Quarterly Report for Quarter Ending September 27, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words "believes," "anticipates," "plans," "expects," "intends," "could," "may," "will," and similar expressions are intended to identify forward-looking statements. The forward-looking statements represent NETGEAR's expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding: NETGEAR's future operating performance and financial condition, including expectations regarding growth, revenue, expenses, operating margin, gross margin, continued profitability and cash generation; NETGEAR's reporting structure; NETGEAR's belief of the principal competitive factors in the business, consumer, and service provider markets for networking products; expectations regarding transportation costs; expectations regarding product costs, including the impact of rising memory costs and our mitigation efforts on our gross margin; NETGEAR's ability to continue launching new consumer router models and other new products, providing software updates to existing products, and maintain conditional approval from the Federal Communications Commission in connection with its Covered List designation of foreign-produced routers and additional costs incurred in connection with complying with applicable regulations; NETGEAR's strategy of capitalizing on technological inflection points, developing products that serve a broader segment and simplifying and developing service offerings that build recurring service revenue streams; expectations regarding paid revenue from paid subscription service plans; expectations regarding product mix and market demand for NETGEAR's products and services, including Enterprise and Consumer products and subscription services and NETGEAR's ability to respond to this demand; expectations regarding competition, competitive factors, consumer price sensitivity and demand for NETGEAR's products and services; expectations regarding sales channels, direct online store and in-app offerings; expectations regarding macroeconomic conditions and impacts to NETGEAR's operational and financial performance and business strategies; expectations regarding existing cash, cash equivalents and short-term investments and anticipated cash requirements; expectations regarding inventory levels, inventory management and inventory costs; expectations regarding research and development expenses, sales and marketing expenses and general and administrative expenses; expectations regarding our restructuring activities, including the timing and costs associated with such activities; expectations regarding expected tax rates or tax expenses, the potential applicability and impact of global tax regimes, and changes in legislation related to the taxation of business entities; expectations regarding the impact of acquisitions; expectations regarding our product portfolio, and expectations regarding NETGEAR's subscription services and service revenue. These statements are based on management's current expectations and are subject to a number of risks and uncertainties, including but not limited to those described in "Part II-Item 1A-Risk Factors" and "Liquidity and Capital Resources" below and in our other SEC filings, including our Annual Report. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. All forward-looking statements in this document are based on information available to us as of the date hereof and we assume no obligation to update any such forward-looking statements except as required by law. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes contained in this quarterly report. Unless expressly stated or the context otherwise requires, the terms "we," "our," "us" and "NETGEAR" refer to NETGEAR, Inc. and its subsidiaries.

Use of Non-GAAP Financial Measures

In the following discussion and analysis, we present certain non-GAAP financial measures, including segment gross profit, segment gross margin, segment operating expenses (consisting of segment research and development, and sales and marketing), segment contribution income (loss) and segment contribution margin. These segment measures exclude amortization of intangible assets, stock-based compensation expense, acquisition related expenses, restructuring and other charges, litigation reserves, net, and other corporate-level items that are managed at the corporate level and not allocated to our segments, as further described in Note 11, Segment Information, in the Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Our Chief Operating Decision Maker ("CODM") uses these non-GAAP segment measures to evaluate the operating performance of each segment, in connection with operating and resource allocation decisions, for comparison with forecasts and strategic plans, and in determining management incentive compensation. We believe these measures, when read together with our GAAP results, provide useful information to investors by facilitating period-to-period comparisons of our ongoing segment results and offering insight into how management measures segment performance.

These non-GAAP measures are not in accordance with, or an alternative for, financial measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. They have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, and should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. Investors should evaluate these measures only in conjunction with the corresponding GAAP measures and the reconciliation of segment contribution income (loss) to income (loss) before income taxes included in Note 11, Segment Information, in the Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Business and Executive Overview

We are a global provider of networking technologies for businesses, homes, and service providers. We deliver a wide range of networking hardware, software, and services designed to enable reliable connectivity and security. Our mission is to unleash the full potential of connectivity with intelligent solutions that delight and protect. We are executing a multi-phase transformation to strengthen execution, reinforce our core businesses, and support long-term growth and margin expansion, while exercising strong operational discipline. Our products and services are delivered through integrated platforms that combine hardware, software, and services. Our connected solutions range from switching and wireless products that support audio and video ("AV") over Ethernet for Pro AV applications and business networks to WiFi networking solutions, security and support services for enterprise and home networks. We continually invest in research and development to create new technologies and services and to address technological trends such as AV over Ethernet, multi-Gigabit connectivity, WiFi 7, eSIM and future technologies. Our product line enables the creation and extension of wired and wireless networks and includes services that complement and enhance our hardware offerings. These products are available in multiple configurations to address the changing needs of our customers across geographic regions.

