Why has NETGEAR (NTGR) decreased by 23.4% since the last earnings report?

NETGEAR, Inc. (NTGR) has seen a decline in shares of about 23.4% since the last earnings report, which is lower than the S&P 500’s performance. Investors are now questioning whether this negative trend will continue as the company approaches its next earnings release, or if NETGEAR is poised for a turnaround.

The latest earnings report from NETGEAR showcased some positive results, with the company reporting third-quarter 2025 non-GAAP earnings at 12 cents per share, while the Zacks Consensus Estimate predicted a loss of 9 cents per share. This exceeded the company’s own guidance of $165-$180 million, bringing in net revenues of $184.6 million. Revenues were up 0.9% year over year and 8.2% sequentially, with the Enterprise segment performing well due to ASP and unit growth in ProAV-managed switch products.

Within the Enterprise segment, NETGEAR saw a 15.7% revenue increase to $90.8 million, driven by the demand for ProAV managed switch products. The company continued to secure blue-chip customer wins and increase AV Manufacturing partnerships. In an effort to navigate supply chain challenges, NETGEAR projects a return to an optimal inventory position in the first quarter of 2026.

Despite a 20.7% year-over-year decline in Mobile segment revenues, there was a sequential increase of 3.3%. The Home Networking business saw revenues decline by 6.6% year over year but increased by 7.6% sequentially. This growth was attributed to an expanded product portfolio, including WiFi 7 products and the Armor subscription service.

Regionally, the Americas brought in $128.1 million in net revenues, representing a year-over-year increase of 0.3%. Europe, the Middle East, and Africa generated $37 million in revenues, up 12.6%, while the Asia Pacific region saw revenues fall by 12.4% to $19.5 million. Margin details showed an improvement due to a better mix of higher-margin Enterprise business and selling off older, higher-cost inventory. The gross margin increased to 39.6%, with Enterprise segment non-GAAP gross margin at 51%, marking a 630 basis points increase from the previous year.

Operating expenses for NETGEAR rose by 25.1% year over year, mainly due to hiring plans and one-time expenses related to the relocation of headquarters. With an operating income of $3.8 million and non-GAAP operating expenses sitting at $69.2 million, NETGEAR showcased growth and potential.

For the quarter ended September 28, 2025, NETGEAR utilized $7.4 million in cash from operations, with solid financials and liquidity pointing to a stable position for the company moving forward.