What changed in this filing

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Item 1. Financial Statements

2025-08-01 compared with 2025-05-02 · 222 added, 107 removed, 551 unchanged (37% of the section changed)

3 unchanged sentences

(In thousands)

March 30, 2025

June 29, 2025

December 31, 2024

2 unchanged sentences

Short-term investments

Accounts receivable, net of allowance for doubtful accounts of $ 507 and $ 507 as of March 30, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 507 and $ 507 as of June 29, 2025 and December 31, 2024, respectively

Prepaid expenses and other current assets

2 unchanged sentences

Operating lease right-of-use assets

Intangible assets, net

Other non-current assets

23 unchanged sentences

Three Months Ended

March 30, 2025

March 31, 2024

Six Months Ended

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

Cost of revenue

9 unchanged sentences

Loss before income taxes

Provision for (benefit from) income taxes

Provision for income taxes

Net loss per share

5 unchanged sentences

Three Months Ended

March 30, 2025

March 31, 2024

Six Months Ended

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

Other comprehensive income (loss), before tax:

1 unchanged sentence

Change in unrealized gains and losses on available-for-sale investments

Other comprehensive loss, before tax

Other comprehensive income (loss), before tax

Tax benefit (provision) related to derivatives

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

Comprehensive loss

14 unchanged sentences

Balance as of March 30, 2025

Change in unrealized gains and losses on available-for-sale investments, net of tax

Change in unrealized gains and losses on derivatives, net of tax

Stock-based compensation

Repurchase of common stock

Restricted stock unit withholdings

Issuance of common stock under stock-based compensation plans

Balance as of June 29, 2025

Comprehensive

9 unchanged sentences

Balance as of March 31, 2024

Change in unrealized gains and losses on available-for-sale investments, net of tax

Change in unrealized gains and losses on derivatives, net of tax

Stock-based compensation

Repurchase of common stock

Restricted stock unit withholdings

Issuance of common stock under stock-based compensation plans

Balance as of June 30, 2024

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

19 unchanged sentences

Purchases of long-term investments

Payments made in connection with business acquisitions, net of cash acquired

Net cash used in investing activities

5 unchanged sentences

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, at beginning of period

30 unchanged sentences

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 and operating results for the three months ended March 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any future period.

Actual results could differ materially from those estimates and operating results for the three and six months ended June 29, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any future period.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

As previously announced, i n the first fiscal quarter of 2025, the Company realigned its business structure by separating the Connected Home segment into two distinct reportable segments:

Home Networking and Mobile.

As previously announced, in the first fiscal quarter of 2025, the Company realigned its business structure by separating the Connected Home segment into two distinct reportable segments:

Mobile and Home Networking.

This realignment is intended to further strengthen the Company's operational and financial management and enable further focus on growth opportunities while maintaining financial discipline.

Effective January 1, 2025, the Company operates and reports in three segments:

NETGEAR for Business, Home Networking, and Mobile.

NETGEAR for Business, Mobile, and Home Networking.

The prior-year segment financial information has been recast to conform to the current-year presentation.

None of the changes impacted previously reported consolidated net revenue, income (loss) from operations, net income (loss) per share, total assets, or stockholders’ equity.

In addition, as the goodwill balance was zero for the Connected Home segment before the segment realignment, no goodwill has been allocated to Home Networking and Mobile segments and the entire goodwill balance of $ 36.3 million remained in the NETGEAR for Business segment.

Refer to Note 11, Segment Information for additional information.

In addition, a s the goodwill balance was zero for the Connected Home segment before the segment realignment, no goodwill has been allocated to the Mobile and Home Networking segments, and the entire goodwill balance of $ 36.3 million prior to the segment realignment in the first quarter of 2025 remained in the NETGEAR for Business segment.

An additional $ 9.5 million of goodwill was recorded in the NETGEAR for Business segment in the second quarter of 2025 in connection with the acquisition of Exium Inc.

Refer to Note 4, Business Acquisition and Note 12, Segment Information for additional information.

Summary of Signif icant Accounting Policies

23 unchanged sentences

With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows.

Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Transaction Price Allocated to the Remaining Performance Obligations

2 unchanged sentences

Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

The following table summarizes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 30, 2025 :

The following table summarizes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of June 29, 2025 :

(In thousands)

13 unchanged sentences

Balance Sheet Location

March 30, 2025

June 29, 2025

December 31, 2024

5 unchanged sentences

Other non-current liabilities

The difference in the balances of the Company’s contract assets and liabilities as of March 30, 2025 and December 31, 2024, primarily results from the timing difference between the Company's performance and the customer's payment.

During the three months ended March 30, 2025 , $ 12.1 million of revenue was deferred primarily due to unsatisfied performance obligations for service contracts, $ 12.2 million of revenue was recognized for the satisfaction of performance obligations and $ 10.8 million of this recognized revenue was included in the contract liability balance at the beginning of the period.

The difference in the balances of the Company’s contract assets and liabilities as of June 29, 2025 and December 31, 2024, primarily results from the timing difference between the Company's performance and the customer's payment.

During the six months ended June 29, 2025, $ 23.5 million of revenue was deferred primarily due to unsatisfied performance obligations for service contracts, $ 25.0 million of revenue was recognized for the satisfaction of performance obligations and $ 20.0 million of this recognized revenu e was included in the contract liability balance at the beginning of the period.

There were no significant changes in estimates during the period that would affect the contract balances.

7 unchanged sentences

As disclosed above, effective January 1, 2025, the Company operates and reports in three segments:

NETGEAR for Business, Home Networking and Mobile.

NETGEAR for Business, Mobile, and Home Networking.

The prior-year segment financial information has been recast to conform to the current-year presentation.

1 unchanged sentence

Three Months Ended

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

(In thousands)

7 unchanged sentences

Non-service provider

Six Months Ended

June 29, 2025

June 30, 2024

(In thousands)

NETGEAR for Business

Home Networking

NETGEAR for Business

Home Networking

Geographic regions (1) :

Sales channels:

Service provider

Non-service provider

_____________________________

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

Business Acquisition

On June 16, 2025, the Company acquired Exium Inc.

(“Exium”), a cybersecurity company focused on developing and delivering Secure Access Service Edge (SASE) platforms, as part of its continued investment in cloud-based solutions for advanced business connectivity.

The Company believes that Exium’s products and expertise will enhance its network offering by adding an integrated SASE platform tailored for small and medium enterprises, which strategically aligns with its existing products, teams, and target markets.

The preliminary total purchase consideration was $ 12.5 million, which consisted of $ 12.1 million in cash paid in the second quarter of 2025, and $ 0.4 million in acquisition holdback for potential purchase price adjustments and indemnification, if any.

In addition, $ 2.4 million may be payable as retention compensation.

The acquisition qualified as a business combination and was accounted for using the acquisition method.

The results of Exium have been included in the unaudited condensed consolidated financial statements since the date of acquisition.

Pro forma results of operations for the acquisition are not presented as the financial impact to the Company's consolidated results of operations is not material.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Of the total preliminary purchase consideration, $ 9.5 million was allocated to goodwill, $ 4.3 million to developed technology platform, and $ 1.2 million to deferred tax liability.

All the other assets acquired and liabilities assumed were immaterial.

The goodwill recorded on the acquisition of Exium is not deductible for U.S.

federal or U.S.

state income tax purposes.

The goodwill recognized was allocated to the Company's NETGEAR for Business segment, and it is primarily attributable to expected synergies, and future growth opportunities associated with Exium’s cybersecurity platform.

Developed technology platform of $ 4.3 million was valued using the multi-period excess earnings method under the income approach, which discounted the asset's projected future cash flows at 28.5 %.

The provisional amortization period is seven years .

In co nnection with the acquisition, the Company recorded net deferred tax liabilities of $ 1.2 million, resulting from the recognition of $ 4.4 million in gross temporary differences related to the book basis of the intangible assets for which the Company has no tax basis.

