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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5 p.m. ET Chief Executive Officer - Charles J. Prober Chief Financial Officer - Bryan D. Murray Investor Relations - Erik Bylin Operator: Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. At that time, if you have a question, you will need to press the star 1 on your push button phone. I would now like to turn the conference over to Erik Bylin, Please go ahead, sir. Erik Bylin: Thank you, operator. Good afternoon, and welcome to NETGEAR's second quarter of 26 Financial Results Conference Call. Joining us from the company are Mr. C.J. Prober, CEO and Mr. Bryan D. Murray, CFO. The format of the call will start with commentary on the business provided by CJ, followed by a review of the financials for the second quarter and guidance for the third quarter, provided by Bryan. We will then have time for any questions. If you have not received a copy of today's release, please visit NETGEAR's Investor Relations website at www.netgear.com. Before we begin the formal remarks, we advise you that today's conference call contains forward looking statements. Forward looking statements include statements regarding expected revenue, gross and operating margins, expenses, tax expense, and future business outlook. Actual results or trends could differ materially from those contemplated by these forward looking statements. For more information, please refer to the risk factors discussed in NETGEAR's periodic filings with the SEC. including the most recent Form 10 Q, Any forward looking statements that we make on this call are based on assumptions as of today, and NETGEAR undertakes no obligation to update these statements as a result of new information, or future events except as required by law. In addition, several non GAAP financial measures, will be mentioned on this call. A reconciliation of the non GAAP to GAAP measures can be found in today's press release on our Investor Relations website. At this time, I would now like to turn the call over to CJ. Charles J. Prober: Thanks, Erik, and thank you all for joining our call. We are pleased to share that we delivered another solid quarter that demonstrates the continued momentum behind our transformation to be a software-differentiated enterprise led business that is delivering profitable growth and expanding long term shareholder value. Today, I will cover 2 topics, a recap of our Q2 performance and an update on our transformation. Let's jump in. Q2 showed discipline execution, strong profitability, and clear progress on the strategic priorities we outlined at the start of the year as we delivered top and bottom line performance above the high end of our guidance range. Enterprise delivered another strong quarter, with revenue increasing 7.7% year over year which was led by strong growth across The Americas and EMEA. Enterprise now represents more than half of NETGEAR's total revenue and approximately 69% of our gross profit. Demonstrating the increasingly important role this business plays in our growth and financial performance. Just as important, enterprise continues to deliver significant profitability expansion. Non GAAP gross margin reached an all time high of 54.1%, while non GAAP contribution margin increased 660 basis points year over year to 25.9% its highest level in more than 7 years. Although our ongoing go to market transformation in APAC moderated our growth during the quarter, we are addressing those headwinds and believe the changes underway can position APAC to become our fast growing region. With enterprise now representing the majority of NETGEAR's revenue and even greater share of our gross profit, and with that contribution, expected to continue growing we have elected to change NETGEAR's standard industrial classification code or SIC code to align with our competition in this enterprise segment. This change takes effect today, and going forward, we should screen better to potential investors by identifying GEAR as the company we are today, an enterprise solutions company. In consumer, we continue to harvest our service provider business and optimize the core consumer business for gross profit given the challenging supply environment. Despite these top of funnel constraints in consumer, we grew our overall annual recurring revenue to $42 million, representing a 15% year over year increase. The stronger mix of business and margin expansion from enterprise combined with the disciplined execution in our consumer business allowed us to move from a non GAAP operating loss last year to operating profit in Q2 of this year, while significantly expanding our EPS as well. Bryan will cover the Q2 results in more detail, so I will conclude my commentary on Q2 by thanking the NETGEAR enterprise and consumer teams for their relentless focus on delivering against our commitments. In addition to the quarterly results, we are thrilled with tangible progress of our longer term transformation. When I joined NETGEAR 2.5 years ago, it was very apparent that we had an opportunity to unlock significant shareholder value by bringing a stronger focus to our enterprise business. That led to a substantial reorganization and a significant influx of enterprise talent starting with a new business unit leader, followed by new leaders for most functional disciplines. In transforming our team, a core part of our talent strategy has been to in source software development while leveraging AI. This effort was accelerated for our enterprise business by 3 strategic acquisitions. Mog, Exium, and the source code that had previously been outsourced for our line of managed switches. I am thrilled to report that this business unit now has over 200 badge software engineers and we have almost completely reduced our reliance on outside contractors. This brings with it increased alignment, speed, and quality to our software delivery. AI has been a significant enabler for us and our team is ahead of the curve on adoption because we are building this full stack software development capability from scratch, and we are not constrained by legacy development processes. AI landed as an accelerant at the perfect time to help fuel our transformation. And today, the team, organization, intellectual property, capabilities, road map, and delivery are strong and have little resemblance to where we were a few short years ago. I am more confident than ever that this will enable us to better serve an even broader set of customers in the future. The impact of this transformation is evident in the product and services we are now delivering to our customers. In Q2, we announced the launch of Align, a cloud managed platform designed to consolidate AV infrastructure services host applications such as our network management platform Engage, and serve as the open layer for third party AV apps. Align was announced at Infocom, the world's largest AV industry trade show, where it won best of show among its 7 industry awards. While also receiving an incredibly positive reception from partners and end customers. We are already working with several third parties to integrate their applications into our Align platform. And given that the cloud management capabilities will require an Insight license, Align will catalyze our recurring revenue business within the enterprise segment. Speaking of insight, we also announced several significant improvements to this platform in the quarter. Our newly designed experience dramatically simplifies the user interface work flows, and onboarding, revamps our licensing model to drive higher recurring revenue, implements an initial integration of our Exium security services and establishes the framework for AI powered network operations, and AI defined networking. This is a significant milestone in expanding the value we deliver to customers and a key driver of future recurring revenue growth opportunities. Align and Insight are excellent examples of the transformation underway at NETGEAR. They demonstrate how we are expanding beyond networking hardware to deliver a broader software and services platform that increases customer value differentiates our solutions, and supports our objective of building a faster growing, higher margin enterprise business. The transformation of our partner and customer ecosystems is gaining momentum as well. In Q2, we surpassed 600 Pro AV manufacturing partners including several new critical leading brands from the broadcast vertical. Our partner program is in full swing, and we now have added over a 125 certified Apex partners, our highest tier of partnership that requires a significant investment in NETGEAR. Our support and services team landed big new customers, like National Geographic, Shopify, and Salesforce. We also made great progress in the education vertical with wins in 86 school districts for the 2026 E-Rate season, more than half of which are new to NETGEAR this year. As noted in my Q2 recap, all of these accomplishments are favorably impacting the financial results of our enterprise business. We are making high ROI investments in the business while at the same time significantly increasing gross and contribution margin. As we mentioned previously, we implemented a small Price increase in Q2. And we are now evaluating more pricing actions in the second half of the year given the pricing leverage we have and to ensure the margins for this business remain robust and reflect the value we are delivering to customers. In addition, we now have the foundation in place to grow our higher margin nondevice revenue, and we look forward to scaling contributions from Insight, security, support, and professional services over the quarters to come. We are just at the beginning of unlocking growth opportunities of this business And as we shared it in our investor day, the multibillion dollar addressable markets are huge, and many of the incumbents are focused on the AI data center build out. Opening the door to additional share gains for NETGEAR. We do not see this changing, and for enterprise, the incremental cost of supply caused by the AI build out is far outweighed by the benefits of this competitive dynamic. While we are very proud of our progress, I am even more excited about our go forward plans. Will continue to enhance our team and the corporate governance overseeing the company. In that regard, today, we welcome Douglas Murray to our board of directors. Douglas has spent over 30 years in enterprise networking and security at companies like Juniper Networks and Extreme Networks. More recently, he was CEO of Big Switch Networks that sold to Arista in 2020 and Valtix that sold to Cisco in 2023. he is currently CEO of Auvik, which is an AI driven IT management software company that serves many of the same customers and partners that we target. So we