v3.26.1
Segment Information
 6 Months Ended
Jun. 28, 2026
Segment Reporting [Abstract]  
Segment Information

Note 12. Segment Information

Operating segments are components of an enterprise about which separate financial information is available and is evaluated quarterly by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company has identified its CEO as the CODM. The Company operates and reports in two segments: Enterprise and Consumer. As previously disclosed, during 2025, the

Company realigned its reportable segments twice. Effective the first quarter of 2025, the Company separated the former Connected Home segment into Home Networking and Mobile, resulting in three reportable segments during the first three fiscal quarters of 2025: NETGEAR for Business, Home Networking, and Mobile. Beginning in the fourth quarter of 2025, the Company combined Home Networking and Mobile into a single Consumer segment and renamed NETGEAR for Business as Enterprise, resulting in the current two reportable segments. The prior-year segment financial information has been recast to conform to the current-year presentation.

 

•
Enterprise: focuses on small and medium enterprises and provides solutions for audio and video over Ethernet for AV applications, enterprise networking solutions, including wireless local area network (“LAN”) and cloud-managed networking capabilities, software platforms for deployment and remote management, and security offerings, including firewall and SASE functionality, designed to address the networking, security, and manageability requirements of organizations seeking reliable and cost-effective connectivity solutions; and
•
Consumer: focuses on consumers and provides high-performance, dependable and easy-to-use WiFi internet networking solutions such as multi-band WiFi 7 mesh systems and routers, subscription services offering performance, security, privacy and support, and 4G/5G mobile products, including WiFi 7 and WiFi 6/6E-enabled portable mobile hotspots and mobile routers, designed to address the demand for reliable, high-speed connectivity at home and on the go.

 

The Company believes that this structure reflects its current operational and financial management, with Enterprise and Consumer operating as distinct business units with integrated product development and go-to-market capabilities. The leadership teams of each segment are responsible for sales, marketing, product management, engineering, and customer support activities tailored to their respective markets.

The results of the reportable segments are derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including segment gross profit and segment contribution income (loss). Segment gross profit consists of segment net revenue less the related segment cost of revenue, where segment cost of revenue excludes stock-based compensation expense and amortization of intangible assets, each of which is managed at the corporate level and reported within unallocated indirect costs below. Segment contribution income (loss) consists of segment net revenue less the related segment cost of revenue, research and development and sales and marketing costs, in each case excluding the corporate-level items described below. Segment contribution income (loss) is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing and general and administrative expenses, amortization of intangible assets, stock-based compensation expense, acquisition related expenses, restructuring and other charges, litigation reserves, net, and other income (expenses), net.

Financial information for each reportable segment and a reconciliation of segment contribution income to income (loss) before income taxes is as follows:

 

 

 

 

Three Months Ended

 

 

 

 

June 28, 2026

 

 

 

June 29, 2025

 

(In thousands, except percentage data)

 

 

Enterprise

 

 

 

Consumer

 

 

 

Total

 

 

 

Enterprise

 

 

 

Consumer

 

 

 

Total

 

Net revenue

 

$

 

88,954

 

 

$

 

79,608

 

 

$

 

168,562

 

 

$

 

82,621

 

 

$

 

87,911

 

 

$

 

170,532

 

Segment cost of revenue

 

 

 

40,854

 

 

 

 

57,890

 

 

 

 

 

 

 

 

44,036

 

 

 

 

62,062

 

 

 

 

 

Segment gross profit

 

 

 

48,100

 

 

 

 

21,718

 

 

 

 

69,818

 

 

 

 

38,585

 

 

 

 

25,849

 

 

$

 

64,434

 

Segment gross margin

 

 

 

54.1

%

 

 

 

27.3

%

 

 

 

 

 

 

 

46.7

%

 

 

 

29.4

%

 

 

 

 

Reconciliation of gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

(1,416

)

 

 

 

 

 

 

 

 

 

