NETGEAR Q3 Earnings & Revenues Beat Estimates, Q4 Guidance Provided

NETGEAR, Inc. NTGR reported third-quarter 2025 non-GAAP earnings per share of 12 cents, in contrast to the Zacks Consensus Estimate of a loss of 9 cents. The company reported non-GAAP earnings of 17 cents per share in the year-ago quarter. 

NETGEAR generated net revenues of $184.6 million, beating the consensus estimate by 7% and surpassing the company’s guidance of $165-$180 million. Revenues rose 0.9% year over year and 8.2% sequentially. The higher-margin enterprise segment buoyed the performance, benefiting from ASP and unit growth in ProAV-managed switch products.

NTGR now has 560,000 recurring subscribers. 

NETGEAR is now reporting revenues under three segments: NETGEAR Enterprise, Mobile and Home networking. It renamed the NETGEAR for Business segment to NETGEAR Enterprise. For the fourth quarter of 2025, NTGR will be reporting under two segments, NETGEAR Enterprise and NETGEAR Consumer. 

NTGR noted that within the Enterprise segment, it continues to witness supply headwinds, 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 third quarter. Net revenues for the fourth quarter are predicted between $170 million and $185 million.

In the past year, shares of NTGR have skyrocketed 53.3% compared with the Computer-Networking industry’s growth of 29.7%.

NETGEAR’s Q3 in Details

Driven by the ongoing momentum for ProAV managed switch products (up double-digit year over year), revenues from the Enterprise segment jumped 15.7% to $90.8 million. The company also announced that it secured several blue-chip customer wins and increased its total number of AV Manufacturing partnerships to 500. In the third quarter, NTGR unveiled a new cybersecurity offering based on its Exium acquisition. 

Though NTGR is navigating supply-chain headwinds to boost supply and lower backlog, it still anticipates returning to an optimal inventory position in the first quarter of 2026.

NETGEAR, Inc. Price, Consensus and EPS Surprise

NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote

The Mobile segment’s revenues of $21.1 million fell 20.7% year over year but were up 3.3% sequentially. High-end Nighthawk M7 Pro mobile hotspots in retail witnessed increased uptake. The company remains focused on executing its ‘good-better-best' strategy with product launches scheduled in the coming months.

Home Networking business revenues declined 6.6% on a year-over-year basis but were up 7.6% sequentially to $72.6 million. A favorable product mix stemming from the expansion of the product WiFi 7 products portfolio, newly launched Orbi 370 and growth of the Armor subscription service acted as major catalysts.

Our estimates for NFB, Home Networking and Mobile stood at $79.3 million, $72.5 million and $20.3 million, respectively. 

Region-wise, net revenues from the Americas were $128.1 million (69% of total revenues), up 0.3% year over year. Europe, the Middle East and Africa generated revenues (20%) were $37 million, up 12.6%. Revenues from the Asia Pacific region (11%) fell 12.4% year over year to $19.5 million.

NTGR’s Margin Details

The gross margin performance gained from improved mix of the higher-margin Enterprise business and selling the older, higher cost inventory.

The adjusted gross margin increased year over year to 39.6% from 31.1%.  Enterprise segment non-GAAP gross margin came in at 51% up 630 basis points (bps) from the prior-year quarter. Mobile segment non-GAAP gross margin improved 1,270 bps year over year to 31%. 

The non-GAAP operating income was $3.8 million against an operating income of $1.6 million in the year-ago quarter.

Non-GAAP operating expenses were $69.2 million, up 25.1% year over year, due to hiring plans as well as one-time expenses related to the relocation of headquarters.

NTGR’s Cash Flow & Liquidity

For the quarter ended Sept. 28, 2025, NETGEAR used $7.4 million in cash from operations.

The company also had $326.4 million in cash and cash equivalents, and short-term investments, as well as $239.2 million of total current liabilities.

NTGR repurchased shares worth $20 million in the quarter under review. In 2024, NETGEAR bought back $33.6 million worth of shares. The company has 2 million shares left under its existing authorization.

NETGEAR’s Q4 Guidance

Gross margin is expected to witness a 150-bps headwind stemming from the rising cost of memory as several of the main suppliers have exited the DDR4 market. 

The GAAP operating margin is forecast between (7.3)% and (4.3)%. The non-GAAP operating margin is estimated to be (2)% to 1%. 

GAAP tax expenses are anticipated to be a benefit of $500,000 to an expense of $500,000, with non-GAAP tax expenses between $0.5 million and $1.5 million.

NTGR’s Zacks Rank

NETGEAR currently carries a Zacks Rank #4 (Sell). 

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

Seagate Technology Holdings plc STX reported first-quarter fiscal 2026 non-GAAP earnings of $2.61 per share, beating the Zacks Consensus Estimate by 10.6% and exceeding the high end of management’s guidance of $2.3 per share (+/- 20 cents). Seagate continues to advance its technology roadmap to meet the growing demand for higher-capacity products.

Non-GAAP revenues of $2.63 billion exceeded the Zacks Consensus Estimate by 3.9%. Seagate’s revenues were above the guidance midpoint, increasing 21% year over year. The rising demand for high-capacity hard drives contributed to this growth. Global cloud service providers primarily fueled demand, with notable sequential revenue increases from enterprise customers.

Cadence Design Systems CDNS reported third-quarter 2025 non-GAAP earnings per share (EPS) of $1.93, which beat the Zacks Consensus Estimate by 7.8%. The bottom line increased 17.7% year over year, exceeding management’s guided range of $1.75-$1.81.
Revenues of $1.339 billion beat the Zacks Consensus Estimate by 0.9% and increased 10.2% year over year. The figure also beat the management’s guided range of $1.305-$1.335 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.

CDNS added that its efforts to unify EDA, IP, 3D-IC, PCB and system analysis are aiding in capitalizing on the opportunity presented by the AI super cycle. CDNS ended the quarter with a backlog of $7 billion and current-remaining performance obligations of $3.5 billion.

Plexus Corp PLXS reported fourth-quarter fiscal 2025 adjusted EPS of $2.14 compared with the year-ago quarter’s earnings of $1.85. The figure beat the Zacks Consensus Estimate of $1.84 per share. Plexus expected non-GAAP EPS to be in the band of $1.82-$1.97.

Plexus’ revenues of $1.058 billion were up nearly 0.7% year over year and topped the Zacks Consensus Estimate of $1.046 billion. Management expected revenues to be between $1.025 billion and $1.065 billion. 
 

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