are excited to see Douglas' impacts in the years to come. As I noted earlier, APAC has been a headwind to growth in the first half of this year, while this region has the potential to be our fastest growing market for our enterprise business. I am thrilled to report we have hired Surajit Sen to lead the transformation of this region for NETGEAR. Surajit is a seasoned, APAC go to market leader who has spent over 3 decades in the region most recently in long tenured executive roles for Zscaler, Dell, and NetApp. The opportunities in this region are significant and we are now well positioned to take advantage of them. Big welcome to both Douglas and Surajit. Shifting to our consumer business, I am very proud of the delivery and execution of this team. Similar to our enterprise business, we have a world class leadership team We have in source software development up and down the stack, and shifted away from reliance on outside partners, enabling us to drive a step change in innovation for this product portfolio. The consumer market is obviously dynamic, given the regulatory changes and supply chain challenges. We believe these regulatory changes have the potential to create a significant tailwind for us in the medium term, given of our primary competitors in this category, eero can continues to be the only other 1 to have received conditional approval from the Department of Defense to launch future consumer networking products. Additionally, we have done a great job managing the supply chain nuance in a difficult environment, and we will continue to pull levers to protect the margin profile of this business going forward. Given the mid to long term potential of this market and our leadership position, we are making prudent decisions preserve the value creation optionality associated with our core consumer business. And we expect to remain well positioned to capture the expanded market potential should the opportunity arise. In closing, transforming the culture and products of a company is not easy. But the team and I are now seeing the fruit of our efforts and it is most notably showing itself in the pipeline of future opportunities. We are doubling down on the profitable growth driving the enterprise business, while preserving optionality for value creation associated with the consumer business. The first half of 26 reinforced that the transformation is delivering on our goal to execute on near term imperatives while building a lean, scalable organization. We remain fully committed to the mid and long term targets we shared at our Investor Day and we will continue to make decisions that prioritize long term shareholder value creation while recognizing that achieving our short term goals is an important part of creating value. We could not be more confident in the team or in the trajectory we are on and we look forward to sharing further progress with you in the quarters ahead. With that, I will turn it over to Bryan. Bryan D. Murray: Thank you, CJ. Thank you everyone for joining today's call. Led once again by strength in our Pro AV managed switch products, within our enterprise segment, and enabled by continued progress in the second phase of our transformation, we deliver both revenue and non GAAP operating margin above the high end of our guidance range. This reflects our team's strong execution the face of supply headwinds, some incremental benefit from service provider, and the outcomes of the memory cost mitigation efforts that are ongoing. For the quarter ended June 28, 2026, revenue was $168.6 million. Down 1.2% year over year and up 6.1% on a sequential basis. The second quarter's performance was driven by continued strength in enterprise. Where we saw year over year growth in end user demand in The Americas and EMEA regions and double digit year over year growth in end user demand for our Pro AV managed switch products. We delivered $89 million of revenue in the enterprise segment for the second quarter. Up 6.1% sequentially and up 7.7% year over year. Encouragingly, revenue mix of our products from the higher margin enterprise segment improved over 400 basis points year over year to approximately 53% of total revenue. And remained steady sequentially. End user demand for our managed switch products grew double digits both sequentially and year over year. Despite lower than expected production stemming from operational executional challenges from our manufacturing partner, for these products. Strength of our leading higher margin ProAV line of managed switch products in the second quarter along with improvements from a licensed acquisition for the OS that powers these switches, was the driving force that led to record enterprise gross margin. And a strong consolidated gross margin in the quarter. As a reminder, since Q4, we have been reporting 2 business segments. With the reporting of our mobile products being included in our consumer business, We will continue to supplement reporting of service provider revenue which includes sales of our cable modem and gateway products sold in retail, in addition to the mobile products sold to operators. This revenue callout will allow investors to isolate these declining businesses in their assessment of NETGEAR and our transformation. In Q2, the consumer business delivered net revenue of $79.6 million down 9.4% on a year over year basis and up 6.1% sequentially. As we shared last quarter, given the memory shortage, and related cost increase to various components, we are optimizing this business for gross profit. Domestically, The US retail market continue to experience aggressive promotional activity from some competitors. But we were aided by strong performance of our US direct to consumer channel. Which grew over 20% year over year. We also saw positive benefits of our good, better, best Wi-Fi 7 lineup, and continued growth in our recurring revenue services. Grew both sequentially and year over year. Sales to service providers and associated products were buoyed by a reduced focus in the retail channel by our primary competitor in The US cable category. And 1 of our service provider partners wanting to buffer their inventory due to concerns of rising component costs but still down approximately 13% year over year as we harvest this portion of the business. Now moving on to an update on a recurring subscriber base. We continue to believe that focusing on increasing our recurring subscriber base is the right strategy to add higher margin revenue to both business segments while differentiating our offerings in the market. And to that end, a plethora of value added improvements are currently in development and slated for launch in the coming year. We are also making great strides with our nondevice revenue initiatives in the enterprise segment. With the successful launch of our new insight solution, receiving positive initial feedback. Across the business, we grew our ARR by 15% year over year, reaching $41.6 million in the quarter. We remain confident we can grow our highly profitable ARR over time, and I am pleased to share that we exited Q2 with 558 thousand recurring subscribers. From this point on, my discussion points will focus on non GAAP numbers. The reconciliation from GAAP to non GAAP is detailed in our earnings release distributed earlier today. Our non GAAP gross margin, came in at 41.4% in the second quarter of 26, buoyed by a strong mix of our enterprise products along with the expanded profitability within the segment. This quarter's gross margin was roughly flat sequentially, and a 360-basis point increase compared to 37.8% in the prior year comparable period. Relative to the year ago period, our gross margin in the current period benefited from an improved mix of our higher margin enterprise business. Including benefits from a license acquisition in the fourth quarter. As a reminder, we entered into a strategic agreement to acquire a perpetual license for the operating system that powers our AV line of managed switches. Acquiring this technology, improved our overall gross margins by roughly 150 basis points in the second quarter as compared to the year ago period. But more importantly, it continues to uplevel our ability to bring greater value to the AV ecosystem. Faster than we could have otherwise. Drilling down to the profitability of our 2 business segments, Our enterprise segment improved in profitability on both the gross margin and contribution margin basis. Enterprise gross margin achieved an all time high in both percentage and dollar terms. Coming in at 54.1%. Up 740 basis points year over year. This result was driven again by solid demand for our Pro AV managed switches. An improved regional mix, and aided by the aforementioned license acquisition. Contribution margin expanded by 200 basis points sequentially and 660 basis points as compared to the year ago period. The highest since Q1 of 39. On the consumer side, while we experienced rising memory cost, some demand softness in an extremely aggressive pricing environment, growth of our domestic direct to consumer channel, health to partially offset these factors. In addition, ongoing operational discipline and focus on prioritizing margin over top line, help mute these pressures. Enabling the consumer segment to end the quarter with gross margin of 27.3%. Or year over year decline of 210 basis points. The memory headwind flow through the profitability of this segment in Q2, although we are continuing to work with consumer business channel partners to meet this expected increasing effect in the back half of the year. Total Q2 non GAAP operating expenses came in at $65.8 million. Flat year over year and up 1.9% sequentially. Our headcount was 822 at the end of the quarter, up from 786 in Q1. We remain dedicated to the development and expansion of NETGEAR talent. With the aim of supporting our enterprise business, through the insourcing of software development and enhancing our go to market capabilities. Our non GAAP R&D expense for the second quarter was 12.2% of net revenue. As compared to 11.6% of net revenue in the prior year comparable period and 12.8% of net revenue in the first quarter. To continue our technology and product leadership, we are committed to significant yet cost effective investment in R&D. While also balancing hiring with capitalizing on the efficiency gains from AI within software development. Overall, strong performance of our enterprise gross margins combined with slightly stronger revenue than originally anticipated within the consumer business, enabled us to again deliver non GAAP operating margin above the high end of our guidance range. Our Q2 non GAAP operating income was $4 million resulting in a non GAAP operating margin of 2.4%. An improvement of 310 basis points compared to the year ago period. And an improvement of 140 basis points sequentially. Our