NETGEAR Q3 Earnings & Revenues Beat Estimates, Q4 Guidance Provided

Core Insights - NETGEAR, Inc. (NTGR) reported third-quarter 2025 non-GAAP earnings per share of 12 cents, exceeding the Zacks Consensus Estimate of a loss of 9 cents and down from 17 cents in the same quarter last year [1][9] - The company generated net revenues of $184.6 million, beating the consensus estimate by 7% and surpassing its own guidance of $165-$180 million, with a year-over-year increase of 0.9% and a sequential increase of 8.2% [2][9] Financial Performance - Revenues from the Enterprise segment increased by 15.7% to $90.8 million, driven by strong demand for ProAV managed switch products [6] - The Mobile segment reported revenues of $21.1 million, down 20.7% year over year but up 3.3% sequentially, with increased uptake of high-end Nighthawk M7 Pro mobile hotspots [10] - Home Networking revenues declined 6.6% year over year but increased 7.6% sequentially to $72.6 million, supported by a favorable product mix and the expansion of the WiFi 7 product portfolio [11] Segment Reporting - NETGEAR now reports revenues under three segments: NETGEAR Enterprise, Mobile, and Home Networking, with plans to report under two segments in Q4 2025 [3] - The Enterprise segment continues to face supply headwinds, but demand for ProAV products remains strong [4] Guidance and Future Outlook - For Q4 2025, NETGEAR anticipates net revenues between $170 million and $185 million [4][9] - The company expects a 150-basis point headwind on gross margin due to rising memory costs [16] Market Performance - Over the past year, NETGEAR's shares have increased by 53.3%, outperforming the Computer-Networking industry's growth of 29.7% [5] Margin Analysis - The adjusted gross margin improved to 39.6% from 31.1% year over year, with the Enterprise segment's non-GAAP gross margin at 51%, up 630 basis points [13] - Non-GAAP operating income was $3.8 million, compared to $1.6 million in the previous year, while operating expenses rose by 25.1% year over year [14] Cash Flow and Share Repurchase - For the quarter ended September 28, 2025, NETGEAR used $7.4 million in cash from operations and had $326.4 million in cash and cash equivalents [15] - The company repurchased shares worth $20 million during the quarter, with $33.6 million repurchased in 2024 [15]