NETGEAR (NTGR) Q1 2026 earnings summary

Executive summary

• Q1 2026 net revenue was $158.8 million, down 2% year-over-year, with Enterprise revenue up 5.8% and Consumer revenue down 9.5%.

• Record gross margin achieved: GAAP 40.5%, non-GAAP 41.7%, driven by Enterprise mix, ProAV OS acquisition, and supply chain discipline.

• Non-GAAP operating income was $1.7 million, while GAAP operating loss was $13.6 million; net loss was $13.0 million, or $(0.47) per share.

• Annual recurring revenue from subscriptions and services grew 12% year-over-year to approximately $40 million, with 559,000 recurring subscribers.

• Transformation initiatives and restructuring impacted 5% of employees to accelerate operational efficiency and maintain strategic investments.

Financial highlights

• Net revenue: $158.8 million (down 2% year-over-year); gross profit: $64.3 million; gross margin: GAAP 40.5%, non-GAAP 41.7%.

• Non-GAAP operating income: $1.7 million (1% margin); non-GAAP net income: $1.9 million ($0.06 per share); GAAP EPS: $(0.47).

• Operating expenses: $77.9 million, up from $69.1 million year-over-year.

• Cash and short-term investments at quarter end: $296.5 million.

• ARR grew 12% year-over-year to $39.7 million.

Outlook and guidance

• Q2 2026 net revenue expected between $150 million and $165 million.

• GAAP operating margin guidance: -8.4% to -5.4%; non-GAAP operating margin: -1% to 2%.

• Service provider revenue expected to decline ~33% year-over-year in Q2.

• Memory cost headwinds expected to persist, with mitigation efforts underway and greater benefit in Enterprise.

• Continued investment in Enterprise software and Consumer product launches.