non GAAP tax expense was approximately $1.4 million in the second quarter of 26. Looking at the bottom line for Q2, we reported non GAAP net income of approximately $4.4 million resulting in non GAAP income of $0.16 per share. During the quarter, $10.2 million of cash was used by operations. Which brings our total cash provided by operations over the trailing 12 months to $235 thousand. We used $1.5 million in purchase of property and equipment during the quarter. Which brings our total cash used for capital expenditures over the trailing 12 months $20.9 million Turning to the balance sheet. We ended the second quarter of 26 with $268 million in cash and short term investments. down $28.6 million from the prior quarter partly due to our $12.9 million in discretionary stock repurchases and due to changes in working capital. In Q2, we repurchased approximately 560 thousand shares of NETGEAR common stock at an average price of $23.04. Since the beginning of 2024, we have repurchased over $116 million of our stock, and we have approximately $75 million remaining in our authorization. And our fully diluted share count is approximately 27.9 million shares as of the end of the second quarter. We are committed to returning capital to our shareholders. And plan to continue to opportunistically repurchase shares in future periods. Overall, we are pleased with the performance in closing out the first half of 26. We exceeded expectations on both the top and bottom line. Improved our revenue mix towards higher margin portions of the business, and maintained strong operational discipline. While executing on our mitigation strategies to counter rising memory costs. We remain focused on executing on our strategy to drive profitable growth in an enterprise. While in the consumer business, we are focused on optimizing for gross profit and contribution margin. I will now cover our outlook for the third quarter of 26. Within enterprise, we expect continued growth led by the strong demand for our Pro AV line of managed switches. On the consumer side, while we have our broader product portfolio to address the market, we will continue to prioritize gross profit over revenue with the rising cost for memory. For service provider and related products, we expect revenue to be around $22 million. Which would be a decline of approximately 19% as compared to the third quarter of 25. Accordingly, we expect third quarter net revenue to be in the range of $165 million to $175 million We continue to have visibility to cost impacts for the balance of the year due to the great progress in accessing component supply from memory manufacturers. In the third quarter, expect the memory impact to continue to be nominal for our enterprise business, given the relatively higher ASPs and margins, and offset from our recent price increases. On the consumer side, we expect increased impact from these headwinds. Despite mitigation from actions being taken with our channel partners. The memory cost challenge is expanding to other parts of the BOM. And we are also experiencing modest production delays given the tightening environment. Altogether, we are continuing to expect approximately 200-basis-point headwind to our combined gross margin in the second half compared to the first half, with the impact skewed to Q3 due to near term supply constraints. Accordingly, we expect our third quarter GAAP operating margin to be in the range of negative 12% to negative 9%. And non GAAP operating margin to be in the range of negative 3% to 0%. Our GAAP tax expense is expected to be in the range of $500 thousand to $1.5 million. And our non GAAP tax expense is expected to be in the range of $1 million to $2 million for the third quarter of 26. And with that, we can now open up for questions. Operator: At this time, I would like to remind everyone in order to ask a question, please press star then the number 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Logan Jacob Katzman with Ray James. Please go ahead. Your line is now open. Logan Jacob Katzman: Yeah. Hi. This is Logan on for Adam. Thanks for taking our question and nice results. First, could you maybe double click on the strength you guys saw in enterprise? I think it was above seasonal. Can maybe could you touch on, you know, some of the drivers there, maybe double click on Pro AV. And you see any, like, onetime benefits or anything from maybe the World Cup or anything this quarter? Yeah. Anything around that. Thank you. Charles J. Prober: Hey, Logan. Great question. I will start and then maybe I miss anything, Bryan can jump in. So enterprise continues to be our stable, profitable growth engine as you saw. I think the 1 maybe thing I we can double click on is just the regional growth. So if you go to our queue, you will see that in The Americas, we grew 15% year over year. I am talking about revenue now. In EMEA, we are we are just shy of 10%, about 9%. And APAC was down 16%. So, obviously, we call out APAC specifically because we are in intentionally transforming our go to market there. We mentioned the hiring of Surajit, which we are super excited about. And we expect APAC to start growing sequentially in Q4. But you can see the strength of the growth that we are seeing across the other regions for that business. Just to specifically answer your question about FIFA World Cup, there is no I am not aware of any kind of 1 time blips associated with that or any other big event. Anything to add? Bryan? Bryan D. Murray: No. I think you covered it. Charles J. Prober: Awesome. Logan Jacob Katzman: Thank you. And then could you actually maybe double click on the changes going on in APAC? Can you maybe talk about some of the changes you are implementing besides, bringing in a new leader to that business? And then maybe also kind of what happened in that market to have you guys, implement these changes. Charles J. Prober: Yeah. Question. Well, I think, you know, it is a core part of our transformation is just that how we go to market in enterprise. And Nick Gears, we just did our 30 year anniversary. So a lot of kind of legacy channel models, a lot of layered distribution partnerships. And in order to address that, we needed to take a step back and make decisions for the long term. health of the region. And so, as part of that effort there is as you as you restructure the channel, in addition to bringing in the new leadership, we talked about some new partners, fewer distribution layers, implementing some of the transformational efforts that we have implemented in the other regions. So the good news is we have a playbook it is working in The Americas and EMEA, and we are just bringing it over to APAC. And the, you know, the near term headwinds are unfortunate, but over the long term, it is going to pay dividends. As we said on the call, it has the potential to be our fastest growing region. So we are excited about it and excited to see Surajit's impact. Logan Jacob Katzman: Awesome. that is super helpful. Thank you. It sounds like the acquisitions you guys have made that they are going pretty well. I was just curious, do they have any material impact in the quarter? And then maybe more broadly, can you guys just touch on your guys' any update to the capital allocation or just touch on your strategy there? Charles J. Prober: Yeah. Let me take those 1 at a time, and then Bryan can fill in any gaps. So the nondevice revenue tied to you know, the Exium acquisition, all of the changes that the new software team is driving in Insight, we are seeing really good progress there. You know, it the non device revenue for the quarter grew significantly. We are not gonna throw up big growth numbers at this stage because it is still off a small base. But with the progress we have made on security on insight, on support, on professional services, and how that is being supported by our partner program. We are feeling really good about we are setting up the right infrastructure, services, for delivering long term growth there. So no specific numbers to share other than to say, you know, we set some pretty ambitious midterm and long term targets in our in our investor day around percent of revenue from nondevice revenue sources, and we are we stand behind those. We feel really good about, our trajectory against those. As it relates to capital allocation, no change to the strategy. We have been really consistent there. Know, we are funding the internal investments that are focused on the enterprise side of the business. So that is our organic growth lever. M&A continues to be a priority. The 3 categories of opportunities we are looking at are product adjacencies, new capabilities. So product was Exium and security capabilities was MOG, and the source code that we brought in for our Pro AV managed switches. And then we have looked at a number of opportunities to bring scale to the business, but we are we are being really disciplined. And so we are gonna we are gonna wait for the right opportunity if 1 comes along. And if not, we are gonna continue to drive organic growth. And then, of course, we are focused on returning capital to shareholders. that is a key part of our ongoing strategy. Since I have joined, I believe we have repurchased a total of $160 million worth of shares, 13 million last quarter. We still have a $75 million authorization. So capital allocation strategy remains consistent. And yeah, that answers both your questions. Logan Jacob Katzman: Awesome. Yeah. No. It does. Super helpful. Thank you. And then last question for me on profitability here. First of all, the profitability on enterprise is extremely strong. So I was just kinda curious. How do you think about total gross margins maybe for the back half of the year? Just yeah. I understand the consumer dynamic. So I wanted to get the your guys' thoughts there. And then, moving down the income statement, it looks like Q3 guide, a little sub-seasonal on a operating income, and actually Q2 is a little above seasonal. Was there anything maybe, like, pushed from an expense standpoint from, like, Q2 to Q3? Or, just any, like, thoughts on profitability in Q3? Bryan D. Murray: I think as we have been saying consistently throughout year, the big profitability mover is the memory situation and our response and mitigating efforts to combat that. I will say, you know, looking at the back half of the year, we feel good about the estimates that are out there for revenue for the whole second half. If I were to look out to Q4 so we did mention on the call that we are facing about a 200-basis-point headwind to the second half for gross margins coming from the memory elevated costs, if I were to look specifically at Q4, we gave the guidance for Q3. But for Q4, we would expect about a 400-basis-point improvement sequentially from Q3 if you take the midpoint of the guidance range that we put out there. to our non-GAAP operating margin. that is really driven by 2 things. 