 

 

-

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

(616

)

 

 

 

 

 

 

 

 

 

 

 

(456

)

Total Consolidated gross profit

 

 

 

 

 

 

 

 

 

$

 

67,786

 

 

 

 

 

 

 

 

 

 

$

 

63,978

 

Segment operating expenses

 

 

 

25,050

 

 

 

 

23,452

 

 

 

 

 

 

 

 

22,623

 

 

 

 

22,562

 

 

 

 

 

Contribution income (loss)

 

 

 

23,050

 

 

 

 

(1,734

)

 

 

 

21,316

 

 

 

 

15,962

 

 

 

 

3,287

 

 

 $

 

19,249

 

Contribution margin

 

 

 

25.9

%

 

 

 

(2.2

)%

 

 

 

 

 

 

 

19.3

%

 

 

 

3.7

%

 

 

 

 

Corporate and unallocated costs

 

 

 

 

 

 

 

 

 

 

 

(17,294

)

 

 

 

 

 

 

 

 

 

 

 

(20,472

)

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

(1,418

)

 

 

 

 

 

 

 

 

 

 

 

—

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

(10,020

)

 

 

 

 

 

 

 

 

 

 

 

(6,675

)

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

(244

)

 

 

 

 

 

 

 

 

 

 

 

(705

)

Restructuring and other charges

 

 

 

 

 

 

 

 

 

 

 

(782

)

 

 

 

 

 

 

 

 

 

 

 

(862

)

Litigation reserves, net

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

(75

)

Other income, net (1)

 

 

 

 

 

 

 

 

 

 

 

1,701

 

 

 

 

 

 

 

 

 

 

 

 

3,976

 

Income (loss) before income taxes

 

 

 

 

 

 

 

 

 

$

 

(6,740

)

 

 

 

 

 

 

 

 

 

$

 

(5,564

)

 

 

 

 

 

 

Six Months Ended

 

 

 

 

June 28, 2026

 

 

 

June 29, 2025

 

(In thousands, except percentage data)

 

 

Enterprise

 

 

 

Consumer

 

 

 

Total

 

 

 

Enterprise

 

 

 

Consumer

 

 

 

Total

 

Net revenue

 

$

 

172,756

 

 

$

 

154,625

 

 

$

 

327,381

 

 

$

 

161,812

 

 

$

 

170,780

 

 

$

 

332,592

 

Segment cost of revenue

 

 

 

80,512

 

 

 

 

110,830

 

 

 

 

 

 

 

 

86,566

 

 

 

 

124,844

 

 

 

 

 

Segment gross profit*

 

 

 

92,244

 

 

 

 

43,795

 

 

 

 

136,039

 

 

 

 

75,246

 

 

 

 

45,936

 

 

 

 

121,182

 

Segment Gross margin

 

 

 

53.4

%

 

 

 

28.3

%

 

 

 

 

 

 

 

46.5

%

 

 

 

26.9

%

 

 

 

 

Reconciliation of gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

(2,834

)

 

 

 

 

 

 

 

 

 

 

 

-

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

(1,117

)

 

 

 

 

 

 

 

 

 

 

 

(878

)

Total Consolidated gross profit

 

 

 

 

 

 

 

 

 

$

 

132,088

 

 

 

 

 

 

 

 

 

 

$

 

120,304

 

Segment operating expenses

 

 

 

49,137

 

 

 

 

45,655

 

 

 

 

 

 

 

 

41,649

 

 

 

 

44,114

 

 

 

 

 

Contribution income (loss)

 

 

 

43,107

 

 

 

 

(1,860

)

 

 

 

41,247

 

 

 

 

33,597

 

 

 

 

1,822

 

 

 

 

35,419

 

Contribution margin

 

 

 

25.0

%

 

 

 

(1.2

)%

 

 

 

 

 

 

 

20.8

%

 

 

 

1.1

%

 

 

 

 

