Strong Financial Performance
NETGEAR reported better-than-expected revenue and operating margin, driven by strong contributions from the B2B division. Non-GAAP gross margins reached 35%, highlighting improved profitability through a leaner, more effective channel strategy.
Growth in NETGEAR for Business (NFB)
The NFB segment saw revenue growth of 15.4% year-over-year. Significant contribution margin improvements and a 78% year-over-year rise in contribution profit were reported, driven by strong demand for ProAV managed switches.
Strategic Transformation and Reorganization
NETGEAR underwent a proactive reorganization in January 2025 to focus on unlocking inherent business value. This reorganization helped in freeing up cash for strategic investments and improved operational efficiency.
Successful Acquisition of VAAG Systems
The acquisition of VAAG Systems, based in Chennai, India, aims to enhance software development capabilities. This move will leverage AI for networking simplification for SMEs, reduce costs, and accelerate product innovation.
Positive Market Positioning
NETGEAR benefits from not manufacturing in China and having products exempt from tariffs, strengthening its competitive position amid geopolitical uncertainties.