Balance Sheet Components

Available-for-sale investments

Amortized cost and estimated fair market value of investments classified as available-for-sale, excluding cash equivalents, as of March 30, 2025 and December 31, 2024, were as follows:

March 30, 2025

Amortized cost and estimated fair market value of investments classified as available-for-sale, excluding cash equivalents, as of June 29, 2025 and December 31, 2024, were as follows:

June 29, 2025

(In thousands)

6 unchanged sentences

The contractual maturities on the U.S.

treasury securities as of March 30, 2025 are all due within one year.

Accrued interest receivable as of March 30, 2025 was $ 1.3 million a nd was recorded within Prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet.

There we re no investments classified as ava ilable-for-sale in a continuous unrealized loss position for which an allowance for credit losses was not recorded as of March 30, 2025 and December 31, 2024.

In the three months ended March 30, 2025 and March 31, 2024 , no unrealized losses on available-for-sale securities were recognized in income.

treasury securities as of June 29, 2025 are all due within one year.

Accrued interest receivable as of June 29, 2025 was $ 1.4 million and was recorde d within Prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet.

There we re no investments classified as ava ilable-for-sale in a continuous unrealized loss position for which an allowance for credit losses was not recorded as of June 29, 2025 and December 31, 2024.

In the three and six months ended June 29, 2025 and June 30, 2024 , no unrealized losses on available-for-sale securities were recognized in income.

The Company does not intend to sell, and it is unlikely that it will be required to sell the investments in an unrealized loss position prior to their anticipated recovery.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

securities during the three months ended March 30, 2025 and March 31, 2024.

securities during the three and six months ended June 29, 2025 and June 30, 2024.

Refer to Note 13, Fair Value Measurements, for detailed disclosures regarding fair value measurements.

(In thousands)

March 30, 2025

June 29, 2025

December 31, 2024

1 unchanged sentence

Finished goods

The Company records provisions for excess and obsolete inventory based on assumptions about future demand and market conditions and the amounts incurred were $ 1.4 million and $ 1.1 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

The Company records provisions for exce ss and obsolete inventory based on assumptions about future demand and market conditions and the amounts incurred were $ 0.8 million and $ 2.2 million for the three and six months ended June 29, 2025 , respectively, and $ 1.9 million and $ 3.0 million for the three and six months ended June 30, 2024, respectively.

While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is a risk that additional charges may be necessary if current forecasts are greater than actual demand.

1 unchanged sentence

(In thousands)

March 30, 2025

June 29, 2025

December 31, 2024

6 unchanged sentences

(In thousands)

March 30, 2025

June 29, 2025

December 31, 2024

5 unchanged sentences

The Company’s long -term investments are primarily comprised of equity investments without readily determinable fair values and investments in limited partnership funds.

The carrying value of the equity investments without readily determinable fair values was $ 6.1 million as of March 30, 2025 and March 31, 2024, respectively.

For such equity investments without readily determinable fair value still held at March 30, 2025 , there were no cumulative downward adjustments for price changes or impairment, and the cumulative upward adjustments for price changes was $ 0.3 million.

Investments in limited partnership funds amounted to $ 2.4 million as of March 30, 2025 , $ 2.2 million as of March 31, 2024 , $ 2.3 million as of December 31, 2024, and $ 2.3 million as of December 31, 2023, respectively.

The carrying value of the equity investments without readily determinable fair values was $ 6.1 million as of June 29, 2025 and June 30, 2024 , respectively.

For such equity investments without readily determinable fair value still held at June 29, 2025 , there were no cumulative downward adjustments for price changes or impairment, and the cumulative upward adjustments for price changes was $ 0.3 million.

Investments in limited partnership funds amounted to $ 2.6 million as of June 29, 2025 , and $ 2.3 million as of June 30, 2024, December 31, 2024, and December 31, 2023, respectively.

Other accrued liabilities

(In thousands)

March 30, 2025

June 29, 2025

December 31, 2024

4 unchanged sentences

Freight and duty

(1) Inventory expected to be received from future sales returns amounte d to $ 12.8 million and $ 15.1 million as of March 30, 2025 and December 31, 2024, respectively.

Provisions to write down expected returned inventory to net realizable value amounted to $ 8.6 mil lion and $ 9.0 million as of March 30, 2025 and December 31, 2024 , respectively.