We operate and report in two segments: Enterprise and Consumer. The leadership team of each segment focuses on serving the unique needs of its customers through product and service development, while also managing the sales and marketing functions that support the business. During 2025, we realigned our reportable segments, first separating the former Connected Home segment into Home Networking and Mobile effective in the first quarter of 2025, and then combining Home Networking and Mobile into a single Consumer segment beginning in the fourth quarter of 2025. Prior-year segment information has been recast to conform to the current two-segment presentation. For additional information regarding the segment realignments, refer to Note 11, Segment Information, in the Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q. The Enterprise segment 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 secure access service edge ("SASE") functionality, designed to address the networking, security, and manageability requirements of organizations seeking reliable and cost-effective connectivity. The Consumer segment focuses on consumers and provides high-performance, dependable and easy-to-use WiFi internet networking solutions such as WiFi 6, WiFi 6E and WiFi 7 multi-band mesh systems, routers and subscription services that provide consumers a range of value-added services focused on performance, security, privacy and premium support, together with high-performance Mobile (4G/5G) products, including WiFi 7, WiFi 6/6E-enabled portable mobile hotspots and mobile routers designed to meet the growing demand for on-the-go, high-speed and reliable internet connectivity with advanced security features.

We conduct business across three geographic regions: Americas; Europe, Middle East and Africa ("EMEA"); and Asia Pacific ("APAC").

Business Overview

The enterprise, consumer, and service provider markets are intensely competitive and subject to rapid technological change. We expect competition to continue to intensify. We believe that the principal competitive factors in the business, consumer, and service provider markets for networking products include product breadth, price points, brand name, security and privacy, performance, features, functionality and reliability, product availability, timeliness of new product introductions, size and scope of the sales channel, ease-of-installation, maintenance and use, and customer service and support. We seek to differentiate our offerings through integrated hardware and software solutions, partner relationships, centralized management capabilities, and services. To remain competitive, we focus on investing in differentiated connectivity solutions across a range of performance tiers, complemented by subscription-based services, expanding and supporting our sales channels, strengthening engagement with customers and partners, and maintaining a high level of customer satisfaction. Our investments align with our strategic priorities, including investments in enterprise and Pro AV initiatives and selective acquisitions intended to enhance software and security capabilities.

We sell our products through multiple sales channels worldwide, including traditional and online retailers, wholesale distributors, direct market resellers ("DMRs"), managed service providers ("MSPs"), AV ecosystem partners, broadband service providers, and through our direct online store at www.netgear.com. Our main wholesale distributors include Ingram Micro, TD

Synnex, and D&H Distributing Company. Our retail channel includes traditional and online retail locations both domestically and internationally, such as Amazon.com (worldwide), Best Buy, Walmart, Staples, Office Depot, Target, Electra (Sweden), Fnac Darty (Europe), JB HiFi (Australia), Elkjop (Norway), and Boulanger (France). Our DMRs include CDW Corporation, Insight Enterprises, and PC Connection in domestic markets. In addition, we also sell products directly to broadband service providers in the United States and internationally providing WiFi, cable and 4G/5G mobile broadband products. Some of these retailers and broadband service providers purchase directly from us, while others are fulfilled through wholesale distributors around the world. A substantial portion of our net revenue is derived from a limited number of wholesale distributors, service providers and retailers. While we expect these channels to continue to be a significant part of our sales strategy, increasingly, customers are choosing to purchase products and services directly from us. Within our consumer business, we expect revenue through our direct online store and in-app offerings to continue to increase as a percentage of consumer revenue for the foreseeable future.

