Financial Data and Key Metrics Changes - NETGEAR achieved its first year of revenue growth since 2020, with full-year revenues of $699.6 million, up 3.8% year-over-year [26] - Non-GAAP gross margin reached an all-time high of 41.2% in Q4 2025, marking an 840 basis point increase compared to the prior year [27] - Non-GAAP EPS for the full year was $0.44, with a significant improvement of $1.35 compared to the previous year [32] Business Line Data and Key Metrics Changes - The enterprise segment generated $89.4 million in revenue for Q4, up 10.6% year-over-year, while the consumer segment reported $93.1 million, down 8.4% year-over-year [21][24] - The enterprise gross margin was 51.4%, a record for this business, while the consumer segment gross margin improved to 31.4% [30] - The enterprise business saw double-digit growth year-over-year, particularly in ProAV solutions, which experienced over 25% sell-through growth [64] Market Data and Key Metrics Changes - The consumer business faced challenges with a 30% decline in sales to service providers, but core consumer business revenues increased by 1.6% year-over-year [26] - The company reported a decline in service provider revenue, projecting around $20 million for Q1 2026, a decrease of approximately 35% compared to Q1 2025 [37] - Inventory levels in retail are tightening, with expectations of lean inventory in anticipation of a broader Wi-Fi 7 rollout [60] Company Strategy and Development Direction - NETGEAR is focusing on transforming its business by investing in high-growth opportunities, particularly in the enterprise segment [6] - The company aims to leverage software investments to expand subscription and services revenue, with a goal of increasing its recurring subscriber base [25] - A recent restructuring was implemented to streamline operations and empower business units, impacting approximately 5% of employees [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges related to memory shortages impacting the consumer business, with expectations of limited gross margin impact in the first half of 2026 [16] - The company remains optimistic about its long-term growth trajectory, despite potential headwinds from rising memory costs [18] - Management emphasized the importance of maintaining operational efficiency and agility in navigating supply chain challenges [19] Other Important Information - NETGEAR repurchased approximately $50 million in shares throughout 2025, reflecting its commitment to returning capital to shareholders [15] - The company ended Q4 2025 with $323 million in cash and short-term investments, indicating a strong balance sheet [33] Q&A Session Summary Question: Can you elaborate on the potential impact of memory prices on the business? - Management indicated that mitigation efforts are in place, but the impact on the consumer side could be significant if memory prices remain high [40][42] Question: What is the competitive pricing environment in the consumer market? - Management noted that while enterprise pricing is increasing, the consumer side is more complex, with some competitors not raising prices [46][48] Question: How is the channel inventory health currently? - Management stated that retail partners are tightening inventory levels, which is typical post-holiday season [61] Question: What is the status of the backlog for ProAV managed switches? - Management confirmed that they are on track to clear the backlog and are now in a position to meet unconstrained demand [63]