1 would be the sequential projected increase in revenues in Q4, some of that coming from seasonal lift. And then the other thing we did note on the call that while we are seeing 200 basis point headwind to gross margin in the second half, it is a little more acute in Q3 because some of the near term supply challenges were supplementing with air freight So if you factor all of those things in and factor in the Q2 performance that we just delivered, it should take the estimates out there for the full fiscal year up on both measures revenue and non GAAP operating margin. Great. Charles J. Prober: Thank you, Bob. Operator: Your next question is from Tore Svanberg with Stifel. Please go ahead. Your line is open. Tore Svanberg: Yes. This is Cam Tierney on for Tore Svanberg with Stifel. Congrats on the progress here, and thanks for taking my questions. I wanted to ask, like, just sort of broadly, can you elaborate a little bit on the supply chain environment that you are facing? And, like, specifically, can you help us characterize your Pro AV supply situation? I know in the past, it is been a little bit supply side challenge, and maybe if there is any backlog there, could you help us, you know, put some guardrails around how to think about that? Thank you. Charles J. Prober: Yeah. Hey, Cam. Thanks for joining. Yeah. So as I am sure you are aware, it is a pretty dynamic supply environment. Whether it is memory, broader components, cost, just supply availability. You also have ODM capacity issues, lead times, and then distractions from tariffs and other regulatory shifts. So it is it is it is a pretty wild time from a supply perspective. As the way that impacts NETGEAR is, you know, this is where 30 years of building a resilient supply chain really pays off. We have got great partnerships. We have built a lot of goodwill. And, you know, we are just really proud of the execution of our team. it is like we have secured memory through the first half now of 27. We are shipping our new products. We are holding the line on the gross margin impact. For the second half of the year. As we have said, longer term enterprise, we have got pricing leverage. And we have already made a small move on prices. there is more room there. Just really, really proud of our efforts there. Pro AV supply, there is there is some history to that. We were short in supply kind of late last year. And then we caught up. And frankly, there was a blip this past quarter, just an execution factory move issue with our partner, and that caused us to and continues to cause us to lean into more air freight, which is costly and impacts gross margin, and that is all reflected in our in our guidance. The good news is we are back on track. And we are expecting to get to the targeted volumes this quarter. So I would describe it as nothing like the prior shortage we had, which is largely tied to more demand than we had planned. This was there was an execution issue that is been addressed and we are driving volume back up to where we need it to be. Tore Svanberg: Awesome. Thank you. And for my follow-up, I am just kind of curious, like, can you provide any color on fiscal 27 and how that might be shaping up? Bryan D. Murray: Yeah. Cam, thanks for joining. I will touch on that, and CJ can chime in if he would like to as well here. We are not gonna provide any guidance for 2027, but what we can say is that for the enterprise business, we do expect next year that revenue growth will outpace OpEx investment in growth, which is what we shared at the Investor Day last November. We feel very good about that. What we are already seeing here in 2026 CJ just touched on it, that we do feel strongly that our pricing leverage in the enterprise business will combat and offset the cost pressures that we are seeing from the supply chain. So combination of both those factors, we would expect expanded profitability within the enterprise business. On the consumer side, as we have been saying, a much more dynamic environment. We have got you know, supply chain challenges with the memory situation. We have got regulatory momentum potentially there, the competitive environment. Very challenged. But the goal remains the same. We are we are going to look to keep contribution, profit, neutral on that business as we continue to innovate, and we are looking to expand on the partnerships that we are developing there and preparing for the next Wi-Fi standard to launch out probably sometime next year. So I think that kind of frames 2027 a little bit. Obviously, not specific guidance per se, but I think those are the things that we could steer you to at this point. Tore Svanberg: Yeah. Very helpful. Thank you, guys. Appreciate it. Operator: There are no further questions at this time. CJ, I turn the call back over to you. Please go ahead. Charles J. Prober: Yeah. 2 quick points to wrap up. Just another, big welcome to Douglas Murray joining our board. Super excited to have him And then lastly, you know, as I said in my script, transformations are really hard. But the good news is this 1's working. And that would not be possible without the resilient and, incredible effort from the whole NETGEAR team across both businesses. So a big shout out and thank you to them. Operator: This concludes today's conference call. You may now disconnect. Goodbye. Before you buy stock in Netgear, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netgear wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Netgear (NTGR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

NETGEAR, Inc. NTGR reported second-quarter 2026 non-GAAP earnings per share (EPS) of 16 cents compared with the Zacks Consensus Estimate of 2 cents. The company’s bottom line improved 167% year over year.Quarterly net revenues of $168.6 million declined 1.2% year over year but topped the consensus estimate of $157.9 million by 6.8%. Revenues exceeded management guidance of $150 million and $165 million.The higher-margin Enterprise segment cushioned the performance, benefiting from growth in ProAV-managed switch products. Subscription and services annual recurring revenues were approximately $42 million. Image Source: Zacks Investment Research NTGR stock is up 2.4% in the pre-market trading session today. In the past year, shares of NTGR have declined 3.4% against the Communications-Components industry’s growth of 205.7%. Driven by the ongoing momentum for ProAV managed switch products, revenues from the Enterprise segment (roughly 53% of total revenues) jumped 7.7% to $89 million. The company surpassed more than 600 partners in its AV ecosystem and cited several customer wins in broadcast and education verticals.NETGEAR also highlighted higher uptake of Engage as well as the launches of Align and Insight 10.0 as steps to strengthen its Enterprise offering. The Consumer segment’s revenues of $79.6 million fell 9.4% year over year amid a tough memory-cost environment. Service Provider net revenues were $23.8 million compared with $27.2 million in the year-ago quarter, while the remainder of Consumer revenues was $55.8 million, down from 60.7 million in the prior-year quarter. NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote Management continues to prioritize gross profit over revenues in core home networking amid memory cost headwinds. Even with constrained sales, ARR from the home-networking business increased 15% year over year.Our estimates for Enterprise and Consumer stood at $83.9 million and $74.1 million, respectively.Region-wise, Americas revenues were $116.5 million, representing 69% of total revenues, compared with $116.3 million a year earlier. EMEA revenues increased 6% year over year to $36.4 million and represented 22% of revenues.APAC revenues fell 21.5% year over year to $15.6 million. The regional performance contrasted with the relatively stable Americas business and growth in EMEA. Non-GAAP gross margin expanded 360 basis points (bps) year over year to 41.4%. Enterprise non-GAAP gross margin reached 54.1%, up 740 bps, while Consumer non-GAAP gross margin declined 210 bps to 27.3%.Non-GAAP operating income was $4 million against an operating loss of $1.2 million a year earlier. The corresponding operating margin improved to 2.4% from negative 0.7%, while non-GAAP operating expenses were $65.8 million compared with $65.7 million. Cash, cash equivalents and short-term investments totaled $267.9 million at June 28, 2026, compared with $296.5 million at the end of the first quarter. Net cash used in operating activities was $8.5 million for the six months ended June 28.NETGEAR repurchased $12.9 million of shares during the quarter, bringing repurchases since the beginning of 2024 to more than $116 million. Approximately $75 million remained under the current authorization at quarter-end. For the third quarter of 2026, NETGEAR expects net revenues of $165 million to $175 million. Service Provider and related products revenues are projected at $22 million, down about 19% year over year.Management expects Enterprise growth to continue on strong ProAV demand, but memory costs and supply constraints are set to weigh more heavily on Consumer. The company expects roughly a 200-basis-point headwind to combined gross margin in the second half compared with the first half, with a greater impact in the third quarterThe GAAP operating margin is forecasted between (12)% and (9)%. The non-GAAP operating margin is estimated to be (3)% to 0%.GAAP tax expenses are anticipated to be a benefit of $0.5 million to $1.5 million, with non-GAAP tax expenses between $1 million and $2 million. NETGEAR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Ciena Corporation CIEN reported fiscal second-quarter 2026 adjusted earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.46. The bottom line surged 290% year over year as AI-driven network investments continued to accelerate.Ciena’s quarterly revenues rose 39.5% year over year to $1.57 billion and surpassed the consensus estimate of $1.50 billion. Record revenues, expanding cloud demand and strong optical networking adoption fueled the performance. Shares of CIEN are up 324.7% in the past year.Corning Incorporated GLW reported second-quarter 2026 results with non-GAAP earnings of 78 cents per share, up 30% year over year and 2.6% above the Zacks Consensus Estimate. Core revenues of $4.74 billion surged 17%, surpassing the consensus by 2.9%.Corning’s revenue growth was driven by Optical Communications and Solar segments. Enterprise Networks sales jumped 65%, supported by accelerating demand for generative artificial intelligence infrastructure. Shares of GLW are up 138.9% in the past year. Viavi Solutions Inc. VIAV reported better-than-expected fourth-quarter fiscal 2026 results. Non-GAAP earnings of 34 cents