Financial Overview

During the three months ended September 27, 2026, our net revenue decreased by $17.2 million, or 9.3%, compared to the prior year period, driven by a $17.1 million, or 18.2%, decrease in our Consumer segment, while net revenue in our Enterprise segment was relatively flat. The decrease in Consumer net revenue was driven by lower sales of our service provider and related products, consistent with our strategy of harvesting this business, as well as by declines in our core consumer business attributable to continued softness in the broader home networking retail market, including electronics pricing pressures from rising memory costs. In light of these conditions, we have been prioritizing gross profit over revenue growth in our Consumer business. Enterprise net revenue was relatively flat, as growth in our Pro AV product line of managed switches in the Americas region was offset by declines in the EMEA and APAC regions. Supply constraints during the quarter also limited net revenue in both segments, particularly in Enterprise, due to a significant manufacturing delay at one of our contract manufacturers related to its challenges in bringing a new factory online rather than component availability. This delay was the primary driver of approximately $18 million of Enterprise backlog at quarter-end. Gross margin improved 100 basis points year-over-year to 40.1%, primarily driven by a higher revenue mix from our higher-margin Enterprise segment and lower warranty costs, partially offset by higher product costs associated with memory chip price increases and higher amortization of intangible assets. We recorded an operating loss of $13.7 million, compared to an operating loss of $7.1 million in the prior year period, primarily due to lower gross profit and higher restructuring and other charges resulting from organizational changes implemented in the third quarter of 2026, mainly severance and the cancellation of materials purchase commitments for certain mobile products.

Geographically, for the three months ended September 27, 2026, net revenue from our Enterprise segment increased in Americas and decreased in EMEA and APAC, while net revenue from our Consumer segment declined in Americas and EMEA and was relatively flat in APAC, compared to the prior year period. For the nine months ended September 27, 2026, net revenue from our Enterprise segment increased in Americas and EMEA and decreased in APAC, while net revenue from our Consumer segment declined in all three regions, compared to the prior year period.

Global Events Affecting our Business and Operations

Macroeconomic and geopolitical trends have continued to create uncertainty in the global economic environment. Contributing factors include persistent inflation, elevated interest rates, foreign exchange rate fluctuations, particularly involving the U.S. dollar, and ongoing trade policy shifts. Trade policy uncertainty and the potential for further expanded or modified tariff regimes, continues to affect global commerce and supply chain planning, and could increase our product costs. Geopolitical tensions, including in the Middle East, and related disruptions to global shipping routes, along with volatile ocean freight and fuel costs, have added complexity to the global operating environment. We are exposed to lengthening lead times and increasing costs on various components, including a significant increase in memory prices during the third quarter of 2026, driven in part by industry demand related to AI data center deployments, which have created additional pressures within our supply chain and have adversely affected and we expect will continue to adversely affect our product costs and gross margin. In light of this environment, we continue to invest in cybersecurity, product security, and sourcing, as well as our regulatory compliance readiness. The extent of impacts from these macroeconomic and geopolitical trends and from our ongoing investment and go-to-market initiatives on our operational and financial performance, including our ability to execute our business strategies in the expected time frame, will depend on future developments. In addition, in March 2026, the Federal Communications Commission issued regulations adding foreign-produced routers to its Covered List, and in April 2026 we were granted conditional approval, which permits the importation of our approved models through October 1, 2027, allowing us to continue to launch new consumer router models and provide software updates to existing products while the designation is maintained. The broader implications of the macroeconomic uncertainty, the evolving regulatory environment affecting our products, and any related disruptions to channel partners and freight remain unpredictable. Refer to Item 1A, Risk Factors of Part II of this Quarterly Report on Form 10-Q for various risks and uncertainties associated with the macroeconomic trends and uncertainty.

Looking forward, within our Enterprise segment, we continue to see encouraging underlying demand, particularly for our Pro AV managed switches. However, our near-term revenue outlook remains constrained by manufacturing output and the timing of product availability, which we expect to persist into the first quarter of 2027. While we expect Enterprise revenue to increase modestly in the fourth quarter of 2026 compared to the third quarter, we anticipate that improvements in production execution will still fall short of customer demand. We expect our cost mitigation efforts to continue to offset rising component costs within our Enterprise business. In our Consumer segment, we expect to continue to optimize this business for gross profit, with increasing impact from component costs and some additional impact from supply constraints, and we expect revenue in this segment to decline modestly compared to the third quarter of 2026. For our service provider and related products, we remain focused on optimizing contribution profit and expect revenue to decline significantly compared to the prior year period. We are continuing to ramp our planned investments, with a focus on expanding our insourced software development capabilities and enhancing our go-to-market efforts, particularly in support of our Enterprise business. These investments support our strategy of differentiating our portfolio through software, services, and security offerings. Within our Consumer business, we are addressing key technology transitions, including WiFi 8, WiFi 7, WiFi 6E, WiFi 6, and 5G, through a good, better, best product strategy. We are also continuing to expand service offerings, strengthen direct-to-consumer capabilities, and introduce new products, to support the expansion of recurring non-device revenue streams over time.

Critical Accounting Estimates

In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income, and net income, as well as on the value of certain assets and liabilities on our condensed consolidated balance sheets. We base these estimates on historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances. As of the date of issuance of these condensed consolidated financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ materially from those estimates under different assumptions and conditions.

