago quarter.
Non-GAAP operating expenses were $65.7 million, up 3.7% year over year due to hiring plans.
Region-wise, net revenues from the Americas were $116.3 million (68% of total revenues), up 21.8% year over year. Europe, the Middle East and Africa generated revenues (20%) were $34.4 million, up 25.7%. Revenues from the Asia Pacific region (12%) fell 5.5% year over year to $19.9 million.
NTGR’s Cash Flow & Liquidity
For the quarter ended June 29, 2025, NETGEAR used $1.8 million in cash from operations.
The company also had $364 million in cash and cash equivalents, and short-term investments, as well as $243.1 million of total current liabilities.
NTGR repurchased shares worth $7.5 million in the quarter under review. In 2024, NETGEAR bought back $33.6 million worth of shares. The company has 2.8 million shares left under its existing authorization.
NETGEAR’s Q3 Guidance
The GAAP operating margin is forecast between (11)% and (8)%. The non-GAAP operating margin is estimated to be (5.5)-(2.5)%.
GAAP tax expenses are anticipated between $0.8 million and $1.8 million, with non-GAAP tax expenses between $(0.5) million and $0.5 million for the third quarter of 2025.
Recent Performance of Other Companies in Broader Tech Space
Cadence Design Systems (CDNS - Free Report) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guidance of $1.55-$1.61.
Revenues of $1.275 billion beat the Zacks Consensus EsCadence Design Systems timate by 1.3% and increased 20.3% year over year. The figure beat CDNS’s view of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.
SAP SE (SAP - Free Report) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter. The Zacks Consensus Estimate was pegged at $1.63 per share.
Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.
Seagate Technology Holdings plc (STX - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.59 per share, beating the Zacks Consensus Estimate by 5.3%. The bottom line was in the upper end of STX’s guidance of $2.4 per share (+/- 20 cents), reflecting the outcome of structural improvements and strong cloud-driven demand. The company reported non-GAAP earnings of $1.05 per share in the year-ago quarter.
Non-GAAP revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.6%. Revenues came in above the midpoint of guidance, rising 30% year over year. Seagate’s performance this quarter reflects the tailwinds of massive data growth, driven by hyperscale cloud customers, AI workloads and edge computing, all of which require scalable, reliable and high-density storage solutions. For fiscal 2025, STX reported revenues of $9.1 million, a 39% year-over-year increase.
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NETGEAR Q2 Earnings & Revenues Surpass Estimates, Grow Y/Y
Key Takeaways
NETGEAR, Inc. (NTGR - Free Report) reported second-quarter 2025 non-GAAP earnings per share of 6 cents, beating the Zacks Consensus Estimate of a loss of 16 cents. The company incurred a non-GAAP loss of 74 cents per share in the year-ago quarter.
NETGEAR generated net revenues of $170.5 million, beating the consensus estimate by 5.3%. The figure also surpassed the company’s guidance of $155-$170 million. Revenues rose 18.5% on a year-over-year basis and 5.2% sequentially. The company revealed that the successful channel destocking plan in 2024 and operational discipline drove the results.
NTGR generated $9 million of recurring services revenues in the reported quarter. It now has 559,000 recurring subscribers. In the second quarter, NTGR acquired Exium to add security specifically designed for small and medium enterprises to its NETGEAR for Business (“NFB”) portfolio.
NETGEAR is now reporting revenues under three segments, NFB, Mobile and Home networking.
NTGR noted that within the NFB segment, it continues to witness lengthy lead times for supply, though demand for its ProAV line of managed switches remains robust. This is likely to restrict the realization of the full revenue potential of this segment. The Home Networking segment will benefit from an expanded product portfolio. Mobile segment revenues are expected to be in line with the second quarter. Net revenues for the third quarter are predicted between $165 million and $180 million.
Image Source: Zacks Investment Research
The company’s shares gained 4.4% in yesterday’s after-market trading session. In the past year, shares of NTGR have skyrocketed 50.1% compared with the Computer-Networking industry’s growth of 43%.
