NETGEAR Q2 Earnings Call Highlights

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.

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.

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.

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.