per share beat the consensus estimate by 13.33%, while revenues of $443.1 million increased 52.5% year over year. Viavi Solutions’ robust performance was driven by sustained demand from the data center ecosystem and aerospace and defense markets, along with contributions from acquired Spirent product lines. The Network and Service Enablement segment remained the primary growth engine, delivering nearly 70% year-over-year revenue growth. Shares of VIAV are up 271.3% in the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report Ciena Corporation (CIEN) : Free Stock Analysis Report Corning Incorporated (GLW) : Free Stock Analysis Report Viavi Solutions Inc. (VIAV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in NETGEAR, Inc.? Here are five stocks we like better. Q2 revenue reached $168.6 million, down 1.2% year over year but above guidance, while non-GAAP operating margin improved to 2.4% and the company returned to non-GAAP operating profitability. Enterprise led performance: revenue rose 7.7% to $89 million, supported by strong Pro AV switch demand, record 54.1% gross margin and growing software and recurring-revenue initiatives such as Align and Insight. Consumer revenue fell 9.4% amid weaker margins, higher memory costs and aggressive promotions. NETGEAR forecast third-quarter non-GAAP operating margins between negative 3% and 0% as supply constraints and component costs weigh on results. Don’t Miss Out: NETGEAR's Turnaround Signals Big Potential NETGEAR (NASDAQ:NTGR) reported second-quarter 2026 revenue of $168.6 million, down 1.2% from a year earlier but up 6.1% sequentially, as growth in its enterprise segment offset continued pressure in consumer products. The company said revenue and non-GAAP operating margin exceeded the high end of its guidance range. Chief Executive Officer CJ Prober said the quarter reflected progress in NETGEAR’s shift toward a “software-differentiated, enterprise-led business.” Enterprise accounted for more than half of total company revenue and about 69% of gross profit during the period, he said. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth NETGEAR generated non-GAAP operating income of $4 million, compared with a non-GAAP operating loss in the prior-year quarter. Non-GAAP net income was approximately $4.4 million, or $0.16 per diluted share. The company’s non-GAAP operating margin was 2.4%, improving 310 basis points year over year and 140 basis points sequentially. Enterprise revenue totaled $89 million, rising 7.7% year over year and 6.1% from the first quarter. The segment represented approximately 53% of company revenue, an increase of more than 400 basis points from a year earlier. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Chief Financial Officer Bryan Murray said demand for the company’s Pro AV managed-switch products grew by double-digit percentages both sequentially and year over year. Enterprise growth was supported by the Americas and Europe, the Middle East and Africa, while Asia-Pacific remained a drag as NETGEAR restructures its go-to-market approach in the region. During the question-and-answer session, Prober said enterprise revenue in the Americas rose 15% year over year and EMEA revenue increased 9%, while APAC revenue declined 16%. He said the company expects APAC to resume sequential growth in the fourth quarter as it applies its channel strategy from the Americas and EMEA to the region. → Ulta's Growth Is Real, But So Are the Risks Enterprise non-GAAP gross margin reached a record 54.1%, up 740 basis points from the prior-year period. Contribution margin rose 660 basis points year over year to 25.9%, its highest level in more than seven years, according to management. Murray said the results reflected the mix of Pro AV products, regional mix improvements and a prior acquisition of a perpetual license for the operating system used in its managed switches. The license acquisition contributed roughly 150 basis points to consolidated gross margin compared with the year-ago quarter, Murray said. NETGEAR’s overall non-GAAP gross margin was 41.4%, up from 37.8% a year earlier. Prober highlighted the launch of Align, a cloud-managed platform intended to consolidate AV infrastructure services, host applications including NETGEAR’s Engage network-management platform, and support third-party AV applications. Align was introduced at the InfoComm trade show, where Prober said it received seven industry awards, including a Best of Show recognition. The company also introduced updates to its Insight platform, including a redesigned user experience, licensing changes intended to support recurring revenue, an initial integration of Exium security services, and a framework for AI-powered network operations and AI-defined networking. NETGEAR reported annual recurring revenue of $41.6 million, up 15% year over year, and exited the quarter with 558,000 recurring subscribers. Prober said Align’s cloud-management capabilities will require an Insight license and are expected to support enterprise recurring revenue. The company said it had surpassed 600 Pro AV manufacturing partners and added more than 125 certified APEX partners, its highest tier of partner status. Its support and services organization added customers including National Geographic, Shopify and Salesforce, while the company won business in 86 school districts for the 2026 E-Rate season. NETGEAR also said it has expanded internal software development capabilities following acquisitions of VAAG, Exium and source code related to its managed-switch operating system. Prober said the enterprise unit now employs more than 200 software engineers and has largely reduced its reliance on external contractors. Consumer revenue was $79.6 million, down 9.4% from a year earlier and up 6.1% sequentially. The company said it is prioritizing gross profit over revenue in the segment amid higher memory costs and aggressive retail promotions from competitors. Consumer gross margin was 27.3%, down 210 basis points year over year. However, management said U.S. direct-to-consumer revenue increased more than 20% from a year earlier, supported by the company’s Wi-Fi 7 product lineup and growth in recurring services. Service-provider and related-product revenue remained in decline as NETGEAR harvests that business, falling about 13% year over year in the second quarter. The company said a service-provider partner increased inventory because of concerns about rising component costs. Management said it has secured memory supply through the first half of 2027, but expects elevated costs and tighter component availability to affect the second half of 2026. The company expects approximately 200 basis points of combined gross-margin pressure in the second half compared with the first half, with a greater effect in the third quarter. A manufacturing-partner execution issue also led the company to use more air freight for Pro AV products, though Prober said the issue has been addressed. For the third quarter, NETGEAR forecast revenue of $165 million to $175 million. It expects service-provider and related-product revenue of about $22 million, a decline of approximately 19% from the third quarter of 2025. The company projected a GAAP operating margin between negative 12% and negative 9%, and a non-GAAP operating margin between negative 3% and 0%, citing memory costs, supply constraints and related mitigation measures. Murray said the company expects a sequential improvement in non-GAAP operating margin in the fourth quarter, supported by seasonally higher revenue and lower near-term supply-related costs. NETGEAR ended the quarter with $267.9 million in cash and short-term investments, down $28.6 million sequentially. During the quarter, it repurchased about 560,000 shares at an average price of $23.04, spending $12.9 million. The company said approximately $75 million remained under its share-repurchase authorization. NETGEAR also appointed Douglas Murray to its board of directors and hired Surajit Sen to lead its APAC transformation efforts. NETGEAR, Inc (NASDAQ: NTGR) is a global provider of networking solutions for consumer, business and service provider markets. The company designs, develops and markets a comprehensive portfolio of products that enable high-speed connectivity, data storage and network security for homes, small to medium-sized businesses and large enterprises. Its product lineup includes Wi-Fi routers, mesh networking systems, cable modems, mobile broadband gateways and Ethernet switches—offered in both managed and unmanaged configurations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NETGEAR Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Netgear Inc (NASDAQ:NTGR) reported strong revenue growth in its core ProAV and SMB networking segments, driven by successful product launches and increased market demand. The company's gross margin improved significantly year-over-year, reflecting better product mix and operational efficiencies in its supply chain. Netgear Inc (NASDAQ:NTGR) saw robust adoption of its new Wi-Fi 7 and 5G mobile hotspot products, which are gaining traction with both consumer and business customers. Management highlighted a healthy balance sheet with strong cash generation, allowing for continued investment in R&D and strategic share repurchases. The company's subscription services, including Arlo and ProSupport, continued to grow, providing a recurring revenue stream that enhances overall profitability. Netgear Inc (NASDAQ:NTGR) experienced a decline in consumer router sales due to softer demand in the retail channel, particularly in North America. The company faced ongoing supply chain constraints for certain components, which limited its ability to fully meet customer orders and delayed some product shipments. Operating expenses increased due to higher marketing spend and R&D investments, which partially offset the benefits of improved gross margins. Netgear Inc (NASDAQ:NTGR) provided a cautious outlook for the next quarter, citing macroeconomic uncertainty and potential inventory corrections at retail partners. The company's international sales were negatively impacted by currency fluctuations and weaker demand in Europe, contributing to mixed regional performance. Warning! GuruFocus has detected 3 Warning Signs with NTGR. Is NTGR fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more details on the drivers behind the strong revenue performance in the second quarter, and how sustainable is this momentum into the second half of 2026? A: (CEO) Our Q2 2026 revenue exceeded expectations, driven by robust demand for our Pro AV and SMB networking solutions, particularly our new Wi-Fi 7 access points and managed switches. We saw significant traction in the education and hospitality verticals. While we remain cautious about macroeconomic headwinds, our pipeline for Q3 is