(1) Inventory expected to be received from future sales returns amounted to $ 10.6 million and $ 15.1 million as of June 29, 2025 and December 31, 2024 , respectively.

Provisions to write down expected returned inventory to net realizable value amounted to $ 7.4 million and $ 9.0 million as of June 29, 2025 and December 31, 2024 , respectively.

Derivative F inancial Instruments

5 unchanged sentences

The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any individual counterparty .

The Company typically executes ten cash flow hedges per quarter with maturities under six months and with an average USD notional amount of approximately $ 5.0 million that are designated as cash flow hedges.

The Company enters into non-designated hedges that are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations.

The Company typically execut es ten cash flow hedges per quarter with maturities under six months and with an average USD notional amount of approximately $ 4.8 million that are designated as cash flow hedges.

The Company enters into non-des ignated hedges that are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations.

The Company adjusts its non-designated hedges monthly and typically executes about ten non-designated forwards per quarter with maturities less than three months and an average USD notional amount of approximately $ 3.0 million.

20 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands, except per share data)

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

Weighted average common shares – basic

4 unchanged sentences

In come Taxes

The income tax provision for the three months ended March 30, 2025 was $ 1.4 million, or an effective tax rate of ( 30.4 )%.

The income tax benefit for the three months ended March 31, 2024 was $ 0.1 million, or an effective tax rate of 0.8 %.

The changes in taxes for the three months ended March 30, 2025, compared to the prior year period, was primarily due to lower foreign profits in the period ended March 31, 2024, combined with foreign reserve releases resulting from audits effectively settled in the period ended March 31, 2024.

The income tax provision for the three and six months ended June 29, 2025 was $ 0.9 million, or an effective tax rate of ( 15.5 )%, and $ 2.3 million, or an effective tax rate of ( 22.3 )%, respectively.

The income tax provision for the three and six months ended June 30, 2024 was $ 1.0 million, or an effective tax rate of ( 2.3 )%, and $ 0.9 million, or an effective tax rate of ( 1.4 )%, respectively.

The changes in taxes for the three and six months ended June 29, 2025, compared to the prior year periods, were primarily due to tax benefits recorded for the reversal of a portion of the federal and state valuation allowances that offset deferred tax liabilities resulting from intangibles established in purchased accounting for the Exium acquisition.

Further, in the period ended June 30, 2024, there were lower foreign profits combined with foreign reserve releases resulting from audits effectively settled in 2024.

The Company is subject to income taxes in the U.S.

9 unchanged sentences

The liability for uncertain tax positions may be reduced for liabilities that are settled with taxing authorities or on which the statute of limitations could expire without assessment from tax authorities.

The possible reduction in liabilities for uncertain tax positions in multiple jurisdictions in the next twelve months is approximately $ 1.4 million excluding the interest, penalties and the effect of any related deferred tax assets or liabilities.

The possible reduction in liabilities for uncertain tax positions in multiple jurisdictions in the

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

next twelve months is approximately $ 1.4 million excluding the interest, penalties and the effect of any related deferred tax assets or liabilities.

The Company is currently under examination in various U.S.

and foreign jurisdictions.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company accounts for income taxes under an asset and liability approach.

12 unchanged sentences

federal and state jurisdictions reported in “Other Non-current Assets” were reduced after the effect of establishing the valuation allowance.

The Company evaluated the current results as of the period ended March 30, 2025, coupled with the expectations for the remainder of the year, and determined that it continues to not be more likely than not that the deferred tax assets would be realized, and accordingly, has recorded no benefit for the forecasted tax loss for the three months ended March 30, 2025.

The Company evaluated the current results as of the period ended June 29, 2025, coupled with the expectations for the remainder of the year, and determined that it continues to not be more likely than not that the deferred tax assets would be realized, and accordingly, has recorded no benefit for the forecasted tax loss for the three months ended June 29, 2025.

The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025 and the Company continues to evaluate the impact on its financial position.

The OBBBA is not currently expected to materially impact the Company’s effective tax rate or cash flows in the current fiscal year.

Commitment s and Contingencies

2 unchanged sentences

Generally, under these agreements, 50 % of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25 % of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date.

