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NETGEAR posted Q1 non-GAAP EPS of 6 cents vs. an estimated loss, while revenues beat forecasts.
NETGEAR's Enterprise revenues rose 5.8% to $83.8M on ProAV switch momentum, lifting margins.
NTGR ended Q1 with 559K subscribers and $39.7M ARR; Q2 revenues guided to $150M-$165M.
NETGEAR, Inc. (NTGR - Free Report) reported first-quarter 2026 non-GAAP earnings per share (EPS) of 6 cents compared with the Zacks Consensus Estimate of a loss of 8 cents. The company’s bottom line improved 200% year over year.
Quarterly net revenues of $158.8 million declined 2% year over year but topped the consensus estimate of $152.5 million by 4.1%. Revenues came within the management guidance of $145 million and $160 million.
The higher-margin Enterprise segment cushioned the performance, benefiting from growth in ProAV-managed switch products.
At the end of the first quarter, NTGR now has 559,000 recurring subscribers and $39.7 million in annual recurring revenues.
For the second quarter of 2026, NETGEAR projects net revenues of $150 million to $165 million. The company expects end-user demand for ProAV managed switches to remain strong. However, the Consumer business is likely to be impacted by the rising cost of memory throughout the year, according to management. Service Provider and related products business revenues are forecast to be around $18 million, down nearly 33% year over year.
Image Source: Zacks Investment Research
In the past year, shares of NTGR have declined 7.5% against the Communications-Components industry’s growth of 335.7%.
NETGEAR’s Q1 in Details
Driven by the ongoing momentum for ProAV managed switch products, revenues from the Enterprise segment (53% of total revenues) jumped 5.8% to $83.8 million. The company has added more than 50 partners to its AV ecosystem in the year, bringing total partnerships to 577.
NTGR is also navigating supply-chain headwinds around certain managed switch products.
The Consumer segment’s revenues of $75 million fell 9.5% year over year. Weakness in sales to Service Providers and associated products, which declined 32% year on year, proved a drag. Excluding this, the core Consumer business was up 3%, driven by strength in the WiFi 7 lineup and growth in recurring revenue services.
Our estimates for Enterprise and Consumer stood at $79.5 million and $73 million, respectively.
Region-wise, net revenues from the Americas were $105.9 million (67% of total revenues), down 1.8% year over year. Europe, the Middle East and Africa generated revenues (21%) of $33.5 million, up 4.2%. Revenues from the Asia Pacific region (12%) fell 12.1% year over year to $19.5 million.
NTGR’s Margin Details
Non-GAAP gross margin was 41.7%, up 670 basis points (bps) from the prior-year quarter, helped by transformation efforts and a shift towards enterprise business.
Enterprise segment’s non-GAAP gross margin came in at 52.7%, up 640 bps from the prior-year quarter. Consumer segment non-GAAP gross margin also improved 520 bps year over year to 29.4%, driven primarily by a favorable mix of Wi-Fi 7 products and a lower service provider mix, which partly offset the impact of higher memory costs.
The non-GAAP operating income was $1.7 million against an operating loss of $2.6 million in the year-ago quarter.
Non-GAAP operating expenses were $64.6 million, up 8.8% year over year.
NTGR’s Cash Flow & Liquidity
For the quarter ended March 29, 2026, cash and cash equivalents, and short-term investments were $296.5 million with $248.7 million of total current liabilities.
Cash provided by operations was $1.6 million in the reported quarter.
NTGR repurchased shares worth $20 million in the quarter under review. It announced additional authorization worth $75 million. The company now has $89 million worth of shares left under its existing authorization.
NETGEAR’s Q2 Guidance
The GAAP operating margin is forecasted between (8.4)% and (5.4)%. The non-GAAP operating margin is estimated to be (1)% to 2%.
Management noted that the company has secured adequate memory for all 2026 production and continues with mitigation efforts with higher benefit to the enterprise business.
GAAP tax expenses are anticipated to be a benefit of $0.8 million to $1.8 million, with non-GAAP tax expenses between $0.5 million and $1.5 million.
Recent Performance of Other Companies in the Same Space
Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2026 (ended Jan. 31) adjusted EPS of $1.35, which surpassed the Zacks Consensus Estimate of $1.14. The bottom line skyrocketed 111% year over year.
With hyperscalers, telecom providers and enterprises rapidly expanding high-speed networks to support AI workloads, Ciena’s optical networking solutions are becoming increasingly critical. CIEN’s expansion reflects not only strong operational execution but also a structural shift in networking demand driven by AI infrastructure.
Corning Incorporated (GLW - Free Report) reported first-quarter 2026 core earnings of 70 cents per share, up 29.6% year over year and in line with the Zacks Consensus Estimate. Revenues of $4.35 billion increased 18.1% from the year-ago quarter and beat the consensus estimate by 1.78%.
Corning’s top-line growth was driven by strong demand for Gen AI-related products and a sharp ramp in solar offerings, with Optical Communications and Solar emerging as key contributors. GLW’s core operating margin expanded to 20.2%, reflecting improved scale and execution.
Viavi Solutions Inc. (VIAV - Free Report) reported strong third-quarter fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimate. Net sales increased to $406.8 million from $284.8 million in the year-ago quarter, primarily driven by strong performance in its Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments.