For a complete description of what we believe to be the critical accounting estimates used in the preparation of our Unaudited Condensed Consolidated Financial Statements, refer to Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report.

Results of Operations

The following table sets forth the unaudited condensed consolidated statements of operations for the periods presented.

Net Revenue by Geographic Region

Our net revenue consists of gross product shipments and service revenue, less allowances for estimated sales returns, price protection, end-user customer rebates and other channel sales incentives deemed to be a reduction of revenue per the authoritative guidance for revenue recognition, and net changes in deferred revenue.

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

Americas

Net revenue in Americas decreased for both the three and nine months ended September 27, 2026, compared to the prior year periods. Consumer segment net revenue declined by $14.3 million and $26.4 million for the three- and nine-month periods, respectively. The decreases in Consumer net revenue were driven by lower sales of our service provider and related products, consistent with our strategy of harvesting this business, as well as by declines in our core consumer business attributable to continued softness in the broader home networking retail market, including electronics pricing pressures from rising memory costs. The decreases were partially offset by increases in Enterprise segment net revenue of $2.0 million and $12.4 million for the three- and nine-month periods, respectively, primarily attributable to our Pro AV product line of managed switches, driven mainly by higher average selling prices. The manufacturing constraints noted above also limited net revenue in Americas for the three- and nine- month periods.

EMEA

Net revenue in EMEA decreased for the three months ended September 27, 2026, and was relatively flat for the nine months ended September 27, 2026, compared to the prior year periods. For the three-month period, Consumer segment net revenue declined by $2.9 million, mainly attributable to declines in our core consumer business and lower sales of our service provider and related products, and Enterprise segment net revenue declined by $1.0 million. For the nine-month period, a decrease in Consumer segment net revenue of $2.7 million was largely offset by growth in our Enterprise segment of $2.3 million, attributable to our Pro AV product line of managed switches, driven mainly by higher average selling prices. The manufacturing constraints noted above also limited net revenue in EMEA for the three- and nine-month periods.

APAC

Net revenue in APAC decreased for both the three and nine months ended September 27, 2026, compared to the prior year periods. Enterprise segment net revenue declined $1.1 million and $3.8 million for the three- and nine-month periods, respectively, reflecting in part the transformation of our go-to-market approach currently underway in the region, which we do not expect to contribute to revenue growth in the near term. Consumer segment net revenue was relatively flat for the three-month period, as lower sales of our service provider and related products were offset by higher retail sales, and declined $4.2 million for the nine-month period, mainly due to lower sales of our service provider and related products.

For further discussions specific to our Enterprise and Consumer segments, refer to the "Segment Information" section below.

Cost of Revenue and Gross Margin

Cost of revenue consists primarily of the following: the cost of finished products from our third party manufacturers; overhead costs, including purchasing, product planning, inventory control, warehousing and distribution logistics; third-party software licensing fees; inbound freight; import duties/tariffs; warranty costs associated with returned goods; write-downs for excess and

obsolete inventory; amortization of certain acquired intangible assets and software development costs; and costs attributable to the provision of service offerings.

We outsource our manufacturing, warehousing and distribution logistics. We believe this outsourcing strategy allows us to better manage our product costs and gross margin. Our gross margin can be affected by a number of factors, including fluctuation in foreign exchange rates, sales returns, changes in average selling prices, end-user customer rebates and other channel sales incentives, changes in our cost of goods sold due to fluctuations and increases in prices paid for components, net of vendor rebates, royalty and licensing fees, warranty and overhead costs, inbound freight and duty/tariffs, conversion costs, charges for excess or obsolete inventory, amortization of acquired intangible assets and capitalized software development costs. The following table presents costs of revenue and gross margin, for the periods indicated:

Our gross margin increased for both the three and nine months ended September 27, 2026, compared to the prior year periods, primarily driven by a higher revenue mix from our higher-margin Enterprise segment and lower warranty costs, partially offset by higher product costs associated with memory chip price increases. The increase for the nine-month period was also partially offset by higher excess or obsolete inventory charges in our Consumer business.