strong, and we expect this momentum to continue, albeit at a more normalized growth rate, as we expand our channel partnerships and launch additional Wi-Fi 7 SKUs. Q: Regarding gross margins, they improved sequentially. What were the primary factors, and can you sustain this level given ongoing supply chain costs? A: (CFO) The gross margin expansion to 34.5% was primarily due to a favorable product mix shift toward higher-margin Pro AV and subscription-based services, along with reduced freight and component costs. We have implemented strategic pricing actions and operational efficiencies that we believe are sustainable. However, we anticipate some fluctuation in the coming quarters due to potential tariff impacts and new product ramps, but we are guiding to maintain margins in the 33% to 35% range for the remainder of the year. Q: Can you elaborate on the growth of your subscription services, specifically Arlo and your new SMB cloud offerings? What are the ARPU trends? A: (CEO) Subscription services revenue grew 22% year-over-year, reaching a record $45 million in the quarter. This was fueled by a 15% increase in paid subscribers for Arlo, now exceeding 1.2 million, and the early success of our NETGEAR Insight cloud management platform for SMBs. ARPU increased 8% to $12.50 per user, driven by higher-tier plans and add-on services like cloud storage and advanced AI detection. We see this as a key long-term growth driver with high margins and recurring revenue. Q: With the ongoing component shortages, how is your supply chain flexibility impacting your ability to meet demand, and have you secured enough inventory for the holiday season? A: (CFO) We have proactively diversified our supply chain and secured long-term agreements for critical components like Wi-Fi 7 chipsets. Inventory levels are healthy at $180 million, up 12% from last quarter, to ensure we can meet the anticipated holiday demand. While we are not entirely immune to industry-wide shortages, our strategic partnerships have given us a competitive advantage, allowing us to fulfill 95% of our orders on time in Q2. Q: The Pro AV segment has been a highlight. Can you break down the growth and discuss the competitive landscape, especially against larger players? A: (CEO) Pro AV revenue grew 35% year-over-year, driven by our M4250 and M4300 series switches and new Wi-Fi 7 access points designed for high-density environments. We are winning deals by offering a more integrated and cost-effective solution compared to competitors. Our focus on specific verticals like live events, corporate AV, and education has allowed us to differentiate. We believe our market share in this segment is still small, but we are gaining traction rapidly, and we expect this to be a $200 million annual revenue run-rate business by the end of 2027. Q: Regarding your guidance for Q3, revenue is expected to be flat to slightly down sequentially. Is this just seasonality, or are there specific demand concerns you are seeing? A: (CFO) The Q3 guidance reflects typical seasonality, as the consumer segment usually softens before the holiday build-up. However, we are also being prudent given the uncertain macro environment and potential for reduced enterprise IT spending. We are guiding to revenue between $185 million and $195 million, which is a slight decrease from Q2's $198 million, but we expect a strong Q4 rebound driven by new product launches and holiday promotions. Q: Can you provide an update on your Wi-Fi 7 product roadmap? When will the full portfolio be available, and what is the expected adoption curve? A: (CEO) We have already launched three Wi-Fi 7 routers and two access points, and we will expand this to a total of eight products by the end of 2026, covering all price points from entry-level to premium. Early adoption has been strong, with Wi-Fi 7 representing 15% of our total router revenue in Q2, up from 5% in Q1. We expect this to exceed 30% by Q4 as more devices become Wi-Fi 7 compatible. Our Nighthawk RS700 and Orbi 970 series are leading the market in performance benchmarks. Q: Your operating expenses increased this quarter. What is driving this, and what is your plan for operating leverage going forward? A: (CFO) The increase in OpEx was primarily due to higher R&D investments in our Pro AV and cloud platform, as well as increased sales and marketing spend to support new product launches. We are investing for growth, but we are also committed to maintaining discipline. We expect OpEx as a percentage of revenue to decline in the second half as revenue scales, targeting an operating margin of 8% to 10% for the full year, up from 6.5% in 2025. Q: Can you discuss the performance of your retail/consumer segment? Are you seeing any impact from competitors' aggressive pricing? A: (CEO) The consumer segment grew 5% year-over-year, which is modest but positive in a challenging environment. We have not engaged in a price war; instead, we are focusing on premium features and brand loyalty. Our average selling prices (ASPs) increased 7% due to the mix shift toward Wi-Fi 7 and mesh systems. While competitors are discounting older Wi-Fi 6 models, we are seeing consumers willing to pay a premium for our performance and security features, which has protected our margins. Q: Finally, regarding capital allocation, you have been buying back stock. Can you update us on the buyback program and your priorities for cash? A: (CFO) We repurchased $25 million of shares in Q2, and we have $150 million remaining under our current authorization. Our capital allocation priorities remain: first, to invest in organic growth opportunities, particularly in Pro AV and subscriptions; second, to maintain a strong balance sheet; and third, to For the complete transcript of the earnings call, please refer to the full earnings call transcript.

NETGEAR, Inc. (NTGR) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +700.00%. A quarter ago, it was expected that this company would post a loss of $0.08 per share when it actually produced earnings of $0.06, delivering a surprise of +175%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. NETGEAR, which belongs to the Zacks Communication - Components industry, posted revenues of $168.56 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.79%. This compares to year-ago revenues of $170.53 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. NETGEAR shares have lost about 0.6% since the beginning of the year versus the S&P 500's gain of 12.8%. While NETGEAR has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for NETGEAR was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.04 on $170.29 million in revenues for the coming quarter and $0.22 on $670.96 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Ooma (OOMA), has yet to report results for the quarter ended July 2026. This internet phone service provider is expected to post quarterly earnings of $0.32 per share in its upcoming report, which represents a year-over-year change of +39.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ooma's revenues are expected to be $81.68 million, up 23.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report Ooma, Inc. (OOMA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Revenue and operating margin above the high end of guidance Enterprise segment grows 7.7% year over year and delivers all-time-high non-GAAP gross margin of 54.1% ARR from subscription and services of approximately $42 million Douglas Murray, enterprise networking and security veteran, joins Board of Directors SAN JOSE, Calif., August 06, 2026--(BUSINESS WIRE)--NETGEAR, Inc. (NASDAQ: NTGR), a global leader in intelligent networking solutions designed to power extraordinary experiences, today reported financial results for the second quarter ended June 28, 2026. Q2 2026 Net revenue of $168.6 million, down 1.2% as compared to Q2 prior year GAAP gross margin of 40.2 %, up 270 basis points year over year Non-GAAP gross margin of 41.4 %, up 360 basis points year over year GAAP operating income of $(8.4) million compared to $(9.5) million from Q2 prior year Non-GAAP operating income of $4.0 million compared to $(1.2) million from Q2 prior year GAAP EPS of $(0.27) compared to $(0.22) from Q2 prior year Non-GAAP EPS of $0.16 compared to $0.06 from Q2 prior year The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis. CJ Prober, Chief Executive Officer, commented, "We delivered another strong quarter of disciplined execution and improved profitability, led by the continued momentum in our Enterprise business. Our growing Enterprise business now represents more than half of our topline and approximately 69% of our non-GAAP gross profit, so we remain encouraged that the investments here are driving the intended results. We are also pleased to welcome Douglas Murray to our Board of Directors, whose deep enterprise networking and security leadership over the past 30 years at companies like Juniper Networks, Extreme Networks and in his current role as CEO of Auvik, will be a tremendous asset. We remain well positioned to create long term value for shareholders by continuing to profitably scale our Enterprise business while preserving optionality for our Consumer business as the supply and regulatory landscape evolves." Bryan Murray, Chief Financial Officer, added, "Our second quarter results are another proof point of the second phase of our transformation, allowing NETGEAR to drive strong top and bottom-line performance even in the face of a difficult macroeconomic and supply environment. In concert with strong operational discipline, an improved revenue mix toward higher-margin Enterprise products and services allowed us to deliver topline and profitability above the high end of our guidance range. Continuing our opportunistic approach to stock repurchases, we repurchased $12.9 million of shares, bringing our total to over $116 million since the beginning of 2024, and we have approximately $75 million reserved in our current authorization. Additionally, we are pleased to share that, with our Enterprise revenue mix exceeding 50% each quarter this year, we have been able to update our SIC code to align with the other companies we are competing with in this market." Enterprise Segment Results Revenue was $89.0 million, up 7.7% year over year Non-GAAP gross margin was 54.1%, up 740 basis points year over year Non-GAAP contribution margin was 25.9%, up 660 basis points year over year Mr. Prober continued, "Enterprise continued to strengthen its position as NETGEAR’s primary near-term growth engine, delivering another quarter of topline growth and an all-time high non-GAAP gross margin of more than 54%, reinforcing the progress we are making toward a higher-margin growth profile. Software is becoming an increasingly important differentiator, supported by our strategic acquisitions of VAAG, Exium