Viavi’s non-GAAP net income in the reported quarter was $67.6 million or 27 cents per share compared with $33.9 million or 15 cents per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 3 cents.
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NETGEAR Q1 Earnings Beat Estimates, Revenues Decline Y/Y
Key Takeaways
NETGEAR, Inc. (NTGR - Free Report) reported first-quarter 2026 non-GAAP earnings per share (EPS) of 6 cents compared with the Zacks Consensus Estimate of a loss of 8 cents. The company’s bottom line improved 200% year over year.
Quarterly net revenues of $158.8 million declined 2% year over year but topped the consensus estimate of $152.5 million by 4.1%. Revenues came within the management guidance of $145 million and $160 million.
The higher-margin Enterprise segment cushioned the performance, benefiting from growth in ProAV-managed switch products.
NETGEAR, Inc. Price, Consensus and EPS Surprise
NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote
At the end of the first quarter, NTGR now has 559,000 recurring subscribers and $39.7 million in annual recurring revenues.
For the second quarter of 2026, NETGEAR projects net revenues of $150 million to $165 million. The company expects end-user demand for ProAV managed switches to remain strong. However, the Consumer business is likely to be impacted by the rising cost of memory throughout the year, according to management. Service Provider and related products business revenues are forecast to be around $18 million, down nearly 33% year over year.
Image Source: Zacks Investment Research
In the past year, shares of NTGR have declined 7.5% against the Communications-Components industry’s growth of 335.7%.
NETGEAR’s Q1 in Details
Driven by the ongoing momentum for ProAV managed switch products, revenues from the Enterprise segment (53% of total revenues) jumped 5.8% to $83.8 million. The company has added more than 50 partners to its AV ecosystem in the year, bringing total partnerships to 577.
NTGR is also navigating supply-chain headwinds around certain managed switch products.
The Consumer segment’s revenues of $75 million fell 9.5% year over year. Weakness in sales to Service Providers and associated products, which declined 32% year on year, proved a drag. Excluding this, the core Consumer business was up 3%, driven by strength in the WiFi 7 lineup and growth in recurring revenue services.
Our estimates for Enterprise and Consumer stood at $79.5 million and $73 million, respectively.
Region-wise, net revenues from the Americas were $105.9 million (67% of total revenues), down 1.8% year over year. Europe, the Middle East and Africa generated revenues (21%) of $33.5 million, up 4.2%. Revenues from the Asia Pacific region (12%) fell 12.1% year over year to $19.5 million.
NTGR’s Margin Details
Non-GAAP gross margin was 41.7%, up 670 basis points (bps) from the prior-year quarter, helped by transformation efforts and a shift towards enterprise business.
Enterprise segment’s non-GAAP gross margin came in at 52.7%, up 640 bps from the prior-year quarter. Consumer segment non-GAAP gross margin also improved 520 bps year over year to 29.4%, driven primarily by a favorable mix of Wi-Fi 7 products and a lower service provider mix, which partly offset the impact of higher memory costs.
The non-GAAP operating income was $1.7 million against an operating loss of $2.6 million in the year-ago quarter.
Non-GAAP operating expenses were $64.6 million, up 8.8% year over year.
NTGR’s Cash Flow & Liquidity
For the quarter ended March 29, 2026, cash and cash equivalents, and short-term investments were $296.5 million with $248.7 million of total current liabilities.
Cash provided by operations was $1.6 million in the reported quarter.
NTGR repurchased shares worth $20 million in the quarter under review. It announced additional authorization worth $75 million. The company now has $89 million worth of shares left under its existing authorization.
NETGEAR’s Q2 Guidance
The GAAP operating margin is forecasted between (8.4)% and (5.4)%. The non-GAAP operating margin is estimated to be (1)% to 2%.
Management noted that the company has secured adequate memory for all 2026 production and continues with mitigation efforts with higher benefit to the enterprise business.
GAAP tax expenses are anticipated to be a benefit of $0.8 million to $1.8 million, with non-GAAP tax expenses between $0.5 million and $1.5 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 the Same Space
Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2026 (ended Jan. 31) adjusted EPS of $1.35, which surpassed the Zacks Consensus Estimate of $1.14. The bottom line skyrocketed 111% year over year.
With hyperscalers, telecom providers and enterprises rapidly expanding high-speed networks to support AI workloads, Ciena’s optical networking solutions are becoming increasingly critical. CIEN’s expansion reflects not only strong operational execution but also a structural shift in networking demand driven by AI infrastructure.
Corning Incorporated (GLW - Free Report) reported first-quarter 2026 core earnings of 70 cents per share, up 29.6% year over year and in line with the Zacks Consensus Estimate. Revenues of $4.35 billion increased 18.1% from the year-ago quarter and beat the consensus estimate by 1.78%.
Corning’s top-line growth was driven by strong demand for Gen AI-related products and a sharp ramp in solar offerings, with Optical Communications and Solar emerging as key contributors. GLW’s core operating margin expanded to 20.2%, reflecting improved scale and execution.
Viavi Solutions Inc. (VIAV - Free Report) reported strong third-quarter fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimate. Net sales increased to $406.8 million from $284.8 million in the year-ago quarter, primarily driven by strong performance in its Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments.
Viavi’s non-GAAP net income in the reported quarter was $67.6 million or 27 cents per share compared with $33.9 million or 15 cents per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 3 cents.