As of March 30, 2025, the Company had approximately $ 51.3 million , as compared to $ 57.4 million as of December 31, 2024, in short-term non-cancelable purchase commitments with suppliers or where the suppliers had procured unique materials and components upon receipts of the Company’s purchase orders.

As of June 29, 2025, the Company had approximately $ 60.2 million , as compared to $ 57.4 million as of December 31, 2024, in short-term non-cancelable purchase commitments with suppliers or where the suppliers had procured unique materials and components upon receipts of the Company’s purchase orders.

Due to an elongation of the time from order placement to production that occurred several years ago, the Company issued purchase orders to supply chain partners beyond contractual termination periods.

As of March 30, 2025 , $ 239.8 million of purchase orders beyond contractual termination periods remained outstanding.

As of June 29, 2025 , $ 208.7 million of purchase orders beyond contractual termination periods remained outstanding.

Consequently, the Company may incur expenses for materials and components, such as chipsets purchased by the supplier to fulfill the purchase order if the purchase order is cancelled.

3 unchanged sentences

Such loss liability is included in Other accrued liabilities on the Company’s unaudited condensed consolidated balance sheets.

Losses incurred in relation to purchase commitments, including unique materials and components, amounted to $ 53,000 and $ 1.1 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

Non-Trade Commitments

As of March 30, 2025, the Company had non-cancellable purchase commitme nts of $ 11.3 million pertaining to non-trade activities.

Losses incurred in relation to purchase commitments, including unique materials and components, amounted to $ 0.2 million and $ 0.3 million for the three and six months ended June 29, 2025 , respectively, and $ 5.1 million and $ 6.2 million for the three and six months ended June 30, 2024, respectively.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Non-Trade Commitments

As of June 29, 2025, the Company had non-cancellable purchase commit ments of $ 9.4 million pertaining to non-trade activities.

Warranty Obligations

1 unchanged sentence

Three Months Ended

Six Months Ended

(In thousands)

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

Balance as of beginning of the period

2 unchanged sentences

Balance as of the end of the period

As of March 30, 2025, the Company entered into an office lease that has not yet commenced with short-term and long-term future lease payments of $ 1.7 million and $ 41.2 million, respectively, that are not yet recorded on the unaudited consolidated balance sheets.

This lease will comme nce in late 2025 with a non-cancelable lease term of 11 years .

As of June 29, 2025 , the Company entered into an office lease that has not yet commenced with short-term and long-term future lease payments of $ 2.3 million and $ 40.6 million, respectively, that are not yet recorded on the unaudited consolidated balance sheets.

This lease will commence in the third fiscal quarter of 2025 with a non-cancelable lease term of 11 years .

Litigation and Other Legal Matters

13 unchanged sentences

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 the Company’s common stock.

During the three months ended March 30, 2025 and March 31, 2024, the Company repurchased, retired and reported, based on trade date, approximately 0.3 million a nd 0.8 million shares of common stock, at a cost of approxim ately $ 7.5 million and $ 11.4 milli on, respectively.

As of March 30, 2025 , approximately 3.1 million shares remained authorized for repurchase under the repurchase program.

The Company repurchased and reported, based on trade date, approximately 186,000 shares and 32,000 shares of common stock, at a cost of approximately $ 5.1 million and $ 0.5 million, during the three months ended March 30, 2025 and March 31, 2024, respectively, to administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs.

During the six months ended June 29, 2025 and June 30, 2024 , the Company repurchased, retired and reported, based on trade date, approximately 0.5 million and 1.6 million shares of

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

common stock, at a cost of approximately $ 15.0 million and $ 21.4 million, respectively.

As of June 29, 2025 , approximately 2.8 million shares remained authorized for repurchase under the repurchase program.

The Company repurchased and rep orted, based on trade date, approximately 370,000 shares and 197,000 shares of common stock, at a cost of approximately $ 9.7 million and $ 2.9 million, during the six months ended June 29, 2025 and June 30, 2024, respectively, to administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs.

These shares were retired upon repurchase.

