NETGEAR, Inc.

For Q2 2026, NETGEAR reported revenue of $168.6 million, down 1.2% year over year and up 6.1% sequentially. Non-GAAP gross margin was 41.4%, versus 37.8% in the prior-year quarter; enterprise gross margin was 54.1%, up 740 basis points year over year; and consumer gross margin was 27.3%, down 210 basis points year over year. Non-GAAP operating income was $4 million, or 2.4% operating margin, and non-GAAP net income was about $4.4 million, or $0.16 per share. Looking ahead to Q3 2026, management guided to revenue of $165 million to $175 million, non-GAAP operating margin of negative 3% to 0%, and service provider revenue of around $22 million; they also said they expect about a 200-basis-point gross margin headwind in the second half, skewed more heavily to Q3.

CEO Charles J. Prober framed the quarter as evidence that NETGEAR’s transformation toward a software-differentiated enterprise business is working. He highlighted enterprise momentum, new software and platform offerings like Align and improved Insight capabilities, growing partner/customer ecosystems, and a shift toward higher-margin recurring revenue. His tone was confident and long-term oriented, emphasizing pricing leverage, AI-enabled software development, and the view that the company is becoming an enterprise solutions business.

CFO Bryan D. Murray said Q2 revenue of $168.6 million and non-GAAP operating margin of 2.4% were above the high end of guidance, helped by enterprise strength and some service-provider benefit. He pointed to non-GAAP gross margin of 41.4%, enterprise gross margin of 54.1%, consumer gross margin of 27.3%, and ARR of $41.6 million, while noting $10.2 million of cash used by operations in the quarter and $268 million in cash and short-term investments at quarter-end. He also said the company repurchased about 560,000 shares at an average price of $23.04, spent $1.5 million on capex, and still has about $75 million remaining under authorization.

Analysts focused on why enterprise strength exceeded seasonality, with management pointing to solid demand in the Americas and EMEA, double-digit growth in Pro AV managed switches, and no meaningful one-time benefit from events like the World Cup. They also pressed on APAC, where Prober described a legacy-channel restructuring with fewer distribution layers and a new regional leader, saying the region has near-term headwinds but could become the fastest-growing market. On supply-chain pressure and margins, management said memory shortages, broader component cost inflation, and some air-freight use are pressuring Q3 margins, but enterprise pricing leverage and supply improvements should help later in the year.