We expect our gross margin in the fourth fiscal quarter of 2026 to be in line with or below the third fiscal quarter of 2026 level, as the impact of rising memory costs continues. The memory cost challenge has expanded to other parts of the BOM, and we are also experiencing production delays given the tightening environment. We also expect to incur higher air freight costs to bring in constrained product as our manufacturing partner works through their process of stabilizing their new production environment, which could affect our product mix and the timing of shipments. Forecasting gross margin percentages is difficult, and there are a number of risks related to our ability to maintain or improve our current gross margin levels. Our cost of revenue as a percentage of net revenue can vary significantly based upon factors such as: uncertainties surrounding revenue levels, broad-based inflationary pressures and the uncertain macroeconomic environment, future pricing and/or potential discounts as a result of the economy or in response to the strengthening of the U.S. dollar in our international markets, competition, the timing of sales, and related production level variances; import customs duties and imposed tariffs; changes in technology; changes in product mix; expenses associated with writing off excessive or obsolete inventory; variability of stock-based compensation costs; royalties to third parties; fluctuations in freight costs; manufacturing and purchase price variances; changes in prices on commodity components; and warranty costs. We expect that revenue derived from paid subscription service plans will continue to increase in the future, which may have a positive impact on our gross margin. However, we will continue to experience fluctuations in our gross margin due to the factors discussed above.

Operating Expenses

Research and Development

Research and development expenses consist primarily of personnel expenses, payments to suppliers for design services, safety and regulatory testing, product certification expenditures to qualify our products for sale into specific markets, prototypes, IT and facility allocations, and other consulting fees. Research and development expenses are recognized as they are incurred. Our research and development organization is focused on enhancing our ability to introduce innovative and easy-to-use products and services. The following table presents research and development expenses, for the periods indicated:

Research and development expenses decreased for the three months ended September 27, 2026, and increased for the nine months ended September 27, 2026, compared to the prior year periods. The decrease for the three-month period was primarily due to lower engineering project and outside professional services expenditures of $1.0 million and lower IT and facility allocations of $0.3 million, partially offset by higher personnel-related expenditures of $0.3 million. The increase for the nine-month period was primarily due to higher personnel-related expenditures of $4.0 million, mainly from higher headcount supporting our Enterprise business, with an emphasis on insourcing software development, and higher IT and facility allocations of $1.4 million, partially offset by lower engineering project and outside professional services expenditures of $1.6 million. Research and development headcount increased to 395 employees at September 27, 2026, compared to 319 employees at September 28, 2025.

We believe that innovation and technological leadership is critical to our future success, and we are committed to continuing a significant level of research and development to develop new technologies, products and services. We expect research and development expenses as a percentage of net revenue in the fourth fiscal quarter of 2026 to be in line with the third fiscal quarter of 2026 level. We continually invest in research and development to create new technologies and services and to address technological trends such as AV over Ethernet, multi-Gigabit connectivity, WiFi 8, WiFi 7, eSIM and future technologies. We anticipate that our research and development efforts will increasingly focus on software, security, and capabilities that support subscription-based services and margin improvement. We also expect that our Enterprise segment will receive most of our incremental investments for 2026 with a focus on in-sourcing our software capabilities, building on our prior-year establishment of an in-house research and development center in Chennai, India and acquisitions of Exium and the source code for our managed switches, and expanding our product portfolio to grow our share in the sizable AV and enterprise WiFi markets. Research and development expenses may fluctuate depending on the timing and number of development activities and could vary significantly as a percentage of net revenue, depending on actual revenues achieved in any given quarter.

Sales and Marketing

Sales and marketing expenses consist primarily of advertising, trade shows, corporate communications and other marketing expenses, product marketing expenses, outbound freight costs, amortization of certain intangible assets, personnel expenses for sales and marketing staff, technical support expenses, and IT and facility allocations. The following table presents sales and marketing expenses, for the periods indicated:

Sales and marketing expenses slightly decreased for the three months ended September 27, 2026, and increased for the nine months ended September 27, 2026, compared to the prior year periods. The decrease for the three-month period was primarily due to lower IT and facility allocations of $1.1 million and lower brand marketing expenditures of $0.9 million, partially offset by increased investment in sales resources of $1.3 million, including headcount as well as outsourced arrangements, to expand our go-to-market capabilities in support of our Enterprise business. The increase for the nine-month period primarily reflected increased investment in sales resources of $7.4 million and outbound freight costs of $0.6 million, partially offset by lower IT and facility allocations of $1.7 million and lower brand marketing expenditures of $1.1 million.

We expect sales and marketing expenses as a percentage of revenue in the fourth fiscal quarter of 2026 to be in line with the third fiscal quarter of 2026 level. We expect most of our incremental investments in sales and marketing in 2026 will be related to go-to-market capabilities of our product offerings in the Enterprise segment, partially offset by efficiencies in marketing on the Consumer side. Expenses may fluctuate depending on revenue levels achieved as certain expenses, such as commissions, are determined based upon the revenues achieved. Forecasting sales and marketing expenses is highly dependent on expected revenue levels and could vary significantly depending on actual revenue achieved in any given quarter. Marketing expenses may also fluctuate depending upon the timing, extent and nature of marketing programs. Marketing expenditure committed with a customer is generally recorded as a reduction of revenue per authoritative guidance.

