Netgear Reports Strong Enterprise Growth but Struggles in Consumer Segment
Netgear (NASDAQ:NTGR) reported second-quarter results for fiscal year 2026, showing revenue of $168.6 million and a non-GAAP operating income of $4.0 million—a significant improvement from the previous year's loss. The company’s Enterprise segment drove much of this success with $89.0 million in revenue (up 7.7% YoY), record gross margins, and strong contribution profit growth. This shift has led Netgear to update its SIC code to align more closely with enterprise networking peers. However, the Consumer segment continued to underperform, reporting a decline of 9.4% year over year in revenue ($79.6 million) alongside falling gross margins (27.3%) and negative contribution margin (-2.2%). This drag caused total company revenue to fall slightly compared to last year despite Enterprise gains. Netgear also reported a GAAP operating loss of $8.4 million for the quarter. Looking ahead, management expects continued pressure from rising memory costs in Q3 2026, with guidance pointing toward wider losses and declining Service Provider segment revenues.
Tickers: $NTGR
Topics: consumer_weakness enterprise_growth revenue_performance stock_buybacks