NETGEAR (NASDAQ:NTGR) Issues Earnings Results

Key Points

• NETGEAR reported adjusted Q1 EPS of $0.06 (vs. consensus -$0.08) and revenue of $158.8M, beating estimates though revenue was down ~2% year‑over‑year and the company still had a negative net margin.
• Enterprise momentum is driving profitability: enterprise revenue made up ~53% of sales, enterprise gross margin reached a record 52.7%, and company non‑GAAP gross margin hit a record 41.7% while expanding partners and services via acquisitions (VAAG, Exium).
• Management warned of memory cost headwinds despite securing DDR4 supply for most of 2026 — expecting ~100 bps margin pressure in Q1 (neutralized in Q2) and an additional ~200 bps consolidated pressure in the back half that will disproportionately affect consumer results.

NETGEAR (NASDAQ:NTGR - Get Free Report) issued its quarterly earnings results on Wednesday. The communications equipment provider reported $0.06 earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.08) by $0.14, FiscalAI reports. NETGEAR had a negative return on equity of 2.40% and a negative net margin of 2.56%.The company had revenue of $158.82 million for the quarter, compared to analysts' expectations of $152.49 million. During the same period last year, the firm earned $0.02 EPS. The firm's revenue for the quarter was down 2.0% on a year-over-year basis.

Here are the key takeaways from NETGEAR's conference call:

• Q1 revenue was $158.8M (down 2% YoY) but NETGEAR delivered a record non-GAAP gross margin of 41.7% and non-GAAP EPS of $0.06, driven by a larger enterprise mix and operational discipline.
• The company secured DDR4 memory supply for most of 2026 but expects memory cost headwinds — ~100 basis points hit in Q1, neutralized in Q2 by mitigations, and a further ~200 basis point consolidated margin pressure in the back half that will disproportionately affect consumer results.
• Enterprise momentum continues: Pro AV managed switches saw double-digit end-user demand, enterprise revenue mix rose to ~53% of total, enterprise gross margin hit a record 52.7%, partner ecosystem expanded to 577 partners, and the company is growing non-device offerings (Insight 10.0, paid support/services) supported by acquisitions VAAG and Exium.
• Consumer strategy is being optimized for margin not top-line growth — core consumer products grew 3% YoY and recurring ARR rose 12% to $39.7M (559k subscribers), while NETGEAR readies Wi‑Fi 7 releases and a Google Home/Matter integration to boost long-term services revenue.
• Capital return is active: the company repurchased ~929k shares in Q1 at an average $21.53, ended the quarter with $296.5M in cash/short-term investments, and has ~ $89M remaining under its refreshed repurchase authorization.

NETGEAR Stock Up 4.0%

Shares of NASDAQ NTGR opened at $25.89 on Thursday. The business has a fifty day simple moving average of $22.78 and a 200-day simple moving average of $24.68. The company has a market cap of $707.94 million, a price-to-earnings ratio of -41.76 and a beta of 1.09. NETGEAR has a 12 month low of $19.00 and a 12 month high of $36.86.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on NTGR shares. Stifel Nicolaus set a $36.00 price objective on NETGEAR in a report on Thursday, February 5th. Wall Street Zen raised NETGEAR from a "sell" rating to a "hold" rating in a report on Saturday, March 28th. Zacks Research upgraded shares of NETGEAR from a "strong sell" rating to a "hold" rating in a research report on Tuesday, March 10th. Finally, Weiss Ratings reissued a "sell (d)" rating on shares of NETGEAR in a report on Friday, March 27th. Two analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock has an average rating of "Hold" and a consensus price target of $36.00.

Insider Buying and Selling

In other NETGEAR news, insider Pramod Badjate sold 3,000 shares of the company's stock in a transaction dated Monday, February 2nd. The shares were sold at an average price of $20.97, for a total transaction of $62,910.00. Following the completion of the sale, the insider directly owned 144,586 shares of the company's stock, valued at approximately $3,031,968.42. This represents a 2.03% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Corporate insiders own 2.30% of the company's stock.

Institutional Investors Weigh In On NETGEAR

Several hedge funds have recently made changes to their positions in the company. Windward Management LP purchased a new position in NETGEAR during the 4th quarter worth approximately $35,468,000. Lazard Asset Management LLC lifted its holdings in shares of NETGEAR by 87.6% in the third quarter. Lazard Asset Management LLC now owns 548,911 shares of the communications equipment provider's stock valued at $17,779,000 after purchasing an additional 256,266 shares in the last quarter. Jacobs Levy Equity Management Inc. boosted its position in shares of NETGEAR by 43.7% in the third quarter. Jacobs Levy Equity Management Inc. now owns 717,973 shares of the communications equipment provider's stock worth $23,255,000 after buying an additional 218,347 shares during the period. Millennium Management LLC boosted its position in shares of NETGEAR by 386.1% in the fourth quarter. Millennium Management LLC now owns 236,078 shares of the communications equipment provider's stock worth $5,791,000 after buying an additional 187,515 shares during the period. Finally, Qube Research & Technologies Ltd grew its holdings in shares of NETGEAR by 447.9% during the second quarter. Qube Research & Technologies Ltd now owns 153,524 shares of the communications equipment provider's stock valued at $4,463,000 after buying an additional 125,504 shares in the last quarter. Hedge funds and other institutional investors own 82.97% of the company's stock.

NETGEAR Company Profile

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.