General and Administrative

General and administrative expenses consist of salaries and related expenses for executives, finance and accounting, human resources, information technology, professional fees, including legal costs associated with defending claims against us and business acquisition related expenses, allowance for doubtful accounts, IT and facility allocations, and other general corporate expenses. The following table presents general and administrative expenses, for the periods indicated:

General and administrative expenses decreased slightly for the three months ended September 27, 2026 and were flat for the nine months ended September 27, 2026, compared to the prior year periods. The slight decrease for the three-month period was primarily due to lower IT and facility costs, including allocations, of $1.0 million, partially offset by higher legal and outside professional services of $0.3 million. For the nine-month period, general and administrative expenses were flat as lower IT and facility costs, including allocations, of $1.1 million, lower acquisition related expenses of $0.7 million, lower other operating

expenses of $0.5 million and lower legal and outside professional services of $0.5 million were substantially offset by higher personnel-related expenditures of $2.4 million, including stock-based compensation expense associated with our executive transition.

We expect general and administrative expenses in absolute dollar amount in the fourth fiscal quarter of 2026 to be in line with the third fiscal quarter of 2026 level. General and administrative expenses could fluctuate depending on a number of factors, including the level and timing of expenditures associated with litigation defense costs in connection with the litigation and other legal matters, as discussed in Note 8, Commitments and Contingencies, in Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q. Future increases or decreases in general and administrative expenses are difficult to predict in absolute dollars due to the lack of visibility of certain costs, including legal costs associated with defending claims against us, asserting and enforcing our intellectual property portfolio, acquisition related activities, and other factors.

Restructuring and Other Charges

Restructuring and other charges increased for both the three and nine months ended September 27, 2026, compared to the prior year periods. As part of our ongoing multi-phase transformation, we periodically implement organizational changes to align our cost structure and organizational design with our strategic priorities. Charges in the three-month period primarily related to organizational changes implemented in the third quarter of 2026, and consisted primarily of severance and contract termination and other costs related to the cancellation of materials purchase commitments for certain mobile products. In connection with these changes, we approved a plan to close our Richmond, Canada office, which is expected to be completed by the end of 2026. Charges for both periods also reflected organizational changes implemented in the first quarter of 2026. The savings resulting from these changes are intended to be reinvested in our strategic priorities to support our ongoing transformation. For a detailed discussion of restructuring and other charges, refer to Note 13, Restructuring and Other Charges, in Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Other Income, Net

Other income, net consists of interest income, which represents amounts earned and incurred on our cash, cash equivalents and short-term investments, and other income and expenses, which primarily represents gains and losses on transactions denominated in foreign currencies, gains and losses on investments, and other non-operating income and expenses. The following table presents other income, net for the periods indicated:

The decreases in other income, net for the three and nine months ended September 27, 2026, compared to the prior year periods, were primarily due to lower interest income of $1.1 million and $3.7 million, respectively, resulting from lower average cash and short-term investment balances, and imputed interest expense of $0.6 million and $1.9 million, respectively, recognized in the current year periods related to an intangible asset acquisition. The nine-month decrease also reflected $4.7 million of proceeds from a sale of patents in the prior year period, with no comparable amount in the current year.

Provision for Income Taxes

** Percentage change not meaningful.

The decreases in income tax expense for the three and nine months ended September 27, 2026, compared to the prior year periods, were primarily attributable to net discrete tax benefits of $1.3 million recorded in the third quarter of 2026, consisting

primarily of return-to-provision adjustments related to the carryback of the fiscal 2025 U.S. federal research and development credit and certain foreign tax credits upon finalization of our fiscal 2025 U.S. federal income tax return, partially offset by increases in our liability for uncertain tax positions, as well as lower income in foreign jurisdictions. During the second quarter of 2026, we also recorded a discrete tax benefit related to the completion of our fiscal 2024 Pillar Two filings. The prior-year periods also reflected tax effects associated with the deferred tax liability established for intangible assets recognized in connection with the Exium acquisition. Because we maintain a full valuation allowance against our U.S. federal and state deferred tax assets, no tax benefit is recognized on forecasted U.S. losses.

