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NTGR guided Q1 revenues of $145M-$160M, citing memory cost headwinds and softer Consumer demand.
NETGEAR, Inc. (NTGR - Free Report) reported fourth-quarter 2025 non-GAAP earnings per share (EPS) of 26 cents compared with the Zacks Consensus Estimate of 5 cents. The company reported a non-GAAP loss of 6 cents per share in the year-ago quarter.
NETGEAR generated net revenues of $182.5 million, beating the consensus estimate by 2.9% and coming at the high end of its guidance of $170-$185 million. Revenues were flat year over year and down 1.1% sequentially. The higher-margin enterprise segment buoyed the performance, benefiting from ASP and unit growth in ProAV-managed switch products.
At the end of 2025, NTGR now has 558,000 recurring subscribers and more than $40 million in annual recurring revenues driven by the Armor security offering.
Management renamed the NETGEAR for Business segment to NETGEAR Enterprise. From the fourth quarter of 2025, NTGR is reporting revenues under two segments, NETGEAR Enterprise and NETGEAR Consumer.
For 2025, revenues were up 3.8% to $699.6 million, while non-GAAP EPS came in at 44 cents in contrast to a loss of 91 cents in 2024. The enterprise segment revenues were up 18.8%.
However, management noted that DDR4 memory shortages are an escalating and uncertain risk, particularly in the second half of 2026. While the company expects to largely mitigate gross margin impact in the first half, it emphasized that the second-half outcome is uncertain, especially for the consumer segment, where memory represents a significantly higher percentage of bill of materials than the enterprise segment.
Government shutdown and softening demand within the Consumer segment amid pricing pressures from electronics makers, who are dealing with the higher cost of memory, will result in about a 35% year over year decline in revenues from Service Provider and related products in the first quarter. End-user demand for ProAV switches is expected to be strong.
As a result, the first-quarter revenues are projected to be between $145 million and $160 million.
Following the announcement, shares are up 10% in the pre-market trading session today. In the past year, shares of NTGR have declined 29.3% against the Communications-Components industry’s growth of 129.1%.
Image Source: Zacks Investment Research
NETGEAR’s Q4 in Details
Driven by the ongoing momentum for ProAV managed switch products (demand up double-digit year over year), revenues from the Enterprise segment jumped 10.6% to $89.4 million. The company has added more than 150 partners to its AV ecosystem in the year.
NTGR is also navigating supply-chain headwinds to boost supply and lower backlog, and still anticipates returning to an optimal inventory position in the first quarter of 2026.
The Consumer segment’s revenues of $93.1 million fell 8.4% year over year and 0.7% sequentially. Weakness in sales to Service Providers and associated products, which declined 30% year on year, proved a drag. Excluding this, the core Consumer business was up 1.6%, driven by strength in WiFi 7 routers and mesh systems.
Our estimates for Enterprise, Home Networking and Mobile (together comprise Consumer) stood at $88.5 million, $67.7 million and $21.1 million, respectively.
Region-wise, net revenues from the Americas were $123.9 million (68% of total revenues), up 0.8% year over year. Europe, the Middle East and Africa generated revenues (20%) were $36.2 million, up 0.7%. Revenues from the Asia Pacific region (12%) fell 5.2% year over year to $22.4 million.
NTGR’s Margin Details
The gross margin performance gained from improved mix of the higher-margin Enterprise business and Wi-Fi 7 products (within the consumer business), along with the license acquisition (a perpetual license for the operating system powering AV line managed switches in the fourth quarter).
The adjusted gross margin increased year over year to 41.2% from 32.8%. Enterprise segment non-GAAP gross margin came in at 51.4%, up 750 basis points (bps) from the prior-year quarter. Consumer segment non-GAAP gross margin also improved 750 bps year over year to 31.4%, driven by favorable mix of Wi-Fi 7 products and strength in the higher-margin direct-to-consumer channel.
The non-GAAP operating income was $5.95 million against an operating loss of $4.16 million in the year-ago quarter.
Non-GAAP operating expenses were $69.2 million, up 8.3% year over year, due to hiring plans.
NTGR’s Cash Flow & Liquidity
For the quarter ended Dec. 31, 2025, NETGEAR had $19.5 million in cash from operations.
The company also had $323 million in cash and cash equivalents, and short-term investments, as well as $250.2 million of total current liabilities.
NTGR repurchased shares worth $15 million in the quarter under review. In 2025, NETGEAR bought back $50 million worth of shares. The company has 1.5 million shares left under its existing authorization.