Corporate and unallocated costs

 

 

 

 

 

 

 

 

 

 

 

(35,573

)

 

 

 

 

 

 

 

 

 

 

 

(39,240

)

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

(2,837

)

 

 

 

 

 

 

 

 

 

 

 

—

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

(18,225

)

 

 

 

 

 

 

 

 

 

 

 

(12,171

)

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

(488

)

 

 

 

 

 

 

 

 

 

 

 

(705

)

Restructuring and other charges

 

 

 

 

 

 

 

 

 

 

 

(5,658

)

 

 

 

 

 

 

 

 

 

 

 

(5,604

)

Litigation reserves, net

 

 

 

 

 

 

 

 

 

 

 

(499

)

 

 

 

 

 

 

 

 

 

 

 

(38

)

Other income, net (1)

 

 

 

 

 

 

 

 

 

 

 

3,282

 

 

 

 

 

 

 

 

 

 

 

 

12,147

 

Income (loss) before income taxes

 

 

 

 

 

 

 

 

 

$

 

(18,751

)

 

 

 

 

 

 

 

 

 

$

 

(10,192

)

 

(1)
Amounts included interest income of $1.7 million and $3.8 million for the three and six months ended June 28, 2026, respectively, and $3.1 million and $6.4 million for the three and six months ended June 29, 2025, respectively. Amounts also included gain/(loss), net from derivatives not designated as hedging instruments of $0.4 million and $0.8 million for the three and six months ended June 28, 2026, respectively, and $(2.1) million and $(3.1) million for the three and six months ended June 29, 2025, respectively. For the three and six months ended June 28, 2026, the amount also included $0.6 million and $1.3 million, respectively, of imputed interest expense related to an intangible asset acquisition. For the three and six months ended June 29, 2025, the amount also included gain/(loss), net from foreign currency transactions of $2.4 million and $3.8 million, respectively, and proceeds of $4.7 million from a sale of patents for the six months ended June 29, 2025.

The CODM does not evaluate operating segments using discrete asset information.

Operations by Geographic Region

For reporting purposes, revenue is generally attributed to each geographic region based on the location of the customer.

The following table shows net revenue by geography:

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

(In thousands)

 

 

June 28, 2026

 

 

 

June 29, 2025

 

 

 

June 28, 2026

 

 

 

June 29, 2025

 

United States (U.S.)

 

$

 

112,801

 

 

$

 

112,762

 

 

$

 

215,380

 

 

$

 

216,801

 

Americas (excluding U.S.)

 

 

 

3,725

 

 

 

 

3,517

 

 

 

 

7,009

 

 

 

 

7,239

 

EMEA

 

 

 

36,423

 

 

 

 

34,375

 

 

 

 

69,898

 

 

 

 

66,504

 

APAC

 

 

 

15,613

 

 

 

 

19,878

 

 

 

 

35,094

 

 

 

 

42,048

 

Total net revenue (1)

 

$

 

168,562

 

 

$

 

170,532

 

 

$

 

327,381

 

 

$

 

332,592

 

 

(1)
No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.

 

Long-lived assets by Geographic Region

The following table presents the Company’s long-lived assets located in geographic areas, which consist of property and equipment, net, and operating lease right-of-use assets:

 

(In thousands)

 

 

June 28, 2026

 

 

 

December 31, 2025

 

United States (U.S.)

 

$

 

38,832

 

 

$

 

42,836

 

Americas (excluding U.S. )

 

 

 

4,064

 

 

 

 

4,594

 

EMEA

 

 

 

2,443

 

 

 

 

2,345

 

India

 

 

 

5,801

 

 

 

 

5,596

 

APAC (excluding India)

 

 

 

6,387

 

 

 

 

7,345

 

Total  (1)

 

$

 

57,527

 

 

$

 

62,716

 

 

(1)
No individual country other than those presented above represented more than 10% of the Company’s total long-lived assets in the periods presented.