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our future foreign tax rate could be affected by changes in the composition in earnings in countries with tax rates differing from the U.S. federal rate. We are under examination in various U.S. and foreign jurisdictions.

Segment Information

As disclosed above, during 2025 we realigned our reportable segments, first separating the former Connected Home segment into Home Networking and Mobile effective in the first quarter of 2025, and then combining Home Networking and Mobile into a single Consumer segment and renaming our NETGEAR for Business segment to Enterprise beginning in the fourth quarter of 2025. As a result, we now operate and report in two segments: Enterprise and Consumer. Prior-period segment financial information has been recast to conform to the current presentation. Additional information on the realignment, a description of our products and services, as well as segment financial data, for each segment and a reconciliation of segment contribution income (loss) to income (loss) before income taxes can be found in Note 11, Segment Information, and information on net revenue by product category can be found in Disaggregation of Revenue in Note 3, Revenue, in the Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Enterprise Segment

Enterprise segment net revenue was relatively flat for the three months ended September 27, 2026, and increased for the nine months ended September 27, 2026, compared to the prior year periods. Supply constraints resulting from manufacturing delays at one of our contract manufacturers, related to its challenges in bringing a new factory online rather than component availability, limited Enterprise net revenue during the three- and nine-month periods. We exited the quarter with approximately $18 million of Enterprise backlog for products that were unavailable due to these constraints. For the three-month period, growth in our Pro AV product line of managed switches in the Americas region was offset by declines in the EMEA and APAC regions. The increase for the nine-month period was primarily driven by our Pro AV product line of managed switches, which experienced double-digit sales growth in the Americas and EMEA regions, primarily driven by higher average selling prices. Geographically, net revenue from our Enterprise segment increased in Americas and decreased in EMEA and APAC for the three-month period, and increased in Americas and EMEA and decreased in APAC for the nine-month period. The declines in APAC reflect the transformation of our go-to-market approach currently underway in the region, which we do not expect to contribute to revenue growth in the near term.

Enterprise segment contribution income decreased slightly for the three months ended September 27, 2026, and increased for the nine months ended September 27, 2026, compared to the prior year periods. In both periods, gross margin increased, mainly driven by higher margins across our product lines, including our Pro AV product line of managed switches, which also represented a higher proportion of segment sales, while operating expenses increased, primarily driven by increased headcount and related investments as we continue to focus on and shift resources toward growing our Enterprise business. For the three-month period, the higher operating expenses more than offset the gross margin improvement, while for the nine-month period, the gross margin improvement, together with higher net revenue and a continuing benefit from a perpetual software license acquired in the fourth quarter of fiscal 2025, more than offset the higher operating expenses.

Consumer Segment

** Percentage change not meaningful.

Consumer segment net revenue decreased for both the three and nine months ended September 27, 2026, compared to the prior year periods. The decreases were driven by lower sales of our service provider and related products of $6.2 million and $19.1 million, respectively, consistent with our strategy of harvesting this business, as well as by declines in our core consumer business, primarily WiFi mesh systems and routers, attributable to continued softness in the broader home networking retail market, including electronics pricing pressures from rising memory costs. Supply constraints noted above also partially limited Consumer net revenue during the three- and nine-month periods. For the nine-month period, these declines were partially offset by growth in sales of our WiFi 7 routers. Geographically, Consumer segment net revenue declined in Americas and EMEA and was relatively flat in APAC for the three-month period, and declined in all three regions for the nine-month period. Given the rising cost of memory and related components, we are prioritizing gross profit over revenue growth in our Consumer business.

Consumer segment recorded contribution losses for both the three and nine months ended September 27, 2026, compared to contribution income in the prior year periods. The movements in both periods were mainly driven by lower net revenue and higher product costs associated with memory chip price increases, partially offset by lower warranty costs and lower operating expenses. The nine-month period was also impacted by higher charges for excess or obsolete inventory.

Liquidity and Capital Resources

Our principal sources of liquidity are cash, cash equivalents, short-term investments and cash generated from operations. As of September 27, 2026, we had cash, cash equivalents and short-term investments of $242.1 million, a decrease of $80.9 million from December 31, 2025.

As of September 27, 2026, approximately 34% of our cash and cash equivalents and short-term investments were outside of the U.S., which are subject to fluctuation based on the settlement of intercompany balances. As we repatriate these funds in accordance with our designation of funds not permanently reinvested outside of the U.S., we will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. We have recorded deferred taxes for the tax effect of repatriating the funds to the U.S.

Cash Flows

The following table presents our cash flows for the periods presented.

Operating Activities

Net cash used in operating activities decreased by $5.6 million for the nine months ended September 27, 2026, compared to the prior year period. The decrease reflected higher adjustments to reconcile net loss to net cash used in operating activities, principally related to stock-based compensation, depreciation and amortization, and the provision for excess and obsolete inventory, together with favorable changes in working capital, which collectively more than offset the increase in net loss. Accounts receivable increased to $156.4 million as of September 27, 2026 from $142.0 million as of December 31, 2025, mainly due to the timing of cash receipts and marketing claims processing. Our inventory decreased from $176.5 million as of December 31, 2025 to $169.4 million as of September 27, 2026, mainly due to the timing of purchases. Accounts payable (excluding payables related to property

and equipment) increased from $41.6 million as of December 31, 2025 to $48.7 million as of September 27, 2026, primarily due to the timing of inventory receipts and supplier payments.

Investing Activities

Net cash provided by investing activities was $43.0 million for the nine months ended September 27, 2026, compared to $26.6 million used in the prior year period, primarily due to lower purchases of short-term investments of $49.4 million and the absence of $12.2 million of payments for a business acquisition made in the prior year period and lower purchases of property and equipment of $7.9 million.

Financing Activities

Net cash used in financing activities increased by $23.7 million for the nine months ended September 27, 2026, compared to the prior year period. The increase in cash used was primarily due to $12.4 million of higher repurchases of our common stock, $7.8 million of principal payments on the deferred purchase price for acquisitions and the absence of $5.3 million of proceeds from the exercise of stock options received in the prior year period, partially offset by $1.1 million of lower payments for restricted stock unit tax withholdings.

Based on our current plans and market conditions, we believe that our existing cash, cash equivalents and short-term investments, together with cash generated from operations, will be sufficient to satisfy our anticipated cash requirements in the short-term and long-term. However, we may require or desire additional funds to support our operating expenses and capital requirements or for other purposes, such as acquisitions, and may seek to raise such additional funds through public or private equity financing or from other sources. We cannot assure you that additional financing will be available at all or that, if available, such financing would be obtainable on terms favorable to us and would not be dilutive. Our future liquidity and cash requirements will depend on numerous factors, including the introduction of new products and potential acquisitions of related businesses or technology.

Stock Repurchases and Restricted Stock Unit Withholdings

From time to time, our Board of Directors has authorized programs under which we may repurchase shares of our common stock. Under the authorizations, the timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, such as levels of cash generation from operations, cash requirements for acquisitions and the price of our common stock. On April 22, 2026, our Board of Directors authorized an incremental $75.0 million for repurchases of our common stock under the existing repurchase program. As of September 27, 2026, approximately $60.0 million remained authorized for repurchase under the repurchase program. We repurchased, retired and reported, based on trade date, approximately 2.2 million and 1.3 million shares of common stock, at a cost of approximately $47.9 million and $35.0 million under the repurchase authorization during the nine months ended September 27, 2026 and September 28, 2025, respectively. We also withheld and reported, based on trade date, approximately 462,000 shares and 452,000 shares of common stock, at a cost of approximately $10.6 million and $11.8 million during the nine months ended September 27, 2026 and September 28, 2025, respectively, to facilitate the administrative process of withholding and remitting personal income and payroll taxes for individuals receiving Restricted Stock Units. For a detailed discussion of our common stock repurchases, refer to Note 9, Stockholders' Equity, in Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Contractual and Other Obligations

Except as follows, there were no material changes outside of the ordinary course of business in our contractual obligations as of September 27, 2026, from those as of December 31, 2025, disclosed in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report.

We have entered into various inventory-related purchase agreements with suppliers. We are exposed to lengthening lead times and increasing costs on various components, certain of which are non-cancelable regardless of lead time, and as a result we have issued purchase orders to supply chain partners beyond contractual termination periods. As of September 27, 2026, we had $57.5 million of purchase obligations which represented short-term non-cancelable inventory-related purchase agreements with suppliers, as compared to $55.3 million as of December 31, 2025. As of September 27, 2026, $245.1 million of purchase orders beyond contractual termination periods remained outstanding. These purchase orders may be cancelled by either party, however we may incur expenses for materials and components, such as chipsets purchased by the supplier to fulfill the purchase order, in the event of cancellation. Expenses incurred in respect of cancelled purchase orders have historically not been significant relative to the original order value.

For a detailed discussion, refer to Note 8, Commitments and Contingencies, in Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

Information with respect to this item may be found in Note 2, Summary of Significant Accounting Policies, in Notes to Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q, which are hereby incorporated by reference.