NETGEAR’s Q1 Guidance
Gross margin is expected to witness a 100-bps headwind stemming from the rising cost of memory.
The GAAP operating margin is forecasted between (16.3)% and (13.3)%. The non-GAAP operating margin is estimated to be (6)% to (3)%.
GAAP tax expenses are anticipated to be a benefit of $1 million to $2 million, with non-GAAP tax expenses between $0.3 million and $1.3 million.
Recent Performance of Other Companies in Same Space
Lumentum (LITE - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $1.67 per share, which beat the Zacks Consensus Estimate by 18.68%. The company reported non-GAAP earnings of 42 cents per share in the year-ago quarter.
Lumentum’s non-GAAP revenues of $665.5 million, which beat the consensus mark by 1.85%, increased 24.7% on a sequential basis and 65.5% on a year-over-year basis. The growth showcases the strength of the company’s plans for both optical components and systems. LITE reported a non-GAAP gross margin of 42.5% compared with 32.3% in the year-ago quarter.
Viavi Solutions Inc. (VIAV - Free Report) reported strong second-quarter fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimate. Viavi Solutions posted a solid 36.4% year-over-year increase in revenues, supported by strong performance in its Network and Service Enablement (“NSE”) and Optical Security and Performance Products segments. Growth was driven by sustained demand from data centers and ongoing 5G and fiber network upgrades, along with solid sales in the aerospace and defense markets. In the second quarter of fiscal 2026, the NSE segment generated $291.5 million in revenues, up 45.8% year over year.
Corning Incorporated (GLW - Free Report) reported impressive fourth-quarter 2025 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy sales across multiple end markets. The growing adoption of GLW’s advanced products for Gen-AI (generative artificial intelligence) applications is a tailwind. Its U.S.-made solar products are also gaining solid market traction.
Net sales, on a GAAP basis, were $4.21 billion, up from $3.5 billion reported in the year-ago quarter. Solid traction in Corning’s mobile consumer electronics, premium smartphone verticals and Optical Communications boosted net sales. Core sales were up 14% to $4.41 billion. The top line beat the consensus estimate of $4.32 billion.
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NETGEAR Q4 Earnings & Revenues Beat Estimates, Q1 Guidance Provided
Key Takeaways
NETGEAR, Inc. (NTGR - Free Report) reported fourth-quarter 2025 non-GAAP earnings per share (EPS) of 26 cents compared with the Zacks Consensus Estimate of 5 cents. The company reported a non-GAAP loss of 6 cents per share in the year-ago quarter.
NETGEAR generated net revenues of $182.5 million, beating the consensus estimate by 2.9% and coming at the high end of its guidance of $170-$185 million. Revenues were flat year over year and down 1.1% sequentially. The higher-margin enterprise segment buoyed the performance, benefiting from ASP and unit growth in ProAV-managed switch products.
At the end of 2025, NTGR now has 558,000 recurring subscribers and more than $40 million in annual recurring revenues driven by the Armor security offering.
Management renamed the NETGEAR for Business segment to NETGEAR Enterprise. From the fourth quarter of 2025, NTGR is reporting revenues under two segments, NETGEAR Enterprise and NETGEAR Consumer.
NETGEAR, Inc. Price, Consensus and EPS Surprise
NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote
For 2025, revenues were up 3.8% to $699.6 million, while non-GAAP EPS came in at 44 cents in contrast to a loss of 91 cents in 2024. The enterprise segment revenues were up 18.8%.
However, management noted that DDR4 memory shortages are an escalating and uncertain risk, particularly in the second half of 2026. While the company expects to largely mitigate gross margin impact in the first half, it emphasized that the second-half outcome is uncertain, especially for the consumer segment, where memory represents a significantly higher percentage of bill of materials than the enterprise segment.
Government shutdown and softening demand within the Consumer segment amid pricing pressures from electronics makers, who are dealing with the higher cost of memory, will result in about a 35% year over year decline in revenues from Service Provider and related products in the first quarter. End-user demand for ProAV switches is expected to be strong.
As a result, the first-quarter revenues are projected to be between $145 million and $160 million.
Following the announcement, shares are up 10% in the pre-market trading session today. In the past year, shares of NTGR have declined 29.3% against the Communications-Components industry’s growth of 129.1%.