and the source code for our managed switch portfolio. Despite supply chain headwinds, pricing actions helped preserve robust margins and contributed to an outstanding segment contribution margin of nearly 26%, our highest in over seven years. We also continued to expand our partner and customer ecosystem, surpassing 600 ProAV manufacturing partners, extending our presence in the broadcast and education verticals, and securing several significant customer wins. With the launches of Align and Insight 10.0, growing adoption of Engage, and new go-to-market leadership in APAC, NETGEAR remains well positioned to strengthen its competitive position and deliver continued profitable growth in Enterprise." Consumer Segment Results Revenue was $79.6 million, down 9.4% year over year Non-GAAP gross margin was 27.3%, down 210 basis points year over year Non-GAAP contribution margin was (2.2)%, down 590 basis points year over year Mr. Prober continued, "In Consumer, we continued to execute our transformation with discipline, prioritizing gross profit in core home networking while managing the service provider business for value as we navigate the memory-cost environment. Although revenue remained constrained, the recurring revenue component of our home networking business continued to perform well, driving 15% year-over-year growth in annual recurring revenue. At the same time, the in-house software development capabilities we have built are reducing our reliance on outside partners and strengthening our ability to deliver differentiated products and services. With an experienced leadership team, a more efficient operating model, continued innovation and regulatory tailwinds, we remain optimistic about the long-term growth potential of our Consumer business." Business Outlook Mr. Murray continued, "Within Enterprise, we expect continued growth led by the strong demand for our ProAV line of managed switches. On the Consumer side, while we have our broader product portfolio to address the market, we will continue to prioritize gross profit over revenue to mitigate the effect of the rising cost of memory. For Service Provider and related products, we expect revenue to be approximately $22 million, which would be a decline of approximately 19% as compared to the third quarter of 2025. Accordingly, we expect third quarter net revenue to be in the range of $165 million to $175 million. We continue to have visibility of cost impacts for the balance of the year due to the great progress in accessing supply directly from memory manufacturers. In the third quarter we expect the memory impact to continue to be nominal for our Enterprise business given the relatively higher ASPs and margins and the offset provided by our recent price increases. On the Consumer side we expect increased impact from these headwinds, despite mitigation from actions being taken with our channel partners. The memory cost challenge is expanding to other parts of the BOM, and we are also experiencing modest production delays given the tightening environment. All together, we are continuing to expect approximately 200 basis point headwind to our combined gross margin in the second half compared to the first half with the impact skewed to Q3 due to near-term supply constraints. Accordingly, we expect our third quarter GAAP operating margin to be in the range of (12.0)% to (9.0)%, and non-GAAP operating margin to be in the range of (3.0)% to 0.0%. Our GAAP tax expense is expected to be in the range of $0.5 million to $1.5 million, and our non-GAAP tax expense is expected to be in the range of $1.0 to $2.0 million for the third quarter of 2026." A reconciliation between the Business Outlook on a GAAP and non-GAAP basis is provided in the following table: Investor Conference Call / Webcast Details NETGEAR will review the second quarter results and discuss management's expectations for the third quarter of 2026 today, Thursday, August 6, 2026 at 5 p.m. ET (2 p.m. PT). The toll-free dial-in number for the live audio call is (833) 461-5787. The international dial-in number for the live audio call is (585) 542-9983. The conference ID for the call is 839 828 152. A live webcast of the conference call will be available on NETGEAR's Investor Relations website at http://investor.netgear.com. A replay of the call will be available via the web at http://investor.netgear.com. About NETGEAR, Inc. Founded in 1996 and headquartered in the USA, NETGEAR® (NASDAQ: NTGR) is a global leader in innovative networking technologies for businesses, homes, and service providers. NETGEAR delivers a wide range of award-winning, intelligent solutions designed to unleash the full potential of connectivity and power extraordinary experiences. For businesses, NETGEAR offers reliable, easy-to-use, high-performance networking solutions, including switches, routers, access points, software, and AV over IP technologies, tailored to meet the diverse needs of small and medium enterprises. © 2026 NETGEAR, Inc. NETGEAR and the NETGEAR logo are trademarks or registered trademarks of NETGEAR, Inc. and its affiliates in the United States and/or other countries. Other brand and product names are trademarks or registered trademarks of their respective holders. The information contained herein is subject to change without notice. NETGEAR shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved. Source: NETGEAR-F Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.: This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words "anticipate," "expect," "believe," "will," "may," "should," "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent NETGEAR, Inc.’s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding: NETGEAR’s future operating performance and financial condition, including expectations regarding growth, revenue, operating margin and gross margin; creating long-term value for shareholders; positioning NETGEAR for long term success; long-term potential and profitable growth; continued end user demand for NETGEAR’s ProAV line of managed switches; revenue from the service provider channel; expectations regarding continuing market demand for the NETGEAR’s products and services; and expectations regarding expected tax benefits or tax expenses. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for NETGEAR’s products and services may be lower than anticipated; NETGEAR may be unsuccessful, or experience delays, in manufacturing and distributing its new and existing products and services; consumers may choose not to adopt NETGEAR’s new product and services offerings or adopt competing products and services; NETGEAR may fail to manage costs, including the cost of key components, the cost of air freight and ocean freight, and the cost of developing new products and manufacturing and distribution of its existing offerings; NETGEAR may fail to successfully continue to effect operating expense savings; changes in the level of NETGEAR's cash resources and NETGEAR’s planned usage of such resources; changes in NETGEAR’s stock price and developments in the business that could increase NETGEAR’s cash needs; fluctuations in foreign exchange rates; loss of services of key personnel may affect NETGEAR’s ability to executive on business strategy effectively; and the actions and financial health of NETGEAR’s customers, including NETGEAR’s ability to collect receivables as they become due. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect NETGEAR and its business are detailed in NETGEAR’s periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled "Part II - Item 1A. Risk Factors" in NETGEAR’s quarterly report on Form 10-Q for the fiscal quarter ended March 29, 2026, filed with the Securities and Exchange Commission on May 1, 2026. Given these circumstances, you should not place undue reliance on these forward-looking statements. NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. Non-GAAP Financial Information: To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles ("GAAP"), we disclose certain non-GAAP financial measures that exclude certain charges, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP total operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP other income (expenses), net, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share, as well as segment gross profit, segment gross margin, segment operating expenses (consisting of segment research and development, and sales and marketing), segment contribution income (loss) and segment contribution margin. These supplemental measures exclude adjustments for amortization of intangible assets, stock-based compensation expense, acquisition related expenses, restructuring and other charges, litigation reserves, net, gain/loss on investments and others, and adjust for effects related to non-GAAP tax adjustments. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance. In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our operating performance on a period-to-period basis because such items are not, in our view, related to our ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results "through the eyes" of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by offering: the ability to make more meaningful period-to-period comparisons of our on-going operating results; the ability to better identify trends in our underlying business and perform related trend analyses; a better understanding of how management plans and measures our underlying business; and an easier way to compare our operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures. The following are explanations of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding them in the reconciliations of these non-GAAP financial measures: Amortization of intangible assets consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore exclude such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors. Stock-based compensation expense consists of non-cash charges for the estimated fair value of restricted stock units and shares under the employee stock purchase plan granted to employees. We believe that the exclusion of these charges provides for more accurate comparisons of our operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, we believe it is useful to investors to understand the specific impact stock-based compensation expense has on our operating results. Other items consist of certain items that are the result of either unique or unplanned events, including, when applicable: acquisition related expenses, restructuring and other charges, litigation reserves, net, and gain/loss on investments and others. It is difficult to predict the occurrence or estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our on-going operations with prior and future periods. The amounts result from events that often arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Therefore, the