NETGEAR’s Q2 in Details
Driven by the ongoing momentum for ProAV managed switch products (up double-digit year-over-year across all geographic regions), revenues from the NFB segment jumped 38% year over year to $82.6 million. NTGR continues to witness supply constraints around certain managed switch products, leading to constrained revenue expectations for the same in the second half.
However, NTGR is carrying a higher backlog for ProAV Managed Switch products despite the challenged supply, but anticipates gradual improvement through the first quarter of 2026.
Due to weaker-than-expected service provider sales, the Mobile segment’s revenues of $20.4 million fell 16.1% year over year and 5% sequentially. The company remains focused on executing its ‘good-better-best' strategy with product launches scheduled for later in the year.
Home Networking business revenues jumped 13.1% on a year-over-year basis and 10% sequentially to $67.5 million. A favorable product mix stemming from the expansion of the product portfolio, improved operational footprint and progress in selling old inventory acted as major catalysts.
Our estimates for NFB, Mobile and Home Networking stood at $76.9 million, $63.6 million and $21.5 million, respectively.
NETGEAR, Inc. Price, Consensus and EPS Surprise
NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote
The gross margin performance gained from improved mix of the higher-margin NFB business, better sales returns and associated costs, and selling the older, higher cost inventory.
The adjusted gross margin increased year over year to 37.8% from 22.4%. NFB gross margin came in at 46.7% compared with 33.7% reported in the prior year quarter.
The non-GAAP operating loss was $1.2 million against an operating income of $31.1 million in the year-ago quarter.
Non-GAAP operating expenses were $65.7 million, up 3.7% year over year due to hiring plans.
Region-wise, net revenues from the Americas were $116.3 million (68% of total revenues), up 21.8% year over year. Europe, the Middle East and Africa generated revenues (20%) were $34.4 million, up 25.7%. Revenues from the Asia Pacific region (12%) fell 5.5% year over year to $19.9 million.
NTGR’s Cash Flow & Liquidity
For the quarter ended June 29, 2025, NETGEAR used $1.8 million in cash from operations.
The company also had $364 million in cash and cash equivalents, and short-term investments, as well as $243.1 million of total current liabilities.
NTGR repurchased shares worth $7.5 million in the quarter under review. In 2024, NETGEAR bought back $33.6 million worth of shares. The company has 2.8 million shares left under its existing authorization.
NETGEAR’s Q3 Guidance
The GAAP operating margin is forecast between (11)% and (8)%. The non-GAAP operating margin is estimated to be (5.5)-(2.5)%.
GAAP tax expenses are anticipated between $0.8 million and $1.8 million, with non-GAAP tax expenses between $(0.5) million and $0.5 million for the third quarter of 2025.
NTGR’s Zacks Rank
NETGEAR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in Broader Tech Space
Cadence Design Systems (CDNS - Free Report) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guidance of $1.55-$1.61.
Revenues of $1.275 billion beat the Zacks Consensus EsCadence Design Systems timate by 1.3% and increased 20.3% year over year. The figure beat CDNS’s view of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.
SAP SE (SAP - Free Report) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter. The Zacks Consensus Estimate was pegged at $1.63 per share.
Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.
Seagate Technology Holdings plc (STX - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.59 per share, beating the Zacks Consensus Estimate by 5.3%. The bottom line was in the upper end of STX’s guidance of $2.4 per share (+/- 20 cents), reflecting the outcome of structural improvements and strong cloud-driven demand. The company reported non-GAAP earnings of $1.05 per share in the year-ago quarter.
Non-GAAP revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.6%. Revenues came in above the midpoint of guidance, rising 30% year over year. Seagate’s performance this quarter reflects the tailwinds of massive data growth, driven by hyperscale cloud customers, AI workloads and edge computing, all of which require scalable, reliable and high-density storage solutions. For fiscal 2025, STX reported revenues of $9.1 million, a 39% year-over-year increase.