NETGEAR reported third quarter 2026 revenue of $167.3 million, a 9.3% year-over-year decline that missed analyst expectations. However, non-GAAP EPS of $0.13 significantly outperformed the expected $0.05 loss, driven by a strategic shift toward higher-margin Enterprise products and disciplined cost management despite manufacturing constraints.

Key Highlights

  • The Enterprise segment now accounts for 54% of total revenue and approximately 70% of non-GAAP gross profit, with segment gross margins reaching 53.2%.
  • Consolidated non-GAAP gross margin expanded 170 basis points year-over-year to 41.3%, exceeding the high end of management guidance.
  • Manufacturing output issues at a key production partner constrained shipments, leaving Enterprise backlog at the end of Q3 more than 2.5x higher than Q2 levels.
  • Annual Recurring Revenue (ARR) from subscriptions and services grew 12% year-over-year to $42.5 million.