10 unchanged sentences

Other comprehensive income (loss) before reclassifications

Amount reclassified from accumulated other comprehensive (loss) income

Amount reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

Balance as of March 30, 2025

Balance as of June 29, 2025

(In thousands)

8 unchanged sentences

Net current period other comprehensive income (loss)

Balance as of March 31, 2024

Balance as of June 30, 2024

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table provides details about significant amounts reclassified out of each component of AOCI:

Three Months Ended

Six Months Ended

(In thousands)

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

Amount Reclassified from AOCI

8 unchanged sentences

Total, net of tax

Employe e Benefit Plans

The Company grants options, time-based RSUs and performance-based RSUs under the 2016 Incentive Plan (the “2016 Plan”), under which awards may be granted to all employees.

Vesting periods under this plan are generally four years for options, three years for performance-based RSUs, and three or four years for time-based RSUs.

As of March 30, 2025 , approximately 2.5 million shares were reserved for future grants under the 2016 Plan.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Employe e Benefit Plans

2025 Equity Incentive Plan

In April 2025, t he Company's Board of Directors adopted the 2025 Equity Incentive Plan (the "2025 Plan") which was approved by the Company's stockholders at the 2025 Annual Meeting of Stockholders on May 29, 2025.

The 2025 Plan provides for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to eligible directors, employees and consultants of the Company.

The maximum aggregate number of shares that may be issued under the 2025 Plan is 750,000 shares, plus (i) any shares that were available for grant under the 2016 Plan as of immediately prior to the date the 2025 Plan becomes effective, plus (ii) any shares granted under the 2016 Plan t hat expire, are forfeited to or repurchased by the Company.

As of June 29, 2025 , approximately 2.5 mil lion shares were reserved and available for future grants under the 2025 Plan.

Time-based RSUs granted generally vest over three years with the first tranche at the end of twelve months from the vest start date and the remaining vesting quarterly over the remaining two years .

RSUs do not have an expiration date.

Performance-based RSUs granted generally vest at the end of a three-year period if performance conditions are met.

Any shares that are tendered by a participant of the 2025 Plan or retained by the Company as full or partial payment for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall again be made available for issuance under the 2025 Plan.

2016 Equity Incentive Plan

The Company granted options, time-based RSUs and performance-based RSUs under the 2016 Incentive Plan (the “2016 Plan”), under which awards were granted to employees.

Vesting periods under this plan were generally four years for options, three years for performance-based RSUs, and three or four years for time-based RSUs.

As of June 29, 2025, as disclosed above, the Company adopted the 2025 Plan, which superseded the 2016 Plan with respect to new equity award grants.

No additional awards will be granted under the 2016 Plan following the effective date of the 2025 Plan.

However, (i) any shares that remained available for grant under the 2016 Plan immediately prior to the 2025 Plan’s effective date and (ii) any shares subject to awards granted under the 2016 Plan that are subsequently forfeited, expire, or are repurchased by the Company, will become available for issuance under the 2025 Plan.

All outstanding awards previously granted under the 2016 Plan remain outstanding and continue to be governed by the applicable terms and conditions of that plan.

Any shares that are tendered by a participant of the 2016 Plan or retained by the Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall no longer again be made available for issuance under the 2016 Plan.

2024 Inducement Plan

In February 2024, the Company’s Board of Directors approved 2024 Inducement Equity Incentive Plan (the “2024 Inducement Plan”), under which options, restricted stock awards, RSUs, stock appreciation rights, performance units, performance shares, and other stock or cash awards can be granted to personnel for positions of substantial responsibility.

As of March 30, 2025 , approximately 0.2 million shares were reserved for future grants under the 2024 Inducement Plan.

Additionally, the Company sponsors an Employee Stock Purchase Plan (the “ESPP”).

In May 2025, the Company’s Board of Directors approved an amendment to the 2024 Inducement Plan which increased t he number of shares of the Company’s common stock that may be issued under the 2024 Inducement Plan by an additional 600,000 shares.

As of June 29, 2025, approxim ately 0.5 million shares were reserved for future grants under the 2024 Inducement Plan.

Employee Stock Purchase Plan

The Company sponsors an Employee Stock Purchase Plan (the “ESPP”).