Image Source: Zacks Investment Research
NETGEAR’s Q4 in Details
Driven by the ongoing momentum for ProAV managed switch products (demand up double-digit year over year), revenues from the Enterprise segment jumped 10.6% to $89.4 million. The company has added more than 150 partners to its AV ecosystem in the year.
NTGR is also navigating supply-chain headwinds to boost supply and lower backlog, and still anticipates returning to an optimal inventory position in the first quarter of 2026.
The Consumer segment’s revenues of $93.1 million fell 8.4% year over year and 0.7% sequentially. Weakness in sales to Service Providers and associated products, which declined 30% year on year, proved a drag. Excluding this, the core Consumer business was up 1.6%, driven by strength in WiFi 7 routers and mesh systems.
Our estimates for Enterprise, Home Networking and Mobile (together comprise Consumer) stood at $88.5 million, $67.7 million and $21.1 million, respectively.
Region-wise, net revenues from the Americas were $123.9 million (68% of total revenues), up 0.8% year over year. Europe, the Middle East and Africa generated revenues (20%) were $36.2 million, up 0.7%. Revenues from the Asia Pacific region (12%) fell 5.2% year over year to $22.4 million.
NTGR’s Margin Details
The gross margin performance gained from improved mix of the higher-margin Enterprise business and Wi-Fi 7 products (within the consumer business), along with the license acquisition (a perpetual license for the operating system powering AV line managed switches in the fourth quarter).
The adjusted gross margin increased year over year to 41.2% from 32.8%. Enterprise segment non-GAAP gross margin came in at 51.4%, up 750 basis points (bps) from the prior-year quarter. Consumer segment non-GAAP gross margin also improved 750 bps year over year to 31.4%, driven by favorable mix of Wi-Fi 7 products and strength in the higher-margin direct-to-consumer channel.
The non-GAAP operating income was $5.95 million against an operating loss of $4.16 million in the year-ago quarter.
Non-GAAP operating expenses were $69.2 million, up 8.3% year over year, due to hiring plans.
NTGR’s Cash Flow & Liquidity
For the quarter ended Dec. 31, 2025, NETGEAR had $19.5 million in cash from operations.
The company also had $323 million in cash and cash equivalents, and short-term investments, as well as $250.2 million of total current liabilities.
NTGR repurchased shares worth $15 million in the quarter under review. In 2025, NETGEAR bought back $50 million worth of shares. The company has 1.5 million shares left under its existing authorization.
NETGEAR’s Q1 Guidance
Gross margin is expected to witness a 100-bps headwind stemming from the rising cost of memory.
The GAAP operating margin is forecasted between (16.3)% and (13.3)%. The non-GAAP operating margin is estimated to be (6)% to (3)%.
GAAP tax expenses are anticipated to be a benefit of $1 million to $2 million, with non-GAAP tax expenses between $0.3 million and $1.3 million.
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 Same Space
Lumentum (LITE - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $1.67 per share, which beat the Zacks Consensus Estimate by 18.68%. The company reported non-GAAP earnings of 42 cents per share in the year-ago quarter.
Lumentum’s non-GAAP revenues of $665.5 million, which beat the consensus mark by 1.85%, increased 24.7% on a sequential basis and 65.5% on a year-over-year basis. The growth showcases the strength of the company’s plans for both optical components and systems. LITE reported a non-GAAP gross margin of 42.5% compared with 32.3% in the year-ago quarter.
Viavi Solutions Inc. (VIAV - Free Report) reported strong second-quarter fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimate.
Viavi Solutions posted a solid 36.4% year-over-year increase in revenues, supported by strong performance in its Network and Service Enablement (“NSE”) and Optical Security and Performance Products segments. Growth was driven by sustained demand from data centers and ongoing 5G and fiber network upgrades, along with solid sales in the aerospace and defense markets. In the second quarter of fiscal 2026, the NSE segment generated $291.5 million in revenues, up 45.8% year over year.
Corning Incorporated (GLW - Free Report) reported impressive fourth-quarter 2025 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy sales across multiple end markets. The growing adoption of GLW’s advanced products for Gen-AI (generative artificial intelligence) applications is a tailwind. Its U.S.-made solar products are also gaining solid market traction.
Net sales, on a GAAP basis, were $4.21 billion, up from $3.5 billion reported in the year-ago quarter. Solid traction in Corning’s mobile consumer electronics, premium smartphone verticals and Optical Communications boosted net sales. Core sales were up 14% to $4.41 billion. The top line beat the consensus estimate of $4.32 billion.