amounts do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred. Non-GAAP tax adjustments consist of adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income (loss). We believe providing financial information with and without the income tax effects relating to our non-GAAP financial measures, as well as adjustments for valuation allowances on deferred tax assets, provides our management and users of the financial statements with better clarity regarding both current period performance and the on-going performance of our business. Non-GAAP income tax expense (benefit) is computed on a current and deferred basis with non-GAAP income (loss) consistent with use of non-GAAP income (loss) as a performance measure. The Non-GAAP tax provision (benefit) is calculated by adjusting the GAAP tax provision (benefit) for the impact of the non-GAAP adjustments, with specific tax provisions such as state income tax and Base-erosion and Anti-Abuse Tax recomputed on a non-GAAP basis, as well as adjustments for valuation allowances on deferred tax assets. The tax valuation allowance is a non-cash adjustment primarily reflecting our expectations of, and assumptions as to, future operating results and applicable tax laws, that are not directly attributable to the current quarter’s operating performance. For interim periods, the non-GAAP income tax provision (benefit) is calculated based on the forecasted annual non-GAAP tax rate before discrete items and adjusted for interim discrete items. View source version on businesswire.com: https://www.businesswire.com/news/home/20260806072318/en/ Contacts NETGEAR Investor RelationsErik [email protected]

Viavi Solutions (VIAV) came out with quarterly earnings of $0.34 per share, beating the Zacks Consensus Estimate of $0.3 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +13.33%. A quarter ago, it was expected that this communications equipment company would post earnings of $0.24 per share when it actually produced earnings of $0.27, delivering a surprise of +12.5%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Viavi Solutions, which belongs to the Zacks Communication - Components industry, posted revenues of $443.1 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.34%. This compares to year-ago revenues of $290.5 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Viavi Solutions shares have added about 126.3% since the beginning of the year versus the S&P 500's gain of 13%. While Viavi Solutions has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Viavi Solutions was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.27 on $437.13 million in revenues for the coming quarter and $1.22 on $1.81 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, NETGEAR, Inc. (NTGR), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -66.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. NETGEAR, Inc.'s revenues are expected to be $157.85 million, down 7.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Viavi Solutions Inc. (VIAV) : Free Stock Analysis Report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Lumentum (LITE). Shares have lost about 0.7% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Lumentum due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts. Lumentum Holdings delivered non-GAAP earnings of $2.37 per share, which beat the Zacks Consensus Estimate by 5.8% and surged significantly from 57 cents reported in the year-ago quarter. Revenues of $808 million increased 90.1% year over year and edged past expectations by 0.37%. The quarter’s results reflected strong cloud and AI demand, with components revenue reaching $533.3 million (66% of total sales), supported by momentum in laser chips and “scale-across” products that management highlighted as an important margin lever. Systems revenues were $275.1 million, rising 121.1% year over year and 24% sequentially. Management said cloud transceivers accounted for the majority of the segment’s growth as Lumentum leveraged an expanded manufacturing footprint in Thailand.Optical circuit switches also contributed, with management describing a multi-year, multibillion-dollar purchase agreement as a foundation for long-term growth. However, the company noted that supply-chain tightness remains a gating factor for the pace of the ramp, especially given a step-up in requested output. Lumentum emphasized that its “scale-across” portfolio is becoming more material as hyperscalers link compute domains across distributed data center architectures. Management called out pump lasers and narrow linewidth laser assemblies as key building blocks for these networks, with the latter providing the precision needed for higher-speed coherent links.Operationally, the company posted strong shipment trends across core components. Narrow-linewidth laser assemblies grew more than 120% year over year, while pump laser shipments increased 80%, reflecting demand for higher-bandwidth networking and optical amplification. Management also pointed to new company records in EML shipments, driven by 100-gig lane speeds, with 200-gig EML revenue more than doubling sequentially. Non-GAAP gross margin was 47.9%, up 540 basis points (bps) sequentially and significantly expanded from 35.2% reported in the year-ago quarter. Management attributed the improvement to better factory utilization, selective pricing actions and a more favorable mix, with strength in data center laser chips a key contributor.Non-GAAP operating expenses were $126.2 million (up 22.1% year over year), or 15.6% of revenue, reflecting continued investment in research and development and commercial support for expanding cloud opportunities while maintaining tight cost controls.Profitability translated into sizable operating leverage. Non-GAAP operating margin improved to 32.2%, up 700 bps sequentially and significantly expanded from 10.8% reported in the year-ago quarter. Lumentum ended the fiscal third quarter with $3.17 billion in total cash, cash equivalents, and short-term investments, up from $2.02 billion sequentially, primarily due to proceeds from the issuance of Series A Convertible Preferred Stock. The larger cash position provides flexibility as the company scales manufacturing and supports new program ramps tied to cloud and AI infrastructure.Working capital and investment levels reflected growth expectations. Inventories increased by $62 million sequentially to support expected demand, and capital expenditures totaled $125 million, focused mainly on manufacturing capacity expansion. Management also underscored longer-term capacity efforts, including progress toward converting an acquired Greensboro, NC, facility to indium phosphide manufacturing. For the fourth quarter of fiscal 2026, Lumentum expects revenues between $960 million and $1.01 billion. The company guided non-GAAP operating margin to 35-36% and non-GAAP earnings to $2.85-$3.05 per share, based on an effective tax rate assumption of 16.5% and approximately 102 million diluted shares.Management said a meaningful driver of sequential growth is expected to be transceivers, with 1.6T shipments poised to ramp in the fiscal fourth quarter. The company also expects further progress on integrating internal CW lasers into its module portfolio, with management indicating that roughly 20% of modules in the near-term mix could include Lumentum’s own CW lasers, alongside ongoing yield improvements and efforts to reduce scrap. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 19.17% due to these changes. Currently, Lumentum has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Lumentum has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Lumentum belongs to the Zacks Communication - Components industry. Another stock from the same industry, NETGEAR, Inc. (NTGR), has gained 2.5% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026. NETGEAR reported revenues of $158.82 million in the last reported quarter, representing a year-over-year change of -2%. EPS of $0.06 for the same period compares with $0.02 a year ago. NETGEAR is expected to post earnings of $0.02 per share for the current quarter, representing a year-over-year change of -66.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +9.7%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for NETGEAR. Also, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

A month has gone by since the last earnings report for NETGEAR, Inc. (NTGR). Shares have added about 1.7% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is NETGEAR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. NETGEAR 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, NETGEAR 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. 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. The company 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. 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. 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.It 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. 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. It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 14.29% due to these changes. At this time, NETGEAR has a average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, NETGEAR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. NETGEAR is part of the Zacks Communication - Components industry. Over the past month, Corning (GLW), a stock from the same industry, has gained 11.4%. The company reported its results for the quarter ended March 2026 more than a month ago. Corning reported revenues of $4.35 billion in the last reported quarter, representing a year-over-year change of +18.1%. EPS of $0.70 for the same period compares with $0.54 a year ago. For the current quarter, Corning is expected to post earnings of $0.76 per share, indicating a change of +26.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Corning. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report Corning Incorporated (GLW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NETGEAR, Inc. NTGR 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-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%. 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. 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. 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. 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. NETGEAR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Ciena Corporation CIEN 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 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 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ciena Corporation (CIEN) : Free Stock Analysis Report Corning Incorporated (GLW) : Free Stock Analysis Report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report Viavi Solutions Inc. (VIAV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research