The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85 % of the lesser of the fair market value at the beginning of the offering period or the purchase date.

The duration of each offering period is generally six months.

As of March 30, 2025 , approximately 0.3 million shares were available for issuance under the ESPP.

In May 2025, the stockholders of the Company appr oved an amendment to the 2003 Employee Stock Purchase Plan to increase the number of shares of common stock authorized for sale under the ESPP by 1.5 million shares.

As of June 29, 2025 , approximately 1.8 million shares were available for issuance under the ESPP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Option Activity

3 unchanged sentences

Outstanding as of December 31, 2024

Outstanding as of March 30, 2025

Outstanding as of June 29, 2025

Time-Based RSU Activity

3 unchanged sentences

Outstanding as of December 31, 2024

Outstanding as of March 30, 2025

Outstanding as of June 29, 2025

Performance-Based RSU Activity

Since 2020, the Company’s executive officers were granted performance-based restricted stock units (“PSUs”) under the 2016 Plan with vesting occurring at the end of a three-year period if performance conditions are met.

Since 2020, the Company’s executives have been granted performance-based restricted stock units (“PSUs”) under the 2016 Plan with vesting occurring at the end of a three-year period, contingent upon the achievement of specified performance conditions.

In February 2024, the Company granted PSUs under the 2024 Inducement Plan to its newly-hired Chief Executive Officer with 1/3 of the target PSUs being allocated to each tranche and vesting occurring at the end of each anniversary of the vesting commencement date over a three-year period.

In addition, in 2024, the Company granted PSUs under the 2024 Inducement Plan to its newly-hired employees with vesting occurring at the end of a three-year period if performance conditions are met.

In addition, in 2024 and 2025, the Company granted PSUs under the 2016 Plan, 2024 Inducement Plan and 2025 Plan to its newly-hired employees or executives with vesting occurring at the end of a three-year period if performance conditions are met.

The number of PSUs earned and eligible to vest are determined based on achievement of the pre-determined performance or market conditions and the recipients’ continued service with the Company.

2 unchanged sentences

The stock-based compensation expense relating to PSUs with a market condition is recognized ratably from the service inception date to the vesting date for each tranche.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

PSU activity was as follows:

2 unchanged sentences

Outstanding as of December 31, 2024

Outstanding as of March 30, 2025

Outstanding as of June 29, 2025

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Valuation and Expense Information

1 unchanged sentence

Three Months Ended

Six Months Ended

(In thousands)

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

Cost of revenue

2 unchanged sentences

General and administrative

As of March 30, 2025 , $ 36.8 million of unrecognized compensation cost related to unvested RSUs (time-based and performance-based) expected to be recognized over a weighted-average period of 2.0 years.

As of June 29, 2025 , $ 59.7 million of unrecognized compensation cost related to unvested RSUs (time-based and performance-based) expected to be recognized over a weighted-average period of 2.1 years.

Segme nt Information

2 unchanged sentences

As previously announced, i n the first fiscal quarter of 2025, the Company realigned its business structure by separating the Connected Home segment into two distinct reportable segments:

Home Networking and Mobile.

Mobile and Home Networking.

This realignment is intended to further strengthen the Company's operational and financial management and enable further focus on growth opportunities while maintaining financial discipline.

1 unchanged sentence

Effective January 1, 2025, the Company operates and reports in three segments:

NETGEAR for Business, Home Networking, and Mobile.

NETGEAR for Business, Mobile, and Home Networking.

The prior-year segment financial information has been recast to conform to the current-year presentation.

1 unchanged sentence

Focuses on businesses and provides solutions for business networking, wireless local area network (“LAN”), audio and video over Ethernet for Pro AV applications, security and remote management providing enterprise-class functionality at an affordable price;

• Home Networking:

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 Tri-band and Quad-band mesh systems, routers, and subscription services that provide consumers a range of value-added services focused on performance, security, privacy, and premium support.

Focuses on both consumers and businesses and provides 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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

• Home Networking:

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.

The results of the reportable segments are derived directly from the Company’s management reporting system.

4 unchanged sentences

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 intangibles, stock-based compensation expense, intangibles impairment, restructuring and other charges, litigation reserves, net, and other income (expenses), net.

These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing and general and administrative expenses, stock-based compensation expense, acquisition related expenses, restructuring and other charges, litigation reserves, net, and other income (expenses), net.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

(In thousands, except percentage data)

9 unchanged sentences

Stock-based compensation expense

Acquisition related expenses

Restructuring and other charges

2 unchanged sentences

Loss before income taxes

(1) Amoun ts included interest income of $ 3.3 million and $ 2.5 million, and gain/(loss), net from derivatives not designated as hedging instruments of $( 1.0 ) million and $ 1.5 million, for the three months ended March 30, 2025 and March 31, 2024, respectively.

For the three months ended March 30, 2025 , the amount also included proceeds of $ 4.7 million from a sale of patents.

(2) Financial information for the Home Networking segment and Mobile segment in the prior year period were recast to conform to the current reportable segment structure.

Six Months Ended

June 29, 2025

June 30, 2024

(In thousands, except percentage data)

NETGEAR for Business

Home Networking

NETGEAR for Business

Home Networking (2)

Cost of revenue

Operating expenses

Contribution income (loss)

Contribution margin

Corporate and unallocated costs

Stock-based compensation expense

Acquisition related expenses

Restructuring and other charges

Litigation reserves, net

Other income, net (1)

Loss before income taxes

(1) Amoun ts included interest income of $ 3.1 million and $ 6.4 million for the three and six months ended June 29, 2025, respectively, and $ 2.5 million and $ 5.0 million for the three and six months ended June 30, 2024, respectively.

Amounts also included gain/(loss), net from derivatives not designated as hedging instruments of $( 2.1 ) million and $( 3.1 ) million for the three and six months ended June 29, 2025 , respectively, and $ 0.6 million and $ 2.1 million for the three and six months ended June 30, 2024, respectively.

For the six months ended June 29, 2025 , the amount also included proceeds of $ 4.7 million from a sale of patents.

(2) Financial information for the Mobile segment and Home Networking segment in the prior year period were recast to conform to the current reportable segment structure.

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

4 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

March 30, 2025

March 31, 2024

June 29, 2025

June 30, 2024

June 29, 2025

June 30, 2024

United States (U.S.)

5 unchanged sentences

(In thousands)

March 30, 2025

June 29, 2025

December 31, 2024

6 unchanged sentences

The following tables summarize assets and liabilities measured at fair value on a recurring basis:

March 30, 2025

June 29, 2025

(In thousands)

37 unchanged sentences

The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities.

The Company includes expenses related to restructuring and other charges in Other operating expenses (income), net in the

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

condensed consolidated statements of operations.

The Company includes expenses related to restructuring and other charges in Other operating expenses (income), net in the condensed consolidated statements of operations.

Accrued restructuring and other charges are classified within Accrued employee compensation and Other accrued liabilities on the condensed consolidated balance sheets.

Restructuring and other charges recognized in the three months ended March 30, 2025 and March 31, 2024, respectively, were primarily for severance, and other costs in relation to the reorganization of our business to better align the cost structure of the business with the areas to deliver long-term growth and expanding profitability or projected revenue levels.

The liabilities as of March 30, 2025 are expected to be settled in 2025.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Restructuring and other charges recognized in the three and six months ended June 29, 2025 and June 30, 2024, respectively, were primarily for severance, and other costs in relation to the reorganization of the business.

These initiatives were undertaken to reduce costs, and reinvest into the business to capitalize on the Company's highest priority opportunities to drive revenue growth and improve profitability.

The vast majority of the liabilities as of June 29, 2025 are expected to be settled in 2025.

The following table provides a summary of the activity related to accrued restructuring and other charges:

2 unchanged sentences

Cash Payments

Accrued Restructuring and Other Charges at March 30, 2025

Accrued Restructuring and Other Charges at June 29, 2025

Restructuring

5 unchanged sentences

Cash Payments

Accrued Restructuring and Other Charges at March 31, 2024

Accrued Restructuring and Other Charges at June 30, 2024

Restructuring

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements